[Federal Register Volume 88, Number 105 (Thursday, June 1, 2023)]
[Rules and Regulations]
[Pages 36066-36152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-10019]
[[Page 36065]]
Vol. 88
Thursday,
No. 105
June 1, 2023
Part III
Department of Energy
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10 CFR Part 431
Energy Conservation Program: Energy Conservation Standards for Electric
Motor; Final Rule
Federal Register / Vol. 88 , No. 105 / Thursday, June 1, 2023 / Rules
and Regulations
[[Page 36066]]
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DEPARTMENT OF ENERGY
10 CFR Part 431
[EERE-2020-BT-STD-0007]
RIN 1904-AE63
Energy Conservation Program: Energy Conservation Standards for
Electric Motors
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Direct final rule.
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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including electric
motors. EPCA also requires the U.S. Department of Energy (``DOE'') to
periodically determine whether more-stringent, standards would be
technologically feasible and economically justified, and would result
in significant energy savings. In this direct final rule, DOE is
adopting new and amended energy conservation standards for electric
motors. It has determined that the new and amended energy conservation
standards for these products would result in significant conservation
of energy, and are technologically feasible and economically justified.
DATES: The effective date of this rule is September 29, 2023, unless
adverse comment is received by September 19, 2023. If adverse comments
are received that DOE determines may provide a reasonable basis for
withdrawal of the direct final rule, a timely withdrawal of this rule
will be published in the Federal Register. If no such adverse comments
are received, compliance with the new and amended standards established
for electric motors in this direct final rule is required on and after
June 1, 2027.
ADDRESSES: The docket for this rulemaking, which includes Federal
Register notices, public meeting attendee lists and transcripts,
comments, and other supporting documents/materials, is available for
review at www.regulations.gov. All documents in the docket are listed
in the www.regulations.gov index. However, not all documents listed in
the index may be publicly available, such as information that is exempt
from public disclosure.
The docket web page can be found www.regulations.gov/docket/EERE-2020-BT-STD-0007. The docket web page contains instructions on how to
access all documents, including public comments, in the docket.
For further information on how to submit a comment or review other
public comments and the docket, contact the Appliance and Equipment
Standards Program staff at (202) 287-1445 or by email:
[email protected].
FOR FURTHER INFORMATION CONTACT:
Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Email:
[email protected].
Mr. Matthew Ring, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121.
Telephone: (202) 586-2555; Email: [email protected].
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact the Appliance and Equipment Standards Program staff at (202)
287-1445 or by email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Direct Final Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Electric Motors
3. Electric Motors Working Group Recommended Standard Levels
III. General Discussion
A. General Comments
B. Scope of Coverage and Equipment Classes
C. Test Procedure
D. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
E. Energy Savings
1. Determination of Savings
2. Significance of Savings
F. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Savings in Operating Costs Compared to Increase in Price (LCC
and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Scope of Coverage
a. Motor Used as a Component of a Covered Product or Equipment
b. Air-Over Electric Motors
c. AC Induction Electric Motors Greater Than 500 Horsepower
d. AC Induction Inverter-Only and Synchronous Electric Motors
e. Submersible Electric Motors
2. Test Procedure and Metric
3. Equipment Classes
4. Technology Options
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Representative Units Analyzed
b. Baseline Efficiency
c. Higher Efficiency Levels
2. Cost Analysis
3. Cost-Efficiency Results
4. Scaling Methodology
D. Markups Analysis
E. Energy Use Analysis
1. Consumer Sample
2. Motor Input Power
3. Annual Operating Hours
4. Impact of Electric Motor Speed
F. Life-Cycle Cost and Payback Period Analysis
1. Equipment Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Equipment Lifetime
7. Discount Rates
8. Energy Efficiency Distribution in the No-New-Standards Case
9. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Equipment Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Product and Capital Conversion Costs
d. Markup Scenarios
3. Manufacturer Interviews
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous Oxide
2. Monetization of Other Emissions Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
[[Page 36067]]
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. Direct Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Electric Motors
Standards
2. Annualized Benefits and Costs of the Standards
D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
M. Congressional Notification
VII. Approval of the Office of the Secretary
I. Synopsis of the Direct Final Rule
The Energy Policy and Conservation Act, Public Law 94-163, as
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency
of a number of consumer products and certain industrial equipment. (42
U.S.C. 6291-6317) Title III, Part C \2\ of EPCA established the Energy
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317). Such equipment includes electric motors, the subject of this
rulemaking.
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\1\ All references to EPCA in this document refer to the statute
as amended through the Energy Act of 2020, Public Law 116-260 (Dec.
27, 2020), which reflect the last statutory amendments that impact
Parts A and A-1 of EPCA.
\2\ For editorial reasons, upon codification in the U.S. Code,
Part C was re-designated Part A-1.
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Pursuant to EPCA, any new or amended energy conservation standard
must be designed to achieve the maximum improvement in energy
efficiency that DOE determines is technologically feasible and
economically justified. (42 U.S.C. 6316(a); 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. 6316(a); 42 U.S.C. 6295(o)(3)(B))
EPCA also provides that not later than 6 years after issuance of any
final rule establishing or amending a standard, DOE must publish either
a notice of determination that standards for the product do not need to
be amended, or a notice of proposed rulemaking including new proposed
energy conservation standards (proceeding to a final rule, as
appropriate). (42 U.S.C. 6316(a); 42 U.S.C. 6295(m))
In light of the above and under the authority provided by 42 U.S.C.
6295(p)(4), DOE is issuing this direct final rule amending the energy
conservation standards for electric motors. The amended standard levels
in this document were submitted in a joint recommendation (the
``November 2022 Joint Recommendation'') \3\ by the American Council for
an Energy-Efficient Economy (``ACEEE''), Appliance Standards Awareness
Project (``ASAP''), National Electrical Manufacturers Association
(``NEMA''), Natural Resources Defense Council (``NRDC''), Northwest
Energy Efficiency Alliance (``NEEA''), Pacific Gas & Electric Company
(``PG&E''), San Diego Gas & Electric (``SDG&E''), and Southern
California Edison (``SCE'') hereinafter referred to as ``the Electric
Motors Working Group.'' In a letter comment submitted December 12,
2022, the New York State Energy Research and Development Authority
(``NYSERDA'') expressed its support of the November 2022 Joint
Recommendation and urged DOE to implement it in a timely manner. The
November 2022 Joint Recommendation was preceded by the following DOE
actions in this rulemaking and stakeholder comments thereon: May 2020
Early Assessment Review RFI (85 FR 30878 (May 21, 2020)); March 2022
Preliminary Analysis (87 FR 11650 (March 2, 2022)) and the Preliminary
Analysis TSD (``March 2022 Prelim TSD''). See sections II.B.2 and
II.B.3 for a detailed history of the current rulemaking and a
discussion of the November 2022 Joint Recommendation.
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\3\ Joint comment response to the published Notification of a
webinar and availability of preliminary technical support document;
www.regulations.gov/comment/EERE-2020-BT-STD-0007-0035.
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After carefully considering the November 2022 Joint Recommendation,
DOE determined that the recommendations contained therein are compliant
with 42 U.S.C. 6295(o), as required by 42 U.S.C. 6295(p)(4)(A)(i) for
the issuance of a direct final rule. As required by 42 U.S.C.
6295(p)(4)(A)(i), DOE is simultaneously publishing a NOPR proposing
that the identical standard levels contained in this direct final rule
be adopted. Consistent with the statute, DOE is providing a 110-day
public comment period on the direct final rule. (42 U.S.C.
6295(p)(4)(B)) If DOE determines that any comments received provide a
reasonable basis for withdrawal of the direct final rule under 42
U.S.C. 6295(o), DOE will continue the rulemaking under the
simultaneously published NOPR. (42 U.S.C. 6295(p)(4)(C)) See section
II.A for more details on DOE's statutory authority.
This direct final rule documents DOE's analyses to objectively and
independently evaluate the energy savings potential, technological
feasibility, and economic justification of the standard levels
recommended in the November 2022 Joint Recommendation, as per the
requirements of 42 U.S.C. 6295(o).
Ultimately, DOE found that the standard levels recommended in the
November 2022 Joint Recommendation would result in significant energy
savings and are technologically feasible and economically justified.
Table I-1 through Table I-3 document the amended standards for electric
motors. The amended standards correspond to the recommended trial
standard level (``TSL'') 2 (as described in section V.A of this
document) and are expressed in terms of nominal full-load efficiency.
The amended standards are the same as those recommended by the Electric
Motors Working Group. These standards apply to all products listed in
through Table I-1 through Table I-3 and manufactured in, or imported
into, the United States starting on June 1, 2027.
[[Page 36068]]
Table I-1--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding Fire Pump Electric Motors
and Air-Over Electric Motors) at 60 Hz
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Nominal full-load efficiency (%)
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Motor horsepower/ standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
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Enclosed Open Enclosed Open Enclosed Open Enclosed Open
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1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
300/224......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
350/261......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
400/298......................................................... 95.8 95.8 96.2 95.8 ......... ......... ......... .........
450/336......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
500/373......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
550/410......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
600/447......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
650/485......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
700/522......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
750/559......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
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Table I-2--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY
Standard Frame Size Air-Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
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Nominal full-load efficiency (%)
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Motor horsepower/ standard 2 Pole 4 Pole 6 Pole 8 Pole
kilowatt equivalent -----------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
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1/.75....................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1..................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5....................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2....................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7....................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5..................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5...................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11....................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15....................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5..................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22....................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30....................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37....................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45....................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55....................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75...................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90...................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110..................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150..................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186..................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
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[[Page 36069]]
Table I-3--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY
Specialized Frame Size Air-Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
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Nominal full-load efficiency (%)
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Motor horsepower/ standard 2 Pole 4 Pole 6 Pole 8 Pole
kilowatt equivalent -----------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
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1/.75....................... 74.0 ........ 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1..................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5....................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2....................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7....................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5..................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5...................... 89.5 88.5 89.5 89.5 89.5 90.2 ......... ........
15/11....................... 90.2 89.5 91.0 91.0 ......... ........ ......... ........
20/15....................... 90.2 90.2 91.0 91.0 ......... ........ ......... ........
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A. Benefits and Costs to Consumers
Table I-4 summarizes DOE's evaluation of the economic impacts of
the adopted standards on consumers of electric motors, as measured by
the average life-cycle cost (``LCC'') savings and the simple payback
period (``PBP'').\4\ The average LCC savings are positive for all
representative units, and the PBP is less than the average lifetime of
electric motors, which is estimated to be 13.6 years (see section V.B.1
of this document).
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\4\ The average LCC savings refer to consumers that are affected
by a standard and are measured relative to the efficiency
distribution in the no-new-standards case, which depicts the market
in the compliance year in the absence of new or amended standards
(see section IV.F.8 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.F.9 of this document).
Table I-4--Impacts of Adopted Energy Conservation Standards on Consumers of Electric Motors
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Average LCC Simple payback
Equipment class group Representative unit savings (2021$) period (years)
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MEM, 1-500 hp, NEMA Design A and B....... RU1.............................. N/A N/A
RU2.............................. N/A N/A
RU3.............................. N/A N/A
RU4.............................. 567.1 4.1
RU5.............................. N/A N/A
MEM, 501-750 hp, NEMA Design A and B RU6.............................. 2,550.1 3.7
above 500 hp.
AO-MEM (Standard Frame Size)............. RU7.............................. 57.6 4.0
RU8.............................. 472.4 1.6
RU9 *............................ ................ ................
RU10............................. 930.7 4.9
AO-Polyphase (Specialized Frame Size).... RU11............................. 49.9 4.1
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The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact because there are no shipments below the efficiency level corresponding to TSL1 and TSL2 for RU9.
DOE's analysis of the impacts of the adopted standards on consumers
is described in section IV.F of this document.
B. Impact on Manufacturers
The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the base year through the
end of the analysis period (2023-2056). Using a real discount rate of
9.1 percent, DOE estimates that the INPV for manufacturers of electric
motors in the case without new and amended standards is $5,023 million
in 2021 dollars. Under the adopted standards, DOE estimates the change
in INPV to range from -6.6 percent to -6.0 percent, which is
approximately -$333 million to -$303 million. In order to bring
products into compliance with new and amended standards, it is
estimated that industry will incur total conversion costs of $468
million.
DOE's analysis of the impacts of the adopted standards on
manufacturers is described in sections IV.J and V.B.2 of this document.
C. National Benefits and Costs 5
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\5\ All monetary values in this document are expressed in 2021
dollars.
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DOE's analyses indicate that the adopted energy conservation
standards for electric motors would save a significant amount of
energy. Relative to the case without new and amended standards, the
lifetime energy savings for electric motors purchased in the 30-year
period that begins in the anticipated year of compliance with the new
and amended standards (2027-2056) amount to 3.0 quadrillion British
thermal units (``Btu''), or quads.\6\ This represents a savings of 0.2
percent relative to the energy use of these products in the case
without amended standards (referred to as the ``no-new-standards
case'').
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\6\ The quantity refers to full-fuel-cycle (``FFC'') energy
savings. FFC energy savings includes the energy consumed in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and, thus, presents a more complete
picture of the impacts of energy efficiency standards. For more
information on the FFC metric, see section IV.H.2 of this document.
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The cumulative net present value (``NPV'') of total consumer
benefits of the standards for electric motors ranges from $2.23 billion
(at a 7-percent discount rate) to $7.47 billion (at a 3-percent
discount rate). This NPV
[[Page 36070]]
expresses the estimated total value of future operating-cost savings
minus the estimated increased equipment and installation costs for
electric motors purchased in 2027-2056.
In addition, the adopted standards for electric motors are
projected to yield significant environmental benefits. DOE estimates
that the adopted standards will result in cumulative emission
reductions (over the same period as for energy savings) of 91.69
million metric tons (``Mt'') \7\ of carbon dioxide
(``CO2''), 35.12 thousand tons of sulfur dioxide
(``SO2''), 148.74 thousand tons of nitrogen oxides
(``NOX''), 690.10 thousand tons of methane
(``CH4''), 0.82 thousand tons of nitrous oxide
(``N2O''), and 0.23 tons of mercury (``Hg'').\8\ The
estimated cumulative reduction in CO2 emissions through 2030
amounts to 0.90 million Mt, which is equivalent to the emissions
resulting from the annual electricity use of more than 0.15 million
homes.
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\7\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\8\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2022 (``AEO2022''). AEO2022 represents current federal and
state legislation and final implementation of regulations as of the
time of its preparation. See section IV.K of this document for
further discussion of AEO2022 assumptions that effect air pollutant
emissions.
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DOE estimates climate benefits from a reduction in greenhouse gases
(GHG) using four different estimates of the social cost of
CO2 (``SC-CO2''), the social cost of methane
(``SC-CH4''), and the social cost of nitrous oxide (``SC-
N2O''). Together these represent the social cost of GHG (SC-
GHG). DOE used SC-GHG values based on the interim values developed by
an Interagency Working Group on the Social Cost of Greenhouse Gases
(IWG),\9\ as discussed in section IV.K of this document. For
presentational purposes, the climate benefits associated with the
average SC-GHG at a 3-percent discount rate are $3.14 billion. DOE does
not have a single central SC-GHG point estimate and it emphasizes the
importance and value of considering the benefits calculated using all
four SC-GHG estimates.
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\9\ See Interagency Working Group on Social Cost of Greenhouse
Gases, Technical Support Document: Social Cost of Carbon, Methane,
and Nitrous Oxide. Interim Estimates Under Executive Order 13990,
Washington, DC, February 2021 (``February 2021 SC-GHG TSD'').
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
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DOE also estimated health benefits from SO2 and
NOX emissions reductions.\10\ DOE estimated the present
value of the health benefits would be $1.76 billion using a 7-percent
discount rate, and $5.72 billion using a 3-percent discount rate.\11\
DOE is currently only monetizing (for SO2 and
NOX) PM2.5 precursor health benefits and (for
NOX) ozone precursor health benefits, but will continue to
assess the ability to monetize other effects such as health benefits
from reductions in direct PM2.5 emissions.
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\10\ DOE estimated the monetized value of SO2 and
NOX emissions reductions associated with electricity
savings using benefit per ton estimates from the scientific
literature. See section IV.L.2 of this document for further
discussion.
\11\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
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Table I-5 summarizes the economic benefits and costs expected to
result from the new and amended standards for electric motors. There
are other important unquantified effects, including certain
unquantified climate benefits, unquantified public health benefits from
the reduction of toxic air pollutants and other emissions, unquantified
energy security benefits, and distributional effects, among others.
Table I-5--Summary of Economic Benefits and Costs of Adopted Energy
Conservation Standards for Electric Motors
[TSL 2]
------------------------------------------------------------------------
Billion $2021
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 8.8
Climate Benefits *.................................... 3.1
Health Benefits **.................................... 5.7
-----------------
Total Benefits [dagger]........................... 17.7
Consumer Incremental Equipment Costs [Dagger]......... 1.4
-----------------
Net Benefits...................................... 16.3
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 3.0
Climate Benefits * (3% discount rate)................. 3.1
Health Benefits **.................................... 1.8
-----------------
Total Benefits [dagger]........................... 7.8
Consumer Incremental Equipment Costs [Dagger]......... 0.7
-----------------
Net Benefits...................................... 7.1
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with product
name shipped in 2027-2056. These results include benefits to consumers
which accrue after 2027 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the
SC-GHG (see section IV.L of this document). For presentational
purposes of this table, the climate benefits associated with the
average SC-GHG at a 3 percent discount rate are shown, but the
Department does not have a single central SC-GHG point estimate, and
it emphasizes the importance of considering the benefits calculated
using all four SC-GHG estimates.
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
precursor health benefits and (for NOX) ozone precursor health
benefits, but will continue to assess the ability to monetize other
effects such as health benefits from reductions in direct PM2.5
emissions. The health benefits are presented at real discount rates of
3 and 7 percent. See section IV.L of this document for more details.
[[Page 36071]]
[dagger] Total and net benefits include consumer, climate, and health
benefits. For presentation purposes, total and net benefits for both
the 3-percent and 7-percent cases are presented using the average SC-
GHG with 3-percent discount rate, but the Department does not have a
single central SC-GHG point estimate. DOE emphasizes the importance
and value of considering the benefits calculated using all four SC-GHG
estimates. See Table V-41 for net benefits using all four SC-GHG
estimates. To monetize the benefits of reducing GHG emissions this
analysis uses the interim estimates presented in the Technical Support
Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates Under Executive Order 13990 published in February 2021 by
the Interagency Working Group on the Social Cost of Greenhouse Gases
(IWG).
[Dagger] Costs include incremental equipment costs as well as
installation costs.
The benefits and costs of the standards can also be expressed in
terms of annualized values. The monetary values for the total
annualized net benefits are (1) the reduced consumer operating costs,
minus (2) the increase in product purchase prices and installation
costs, plus (3) the value of the benefits of GHG and NOX and
SO2 emission reductions, all annualized.\12\ The national
operating savings are domestic private U.S. consumer monetary savings
that occur as a result of purchasing the covered products and are
measured for the lifetime of electric motors shipped in 2027-2056. The
benefits associated with reduced emissions achieved as a result of the
standards are also calculated based on the lifetime of electric motors
shipped in 2027-2056.
---------------------------------------------------------------------------
\12\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2023, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2030), and then discounted the present value from each year
to 2023. Using the present value, DOE then calculated the fixed
annual payment over a 30-year period, starting in the compliance
year, that yields the same present value.
---------------------------------------------------------------------------
Estimates of annualized benefits and costs of the adopted standards
are shown in Table I-6. The results under the primary estimate are as
follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced NOX and SO2
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated cost of the standards adopted
in this rule is $62.1 million per year in increased equipment costs,
while the estimated annual benefits are $254.8 million in reduced
equipment operating costs, $164.8 million in climate benefits, and
$151.4 million in health benefits. In this case, the net benefit would
amount to $508.9 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the standards is $71.0 million per year in increased
equipment costs, while the estimated annual benefits are $463.6 million
in reduced operating costs, $164.8 million in climate benefits, and
$300.7 million in health benefits. In this case, the net benefit would
amount to $858.2 million per year.
Table I-6--Annualized Benefits and Costs of Adopted Standards for Electric Motors
[TSL 2]
----------------------------------------------------------------------------------------------------------------
Million 2021$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 463.6 405.1 542.9
Climate Benefits *.............................................. 164.8 148.0 186.5
Health Benefits **.............................................. 300.7 269.5 341.0
-----------------------------------------------
Total Benefits [dagger]..................................... 929.1 822.5 1070.4
Consumer Incremental Equipment Costs [Dagger]................... 71.0 73.7 73.0
-----------------------------------------------
Net Benefits................................................ 858.2 748.8 997.4
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 254.8 225.3 293.6
Climate Benefits * (3% discount rate)........................... 164.8 148.0 186.5
Health Benefits **.......................................... 151.4 137.1 169.5
-----------------------------------------------
Total Benefits [dagger]..................................... 571.0 510.4 649.6
Consumer Incremental Equipment Costs [Dagger]................... 62.1 63.8 63.9
-----------------------------------------------
Net Benefits................................................ 508.9 446.6 585.6
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with electric motors shipped in 2027-2056. These
results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
at a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point
estimate, and it emphasizes the importance and value of considering the benefits calculated using all four SC-
GHG estimates.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[[Page 36072]]
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Table V-
41 for net benefits using all four SC-GHG estimates. To monetize the benefits of reducing GHG emissions this
analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon,
Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the
Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
[Dagger] Costs include incremental equipment costs as well as installation costs.
DOE's analysis of the national impacts of the adopted standards is
described in sections IV.H, V.B.3 and V.C of this document.
D. Conclusion
DOE has determined that the November 2022 Joint Recommendation
containing recommendations with respect to energy conservation
standards for electric motors was submitted jointly by interested
persons that are fairly representative of relevant points of view, in
accordance with 42 U.S.C. 6295(p)(4)(A). After considering the analysis
and weighing the benefits and burdens, DOE has determined that the
recommended standards are in accordance with 42 U.S.C. 6295(o), which
contains the criteria for prescribing new or amended standards.
Specifically, the Secretary has determined that the adoption of the
recommended standards would result in the significant conservation of
energy and is technologically feasible and economically justified. In
determining whether the recommended standards are economically
justified, the Secretary has determined that the benefits of the
recommended standards exceed the burdens. Namely, the Secretary has
concluded that the recommended standards, when considering the benefits
of energy savings, positive NPV of consumer benefits, emission
reductions, the estimated monetary value of the emissions reductions,
and positive average LCC savings, would yield benefits outweighing the
negative impacts on some consumers and on manufacturers, including the
conversion costs that could result in a reduction in INPV for
manufacturers.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
standards for electric motors is $62.1 million per year in increased
equipment and installation costs, while the estimated annual benefits
are $254.8 million in reduced equipment operating costs, $164.8 million
in climate benefits and $151.4 million in health benefits. The net
benefit amounts to $508.9 million per year.
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\13\ For
example, some covered products and equipment have most of their energy
consumption occur during periods of peak energy demand. The impacts of
these products on the energy infrastructure can be more pronounced than
products with relatively constant demand. Accordingly, DOE evaluates
the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------
\13\ Procedures, Interpretations, and Policies for Consideration
in New or Revised Energy Conservation Standards and Test Procedures
for Consumer Products and Commercial/Industrial Equipment, 86 FR
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------
As previously mentioned, the standards are projected to result in
estimated national energy savings of 3.0 quads (FFC), the equivalent of
the primary annual energy use of 31 million homes. The NPV of consumer
benefit for these projected energy savings is $2.2 billion using a
discount rate of 7 percent, and $7.5 billion using a discount rate of 3
percent. The cumulative emission reductions associated with these
energy savings are 91.69 Mt of CO2, 35.12 thousand tons of
SO2, 148.74 thousand tons of NOX, 690.10 thousand
tons of CH4, 0.82 thousand tons of N2O, and 0.23
tons of Hg. The estimated monetary value of the climate benefits from
reduced GHG emissions (associated with the average SC-GHG at a 3-
percent discount rate) is $3.14 billion. The estimated monetary value
of the health benefits from reduced SO2 and NOX
emissions is $1.76 billion using a 7-percent discount rate, and $5.72
billion using a 3-percent discount rate. Based on these findings, DOE
has determined the energy savings from the standard levels adopted in
this DFR are ``significant'' within the meaning of 42 U.S.C.
6295(o)(3)(B). A more detailed discussion of the basis for these
tentative conclusions is contained in the remainder of this document
and the accompanying TSD.
Under the authority provided by 42 U.S.C. 6295(p)(4), DOE is
issuing this direct final rule (``DFR'') amending the energy
conservation standards for electric motors. Consistent with this
authority, DOE is also publishing elsewhere in this Federal Register a
notice of proposed rulemaking proposing standards that are identical to
those contained in this direct final rule. See 42 U.S.C.
6295(p)(4)(A)(i).
II. Introduction
The following section briefly discusses the statutory authority
underlying this direct final rule, as well as some of the relevant
historical background related to the establishment of standards for
electric motors.
A. Authority
EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, Part
C \14\ of EPCA added by Public Law 95-619, Title IV, section 441(a) (42
U.S.C. 6311-6317, as codified), established the Energy Conservation
Program for Certain Industrial Equipment, which sets forth a variety of
provisions designed to improve the energy efficiency of certain types
of industrial equipment, including electric motors, the subject of this
direct final rule. (42 U.S.C. 6311(1)(A)). The Energy Policy Act of
1992 (``EPACT 1992'') (Pub. L. 102-486 (Oct. 24, 1992)) further amended
EPCA by establishing energy conservation standards and test procedures
for certain commercial and industrial electric motors that are
manufactured alone or as a component of another piece of equipment. In
December 2007, Congress enacted the Energy Independence and Security
Act of 2007 (``EISA 2007'') (Pub. L. 110-140 (Dec. 19, 2007). Section
313(b)(1) of EISA 2007 updated the energy conservation standards for
those electric motors already covered by EPCA and established energy
conservation standards for a larger scope of motors not previously
covered by standards. (42 U.S.C. 6313(b)(2)) EISA 2007 also revised
certain statutory definitions related to electric motors. See EISA
2007, sec. 313 (amending statutory definitions related to electric
motors at 42 U.S.C. 6311(13)).
---------------------------------------------------------------------------
\14\ For editorial reasons, upon codification in the U.S. Code,
Part C was redesignated Part A-1.
---------------------------------------------------------------------------
The energy conservation program under EPCA consists essentially of
four parts: (1) testing, (2) labeling, (3) the establishment of Federal
energy conservation standards, and (4) certification and enforcement
procedures. Relevant provisions of EPCA include definitions (42 U.S.C.
[[Page 36073]]
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C.
6315), energy conservation standards (42 U.S.C. 6313), and the
authority to require information and reports from manufacturers (42
U.S.C. 6316; 42 U.S.C. 6296).
Federal energy efficiency requirements for covered equipment
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6316(a) and (b); 42 U.S.C. 6297) DOE may, however, grant waivers
of Federal preemption in limited instances for particular State laws or
regulations, in accordance with the procedures and other provisions set
forth under EPCA. (See 42 U.S.C. 6316(a) (applying the preemption
waiver provisions of 42 U.S.C. 6297))
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered product. (42 U.S.C.
6314(a), 42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers
of covered equipment must use the Federal test procedures as the basis
for: (1) certifying to DOE that their equipment complies with the
applicable energy conservation standards adopted pursuant to EPCA (42
U.S.C. 6316(a); 42 U.S.C. 6295(s)), and (2) making representations
about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly,
DOE must use these test procedures to determine whether the equipment
complies with relevant standards promulgated under EPCA. (42 U.S.C.
6316(a); 42 U.S.C. 6295(s)) The DOE test procedures for electric motors
appear at title 10 of the Code of Federal Regulations (``CFR'') part
431, subpart B, appendix B.
EPCA further provides that, not later than 6 years after the
issuance of any final rule establishing or amending a standard, DOE
must publish either a notice of determination that standards for the
product do not need to be amended, or a notice of proposed rulemaking
including new proposed energy conservation standards (proceeding to a
final rule, as appropriate). (42 U.S.C. 6316(a); 42 U.S.C. 6295(m)(1))
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered equipment, including electric motors. Any
new or amended standard for a covered product must be designed to
achieve the maximum improvement in energy efficiency that the Secretary
of Energy determines is technologically feasible and economically
justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C.
6295(o)(3)(B)) Furthermore, DOE may not adopt any standard that would
not result in the significant conservation of energy. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(3))
Moreover, DOE may not prescribe a standard: (1) for certain
products, including electric motors, if no test procedure has been
established for the product, or (2) if DOE determines by rule that the
standard is not technologically feasible or economically justified. (42
U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a
proposed standard is economically justified, DOE must determine whether
the benefits of the standard exceed its burdens. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after
receiving comments on the proposed standard, and by considering, to the
greatest extent practicable, the following seven statutory factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered products that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water)
savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (``Secretary'') considers
relevant. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA, as codified, establishes a rebuttable presumption
that a standard is economically justified if the Secretary finds that
the additional cost to the consumer of purchasing a product complying
with an energy conservation standard level will be less than three
times the value of the energy savings during the first year that the
consumer will receive as a result of the standard, as calculated under
the applicable test procedure. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(iii))
EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing
any 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. 6316(a); 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 in any
covered product type (or class) of performance characteristics
(including reliability), features, sizes, capacities, and volumes that
are substantially the same as those generally available in the United
States. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an
energy conservation standard for a covered product that has two or more
subcategories. DOE must specify a different standard level for a type
or class of products that has the same function or intended use, if DOE
determines that products within such group: (A) consume a different
kind of energy from that consumed by other covered products within such
type (or class); or (B) have a capacity or other performance-related
feature which other products within such type (or class) do not have
and such feature justifies a higher or lower standard. (42 U.S.C.
6316(a); 42 U.S.C. 6295(q)(1)) In determining whether a performance-
related feature justifies a different standard for a group of products,
DOE must consider such factors as the utility to the consumer of such a
feature and other factors DOE deems appropriate. Id. Any rule
prescribing such a standard must include an explanation of the basis on
which such higher or lower level was established. (42 U.S.C. 6316(a);
42 U.S.C. 6295(q)(2))
Finally, EISA 2007 amended EPCA, in relevant part, to grant DOE
authority to issue a final rule (i.e., a ``direct final rule'' or
``DFR'') establishing an energy conservation standard on receipt of a
statement submitted jointly by interested persons that are fairly
representative of relevant points of view (including representatives of
manufacturers of covered products, States, and efficiency advocates),
as determined by the Secretary, that contains recommendations with
respect to an energy or water conservation standard that are in
accordance with the provisions of 42 U.S.C. 6295(o). (42 U.S.C.
6295(p)(4)) Pursuant to 42 U.S.C. 6295(p)(4), the Secretary must also
determine whether a jointly-submitted recommendation for an energy or
water conservation standard satisfies 42 U.S.C. 6295(o) or 42 U.S.C.
6313(a)(6)(B), as applicable.
[[Page 36074]]
The direct final rule must be published simultaneously with a NOPR
that proposes an energy or water conservation standard that is
identical to the standard established in the direct final rule, and DOE
must provide a public comment period of at least 110 days on this
proposal. (42 U.S.C. 6295(p)(4)(A)-(B)) Based on the comments received
during this period, the direct final rule will either become effective,
or DOE will withdraw it not later than 120 days after its issuance if
(1) one or more adverse comments is received, and (2) DOE determines
that those comments, when viewed in light of the rulemaking record
related to the direct final rule, provide a reasonable basis for
withdrawal of the direct final rule under 42 U.S.C. 6295(o), 42 U.S.C.
6313(a)(6)(B), or any other applicable law. (42 U.S.C. 6295(p)(4)(C))
Receipt of an alternative joint recommendation may also trigger a DOE
withdrawal of the direct final rule in the same manner. Id. After
withdrawing a direct final rule, DOE must proceed with the notice of
proposed rulemaking published simultaneously with the direct final rule
and publish in the Federal Register the reasons why the direct final
rule was withdrawn. Id.
Typical of other rulemakings, it is the substance, rather than the
quantity, of comments that will ultimately determine whether a direct
final rule will be withdrawn. To this end, the substance of any adverse
comment(s) received will be weighed against the anticipated benefits of
the jointly-submitted recommendations and the likelihood that further
consideration of the comment(s) would change the results of the
rulemaking. DOE notes that, to the extent an adverse comment had been
previously raised and addressed in the rulemaking proceeding, such a
submission will not typically provide a basis for withdrawal of a
direct final rule.
B. Background
1. Current Standards
In a final rule published on May 29, 2014, DOE prescribed the
current energy conservation standards for electric motors manufactured
on and after June 1, 2016. 79 FR 30934 (``May 2014 Final Rule''). These
standards are set forth in DOE's regulations at 10 CFR 431.25 and are
repeated in Table II-1, Table II-2, and Table II-3.
Table II-1--Energy Conservation Standards for NEMA Design A, NEMA Design B and IEC Design N Motors (Excluding
Fire Pump Electric Motors) at 60 Hz
----------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
-----------------------------------------------------------------------------------
Motor horsepower/standard 2 Pole 4 Pole 6 Pole 8 Pole
kilowatt equivalent -----------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
----------------------------------------------------------------------------------------------------------------
1/.75....................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1..................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5....................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2....................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7....................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5..................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5...................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11....................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15....................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5..................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22....................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30....................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37....................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45....................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55....................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75...................... 94.1 93.6 95.4 95.4 95.0 95.0 93.6 94.1
125/90...................... 95.0 94.1 95.4 95.4 95.0 95.0 94.1 94.1
150/110..................... 95.0 94.1 95.8 95.8 95.8 95.4 94.1 94.1
200/150..................... 95.4 95.0 96.2 95.8 95.8 95.4 94.5 94.1
250/186..................... 95.8 95.0 96.2 95.8 95.8 95.8 95.0 95.0
300/224..................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... ........
350/261..................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... ........
400/298..................... 95.8 95.8 96.2 95.8 ......... ........ ......... ........
450/336..................... 95.8 96.2 96.2 96.2 ......... ........ ......... ........
500/373..................... 95.8 96.2 96.2 96.2 ......... ........ ......... ........
----------------------------------------------------------------------------------------------------------------
Table II-2--Energy Conservation Standards for NEMA Design C and IEC Design H Motors at 60 Hz
----------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
-----------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 4 Pole 6 Pole 8 Pole
-----------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open
----------------------------------------------------------------------------------------------------------------
1/.75......................................... 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1....................................... 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5......................................... 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2......................................... 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7......................................... 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5....................................... 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5........................................ 91.7 91.7 91.0 91.7 89.5 90.2
15/11......................................... 92.4 93.0 91.7 91.7 89.5 90.2
20/15......................................... 93.0 93.0 91.7 92.4 90.2 91.0
[[Page 36075]]
25/18.5....................................... 93.6 93.6 93.0 93.0 90.2 91.0
30/22......................................... 93.6 94.1 93.0 93.6 91.7 91.7
40/30......................................... 94.1 94.1 94.1 94.1 91.7 91.7
50/37......................................... 94.5 94.5 94.1 94.1 92.4 92.4
60/45......................................... 95.0 95.0 94.5 94.5 92.4 93.0
75/55......................................... 95.4 95.0 94.5 94.5 93.6 94.1
100/75........................................ 95.4 95.4 95.0 95.0 93.6 94.1
125/90........................................ 95.4 95.4 95.0 95.0 94.1 94.1
150/110....................................... 95.8 95.8 95.8 95.4 94.1 94.1
200/150....................................... 96.2 95.8 95.8 95.4 94.5 94.1
----------------------------------------------------------------------------------------------------------------
Table II-3--Energy Conservation Standards for Fire Pump Electric Motors At 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 75.5 ......... 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1......................................................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5........................................................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2........................................................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7........................................................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5......................................................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5.......................................................... 89.5 88.5 89.5 89.5 89.5 90.2 88.5 89.5
15/11........................................................... 90.2 89.5 91.0 91.0 90.2 90.2 88.5 89.5
20/15........................................................... 90.2 90.2 91.0 91.0 90.2 91.0 89.5 90.2
25/18.5......................................................... 91.0 91.0 92.4 91.7 91.7 91.7 89.5 90.2
30/22........................................................... 91.0 91.0 92.4 92.4 91.7 92.4 91.0 91.0
40/30........................................................... 91.7 91.7 93.0 93.0 93.0 93.0 91.0 91.0
50/37........................................................... 92.4 92.4 93.0 93.0 93.0 93.0 91.7 91.7
60/45........................................................... 93.0 93.0 93.6 93.6 93.6 93.6 91.7 92.4
75/55........................................................... 93.0 93.0 94.1 94.1 93.6 93.6 93.0 93.6
100/75.......................................................... 93.6 93.0 94.5 94.1 94.1 94.1 93.0 93.6
125/90.......................................................... 94.5 93.6 94.5 94.5 94.1 94.1 93.6 93.6
150/110......................................................... 94.5 93.6 95.0 95.0 95.0 94.5 93.6 93.6
200/150......................................................... 95.0 94.5 95.0 95.0 95.0 94.5 94.1 93.6
250/186......................................................... 95.4 94.5 95.0 95.4 95.0 95.4 94.5 94.5
300/224......................................................... 95.4 95.0 95.4 95.4 95.0 95.4 ......... .........
350/261......................................................... 95.4 95.0 95.4 95.4 95.0 95.4 ......... .........
400/298......................................................... 95.4 95.4 95.4 95.4 ......... ......... ......... .........
450/336......................................................... 95.4 95.8 95.4 95.8 ......... ......... ......... .........
500/373......................................................... 95.4 95.8 95.8 95.8 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. History of Standards Rulemaking for Electric Motors
In the May 2020 Early Assessment Review RFI, DOE stated that it was
initiating an early assessment review to determine whether any new or
amended standards would satisfy the relevant requirements of EPCA for a
new or amended energy conservation standard for electric motors and
sought information related to that effort. Specifically, DOE sought
data and information that could enable the agency to determine whether
DOE should propose a ``no new standard'' determination because a more
stringent standard: (1) would not result in a significant savings of
energy; (2) is not technologically feasible; (3) is not economically
justified; or (4) any combination of the foregoing. 85 FR 30878, 30879.
On March 2, 2022, DOE published the preliminary analysis for
electric motors. 87 FR 11650 (``March 2022 Preliminary Analysis''). In
conjunction with the March 2022 Preliminary Analysis, DOE published a
technical support document (``March 2022 Prelim TSD'') which presented
the results of the in-depth technical analyses in the following areas:
(1) Engineering; (2) markups to determine equipment price; (3) energy
use; (4) life cycle cost (``LCC'') and payback period (``PBP''); and
(5) national impacts. The results presented included the current scope
of electric motors regulated at 10 CFR 431.25, in addition to an
expanded scope of motors, including electric motors above 500
horsepower, air-over electric motors, and small, non-small-electric-
motor, electric motors (``SNEM''). See Chapter 2 of the March 2022
Prelim TSD. DOE requested comment on a number of topics regarding the
analysis presented.
DOE received comments in response to the March 2022 Preliminary
Analysis from the interested parties listed in Table II-4.
[[Page 36076]]
Table II-4--March 2022 Preliminary Analysis Written Comments
----------------------------------------------------------------------------------------------------------------
Reference in this final
Commenter(s) rule Docket No. Commenter type
----------------------------------------------------------------------------------------------------------------
ABB Motors and Mechanical Inc............ ABB........................ 28 Manufacturer.
American Council for an Energy-Efficient Electric Motors Working 35, 36 Working Group.
Economy, Appliance Standards Awareness Group.
Project, National Electrical
Manufacturers Association, Natural
Resources Defense Council, Northwest
Energy Efficiency Alliance, Pacific Gas
& Electric Company, San Diego Gas &
Electric, Southern California Edison.
Appliance Standards Awareness Project, Joint Advocates............ 27 Efficiency Organizations.
American Council for an Energy-Efficient
Economy, Natural Resources Defense
Council, New York State Energy Research
and Development Authority.
Association of Home Appliance AHAM and AHRI.............. 25 Industry OEM Trade
Manufacturers; Air-Conditioning, Association.
Heating, and Refrigeration Institute.
Air-Conditioning, Heating, and AHRI....................... 26 Industry OEM Trade
Refrigeration Institute. Association.
Pacific Gas and Electric Company (PG&E), CA IOUs.................... 30 Utilities.
San Diego Gas and Electric (SDG&E), and
Southern California Edison (SCE).
Daikin Comfort Technologies Manufacturing Daikin..................... 32 Manufacturer.
Company, L.P.
Electrical Apparatus Service Association, EASA....................... 21 International Trade
Inc. Association.
Hydraulics Institute..................... HI......................... 31 Industry Pump Trade
Association.
Lennox International..................... Lennox..................... 29 Manufacturer.
Metglas, Inc............................. Metglas.................... 24 Materials supplier.
Northwest Energy Efficiency Alliance..... NEEA....................... 33 Non-profit organization.
National Electrical Manufacturers Joint Industry Stakeholders 23 Industry Trade
Association (NEMA), Association of Home Associations.
Appliance Manufacturers (AHAM), the Air-
Conditioning, Heating, and Refrigeration
Institute (AHRI), the Medical Imaging
Technology Alliance (MITA), the Outdoor
Power Equipment Institute (OPEI), Home
Ventilating Institute (HVI) and the
Power Tool Institute (PTI).
National Electrical Manufacturers NEMA....................... 22 Industry Trade Association.
Association.
----------------------------------------------------------------------------------------------------------------
By letter dated on November 15, 2022, DOE received a joint
recommendation for energy conservation standards for electric motors
(``November 2022 Joint Recommendation''). The November 2022 Joint
Recommendation represented the motors industry, energy efficiency
organizations and utilities (collectively, ``the Electric Motors
Working Group'').\15\ The November 2022 Joint Recommendation addressed
energy conservation standards for medium electric motors that are 1-750
hp and polyphase, and air-over medium electric motors. On December 9,
2022, DOE received a supplemental letter to the November 2022 Joint
Recommendation from the Electric Motors Working Group. The supplemental
letter provided additional guidance on the recommended levels for open
medium electric motors rated 100 hp to 250 hp, and a recommended
compliance date for standards presented in the November 2022 Joint
Recommendation.
---------------------------------------------------------------------------
\15\ The members of the Electric Motors Working Group included
ACEEE, ASAP, NEMA, NRDC, NEEA, PG&E, SDG&E, and SCE.
---------------------------------------------------------------------------
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\16\
---------------------------------------------------------------------------
\16\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for electric motors. (Docket NO EERE-
2020-BT-STD-0007, which is maintained at www.regulations.gov). The
references are arranged as follows: (commenter name, comment docket
ID number, page of that document).
---------------------------------------------------------------------------
3. Electric Motors Working Group Recommended Standard Levels
This section summarizes the standard levels recommended in the
November 2022 Joint Recommendation and supplement by the Electric
Motors Working Group and the subsequent procedural steps taken by DOE.
Further discussion on scope is provided in section III.B of this
document.
Recommendation #1: For NEMA Design A/B medium electric motors
(``MEM'') rated up to 500 hp at 60Hz, standard levels as follows:
a. Less than 100 hp--remain at Premium LevelIE3 level \17\
---------------------------------------------------------------------------
\17\ IE3 efficiency level refers to the 60 Hz efficiency values
in Table 8 of IEC 60034-30-1:2014.
---------------------------------------------------------------------------
b. 100-250 hp--increase to Super Premium/IE4 level,\18\ aligning
with European Union (``EU'') Ecodesign Directive 2019/1781 which
requires IE4 levels for 75-200 kW motors.
---------------------------------------------------------------------------
\18\ IE4 efficiency level refers to the 60 Hz efficiency values
in Table 10 of IEC 60034-30-1:2014.
---------------------------------------------------------------------------
c. Over 250 and up to 500 hp--remain at Premium Level/IE3 level
Separately, because the efficiencies for the IE4 level in IEC
60034-30-1:2014 do not distinguish between enclosed and open motors,
the supplemental letter to the November 2022 Joint Recommendation
recommended efficiencies for open motors based on the efficiencies for
enclosed motors in the IEC standard. The supplemental letter stated
that for some horsepower ratings, open motors have different minimum
efficiencies which account for the different frame size at a given
horsepower rating.
[[Page 36077]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Premium efficiency level refers to the efficiency values in NEMA MG
1-2016 Tables 12-12. The current standards for NEMA Design A/B in Table
5 of 10 CFR 431.25 are at Premium efficiency. Accordingly, in this
direct final rule, pursuant to the November 22 Joint Recommendation,
the energy conservation standards for NEMA Design A/B medium electric
motors (``MEM'') less than 100 hp and between 250 to 500 hp, remain at
the current levels in 10 CFR 430.25. However, the energy conservation
standards for such MEMs between 100 and 250 hp increase to the Super
Premium/IE4 Level, which approximately represents a 20 percent
reduction of losses over Premium/IE3. Table II-4 presents a comparison
of the current and updated standards for MEMs between 100 and 250 hp.
Table II-4--Crosswalk of Current and New Efficiency Standards for MEMs 100-250 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current Standards in Table 5 of 10 CFR 431.25
--------------------------------------------------------------------------------------------------------------------------------------------------------
100/75.......................................................... 94.1 93.6 95.4 95.4 95.0 95.0 93.6 94.1
125/90.......................................................... 95.0 94.1 95.4 95.4 95.0 95.0 94.1 94.1
150/110......................................................... 95.0 94.1 95.8 95.8 95.8 95.4 94.1 94.1
200/150......................................................... 95.4 95.0 96.2 95.8 95.8 95.4 94.5 94.1
250/186......................................................... 95.8 95.0 96.2 95.8 95.8 95.8 95.0 95.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Updated Standards in this DFR, pursuant to the November 2022 Joint Recommendation
--------------------------------------------------------------------------------------------------------------------------------------------------------
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recommendation #2: For medium electric motors rated over 500 hp and
up to 750 hp at 60 Hz, standard levels that correspond to IE3 levels
for open and enclosed electric motors.
The current energy conservation standards for MEMs do not contain
standards for MEMs with greater than 500 hp. However, in the May 2014
Final Rule, DOE noted that it may consider future regulation of motor
types not regulated in the May 2014 Final Rule, including motors
greater than 500 hp. See 79 FR 30946. As discussed more in section
III.B of this document, DOE recently expanded the electric motor test
procedure to include motors between 500 hp and 750 hp. Pursuant to the
November 2022 Joint Recommendation, this direct final rule establishes
standards for motors between 500 and 750 hp at levels consistent with
IE3 levels for open and enclosed electric motors.
Recommendation #3: For air-over \19\ medium electric motors (``AO-
MEMs''), establish two equipment classes and corresponding energy
conservation standards for AO MEMs: AO-MEMs in standard NEMA frame
sizes and air-over motors in specialized NEMA frame sizes, with
standard levels as follows:
---------------------------------------------------------------------------
\19\ Air-over electric motor means an electric motor that does
not reach thermal equilibrium (i.e., thermal stability), during a
rated load temperature test according to section 2 of appendix B,
without the application of forced cooling by a free flow of air from
an external device not mechanically connected to the motor within
the motor enclosure. 10 CFR 430.12.
---------------------------------------------------------------------------
a. Standard Frame Size AO-MEMs: For AO MEMs sold in standard NEMA
frame sizes aligned with NEMA MG 1-2016, Table 13.2 (open motors) and
Table 13.3 (enclosed motors), standard levels consistent with
Recommendation #1 (i.e., standard levels for NEMA MG 1 12-12 levels for
motors rated less than 100 hp, IE4 levels for motors rated 100 to 250
hp, and MG 1 12-12 levels for motors rated over 250 hp).
b. Specialized Frame Size air-over electric motors: For air-over
electric motors sold in smaller, specialized NEMA frame sizes, standard
levels consistent with current fire pump efficiency levels (in Table 7
of 10 CFR 431.25), but with constraint on frame size as follows:
[[Page 36078]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2 Pole (maximum NEMA 4 Pole (maximum NEMA 6 Pole (maximum NEMA 8 Pole (maximum NEMA
frame diameter) frame diameter) frame diameter) frame diameter)
HP/kW -----------------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75................................................... 74 (48) .......... 82.5 (48) 82.5 (48) 80 (48) 80 (48) 74 (140) 74 (140)
1.5/1.1................................................. 82.5 (48) 82.5 (48) 84 (48) 84 (48) 85.5 (140) 84 (140) 77 (140) 75.5 (140)
2/1.5................................................... 84 (48) 84 (48) 84 (48) 84 (48) 86.5 (140) 85.5 (140) 82.5 (180) 85.5 (180)
3/2.2................................................... 85.5 (140) 84 (48) 87.5 (140) 86.5 (140) 87.5 (180) 86.5 (180) 84 (180) 86.5 (180)
5/3.7................................................... 87.5 (140) 85.5 (140) 87.5 (140) 87.5 (140) 87.5 (180) 87.5 (180) 85.5 (210) 87.5 (210)
7.5/5.5................................................. 88.5 (180) 87.5 (140) 89.5 (180) 88.5 (180) 89.5 (210) 88.5 (210) 85.5 (210) 88.5 (210)
10/7.5.................................................. 89.5 (180) 88.5 (180) 89.5 (180) 89.5 (180) 89.5 (210) 90.2 (210) .......... ..........
15/11................................................... 90.2 (210) 89.5 (180) 91 (210) 91 (210) .......... .......... .......... ..........
20/15................................................... 90.2 (210) 90.2 (210) 91 (210) 91 (210) .......... .......... .......... ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
The current energy conservation standard for electric motors in 10
CFR 430.25 exempt air-over electric motors from the standards. 10 CFR
430.25(l). In the May 2014 Final Rule, DOE explained that this
exemption was due to a lack of information at that time to support the
establishment of a test method for air-over electric motors. See 79 FR
30946; 78 FR 38474. However, as discussed more in section III.B, DOE
recently expanded the electric motor test procedure to include AO-MEMs.
Accordingly, pursuant to the November 2022 Joint Recommendation, this
direct final rule establishes 2 equipment classes for AO-MEMs (AO-MEMs
in standard NEMA frame sizes, and those in specialized NEMA frame
sizes) and corresponding standards based on the November 2022 Joint
Recommendation. However, based on DOE's review of the market, DOE only
observed AO-MEMs up to 250 hp. As such, in this direct final rule, DOE
is only establishing standards for AO-MEMs up to 250 hp.
Recommendation #4: For synchronous and inverter-only electric
motors, a recommendation to forego establishing standards until an
updated test procedure is adopted that better captures the energy-
saving benefits of these motors.
The current energy conservation standard for electric motors in 10
CFR 430.25 exempts inverter-only electric motors from the standards. 10
CFR 431.25(l). Similarly, the current energy conservation standards
apply to AC induction motors, which do not include synchronous
motors.\20\ Accordingly, following this recommendation, this direct
final rule continues to exempt these types of motors from the energy
conservation standards.
---------------------------------------------------------------------------
\20\ In the May 2014 Final Rule, DOE chose not to establish
standards for inverter-only electric motors because of the then
absence of a reliable and repeatable method to test them for
efficiency, but DOE noted that if a test procedure became available,
DOE may consider setting standards for inverter-only electric motors
at that time. 79 FR 30945. DOE recently expanded the electric motor
test procedure to include inverter-only and synchronous electric
motors. See 87 FR 63600-63605. Similarly, DOE expanded the scope of
the test procedure to include synchronous electric motors. 87 FR
63601-63605. However, pursuant to the November 2022 Joint
Recommendation, DOE is not separately regulating inverter-only and
synchronous electric motors in this direct final rule. Rather, DOE
is only considering the substitution effects of switching to these
electric motors if higher standards for MEMs are established. More
discussion on inverter-only and synchronous electric motors may be
found in sections IV.A and F of this document.
---------------------------------------------------------------------------
Recommendation #5: For the recommended energy conservation standard
levels, a compliance date of four (4) years from the date of
publication of the final rule.
In the May 2014 Final Rule, DOE provided a 2-year compliance lead
time based on the requirements of 42 U.S.C. 6313(b)(4)(B). See 79 FR
30944. DOE notes that EPCA generally requires a 3-year compliance lead
time from the effective date of an amended standard under EPCA's 6-year
lookback provisions. (42 U.S.C. 6316(a); 42 U.S.C. 6295(m)) However,
EPCA's direct final rule provision (42 U.S.C. 6295(p)(4)) conveys upon
DOE a substantive grant of rulemaking authority, thereby allowing
stakeholders to negotiate over more aspects of the energy or water
conservation standard, so long as the requirements of 42 U.S.C. 6295(o)
are met. See 86 FR 70892, 70915. In the past, DOE has looked to joint
recommendations to fill in necessary details that EPCA does not place
upon the direct final rule process, including compliance periods. DOE's
direct final rules have frequently utilized alternative compliance
dates, while continuing to ensure that the standards in these rules
represent the maximum improvement in energy efficiency that is
technologically feasible and economically justified.
After carefully considering the November 2022 Joint Recommendation
and supplement for amending the energy conservation standards for
electric motors submitted by the Electric Motors Working Group, DOE has
determined that these recommendations are in accordance with the
statutory requirements of 42 U.S.C. 6295(p)(4) for the issuance of a
direct final rule.
More specifically, these recommendations comprise a statement
submitted by interested persons who are fairly representative of
relevant points of view on this matter. In appendix A to subpart C of
10 CFR part 430 (``Appendix A''), DOE explained that to be ``fairly
representative of relevant points of view,'' the group submitting a
joint statement must, where appropriate, include larger concerns and
small business in the regulated industry/manufacturer community, energy
advocates, energy utilities, consumers, and States. However, it will be
necessary to evaluate the meaning of ``fairly representative'' on a
case-by-case basis, subject to the circumstances of a particular
rulemaking, to determine whether fewer or additional parties must be
part of a joint statement in order to be ``fairly representative of
relevant points of view.'' Section 10 of appendix A. In reaching this
determination, DOE took into consideration the fact that the Joint
Recommendation was signed and submitted by a broad cross-section of
interests, including a manufacturers' trade association, environmental
and energy-efficiency advocacy organizations, and electric utility
companies. NYSERDA, a state organization, also submitted a letter
supporting the Joint Recommendation. DOE notes that these organizations
include the relevant points of view specifically identified by
Congress: manufacturers of covered products, States, and efficiency
advocates. (42 U.S.C. 6295(p)(4)(A))
DOE also evaluated whether the recommendation satisfies 42 U.S.C.
6295(o), as applicable. In making this determination, DOE conducted an
analysis to evaluate whether the potential energy conservation
standards under consideration achieve the maximum improvement in energy
efficiency that is technologically
[[Page 36079]]
feasible and economically justified and result in significant energy
conservation. The evaluation is the same comprehensive approach that
DOE typically conducts whenever it considers potential energy
conservation standards for a given type of product or equipment.
Upon review, the Secretary determined that the November 2022 Joint
Recommendation comports with the standard-setting criteria set forth
under 42 U.S.C. 6295(p)(4)(A). Accordingly, the Electric Motors Working
Group recommended efficiency levels were included as the ``recommended
TSL'' for electric motors (see section V.A for description of all of
the considered TSLs). The details regarding how the Electric Motors
Working Group-recommended TSLs comply with the standard-setting
criteria are discussed and demonstrated in the relevant sections
throughout this document.
In sum, as the relevant criteria under 42 U.S.C. 6295(p)(4) have
been satisfied, the Secretary has determined that it is appropriate to
adopt the Electric Motors Working Group-recommended amended energy
conservation standards for Electric Motors through this direct final
rule. Also, in accordance with the provisions described in section II.A
of this document, DOE is simultaneously publishing a NOPR proposing
that the identical standard levels contained in this direct final rule
be adopted.
III. General Discussion
A. General Comments
This section summarizes general comments received from interested
parties regarding rulemaking timing and process for the March 2022
Preliminary Analysis.
Lennox commented that long-standing DOE practice recognizes the
benefit of establishing an appropriate test procedure before
undertaking an energy conservation standards rulemaking. Lennox
commented that the March 2022 Preliminary Analysis was issued in
February 2022 while comments on the test procedure NOPR were due. As
such, Lennox suggested that DOE cutting corners on the regulatory
process undermines the accuracy and reliability of data contained in
the March 2022 Preliminary Analysis TSD. (Lennox, No. 29 at p. 4-5) The
Joint Industry Stakeholders commented that the process DOE is using for
the electric motor test procedure and standards undermines the value of
early stakeholder engagement. Specifically, they claimed that DOE is:
(1) shortening comment periods; (2) overlapping comment periods; and
(3) condensing the rulemaking process. The Joint Industry Stakeholders
noted that DOE published the March 2022 Preliminary Analysis two months
after issuing a proposed test procedure. Furthermore, the Joint
Industry Stakeholders commented that there were numerous comments
challenging DOE's proposed test procedure, which resulted in
significant changes. They commented that manufacturers and others lack
enough time with the proposed test procedure to fully understand or
comment upon its impact on potential energy conservation standards,
especially for SNEMs where they stated that DOE has done no testing.
The Joint Industry Stakeholders commented that they recognize and
support DOE's interest in moving rulemakings forward, especially rules
such as the electric motor standards and test procedures, which have
missed statutory deadlines. However, they stated that DOE should have
released the proposed test procedure earlier so that DOE could receive
feedback on the test procedure before proceeding with its resource-
intensive preliminary analysis. (Joint Industry Stakeholders, No. 23 at
p. 9-10)
Appendix A establishes procedures, interpretations, and policies to
guide DOE in the consideration and promulgation of new or revised
appliance energy conservation standards and test procedures under EPCA.
DOE has maintained the process and timeline for the electric motors
test procedure and energy conservation standards based on appendix A.
Appendix A requires that DOE provide for early input from
stakeholders so that the initiation and direction of rulemaking is
informed by comments from interested parties. Appendix A, section 1(a).
As discussed in section II.B.2 of this document, DOE provided
opportunity for comment for these energy conservation standards through
the May 2020 Early Assessment Review RFI, which had a 30-day comment
period, and the March 2022 Preliminary Analysis, which had a 60-day
comment period. Further, DOE provided multiple opportunities for
stakeholder comments and inputs through the test procedure rulemaking
process; DOE published a request for information (85 FR 34111; June 3,
2020 ``June 2020 RFI''), which had a 45-day comment period, and DOE
published a test procedure NOPR (86 FR 71710; December 17, 2021
``December 2021 NOPR''), which originally had a 60-day comment period,
which was extended to a 75-day comment period. 87 FR 6436. Even though
some of these comment periods overlapped to some extent, DOE has
nonetheless provided ample opportunity for stakeholder review and
comments and has considered such comments and recommendations in this
notice.
Appendix A also generally requires that test procedure rulemakings
establishing methodologies used to evaluate proposed energy
conservation standards will be finalized prior to publication of a NOPR
proposing new or amended energy conservation standards. Appendix A,
section 8(d)(1). Pursuant to 42 U.S.C. 6295(p)(4), published elsewhere
in the Federal Register is a NOPR accompanying this direct final rule,
which proposes standards identical to those in this direct final rule.
On October 19, 2022, DOE published the electric motor test procedure
final rule. (``October 2022 Final Rule''). Thus, in accordance with
appendix A section 8(d)(1), the October 2022 Final Rule prior was
published 180 days prior to publication of this energy conservations
standards direct final rule and the accompanying NOPR.
B. Scope of Coverage and Equipment Classes
When evaluating and establishing energy conservation standards, DOE
divides covered equipment into equipment classes by the type of energy
used or by capacity or other performance-related features that justify
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such
factors as the utility of the feature to the consumer and other factors
DOE determines are appropriate. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q))
This document covers certain equipment meeting the definition of
electric motors as defined in 10 CFR 431.12. Specifically, the
definition for ``electric motor'' is ``a machine that converts
electrical power into rotational mechanical power.'' Id. Electric
motors are used in a wide range of applications in commercial building
and in the industrial sector (e.g., chemicals, primary metals, food,
paper, plastic/rubber, petroleum refining, and wastewater), including:
fans, compressors, pumps, material handling equipment, and material
processing equipment.
Currently, DOE regulates medium electric motors (``MEMs'') falling
into the NEMA Design A, NEMA Design B, NEMA Design C, and fire pump
motor categories and those electric motors that meet the criteria
specified at 10 CFR 431.25(g). 10 CFR 431.25(h)-(j). Section
[[Page 36080]]
431.25(g) specifies that the relevant standards apply only to electric
motors, including partial electric motors, that satisfy the following
criteria:
(1) Are single-speed, induction motors;
(2) Are rated for continuous duty (MG 1) operation or for duty
type S1 (IEC)
(3) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
(4) Operate on polyphase alternating current 60-hertz sinusoidal
line power;
(5) Are rated 600 volts or less;
(6) Have a 2-, 4-, 6-, or 8-pole configuration;
(7) Are built in a three-digit or four-digit NEMA frame size (or
IEC metric equivalent), including those designs between two
consecutive NEMA frame sizes (or IEC metric equivalent), or an
enclosed 56 NEMA frame size (or IEC metric equivalent);
(8) Produce at least one horsepower (0.746 kW) but not greater
than 500 horsepower (373 kW), and
(9) Meet all of the performance requirements of one of the
following motor types: A NEMA Design A, B, or C motor or an IEC
Design N, NE, NEY, NY or H, HE, HEY, HYmotor.\21\
---------------------------------------------------------------------------
\21\ DOE added the ``E'' and ``Y'' designations for IEC Design
motors into Sec. 431.25(g) in the October 2022 Final Rule. 87 FR
63596, 636597, 6306.
10 CFR 431.25(g).
The definitions for NEMA Design A motors, NEMA Design B motors,
NEMA Design C motors, fire pump electric motors, IEC Design N motor and
IEC Design H motor, as well as ``E'' and ``Y'' designated IEC Design
motors, are codified in 10 CFR 431.12. DOE has also currently exempted
certain categories of motors from standards. The exemptions are as
follows:
(1) Air-over electric motors;
(2) Component sets of an electric motor;
(3) Liquid-cooled electric motors;
(4) Submersible electric motors; and
(5) Inverter-only electric motors.
10 CFR 431.25(l)
On October 19, 2022, DOE published the electric motors test
procedure final rule. 87 FR 63588 (``October 2022 Final Rule''). As
part of the October 2022 Final Rule, DOE expanded the test procedure
scope to additional categories of electric motors that currently do not
have energy conservation standards. 87 FR 63588, 63593-63606. The
expanded test procedure scope included the following:
Electric motors having a rated horsepower above 500 and up
to 750 hp that meets the criteria listed at Sec. 431.25(g), with the
exception of criteria Sec. 431.25(g)(8) to air-over electric motors
(``AO-MEMs''), and inverter-only electric motors;
Small, non-Small-Electric Motor, Electric Motors
(``SNEM''), which:
(a) Is not a small electric motor, as defined at Sec. 431.442 and
is not a dedicated pool pump motors as defined at Sec. 431.483;
(b) Is rated for continuous duty (MG 1) operation or for duty type
S1 (IEC);
(c) Operates on polyphase or single-phase alternating current 60-
hertz (Hz) sinusoidal line power; or is used with an inverter that
operates on polyphase or single-phase alternating current 60-hertz (Hz)
sinusoidal line power;
(d) Is rated for 600 volts or less;
(e) Is a single-speed induction motor capable of operating without
an inverter or is an inverter-only electric motor;
(f) Produces a rated motor horsepower greater than or equal to 0.25
horsepower (0.18 kW); and
(g) Is built in the following frame sizes: any two-, or three-digit
NEMA frame size (or IEC equivalent) if the motor operates on single-
phase power; any two-, or three-digit NEMA frame size (or IEC
equivalent) if the motor operates on polyphase power, and has a rated
motor horsepower less than 1 horsepower (0.75 kW); or a two-digit NEMA
frame size (or IEC metric equivalent), if the motor operates on
polyphase power, has a rated motor horsepower equal to or greater than
1 horsepower (0.75 kW), and is not an enclosed 56 NEMA frame size (or
IEC metric equivalent).
SNEMs that are air-over electric motors (``AO-SNEMs'') and
inverter-only electric motors;
Synchronous electric motors, which:
(a) Is not a dedicated pool pump motor as defined at Sec. 431.483
or is not an air-over electric motor;
(b) Is a synchronous electric motor;
(c) Operates on polyphase or single-phase alternating current 60-
hertz (Hz) sinusoidal line power; or is used with an inverter that
operates on polyphase or single-phase alternating current 60-hertz (Hz)
sinusoidal line power;
(d) Is rated 600 volts or less; and
(e) Produces at least 0.25 hp (0.18 kW) but not greater than 750 hp
(559 kW).
Synchronous electric motors that are inverter-only
electric motors.
In the October 2022 Final Rule, DOE noted that, for these motors
newly included within the scope of the test procedure for which there
was no established energy conservation standard, manufacturers would
not be required to use the test procedure to certify these motors to
DOE until such time as a standard is established. 87 FR 63591.\22\
Further, the October 2022 Final Rule continued to exclude the following
categories of electric motors:
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\22\ However, manufacturers making voluntary representations
respecting the energy consumption or cost of energy consumed by such
motors are required to use the DOE test procedure for making such
representations beginning 180 days following publication of the
October 2022 Final Rule. Id.
inverter-only electric motors that are air-over electric
motors;
component sets of an electric motor;
liquid-cooled electric motors; and
submersible electric motors.
In the March 2022 Preliminary Analysis, DOE analyzed the additional
motors now included within the scope of the test procedure after the
October 2022 Final Rule.\23\ See sections 2.2.1 and 2.2.3.2 of the
March 2022 Prelim TSD. This included MEMs from 1-500 hp, AO-MEMs,
SNEMs, and AO-SNEMs. However, consistent with the November 2022 Joint
Recommendation, this direct final rule establishes new and amended
standards for only a portion of the scope analyzed in the March 2022
Preliminary Analysis and included within the scope of the test
procedure after the October 2022 Final Rule. Specifically, in this
direct final rule, DOE is only amending standards for certain MEMs and
establishing new standards for AO-MEMs and certain air-over polyphase
motors. DOE may address in a future rulemaking energy conservation
standards for electric motor equipment classes not addressed in this
direct final rule. Table III-1 summarizes the equipment class groups
(``ECG'') DOE established pursuant to the November 2022 Joint
Recommendation and analyzed in this direct final rule. Further
discussion on equipment classes is provided in section IV.A.3 of this
document.
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\23\ At the time, most of these motors had been proposed for
inclusion in the scope of the test procedure in the December 2021
Test Procedure NOPR. 86 FR 71710.
Table III-1--Equipment Class Groups Considered
----------------------------------------------------------------------------------------------------------------
ECG motor design Horsepower Pole
ECG type Motor topology rating configuration Enclosure
----------------------------------------------------------------------------------------------------------------
1............................. MEM 1-500 hp, Polyphase..... 1-500 2, 4, 6, 8 Open.
NEMA Design A & Enclosed.
B.
[[Page 36081]]
2............................. MEM 501-750 hp, Polyphase..... 501-750 2, 4 Open.
NEMA Design A & Enclosed.
B.
3............................. AO-MEM (Standard Polyphase..... 1-250 2, 4, 6, 8 Open.
Frame Size). Enclosed.
4............................. AO-Polyphase Polyphase..... 1-20 2, 4, 6, 8 Open.
(Specialized Enclosed.
Frame Size).
----------------------------------------------------------------------------------------------------------------
As described in section II.B.3 of this document, this direct final
rule establishes new equipment classes for AO-MEMs, AO-polyphase
motors, and MEMs between 500 and 750 hp, and amends the standards for
the 100-250 hp MEMs equipment classes.
C. Test Procedure
EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a))
Manufacturers of covered products must use these test procedures to
certify to DOE that their product complies with energy conservation
standards and to quantify the efficiency of their product. On October
19, 2022, DOE published the electric motor test procedure final rule.
87 FR 63588 (``October 2022 Final Rule''). As described previously, the
October 2022 Final Rule expanded the types of motors included within
the scope of the test procedure, including the new classes of electric
motors for which DOE is establishing energy conservation standards in
this final rule. DOE's test procedures for electric motors are
currently prescribed at appendix B to subpart B of 10 CFR part 431
(``appendix B'').
DOE's energy conservation standards for electric motors are
currently prescribed at 10 CFR 431.25. DOE's current energy
conservation standards for electric motors are expressed in terms of
nominal full-load efficiency.
D. Technological Feasibility
1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
rulemaking. As the first step in such an analysis, DOE develops a list
of technology options for consideration in consultation with
manufacturers, design engineers, and other interested parties. DOE then
determines which of those means for improving efficiency are
technologically feasible. DOE considers technologies incorporated in
commercially-available products or in working prototypes to be
technologically feasible. 10 CFR 431.4; 10 CFR part 430, subpart C,
appendix A, sections 6(c)(3)(i) and 7(b)(1) (``Appendix A'').
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
practicability to manufacture, install, and service; (2) adverse
impacts on product utility or availability; (3) adverse impacts on
health or safety, and (4) unique-pathway proprietary technologies.
Section 7(b)(2)-(5) of appendix A. Section IV.B of this document
discusses the results of the screening analysis for electric motors,
particularly the designs DOE considered, those it screened out, and
those that are the basis for the standards considered in this
rulemaking. For further details on the screening analysis for this
rulemaking, see chapter 4 of the direct final rule technical support
document (``TSD'').
2. Maximum Technologically Feasible Levels
When DOE adopts an amended standard for a type or class of covered
product, it must determine the maximum improvement in energy efficiency
or maximum reduction in energy use that is technologically feasible for
such product. (42 U.S.C. 6316(a); 42 U.S.C. 6295(p)(1)) Accordingly, in
the engineering analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for electric
motors, using the design parameters for the most efficient products
available on the market or in working prototypes. The max-tech levels
that DOE determined for this rulemaking are described in section III.C
of this direct final rule and in chapter 5 of the direct final rule
TSD.
E. Energy Savings
1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to electric motors purchased in the
30-year period that begins in the first year of compliance with the
amended standards (2027-2056).\24\ The savings are measured over the
entire lifetime of electric motors purchased in the 30-year analysis
period. DOE quantified the energy savings attributable to each TSL as
the difference in energy consumption between each standards case and
the no-new-standards case. The no-new-standards case represents a
projection of energy consumption that reflects how the market for an
equipment would likely evolve in the absence of new and amended energy
conservation standards.
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\24\ Each TSL is composed of specific efficiency levels for each
product class. The TSLs considered for this direct final rule are
described in section V.A of this document. DOE also presents a
sensitivity analysis that considers impacts for products shipped in
a 9-year period.
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DOE used its national impact analysis (``NIA'') spreadsheet model
to estimate national energy savings (``NES'') from potential amended or
new standards for electric motors. The NIA spreadsheet model (described
in section IV.H of this document) calculates energy savings in terms of
site energy, which is the energy directly consumed by products at the
locations where they are used. For electricity, DOE reports national
energy savings in terms of primary energy savings, which is the savings
in the energy that is used to generate and transmit the site
electricity. DOE also calculates NES in terms of FFC energy savings.
The FFC metric includes the energy consumed in extracting, processing,
and transporting primary fuels (i.e., coal, natural gas, petroleum
fuels), and thus presents a more complete picture of the impacts of
energy conservation standards.\25\ DOE's
[[Page 36082]]
approach is based on the calculation of an FFC multiplier for each of
the energy types used by covered products or equipment. For more
information on FFC energy savings, see section IV.H.2 of this document.
---------------------------------------------------------------------------
\25\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------
2. Significance of Savings
To adopt any new or amended standards for a covered product, DOE
must determine that such action would result in significant energy
savings. (42 U.S.C. 6295(o)(3)(B))
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking. For example,
some covered products and equipment have most of their energy
consumption occur during periods of peak energy demand. The impacts of
these products on the energy infrastructure can be more pronounced than
products with relatively constant demand.
Accordingly, DOE evaluates the significance of energy savings on a
case-by-case basis, taking into account the significance of cumulative
FFC national energy savings, the cumulative FFC emissions reductions,
health benefits, and the need to confront the global climate crisis,
among other factors.
As stated, the standard levels adopted in this direct final rule
are projected to result in national energy savings of 3.0 quads, the
equivalent of the electricity use of 31 million homes in one year.
Based on the amount of FFC savings, the corresponding reduction in
emissions, and need to confront the global climate crisis, DOE has
determined the energy savings from the standard levels adopted in this
direct final rule are ``significant'' within the meaning of 42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(3)(B).
F. Economic Justification
1. Specific Criteria
As noted previously, EPCA provides seven factors to be evaluated in
determining whether a potential energy conservation standard is
economically justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has
addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential amended standard on
manufacturers, DOE conducts an MIA, as discussed in section IV.J of
this document. DOE first uses an annual cash-flow approach to determine
the quantitative impacts. This step includes both a short-term
assessment--based on the cost and capital requirements during the
period between when a regulation is issued and when entities must
comply with the regulation--and a long-term assessment over a 30-year
period. The industry-wide impacts analyzed include (1) INPV, which
values the industry on the basis of expected future cash flows; (2)
cash flows by year; (3) changes in revenue and income; and (4) other
measures of impact, as appropriate. Second, DOE analyzes and reports
the impacts on different types of manufacturers, including impacts on
small manufacturers. Third, DOE considers the impact of standards on
domestic manufacturer employment and manufacturing capacity, as well as
the potential for standards to result in plant closures and loss of
capital investment. Finally, DOE takes into account cumulative impacts
of various DOE regulations and other regulatory requirements on
manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national net present value of
the consumer costs and benefits expected to result from particular
standards. DOE also evaluates the impacts of potential standards on
identifiable subgroups of consumers that may be affected
disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC
and PBP analysis.
The LCC is the sum of the purchase price of an equipment(including
its installation) and the operating costs (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more-stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first year of compliance with new
or amended standards. The LCC savings for the considered efficiency
levels are calculated relative to the case that reflects projected
market trends in the absence of new or amended standards. DOE's LCC and
PBP analysis is discussed in further detail in section IV.F of this
document.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(III)) As discussed in section IV.H of this document,
DOE uses the NIA spreadsheet model to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards
adopted in this document would not reduce the utility or performance of
the products under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a standard. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine
the impact, if any, of any lessening of competition likely to result
from a standard and to transmit such determination to the Secretary
within 60
[[Page 36083]]
days of the publication of a rule, together with an analysis of the
nature and extent of the impact. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(ii)) To assist the Department of Justice (``DOJ'') in
making such a determination, DOE transmitted copies of its proposed
rule and the NOPR TSD to the Attorney General for review, with a
request that the DOJ provide its determination on this issue. In its
assessment letter responding to DOE, DOJ concluded that the energy
conservation standards for electric motors are unlikely to have a
significant adverse impact on competition. DOE is publishing the
Attorney General's assessment at the end of this direct final rule.
f. Need for National Energy Conservation
DOE also considers the need for national energy and water
conservation in determining whether a new or amended standard is
economically justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(VI)) The energy savings from the adopted standards are
likely to provide improvements to the security and reliability of the
Nation's energy system. Reductions in the demand for electricity also
may result in reduced costs for maintaining the reliability of the
Nation's electricity system. DOE conducts a utility impact analysis to
estimate how standards may affect the Nation's needed power generation
capacity, as discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when considering the need for national energy
conservation. The adopted standards are likely to result in
environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases (``GHGs'') associated with energy
production and use. DOE conducts an emissions analysis to estimate how
potential standards may affect these emissions, as discussed in section
IV.K the estimated emissions impacts are reported in section V.B.6 of
this document. DOE also estimates the economic value of emissions
reductions resulting from the considered TSLs, as discussed in section
IV.L of this document.
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant
information regarding economic justification that does not fit into the
other categories described previously, DOE could consider such
information under ``other factors.''
2. Rebuttable Presumption
EPCA creates a rebuttable presumption that an energy conservation
standard is economically justified if the additional cost to the
equipment that meets the standard is less than three times the value of
the first year's energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. (42 U.S.C. 6316(a);
42 U.S.C. 6295(o)(2)(B)(iii)) DOE's LCC and PBP analyses generate
values used to calculate the effects that energy conservation standards
would have on the payback period for consumers. These analyses include,
but are not limited to, the 3-year payback period contemplated under
the rebuttable-presumption test. In addition, DOE routinely conducts an
economic analysis that considers the full range of impacts to
consumers, manufacturers, the Nation, and the environment, as required
under 42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i). The results of
this analysis serve as the basis for DOE's evaluation of the economic
justification for a potential standard level (thereby supporting or
rebutting the results of any preliminary determination of economic
justification). The rebuttable presumption payback calculation is
discussed in section IV.F of this direct final rule.
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this
rulemaking with regards to electric motors. Separate subsections
address each component of DOE's analyses. In this direct final rule,
DOE is only addressing comments and analysis specific to the scope of
motors provided in the November 2022 Joint Recommendation. As such, any
analysis and comments related to SNEMs and AO-SNEMs will be addressed
in a separate NOPR.
DOE used several analytical tools to estimate the impact of the
standards considered in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential amended or new
energy conservation standards. The national impacts analysis uses a
second spreadsheet set that provides shipments projections and
calculates national energy savings and net present value of total
consumer costs and savings expected to result from potential energy
conservation standards. DOE uses the third spreadsheet tool, the
Government Regulatory Impact Model (GRIM), to assess manufacturer
impacts of potential standards. These three spreadsheet tools are
available on the DOE website for this rulemaking: www.regulations.gov/docket/EERE-2020-BT-STD-0007. Additionally, DOE used output from the
latest version of the Energy Information Administration's (``EIA's'')
Annual Energy Outlook (``AEO'') for the emissions and utility impact
analyses.
A. Market and Technology Assessment
DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly-available
information. The subjects addressed in the market and technology
assessment for this rulemaking include (1) a determination of the scope
of the rulemaking and product classes, (2) manufacturers and industry
structure, (3) existing efficiency programs, (4) shipments information,
(5) market and industry trends; and (6) technologies or design options
that could improve the energy efficiency of electric motors. The key
findings of DOE's market assessment are summarized in the following
sections. See chapter 3 of the direct final rule TSD for further
discussion of the market and technology assessment.
1. Scope of Coverage
This document covers equipment meeting the definition of electric
motors as defined in 10 CFR 431.12. Specifically, the definition for
``electric motor'' is ``a machine that converts electrical power into
rotational mechanical power.'' Id.
In the March 2022 Preliminary Analysis, DOE presented analysis for
the current scope of electric motors regulated at 10 CFR 431.25, as
well as expanded scope proposed in the December 2021 test procedure
NOPR, which included air-over electric motors and SNEMs. See Chapter 2
of the March 2022 Prelim TSD. Since, DOE has published the October 2022
Final Rule, which expanded the scope of the test procedures to include
such motors, as discussed in detail in section III.B of this direct
final rule.
In response to the scope presented in the March 2022 Preliminary
Analysis, DOE received a number of comments, which are discussed in the
subsections
[[Page 36084]]
below. In this direct final rule, DOE is only addressing comments and
analysis specific to the scope of motors provided in the November 2022
Joint Recommendation, which includes MEMs and polyphase air-over
electric motors.
a. Motor Used as a Component of a Covered Product or Equipment
Generally, Lennox noted that DOE should apply a finished-product
approach to energy efficiency regulations. Specifically, Lennox
commented that system performance standards of HVAC-R products include
the energy used by the electric motors, and that increasing the
stringency of component-level regulation does not have any efficiency
benefit when the ultimate efficiency is measured at the systems level
and manufacturers adjust other equipment parameters based on the
overall system level of performance, offsetting increased motor costs
by reducing other component costs and efficiencies to mitigate adverse
financial impacts on consumers.\26\ Lennox stated that mandating
additional testing and certification of motors used in already-
regulated HVAC-R products would not save energy and create needless
testing, paperwork, and record-keeping requirements that raise consumer
costs. (Lennox, No. 29 at p. 2-3) Lennox elaborated that the HVAC-R
standards in place will drive more efficient design of relevant
components, including motors, without unnecessary further regulation of
components, and that the March 2022 Preliminary Analysis has not
adequately accounted for these cumulative manufacturer burdens.\27\
(Lennox, No. 29 at p. 6)
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\26\ Lennox made these comments in the context of air-over and
inverter-only motors included within HVACR products, requesting that
DOE maintain the exemptions to the energy conservation standards for
these motors contained in 10 CFR 431.25(l). (Lennox, No. 29 at p. 2)
DOE addresses Lennox's comments regarding the exemption for these
specific motors in sections IV.1.b and d of this document.
\27\ Lennox also commented that DOE should continue exempting
SEMs used as a component in covered equipment (specifically, HVACR
equipment) from the energy conservation standards for electric
motors, and that including SNEMs in the energy conversation
standards for electric motors would circumvent Congressional intent
to exempt from regulation small electric motors that are components
of EPCA covered products and covered equipment. (Lennox, No. 29 at
p. 3). As noted previously, DOE is not including SNEMs within the
scope of this direct final rule. SNEMs may be addressed in a future
rulemaking, and DOE will consider such comments in that rulemaking.
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AHAM and AHRI strongly opposed DOE's plan to expand the existing
scope of coverage of electric motors to include motors destined for
particular applications in finished goods, and instead recommended that
DOE should apply a finished-product approach to energy efficiency
regulations. (AHAM, AHRI, No. 25 at p. 7-9) NEMA commented that further
elevations to component efficiencies or changes to scope for electric
motors energy conservation standards will lead to diminishing returns,
and are therefore less practical, because previous electric motors
rulemakings adequately addressed concerns for ``application and
performance of existing equipment'' to the maximum extent practical.
NEMA stated that DOE should allow application-dependent solutions like
power drive systems to take over from minimum energy conservation
standards as the most-appropriate and best-fit market transformation
vehicles, but they must be selected and installed with due regard for
their application-specific nature, which calls for ``other than
regulatory action'' on the part of DOE. (NEMA, No. 22 at p. 26)
Daikin commented that they do not support the regulation of
electric motors that are components of a covered equipment such as HVAC
equipment. Daikin added that regulating embedded components creates
both apparent and likely unforeseen issues. For HVAC manufacturers,
Daikin commented that regulating components reduces design flexibility
and may not result in optimal design for overall system performance.
Daikin stated that standards for HVAC equipment are regularly evaluated
by DOE to ensure regulations are aligned with the most cost-effective
product for consumers, and HVAC manufacturers generally respond by
producing a class of equipment at these federal minimum efficiency
levels. As such, Daikin stated that regulating an embedded component
will not improve the overall product's energy efficiency. (Daikin, No.
32 at p. 1)
On the other hand, the Joint Advocates commented in support of
regulating electric motors that are components of covered equipment.
The Joint Advocates stated that there is value in regulating the motors
separately. The Joint Advocates agreed with DOE that different motor
efficiency levels may be cost-effective for different covered products,
and the presence of electric motors in covered equipment does not
preclude the possibility of cost-effective energy standards for
electric motors individually. Furthermore, the Joint Advocates
commented that absent standards for motors that are used in covered
equipment, consumers may get stuck with inefficient replacement motors.
Finally, the Joint Advocates commented that motors used in covered
equipment are often purchased by the original equipment manufacturer
(``OEM'') from a motor manufacturer, and thus, exempting motors used in
covered equipment would likely create enforcement challenges since it
would be difficult to determine a given motor's end use application.
(Joint Advocates, No. 27 at p. 5)
DOE understands that the majority of the concerns summarized in
this section and provided separately by commenters stems from DOE
potentially regulating SNEMs and AO-SNEMs. This direct final rule does
not address SNEMs or AO-SNEMs as part of the scope. DOE may consider in
a future rulemaking energy conservation standards for electric motor
equipment classes not addressed in this direct final rule, including
SNEMs and AO-SNEMs. If so, DOE will address these comments and concerns
as part of any future rulemaking. As such, in this final rule, DOE is
generally addressing comments regarding electric motors scope and what
DOE has the authority to regulate.
As discussed in the October 2022 Final Rule, EPCA, as amended
through EISA 2007, provides DOE with the authority to regulate the
expanded scope of motors addressed in this rule. 87 FR 63588, 63596.
Before the enactment of EISA 2007, EPCA defined the term ``electric
motor'' as any motor that is a general purpose T-frame, single-speed,
foot-mounting, polyphase squirrel-cage induction motor of the NEMA,
Design A and B, continuous rated, operating on 230/460 volts and
constant 60 Hertz line power as defined in NEMA Standards Publication
MG1-1987. (See 42 U.S.C. 6311(13)(A) (2006)) Section 313(a)(2) of EISA
2007 removed that definition and the prior limits that narrowly defined
what types of motors would be considered as electric motors. In its
place, EISA 2007 inserted a new ``Electric motors'' heading, and
created two new subtypes of electric motors: General purpose electric
motor (subtype I) and general purpose electric motor (subtype II). (42
U.S.C. 6311(13)(A)-(B) (2011)) In addition, section 313(b)(2) of EISA
2007 established energy conservation standards for four types of
electric motors: general purpose electric motors (subtype I) (i.e.,
subtype I motors) with a power rating of 1 to 200 horsepower; fire pump
motors; general purpose electric motor (subtype II) (i.e., subtype II
motors) with a power rating of 1 to 200 horsepower; and NEMA Design B,
general purpose electric motors with a power rating of more than 200
horsepower, but less than or equal to 500 horsepower. (42 U.S.C.
6313(b)(2)) The term ``electric motor'' was left undefined. However, in
a May 4, 2012 final rule amending the electric
[[Page 36085]]
motors test procedure (the May 2012 Final Rule), DOE adopted the
broader definition of ``electric motor'' currently found in 10 CFR
431.12 because DOE noted that the absence of a definition may cause
confusion about which electric motors are required to comply with
mandatory test procedures and energy conservation standards, and to
provide DOE with the flexibility to set energy conservation standards
for other types of electric motors without having to continuously
update the definition of ``electric motors'' each time DOE sets energy
conservation standards for a new subset of electric motors. 77 FR
26608, 26613.
The provisions of EPCA make clear that DOE may regulate electric
motors ``alone or as a component of another piece of equipment.'' See
42 U.S.C. 6313(b)(1) & (2) (providing that standards for electric
motors be applied to electric motors manufactured ``alone or as a
component of another piece of equipment'') In contrast, Congress
exempted small electric motors (SEMs) \28\ that are a component of a
covered product or a covered equipment from the standards that DOE was
required to establish under 42 U.S.C. 6317(b). Congress did not,
however, similarly restrict electric motors. Unlike SEMs, the statute
does not limit DOE's authority to regulate an electric motor with
respect to whether ``electric motors'' are stand-alone equipment items
or components of a covered product or covered equipment. Rather,
Congress specifically provided that DOE could regulate electric motors
that are components of other covered equipment in the standards
established by DOE.
---------------------------------------------------------------------------
\28\ Congress defined what equipment comprises a small electric
motor (``SEM'')--specifically, ``a NEMA general purpose alternating
current single-speed induction motor, built in a two-digit frame
number series in accordance with NEMA Standards Publication MG1-
1987.'' (42 U.S.C. 6311(13)(G)) (DOE clarified, at industry's
urging, that the definition also includes motors that are IEC metric
equivalents to the specified NEMA motors prescribed by the statute.
See 74 FR 32059, 32061-32062; 10 CFR 431.442.
---------------------------------------------------------------------------
Additionally, EPCA requires that any new or amended standard for a
covered product must be designed to achieve the maximum improvement in
energy efficiency that the Secretary of Energy determines is
technologically feasible and economically justified. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B)) In this
direct final rule, DOE performs the necessary analyses to determine
whether amended or new standards would meet the aforementioned
criteria. Further, DOE has determined that the amended standards
provide cost-effective standards that would result in the significant
conservation of energy. Further discussion on double-counting as it
relates to energy savings is provided in section IV.F of this document.
Further discussion on the analytical results and DOE's justification is
provided in section V.C of this document.
b. Air-Over Electric Motors
NEEA supported the inclusion of air-over electric motors in the
scope of the standards, noting that including them will allow
comparison of performance and informed purchase decisions. (NEEA, No.
33 at p. 2) The CA IOUs supported the inclusion of Totally Enclosed Air
Over (``TEAO'') motors in the analysis. In addition, the CA IOUs
commented that they support establishing standards for air-over motors
that otherwise meet the description of regulated motors (i.e., ``AO-
MEM'') consistent with the levels for totally enclosed fan cooled
(``TEFC'') electric motors. (CA IOUs, No. 30 at p. 1-2)
Lennox commented that DOE must continue the current electric motor
exemptions specified in 10 CFR 431.25(l) for air-over, particularly
when those motors are used in already-regulated HVACR products.
(Lennox, No. 29 at p. 3) AHRI commented that air-over motors are
explicitly exempted from regulation in 10 CFR 431.25(l), and that DOE
has not overcome the challenges to include these exempted products,
procedurally or technically. (AHRI, No. 26 at p. 1, 2)
DOE is covering air-over electric motors under its ``electric
motors'' authority. (42 U.S.C. 6311(1)(A)) As previously discussed, the
statute does not limit DOE's authority to regulate an electric motor
with respect to whether they are stand-alone equipment items or as
components of a covered product or covered equipment. See 42 U.S.C.
6313(b)(1) (providing that standards for electric motors be applied to
electric motors manufactured ``alone or as a component of another piece
of equipment'').
DOE's previous determination in the December 2013 Final Rule to
exclude air-over electric motors from scope was due to insufficient
information available to DOE at the time to support establishment of a
test method. See 78 FR 75962, 75974-75975. Since that time, NEMA
published a test standard for air-over motors in Section IV,
``Performance Standards Applying to All Machines,'' Part 34 ``Air-Over
Motor Efficiency Test Method'' of NEMA MG 1-2016 (``NEMA Air-over Motor
Efficiency Test Method''). The air-over method was originally published
as part of the 2017 NEMA MG-1 Supplements and is also included in the
latest version of NEMA MG 1-2016. In the October 2022 Final Rule, DOE
used the aforementioned argument to include air-over electric motors
into the test procedure scope and establish test procedures. See 87 FR
63588, 63597. In this direct final rule, DOE has analyzed the scope of
electric motors based on the finalized test procedures from the October
2022 Final Rule, and amended energy conservation standards based on the
November 2022 Joint Recommendation.
c. AC Induction Electric Motors Greater Than 500 Horsepower
NEEA commented in support of expanding the scope to include AC
induction electric motors greater than 500 horsepower to identify their
energy use, potential for energy savings, price, and prevalence in the
market today. NEEA added that these motors consume a significant amount
of energy, and that motor efficiency generally improves as a function
of motor size, so it may be possible to establish higher efficiency
standards for greater than 500 HP motors. (NEEA, No. 33 at p. 3)
NEMA stated that energy conservation standards for >500 HP motors
would likely not be justified because of how tiny their market share
is. It also stated that there are unique performance requirements
applied to these motors that require custom designs that limit
efficiency. NEMA stated that, at minimum, if a motor has one of the
following special requirements, it should not be subject to standards;
those special requirements are: <550 percent locked-rotor current,
minimum locked rotor steady state supply voltage of <80 percent,
ability to accelerate a moment of inertia greater than the moment of
inertia defined by NEMA, ability to operate outside the range of -20
[deg]C to +60 [deg]C, ability to operate above 4,000 m above sea level,
a load-torque envelope with a minimum torque of 25 percent of rated
torque with a square shaped T-n[supcaret]2 up to a max load, ability to
start consecutively from cold three times or from hot two times, being
a multi-speed motor, submersible, smoke extraction motor, explosion-
proof motor, or a motor used in nuclear plants. (NEMA, No. 22 at p. 9-
10)
Since the comments to the March 2022 Preliminary Analysis, the
Electric Motors Working Group, which included NEEA and NEMA,
recommended standards for medium electric motors rated over 500 hp and
up to 750 hp at 60 Hz (Recommendation #2). The scope of medium electric
motors includes those electric motors that currently meet
[[Page 36086]]
10 CFR 431.25(g), but expanded to include motor horsepower >500 hp but
less than 750 hp. Accordingly, in this direct final rule, DOE is
including the aforementioned scope of electric motors for consideration
of new standards, based on the November 2022 Joint Recommendation.
Specifically, in the November 2022 Joint Recommendation, the Electric
Motors Working Group agreed on establishing efficiency levels
corresponding to 60 Hz NEMA Premium levels for motors rated over 500 hp
and up to 750 hp. The Electric Motors Working Group noted that
extending the horsepower range of electric motors subject to energy
conservation standards would be beneficial in aligning with EU
Ecodesign Directive 2019/1781,\29\ which covers motors up to 1000 kW
(1341 hp) at NEMA Premium levels, and for which manufacturers are
making investments to comply.
---------------------------------------------------------------------------
\29\ In terms of standardized horsepowers, this would correspond
to 100-250 hp when applying the guidance from 10 CFR 431.25(k) (and
new section 10 CFR 431.25(q)).
---------------------------------------------------------------------------
d. AC Induction Inverter-Only and Synchronous Electric Motors
NEEA commented in support of expanding the scope of standards to
synchronous and inverter-only motors to identify their energy use,
potential for energy savings, price, and prevalence in the market
today. NEEA recommended to include these motors in the same equipment
classes are induction motors. In addition, NEEA recommended not to
establish stricter efficiency requirements for these motors based on
full-load efficiency because these motors allow energy savings at part
load conditions. (NEEA, No. 33 at p. 3) NEMA stated that synchronous
motors should have their own equipment class until analysis concludes
they are not needed. NEMA suggested DOE make an ``other than regulatory
action'' to save energy at the application and reference NEMA Standard
10011-22 with regards to the power index. (NEMA, No. 22 at p. 8)
CA IOUs supported including inverter-only and synchronous electric
motors, but in the same equipment class as currently regulated
induction motors. The CA IOUs recommended convening an Appliance
Standards and Rulemaking Federal Advisory Committee (``ASRAC'') Working
Group to finalize a test procedure and part-load metric for these
motors before finalizing a test procedure and energy conservation
standards rulemaking. (CA IOUs, No. 30 at p. 2) The Joint Advocates
also commented supporting analyzing synchronous motors jointly with
currently covered motors and recommended that DOE also analyze
synchronous motors jointly with relevant SNEM and AO motors. The Joint
Advocates commented that synchronous motors represent the most
efficient motors on the market and highlighted the potential energy
savings opportunities facilitated by market shifts to synchronous
motors. In addition, the Joint Advocates commented that the potential
life-cycle cost savings associated with synchronous motor substitutions
should be directly accounted for when evaluating potential amended
standards for electric motors. (Joint Advocates, No. 27 at p. 2)
Similarly, the CA IOUs also provided the following supporting data to
show that synchronous and inverter-only electric motor are designed,
marketed, capable, and are being used to replace induction motors: (1)
manufacturer reference tables that promote the direct replacement of
currently regulated induction motors with synchronous and inverter-only
motors (2) data showing synchronous motor performance exceeding a best-
in-class copper cage induction motor paired with a commercially
available VFD (which the CA IOUs stated corroborates the PTSD savings
estimates for synchronous electric motors), and (3) a summary of case
studies docketed in response to the December 2021 test procedure NOPR.
The CA IOUs commented that this supporting data demonstrates the use of
synchronous and inverter-only motors in applications where National
Electrical Manufacturers Association (NEMA) Design B motors are
typically used. (CA IOUs, No. 30 at p. 2-3)
AHAM and AHRI commented that if DOE includes inverter-only and
synchronous motors in the scope of the ECS, it should first publish a
preliminary analysis or NODA for these motors before proceeding to a
NOPR. (AHAM, AHRI, No. 25 at p. 2) Lennox commented that DOE imposing
increased costs on inverter-only motors by additional regulation may
inhibit HVACR manufacturer use of these motors in innovative
applications. Further, Lennox commented that DOE ceasing its exemptions
for inverter-only motors, and thereby unduly-burdening manufacturers
and forcing higher HVACR product costs on consumers with component-
level regulation, is particularly inappropriate during an ongoing
pandemic where inflation has been at a 40-year high. (Lennox, No. 29 at
p. 2-3) NEMA stated that by regulating synchronous motors, DOE is
regulating both the required adjustable speed drive and the motor
itself. It stated that this is unnecessary and poorly conceived, and
that synchronous motors do not generally conform to the torque-speed
curves required by NEMA and IEC Designs. (NEMA, No. 22 at p. 7) In
addition, NEMA stated that inverter-only induction motors have
characteristics warranting their own equipment class. It stated these
motors are used exclusively for constant torque or constant HP
applications and that certain applications have performance
requirements like acceleration, deceleration, and overload capability
for optimal control of a process. NEMA also stated that the performance
requirements go beyond a single steady-state load condition that the
test procedure uses, and that targeting a specific operating point's
efficiency could restrict the other torque and thermal requirements of
these motors. It also states that since the metric includes the losses
of the inverter, these motors will have a lower maximum potential
efficiency than typical induction motors. NEMA pointed to IEC 60034-30-
2 as an example for efficiency values that pertain specifically to
variable-speed motors. (NEMA, No. 22 at p. 8-9)
In this direct final rule, DOE is not separately regulating or
establishing standards for inverter-only and synchronous electric
motors. As a sensitivity analysis, DOE notes that it analyzed the
impacts of potentially switching to these electric motors as a result
of higher standards that will be finalized for MEMs 100-250 hp, NEMA
Design A & B in this DFR; further discussion is provided in section
IV.F of this document.
e. Submersible Electric Motors
NEEA and HI recommended excluding submersible motors from the scope
of the standards due to the lack of repeatable and representative test
procedures. (NEEA, No. 33 at p. 4; HI, No. 31 at p. 1) CA IOUs
commented that they do not support including submersible electric
motors, and that DOE should collaborate with industry stakeholders in
developing a test procedure for this motor category. (CA IOUs, No. 30
at p. 2) Finally, NEMA stated that submersible electric motors should
be removed from the rulemaking. (NEMA, No. 22 at p. 9) In the October
2022 Final Rule, DOE did not finalize a test method for submersible
electric motors. See 87 FR 63588, 63605. Moreover, the November 2022
Joint Recommendation did not recommend energy conservation standards
for submersible electric motors. Accordingly, submersible electric
motors continue to be excluded
[[Page 36087]]
from the test procedure and are not included in this standards direct
final rule.
2. Test Procedure and Metric
DOE received comments regarding the test procedure and efficiency
metric for electric motors subject to these energy conservation
standards.
NEMA requested an SNOPR for the test procedure and requested that
the energy conservation standards rulemaking not move forward until the
test procedure is finished. (NEMA, No. 22 at p. 2). DOE published the
electric motor test procedure final rule on October 19, 2022. 87 FR
63588.
NEEA commented that, until DOE revises their test procedure and
efficiency metric to account for part-load operating conditions, they
do not recommend that DOE establish stricter efficiency requirements
for synchronous electric motors and inverter-only electric motors.
(NEEA, No. 33 at p. 4,5) CA IOUs commented similarly, strongly
encouraging DOE to adopt the use of a metric that is representative of
part-load performance for inverter-only and synchronous electric
motors. CA IOUs provided data in support of the use of a part-load
metric for inverter-only and synchronous electric motor applications to
better reflect how these motors operate in the field. (CA IOUs, No. 30
at p. 2) The Joint Advocates explained that inverter-only AC motors may
not have a higher full-load efficiency than a comparable single-speed
motor, but they may save energy by reducing motor speed and resulting
input power at partial loads. Therefore, they commented that because
the efficiency is evaluated only at full load, inverter-only motors
would be at a disadvantage as the input losses associated with the
inverter would be included in the efficiency calculation, but the
potential energy savings resulting from its speed control capabilities
would not be captured. (Joint Advocates, No. 27 at p. 3) NEMA commented
that DOE should transition away from a single point efficiency metric
and instead should develop a Power Index that incorporates the savings
associated with power drive systems. NEMA commented that by applying a
fixed speed efficiency testing at full load metric, the DOE misses the
true opportunity for energy savings. NEMA explained that while at
certain load points the motor losses might be a fraction (0.5 percent)
lower, the application of a PDS would save 25-50 percent of power in
the integral horsepower market and that these savings dwarf the 0.8
percent reduction associated with EL2. (NEMA, No. 22 at p. 5)
The currently prescribed test procedure in appendix B requires
testing electric motors at full-load only. In the October 2022 Final
Rule, DOE argued that variable-load applications primarily operate in a
range where efficiency is relatively flat as a function of load, and
therefore measuring the performance of these motors at full-load is
representative of an average use cycle. See 87 FR 63588, 63620.
Moreover, in this direct final rule, DOE is not proposing to separately
regulate inverter-only and synchronous electric motors, but rather DOE
is considering substitution effects to these motors for higher
efficiency standards for MEMs.
Lennox commented that there would be insufficient testing
facilities to accommodate significantly expanded motor product classes,
such as DOE expanding motor regulations into SNEMs, air-over,
synchronous or inverter-only motors, specifically in view of the
proposal to require third-party laboratory testing. (Lennox, No. 29 at
p. 5-6) The Joint Industry Stakeholders commented that DOE proposed
that electric motors certified to the new test procedure could only be
certified by 3rd party test labs, instead of certified labs in
accordance with longstanding recognized practice. They stated that
special and definite-purpose motors potentially classified as SNEM
could not possibly be tested, redesigned, retested, certified, and made
available for OEM use by the few third-party small electric motor
certification bodies recognized by DOE today. (Joint Industry
Stakeholders, No. 23 at p. 9) As discussed in section IV.A.1, in this
direct final rule, DOE is only amending standards for certain MEMs and
establishing standards for AO-MEMs and certain air-over polyphase
motors. Further, DOE understands the Joint Industry Stakeholders
comments to be directed at the proposals from the test procedure
rulemaking. Since this proposal, DOE published the October 2022 Final
Rule, where DOE decided to not adopt its proposal to require the use of
an independent testing program, and to instead continue permitting the
use of accredited labs as currently allowed through National Institute
of Standards and Technology (``NIST'') and National Voluntary
Laboratory Accreditation Program (``NVLAP'') accreditation. See 87 FR
62588, 63628-63629.
3. Equipment Classes
When evaluating and establishing energy conservation standards, DOE
divides covered equipment into equipment classes by the type of energy
used or by capacity or other performance-related features that justify
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such
factors as the utility of the feature to the consumer and other factors
DOE determines are appropriate. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q))
Due to the number of electric motor characteristics (e.g.,
horsepower rating, pole configuration, and enclosure), in the March
2022 Preliminary Analysis, DOE used two constructs to help develop
appropriate energy conservation standards for electric motors:
``equipment class'' and ``equipment class groups.'' An equipment class
represents a unique combination of motor characteristics for which DOE
is establishing a specific energy conservation standard. This includes
permutations of electric motor design types (i.e., NEMA Design A & B
(and IEC equivalents)), standard horsepower ratings (i.e., standard
ratings from 1 to 500 horsepower), pole configurations (i.e., 2-, 4-,
6-, or 8-pole), and enclosure types (i.e., open or enclosed). An
equipment class group (``ECG'') is a collection of electric motors that
share a common design trait. Equipment class groups include motors over
a range of horsepower ratings, enclosure types, and pole
configurations. Essentially, each equipment class group is a collection
of a large number of equipment classes with the same design trait. As
such, in the March 2022 Preliminary Analysis, DOE presented equipment
class groups based on electric motor design, motor topology, horsepower
rating, pole configuration and enclosure type. See Chapters 2.3.1 and
3.2.2 of the March 2022 Preliminary Analysis TSD.
Further, although DOE acknowledged that synchronous electric
motors, inverter-only electric motors and induction electric motors
>500 hp and <=750 hp would be within scope, DOE did not create separate
equipment classes for these electric motors and did not evaluate
separate energy conservation standards. (See Chapter 2.3.1.3 of the
March 2022 Preliminary Analysis TSD) However, DOE did evaluate
synchronous and inverter-only electric motors jointly with the
induction motors because the motors did not have a performance-related
feature that would justify a separate class. Id.
In response to the equipment classes, DOE received a number of
comments, which are presented below. Comments regarding SNEM and AO-
SNEM equipment classes will be addressed in a separate NOPR.
[[Page 36088]]
Regarding air-over motors, NEMA agreed that an air-over rating
warrants a separate equipment class because these motors are often
built in a smaller frame size to take advantage of the outside airflow.
NEMA stated that these motors built in a smaller frame size are limited
in their efficiency capability because less active material can fit in
them. (NEMA, No. 22 at p. 7)
Since the comments to the March 2022 Preliminary Analysis TSD, the
November 2022 Joint Recommendation specifically recommended that DOE
establish two separate equipment classes for AO-MEMs, i.e., standard
frame AO-MEMs and specialized frame AO-MEMs, because of their different
applications. The November 2022 Joint Recommendation identified
standard frame AO-MEMs as AO-MEMs sold in standard NEMA frame sizes
aligned with NEMA MG1, Table 13.2 and Table 13.3. In addition, the
November 2022 Joint Recommendation identified specialized, smaller
frame AO-MEMs as a group of motors for which the rated output exceeds
the horsepower-frame size limits in the aforementioned NEMA MG1 tables.
The Electric Motors Working Group noted that these motors are used in
specialty applications where the design is optimized to meet space
constraints and take advantage of higher-than-normal airflows, such as
in agriculture applications. They also stated that because of the
higher airflows, the motor operates at greater power densities than
standard-frame motors, which therefore results in the motor being
loaded to a slightly less efficient operating point. Accordingly, they
recommended these motors be separated into their own equipment class.
See November 2022 Joint Recommendation at 4-5.
Consistent with the November 2022 Joint Recommendation, in this
direct final rule, DOE is separating the air-over equipment class into
two equipment classes. As such, DOE is including ``AO-MEM (Standard
frame size),'' and renaming ``Specialized Frame Size AO-MEMs'' (from
the November 2022 Joint Recommendation) to ``AO-Polyphase (Specialized
frame size)''. DOE notes that the frame size constraints from
Recommendation 3.b. include frame sizes beyond those specifically in
the AO-MEM scope; as discussed in section III.A, 10 CFR 431.25(g)(7)
specifically states that a MEM built in a two-digit frame size would
only be an enclosed 56 NEMA frame size (or IEC metric equivalent),
whereas Recommendation 3.b. specifies maximum NEMA frame diameters at
48 NEMA frame size. Accordingly, to provide a more representative
naming convention for these motors, DOE is using ``AO-Polyphase
(Specialized frame size)'' in this direct final rule. DOE notes that
only the naming convention is changed compared to the November 2022
Joint Recommendation; the scope of motors being represented continues
to stay the same.
In addition, to clarify what is meant by ``standard frame size''
and ``specialized frame size,'' DOE is adding definitions in the CFR
consistent with the recommendations from the November 2022 Joint
Recommendation. Specifically, in this direct final rule, DOE is adding
a definition for ``standard frame size'' as ``aligned with the
specifications in NEMA MG 1-2016 section 13.2 for open motors, and NEMA
MG 1-2016 section 13.3 for enclosed motors.'' Further, DOE is adding a
definition for ``specialized frame size'' as ``means an electric motor
frame size for which the rated output power of the motor exceeds the
motor frame size limits specified for standard frame size. Specialized
frame sizes have maximum diameters corresponding to the following NEMA
Frame Sizes:''
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum NEMA frame diameter
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 48 ......... 48 48 48 48 140 140
1.5/1.1......................................................... 48 48 48 48 140 140 140 140
2/1.5........................................................... 48 48 48 48 140 140 180 180
3/2.2........................................................... 140 48 140 140 180 180 180 180
5/3.7........................................................... 140 140 140 140 180 180 210 210
7.5/5.5......................................................... 180 140 180 180 210 210 210 210
10/7.5.......................................................... 180 180 180 180 210 210 ......... .........
15/11........................................................... 210 180 210 210 ......... ......... ......... .........
20/15........................................................... 210 210 210 210 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Regarding motors already covered at 10 CFR 431.25(g), NEMA stated
that locked-rotor torque is not a typical design criterion used by end-
users and that this value is already captured in the NEMA Design A, B,
C etc. classification. NEMA also stated that locked-rotor torque is not
a reliable means for determining energy efficiency. (NEMA, No. 22 at p.
6) DOE agrees with the statement and is therefore not incorporating
locked-rotor torque as an equipment class identifier for MEMs currently
covered at 10 CFR 431.25(g).
Regarding synchronous and inverter-only electric motors, NEEA
recommended that DOE not create separate equipment classes because
these motors are used in the same applications as their induction motor
counterparts. (NEEA, No. 33 at p. 3) The Joint Advocates stated that
while they agree that inverter-only induction electric motors do not
have a unique performance-related feature or utility that justifies a
separate class from non-inverter and inverter-capable motors, they were
concerned that inverter-only motors may be at an unfair disadvantage
relative to single-speed induction motors when efficiencies are
evaluated only at full load. (Joint Advocates, No. 28 at p. 3) As
discussed in section IV.A.1.d of this document, DOE is not separately
regulating inverter-only and synchronous electric motors in this direct
final rule. Rather, DOE is only considering the substitution effects of
switching to these electric motors if higher standards for MEMs are
established. Otherwise, comments regarding the test procedure and
metric are addressed in section IV.A.2 of this document.
Therefore, Table IV-1 presents the ECGs considered in this direct
final rule. The equipment class groups represent a total of 425
equipment classes.
[[Page 36089]]
Table IV-1--Equipment Class Groups Considered
--------------------------------------------------------------------------------------------------------------------------------------------------------
Horsepower Pole
ECG ECG motor design type Motor topology rating configuration Enclosure
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... MEM 1-500 hp, NEMA Polyphase.................... 1-500 2, 4, 6, 8 Open.
Design A & B. Enclosed.
2................................... MEM 501-750 hp, NEMA Polyphase.................... 501-750 2, 4 Open.
Design A & B. Enclosed.
3................................... AO-MEM (Standard Frame Polyphase.................... 1-250 2, 4, 6, 8 Open.
Size). Enclosed.
4................................... AO-Polyphase Polyphase.................... 1-20 2, 4, 6, 8 Open.
(Specialized Frame Enclosed.
Size).
--------------------------------------------------------------------------------------------------------------------------------------------------------
4. Technology Options
In the March 2022 Preliminary Analysis market and technology
assessment, DOE identified several technology options that were
initially determined to improve the efficiency of electric motors, as
measured by the DOE test procedure. Table IV-2 presents the technology
options considered in the March 2022 Preliminary Analysis.
Table IV-2--March 2022 Preliminary Analysis Technology Options To
Increase Motor Efficiency
------------------------------------------------------------------------
Type of loss to reduce Technology option
------------------------------------------------------------------------
Stator I2R Losses............ Increase cross-sectional area of copper
in stator slots
Decrease the length of coil extensions
Rotor I2R Losses............. Increase cross-sectional area of end
rings.
Increase cross-sectional area of rotor
conductor bars.
Use a die-cast copper rotor cage.
Core Losses.................. Use electrical steel laminations with
lower losses. (watts/lb)
Use thinner steel laminations.
Increase stack length (i.e., add
electrical steel laminations).
Friction and Windage Losses.. Optimize bearing and lubrication
selection.
Improve cooling system design.
Stray-Load Losses............ Reduce skew on rotor cage.
Improve rotor bar insulation.
------------------------------------------------------------------------
In response to the technology options, DOE received several
comments.
Regarding electrical steel, NEMA stated that newer grade steels are
available but not in the high volumes required to replace today's
production, and that many new grades are imported and subject to
tariffs and delays. (NEMA, No. 22 at p. 10) NEMA argued that using
lower-loss steel would not necessarily result in a more efficient
electric motor. (NEMA, No. 22 at p. 10-13) Specifically, NEMA stated
that processing of the steel during motor manufacturing could alter
electrical steel performance. As an example, NEMA noted that thinner
steels would deform more when punched than thicker grades. (NEMA, No.
22 at p. 11) Additionally, NEMA stated that different steel grades
could have different heat transfer rates, which may affect motor
operating temperature and, thus, efficiency. (NEMA, No. 22 at p. 11)
NEMA provided certain test data illustrating its claims regarding the
potential for steel loss and motor efficiency to diverge. (NEMA, No. 22
at p. 12) Relatedly, NEMA provided finite element model data
illustrating magnetic flux density over the cross section of a 4-pole
induction motor and noting the nonuniformity of the flux density values
obtained, which NEMA observed could exceed the 1.5T-reference value
commonly used by steel producers to rate their products. (NEMA, No. 22
at p. 13-14)
Losses generated in the electrical steel in the core of an
induction motor can be significant and are classified as either
hysteresis or eddy current losses. Hysteresis losses are caused by
magnetic domains resisting reorientation to the alternating magnetic
field. Eddy currents are physical currents that are induced in the
steel laminations by the magnetic flux produced by the current in the
windings. Both hysteresis and eddy current losses generate heat in the
electrical steel.
In evaluating techniques used to reduce steel losses, DOE
considered two types of material: conventional non-oriented electrical
steel and ``non-conventional'' steels, which may contain high
proportions of boron or cobalt or lack metal grain structure
altogether. Conventional steels are more commonly used in electric
motors manufactured today. The three types of steel that DOE classifies
as ``conventional,'' include cold-rolled magnetic laminations, fully
processed non-oriented electrical steel, and semi-processed non-
oriented electrical steel. DOE does not model non-conventional
electrical steels in its analysis of electric motors, including cobalt-
based and amorphous steels. For additional details on DOE's software
modeling and analysis of electrical steel performance, see chapter 3 of
the direct final rule TSD.
DOE acknowledges the potential for increased non-oriented steel
demand arising from a larger trend toward electrification of vehicles
and equipment. However, DOE's research of publicly announced non-
oriented electrical steel manufacturing capacity expansions \30\ either
currently underway
[[Page 36090]]
or planned for the near future suggests that steelmakers, both US-based
and international, are anticipating increased demand and demonstrating
willingness to increase supply accordingly.
---------------------------------------------------------------------------
\30\ E.g., (1) US-based Cleveland-Cliffs doubles NOES capacity
by 2023, adding 70 kilotons of annual capacity in response to
customer demand.
(2) US-based Big River Steel (a subsidiary of United States
Steel Corporation) announced plans to increase annual NOES
production capacity by 200 kilotons by September 2023.
(3) JFE Steel reports plans to double NOES production capacity
by the first half of the 2024 fiscal year, which begins in April
2024.
(4) Baoshan Iron & Steel (``Baosteel'', a subsidiary of China
Baowu Steel Group) is reported to be expanding NOES production
capacity by 500 kilotons by March 2023.
(5) POSCO announced groundbreaking for a NOES production
facility which will approximately quadruple high-efficiency NOES
capacity to 400 kilotons by 2025.
---------------------------------------------------------------------------
Regarding tariffs on imported steels, DOE presented the costs for
various steel grades to manufacturers during interviews and updated the
costs based on input received. The input DOE received about steel
prices incorporated changes in costs due to importing delays, tariffs,
and global supply. Because the steel tariff applies to articles
imported into the United States, it does not directly affect prices
paid for steel in other nations, including those which manufacture
motors sold in the US market.
Regarding the uncertain ability of lower-loss electrical steel to
increase motor efficiency, electric motor manufacturers stated during
confidential interviews that lower-loss steel would generally increase
motor efficiency, even when considering the potential increase in steel
loss that can arise during manufacturing. Accordingly, DOE considers
lower-loss electrical steel to be an available option for improving
motor efficiency in general, even if not in all possible motor designs.
Electric motor manufacturers during confidential interviews did not
report having constructed or tested electric motor designs using what
appear to be the lowest-loss electrical steel grades available in the
market. In cases, manufacturers reported unfamiliarity with the grades.
As a result, DOE is not able to assess whether testing performed by
manufacturers, including the example presented by NEMA (NEMA, No. 22 at
p. 12), establishes a limitation on the degree of electric motor
efficiency improvement possible through use of increasingly lower-loss
electric steel.
Regarding the flux density map from finite element modeling
provided by NEMA, it is reasonable to expect variation in flux density
levels throughout both the motor laminations and over time, as NEMA
observes. DOE's analysis does not assume a constant flux density would
exist throughout an electric motor. Those variations would cause
instantaneous, localized steel loss levels to vary accordingly, and
depart from the manufacturer-rated values at a given, single reference
value (1.5T, commonly for non-oriented electric steels). All grades of
non-oriented electrical steel that DOE has identified share the
property of increasing loss with increasing flux density. Thus, the
flux density variation cited by NEMA would ostensibly exist for
electrical steels generally; it would not be unique to lower-loss steel
grades. Additionally, when evaluating use of a higher steel grade,
manufacturers would likely optimize the design for the grade in
question for any design likely to be built in significant volume. For
DOE's modeling, DOE considered a conservative approach to represent
performance of these lower-loss electrical steels, which is discussed
further in section IV.C.1.c of this document.
Some production requirements associated with using lower-loss steel
grades are understood and able to be accounted for with a cost. For
example, increasing the silicon content of an alloy may increase
resistivity (and thus, potentially reduce loss) but increase the
hardness of the grade as a side effect. The comparatively harder steel
may wear punching dies more rapidly, which would be likely to worsen
the quality of the punched steel laminations more quickly if tooling
were not replaced correspondingly more often or substituted with a
harder tooling material. More frequent tooling replacement and harder
tooling would be likely to add cost to the electric motor manufacturing
process, which DOE accounts for in the manufacturer impact analysis.
Separately, NEMA also commented on another technology option that
DOE considered. Specifically, NEMA stated that the benefits of reducing
the length of the coil extensions are not clear. It noted that to
reduce the I\2\R loss, the mean length of each turn in the end coil
region would have to be reduced during the coil winding stage but doing
so would increase the difficulty of winding insertion due to increased
crowding with adjacent coils. However, NEMA stated that if such a
reduction in mean length was feasible, it is likely to have already
been exploited to their full extent because it would reduce the amount
of copper in the winding, and would also be a cost-saving measure.
(NEMA, No. 22 at p. 3) DOE agrees that decreasing the length of the
coil extensions in the stator slots of an electric motor reduces the
resistive I\2\R losses, and reduces the material cost of the electric
motor because less copper is being used. DOE also agrees that there may
be limited efficiency gains, if any, for most electric motors using
this technology option. DOE understands that electric motors have been
produced for many decades and that many manufacturers have improved
their production techniques to the point where certain design
parameters may already be fully optimized. However, DOE cannot conclude
that this design parameter is fully optimized for all electric motors,
and therefore maintains that this is a design parameter that affects
efficiency and should be considered when designing an electric motor
because it is a technology option that continues to be technologically
feasible. DOE has previously made similar conclusions in the May 2014
Final Rule. See 79 FR 30934, 30960.
The CA IOUs strongly suggested that DOE update the maximum
technology feasible for electric motors to include, at a minimum, the
commercially available technology with the highest efficiency. The CA
IOUs provided data for commercially available electric motors, as well
as built and tested prototypes, that exceed the max-tech performance
assumption in the March 2022 Preliminary Analysis. (CA IOUs, No. 30 at
p. 3) For the analysis, DOE uses the maximum efficiency technology
option to represent the design option which yields the highest energy
efficiency that is technologically feasible within the scope of MEMs
and air-over electric motors, which are all induction motors. In their
comment, the CA IOU's present high efficiency motors that are all
outside the scope of this direct final rule, such as permanent magnet
synchronous motors, and electronically commutated motors. As such, DOE
is not amending the maximum technology design option in this direct
final rule.
Therefore, DOE maintains the same technology options from the March
2022 Preliminary Analysis in this direct final rule.
B. Screening Analysis
DOE uses the following five screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
(8) Technological feasibility. Technologies that are not
incorporated in commercial products or in commercially viable, existing
prototypes will not be considered further.
(9) Practicability to manufacture, install, and service. If it is
determined that mass production of a technology in commercial products
and reliable installation and servicing of the technology could not be
achieved on the scale necessary to serve the relevant market at the
time of the projected compliance date of the standard, then that
technology will not be considered further.
[[Page 36091]]
(10) Impacts on product utility. If a technology is determined to
have a significant adverse impact on the utility of the product to
subgroups of consumers, or result in the unavailability of any covered
product type with performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as products generally available in the United States at the time,
it will not be considered further.
(11) Safety of technologies. If it is determined that a technology
would have significant adverse impacts on health or safety, it will not
be considered further.
(12) Unique-pathway proprietary technologies. If a technology has
proprietary protection and represents a unique pathway to achieving a
given efficiency level, it will not be considered further, due to the
potential for monopolistic concerns.
10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, sections
6(c)(3) and 7(b).
In summary, if DOE determines that a technology, or a combination
of technologies, fails to meet one or more of the listed five criteria,
it will be excluded from further consideration in the engineering
analysis. The reasons for eliminating any technology are discussed in
the following sections.
As part of the May 2022 Preliminary Analysis, DOE requested
feedback, in part, on its screening analysis based on the five criteria
described in this section. 87 FR 11650. The subsequent sections include
comments from interested parties pertinent to the screening criteria,
DOE's evaluation of each technology option against the screening
analysis criteria, and whether DOE determined that a technology option
should be excluded (``screened out'') based on the screening criteria.
1. Screened-Out Technologies
In the March 2022 Prelim TSD, DOE screened out amorphous metal
laminations and plastic bonded iron powder (``PBIP'') from the
analysis. DOE requested further data on the feasibility of amorphous
steel being used in electric motors at scale. See chapter 3 of the
March 2022 Prelim TSD. In response, DOE received comments regarding the
technologies excluded from this engineering analysis.
Metglas commented that they strongly disagree with the decision to
exclude electric motors that use amorphous steel. Metglas stated that
Hitachi Industrial Equipment Systems Co., Ltd. (Hitachi Sanki Systems)
has commercially produced higher efficiency air compressors (IE5 class)
with an amorphous metal-based motor since 2017. Metglas noted that
Hitachi Ltd. is using novel motor topologies to optimize the use of
amorphous foil in the fabrication process. Metglas claimed that other
motor producers are actively designing amorphous metal-based motors,
and while amorphous metal-based motors are certainly not predominant
today, they do represent where the maximum technological feasibility
efficiency levels can be set for electric motors. Metglas claimed the
losses when using an amorphous metal stator have been shown to drop by
more than 75 percent compared to a conventional non-oriented electrical
steel, and that this allows for higher operational frequencies which
reduces the overall motor size for the same output power. Furthermore,
Metglas claimed higher efficiencies in other electrical appliances can
be achieved with more efficient amorphous-based motors. (Metglas, No.
24 at p. 1) Metglas requested that DOE consider the maximum technical
feasibility efficiency be based on the performance of amorphous metal
containing motors, but understands that the DOE cannot set efficiency
levels based on niche materials that have not been widely demonstrated
on a commercial scale. (Metglas, No. 24 at p. 2) On the other hand,
NEMA commented that amorphous steel is not a direct replacement for the
current electrical steel that is in motors, and stated that this option
is unproven since NEMA is not aware of any successful prototype motors
using this steel. (NEMA, No. 22 at p. 14)
DOE reviewed the information submitted by Metglas and notes that
the motors provided appear to all require an inverter to drive and are
thus not in the scope of this direct final rule. DOE understands the
potential benefits of using amorphous steel, particularly the reduction
in core losses during operation, but was unable to identify any
electric motors within the scope of this rule using amorphous steel.
Additionally, as stated in the March 2022 Preliminary TSD, amorphous
steel is a very brittle material which makes it difficult to punch into
motor laminations. Amorphous steel may also be less structurally stiff,
requiring additional mechanical support to implement. Finally,
amorphous steel may entail greater acoustic noise levels, which may be
unsuitable for some applications or require design compromises to
mitigate. As such, with it not being definitive that amorphous steel is
able to meet all the screening criteria, DOE is continuing to screen
out amorphous metal in this direct final rule on the basis of
technological feasibility.
Accordingly, consistent with the March 2022 Preliminary Analysis,
DOE is continuing to screen out amorphous metal laminations and PBIP in
this direct final rule.
2. Remaining Technologies
In the March 2022 Prelim TSD, DOE did not screen out the following
technology options: Increasing cross-sectional area of copper in stator
slots; decreasing the length of coil extensions; increasing cross-
sectional area of end rings; increasing cross-sectional area of rotor
conductor bars; using a die-cast copper rotor cage; using electrical
steel laminations with lower losses (watts/lb); using thinner steel
laminations; increasing stack length; optimizing bearing and
lubrication selection; improving cooling system design; reducing skew
on rotor cage; and improving rotor bar insulation. See chapter 3 of the
March 2022 Prelim TSD.
Regarding copper die-cast rotors, NEMA commented in opposition of
DOE's decision to not screen out copper die-cast rotors. NEMA stated
that only one manufacturer offers NEMA Design A, B, or C motors with
copper rotor cages, and that the largest horsepower offered of these
motors was 20 HP. NEMA also stated that they are not practicable to
manufacture because of added equipment requirements, higher energy
costs to melt the copper, die lifespan that is 10 percent that of dies
used for aluminum, and a casting piston life of only 500 rotors. NEMA
also stated that the increased locked-rotor current due to the copper
rotor would push certain motors out of NEMA Design B requirements and
reduce consumer utility. NEMA finally stated that the higher melting
point of copper (1084 deg C) vs. aluminum (660 deg C) poses health and
safety issues for plant workers, and that DOE failed to rebut this
claim with evidence in 2012. (NEMA, No. 22 at p. 4-5)
Aluminum is the most common material used today to create die-cast
rotor bars for electric motors. Some manufacturers that focus on
producing high-efficiency designs have started to offer electric motors
with die-cast rotor bars made of copper. Copper offers better
performance than aluminum because it has better electrical conductivity
(i.e., a lower electrical resistance). However, because copper also has
a higher melting point than aluminum, the casting process becomes more
difficult and is likely to increase both production time and cost.
[[Page 36092]]
DOE recognizes that assessing the technological feasibility of
copper die-cast rotors in high-horsepower motors (above 30 HP) is made
more complex by the fact that manufacturers do not offer them
commercially. That could be for a variety of reasons, among them: (1)
large copper die-cast rotors are physically impossible to construct;
(2) they are possible to construct, but impossible to construct to
required specifications, or (3) they are possible to construct to
required specifications, but would require large capital investment to
do so and would be so costly that few (if any) consumers would choose
them. As stated in the March 2022 Preliminary TSD, electric motors
incorporating copper die-cast rotor cages are already commercially
available by large manufacturers for motors up to 30 horsepower.\31\ As
such, DOE does not have enough evidence to screen out copper die-cast
rotors on the basis of practicability to manufacture, install, and
service, or adverse impacts to equipment utility or availability.
Additionally, DOE is hesitant to screen out copper die-cast rotors on
the basis of technological feasibility because there is nothing to
suggest the advantages associated with copper rotors would not occur
beyond a certain size. Therefore, DOE's research into commercially
available electric motors with copper die-cast rotors does not conclude
that copper die-cast rotors are either: (1) physically impossible to
construct, or (2) possible to construct, but impossible to construct to
required specifications.
---------------------------------------------------------------------------
\31\ DOE is aware of two large manufacturers--Siemens and SEW-
Eurodrive--that offer die-cast copper rotor motors up to 30-
horsepower.
---------------------------------------------------------------------------
DOE considers a higher factory overhead markup (which includes all
the indirect costs associated with production, indirect materials and
energy use, taxes, and insurance) for copper die-cast rotors in the
engineering analysis. See Chapter 5 of the direct final rule TSD. In
addition, DOE understands that large capital investments may be needed
for copper die-cast rotors, which is addressed as additional conversion
costs in the manufacturer impact analysis (see section IV.J.4).
Regarding the higher melting point of copper versus aluminum (1085
degrees Celsius versus 660 degrees Celsius), although the increased
temperature could theoretically affect the health or safety of plant
workers, DOE does not believe that this potential impact is
sufficiently adverse to screen out copper as a die cast material for
rotor conductors. The process for die casting copper rotors involves
risks similar to those of die casting aluminum. DOE believes that
manufacturers who die-cast metal at 660 Celsius or 1085 Celsius (the
respective temperatures required for aluminum and copper) would need to
maintain strict safety protocols in both cases. DOE understands that
many plants already work with molten aluminum die casting processes and
believes that similar processes could be adopted for copper. Since DOE
has not received any supporting data about the increased risks
associated with copper die-casting versus aluminum die-casting, DOE is
not screening out copper die-cast rotors from this direct final rule.
Otherwise, through a review of each technology, DOE concludes that
all of the other identified technologies listed in section IV.A.4 met
all five screening criteria to be examined further as design options in
DOE's direct final rule analysis. The design options screened-in are
consistent with the design options from the March 2022 Preliminary
Analysis. DOE determined that these technology options are
technologically feasible because they are being used or have previously
been used in commercially-available products or working prototypes. DOE
also finds that all of the remaining technology options meet the other
screening criteria (i.e., practicable to manufacture, install, and
service and do not result in adverse impacts on consumer utility,
product availability, health, or safety). For additional details, see
chapter 4 of the direct final rule TSD.
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of electric motors. There
are two elements to consider in the engineering analysis; the selection
of efficiency levels to analyze (i.e., the ``efficiency analysis'') and
the determination of product cost at each efficiency level (i.e., the
``cost analysis''). In determining the performance of higher-efficiency
equipment, DOE considers technologies and design option combinations
not eliminated by the screening analysis. For each equipment class, DOE
estimates the baseline cost, as well as the incremental cost for the
equipment at efficiency levels above the baseline. The output of the
engineering analysis is a set of cost-efficiency ``curves'' that are
used in downstream analyses (i.e., the LCC and PBP analyses and the
NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing products (in other words, based on
the range of efficiencies and efficiency level ``clusters'' that
already exist on the market). Using the design option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended
using the design option approach to interpolate to define ``gap fill''
levels (to bridge large gaps between other identified efficiency
levels) and/or to extrapolate to the max-tech level (particularly in
cases where the max-tech level exceeds the maximum efficiency level
currently available on the market).
In this rulemaking, DOE applied a combination of the efficiency-
level approach and the design-option approach to establish efficiency
levels to analyze. The design-option approach was used to characterize
efficiency levels that are not available on the market but appear to be
market solutions for those higher efficiency levels if sufficient
demand existed. For the efficiency levels available on the market,
sufficient performance data was publicly available to characterize
these levels.
a. Representative Units Analyzed
Due to the large number of equipment classes, DOE did not directly
analyze all equipment classes of electric motors considered in this
direct final rule. Instead, DOE selected representative units based on
two factors: (1) the quantity of motor models available within an
equipment class and (2) the
[[Page 36093]]
ability to scale to other equipment classes.
Table IV-3 presents the representative units DOE analyzed in the
March 2022 Preliminary Analysis. DOE only analyzed NEMA Design B
representative units.
Table IV-3--March 2022 Preliminary Analysis Representative Units Analyzed
----------------------------------------------------------------------------------------------------------------
Representative unit
ECG/Design type horsepower (4 poles, Represented horsepower range (all poles, all
enclosed) enclosures)
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design B........................ 5 1 <= hp <=5.
30 5 < hp <= 50.
75 51 < hp <= 100.
*150 101 < hp <= 200.
*250 201 < hp <= 500.
AO-MEM, NEMA Design B..................... 5 1 < hp <= 20.
30 21 < hp <= 50.
75 51 < hp <= 500.
----------------------------------------------------------------------------------------------------------------
* While these representative units were not directly analyzed in the engineering analysis, they were added to
represent consumers of larger sized electric motors for the LCC and NIA analyses.
DOE received a comment regarding motor testing at higher efficiency
levels. NEMA stated that DOE should test a greater number of
representative units across all design types to better inform scaling
assumptions, and that for higher efficiency levels, testing is more
important than scaling. In addition, NEMA commented that DOE places too
much reliance on untested models, scaling and interpolation. NEMA
commented that the only appropriate way to evaluate non-represented
equipment classes is to study them through testing (including prototype
construction for testing, as appropriate). (NEMA, No. 22 at p. 15, 24)
DOE recognizes that scaling motor efficiencies is a complicated
proposition that has the potential to result in efficiency standards
that are not evenly stringent across all equipment classes. However,
given the extremely high volume of horsepower rating, pole
configuration, and enclosure combinations, DOE cannot feasibly analyze
all of these variants directly, hence, the need for scaling.
For the analysis, DOE obtained electric motor performance data from
a catalog reflecting electric motors currently available in the U.S.
market and views this database as representative of the full range of
motors that can be purchased. Specifically, DOE created a database
which contains information regarding the characteristics of the motor
(motor performance values like horsepower output, pole configuration,
NEMA Design letter, etc.), and the full-load efficiency (``2022 Motor
Database''). DOE collected performance data from online catalogs for
four major motor manufacturers in 2022: ABB (which includes the
manufacturer formerly known as Baldor Electric Company), Nidec Motor
Corporation (which includes the US Motors brand), Regal-Beloit
Corporation (which includes the Marathon and Leeson brands), and WEG
Electric Motors Corporation.\32\ Based on market information from the
Low-Voltage Motors World Market Report,\33\ DOE estimates that the four
major motor manufacturers noted above comprise the majority of the U.S.
motors market and are consistent with the motor brands considered in
this direct final rule. In addition, DOE tested multiple motors and
obtained test reports detailing the efficiency of these motors at their
rated load, along with many other measurements and technical
specifications, to inform the scaling relationships and efficiency
analysis described in this direct final rule.
---------------------------------------------------------------------------
\32\ ABB (Baldor-Reliance): Online Manufacturer Catalog,
accessed March 22, 2022. Available at https://www.baldor.com/catalog#category=2; Nidec: Online Manufacturer Catalog, accessed
April 8, 2022. Available at ecatalog.motorboss.com/Catalog/Motors/ALL; Regal (Marathon and Leeson): Online Manufacturer Catalog,
accessed May 25, 2022. Available at https://www.regalbeloit.com/Products/Faceted-Search?category=Motors&brand=Leeson,Marathon%20Motors; WEG: Online
Manufacturer Catalog, accessed March 22, 2022. Available at http://catalog.wegelectric.com/.
\33\ Based on the OMDIA, Low-Voltage Motors Intelligence
Service, Annual 2020 Analysis(OMDIA Report November 2020) Table 3:
Market Share Estimates for Low-voltage Motors: Americas; Suppliers
`share of the Market:2019.
---------------------------------------------------------------------------
Using the 2022 Motor Database, and along with testing and modeling,
DOE affirms that the scaling methodologies employed are accurate for
the purposes of determining energy conservation standards, and
therefore maintains the current scaling methodology. Further, the
relationships used to scale between efficiency and a combination of
horsepower, pole count, and enclosure are consistent with previously
used and validated methods of scaling, which are based on Table 12-12
of NEMA MG 1-2016. For more detailed discussion on scaling, see section
IV.C.4. Consequently, DOE has concluded that scaling is necessary and
suitable for establishing appropriate efficiency levels for new or
amended energy conservation standards for electric motors.
For this direct final rule, DOE updated several representative
units based on the November 2022 Joint Recommendation. Overall, DOE
updated the representative units to be based on both NEMA Design A and
B instead of only NEMA Design B. The November 2022 Joint Recommendation
specifically noted that to achieve IE4 levels, manufacturers would
likely shift from NEMA Design B to NEMA Design A motors.
DOE notes that the one main difference between NEMA Design A and
Design B is that Design A does not have a locked-rotor current limit.
Locked-rotor current is the steady-state current applied to a motor, at
its rated voltage, when the rotor is stationary. It is a critical
design characteristic of induction motors because higher locked-rotor
currents can negatively impact (or even damage) the starting circuit if
the starting circuit is not equipped to handle the locked-rotor
current. One of the ways to improve motor efficiency is to use lower
core-loss electrical steel, but a common tradeoff of these low core-
loss steels is a lower permeability \34\ that requires the motor to
have a higher locked-rotor current to meet the torque requirements of
NEMA Design A and B. DOE analyzed a sample of over 3,000 NEMA Design A
and B motors currently available on the market and found that
[[Page 36094]]
over 50 percent of them are already at or above 90 percent of the NEMA
Design B locked-rotor current limit. DOE notes that higher energy
conservation standards could incentivize manufacturers to offer NEMA
Design A motors in place of their Design B motors.
---------------------------------------------------------------------------
\34\ The magnetic permeability of a material determines the
magnitude of magnetic flux density in the material after a magnetic
field is applied to it, and the magnetic flux density is
proportional to the amount of torque generated in an electric motor.
---------------------------------------------------------------------------
While it appears to be possible to design NEMA Design B motors that
are at higher efficiency levels than current standards, these NEMA
Design B motors would require some combination of longer stack lengths,
wider core laminations, and/or higher slot fills, all of which could
require additional equipment and retooling by the manufacturer. Because
NEMA Design A and B motors are in the same equipment class, in the case
of higher standards, manufacturers could opt to shift their offerings
to NEMA Design A motors that do not require nearly the same magnitude
of investment by the manufacturer. This shift to NEMA Design A
offerings could result in additional installation costs, discussed in
section IV.F.2. DOE's review of current motor catalogs suggests
multiple manufacturers representing their IE4 motors as NEMA Design
A.\35\ As such, in this direct final rule, the representative unit
designs include both NEMA Design A and Design B.
---------------------------------------------------------------------------
\35\ ABB Product Brochure: NEMA Super-E Premium efficient
motors. (Last accessed December 2, 2022.) https://library.e.abb.com/public/e35d57ce4df3160285257d6d00720f51/9AKK106369_SuperE_1014_WEB.pdf.
WEG Super Premium Efficiency Catalog: https://www.weg.net/catalog/weg/US/en/c/MT_1PHASE_LV_TEFC_W22_STANDARD/list?h=3a6a6e81.
---------------------------------------------------------------------------
In addition, DOE updated the horsepowers analyzed, and the range of
horsepowers each representative unit represents. First, DOE updated the
MEM Design A/B 250 hp representative unit to 350 hp to better represent
the horsepower range between 250 hp to 500 hp, which the Electric
Motors Working Group recommended to remain at Premium Level/IE3 level
(see Recommendation #1 in section II.B.3). Second, DOE added a MEM
Design A/B representative unit at 600 hp to represent and analyze
electric motors rated over 500 hp and up to 750 hp (see Recommendation
#2 in section II.B.3). Third, DOE split the air-over equipment class
into AO-MEM (Standard Frame Size) and AO-Polyphase (Specialized Frame
Size), as discussed in section IV.A.3, and added the following
representative units: (1) a representative unit to represent the
horsepower range between 100 hp to 250 hp for AO-MEM (Standard Frame
Size), which the Electric Motors Working Group recommended at Super
Premium/IE4 level; and (2) a representative unit to represent the
horsepower range between 1 hp to 20 hp for AO-Polyphase (Specialized
Frame Size), which the Electric Motors Working Group recommended at
fire pump level (see Recommendation #3 in section II.B.3). DOE notes
that the 250 hp limit for AO-MEM (Standard Frame Size) corresponds to
the horsepower output range observed in the 2022 Motor Database.
Otherwise, similar to the March 2022 Preliminary Analysis, DOE
chose the horsepower ratings that constitute a high volume of motor
models and approximate the middle of the range of covered horsepower
ratings so that DOE could develop a reasonable scaling methodology. DOE
did not vary the pole configuration of the representative classes it
analyzed because analyzing the same pole configuration provided the
strongest relationship upon which to base its scaling. Keeping as many
design characteristics constant as possible enabled DOE to more
accurately identify how design changes affect efficiency across
horsepower ratings. For each motor topology, DOE directly analyzed the
most common pole-configuration, which was 4-pole.
Table IV-4 presents the representative units analyzed, and the
covered horsepower ranges for each of the representative units.
Table IV-4--Representative Units Analyzed
----------------------------------------------------------------------------------------------------------------
Representative unit
ECG Representative horsepower (4 poles, Represented horsepower range (all
unit (RU) enclosed) poles, all enclosures)
----------------------------------------------------------------------------------------------------------------
MEM 1-500 hp, NEMA Design A & B.. 1 5 1 <= hp <= 5.
2 30 5 < hp <= 20.
20 < hp <= 50.
3 75 50 < hp < 100.
4 150 100 <= hp <= 250.
5 350 250 < hp <= 500.
MEM 501-750 hp, NEMA Design A & B 6 600 500 < hp <= 750.
AO-MEM (Standard Frame Size)..... 7 5 1 <= hp <= 20.
8 30 20 < hp <= 50.
9 75 50 < hp < 100.
10 150 100 <= hp <= 250.
AO-Polyphase (Specialized Frame 11 5 1 <= hp <= 20.
Size).
----------------------------------------------------------------------------------------------------------------
b. Baseline Efficiency
For each equipment class, DOE generally selects a baseline model as
a reference point for each class, and measures changes resulting from
potential energy conservation standards against the baseline. The
baseline model in each equipment class represents the characteristics
of an equipment typical of that class (e.g., capacity, physical size).
Generally, a baseline model is one that just meets current energy
conservation standards, or, if no standards are in place, the baseline
is typically the most common or least efficient unit on the market.
In the March 2022 Preliminary Analysis, for current scope motors in
10 CFR 431.25, DOE used the current energy conservation standards in
Table 5 of 10 CFR 431.25 as the baseline. For AO-MEMs, DOE used a
baseline representing the lowest efficiencies available in the market
based on catalog listings. See Chapter 5 of the March 2022 Prelim TSD.
In response to the March 2022 Preliminary Analysis, DOE received
comments on how the baseline efficiencies were established.
The Joint Advocates encouraged DOE to both clarify and refine the
baseline efficiency levels for air-over electric motors. (Joint
Advocates, No. 27 at pp. 2-3) Specifically, they commented that while
the March 2022 Preliminary Analysis stated that the baseline
[[Page 36095]]
efficiency levels of the currently covered motors were the same as the
air-over versions (See: EERE-2020-BT-STD-0007-0010, p. 5-7), Table
5.3.6 of the March 2022 Prelim TSD showed the baseline efficiency
levels for the currently covered motors as EL1 for the air-over
variants. Further, the Joint Advocates commented that the assumption
that baseline air-over motors are less efficient than the baseline in
the current standard for covered motors is supported by the 2015
Appliance Standards and Rulemaking Federal Advisory Committee
(``ASRAC'') term sheet for fans and blowers,\36\ which included default
air-over motor efficiencies less than those shown in the March 2022
Preliminary Analysis. The Joint Advocates commented that they suspected
that the lack of coverage for air-over motors means that there are
available models that may be considerably less efficient than
equivalent non-air-over motors. In addition, the Joint Advocates
commented that the appropriate baseline efficiency levels for AO motors
will depend heavily on the final AO motor test procedure. (Joint
Advocates, No. 27 at pp. 2-3)
---------------------------------------------------------------------------
\36\ See EERE-2013-BT-STD-0006-0179, p. 18, www.regulations.gov/document/EERE-2013-BT-STD-0006-0179.
---------------------------------------------------------------------------
DOE notes that the Joint Advocates' statement that the baseline
efficiency levels of currently covered motors are the same as the air-
over versions in the March 2022 Prelim TSD is incorrect. The March 2022
Prelim TSD stated that, since AO motors are designed largely the same
as non-AO motors, DOE used the same higher efficiency levels for AO MEM
motors, and did not state that baseline efficiency levels of currently
covered motors are the same as the air-over versions. This is shown in
Table 5.3.6 and Table ES3.3.3 of the March 2022 Preliminary TSD, which
also present the baseline efficiency for air-over motors as lower than
the baseline for currently regulated motors.
Otherwise, DOE acknowledges that because air-over electric motors
are not currently regulated, air-over electric motors will likely be
less efficient than currently regulated non-air-over electric motors
available on the market. In order to understand the efficiency of air-
over electric motors currently available, DOE reviewed the 2022 Motor
Database. With that, DOE confirmed that air-over electric motors were
less efficient than currently regulated non-air-over electric motors
and also noted that AO-MEMs were only available up to 250 hp. However,
DOE did not identify baselines as low as what was considered in the
2015 ASRAC term sheet for fans and blowers; because DOE had current
market data through the 2022 Motor Database, DOE decided to consider
more up-to-date baseline efficiencies. As such, DOE maintained the
engineering analysis for AO-MEMs from the March 2022 Preliminary
Analysis.
The Joint Advocates commented that DOE's specification of a single
target test temperature of 75 [deg]C for all AO motors may not be
representative. For example, the Joint Advocates commented that it is
plausible that one or more of the AO motors that DOE tested may run at
higher temperatures in the field, which would result in lower real-
world efficiency. As such, they noted that artificially cooling a
hotter running motor beyond realistic operating temperatures could
result in AO motor efficiency ratings that are not representative both
in comparison to other AO motors and the equivalent non-AO motors.
Therefore, the Joint Advocates recommend that DOE analyze appropriate
baseline efficiency levels for AO motors. (Joint Advocates, No. 27 at
p. 3) In the October 2022 Final Rule, DOE addressed the single-target
temperature concerns by specifying that the requirement to use a single
target temperature of 75 [deg]C only applies to air-over motors that do
not have a specified temperature rise. As such, if the temperature rise
is specified on the motor, such temperature rise will be used to
determine the target temperature. 87 FR 63588, 63614.
Accordingly, in this direct final rule, DOE included the following
baseline efficiencies, which are summarized below in Table IV-5:
For ECG 1, DOE used the current energy conservations standards in
Table 5 of 10 CFR 431.25 to establish the baseline efficiency for each
representative unit analyzed. The standards for this ECG align with
Table 12-12 of NEMA MG 1-2016 ``Full-Load Efficiencies for 60 Hz
Premium Efficiency . . .'' and is commonly referred to by industry as
``NEMA Premium'' or IE3 levels.
For ECGs 2 and 3, DOE used available catalog data to understand the
efficiencies of motors offered. DOE observed that the lowest
efficiencies at multiple horsepowers aligned with the efficiencies
found in Table 12-11 of NEMA MG 1-2016 ``Full-Load Efficiencies of 60
Hz Energy-Efficient Motors''. These levels of efficiency are commonly
referred to as ``fire pump electric motor levels'' since they largely
correspond to the energy conservations standards for fire pump motors
set out in Table 7 of 10 CFR 431.25. As such, DOE set the baseline for
ECGs 2 and 3 in line with fire pump electric motor levels.
For ECG 4, during the electric motor working group negotiations it
was discussed that catalog data would not accurately represent the
efficiencies of these ``specialized'' frame size motors since they are
designed be placed in larger equipment based on manufacturer
specifications, and not typically sold through publicly available
catalogs. DOE understands that given a fixed horsepower output,
reducing frame size will restrict the potential for efficiency
improvements in a motor and may make improvements in efficiency more
expensive compared to a larger motor. Because the electric motors in
ECG 4 are smaller versions of those in ECG 3, DOE assumed that the
baseline efficiency for ECG 4 would be an offset version of the
baseline of ECG 3. DOE decided to quantify the offset in terms of `NEMA
bands' because these bands are commonly used by industry when
describing motor efficiency. One NEMA band represents a 10 percent
reduction in motor losses from the previous efficiency value; Table 12-
10 of NEMA MG 1-2016 specifies the list of selectable efficiency
values. DOE received feedback from manufacturers that they typically
design motors in increments of 20 percent loss differences or more
because of motor efficiency test variability and marketing clarity.
This 20 percent loss is consistent with the IE level designations, in
that each IE level that is included in IEC 60034-30-1:2014, starting
from IE1 (lowest efficiency) to IE4 (highest efficiency), is
approximately in increments of 20 percent loss difference. As such, DOE
assumed the baseline for ECG 4 would be 2 NEMA bands (or 20 percent
loss difference) lower than the baseline of ECG 3 due to reduced size
of ECG 4 motors. This baseline corresponds with the IE1 level, the
lowest level defined by IEC 60034-30-1:2014.
[[Page 36096]]
Table IV-5--Baseline Efficiencies Analyzed
----------------------------------------------------------------------------------------------------------------
ECG ECG motor design type RU Description
----------------------------------------------------------------------------------------------------------------
1.................................. MEM 1-500 hp, NEMA Design A & B 1 NEMA Premium/IE3.
2
3
4
5
2.................................. MEM 501-750 hp, NEMA Design A & 6 Fire Pump.
B.
3.................................. AO-MEM (Standard Frame Size)... 7 Fire Pump.
8
9
10
4.................................. AO-Polyphase (Specialized Frame 11 2 NEMA bands below Fire
Size). Pump.
----------------------------------------------------------------------------------------------------------------
c. Higher Efficiency Levels
As part of DOE's analysis, the maximum available efficiency level
is the highest efficiency unit currently available on the market. DOE
also defines a ``max-tech'' efficiency level to represent the maximum
possible efficiency for a given product.
In the March 2022 Preliminary Analysis, DOE established the higher
efficiency levels by shifting the baseline efficiencies up a certain
number of NEMA bands. For ECG 1, EL 1 represented a 1 NEMA band
increase over baseline efficiency, EL 2 a 2 NEMA band increase, and so
on until max-tech. For ECG 3 of this direct final rule (referred to as
``AO-MEMs'' in the March 2022 Preliminary Analysis), EL 1 was NEMA
Premium because this ECG had a lower baseline at fire pump levels. EL 2
was 1 NEMA band above premium, EL 3 was 2 NEMA bands above NEMA
Premium, and the max-tech was the same as ECG 1. See Chapter 5 of the
March 2022 Prelim TSD.
In response to the March 2022 Preliminary Analysis, DOE received
comments regarding the analysis used to determine efficiencies at
higher levels.
NEMA stated that any performance modeling done by DOE should rely
on multiple tested models rather than a single unverified motor
performance model (NEMA, No. 22 at p. 2-3). NEMA also stated that
building and testing models with high enough volumes to ensure
repeatability is the only way to prove the performance of a new steel.
(NEMA, No. 22 at p. 11,13)
While DOE acknowledges that testing individual models is the most
ideal way to gather performance data for electric motors, given the
extremely high volume of horsepower rating, pole configuration, and
enclosure combinations, DOE cannot feasibly analyze all of these
variations directly, hence, the need for scaling and modeling.
Accordingly, DOE retained an electric motors subject matter expert
(``SME'') with significant experience in terms of both design and
related software, who prepared a set of electric motor designs with
increasing efficiency.
DOE concurs that modeling is not an exact equivalent to testing in
all regards, and that relative to physical motor units, modeled results
may over- or -underestimate performance. That prototyping and testing
of production runs are important motor tools does not imply, however,
that properly modeled motors would carry no predictive power and could
not be of value in estimating electric motor performance. Through
confidential interviews of electric motor manufacturers, DOE learned
that performance modeling, along with prototyping, is a central element
in modern electric motor development. Therefore, DOE does not find
justification to abandon modeling as an analytical practice. DOE pairs
and informs modeled results using physical testing and teardown of
motors purchased on the market, and from performance data collected in
the 2022 Motor Database, as detailed in chapter 5 of the direct final
rule TSD. The motors that were torn down represented a range of
horsepowers, and had efficiencies rated at 2 to 3 NEMA bands above
their respective standards. As new designs were created, DOE's SME
ensured that the critical performance characteristics that define a
NEMA design letter (e.g., locked-rotor torque, breakdown torque, pull-
up torque, and locked-rotor currents) were maintained.
As an example on how the modeling was informed by teardowns, DOE's
SME used lamination diameters measured during the teardowns as limits
for the software models. After establishing baseline models, DOE used
the motor design software to incorporate design options (generated in
the market and technology assessment and screening analysis) to
increase motor efficiency all the way up to the max-tech design. This
procedure has been utilized to inform scaling relationships in previous
rulemakings, and as such, DOE is continuing to use motor performance
modeling as the basis of its efficiency analysis in this direct final
rule.
In recognition of the potential for electrical steel quality to
vary and of modeled results to diverge from test results of production
electric motor designs, DOE opted to use a conservative approach when
modeling the performance of electrical steels by using the guaranteed
maximum core loss values for various steel grades in place of
``average'' or ``typical'' core loss per pound values. Purchasers of
electrical steel cannot rely on a given sample of electrical steel
exceeding (i.e., carrying lower loss) the guaranteed loss. However, on
a larger scale the steel performance would be expected to converge to
the average if steel manufacturers are accurately representing their
products.
Separately, NEMA stated that the inrush current of multiple models
exceeds the NEMA Design B and C locked-rotor current limits for the
following representative units: 5HP, Design B; 5HP, Design C; and 50
HP, Design C. (NEMA, No. 22 at p. 3) NEMA also stated that in order to
comply with the test procedure, motors may become NEMA Design A motors
with higher inrush current, and that this higher current could create
safety issues on other components and would require upgrades and
modifications to electrical components of the motor. It stated that not
being able to satisfy NEMA Design B requirements would present a loss
of consumer utility. (NEMA, No. 22 at p. 2)
DOE disagrees with NEMA's claim that the test procedure rule would
require a change in motor design to comply with standards. DOE
understands NEMA's comment to relate to the changes to the represented
value formula (currently in 10 CFR 429.64) proposed in the test
procedure NOPR (86 FR 71710, December 17, 2021). DOE addressed concerns
regarding the
[[Page 36097]]
updates to the test procedure in the October 2022 Final Rule;
specifically, DOE noted that while DOE proposed changes in the formulas
used to determine the represented value of a basic model, DOE did not
propose to change how the compliance of a given basic model is
determined. As such, DOE concluded that the compliance or noncompliance
of a basic model would remain unchanged by the publication of this
final rule, and therefore, disagreed with NEMA that basic model
redesigns would be required to ensure compliance. 87 FR 63588, 63631-
63633
As for the representative unit designs not complying with NEMA
Design B locked-rotor current requirements, DOE agrees and notes that
the voltages specified for those units in the March 2022 Preliminary
TSD were incorrect and will be corrected in the TSD of this direct
final rule. With that voltage correction, the locked-rotor current
units for the mentioned representative units fell within NEMA Design B
limits. However, as discussed in section IV.C.1.a, DOE is considering
NEMA Design A at higher efficiency levels.
As such, for this direct final rule, DOE considered several design
options for higher efficiencies: improved electrical steel for the
stator and rotor, using die-cast copper rotors, increasing stack
length, and any other applicable design options remaining after the
screening analysis when improving electric motor efficiency from the
baseline level up to a max-tech level. As each of these design options
are added, the manufacturer's cost generally increases and the electric
motor's efficiency improves. DOE worked with an SME to develop the
highest efficiency levels technologically feasible for each
representative unit analyzed, and used a combination of electric motor
software design programs and SME input to develop these levels. The SME
also checked his designs against tear-down data and calibrated his
software using the relevant test results. DOE notes that for all
efficiency levels of directly modeled representative units, the frame
size was constrained to that of the baseline unit. DOE also notes that
the full-load speed of the simulated motors did not stay the same
throughout all efficiency levels. Depending on the materials used to
meet a given efficiency level, the full-load speed of the motor may
increase compared to a lower efficiency model, but for the
representative units analyzed this was not always the case. See chapter
5 of the TSD for more details on the full-load speeds of modeled units.
For the max-tech efficiencies in the engineering analysis, DOE
considered 35H210 silicon steel, which has the lowest theoretical
maximum core loss of all steels considered in this engineering
analysis, and the thinnest practical thickness for use in motor
laminations. In addition, the max-tech efficiency designs all use die-
cast copper rotors, because copper offers better performance than
aluminum since it has better electrical conductivity (i.e., a lower
electrical resistance), leading to a higher-efficiency design. The max-
tech designs also have the highest possible slot fill, maximizing the
number of motor laminations that can fit inside the motor. Further
details are provided in Chapter 5 of the direct final rule TSD.
For intermediate efficiency levels that were higher than an ECG's
baseline but not the max-tech efficiency considered, DOE used different
approaches to establish these levels depending on the ECG, as discussed
in the next few paragraphs.
For ECG 1, EL 1 was set at IE4 levels (also referred to as NEMA
Super-Premium) after receiving feedback during the electric motor
working group negotiations that this should be the first EL considered
above current standards (in 10 CFR 431.25, IE3 or ``NEMA Premium''),
consistent with the progression of the IE levels to represent
efficiency, when available. IE4 levels correspond to the efficiency
values in Table 10 of IEC 60034-30-1:2014,''Nominal efficiency limits
(percentage) for 60 Hz IE4''. DOE notes that the efficiencies at IE4
levels are varying magnitudes above current standard levels, but are
typically either 1 or 2 NEMA bands higher depending on pole
configuration and horsepower output. Next, DOE defined EL 2 as 2 NEMA
bands above current standards and EL 3 as 3 NEMA bands above current
standards. For RU1, RU2 and RU5, EL 1 efficiency is the same as EL 2
efficiency because the IE4 efficiencies are the same as the
efficiencies at 2 NEMA bands above current standard levels.
When possible, DOE opted to set the intermediate efficiency levels
at industry-recognized levels of efficiency like NEMA Premium or IE4.
For ECGs 2 and 3, EL 1 was set at current standards since the baseline
for these ECGs was lower than current standards. EL 2 was then set at
IE4 levels, and EL 3 set at 2 NEMA bands above current standard levels.
For RU6, RU7 and RU8, EL 2 efficiency is the same as EL 3 efficiency
because the IE4 efficiencies are the same as the efficiencies at 2 NEMA
bands above current standards.
For ECG 4, DOE again opted to set the intermediate efficiency
levels at industry-recognized levels. Therefore, EL 1 was set at fire
pump electric motor levels, EL 2 at current standards or NEMA Premium,
and EL 3 at IE4 levels. For RU11, the max-tech efficiency is the same
as EL 3 efficiency at IE4.
Table IV-6 presents a summary of the description of the higher
efficiency levels analyzed in this direct final rule. For additional
details on the efficiency levels, see chapter 5 of the direct final
rule TSD.
Table IV-6--Higher Efficiencies Analyzed
--------------------------------------------------------------------------------------------------------------------------------------------------------
ECG RUs EL0/Baseline EL1 EL2 EL3 EL4
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.............................. 1 through 5....... Premium/IE3....... Super Premium/IE4. 2 NEMA bands above 3 NEMA bands Max-tech
Premium. above Premium.
2.............................. 6................. Fire pump......... Premium/IE3....... Super Premium/IE4. 2 NEMA bands Max-tech
above Premium.
3.............................. 7 through 10...... Fire pump......... Premium/IE3....... Super Premium/IE4. 2 NEMA bands Max-tech
above Premium.
4.............................. 11................ 2 NEMA Bands below Fire pump......... Premium/IE3....... Super Premium/IE4 Max-tech
Fire pump.
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, the availability and timeliness of purchasing the equipment on
the market. The cost approaches are summarized as follows:
Physical teardowns: Under this approach, DOE physically
dismantles a commercially available product,
[[Page 36098]]
component-by-component, to develop a detailed bill of materials for the
product.
Catalog teardowns: In lieu of physically deconstructing a
product, DOE identifies each component using parts diagrams (available
from manufacturer websites or appliance repair websites, for example)
to develop the bill of materials for the product.
Price surveys: If neither a physical nor catalog teardown
is feasible (for example, for tightly integrated products such as
fluorescent lamps, which are infeasible to disassemble and for which
parts diagrams are unavailable) or cost-prohibitive and otherwise
impractical (e.g. large commercial boilers), DOE conducts price surveys
using publicly available pricing data published on major online
retailer websites and/or by soliciting prices from distributors and
other commercial channels.
In the March 2022 Preliminary Analysis, DOE conducted the analysis
using a combination of physical teardowns and software modeling. DOE
contracted a professional motor laboratory to disassemble various
electric motors and record what types of materials were present and how
much of each material was present, recorded in a final bill of
materials (``BOM''). To supplement the physical teardowns, software
modeling by an SME was also used to generate BOMs for select efficiency
levels of directly analyzed representative units. The resulting bill of
materials provides the basis for the manufacturer production cost
(``MPC'') estimates. See Chapter 5 of the March 2022 Prelim TSD.
In response to the March 2022 Preliminary Analysis, DOE received a
number of comments. First, DOE received a comment regarding labor rates
and markups used in the engineering analysis. ABB commented that the
tabulated cost of labor used in Table 2.5.17 of the March 2022 Prelim
TSD does not accurately reflect the current labor market. ABB added
that the U.S. labor markets have tightened significantly over the past
12 months, and as a result labor rates have increased significantly.
Therefore, ABB commented that they believe the labor rates shown in the
table are outdated and need to be revised with current rates. Regarding
the magnitude of the factory markup in Table 2.5.17 in the March 2022
Prelim TSD, ABB also commented that they believe that 30 percent is a
more accurate estimate than the 15 percent mentioned, and that using
the 15 percent markup would result in an underestimation of the cost
impacts of factory overhead. (ABB, No. 28 at p. 1)
Regarding labor rates and markups, DOE used the same hourly labor
rate for all electric motors analyzed. DOE determined the unburdened
labor rate by using the 2007 Economic Census of Industry, and since the
March 2022 Preliminary Analysis, updated the labor rate to dollar year
2021 using producer price index (``PPI'') data.\37\ DOE understands
this method of calculation accounts for changes in the labor market
because the PPI data contains information from the current market. In
addition, several markups were applied to this hourly rate to obtain a
fully burdened rate, which is representative of the labor costs
associated with manufacturing electric motors. The markups applied to
the base labor cost per hour include indirect production, overhead,
fringe, and assembly labor up-time costs. Finally, DOE also
incorporated input from manufacturers during interviews on domestic and
foreign labor rates to inform the labor cost values used in the
engineering analysis in this direct final rule. As such, DOE concludes
that the updates to the labor rates since the March 2022 Preliminary
Analysis accurately represent current labor market.
---------------------------------------------------------------------------
\37\ NAICS code 335312 ``Motor and generator manufacturing''
production workers hours and wages.
---------------------------------------------------------------------------
Regarding the overhead markup, DOE notes that in the March 2022
Preliminary Analysis, an overhead markup of 30 percent was applied to
the unburdened labor rate in line with ABB's recommendation. The 15
percent factory overheard markup referenced in ABB's comment is a
separate markup applied to the material cost of a motor, not related to
the labor markup of concern. In addition, the factory overhead markup
was increased to 20 percent when copper die-casting was used in the
rotor. DOE presented the range of factory overhead markups in
manufacturer interviews, and either received little feedback, or
generally supportive comments from manufacturers. Accordingly, DOE
concludes that the factory overhead markups used in the March 2022
Preliminary Analysis sufficiently characterizes the markups used for
the cost analysis.
DOE also received a comment regarding material prices. NEMA
commented referring DOE to a Department of Commerce study from October
2020 for perspective on conductor prices. NEMA also stated that DOE
should update its information to 2022 data and pricing. (NEMA, No. 22
at p. 16) DOE reviewed the Department of Commerce study referenced by
NEMA and did not find any specific material pricing information
regarding copper or aluminum, the two conductors that this engineering
analysis focuses on. In the direct final rule, DOE determined conductor
prices based on producer price indices \38\ and manufacturer input
obtained through interviews.
---------------------------------------------------------------------------
\38\ Producer Price Index by Commodity: Metals and Metal
Products: Copper Wire and Cable (WPU10260314): https://fred.stlouisfed.org/series/WPU10260314; Producer Price Index by
Commodity: Metals and Metal Products: Extruded Aluminum Rod, Bar,
and Other Extruded Shapes (WPU10250162): https://fred.stlouisfed.org/series/WPU10250162.
---------------------------------------------------------------------------
Regarding the dollar year used for the analysis, DOE usually uses
the most recent completed year before the publication of any rulemaking
document when presenting pricing information and data to reduce the
impact of month-to-month material pricing volatility. However, due to
recent pricing volatility as a result of global supply chain issues,
DOE is presenting pricing information as a 5-year average price so that
the price results can be extrapolated more accurately for use in future
years. As such, DOE presents all costs and pricing information as a 5-
year average of the years 2017 to 2021 in this direct final rule.
Finally, DOE also received a comment regarding how costs would need
to be updated because of the stack length increase. NEMA commented that
the stack lengths of motors in Table 2.5.13 of the March 2022
Preliminary Analysis TSD appear to be longer than what would fit in a
typical motor housing and stated that DOE needs to consider the cost of
redesigning the motor to accommodate the larger stack and all costs of
changing the production line. NEMA stated that certain stack lengths
may be so long that they are not able to be machine wound, and instead
would use the more labor-intensive process of hand winding. NEMA
commented that the increased labor requirements would push
manufacturers to move production to facilities with lower cost of labor
outside of the US and would reduce US jobs. Finally, NEMA stated that
the conversion costs of using thinner steels did not capture the
conversion costs of using longer stack lengths. NEMA also stated that
end-use motor application redesign should be accounted for as well.
(NEMA, No. 22 at p. 17)
DOE notes that NEMA did not identify specific units that would have
to be hand-wound because of their stack lengths. A given winding
machine may have a limit of how long of a stack it can wind, but DOE
understands that if the
[[Page 36099]]
stack length increased beyond this limit, a manufacturer could use the
next sized winding machine that they may already use for larger
horsepower motors. However, in this direct final rule, DOE is not
adopting a standard level that would require motors to be hand-wound,
and as such does not find that there will be a push to offshore US
manufacturing of electric motors for the standards being finalized.
However, separately DOE also performs a manufacturer impact analysis to
quantify the costs incurred by the manufacturer to redesign regulated
equipment at each efficiency level; see discussion in section IV.J.
Accordingly, in this direct final rule, DOE continues to use the
approach from the March 2022 Preliminary Analysis by determining costs
using a combination of physical teardowns and software modeling. In
addition, as part of this direct final rule, DOE supplemented other
critical inputs to the MPC estimate, including material prices assumed,
scrap costs, overhead costs, and conversion costs incurred by the
manufacturer, using information provided by manufacturers under a
nondisclosure agreement through both manufacturer interviews and the
Electric Motors Working Group. Through these nondisclosure agreements,
DOE solicited and received feedback on inputs like: motor starter costs
associated with NEMA Design A motors, recent electrical steel prices by
grade, and the MPCs of both Design A and Design B motors at different
efficiency levels and rated motor output. See chapter 5 of the direct
final rule TSD for more detail on the scrap, overhead, and conversion
costs as well as material prices used.
Finally, to account for manufacturers' non-production costs and
profit margin, DOE applies a non-production cost multiplier (the
manufacturer markup) to the MPC. The resulting manufacturer selling
price (``MSP'') is the price at which the manufacturer distributes a
unit into commerce. DOE developed an average manufacturer markup by
examining the annual Securities and Exchange Commission (SEC) 10-K
reports filed by publicly-traded manufacturers primarily engaged in
electric motor manufacturing and whose combined product range includes
electric motors. For motors with a rated output power of 5 or less
horsepower, DOE used a non-production markup of 37 percent. For motors
rated above 5 horsepower, DOE used a non-production markup of 45
percent.
3. Cost-Efficiency Results
The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of MSP (in dollars) versus
full-load efficiency (in %), which form the basis for subsequent
analysis. DOE developed eleven curves representing the four equipment
class groups. The methodology for developing the curves started with
determining the full-load efficiency and MPCs for baseline motors.
Above the baseline, DOE implemented various combinations of design
options to achieve each efficiency level. Design options were
implemented until all available technologies were employed (i.e., at a
max-tech level). To account for manufacturers' non-production costs and
profit margin, DOE applies a manufacturer markup to the MPC, resulting
in the MSP. See Table IV-7 for the final results. See TSD Chapter 5 for
additional detail on the engineering analysis.
Table IV-7--Cost-Efficiency Results
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Full-load efficiency (%) MSP (2021$)
RU HP Pole Enclosure --------------------------------------------------------------------------------------------------------
EL0 EL1 EL2 EL3 EL4 EL0 EL1 EL2 EL3 EL4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1........................................ 5 4 Enclosed.................. 89.50 91.00 91.00 91.70 92.40 $340.95 $424.52 $424.52 $459.91 $614.47
2........................................ 30 4 Enclosed.................. 93.60 94.50 94.50 95.00 95.40 1,331.45 1,792.24 1,792.24 1,928.42 1,999.62
3........................................ 75 4 Enclosed.................. 95.40 95.80 96.20 96.50 96.80 3,724.25 4,577.13 4,943.96 5,219.07 5,541.73
4........................................ 150 4 Enclosed.................. 95.80 96.20 96.50 96.80 97.10 6,181.17 6,378.33 8,205.53 8,662.15 9,197.66
5........................................ 350 4 Enclosed.................. 96.20 96.80 96.80 97.10 97.40 12,874.60 15,313.54 15,313.54 18,042.15 19,157.57
6........................................ 600 4 Enclosed.................. 95.80 96.20 96.80 96.80 97.40 19,711.60 20,532.73 24,422.41 24,422.41 30,552.96
7........................................ 5 4 Enclosed.................. 87.50 89.50 91.00 91.00 92.40 304.59 332.96 414.57 414.57 554.40
8........................................ 30 4 Enclosed.................. 92.40 93.60 94.50 94.50 95.40 1,281.82 1,326.36 1,785.38 1,785.38 1,975.97
9........................................ 75 4 Enclosed.................. 94.10 95.40 95.80 96.20 96.80 3,097.87 3,703.79 4,551.99 4,910.11 5,510.57
10....................................... 150 4 Enclosed.................. 95.00 95.80 96.20 96.50 97.10 5,352.67 6,199.20 6,396.94 8,229.47 8,687.42
11....................................... 5 4 Enclosed.................. 85.50 87.50 89.50 91.00 91.00 304.59 332.96 414.57 554.40 554.40
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
In this direct final rule, DOE also added a scenario to account for
the fact that some consumers may choose to purchase a synchronous
electric motor (out of scope of this direct final rule) rather than a
more efficient NEMA Design A or B electric motor or select to purchase
a VFD in combination with a compliant electric motor. As such, DOE
costed out the price of a synchronous electric motor and a VFD to
analyze for this substitution; further discussion on this analysis is
provided in Chapter 5 of the direct final rule TSD.
4. Scaling Methodology
Due to the large number of equipment classes, DOE was not able to
perform a detailed engineering analysis on each one. Instead, DOE
focused its analysis on the representative units and scaled the results
to equipment classes not directly analyzed in the engineering analysis.
In the March 2022 Preliminary Analysis, DOE used the current standards
at 10 CFR 431.25 as a basis to scale the efficiency of the
representative units to all other equipment classes. In order to scale
for efficiency levels above baseline, the efficiencies for the
representative units were shifted up or down by however many NEMA
bands, because these bands are commonly used by industry when
describing motor efficiency, that efficiency level was above current
standards.
In response to the preliminary analysis, NEMA disagreed that a
given enclosed motor could meet the same or higher efficiency standards
as an open motor. NEMA stated that Part 13 of NEMA MG1 specifies, for
many ratings, their standard frame size to be smaller than an enclosed
motor of the same frame size. NEMA provided an example of a 7.5 hp,
575V, 2 pole standard NEMA Design A/B motor and state that an open
enclosure motor is standard as a 184T frame whereas an enclosed would
be a 213T frame. NEMA stated that the ratings for which the standard
frame size is the same for an open or enclosed enclosure, the
efficiency capability of the open motor is expected to be equal or
greater than an enclosed motor because of the reduced windage losses
and potentially lower operating temperature. NEMA noted that the
specific utility lost by switching from an open motor to an enclosed
one would be having to move to a physically larger motor and mounting
dimensions for certain ratings. NEMA stated that the
[[Page 36100]]
efficiency ratings of NEMA 12-12 is higher for open motors at some
ratings, higher for enclosed at others, and in some cases equal in
order to retain this utility of having a smaller motor for a given
application. (NEMA, No. 22 at p. 6)
DOE acknowledges that the efficiencies would be different for open
and enclosed motors for the scope of electric motors being considered
in this direct final rule. As such, DOE considered separate
efficiencies for open and enclosed motors; although DOE only analyzed
enclosed motor representative units as part of the analysis, for the
full range of efficiencies being considered for the downstream
analysis, DOE considered different efficiencies for open and enclosed.
DOE based the relationship between enclosed and open motor efficiencies
on Table 5 of 10 CFR 431.25. Specifically, DOE quantified the offset
between enclosed and open motor efficiencies for each pole and
horsepower combination in terms of NEMA bands. DOE used the same offset
to determine the open motor efficiencies from the enclosed motor
efficiencies for the full range of pole and horsepower combinations
being considered for each ECG and efficiency level analyzed.
In this direct final rule, to scale across horsepower, pole
configuration, and enclosure, DOE again relied on industry-recognized
levels of efficiency when possible, or shifted forms of these levels.
For example: when an efficiency level for a representative unit was
NEMA Premium, Table 12-12 of NEMA MG 1-2016 was used to determine the
efficiency of all the non-representative unit equipment classes. This
method of scaling was also done for IE4 levels of efficiency, electric
motor fire pump levels, and shifted versions of NEMA Premium (see Table
IV-10 for description of efficiency levels analyzed). DOE relied on
industry-recognized levels because they sufficiently capture the
effects of enclosure, pole configuration, frame size, and horsepower on
motor efficiency.
D. Markups Analysis
The markups analysis develops appropriate markups (e.g., retailer
markups, distributor markups, contractor markups) in the distribution
chain and sales taxes to convert the MSP estimates derived in the
engineering analysis to consumer prices, which are then used in the LCC
and PBP analysis and in the manufacturer impact analysis. At each step
in the distribution channel, companies mark up the price of the product
to cover business costs and profit margin.
In the March 2022 Preliminary Analysis, DOE identified distribution
channels for MEM 1-500 hp, NEMA Design A and B and AO-MEM (Standard
Frame Size) and their respective market shares (i.e., percentage of
sales going through each channel). For these electric motors, the main
parties in the distribution chain are OEMs, equipment or motor
wholesalers, retailers, and contractors. In response to the March 2022
Preliminary Analysis, DOE did not receive any comment on the
distribution channels identified. Therefore, DOE retained these
distribution channels for MEM 1-500 hp, NEMA Design A and B and AO-MEM
(Standard Frame Size) in the direct final rule. For electric motors
above 500 hp and up to 750 hp (``MEM 501-750 hp, NEMA Design A & B''),
DOE applied the same distribution channels. For and AO-polyphase
(specialized frame size) electric motors which are typically sold
through OEMs, DOE assumed that these motors are only sold through
distribution channels that include OEMs.
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
products with baseline efficiency, while incremental markups are
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental
markup is typically less than the baseline markup and is designed to
maintain similar per-unit operating profit before and after new or
amended standards.\39\
---------------------------------------------------------------------------
\39\ Because the projected price of standards-compliant products
is typically higher than the price of baseline products, using the
same markup for the incremental cost and the baseline cost would
result in higher per-unit operating profit. While such an outcome is
possible, DOE maintains that in markets that are reasonably
competitive it is unlikely that standards would lead to a
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------
In the March 2022 Preliminary Analysis, DOE relied on economic data
from the U.S. Census Bureau and on 2020 RS Means Electrical Cost Data
to estimate average baseline and incremental markups. Specifically, DOE
estimated the OEM markups for electric motors based on financial data
of different sets of OEMs that use respective electric motors from the
latest 2019 Annual Survey of Manufactures.\40\ The relevant sets of
OEMs identified were listed in Table 6.4.2 of the March 2022 Prelim
TSD, using six-digit code level North American Industry Classification
System (NAICS). Further, DOE collected information regarding sales
taxes from the Sales Tax Clearinghouse.\41\ See chapter 6 of the March
2022 Prelim TSD.
---------------------------------------------------------------------------
\40\ U.S. Census Bureau. 2019 Annual Survey of Manufactures
(ASM): Statistics for Industry Groups and Industries. (Last accessed
March 23, 2021.) www.census.gov/programs-surveys/asm.html.
\41\ Sales Tax Clearinghouse Inc. State Sales Tax Rates Along
with Combined Average City and County Rates. July 2021. (Last
accessed July 1, 2021.) thestc.com/STrates.stm.
---------------------------------------------------------------------------
In response to the March 2022 Preliminary Analysis, NEMA commented
that Table 6.4.2 of the March 2022 Prelim TSD should be replaced by
Table IV.3 of the Import Data Declaration Proposed Rule.\42\ (NEMA, No.
22 at p. 18)
---------------------------------------------------------------------------
\42\ NEMA also provided the following link: www.regulations.gov/document/EERE-2015-BT-CE-0019-0001
---------------------------------------------------------------------------
Table IV.3 of the Import Data Declaration Proposed Rule provides a
list of five-digit code level NAICS.\43\ DOE reviewed the corresponding
six-digit code level NAICS and identified the following additional
NAICS code as relevant in the context of OEMs incorporating electric
motors in their equipment: 333999 ``All other miscellaneous general
Purpose machinery manufacturing''. Other NAICS codes were either
already included in the March 2022 Preliminary Analysis or were did not
correspond to OEMs incorporating electric motors subject to this DFR in
their equipment.
---------------------------------------------------------------------------
\43\ Each five-digit code level NAICS includes several six-digit
code level NAICS.
---------------------------------------------------------------------------
For the direct final rule, DOE revised the OEM baseline and
incremental markups calculation to account for this additional NAICS
code. In addition, DOE relied on updated data from the economic data
from the U.S. Census Bureau and on 2022 RS Means Electrical Cost Data,
and the Sales Tax Clearinghouse.
Chapter 6 of the direct final rule TSD provides details on DOE's
development of markups for electric motors.
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of electric motors at different efficiencies for a
representative sample of commercial, industrial, and agricultural
consumers, and to assess the energy savings potential of increased
electric motor efficiency. The energy use analysis estimates the range
of energy use of electric motors in the field (i.e., as they are
actually used by consumers). For each consumer in the sample, the
energy use is calculated by multiplying the annual average motor input
power by the annual operating hours. The
[[Page 36101]]
energy use analysis provides the basis for other analyses DOE
performed, particularly assessments of the energy savings and the
savings in consumer operating costs that could result from adoption of
amended or new standards.
1. Consumer Sample
In the March 2022 Preliminary Analysis, DOE created a consumer
sample to represent consumers of electric motors in the commercial,
industrial, and agricultural sectors. DOE used the sample to determine
electric motor annual energy consumption as well as for conducting the
LCC and PBP analyses. Each consumer in the sample was assigned a
sector, an application, and a region. The sector and application
determine the usage profile of the electric motor and the economic
characteristics of the motor owner vary by sector and region. DOE
primarily relied on data from the 2018 Commercial Building Energy
Consumption Survey (``CBECS''), the 2018 Manufacturing Energy
Consumption Survey (``MECS''), the 2013 Farm and Ranch Irrigation
Survey, and a DOE-AMO report ``U.S. Industrial and Commercial Motor
System Market Assessment Report Volume 1: Characteristics of the
Installed Base'' (``MSMA'' or ``DOE-AMO report'').\44\ See chapter 7 of
the March 2022 Prelim TSD.
---------------------------------------------------------------------------
\44\ Prakash Rao et al., ``U.S. Industrial and Commercial Motor
System Market Assessment Report Volume 1: Characteristics of the
Installed Base,'' January 12, 2021, doi.org/10.2172/1760267.
---------------------------------------------------------------------------
In response to DOE's requests for feedback regarding the consumer
sample, NEMA referred to the MSMA report (NEMA, No. 22 at p. 19) As
previously described, DOE relied on information from the MSMA report to
inform its consumer sample. DOE did not receive any additional comments
related to the consumer sample developed in the preliminary analysis
and retained the same approach for this direct final rule. In addition,
for electric motors above 500 hp and up to 750 hp, and AO-polyphase
specialized frame size electric motors, DOE applied the same consumer
sample.
2. Motor Input Power
In the March 2022 Preliminary Analysis, DOE calculated the motor
input power as the sum of (1) the electric motor's rated horsepower
multiplied by its operating load (i.e., the motor output power), and
(2) the losses at the operating load (i.e., part-load losses). DOE
estimated distributions of motor average annual operating load by
application and sector based on information from the MSMA report. DOE
determined the part-load losses using outputs from the engineering
analysis (full-load efficiency at each efficiency level) and published
part-load efficiency information from 2016 and 2020 catalog data from
several manufacturers to model motor part-load losses as a function of
the motor's operating load. See chapter 7 of the March 2022 Prelim TSD.
In response to DOE's requests for feedback regarding distributions
of average annual operating load by application and sector, NEMA
referred to the MSMA report (NEMA, No. 22 at p. 19) As previously
described, DOE relied on information from the MSMA report to
characterize average annual operating loads. DOE did not receive any
additional comments related to the distributions of operating loads
developed in the March 2022 Preliminary Analysis and retained the same
approach for this DFR.
DOE did not receive any comments on its approach to determine part-
load losses and retained the same methodology for this DFR. However,
DOE updated its analysis to account for more recent part-load
efficiency information from the 2022 Motor Database. In addition, for
electric motors larger than 500 hp and up to 750 hp, and AO-polyphase
specialized frame size electric motors, DOE applied the same approach
for establishing motor part-load losses and motor input power.
3. Annual Operating Hours
In the March 2022 Preliminary Analysis, DOE used information from
the MSMA report to establish distributions of motor annual hours of
operation by application for the commercial and industrial sectors. The
MSMA report provided average, mean, median, minimum, maximum, and
quartile boundaries for annual operating hours across industrial and
commercial sectors by application and showed no significant difference
in average annual hours of operation between horsepower ranges. DOE
used this information to develop application-specific statistical
distributions of annual operating hours in the commercial and
industrial sectors. See chapter 7 of the March 2022 Prelim TSD.
For electric motors used in the agricultural sector (which were not
included in the MSMA report), DOE derived statistical distributions of
annual operating hours of irrigation pumps by region using data from
the 2013 Census of Agriculture Farm and Ranch Irrigation Survey.
In response to DOE's requests for feedback regarding distributions
of average annual operating hours by application and sector, NEMA
referred to the DOE MSMA report. (NEMA, No. 22 at p. 20) As previously
described, DOE relied on information from the MSMA report to inform its
distributions of annual operating hours in the commercial and
industrial sectors. For the agricultural sector, which was not included
in the MSMA report, DOE relied on additional data sources as previously
described. DOE did not receive any additional comments related to the
distributions of operating hours developed in the March 2022
Preliminary Analysis and retained the same approach for this final
rule. In addition for electric motors larger than 500 hp, DOE also
relied on data from the MSMA report to develop operating hours.
4. Impact of Electric Motor Speed
Any increase in operating speeds as the efficiency of the motor is
increased could affect the energy saving benefits of more efficient
motors in certain variable torque applications (i.e., fans, pumps, and
compressors) due to the cubic relation between speed and power
requirements (i.e., ``affinity law''). In the March 2022 Preliminary
Analysis, DOE accounted for any changes in the motor's rated speed with
an increase in efficiency levels, based on the speed information by EL
provided in the engineering analysis. Based on information from a
European motor study,\45\ DOE assumed that 20 percent of consumers with
fan, pump, and air compressor applications would be negatively impacted
by higher operating speeds. See chapter 7 of the March 2022 Prelim TSD.
---------------------------------------------------------------------------
\45\ ``EuP-LOT-30-Task-7-Jun-2014.Pdf,'' accessed April 26,
2021, www.eup-network.de/fileadmin/user_upload/EuP-LOT-30-Task-7-
Jun-2014.pdf. The European motor study estimated, as a ``worst case
scenario,'' that up to 40 percent of consumers purchasing motors for
replacement applications may not see any decrease or increase in
energy use due to this impact and did not incorporate any change in
energy use with increased speed. In addition, the European motor
study also predicts that any energy use impact will be reduced over
time because new motor driven equipment would be designed to take
account of this change in speed. Therefore, the study did not
incorporate this effect in the analysis (i.e., 0 percent of
negatively impacted consumers). In the absence of additional data to
estimate the percentage of consumers that may be negatively impacted
in the compliance year, DOE relied on the mid-point value of 20
percent.
---------------------------------------------------------------------------
The Joint Advocates requested clarifications regarding how DOE
accounted for the impact of the increased motor speed on the energy
use, as well as how motor slip \46\ was
[[Page 36102]]
incorporated into the energy use analysis. (Joint Advocates, No. 27 at
p. 4-5)
---------------------------------------------------------------------------
\46\ The motor slip is the difference between the motor's
synchronous speed and actual speed which is lower than the
synchronous speed). At higher ELs, the speed of a given motor may
increase and the motor slip may decrease.
---------------------------------------------------------------------------
DOE described the method and assumptions used to calculate the
impact of higher speeds (i.e., lower slip) by EL on the energy use in
section 7.2.2.1 of the March 2022 Prelim TSD. In the direct final rule
TSD, DOE provided additional details on the methodology and equations
used as part of Appendix 7A.
NEMA commented that nearly 100 percent of fans, pumps and
compressors using electric motors would be negatively impacted by an
increase in speed. In addition, NEMA commented that it would take up to
two years for OEMs to redesign and recertify an equipment with a motor
that has higher speed and provided an example calculation to illustrate
the impacts of higher speed operation. (NEMA, No. 22 at pp. 20-21, 49)
The Joint Industry Stakeholders commented that DOE should consider the
full impact of higher speed motors by taking into account new products
as well as replacement. The Joint Industry Stakeholders commented that
if lower speed motors are no longer available, appliances may be forced
to incorporate higher speed motors which may cause short-cycling in
HVAC and refrigeration applications and result in negative impacts in
other appliances. (Joint Industry Stakeholders, No. 23 at pp. 8-9)
In this direct final rule, DOE included the effect of increased
speeds in the energy use calculation for all equipment classes. DOE
reviewed information related to pump, fans, and compressor applications
and notes that: (1) seven to 20 percent of motors used in these
applications are paired with VFDs which allow the user to adjust the
speed of the motor; \47\ (2) approximately half of fans operate with
belts which also allow the user to adjust the speed of the driven fan;
\48\ (3) some applications would benefit from increase in speeds as the
work would be completed at a higher load in less operating hours (e.g.
pump filling water tank faster at increased speed); (4) not all fans,
pumps and compressors are variable torque loads to which the affinity
laws applies. Therefore, less than 100 percent of motors in these
applications would experience an increase in energy use as a result of
an increase in speed. In addition, as described in the European motor
study, the increase in speed would primarily impact replacement motors
installed in applications that previously operated with a lower speed
motor. For these reasons, DOE determined that assuming that 100 percent
of fans, pumps and compressors using electric motors would be
negatively impacted by an increase in speed would not be
representative. DOE continues to rely on a 20 percent assumption used
in the March 2022 Preliminary Analysis. In addition, DOE incorporated a
sensitivity analysis allowing the user to consider this effect
following scenarios described in Appendix 7-A of the TSD.
---------------------------------------------------------------------------
\47\ See Figure 64 and Figure 71 of the MSMA report.
\48\ See 2016 Fan Notice of Data Availability, 81 FR 75742
(November 1, 2016). LCC spreadsheet, ``LCC sample'' worksheet,
``Belt vs. direct driven fan distribution'' available at
www.regulations.gov/document/EERE-2013-BT-STD-0006-0190.
---------------------------------------------------------------------------
Chapter 7 of the direct final rule TSD provides details on DOE's
energy use analysis for electric motors.
F. Life-Cycle Cost and Payback Period Analysis
DOE conducted LCC and PBP analyses to evaluate the economic impacts
on individual consumers of potential energy conservation standards for
electric motors. The effect of new or amended energy conservation
standards on individual consumers usually involves a reduction in
operating cost and an increase in purchase cost. DOE used the following
two metrics to measure consumer impacts:
The LCC is the total consumer expense of an appliance or
product over the life of that product, consisting of total installed
cost (manufacturer selling price, distribution chain markups, sales
tax, and installation costs) plus operating costs (expenses for energy
use, maintenance, and repair). To compute the operating costs, DOE
discounts future operating costs to the time of purchase and sums them
over the lifetime of the product.
The PBP is the estimated amount of time (in years) it
takes consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
at higher efficiency levels by the change in annual operating cost for
the year that amended or new standards are assumed to take effect.
For any given efficiency level, DOE measures the change in LCC
relative to the LCC in the no-new-standards case, which reflects the
estimated efficiency distribution of electric motors in the absence of
new or amended energy conservation standards. In contrast, the PBP for
a given efficiency level is measured relative to the baseline product.
For each considered efficiency level in each product class, DOE
calculated the LCC and PBP for a nationally representative set of
consumers. As stated previously, DOE developed consumer samples from
various data sources (see section IV.E.1 of this document). For each
sample consumer, DOE determined the energy consumption for the electric
motor and the appropriate energy price. By developing a representative
sample of consumers, the analysis captured the variability in energy
consumption and energy prices associated with the use of electric
motors.
Inputs to the calculation of total installed cost include the cost
of the product--which includes MPCs, manufacturer markups, retailer and
distributor markups, and sales taxes--and installation costs. Inputs to
the calculation of operating expenses include annual energy
consumption, energy prices and price projections, repair and
maintenance costs, product lifetimes, and discount rates. DOE created
distributions of values for product lifetime, discount rates, and sales
taxes, with probabilities attached to each value, to account for their
uncertainty and variability.
The computer model DOE uses to calculate the LCC and PBP relies on
a Monte Carlo simulation to incorporate uncertainty and variability
into the analysis. The Monte Carlo simulations randomly sample input
values from the probability distributions and electric motor user
samples. The model calculated the LCC and PBP for products at each
efficiency level for 10,000 consumer per simulation run. The analytical
results include a distribution of 10,000 data points showing the range
of LCC savings for a given efficiency level relative to the no-new-
standards case efficiency distribution. In performing an iteration of
the Monte Carlo simulation for a given consumer, product efficiency is
chosen based on its probability. If the chosen product efficiency is
greater than or equal to the efficiency of the standard level under
consideration, the LCC and PBP calculation reveals that a consumer is
not impacted by the standard level. By accounting for consumers who
already purchase more-efficient products, DOE avoids overstating the
potential benefits from increasing product efficiency.
DOE calculated the LCC and PBP for all consumers of electric motors
as if each were to purchase a new product in the first year of required
compliance with new or amended standards. DOE
[[Page 36103]]
expects the direct final rule to publish in the first half of 2023.
Therefore, DOE used 2027 as the year of compliance with any new or
amended standards for electric motors based on the recommended 4 year
compliance period after the direct final rule publication.
Table IV-8 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The subsections that follow
provide further discussion. Details of the LCC model, and of all the
inputs to the LCC and PBP analyses, are contained in chapter 8 of the
direct final rule TSD and its appendices.
Table IV-8--Summary of Inputs and Methods for the LCC and PBP Analysis *
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Equipment Cost............... Derived by multiplying MPCs by
manufacturer and retailer markups and
sales tax, as appropriate. Used a
constant price trend to project
equipment costs based on historical
data.
Installation Costs........... Installation costs vary by EL. Used input
from NEMA and engineering analysis to
determine installation costs.
Annual Energy Use............ Motor input power multiplied by annual
operating hours per year. Variability:
Primarily based on the MSMA report, 2018
CBECS, 2018 MECS, and 2013 Farm and
Ranch Irrigation Survey.
Energy Prices................ Electricity: Based on EEI Typical Bills
and Average Rates Reports data for 2021.
Variability: Regional energy prices
determined for four census regions.
Energy Price Trends.......... Based on AEO 2022 price projections.
Repair and Maintenance Costs. Repair costs based on Vaughen 2021,
varies by EL Assumed no change in
maintenance costs with efficiency level.
Equipment Lifetime........... Average: 11.8-33.6 years depending on the
equipment class group and horsepower
considered. Shipments-weighted average
lifetime is 13.6.
Discount Rates............... Calculated as the weighted average cost
of capital for entities purchasing
electric motors. Primary data source was
Damodaran Online.
Compliance Date.............. 2027.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
in the sections following the table or in chapter 8 of the direct
final rule TSD.
In response to the preliminary analysis, the Joint Stakeholders
commented that double-regulation has no corresponding consumer benefits
in the form of reduced power consumption given the appliance
regulations being unchanged and the fact that a more efficient motor
does not necessarily translate to a more efficient product when
incorporated into a finished good. The Joint Stakeholders commented
that to potentially increase the cost of an OEM product, without a
corresponding energy savings would mean a net loss for consumers and
negative national impacts. The Joint Industry Stakeholders noted that
the DOE used operating hours for the following categories of equipment:
air compressors, refrigeration compressors, fans and blowers, pumps
material handling, material processing, other, and agricultural pumps.
Of these, the Joint Stakeholders noted that electric motors used in air
compressors, refrigeration compressors, fans and blowers, pumps and
agricultural pumps are already regulated to some extent and that DOE
made no apparent effort to account for this and deduct a significant
portion of those estimated hours (Joint Industry Stakeholders, No. 23
at p. 5) Lennox commented that DOE must accurately assess, and avoid
double-counting, energy savings when assessing potential efficiency
improvements from motors used in already-regulated HVAC equipment.
Lennox commented that it is unclear in the LCC and payback periods
analysis if DOE accounted for double regulation and eliminated energy
savings already achieved from system-level HVACR regulation. (Lennox,
No. 29 at p. 4) HI commented that there is a potential for duplicate
accounting of energy savings when regulating motors in general. In
addition, there is a potential for other motor product efficiencies to
be counted twice such as the use of inverter-only products in pumps
when the DOE calculates savings in their evaluations (one for inverter
only motors, and another for pumps using those motors). (HI, No. 31 at
p. 1) NEMA commented that many of the proposed additions to scope are
accompanied by erroneous claims of potential energy savings, owing to
the fact that the added motors are components to other regulated
appliances and devices. They commented that their review of the
document shows instances where the DOE is anticipating energy savings
on products that will be used in other covered products, suggesting the
potentially significant overstatement of potential energy savings
benefits. (NEMA, No. 22 at p. 5)
As highlighted in a previous DOE report, motor energy savings
potential and opportunities for higher efficiency electric motors in
commercial and residential equipment would result in overall energy
savings.\49\ In addition, some manufacturers advertise electric motors
as resulting in energy savings in HVAC equipment.\50\ Therefore, DOE
disagrees with the Joint Industry Stakeholders that an increase in
motor efficiency would not necessarily result in a more efficient
equipment when incorporated into a given equipment. In addition, DOE's
analysis ensures the LCC and NIA analysis do not result in double-
counting of energy savings by accounting for consumers who already
purchase more-efficient products and calculating LCC and energy savings
relative to a no-new standards case efficiency distribution. See
Section IV.F.8 for more details. DOE applies the same approach in other
equipment rulemakings, and evaluates energy savings relative to a no-
new standards case efficiency distribution that accounts for consumers
who already purchase more-efficient equipment incorporating more
efficient motors. As such, any future analysis in support of energy
conservation standards for equipment incorporating motors would also
account for equipment that already incorporate more-efficient electric
[[Page 36104]]
motors and would not result in any double counting of energy savings
resulting from motor efficiency improvements.
---------------------------------------------------------------------------
\49\ U.S. DOE Building technology Office, Energy Savings
Potential and Opportunities for High-Efficiency Electric Motors in
residential and Commercial Equipment, December 2013. Available at:
www.energy.gov/eere/buildings/downloads/motor-energy-savings-potential-report
\50\ See for example Nidec and ABB: acim.nidec.com/motors/usmotors/industry-applications/hvac; bit.ly/3wEIQyu
---------------------------------------------------------------------------
In the direct final rule TSD, DOE added a scenario to account for
the fact that some consumers may choose to purchase a synchronous
electric motor (out of scope of this direct final rule) rather than a
more efficient NEMA Design A or B electric motor or select to purchase
a VFD in combination with a compliant electric motor. DOE developed a
consumer choice model to estimate the percentage of consumers that
would purchase a synchronous electric motor based on the payback period
of such investment. See Appendix 8-D for more details on this analysis.
DOE notes that there is uncertainty as to which rate such substitution
would occur and did not incorporate this scenario as part of the
reference analysis.
1. Equipment Cost
To calculate consumer product costs, DOE multiplied the MSPs
developed in the engineering analysis by the distribution channel
markups described previously (along with sales taxes). DOE used
different markups for baseline products and higher-efficiency products,
because DOE applies an incremental markup to the increase in MSP
associated with higher-efficiency products.
Economic literature and historical data suggest that the real costs
of many products may trend downward over time according to ``learning''
or ``experience'' curves. Experience curve analysis implicitly includes
factors such as efficiencies in labor, capital investment, automation,
materials prices, distribution, and economies of scale at an industry-
wide level. To derive a price trend for electric motors, DOE obtained
historical PPI data for integral horsepower motors and generators
manufacturing spanning the time period 1969-2021 from the Bureau of
Labor Statistics' (``BLS'').\51\ The PPI data reflect nominal prices,
adjusted for electric motor quality changes. An inflation-adjusted
(deflated) price index for integral horsepower motors and generators
manufacturing was calculated by dividing the PPI series by the implicit
price deflator for Gross Domestic Product. The deflated price index for
integral horsepower motors was found to align with the copper, steel
and aluminum deflated price indices. DOE believes that the extent to
how these trends will continue in the future is very uncertain.
Therefore, DOE relied on a constant price assumption as the default
price factor index to project future electric motor prices.
---------------------------------------------------------------------------
\51\ Serie PCU3353123353121 for integral horsepower motors and
generators manufacturing; www.bls.gov/ppi/.
---------------------------------------------------------------------------
DOE did not receive any comments on price trends in response to the
preliminary analysis and followed the same methodology in the direct
final rule.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. In the March 2022
Preliminary Analysis, DOE considered that all motors would remain NEMA
Design B as efficiency increased, and DOE found no evidence that
installation costs would be impacted with increased efficiency levels.
Therefore, in the March 2022 Preliminary Analysis, DOE did not
incorporate changes in installation costs for motors that are more
efficient than baseline equipment. DOE assumed there was no variation
in installation costs between a baseline efficiency motor and a higher
efficiency motor except in terms of shipping costs. These shipping
costs were based on weight data from the engineering analysis for the
representative units. See chapter 8 of the March 2022 Prelim TSD.
In response to the preliminary analysis, EASA stated that there is
no simple or reliable method to estimate the installation time and
costs for synchronous motors under 100 hp because they are typically
embedded into a machine like a fan or compressor. EASA further
commented that submersible motors do not have a simple or reliable
method to estimate their installation costs because of the physically
connected piping that would require more time to install than a typical
motor. EASA commented that inverter-only motors probably do not require
additional time and cost to install compared to non-inverter motor
unless they require additional wiring for feedback devices and sensors
or mitigation of harmonics. (EASA, No. 21 at pp. 3-4)
DOE is not including synchronous electric motors, submersible
electric motors, and inverter-only motors in the scope of this direct
final rule.
EASA commented that motors above 500 hp have additional rigging
costs during installation because of their size and sometimes difficult
to access locations. EASA stated that there is not a simple or reliable
method to estimate the installation time and costs for this size of
motor. (EASA, No. 21 at p. 3) NEMA commented that DOE should include
costs for rigging (hoisting) for larger motors due to their extreme
weight. As rated horsepower increases, so too does the expense and time
to move them safely. (NEMA, No. 22 at p. 22)
DOE agrees that at a given efficiency level, the installation costs
will vary as a function of the motor's weight. However, DOE did not
find evidence that rigging costs (for a given motor size) would be
impacted with increased efficiency levels as the variations in weights
by EL are not significant enough to change the equipment and labor
required to hoist the motor as compared to the baseline.
EASA commented that if a motor is replaced with a physically larger
frame, the replacement would have higher installation costs because of
the added complexity of modifying the mounting setup to accommodate the
larger motor, and in some case would be impossible. (EASA, No. 21 at p.
2-3)
As noted in section IV.C of this document, DOE fixed the frame size
which remains the same across efficiency levels. Therefore, DOE did not
account for any changes in installation costs due to changes in frame
sizes in this direct final rule.
In addition, as noted in IV.C.1.a, in this direct final rule, DOE
revised the engineering approach, and assumed that higher efficiency
motors above the baseline would meet the characteristics of a NEMA A
motors and have higher inrush currents. Therefore, based on input from
NEMA, DOE estimated the additional installation costs associated with
the higher inrush current at efficiency levels above baseline, and
incorporated these costs in the analysis.
3. Annual Energy Consumption
For each sampled consumer, DOE determined the energy consumption
for an electric motor at different efficiency levels using the approach
described previously in section IV.E of this document.
4. Energy Prices
Because marginal electricity price more accurately captures the
incremental savings associated with a change in energy use from higher
efficiency, it provides a better representation of incremental change
in consumer costs than average electricity prices. Therefore, DOE
applied average electricity prices for the energy use of the product
purchased in the no-new-standards case, and marginal electricity prices
for the incremental change in energy use associated with the other
efficiency levels considered.
[[Page 36105]]
DOE derived electricity prices in 2021 using data from EEI Typical
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric
bills and average kilowatt-hour costs to the customer as charged by
investor-owned utilities. For all sectors, DOE calculated electricity
prices using the methodology described in Coughlin and Beraki
(2019).\52\
---------------------------------------------------------------------------
\52\ Coughlin, K. and B. Beraki. 2019. Non-residential
Electricity Prices: A Review of Data Sources and Estimation Methods.
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. https://ees.lbl.gov/publications/non-residential-electricity-prices.
---------------------------------------------------------------------------
DOE's methodology allows electricity prices to vary by sector,
region and season. In the analysis, variability in electricity prices
is chosen to be consistent with the way the consumer economic and
energy use characteristics are defined in the LCC analysis. For
electric motors, DOE relied on variability by region and sector. See
chapter 8 of the final rule TSD for details.
To estimate energy prices in future years, DOE multiplied the 2021
energy prices by the projection of annual average price changes for
each sector from the Reference case in AEO2022, which has an end year
of 2050.\53\ To estimate price trends after 2050, DOE used the 2050
electricity prices, held constant.
---------------------------------------------------------------------------
\53\ U.S. Energy Information Administration. Annual Energy
Outlook 2022. 2022. Washington, DC (Last accessed June 1, 2022.)
https://www.eia.gov/outlooks/aeo/index.php.
---------------------------------------------------------------------------
5. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing product
components that have failed in an appliance; maintenance costs are
associated with maintaining the operation of the product
In the March 2022 Preliminary Analysis, for the maintenance costs,
DOE did not find data indicating a variation in maintenance costs
between baseline efficiency and higher efficiency motors. The cost of
replacing bearings, which is the most common maintenance practice, is
constant across efficiency levels. Therefore, DOE did not include
maintenance costs in the LCC analysis. See chapter 8 of the March 2022
Prelim TSD.
DOE did not receive any comments related to maintenance costs and
retained the same approach in this direct final rule.
DOE defines motor repair as including rewinding and reconditioning.
In the March 2022 Preliminary Analysis, DOE estimated repair costs as a
function of efficiency based on data from 2021 Vaughen's National
Average Prices. Based on these data, DOE estimated the repair costs for
baseline electric motors, and used a 15 percent repair cost increase
per NEMA efficiency band increase. In addition, DOE considered that
electric motors at or below 20 horsepower were not repaired. DOE also
assumed that electric motors with a horsepower greater than 20 and less
than or equal to 100 horsepower are repaired once over their lifetime,
while electric motors with a horsepower greater than 100 and less than
or equal to 500 are repaired twice over their lifetime. DOE also
assumed that all electric motors above 20 horsepower would be repaired
at least one, regardless of the sampled lifetime. As a sensitivity
analysis, DOE also considered an alternative scenario where motors are
repaired only upon meeting certain lifetime criteria. See chapter 8 of
the March 2022 Prelim TSD.
In response to the March 2022 Preliminary Analysis, EASA and NEMA
stated that DOE may have overlooked non-rewinding repairs like bearing
changes and stated that these repairs occur 5-7 times more often than
rewinds regardless of motor output power. (EASA, No. 21 at p. 3; NEMA,
No. 22 at p. 21) As noted previously, DOE defines motor repair as
including rewinding and reconditioning. Other non-rewinding related
practices such as bearing replacement were considered as part of the
maintenance costs.
EASA commented that a higher efficiency motor may require more
material (e.g. copper magnet wire) and more labor to rewind windings
with the higher slot fill that is typical of high efficiency designs.
EASA also state that section 2.8.5 of the preliminary analysis TSD
attributes a 15 percent increase in repair cost due to higher
efficiency which contradicts Table 2.8.1 of the preliminary analysis
TSD that states ``assumed no change with efficiency level'' for repair
costs. (EASA, No. 21 at pp. 3-4) NEMA commented that as efficiency
increases, the rate of hand winding increases. Repairing hand-wound
motors may take longer as they are usually would by hand to accomplish
very tight stacking. Rewinding such motors will take longer and cost
more than random wound designs (NEMA, No. 22 at p. 22) NEMA also
commented that the discussion on section 2.8.5 of the preliminary
analysis TSD contradicted the summary table 2.8.1. of the preliminary
analysis TSD (NEMA, No. 22 at p. 22)
As noted by NEMA and EASA, more efficient motors are more expensive
to repair. In the March 2022 Preliminary Analysis, DOE estimated the
repair costs for baseline electric motors, and used a 15 percent repair
cost increase per NEMA efficiency band increase to characterize the
increase in repair costs with increased electric motor efficiency. In
this direct final rule, DOE continues to apply an increase in repair
costs at higher efficiency, and because the increase is directly
related to the increase in material costs, DOE assumed the repair costs
would increase similarly to the MSP instead of applying a 15 percent
increase per NEMA efficiency band increase. DOE notes a typographical
error in Table 2.8.1 of the preliminary analysis TSD. In that Table,
DOE omitted to describe the repair cost assumption, and the statement
only applies to the maintenance costs.
EASA and NEMA commented that they believe 20 horsepower is not a
valid breakpoint for a repair/replace decision on electric motors. In
practice, EASA and NEMA commented that the horsepower breakpoint may be
as high as 100 horsepower on motors readily available from stock. Also,
special OEM motors and IEC motors that may be unavailable from
inventory may be rewound more often than other motors and in lower
power ratings due to need to keep equipment in service. (EASA, No. 21
at p. 2; NEMA, No. 22 at p. 21) EASA provided data from 2017-2021
regarding 11,000 technical inquiries they received about rewinding
motors. The data showed that 32 percent, 29 percent, 31 percent and 8
percent of inquiries related to motors with horsepower below 20,
between 20 and 100 hp, between 100-500 hp, and greater than 500 hp,
respectively. (EASA, No. 21 at p. 2) EASA commented that getting
substantive data on repair likelihood would require polling a large
sample of end-users and providing them with the definition of repair
given in 8.3.3. of the preliminary analysis TSD.\54\ (EASA, No. 21 at
p. 4)
---------------------------------------------------------------------------
\54\ DOE defined a motor repair as repair as including rewinding
and reconditioning
---------------------------------------------------------------------------
Since the publication of the March 2022 Preliminary Analysis, DOE
reviewed additional information related to repair practices. DOE found
that although a breakpoint of 20 hp reflects the breakpoint below which
the repair cost for is equivalent to or exceeds the cost of a new
motor, the decision to repair or replace the motor is not only based on
a cost effectiveness criteria.\55\ Specifically, in most facilities the
cost of lost production or customer
[[Page 36106]]
inconvenience from downtime outweighs any cost differences between
repairing or replacing a failed motor. As noted by EASA, the need to
keep the equipment in service also affects the repair or replace
decision. In addition, when replacing a motor, another major concern is
stock availability. Most motors under 100 hp will typically be
available on the shelf at the facility while larger and specialty
motors will not.\56\ Based on this additional information, DOE updated
the repair breakpoint from 20 hp to 100 hp. As such DOE considered that
electric motors below 100 hp would not be repaired while motors above
100 hp would be repaired at least once. In addition, DOE revised the
analysis to consider that specialty electric motors, which are less
likely to be in stock would be repaired regardless of their size.
---------------------------------------------------------------------------
\55\ ``US Department of Energy, Advanced Manufacturing Office,
Premium Efficiency Motor Selection and Application Guide,'' February
2014, www.energy.gov/sites/prod/files/2014/04/f15/amo_motors_handbook_web.pdf.
\56\ Bonneville Power Administration, ``Quality Electric Motor
Repair, a Guidebook for Electric Utilities''
digital.library.unt.edu/ark:/67531/metadc665937/m2/1/high_res_d/237370.pdf.
---------------------------------------------------------------------------
The Joint Advocates observed that for several representative units
of currently-covered motors, the lifetime operating costs increased at
higher EL and commented that DOE should review the repair assumptions
and costs to ensure that operating costs at higher ELs are not over-
estimated. Specifically, the Joint Advocates commented that DOE should
use the alternative scenario, wherein a motor is only assumed to be
repaired if that motor's projected lifetime is greater than half of the
average motor lifetime. The Joint Advocates commented that this
alternative approach is similar to that used in the analysis for motor
replacements in the direct final rule for dedicated-purpose pool pumps
\57\ and would result in LCCs that are more reflective of real-world
repair/replacement decisions. (Joint Advocates, No. 27 at p. 3-4)
---------------------------------------------------------------------------
\57\ See 82 FR 5650 (January 18, 2017).
---------------------------------------------------------------------------
In this direct final rule, DOE revised the repair assumptions to
align with the alternative scenario presented in the March 2022
Preliminary Analysis. As noted by the Joint Advocates, this scenario,
which assumes that motors with longer lifetimes would be repaired more
often is more representative of industry practice.
6. Equipment Lifetime
In the March 2022 Preliminary Analysis, for electric motors
regulated at 10 CFR 431.25, DOE estimated the average mechanical
lifetime of electric motors (i.e., the total number of hours an
electric motor operates throughout its lifetime) and used different
values depending on the electric motor's horsepower. For NEMA Design A
and B electric motors, and AO MEMs, DOE established sector-specific
average motor lifetime estimates to account for differences in
maintenance practices and field usage conditions. In addition, DOE
applied a maximum lifetime of 30 years as used in the May 2014 Final
Rule. DOE then developed Weibull distributions of mechanical lifetimes.
The lifetime in years for a sampled electric motor is calculated by
dividing the sampled mechanical lifetime by the sampled annual
operating hours of the electric motor. This model produces a negative
correlation between annual hours of operation and electric motor
lifetime. Electric motors operated many hours per year are likely to be
retired sooner than electric motors that are used for only a few hours
per year. In addition, DOE considered that electric motors of less than
or equal to 75 horsepower are most likely to be embedded in a piece of
equipment (i.e., an application). For such applications, DOE developed
Weibull distributions of application lifetimes expressed in years and
compared the sampled motor mechanical lifetime (in years) with the
sampled application lifetime. DOE assumed that the electric motor would
be retired at the earlier of the two lifetimes. See chapter 8 of the
March 2022 Prelim TSD.
In response to the March 2022 Preliminary Analysis, NEMA commented
that the lifetimes assigned to the representative units appear to be
sufficiently accurate. (NEMA, No. 22 at p. 22). The CA IOUs recommended
higher maximum lifetimes for NEMA Designs A and B electric motors
beyond 30 years and provided data to justify a higher maximum lifetime.
Specifically, the CA IOUs referenced the MSMA report which shows that
5.4 percent of motors with legible nameplate were older than 30 years,
including 3.4 percent of motors rated 101 to 500 hp which had lifetimes
of at least 50 years. The CA IOUs also cited the Swiss EASY program
which showed motors of 40 years still in operation. Finally the CA IOUs
cited the ``Energy-Efficient Motor Systems: A Handbook on Technology,
Program, and Policy Opportunities'' which references average lifetimes
of 30 years for motors larger than 50 hp. (CA IOUs, No. 30 at p. 3)
DOE reviewed the data provided by the CA IOUs. As noted by the CA
IOUs, the maximum lifetime of 30 years assumed in the March 2022
Preliminary Analysis is not representative as some motors are reported
to have a lifetime exceeding 50 years. In this direct final rule, DOE
revised the maximum lifetime of NEMA Designs A and B electric motors
and AO MEMs from 30 years to 60 years based on information from the
MSMA report which showed motors still in operation after 50 years.
7. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to consumers to estimate the present value of future operating cost
savings. DOE estimated a distribution of discount rates for electric
motors based on the opportunity cost of consumer funds.
DOE applies weighted average discount rates calculated from
consumer debt and asset data, rather than marginal or implicit discount
rates.\58\ The LCC analysis estimates net present value over the
lifetime of the product, so the appropriate discount rate will reflect
the general opportunity cost of household funds, taking this time scale
into account. Given the long time horizon modeled in the LCC analysis,
the application of a marginal interest rate associated with an initial
source of funds is inaccurate. Regardless of the method of purchase,
consumers are expected to continue to rebalance their debt and asset
holdings over the LCC analysis period, based on the restrictions
consumers face in their debt payment requirements and the relative size
of the interest rates available on debts and assets. DOE estimates the
aggregate impact of this rebalancing using the historical distribution
of debts and assets.
---------------------------------------------------------------------------
\58\ The implicit discount rate is inferred from a consumer
purchase decision between two otherwise identical goods with
different first cost and operating cost. It is the interest rate
that equates the increment of first cost to the difference in net
present value of lifetime operating cost, incorporating the
influence of several factors: transaction costs; risk premiums and
response to uncertainty; time preferences; interest rates at which a
consumer is able to borrow or lend. The implicit discount rate is
not appropriate for the LCC analysis because it reflects a range of
factors that influence consumer purchase decisions, rather than the
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------
To establish commercial and industrial discount rates, DOE
estimated the weighted-average cost of capital using data from
Damodaran Online.\59\ The weighted-average cost of capital is commonly
used to estimate the present value of cash flows to be derived from a
typical company project or investment. Most companies use both debt and
equity capital to fund investments, so their cost of capital is the
weighted average of the cost to the firm of equity and debt financing.
DOE estimated the cost of equity using the
[[Page 36107]]
capital asset pricing model, which assumes that the cost of equity for
a particular company is proportional to the systematic risk faced by
that company. The average commercial, industrial, and agricultural
discount rates in 2022 are 6.8 percent, 7.2 percent, and 7.1 percent
respectively.
---------------------------------------------------------------------------
\59\ Damodaran, A. Data Page: Historical Returns on Stocks,
Bonds and Bills-United States. 2021. (Last accessed April 26, 2022.)
pages.stern.nyu.edu/~adamodar/.
---------------------------------------------------------------------------
In response to the March 2022 Preliminary Analysis, DOE did not
receive any comments on discount rates.
See chapter 8 of the direct final rule TSD for further details on
the development of consumer discount rates.
8. Energy Efficiency Distribution in the No-New-Standards Case
To accurately estimate the share of consumers that would be
affected by a potential energy conservation standard at a particular
efficiency level, DOE's LCC analysis considered the projected
distribution (market shares) of equipment efficiencies under the no-
new-standards case (i.e., the case without amended or new energy
conservation standards).
In the March 2022 Preliminary Analysis, to estimate the energy
efficiency distribution of electric motors for 2027, DOE relied on
model counts by efficiency from the 2016 and 2020 Manufacturer Catalog
Data and assumed no changes in electric motor efficiency over time. In
some cases where DOE did not have enough models with efficiency
information within a single horsepower range, DOE aggregated horsepower
ranges. In addition for certain AO-SNEM electric motors, DOE did not
find enough models with efficiency information to develop a
distribution and used the efficiency distributions of the corresponding
non-AO equipment class instead. In the March 2022 Preliminary Analysis,
DOE used a Monte Carlo simulation to draw from the efficiency
distributions and randomly assign an efficiency to the electric motor
purchased by each sample household in the no-new-standards case. The
resulting percent shares within the sample match the market shares in
the efficiency distributions. See chapter 8 of the March 2022 Prelim
TSD.
NEMA disagreed with the DOE estimates for AO MEMs efficiency
distributions and commented that these distributions were modeled/
estimated, rather than gathered properly and accurately through testing
and other means. NEMA commented that DOE should not develop estimates
and interpolations and instead finalize test procedures. NEMA added
that energy efficiency information does not exist because Federal test
procedures for some of these motors have not been established. (NEMA,
No. 22 at p. 23)
DOE notes that NEMA did not provide any data to support alternative
efficiency distributions. In the absence of such data, DOE relied on
model counts by efficiency from manufacturer Catalog Data and updated
the data to reflect 2022 catalog offerings (using the 2022 Motor
Database). For AO Polyphase specialized frame electric motors, DOE did
not find any catalog data to characterize their efficiency
distributions and assumed all motors were at the baseline, because the
OEM market is cost-driven. As such these motors are typically built on
a first-cost basis and are not optimized for efficiency.\60\ In
addition, the electric motors test procedure, which relies on industry
test methods published in 2016,\61\ was finalized on October 19, 2022.
87 FR 63588 For air-over motors, DOE believes manufacturers currently
use the industry test methods (which were adopted in the October 2022
Final Rule) to evaluate the efficiency of electric motors as reported
in their catalogs, which is in line with the DOE test procedure as
finalized.
---------------------------------------------------------------------------
\60\ See, Almeida, Anibal T., et al. 2008. EuP Lot 11 Motors,
Ecodesign Assessment of Energy Using Products. s.l.: ISR-University
of Coimbra for the European Commission Directorate General for
Mobility and Transport, 2008. (p.117). Available at:
circabc.europa.eu/sd/d/62415be2-3d5a-4b3f-b29a-d1760f4dc11a/
Lot11Motors1-8final28-04-08.pdf.
\61\ NEMA Standards Publication MG 1-2016, ``Motors and
Generators: Air-Over Motor Efficiency Test Method Section IV Part
34'', www.nema.org/docs/default-source/standards-document-library/part-34-addition-to-mg1-2016-watermarkd91d7834-cf4f-4a87-b86f-bef96b7dad54.pdf?sfvrsn=cbf1386d_3.
---------------------------------------------------------------------------
As previously noted, in the March 2022 Preliminary Analysis, DOE
assumed no changes in electric motor efficiency over time. DOE did not
receive any comment on this assumption and retain the same approach in
this direct final rule: to estimate the energy efficiency distribution
of electric motors for 2027, DOE assumed no changes in electric motor
efficiency over time. The estimated market shares for the no-new-
standards case for electric motors are shown in Table IV-9 by equipment
class group and horsepower range.
Table IV-9--No-New Standards Case Efficiency Distributions in the Compliance Year
----------------------------------------------------------------------------------------------------------------
Equipment class group Horsepower range EL0 (%) EL1 (%) EL2 (%) EL3 (%) EL4 (%)
----------------------------------------------------------------------------------------------------------------
MEM 1-500 hp, NEMA Design A and B.. 1 <= hp <= 5.................. 79.8 18.8 0.0 0.9 0.6
5 < hp <= 20.................. 93.9 5.4 0.0 0.5 0.1
20 < hp <= 50................. 93.9 5.4 0.0 0.5 0.1
50 < hp <100.................. 89.6 1.2 6.7 2.5 0.0
100 <= hp <= 250.............. 85.9 7.0 6.5 0.6 0.0
250 < hp <= 500............... 91.9 8.1 0.0 0.0 0.0
MEM 501-750 hp, NEMA Design A & B.. 500 < hp <= 750............... 10.5 73.7 15.8 0.0 0.0
AO-MEM (Standard Frame Size)....... 1 <= hp <= 20................. 33.3 64.3 2.3 0.0 0.0
20 < hp <= 50................. 10.3 89.7 0.0 0.0 0.0
50 < hp < 100................. 0.0 100.0 0.0 0.0 0.0
100 <= hp <= 250.............. 16.7 75.0 8.3 0.0 0.0
AO-Polyphase (Specialized Frame 1 <= hp <= 20................. 100 0 0 0 0
Size).
----------------------------------------------------------------------------------------------------------------
* May not sum to 100% due to rounding.
The existence of market failures in the commercial and industrial
sectors is well supported by the economics literature and by a number
of case studies as discussed in the remainder of this section. DOE did
not receive any comments specific to the random assignment of no-new-
standards case efficiencies (sampled from the developed efficiency
distribution) in the LCC model and continued to rely on the same
approach to reflect market failures in the motor market, as noted in
the following examples. First, a recognized problem in commercial
settings is the
[[Page 36108]]
principal-agent problem, where the building owner (or building
developer) selects the equipment and the tenant (or subsequent building
owner) pays for energy costs.62 63 In the case of electric
motors, for many companies, the energy bills are paid for the company
as a whole and not allocated to individual departments. This practice
provides maintenance and engineering staff little incentives to pursue
energy saving investments because the savings in energy bills provide
little benefits to the decision-making maintenance and engineering
staff. (Nadel et al.) \64\ Second, the nature of the organizational
structure and design can influence priorities for capital budgeting,
resulting in choices that do not necessarily maximize
profitability.\65\ In the case of electric motors, within manufacturing
as a whole, motor system energy costs constitute less than 1 percent of
total operating costs and energy efficiency has a low level of priority
among capital investment and operating objectives. (Xenergy,\66\ Nadel
et al.) Third, there are asymmetric information and other potential
market failures in financial markets in general, which can affect
decisions by firms with regard to their choice among alternative
investment options, with energy efficiency being one such option.\67\
In the case of electric motors, Xenergy identified the lack of
information concerning the nature of motor system efficiency measures--
their benefits, costs, and implementation procedures--as a principal
barrier to their adoption. In addition, Almeida \68\ reports that the
attitude of electric motor end-user is characterized by bounded
rationality where they adopt `rule of thumb' routines because of the
complexity of market structure which makes it difficult for motors end-
users to get all the information they need to make an optimum decision
concerning allocation of resources. The rule of thumb is to buy the
same type and brand as the failed motor from the nearest retailer.
Almeida adds that the same problem of bounded rationality exists when
end-users purchase electric motors incorporated in larger equipment. In
general, end-users are only concerned about the overall performance of
a machine, and energy efficiency is rarely a key factor in this
performance. Motor selection is therefore often left to the OEM, which
are not responsible for energy costs and prioritize price and
reliability.
---------------------------------------------------------------------------
\62\ Vernon, D., and Meier, A. (2012). ``Identification and
quantification of principal-agent problems affecting energy
efficiency investments and use decisions in the trucking industry,''
Energy Policy, 49, 266-273.
\63\ Blum, H. and Sathaye, J. (2010). ``Quantitative Analysis of
the Principal-Agent Problem in Commercial Buildings in the U.S.:
Focus on Central Space Heating and Cooling,'' Lawrence Berkeley
National Laboratory, LBNL-3557E. (Available at: escholarship.org/uc/item/6p1525mg) (Last accessed January 20, 2022).
\64\ Nadel, S., R.N. Elliott, M. Shepard, S. Greenberg, G. Katz
& A.T. de Almedia. 2002. Energy-Efficient Motor Systems: A Handbook
on Technology, Program and Policy Opportunities. Washington, DC:
American Council for an Energy-Efficient Economy. Second Edition.
\65\ DeCanio, S.J. (1994). ``Agency and control problems in US
corporations: the case of energy-efficient investment projects,''
Journal of the Economics of Business, 1(1), 105-124.
Stole, L.A., and Zwiebel, J. (1996). ``Organizational design and
technology choice under intrafirm bargaining,'' The American
Economic Review, 195-222.
\66\ Xenergy, Inc. (1998). United States Industrial Electric
Motor Systems Market Opportunity Assessment. (Available at:
www.energy.gov/sites/default/files/2014/04/f15/mtrmkt.pdf) (Last
accessed January 20, 2022).
\67\ Fazzari, S.M., Hubbard, R.G., Petersen, B.C., Blinder,
A.S., and Poterba, J.M. (1988). ``Financing constraints and
corporate investment,'' Brookings Papers on Economic Activity,
1988(1), 141-206.
Cummins, J.G., Hassett, K.A., Hubbard, R.G., Hall, R.E., and
Caballero, R.J. (1994). ``A reconsideration of investment behavior
using tax reforms as natural experiments,'' Brookings Papers on
Economic Activity, 1994(2), 1-74.
DeCanio, S.J., and Watkins, W.E. (1998). ``Investment in energy
efficiency: do the characteristics of firms matter?'' Review of
Economics and Statistics, 80(1), 95-107.
Hubbard R.G. and Kashyap A. (1992). ``Internal Net Worth and the
Investment Process: An Application to U.S. Agriculture,'' Journal of
Political Economy, 100, 506-534.
\68\ de Almeida, E.L.F. (1998). ``Energy efficiency and the
limits of market forces: The example of the electric motor market in
France'', Energy Policy, 26(8), 643-653.
---------------------------------------------------------------------------
See chapter 8 of the direct final rule TSD for further information
on the derivation of the efficiency distributions.
9. Payback Period Analysis
The payback period is the amount of time it takes the consumer to
recover the additional installed cost of more-efficient products,
compared to baseline products, through energy cost savings. Payback
periods are expressed in years. Payback periods that exceed the life of
the product mean that the increased total installed cost is not
recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the product and the change in the
first-year annual operating expenditures relative to the baseline. The
PBP calculation uses the same inputs as the LCC analysis, except that
discount rates are not needed.
As noted previously, EPCA establishes a rebuttable presumption that
a standard is economically justified if the Secretary finds that the
additional cost to the consumer of purchasing a product complying with
an energy conservation standard level will be less than three times the
value of the first year's energy savings resulting from the standard,
as calculated under the applicable test procedure. (42 U.S.C.
6295(o)(2)(B)(iii)) For each considered efficiency level, DOE
determined the value of the first year's energy savings by calculating
the energy savings in accordance with the applicable DOE test
procedure, and multiplying those savings by the average energy price
projection for the year in which compliance with the new or amended
standards would be required.
G. Shipments Analysis
DOE uses projections of annual product shipments to calculate the
national impacts of potential amended or new energy conservation
standards on energy use, NPV, and future manufacturer cash flows.\69\
The shipments model takes an accounting approach, tracking market
shares of each product class and the vintage of units in the stock.
Stock accounting uses product shipments as inputs to estimate the age
distribution of in-service product stocks for all years. The age
distribution of in-service product stocks is a key input to
calculations of both the NES and NPV, because operating costs for any
year depend on the age distribution of the stock.
---------------------------------------------------------------------------
\69\ DOE uses data on manufacturer shipments as a proxy for
national sales, as aggregate data on sales are lacking. In general
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------
In the March 2022 Preliminary Analysis, DOE estimated shipments in
the base year (2020). DOE estimated the shipments of NEMA Design A and
B electric motors regulated under 10 CFR 431.25 to be approximately 4.5
million units in 2020 based on data from the 2019 Low-Voltage Motors,
World Market Report, and on the share of low-voltage motors that are
subject to the electric motors energy conservation standards. DOE
estimated the total shipments AO-MEMs in 2020 to be 240,000 units. For
electric motors regulated under 10 CFR 431.25, DOE developed a
distribution of shipments by equipment class group, horsepower,
enclosure, and poles based on data from manufacturer interviews. For
AO-MEMs, DOE relied on model counts from the 2020 and 2016/2020
Manufacturer Catalog Data. DOE also provided shipments estimates for
additional categories of electric motors not analyzed in the
preliminary analysis such as electric motors with horsepower greater
than 500 hp. See chapter 9 of the March 2022 Prelim TSD.
[[Page 36109]]
NEMA commented that shipments for motors above 500 hp were over-
estimated (NEMA, No. 22 at p. 24) During the electric motor working
group negotiations, NEMA provided an estimate of 250--400 units sold
per year. NEMA also provided an estimate of 180,000 units for AO MEMs,
and 20,000 units for AO polyphase specialized frame size electric
motors. In this direct final rule, DOE is including electric motors
with horsepower greater than 500 hp and relied on NEMA's input to
estimate shipments to 375 units in the base year. For AO MEMs and AO
polyphase specialized frame size electric motors, DOE revised the total
shipments to align with NEMA's estimate and revised the distribution of
shipments by horsepower range based on model counts from the 2022 Motor
Database. DOE did not receive any additional comments related to the
base year shipments estimates and retained the values estimated in the
March 2022 Preliminary Analysis for NEMA Design A and B motors between
1--500 hp.
In the March 2022 Preliminary Analysis, for NEMA A and B electric
motors which are primarily used in the industry and commercial sectors,
DOE projected shipments in the no-new standards case under the
assumption that long-term growth of electric motor shipments will be
driven by long-term growth of fixed investments. DOE relied on the AEO
2021 forecast of fixed investments through 2050 to inform its shipments
projection. For the years beyond 2050, DOE assumed that fixed
investment growth will follow the same growth trend as GDP, which DOE
projected for years after 2050 based on the GDP forecast provided by
AEO 2021. For AO-MEM electric motors, which are typically lower
horsepower motors, DOE projected shipments using the following sector-
specific market drivers from AEO 2021: commercial building floor space,
housing numbers, and value of manufacturing activity for the
commercial, residential, and industrial sector, respectively. In
addition, DOE kept the distribution of shipments by equipment class
group/horsepower range constant across the analysis period. Finally, in
each standard case, DOE accounted for the possibility that some
consumers may choose to purchase a synchronous electric motor (out of
scope of this preliminary analysis) rather than a more efficient NEMA
Design A or B electric motor. DOE developed a consumer choice model to
estimate the percentage of consumers that would purchase a synchronous
electric motor based on the payback period of such investment.
In response to the March 2022 Preliminary Analysis, NEMA commented
that they do not anticipate horsepower shifts from technology changes.
NEMA also noted that, as an example, increased emission requirements
for stationary diesel pump drivers will increase demand for larger 200
hp and above electric motors. (NEMA, No. 22 at p. 24) NEMA did not
provide any additional comments regarding shipments projections. DOE
did not receive any additional comments related to shipments and
retained the same methodology as in the preliminary analysis and
updated the analysis to reflect AEO 2022. DOE applied the same
shipments trends to electric motors above 500 hp.
With respect to synchronous motors, NEMA commented that in section
2.9.5 of the March 2022 Prelim TSD, DOE notes that synchronous motors
are less efficient than their Design A or B counterparts, which NEMA
does not agree with. Furthermore, NEMA stated that a focus on single
point efficiency at full load misses the benefit synchronous motors
provide (variable load and reduced speed operation). (NEMA, No. 22 at
p. 24)
DOE clarifies that Table 2.9.5 of the March 2022 Preliminary
Analysis TSD did not provide information related to the efficiency of
synchronous motors. Instead, Table 2.9.5 of the March 2022 Prelim TSD
presented the percentage of consumer that would select a synchronous
motor over a compliant induction motor in each considered standard
level case. In addition, as noted by NEMA, synchronous motors offer
additional energy savings benefits through variable load and reduced
speed operation and DOE accounted for these savings in the preliminary
analysis by applying a reduction of energy of 30 percent based on
information from a previous DOE study.\70\ (See section 9.4 of the
March 2022 Prelim TSD).
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\70\ U.S Department of Energy. United States Industrial Electric
Motor Systems Market Opportunities Assessment. 2002.
---------------------------------------------------------------------------
The Electric Motors Working Group stated that to achieve IE4
efficiency levels, manufacturers would likely shift from NEMA Design B
to NEMA Design A motors. This shift may result in the increased
adoption of variable frequency drives (VFDs), which would significantly
increase energy savings. Furthermore, while DOE's March 2022
Preliminary Analysis looked only at substitutions to synchronous motors
up to 100 hp, the increased adoption of VFDs (paired with an IE4 motor)
would also be relevant at higher horsepower levels. The Electric Motors
Working Group therefore encouraged DOE to include this VFD substitution
in its analysis and added that with these substitutions, DOE's updated
analysis will show the recommended efficiency levels to be cost
effective. The Electric Motors Working Group did not provide estimates
regarding the rate at which this substitution would occur.
In the direct final rule TSD, DOE added a scenario to account for
the fact that some consumers may choose to purchase a synchronous
electric motor (out of scope of this direct final rule) rather than a
more efficient NEMA Design A or B electric motor or select to purchase
a VFD in combination with a compliant electric motor. Similar to the
approach used in the March 2022 Preliminary Analysis, DOE developed a
consumer choice model to estimate the percentage of consumers that
would purchase a synchronous electric motor based on the payback period
of such investment. DOE notes that there is uncertainty as to which
rate such substitution would occur and did not incorporate this
scenario as part of the reference analysis. To support the payback
calculation, DOE accounted for the total installed costs and annual
operating costs of a synchronous motor and of a VFD in combination with
a compliant electric motor. In addition, DOE updated its previous
estimate of energy use reduction resulting from variable load and
reduced speed operation based on a more recent study. See appendix 8-D
of the DFR TSD for more details on this analysis.
NEMA added that comparing a synchronous motor and drive combination
to an induction motor is not an apples-to-apples comparison and should
be avoided. NEMA stated that the application of motor-drive systems are
application dependent. NEMA stated that programs which encourage and
facilitate power drive system installations in the field and during
planning are the appropriate vehicles for market transformation, not
point-of-sale regulations such as those in question of the PTSD. NEMA
stated that DOE should defer to and encourage those programs as
appropriate ``other than regulatory'' actions for market
transformation. (NEMA, No. 22 at p. 24)
DOE notes that NEMA is a member of the Electric Motors Working
Group and jointly commented that DOE should consider that some
consumers may select to purchase a synchronous motor and drive
combination or a VFD combined with a compliant motor. As noted, DOE
analyzed this scenario as a
[[Page 36110]]
sensitivity analysis and the reference scenario did not include this
potential market shift to synchronous motors and VFD usage.
NEMA commented that legacy induction motors are being replaced by
PDS (or power drive systems) consisting of a motor and controls/drives
as a means to dramatically reduce power and integrate motor driven
systems into sophisticated control schemes that continuously monitor
processes managing flow, pressure, etc., to reduce operating costs and
emissions. (NEMA, No. 22 at p. 23) As noted by NEMA, advanced
technology electric motors that are combined with a drive are now
available on the market and could be used in the same applications as
the electric motors analyzed in this direct final rule. However, DOE
estimates these PDS currently represent a small fraction of the
market.\71\ Further, NEMA did not provide data to quantitatively
estimate the rate at which such PDS would replace legacy induction
motors. As such DOE did not include such impact in the reference
scenario. Instead, DOE accounted for the potential switch from
induction motors to PDS as a sensitivity scenario. See Appendix 8-C and
10-D for more details. In addition, as another sensitivity analysis,
DOE also projected shipments in a low growth scenario which assumed
lower shipments compared to the reference scenario. See Chapter 9 of
the direct final rule for more details.
---------------------------------------------------------------------------
\71\ DOE estimates the market share of advanced technology
motors to be less than 1 percent based on information from OMDIA,
Low-Voltage Motors Intelligence Service, Annual 2020 Analysis (OMDIA
Report November 2020).
---------------------------------------------------------------------------
H. National Impact Analysis
The NIA assesses the national energy savings (``NES'') and the NPV
from a national perspective of total consumer costs and savings that
would be expected to result from new or amended standards at specific
efficiency levels.\72\ (``Consumer'' in this context refers to
consumers of the product being regulated.) DOE calculates the NES and
NPV for the potential standard levels considered based on projections
of annual product shipments, along with the annual energy consumption
and total installed cost data from the energy use and LCC analyses. For
the present analysis, DOE projected the energy savings, operating cost
savings, product costs, and NPV of consumer benefits over the lifetime
of electric motors sold from 2027 through 2056.
---------------------------------------------------------------------------
\72\ The NIA accounts for impacts in the 50 states and U.S.
territories.
---------------------------------------------------------------------------
DOE evaluates the impacts of new or amended standards by comparing
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each
product class in the absence of new or amended energy conservation
standards. For this projection, DOE considers historical trends in
efficiency and various forces that are likely to affect the mix of
efficiencies over time. DOE compares the no-new-standards case with
projections characterizing the market for each product class if DOE
adopted new or amended standards at specific energy efficiency levels
(i.e., the TSLs or standards cases) for that class. For the standards
cases, DOE considers how a given standard would likely affect the
market shares of products with efficiencies greater than the standard.
In its analysis, DOE analyzes the energy and economic impacts of a
potential standard on all equipment classes aggregated by horsepower
range and equipment class group. For NEMA Design A and B electric
motors regulated under 10 CFR 431.25, inputs for non-representative
equipment classes (i.e., those not analyzed in the engineering, energy-
use, and LCC analyses) are scaled using inputs for the analyzed
representative equipment classes.\73\ For AO-MEMs and electric motors
above 500 hp, DOE used the results of the representative units without
any scaling due to the smaller size of horsepower ranges associated for
each representative unit, and lower shipments of motors at larger
horsepower ratings.
---------------------------------------------------------------------------
\73\ For example, results from representative unit 1 (NEMA
Design A and B electric motors, 5-horsepower, 4-pole, enclosed) were
scaled based by HP and weight to represent all NEMA Design A and B
electric motor equipment classes between 1 and 5 horsepower. DOE
then used shipments weighted-average results to represent the 1-5 HP
range.
---------------------------------------------------------------------------
DOE uses a spreadsheet model to calculate the energy savings and
the national consumer costs and savings from each TSL. Interested
parties can review DOE's analyses by changing various input quantities
within the spreadsheet. The NIA spreadsheet model uses typical values
(as opposed to probability distributions) as inputs.
Table IV-10 summarizes the inputs and methods DOE used for the NIA
analysis for the direct final rule. Discussion of these inputs and
methods follows the table. See chapter 10 of the direct final rule TSD
for further details.
Table IV-10--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments.................... Annual shipments from shipments model.
Compliance Date of Standard.. 2027.
Efficiency Trends............ No-new-standards case: constant trend
Standard cases: constant trend.
Annual Energy Consumption per Annual weighted-average values are a
Unit. function of energy use at each TSL.
Total Installed Cost per Unit Annual weighted-average values are a
function of cost at each TSL.
Incorporates projection of future
product prices based on historical data
(constant trend).
Repair and Maintenance Cost Maintenance costs: Do not change with
per Unit. efficiency level. Repair costs: Changes
with efficiency level.
Electricity Price............ Estimated average and marginal
electricity prices from the LCC analysis
based on EEI data.
Electricity Price Trends..... AEO2022 projections (to 2050) and
extrapolation thereafter.
Energy Site-to-Primary and A time-series conversion factor based on
FFC Conversion. AEO2022.
Discount Rate................ 3 percent and 7 percent.
Present Year................. 2023.
------------------------------------------------------------------------
1. Equipment Efficiency Trends
A key component of the NIA is the trend in energy efficiency
projected for the no-new-standards case and each of the standards
cases. Section IV.F.8 of this document describes how DOE developed an
energy efficiency distribution for the no-new-standards case (which
yields a shipment-weighted average efficiency) for each of the
considered equipment classes for the first year of anticipated
compliance with an amended or new standard. To project the trend in
efficiency absent amended standards for electric motors over the
[[Page 36111]]
entire shipments projection period, similar to what was done in the
March 2022 preliminary Analysis, DOE applied a constant trend. The
approach is further described in chapter 10 of the direct final rule
TSD.
For the standards cases, similar to what was done in the March 2022
preliminary Analysis, DOE used a ``roll-up'' scenario to establish the
shipment-weighted efficiency for the year that standards are assumed to
become effective (2027). In this scenario, the market shares of
products in the no-new-standards case that do not meet the standard
under consideration would ``roll up'' to meet the new standard level,
and the market share of products above the standard would remain
unchanged.
To develop standards case efficiency trends after 2027, DOE assumed
no change over the forecast period.
DOE did not receive any comments on the projected efficiency
trends.
2. National Energy Savings
The national energy savings analysis involves a comparison of
national energy consumption of the considered products between each
potential standards case (``TSL'') and the case with no new or amended
energy conservation standards. DOE calculated the national energy
consumption by multiplying the number of units (stock) of each product
(by vintage or age) by the unit energy consumption (also by vintage).
DOE calculated annual NES based on the difference in national energy
consumption for the no-new standards case and for each higher
efficiency standard case. DOE estimated energy consumption and savings
based on site energy and converted the electricity consumption and
savings to primary energy (i.e., the energy consumed by power plants to
generate site electricity) using annual conversion factors derived from
AEO2022. Cumulative energy savings are the sum of the NES for each year
over the timeframe of the analysis.
Use of higher-efficiency products is sometimes associated with a
direct rebound effect, which refers to an increase in utilization of
the product due to the increase in efficiency. For example, when a
consumer realizes that a more-efficient electric motor used for cooling
will lower the electricity bill, that person may opt for increased
comfort in the building by using the equipment more, thereby negating a
portion of the energy savings. In commercial buildings, however, the
person owning the equipment (i.e., the building owner) is usually not
the person operating the equipment (i.e., the renter). Because the
operator usually does not own the equipment, that person will not have
the operating cost information necessary to influence their operation
of the equipment. Therefore, DOE believes that a rebound effect is
unlikely to occur in commercial buildings. In the industrial and
agricultural sectors, DOE believes that electric motors are likely to
be operated whenever needed for the required process or service, so a
rebound effect is also unlikely to occur in the industrial and
agricultural sectors.
In addition, electric motors are components of larger equipment or
systems and DOE has determined that a change in motor efficiency alone
would not increase the utilization of that equipment or system. DOE did
not find any data on the rebound effect specific to electric motors and
did not receive any comments supporting the inclusion of a rebound
effect for electric motors. DOE did not apply a rebound effect for
electric motors.
In 2011, in response to the recommendations of a committee on
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy
Efficiency Standards'' appointed by the National Academy of Sciences,
DOE announced its intention to use FFC measures of energy use and
greenhouse gas and other emissions in the national impact analyses and
emissions analyses included in future energy conservation standards
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the
approaches discussed in the August 18, 2011 notice, DOE published a
statement of amended policy in which DOE explained its determination
that EIA's National Energy Modeling System (``NEMS'') is the most
appropriate tool for its FFC analysis and its intention to use NEMS for
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain,
multi-sector, partial equilibrium model of the U.S. energy sector \74\
that EIA uses to prepare its Annual Energy Outlook. The FFC factors
incorporate losses in production and delivery in the case of natural
gas (including fugitive emissions) and additional energy used to
produce and deliver the various fuels used by power plants. The
approach used for deriving FFC measures of energy use and emissions is
described in appendix 10B of the direct final rule TSD.
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\74\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2018, DOE/EIA-0581(2018), April 2019.
Available at www.eia.gov/outlooks/aeo/nems/documentation/ (last
accessed July 26, 2022).
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3. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers are (1) total annual installed cost, (2) total
annual operating costs (energy costs and repair and maintenance costs),
and (3) a discount factor to calculate the present value of costs and
savings. DOE calculates net savings each year as the difference between
the no-new-standards case and each standards case in terms of total
savings in operating costs versus total increases in installed costs.
DOE calculates operating cost savings over the lifetime of each product
shipped during the projection period.
As discussed in section IV.F.1 of this document, DOE developed
equipment price trends based on historical PPI data. DOE applied the
same trends (i.e., constant price trend) to project prices for each
equipment class at each considered efficiency level.
To evaluate the effect of uncertainty regarding the price trend
estimates, DOE investigated the impact of different product price
projections on the consumer NPV for the considered TSLs for electric
motors. In addition to the default price trend, DOE considered two
product price sensitivity cases: (1) a high price decline case and (2)
a low price decline case based on historical PPI data. The derivation
of these price trends and the results of these sensitivity cases are
described in appendix 10-C of the direct final rule TSD.
The operating cost savings are electricity cost savings and any
changes in repair costs, which are calculated using the estimated
energy savings in each year and the projected electricity price as well
as using the lifetime repair costs estimates from the LCC. To estimate
electricity prices in future years, in each sector (commercial,
industrial and agriculture), DOE multiplied the sector-specific average
electricity prices by the projection of annual national-average
electricity price changes in the Reference case from AEO2022, which has
an end year of 2050. To estimate price trends after 2050, DOE used the
2050 electricity prices, held constant. DOE then used a weighted-
average trend across all sectors in the NIA. As part of the NIA, DOE
also analyzed scenarios that used inputs from variants of the AEO2022
Reference case that have lower and higher economic growth. Those cases
have lower and higher energy price trends compared to the Reference
case. NIA results based on these cases are presented in appendix 10C of
the direct final rule TSD.
[[Page 36112]]
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
direct final rule, DOE estimated the NPV of consumer benefits using
both a 3-percent and a 7-percent real discount rate. DOE uses these
discount rates in accordance with guidance provided by the Office of
Management and Budget (``OMB'') to Federal agencies on the development
of regulatory analysis.\75\ The discount rates for the determination of
NPV are in contrast to the discount rates used in the LCC analysis,
which are designed to reflect a consumer's perspective. The 7-percent
real value is an estimate of the average before-tax rate of return to
private capital in the U.S. economy. The 3-percent real value
represents the ``social rate of time preference,'' which is the rate at
which society discounts future consumption flows to their present
value.
---------------------------------------------------------------------------
\75\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at
georgewbush-whitehouse.archives.gov/omb/memoranda/m03-21.html (last
accessed July 26, 2022).
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I. Consumer Subgroup Analysis
In analyzing the potential impact of new or amended energy
conservation standards on consumers, DOE evaluates the impact on
identifiable subgroups of consumers that may be disproportionately
affected by a new or amended national standard. The purpose of a
subgroup analysis is to determine the extent of any such
disproportional impacts. DOE evaluates impacts on particular subgroups
of consumers by analyzing the LCC impacts and PBP for those particular
consumers from alternative standard levels. For this direct final rule,
DOE analyzed the impacts of the considered standard levels on one
subgroup: small businesses.
DOE used the LCC and PBP spreadsheet model to estimate the impacts
of the considered efficiency levels on this subgroup. Chapter 11 in the
direct final rule TSD describes the consumer subgroup analysis.
J. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the financial impacts of new and
amended energy conservation standards on manufacturers of electric
motors and to estimate the potential impacts of such standards on
employment and manufacturing capacity. The MIA has both quantitative
and qualitative aspects and includes analyses of projected industry
cash flows, the INPV, investments in research and development (``R&D'')
and manufacturing capital, and domestic manufacturing employment.
Additionally, the MIA seeks to determine how new and amended energy
conservation standards might affect manufacturing employment, capacity,
and competition, as well as how standards contribute to overall
regulatory burden. Finally, the MIA serves to identify any
disproportionate impacts on manufacturer subgroups, including small
business manufacturers.
The quantitative part of the MIA primarily relies on the Government
Regulatory Impact Model (``GRIM''), an industry cash flow model with
inputs specific to this rulemaking. The key GRIM inputs include data on
the industry cost structure, unit production costs, product shipments,
manufacturer markups, and investments in R&D and manufacturing capital
required to produce compliant products. The key GRIM outputs are the
INPV, which is the sum of industry annual cash flows over the analysis
period, discounted using the industry-weighted average cost of capital,
and the impact to domestic manufacturing employment. The model uses
standard accounting principles to estimate the impacts of more-
stringent energy conservation standards on a given industry by
comparing changes in INPV and domestic manufacturing employment between
a no-new-standards case and the various standards cases (``TSLs''). To
capture the uncertainty relating to manufacturer pricing strategies
following new and amended standards, the GRIM estimates a range of
possible impacts under different manufacturer markup scenarios.
The qualitative part of the MIA addresses manufacturer
characteristics and market trends. Specifically, the MIA considers such
factors as a potential standard's impact on manufacturing capacity,
competition within the industry, the cumulative impact of other DOE and
non-DOE regulations, and impacts on manufacturer subgroups. The
complete MIA is outlined in chapter 12 of the direct final rule TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase
1 of the MIA, DOE prepared a profile of the electric motors
manufacturing industry based on the market and technology assessment,
preliminary manufacturer interviews, and publicly-available
information. This included a top-down analysis of electric motors
manufacturers that DOE used to derive preliminary financial inputs for
the GRIM (e.g., revenues; materials, labor, overhead, and depreciation
expenses; selling, general, and administrative expenses (``SG&A''); and
R&D expenses). DOE also used public sources of information to further
calibrate its initial characterization of the electric motors
manufacturing industry, including company filings of form 10-K from the
SEC,\76\ corporate annual reports, the U.S. Census Bureau's ``Economic
Census,'' \77\ and reports from D&B Hoover.\78\
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\76\ www.sec.gov/edgar.
\77\ www.census.gov/programs-surveys/asm/data/tables.html.
\78\ app.avention.com.
---------------------------------------------------------------------------
In Phase 2 of the MIA, DOE prepared a framework industry cash-flow
analysis to quantify the potential impacts of new and amended energy
conservation standards. The GRIM uses several factors to determine a
series of annual cash flows starting with the announcement of the
standard and extending over a 30-year period following the compliance
date of the standard. These factors include annual expected revenues,
costs of sales, SG&A and R&D expenses, taxes, and capital expenditures.
In general, energy conservation standards can affect manufacturer cash
flow in three distinct ways: (1) creating a need for increased
investment, (2) raising production costs per unit, and (3) altering
revenue due to higher per-unit prices and changes in sales volumes.
In addition, during Phase 2, DOE developed interview guides to
distribute to manufacturers of electric motors in order to develop
other key GRIM inputs, including product and capital conversion costs,
and to gather additional information on the anticipated effects of
energy conservation standards on revenues, direct employment, capital
assets, industry competitiveness, and subgroup impacts.
In Phase 3 of the MIA, DOE conducted structured, detailed
interviews with representative manufacturers. During these interviews,
DOE discussed engineering, manufacturing, procurement, and financial
topics to validate assumptions used in the GRIM and to identify key
issues or concerns. See section IV.J.3 of this document for a
description of the key issues raised by manufacturers during the
interviews. As part of Phase 3, DOE also evaluated subgroups of
manufacturers that may be disproportionately impacted by new and
amended standards or that may not be accurately represented by the
average cost assumptions used to develop the industry cash flow
analysis. Such
[[Page 36113]]
manufacturer subgroups may include small business manufacturers, low-
volume manufacturers (``LVMs''), niche players, and/or manufacturers
exhibiting a cost structure that largely differs from the industry
average. DOE identified one subgroup for a separate impact analysis:
small business manufacturers. The small business subgroup is discussed
in section VI.B, ``Review under the Regulatory Flexibility Act'' and in
chapter 12 of the direct final rule TSD.
2. Government Regulatory Impact Model and Key Inputs
DOE uses the GRIM to quantify the changes in cash flow due to new
and amended standards that result in a higher or lower industry value.
The GRIM uses a standard, annual discounted cash-flow analysis that
incorporates manufacturer costs, markups, shipments, and industry
financial information as inputs. The GRIM models changes in costs,
distribution of shipments, investments, and manufacturer margins that
could result from new and amended energy conservation standards. The
GRIM spreadsheet uses the inputs to arrive at a series of annual cash
flows, beginning in 2023 (the base year of the analysis) and continuing
to 2056. DOE calculated INPVs by summing the stream of annual
discounted cash flows during this period. For manufacturers of electric
motors, DOE used a real discount rate of 9.1 percent, which was used in
the May 2014 Final Rule and then asked for feedback on this value
during manufacturer interviews.
The GRIM calculates cash flows using standard accounting principles
and compares changes in INPV between the no-new-standards case and each
standards case. The difference in INPV between the no-new-standards
case and a standards case represents the financial impact of the new
and amended energy conservation standards on manufacturers. As
discussed previously, DOE developed critical GRIM inputs using a number
of sources, including publicly available data, results of the
engineering analysis, and information gathered from industry
stakeholders during the course of manufacturer interviews and
subsequent Working Group meetings. The GRIM results are presented in
section V.B.2. Additional details about the GRIM, the discount rate,
and other financial parameters can be found in chapter 12 of the direct
final rule TSD.
a. Manufacturer Production Costs
Manufacturing more efficient equipment is typically more expensive
than manufacturing baseline equipment due to the use of more complex
components, which are typically more costly than baseline components.
The changes in the MPCs of the covered equipment can affect the
revenues, gross margins, and cash flow of the industry.
DOE conducted the engineering analysis using a combination of
physical teardowns and software modeling. DOE contracted a professional
motor laboratory to disassemble various electric motors and record what
types of materials were present and how much of each material was
present, recorded in a final bill of materials (``BOM''). To supplement
the physical teardowns, software modeling by a subject matter expert
(``SME'') was also used to generate BOMs for select efficiency levels
of directly analyzed representative units.
For a complete description of the MPCs, see chapter 5 of the direct
final rule TSD.
b. Shipments Projections
The GRIM estimates manufacturer revenues based on total unit
shipment projections and the distribution of those shipments by
efficiency level. Changes in sales volumes and efficiency mix over time
can significantly affect manufacturer finances. For this analysis, the
GRIM uses the NIA's annual shipment projections derived from the
shipments analysis from 2023 (the base year) to 2056 (the end year of
the analysis period). See chapter 9 of the direct final rule TSD for
additional details.
c. Product and Capital Conversion Costs
New and amended energy conservation standards could cause
manufacturers to incur conversion costs to bring their production
facilities and equipment designs into compliance. DOE evaluated the
level of conversion-related expenditures that would be needed to comply
with each considered efficiency level in each equipment class. For the
MIA, DOE classified these conversion costs into two major groups: (1)
product conversion costs; and (2) capital conversion costs. Product
conversion costs are investments in research, development, testing,
marketing, and other non-capitalized costs necessary to make equipment
designs comply with new amended energy conservation standards. Capital
conversion costs are investments in property, plant, and equipment
necessary to adapt or change existing production facilities such that
new compliant equipment designs can be fabricated and assembled.
DOE calculated the product and capital conversion costs using
bottom-up approach based on feedback from manufacturers during
manufacturer interviews. During manufacturer interviews, DOE asked
manufacturers questions regarding the estimated product and capital
conversion costs needed to produce electric motors within an equipment
class at each specific EL. DOE used the feedback provided from
manufacturers to estimate the approximate amount of engineering time,
testing costs and capital equipment that would be purchased to redesign
a single frame size to each EL. Some of the types of capital conversion
costs manufacturers identified were the purchase of lamination die
sets, winding machines, frame casts, and assembly equipment as well as
other retooling costs. The two main types of product conversion costs
manufacturers shared with DOE during interviews were number of engineer
hours necessary to re-engineer frames to meet higher efficiency
standards and the testing costs to comply with higher efficiency
standards.
DOE then took average values (i.e., costs or number of hours) based
on the range of responses given by manufacturers for each product and
capital conversion costs necessary for a manufacturer to increase the
efficiency of one frame size to a specific EL. DOE multiplied the
conversion costs associated with manufacturing a single frame size at
each EL by the number of frames each interviewed manufacturer produces.
DOE finally scaled this number based on the market share of the
manufacturers DOE interviewed, to arrive at industry wide bottom-up
product and capital conversion cost estimates for each representative
unit at each EL.
In response to the May 2020 Early Assessment Review RFI, NEMA
stated that if DOE decides to pursue revision of energy conservation
standards for electric motors, DOE should revisit its analyses and
assumptions for the product and capital conversion costs used in the
May 2014 Final Rule. (NEMA, No. 4 at p. 3) Additionally, in response to
the March 2022 Preliminary Analysis EASA agreed with NEMA's comment
that DOE should revise the analyses for product and capital conversion
costs (EASA, No. 21 at p. 5) After the publication of the March 2022
Preliminary Analysis, DOE interviewed manufacturers to gather
information regarding the product and capital conversion costs used in
this NOPR analysis. DOE relied on the information gathered during these
manufacturer interviews to create the product and
[[Page 36114]]
capital conversion cost estimated used in this direct final rule
analysis.
In general, DOE assumes all conversion-related investments occur
between the year of publication of the direct final rule and the year
by which manufacturers must comply with the new and amended standard.
The conversion cost figures used in the GRIM can be found in section
V.B.2 of this document. For additional information on the estimated
capital and product conversion costs, see chapter 12 of the direct
final rule TSD.
d. Markup Scenarios
MSPs include direct manufacturing production costs (i.e., labor,
materials, and overhead estimated in DOE's MPCs) and all non-production
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate
the MSPs in the GRIM, DOE applied non-production cost markup
multipliers to the MPCs estimated in the engineering analysis for each
equipment class and efficiency level. Modifying these markup
multipliers the standards case yields different sets of impacts on
manufacturers. For the MIA, DOE modeled two standards-case markup
scenarios to represent uncertainty regarding the potential impacts on
prices and profitability for manufacturers following the implementation
of new and amended energy conservation standards: (1) a preservation of
gross margin scenario; and (2) a preservation of operating profit
markup scenario. These scenarios lead to different markup multipliers
that, when applied to the MPCs, result in varying revenue and cash flow
impacts.
Under the preservation of gross margin scenario, DOE applied a
single uniform ``gross margin percentage'' across all efficiency
levels, which assumes that manufacturers would be able to maintain the
same amount of profit as a percentage of revenues at all efficiency
levels within an equipment class. In this manufacturer markup scenario,
electric motor manufacturers fully pass on any additional MPC increase
due to standards to their consumers. DOE used a manufacturer markup of
1.37 for all electric motors covered by this rulemaking with less than
or equal to 5 hp, and a manufacturer markup or 1.45 for all electric
motors covered by this rulemaking greater than 5 hp. DOE used these
same manufacturer markups for all TSLs in the preservation of gross
margin scenario. This manufacturer markup scenario represents the
upper-bound of manufacturer INPV and is the manufacturer markup
scenario used to calculate the economic impacts on consumers.
Under the preservation of operating profit scenario, DOE modeled a
situation in which manufacturers are not able to increase per-unit
operating profit in proportion to increases in MPCs. Under this
scenario, as MPCs increase, manufacturers reduce the manufacturer
margins to maintain a cost competitive offering in the market. However,
in this scenario manufacturers maintain their total operating profit in
absolute dollars in the standards case, despite higher product costs
and investment. Therefore, gross margin (as a percentage) shrinks in
the standards cases. This manufacturer markup scenario represents the
lower-bound to industry profitability under new and amended energy
conservation standards.
A comparison of industry financial impacts under the two markup
scenarios is presented in section V.B.2.a of this document.
3. Manufacturer Interviews
DOE conducted additional interviews with manufacturers following
the publication of the March 2022 Prelim TSD in preparation for this
NOPR analysis. In interviews, DOE asked manufacturers to describe their
major concerns regarding this rulemaking. The following section
highlights manufacturer concerns that helped inform the projected
potential impacts of anew and amended standard on the industry.
Manufacturer interviews are conducted under non-disclosure agreements
(``NDAs''), so DOE does not document these discussions in the same way
that it does public comments in the comment summaries and DOE's
responses throughout the rest of this document.
During these interviews, most manufacturers stated that even
manufacturing a single electric motor to an efficiency level above IE 4
(or IE 4 equivalent efficiency levels) would require a significant
level of investments. Further, most manufacturers also stated that it
would be impossible to manufacturer a complete line of electric motors
spanning all horsepower covered by this rulemaking regardless of the
costs associated with this task. Increasing the efficiency of any
electric motor to an efficiency level above IE 4 would require each
manufacturer to make a significant capital investment to retool their
entire production line. It would also require manufacturers to
completely redesign almost every electric motor configuration offered,
which could take more than a decade of engineering time.
DOE examines a range of efficiency levels for covered equipment
when determining whether to amend or establish energy conservation
standards, including the level that represents the most energy-
efficient combination of design options. In this analysis for NEMA
Design A and B electric motors between 1 and 500 hp, EL 1 is associated
with an IE 4 equivalent efficiency level and EL 2, EL 3, and EL 4 (max-
tech) represent efficiency levels above IE 4. DOE understands the level
of burden placed on electric motor manufacturers if energy conservation
standards require any electric motors to meet energy conservation
standards set above IE 4 equivalent levels. These investments (in the
form of conversion costs) are accounted for in the MIA and displayed in
section V.B.2.a.
K. Emissions Analysis
The emissions analysis consists of two components. The first
component estimates the effect of potential energy conservation
standards on power sector and site (where applicable) combustion
emissions of CO2, NOX, SO2, and Hg.
The second component estimates the impacts of potential standards on
emissions of two additional greenhouse gases, CH4 and
N2O, as well as the reductions in emissions of other gases
due to ``upstream'' activities in the fuel production chain. These
upstream activities comprise extraction, processing, and transporting
fuels to the site of combustion.
The analysis of electric power sector emissions of CO2,
NOX, SO2, and Hg uses emissions factors intended
to represent the marginal impacts of the change in electricity
consumption associated with amended or new standards. The methodology
is based on results published for the AEO, including a set of side
cases that implement a variety of efficiency-related policies. The
methodology is described in appendix 13A in the direct final rule TSD.
The analysis presented in this notice uses projections from AEO2022.
Power sector emissions of CH4 and N2O from fuel
combustion are estimated using Emission Factors for Greenhouse Gas
Inventories published by the Environmental Protection Agency (EPA).\79\
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\79\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12,
2021).
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FFC upstream emissions, which include emissions from fuel
combustion during extraction, processing, and transportation of fuels,
and ``fugitive''
[[Page 36115]]
emissions (direct leakage to the atmosphere) of CH4 and
CO2, are estimated based on the methodology described in
chapter 15 of the direct final rule TSD.
The emissions intensity factors are expressed in terms of physical
units per MWh or MMBtu of site energy savings. For power sector
emissions, specific emissions intensity factors are calculated by
sector and end use. Total emissions reductions are estimated using the
energy savings calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
DOE's no-new-standards case for the electric power sector reflects
the AEO, which incorporates the projected impacts of existing air
quality regulations on emissions. AEO2022 generally represents current
legislation and environmental regulations, including recent government
actions, that were in place at the time of preparation of AEO2022,
including the emissions control programs discussed in the following
paragraphs.\80\
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\80\ For further information, see the Assumptions to AEO2022
report that sets forth the major assumptions used to generate the
projections in the Annual Energy Outlook. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed June 22, 2022).
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SO2 emissions from affected electric generating units
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions
cap on SO2 for affected EGUs in the 48 contiguous States and
the District of Columbia (``DC''). (42 U.S.C. 7651 et seq.)
SO2 emissions from numerous States in the eastern half of
the United States are also limited under the Cross-State Air Pollution
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these
States to reduce certain emissions, including annual SO2
emissions, and went into effect as of January 1, 2015.\81\ AEO2022
incorporates implementation of CSAPR, including the update to the CSAPR
ozone season program emission budgets and target dates issued in 2016.
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among
EGUs and is enforced through the use of tradable emissions allowances.
Under existing EPA regulations, for states subject to SO2
emissions limits under CSAPR, any excess SO2 emissions
allowances resulting from the lower electricity demand caused by the
adoption of an efficiency standard could be used to permit offsetting
increases in SO2 emissions by another regulated EGU.
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\81\ CSAPR requires states to address annual emissions of
SO2 and NOX, precursors to the formation of
fine particulate matter (PM2.5) pollution, in order to
address the interstate transport of pollution with respect to the
1997 and 2006 PM2.5 National Ambient Air Quality
Standards (``NAAQS''). CSAPR also requires certain states to address
the ozone season (May-September) emissions of NOX, a
precursor to the formation of ozone pollution, in order to address
the interstate transport of ozone pollution with respect to the 1997
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a
supplemental rule that included an additional five states in the
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011)
(Supplemental Rule).
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However, beginning in 2016, SO2 emissions began to fall
as a result of the Mercury and Air Toxics Standards (``MATS'') for
power plants. 77 FR 9304 (Feb. 16, 2012). The final rule establishes
power plant emission standards for mercury, acid gases, and non-mercury
metallic toxic pollutants. In order to continue operating, coal plants
must have either flue gas desulfurization or dry sorbent injection
systems installed. Both technologies, which are used to reduce acid gas
emissions, also reduce SO2 emissions. Because of the
emissions reductions under the MATS, it is unlikely that excess
SO2 emissions allowances resulting from the lower
electricity demand would be needed or used to permit offsetting
increases in SO2 emissions by another regulated EGU.
Therefore, energy conservation standards that decrease electricity
generation will generally reduce SO2 emissions. DOE
estimated SO2 emissions reduction using emissions factors
based on AEO2022.
CSAPR also established limits on NOX emissions for
numerous States in the eastern half of the United States. Energy
conservation standards would have little effect on NOX
emissions in those States covered by CSAPR emissions limits if excess
NOX emissions allowances resulting from the lower
electricity demand could be used to permit offsetting increases in
NOX emissions from other EGUs. In such case, NOX
emissions would remain near the limit even if electricity generation
goes down. Depending on the configuration of the power sector in the
different regions and the need for allowances, however, NOX
emissions might not remain at the limit in the case of lower
electricity demand. That would mean that standards might reduce
NOX emissions in covered States. Despite this possibility,
DOE has chosen to be conservative in its analysis and has maintained
the assumption that standards will not reduce NOX emissions
in States covered by CSAPR. Standards would be expected to reduce
NOX emissions in the States not covered by CSAPR. DOE used
AEO2022 data to derive NOX emissions factors for the group
of States not covered by CSAPR.
The MATS limit mercury emissions from power plants, but they do not
include emissions caps and, as such, DOE's energy conservation
standards would be expected to slightly reduce Hg emissions. DOE
estimated mercury emissions reduction using emissions factors based on
AEO2022, which incorporates the MATS.
NEMA commented that DOE does not adequately examine or account for
the significant impacts from ever-increasing investment in and use of
renewable energy sources and associated decrease in emissions. (NEMA,
No. 22 at p. 25)
DOE acknowledges that increasing use of renewable electricity
sources could reduce CO2 emissions and likely other
emissions from the power sector faster than could have been expected
when AEO2022 was prepared. Nevertheless, DOE has used AEO2022 for the
purposes of quantifying emissions as DOE believes it continues to be
the most appropriate projection at this time for such purposes.
L. Monetizing Emissions Impacts
As part of the development of this direct final rule, for the
purpose of complying with the requirements of Executive Order 12866,
DOE considered the estimated monetary benefits from the reduced
emissions of CO2, CH4, N2O,
NOX, and SO2 that are expected to result from
each of the TSLs considered. In order to make this calculation
analogous to the calculation of the NPV of consumer benefit, DOE
considered the reduced emissions expected to result over the lifetime
of products shipped in the projection period for each TSL. This section
summarizes the basis for the values used for monetizing the emissions
benefits and presents the values considered in this direct final rule.
To monetize the benefits of reducing GHG emissions this analysis
uses the interim estimates presented in the Technical Support Document:
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates
Under Executive Order 13990 published in February 2021 by the
Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
DOE requests comment on how to address the climate benefits and other
non-monetized effects of the proposal.
1. Monetization of Greenhouse Gas Emissions
DOE estimates the monetized benefits of the reductions in emissions
of CO2, CH4, and N2O by using a
measure of the SC of each pollutant (e.g., SC-CO2).
[[Page 36116]]
These estimates represent the monetary value of the net harm to society
associated with a marginal increase in emissions of these pollutants in
a given year, or the benefit of avoiding that increase. These estimates
are intended to include (but are not limited to) climate-change-related
changes in net agricultural productivity, human health, property
damages from increased flood risk, disruption of energy systems, risk
of conflict, environmental migration, and the value of ecosystem
services.
DOE exercises its own judgment in presenting monetized climate
benefits as recommended by applicable Executive orders, and DOE would
reach the same conclusion presented in this direct final rule in the
absence of the social cost of greenhouse gases. That is, the social
costs of greenhouse gases, whether measured using the February 2021
interim estimates presented by the Interagency Working Group on the
Social Cost of Greenhouse Gases or by another means, did not affect the
rule ultimately adopted by DOE.
DOE estimated the global social benefits of CO2,
CH4, and N2O reductions (i.e., SC-GHGs) using the
estimates presented in the Technical Support Document: Social Cost of
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive
Order 13990, published in February 2021 by the IWG. The SC-GHGs is the
monetary value of the net harm to society associated with a marginal
increase in emissions in a given year, or the benefit of avoiding that
increase. In principle, SC-GHGs includes the value of all climate
change impacts, including (but not limited to) changes in net
agricultural productivity, human health effects, property damage from
increased flood risk and natural disasters, disruption of energy
systems, risk of conflict, environmental migration, and the value of
ecosystem services. The SC-GHGs therefore, reflects the societal value
of reducing emissions of the gas in question by one metric ton. The SC-
GHGs is the theoretically appropriate value to use in conducting
benefit-cost analyses of policies that affect CO2,
N2O and CH4 emissions. As a member of the IWG
involved in the development of the February 2021 SC-GHG TSD, DOE agrees
that the interim SC-GHG estimates represent the most appropriate
estimate of the SC-GHG until revised estimates have been developed
reflecting the latest, peer-reviewed science.
The SC-GHGs estimates presented here were developed over many
years, using transparent process, peer-reviewed methodologies, the best
science available at the time of that process, and with input from the
public. Specifically, in 2009, the IWG, that included the DOE and other
executive branch agencies and offices was established to ensure that
agencies were using the best available science and to promote
consistency in the social cost of carbon (SC-CO2) values
used across agencies. The IWG published SC-CO2 estimates in
2010 that were developed from an ensemble of three widely cited
integrated assessment models (IAMs) that estimate global climate
damages using highly aggregated representations of climate processes
and the global economy combined into a single modeling framework. The
three IAMs were run using a common set of input assumptions in each
model for future population, economic, and CO2 emissions
growth, as well as equilibrium climate sensitivity--a measure of the
globally averaged temperature response to increased atmospheric
CO2 concentrations. These estimates were updated in 2013
based on new versions of each IAM. In August 2016 the IWG published
estimates of the social cost of methane (SC-CH4) and nitrous
oxide (SC-N2O) using methodologies that are consistent with
the methodology underlying the SC-CO2 estimates. The
modeling approach that extends the IWG SC-CO2 methodology to
non-CO2 GHGs has undergone multiple stages of peer review.
The SC-CH4 and SC-N2O estimates were developed by
Marten et al.\82\ and underwent a standard double-blind peer review
process prior to journal publication. In 2015, as part of the response
to public comments received to a 2013 solicitation for comments on the
SC-CO2 estimates, the IWG announced a National Academies of
Sciences, Engineering, and Medicine review of the SC-CO2
estimates to offer advice on how to approach future updates to ensure
that the estimates continue to reflect the best available science and
methodologies. In January 2017, the National Academies released their
final report, Valuing Climate Damages: Updating Estimation of the
Social Cost of Carbon Dioxide, and recommended specific criteria for
future updates to the SC-CO2 estimates, a modeling framework
to satisfy the specified criteria, and both near-term updates and
longer-term research needs pertaining to various components of the
estimation process (National Academies, 2017).\83\ Shortly thereafter,
in March 2017, President Trump issued Executive Order 13783, which
disbanded the IWG, withdrew the previous TSDs, and directed agencies to
ensure SC-CO2 estimates used in regulatory analyses are
consistent with the guidance contained in OMB's Circular A-4,
``including with respect to the consideration of domestic versus
international impacts and the consideration of appropriate discount
rates'' (Executive Order (``E.O.'') 13783, section 5(c)). Benefit-cost
analyses following E.O. 13783 used SC-GHG estimates that attempted to
focus on the U.S.-specific share of climate change damages as estimated
by the models and were calculated using two discount rates recommended
by Circular A-4, 3 percent and 7 percent. All other methodological
decisions and model versions used in SC-GHG calculations remained the
same as those used by the IWG in 2010 and 2013, respectively.
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\82\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold,
and A. Wolverton. Incremental CH4 and N2O
mitigation benefits consistent with the U.S. Government's SC-
CO2 estimates. Climate Policy. 2015. 15(2): pp. 272-298.
\83\ National Academies of Sciences, Engineering, and Medicine.
Valuing Climate Damages: Updating Estimation of the Social Cost of
Carbon Dioxide. 2017. The National Academies Press: Washington, DC.
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On January 20, 2021, President Biden issued Executive Order 13990,
which re-established the IWG and directed it to ensure that the U.S.
Government's estimates of the social cost of carbon and other
greenhouse gases reflect the best available science and the
recommendations of the National Academies (2017). The IWG was tasked
with first reviewing the SC-GHG estimates currently used in Federal
analyses and publishing interim estimates within 30 days of the E.O.
that reflect the full impact of GHG emissions, including by taking
global damages into account. The interim SC-GHG estimates published in
February 2021 are used here to estimate the climate benefits for this
direct final rule. The E.O. instructs the IWG to undertake a fuller
update of the SC-GHG estimates by January 2022 that takes into
consideration the advice of the National Academies (2017) and other
recent scientific literature. The February 2021 SC-GHG TSD provides a
complete discussion of the IWG's initial review conducted under
E.O.13990. In particular, the IWG found that the SC-GHG estimates used
under E.O. 13783 fail to reflect the full impact of GHG emissions in
multiple ways.
First, the IWG found that the SC-GHG estimates used under E.O.
13783 fail to fully capture many climate impacts that affect the
welfare of U.S. citizens and residents, and those impacts are better
reflected by global measures of the SC-GHG. Examples of omitted effects
from
[[Page 36117]]
the E.O. 13783 estimates include direct effects on U.S. citizens,
assets, and investments located abroad, supply chains, U.S. military
assets and interests abroad, and tourism, and spillover pathways such
as economic and political destabilization and global migration that can
lead to adverse impacts on U.S. national security, public health, and
humanitarian concerns. In addition, assessing the benefits of U.S. GHG
mitigation activities requires consideration of how those actions may
affect mitigation activities by other countries, as those international
mitigation actions will provide a benefit to U.S. citizens and
residents by mitigating climate impacts that affect U.S. citizens and
residents. A wide range of scientific and economic experts have
emphasized the issue of reciprocity as support for considering global
damages of GHG emissions. If the United States does not consider
impacts on other countries, it is difficult to convince other countries
to consider the impacts of their emissions on the United States. The
only way to achieve an efficient allocation of resources for emissions
reduction on a global basis--and so benefit the U.S. and its citizens--
is for all countries to base their policies on global estimates of
damages. As a member of the IWG involved in the development of the
February 2021 SC-GHG TSD, DOE agrees with this assessment and,
therefore, in this direct final rule DOE centers attention on a global
measure of SC-GHG. This approach is the same as that taken in DOE
regulatory analyses from 2012 through 2016. A robust estimate of
climate damages that accrue only to U.S. citizens and residents does
not currently exist in the literature. As explained in the February
2021 TSD, existing estimates are both incomplete and an underestimate
of total damages that accrue to the citizens and residents of the U.S.
because they do not fully capture the regional interactions and
spillovers discussed above, nor do they include all of the important
physical, ecological, and economic impacts of climate change recognized
in the climate change literature. As noted in the February 2021 SC-GHG
TSD, the IWG will continue to review developments in the literature,
including more robust methodologies for estimating a U.S.-specific SC-
GHG value, and explore ways to better inform the public of the full
range of carbon impacts. As a member of the IWG, DOE will continue to
follow developments in the literature pertaining to this issue
Second, the IWG found that the use of the social rate of return on
capital (7 percent under current OMB Circular A-4 guidance) to discount
the future benefits of reducing GHG emissions inappropriately
underestimates the impacts of climate change for the purposes of
estimating the SC-GHG. Consistent with the findings of the National
Academies (2017) and the economic literature, the IWG continued to
conclude that the consumption rate of interest is the theoretically
appropriate discount rate in an intergenerational context,\84\ and
recommended that discount rate uncertainty and relevant aspects of
intergenerational ethical considerations be accounted for in selecting
future discount rates.
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\84\ Interagency Working Group on Social Cost of Carbon. Social
Cost of Carbon for Regulatory Impact Analysis under Executive Order
12866. 2010. United States Government. (Last accessed April 15,
2022.) www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf; Interagency Working Group on Social Cost of
Carbon. Technical Update of the Social Cost of Carbon for Regulatory
Impact Analysis Under Executive Order 12866. 2013. (Last accessed
April 15, 2022.) www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact; Interagency Working Group on
Social Cost of Greenhouse Gases, United States Government. Technical
Support Document: Technical Update on the Social Cost of Carbon for
Regulatory Impact Analysis-Under Executive Order 12866. August 2016.
(Last accessed January 18, 2022.) www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf; Interagency Working
Group on Social Cost of Greenhouse Gases, United States Government.
Addendum to Technical Support Document on Social Cost of Carbon for
Regulatory Impact Analysis under Executive Order 12866: Application
of the Methodology to Estimate the Social Cost of Methane and the
Social Cost of Nitrous Oxide. August 2016. (Last accessed January
18, 2022.) www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf.
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Furthermore, the damage estimates developed for use in the SC-GHG
are estimated in consumption-equivalent terms, and so an application of
OMB Circular A-4's guidance for regulatory analysis would then use the
consumption discount rate to calculate the SC-GHG. DOE agrees with this
assessment and will continue to follow developments in the literature
pertaining to this issue. DOE also notes that while OMB Circular A-4,
as published in 2003, recommends using 3% and 7% discount rates as
``default'' values, Circular A-4 also reminds agencies that ``different
regulations may call for different emphases in the analysis, depending
on the nature and complexity of the regulatory issues and the
sensitivity of the benefit and cost estimates to the key assumptions.''
On discounting, Circular A-4 recognizes that ``special ethical
considerations arise when comparing benefits and costs across
generations,'' and Circular A-4 acknowledges that analyses may
appropriately ``discount future costs and consumption benefits . . . at
a lower rate than for intragenerational analysis.'' In the 2015
Response to Comments on the Social Cost of Carbon for Regulatory Impact
Analysis, OMB, DOE, and the other IWG members recognized that
``Circular A-4 is a living document'' and ``the use of 7 percent is not
considered appropriate for intergenerational discounting. There is wide
support for this view in the academic literature, and it is recognized
in Circular A-4 itself.'' Thus, DOE concludes that a 7% discount rate
is not appropriate to apply to value the social cost of greenhouse
gases in the analysis presented in this analysis.
To calculate the present and annualized values of climate benefits,
DOE uses the same discount rate as the rate used to discount the value
of damages from future GHG emissions, for internal consistency. That
approach to discounting follows the same approach that the February
2021 TSD recommends ``to ensure internal consistency--i.e., future
damages from climate change using the SC-GHG at 2.5 percent should be
discounted to the base year of the analysis using the same 2.5 percent
rate.'' DOE has also consulted the National Academies' 2017
recommendations on how SC-GHG estimates can ``be combined in RIAs with
other cost and benefits estimates that may use different discount
rates.'' The National Academies reviewed several options, including
``presenting all discount rate combinations of other costs and benefits
with [SC-GHG] estimates.''
As a member of the IWG involved in the development of the February
2021 SC-GHG TSD, DOE agrees with the above assessment and will continue
to follow developments in the literature pertaining to this issue.
While the IWG works to assess how best to incorporate the latest, peer
reviewed science to develop an updated set of SC-GHG estimates, it set
the interim estimates to be the most recent estimates developed by the
IWG prior to the group being disbanded in 2017. The estimates rely on
the same models and harmonized inputs and are calculated using a range
of discount rates. As explained in the February 2021 SC-GHG TSD, the
IWG has recommended that agencies revert to the same set of four values
drawn from the SC-GHG distributions based on three discount rates as
were used in regulatory analyses between 2010 and 2016 and were subject
to public comment. For each discount rate, the IWG combined the
distributions across models and socioeconomic emissions scenarios
(applying equal weight to
[[Page 36118]]
each) and then selected a set of four values recommended for use in
benefit-cost analyses: an average value resulting from the model runs
for each of three discount rates (2.5 percent, 3 percent, and 5
percent), plus a fourth value, selected as the 95th percentile of
estimates based on a 3 percent discount rate. The fourth value was
included to provide information on potentially higher-than-expected
economic impacts from climate change. As explained in the February 2021
SC-GHG TSD, and DOE agrees, this update reflects the immediate need to
have an operational SC-GHG for use in regulatory benefit-cost analyses
and other applications that was developed using a transparent process,
peer-reviewed methodologies, and the science available at the time of
that process. Those estimates were subject to public comment in the
context of dozens of proposed rulemakings as well as in a dedicated
public comment period in 2013.
There are a number of limitations and uncertainties associated with
the SC-GHG estimates. First, the current scientific and economic
understanding of discounting approaches suggests discount rates
appropriate for intergenerational analysis in the context of climate
change are likely to be less than 3 percent, near 2 percent or
lower.\85\ Second, the IAMs used to produce these interim estimates do
not include all of the important physical, ecological, and economic
impacts of climate change recognized in the climate change literature
and the science underlying their ``damage functions''--i.e., the core
parts of the IAMs that map global mean temperature changes and other
physical impacts of climate change into economic (both market and
nonmarket) damages--lags behind the most recent research. For example,
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the integrated assessment models, their
incomplete treatment of adaptation and technological change, the
incomplete way in which inter-regional and intersectoral linkages are
modeled, uncertainty in the extrapolation of damages to high
temperatures, and inadequate representation of the relationship between
the discount rate and uncertainty in economic growth over long time
horizons. Likewise, the socioeconomic and emissions scenarios used as
inputs to the models do not reflect new information from the last
decade of scenario generation or the full range of projections. The
modeling limitations do not all work in the same direction in terms of
their influence on the SC-CO2 estimates. However, as
discussed in the February 2021 TSD, the IWG has recommended that, taken
together, the limitations suggest that the interim SC-GHG estimates
used in this final rule likely underestimate the damages from GHG
emissions. DOE concurs with this assessment.
---------------------------------------------------------------------------
\85\ Interagency Working Group on Social Cost of Greenhouse
Gases (IWG). 2021. Technical Support Document: Social Cost of
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive
Order 13990. February. United States Government. Available at:
www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/.
---------------------------------------------------------------------------
DOE's derivations of the SC-GHG (i.e., SC-CO2, SC-
N2O, and SC-CH4) values used for this direct
final rule are discussed in the following sections, and the results of
DOE's analyses estimating the benefits of the reductions in emissions
of these pollutants are presented in section V.B.6 of this document.
NEMA disagrees with DOE's approach for estimating monetary benefits
associated with emissions reductions. NEMA commented that this topic is
too convoluted and subjective to be included in a rulemaking analysis
for electric motor standards.(NEMA, No. 22 at p. 25)
As previously stated, as part of the development of this direct
final rule, for the purpose of complying with the requirements of
Executive Order 12866, DOE considered the estimated monetary benefits
from the reduced emissions of CO2, CH4,
N2O, NOX, and SO2 that are expected to
result from each of the TSLs considered.
a. Social Cost of Carbon
The SC-CO2 values used for this direct final rule were
generated using the values presented in the 2021 update from the IWG's
February 2021 TSD. Table IV-11 shows the updated sets of SC-
CO2 estimates from the latest interagency update in 5-year
increments from 2020 to 2050. The full set of annual values used is
presented in Appendix 14-A of the direct final rule TSD. For purposes
of capturing the uncertainties involved in regulatory impact analysis,
DOE has determined it is appropriate include all four sets of SC-
CO2 values, as recommended by the IWG.\86\
---------------------------------------------------------------------------
\86\ For example, the February 2021 TSD discusses how the
understanding of discounting approaches suggests that discount rates
appropriate for intergenerational analysis in the context of climate
change may be lower than 3 percent.
Table IV-11--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
[2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
Discount rate
-----------------------------------------------------------------
Year 3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
2020.......................................... 14 51 76 152
2025.......................................... 17 56 83 169
2030.......................................... 19 62 89 187
2035.......................................... 22 67 96 206
2040.......................................... 25 73 103 225
2045.......................................... 28 79 110 242
2050.......................................... 32 85 116 260
----------------------------------------------------------------------------------------------------------------
For 2051 to 2070, DOE used SC-CO2 estimates published by
EPA, adjusted to 2020$.\87\ These estimates are based on methods,
assumptions, and parameters identical to the 2020-2050 estimates
published by the IWG. DOE expects additional climate benefits to accrue
for any longer-life electric motors after 2070, but a lack of available
SC-CO2 estimates for emissions years beyond 2070 prevents
DOE from monetizing these potential benefits in this analysis.
---------------------------------------------------------------------------
\87\ See EPA, Revised 2023 and Later Model Year Light-Duty
Vehicle GHG Emissions Standards: Regulatory Impact Analysis,
Washington, DC, December 2021. Available at: www.epa.gov/system/files/documents/2021-12/420r21028.pdf (last accessed January 13,
2022).
---------------------------------------------------------------------------
[[Page 36119]]
DOE multiplied the CO2 emissions reduction estimated for
each year by the SC-CO2 value for that year in each of the
four cases. DOE adjusted the values to 2021$ using the implicit price
deflator for gross domestic product (``GDP'') from the Bureau of
Economic Analysis. To calculate a present value of the stream of
monetary values, DOE discounted the values in each of the four cases
using the specific discount rate that had been used to obtain the SC-
CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
The SC-CH4 and SC-N2O values used for this
direct final rule were based on the values developed for in the
February 2021 TSD. Table IV-12 shows the updated sets of SC-
CH4 and SC-N2O estimates from the latest
interagency update in 5-year increments from 2020 to 2050. The full set
of annual values used is presented in Appendix 14-A of the direct final
rule TSD. To capture the uncertainties involved in regulatory impact
analysis, DOE has determined it is appropriate to include all four sets
of SC-CH4 and SC-N2O values, as recommended by
the IWG.
Table IV-12--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
[2020$ per metric ton]
--------------------------------------------------------------------------------------------------------------------------------------------------------
SC-CH4 SC-N2O
-----------------------------------------------------------------------------------------------
Discount rate and statistic Discount rate and statistic
Year -----------------------------------------------------------------------------------------------
5% 3% 2.5% 3% 95th 5% 3% 2.5% 3% 95th
Average Average Average percentile Average Average Average percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020.................................................... 670 1,500 2,000 3,900 5,800 18,000 27,000 48,000
2025.................................................... 800 1,700 2,200 4,500 6,800 21,000 30,000 54,000
2030.................................................... 940 2,000 2,500 5,200 7,800 23,000 33,000 60,000
2035.................................................... 1,100 2,200 2,800 6,000 9,000 25,000 36,000 67,000
2040.................................................... 1,300 2,500 3,100 6,700 10,000 28,000 39,000 74,000
2045.................................................... 1,500 2,800 3,500 7,500 12,000 30,000 42,000 81,000
2050.................................................... 1,700 3,100 3,800 8,200 13,000 33,000 45,000 88,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE multiplied the CH4 and N2O emissions
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. To
calculate a present value of the stream of monetary values, DOE
discounted the values in each of the cases using the specific discount
rate that had been used to obtain the SC-CH4 and SC-
N2O estimates in each case.
2. Monetization of Other Emissions Impacts
For the direct final rule, DOE estimated the monetized value of
NOX and SO2 emissions reductions from electricity
generation using benefit per ton estimates for that sector from the
EPA's Benefits Mapping and Analysis Program.\88\ DOE used EPA's values
for PM2.5-related benefits associated with NOX
and SO2 and for ozone-related benefits associated with
NOX for 2025 and 2030, and 2040, calculated with discount
rates of 3 percent and 7 percent. DOE used linear interpolation to
define values for the years not given in the 2025 to 2040 range; for
years beyond 2040 the values are held constant. DOE derived values
specific to the sector for electric motors using a method described in
appendix 14B of the direct final rule TSD.
---------------------------------------------------------------------------
\88\ Estimating the Benefit per Ton of Reducing PM2.5
Precursors from 21 Sectors. www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
---------------------------------------------------------------------------
DOE multiplied the site emissions reduction (in tons) in each year
by the associated $/ton values, and then discounted each series using
discount rates of 3 percent and 7 percent as appropriate.
M. Utility Impact Analysis
The utility impact analysis estimates the changes in installed
electrical capacity and generation projected to result for each
considered TSL. The analysis is based on published output from the NEMS
associated with AEO2022. NEMS produces the AEO Reference case, as well
as a number of side cases that estimate the economy-wide impacts of
changes to energy supply and demand. For the current analysis, impacts
are quantified by comparing the levels of electricity sector
generation, installed capacity, fuel consumption and emissions in the
AEO2022 Reference case and various side cases. Details of the
methodology are provided in the appendices to chapters [13] and [15] of
the direct final rule TSD.
The output of this analysis is a set of time-dependent coefficients
that capture the change in electricity generation, primary fuel
consumption, installed capacity and power sector emissions due to a
unit reduction in demand for a given end use. These coefficients are
multiplied by the stream of electricity savings calculated in the NIA
to provide estimates of selected utility impacts of potential new or
amended energy conservation standards.
N. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a standard. Employment impacts from new or amended
energy conservation standards include both direct and indirect impacts.
Direct employment impacts are any changes in the number of employees of
manufacturers of the products subject to standards, their suppliers,
and related service firms. The MIA addresses those impacts. Indirect
employment impacts are changes in national employment that occur due to
the shift in expenditures and capital investment caused by the purchase
and operation of more-efficient appliances. Indirect employment impacts
from standards consist of the net jobs created or eliminated in the
national economy, other than in the manufacturing sector being
regulated, caused by (1) reduced spending by consumers on energy, (2)
reduced spending on new energy supply by the utility industry, (3)
increased consumer spending on the products to which the new standards
apply and other goods and services, and (4) the effects of those three
factors throughout the economy.
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare sector
employment statistics developed by the Labor Department's Bureau of
Labor Statistics (``BLS''). BLS regularly publishes its estimates of
the number of jobs per million dollars of economic
[[Page 36120]]
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.\89\ There are many reasons for these
differences, including wage differences and the fact that the utility
sector is more capital-intensive and less labor-intensive than other
sectors. Energy conservation standards have the effect of reducing
consumer utility bills. Because reduced consumer expenditures for
energy likely lead to increased expenditures in other sectors of the
economy, the general effect of efficiency standards is to shift
economic activity from a less labor-intensive sector (i.e., the utility
sector) to more labor-intensive sectors (e.g., the retail and service
sectors). Thus, the BLS data suggest that net national employment may
increase due to shifts in economic activity resulting from energy
conservation standards.
---------------------------------------------------------------------------
\89\ See U.S. Department of Commerce-Bureau of Economic
Analysis. Regional Multipliers: A User Handbook for the Regional
Input-Output Modeling System (RIMS II). 1997. U.S. Government
Printing Office: Washington, DC. Available at www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed September 30, 2022).
---------------------------------------------------------------------------
DOE estimated indirect national employment impacts for the standard
levels considered in this direct final rule using an input/output model
of the U.S. economy called Impact of Sector Energy Technologies version
4 (``ImSET'').\90\ ImSET is a special-purpose version of the ``U.S.
Benchmark National Input-Output'' (``I-O'') model, which was designed
to estimate the national employment and income effects of energy-saving
technologies. The ImSET software includes a computer- based I-O model
having structural coefficients that characterize economic flows among
187 sectors most relevant to industrial, commercial, and residential
building energy use.
---------------------------------------------------------------------------
\90\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W.
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model
Description and User Guide. 2015. Pacific Northwest National
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------
NEMA commented that the proposed approach for assessing national
employment impacts appears to be sufficient. (NEMA, No. 22 at p. 25)
DOE notes that ImSET is not a general equilibrium forecasting
model, and that the uncertainties involved in projecting employment
impacts, especially changes in the later years of the analysis. Because
ImSET does not incorporate price changes, the employment effects
predicted by ImSET may over-estimate actual job impacts over the long
run for this rule. Therefore, DOE used ImSET only to generate results
for near-term timeframes (2027-2031), where these uncertainties are
reduced. For more details on the employment impact analysis, see
chapter 16 of the direct final rule TSD.
V. Analytical Results and Conclusions
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for
electric motors. It addresses the TSLs examined by DOE, the projected
impacts of each of these levels if adopted as energy conservation
standards for electric motors, and the standards levels that DOE is
proposing to adopt in this direct final rule. Additional details
regarding DOE's analyses are contained in the direct final rule TSD
supporting this document.
A. Trial Standard Levels
In general, DOE typically evaluates potential amended standards for
products and equipment by grouping individual efficiency levels for
each class into TSLs. Use of TSLs allows DOE to identify and consider
manufacturer cost interactions between equipment classes, to the extent
that there are such interactions, and market cross elasticity from
consumer purchasing decisions that may change when different standard
levels are set.
In the analysis conducted for this direct final rule, DOE analyzed
the benefits and burdens of four TSLs for electric motors. DOE
developed TSLs that combine efficiency levels for each analyzed
equipment class group by horsepower range. DOE presents the results for
the TSLs in this document, while the results for all efficiency levels
that DOE analyzed are in the direct final rule TSD.
Table V.1 presents the TSLs and the corresponding efficiency levels
that DOE has identified for potential amended energy conservation
standards for electric motors. Table V.2 presents the corresponding
description of the levels.
TSL 4 represents the maximum technologically feasible (``max-
tech'') energy efficiency for all equipment class groups and is
constructed with the same efficiency level for all equipment class
groups (i.e., EL 4). (See Table IV-6 in section IV.C.1.c for a
breakdown of ELs 1-4 for each ECG).
TSL 3 represents a level corresponding to the IE4 level for each
equipment class group (i.e., the industry standard efficiency
classification above NEMA Premium/I3), except for AO-polyphase
specialized frame size electric motors, where it corresponds to a lower
level of efficiency (i.e., NEMA Premium/I3 level) due to the physical
limitation of these electric motors.
TSL 2 represents the levels recommended by the November 2022 Joint
Recommendation. For currently regulated electric motors (i.e., MEM, 1-
500 hp, NEMA Design A and B motors), this TSL represents no changes in
the current standard (i.e., NEMA Premium/IE3 level, EL0), except for
currently regulated motors in the 100 to 250 hp range where TSL 2 is
set at an EL corresponding to the IE4 level (i.e., the industry
standard efficiency classification above NEMA Premium/IE3, EL1).\91\ At
TSL 2, MEM 501-750 hp, NEMA Design A and B electric motors are set at
the NEMA Premium level (EL1). For AO-MEM standard frame size, TSL 2 is
similarly constructed using the efficiency levels corresponding to the
NEMA Premium/IE3 level (EL1), except in the 100 to 250 hp range of AO-
MEM standard frame size motors, where it is equivalent to the IE4 level
(EL2). For AO-polyphase specialized frame electric motors, TSL 2
represents the fire pump electric motor level (EL1), which is the
industry standard efficiency classification approximately two bands
below NEMA Premium/IE3.
---------------------------------------------------------------------------
\91\ As noted, this TSL would harmonize with the current
European energy conservation standards (compliance date July, 2023).
See eur-lex.europa.eu/eli/reg/2019/1781/oj.
---------------------------------------------------------------------------
TSL1 represents a level below the recommended level. TSL1
represents a level where the currently non-regulated electric motors
would be subject to the same standards as currently regulated motors
(i.e., NEMA Premium level), except for AO-polyphase specialized frame
size electric motors, where it corresponds to a lower level of
efficiency (i.e., fire pump electric motor level) due to the physical
limitation of these electric motors. For currently regulated electric
motors (i.e., MEM, 1-500 hp, NEMA Design A and B motors), this TSL
would represent no changes in the current standard.
[[Page 36121]]
Table V.1--Trial Standard Levels for Electric Motors
----------------------------------------------------------------------------------------------------------------
Trial standard level
Equipment class group Horsepower range -------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
............................... Efficiency level
----------------------------------------------------------------------------
MEM, 1-500 hp, NEMA Design A and B. 1 <= hp <= 5................... 0 0 1 4
5 < hp <= 20................... 0 0 1 4
20 < hp <= 50.................. 0 0 1 4
50 < hp <100................... 0 0 1 4
100 <= hp <= 250............... 0 1 1 4
250 < hp <= 500................ 0 0 1 4
MEM, 501-750 hp, NEMA Design A and 500 < hp <= 750................ 1 1 2 4
B.
AO-MEM (Standard Frame Size)....... 1 <= hp <= 20.................. 1 1 2 4
20 < hp <= 50.................. 1 1 2 4
50 < hp < 100.................. 1 1 2 4
100 <= hp <= 250............... 1 2 2 4
AO-Polyphase (Specialized Frame 1 <= hp <= 20.................. 1 1 2 4
Size).
----------------------------------------------------------------------------------------------------------------
Table V.2--Description of Trial Standard Levels for Electric Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
ECG Horsepower range -----------------------------------------------------------------------------------------
1 2 3 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Efficiency level description
----------------------------------------------------------------------------------------------------------------------
NEMA premium *...... Recommended......... IE4 *............... Max-tech
--------------------------------------------------------------------------------------------------------------------------------------------------------
MEM, 1-500 hp, NEMA Design A and 1 <= hp <= 5............... Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
B.
5 < hp <= 20............... Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
20 < hp <= 50.............. Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
50 < hp <100............... Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
100 <= hp <= 250........... Premium/IE3......... Super Premium/IE4... Super Premium/IE4... Max-tech.
250 < hp <= 500............ Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
MEM, 501-750 hp, NEMA Design A 500 < hp <= 750............ Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
and B.
AO-MEM (Standard Frame Size)..... 1 <= hp <= 20.............. Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
20 < hp <= 50.............. Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
50 < hp < 100.............. Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
100 <= hp <= 250........... Premium/IE3......... Super Premium/IE4... Super Premium/IE4... Max-tech.
AO-Polyphase (Specialized Frame 1 <= hp <= 20.............. Fire pump........... Fire pump........... Premium/IE3......... Max-tech.
Size).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Except for AO-Polyphase (Specialized Frame Size) electric motors where the efficiency level corresponds to a lower efficiency.
DOE constructed the TSLs for this direct final rule to include ELs
representative of ELs with similar characteristics (i.e., using similar
technologies and/or efficiencies, and having roughly comparable
equipment availability). The use of representative ELs provided for
greater distinction between the TSLs. While representative ELs were
included in the TSLs, DOE considered all efficiency levels as part of
its analysis.\92\ In constructing the TSLs, DOE did not consider EL3
because the average LCC savings at EL3 were negative for all
representative units, with a majority of consumers experiencing net
cost as shown in section V.B.1.a of this document. Similarly, DOE did
not consider a TSL with EL2 for the MEM, 1-500 hp, NEMA Design A and B
electric motors because the average LCC savings at EL 2 were negative
for each of the representative units analyzed, with a majority of
consumers experiencing net cost as shown in section V.B.1.a of this
document.
---------------------------------------------------------------------------
\92\ Efficiency levels that were analyzed for this final rule
are discussed in section IV.C of this document. Results by
efficiency level are presented in TSD chapter 8.
---------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on electric motors consumers by
looking at the effects that new and amended standards at each TSL would
have on the LCC and PBP. DOE also examined the impacts of potential
standards on selected consumer subgroups. These analyses are discussed
in the following sections.
a. Life-Cycle Cost and Payback Period
In general, higher-efficiency products affect consumers in two
ways: (1) purchase price increases and (2) annual operating costs
decrease. Inputs used for calculating the LCC and PBP include total
installed costs (i.e., product price plus installation costs), and
operating costs (i.e., annual energy use, energy prices, energy price
trends, repair costs, and maintenance costs). The LCC calculation also
uses product lifetime and a discount rate. Chapter [8] of the direct
final rule TSD provides detailed information on the LCC and PBP
analyses.
[[Page 36122]]
As described in Table IV-4 of this document, the analysis focuses
on 11 representative units identified in the engineering analysis.
Table V-3 through Table V-24 show the LCC and PBP results for the TSLs
considered for each representative unit. In the first of each pair of
tables, the simple payback is measured relative to the baseline
product. In the second table, impacts are measured relative to the
efficiency distribution in the no-new-standards case in the compliance
year (see section IV.F.8 of this document). Because some consumers
purchase products with higher efficiency in the no-new-standards case,
the average savings are less than the difference between the average
LCC of the baseline product and the average LCC at each TSL. The
savings refer only to consumers who are affected by a standard at a
given TSL. Those who already purchase a product with efficiency at or
above a given TSL are not affected. Consumers for whom the LCC
increases at a given TSL experience a net cost.
Table V-3--Average LCC and PBP Results for MEM, NEMA Design A and B; 5 hp, 4 Poles, Enclosed
[RU1]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
1-2.............. Baseline........ 1,185.5 789.9 5,754.2 6,939.6 ......... 12.6
3................ EL1............. 1,356.8 779.7 5,684.8 7,041.6 16.7 12.6
EL2 *........... 1,356.8 779.7 5,684.8 7,041.6 16.7 12.6
EL3............. 1,408.0 773.7 5,643.8 7,051.8 13.7 12.6
4................ EL4............. 1,620.1 768.5 5,616.7 7,236.8 20.3 12.6
----------------------------------------------------------------------------------------------------------------
* EL1 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-4--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 5 hp, 4
Poles, Enclosed
[RU1]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
1-2................................ Baseline............. N/A N/A
3.................................. EL1.................. -101.8 64.1
EL2 *................ -101.8 64.1
EL3.................. -92.3 76.4
4.................................. EL4.................. -276.4 95.9
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* EL1 = EL2.
** The savings represent the average LCC for affected consumers.
Table V-5--Average LCC and PBP Results for MEM, NEMA Design A and B; 30 hp, 4 Poles, Enclosed
[RU2]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
1-2.............. Baseline........ 3,274.2 4,568.5 37,700.8 40,975.0 ......... 14.1
3................ EL1............. 3,964.7 4,523.7 37,347.1 41,311.9 15.4 14.1
EL2 *........... 3,964.7 4,523.7 37,347.1 41,311.9 15.4 14.1
EL3............. 4,175.1 4,502.3 37,174.6 41,349.7 13.6 14.1
4................ EL4............. 4,277.2 4,484.2 37,026.9 41,304.1 11.9 14.1
----------------------------------------------------------------------------------------------------------------
* EL1 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
[[Page 36123]]
Table V-6--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 30 hp, 4
Poles, Enclosed
[RU2]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
1-2................................ Baseline............. N/A N/A
3.................................. EL1.................. -336.9 82.2
EL2 *................ -336.9 82.2
EL3.................. -356.9 81.1
4.................................. EL4.................. -309.4 75.0
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* EL1 = EL2.
** The savings represent the average LCC for affected consumers.
Table V-7--Average LCC and PBP Results for MEM, NEMA Design A and B; 75 hp, 4 Poles, Enclosed
[RU3]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
1-2.............. Baseline........ 8,046.4 10,021.1 83,400.1 91,446.5 ......... 14.2
3................ EL1............. 9,288.2 9,979.9 83,074.6 92,362.8 30.2 14.2
EL2............. 9,811.9 9,956.1 82,879.4 92,691.3 27.2 14.2
EL3............. 10,177.1 9,925.6 82,631.4 92,808.5 22.3 14.2
4................ EL4............. 10,636.4 9,895.3 82,386.0 93,022.4 20.6 14.2
----------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-8--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 75 hp, 4
Poles, Enclosed
[RU3]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings * Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
1-2................................ Baseline............. N/A N/A
3.................................. EL1.................. -916.7 88.4
EL2.................. -1,229.6 86.0
EL3.................. -1,258.0 89.0
4.................................. EL4.................. -1,439.6 90.5
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* The savings represent the average LCC for affected consumers.
Table V-9--Average LCC and PBP Results for MEM, NEMA Design A and B; 150 hp, 4 Poles, Enclosed
[RU4]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
1................ Baseline........ 13,066.4 20,576.9 243,710.9 256,777.2 ......... 33.4
2-3.............. EL1............. 13,414.0 20,492.3 242,797.2 256,211.3 4.1 33.4
EL2............. 15,941.3 20,467.3 243,214.8 259,156.1 26.2 33.4
EL3............. 16,547.4 20,404.6 242,661.3 259,208.7 20.2 33.4
4................ EL4............. 17,308.4 20,342.2 242,143.9 259,452.3 18.1 33.4
----------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
[[Page 36124]]
Table V-10--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 150 hp, 4
Poles, Enclosed
[RU4]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings * Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
1.................................. Baseline............. N/A N/A
2-3................................ EL1.................. 567.1 20.2
EL2.................. -2,424.3 90.1
EL3.................. -2,314.5 90.3
4.................................. EL4.................. -2,541.1 89.1
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* The savings represent the average LCC for affected consumers.
Table V-11--Average LCC and PBP Results for MEM, NEMA Design A and B; 350 hp, 4 Poles, Enclosed
[RU5]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
1-2.............. Baseline........ 26,409.6 47,899.8 563,544.0 589,953.6 ......... 33.4
3................ EL1............. 29,815.6 47,610.1 561,091.1 590,906.6 11.8 33.4
EL2 *........... 29,815.6 47,610.1 561,091.1 590,906.6 11.8 33.4
EL3............. 33,572.3 47,548.0 561,385.2 594,957.5 20.4 33.4
4................ EL4............. 35,153.9 47,405.2 560,142.3 595,296.2 17.7 33.4
----------------------------------------------------------------------------------------------------------------
* EL1 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-12--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 350 hp, 4
Poles, Enclosed
[RU5]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
1-2................................ Baseline............. N/A N/A
3.................................. EL1.................. -945.5 66.9
EL2 *................ -945.5 66.9
EL3.................. -4,918.5 92.4
4.................................. EL4.................. -5,257.2 89.0
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* EL1 = EL2.
** The savings represent the average LCC for affected consumers.
Table V-13--Average LCC and PBP Results for MEM, NEMA Design A and B; 600 hp, 4 Poles, Enclosed
[RU6]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 40,229.5 83,393.4 980,309.1 1,020,538.6 ......... 33.5
1-2.............. EL1............. 41,466.0 83,054.7 976,644.0 1,018,109.9 3.7 33.5
3................ EL2............. 46,889.6 82,698.8 973,798.2 1,020,687.7 9.6 33.5
EL3 *........... 46,889.6 82,698.8 973,798.2 1,020,687.7 9.6 33.5
4................ EL4............. 55,293.3 82,201.3 970,160.6 1,025,454.0 12.6 33.5
----------------------------------------------------------------------------------------------------------------
* EL2 = EL3.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
[[Page 36125]]
Table V-14--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 600 hp, 4
Poles, Enclosed
[RU6]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1-2................................ EL1.................. 2,550.1 2.1
3.................................. EL2.................. -2,287.8 58.3
EL3 *................ -2,287.8 58.3
4.................................. EL4.................. -6,710.3 83.2
----------------------------------------------------------------------------------------------------------------
* EL2 = EL3.
** The savings represent the average LCC for affected consumers.
Table V-15--Average LCC and PBP Results for AO MEM (Standard Frame Size); 5 hp, 4 Poles, Enclosed
[RU7]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 1,126.0 992.2 6,734.4 7,860.4 ......... 11.8
1-2.............. EL1............. 1,214.2 970.4 6,589.4 7,803.6 4.0 11.8
3................ EL2............. 1,331.6 960.7 6,531.3 7,862.8 6.5 11.8
EL3............. 1,331.6 960.7 6,531.3 7,862.8 6.5 11.8
4................ EL4............. 1,525.2 947.7 6,455.8 7,981.0 9.0 11.8
----------------------------------------------------------------------------------------------------------------
* EL3 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-16--Average LCC Savings Relative to the No-New-Standards Case for AO MEM (Standard Frame Size); 5 hp, 4
Poles, Enclosed
[RU7]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1-2................................ EL1.................. 57.6 10.3
3.................................. EL2.................. -39.2 62.9
EL3 *................ -39.2 62.9
4.................................. EL4.................. -156.5 80.7
----------------------------------------------------------------------------------------------------------------
* EL2 = EL3.
** The savings represent the average LCC for affected consumers.
Table V-17--Average LCC and PBP Results for AO MEM (Standard Frame Size); 30 hp, 4 Poles, Enclosed
[RU8]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 3,186.7 5,553.3 44,668.1 47,854.8 ......... 13.7
1-2.............. EL1............. 3,302.6 5,482.2 44,098.8 47,401.4 1.6 13.7
3................ EL2............. 3,925.6 5,428.3 43,681.1 47,606.7 5.9 13.7
EL3 *........... 3,925.6 5,428.3 43,681.1 47,606.7 5.9 13.7
4................ EL4............. 4,214.4 5,384.7 43,337.1 47,551.4 6.1 13.7
----------------------------------------------------------------------------------------------------------------
* EL3 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
[[Page 36126]]
Table V-18--Average LCC Savings Relative to the No-New-Standards Case for AO MEM (Standard Frame Size); 30 hp, 4
Poles, Enclosed
[RU8]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1-2................................ EL1.................. 472.4 0.9
3.................................. EL2.................. -160.8 73.9
EL3 *................ -160.8 73.9
4.................................. EL4.................. -105.5 64.5
----------------------------------------------------------------------------------------------------------------
* EL2 = EL3.
** The savings represent the average LCC for affected consumers.
Table V-19--Average LCC and PBP Results for AO MEM (Standard Frame Size); 75 hp, 4 Poles, Enclosed
[RU9]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 6,905.6 13,470.2 104,380.5 111,286.0 ......... 13.3
1-2.............. EL1............. 7,850.5 13,291.7 103,149.1 110,999.7 5.3 13.3
3................ EL2............. 8,995.7 13,237.8 102,934.5 111,930.2 9.0 13.3
EL3............. 9,505.8 13,227.0 102,934.8 112,440.6 10.7 13.3
4................ EL4............. 10,331.4 13,147.4 102,463.3 112,794.6 10.6 13.3
----------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-20--Average LCC Savings Relative to the No-New-Standards Case for AO MEM (Standard Frame Size); 75 hp, 4
Poles, Enclosed
[RU9]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1-2................................ EL1 *................ ....................... ...........................
3.................................. EL2.................. -930.5 99.9
EL3.................. -1,441.0 98.4
4.................................. EL4.................. -1,795.0 96.4
----------------------------------------------------------------------------------------------------------------
* No savings at EL1 as there are no shipments at the baseline for RU9. See Table IV-9 of this document.
** The savings represent the average LCC for affected consumers.
Table V-21--Average LCC and PBP Results for AO MEM (Standard Frame Size); 150 hp, 4 Poles, Enclosed
[RU10]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 11,557.8 26,565.2 296,595.2 308,153.0 ......... 31.4
1................ EL1............. 12,862.9 26,349.5 294,637.7 307,500.7 6.1 31.4
2-3.............. EL2............. 13,119.9 26,243.0 293,559.4 306,679.3 4.9 31.4
EL3 *........... 15,651.8 26,253.2 294,598.5 310,250.3 13.1 31.4
4................ EL4............. 16,290.6 26,095.5 293,085.9 309,376.5 10.1 31.4
----------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
* At EL3, for RU10, the increase in motor speed compared to the baseline is greater than the increase in motor
speed at EL2 compared to the baseline (see section IV.C.1.c of this document). The additional energy use due
to the increase in motor speed at EL3 results in lower energy savings and higher operating costs at EL3
compared to EL2. See section IV.E.4 of this document for a detailed explanation of the impact of speed.
[[Page 36127]]
Table V-22--Average LCC Savings Relative to the No-New-Standards Case for AO MEM (Standard Frame Size); 150 hp,
4 Poles, Enclosed
[RU10]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings * Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1.................................. EL1.................. 608.8 6.3
2-3................................ EL2.................. 930.7 11.7
EL3.................. -2,720.3 93.7
4.................................. EL4.................. -1,846.6 79.0
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V-23--Average LCC and PBP Results for Polyphase (Specialized Frame Size); 5 hp, 4 Poles, Enclosed
[RU11]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback Lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 1,134.3 993.4 6,899.6 8,033.9 ......... 11.9
1-2.............. EL1............. 1,225.1 971.1 6,758.9 7,984.0 4.1 11.9
3................ EL2............. 1,342.9 956.1 6,688.5 8,031.3 5.6 11.9
EL3............. 1,539.1 942.1 6,648.0 8,187.0 7.9 11.9
4................ EL4 *........... 1,539.1 942.1 6,648.0 8,187.0 7.9 11.9
----------------------------------------------------------------------------------------------------------------
* EL3 = EL4.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-24--Average LCC Savings Relative to the No-New-Standards Case for AO-Polyphase (Specialized Frame Size);
5 hp, 4 Poles, Enclosed
[RU11]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings * Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1-2................................ EL1.................. 49.9 32.1
3.................................. EL2.................. 2.5 53.4
EL3.................. -153.2 74.5
4.................................. EL4 *................ -153.2 74.5
----------------------------------------------------------------------------------------------------------------
* EL3 = EL4.
** The savings represent the average LCC for affected consumers.
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on small businesses. Table V-25 compares the average
LCC savings and PBP at each efficiency level for the consumer subgroups
with similar metrics for the entire consumer sample for electric
motors. For the subgroup analysis, the only input change to the LCC
calculation is the discount rate applied. Therefore, the simple
paybacks remain identical for small businesses compared to the whole
sample. In all cases, the average LCC savings and PBP for small
businesses at the considered efficiency levels are reduced compared to
the average for all consumers. Chapter 11 of the direct final rule TSD
presents the complete LCC and PBP results for the subgroups.
[[Page 36128]]
Table V-25--Comparison of LCC Savings and PBP for Small Business Consumer Subgroups and All Consumers
----------------------------------------------------------------------------------------------------------------
Average LCC savings * (2021$) Simple payback (years)
---------------------------------------------------------------
TSL EL Small Small
businesses All businesses businesses All businesses
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 5 hp, 4 poles, enclosed (RU1)
----------------------------------------------------------------------------------------------------------------
1-2............................. 0 N/A N/A N/A N/A
3............................... 1 -108.5 -101.8 16.7 16.7
2 -108.5 -101.8 16.7 16.7
3 -101.7 -92.3 13.3 13.3
4............................... 4 -288.0 -276.4 20.7 20.7
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 30 hp, 4 poles, enclosed (RU2)
----------------------------------------------------------------------------------------------------------------
1-2............................. 0 N/A N/A N/A N/A
3............................... 1 -376.7 -336.9 15.4 15.4
2 -376.7 -336.9 15.4 15.4
3 -414.2 -356.9 13.6 13.6
4............................... 4 -383.3 -309.4 11.8 11.8
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 75 hp, 4 poles, enclosed (RU3)
----------------------------------------------------------------------------------------------------------------
1-2............................. 0 N/A N/A N/A N/A
3............................... 1 -954.2 -916.7 30.3 30.3
2 -1,290.1 -1229.6 27.1 27.1
3 -1,342.9 -1258.0 22.0 22.0
4............................... 4 -1,550.9 -1439.6 20.3 20.3
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 150 hp, 4 poles, enclosed (RU4)
----------------------------------------------------------------------------------------------------------------
1............................... 0 N/A N/A N/A N/A
2-3............................. 1 398.4 567.1 4.1 4.1
2 -2,471.1 -2424.3 27.6 27.6
3 -2,454.5 -2314.5 20.5 20.5
4............................... 4 -2,768.0 -2541.1 18.2 18.2
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 350 hp, 4 poles, enclosed (RU5)
----------------------------------------------------------------------------------------------------------------
1-2............................. 0 N/A N/A N/A N/A
3............................... 1 -1,362.7 -945.5 11.7 11.7
2 -1,362.7 -945.5 11.7 11.7
3 -5,206.4 -4918.5 20.9 20.9
4............................... 4 -5,758.3 -5257.2 17.9 17.9
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 600 hp, 4 poles, enclosed (RU6)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1-2............................. 1 1,865.7 2550.1 3.6 3.6
3............................... 2 -2,854.2 -2287.8 14.1 14.1
3 -2,854.2 -2287.8 14.1 14.1
4............................... 4 -7,771.5 -6710.3 15.8 15.8
----------------------------------------------------------------------------------------------------------------
AO-MEM (Standard Frame Size); 5 hp, 4 poles, enclosed (RU7)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1-2............................. 1 44.1 57.6 4.0 4.0
3............................... 2 -49.0 -39.2 8.6 8.6
3 -49.0 -39.2 8.6 8.6
4............................... 4 -172.7 -156.5 11.4 11.4
----------------------------------------------------------------------------------------------------------------
AO-MEM (Standard Frame Size); 30 hp, 4 poles, enclosed (RU8)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1-2............................. 1 407.9 472.4 1.6 1.6
3............................... 2 -213.1 -160.8 10.4 10.4
3 -213.1 -160.8 10.4 10.4
4............................... 4 -196.1 -105.5 8.8 8.8
----------------------------------------------------------------------------------------------------------------
AO-MEM (Standard Frame Size); 75 hp, 4 poles, enclosed (RU9)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1-2............................. *1 .............. .............. .............. ..............
[[Page 36129]]
3............................... 2 -947.0 -930.5 21.2 21.2
3 -1,454.5 -1,441.0 25.6 25.6
4............................... 4 -1,854.7 -1795.0 17.2 17.2
----------------------------------------------------------------------------------------------------------------
AO-MEM (Standard Frame Size); 150 hp, 4 poles, enclosed (RU10)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1............................... 1 292.7 608.8 6.1 6.1
2-3............................. 2 691.0 930.7 3.4 3.4
3 -2,732.4 -2720.3 24.5 24.5
4............................... 4 -2,111.7 -1846.6 13 13
----------------------------------------------------------------------------------------------------------------
AO-Polyphase (Specialized Frame Size); 5 hp, 4 poles, enclosed (RU11)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1-2............................. 1 37.0 49.9 4.1 4.1
3............................... 2 -16.1 2.5 5.6 5.6
3 -173.9 -153.2 7.9 7.9
4............................... 4 -173.9 -153.2 7.9 7.9
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No savings at EL1 as there are no shipments at the baseline for RU9. See Table IV-9 of this document.
c. Rebuttable Presumption Payback
As discussed in section III.F.2, EPCA establishes a rebuttable
presumption that an energy conservation standard is economically
justified if the increased purchase cost for a product that meets the
standard is less than three times the value of the first-year energy
savings resulting from the standard. In calculating a rebuttable
presumption payback period for each of the considered TSLs, DOE used
discrete values, and, as required by EPCA, based the energy use
calculation on the DOE test procedure for electric motors. In contrast,
the PBPs presented in section V.B.1.a were calculated using
distributions that reflect the range of energy use in the field.
Table V-26 presents the rebuttable-presumption payback periods for
the considered TSLs for electric motors. While DOE examined the
rebuttable-presumption criterion, it considered whether the standard
levels considered for the direct final rule are economically justified
through a more detailed analysis of the economic impacts of those
levels, pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that considers the full
range of impacts to the consumer, manufacturer, Nation, and
environment. The results of that analysis serve as the basis for DOE to
definitively evaluate the economic justification for a potential
standard level, thereby supporting or rebutting the results of any
preliminary determination of economic justification.
Table V-26--Rebuttable-Presumption Payback Periods
----------------------------------------------------------------------------------------------------------------
Rebuttable payback period (years)
Representative unit ---------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 5 hp, 4 poles, enclosed (RU1)..... N/A N/A 12.6 15.1
MEM, NEMA Design A and B; 30 hp, 4 poles, enclosed (RU2).... N/A N/A 11.4 8.8
MEM, NEMA Design A and B; 75 hp, 4 poles, enclosed (RU3).... N/A N/A 21.6 14.9
MEM, NEMA Design A and B; 150 hp, 4 poles, enclosed (RU4)... N/A 3.0 3.0 12.9
MEM, NEMA Design A and B; 350 hp, 4 poles, enclosed (RU5)... N/A N/A 8.5 12.9
MEM, NEMA Design A and B; 600 hp, 4 poles, enclosed (RU6)... 2.7 2.7 6.9 9.2
AO-MEM (Standard Frame Size); 5 hp, 4 poles, enclosed (RU7). 3.1 3.1 5.0 6.9
AO-MEM (Standard Frame Size); 30 hp, 4 poles, enclosed (RU8) 1.2 1.2 4.5 4.6
AO-MEM (Standard Frame Size); 75 hp, 4 poles, enclosed (RU9) ........... ........... 6.6 7.8
*..........................................................
AO-MEM (Standard Frame Size); 150 hp, 4 poles, enclosed 4.4 3.5 3.5 7.3
(RU10).....................................................
AO-Polyphase (Specialized Frame Size); 5 hp, 4 poles, 3.1 3.1 4.2 5.9
enclosed (RU11)............................................
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No payback at TSL1 and TSL2 (EL1) as there are no shipments at the baseline for RU9. See Table IV-9 of this
document.
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of new and amended
energy conservation standards on manufacturers of electric motors. The
following section describes the expected impacts on manufacturers at
each considered TSL. Chapter 12 of the direct final rule TSD explains
the analysis in further detail.
a. Industry Cash Flow Analysis Results
In this section, DOE provides GRIM results from the analysis, which
examines changes in the industry that would result from a standard. The
[[Page 36130]]
following tables summarize the estimated financial impacts (represented
by changes in INPV) of potential new and amended energy conservation
standards on manufacturers of electric motors, as well as the
conversion costs that DOE estimates manufacturers of electric motors
would incur at each TSL.
To evaluate the range of cash flow impacts on the electric motor
industry, DOE modeled two manufacturer markup scenarios that correspond
to the range of possible market responses to new and amended standards.
Each manufacturer markup scenario results in a unique set of cash flows
and corresponding INPVs at each TSL.
In the following discussion, the INPV results refer to the
difference in industry value between the no-new-standards case and the
standards cases that result from the sum of discounted cash flows from
the reference year (2023) through the end of the analysis period
(2056). The results also discuss the difference in cash flows between
the no-new standards case and the standards cases in the year before
the estimated compliance date for new and amended energy conservation
standards. This figure represents the size of the required conversion
costs relative to the cash flow generated by the electric motor
industry in the absence of new and amended energy conservation
standards.
To assess the upper (less severe) end of the range of potential
impacts on electric motors manufacturers, DOE modeled a preservation of
gross margin scenario. This scenario assumes that in the standards
cases, electric motor manufacturers will be able to pass along all the
higher MPCs required for more efficient equipment to their customers.
Specifically, the industry will be able to maintain its average no-new-
standards case gross margin (as a percentage of revenue) despite the
higher production costs in the standards cases. In general, the larger
the MPC increases, the less likely manufacturers are to achieve the
cash flow from operations calculated in this scenario because it is
less likely that manufacturers will be able to fully markup these
larger production cost increases.
To assess the lower (more severe) end of the range of potential
impacts on the electric motor manufacturers, DOE modeled a preservation
of operating profit scenario. This scenario represents the lower end of
the range of impacts on manufacturers because no additional operating
profit is earned on the higher MPCs, eroding profit margins as a
percentage of total revenue.
Table V-27--Manufacturer Impact Analysis for Electric Motors--Preservation of Gross Margin Scenario
----------------------------------------------------------------------------------------------------------------
No-new- Trial standard level
Units standards -------------------------------------------
case 1 2 3 4
----------------------------------------------------------------------------------------------------------------
INPV............................. 2021$ millions...... 5,023 4,899 4,720 4,681 (3,840)
Change in INPV................... 2021$ millions...... ........... (124) (303) (342) (8,863)
%................... ........... (2.5) (6.0) (6.8) (176.4)
Product Conversion Costs......... 2021$ millions...... ........... 159 296 870 6,285
Capital Conversion Costs......... 2021$ millions...... ........... 31 173 748 7,231
Total Conversion Costs........... 2021$ millions...... ........... 190 468 1,618 13,516
----------------------------------------------------------------------------------------------------------------
Table V-28--Manufacturer Impact Analysis for Electric Motors--Preservation of Operating Profit Scenario
----------------------------------------------------------------------------------------------------------------
No-new- Trial standard level
Units standards -------------------------------------------
case 1 2 3 4
----------------------------------------------------------------------------------------------------------------
INPV............................. 2021$ millions...... 5,023 4,896 4,690 3,659 (6,066)
Change in INPV................... 2021$ millions...... ........... (127) (333) (1,364) (11,090)
%................... ........... (2.5) (6.6) (27.2) (220.8)
Product Conversion Costs......... 2021$ millions...... ........... 159 296 870 6,285
Capital Conversion Costs......... 2021$ millions...... ........... 31 173 748 7,231
Total Conversion Costs........... 2021$ millions...... ........... 190 468 1,618 13,516
----------------------------------------------------------------------------------------------------------------
TSL 1 sets the efficiency level at baseline for all MEM, 1-500 hp,
NEMA Design A and B; and at EL 1 for all MEM, 501-750 hp, NEMA Design A
and B, for all AO-MEM 1-250 hp (standard frame size), and for all AO-
Polyphase 1-20 hp (specialized frame size). At TSL 1, DOE estimates
impacts on INPV will range from -$127 million to -$124 million, which
represents a change in INPV of approximately -2.5 percent (for both
values, when rounded to the nearest tenth of a percent). At TSL 1,
industry free cash flow (operating cash flow minus capital
expenditures) is estimated to decrease to $272 million, or a drop of 21
percent, compared to the no-new-standards case value of $343 million in
2026, the year leading up to the compliance date of new and amended
energy conservation standards.
In the absence of new or amended energy conservation standards, DOE
estimates that all MEM, 1-500 hp, NEMA Design A and B; 90 percent of
MEM, 501-750 hp, NEMA Design A and B; 73 percent of the AO-MEM 1-250 hp
(standard frame size); and none of the AO-Polyphase 1-20 hp
(specialized frame size) shipments will meet or exceed the ELs required
at TSL 1 in 2027, the compliance year of new and amended standards.
DOE does not expect manufacturers to incur any product or capital
conversion costs for MEM, 1-500 hp, NEMA Design A and B at TSL 1, since
standards are set at baseline at TSL 1 for these electric motors. For
the rest of the electric motors covered by this rulemaking, DOE
estimates that manufacturers will incur approximately $159 million in
product conversion costs and approximately $31 million in capital
conversion costs. Product conversion costs primarily include
engineering time to redesign non-compliance electric motor models and
to re-test these newly redesigned models to meet the standards set at
TSL 1. Capital conversion costs include the purchase of lamination die
sets, winding machines, frame casts, and assembly equipment as well as
other
[[Page 36131]]
retooling costs for MEM, 501-750 hp, NEMA Design A and B and for all
AO-MEM 1-250 hp (standard frame size) and all AO-Polyphase 1-20 hp
(specialized frame size) electric motors covered by this rulemaking.
At TSL 1, under the preservation of gross margin scenario, the
shipment weighted average MPC increases slightly by approximately 0.1
percent relative to the no-new-standards case MPC. This slight price
increase is outweighed by the $190 million in total conversion costs
estimated at TSL 1, resulting in slightly negative INPV impacts at TSL
1 under the preservation of gross margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The slight increase in the shipment weighted
average MPC results in a slightly lower average manufacturer margin.
This slightly lower average manufacturer margin and the $190 million in
total conversion costs result in slightly negative INPV impacts at TSL
1 under the preservation of operating profit scenario.
TSL 2 sets the efficiency level at baseline for all MEM, 1-99 hp
and 251-500 hp, NEMA Design A and B; at EL 1 for all MEM, 100-250 hp
and 501-750 hp, NEMA Design A and B, for all AO-MEM 1-99 hp (standard
frame size), and for all AO-Polyphase 1-20 hp (specialized frame size);
and at EL 2 for all AO-MEM 100-250 hp (standard frame size). At TSL 2,
DOE estimates impacts on INPV will range from -$333 million to -$303
million, which represents a change in INPV of approximately -6.6
percent to -6.0 percent, respectively. At TSL 2, industry free cash
flow (operating cash flow minus capital expenditures) is estimated to
decrease to $160 million, or a drop of 53 percent, compared to the no-
new-standards case value of $343 million in 2026, the year leading up
to the compliance date of new and amended energy conservation
standards.
In the absence of new or amended energy conservation standards, DOE
estimates that all MEM, 1-99 hp and 251-500 hp, NEMA Design A and B; 14
percent of all MEM, 100-250 hp, NEMA Design A and B; 90 percent of all
MEM, 501-750, NEMA Design A and B; 72 percent of all AO-MEM 1-99 hp
(standard frame size); 8 percent of all AO-MEM 100-250 hp (standard
frame size); and none of the AO-Polyphase 1-20 hp (specialized frame
size) shipments will meet or exceed the ELs required at TSL 2 in 2027,
the compliance year of new and amended standards.
DOE does not expect manufacturers to incur any product or capital
conversion costs for MEM, 1-99 hp and 250-500 hp, NEMA Design A and B
at TSL 2, since standards are set at baseline at TSL 2 for these
electric motors. For the rest of the electric motors covered by this
rulemaking, DOE estimates that manufacturers will incur approximately
$296 million in product conversion costs and approximately $173 million
in capital conversion costs. Product conversion costs primarily include
engineering time to redesign non-compliance electric motor models and
to re-test these newly redesigned models to meet the standards set at
TSL 2. Capital conversion costs include the purchase of lamination die
sets, winding machines, frame casts, and assembly equipment as well as
other retooling costs for MEM, 100-250 hp and 501-750 hp, NEMA Design A
and B and for all AO-MEM 1-250 hp (standard frame size) and all AO-
Polyphase 1-20 hp (specialized frame size) electric motors covered by
this rulemaking.
At TSL 2, under the preservation of gross margin scenario, the
shipment weighted average MPC increases slightly by approximately 0.7
percent relative to the no-new-standards case MPC. This slight price
increase is outweighed by the $468 million in total conversion costs
estimated at TSL 2, resulting in moderately negative INPV impacts at
TSL 2 under the preservation of gross margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The slight increase in the shipment weighted
average MPC results in a slightly lower average manufacturer margin.
This slightly lower average manufacturer margin and the $468 million in
total conversion costs result in moderately negative INPV impacts at
TSL 2 under the preservation of operating profit scenario.
TSL 3 sets the efficiency level at EL 1 for all MEM, 1-500 hp, NEMA
Design A and B; and at EL 2 for all MEM, 501-750 hp, NEMA Design A and
B, for all AO-MEM 1-250 hp (standard frame size), and for all AO-
Polyphase 1-20 hp (specialized frame size). At TSL 3, DOE estimates
impacts on INPV will range from -$1,364 million to -$342 million, which
represents a change in INPV of approximately -27.2 percent to -6.8
percent, respectively. At TSL 3, industry free cash flow (operating
cash flow minus capital expenditures) is estimated to decrease to -$303
million, or a drop of 189 percent, compared to the no-new-standards
case value of $343 million in 2026, the year leading up to the
compliance date of new and amended energy conservation standards.
In the absence of new or amended energy conservation standards, DOE
estimates that 14 percent of all MEM, 1-500 hp, NEMA Design A and B; 16
percent of all MEM, 501-750 hp, NEMA Design A and B; 2 percent of all
AO-MEM 1-250 hp (standard frame size); and none of the AO-Polyphase 1-
20 hp (specialized frame size) shipments will meet or exceed the ELs
required at TSL 3 in 2027, the compliance year of new and amended
standards.
The majority of electric motors covered by this rulemaking will
need to be redesigned at TSL 3. DOE estimates that manufacturers will
have to make significant investments in their manufacturing production
equipment and the engineering resources dedicated to redesigning
electric motor models. DOE estimates that manufacturers will incur
approximately $870 million in product conversion costs and
approximately $748 million in capital conversion costs.
At TSL 3, under the preservation of gross margin scenario, the
shipment weighted average MPC increases significantly by approximately
22.0 percent relative to the no-new-standards case MPC. This price
increase is outweighed by the $1,618 million in total conversion costs
estimated at TSL 3, resulting in moderately negative INPV impacts at
TSL 3 under the preservation of gross margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The increase in the shipment weighted average
MPC results in a significantly lower average manufacturer margin,
compared to the no-new-standards case manufacturer margin. This lower
average manufacturer margin and the $1,618 million in total conversion
costs result in significantly negative INPV impacts at TSL 3 under the
preservation of operating profit scenario.
TSL 4 sets the efficiency level at EL 4 (max-tech) for all electric
motors covered by this rulemaking. At TSL 4, DOE estimates impacts on
INPV will range from -$11,090 million to -$8,863 million, which
represents a change in INPV of approximately -220.8 percent to -176.4
percent, respectively. At TSL 4, industry free
[[Page 36132]]
cash flow (operating cash flow minus capital expenditures) is estimated
to decrease to -$5,634 million, or a drop of 1,745 percent, compared to
the no-new-standards case value of $343 million in 2026, the year
leading up to the compliance date of new and amended energy
conservation standards.
In the absence of new or amended energy conservation standards, DOE
estimates that less than 1 percent of all MEM, 1-50 hp, NEMA Design A
and B; none of the MEM, 51-750 hp, NEMA Design A and B; none of the AO-
MEM 1-250 hp (standard frame size); and none of the AO-Polyphase 1-20
hp (specialized frame size) shipments will meet the ELs required at TSL
4 in 2027, the compliance year of new and amended standards.
Almost all electric motors covered by this rulemaking will need to
be redesigned at TSL 4. DOE estimates that manufacturers will have to
make significant investments in their manufacturing production
equipment and the engineering resources dedicated to redesigning
electric motor models. DOE estimates that manufacturers will incur
approximately $6,285 million in product conversion costs and
approximately $7,231 million in capital conversion costs. The
significant increase in product and capital conversion costs is because
DOE assumes that electric motor manufacturers will need to use die-cast
copper rotors for most, if not all, electric motors manufactured to
meet this TSL. This technology requires a significant level of
investment because the majority of the existing electric motor
production machinery would need to be replaced or significantly
modified.
At TSL 4, under the preservation of gross margin scenario, the
shipment weighted average MPC increases significantly by approximately
49.5 percent relative to the no-new-standards case MPC. This price
increase is significantly outweighed by the $13,516 million in total
conversion costs estimated at TSL 4, resulting in significantly
negative INPV impacts at TSL 4 under the preservation of gross margin
scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The increase in the shipment weighted average
MPC results in a lower average manufacturer margin, compared to the no-
new-standards case manufacturer margin. This lower average manufacturer
margin and the $13,516 million in total conversion costs result in
significantly negative INPV impacts at TSL 4 under the preservation of
operating profit scenario.
b. Direct Impacts on Employment
To quantitatively assess the potential impacts of new and amended
energy conservation standards on direct employment in the electric
motors industry, DOE used the GRIM to estimate the domestic labor
expenditures and number of direct employees in the no-new-standards
case and in each of the standards cases during the analysis period.
DOE used statistical data from the U.S. Census Bureau's 2021 Annual
Survey of Manufacturers (``ASM''), the results of the engineering
analysis, and interviews with manufacturers to determine the inputs
necessary to calculate industry-wide labor expenditures and domestic
employment levels. Labor expenditures involved with the manufacturing
of electric motors are a function of the labor intensity of the
product, the sales volume, and an assumption that wages remain fixed in
real terms over time.
In the GRIM, DOE used the labor content of each piece of equipment
and the MPCs to estimate the annual labor expenditures of the industry.
DOE used Census data and interviews with manufacturers to estimate the
portion of the total labor expenditures attributable to domestic labor.
The production worker estimates in this employment section cover
only workers up to the line-supervisor level who are directly involved
in fabricating and assembling an electric motor within a motor
facility. Workers performing services that are closely associated with
production operations, such as material handling with a forklift, are
also included as production labor. DOE's estimates account for only
production workers who manufacture the specific equipment covered by
this rulemaking. For example, a worker on an electric motor line
manufacturing a fractional horsepower motor (i.e., a motor with less
than one horsepower) would not be included with this estimate of the
number of electric motor workers, since fractional motors are not
covered by this rulemaking.
The employment impacts shown in Table V-29 represent the potential
production employment impact resulting from new and amended energy
conservation standards. The upper bound of the results estimates the
maximum change in the number of production workers that could occur
after compliance with new and amended energy conservation standards
when assuming that manufacturers continue to produce the same scope of
covered equipment in the same production facilities. It also assumes
that domestic production does not shift to lower-labor-cost countries.
Because there is a real risk of manufacturers evaluating sourcing
decisions in response to new and amended energy conservation standards,
the lower bound of the employment results includes the estimated total
number of U.S. production workers in the industry who could lose their
jobs if some existing electric motor production was moved outside of
the U.S. While the results present a range of employment impacts
following 2027, this section also include qualitative discussions of
the likelihood of negative employment impacts at the various TSLs.
Finally, the employment impacts shown are independent of the indirect
employment impacts from the broader U.S. economy, which are documented
in chapter 16 of the direct final rule TSD.
Based on 2021 ASM data and interviews with manufacturers, DOE
estimates approximately 15 percent of electric motors covered by this
rulemaking sold in the U.S. are manufactured domestically. Using this
assumption, DOE estimates that in the absence of new and amended energy
conservation standards, there would be approximately 1,242 domestic
production workers involved in manufacturing all electric motors
covered by this rulemaking in 2027. Table V-29 shows the range of
potential impacts of new and amended energy conservation standards on
U.S. production workers involved in the production of electric motors
covered by this rulemaking.
Table V-29--Potential Changes in the Number of Domestic Electric Motor Workers
----------------------------------------------------------------------------------------------------------------
No-new- Trial standard level
standards ---------------------------------------------------------
case 1 2 3 4
----------------------------------------------------------------------------------------------------------------
Domestic Production Workers in 2027...... 1,242 1,243 1,250 1,515 1,857
[[Page 36133]]
Domestic Non-Production Workers in 2027.. 712 712 712 712 712
Total Domestic Employment in 2027........ 1,954 1,955 1,962 2,227 2,569
Potential Changes in Total Domestic ........... (2)-1 (13)-8 (432)-273 (1,201)-615
Employment in 2027 *....................
----------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential impacts. Numbers in parentheses indicate negative values.
At the upper end of the range, all examined TSLs show an increase
in the number of domestic production workers for electric motors. The
upper end of the range represents a scenario where manufacturers
increase production hiring due to the increase in the labor associated
with adding the required components and additional labor (e.g., hand
winding, etc.) to make electric motors more efficient. However, as
previously stated, this assumes that in addition to hiring more
production employees, all existing domestic production would remain in
the United States and not shift to lower labor-cost countries.
At the lower end of the range, all examined TSLs show a decrease in
domestic production employment. In response to the March 2022
Preliminary TSD NEMA stated that increasing component prices can drive
production offshore when tariffs only apply to raw materials and not
finished goods. (NEMA, No. 22 at p. 16). The lower end of the domestic
employment range assumes that some electric motor domestic production
employment may shift to lower labor-cost countries in response to
energy conservation standards. DOE estimated this lower bound potential
change in domestic employment based on the percent change in the MPC at
each TSL.
c. Impacts on Manufacturing Capacity
During manufacturer interviews and during meetings supporting the
November 2022 Joint Recommendation, most manufacturers stated that any
standards requiring efficiency levels higher than IE4 (also referred to
as NEMA Super-Premium) \93\ would severely disrupt manufacturing
capacity (in this analysis these efficiency levels correspond to two or
more NEMA bands of efficiency above NEMA Premium). Many electric motor
manufacturers do not offer any electric motor models that would meet
these higher efficiency levels. Based on the shipments analysis used in
the NIA, DOE estimates that less than 1.5 percent of all electric motor
shipments will meet any efficiency level above IE4, in the no-new-
standards case in 2027, the compliance year of new and amended
standards.
---------------------------------------------------------------------------
\93\ The TSL that require efficiency levels above IE4/NEMA
Super-Premium is TSL 4.
---------------------------------------------------------------------------
Additionally, most manufacturers stated they would not be able to
provide a full portfolio of electric motors for any standards that
would be met using copper rotors. Most manufacturers stated that they
do not currently have the machinery, technology, or engineering
resources to produce copper rotors in-house. Some manufacturers claim
that the few manufacturers that do have the capability of producing
copper rotors are not able to produce these motors in volumes
sufficient to fulfill the entire electric motor market and would not be
able to ramp up those production volumes over the four-year compliance
period. For manufacturers to either completely redesign their motor
production lines or significantly expand their very limited copper
rotor production line would require a massive retooling and engineering
effort, which could take more than a decade to complete. Most
manufacturers stated they would have to outsource copper rotor
production because they would not be able to modify their facilities
and production processes to produce copper rotors in-house within a
four-year time period. Most manufacturers agreed that outsourcing rotor
die casting would constrain capacity by creating a bottleneck in rotor
production, as there are very few companies that produce copper rotors.
Manufacturers also pointed out that there is substantial
uncertainty surrounding the global availability and price of copper,
which has the potential to constrain capacity. Several manufacturers
expressed concern that the combination of all of these factors would
make it impossible to support existing customers while redesigning
product lines and retooling.
DOE estimates there is a strong likelihood of manufacturer capacity
constraints in the near term for any standards that would likely
require the use of copper rotors and for any standards set at
efficiency levels higher than IE4.
d. Impacts on Subgroups of Manufacturers
Using average cost assumptions to develop an industry cash-flow
estimate may not be adequate for assessing differential impacts among
manufacturer subgroups. Small manufacturers, niche equipment
manufacturers, and manufacturers exhibiting cost structures
substantially different from the industry average could be affected
disproportionately. DOE analyzed the impacts to small businesses in
section VI.B and did not identify any other adversely impacted electric
motor-related manufacturer subgroups for this rulemaking based on the
results of the industry characterization.
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer burden involves looking at the
cumulative impact of multiple DOE standards and the product-specific
regulatory actions of other Federal agencies that affect the
manufacturers of a covered product or equipment. While any one
regulation may not impose a significant burden on manufacturers, the
combined effects of several existing or impending regulations may have
serious consequences for some manufacturers, groups of manufacturers,
or an entire industry. Assessing the impact of a single regulation may
overlook this cumulative regulatory burden. In addition to energy
conservation standards, other regulations can significantly affect
manufacturers' financial operations. Multiple regulations affecting the
same manufacturer can strain profits and lead companies to abandon
product lines or markets with lower expected future returns than
competing products. For these reasons, DOE conducts an analysis
[[Page 36134]]
of cumulative regulatory burden as part of its rulemakings pertaining
to appliance efficiency. DOE requests information regarding the impact
of cumulative regulatory burden on manufacturers of electric motors
associated with multiple DOE standards or product-specific regulatory
actions of other Federal agencies.
DOE evaluates product-specific regulations that will take effect
approximately 3 years before or after the 2027 compliance date of any
new and amended energy conservation standards for electric motors. This
information is presented in Table V-30.
Table V-30--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting Electric Motor Manufacturers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Industry
Number of manufacturers Approx. conversion costs/
Federal energy conservation standard manufacturers * affected from standards year Industry conversion costs (millions) product revenue
this rule ** *** (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dedicated-Purpose Pool Pump Motors 87 FR 5 5 2026 $46.2 (2020$) 2.8
37122 (Jun. 21, 2022) [dagger].
Distribution Transformer 88 FR 1722 (Jan. 27 6 2027 $343 (2021$) 2.7
11, 2023) [dagger].
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This column presents the total number of manufacturers identified in the energy conservation standard rule contributing to cumulative regulatory
burden.
** This column presents the number of manufacturers producing electric motors that are also listed as manufacturers in the listed energy conservation
standard contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of product revenue during the conversion period. Industry conversion costs are the
upfront investments manufacturers must make to sell compliant products/equipment. The revenue used for this calculation is the revenue from just the
covered product/equipment associated with each row. The conversion period is the time frame over which conversion costs are made and lasts from the
publication year of the final rule to the compliance year of the energy conservation standard. The conversion period typically ranges from 3 to 5
years, depending on the rulemaking.
[dagger] Indicates a proposed rulemaking. Final values may change upon the publication of a final rule.
3. National Impact Analysis
This section presents DOE's estimates of the national energy
savings and the NPV of consumer benefits that would result from each of
the TSLs considered as potential amended standards.
a. Significance of Energy Savings
To estimate the energy savings attributable to potential amended
standards for electric motors, DOE compared their energy consumption
under the no-new-standards case to their anticipated energy consumption
under each TSL. The savings are measured over the entire lifetime of
products purchased in the 30-year period that begins in the year of
anticipated compliance with amended standards (2027-2056). Table V-31
presents DOE's projections of the national energy savings for each TSL
considered for electric motors. The savings were calculated using the
approach described in section IV.H of this document.
Table V-31--Cumulative National Energy Savings for Electric Motors; 30 Years of Shipments
[2027-2056]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Equipment class group Horsepower range ------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
(quads)
----------------------------------------------------------------------------------------------------------------
Primary Energy:
MEM, 1-500 hp, NEMA Design A 1 <= hp <= 5.................... N/A N/A 0.799 1.877
and B.
5 < hp <= 20.................... N/A N/A 2.303 4.461
20 < hp <= 50................... N/A N/A 2.049 3.968
50 < hp < 100................... N/A N/A 0.327 1.049
100 <= hp <= 250................ N/A 2.609 2.609 7.926
250 < hp <= 500................. N/A N/A 1.411 2.497
MEM, 501-750 hp, NEMA Design A 500 < hp <= 750................. 0.003 0.003 0.029 0.073
and B above 500 hp.
AO-MEM (Standard Frame Size)... 1 <= hp <= 20................... 0.045 0.045 0.104 0.184
20 < hp <= 50................... 0.012 0.012 0.100 0.171
50 < hp < 100*.................. ........... ........ 0.018 0.047
100 <=hp <= 250................. 0.056 0.207 0.207 0.436
AO-Polyphase (Specialized Frame 1 <= hp <= 20................... 0.021 0.021 0.036 0.049
Size).
------------------------------------------
Total...................... ................................ 0.137 2.898 9.991 22.739
----------------------------------------------------------------------------------------------------------------
FFC:
MEM, 1-500 hp, NEMA Design A 1 <= hp <= 5.................... N/A N/A 0.830 1.950
and B. 5 < hp <= 20.................... N/A N/A 2.393 4.635
20 < hp <= 50................... N/A N/A 2.128 4.123
50 < hp < 100................... N/A N/A 0.339 1.090
100 <= hp <= 250................ N/A 2.710 2.710 8.234
250 < hp <= 500................. N/A N/A 1.466 2.594
MEM, 501-750 hp, NEMA Design A 500 < hp <= 750................. 0.003 0.003 0.031 0.076
and B above 500 hp.
[[Page 36135]]
AO-MEM (Standard Frame Size)... 1 <= hp <= 20................... 0.047 0.047 0.108 0.192
20 < hp <= 50................... 0.012 0.012 0.104 0.177
50 <= hp <= 100 *............... ........... ........ 0.018 0.049
100 <= hp <= 250 **............. 0.058 0.215 0.215 0.453
AO-Polyphase (Specialized Frame 1 hp 20......................... 0.022 0.022 0.037 0.051
Size).
------------------------------------------
Total...................... ................................ 0.143 3.011 10.379 23.623
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and
TSL2 in that equipment class group and horsepower range.
OMB Circular A-4 \94\ requires agencies to present analytical
results, including separate schedules of the monetized benefits and
costs that show the type and timing of benefits and costs. Circular A-4
also directs agencies to consider the variability of key elements
underlying the estimates of benefits and costs. For this rulemaking,
DOE undertook a sensitivity analysis using 9 years, rather than 30
years, of product shipments. The choice of a 9-year period is a proxy
for the timeline in EPCA for the review of certain energy conservation
standards and potential revision of and compliance with such revised
standards.\95\ The review timeframe established in EPCA is generally
not synchronized with the product lifetime, product manufacturing
cycles, or other factors specific to electric motors. Thus, such
results are presented for informational purposes only and are not
indicative of any change in DOE's analytical methodology. The NES
sensitivity analysis results based on a 9-year analytical period are
presented in Table V-32. The impacts are counted over the lifetime of
electric motors purchased in 2027-2035.
---------------------------------------------------------------------------
\94\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003.
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed
September 30, 2022).
\95\ EPCA requires DOE to review its standards at least once
every 6 years, and requires, for certain products, a 3-year period
after any new standard is promulgated before compliance is required,
except that in no case may any new standards be required within 6-
years of the compliance date of the previous standards. While adding
a 6-year review to the 3-year compliance period adds up to 9 years,
DOE notes that it may undertake reviews at any time within the 6-
year period and that the 3-year compliance date may yield to the 6-
year backstop. A 9-year analysis period may not be appropriate given
the variability that occurs in the timing of standards reviews and
the fact that for some products, the compliance period is 5 years
rather than 3 years.
Table V-32--Cumulative National Energy Savings for Electric Motors; 9 Years of Shipments
[2027-2035]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Equipment class group Horsepower range ------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
(quads)
----------------------------------------------------------------------------------------------------------------
Primary Energy:
MEM, 1-500 hp, NEMA Design A 1 <= hp <= 5.................... N/A N/A 0.182 0.427
and B. 5 < hp <= 20.................... N/A N/A 0.524 1.016
20 < hp <= 50................... N/A N/A 0.466 0.903
50 < hp < 100................... N/A N/A 0.074 0.239
100 <= hp <= 250................ N/A 0.592 0.592 1.799
250 < hp <= 500................. N/A N/A 0.320 0.567
MEM, 501-750 hp, NEMA Design A 500 < hp <= 750................. 0.001 0.001 0.007 0.017
and B above 500 hp.
AO-MEM (Standard Frame Size)... 1 <= hp <= 20................... 0.012 0.012 0.029 0.051
20 < hp <= 50................... 0.003 0.003 0.027 0.047
50 < hp < 100 *................. ........... ........ 0.005 0.013
100 <= hp <= 250................ 0.015 0.057 0.057 0.119
AO-Polyphase (Specialized Frame 1 <= hp <= 20................... 0.006 0.006 0.010 0.014
Size).
------------------------------------------
Total...................... ................................ 0.038 0.671 2.294 5.211
----------------------------------------------------------------------------------------------------------------
FFC:
MEM, 1--500 hp, NEMA Design A 1 <= hp <= 5.................... N/A N/A 0.189 0.444
and B. 5 < hp <= 20.................... N/A N/A 0.545 1.056
20 < hp <= 50................... N/A N/A 0.485 0.939
50 < hp < 100................... N/A N/A 0.077 0.248
100 <= hp <= 250................ N/A 0.615 0.615 1.869
250 < hp <= 500................. N/A N/A 0.333 0.589
MEM, 501-750 hp, NEMA Design A 500 < hp <= 750................. 0.001 0.001 0.007 0.017
and B above 500 hp.
AO-MEM (Standard Frame Size)... 1 <= hp <= 20................... 0.013 0.013 0.030 0.053
20 < hp <= 50................... 0.003 0.003 0.028 0.049
50 < hp < 100 *................. ........... ........ 0.005 0.013
100 <= hp <= 250 **............. 0.016 0.059 0.059 0.124
[[Page 36136]]
AO-Polyphase (Specialized Frame 1 <= hp <= 20................... 0.006 0.006 0.010 0.014
Size).
------------------------------------------
Total...................... ................................ 0.039 0.698 2.384 5.416
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and
TSL2 (EL1) in that equipment class group and horsepower range.
b. Net Present Value of Consumer Costs and Benefits
DOE estimated the cumulative NPV of the total costs and savings for
consumers that would result from the TSLs considered for electric
motors. In accordance with OMB's guidelines on regulatory analysis,\96\
DOE calculated NPV using both a 7-percent and a 3-percent real discount
rate. Table V-33 shows the consumer NPV results with impacts counted
over the lifetime of products purchased in 2027-2056.
---------------------------------------------------------------------------
\96\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003.
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed
September 30, 2022).
Table V-33--Cumulative Net Present Value of Consumer Benefits for Electric Motors; 30 Years of Shipments
[2027-2056]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate Equipment class Horsepower -------------------------------------------
group range 1 2 3 4
----------------------------------------------------------------------------------------------------------------
(billion 2021$)
----------------------------------------------------------------------------------------------------------------
3 percent...................... MEM, 1-500 hp, 1 <= hp <= 5 N/A N/A -2.18 -8.54
NEMA Design A and
B.
5 < hp <= 20 N/A N/A -7.17 -6.21
20 < hp <= 50 N/A N/A -3.24 -0.93
50 < hp < 100 N/A N/A -1.36 -1.50
100 <= hp <= N/A 6.73 6.73 5.13
250
250 < hp <= 500 N/A N/A 1.77 0.66
MEM, 501-750 hp, 500 < hp <= 750 0.01 0.01 0.02 0.03
NEMA Design A and
B above 500 hp.
AO-MEM (Standard 1 <= hp <= 20 0.12 0.12 0.05 -0.14
Frame Size). 20 < hp <= 50 0.04 0.04 0.04 0.17
50 < hp < 100 * ......... ......... -0.09 -0.16
100 <= hp <= 0.11 0.52 0.52 0.18
250
AO-Polyphase 1 <= hp <= 20 0.05 0.05 0.05 0.01
(Specialized
Frame Size).
-------------------------------------------
Total.......... ............... 0.33 7.47 -4.85 -11.30
----------------------------------------------------------------------------------------------------------------
7 percent...................... MEM, 1-500 hp, 1 <= hp <= 5 N/A N/A -1.49 -5.30
NEMA Design A and
B.
5 < hp <= 20 N/A N/A -4.77 -5.18
20 < hp <= 50 N/A N/A -2.62 -2.25
50 < hp < 100 N/A N/A -0.86 -1.26
100 <= hp <= N/A 2.00 2.00 -2.04
250
250 < hp <= 500 N/A N/A 0.09 -1.15
MEM, 501-750 hp, 500 < hp <= 750 0.00 0.00 -0.01 -0.03
NEMA Design A and
B above 500 hp.
AO-MEM (Standard 1 <= hp <= 20 0.04 0.04 -0.02 -0.16
Frame Size). 20 < hp <= 50 0.02 0.02 -0.02 0.01
50 < hp < 100 * ......... ......... -0.06 -0.11
100 <= hp <= 0.02 0.16 0.16 -0.18
250
AO-Polyphase 1 <= hp <= 20 0.02 0.02 0.01 -0.02
(Specialized
Frame Size).
-------------------------------------------
Total.......... ............... 0.11 2.23 -7.60 -17.67
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and
TSL2 in that equipment class group and horsepower range.
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V-34. The impacts are counted over the
lifetime of products purchased in 2027-2035. As mentioned previously,
such results are presented for informational purposes only and are not
indicative of any
[[Page 36137]]
change in DOE's analytical methodology or decision criteria.
Table V-34--Cumulative Net Present Value of Consumer Benefits for Electric Motors; 9 Years of Shipments
[2027-2035]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate Equipment class Horsepower -------------------------------------------
group range 1 2 3 4
----------------------------------------------------------------------------------------------------------------
(billion 2021$)
----------------------------------------------------------------------------------------------------------------
3 percent...................... MEM, 1-500 hp, 1 <= hp <= 5 N/A N/A -0.66 -2.62
NEMA Design A and 5 < hp <= 20 N/A N/A -2.17 -1.79
B.
20 < hp <= 50 N/A N/A -0.95 -0.16
50 < hp < 100 N/A N/A -0.41 -0.43
100 <= hp <= N/A 2.16 2.16 1.74
250
250 < hp <= 500 N/A N/A 0.58 0.25
MEM, 501-750 hp, 500 < hp <= 750 0.00 0.00 0.01 0.01
NEMA Design A and
B above 500 hp.
AO-MEM (Standard 1 <= hp <= 20 0.04 0.04 0.02 -0.04
Frame Size). 20 < hp <= 50 0.02 0.02 0.02 0.07
50 < hp < 100 * ......... ......... -0.03 -0.06
100 <= hp <= 0.04 0.20 0.20 0.08
250
AO-Polyphase 1 <= hp <= 20 0.02 0.02 0.02 0.01
(Specialized
Frame Size).
-------------------------------------------
Total.......... ............... 0.12 2.44 -1.22 -2.95
----------------------------------------------------------------------------------------------------------------
7 percent...................... MEM, 1-500 hp, 1 <= hp <= 5 N/A N/A -0.64 -2.30
NEMA Design A and 5 < hp <= 20 N/A N/A -2.06 -2.20
B.
20 < hp <= 50 N/A N/A -1.12 -0.93
50 < hp < 100 N/A N/A -0.37 -0.54
100 <= hp <= N/A 0.90 0.90 -0.84
250
250 < hp <= 500 N/A N/A 0.05 -0.49
MEM, 501--750 hp, 500 < hp <= 750 0.00 0.00 0.00 -0.01
NEMA Design A and
B above 500 hp.
AO-MEM (Standard 1 <= hp <= 20 0.02 0.02 -0.01 -0.08
Frame Size). 20 < hp <= 50 0.01 0.01 -0.01 0.01
50 < hp < 100 ......... ......... -0.03 -0.05
100 <= hp <= 0.01 0.08 0.08 -0.08
250
AO-Polyphase 1 <= hp <= 20 0.01 0.01 0.01 -0.01
(Specialized
Frame Size).
-------------------------------------------
Total.......... ............... 0.06 1.02 -3.21 -7.51
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and
TSL2 in that equipment class group and horsepower range.
The previous results reflect the use of a default trend to estimate
the change in price for electric motors over the analysis period (see
section IV.F.1 of this document). In addition to the default trend
(constant prices), DOE also conducted a sensitivity analysis that
considered one scenario with a rate of price decline and one scenario
with a rate of price increase. The results of these alternative cases
are presented in appendix 10C of the direct final rule TSD. In the
price-decline case, the NPV of consumer benefits is higher than in the
default case. In the price-increase case, the NPV of consumer benefits
is lower than in the default case.
c. Indirect Impacts on Employment
It is estimated that that amended energy conservation standards for
electric motors would reduce energy expenditures for consumers of those
products, with the resulting net savings being redirected to other
forms of economic activity. These expected shifts in spending and
economic activity could affect the demand for labor. As described in
section IV.N of this document, DOE used an input/output model of the
U.S. economy to estimate indirect employment impacts of the TSLs that
DOE considered. There are uncertainties involved in projecting
employment impacts, especially changes in the later years of the
analysis. Therefore, DOE generated results for near-term timeframes
(2027-2031), where these uncertainties are reduced.
The results suggest that the standards would be likely to have a
negligible impact on the net demand for labor in the economy. The net
change in jobs is so small that it would be imperceptible in national
labor statistics and might be offset by other, unanticipated effects on
employment. Chapter 16 of the direct final rule TSD presents detailed
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
As discussed in section IV.C.1.b of this document, DOE concludes
that the standards in this direct final rule would not lessen the
utility or performance of the electric motors under consideration in
this rulemaking. Manufacturers of these products currently offer units
that meet or exceed the standards.
5. Impact of Any Lessening of Competition
DOE considered any lessening of competition that would be likely to
result from new or amended standards. As discussed in section III.F.1.e
of this document, the Attorney General
[[Page 36138]]
determines the impact, if any, of any lessening of competition likely
to result from a standard, and transmits such determination in writing
to the Secretary, together with an analysis of the nature and extent of
such impact. To assist the Attorney General in making this
determination, DOE has provided DOJ with copies of this direct final
rule and the accompanying TSD for review. DOE will consider DOJ's
comments on the rule in determining whether to proceed to a final rule.
DOE will publish and respond to DOJ's comments in that document. DOE
invites comment from the public regarding the competitive impacts that
are likely to result from this rule. In addition, stakeholders may also
provide comments separately to DOJ regarding these potential impacts.
See the ADDRESSES section for information to send comments to DOJ.
6. Need of the Nation To Conserve Energy
Enhanced energy efficiency, where economically justified, improves
the Nation's energy security, strengthens the economy, and reduces the
environmental impacts (costs) of energy production. Reduced electricity
demand due to energy conservation standards is also likely to reduce
the cost of maintaining the reliability of the electricity system,
particularly during peak-load periods. Chapter 15 in the direct final
rule TSD presents the estimated impacts on electricity generating
capacity, relative to the no-new-standards case, for the TSLs that DOE
considered in this rulemaking.
Energy conservation resulting from potential energy conservation
standards for electric motors is expected to yield environmental
benefits in the form of reduced emissions of certain air pollutants and
greenhouse gases. Table V-35 provides DOE's estimate of cumulative
emissions reductions expected to result from the TSLs considered in
this rulemaking. The emissions were calculated using the multipliers
discussed in section IV.K of this document. DOE reports annual
emissions reductions for each TSL in chapter 13 of the direct final
rule TSD.
Table V-35--Cumulative Emissions Reduction for Electric Motors Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
Trial standard level
---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 4.08 84.48 294.36 669.19
CH4 (thousand tons)............................. 0.28 5.73 20.15 45.77
N2O (thousand tons)............................. 0.04 0.79 2.78 6.31
NOX (thousand tons)............................. 1.93 39.32 138.52 314.54
SO2 (thousand tons)............................. 1.68 34.64 121.08 275.16
Hg (tons)....................................... 0.01 0.23 0.80 1.81
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 0.34 7.20 24.88 56.62
CH4 (thousand tons)............................. 32.47 684.37 2,359.60 5,370.22
N2O (thousand tons)............................. 0.00 0.04 0.12 0.28
NOX (thousand tons)............................. 5.20 109.42 377.47 859.03
SO2 (thousand tons)............................. 0.02 0.47 1.67 3.79
Hg (tons)....................................... 0.00 0.00 0.00 0.01
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 4.42 91.69 319.24 725.80
CH4 (thousand tons)............................. 32.75 690.10 2,379.75 5,415.99
N2O (thousand tons)............................. 0.04 0.82 2.90 6.59
NOX (thousand tons)............................. 7.13 148.74 516.00 1,173.58
SO2 (thousand tons)............................. 1.71 35.12 122.75 278.95
Hg (tons)....................................... 0.01 0.23 0.80 1.82
----------------------------------------------------------------------------------------------------------------
As part of the analysis for this rulemaking, DOE estimated monetary
benefits likely to result from the reduced emissions of CO2
that DOE estimated for each of the considered TSLs for electric motors.
Section IV.L of this document discusses the SC-CO2 values
that DOE used. Table V-36 presents the value of CO2
emissions reduction at each TSL for each of the SC-CO2
cases. The time-series of annual values is presented for the TSL in
chapter 14 of the direct final rule TSD.
Table V-36--Present Value of CO2 Emissions Reduction for Electric Motors Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-CO2 case
-----------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(Billion 2021$)
----------------------------------------------------------------------------------------------------------------
1............................................. 35.69 155.25 243.87 470.82
2............................................. 553.79 2,504.21 3,979.48 7,570.82
[[Page 36139]]
3............................................. 2,455.13 10,830.27 17,081.13 32,809.19
4............................................. 5,459.53 24,136.32 38,092.58 73,105.31
----------------------------------------------------------------------------------------------------------------
As discussed in section IV.L.2 of this document, DOE estimated the
climate benefits likely to result from the reduced emissions of methane
and N2O that DOE estimated for each of the considered TSLs
for electric motors. Table V-37 presents the value of the
CH4 emissions reduction at each TSL, and Table V-38 presents
the value of the N2O emissions reduction at each TSL. The
time-series of annual values is presented for the TSL in chapter 14 of
the direct final rule TSD.
Table V-37--Present Value of Methane Emissions Reduction for Electric Motors Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-CH4 case
-----------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(Billion 2021$)
----------------------------------------------------------------------------------------------------------------
1............................................. 12.16 37.03 51.92 97.98
2............................................. 194.82 623.71 884.30 1,651.65
3............................................. 845.85 2,621.71 3,690.13 6,932.36
4............................................. 1,884.39 5,857.68 8,250.30 15,490.67
----------------------------------------------------------------------------------------------------------------
Table V-38--Present Value of Nitrous Oxide Emissions Reduction for Electric Motors Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-N2O case
-----------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(Billion 2021$)
----------------------------------------------------------------------------------------------------------------
1............................................. 0.13 0.51 0.79 1.36
2............................................. 1.95 8.23 12.94 21.99
3............................................. 8.63 35.54 55.47 94.75
4............................................. 19.20 79.21 123.71 211.22
----------------------------------------------------------------------------------------------------------------
DOE is aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
global and U.S. economy continues to evolve rapidly. DOE, together with
other Federal agencies, will continue to review methodologies for
estimating the monetary value of reductions in CO2 and other
GHG emissions. This ongoing review will consider the comments on this
subject that are part of the public record for this and other
rulemakings, as well as other methodological assumptions and issues.
DOE notes that the standards would be economically justified even
without inclusion of monetized benefits of reduced GHG emissions.
DOE also estimated the monetary value of the health benefits
associated with NOX and SO2 emissions reductions
anticipated to result from the considered TSLs for electric motors. The
dollar-per-ton values that DOE used are discussed in section IV.L of
this document. Table V-39 presents the present value for NOX
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and Table V-40 presents similar results for
SO2 emissions reductions. The results in these tables
reflect application of EPA's low dollar-per-ton values, which DOE used
to be conservative. The time-series of annual values is presented for
the TSL in chapter 14 of the direct final rule TSD.
[[Page 36140]]
Table V-39--Present Value of NOX Emissions Reduction for Electric Motors
Shipped in 2027-2056
------------------------------------------------------------------------
TSL 3% Discount rate 7% Discount rate
------------------------------------------------------------------------
(million 2021$)
------------------------------------------------------------------------
1........................... 251.49 93.31
2........................... 4,333.63 1,321.91
3........................... 17,501.29 6,149.06
4........................... 39,226.69 13,614.34
------------------------------------------------------------------------
Table V-40--Present Value of SO2 Emissions Reduction for Electric Motors
Shipped in 2027-2056
------------------------------------------------------------------------
TSL 3% Discount rate 7% Discount rate
------------------------------------------------------------------------
(million 2021$)
------------------------------------------------------------------------
1........................... 82.00 31.35
2........................... 1,388.59 434.33
3........................... 5,658.54 2,042.58
4........................... 12,671.52 4,517.89
------------------------------------------------------------------------
Not all the public health and environmental benefits from the
reduction of greenhouse gases, NOx, and SO2 are
captured in the values above, and additional unquantified benefits from
the reductions of those pollutants as well as from the reduction of
direct PM and other co-pollutants may be significant. DOE has not
included the monetary benefits of the reduction of Hg for this direct
final rule because Hg emissions reductions are expected to be small.
7. Other Factors
The Secretary of Energy, in determining whether a standard is
economically justified, may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII))
8. Summary of Economic Impacts
Table V-41 presents the NPV values that result from adding the
estimates of the potential economic benefits resulting from reduced GHG
and NOX and SO2 emissions to the NPV of consumer
benefits calculated for each TSL considered in this rulemaking. The
consumer benefits are domestic U.S. monetary savings that occur as a
result of purchasing the covered electric motors, and are measured for
the lifetime of products shipped in 2027-2056. The benefits associated
with reduced GHG emissions resulting from the adopted standards are
global benefits, and are also calculated based on the lifetime of
electric motors shipped in 2027-2056.
Table V-41--Consumer NPV Combined With Present Value of Benefits From Climate and Health Benefits
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
3% Discount Rate for Consumer NPV and Health Benefits (billion 2021$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.......................... 0.71 13.95 21.62 47.96
3% Average SC-GHG case.......................... 0.85 16.33 31.80 70.67
2.5% Average SC-GHG case........................ 0.96 18.07 39.14 87.07
3% 95th percentile SC-GHG case.................. 1.23 22.44 58.15 129.41
----------------------------------------------------------------------------------------------------------------
7% Discount Rate for Consumer NPV and Health Benefits (billion 2021$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.......................... 0.28 4.74 3.90 7.83
3% Average SC-GHG case.......................... 0.43 7.13 14.08 30.54
2.5% Average SC-GHG case........................ 0.53 8.87 21.42 46.93
3% 95th percentile SC-GHG case.................. 0.80 13.24 40.43 89.27
----------------------------------------------------------------------------------------------------------------
C. Conclusion
When considering new or amended energy conservation standards, the
standards that DOE adopts for any type (or class) of covered equipment
must be designed to achieve the maximum improvement in energy
efficiency that the Secretary determines is technologically feasible
and economically justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(A)) In determining whether a standard is economically
justified, the Secretary must determine whether the benefits of the
standard exceed its burdens by, to the greatest extent practicable,
considering the seven statutory factors discussed in section III.F.1 of
this document. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)) The new
or amended standard must also result in significant conservation of
energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B))
For this direct final rule, DOE considered the impacts of new and
amended standards for electric motors at each TSL, beginning with the
maximum technologically feasible level, to determine whether that level
was economically justified. Where the max-tech level was not justified,
DOE then considered the next most efficient level and undertook the
same evaluation until it reached the highest efficiency level that is
both technologically feasible and economically justified and saves a
significant amount of energy.
To aid the reader as DOE discusses the benefits and/or burdens of
each TSL,
[[Page 36141]]
tables in this section present a summary of the results of DOE's
quantitative analysis for each TSL. In addition to the quantitative
results presented in the tables, DOE also considers other burdens and
benefits that affect economic justification. These include the impacts
on identifiable subgroups of consumers who may be disproportionately
affected by a national standard and impacts on employment.
1. Benefits and Burdens of TSLs Considered for Electric Motors
Standards
Tables V-42 and V-43 summarize the quantitative impacts estimated
for each TSL for electric motors. The national impacts are measured
over the lifetime of electric motors purchased in the 30-year period
that begins in the anticipated year of compliance with amended
standards (2027-2056). The energy savings, emissions reductions, and
value of emissions reductions refer to full-fuel-cycle results. DOE is
presenting monetized benefits of GHG emissions reductions in accordance
with the applicable Executive Orders and DOE would reach the same
conclusion presented in this notice in the absence of the social cost
of greenhouse gases, including the Interim Estimates presented by the
Interagency Working Group. The efficiency levels contained in each TSL
are described in section V.A of this document.
Table V-42--Summary of Analytical Results for Electric Motors TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings
----------------------------------------------------------------------------------------------------------------
Quads........................................... 0.1 3.0 10.4 23.6
----------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 4.42 91.69 319.24 725.80
CH4 (thousand tons)............................. 32.75 690.10 2,379.75 5,415.99
N2O (thousand tons)............................. 0.04 0.82 2.90 6.59
NOX (thousand tons)............................. 7.13 148.74 516.00 1,173.58
SO2 (thousand tons)............................. 1.71 35.12 122.75 278.95
Hg (tons)....................................... 0.01 0.23 0.80 1.82
----------------------------------------------------------------------------------------------------------------
Present Value of Benefits and Costs (3% discount rate, billion 2021$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................. 0.51 8.82 34.86 73.26
Climate Benefits *.............................. 0.19 3.14 13.49 30.07
Health Benefits **.............................. 0.33 5.72 23.16 51.90
Total Benefits [dagger]......................... 1.04 17.68 71.50 155.23
Consumer Incremental Product Costs [Dagger]..... 0.18 1.35 39.70 84.56
Consumer Net Benefits........................... 0.33 7.47 -4.85 -11.30
Total Net Benefits.............................. 0.85 16.33 31.80 70.67
----------------------------------------------------------------------------------------------------------------
Present Value of Benefits and Costs (7% discount rate, billion 2021$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................. 0.21 2.95 13.44 27.14
Climate Benefits *.............................. 0.19 3.14 13.49 30.07
Health Benefits **.............................. 0.12 1.76 8.19 18.13
Total Benefits [dagger]......................... 0.53 7.85 35.11 75.34
Consumer Incremental Product Costs [Dagger]..... 0.10 0.72 21.03 44.80
Consumer Net Benefits........................... 0.11 2.23 -7.60 -17.67
Total Net Benefits.............................. 0.43 7.13 14.08 30.54
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with electric motors shipped in 2027-2056. These
results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the SC-CO2, SC-CH4 and SC-N2O. Together,
these represent the global SC-GHG. For presentational purposes of this table, the climate benefits associated
with the average SC-GHG at a 3 percent discount rate are shown, but the Department does not have a single
central SC-GHG point estimate. To monetize the benefits of reducing GHG emissions this analysis uses the
interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous
Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working
Group on the Social Cost of Greenhouse Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
the importance and value of considering the benefits calculated using all four SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.
Table V-43--Summary of Analytical Results for Electric Motors TSLs: Manufacturer and Consumer Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
----------------------------------------------------------------------------------------------------------------
Industry NPV (million 2021$) (No-new-standards 4,896-4,899 4,690-4,720 3,659-4,681 (6,066)-(3,840)
case INPV = 5,023)...........................
[[Page 36142]]
Industry NPV (% change)....................... (2.5) (6.6)-(6.0) (27.2)-(6.8) (220.8)-(176.4)
----------------------------------------------------------------------------------------------------------------
Consumer Average LCC Savings (2021$)
----------------------------------------------------------------------------------------------------------------
RU1........................................... N/A N/A -101.8 -276.4
RU2........................................... N/A N/A -336.9 -309.4
RU3........................................... N/A N/A -916.7 -1,439.6
RU4........................................... N/A 567.1 567.1 -2,541.1
RU5........................................... N/A N/A -945.5 -5,257.2
RU6........................................... 2,550.1 2,550.1 -2,287.8 -6,710.3
RU7........................................... 57.6 57.6 -39.2 -156.5
RU8........................................... 472.4 472.4 -160.8 -105.5
RU9 *......................................... .............. .............. -930.5 -1,795.0
RU10.......................................... 608.8 930.7 930.7 -1,846.6
RU11.......................................... 49.9 49.9 2.5 -153.2
Shipment-Weighted Average **.................. 159.8 337.4 -196.2 -404.2
----------------------------------------------------------------------------------------------------------------
Consumer Simple PBP (years)
----------------------------------------------------------------------------------------------------------------
RU1........................................... N/A N/A 16.7 20.3
RU2........................................... N/A N/A 15.4 11.9
RU3........................................... N/A N/A 30.2 20.6
RU4........................................... N/A 4.1 4.1 18.1
RU5........................................... N/A N/A 11.8 17.7
RU6........................................... 3.7 3.7 9.6 12.6
RU7........................................... 4.0 4.0 6.5 9.0
RU8........................................... 1.6 1.6 5.9 6.1
RU9 *......................................... .............. .............. 9.0 10.6
RU10.......................................... 6.1 4.9 4.9 10.1
RU11.......................................... 4.1 4.1 5.6 7.9
Shipment-Weighted Average **.................. 3.8 3.9 15.6 16.3
----------------------------------------------------------------------------------------------------------------
Percent of Consumers that Experience a Net Cost
----------------------------------------------------------------------------------------------------------------
RU1........................................... N/A N/A 64.1% 95.9%
RU2........................................... N/A N/A 82.2% 75.0%
RU3........................................... N/A N/A 88.4% 90.5%
RU4........................................... N/A 20.2% 20.2% 89.1%
RU5........................................... N/A N/A 66.9% 89.0%
RU6........................................... 2.1% 2.1% 58.3% 83.2%
RU7........................................... 10.3% 10.3% 62.9% 80.7%
RU8........................................... 0.9% 0.9% 73.9% 64.5%
RU9 *......................................... .............. .............. 99.9% 96.4%
RU10.......................................... 6.3% 11.7% 11.7% 79.0%
RU11.......................................... 32.1% 32.1% 53.4% 74.5%
Shipment-Weighted Average **.................. 10.9% 14.9% 70.6% 86.3%
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact because there are no shipments below the efficiency level corresponding to TSL1 and TSL2 for RU9.
** Weighted by shares of each equipment class in total projected shipments in 2027 for impacted consumers.
DOE first considered TSL 4, which represents the max-tech
efficiency levels. At this level, DOE expects that all equipment
classes would require 35H210 silicon steel and die-cast copper rotors.
DOE estimates that approximately 0.34 percent of annual shipments
across all electric motor equipment classes currently meet the max-tech
efficiencies required. TSL 4 would save an estimated 23.6 quads of
energy, an amount DOE considers significant. Under TSL 4, the NPV of
consumer benefit would be -$17.67 billion using a discount rate of 7
percent, and -$11.30 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 725.80 Mt of
CO2, 278.95 thousand tons of SO2, 1,173.58
thousand tons of NOX, 1.82 tons of Hg, 5,415.99 thousand
tons of CH4, and 6.59 thousand tons of N2O. The
estimated monetary value of the climate benefits from reduced GHG
emissions (associated with the average SC-GHG at a 3-percent discount
rate) at TSL 4 is $30.07 billion. The estimated monetary value of the
health benefits from reduced SO2 and NOX
emissions at TSL 4 is $18.13 billion using a 7-percent discount rate
and $51.90 billion using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 4 is $30.54
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 4 is $70.67 billion.
At TSL 4, for the largest equipment class group and horsepower
ranges, which are represented by RU1 and RU2, which together represent
approximately 90 percent of annual shipments, there is a life cycle
cost savings of -$276.4 and -$309.4 and a payback period of 20.3
[[Page 36143]]
years and 11.9 years, respectively. For these equipment classes, the
fraction of customers experiencing a net LCC cost is 95.9 percent and
75.0 percent due to increases in total installed cost of $434.7 and
$1,003.0, respectively. Overall, for the remaining equipment class
groups and horsepower ranges, a majority of electric motor consumers
(84.5 percent) would experience a net cost and the average LCC savings
would be negative for all remaining equipment class groups and
horsepower ranges.
At TSL 4, the projected change in INPV ranges from a decrease of
$11,090 million to a decrease of $8,863 million, which corresponds to
decreases of 220.8 percent and 176.4 percent, respectively. DOE
estimates that industry must invest $13,516 million to comply with
standards set at TSL 4. The significant increase in product and capital
conversion costs is because DOE assumes that electric motor
manufacturers will need to use die-cast copper rotors for most, if not
all, electric motors manufactured to meet this TSL. This technology
requires a significant level of investment because almost all existing
electric motor production machinery would need to be replaced or
significantly modified. Based on the shipments analysis used in the
NIA, DOE estimates that approximately 0.3 percent of all electric motor
shipments will meet the efficiency levels required at TSL 4, in the no-
new-standards case in 2027, the compliance year of new and amended
standards.
Under 42 U.S.C. 6295(o)(2)(B)(i), DOE determines whether a standard
is economically justified after considering seven factors. Based on
these factors, the Secretary concludes that at TSL 4 for electric
motors, the benefits of energy savings, emission reductions, and the
estimated monetary value of the emissions reductions are outweighed by
the negative NPV of consumer benefits, economic burden on many
consumers, and the impacts on manufacturers, including the extremely
large conversion costs, profit margin impacts that will result in a
negative INPV, and the lack of manufacturers currently offering
products meeting the efficiency levels required at this TSL. A majority
of electric motor consumers (86.3 percent) would experience a net cost
and the average LCC savings for each representative unit DOE examined
is negative. In both manufacturer markup scenarios, INPV is negative at
TSL 4, which implies that manufacturers would never recover the
conversion costs they must make to produce electric motors at TSL 4.
Consequently, the Secretary concludes that TSL 4 is not economically
justified.
DOE then considered TSL 3, which represents a level corresponding
to the IE4 level, except for AO-polyphase specialized frame size
electric motors, where it corresponds to a lower level of efficiency
(i.e., NEMA Premium level). TSL 3 would save an estimated 10.4 quads of
energy, an amount DOE considers significant. Under TSL 3, the NPV of
consumer benefit would be -$7.60 billion using a discount rate of 7
percent, and -$4.85 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 319.24 Mt of
CO2, 122.75 thousand tons of SO2, 516.00 thousand
tons of NOX, 0.80 tons of Hg, 2,379.75 thousand tons of
CH4, and 2.90 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 3 is $13.49 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 3 is 8.19 billion using a 7-percent discount rate and $23.16
billion using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 3 is $14.08
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 3 is $31.80 billion.
At TSL 3, for the largest equipment class group and horsepower
ranges, which are represented by RU1 and RU2, there is a life cycle
cost savings of -$101.8 and -$336.9 and a payback period of 16.7 and
15.4, respectively. For these equipment classes, the fraction of
customers experiencing a net LCC cost is 64.1 percent and 82.2 percent
due to increases in total installed cost of $171.3 and $690.5,
respectively. Overall, for the remaining equipment class groups and
horsepower ranges, a majority of electric motor consumers (55.5
percent) would experience a net cost and the shipments-weighted average
LCC savings would be negative for all remaining equipment class groups
and horsepower ranges.
At TSL 3, the projected change in INPV ranges from a decrease of
$1,364 million to a decrease of $342 million, which correspond to
decreases of 27.2 percent and 6.8 percent, respectively. DOE estimates
that industry must invest $1,618 million to comply with standards set
at TSL 3. Based on the shipments analysis used in the NIA, DOE
estimates that approximately 13.3 percent of all electric motor
shipments will meet or exceed the efficiency levels required at TSL 3,
in the no-new-standards case in 2027, the compliance year of new and
amended standards.
Under 42 U.S.C. 6295(o)(2)(B)(i), DOE determines whether a standard
is economically justified after considering seven factors. Based on
these factors, the Secretary concludes that at TSL 3 for electric
motors, the benefits of energy savings, emission reductions, and the
estimated monetary value of the emissions reductions are outweighed by
the negative NPV of consumer benefits, economic burden on many
consumers, and the impacts on manufacturers, including the large
conversion costs, profit margin impacts that could result in a large
reduction in INPV, and the lack of manufacturers currently offering
products meeting the efficiency levels required at this TSL. A majority
of electric motor consumers (70.6 percent) would experience a net cost
and the average LCC savings would be negative. The potential reduction
in INPV could be as high as 27.2 percent. Consequently, the Secretary
concludes that TSL 3 is not economically justified.
DOE then considered TSL 2, the standard levels recommended in the
November 2022 Joint Recommendation by the Electric Motors Working
Group. TSL 2 would also align with the EU Ecodesign Directive 2019/
1781, which requires IE4 levels for 75-200 kW motors.\97\ TSL 2 would
save an estimated 3.0 quads of energy, an amount DOE considers
significant. Under TSL 2, the NPV of consumer benefit would be $2.23
billion using a discount rate of 7 percent, and $7.47 billion using a
discount rate of 3 percent.
---------------------------------------------------------------------------
\97\ In terms of standardized horsepowers, this would correspond
to 100-250 hp when applying the provisions from 10 CFR 431.25(k)
(and new section 10 CFR 431.25(q)).
---------------------------------------------------------------------------
The cumulative emissions reductions at TSL 2 are 91.69 Mt of
CO2, 35.12 thousand tons of SO2, 148.74 thousand
tons of NOX, 0.23 tons of Hg, 690.10 thousand tons of
CH4, and 0.82 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 2 is $3.14 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 2 is $1.76 billion using a 7-percent discount rate and $5.72
billion using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
[[Page 36144]]
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 2 is $7.13
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 2 is $16.33 billion.
At TSL 2, for the largest equipment class group and horsepower
ranges, which are represented by RU1 and RU2, there would be no changes
in the standards. Overall, for the remaining equipment class groups and
horsepower ranges, 14.9 percent of electric motor consumers would
experience a net cost and the shipments-weighted average LCC savings
would be positive for all remaining equipment class groups and
horsepower ranges.
At TSL 2, the projected change in INPV ranges from a decrease of
$333 million to a decrease of $303 million, which correspond to
decreases of 6.6 percent and 6.0 percent, respectively. DOE estimates
that industry must invest $468 million to comply with standards set at
TSL 2. Based on the shipments analysis used in the NIA, DOE estimates
that approximately 96.2 percent of all electric motor shipments will
meet or exceed the efficiency levels required at TSL 2, in the no-new-
standards case in 2027, the compliance year of new and amended
standards.
Under 42 U.S.C. 6295(o)(2)(B)(i), DOE determines whether a standard
is economically justified after considering seven factors. Based on
these factors, the Secretary concludes that a standard set at TSL 2 for
electric motors would be economically justified. At this TSL, the
average LCC savings is positive. Only an estimated 14.9 percent of
electric motor consumers experience a net cost. The FFC national energy
savings are significant and the NPV of consumer benefits is positive
using both a 3-percent and 7-percent discount rate. Notably, the
benefits to consumers vastly outweigh the cost to manufacturers.
Notably, at TSL 2, the NPV of consumer benefits, even measured at the
more conservative discount rate of 7 percent, is over 6 times higher
than the maximum estimated manufacturers' loss in INPV. The standard
levels at TSL 2 are economically justified even without weighing the
estimated monetary value of emissions reductions. When those emissions
reductions are included--representing $3.14 billion in climate benefits
(associated with the average SC-GHG at a 3-percent discount rate), and
$5.72 billion (using a 3-percent discount rate) or $1.76 billion (using
a 7-percent discount rate) in health benefits--the rationale becomes
stronger still.
As stated, DOE conducts the walk-down analysis to determine the TSL
that represents the maximum improvement in energy efficiency that is
technologically feasible and economically justified as required under
EPCA. The walk-down is not a comparative analysis, as a comparative
analysis would result in the maximization of net benefits instead of
energy savings that are technologically feasible and economically
justified, which would be contrary to the statute. 86 FR 70892, 70908.
Although DOE has not conducted a comparative analysis to select the
energy conservation standards, DOE notes that as compared to TSL 3 and
TSL 4, TSL 2 has higher average LCC savings for consumers,
significantly smaller percentages of electric motor consumers
experiencing a net cost, a lower maximum decrease in INPV, and lower
manufacturer conversion costs.
Although DOE considered amended standard levels for electric motors
by grouping the efficiency levels for each equipment class groups and
horsepower ranges into TSLs, DOE evaluates all analyzed efficiency
levels in its analysis. For all equipment class groups and horsepower
ranges, TSL 2 represents the maximum energy savings that does not
result in the majority of consumers experiencing a net LCC cost. The
ELs at the adopted TSL result in average positive LCC savings for all
equipment class groups and horsepower ranges, significantly reduce the
number of consumers experiencing a net cost, and reduce the decrease in
INPV and conversion costs to the point where DOE has concluded they are
economically justified, as discussed for TSL 2 in the preceding
paragraphs.
Therefore, based on the previous considerations, DOE adopts the
energy conservation standards for electric motors at TSL 2. The new and
amended energy conservation standards for electric motors, which are
expressed as full-load nominal efficiency values are shown in Table V-
44, Table V-45 and Table V-46.
Table V-44--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding Fire Pump Electric Motors
and Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
[[Page 36145]]
300/224......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
350/261......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
400/298......................................................... 95.8 95.8 96.2 95.8 ......... ......... ......... .........
450/336......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
500/373......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
550/410......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
600/447......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
650/485......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
700/522......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
750/559......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-45--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Standard Frame Size Air-Over Electric Motors
(Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-46--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Specialized Frame Size Air-Over Electric
Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 74.0 ......... 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1......................................................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5........................................................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2........................................................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7........................................................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5......................................................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5.......................................................... 89.5 88.5 89.5 89.5 89.5 90.2 ......... .........
15/11........................................................... 90.2 89.5 91.0 91.0 ......... ......... ......... .........
20/15........................................................... 90.2 90.2 91.0 91.0 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 36146]]
2. Annualized Benefits and Costs of the Standards
The benefits and costs of the adopted standards can also be
expressed in terms of annualized values. The annualized net benefit is
(1) the annualized national economic value (expressed in 2021$) of the
benefits from operating equipment that meet the adopted standards
(consisting primarily of operating cost savings from using less energy,
minus increases in equipment purchase costs, and (2) the annualized
monetary value of the climate and health benefits from emission
reductions.
Table V-47 shows the annualized values for electric motors under
TSL 2, expressed in 2021$. The results under the primary estimate are
as follows.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
standards for electric motors is $62.1 million per year in increased
equipment costs, while the estimated annual benefits are $254.8 million
in reduced equipment operating costs, $164.8 million in climate
benefits, and $151.4 million in health benefits. In this case, the net
benefit amounts to $508.9 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the standards for electric motors is $71.0 million
per year in increased equipment costs, while the estimated annual
benefits are $463.6 million in reduced operating costs, $164.8 million
in climate benefits, and $300.7 million in health benefits. In this
case, the net benefit amounts to $858.2 million per year.
Table V-47--Annualized Benefits and Costs of Amended Energy Conservation Standards for Electric Motors
[TSL 2]
----------------------------------------------------------------------------------------------------------------
Million 2021$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 463.6 405.1 542.9
Climate Benefits *.............................................. 164.8 148.0 186.5
Health Benefits **.............................................. 300.7 269.5 341.0
Total Benefits [dagger]......................................... 929.1 822.5 1070.4
Consumer Incremental Equipment Costs [Dagger]................... 71.0 73.7 73.0
Net Benefits.................................................... 858.2 748.8 997.4
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 254.8 225.3 293.6
Climate Benefits * (3% discount rate)........................... 164.8 148.0 186.5
Health Benefits **.............................................. 151.4 137.1 169.5
Total Benefits [dagger]......................................... 571.0 510.4 649.6
Consumer Incremental Product Costs.............................. 62.1 63.8 63.9
Net Benefits.................................................... 508.9 446.6 585.6
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with electric motors shipped in 2027-2056. These
results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056. The
Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the
AEO2022 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition,
incremental equipment costs reflect a constant rate in the Primary Estimate, an increasing rate in the Low Net
Benefits Estimate, and a declining rate in the High Net Benefits Estimate. The methods used to derive
projected price trends are explained in section IV.H.3 of this document. Note that the Benefits and Costs may
not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
notice). For presentational purposes of this table, the climate benefits associated with the average SC-GHG at
a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point estimate,
and it emphasizes the importance and value of considering the benefits calculated using all four SC-GHG
estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates
presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the
Social Cost of Greenhouse Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate.
[Dagger] Costs include incremental equipment costs as well as installation costs.
D. Reporting, Certification, and Sampling Plan
Manufacturers, including importers, must use product-specific
certification templates to certify compliance to DOE. For electric
motors, the certification template reflects the general certification
requirements specified at 10 CFR 429.64 and the product-specific
requirements specified at 10 CFR 429.64. DOE is not amending the
product-specific certification requirements for this equipment in this
direct final rule.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
Executive Order (``E.O.'') 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (Oct. 4, 1993), as supplemented and reaffirmed by
E.O. 13563, ``Improving Regulation and
[[Page 36147]]
Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011) and amended by E.O.
14094, ``Modernizing Regulatory Review,'' 88 FR 21879 (April 11, 2023),
requires agencies, to the extent permitted by law, to (1) propose or
adopt a regulation only upon a reasoned determination that its benefits
justify its costs (recognizing that some benefits and costs are
difficult to quantify); (2) tailor regulations to impose the least
burden on society, consistent with obtaining regulatory objectives,
taking into account, among other things, and to the extent practicable,
the costs of cumulative regulations; (3) select, in choosing among
alternative regulatory approaches, those approaches that maximize net
benefits (including potential economic, environmental, public health
and safety, and other advantages; distributive impacts; and equity);
(4) to the extent feasible, specify performance objectives, rather than
specifying the behavior or manner of compliance that regulated entities
must adopt; and (5) identify and assess available alternatives to
direct regulation, including providing economic incentives to encourage
the desired behavior, such as user fees or marketable permits, or
providing information upon which choices can be made by the public. DOE
emphasizes as well that E.O. 13563 requires agencies to use the best
available techniques to quantify anticipated present and future
benefits and costs as accurately as possible. In its guidance, the
Office of Information and Regulatory Affairs (``OIRA'') in the Office
of Management and Budget (``OMB'') has emphasized that such techniques
may include identifying changing future compliance costs that might
result from technological innovation or anticipated behavioral changes.
For the reasons stated in the preamble, this final regulatory action is
consistent with these principles.
Section 6(a) of E.O. 12866 also requires agencies to submit
``significant regulatory actions'' to OIRA for review. OIRA has
determined that this final regulatory action constitutes a significant
regulatory action within the scope of section 3(f)(1) of E.O. 12866.
Accordingly, pursuant to section 6(a)(3)(C) of E.O. 12866, DOE has
provided to OIRA an assessment, including the underlying analysis, of
benefits and costs anticipated from the final regulatory action,
together with, to the extent feasible, a quantification of those costs;
and an assessment, including the underlying analysis, of costs and
benefits of potentially effective and reasonably feasible alternatives
to the planned regulation, and an explanation why the planned
regulatory action is preferable to the identified potential
alternatives. These assessments are summarized in this preamble and
further detail can be found in the technical support document for this
rulemaking.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (``IRFA'')
and a final regulatory flexibility analysis (``FRFA'') for any rule
that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by E.O. 13272, ``Proper Consideration of Small Entities in Agency
Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published procedures and
policies on February 19, 2003, to ensure that the potential impacts of
its rules on small entities are properly considered during the
rulemaking process. 68 FR 7990. DOE has made its procedures and
policies available on the Office of the General Counsel's website
(www.energy.gov/gc/office-general-counsel).
DOE is not obligated to prepare a regulatory flexibility analysis
for this rulemaking because there is not a requirement to publish a
general notice of proposed rulemaking under the Administrative
Procedure Act. See 5 U.S.C. 601(2), 603(a). As discussed previously,
DOE has determined that the November 2022 Joint Recommendation meets
the necessary requirements under EPCA to issue this direct final rule
for energy conservation standards for electric motors under the
procedures in 42 U.S.C. 6295(p)(4). DOE notes that the NOPR for energy
conservation standards for electric motors published elsewhere in this
Federal Register contains an IRFA.
C. Review Under the Paperwork Reduction Act
Under the procedures established by the Paperwork Reduction Act of
1995 (``PRA''), a person is not required to respond to a collection of
information by a Federal agency unless that collection of information
displays a currently valid OMB Control Number.
OMB Control Number 1910-1400, Compliance Statement Energy/Water
Conservation Standards for Appliances, is currently valid and assigned
to the certification reporting requirements applicable to covered
equipment, including electric motors.
DOE's certification and compliance activities ensure accurate and
comprehensive information about the energy and water use
characteristics of covered products and covered equipment sold in the
United States. Manufacturers of all covered products and covered
equipment must submit a certification report before a basic model is
distributed in commerce, annually thereafter, and if the basic model is
redesigned in such a manner to increase the consumption or decrease the
efficiency of the basic model such that the certified rating is no
longer supported by the test data. Additionally, manufacturers must
report when production of a basic model has ceased and is no longer
offered for sale as part of the next annual certification report
following such cessation. DOE requires the manufacturer of any covered
product or covered equipment to establish, maintain, and retain the
records of certification reports, of the underlying test data for all
certification testing, and of any other testing conducted to satisfy
the requirements of part 429, part 430, and/or part 431. Certification
reports provide DOE and consumers with comprehensive, up-to date
efficiency information and support effective enforcement.
New certification data would be required for electric motors were
this direct final rule to be finalized as proposed; however, DOE is not
proposing new or amended certification or reporting requirements for
electric motors in this direct final rule. Instead, DOE may consider
proposals to establish certification requirements and reporting for
electric motors under a separate rulemaking regarding appliance and
equipment certification. DOE will address changes to OMB Control Number
1910-1400 at that time, as necessary.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
D. Review Under the National Environmental Policy Act of 1969
Pursuant to the National Environmental Policy Act of 1969
(``NEPA''), DOE has analyzed this rule in accordance with NEPA and
DOE's NEPA implementing regulations (10 CFR part 1021). DOE has
determined that this rule qualifies for categorical exclusion under 10
CFR part 1021, subpart D, appendix B5.1 because it is a rulemaking that
establishes energy
[[Page 36148]]
conservation standards for consumer products or industrial equipment,
none of the exceptions identified in B5.1(b) apply, no extraordinary
circumstances exist that require further environmental analysis, and it
meets the requirements for application of a categorical exclusion. See
10 CFR 1021.410. Therefore, DOE has determined that promulgation of
this rule is not a major Federal action significantly affecting the
quality of the human environment within the meaning of NEPA, and does
not require an environmental assessment or an environmental impact
statement.
E. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The Executive order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions. The Executive order also requires
agencies to have an accountable process to ensure meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications. On March 14, 2000, DOE
published a statement of policy describing the intergovernmental
consultation process it will follow in the development of such
regulations. 65 FR 13735. DOE has examined this rule and has determined
that it would not have a substantial direct effect on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government. EPCA governs and prescribes Federal preemption of State
regulations as to energy conservation for the equipment that are the
subject of this final rule. States can petition DOE for exemption from
such preemption to the extent, and based on criteria, set forth in
EPCA. (42 U.S.C. 6316(a) and (b); 42 U.S.C. 6297) Therefore, no further
action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation (1)
clearly specifies the preemptive effect, if any, (2) clearly specifies
any effect on existing Federal law or regulation, (3) provides a clear
legal standard for affected conduct while promoting simplification and
burden reduction, (4) specifies the retroactive effect, if any, (5)
adequately defines key terms, and (6) addresses other important issues
affecting clarity and general draftsmanship under any guidelines issued
by the Attorney General. Section 3(c) of E.O. 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. DOE has completed the
required review and determined that, to the extent permitted by law,
this direct final rule meets the relevant standards of E.O. 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a regulatory action likely to result in a rule that may cause the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector of $100 million or more in any one year
(adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. On March 18, 1997, DOE published
a statement of policy on its process for intergovernmental consultation
under UMRA. 62 FR 12820. DOE's policy statement is also available at
www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
DOE has concluded that this direct final rule may require
expenditures of $100 million or more in any one year by the private
sector. Such expenditures may include (1) investment in research and
development and in capital expenditures by electric motor manufacturers
in the years between the direct final rule and the compliance date for
the new standards and (2) incremental additional expenditures by
consumers to purchase higher-efficiency electric motors, starting at
the compliance date for the applicable standard.
Section 202 of UMRA authorizes a Federal agency to respond to the
content requirements of UMRA in any other statement or analysis that
accompanies the direct final rule. (2 U.S.C. 1532(c)) The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap with the economic analysis requirements
that apply under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of this document and the TSD for this
direct final 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(m)
and 42 U.S.C. 6316(a), this rule establishes new and amended energy
conservation standards for electric motors that are designed to achieve
the maximum improvement in energy efficiency that DOE has determined to
be both technologically feasible and economically justified, as
required by 42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C.
6295(o)(3)(B). A full discussion of the alternatives considered by DOE
is presented in chapter 17 of the TSD for this rule.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule
[[Page 36149]]
that may affect family well-being. This rule will not have any impact
on the autonomy or integrity of the family as an institution.
Accordingly, DOE has concluded that it is not necessary to prepare a
Family Policymaking Assessment.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15,
1988), DOE has determined that this rule would not result in any
takings that might require compensation under the Fifth Amendment to
the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review
most disseminations of information to the public under information
quality guidelines established by each agency pursuant to general
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving
Implementation of the Information Quality Act (April 24, 2019), DOE
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has
reviewed this direct final rule under the OMB and DOE guidelines and
has concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13211
E.O. 13211, ``Actions Concerning Regulations That Significantly
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22,
2001), requires Federal agencies to prepare and submit to OIRA at OMB,
a Statement of Energy Effects for any significant energy action. A
``significant energy action'' is defined as any action by an agency
that promulgates or is expected to lead to promulgation of a final
rule, and that (1) is a significant regulatory action under Executive
Order 12866, or any successor order; and (2) is likely to have a
significant adverse effect on the supply, distribution, or use of
energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any significant energy action, the
agency must give a detailed statement of any adverse effects on energy
supply, distribution, or use should the proposal be implemented, and of
reasonable alternatives to the action and their expected benefits on
energy supply, distribution, and use.
DOE concludes that this regulatory action, which sets forth new and
amended energy conservation standards for electric motors, is not a
significant energy action because standards are not likely to have a
significant adverse effect on the supply, distribution, or use of
energy, nor has it been designated as such by the Administrator at
OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects
on this direct final rule.
L. Information Quality
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (``OSTP''), issued its Final Information
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan.
14, 2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
the agency reasonably can determine will have, or does have, a clear
and substantial impact on important public policies or private sector
decisions.'' 70 FR 2664, 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and the analyses
that are typically used and has prepared a report describing that peer
review.\98\ Generation of this report involved a rigorous, formal, and
documented evaluation using objective criteria and qualified and
independent reviewers to make a judgment as to the technical/
scientific/business merit, the actual or anticipated results, and the
productivity and management effectiveness of programs and/or projects.
Because available data, models, and technological understanding have
changed since 2007, DOE has engaged with the National Academy of
Sciences to review DOE's analytical methodologies to ascertain whether
modifications are needed to improve the Department's analyses. DOE is
in the process of evaluating the resulting report.\99\
---------------------------------------------------------------------------
\98\ The 2007 ``Energy Conservation Standards Rulemaking Peer
Review Report'' is available at the following website: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last accessed December 12, 2022).
\99\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------
NEMA MG 1-2016 was previously approved for incorporation by
reference in the section where it appears in this proposed rule and no
change is made.
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. The report will
state that it has been determined that the rule is a ``major rule'' as
defined by 5 U.S.C. 804(2).
VII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this direct
final rule.
List of Subjects in 10 CFR Part 431
Administrative practice and procedure, Confidential business
information, Energy conservation test procedures, Incorporation by
reference, Reporting and recordkeeping requirements.
Signing Authority
This document of the Department of Energy was signed on May 1,
2023, Francisco Alejandro Moreno, Acting Assistant Secretary for Energy
Efficiency and Renewable Energy. That document with the original
signature and date is maintained by DOE. For administrative purposes
only, and in compliance with requirements of the Office of the Federal
Register, the undersigned DOE Federal Register Liaison Officer has been
authorized to sign and submit the document in electronic format for
publication, as an official document of the Department of Energy. This
administrative process in no way alters the legal effect of this
document upon publication in the Federal Register.
Signed in Washington, DC, on May 5, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons stated in the preamble, DOE amends part 431 of
chapter II of title 10 of the Code of Federal Regulations, as set forth
below:
[[Page 36150]]
PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND
INDUSTRIAL EQUIPMENT
0
1. The authority citation for part 431 continues to read as follows:
Authority: 42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.
0
2. Amend Sec. 431.12 by adding, in alphabetical order, definitions for
``Specialized frame size'' and ``Standard frame size,'' to read as
follows:
Sec. 431.12 Definitions.
* * * * *
Specialized frame size means an electric motor frame size for which
the rated output power of the motor exceeds the motor frame size limits
specified for standard frame size. Specialized frame sizes have maximum
diameters corresponding to the following NEMA Frame Sizes:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum NEMA frame diameters
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 48 ......... 48 48 48 48 140 140
1.5/1.1......................................................... 48 48 48 48 140 140 140 140
2/1.5........................................................... 48 48 48 48 140 140 180 180
3/2.2........................................................... 140 48 140 140 180 180 180 180
5/3.7........................................................... 140 140 140 140 180 180 210 210
7.5/5.5......................................................... 180 140 180 180 210 210 210 210
10/7.5.......................................................... 180 180 180 180 210 210 ......... .........
15/11........................................................... 210 180 210 210 ......... ......... ......... .........
20/15........................................................... 210 210 210 210 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Standard frame size means a motor frame size that aligns with the
specifications in NEMA MG 1-2016, section 13.2 for open motors, and
NEMA MG 1-2016, section 13.3 for enclosed motors (incorporated by
reference, see Sec. 431.15).
* * * * *
0
3. Amend Sec. 431.25 by:
0
a. Revising paragraph (h) introductory text; and
0
b. Adding paragraphs (m) through (r).
The revision and additions read as follows:
Sec. 431.25 Energy conservation standards and effective dates.
* * * * *
(h) Each NEMA Design A motor, NEMA Design B motor, and IEC Design N
(including NE, NEY, or NY variants) motor that is an electric motor
meeting the criteria in paragraph (g) of this section and with a power
rating from 1 horsepower through 500 horsepower, but excluding fire
pump electric motors, manufactured (alone or as a component of another
piece of equipment) on or after June 1, 2016, but before June 1, 2027,
shall have a nominal full-load efficiency of not less than the
following:
* * * * *
(m) The standards in tables 8 through 10 of this section apply only
to electric motors, including partial electric motors, that satisfy the
following criteria:
(1) Are single-speed, induction motors;
(2) Are rated for continuous duty (MG 1) operation or for duty type
S1 (IEC);
(3) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
(4) Operate on polyphase alternating current 60-hertz sinusoidal
line power;
(5) Are rated 600 volts or less;
(6) Have a 2-, 4-, 6-, or 8-pole configuration,
(7) Are built in a three-digit or four-digit NEMA frame size (or
IEC metric equivalent), including those designs between two consecutive
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA
frame size (or IEC metric equivalent),
(8) Produce at least one horsepower (0.746 kW) but not greater than
750 horsepower (559 kW), and
(9) Meet all of the performance requirements of one of the
following motor types: A NEMA Design A, B, or C motor or an IEC Design
N, NE, NEY, NY or H, HE, HEY, HY motor.
(n) Starting on June 1, 2027, each NEMA Design A motor, NEMA Design
B motor, and IEC Design N (including NE, NEY, or NY variants) motor
that is an electric motor meeting the criteria in paragraph (m) of this
section and with a power rating from 1 horsepower through 750
horsepower, but excluding fire pump electric motors and air-over
electric motors, manufactured (alone or as a component of another piece
of equipment) shall have a nominal full-load efficiency of not less
than the following:
Table 8 to Paragraph (n)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding Fire Pump
Electric Motors and Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
[[Page 36151]]
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
300/224......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
350/261......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
400/298......................................................... 95.8 95.8 96.2 95.8 ......... ......... ......... .........
450/336......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
500/373......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
550/410......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
600/447......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
650/485......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
700/522......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
750/559......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(o) Starting on June 1, 2027, each NEMA Design A motor, NEMA Design
B motor, and IEC Design N (including NE, NEY, or NY variants) motor
that is an air-over electric motor meeting the criteria in paragraph
(m) of this section and with a power rating from 1 horsepower through
250 horsepower, built in a standard frame size, but excluding fire pump
electric motors, manufactured (alone or as a component of another piece
of equipment) shall have a nominal full-load efficiency of not less
than the following:
Table 9 to Paragraph (o)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Standard Frame Size Air-Over
Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 36152]]
(p) Starting on June 1, 2027, each NEMA Design A motor, NEMA Design
B motor, and IEC Design N (including NE, NEY, or NY variants) motor
that is an air-over electric motor meeting the criteria in paragraph
(m) of this section and with a power rating from 1 horsepower through
20 horsepower, built in a specialized frame size, but excluding fire
pump electric motors, manufactured (alone or as a component of another
piece of equipment) shall have a nominal full-load efficiency of not
less than the following:
Table 10 to Paragraph (p)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Specialized Frame Size Air-
Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 74.0 ......... 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1......................................................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5........................................................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2........................................................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7........................................................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5......................................................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5.......................................................... 89.5 88.5 89.5 89.5 89.5 90.2 ......... .........
15/11........................................................... 90.2 89.5 91.0 91.0 ......... ......... ......... .........
20/15........................................................... 90.2 90.2 91.0 91.0 ......... ......... ......... .........
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(q) For purposes of determining the required minimum nominal full-
load efficiency of an electric motor that has a horsepower or kilowatt
rating between two horsepower or two kilowatt ratings listed in any
table of energy conservation standards in paragraphs (n) through (p)
through of this section, each such motor shall be deemed to have a
listed horsepower or kilowatt rating, determined as follows:
(1) A horsepower at or above the midpoint between the two
consecutive horsepowers shall be rounded up to the higher of the two
horsepowers;
(2) A horsepower below the midpoint between the two consecutive
horsepowers shall be rounded down to the lower of the two horsepowers;
or
(3) A kilowatt rating shall be directly converted from kilowatts to
horsepower using the formula 1 kilowatt = (\1/0.746\) horsepower. The
conversion should be calculated to three significant decimal places,
and the resulting horsepower shall be rounded in accordance with
paragraphs (q)(1) or (2) of this section, whichever applies.
(r) The standards in tables 8 through 10 of this section do not
apply to the following electric motors exempted by the Secretary, or
any additional electric motors that the Secretary may exempt:
(1) Component sets of an electric motor;
(2) Liquid-cooled electric motors;
(3) Submersible electric motors; and
(4) Inverter-only electric motors.
[FR Doc. 2023-10019 Filed 5-31-23; 8:45 am]
BILLING CODE 6450-01-P