[Federal Register Volume 88, Number 187 (Thursday, September 28, 2023)]
[Rules and Regulations]
[Pages 66966-67041]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20343]
[[Page 66965]]
Vol. 88
Thursday,
No. 187
September 28, 2023
Part II
Department of Energy
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10 CFR Parts 429 and 431
Energy Conservation Program: Energy Conservation Standards for
Dedicated Purpose Pool Pump Motors; Final Rule
Federal Register / Vol. 88 , No. 187 / Thursday, September 28, 2023 /
Rules and Regulations
[[Page 66966]]
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DEPARTMENT OF ENERGY
10 CFR Parts 429 and 431
[EERE-2017-BT-STD-0048]
RIN 1904-AF27
Energy Conservation Program: Energy Conservation Standards for
Dedicated Purpose Pool Pump Motors
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Final rule.
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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including dedicated
purpose pool pump motors. When DOE is considering adopting energy
conservation standards, EPCA requires that the standards be designed to
achieve the maximum improvement in energy efficiency, which DOE
determines is technologically feasible and economically justified. In
this final rule, DOE is adopting amended energy conservation standards
for dedicated purpose pool pump motors. It has determined that the new
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 November 27, 2023. Compliance
with the new standards established for dedicated purpose pool pump
motors with motor total horsepower <0.5 THP in this final rule is
required on and after September 29, 2025. Compliance with the new
standards established for dedicated purpose pool pump motors with motor
total horsepower >=0.5 THP and <1.15 THP in this final rule is required
on and after September 28, 2027. Finally, compliance with the new
standards established for dedicated purpose pool pump motors with motor
total horsepower >=1.15 THP and <=5 THP in this final rule is required
on and after September 29, 2025. The incorporation of refence of
certain material listed in this rule is approved by the Director of the
Federal Register on November 27 2023.
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-2017-BT-STD-0048. The docket web page contains instructions on how to
access all documents, including public comments, in the docket.
For further information on how to review the docket, contact the
Appliance and Equipment Standards Program staff at (202) 287-1445 or by
email: [email protected].
FOR FURTHER INFORMATION CONTACT:
Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Email:
[email protected].
Ms. Amelia Whiting, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (202) 586-2588. Email:
[email protected].
SUPPLEMENTARY INFORMATION: DOE incorporates by reference the following
standard into parts 429 and 431:
UL 1004-10, Standard for Safety for Pool Pump Motors, Revised First
Edition, Dated March 24, 2022 (``UL 1004-10:2022'').
Copies of UL 1004-10:2022 can be obtained from: Underwriters
Laboratories (``UL''), 333 Pfingsten Road, Northbrook, IL 60062, (841)
272-8800, or go to www.ul.com.
For a further discussion of this standard, see section VI.N of this
document.
Table of Contents
I. Synopsis of the Final Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for DPPP Motors
III. General Discussion
A. General Comments
B. Test Procedure
C. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
D. Energy Savings
1. Determination of Savings
2. Significance of Savings
E. 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 and Definitions
2. Market Review
3. Equipment Classes
4. Technology Options
B. Screening Analysis
C. Engineering Analysis
1. Efficiency Analysis
a. Representative Units
b. Baseline Efficiency
c. Higher Efficiency Levels
2. Cost Analysis
D. Markups Analysis
E. Energy Use Analysis
1. DPPP Motor Applications
2. DPPP Motor Consumer Sample
3. Self-Priming and Non-Self-Priming Pool Pump Motor Input Power
4. Pressure Cleaner Booster Pumps Motor Input Power
5. Daily Operating Hours
6. Annual Days of Operation
F. Life-Cycle Cost and Payback Period Analysis
1. Equipment Cost
2. Installation Costs
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
1. Base-Year Shipments
2. No-New-Standards Case Shipment Projections
3. Standards Case Shipment Projections
H. National Impact Analysis
1. Product 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
4. Comments From Interested Parties
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
[[Page 66967]]
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 Conclusion
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 DPPP Motor
Standards
2. Annualized Benefits and Costs of the Adopted Standards
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14904
B. Review Under the Regulatory Flexibility Act
1. Need for, Objectives of, and Legal Basis for, Rule
2. Significant Comments in Response to the IRFA
3. Comments Filed by the Chief Counsel for Advocacy
4. Description on Estimated Number of Small Entities Regulated
5. Description and Estimate of Compliance Requirements Including
Differences in Cost, if Any, for Different Groups of Small Entities
6. Significant Alternatives to the Rule
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
M. Congressional Notification
N. Description of Materials Incorporated by Reference
VII. Approval of the Office of the Secretary
I. Synopsis of the Final Rule
The Energy Policy and Conservation Act, Public Law 94-163, as
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency
of a number of consumer products and certain industrial equipment. (42
U.S.C. 6291-6317) Title III, Part C of the Energy Policy and
Conservation Act, as amended (EPCA) \2\ established the Energy
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes electric motors, which include dedicated-
purpose pool pump motors (``DPPP motors'' or ``DPPPMs'' or ``pool pump
motors''), the subject of this rulemaking. (42 U.S.C. 6311(1)(A)). This
rulemaking does not concern standards for dedicated-purpose pool pumps
(``DPPPs''), which are being addressed in a separate rulemaking.\3\
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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.
\3\ Docket No. EERE-2022-BT-STD-0001, which is maintained at
www.regulations.gov/docket/EERE-2022-BT-STD-0001.
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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 significant
conservation of energy. (42 U.S.C. 6295(o)(3)(B))
In accordance with these and other statutory provisions discussed
in this document, DOE is adopting new energy conservation standards for
DPPP motors. The adopted standards, which are expressed in full-load
efficiency and design requirements, are shown in Table I.1. DOE is
finalizing standards that apply to all products listed in Table I.1 and
manufactured in, or imported into, the United States starting on the
dates provided in the table.
Table I.1--Energy Conservation Standards for DPPP Motors (TSL 7)
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Performance
standard: full- Design requirement: Design requirement:
Motor total horsepower (THP) load speed capability freeze protection Compliance date
efficiency (%)
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THP <0.5........................ 69% None............... None................ September 29, 2025.
0.5 <= THP < 1.15............... .............. Variable speed Only for DPPP motors September 28, 2025.
control *. with freeze
protection controls
**.
1.15 <= THP <= 5................ .............. Variable speed Only for DPPP motors September 29, 2025.
control *. with freeze
protection controls
**.
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* A variable speed motor is a DPPP motor that meets the definition of ``variable-speed control dedicated-purpose
pool pump motor'' as defined by UL 1004-10:2022.
** DPPP motors with freeze protection controls are to be shipped with the freeze protection feature disabled, or
with the following default, user-adjustable settings: (a) the default dry-bulb air temperature setting shall
be no greater than 40 [deg]F; (b) the default run time setting shall be no greater than 1 hour (before the
temperature is rechecked); and (c) the default motor speed in freeze protection mode shall not be more than
half of the maximum operating speed.
A. Benefits and Costs to Consumers
Table I.2 summarizes DOE's evaluation of the economic impacts of
the adopted standards on consumers of DPPP 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 each equipment
class, and the PBP is less than the average lifetime of DPPP motors,
which is estimated to be 4.5 years (see section IV.F 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 distribution of
purchased DPPP motors, and their associated energy 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.9 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.C of this document).
[[Page 66968]]
Table I.2--Impacts of Adopted Energy Conservation Standards on Consumers
of DPPP Motors
------------------------------------------------------------------------
Average LCC Simple payback
DPPP Motors equipment class savings (2022$) period (years)
------------------------------------------------------------------------
Extra-small-size (THP <0.5)......... $3 0.9
Small-size (0.5 <= THP < 1.15)...... 4 3.4
Standard-size (1.15 <= THP <= 5).... 236 1.3
------------------------------------------------------------------------
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, which align with the industry
profits from producing DPPP motors, from the base year through the end
of the analysis period (2024-2055).\5\ Using a real discount rate of
7.2 percent, DOE estimates that the INPV for manufacturers of DPPP
motors in the case without new standards is $661 million in 2022$.
Under the adopted standards, DOE estimates the change in INPV to range
from -32.4 percent to 12.0 percent, which is approximately -$214.2
million to $79.0 million change in profits. In order to bring products
into compliance with new standards, it is estimated that industry will
incur total conversion costs of $56.2 million.\6\
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\5\ This time period captures manufacturers' profits starting
with the years leading up to the compliance date, at which time they
are making investments to comply with standards, and throughout the
30-year analysis period after the compliance date.
\6\ Conversion costs are included in the INPV calculation.
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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 \7\
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\7\ All monetary values in this document are expressed in 2021
dollars and, where appropriate, are discounted to 2024 unless
explicitly stated otherwise.
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DOE's analyses indicate that the adopted energy conservation
standards for DPPP motors would save a significant amount of energy.
Relative to the case without new standards, the lifetime energy savings
for DPPP motors purchased in the 30-year period that begins in the
anticipated first full year of compliance with the new standards (2026-
2055),\8\ amount to 1.56 quadrillion British thermal units (``Btu''),
or quads.\9\ This represents a savings of 27.5 percent relative to the
energy use of these products in the case without new standards
(referred to as the ``no-new-standards case'').
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\8\ DOE conducted the analysis over a 30-year period starting in
2026 (2026-2055). As discussed in section III.A of this document,
for all TSLs DOE considered a 2-year lead time resulting in a first
full year of compliance of 2026, except for small-size DPPP motors
at TSL 7 where DOE uses a 4-year compliance lead time, resulting in
a compliance year of 2028. In this case, DOE considered 28 years of
shipments (2028-2055).
\9\ 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.1 of this document.
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The cumulative net present value (``NPV'') of total consumer
benefits of the standards for DPPP motors ranges from $5.4 billion (at
a 7-percent discount rate) to $10.2 billion (at a 3-percent discount
rate). This NPV expresses the estimated total value of future
operating-cost savings minus the estimated increased equipment and
installation costs for DPPP motors purchased in 2026-2055 relative to
the no-new-standards case.\10\
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\10\ For small size DPPP motors, as noted previously, DOE
considered 28 years of shipments (2028-2055).
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In addition, the adopted standards for DPPP motors are projected to
yield significant environmental benefits. DOE estimates that the
standards will result in cumulative emission reductions (over the same
period as for energy savings) of 31.2 million metric tons (Mt) \11\ of
carbon dioxide (CO2), 9.8 thousand tons of sulfur dioxide
(SO2), 56.4 thousand tons of nitrogen oxides
(NOX), 247.2 thousand tons of methane (CH4), 0.32
thousand tons of nitrous oxide (N2O), and 0.07 tons of
mercury (Hg).\12\
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\11\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\12\ DOE calculated emissions reductions relative to the no-new-
standards-case, which reflects key assumptions in the Annual Energy
Outlook 2023 (AEO2023). AEO2023 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 AEO2023 assumptions that effect air pollutant
emissions.
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DOE estimates the value of climate benefits from a reduction in
greenhouse gases (GHG) using four different estimates of the social
cost of CO2 (SC-CO2), the social cost of methane
(SC-CH4), and the social cost of nitrous oxide (SC-
N2O). Together these represent the social cost of GHG (SC-
GHG). DOE used interim SC-GHG values developed by an Interagency
Working Group on the Social Cost of Greenhouse Gases (IWG).\13\ The
derivation of these values is discussed in section IV.L of this
document. For presentational purposes, the climate benefits associated
with the average SC-GHG at a 3-percent discount rate over the period of
analysis are estimated to be $2.0 billion. DOE does not have a single
central SC-GHG point estimate and it emphasizes the importance and
value of considering the benefits calculated using all four sets of SC-
GHG estimates.
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\13\ To monetize the benefits of reducing GHG emissions this
analysis uses the interim estimates presented in the Technical
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide
Interim Estimates Under Executive Order 13990 published in February
2021 by the IWG. (``February 2021 SC-GHG TSD''). www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
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DOE estimated the monetary health benefits of SO2 and
NOX emissions reductions, using benefit per ton estimates
from the Environmental Protection Agency,\14\ as discussed in section
IV.L of this document. DOE estimated the present value of the health
benefits would be $2.0 billion using a 7-percent discount rate, and
$3.9 billion using a 3-percent discount rate. DOE is currently only
monetizing health benefits from changes in ambient fine particulate
matter (PM2.5) concentrations from two precursors
(SO2 and (for NOX) and from changes in ambient
ozone from one precursor (NOX), but will continue to assess
the ability to monetize other effects such as health benefits from
reductions in direct PM2.5 emissions.
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\14\ U.S. EPA. Estimating the Benefit per Ton of Reducing
Directly Emitted PM2.5, PM2.5 Precursors and
Ozone Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
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Table I.3 summarizes the monetized benefits and costs expected to
result from the amended standards for DPPP motors. There are other
important unquantified effects, including certain unquantified climate
benefits,
[[Page 66969]]
unquantified public health benefits from the reduction of toxic air
pollutants and other emissions, unquantified energy security benefits,
and distributional effects, among others.
Table I.3--Present Value in 2024 of Monetized Benefits and Costs of
Adopted Energy Conservation Standards for DPPP Motors
------------------------------------------------------------------------
Billion 2022$
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 14.0
Climate Benefits *.................................... 2.0
Health Benefits **.................................... 3.9
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Total Monetized Benefits [dagger]................. 19.9
Consumer Incremental Equipment Costs [Dagger]......... 3.9
-----------------
Net Monetized Benefits............................ 16.0
Change in Producer Cashflow (INPV [dagger][dagger])... (0.21)-0.08
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 7.9
Climate Benefits * (3% discount rate)................. 2.0
Health Benefits **.................................... 2.0
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Total Monetized Benefits [dagger]................. 11.9
Consumer Incremental Equipment Costs [Dagger]......... 2.6
-----------------
Net Monetized Benefits............................ 9.3
Change in Producer Cashflow (INPV [dagger][dagger])... (0.21)-0.08
------------------------------------------------------------------------
Note: This table presents the present value of the monetized costs and
benefits associated with product name shipped in 2026-2055, except for
small-size DPPP motors where shipments in 2028-2055 are considered.
These results include consumer, climate, and health benefits which
accrue after 2055 from the products shipped in 2026-2055 (or 2028-
2055).
* Climate benefits are calculated using four different estimates of the
social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
(SC-N2O) (model average at 2.5-percent, 3-percent, and 5-percent
discount rates; 95th percentile at 3-percent discount rate) (see
section IV.L of this document). 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 DOE does not have a single central SC-GHG point estimate.
To monetize the benefits of reducing greenhouse gas 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. See section IV.L of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and
health benefits that can be quantified and monetized. 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 DOE does not have a single central SC-GHG point estimate.
DOE emphasizes the importance and value of considering the benefits
calculated using all four sets of SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as
installation costs.
[dagger][dagger] Operating Cost Savings are calculated based on the life
cycle costs analysis and national impact analysis as discussed in
detail below. See sections IV.F and IV.H of this document. DOE's NIA
includes all impacts (both costs and benefits) along the distribution
chain beginning with the increased costs to the manufacturer to
manufacture the equipment and ending with the increase in price
experienced by the consumer. DOE also separately conducts a detailed
analysis on the impacts on manufacturers (the MIA). See section IV.J
of this document. In the detailed MIA, DOE models manufacturers'
pricing decisions based on assumptions regarding investments,
conversion costs, cashflow, and margins. The MIA produces a range of
impacts, which is the rule's expected impact on the INPV. The change
in INPV is the present value of all changes in industry cash flow,
including changes in production costs, capital expenditures, and
manufacturer profit margins. Change in INPV is calculated using the
industry weighted average cost of capital value of 7.2% that is
estimated in the MIA (see chapter 12 of the Final Rule TSD for a
complete description of the industry weighted average cost of
capital). For DPPP motors, those values are -$214 million and $79
million. DOE accounts for that range of likely impacts in analyzing
whether a TSL is economically justified. See section V.C of this
document. DOE is presenting the range of impacts to the INPV under two
markup scenarios: the Preservation of Gross Margin scenario, which is
the manufacturer markup scenario used in the calculation of Consumer
Operating Cost Savings in this table, and the Preservation of
Operating Profit Markup scenario, where DOE assumed manufacturers
would not be able to increase per-unit operating profit in proportion
to increases in manufacturer production costs. DOE includes the range
of estimated INPV in the above table, drawing on the MIA explained
further in Section IV.J of this document, to provide additional
context for assessing the estimated impacts of this rule to society,
including potential changes in production and consumption, which is
consistent with OMB's Circular A-4 and E.O. 12866. If DOE were to
include the INPV into the net benefit calculation for this final rule,
the net benefits would range from $15.79 billion to $16.08 billion at
3-percent discount rate and range from $9.09 billion to $9.38 billion
at 7-percent discount rate.
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 monetized value of climate and health benefits of
emission reductions, all annualized.\15\
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\15\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2024, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2030 or 2040), and then discounted the present value from
each year to 2024. Using the present value, DOE then calculated the
fixed annual payment over a 30-year period, starting in the
compliance year, that yields the same present value.
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The national operating cost savings are domestic private U.S.
consumer
[[Page 66970]]
monetary savings that occur as a result of purchasing the covered
products and are measured for the lifetime of DPPP motors shipped in
(2026-2055).\16\ The benefits associated with reduced emissions
achieved as a result of the adopted standards are also calculated based
on the lifetime of DPPP motors shipped in (2026-2055).\16\ Total
benefits for both the 3-percent and 7-percent cases are presented using
the average GHG social costs with 3-percent discount rate. Estimates of
SC-GHG values are presented for all four discount rates in section
V.B.6 of this document.
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\16\ For small size DPPP motors, as noted previously, DOE
considered 28 years of shipments (2028-2055).
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Table I.4 presents the total estimated monetized benefits and costs
associated with the standard, expressed in terms of annualized values.
The results under the primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced NOX and SO2
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated monetized cost of the
standards adopted in this rule is $221 million per year in increased
equipment costs, while the estimated annual benefits are $684 million
in reduced equipment operating costs, $103 million in monetized climate
benefits, and $173 million in monetized health benefits. In this case,
the monetized net benefit would amount to $739 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated monetized cost of the standards is $204 million per year in
increased equipment costs, while the estimated annual monetized
benefits are $738 million in reduced operating costs, $103 million in
monetized climate benefits, and $205 million in monetized health
benefits. In this case, the monetized net benefit would amount to $841
million per year.
Table I.4--Annualized Monetized Benefits and Costs of Adopted Standards for DPPP Motors
----------------------------------------------------------------------------------------------------------------
Million 2022$/year
-----------------------------------------------------------------
Low-net-benefits High-net-benefits
Primary estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings............... 738 721 760
Climate Benefits *............................ 103 103 103
Health Benefits **............................ 205 205 205
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Total Monetized Benefits [dagger]......... 1,046 1029 1,068
Consumer Incremental Equipment Costs [Dagger]. 204 235 173
-----------------------------------------------------------------
Monetized Net Benefits.................... 841 793 895
Change in Producer Cashflow (INPV (17)-6 (17)-6 (17)-6
[dagger][dagger])............................
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings............... 684 671 703
Climate Benefits * (3% discount rate)......... 103 103 103
Health Benefits **............................ 173 173 173
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Total Monetized Benefits [dagger]......... 960 947 979
Consumer Incremental Equipment Costs [Dagger]. 221 250 190
-----------------------------------------------------------------
Monetized Net Benefits.................... 739 696 790
Change in Producer Cashflow (INPV (17)-6 (17)-6 (17)-6
[dagger][dagger])............................
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with DPPP motors shipped in 2026-2055, except for
small-size DPPP motors where shipments in 2028-2055 are considered. These results include consumer, climate,
and health benefits which accrue after 2055 from the products shipped in 2026-2055 (or 2028-2055). The
Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the
AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition,
incremental equipment costs reflect a medium decline rate in the Primary Estimate, an increasing rate in the
Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to
derive projected price trends are explained in sections IV.F.1 and 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
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 DOE does not have a single central SC-GHG point estimate, and it
emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG
estimates. To monetize the benefits of reducing greenhouse gas 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. 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 DOE does not have a single central SC-GHG point estimate.
[Dagger] Costs include incremental equipment costs as well as installation costs.
[[Page 66971]]
[dagger][dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's NIA includes
all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the
manufacturer to manufacture the equipment and ending with the increase in price experienced by the consumer.
DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J
of this document. In the detailed MIA, DOE models manufacturers' pricing decisions based on assumptions
regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is
the rule's expected impact on the INPV. The change in INPV is the present value of all changes in industry
cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins.
Annualized change in INPV is calculated using the industry weighted average cost of capital value of 7.2% that
is estimated in the MIA (see chapter 12 of the Final Rule TSD for a complete description of the industry
weighted average cost of capital). For DPPP motors, those values are -$17 million and $6 million. DOE accounts
for that range of likely impacts in analyzing whether a TSL is economically justified. See section V.C of this
document. DOE is presenting the range of impacts to the INPV under two markup scenarios: the Preservation of
Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating
Cost Savings in this table, and the Preservation of Operating Profit Markup scenario, where DOE assumed
manufacturers would not be able to increase per-unit operating profit in proportion to increases in
manufacturer production costs. DOE includes the range of estimated annualized change in INPV in the above
table, drawing on the MIA explained further in section IV.J of this document, to provide additional context
for assessing the estimated impacts of this rule to society, including potential changes in production and
consumption, which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE were to include the INPV into
the annualized net benefit calculation for this final rule, the annualized net benefits would range from $824
million to $847 million at 3-percent discount rate and range from $722 million to $745 million at 7-percent
discount rate.
DOE's analysis of the national impacts of the adopted standards is
described in sections IV.G.2, IV.K, and IV.L of this document.
D. Conclusion
DOE concludes that the standards adopted in this final rule
represent the maximum improvement in energy efficiency that is
technologically feasible and economically justified, and would result
in the significant conservation of energy. Specifically, equipment are
able to achieve these standard levels using technology options
currently available in the DPPPM market. As for economic justification,
DOE's analysis shows that the benefits of the standards exceed the
burdens of the standards.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated monetized cost
of the standards for DPPP motors is $221 million per year in increased
equipment costs, while the estimated annual monetized benefits are $684
million in reduced equipment operating costs, $103 million in monetized
climate benefits, and $173 million in monetized ambient air pollutant
health benefits. The monetized net benefit amounts to $739 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.\17\ 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.
---------------------------------------------------------------------------
\17\ 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 \18\ of 1.56 quads FFC, the
equivalent of the primary annual energy use of 16.8 million homes. In
addition, they are projected to reduce CO2 emissions by 31.2
Mt. Based on these findings, DOE has determined the energy savings from
the standard levels adopted in this final rule are ``significant''
within the meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed
discussion of the basis for these conclusions is contained in the
remainder of this document and the accompanying TSD.
---------------------------------------------------------------------------
\18\ Associated with DPPP motors shipped in 2026-2055, except
for small-size DPPP motors where shipments in 2028-2055 are
considered.
---------------------------------------------------------------------------
II. Introduction
The following section briefly discusses the statutory authority
underlying this final rule, as well as some of the relevant historical
background related to the establishment of standards for DPPP 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 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 energy efficiency. This equipment
includes those electric motors that are DPPP motors, the subject of
this document. (42 U.S.C. 6311(1)(A))
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.
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C.
6315), energy conservation standards (42 U.S.C. 6316 (a); 42 U.S.C.
6295), and the authority to require information and reports from
manufacturers (42 U.S.C. 6316).
Federal energy efficiency requirements for covered equipment
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6316(a); 42 U.S.C. 6297) There are currently no Federal energy
conservation standards for DPPP motors. DOE noted in the July 2021
Final Rule that efforts by States to set energy conservation standards,
test procedures, or labeling requirements for DPPP motors--or any other
electric motor--are preempted as a matter of law. 86 FR 40765, 40767.
Upon further consideration, however, DOE is clarifying here that
none of the provisions in 42 U.S.C. 6313 apply to DPPP motors because,
although they are a category of electric motor, DPPPP motors are not
among the category of electric motors for which Congress established
standards and a rulemaking schedule in 42 U.S.C. 6313(b). Thus, State
DPPP motor standards are not already preempted as a matter of law. EPCA
outlines rules of preemption for State energy conservation standards
before a Federal standard promulgated becomes effective. 42 U.S.C.
6316(a); 42 U.S.C. 6297(b). Specifically, it provides that no State
regulation concerning energy efficiency or energy use of covered
equipment shall be effective with respect to the covered equipment--in
the absence of a Federal regulation--unless the State regulation is a
regulation regulating electric motors other than those to which 42
U.S.C. 6313 is applicable. 42 U.S.C. 6316(a)(7); 42 U.S.C. 6297(b)(4).
As discussed in
[[Page 66972]]
section III.A. of this document, DPPPM are a category of electric
motor, but are excepted from the requirements of 42 U.S.C. 6313(b). See
42 U.S.C. 6313(b)(1). Further, there are no other provisions in 42
U.S.C. 6313 that would apply to DPPP motors. Therefore, any State
regulations establishing or amending standards for DPPPM are not
currently preempted.
Instead, under 42 U.S.C. 6297(c), upon the compliance date for the
Federal standards in this final rule, the Federal standards will
supersede the CEC standards requirements for replacement dedicated-
purpose pool pump motors (``RDPPPM'') for the first time. For extra-
small-size and standard-size DPPP motors, the CEC standards will be
superseded on the compliance date applicable to these DPPP motors,
which is 2 years after the publication of this final rule. For small-
size DPPP motors, which have an additional two-year lead time, the CEC
standards would be superseded on the compliance date applicable to
small-size DPPP motors, which is 4 years after the publication of this
final rule. 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. (See 42
U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A) and (r)) Manufacturers of
covered equipment must use the Federal test procedures as the basis
for: (1) certifying to DOE that their equipment complies with the
applicable energy conservation standards adopted pursuant to EPCA (42
U.S.C. 6316(a); 42 U.S.C. 6295(s)), and (2) making representations
about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly,
DOE must use these test procedures to determine whether the equipment
complies with relevant standards promulgated under EPCA. (42 U.S.C.
6316(a); 42 U.S.C. 6295(s)) The DOE test procedures for DPPP motors
appear at title 10 of the Code of Federal Regulations (``CFR'') Sec.
431.484.
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered equipment, including DPPP 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 (``Secretary'') 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 DPPP 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)(3)(A)-(B)) 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 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))
DOE must also periodically evaluate the energy conservation
standards for certain covered equipment, including electric motors, and
publish either a notification of determination that the standards do
not need to be amended, or a notice of proposed rulemaking (``NOPR'')
that includes new proposed energy conservation standards (proceeding to
a final rule, as appropriate). See 42 U.S.C. 6316(a) and 42 U.S.C.
6295(m)(1).
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))
B. Background
1. Current Standards
DPPP motors are electric motors, which are defined as machines that
convert electrical power into rotational mechanical power. 10 CFR
431.12. DOE has established test procedures, labeling requirements, and
energy conservation standards for certain electric motors (10 CFR part
431, subpart B), but those
[[Page 66973]]
requirements do not apply to DPPP motors. DOE has separately
established a test procedure for DPPP motors in 10 CFR 431.484. The
scope of the DPPP motor definition includes DPPP motors regardless of
how the equipment is sold; i.e., incorporated in a DPPP or sold
separately.
Currently, DPPP motors that would be subject to the energy
conservation standards are not subject to any Federal energy
conservation standards or labeling requirements because they do not
fall within any of the specific classes of electric motors that are
currently regulated by DOE.\19\ However, DPPP motors are electric
motors and, therefore, are and have been among the types of industrial
equipment for which Congress has authorized DOE to establish applicable
regulations under EPCA without the need for DOE to undertake any
additional prior administrative action. (42 U.S.C. 6311(1)(A))
---------------------------------------------------------------------------
\19\ The current energy conservation standards at 10 CFR 431.25
apply to electric motors that satisfy nine criteria listed at 10 CFR
431.25(g), subject to the exemptions listed at 10 CFR 431.25(l). The
nine criteria are as follows: (1) are single-speed, induction
motors; (2) are rated for continuous duty (MG1) operation or for
duty type S1 (IEC); (3) contain a squirrel-cage (MG1) 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 3-digit or
4-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 1 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 or H motor. The
exemptions listed at 10 CFR 431.25(l) are: (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.
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2. History of Standards Rulemaking for DPPP Motors
On January 18, 2017, DOE published a direct final rule establishing
energy conservation standards for DPPPs. 82 FR 5650 (the ``January 2017
Direct Final Rule'').\20\
---------------------------------------------------------------------------
\20\ DOE confirmed the adoption of the standards and the
effective date and compliance date in a notice published on May 26,
2017. 82 FR 24218. DOE also established a test procedure for DPPPs.
82 FR 36858 (August 7, 2017).
---------------------------------------------------------------------------
In comments submitted in response to the direct final rule, several
interested parties discussed the issue of the efficiency of electric
motors used in DPPPs. Comments were received from a broad range of
interested parties, including manufacturers, trade associations, and
energy efficiency advocacy organizations suggesting that energy
conservation standards were also needed for motors used in pool pumps.
Commenters wanted to ensure that consumers who purchased pool pumps
compliant with the new standards at 10 CFR 431.465(f), who subsequently
needed to replace their motor, would do so with a motor of equal or
greater efficiency. All comments received that discussed DPPP motors
supported further rulemaking to address these motors. (Docket No. EERE-
2015-BT-STD-0008; Regal Beloit Corporation (``Regal Beloit''), No. 122
at p. 1; Hayward Industries, Inc. (``Hayward''), No. 125 at p. 1;
Pentair Water Pool and Spa, Inc. (``Pentair''), No. 132 at pp. 1-2;
Zodiac Pool Systems (``Zodiac''), No. 134 at pp. 1-2; Association of
Pool and Spa Professionals (``APSP''), No. 127 at p. 2; Appliance
Standards Awareness Project (``ASAP''), No. 133 at pp. 4-5; Natural
Resource Defense Council (``NRDC''), No. 121 at p. 4; California
Investor Owned Utilities (``CA IOUs''), No. 130 at p. 2)
Acknowledging comments received in response to the direct final
rule in support of regulating DPPP motors that would serve as
replacement motors to the regulated pool pumps, DOE published a notice
of public meeting on July 3, 2017 and held a public meeting on August
10, 2017 to consider potential scope, definitions, equipment
characteristics, and metrics for pool pump motors. 82 FR 30845. DOE
also requested comment on potential requirements for DPPP motors in a
request for information (``RFI'') pertaining to test procedures for
small electric motors and electric motors. 82 FR 35468 (July 31, 2017).
On August 14, 2018, DOE received a petition submitted by a variety of
entities (collectively, the ``Joint Petitioners'') \21\ requesting that
DOE issue a direct final rule to establish prescriptive standards and a
labeling requirement for DPPP motors (``Joint Petition'').\22\ The
Joint Petitioners stated that the motor on a pool pump will often fail
before the pump itself needs to be replaced, and motor-only
replacements are common. (Joint Petition, No. 14 at p. 2) They added
that without a complementary standard for DPPP motors, upon replacing a
pool pump motor, consumers may install replacement motors that are less
efficient than the motor with which the DPPP was originally equipped.
(Id.) To address this concern, the Joint Petitioners asked DOE to
establish a direct final rule establishing prescriptive standards and a
labeling requirement for DPPP motors. (Joint Petition, No. 14 at pp. 6-
9) The Joint Petitioners sought a compliance date of July 19, 2021, to
align with the standards compliance date for DPPPs. (Id.) See also 82
FR 24218 (May 26, 2017). DOE published a notice of the Joint Petition
and sought comment on whether to proceed with the proposal, as well as
any data or information that could be used in DOE's determination of
whether to issue a direct final rule. 83 FR 45851 (Sept. 11, 2018).\23\
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\21\ The Joint Petitioners are: the Association of Pool & Spa
Professionals, Alliance to Save Energy, American Council for an
Energy-Efficient Economy, Appliance Standards Awareness Project,
Arizona Public Service, California Energy Commission, California
Investor Owned Utilities, Consumer Federation of America, Florida
Consumer Action Network, Hayward Industries, National Electrical
Manufacturers Association, Natural Resources Defense Council, Nidec
Motor Corporation, Northwest Power and Conservation Council, Pentair
Water Pool and Spa, Regal Beloit Corporation, Speck Pumps, Texas
ROSE (Ratepayers' Organization to Save Energy), Waterway Plastics,
WEG Commercial Motors, and Zodiac Pool Systems.
\22\ The Joint Petition is available at www.regulations.gov/document?D=EERE-2017-BT-STD-0048-0014.
\23\ Docket No. EERE-2017-BT-STD-0048, available at
www.regulations.gov/docket?D=EERE-2017-BT-STD-0048.
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On December 12, 2018, representatives from the Association of Pool
& Spa Professionals (``APSP''), the National Electrical Manufacturers
Association (``NEMA''), Nidec Motors, Regal Beloit, and Zodiac met with
DOE to reiterate the need for implementation of the Joint Petition.
(December 2018 Ex Parte Meeting, No. 42 at p. 1) \24\ On February 5,
2019, APSP, NEMA, Hayward, Pentair, Nidec Motors, Regal Beloit, WEG
Commercial Motors, and Zodiac Pool Systems met with DOE to present an
alternative approach to the Joint Petition, suggesting DOE propose a
labeling requirement for DPPP motors. (February 2019 Ex Parte Meeting,
No. 43 at p. 1) \25\ These interested parties specifically requested
that DOE base the labeling requirement on a newly available industry
standard for pool pump motors published on July 1, 2019 (UL 1004-
10:2019, ``Pool Pump Motors''), a design standard that incorporates
some of the proposals
[[Page 66974]]
contained in the Joint Petition. (February 2019 Ex Parte Slides, No. 43
at pp. 9-10) A follow-up memorandum was submitted to DOE on March 1,
2019, providing additional information related to UL 1004-10:2019.
(March 2019 Ex Parte Memo, No. 44) The interested parties noted the
timelines and costs that would be involved in applying a label to the
affected pool pump motors and the impacts flowing from past labeling
efforts. (See generally Id. at 1-3.)
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\24\ With respect to each of the ex parte communications noted
in this document, DOE posted a memorandum submitted by the
interested party/parties that summarized the issues discussed in the
relevant meeting as well as its date and attendees, in compliance
with DOE's Guidance on Ex Parte Communications. 74 FR 52795-52796
(Oct. 14, 2009). The memorandum of the meeting as well as any
documents given to DOE employees during the meeting were added to
the docket as specified in that guidance. See Id. at 74 FR 52796.
\25\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop the
test procedure and labeling requirements for DPPP motors. (Docket
No. EERE-2017-BT-STD-0048, which is maintained at
www.regulations.gov/docket/EERE-2017-BT-STD-0048). The references
are arranged as follows: (commenter, comment docket ID number, page
of that document).
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On April 7, 2020, the California Energy Commission (``CEC'')
adopted new regulations for RDPPPMs, with an effective date of July 19,
2021. The adopted standards included nominal efficiency at full-load
and maximum operating speed requirements, in addition to a requirement
that RDPPPMs with a total horsepower (``THP'') greater than or equal to
0.5 THP manufactured on or after July 19, 2021, must be variable-
speed.\26\
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\26\ See Docket # 19-AAER-02 at www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20/appliance-efficiency-proceedings-2.
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On October 5, 2020, in response to the Joint Petition and the
alternative recommendation presented by several of the Joint
Petitioners following submission of the Joint Petition, DOE published a
NOPR proposing to establish a test procedure and an accompanying
labeling requirement for DPPP motors. 85 FR 62816 (``October 2020
NOPR''). Specifically, DOE proposed to incorporate by reference UL
Standard 1004-10:2019 ``Outline of Investigation for Pool Pump Motors''
(``UL 1004-10:2019'') pertaining to DPPP motor definitions and marking
requirements; require the use of Canadian Standards Association
(``CSA'') C747-09 (R2014), ``Energy Efficiency Test Methods for Small
Motors'' (``CSA C747-09'') for testing the energy efficiency of DPPP
motors; require the nameplate of a subject DPPP motor (1) to include
the full-load efficiency of the motor as determined under the proposed
test procedure, and (2) if the DPPP motor is certified to UL-1004-
10:2019, to include the statement, ``Certified to UL 1004-10:2019'';
require that catalogs and marketing materials include the full-load
efficiency of the motor; require manufacturers to notify DOE of the
subject DPPP motor models in current production (according to the
manufacturer's model number) and whether the motor model is certified
to UL 1004-10:2019; and require manufacturers to report to DOE the
full-load efficiency of the subject DPPP motor models as determined
pursuant to the proposed test procedure. 85 FR 62816, 62820.
Additionally, if a DPPP motor model is certified to UL 1004-10:2019,
DOE proposed to require manufacturers to report the THP and speed
configuration of the motor model as provided on the nameplate pursuant
to the UL certification. Id.
On July 29, 2021, DOE published a final rule adopting a test
procedure for DPPP motors. 86 FR 40765. (``July 2021 Final Rule'').
Specifically, the test procedure requires use of CSA C747-09 (R2014),
``Energy Efficiency Test Methods for Small Motors'' (``CSA C747-09'')
for testing the full-load efficiency of DPPP motors and incorporates by
reference UL 1004-10:2020 ``Standard for Pool Pump Motors'' (``UL 1004-
10:2020'') pertaining to definitions and scope. The new test procedure
is currently located at 10 CFR 431.484. 86 FR 40765, 40768. DOE did not
establish a labeling requirement and stated that it intends to address
any such labeling and/or energy conservation standards requirement in a
separate notification. Id.
On June 21, 2022, DOE published a NOPR proposing energy
conservation standards for DPPP motors. 87 FR 37122. (``June 2022
NOPR''). DOE proposed a performance standard for a class of DPPP motors
and design requirements for certain classes of DPPP motors.
Specifically, DOE proposed to require that DPPP motors less than 0.5
THP must have a full-load efficiency of 69 percent, and DPPP motors
greater than or equal to 0.5 THP must be variable speed control DPPP
motors. In addition, for DPPP motors greater than or equal to 0.5 THP,
DOE also proposed to implement freeze-protection requirements. 87 FR
37122, 37123-37124. On July 26, 2022, DOE presented the proposed
standards and accompanying analysis in a public meeting.
DOE received comments in response to the June 2022 NOPR from the
interested parties listed in Table II.1.
Table II.1--June 2022 NOPR Written Comments
----------------------------------------------------------------------------------------------------------------
Comment No. in
Commenter(s) Abbreviation the Docket Commenter type
----------------------------------------------------------------------------------------------------------------
Anonymous................................ Anonymous................. 89 .........................
Appliance Standards Awareness Project Joint Advocates........... 97 Efficiency Organizations.
(ASAP), American Council for an Energy-
Efficient Economy (ACEEE), National
Consumer Law Center, on behalf of its
low-income clients (NCLC), Natural
Resources Defense Council (NRDC), and
Northwest Energy Efficiency Alliance
(NEEA).
California Energy Commission and New York CEC and NYSERDA........... 94 State Agencies.
State Energy Research and Development
Authority.
Center for Climate and Energy Solutions, Joint SC-GHG Commenters... 95 Efficiency Organizations
Institute for Policy Integrity at New and Legal Institute.
York University School of Law, Natural
Resources Defense Council, Sierra Club,
Union of Concerned Scientists.
Fluidra.................................. Fluidra................... 91, 101 Pool Pump Manufacturer.
Hayward Industries, Inc.................. Hayward................... 93 Pool Pump Manufacturer.
Northwest Energy Efficiency Alliance..... NEEA...................... 99 Efficiency Organization.
Pacific Gas and Electric Company (PG&E), CA IOUs................... 96 Utilities.
San Diego Gas and Electric (SDG&E), and
Southern California Edison (SCE).
Pentair Water Pool and Spa, Inc.......... Pentair................... 90 Pool Pump Manufacturer.
The Pool & Hot Tub Alliance and National PHTA and NEMA............. 92 Trade Associations.
Electrical Manufacturers Association.
The Pool & Hot Tub Alliance.............. PHTA...................... 100 Trade Association.
Regal Rexnord............................ Regal..................... 98 Motor Manufacturer.
----------------------------------------------------------------------------------------------------------------
[[Page 66975]]
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\27\
To the extent that interested parties have provided written comments
that are substantively consistent with any oral comments provided
during the July 26, 2022 public meeting, DOE cites the written comments
throughout this final rule. Any oral comments provided during the
webinar that are not substantively addressed by written comments are
summarized and cited separately throughout this final rule.
---------------------------------------------------------------------------
\27\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for DPPP motors. (Docket No. EERE-
2017-BT-STD-0048, which is maintained at www.regulations.gov). The
references are arranged as follows: (commenter name, comment docket
ID number, page of that document).
---------------------------------------------------------------------------
III. General Discussion
DOE developed this final rule after considering oral and written
comments, data, and information from interested parties that represent
a variety of interests. The following discussion addresses issues
raised by these commenters.
A. General Comments
This section summarizes general comments received from interested
parties regarding rulemaking timing and process.
In the June 2022 NOPR, DOE proposed a performance standard (i.e.,
full-load efficiency) and design requirements (i.e., speed capability)
based on DPPP motor THP. Specifically, for motors <0.5 THP, DOE
proposed DPPP motors to meet a full-load efficiency of 69 percent. For
motors >=0.5 THP, DOE proposed variable speed control design
requirements, and freeze protection control requirements for DPPP
motors with freeze protection controls. 87 FR 37122, 37124.
Waterway Plastics commented that the proposal does not align with
CEC scope because that scope is only for replacement DPPP motors and
requested clarity on the scope of the June 2022 NOPR. (Waterway
Plastics, Public Meeting, No. 88 at p. 6) The scope of the final rule
includes DPPP motors regardless of how the equipment is sold i.e.,
incorporated in a DPPP or sold separately (i.e., as a replacement
motor).
One anonymous commenter stated that the proposed standard for DPPP
motors is more stringent than the standard for DPPPs that went into
effect in 2021 and would make the DPPP rule obsolete. Specifically, the
anonymous commenter stated that with the DPPP standard, a 1 hp single-
speed pump would still meet the weighted energy factor (``WEF'')
requirement, but this does not seem to be the case in the proposed DPPP
motor rule. In addition, the anonymous commenter stated that the WEF
DPPP standard was less stringent for non-self-priming pumps, whereas
the proposed DPPP motor level does not separate non-self-priming pumps
motors. The anonymous commenter stated that typically rules for
subcomponents (motors) would have less stringent or equal requirements
to the fully assembled product (i.e., pumps), otherwise the standard
for pool pumps would be obsolete due to the more stringent motor rule.
(Anonymous, No. 89 at p. 1) Waterway Plastics commented that the
proposal could affect the DPPPs that are being manufactured in the
United States, and that they had concerns that the June 2022 NOPR
proposal does not align with the DPPP standards. (Waterway Plastics,
Public Meeting, No. 88 at p. 6)
In addition to setting freeze protection requirements, the standard
for DPPPs at 10 CFR 431.465(f) would likely require DPPP motors sold in
DPPPs to be variable speed for standard-size self priming pool pumps
(using DPPP motors greater than or equal to 1.15 THP) \28\ and to have
a higher efficiency for small-size self priming pumps, non-self priming
pumps, and PCBPs.\29\ The DPPP standards apply to DPPPs only and do not
apply to DPPP motors sold alone as replacement motors. As stated
previously, motor-only replacements are common and comments were
received from a broad range of interested parties, including
manufacturers, trade associations, and energy efficiency advocacy
organizations suggesting that energy conservation standards were also
needed for motors used in pool pumps to ensure that consumers who
purchased pool pumps compliant with the new standards at 10 CFR
431.465(f), who subsequently needed to replace their motor, would do so
with a motor of equal or greater efficiency. In contrast, the CEC
standards apply to replacement DPPP motors only and would require
variable speed replacement DPPP motors at or above 0.5 THP, and also
sets requirements for nominal efficiency at full-load and maximum
operating speed.\30\ In this final rule, DOE establishes DPPP motor
standard for both motors sold in DPPPs and sold alone for replacement
purposes. While the motor improvements realized by this DPPP motor
final rule could be enough to improve a DPPP such that the DPPP would
meet the DPPP standard, DOE notes that the DPPP energy conservation
standards and the DPPP motor standards are complementary to help ensure
a harmonized approach to DPPP and DPPP motors that are replacements.
The DPPP standards includes the hydraulic efficiency of the pump, the
motor efficiency, and the efficiency of the associated controls and
drives supporting the DPPP. By contrast, the DPPP motor standard
focuses on just the motor aspect and is meant to complement the DPPP
standard by ensuring the replacement motors are at least as efficient
as originally intended by the DPPP manufacturer in the DPPP design.
Therefore, DOE does not agree with the commenter that these two
standards are overlapping. Instead, DOE believes it is addressing
complementary but different equipment regulations to help ensure the
efficiencies that consumers expect when purchasing their DPPPs are
maintained when replacing the motor. Since the regulations apply to
both domestically produced equipment and imported equipment and are
intended to be complementary by design, DOE does not agree with
Waterway Plastics that domestic manufacturers will be disadvantaged.
---------------------------------------------------------------------------
\28\ The 0.711 hhp threshold in the DPPP standards for self-
priming pool filter pumps aligns with a 1.15 THP motor threshold
(1.15 THP is roughly equivalent to 0.711 hhp). See section IV.A.3 of
this document.
\29\ The DPPP standard at 10 CFR 431.465(f) would likely require
DPPP motors sold in DPPPs to meet the requirements equivalent to TSL
6, while this DFR establishes standards at TSL 8 for DPPP motors,
regardless of how they are sold (i.e., incorporated in a DPPP or
sold separately). See section V.A of this document.
\30\ See Docket # 19-AAER-02 at www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20/appliance-efficiency-proceedings-2.
---------------------------------------------------------------------------
Regarding pressure cleaner booster pumps (``PCBP''), Fluidra
recommended separating PCBP into their own equipment class, requiring
69-percent efficiency for motors less than 1.15 THP, and implementing
further review of energy use, efficiency, and cost effectiveness for
the motors at 1.15 to 5 THP. (Fluidra, No. 91 at p. 2). PHTA and NEMA
recommended that if DOE confirms that a variable speed requirement is
not cost-effective for PCBP, DOE should not require variable speed for
PCBP motors below 1.15 THP. (PHTA and NEMA, No. 92 at p. 5)
On the other hand, CEC and NYSERDA supported DOE's proposed
standards, specifically the proposal to require variable-speed motors,
and encouraged that DOE finalize the rule as soon as possible. CEC and
NYSERDA stated that the proposed standards will
[[Page 66976]]
extend the 2017 DPPP final rule energy efficiency benefits to
replacement DPPP motors, which currently are unregulated on the Federal
level, and provide additional energy efficiency improvements to new
DPPPs. CEC and NYSERDA also stated that some of the energy savings in
this NOPR are already being realized in California through that State's
Replacement DPPP Motor Regulations, which went into effect July 19,
2021, and which are projected to provide 451 GWh in annual electricity
savings and $82 million in annual savings to California businesses and
individuals. (CEC and NYSERDA, No. 94 at p. 2) Further, CEC and NYSERDA
commented that variable-speed motors are extremely beneficial to
consumers, as DPPPs have different operational modes with different
speed requirements, and because real-world pool design complicates the
size selection of DPPP motors. Further, CEC and NYSERDA stated that the
benefit of variable-speed motors for PCBP applications, which is the
ability to adjust motor speed, will eliminate the need to use pressure
discs or pressure relief valves. (CEC and NYSERDA, No. 94 at p. 3)
The Joint Advocates commented that they support the proposed
standards for DPPP motors, which generally align with the existing
California standards for replacement DPPP motors, and would ensure that
all DPPP motors greater than or equal to 0.5 THP are variable-speed.
The Joint Advocates also supported the proposed freeze protection
control requirements. (Joint Advocates, No. 97 at p. 1)
The CA IOUs supported DOE's proposal to adopt TSL 7 for DPPP
motors. The CA IOUs commented that they surveyed the CEC certifications
database and the DOE Compliance Certification Management System
(``CCMS'') database and noted that small-size DPPP motors represent
motors in PCBPs, small self-priming pool filter pumps, and small non-
self-priming pool filter pumps. The CA IOUs agreed that the 0.5 THP to
1.15 THP threshold is an appropriate range for the DOE analysis and
standard. Further, the CA IOUs commented that the standard-sized DPPP
motor range, between 1.15 to 5.0 THP, represents motors mostly found in
standard-size self-priming pool filter pump applications. (CA IOUs, No.
96 at pp. 1-2) The CA IOUs commented that the proposed standard for a
small-size DPPP motor will provide technically feasible and cost-
effective consumer savings through variable speed motor technology,
allowing consumers to choose the lowest speed that meets their pool
maintenance needs and reducing pressure head losses through the pump
affinity laws. The CA IOUs noted that this energy savings strategy is
consistent with the industry standard American National Standards
Institute/Pool and Hot Tub Alliance/International Code Council (ANSI/
PHTA/ICC)-15:2021, which recommends that ``for maximum energy
efficiency, pool filtration should be operated at the lowest possible
flowrate for a time period that provides sufficient water turnover for
clarity and sanitation.'' (CA IOUs, No. 96 at p. 2) Further, the CA
IOUs supported DOE's proposal to adopt freeze protection setting
requirements, which aligns with the requirements of the DPPP rule and
provides essential energy savings by ensuring that products shopped
with freeze protection have the appropriate settings to protect
equipment from freezing while not using excessive energy. (CA IOUs, No.
96 at p. 2)
Regal commented that they generally support DOE moving forward with
the DPPPM energy conservation standards rule. Regal commented that they
believe the proposed rule will enable the achievement of significant
energy savings, if careful consideration is given to the rule's
underlying technical analysis and the timeline for implementation.
(Regal, No. 98 at p.1) ASAP commented in support of DOE's proposed
standards for DPPP motors and noted that these generally align with the
existing standards in California. (ASAP, Public Meeting, No. 88 at p.5)
As part of this final rule, DOE considered comments received regarding
the technical analysis and made any needed updates, as discussed in
section IV of this document. DOE also updated the market data
information to match the current market of DPPP motors available, as
discussed in section IV.A.2 of this document. Finally, DOE notes that
DOE conducted DPPP motor manufacturer interviews as part of the June
2022 NOPR, as discussed in the manufacturer impact analysis, and
incorporated feedback to estimate the manufacturer impacts of setting
variable-speed requirements as standards. 87 FR 37122, 37154.
In regard to creating an equipment class for DPPP motors used in
PCBP applications, DOE generally does not consider end-use applications
(for DPPP motors, end-use would be DPPPs) when analyzing equipment
classes for covered equipment. See further discussion in IV.A.3 of this
document. DOE also notes that, assuming the same motor output power,
there are no technological features that distinguish a DPPP motor used
in a PCBP from a DPPP motor used in a self-priming or non-self-priming
application. As such, DOE continues to base the analysis in this final
rule only on DPPP motor equipment classes determined only by motor THP,
as defined in Table III.1 of this document.
DOE reviewed the cost-effectiveness of the trial standard levels
considered with the updates for this final rule and continues to
conclude that the proposal from the June 2022 NOPR is technologically
feasible and economically justified. See section V of this document for
analytical results. Section IV provides further details on the analysis
conducted, the analysis inputs, and responses to any analysis-specific
comments that were received regarding the June 2022 NOPR.
In the June 2022 NOPR, DOE proposed that new standards would apply
to DPPP motors manufactured two years after the date on which any new
or amended standard is published.\31\ DOE estimated the publication of
a final rule in the second half of 2023. Therefore, in the June 2022
NOPR, for purposes of its analysis, DOE used 2026 as the first full
year of compliance with any new standards for DPPP motors. 87 FR 37122,
37144.
---------------------------------------------------------------------------
\31\ In the June 2022 NOPR, DOE followed the same 2-year lead
time. See 87 FR 37122, 37144 at FN67.
---------------------------------------------------------------------------
Several commenters recommended that DOE consider a two-step
approach to allow for further analysis and data collection and
coordinate between DPPP and DPPP motors. As a first step, PHTA, NEMA,
and Hayward recommended that DOE adopt a final rule as soon as possible
that would adopt and require a DPPP motor listing to UL 1004-10:2022
``Standard for Pool Pump Motors'' (``UL 1004-10:2022'') in its
entirety, which would provide alignment with the current DPPP rule and
a means for certification and labeling that will provide for easier
enforcement. Further, PHTA, NEMA, and Hayward noted that manufacturers
anticipated compliance with UL 1004-10, which was established in the
2018-2020 efforts to obtain a corresponding DPPP motor rule. Therefore,
PHTA, NEMA, and Hayward stated that manufacturers are ready and able to
provide compliant product 12 months after a final rule effective date.
As a second step, PHTA, NEMA, and Hayward commented that DOE should set
up a negotiation working group on both DPPP and DPPP motor rules to dig
deeper into the concerns highlighted in their comment submission and
ensure performance and timing alignments long term. PHTA, NEMA, and
Hayward commented that they are committed to initiating step two as
soon as possible and stated that if a two-step approach is unfeasible,
that
[[Page 66977]]
prior to issuing a final DPPP motor rule, the cost-effective concerns
laid out in their comments should be further analyzed and manufacturer
interviews conducted. PHTA, NEMA, and Hayward stated that although this
approach will slow down obtaining a final rule, the current NOPR
deviates from the Joint Petition and the commenters have provided
multiple concerns that require attention. (PHTA and NEMA, No. 92 at p.
9; Hayward, No. 93 at pp. 2-3)
In response, Fluidra requested a 5-year transition period to
implement compliance with the DPPP motor regulation proposal. Fluidra
noted that this transition period would give manufacturers adequate
time to develop, test, certify, launch, and transition product lines,
as well as educate distributors, pool builders, and consumers on this
product transition. (Fluidra, No. 91 at p. 2) Hayward, PHTA, and NEMA
requested a compliance date of at least 5 years following the effective
date if DOE decides against the implementation of UL 1004-10 based
rule. Hayward, PHTA, and NEMA noted that more time is required to:
address the limited product that currently exists in the small
fractional motor category; find solutions to the design of other
products impacted by a DPPP motor rule; and provide better alignment
with any coming revisions to the current DPPP rule. (Hayward, No. 93 at
pp. 2-3; PHTA and NEMA, No. 92 at p. 9) PHTA stated that any final
DPPPM rule compliance date should be extended a minimum of 5 years to
allow manufacturers to recover investments made to comply with the pump
rule. (PHTA, No. 100 at p. 3) In addition, Hayward recommended the
alignment of the DPPP and DPPP motor implementation dates. (Hayward,
No. 93 at p. 2) Regal recommended that DOE endeavor to better align
both the performance requirements and compliance deadlines between the
DPPP and DPPP motor rules. Regal commented that this will allow for
maximizing energy savings, while avoiding unintended market disruptions
and significant fiscal impacts to industry and consumers. (Regal, No.
98 at p. 1) Specifically, PHTA and NEMA commented that they were
concerned the different implementation dates of the DPPP and DPPP motor
rules will cause confusion and difficulties for manufacturers and risk
the potential to undercut savings by unaligned implementation of the
two rules. (PHTA and NEMA, No. 92 at pp. 2)
DOE notes that PHTA and NEMA's original recommendation to DOE was
to adopt UL 1004-10:2022 in its entirety (PHTA and NEMA, No. 92 at p.
9, 10), which includes the requirement that DPPP motors rated greater
or equal to 1.15 THP shall not be marked for single-speed, two-speed,
or multi-speed (i.e., shall instead be marked for variable-speed).
(section 7.1(b) of UL 1004-10:2022). Further, PHTA and NEMA stated that
manufacturers were ready and able to provide products compliant with UL
1004-10:2022 12 months after a final rule effective date. (PHTA and
NEMA, No. 92 at p. 9) Finally, PHTA and NEMA suggested that DOE require
compliance with the entire UL 1004-10 standard and not just the scope
and definitions sections because doing so would better align and
provide consistency with the DPPP rule. They also stated that doing so
would provide an easier enforcement tool for DOE by requiring nameplate
markings on those motors captured in the scope of the NOPR and in UL
1004-10, and would also ensure products not within the scope, such as
rigid electric spa motors, be labelled for that intended use only.
(PHTA and NEMA, No. 92 at p. 10) This is an energy conservation
standard and not a labeling rulemaking. In this final rule, DOE is
requiring variable speed control for standard-size DPPP motors (i.e.,
1.15 <= THP <=5), consistent with UL 1004-10:2022. However, DOE is also
requiring variable-speed control for small-size DPPP motors (i.e., 0.5
<= THP <1.15), which is more stringent than UL 1004-10:2022. In this
final rule, DOE has concluded that the proposal from the June 2022 NOPR
is technologically feasible and economically justified. See section V
for analytical results.
As noted previously, PHTA, NEMA, and Hayward recommended a two-step
approach. In addition, most if not all comments to the June 2022 NOPR
concerned the transition to variable-speed for the small-size equipment
class.\32\ DOE reviewed the compliance dates proposed in the June 2022
NOPR with specific concern for the compliance dates applicable to that
class. In the June 2022 NOPR, DOE provided a two-year compliance
timeline for DPPP motors based on the statutorily mandated rulemaking
schedule provided in section 6313. See 87 FR 37122, 37144 at FN 67, and
37186. Upon further review, DOE has determined that the rulemaking
schedule provided in 42 U.S.C. 6313(b) does not apply to DPPPM. As
discussed in section II.A. of this document, DPPPM are a type of
electric motor, but not among the types of electric motor for which
Congress established standards and a rulemaking schedule in 42 U.S.C.
6313(b). DPPPM are definite purpose motors. See 42 U.S.C. 6311(13)(C).
As such, they are excepted from the requirements of 42 U.S.C. 6313(b),
including the compliance deadlines provided in that section. Because 42
U.S.C. 6316(a) applies certain requirements of section 6295(l)-(s) of
EPCA to certain equipment, including electric motors, DOE considered
whether the compliance deadlines of section 6295(m)(4) applied to
DPPPM. Section 6295(m)(4)(A) defines compliance deadlines for specific
products. But electric motors and DPPPMs are not listed, nor does
section 6316 apply a cross reference on how to apply these paragraphs
to electric motors or DPPPMs. Accordingly, DOE determined that these
compliance deadlines do not apply to DPPPM. Additionally, DOE reviewed
section 6296(m)(4)(B), which states that DOE cannot apply new standards
to a product with respect to which other new standards have been
required in the prior 6-year period. As this is the first time DOE is
establishing standards for this product, this paragraph also does not
apply. As such, DOE has determined that it has discretion to establish
compliance deadlines for DPPPM.
---------------------------------------------------------------------------
\32\ See: (Anonymous, No. 89 at p. 1), (Pentair, No. 90 at p. 1,
3), (Fluidra, No. 91 at p. 2), (Hayward, No. 93 at p. 2), (CA IOUs,
No. 96 at p. 1-2), (Joint Advocates, No. 97 at p. 1), (PHTA and
NEMA, No. 92 at p. 10), (PHTA, No. 100 at p. 3)
---------------------------------------------------------------------------
DOE notes CEC's standards for RDPPM, which include standards for
the small-size equipment class, require compliance beginning July of
2021. Docket #19-AAER-02. The CEC standards set a variable speed motor
requirement for motors at or above 0.5 THP as well as minimum motor
full-load efficiency requirements. 20 CA ADC 1605.3(g)(6)(B). DOE's
final rule matches the stringency of the California standards
(requiring variable speed controls for all motors over 0.5 THP) for
replacement DPPP motors but DOE's proposal extends the variable speed
requirement to all DPPP motors, regardless of whether they are sold
with a DPPP or on their own. DOE believes manufacturers are already
producing standard-size and extra-small DPPPMs that will have to comply
with DOE's standards in this final rule. In addition, some
manufacturers already produce small-size DPPPMs that align with CEC's
variable speed RDPPM standards.\33\ However, DOE understands that some
manufacturers may need additional time to scale up their
[[Page 66978]]
manufacturing lines, especially for the small-size DPPP motors.\34\
Therefore, DOE is adopting two different compliance dates in this final
rule depending on the total horsepower of the motor. Doing so will
allow DOE to begin the transition to a Federal standard for DPPP motors
quickly, which will help alleviate any circumvention and unintended
consequences that may be occurring because of the DPPP Federal
standard, while balancing the needs of industry to have additional time
to increase manufacturing scale of the small DPPP motors. Based on the
comments received, DOE has concluded that the need for additional time
is particularly relevant for small-size equipment. Accordingly, DOE is
extending the compliance timeline to 4 years, instead of the proposed
two years, for the small-size equipment class as DOE believes this
provides industry sufficient time to scale up their manufacturing
lines.
---------------------------------------------------------------------------
\33\ https://www.regalrexnord.com/products/electric-motors/ac-motors-nema/pump-motors/pool-pump-motors/pool-pump-motor-01-85-hp-1-ph-60-hz-115-v-3600-rpm-48y-frame-tefc-elv08tb.
\34\ DOE included the capital and product conversion costs
necessary for these DPPP motor manufacturers to introduce variable-
speed DPPP motor models for the small-size equipment class. See
section III.J of this document.
---------------------------------------------------------------------------
For the extra-small-size and standard-size equipment classes, DOE
is maintaining the two-year compliance timelines as proposed. For the
extra-small-size and standard-size equipment classes, the adopted TSL
(TSL7) aligns with the requirements in UL 1004-10:2022 and as noted by
PHTA and NEMA, manufacturers are ready and able to provide products
compliant with UL 1004-10:2022 12 months after a final rule effective
date. Therefore, for the extra-small-size and standard-size equipment
classes DOE has determined that two years provides sufficient lead
time.
The CA IOUs recommended that DOE update the DPPP ECS to align with
the proposed DPPP motor standards. The CA IOUs commented that the
proposed standard requires variable speed capability for small and
standard size DPPP motors, which will impact the motors installed in
DPPPs. The CA IOUs added that the non-self-priming pool filter pump and
PCBP WEF standards allow performance levels achievable by single-speed,
dual-speed, and variable-speed motors. (CA IOUs, No. 96 at p. 6) DOE
appreciates CA IOUs comments. However, because this rulemaking is
concerning DPPP motors only and not DPPPs, DOE may consider
coordinating compliance timelines as part of any upcoming DPPP
rulemakings.
Finally, Pentair stated that after the DPPP rule, it saw a large
increase in internet activity selling illegal pumps and motors that do
not meet DOE requirements. (Pentair, No. 90 at pp. 1-2) Fluidra
commented that American manufacturers may also be negatively impacted
by imports of non-compliant DPPPs and DPPP motors from foreign
manufacturers who unknowingly or knowingly disregard enforcement of
this regulation. (Fluidra, No. 91 at p. 2) Based on input from five
manufacturers, PHTA and NEMA commented that they estimate approximately
5 percent of the current market to be made up of inexpensive imported
pumps sold through online retailers that likely do not comply with
DOE's current energy conservation standard. PHTA and NEMA commented
that these manufacturers have indicated that the current value (5
percent) is approximately double what it was prior to the compliance
date for the DPPP standard. PHTA and NEMA commented that the
manufacturers also estimate that a DPPP motor standard, established as
currently proposed by DOE, will double the percentage of the market
made up of non-compliant DPPPs, increasing it to 10 percent. (PHTA and
NEMA, No. 92 at pp. 7-8) PHTA and NEMA also stated that the
misalignment of the compliance dates for the DPPP energy conservation
standards and the proposed DPPP motor standards could cause confusion
for manufacturers and importers, potentially leading to more non-
compliant DPPP motors being imported. PHTA and NEMA reiterated NEMA's
concerns about port of entry enforcement that they have separately
commented on numerous times. (PHTA and NEMA, No. 92 at p. 8) Nidec
commented that they were concerned that because of the disconnect of
the proposal to the current DPPP regulations (DPPPMs between 0.5 to
1.15 THP), there may be issues with enforcement of pumps assembled
offshore and coming into the U.S. with non-compliant DPPPMs. Nidec
commented that because of the rulemaking, there is a high risk that
DPPPs may not get assembled anymore in the U.S. and instead will be
done offshore unless there is proper enforcement that brings the DPPP
regulations and the proposed DPPPM regulations into harmony. (Nidec,
Public Meeting, No. 88, at pp. 45-46) DOE currently does not have any
energy conservation standards for DPPP motors. This final rule will
finalize standards for DPPP motors and product-specific enforcement
requirements at Sec. 429.134. Any enforcement-related issues,
particularly compliance dates, regarding DPPPs will be addressed as
part of the DPPP rulemaking, or through a separate avenue.
Nidec requested comment on whether there are any other examples
where an end-product rule defines a lower threshold for compliance
versus a component threshold and how DOE has successfully managed that.
They stated that in their experience, the end-product generally
overrides the component standard, and for the DPPPM proposal, it would
not be the case. (Nidec, Public Meeting, No. 88 at p. 47) EPCA
authorizes DOE to regulate the energy efficiency of a number of
consumer products and certain industrial equipment. This equipment
includes those electric motors that are DPPP motors, the subject of
this document, and also pumps (42 U.S.C. 6311(1)(A)) Accordingly, DOE
has the authority to regulate both a component (DPPPM) and the end-
product (DPPPs). Given the current misalignment amongst the Federal
DPPP standards and the CA DPPP replacement motor standards along with
DOE's authority for electric motors, DOE is taking an approach to
facilitate harmonization of the standards at the Federal level and
ensure a complimentary regulatory approach for DPPPs and replacement
DPPP motors which will help ensure energy savings are realized in the
field.
Scope of Coverage
This document covers equipment meeting the definition of a DPPP
motor as defined in Sec. 431.483 and the scope specified in 10 CFR
431.481(b). Specifically, the scope covers DPPP motors with a total THP
of less than or equal to 5, but does not apply to: (i) DPPP motors that
are polyphase motors capable of operating without a drive and
distributed in commerce without a drive that converts single-phase
power to polyphase power; (ii) waterfall pump motors; (iii) rigid
electric spa pump motors, (iv) storable electric spa pump motors; (v)
integral cartridge-filter pool pump motors; and (vi) integral sand-
filter pool pump motors.\35\
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\35\ These terms are defined in UL 1004-10:2020, which is
incorporated by reference in DOE's test procedure at 10 CFR 431.484.
In this final rule, DOE is incorporating by reference the latest
version of the UL standard, UL 1004-10:2022; see discussion in
section III.A.1 of this document.
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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, which other
products within such type (or class) do not have, 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
[[Page 66979]]
feature to the consumer and other factors DOE determines are
appropriate. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q))
DOE is establishing equipment classes for DPPP motors based on THP.
DOE is proposing an extra-small-size equipment class corresponding to
motors with a THP less than 0.5 THP, a small-size equipment class
corresponding to motors with a total horsepower rating greater than or
equal to 0.5 THP but less than 1.15 THP, and a standard-size equipment
class corresponding to a motor with a THP greater than or equal to 1.15
THP and less than or equal to 5 THP. Table III.1 provides a summary of
the equipment classes. See section IV.A.3 for further details on the
reasoning as to why DOE determined these equipment classes are
appropriate and justify having separate standards.
Table III.1--Equipment Classes for DPPP Motors
------------------------------------------------------------------------
Equipment class Motor total horsepower (Hp)
------------------------------------------------------------------------
Extra-small-size.......................... THP <0.5.
Small-size................................ 0.5 <= THP < 1.15.
Standard-size............................. 1.15 <= THP <= 5.
------------------------------------------------------------------------
See section IV.A.1 of this document for discussion of the equipment
classes analyzed in this final rule.
B. 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. (42 U.S.C.
6314(d)(1); 42 U.S.C. 6316(a), 42 U.S.C. 6295(s))
The test procedure references UL 1004-10:2020 ``Standard for Safety
for Pool Pump Motors'' for the definitions (10 CFR 431.483) and
references CSA C747-09 as the energy efficiency test method for DPPP
motors (10 CFR 431.484(b)). The test procedure establishes full-load
efficiency as the metric for DPPP motors. 10 CFR 431.484(b). In this
final rule, DOE is incorporating by reference the latest version of the
UL standard, UL 1004-10:2022; further discussion on this topic and any
comments received are provided in section IV.A.1 of this document. In
addition, DOE is also finalizing product-specific enforcement
requirements at 10 CFR 429.134 that require DPPP motors to be tested in
accordance with UL 1004-10:2022 to verify variable-speed capability and
applicable freeze protection design requirements.
C. 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; sections 6(b)(3)(i) and 7(b)(1)
of appendix A to 10 CFR part 430 subpart C (``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. 10
CFR 431.4; section 7(b)(2)-(5) of appendix A. Section IV.B of this
document discusses the results of the screening analysis for DPPP
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 final rule technical support document
(``TSD'').
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for 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 DPPP 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 IV.C of this final rule and in chapter 5 of the
final rule TSD.
D. Energy Savings
1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to DPPP motors purchased in the 30-
year period that begins in the first full year of compliance with the
standards (2026-2055).\36\ The savings are measured over the entire
lifetime of equipment purchased in the 30-year analysis period. DOE
quantified the energy savings attributable to each TSL as the
difference in energy consumption between each standards case and the
no-new-standards case. The no-new-standards case represents a
projection of energy consumption that reflects how the market for a
product would likely evolve in the absence of energy conservation
standards.
---------------------------------------------------------------------------
\36\ DOE also presents a sensitivity analysis that considers
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------
DOE used its national impact analysis (``NIA'') spreadsheet models
to estimate national energy savings (``NES'') from standards for DPPP
motors. The NIA spreadsheet model (described in section IV.G.2 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. For natural gas,
the primary energy savings are considered to be equal to the site
energy savings. 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.\37\ DOE's 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.
---------------------------------------------------------------------------
\37\ 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
[[Page 66980]]
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.\38\ 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, and the need to confront the
global climate crisis, among other factors.
---------------------------------------------------------------------------
\38\ 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 stated, the standard levels adopted in this final rule are
projected to result in national energy savings of 1.56 quads FFC, the
equivalent of the electricity use of 16.8 million homes in one year.
Based on the amount of FFC savings, the corresponding reduction in
emissions, and the need to confront the global climate crisis, DOE has
determined the energy savings from the standard levels adopted in this
final rule are ``significant'' within the meaning of 42 U.S.C. 6316(a);
42 U.S.C. 6295(o)(3)(B).
E. Economic Justification
1. Specific Criteria
As noted previously, EPCA provides seven factors to be evaluated in
determining whether a potential energy conservation standard is
economically justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has
addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of potential amended standards on
manufacturers, DOE conducts an MIA, as discussed in section IV.J of
this document. DOE first uses an annual cash-flow approach to determine
the quantitative impacts. This step includes both a short-term
assessment--based on the cost and capital requirements during the
period between when a regulation is issued and when entities must
comply with the regulation--and a long-term assessment over a 30-year
period. The industry-wide impacts analyzed include (1) INPV, which
values the industry on the basis of expected future cash flows; (2)
cash flows by year; (3) changes in revenue and income; and (4) other
measures of impact, as appropriate. Second, DOE analyzes and reports
the impacts on different types of manufacturers, including impacts on
small manufacturers. Third, DOE considers the impact of standards on
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 payback period (``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 a product (including
its installation) and the operating cost (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 full 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.G.2 of this document,
DOE uses the NIA spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing equipment classes, and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered equipment. (42 U.S.C. 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 equipment under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a standard. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(V)). It also directs the Attorney General to determine
the impact, if any, of any lessening of competition likely to result
from a standard and to transmit such determination to the Secretary
within 60 days of the publication of a proposed rule, together with an
analysis of the nature and extent of the impact. (42 U.S.C. 6316(a); 42
U.S.C.
[[Page 66981]]
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 noted the possibility of
anticompetitive effects stemming from the differences between the
energy conservation standards for DPPP motors and DPPPs, as well as the
high cost of compliance for domestic small businesses identified by
DOE. DOJ elaborated that the difference in standards between DPPP
motors and DPPPs would force domestic manufacturers to comply with both
standards while foreign manufacturers could import DPPPs that are
compliant with the DPPP rule but contain a non-compliant motor. DOJ
ultimately concluded that they do not have sufficient information to
conclude that the proposed energy conservation standards for DPPP motor
are likely to have a significant adverse impact on competition. DOE
notes that DPPP motors that are a component of an imported DPPP are
subject to energy conservation standards. DOE is publishing the
Attorney General's assessment at the end of this final rule.
f. Need for National Energy Conservation
DOE also considers the need for national energy and water
conservation in determining whether a new 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 of this document; the estimated emissions impacts are reported in
section V.B.6 of this document. DOE also estimates the economic value
of emissions reductions resulting from the considered TSLs, as
discussed in section IV.L 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 effect potential amended energy
conservation standards would have on the payback period for consumers.
These analyses include, but are not limited to, the 3-year payback
period contemplated under the rebuttable-presumption test. In addition,
DOE routinely conducts an economic analysis that considers the full
range of impacts to consumers, manufacturers, the Nation, and the
environment, as required under 42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i). The results of this analysis serve as the basis for
DOE's evaluation of the economic justification for a potential standard
level (thereby supporting or rebutting the results of any preliminary
determination of economic justification). The rebuttable presumption
payback calculation is discussed in section IV.F of this final rule.
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this
rulemaking with regard to DPPP motors. Separate subsections address
each component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the
standards considered in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential 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.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=76.
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 DPPP motors. The key
findings of DOE's market assessment are summarized in the following
sections. See chapter 3 of the final rule TSD for further discussion of
the market and technology assessment.
1. Scope of Coverage and Definitions
This document covers equipment meeting the definition of a DPPP
motor as defined in 10 CFR 431.483 and the scope specified in 10 CFR
431.481(b). Specifically, the scope covers DPPP motors with a THP of
less than or equal to 5, but does not apply to: (i) DPPP motors that
are polyphase motors capable of operating without a drive and
distributed in commerce without a drive that converts single-phase
power to polyphase power; (ii) waterfall pump motors; (iii) rigid
electric spa pump motors; (iv) storable electric spa pump motors; (v)
integral cartridge-filter pool
[[Page 66982]]
pump motors; and (vi) integral sand-filter pool pump motors.\39\ The
scope includes DPPP motors regardless of how the equipment is sold;
i.e., incorporated in a DPPP or sold separately. The DPPP motors in the
scope of this rule are used primarily in the residential sector and
light commercial applications, in self-priming pool filter pumps
(typically used in inground pools), non-self-priming pool filter pumps
(typically used in above-ground pools), and pressure cleaner booster
pumps (typically used for pressure-side pool cleaner applications).
---------------------------------------------------------------------------
\39\ These terms are defined in UL 1004-10:2020, which is
incorporated by reference in DOE's test procedure at 10 CFR 431.484.
In this NOPR, DOE is proposing to reference the latest version of
the UL standard, UL 1004-10:2022; see discussion in section III.A.1
of this document.
---------------------------------------------------------------------------
DOE received some comments on scope and definitions. PHTA and NEMA
commented that storable pools use non-integral pumps, which are
certified to DPPP, but the current direct motor replacements are not
variable-speed capable per what the NOPR would require. PHTA and NEMA
stated that the replacement motors made for this type of pool are
motors integrated with the control unit, and that these motors are
specific to a set pump for the storable pool and cannot be used in
other applications, as there is no way to (dis)connect them. PHTA and
NEMA further stated that these pools are purchased in retail stores,
and based on input from two manufacturers, have an average retail price
slightly over $400. Accordingly, PHTA and NEMA recommended that DOE
consider exempting this specific type of motor based on application and
obtain additional manufacturer information about this specific product
related to the current market, shipments, and pricing for this type of
pool, and to consider the limited use of replacement motors. (PHTA and
NEMA, No. 92 at p. 5)
DPPP motors in scope are those electric motors identified in
sections 1.2, 1.3, and 1.4 of UL 1004-10:2022. 10 CFR 431.481(n), as
updated in this final rule. DOE notes that the DPPP definition
comprises self-priming pool filter pumps, non-self-priming pool filter
pumps, waterfall pumps, PCBPs, integral sand-filter pool pumps,
integral-cartridge filter pool pumps, storable electric spa pumps, and
rigid electric spa pumps. 10 CFR 431.462. In addition, section 1.4 of
UL 1004-10:2022 specifically excludes DPPP motors that are polyphase
motors capable of operating without a drive and distributed in commerce
without a drive that converts single-phase power to polyphase power,
waterfall pump motors, rigid electric spa pump motors, storable
electric spa pump motors, integral cartridge-filter pool pump motors,
and integral sand-filter pool pump motors. As such, the example
application provided by PHTA and NEMA would need to meet the definition
of DPPP and not be one of the aforementioned exclusions to be
considered within the scope of DPPP motor.
As previously noted, storable electric spa pump motors are
specifically excluded from the scope of this rulemaking. Section 2 of
UL 1004-10:2022 defines storable electric spa pump motor as a DPPP
motor that is a component of a storable electric spa pump as defined 10
CFR 431.462, subpart Y, Pumps. Storable electric spa pumps are defined
to include an integral heater and an integral air pump. 10 CFR 431.462.
The example application provided by PHTA and NEMA specifically stated
that it has a non-integral pump. However, PHTA and NEMA did not provide
details on what type of DPPP the example would be considered to be.
As such, DOE attempted to determine what type of product PHTA and
NEMA were referring to and reviewed manufacturer data and specification
sheets to confirm what type of DPPP the example could be considered to
be. Based on DOE's review, DOE did not identify any DPPPs for storable
pumps that would not be applicable to variable-speed motors as defined
due to their integration with controls and other components, and not
already be excluded for other reasons. Specifically, of the examples
DOE was able to find of variable-speed motors integrated with
controllers, they were applicable to integral-cartridge or integral-
sand filter pumps, both of which are already excluded from DPPP motor
scope. Otherwise, DOE also reviewed an outlier filtration system for
storable pools, but could not identify any apparent integration of the
DPPP motor with controls, and there was also no indication that it
would not be able to be replaceable with a variable-speed option being
considered in this rulemaking. As such, DOE could not definitively
conclude that there is a need for the exclusion recommended by PHTA and
NEMA, and therefore maintains the scope from the June 2022 NOPR.
Regarding the variable-speed definition, CEC and NYSERDA
recommended that DOE update the definition to align with the definition
used in the California Code of Regulations, Title 20, section
1602(g)(4), instead of the current definition based on UL 1004-10:2022.
CEC and NYSERDA stated that with the current definition, at minimum,
only four operating speeds are required to meet the definition, whereas
the California code specifies ``operating at a variety of user-
determined speeds,'' which CEC and NYSERDA suggested described a truly
variable-speed motor and aligns with how variable-speed is understood
by consumers. CEC and NYSERDA noted that they were unaware of any DPPP
motors that meet the current definition of variable speed, but do not
meet the Title 20 California definition. However, CED and NYSERDA also
commented that if such a motor exists, having only four operating
speeds would constrain operational flexibility and lead to non-optimal
operation and unnecessary electricity consumption. CEC and NYSERDA
stated that allowing for the potential introduction of less energy
efficient ``variable-speed'' motors is unnecessary and might jeopardize
some of the energy savings associated with this proposed rule. (CEC and
NYSERDA, No. 94 at pp. 3-4)
DOE incorporated by reference UL 1004-10:2020, which includes a
definition of variable speed in the July 2021 Final Rule. 86 FR 40765,
40769-40770. UL 1004-10 is an industry standard specific to DPPP motors
and has been used by industry since 2019. In this final rule, DOE is
not considering any changes in scope; rather, this rulemaking is
finalizing standards based on the scope and definitions established in
the July 2021 Final Rule, and which are currently in 10 CFR 431.481.
Further, as noted by commenters, there are no DPPP motors that meet the
current definition of variable speed but do not meet the Title 20
California definition. As such, if there is any discrepancy in the
future, DOE may consider this issue in a future rulemaking.
In the June 2022 NOPR, DOE also proposed to update the UL 1004-10
reference to the latest version of the industry standard, from UL 1004-
10:2020 to UL 1004-10:2022, in sections 10 CFR 431.481(b), 10 CFR
431.482(c)(1), and 10 CFR 431.483. 87 FR 37122, 37133-37134. DOE
concluded that the only update was the addition of a glossary term for
``factory default setting'' in section 2.7A, which did not change the
content and requirements of UL 1004-10:2020, but only provided a
clarification regarding the factory default setting as it applies to
the industry standard. Id. Further, DOE also proposed product-specific
enforcement requirements at 10 CFR 429.134 that require DPPP motors be
tested in accordance with UL 1004-
[[Page 66983]]
10:2022 to verify variable-speed capability and applicable freeze
protection design requirements. 87 FR 37122, 37131.
In response, PHTA and NEMA supported the DOE's decision to update
from the 2020 to the 2022 version of the UL 1004-10 Standard. (PHTA and
NEMA, No. 92 at p. 10) In this final rule, DOE is incorporating by
reference the latest version of the UL standard, UL 1004-10:2022 to be
consistent with industry practice.
Separately, the Joint Advocates supported the proposed product-
specific enforcement provisions because they will provide clarity
regarding how DOE would determine whether a DPPP motor complies with
the requirements regarding variable-speed capability and freeze
protection design. (Joint Advocates, No. 97 at p. 2) As such, DOE is
also finalizing the proposed product-specific enforcement requirements
at 10 CFR 429.134.
2. Market Review
In the June 2022 NOPR, to review the current market of DPPP motors
incorporated in DPPPs, DOE relied on information from the DOE
Compliance and Certification Database, the CEC, and the ENERGY STAR
program. (``2021 DPPP Database'') To supplement the market review, DOE
also reviewed general motor catalog data from 2020 and created a
database that contained information regarding motor speed-control,
topology, THP, motor application, and full-load efficiency (``2020
Motor Database''). To make the two databases more comparable, DOE
filtered the 2020 Motor Database to analyze only motors used in DPPP
applications. 87 FR 37122, 37134.
DOE received a number of comments regarding the data that were used
for the market analysis. Pentair commented that a lot has changed in
the past 7 years and DOE should consider the latest data versus data
used for the DPPP rule in 2015. (Pentair, No. 90 at p. 1) Hayward
commented that DOE should update its information on the current market.
Specifically, Hayward noted that it has stopped selling any pumps that
were not compliant with the minimum WEF requirements and modified other
pumps that were marginal in performance. In addition, Hayward noted
that variable-speed pumps have continued to gain market share and
therefore would provide a different baseline. (Hayward, No. 93 at p. 2)
PHTA and NEMA commented that DOE relied heavily on the analysis
performed during the 2017 DPPP DFR and recommended that DOE conduct
interviews to obtain current market information, pricing, and shipments
data. (PHTA and NEMA, No. 92 at p. 2) Regal commented that it agrees
with PHTA and NEMA's comments that DOE should consider conducting
additional interviews and analyses to better understand current market
offerings, pricing, and shipments. (Regal, No. 98 at p. 1) PHTA
commented that using 2015 market data is not accurate because the DPPP
market has substantially changed since then and the 2015 data is
invalid in its application to the DPPPM analysis. PHTA provided data
showing that nearly 60 percent of pool pump listings were non-compliant
with the 2017 DPPP rule and had to be modified or removed by the July
19, 2021 compliance date. (PHTA, No. 100 at p. 2) On the other hand,
CEC and NYSERDA stated that DOE's analysis is robust and appropriately
representative. (CEC and NYSERDA, No. 94 at p. 3)
First, DOE notes that DOE did consider the latest DPPPM market data
available for the analysis conducted in the June 2022 NOPR, as
previously discussed. In addition, for this final rule, DOE updated the
market review using current information from the DOE Compliance and
Certification Database, the CEC, and the ENERGY STAR program. (``2022
DPPP Database'') DOE supplemented this review with information from
general motor catalogs surveyed in 2022; these motor catalogs contained
information regarding motor THP, topology, full-load efficiency, pole
configuration, and speed-control. DOE then analyzed the range of
efficiencies offered at a given THP, topology, and pole configuration
as well as the average efficiency of that subset of motors. DOE found
that the average and range of efficiency offered for a given THP,
topology, and pole configuration were not significantly different than
what was observed in the data provided by manufacturers for the January
2017 Direct Final Rule. Based on the similar efficiencies being
offered, DOE concluded that the technology used to meet each efficiency
level has not substantially changed since the analysis for the January
2017 Direct Final Rule.
DOE notes that the shipments efficiency distribution are based on a
review of the 2022 DPPP Database and that this updated database
captures the changes to the DPPP market that have occurred since 2017,
including those changes due to the January 2017 Direct Final Rule (See
section IV.F.8 of this document for more details). For details on how
DOE accounted for the DPPP motor price changes since the January 2017
Direct Final Rule, see section IV.C.2 of this document. DOE also notes
that it had conducted manufacturer interviews as part of the January
2017 Direct Final Rule and incorporated the updated manufacturer
feedback in its analysis. DOE also conducted DPPP motor manufacturer
interviews as part of the June 2022 NOPR, as discussed in the
manufacturer impact analysis, and incorporated feedback to estimate the
manufacturer impacts of setting variable-speed requirements as
standards. 87 FR 37122, 37154. As such, DOE concluded that additional
manufacturer interviews were not needed since DOE performed interviews,
and already considered recent market offering, pricing, and shipments
information in this final rule.
3. Equipment Classes
When evaluating and establishing energy conservation standards, DOE
shall establish separate standards for a group of covered products
(i.e., establish a separate equipment class) if DOE determines that
separate standards are justified based on the type of energy used, or
if DOE determines that a product's capacity or other performance-
related feature, which other products within such type (or class) do
not have, justifies a different standard. (42 U.S.C. 6316(a); 42 U.S.C.
6295(q)) 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. (Id.)
In the June 2022 NOPR, DOE proposed to establish equipment classes
for DPPP motors based on THP. DOE proposed an extra-small-size
equipment class corresponding to motors with a THP less than 0.5 THP, a
small-size equipment class corresponding to motors with a total
horsepower rating greater than or equal to 0.5 THP but less than 1.15
THP, and a standard-size equipment class corresponding to motors with a
THP greater than or equal to 1.15 THP and less than or equal to 5 THP.
87 FR 37122, 37130.
In response to the June 2022 NOPR, DOE received a number of
comments regarding equipment classes. PHTA and NEMA recommended that
DOE analyze DPPP motors based on equipment classes considered in the
DPPP rule. PHTA and NEMA commented that it is critical to differentiate
by application, not just size, to really determine what is or is not
cost-effective. As such, PHTA and NEMA commented that if the analysis
was separated based on PCBP self-priming and non-self-priming, it would
show that not all the current proposed requirements were cost-
effective. Specifically, PHTA and NEMA
[[Page 66984]]
stated that when looking at PCBP as a separate equipment class, a
variable-speed requirement is not cost-effective (PHTA and NEMA, No. 92
at pp. 4-5) In addition, PHTA and NEMA commented that DOE should break
down the 0.5-1.15 THP and analyze the following additional THP ranges:
0.5 < 0.75 THP; 0.75 < 1 THP; 1 > 1.15 THP based on the assessment of
available products and previously recommended THP disaggregation. (PHTA
and NEMA, No. 92 at p. 5; PHTA, No. 100 at p. 3) Further, PHTA and NEMA
commented that breaking down the 0.5-1.15 THP into smaller categories
for an analysis would provide a truer picture of cost-effectiveness
when combined with breaking out PCBP self-priming and non-self-priming
applications. PHTA and NEMA stated that to do otherwise will cause
market confusion and unintended consequences with non-compliant
products being distributed. For example, PHTA and NEMA commented that
imported pump products with THP ratings between 0.50 and 1.14 can meet
the DPPP rule and bypass the DPPP motor proposal, which will negate the
DPPP motor proposed rule and not deliver the intended energy savings.
(PHTA and NEMA, No. 92 at p. 10)
Hayward stated that equipment class should be disaggregated by pump
size and application and noted that THP misrepresents the overall
effect and impact of the rule. Hayward also supported PHTA and NEMA's
recommendations on disaggregation. (Hayward, No. 93 at p. 2) Fluidra
recommended that equipment be disaggregated not only by THP, but also
by application type. Specifically, Fluidra commented that it was
concerned that PCBPs and pool filtration pumps were combined into the
same equipment class. (Fluidra, No. 91 at p. 1)
Waterway Plastic commented that in the negotiations that resulted
in the January 2017 Direct Final Rule, there was consideration of a
separate category for non-self-priming pool pumps that are used in
above-ground pool pump applications, that range from 0.75 to 1 THP, and
are typically two-speed or single-speed pumps. Accordingly, they stated
that the DPPPM rule would not consider this separate category of DPPPs,
which allowed for single- or two-speed DPPPMs to be used to meet the
ultimate WEF standard, and were concerned on how the DPPPM rulemaking
would overwrite the conclusions from the January 2017 Direct Final
Rule. (Waterway Plastic, Public Meeting Transcript, No. 88 at pp. 16-
17) Dose also commented asking if DOE considered breaking the small-
size THP range into subcategories after they suggested the favorable
results would be from the higher THPs. (Dose, Public Meeting
Transcript, No. 88 at pp. 39-40)
DOE notes that this rule concerns DPPP motors, not DPPPs. Further,
DOE notes that the scope includes DPPP motors regardless of how the
equipment is sold (i.e., incorporated in a DPPP or sold separately).
Accordingly, imported pump products that include a DPPP motor would be
subject to the DPPP motor standard as well.
When considering equipment classes, DOE determines whether separate
standards are justified based on the type of energy used for the
equipment in question (which in this rulemaking is DPPP motors only),
or if a DPPP motor's capacity or other DPPPM performance-related
feature justifies a different standard. Manufacturers of covered
equipment must use the Federal test procedure as the basis for
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)). The metric for DPPP motors based on the
DOE test procedure is full-load efficiency (10 CFR 431.484(b)), and
full-load efficiency does not take into consideration the ultimate
application of the DPPP motor in a DPPP and the motor is tested without
an associated DPPP. The DPPP motors in this rule also consume the same
type of energy. Further, DOE notes that there are no physical or
technological distinguishing factors in a DPPP motor that could be used
to identify a particular end-use DPPP application (e.g., PCBP, self-
priming, non-self-priming). If sized correctly, a given DPPP motor
could serve any of the DPPP applications discussed in this rulemaking.
The ranges of motor THP that serve each application overlap and
preclude DOE from setting equipment classes using the motor THP to
distinguish each application. Accordingly, DOE is not considering DPPP
application in addition to motor THP when setting equipment classes and
energy conservation standards for this final rule.
In the June 2022 NOPR, DOE discussed that full-load efficiency
generally correlates with motor horsepower. DOE explained motor
horsepower dictates the maximum load that a motor can drive, which
means that a motor's rated horsepower can influence and limit the end
use applications where that motor can be used, which in this case is
dedicated purpose pool pumps. Horsepower is a critical performance
attribute of a DPPP motor, and since horsepower has a direct
relationship with full load efficiency and consumer utility, used this
element as a criterion for distinguishing among equipment classes. 87
FR 37122, 37134. In determining the proposed equipment classes, DOE
considered how motor total horsepower can be used to decide whether
separate standards are justified based on the utility of the DPPP
motor. Accordingly, DOE first justified a utility argument for the 0.5
THP cut-off based on maximum efficiency potential in non-self-priming
pool filter pumps (i.e., two-speed or variable-speed motors below 0.5
THP would provide inadequate flow to the pool pump). Finally, DOE
justified a utility argument for the 1.15 THP cut-off based on how
almost all DPPP motors greater than or equal to 1.15 THP are primarily
used in standard-size self-priming pool filter pumps, while pool pump
motors below 1.15 THP are typically found in small-size, self-priming
pool filter pumps, non-self-priming pool filter pumps, and PCBPs. 87 FR
37122, 37135.
To review the recommendation from PHTA and NEMA to further break
down the 0.5-1.15 THP range (i.e., small-size equipment class), DOE
analyzed the 2022 DPPP Database to determine whether there was any
other utility argument to consider. DOE identified DPPP motors used in
PCBP applications primarily in the 0.75-1.15 DPPP motor THP range;
however, PCBPs in that range were only 4 percent of the total model
count (96 percent of the models were either self-priming or non-self-
priming). Further, DPPP motors in self-priming pool filter pumps and
non-self-priming pool filter pumps were identified throughout the
small-size equipment class THP range. Accordingly, there was no THP
range within the small-size equipment class that clearly illustrated
that only PCBP motors would be used and therefore have a specific
utility, and so, DOE was unable to determine a clear utility argument
that would allow for the small-size equipment class to be segregated
further. Therefore, because DOE is not considering DPPP application in
addition to motor total horsepower for creating equipment classes, DOE
is maintaining the June 2022 NOPR proposed equipment classes in this
final rule.
Fluidra recommended including a definition for a PCBP DPPP motor as
``a motor used for a pressure cleaner booster pump'', and a definition
for pressure cleaner booster pump as ``an end suction, dry rotor pump
designed and marketed for pressure-side pool cleaner applications, and
which may be
[[Page 66985]]
UL listed under ANSI/UL 1081-2016. (Fluidra, No. 91 at p. 2) PHTA and
NEMA recommended that DOE define a PCBP DPPP motor as ``an electric
motor that is single phase or poly phase and is designed and/or
marketed for use on pressure cleaner booster pumps, as defined in 10
CFR 431.462.'' PHTA and NEMA commented that this definition aligns with
the definitions of a DPPP motor and PCBP, both of which define the
respective equipment based on the design and marketed purpose of the
equipment. (PHTA and NEMA, No. 92 at pp. 4-5) DOE understands that the
definitions provided by the commenters were intended for distinguishing
PCBP within the equipment class structure. As discussed previously, DOE
is not separating equipment classes based on application. As such, DOE
does not need to incorporate a definition for a PCBP motor and is
therefore not including a definition in this final rule.
4. Technology Options
In the June 2022 NOPR market analysis and technology assessment,
DOE identified several technology options initially determined to
improve the efficiency of DPPP motors. Specifically, DOE stated that
the efficiency of a DPPP motor is dependent on motor topology,
capacity, and operating speed. Because DOE proposed to delineate
equipment classes based on motor capacity (i.e., motor horsepower), DOE
considered motor topology and operating speed as technology options. 87
FR 37122, 37135-37136.
For motor topology, DOE considered AC induction motors and
permanent magnet DPPP motors. Within AC induction motors, DOE
identified six categories of motors, including shaded-pole, split-
phase, capacitor-start (capacitor-start induction-run ``CSIR'' and
capacitor-start capacitor-run ``CSCR''), permanent-split capacitor
(``PSC''), and polyphase. 87 FR 37122, 37135-37136. For operating
speed, DOE considered single-speed, multi-speed, and variable-speed
DPPP motors. Single-speed motors can operate at one predefined speed,
and therefore the associated pool pump can provide only a single flow
rate in any given pool system. Two-speed motors can be sized so that
high-flow functions like pool cleaning are effective at full-speed
operation and low-flow tasks like filtration can be completed at low-
speed operation. Multi-speed motors function similarly to two-speed
motors, but provide additional flexibility. Finally, variable-speed
motors can provide greater energy savings than two-speed or multi-speed
motors due to the ability to program these motors to operate at user-
defined speed settings. 87 FR 37122, 37136. Variable-speed motors can
also offer non-energy-saving benefits like reduced pool system wear and
reduced noise levels during operation, both due to the reduced amount
of water flow during pumping. DOE requested comment on the technologies
considered for higher DPPP motor efficiency. Id.
PHTA and NEMA commented that to meet the current DPPP rulemaking,
synchronous motor technologies with a variable frequency drive are
already being utilized to meet system efficiency requirements. As such,
PHTA and NEMA suggested that small additional increments in already
implemented synchronous motor efficiency will have minimal impact on
system efficiency, but significant impact on costs. (PHTA and NEMA, No.
92 at p. 10) DOE notes that this rule is specifically regarding the
DPPP motor, not DPPP, and therefore technology options considered are
with regards to DPPP motors and not the whole DPPP system. DOE also
understands that meeting the current DPPP WEF standards would not
require synchronous motor technologies for the range of DPPP motor
equipment classes being considered. Specifically, in the October 2020
NOPR, DOE specified that only standard-size self-priming pool filter
pumps, which are subject to the DOE DPPP energy conservation standards,
would likely require a variable-speed control motor. 85 FR 62816,
62824. DOE noted that this generally reflects DPPP motors with a THP
greater than or equal to 1.15. Id. As such, there are potential savings
to be considered for the full scope of DPPP motors being considered,
and as discussed previously, the synchronous motor technology option
allows for multiple operating speeds, which can provide energy savings.
Finally, DOE included the incremental costs for requiring variable
speed as part of the engineering analysis, which is discussed further
in section IV.C.2 of this document.
Similarly, PHTA and NEMA commented that variable-speed fractional
HP pumps cannot provide minimum flow at required lower speeds. (PHTA
and NEMA, No. 100 at p. 3) DOE notes that variable-speed motors are
only considered as a design option for DPPP motors where the associated
pump can provide adequate flow at lower speeds, and that the
representative units analyzed in the January 2017 Direct Final Rule
contained fractional THP variable-speed motors. See Table 5.6.5 of the
January 2017 Direct Final Rule TSD, where a .44 hhp pump is driven by a
.75 THP variable-speed motor and provides adequate flow.
Separately, Fluidra, PHTA, and NEMA suggested that the operating
window of a PCBP in practical application is limited to an approximate
motor speed of 2,900 RPM-3,450 RPM (max speed); runs on a timer for 2-
2.5 hours a day at a single operating speed; and, once set, is
typically not further adjusted for speed like one would for a
filtration pump. (Fluidra, No. 101 at p. 1; PHTA and NEMA, No. 100 at
p. 3) Accordingly, Fluidra and PHTA stated that the definition for a
variable-speed control DPPP motor does not make practical sense in a
PCBP application, and therefore recommended separating PCBP
requirements from other DPPP applications. (Fluidra, No. 101 at pp. 1-
3; PHTA, No. 100 at pp. 2-3) DOE notes that the definition for variable
speed comes from UL 1004-10:2020, which is an industry standard DOE
incorporated by reference in the July 2021 Final Rule based on
recommendations from several stakeholders. 86 FR 40765, 40769-40770.
(July 29, 2021). Further, the scope of UL 1004-10:2020 does not
specifically exclude PCBP applications for DPPP motors. See section 1
of UL 1004-10:2020. As such, DOE concludes that the definitions from UL
1004-10:2020 are applicable to all DPPP motors in scope, including
PCBPs, and there is no technical reasoning to exclude application to
PCBPs.
Separately, in the January 2017 Direct Final Rule, DOE also
considered variable-speed motors for PCBPs (82 FR 5650, 5684), as the
WEF metric accounts for energy savings available from reducing the pump
speed to reach the minimum required pressure of 60 feet. See section
3.6.2 of the January 2017 Direct Final Rule TSD. While the test
procedure specifies only one load point for testing PCBPs (see Table 1
of appendix C to subpart Y of 10 CFR part 431), the test procedure does
not specify that PCBPs are tested at maximum speed; rather, it
specifies that PCBPs are tested at the lowest speed that can achieve 60
feet of head at the 10 gpm test condition. Therefore, a PCBP may be
able to achieve a higher (more beneficial) WEF score if it has the
ability to operate at reduced speeds, and as such, the definition for a
variable-speed control DPPP motor would still make practical sense in
terms of examining energy savings potential.
Finally, as part of the January 2017 Direct Final Rule, the DPPP
Working Group discussed that PCBPs on the market supply between 100 and
125 feet of head at the pump outlet at the test condition of 10 gpm,
but these pumps provide more pressure than the cleaner
[[Page 66986]]
requires because the pump must overcome head losses imposed by piping,
couplings, and hoses between the pump and the cleaner. In pool
installations with high head loss, these pumps may deliver the
recommended amount of head to the cleaner when operating at maximum
speed with no flow restriction; in pool installations with low head
loss, these pumps may supply more head than is needed to drive the
pressure cleaner. As such, the DPPP Working Group discussed how, in
installations with low head loss, energy could be conserved by
operating the pressure cleaner booster pump at a reduced speed rather
than by releasing pressure that was supplied unnecessarily. Therefore,
there is benefit to variable-speed control for PCBP applications. See
section 3.6.2.2 of the January 2017 Direct Final Rule TSD.
NEEA recommended that DOE include non-proprietary, standardized
connectivity design requirements for DPPP motors consistent with the
voluntary requirements in the ENERGY STAR Product Specification for
Pool Pumps Version 3.1. The ENERGY STAR specification presents
connected product criteria for a connected pool pump system (``CPPS'').
As part of the CPPS criteria, ENERGY STAR requires communication and
demand response functionality. Specifically, ENERGY STAR requires that
the CPPS shall meet the communication and equipment performance
standards for OpenADR 2.0 and/or CTA-2045. NEEA commented that this
requirement to use these non-proprietary communication protocols and
hardware standards ensures there is an open-source platform that allows
demand response service providers and utilities to interface with as
many demand response customers as possible. NEEA noted that the DOE
DPPP motor rule would benefit from this additional demand response
design requirement because the DPPP motor serves as the energy-
consuming component of the pool pump. However, NEEA further recommended
that this requirement additionally be applied to the pool pumps
themselves, so that the pump controller can provide interface for
response signals. Finally, NEEA noted that connectivity design
requirements would provide the greatest benefits to two-speed or
variable-speed motors, and that DOE should assess the additional cost
requirements for integrating connectivity requirements into DPPP motors
with the multitude of efficiency and grid benefits that grid-connected
pool pumps can provide. NEEA also provided an example of a case study
by Electric Power Research Institute,\40\ which showed connected pool
pumps systems can provide significant grid benefits. (NEEA, No. 99 at
pp. 1-2)
---------------------------------------------------------------------------
\40\ Performance Test Results: CTA-2045 Variable Speed Pool
Pumps, https://www.bpa.gov/-/media/Aep/energy-efficiency/emerging-technologies/ET-Documents/NREL-testing-CTA-2045-VariableSpeedPoolPump-Nov2017-000000003002011749.pdf.
---------------------------------------------------------------------------
The subject of this final rule is DPPP motors, which are within the
scope of electric motors. DOE notes that these potential design
criteria described by NEEA would not directly impact the measured
efficiency of DPPP motors per the DOE test procedure, but could serve
an important purpose for grid flexibility generally, when used in
conjunction with the DPPP. For this final rule, DOE is only considering
technology options that can be directly implemented as part of the DPPP
motor to improve measured efficiency. As such, an additional
connectivity design requirement would be beyond the scope of this final
rule and therefore is not being considered at this time.
B. Screening Analysis
DOE uses the following four screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
(1) Technological feasibility. Technologies that are not
incorporated in commercial products or in commercially viable, existing
prototypes will not be considered further.
(2) Practicability to manufacture, install, and service. If it is
determined that mass production of a technology in commercial 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.
(3) 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 results 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.
(4) Safety of technologies. If it is determined that a technology
would have significant adverse impacts on health or safety, it will not
be considered further.
(5) Unique-pathway proprietary technologies. If a technology has
proprietary protection and represents a unique pathway to achieving a
given EL, 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 sum, if DOE determines that a technology, or a combination of
technologies, fails to meet one or more of the listed five criteria, it
will be excluded from further consideration in the engineering
analysis. The reasons for eliminating any technology are discussed in
the following sections.
In the June 2022 NOPR, DOE determined that all the technology
options considered continue to be technologically feasible because they
are being used or have previously been used in commercially available
products or working prototypes. DOE also found that the technology
options continue to meet the other screening criteria (i.e.,
practicable to manufacture, install, and service; do not result in
adverse impacts on consumer utility, product availability, health, or
safety; and are not unique-pathway proprietary technologies). 87 FR
37122, 37137. As such, DOE screened-in all technology options
considered.
DOE did not receive any comments regarding the screening analysis.
As such, through a review of each technology, similar to the
conclusions from the June 2022 NOPR, DOE concludes that all of the
identified technologies listed in section IV.A.4 of this document met
all five screening criteria to be examined further as design options in
DOE's final rule analysis.
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of DPPP 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).
[[Page 66987]]
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 final rule, DOE applied a combination of the two
approaches. In line with the January 2017 Direct Final Rule, DOE
considered three tiers of motor efficiency (low, medium, and high
efficiency) and design requirements specifically for two-speed, multi-
speed, and variable-speed motors. As discussed in sections IV.A.2 and
IV.A.4 of this document, the motor technologies applicable to pool pump
motors analyzed in the January 2017 Direct Final Rule remain relevant
and applicable in the current DPPP motor market.
a. Representative Units
In the June 2022 NOPR, DOE opted to use representative units for
each equipment class for the engineering analysis. The associated motor
THP of the proposed representative units were consistent with the motor
THPs provided in Table 5.7.1 of the January 2017 Direct Final Rule TSD,
with three exceptions: (1) Representative unit 2A was added to
represent standard-size DPPP motors that are used in small-size self-
priming DPPPs; (2) Representative unit 6 was added to analyze standard-
size DPPP motors used in non-self-priming filter pump applications; and
(3) Representative unit 7 at 1.125 THP, instead of 1.25 THP was
considered so as to keep this representative unit in the small-size
equipment class (EC 2), and to better represent the THP range of motors
in PCBPs.\41\ 87 FR 37122, 37137-37138. The proposed representative
units are provided in Table IV.1.
---------------------------------------------------------------------------
\41\ The Joint Petition noted that almost all motors used in
pressure cleaner booster pumps have THPs less than 1.15 THP. (Joint
Petition, No. 14 at p. 8).
Table IV.1--Representative Units THP and DPPP Application
------------------------------------------------------------------------
Rep. unit Equipment class THP DPPP application *
------------------------------------------------------------------------
1............... 2 (Small)........ 0.75 Self-priming Filter
Pump, Small-size
(0.44 hhp).
2............... 3 (Standard)..... 1.65 Self-priming Filter
Pump, Standard-size
(0.95 hhp).
2A.............. 3 (Standard)..... 1.65 Self-priming Filter
Pump, Small-size
(0.65 hhp).
3............... 3 (Standard)..... 3.45 Self-priming Filter
Pump, Standard-size
(1.88 hhp).
4............... 1 (Extra-small).. 0.22 Non-Self-priming
Filter Pump, Extra-
Small-size (0.09
hhp).
5............... 2 (Small)........ 1 Non-Self-priming
Filter Pump, Standard-
size (0.52 hhp).
6............... 3 (Standard)..... 1.5 Non-Self-priming
Filter Pump, Standard-
size (0.87 hhp).
7............... 2 (Small)........ 1.125 Pressure Cleaner
Booster Pump.
------------------------------------------------------------------------
* For self-priming pumps, the terms small and standard refer to the
hydraulic horsepower (``hhp''). Small-size designates pool pump
applications with hydraulic horsepower less than 0.711 hhp, while
standard-size designates pool pump applications with hydraulic
horsepower greater than or equal to 0.711 hhp. DOE distinguishes extra-
small non-self-priming filter pumps (less than 0.13 hhp) and standard-
size non-self-priming filter pumps (less than 2.5 hhp and greater than
0.13 hhp).
In response to the proposal, DOE received a number of comments.
Fluidra commented that Rep. Unit #4 appears too small and irrelevant
and may only be used for pump/filter combos or spas, which is out of
the scope of this regulation. (Fluidra, No. 91 at p. 3) Based on the
2022 DPPP Database, DOE notes that there are at least 15 non-self-
priming filter pumps having DPPP motors at or less than 0.22 THP. While
Rep. Unit #4 may be a small segment of the whole DPPPM market (3
percent; see shipments in Table IV.9), these are DPPP motors that would
be in scope as they are part of the non-self-priming DPPP motor class.
For this final rule, DOE specifically included an extra-small-size
equipment class because DPPP motors in that class have different
maximum efficiency potential than small- or standard-size equipment
classes and therefore need to be analyzed separately. As such, DOE
continues to include Rep. Unit #4 as part of the analysis.
Fluidra also stated that Rep. Unit #7 only represents single-stage
booster pumps and not multi-stage, which are typically >1.125 THP and
significantly higher WEF, and therefore should be reviewed separately.
(Fluidra, No. 91 at p. 3) PHTA stated that DOE should review the
improvements made in booster pump hydraulic efficiency and go on to
note that a multi-stage booster pump can result in a 40-percent higher
WEF than a single-stage booster pump. (PHTA, No. 100 at p. 3) DOE notes
that representative units exemplify typical capacities in each
equipment class and are used to quantify the manufacturing costs and
the energy savings potential for each equipment class. As discussed
previously, almost all DPPP motors used in PCBPs have THPs less than
1.15 THP. DOE also confirmed the same in the 2022 DPPP Database, with
PCBP applications having DPPPMs ranging from 0.75 to 1.13 THP, with the
majority of the models in the 1.1 to 1.13 THP range. Accordingly, the
chosen DPPP motor representative unit for the PCBP application, Rep.
Unit #7 at 1.125 THP, was considered to represent the full THP range of
motors in PCBPs, which
[[Page 66988]]
are primarily in the small-size equipment class.
The pump performance curve associated with the DPPP motor Rep. Unit
#7 and used in the analysis was based on the pump performance curve
used in the January 2017 Direct Final Rule. Section 5.8.2.3 of the
January 2017 Direct Final Rule TSD specifically notes that DOE
developed the equations by aggregating pump test data that were
submitted by manufacturers, and does not specify that the test data was
only for single-stage pumps. In reviewing the underlying data that were
used to develop the equations, DOE can confirm that the selection of a
representative PCBP unit and its corresponding performance
characteristics was informed by the presence of more efficient multi-
stage pumps available on the market to the extent they represent PCBP
units with the exceptionally high hydraulic efficiency. However, DOE
believed that these motors do not comprise as significant of a share of
the market as single-stage pumps. Consequently, the ultimate
representative unit and performance characteristics more closely
resembled the single-stage PCBPs.
PHTA and NEMA commented that PCBP motors at or above 1.15 THP were
not included in the DOE analysis, and if DOE intends to regulate these
products, PHTA and NEMA requested that DOE update the analysis. (PHTA
and NEMA, No. 92 at p. 5) Further, in a separate comment, PHTA restated
the need for analysis of PCBP motors above 1.15 THP. (PHTA, No. 100 at
p. 2) Based on the 2022 DPPP Database, DOE identifies only one DPPP
motor used in a PCBP application that would be above the 1.15 THP
threshold. Further, based on the 2022 DPPP Database, DOE notes that the
majority of DPPP motors above 1.15 THP are self-priming DPPP
applications (74 percent based on model count), with non-self-priming
DPPP applications being the next highest percentage (26 percent based
on model count). DOE generally selects representative units based on
the quantity of motor models available within an equipment class.
Considering that the number of DPPP motors above 1.15 THP with a PCBP
application is not significant, and that most DPPP motors with a PCBP
application are in the small-size equipment class, DOE continues to
consider Rep. Unit #7 only for PCBP applications.
b. Baseline Efficiency
For each product/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 product/equipment class represents
the characteristics of a product/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 June 2022 NOPR, mirroring the January 2017 Direct Final
Rule, DOE considered the least-efficient single-speed DPPP motor on the
market for each representative unit. 87 FR 37122, 37138. DOE did not
receive any comments regarding the baseline efficiencies, and therefore
is maintaining the same levels from the June 2022 NOPR in this final
rule.
c. Higher Efficiency Levels
As part of DOE's analysis, the maximum available efficiency level
(``EL'') 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 June 2022 NOPR, DOE proposed higher efficiency levels by
substituting higher full-load efficiency DPPP motors and DPPP motors
with finer levels of speed control, consistent with the January 2017
Direct Final Rule. 87 FR 37122, 37138. Efficiency levels 0 through 2
were consistent with Table 5.6.3 of the January 2017 Direct Final Rule
TSD and represented the low-efficiency, medium-efficiency, and high-
efficiency performance of single-speed DPPP motors. Efficiency levels 3
through 6 incorporated certain design requirements based on motor speed
capability and topology.\42\ DOE proposed that EL 3 require motors that
are two-speed, multi-speed, or variable-speed, but with no restrictions
on motor topology. EL 4 required motors that are two-speed or multi-
speed, but did not allow for the low-efficiency motor topologies
(split-phase, shaded-pole, CSIR)--or--required variable-speed motors.
EL 5 required motors that are two-speed or multi-speed, but did not
allow for PSC motors in addition to the other low-efficiency motor
topologies--or--requires variable-speed motors. Finally, EL 6 included
variable speed only, which provides the highest energy savings. 87 FR
37122, 37139.
---------------------------------------------------------------------------
\42\ For the purposes of the analysis, however, DOE did consider
the full-load efficiencies presented in Table 5.6.3 of the January
2017 Direct Final Rule TSD for efficiency levels 3 through 6.
---------------------------------------------------------------------------
In response, CEC and NYSERDA commented that DOE should reevaluate
the ``max-tech'' levels considered for small-size and standard-size
DPPP motors, and work toward a performance metric that captures the
benefits of variable-speed motors. Specifically, CEC and NYSERDA noted
that not all variable-speed DPPP motors are created equal, because an
AC induction motor paired with a variable-frequency drive and a
permanent magnet motor with an integral drive exist and provide
different performance characteristics depending on speed settings.
Accordingly, CEC and NYSERDA encouraged DOE to update the DPPP motor
test method and performance metric that can distinguish between
different speed DPPP motors and between different categories of
variable-speed DPPP motors. While CEC and NYSERDA noted that this
approach may be outside the scope of the current rulemaking, they
stated that it is important to acknowledge that the proposed efficiency
levels for small-size and standard-size DPPP motors do not represent
``max-tech,'' and that there are potential future improvements for both
the DPPP motor test method and the DPPP motor energy conservation
standards. (CEC and NYSERDA, No. 94 at p. 6)
The DOE test procedure in 10 CFR 431.484(b) establishes full-load
efficiency as the metric for DPPP motors. For the engineering analysis,
while DOE considers full-load efficiency per the DOE test procedure for
ELs 0 through 3, the higher ELs only consider design requirements based
on speed control. Accordingly, the variable-speed requirement
considered as part of the analysis is based on the definition of
variable-speed control dedicated-purpose pool pump motor in section 2
``Glossary'' of UL 1004-10:2020.\43\ 10 CFR 431.483. The variable-speed
definition includes specific requirements for motor operation that are
supposed to be met, but does not distinguish between the designs on the
motors. As such, for this rulemaking, DOE is basing the engineering
analysis on the definitions and test procedures prescribed at 10 CFR
431.484. DOE concurs that there may be future improvements for
efficiency, and would consider these improvements in the next stage
rulemaking.
---------------------------------------------------------------------------
\43\ In this final rule, DOE is updating UL 1004-10:2020 to UL
1004-10:2022. See further discussion in section IV.A.1 of this
document.
---------------------------------------------------------------------------
As such, in this final rule, DOE maintains the DPPP motor
engineering
[[Page 66989]]
analysis from the June 2022 NOPR, as presented in Table IV.2.
Table IV.2--Performance and Design Requirements for DPPP Motor ELs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rep. Motor EL0 EL1 EL2
EC unit THP DPPP application (%) (%) (%) EL3 * EL4 * EL5 * EL6 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
1......... 4 0.22 Non-self-priming 55 69 76 ................... ................... ................... ...................
Filter Pump, Extra-
Small-size (0.09
hhp).
2......... 1 0.75 Self-priming Filter 55 69 76 Two-speed--OR-- Two-speed/Multi- Two-speed/Multi- Variable-speed
Pump, Small-size Multi-speed--OR-- speed, not CSIR, speed, not CSIR, only.
(0.44 hhp). Variable-speed. not shaded pole, not shaded pole,
not split-phase;-- not split-phase,
OR--Variable-speed. not PSC;--OR--
Variable-speed.
2......... 5 1 Non-self-priming 55 69 76 Two-speed--OR-- Two-speed/Multi- Two-speed/Multi- Variable-speed
Filter Pump, Small- Multi-speed--OR-- speed, not CSIR, speed, not CSIR, only.
size (0.52 hhp). Variable-speed. not shaded pole, not shaded pole,
not split-phase;-- not split-phase,
OR--Variable-speed. not PSC;--OR--
Variable-speed.
2......... 7 1.125 Pressure Cleaner 55 69 76 Variable-speed only Variable-speed only Variable-speed only Variable-speed
Booster Pump. only.
3......... 6 1.5 Non-self-priming 55 69 77 Two-speed--OR-- Two-speed/Multi- Two-speed/Multi- Variable-speed
Filter Pump (0.87 Multi-speed--OR-- speed, not CSIR, speed, not CSIR, only.
hhp). Variable-speed. not shaded pole, not shaded pole,
not split-phase;-- not split-phase,
OR--Variable-speed. not PSC;--OR--
Variable-speed.
3......... 2 1.65 Self-priming Filter 55 69 77 Two-speed--OR-- Two-speed/Multi- Two-speed/Multi- Variable-speed
Pump, Standard- Multi-speed--OR-- speed, not CSIR, speed, not CSIR, only.
size (0.95 hhp). Variable-speed. not shaded pole, not shaded pole,
not split-phase;-- not split-phase,
OR--Variable-speed. not PSC;--OR--
Variable-speed.
3......... 2A 1.65 Self-priming Filter 55 69 77 Two-speed--OR-- Two-speed/Multi- Two-speed/Multi- Variable-speed
Pump, Small-size Multi-speed--OR-- speed, not CSIR, speed, not CSIR, only.
(0.65 hhp). Variable-speed. not shaded pole, not shaded pole,
not split-phase;-- not split-phase,
OR--Variable-speed. not PSC;--OR--
Variable-speed.
3......... 3 3.45 Self-priming Filter 75 79 84 Two-speed--OR-- Two-speed/Multi- Two-speed/Multi- Variable-speed
Pump, Standard- Multi-speed--OR-- speed, not CSIR, speed, not CSIR, only.
size (1.88 hhp). Variable-speed. not shaded pole, not shaded pole,
not split-phase;-- not split-phase,
OR--Variable-speed. not PSC;--OR--
Variable-speed.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Includes freeze protection control design requirements.
PHTA and NEMA commented that if DOE finds this 0.5 THP requirement
feasible from a lifecycle cost analysis, motor manufacturers can
produce motors meeting the performance requirements; however, this may
result in replacement market fit issues as the product will become
larger in size. (PHTA and NEMA, No. 92 at p. 10) Pentair stated concern
with the proposal to require replacement motors as small as 0.5 THP to
meet variable speed. Specifically, that if motors meeting the DPPP rule
fail, then those motors will not be able to be replaced with an
original single-speed motor. (Pentair, No. 90 at p. 1)
A DPPP motor is subject to standards regardless of how it is sold
(i.e., with or without a corresponding DPPP). As such, Pentair is
correct that if DPPPs using a 0.5 THP motor or smaller sold before the
compliance date of this rule fail after the compliance date of this
rule, consumers would likely be unable to replace the original single-
speed motor with a similar single-speed motor. See section IV.G.3 for
more discussion of repair scenarios in the standards cases.
Additionally, DOE notes that there are a number of variable-speed DPPP
motors on the market that are currently being used in DPPPs. DOE also
notes that PHTA, NEMA, and Pentair did not provide information
supporting the claim that there may be fit issues. In other industries,
variable-speed motors (particularly electronically commutated motors,
or ECMs) have been produced to be drop-in replacements in larger
equipment (i.e., with no fit issues) for single-phase and polyphase
motors in horsepower ranges identified by commenters.\44\ There are no
unique design characteristics of DPPP motors that would prevent
variable-speed motors from being drop-in replacements to single-speed
DPPP motors.\45\ Accordingly, DOE cannot conclude that there will be
fit issues for DPPP motors in this lower THP range, and that in the
scenario identified by Pentair the single-speed motor could be replaced
by a variable-speed motor.
---------------------------------------------------------------------------
\44\ www.regalrexnord.com/brands/genteq/aftermarket-products/Evergreen-Motors/Evergreen-VS-Motor.
\45\ As noted in section 5.7.1 of the January 2017 Direct Final
Rule TSD, DOE researched the design and engineering constraints
associated with motor substitution by examining manufacturer
interview responses and holding discussions with the DPPP Working
Group. DOE concluded that for the representative equipment
capacities being considered, the wet end of the pump can be paired
with a range of motors with various efficiencies and speed
configurations without significant adaptations. See chapter 5 of the
dedicated-purpose pool pumps direct final rule TSD, at
www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------
Motor Input Power and Pump Hydraulic Power
Each efficiency level presented in Table IV.2 has an associated
energy factor (in Gallons/Watt-hour ``G/Wh'') and flow (in gallons per
minute ``gpm'') used to determine efficiency of the pump system. In the
June 2022 NOPR, DOE used the pump performance curves consistent with
the January 2017 Direct Final Rule TSD to represent the energy factors
and flows. 87 FR 37122, 37139.
The CA IOUs commented that DOE should update its analysis to show
motor turn-down savings from variable-speed motors. Specifically, the
CA IOUs commented that the DOE analysis for PCBP assumes an operating
point of 10
[[Page 66990]]
gpm and 112 ft of head, which is not representative of variable-speed
capability at EL 3 nor consistent with the DPPP test procedure. The CA
IOUs recommended that DOE consider an operating point consistent with
the DOE test procedure of 10 gpm and 60 ft of head, which the CA IOUs
noted the industry and advocates agreed to this test point during the
ASRAC negotiation for DPPP standard. The CA IOUs provided estimates of
the input power and WEF for a variable-speed PCBP corresponding to a 60
ft head, and showing a 52-percent decrease compared to the values used
in DOE's NOPR analysis. (CA IOUs, No. 96 at p. 4) Nidec commented that
PCBPs and variable speed will have to run at nearly full speed or maybe
slightly less than full speed. Therefore, they stated that
representation of power usage on variable speed is most likely
incorrect in the analysis, which would make an assumption of actually
having the ability to slow the speed down to take advantage of the
power savings in lower speed. (Nidec, Public Meeting, No. 88 at pp. 28-
29) As discussed in section IV.A.4, the DPPP Working Group considered
variable-speed technology option for PCBPs because in installations
with low head loss, energy could be conserved by operating the pressure
cleaner booster pump at a reduced speed. In reviewing the January 2017
Direct Final Rule TSD, DOE notes that the analysis does only account
for motor and hydraulic efficiency improvements for variable-speed
efficiency levels of PCBPs, and does not account for any change in
energy consumption from the reduction of motor speed. As such, DOE
agrees that a revised approach is necessary to reflect the expected
reduced energy use of variable-speed PCBPs resulting more accurately
from motor turndowns. Additionally, DOE acknowledges the method of
calculation in the CA IOUs comment as properly representative. As such,
in this final rule, DOE has updated the pump curves for PCBPs to be
consistent with the recommendation by the CA IOUs. Further discussion
is provided in chapter 5 of the final rule TSD.
Fluidra stated that, at maximum speed, the variable-speed PCBP
consumed more energy than the single-speed system. As such, Fluidra
commented that a consumer with operating conditions and equipment
similar to those used in this analysis would never be able to recover
the additional cost of variable-speed control. (Fluidra, No. 91 at pp.
1-2) In addition, Fluidra stated that while this test represents only
two sites and two PCBP models, Fluidra feels that the operating
conditions are reasonably representative. (Fluidra, No, 91 at p. 6)
Finally, Fluidra stated that the power consumption of the booster pump
variable-speed motor operating at maximum speed measured noticeably
higher than the single-speed base comparison. Specifically, Fluidra
commented that operating the PCBP at maximum speed is necessary in many
pool applications due to plumbing head loss from extended pipe runs
where the pool equipment pad is further from the pool for aesthetics
and noise reduction. (Fluidra, No. 91 at pp. 1-2).
PHTA and NEMA referenced the same Fluidra study and assertions in
their comment submission. (PHTA and NEMA, No. 92 at pp. 2-3) Further,
PHTA and NEMA commented that the restrictor plates in PCBPs have
multiple purposes and should not be mistaken as used for flow rate
tuning. PHTA and NEMA commented that industry uses restrictor plates/
discs in testing to decrease flow and pressure, and that they start off
with the largest plates and determine if sufficient flow is present,
and if not, go down in size, and if needed, remove completely. PHTA and
NEMA pointed out that the plates are ultimately used because many times
consumers do not turn off the booster pump when they remove the
pressure cleaner; therefore, the plate protects the booster pump if the
pressure cleaner is removed. (PHTA and NEMA, No. 92 at p. 3)
On the other hand, the CA IOUs supported the technical feasibility
of energy savings from variable-speed motors in PCBP applications and
discussed the PCBP variable-speed-motor retrofit study that the CA IOUs
had conducted for the DPPP rulemaking. Specifically, the CA IOUs stated
that the results showed that a variable-speed motor could provide
substantial energy savings by reducing the PCBP pump speed, while
maintaining consumer utility. The CA IOUs stated that the definition of
consumer utility for a pressure side pool cleaner (pool sweep) is the
correct number of wheel revolutions per minute in cleaning operation.
In addition, the CA IOUs stated that a single-speed PCBP produces more
pressure than the pool sweep requires, and the consumer may use the
included flow restrictor discs and a bleed to reduce the pressure and
flow to the sweep's required operating condition. Accordingly, the flow
restrictor and bleed valve allow unused energy from the pump to escape
to the pool, and variable-speed PCBP offers an energy-saving
alternative by allowing the consumer to set the speed of the pump to
deliver the pressure and flow needed to operate the sweep, with low or
no usage of the bleed valve and restrictor rings. The CA IOUs
demonstrated the variable-speed capability by retrofitting a variable-
speed motor to two PCBPs, which resulted in energy savings of 54
percent to 67 percent. (CA IOUs, No. 96 at p. 3)
In the January 2017 Direct Final Rule, for the analysis conducted
for PCBPs, DOE selected a DPPP capacity that was representative of the
cluster of model capacities on the market. As such, the resulting
representative capacity was 10 gpm of flow and 112 ft of head, which
equated to 0.28 hhp. See section 5.4.3 of the January 2017 Direct Final
Rule TSD. DOE notes that the flow rate of 10 gpm aligns with the
testing load point specified in the test procedure. See Table 1 of
appendix C to subpart Y of 10 CFR part 431. In addition, while the DPPP
Working Group initially recommended that PCBPs be tested at 90 ft of
head and a volumetric flow rate that corresponds to 90 ft of head, the
DPPP Working Group revised its recommendation for PCBPs to be tested at
the load point of 10 gpm and a head greater than 60 ft. See section
5.4.3 of the January 2017 Direct Final Rule TSD.
In reviewing the 2022 DPPP Database, DOE observed DPPPMs in PCBP
applications ranging from 0.22 to 0.33 hhp, and therefore concluded
that 0.28 hhp is in the middle of that range and would still be
representative of the PCBP models currently available on the market. As
such, with the required test procedure flow rate for PCBPs at 10 gpm
(see Table 1 of appendix B to subpart Y of 10 CFR part 431), the
representative DPPP head will continue to be around 112 ft.\46\ In
reviewing the analysis that Fluidra, PHTA, and NEMA submitted, the
measured sites #1 and #2 are not representative of typical PCBP
application, as the supplied heads of 74 ft and 71.5 ft, respectively,
which are well below the January 2017 Direct Final Rule analysis
representative dynamic head of 112 ft. See section 5.4.3 of the January
2017 Direct Final Rule TSD. In addition, as noted in the January 2017
Direct Final Rule, the DPPP Working Group did acknowledge the existence
of ideal systems with head demands as low as 50 ft, they determined
that pumps typically supplied 100 ft of head or more. See section
3.6.2.2 of the January 2017 Direct Final Rule TSD. As such, DOE
understands that the smaller difference
[[Page 66991]]
between the operating head of the single-speed and variable-speed PCBPs
is responsible for the smaller savings potential and reduced cost-
effectiveness. DOE does not have any evidence to suggest that the
representative capacity used in the January 2017 Direct Final Rule and
subsequently in the June 2022 NOPR should be revised. As such, DOE
maintains the pump performance inputs from the June 2022 NOPR in this
final rule.
---------------------------------------------------------------------------
\46\ Section 3.3.3 of the January 2017 Direct Final Rule TSD
specifies the relationship between pump flow, head, and power.
---------------------------------------------------------------------------
Further, in chapter 3 of the January 2017 Direct Final Rule TSD,
DOE noted that for installations where the PCBP supplies more pressure
than is recommended for the cleaner, pressure may be reduced using a
throttling valve or restrictor rings, or excess pressure may be
relieved using a pressure relief valve. The pressure relief valve is
attached to the hose line that connects the pump outlet to the pressure
cleaner, and the valve bypasses the cleaner and releases pressure into
the pool being serviced. Further, in reviewing manufacturer operating
instructions online, DOE observed directions to remove or replace
restrictor discs, or to unscrew pressure relief valves, to reduce the
pump flow rate. This is consistent with the information provided by the
CA IOUs. Further discussion and responses to the commenters' payback
period analysis are provided in section IV.F.9 of this document.
Hayward stated that it reviewed energy and cost savings for six of
its currently compliant single-speed pumps, including self and non-
self-priming, and estimated that the average payback period for
conversion to variable speed was over 12 years. Hayward provided
details of its analysis as part of its comment, and noted use of a flow
rate of 24.7 gpm, even though some pool equipment requires a greater
flow rate. (Hayward, No. 93 at p. 2) In reviewing the analysis provided
by Hayward, DOE first notes that the prices used were for the pump. The
analysis DOE conducted in the June 2022 NOPR, however, considers the
motor only, as this rule is specific to the cost-effectiveness of the
DPPP motor. While the engineering analysis determines the manufacturer
selling price (``MSP'') (see section IV.C.2 for further discussion),
DOE uses the markups from the markups analysis (in section IV.D of this
document) to convert the MSP to consumer prices as it relates to the
DPPP motor. Accordingly, the costs included in the Hayward analysis do
not directly translate to the analysis at hand, which is for the DPPP
motor. Further discussion and responses to the commenters' payback
period analysis are provided in section IV.F.9 of this document.
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, and the availability and timeliness of purchasing the
equipment on the market. The cost approaches are summarized as follows:
[ballot] Physical teardowns: Under this approach, DOE physically
dismantles a commercially available product, component by component, to
develop a detailed bill of materials for the product.
[ballot] 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.
[ballot] 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 June 2022 NOPR, DOE used feedback from manufacturers
presented in the January 2017 Direct Final Rule to determine the cost
of DPPP motors, and updated the cost data to be representative of the
market in 2020. DOE adjusted the 2015$ costs to 2020$ using the
historical Bureau of Labor Statistics Producer Price Index (``PPI'')
for each product's industry.\47\ DOE also conducted physical teardowns
to determine updated DPPP motor controller costs for variable-speed
motors. To account for manufacturers' non-production costs and profit
margin, DOE applied a non-production cost multiplier (the manufacturer
markup) to the MPC to determine the manufacturer selling price
(``MSP''). DOE developed an average manufacturer markup of 1.37 by
examining the annual Securities and Exchange Commission (``SEC'') 10-K
reports filed by publicly traded manufacturers primarily engaged in
DPPP manufacturing and whose combined product range includes a variety
of pool products. 87 FR 37122, 37139-37140.
---------------------------------------------------------------------------
\47\ Series IDs: Integral motors (>=1 hp): WPU117304, Fractional
motors (<1 hp): WPU117303, Environmental Controls: WPU1181;
www.bls.gov/ppi/.
---------------------------------------------------------------------------
In response, Fluidra noted that single-speed motor costs have
increased roughly 20-22 percent in the last 3 years. This is just
material costs and does not include transportation costs, which have
risen exponentially since 2020. Further, Fluidra noted that component
shortages and inflation have dramatically increased material costs
since 2020, and that should be evaluated. (Fluidra, No. 91 at p. 3) To
account for the recent price changes to the DPPP motor market, DOE
inflated the cost data in 2020$ to 2022$ using the updated PPI values
for each industry.\48\ DOE notes that these indices sufficiently
characterize the change in motor prices due to material price changes,
transportation costs, and changes in labor costs.
---------------------------------------------------------------------------
\48\ Series IDs: Integral motors (>=1 hp): WPU117304, Fractional
motors (<1 hp): WPU117303, Environmental Controls: WPU1181;
www.bls.gov/ppi/.
---------------------------------------------------------------------------
PHTA and NEMA commented that they believe the 1.37 manufacturer
markup is a reasonable markup for domestically produced product, but it
may be a little low if the product is produced overseas. (PHTA and
NEMA, No. 92 at p. 10) As previously discussed, the 1.37 markup was
based on publicly available financial information for manufacturers of
DPPP motors. The calculation includes general and administrative
(``SG&A'') expenses, research and development (``R&D'') expenses,
interest, and profit. DOE does not have data to suggest that these
costs would change if a DPPP motor is not manufactured domestically,
nor have PHTA and NEMA provided any additional data on how the markup
would need to be updated. As such, for this analysis, DOE maintains the
manufacturer markup from the June 2022 NOPR.
Table IV.3 lists the MSPs of each EL for DPPP motors. See TSD
chapter 5 for additional detail on the engineering analysis and
complete cost-efficiency results.
[[Page 66992]]
Table IV.3--MSPs in 2022$ for DPPP Motors
----------------------------------------------------------------------------------------------------------------
Rep.
EC unit THP DPPP application EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
----------------------------------------------------------------------------------------------------------------
1............ 4 0.22 Non-self-priming $24.84 $31.04 $50.71 ....... ....... ....... .......
Filter Pump,
Extra-Small-
size (0.09 hhp).
2............ 1 0.75 Self-priming 56.92 70.37 90.03 93.13 103.48 114.87 353.97
Filter Pump,
Small-size
(0.44 hhp).
2............ 5 1 Non-self-priming 51.94 56.45 76.21 78.47 93.71 110.09 353.97
Filter Pump,
Small-size
(0.52 hhp).
2............ 7 1.125 Pressure Cleaner 59.84 77.91 97.67 ....... ....... ....... 353.97
Booster Pump.
3............ 6 1.5 Non-self-priming 67.86 89.31 107.38 108.51 127.70 148.03 353.97
Filter Pump
(0.87 hhp).
3............ 2 1.65 Self-priming 74.52 95.97 114.04 115.17 134.36 154.68 353.97
Filter Pump,
Standard-size
(0.95 hhp).
3............ 2A 1.65 Self-priming 74.52 95.97 114.04 115.17 134.36 154.68 353.97
Filter Pump,
Small-size
(0.65 hhp).
3............ 3 3.45 Self-priming 160.33 199.85 223.56 255.17 269.85 285.66 475.85
Filter Pump,
Standard-size
(1.88 hhp).
----------------------------------------------------------------------------------------------------------------
D. Markups Analysis
The markups analysis develops appropriate markups (e.g.,
manufacturer markups, 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 June 2022 NOPR, DOE identified distribution channels for
DPPP motors incorporated in pumps and replacement DPPP motors sold
alone as well as the fraction of shipments sold through each channel.
To characterize these channels, DOE referred to information collected
in support of the January 2017 Direct Final Rule, which reflects the
consensus of the Appliance Standards and Rulemaking Federal Advisory
Committee (``ASRAC'') DPPP Working Group. 87 FR 37122, 37140.
Nidec stated that for motors sold alone, they estimate that the
market is not 50 percent from the motor manufacturer to a retailer.
Instead, Nidec commented that it is significantly weighted to the motor
manufacturer, to the wholesaler, to the retailer, then to the end user.
(Nidec, Public Meeting, No. 88 pp. 24-25)
PHTA and NEMA provided updated estimates of fraction of sales by
distribution channels. In addition, for DPPP motors sold within DPPPs
and going into new pool installations, NEMA and PHTA commented that
these also go through a wholesaler step. For DPPP motors sold alone as
replacement motors, NEMA and PHTA also recommended adding an additional
channel to capture 5 percent of the market being sold through pool
product retailers. (PHTA and NEMA, No. 92 at p. 11)
For this final rule, DOE revised its distribution channels to
incorporate the feedback from PHTA and NEMA as presented in Table IV.4
and Table IV.5.
Table IV.4--Distribution Channels for DPPP Motors Incorporated in Pumps
------------------------------------------------------------------------
June 2022 NOPR
Distribution channel fraction of Fraction of
shipments (%) shipments (%)
------------------------------------------------------------------------
DPPP Motor Manufacturer [rarr] DPPP 75 65
Manufacturer [rarr] Wholesaler [rarr]
Pool Service Contractor [rarr] Consumer
DPPP Motor Manufacturer [rarr] DPPP 20 15
Manufacturer [rarr] Pool Product
Retailer [rarr] Consumer...............
DPPP Motor Manufacturer [rarr] DPPP 5 20
Manufacturer [rarr] Pool Builder [rarr]
Wholesaler [rarr] Consumer.............
------------------------------------------------------------------------
Table IV.5--Distribution Channels for Replacement DPPP Motors Sold Alone
------------------------------------------------------------------------
June 2022 NOPR
Distribution channel fraction of Fraction of
shipments (%) shipments (%)
------------------------------------------------------------------------
DPPP Motor Manufacturer [rarr] 25 45
Wholesaler [rarr] Contractor [rarr] End-
User...................................
DPPP Motor Manufacturer [rarr] 25 25
Wholesaler [rarr] Retailer [rarr] End-
User...................................
DPPP Motor Manufacturer [rarr] Pool Pump 50 25
Retailer [rarr] End-User...............
DPPP Motor Manufacturer [rarr] DPPP .............. 5
Manufacturer [rarr] Pool Pump Retailer
[rarr] End-User........................
------------------------------------------------------------------------
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.\49\
---------------------------------------------------------------------------
\49\ 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.
---------------------------------------------------------------------------
To estimate average baseline and incremental markups DOE relied on
several sources including: (1) for DPPP wholesalers, SEC form 10-K from
Pool Corp; \50\ (2) for pool product retailers, SEC form 10-K from
several major home
[[Page 66993]]
improvement centers \51\ and U.S. Census Bureau 2017 Annual Retail
Trade Survey for the miscellaneous store retailers sector (NAICS 453);
\52\ (3) for pool contractors and pool builders, U.S. Census Bureau
2017 Economic Census data for the plumbing, heating, and air-
conditioning contractor sector (NAICS 238220) and all other specialty
trade contractors sector (NAICS 238990); \53\ (4) for motor
wholesalers, U.S. Census Bureau 2017 Annual Wholesale Trade Survey for
the household appliances and electrical and electronic goods merchant
wholesaler sector (NAICS 4536); \54\ (5) for electrical contractors,
2022 RSMeans Electrical Cost Data; \55\ (6) for motor retailers, U.S.
Census Bureau 2017 Annual Retail Trade Survey for the building material
and garden equipment and supplies dealers (NAICS 444); and (7) for pool
pump retailers, U.S. Census Bureau 2017 Annual Retail Trade Survey for
the miscellaneous store retailers sector (NAICS 453).
---------------------------------------------------------------------------
\50\ U.S. Securities and Exchange Commission. SEC 10-K Reports
for Pool Corp (2017-2021). Available at www.sec.gov/ (last accessed
July 26, 2021.)
\51\ U.S. Securities and Exchange Commission. SEC 10-K Reports
for Home Depot, Lowe's, Wal-Mart and Costco. (2017-2021) Available
at www.sec.gov/ (last accessed July 26, 2022.)
\52\ U.S. Census Bureau, 2017 Annual Retail Trade Survey,
available at www.census.gov/retail/index.html (last accessed July
26, 2021).
\53\ U.S. Census Bureau, 2017 Economic Census Data, available at
www.census.gov/econ/ (last accessed July 26, 2021).
\54\ U.S. Census Bureau, 2017 Annual Wholesale Trade Survey,
available at www.census.gov/awts (last accessed July 26, 2021).
\55\ RSMeans Electrical Cost Data, available at www.rsmeans.com
(last accessed July 26, 2022).
---------------------------------------------------------------------------
In addition to the markups, DOE obtained State and local taxes from
data provided by the Sales Tax Clearinghouse.\56\ These data represent
weighted average taxes that include county and city rates. DOE derived
shipment-weighted average tax values for each State considered in the
analysis.
---------------------------------------------------------------------------
\56\ Sales Tax Clearinghouse Inc., State Sales Tax Rates Along
with Combined Average City and County Rates, available at
thestc.com/STrates.stm (last accessed Jan. 04, 2023).
---------------------------------------------------------------------------
Chapter 6 of the final rule TSD provides details on DOE's
development of markups for DPPP motors.
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of DPPP motors at different efficiencies in
representative U.S. single-family homes, multi-family residences, and
commercial buildings, and to assess the energy savings potential of
increased DPPP motors efficiency. The energy use analysis estimates the
range of energy use of DPPP motors in the field (i.e., as they are
actually used by consumers). The energy use analysis provides the basis
for other analyses DOE performed, particularly assessments of the
energy savings and the savings in consumer operating costs that could
result from adoption of amended or new standards.
1. DPPP Motor Applications
The annual energy consumption of a DPPP motor is expressed in terms
of electricity consumption and depends on the DPPP motor efficiency
level, the pool pumping requirement, the performance of the DPPP
incorporating the motor, and the DPPP annual operating hours. This
electricity consumption is identical to the annual electricity
consumption of the DPPP incorporating the motor. The DPPP motor energy
consumption value is the sum of the energy consumption values in each
mode of operation. Each mode of operation corresponds to a motor speed
setting. Single-speed motors only have one mode of operation while
dual- and variable-speed pool pump motors operate at a low-speed and a
high-speed mode. The unit energy consumption values in each mode are
calculated based on the DPPP usage, which is calculated based on the
pool pump system curve that the DPPP is operating on, the pump flow
rate of the mode, the pump energy factor of the mode (which in turn
determines the motor input power) \57\ and the annual run time of the
pool pump spent in that mode. In the June 2022 NOPR, DOE calculated the
pool pump annual run time based on the application (residential or
commercial), the assumed pool size, the assumed number of turns per
day, and the sample application's geographic location, which implies
the corresponding pool seasons. 87 FR 37122, 37141. A typical DPPP
application, characterized by the DPPP equipment class and hydraulic
horsepower (``hhp''), was associated to each representative unit in
equipment classes 1, 2, and 3 based on inputs from the engineering
analysis. See section IV.C.1.a of this document.
---------------------------------------------------------------------------
\57\ The motor input power is equal to the DPPP flow (gpm)
divided by the DPPP Energy Factor (G/Wh) and multiplied by 60
(number of minutes in an hour).
---------------------------------------------------------------------------
DOE did not receive comments regarding this methodology and
retained the same approach in the final rule.
2. DPPP Motor Consumer Sample
In the June 2022 NOPR, DOE created individual consumer samples for
five DPPP motor markets: (1) single-family homes with a swimming pool;
(2) indoor swimming pools in commercial applications; (3) single-family
community swimming pools; (4) multi-family community swimming pools;
and (5) outdoor swimming pools in commercial applications. DOE used the
samples to determine DPPP motor annual energy consumption and to
conduct the LCC and PBP analyses. 87 FR 37122, 37141.
PTHA and NEMA commented that within the scope of the document,
there is little to no distinction between the types of motors that
would be used across community and commercial pool applications. As a
result, PHTA and NEMA commented that DOE could consider combining
community pool types (single and multi-family), as well as commercial
(indoor and outdoor). (PHTA and NEMA, No. 92 at p. 12)
In the June 2022 NOPR analysis, as noted by NEMA and PTHA,
community pools and commercial pools were combined and analyzed as the
commercial sector by DOE. In this final rule, DOE continued to use the
same approach. 87 FR 37122, 37141 See section 7.3 of chapter 7 of the
final rule TSD for details of community and commercial indoor and
outdoor pool samples used.
DOE used the Energy Information Administration's (``EIA'') 2020
Residential Energy Consumption Survey (``RECS 2020'') to establish a
sample of single-family homes that have a swimming pool.\58\ For DPPPs
used in indoor swimming pools in commercial applications, DOE developed
a sample using the 2018 Commercial Building Energy Consumption Survey
(``CBECS 2018'').\59\ RECS and CBECS include information such as the
household or building owner demographics and the location of the
household or building.
---------------------------------------------------------------------------
\58\ U.S. Department of Energy-Energy Information
Administration. 2020 RECS Survey Data. www.eia.gov/consumption/residential/data/2020/ (last accessed February 2, 2023).
\59\ U.S. Department of Energy-Energy Information
Administration. 2018 CBECS Survey Data. https://www.eia.gov/consumption/commercial/data/2018/ (last accessed: February 2, 2023).
---------------------------------------------------------------------------
Neither RECS nor CBECS provide data on community pools or outdoor
swimming pools in commercial applications, so DOE created samples based
on other available data. To develop samples for DPPPs in single or
[[Page 66994]]
multi-family communities, DOE used a combination of RECS 2020, U.S.
Census 2009 and 2011 American Home Survey Data
(AHS),60 61 62 and the 2022 PK Data report.\63\ To develop a
sample for pool pumps in outdoor commercial swimming pools, DOE relied
on data from both CBECS 2018 and the 2022 PK Data report.
---------------------------------------------------------------------------
\60\ U.S. Census Bureau. 2009 AHS survey data. www.census.gov/
programs-surveys/ahs/data/2009/ahs-2009-public-use-file_puf-/2009-
ahs-national-puf-microdata.html (last accessed: February 2, 2023).
\61\ U.S. Census Bureau. 2011 AHS survey data. www.census.gov/programs-surveys/ahs/data/2011/ahs-2011-summary-tables/h150-11.html
(last accessed: February 2, 2023).
\62\ The earlier versions of AHS was used due to the lack of
pool ownership information in the more recent AHS.
\63\ PK Data. 2022 Swimming Pool and Pool Heater Customized
Report for LBNL. pkdata.com/annual-reports/ (last accessed: February
2, 2023).
---------------------------------------------------------------------------
DPPPs can be installed with either above-ground or in-ground
swimming pools. In the June 2022 NOPR, DOE established separate sets of
consumer samples for in-ground pools and above-ground pools by
adjusting the original sample weights using data on the number of
installed in-ground and above-ground pools gathered during the January
2017 Direct Final Rule, which relied on 2014 data per State provided by
APSP.\64\ The consumer samples for DPPP motors used in self-priming and
pressure cleaner booster pumps are drawn from the in-ground pool
samples; the consumer samples for motors used with non-self-priming
pool pumps are obtained from the above-ground pool samples. 87 FR
37122, 37142. See chapter 8 of the June 2022 NOPR TSD. DOE did not
receive comments on this approach and retained the same method in this
final rule.
---------------------------------------------------------------------------
\64\ For more details see chapter 7 of the January 2017 Direct
Final Rule TSD at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------
See chapter 7 of the final rule TSD for more details about the
creation of the consumer samples and the regional breakdowns.
3. Self-priming and Non-Self-Priming Pool Pump Motor Input Power
The input power of DPPP motors used in self-priming and non-self-
priming pump applications is calculated based on the flow rates (gpm)
and typical energy factor (G/Wh) associated with each representative
unit.\65\ At efficiency levels corresponding to single-speed and two-
speed motors, the flow and energy factor values were based on input
from the engineering analysis and provided for each system curve (A, B,
or C).\66\ In the June 2022 NOPR, for each user of self-priming and
non-self-priming pool pumps in the consumer sample, DOE specified the
system curve used (A, B, or C) by drawing from a probability
distribution in which 35 percent of the pool pumps follow curve A, 10
percent of the pool pumps follow curve B, and the remaining 55 percent
follow curve C. The probability distribution was based on inputs from
the ASRAC DPPP Working Group gathered during the January 2017 Direct
Final Rule.\67\ 87 FR 37122, 37142.
---------------------------------------------------------------------------
\65\ The motor input power is equal to the flow (gpm) divided by
the energy factor (G/Wh) and multiplied by 60 (number of minutes in
an hour).
\66\ When a pump is tested on a system curve (such as curve C),
any one of the measurements hydraulic power, P (hp), volumetric
flow, Q (gpm) and total dynamic head, H (ft of water) can be used to
calculate the other two measurements.
\67\ For more details see chapter 7 of the January 2017 Direct
Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------
DOE did not receive any comments on this approach and retained the
same methodology and inputs for this final rule.
At efficiency levels corresponding to variable-speed motors, the
engineering analysis only provides flow and energy factor values for
the high-speed mode on each system curve. In the June 2022 NOPR, for
the low-speed mode, DOE used data on pool volume and desired time per
turnover from the January 2017 Direct Final Rule TSD to calculate a
consumer-specific low-speed flow.\68\ These relied on inputs from
stakeholders and several other references.69 70 71 DOE then
used the equation provided by the engineering analysis to calculate the
energy factor as a function of Q for each representative unit on each
system curve. 87 FR 37122, 37142. The equations from the engineering
analysis are provided in chapter 5 of the final rule TSD.
---------------------------------------------------------------------------
\68\ Flow (in gpm) is equal to the pool volume (in gallons)
divided by the desired time per turnover (in minutes).
\69\ CEE Residential Swimming Pool Initiative, December 2021.
\70\ California Energy Commission Pool Heater CASE.
efiling.energy.ca.gov/GetDocument.aspx?tn=71754&DocumentContentId=8285 (last accessed July
28, 2016).
\71\ Evaluation of potential best management practices-Pools,
Spas, and Fountains 2010. calwep.org/wp-content/uploads/2021/03/Pools-Spas-and-Fountains-PBMP-2010.pdf (last Accessed July 28,
2016).
---------------------------------------------------------------------------
Pentair and PHTA and NEMA commented that the minimum flow rate of
24.7 gpm that is being used in the energy use analysis is not high
enough to operate certain equipment. (Pentair, No. 90 at p. 2; PHTA and
NEMA, No. 92 at p. 4)
Specifically, PHTA and NEMA commented that in looking at filtration
pump motors, DOE did not consider additional factors, such as whether
the requirements apply to existing pool versus new construction, and
whether the requirements to operate certain equipment. PHTA and NEMA
commented that when designing a new pool, the piping and equipment are
selected in conjunction with the pump system to ensure the pool works
properly and safely. However, in existing pools, the piping and much of
the equipment, including sanitation items such as skimmers, main
drains, and filters, are already in place and would be cost prohibitive
for consumers to replace. As such, PHTA and NEMA commented that any
replacement motor needs to be capable to provide the flow rates needed
to work with the existing system. PHTA and NEMA stated that previous
norm in the pool construction industry was small pipe and bigger pump;
and although that has changed over the last 15 years, there are 5.4
million existing inground pools3 with a significant percentage that may
have 1.5-inch piping. PHTA and NEMA commented that the smaller more
restrictive piping size impacts the pump size, which also impacts the
filter maintenance. Further, PHTA and NEMA added that many existing
pools have skimmers that need a certain minimum flow rate (historically
30-35 gpm) to properly remove surface debris. A skimmer is one part of
the sanitation system of the pool and removes containments off the
surface to protect swimmers from infections. In some existing pool
cases, PHTA and NEMA commented that this will be compromised based on
the requirements found in the NOPR and possibly increase the risk of
recreational water illnesses for bathers. PHTA and NEMA commented that
the energy savings analysis for filtration pumps assumes a minimum flow
rate of 24.7 gpm for all filtration pump systems. However, PHTA and
NEMA stated that different equipment has minimum flow rates higher than
this value (e.g., electrolytic chlorinators, pool heaters, suction
cleaners and skimmers). Further, PHTA and NEMA stated that as equipment
begins to wear out over time, higher flow rates may be needed to
continue having the equipment work properly. PHTA and NEMA added that
while the minimum flow rate of 24.7 gpm was established as a reasonable
estimate of the low-flow conditions a pool may see, different equipment
have minimum flowrates above 24.7 gpm. PHTA and NEMA commented that
through a review of the various equipment, four manufacturers
identified products that require flowrates above 24.7 gpm. These
manufacturers indicated that they sell
[[Page 66995]]
various products, including gas heaters, sand filters, high efficiency
heaters, skimmers, and suction cleaners that all have minimum flowrates
at or above 30 gpm. PHTA and NEMA commented that the NOPR analysis did
not assume a range of minimum flow rates, and as a result, does not
account for the decreased savings (or incompatibility of small
variable-speed motors) associated with existing systems that have
higher minimum flow rates. PHTA and NEMA commented that a minimum flow
rate of 24.7 gpm would result in an existing small-size pump being run
at high speed--once installed with a small variable-speed motor--to
ensure the equipment continues to run as intended, and would defeat the
energy savings and purpose for requiring variable speed. (PHTA and
NEMA, No. 92 at pp. 3-4) Pentair added that the ICC/ANSI/PHTA 15 Energy
Standard has a minimum flow rate of 36 gpm that is being enforced
nationwide by many building departments. Therefore, Pentair noted that
a variable-speed fractional hp motor would have to operate at a max
speed or close to it to produce this minimum flow rate needed at any
reasonable total dynamic head loss. (Pentair, No. 90 at p. 2) Pentair
further added that in the exiting DPPP rule, there was a minimum
filtration rate of 36 gpm. (Pentair, Public Meeting Transcript, No. 88
at p. 62)
PHTA commented that DOE's analysis does not consider the range of
minimum flow rates required for certain pool equipment. PHTA stated
that in doing so, the analysis does not account for the decreased
savings associated with existing systems with and that higher minimum
flow rates require the motor to run at higher speeds. (PHTA, No. 100 at
p. 4)
The CA IOUs commented that during the 2015-2016 ASRAC DPPP Working
Group, DOE, industry representatives, and energy efficiency advocates
unanimously agreed to a low flow test point of 24.7 gpm on Curve C. The
CA IOUs commented that the test point is equivalent to 5 ft of head,
the minimum head loss required to account for static losses in the
system from the pool filter, pool heater, and skimmer. The CA IOUs
recommended that, at this operating point, there would be enough head
to push water through the complete pool filtration system, including
pool piping, pool filter, and pool heater.\72\ (CA IOUs, No. 96 at pp.
2-3)
---------------------------------------------------------------------------
\72\ The CA IOUs provided the following reference: ASRAC DPPP
term sheet, www.regulations.gov/document/EERE-2015-BT-STD-0008-0051,
rec 6.
---------------------------------------------------------------------------
The Joint Advocates stated that DOE's analysis accurately captures
the energy savings for variable speed. The Joint Advocates noted that
DOE did not assume that the low speed of a variable-speed pump is a
fixed percentage of high speed, but rather calculated an appropriate
low-speed flow rate and the associated energy factor for each consumer
in its sample, taking into account the minimum flow rate thresholds.
(Joint Advocates, No. 97 at pp. 1-2)
In the June 2022 NOPR, DOE calculated the low-speed flow rate as
the sampled pool size (drawn from a distribution) divided by the
desired number of hours to complete one turnover of the pool and
divided by 60 minutes per hour to get the low-flow rate per minute. In
addition, if the calculated low-speed flow rate obtained was below 24.7
gpm or 31.1 gpm, DOE used below 24.7 gpm or 31.1 gpm instead. Such an
approach results in a range of low-speed flow rates that are higher
than minimum flow rates. See chapter 7 of the June 2022 NOPR TSD. This
is consistent with the comments provided by PHTA and NEMA, Pentair,
PHTA, and the CA IOUs. As noted by the Joint Advocates, DOE clarifies
that the minimum flow rate is used as a threshold to ensure all low-
speed flow rates (at which the pump is assumed to operate) would be
greater than 24.7 or 31.1 gpm, as appropriate. The minimum flow rate
does not represent the assumed flow rate at which the variable speed
pump operates. As noted by the CA IOUs, the minimum flow rate of 24.7
gpm was developed during the 2015-2016 ASRAC DPPP Working Group.
Specifically, the CA IOUs commented that the minimum flow rates for
two-speed pumps of 24.7 gpm for two-speed pool filter pumps that have a
rated hydraulic horsepower less than or equal to 0.75 hp (small pool
filter pumps) and 31.1 gpm for two-speed pool filter pumps that have a
rated hydraulic horsepower greater than 0.75 (large pool filter pumps)
are consistent with the DPPP Working Group's recommended low-flow rates
for multi-speed and variable-speed pool filter pumps (Docket No. EERE-
2015-BT-STD-0008, No. 51, Recommendation #6 at p. 5). The DPPP Working
Group developed these low-flow rates based on the minimum effective
flow rates for typical pool sizes.\73\ DOE believes these flow rates
are also representative of minimum flow rates for two-speed pool filter
pumps and effectively prevent the inclusion of unreasonably low speeds
on two-speed pool filter pumps for the sole purpose of inflating WEF
ratings. 82 FR 36858, 36880 (Aug. 7, 2017) (citing 81 FR 64580, 64606
(Sept. 20, 2016)). DOE believes that the proposed load points for two-
speed pool filter pumps are representative of typical pool filter pump
operation and energy performance, and that the load points characterize
the efficiency of the pump speeds and flow points in typical
applications (i.e., cleaning/mixing and filtration). 82 FR 36858,
36880. In addition, while Pentair, NEMA, and PTHA recommended using a
range of minimum flow rates, they did not provide supporting
information to develop such distribution. In addition, DOE believes
that a single value of minimum flow rate is sufficient to set a
threshold and has developed a range of low-flow rates. Therefore, in
this final rule, DOE retained the same approach as in the June 2022
NOPR.
---------------------------------------------------------------------------
\73\ The minimum values of 24.7 and 31.1 gpm were used to
provide a threshold when developing low flow values in the 2017 DPPP
DFR. DOE did not use a value of 36 gpm as stated by Pentair. See
Chapter 7 of the January 2017 Direct Final Rule TSD, at
www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105, p.7-6,
footnote c.
---------------------------------------------------------------------------
4. Pressure Cleaner Booster Pumps Motor Input Power
The input power of DPPP motors used in pressure cleaner booster
pumps is calculated using the relationship between input power and flow
and the system curve provided by the engineering analysis. To
characterize operating flow for each consumer in the sample, in the
June 2022 NOPR, DOE drew a value from a statistical distribution of
flow established during the January 2017 Direct Final Rule. This
distribution was developed around the test procedure test point of 10
gpm of flow rate, as recommended by the ASRAC DPPP Working Group.
(Docket EERE-2015-BT-STD-0008, No. 92 at p. 311) For single-speed
pressure cleaner booster pumps, DOE then calculated the input power
using the power curve from the engineering analysis. For variable-speed
motors used in pressure cleaner booster pumps, DOE also calculated the
pool pump motor input power in a low-speed setting. Based on
information from the January 2017 Direct Final Rule, DOE used a value
of 10 gpm to characterize the low-speed flow and calculate the
hydraulic horsepower using the system curve.\74\ Then, DOE calculated
the input power using the relationship between input power and flow as
provided by the engineering analysis. 87 FR 37122, 37142.
---------------------------------------------------------------------------
\74\ For more details, see chapter 7 of the January 2017 Direct
Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------
The Joint Advocates commented that for PCBPs, DOE estimated savings
[[Page 66996]]
associated with reducing flow rate to the 10 gpm specified in the test
procedure, which is the typical flow rate required or recommended for
suction-side pressure cleaners to function. In addition, the Joint
Advocates noted that the savings associated with variable-speed
pressure cleaner booster pump motors are supported by testing conducted
by the CA IOUs during the DPPP rulemaking, which demonstrated that
variable-speed control can reduce pressure cleaner booster pump energy
consumption by 54 to 67 percent. Finally, the Joint Advocates commented
that because of the cubic relationship between pump speed and power,
reducing the speed of a pump by a small amount can yield large energy
savings. (Joint Advocates, No. 97 at p. 2)
As previously described in section IV.C.1.c of this document, DOE
developed a revised pump curve and input power curves as a function of
flow rate for PCBP with variable-speed motors. Accordingly, for both
single-speed and variable-speed PCBPs, DOE calculated the power
directly from the equation providing power as a function of flow
developed in the from the engineering analysis. For variable-speed
PCBPs, as noted by the Joint Advocates, DOE maintained a value of 10
gpm to characterize the flow in the low-speed setting.
5. Daily Operating Hours
In the June 2022 NOPR, DOE relied on information gathered during
the January 2017 Direct Final Rule to develop estimates of pool pump
daily operating hours. For self-priming and non-self-priming pool
filter pumps in residential applications, operating hours are
calculated uniquely for each consumer based on pool size, number of
turnovers per day (itself based on ambient conditions), and the pump
flow rate. In commercial applications, DOE assumed that these pumps
operate 24 hours per day. 87 FR 37122, 37142-37143. For PCBPs,
operating hours were drawn from a distribution based on the January
2017 Direct Final Rule and assumed a minimum operation of 2 hours per
day and a maximum of 3 hours per day. See section 7.4.2.2. of the June
2022 NOPR TSD.
PHTA and NEMA commented in support using the same methodology and
inputs to estimate DPPP motor energy use that were used in the
dedicated-purpose pool pump direct final rule TSD. (PHTA and NEMA, No.
92 at p. 12)
PHTA commented that PCBP motors operate within a small window of 2-
2.5 hours per day and that once a PCBP is set, customers have no reason
to further adjust the speed of the PCBP motor. (PHTA, No. 100 at pp. 2-
3)
In the June 2022 NOPR analysis, as noted above, DOE assumed that
PCBP motors operate between 2 and 3 hours per day, which is in line
with the information provided by PHTA regarding PCBP operating windows.
In addition, as noted in section IV.A.4 of this document, DOE believes
that variable speed is an appropriate design option for these motors
and would result in energy savings to the consumer.
DOE did not receive any other comments on daily operating hours and
retained its approach for calculating the daily operating hours during
the pool operating season.
6. Annual Days of Operation
In the July 2022 NOPR, DOE calculated the annual unit energy
consumption by multiplying the daily operating hours by the annual days
of operation, which depend on the number of months of pool operation.
For each consumer sample, DOE assigned different annual days of
operation depending on the region in which the DPPP is installed. This
assignment was based on information related to pool pump operating
season based on geographical locations collected during the January
2017 Direct Final Rule. 87 FR 37122, 37143-37144.
DOE did not receive any comments on this topic and continued to use
the same inputs regarding annual days of operation by region.
Chapter 7 of the January 2017 Direct Final Rule TSD provides
details on DOE's energy use analysis for DPPP 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
DPPP 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:
[ballot] 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.
[ballot] 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 DPPP 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 including 2009 AHS, 2011 AHS, 2020 RECS, 2018
CBECS and 2022 PK data. For each sample consumer, DOE determined the
energy consumption for DPPP motors and the appropriate energy price. By
developing a representative sample of households, the analysis captured
the variability in energy consumption and energy prices associated with
the use of DPPP 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 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 DPPP motors user samples. For this
rulemaking, the Monte Carlo approach is implemented in MS Excel
together with the Crystal Ball\TM\ add-on.\75\ The
[[Page 66997]]
model calculated the LCC for products at each efficiency level for
10,000 consumers 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 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.
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\75\ Crystal Ball\TM\ is a commercially available software tool
to facilitate the creation of these types of models by generating
probability distributions and summarizing results within Excel,
available at www.oracle.com/technetwork/middleware/crystalball/overview/index.html (last accessed February 3, 2023).
---------------------------------------------------------------------------
DOE calculated the LCC and PBP for consumers of DPPP motors as if
each were to purchase a new product in the first year of required
compliance with new or amended standards. As discussed in section III.A
of this document, for all TSLs except TSL 7, new standards apply to
DPPP motors manufactured 2 years after the date on which any new
standard is published, which corresponds to a first full year of
compliance of 2026.\76\ At TSL 7, new standards would also apply 2
years after the publication of any new standard except for small-size
DPPP motors, for which new standards apply to DPPP motors manufactured
4 years after the date on which any new standard is published. For the
purposes of the LCC and PBP analysis, DOE used 2026 as the first full
year of compliance with any amended standards for DPPP motors.
---------------------------------------------------------------------------
\76\ At this time, DOE estimates publication of a final rule in
the second half of 2023. Therefore, for purposes of its analysis,
DOE used 2026 as the first full year of compliance with any amended
standards for DPPP motors.
---------------------------------------------------------------------------
Table IV.6 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 spreadsheet model, and of
all the inputs to the LCC and PBP analyses, are contained in chapter 8
of the final rule TSD and its appendices.
Table IV.6--Summary of Inputs and Methods for the LCC and PBP Analysis *
----------------------------------------------------------------------------------------------------------------
Inputs Source/method
----------------------------------------------------------------------------------------------------------------
Equipment Cost.......................................... Derived by multiplying MPCs by manufacturer and
distribution channel markups and sales tax, as
appropriate. Used historical data to derive a price
scaling index to project equipment costs.
Installation Costs...................................... Baseline installation costs determined using data from
manufacturer gathered during the January 2017 Direct
Final Rule.
Annual Energy Use....................................... The daily energy consumption multiplied by the number
of operating days per year.
Variability: Based on the 2009 AHS, 2011 AHS, 2020
RECS, 2018 CBECS, 2022 PK data and other data
sources.
Energy Prices........................................... Electricity: Based on EEI data for 2021.
Variability: Regional energy prices determined for
nine census divisions for pool pump motors in
individual single-family homes and nine census
divisions for pool pump motors in community and
commercial pool pump motors.
Average and marginal prices used for electricity.
Energy Price Trends..................................... Based on AEO2023 price projections.
Repair and Maintenance Costs............................ Assumed no repair or maintenance on pool pump motors.
Equipment Lifetime...................................... Average: 3.6 to 5 years depending on the DPPP
applications.
Variability: Based on Weibull distribution.
Discount Rates.......................................... Residential: Approach involves identifying all
possible debt or asset classes that might be used to
purchase the considered appliances, or might be
affected indirectly. Primary data source was the
Federal Reserve Board's Survey of Consumer Finances.
Commercial: Calculated as the weighted average cost of
capital for entities purchasing pool pumps. Primary
data source was Damodaran Online.
Compliance Date......................................... 2026 (first full year for analytical purposes).
----------------------------------------------------------------------------------------------------------------
* Not used for PBP calculation. References for the data sources mentioned in this table are provided in the
sections following the table or in chapter 8 of the 2017 Direct Final Rule TSD.
1. Equipment Cost
To calculate consumer product costs, DOE multiplied the MPCs
developed in the engineering analysis by the markups described
previously (along with sales taxes). DOE used different markups for
baseline products and higher-efficiency products because DOE applies an
incremental markup to the increase in MSP associated with higher-
efficiency products.
In the June 2022 NOPR, to project an equipment price trend, DOE
derived an inflation-adjusted index of the Producer Price Index
(``PPI'') for integral and fractional horsepower motors and generators
manufactured over the period 1967-2020.\77\ For fractional horsepower
motors, the data showed a slightly downward trend prior to the early
2000s, and then the price index increased to a small degree. For
integral horsepower motors, the trend was mostly flat before the early
2000s, and then the price index increased slightly. The trend aligned
with the copper and steel deflated price indices to some extent, as
they are the major materials used in small electric motors. Given the
degree of uncertainty, in the June 2022 NOPR, DOE used a constant price
assumption as the default price factor index to project future DPPP
motor prices. For two-speed DPPP motors \78\, however, DOE assumed that
the timer control portion of the installation cost would be affected by
price learning. DOE used PPI data on ``Automatic environmental control
manufacturing'' between 1980 and 2020 to estimate the historic price
trend of the electronic components in the timer control.\79\ For
variable-speed DPPP motors, DOE assumed that the controls portion of
the DPPP motor would be affected by price
[[Page 66998]]
learning. Similarly, DOE used PPI data on ``Semiconductors and related
device manufacturing'' between 1967 and 2020 to estimate the historic
price trend of electronic components in the control.\80\ 87 FR 37122,
37145.
---------------------------------------------------------------------------
\77\ Series ID PCU 3353123353121; www.bls.gov/ppi/.
\78\ DOE uses the terms ``dual-speed'' and ``two-speed''
interchangeably throughout this document.
\79\ Automatic environmental control manufacturing PPI series ID
PCU334512334512; www.bls.gov/ppi/.
\80\ Semiconductors and related device manufacturing PPI series
ID PCU334413334413; www.bls.gov/ppi/.
---------------------------------------------------------------------------
DOE did not receive any comments on the equipment price trends. DOE
updated the data used to include an additional year (2021) and retained
the same approach to develop equipment price trends.
2. Installation Costs
Installation costs include labor, overhead, and any miscellaneous
materials and parts needed to install the equipment. In the June 2022
NOPR, DOE simplified the calculation and only accounted for the
difference of installation costs by efficiency levels. Specifically,
for two-speed pumps, DOE included the cost of a timer control and its
installation where applicable. DOE also incorporated the supplemental
installation labor costs for variable-speed pumps where applicable. Id.
Pentair commented that older pools with large single-speed pumps
would begin to fail and need replacement, as older pools usually do not
have any automation to control the pool equipment and automation is
needed to be able to program and control a variable-speed pump easily.
Pentair commented that the cost to automate is between $2,000 to
$3,000, and because of this cost, many pool owners rebuild the motor or
purchase a foreign-made motor and pump. (Pentair, No. 90 at p. 1)
DOE understands Pentair's comment regarding automation systems as
relating to additional control systems that can be used to further
automate the operation of a DPPP via computer or mobile devices. These
systems permit sophisticated control over e.g. filtration, pumps,
lighting chemical management, wireless remote control.\81\ DOE notes
that these systems are not necessary to operate a variable-speed DPPP.
As noted in section 5.7.1 of the January 2017 Direct Final Rule
TSD,\82\ DOE researched the design and engineering constraints
associated with motor substitution by examining manufacturer interview
responses and holding discussions with the DPPP Working Group. DOE
concluded that for the representative equipment capacities being
considered, the wet end of the pump can be paired with a range of
motors with various efficiencies and speed configurations without
significant adaptations. In other words, a motor swap results in
negligible incremental costs to the non-motor components of the DPPP.
Thus, DOE concluded that the incremental MPC of the motor swap design
options (improved motor efficiency and ability to operate at reduced
speeds) may be considered equivalent to the incremental MPC of the
motor component being swapped. Therefore, for variable-speed DPPP
motors, DOE is not including the additional cost of automation systems
in its analysis.
---------------------------------------------------------------------------
\81\ See for example: www.pentair.com/en-us/products/residential/pool-spa-equipment/pool-automation/easytouch_pl4_andpsl4poolandspacontrolsystems.html?queryID=b1f890f14ae08bf7d162fc1ae8f116e8&objectID.
\82\ See chapter 5 of the dedicated-purpose pool pumps direct
final rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------
DOE did not receive other comments on installation costs and
retained the same estimates as in the June 2022 NOPR as applied to two-
speed and variable-speed DPPP motors.\83\
---------------------------------------------------------------------------
\83\ Adjusted to 2021$.
---------------------------------------------------------------------------
3. Annual Energy Consumption
For each sampled consumer, DOE determined the energy consumption
for a DPPP 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.
DOE derived electricity prices in 2022 using data from EEI Typical
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric
bills and average kilowatt-hour costs to the customer as charged by
investor-owned utilities. For the residential sector, DOE calculated
electricity prices using the methodology described in Coughlin and
Beraki (2018).\84\ For the commercial sector, DOE calculated
electricity prices using the methodology described in Coughlin and
Beraki (2019).\85\
---------------------------------------------------------------------------
\84\ Coughlin, K. and B. Beraki.2018. Residential Electricity
Prices: A Review of Data Sources and Estimation Methods. Lawrence
Berkeley National Lab. Berkeley, CA. Report No. LBNL-2001169.
ees.lbl.gov/publications/residential-electricity-prices-review.
\85\ 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. 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 DPPP
motors, regional weighted-average values for both average and marginal
prices were calculated for the nine census divisions. Each EEI utility
in a region was assigned a weight based on the number of consumers it
serves. Consumer counts were taken from the most recent EIA Form EIA-
861 data (2021). See chapter 8 of the final rule TSD for details.
To estimate energy prices in future years, DOE multiplied the 2022
energy prices by the projection of annual average price changes for
each of the nine census divisions from the Reference case in AEO2023,
which has an end year of 2050.\86\ To estimate price trends after 2050,
DOE used the average of 2046-2050 values, held constant.
---------------------------------------------------------------------------
\86\ U.S. Department of Energy--Energy Information
Administration. Annual Energy Outlook 2023 with Projections to 2050.
Washington, DC. Available at www.eia.gov/forecasts/aeo/ (last
accessed May 23, 2023).
---------------------------------------------------------------------------
5. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing product
components that have failed in the equipment; maintenance costs are
associated with maintaining the operation of the equipment. Typically,
small incremental increases in equipment efficiency entail no, or only
minor, changes in repair and maintenance costs compared to baseline
efficiency products. In the June 2022 NOPR, DOE assumed that for
maintenance costs, there is no change with efficiency level, and
therefore DOE did not include those costs in the model. In addition,
DPPP motors are not typically repaired and DOE assumed no repair costs.
87 FR 37122, 37146.
DOE did not receive any comments regarding maintenance and repair
costs and maintained the same approach in this final rule.
6. Equipment Lifetime
In the June 2022 NOPR, for DPPP motors used in residential
applications, DOE calculated lifetime estimates using DPPP lifetime
data and rates of repair
[[Page 66999]]
from the January 2017 Direct Final Rule, which estimated that motor
replacement occurs at the halfway point in a pump's lifetime, but only
for those DPPPs whose lifetime exceeds the average lifetime for the
relevant equipment class.\87\ The data allowed DOE to develop a
survival function, which provides a distribution of lifetime ranging
from a minimum of 1 year based on a period covered by warranty, to a
maximum of 10 years, with a mean value of 5 years for self-priming
pumps, to a maximum of 8 years, with a mean value of 3.6 years for non-
self-priming and pressure cleaner booster pumps. These values are
applicable to DPPP motors in residential applications. For commercial
applications, DOE adjusted the lifetimes to account for the higher
operating hours compared to residential applications, resulting in a
reduced average lifetime of 3.2 years for self-priming pumps and 3.5
years for pressure cleaner booster pumps. The resulting shipments-
weighted average lifetime across all DPPP motor equipment classes is
4.5 years. Id.
---------------------------------------------------------------------------
\87\ For DPPPs that do not include a repair, the DPPP motor
lifetime is equal to the DPPP lifetime. For DPPPs that are repaired,
the DPPP motor lifetime is equal to half of the DPPP lifetime. See
chapter 8 of the dedicated-purpose pool pumps January 2017 Direct
Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------
The CA IOUs recommended that DOE increase the PCBP lifetimes to
account for shorter operating hours compared to non-self-priming pump
applications, similar to how DOE assumed longer lifetimes for DPPP
motors used in the residential sector vs. commercial sector. The CA
IOUs estimated the PCBP operating hours are about 40 percent shorter
than the non-self-priming pool filter pump. (CA IOUs, No. 96 at pp. 5-
6)
The CEC and NYSERDA recommended that DOE revise its lifetime
estimates for PCBPs pumps, as well as for variable-speed DPPPs as
compared to single- or two-speed DPPPs. The CEC and NYSERDA commented
that they expected that more up-to-date information would be available
to support increased lifetime estimates for PCBPs, as well as for
variable-speed DPPPs generally. (CEC and NYSERDA, No. 94 at p. 6)
DOE does not have lifetime data for PCBP motors. As stated
previously, DOE calculated PCBP motor lifetimes based on information on
PCBP lifetimes. DOE developed separate DPPP motor lifetimes by DPPP
applications in line with the lifetime estimates from the January 2017
Direct Final Report. Specifically, for PCBPs, a shorter average
lifetime was considered compared to self-priming pumps to reflect a
higher risk of failure typical of these DPPPs. (Docket EERE-2015-BT-
STD-0008; No. 94 p. 221) The PCBP lifetimes were developed with input
from the Working Group and DOE believes these are representative of
PCBP lifetimes. In addition, the CA IOUs, the CEC, and NYSERDA did not
provide data to support longer lifetimes for DPPP motors used in PCBPs,
nor did they provide data to support longer lifetimes for DPPP motors
used in variable-speed DPPPs. Therefore, DOE believes its current
approach is valid and retains its lifetime estimates for DPPP motors
used in PCBPs.
The CEC and NYSERDA stated although the approach \88\ described in
the June 2022 NOPR is reasonable, DOE should revisit its underlying
assumptions for the LCC calculations and ensure the product lifetime
estimates are consistent with the assumptions for motor replacements
and warranty lengths. Specifically, the CEC and NYSERDA noted that
there was a mismatch between the assumptions made for product lifetime,
repair frequency, and warranty length in the January 2017 Direct Final
Rule, and because of this, the resulting estimated equipment lifetime
used in this NOPR underestimates the actual lifetimes of DPPP motors.
The CEC and NYSERDA stated that they believed the Working Group members
did not factor in potential repairs or warranties when coming up with
product lifetime estimates. (Docket EERE-2015-BT-STD-0008; No. 94 pp.
209-223). The CEC and NYSERDA added that motor failure is the major
failure mode for DPPPs and so if the motor is replaced after failure,
the estimated lifetime of a DPPP is doubled. Further, the CEC and
NYSERDA noted that if the DPPP fails during the warranty period and is
replaced at no cost to the consumer, then the estimated lifetime of the
DPPP is increased by the number of years the DPPP worked before it
failed. The CEC and NYSERDA provided the example of the lifetime
distribution for variable-speed non-self-priming pumps from the January
2017 Direct Final Rule and stated that the assumptions regarding
lifetime, repair frequency, and warranty period were incompatible and
required increasing the mean and maximum values of the Weibull
distributions used to estimate the equipment lifetime. The CEC and
NYSERDA commented that DOE relied on an overly conservative assessment
of equipment lifetime, which would mean that the economics of the
proposed standard, in reality, would be even more favorable than what
DOE presented in the LCC analysis. The CEC and NYSERDA, therefore,
commented that DOE should ensure that the product lifetime estimates
are consistent with the assumptions on motor replacements and warranty
lengths. (CEC and NYSERDA, No. 94 at pp. 4-6)
---------------------------------------------------------------------------
\88\ The CEC and NYSERDA referred to the following description:
``for DPPPs that do not include a repair, the DPPP motor lifetime is
equal to the DPPP lifetime. For DPPPs that are repaired, the DPPP
motor lifetime is equal to half of the DPPP lifetime.'' 87 FR 37122,
37146.
---------------------------------------------------------------------------
DOE reviewed the DPPP lifetime assumptions and notes in the January
2017 Direct Final Rule TSD; the average lifetimes and associated
Weibull distributions represent the age at which the equipment is
retired from service and include any repairs \89\ or motor replacement
during the warranty period. (See section 8.2.2.4 of the January 2017
Direct Final Rule TSD) \90\ As noted by the CEC and NYSERDA, the DPPP
lifetimes used in the January 2017 Direct Final Rule were developed
primarily based on input from manufacturers (in responses found in
DOE's manufacturer interviews) and feedback from the ASRAC DPPP Working
Group. The manufacturers interview guide reflects that DPPP lifetime is
considered to include any motor replacement that would occur. (See
section 12A.9 of the January 2017 Direct Final Rule TSD) \91\ As such,
DOE believes that the lifetimes estimated in the January 2017 Direct
Final Rule are inclusive of any repair and warranty periods. In
addition, while the CEC and NYSERDA recommended revising equipment
lifetimes, they did not provide alternative estimates and DOE retains
the lifetimes as calculated in the June 2022 NOPR.
---------------------------------------------------------------------------
\89\ The warranty period is represented by the location or delay
parameter of the Weibull distribution.
\90\ See chapter 8 of the January 2017 Direct Final Rule TSD, at
www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
\91\ See appendix 12A of the January 2017 Direct Final Rule TSD,
at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------
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 DPPP 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
[[Page 67000]]
or implicit discount rates.\92\ 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 longtime horizon modeled
in the LCC, the application of a marginal interest rate associated with
an initial source of funds is inaccurate. Regardless of the method of
purchase, 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.
---------------------------------------------------------------------------
\92\ The implicit discount rate is inferred from a consumer
purchase decision between two otherwise identical goods with
different first cost and operating cost. It is the interest rate
that equates the increment of first cost to the difference in net
present value of lifetime operating cost, incorporating the
influence of several factors: transaction costs; risk premiums and
response to uncertainty; time preferences; interest rates at which a
consumer is able to borrow or lend. The implicit discount rate is
not appropriate for the LCC analysis because it reflects a range of
factors that influence consumer purchase decisions, rather than the
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------
To establish residential discount rates for the LCC analysis, DOE
identified all relevant household debt or asset classes in order to
approximate a consumer's opportunity cost of funds related to appliance
energy cost savings. It estimated the average percentage shares of the
various types of debt and equity by household income group using data
from the Federal Reserve Board's triennial Survey of Consumer Finances
\93\ (``SCF'') starting in 1995 and ending in 2019. Using the SCF and
other sources, DOE developed a distribution of rates for each type of
debt and asset by income group to represent the rates that may apply in
the year in which amended standards would take effect. DOE assigned
each sample household a specific discount rate drawn from one of the
distributions. The average rate across all types of household debt and
equity and income groups, weighted by the shares of each type, is 4.26
percent.
---------------------------------------------------------------------------
\93\ U.S. Board of Governors of the Federal Reserve System.
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010,
2013, 2016, and 2019. www.federalreserve.gov/econresdata/scf/scfindex.htm (last accessed September 1, 2022).
---------------------------------------------------------------------------
To establish commercial discount rates for the small fraction of
applications where businesses purchase and use DPPP motors, DOE
estimated the weighted-average cost of capital using data from
Damodaran Online.\94\ 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 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 discount rate is 6.77 percent.
---------------------------------------------------------------------------
\94\ Damodaran Online, Data Page: Costs of Capital by Industry
Sector (2021). pages.stern.nyu.edu/~adamodar/ (last accessed April
22, 2022).
---------------------------------------------------------------------------
DOE did not receive any comments related to discount rates. DOE
retained the same methodology used in NOPR and updated the discount
rate distributions based on the most recent available data.
See chapter 8 of the January 2017 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 product efficiencies under the no-new-
standards case (i.e., the case without amended or new energy
conservation standards).
In the June 2022 NOPR, to estimate the efficiency distribution of
DPPP motors in 2026, DOE first established efficiency distributions in
2021. Then, as in the January 2017 Direct Final Rule, DOE projected the
2026 efficiency distribution by assuming a 1-percent market shift from
EL 0-EL 2 (single-speed DPPP motors) to EL 6 (variable-speed DPPP
motors) where applicable. To establish the efficiency distributions of
DPPP motors in 2021, DOE considered two market segments: (1) DPPP
motors incorporated in DPPPs and (2) replacement DPPP motors sold
alone. 87 FR 37122, 37147.
For DPPP motors incorporated in DPPPs, in the June 2022 NOPR, DOE
relied on the 2021 DPPP Database that included a total of 345 models of
DPPPs with WEF ratings and on the ELs developed in the January 2017
Direct Final Rule to establish the 2021 efficiency distributions of
DPPPs. DOE also used the scenario of roll-up market response to the
DPPP standards as presented in the January 2017 Direct Final Rule. DOE
then assumed that the distributions of DPPP motors incorporated in
DPPPs would be equivalent to the 2021 efficiency distributions of
DPPPs, based on the equivalent structure of the ELs used in this NOPR
and in the January 2017 Direct Final Rule. For representative units 4
(i.e., DPPP motors used in non-self-priming pumps, extra-small) and 7
(i.e., DPPP motors used in pressure cleaner booster pumps), the 2021
DPPP Database did not include any information specific to these DPPPs.
Instead, for these representative units, DOE relied on the efficiency
distributions provided in the January 2017 Direct Final Rule and
applied a scenario of roll-up market response to the upcoming DPPP
standards. Id.
For replacement DPPP motors sold alone, in the June 2022 NOPR, for
the United States, not including California,\95\ DOE assumed that the
DPPP standards would have no impact on the DPPP motor efficiency
distributions. Therefore, to establish the efficiency distributions of
replacement DPPP motors sold alone, DOE relied on the 2021 no-new-
standards case efficiency distributions provided in the January 2017
Direct Final Rule, which reflect efficiency distributions prior to the
compliance date of the DPPP standards. DOE then assumed that the
efficiency distributions of replacement DPPP motors sold alone would be
equivalent to the efficiency distributions of DPPPs, based on the
equivalent structure of the ELs used in this NOPR and in the January
2017 Direct Final Rule. For California, DOE applied a scenario of roll-
up market response to the upcoming California replacement DPPP motor
standards.\96\ DOE then relied on the market shares of replacement DPPP
motors sold in California \97\ and in the rest of the United States to
establish the nationwide 2021 replacement DPPP motor efficiency
distributions. Id.
---------------------------------------------------------------------------
\95\ DOE considered California separately in light of the July
2021 California standards for replacement DPPP motors adopted April
7, 2020 with an effective date July 19, 2021. See Docket 19-AAER-02
at www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20/appliance-efficiency-proceedings-2.
\96\ For the purposes of this analysis, DOE considered EL 1 (for
motors below 0.5 THP) and EL 6 (for motors above 0.5 THP) as
equivalent levels to the California standards.
\97\ California Energy Commission, Final Analysis of Efficiency
Standards for Replacement Dedicated-Purpose Pool Pump Motors,
February 20, 2020. Docket 9-AAER-02 https://efiling.energy.ca.gov/GetDocument.aspx?tn=232151 (last accessed August 2021).
---------------------------------------------------------------------------
In response to the June 2022 NOPR, PHTA and NEMA commented that DOE
[[Page 67001]]
overestimated the percentage of PCBP and small filter pumps that would
be variable speed in 2026. PHTA and NEMA commented that based on a
review of the CCMS data, there is limited availability of fractional
THP motors currently on the market. Further, PHTA and NEMA commented
that the limited models available are not mass produced. Recognizing
the limited models of motors that exist in the small motor category,
PHTA and NEMA cited this as a rationale for the fact that there are
zero or very limited variable-speed replacement motors in the CEC
database since the July 19, 2021, compliance date of CEC's replacement
motor rule (the database appears to not identify whether products
listed are variable speed or not; it lists only model information).
PHTA and NEMA commented that in discussions with the California pool
service, installer, and distribution industry as well as PHTA and NEMA
manufacturers, it was revealed that small fractional VS motors are
simply not being sold and instead consumers are choosing to replace the
entire pump or repair the existing motor due to the cost justification
and lack of product availability. (PHTA and NEMA, No. 92 at pp. 6-7)
Fluidra commented that DOE's estimate for the share of DPPP motors
used in PCBP at EL 2 appears to be too low. Specifically, Fluidra
commented that EL 2 represents multistage booster pumps, which it
estimates to be approximately a third of total booster pump market
share. Fluidra further commented that DOE's estimated market share of
DPPP motors used in PCBP at EL 6 appears to be too high. Although
technologically feasible, Fluidra noted that it is not economically
practical and there appears to be no availability of this type of pump
in distribution at this time. Fluidra also noted that DOE's estimate
for DPPP motors used in small-size 0.75 hp self-priming DPPP at EL 6
appears to be too high because there are currently no or very limited
variable-speed DPPPs of this size in the market. Fluidra added that for
representative unit 7, the estimated 35 percent of replacement
variable-speed PCBP motors is much too high and should be 0-1 percent,
instead. (Fluidra, No. 91 at pp. 3-4)
Pentair questioned whether variable-speed motors are being shipped
in large numbers and stated that this is not the case. (Pentair, No. 90
at p. 2)
PHTA stated that there are no variable-speed pumps on the market
below 0.75 hp. (PHTA, No. 100 at p. 3) Hayward recommended that DOE
review the availability of low-horsepower variable-speed DPPP motors in
the current market, and that Hayward offers three basic variable-speed
pump models that can achieve a rating of 0.85 THP, but only when
installed with 115V power. Accordingly, Hayward noted that each of
these models is made with dual-voltage capability, and estimated that
over 98 percent are installed with 230V power which yields 1.65 THP.
(Hayward, No. 93 at p. 2)
In this final rule, DOE revised the no-new-standards case
efficiency distributions to incorporate stakeholder feedback. First,
DOE revised the approach used to develop the no-new-standards case
efficiency distributions for replacement DPPP motors in California
(which was based on a roll-up scenario) and assumed shipments of
replacement variable-speed DPPP motors would not always increase as a
result of the California standard. Instead, in cases where the
California standard requires a variable-speed replacement DPPP motor
and the current DOE standards for DPPPs can be met without the use of a
variable-speed motor (i.e., for small-size DPPP motors and for
standard-size DPPP motors used in non-self priming DPPPs), DOE assumed
that consumers would choose to purchase a new, cheaper, non-variable-
speed DPPP instead of purchasing a more expensive variable-speed
replacement motor.\98\ This approach results in a lower market share of
variable-speed DPPP motors overall (i.e., lower shipments), and
specifically for DPPP motors used in PCBPs as recommended by NEMA,
PTHA, and Fluidra. This approach also results in a decrease in the
market share of DPPP motors used in small size 0.75 hp self-priming
DPPP at EL 6 compared to the estimates from the June 2022 NOPR, as
recommended by Fluidra. In addition, DOE updated the information used
to develop the efficiency distributions based on the 2022 DPPP
Database. Further to derive the efficiency distributions for each
representative unit, DOE relied on all models of DPPP with a DPPP motor
THP included in the range represented by the representative unit (e.g.,
for representative unit 1, DOE relied on DPPP motor data with DPPP
motor THP greater than 0.5 and less than 1.15 THP). For this analysis,
DOE considered the DPPP motor THP as rated by manufacturers when
submitting compliance to the DOE Compliance and Certification Database,
the CEC, and the ENERGY STAR program (which DOE collected as part of
the 2022 DPPP Database), which may include ratings at different
voltages. As a result, although DOE did not find DPPP motors at 0.75
THP, DOE found several variable-speed DPPP motors within the 0.5-1.15
THP range. In addition, DOE does not have any technical basis for, or
has not received any comments on, variable-speed technology not being
feasible at 0.75 THP (See section IV.A.4 of this document), and
believes the efficiency distributions as established are representative
of the 0.5-1.15 THP range associated with representative unit 1.
---------------------------------------------------------------------------
\98\ As noted by NEMA and PTHA, a consumer may also choose to
repair its existing motor. However, DOE notes in section IV.F.5 of
this document that DPPP motors are typically not repaired and DOE
believes that the purchase of a new DPPP represents the more likely
scenario.
---------------------------------------------------------------------------
Regarding Fluidra's comment related to the share of shipments at EL
2 for PCBP, Fluidra did not provide supporting data to justify the
recommended one-third market share. In addition, DOE notes that EL 2
represents a level achieved by a higher-efficiency DPPP motor and does
not relate to the pump design (e.g., multi-stage). The market shares
from the June 2022 NOPR were based on information collected during the
January 2017 Direct Final Rule. DOE maintained the same approach as the
2022 DPPP Database and did not have sufficient information \99\ to
revise these estimates.
---------------------------------------------------------------------------
\99\ The 2022 DPPP Database includes 12 models of PBCPs.
---------------------------------------------------------------------------
The projected 2026 market shares by EL for the no-new-standards
case for DPPP motors are shown in Table IV.7 and Table IV.8 by market
segment. See chapter 8 of the final rule TSD for further information on
the derivation of the efficiency distributions.
Table IV.7--DPPP Motors Incorporated in DPPPs 2026 No-New-Standards Case Efficiency Distributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rep. EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
Equipment class unit THP DPPP application (%) (%) (%) (%) (%) (%) (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Extra-Small-size....................... 4 0.22 Non-self-priming Filter Pump, 0 67 33 ....... ....... ....... .......
Extra-Small-size (0.09 hhp).
Small-size............................. 1 0.75 Self-priming Filter Pump, 0 0 45 9 0 1 44
Small-size (0.44 hhp).
Small-size............................. 5 1 Non-self-priming Filter Pump, 0 38 27 10 6 1 18
Small-size (0.52 hhp).
[[Page 67002]]
Small-size............................. * 7 1.125 Pressure Cleaner Booster Pump. 0 81 10 ....... ....... ....... 9
Standard-size.......................... 6 1.5 Non-self-priming Filter Pump 0 38 27 10 6 1 18
(0.87 hhp).
Standard-size.......................... 2 1.65 Self-priming Filter Pump, 0 0 0 0 0 0 100
Standard-size (0.95 hhp).
Standard-size.......................... 2A 1.65 Self-priming Filter Pump, 0 0 45 9 0 1 44
Small-size (0.65 hhp).
Standard-size.......................... 3 3.45 Self-priming Filter Pump, 0 0 0 0 0 0 100
Standard-size (1.88 hhp).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For Pressure cleaner booster pumps EL 3, EL 4, and EL 5 are equivalent to EL 6.
Note: may not sum to 100% due to rounding.
Table IV.8--Replacement DPPP Motors Sold Alone 2026 No-New-Standards Case Efficiency Distributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rep. EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
Equipment class unit THP DPPP application (%) (%) (%) (%) (%) (%) (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Extra-small-size....................... 4 0.22 Non-self-priming Filter Pump, 29 38 33 ....... ....... ....... .......
Extra-Small size (0.09 hhp).
Small-size............................. 1 0.75 Self-priming Filter Pump, 33 11 9 2 2 2 42
Small-size (0.44 hhp).
Small-size............................. 5 1 Non-self-priming Filter Pump, 26 26 31 2 1 1 12
Small-size (0.52 hhp).
Small-size............................. * 7 1.125 Pressure Cleaner Booster Pump. 11 65 10 ....... ....... ....... 14
Standard-size.......................... 6 1.5 Non-Self-priming Filter Pump 26 26 31 2 1 1 12
(0.87 hhp).
Standard-size.......................... 2 1.65 Self-priming Filter Pump, 27 9 7 1 1 1 52
Standard-size (0.95 hhp).
Standard-size.......................... 2A 1.65 Self-priming Filter Pump, 33 11 9 2 2 2 42
Small-size (0.65 hhp).
Standard-size.......................... 3 3.45 Self-priming Filter Pump, 27 9 7 1 1 1 52
Standard-size (1.88 hhp).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For Pressure cleaner booster pumps EL 3, EL 4, and EL 5 are equivalent to EL 6.
The LCC Monte Carlo simulations draw from the efficiency
distributions and randomly assign an efficiency to the DPPP 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.
In the June 2022 NOPR, when assigning an equipment efficiency to a
sample consumer, DOE relied on a random assignment of no-new-standards
case efficiencies (sampled from the developed efficiency distribution)
in the LCC model. 87 FR 37142. 37144. DOE did not receive any comments
on this approach and continued to rely on a random assignment in this
final rule.
9. Payback Period Analysis
The payback period is the amount of time (expressed in years) it
takes the consumer to recover the additional installed cost of more-
efficient products, compared to baseline products, through energy cost
savings. 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. DOE
refers to this as a ``simple PBP'' because it does not consider changes
over time in operating cost savings. The PBP calculation uses the same
inputs as the LCC analysis when deriving first-year operating costs.
As noted previously, EPCA establishes a rebuttable presumption that
a standard is economically justified if the Secretary finds that the
additional cost to the consumer of purchasing 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. 6316(a);
42 U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency level, DOE
determined the value of the first year's energy savings by calculating
the energy savings in accordance with the applicable DOE test
procedure, and multiplying those savings by the average energy price
projection for the year in which compliance with the new standards
would be required.
Fluidra presented a study of PCBP power consumption taken from two
typical residential in-ground pool installations to compare the power
consumption of a production multi-stage single-speed booster pump, with
a multi-stage and a single-stage booster pump fitted with the most
compatible variable-speed DPPP motor currently available. Fluidra
commented that in the study, power was measured at various motor
rotations per minute (``RPM'') down the lowest possible RPM to maintain
the necessary flow and pressure for pool cleaner operation. Fluidra
concluded from the study that a minimum payback period of approximately
9 years was needed, and this was larger than the average lifetime of
the PCBP motor (at 3.6 years from the 2017 Direct Final Rule TSD).
Further, Fluidra noted that the power consumption of the booster pump
variable-speed motor operating at maximum speed measured noticeably
higher than the single-speed base comparison. Specifically, Fluidra
commented that operating a PCBP at maximum speed is necessary because
of the plumbing head loss from extended pipe runs where the pool
equipment pad is further from the pool for aesthetics and noise
reduction. Accordingly, Fluidra concluded that the variable speed would
have incremental costs, without ever realizing the fiscal benefit of
potential energy savings, and with limited impact to energy and waste
reduction. (Fluidra, No. 91 at pp. 1-2, 6-9)
Hayward stated that it reviewed energy and cost savings for six of
its currently compliant single-speed pumps, including self-priming and
non-self-priming, and estimated that the average payback period for
conversion to variable speed was over 12 years. Hayward provided a
separate analysis spreadsheet of this evaluation. Hayward also noted
use of a 24.7 gpm flow rate, although Hayward knows of pool equipment
requiring a greater flow rate. (Hayward, No. 93 at p. 2)
PHTA and NEMA provided the results of field tests of two separate
variable-speed PCBPs showing payback periods of 9-30 years, while a
PCBP has an average lifetime of 3.6 years. In addition, PHTA and NEMA
noted that in some cases, the variable-speed PCBP consumed more energy
than the constant-load system. PHTA and NEMA noted that these results
are consistent
[[Page 67003]]
with the LCC results from the January 2017 Direct Final Rule. (PHTA and
NEMA, No. 92 at pp. 2-3)
PHTA restated that PCBPs, when analyzed as their own equipment
class, would not show cost-effective results; thus, it requested that
DOE confirm its analysis and not require variable speed for these
motors. (PHTA, No. 100 at p. 2) PHTA added that the rule is not cost-
effective and pointed to data provided by Hayward that calculated a 12-
year payback period for both self-priming and non-self-priming pumps
under 1 hp as well as data submitted by Fluidra that calculated a 9-
year payback period for a variable-speed PCBP. (PHTA, No. 100 at pp. 3-
4)
Waterway Plastics commented that savings are application-related.
Waterway Plastics noted that non self-priming pool pumps are used on
smaller swimming pools that have less filtration load, and some of them
are seasonal. Therefore, they questioned the representativeness of
average values for all applications. (Waterway Plastics, Public
Meeting, No. 88 at p. 32) Waterway Plastics added that above-ground
swimming pool and non-self-priming pump is used to filter a much
smaller body of water on average and therefore averaging and combining
the non-self-priming application with the self-priming application do
not provide an accurate economic analysis. Further, Waterway Plastics
added that using variable speed motors results in energy savings
because they are flexible on the speed of operation and do not provide
significant savings when used a maximum speed compared to single speed
motors. (Waterway Plastics, Public Meeting, No. 88 at pp. 58-59)
While the Fluidra and Hayward studies analyzed a number of specific
installations, DOE notes that the LCC analyzes a larger consumer sample
and characterizes inputs using statistical distributions to reflect
variability in the field (see description in sections IV.E. and IV.F of
this document). DOE does not believe that the two or six installations
considered by Fluidra and Hayward are representative of the entire
market as they do not reflect the entire range of possible installation
costs, energy usage and usage conditions (e.g. as noted by Hayward,
they relied on a single value of 24.7 gpm flow rate, although pool
equipment typical runs at higher rates), and related operating costs.
Further, as previously described, DOE believes that variable-speed
motors can lead to energy savings in PCBPs as discussed in section
IV.A.4 of this document. Instead, in the LCC and PBP analysis, DOE
considers a distribution of installations with variations in heads and
flow rates and efficiency as described in sections IV.E and IV.F.8 of
this document. In addition, as presented in section IV.A.3 of this
document, DOE's LCC and PBP analysis results are provided at the
equipment-class level and not at the DPPP-application level (e.g.,
PCBP). The resulting payback periods are presented in section V.B.1.a
of this document.
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.\100\
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.
---------------------------------------------------------------------------
\100\ 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.
---------------------------------------------------------------------------
1. Base-Year Shipments
In the June 2022 NOPR, DOE estimated motor shipments by DPPP
application and considered two pool pump motor market segments: (1)
DPPP motors incorporated in DPPPs and (2) replacement DPPP motors sold
alone. For DPPP motors incorporated in DPPPs, DOE used the 2015
shipments of DPPPs by DPPP application from the January 2017 Direct
Final Rule, which were based on manufacturer interviews. For
replacement DPPP motors sold alone, DOE used estimates of historical
shipments of DPPPs for the period 2007-2014 and estimates of repair
frequency as provided by the ASRAC DPPP Working Group during the
January 2017 Direct Final Rule to calculate the resulting number of
failing DPPP motors each year, and corresponding replacement DPPP motor
shipments by DPPP application.\101\ DOE also used 2018 confidential
DPPP motor shipments data and information from the 2021 DPPP Database
to estimate market share of motor shipments by total horsepower and
distribution of DPPP motor shipments by representative unit. 87 FR
37122, 37148.
---------------------------------------------------------------------------
\101\ DOE relied on a repair frequency of 40 percent as provided
in the January 2017 Direct Final Rule. At the end of life of a
motor, the motor is replaced (i.e., pump repair) 40 percent of the
time, and in the remaining 60 percent of the time, the pump is
replaced by a new pump. For more details, see chapter 9 of the
January 2017 Direct Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------
Regarding DOE's base year shipments estimate, Fluidra commented
that shipments of replacement DPPP motors for booster pumps appear to
be too high. Fluidra stated that it offers two Pressure Cleaner Booster
Pump Models (PB4-60 and PB4SQ), and combined ships less than 1,000
replacement motors per year, which includes warranty replacements.
Fluidra added that due to the low price point of booster pumps, the
cost of a replacement motor and service/repair of a booster pump
outweighs the cost of simply replacing the entire booster pump, which
also comes with a manufacturer warranty. (Fluidra, No. 91 at p. 4)
In this final rule, as described in section IV.F.8 of this
document, DOE revised the base year 2021 shipments to account for
consumers that elect to purchase a new pump, rather than a replacement
motor in California.\102\ This resulted in reduced shipments of
replacement DPPP motors sold alone and increased shipments of motors
sold in DPPP for PCBP, small-size self-priming, small and standard-size
non-self-priming filter pump applications.
---------------------------------------------------------------------------
\102\ As noted in section IV.F.8 of this document, DOE
considered California separately in light of the July 2021
California standards for replacement DPPP motors adopted April 8,
2020 with an effective date July 19, 2021. See Docket 19-AAER-02 at
www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20/appliance-efficiency-proceedings-2.
---------------------------------------------------------------------------
Table IV.9 provides the breakdown of DPPP motor shipments by market
segment and representative unit.
[[Page 67004]]
Table IV.9--2021 Shipments of DPPP Motors by Market Segment and Representative Unit
--------------------------------------------------------------------------------------------------------------------------------------------------------
DPPP motors Replacement
Represented THP range incorporated DPPP motors
Equipment class Rep. unit * THP DPPP category within the DPPP in pumps sold alone
category (thousand (thousand
units) units)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small-size........................... 1 0.75 Small Size Self-priming 0.5 <= THP < 1.15...... 148.3 37.4
Filter Pump.
Standard-size........................ 2A 1.65 1.15 <= THP <= 5....... 103.8 26.1
Standard-size........................ 2 1.65 Standard Size Self- 1.15 <= THP < 1.7...... 155.2 151.7
priming Filter Pump.
Standard-size........................ 3 3.45 1.7 <= THP <= 5........ 243.1 237.5
Extra-Small-size..................... 4 0.22 Non-self-priming Filter <0.5................... 47.4 16.2
Pump.
Small-size........................... 5 1 0.5 <= THP < 1.15...... 299.3 86.9
Standard-size........................ 6 1.5 1.15 <= THP <= 5....... 116.4 33.8
Small-size........................... 7 1.125 Pressure Cleaner Booster 0.5 <= THP < 1.15...... 151.8 39.7
Pump.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Representative unit.
2. No-New-Standards Case Shipment Projections
DOE projected shipments of DPPP motors incorporated in DPPPs and
shipments of replacement DPPP motors sold alone separately.
In the June 2022 NOPR, in the no-new-standards case, DOE assumed
the total shipments of DPPP motors incorporated in DPPPs was equal to
the total shipments of DPPPs as projected in the January 2017 Direct
Final Rule, at the trial standard level corresponding to the DPPP
energy conservation standard.\103\ 87 FR 37122, 37149. DOE did not
receive any comments on this approach and retained the same method to
estimate DPPP motors incorporated in DPPPs.
---------------------------------------------------------------------------
\103\ These were calculated based on input from the ASRAC DPPP
Working Group and using a repair-replace model, and accounted for
price elasticity of demand. A price elasticity of -0.02 was used for
standard-size self-priming pool pumps. For more details see chapter
9 of the January 2017 Direct Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------
In the June 2022 NOPR, in the no-new-standards case, for
replacement DPPP motors sold alone, DOE used the projected shipments of
DPPPs and estimates of repair frequency to calculate the resulting
number of failing motors each year and corresponding motor replacement
sales. For replacement motors sold alone outside of California, DOE
relied on repair frequency rates as provided in the January 2017 Direct
Final Rule. For standard-size, self-priming pump motors sold before
2021 and at efficiency levels below the DPPP standards, DOE assumed
that the repair frequency would increase from 40 percent to 60 percent
to calculate corresponding replacement DPPP motors sales.\104\ For
other categories of DPPPs, DOE relied on a 40-percent repair frequency
as provided in the January 2017 Direct Final Rule. These repair-replace
rates were based on inputs from the ASRAC DPPP Working Group during the
January 2017 Direct Final Rule. For replacement motors sold alone in
California, DOE projects that with the California efficiency standards
for replacement DPPPs,\105\ the repair frequency of standard-size,
self-priming pump motors will remain at its pre-2021 rate of 40 percent
as estimated in the January 2017 Direct Final Rule, rather than
increasing to 60 percent due to the smaller price difference between
replacing the entire pump and replacing the motor only. Id.
---------------------------------------------------------------------------
\104\ In the January 2017 Direct Final Rule, DOE assumed that
users of standard-size self-priming pool pumps purchased before
compliance year of the DPPP standards (i.e., 2021), at efficiency
levels below the upcoming DPPP standards, would seek to increase
their pump's lifetime by performing an additional repair (i.e.,
cheaper motor replacement with a non-variable speed motor), rather
than replacing the entire pump with a more efficient and variable-
speed DPPP (due to the DPPP energy conversation standards at 10 CFR
431.465(f) which correspond to a variable-speed efficiency levels
for these DPPPs). In the January 2017 Direct Final Rule, DOE
therefore increased the repair frequency of these DPPPs from 40
percent to 60 percent. For more details see chapter 9 of the January
2017 Direct Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
\105\ Adopted April 7, 2020 with an effective date July 19,
2021. See Docket #19-AAER-02 at www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20/appliance-efficiency-proceedings-2.
---------------------------------------------------------------------------
In response to the June 2022 NOPR, Fluidra commented that a 60-
percent estimate for replacement motors may be too high, adding that
the tendency for the consumer is to replace motors only when they are
under warranty, and once the motor warranty expires, the consumer
purchases a whole new pump to get a new manufacturer's warranty
(typically a 3-year warranty). (Fluidra, No. 91 at p. 4)
In the June 2022 NOPR, in order to estimate shipments of DPPP
motors, DOE relied on a 40-percent DPPP repair rate for the majority of
DPPPs. See footnote 85 of the June 2022 NOPR. 87 FR 37122, 37148. As
previously noted, for standard-size self-priming pump motors sold
outside California before 2021 and at efficiency levels below the DPPP
standards, DOE assumed that the repair frequency would increase from 40
percent to 60 percent to calculate corresponding replacement DPPP
motors sales. See 87 FR 37122, 37149. Similar to the assumptions used
in the January 2017 Direct Final Rule, DOE assumed that users of
standard-size self-priming pool pumps purchased before compliance year
of the DPPP standards (i.e., 2021), at efficiency levels below the
upcoming DPPP standards, would seek to increase the pump's lifetime by
performing an additional repair (i.e., cheaper motor replacement with a
non-variable-speed motor), rather than replacing the entire pump with a
more efficient and variable-speed DPPP (due to the DPPP energy
conversation standards at 10 CFR 431.465(f), which correspond to
variable-speed efficiency levels for these DPPPs). See footnote 87 of
the June 2022 NOPR 87 FR 37122, 37149. DOE believes this approach is
appropriate and continues to rely on a 60-percent DPPP repair rate for
DPPPs sold prior to 2021 below the current DPPP standards. For all
other categories of DPPPs, DOE relied on a 40-percent repair rate as
using a 60-percent rate would be too high as noted by Fluidra. DOE did
not receive any other comments on this topic and relied on the same
repair rates and approach to estimate replacement DPPP motors sold
alone in the no-new-standards case.
[[Page 67005]]
3. Standards Case Shipment Projections
The standards-case shipments projections account for the effects of
potential standards on shipments.
In the June 2022 NOPR, in the standards cases for which the DPPP
motor efficiency level was set below the level equivalent to the
standard-size self-priming DPPP standards, DOE assumed the increase in
repair frequency (i.e., 60 percent) of standard-size self-priming pool
pumps, which was accounted for in the no-new-standards case, was
maintained for the entire United States except for California (i.e.,
TSLs 1 to 5 as described in section V.A of this document). In
California, due to the California efficiency standards for replacement
DPPP motors, DOE estimated that the repair frequency of standard-size
self-priming pump motors in California would remain at its pre-2021
rate of 40 percent in the standards case (the same as in the no-new-
standards case) because California standards are at or above the levels
equivalent to the DPPP standards at 10 CFR 431.465(f) for all equipment
classes. 87 FR 37122, 37149.
In the June 2022 NOPR, outside of California, in the standards
cases for which the DPPP motor efficiency levels are set at or above
the level equivalent to the standard-size self-priming DPPP standard,
DOE assumed the increase in repair for standard-size self-priming pumps
would no longer occur starting from the compliance year due to the
smaller price difference between replacing the entire pump and
replacing the motor only. Under these scenarios, DOE assumed the pumps
were repaired 40 percent of the time, and new pumps were purchased 60
percent of the time to replace failed pumps (i.e., TSLs 6 to 8 as
described in section V.A of this document). Id.
In addition, DOE accounted for potential downsizing that could
occur as a result of setting different efficiency levels by equipment
classes and THP. Specifically, DOE assumed that DPPP manufacturers may
not want to incorporate variable-speed motors in DPPPs, where the DPPP
energy conservation standard level does not require the use of a
variable-speed motor. Therefore, at TSLs requiring a variable-speed
motor for certain equipment classes with larger THP (i.e., TSL 8, 7, 6.
See section V.A), DOE assumed that DPPP manufacturers might decide to
use motors with smaller THP for DPPPs that were not required to comply
with a DPPP standard level corresponding to a variable-speed-motor
efficiency level. DOE analyzed DPPP motor THP size as a function of
DPPP hhp in the 2021 DPPP Database to estimate where such downsizing
may occur. For TSL 8 and 7, DOE did not identify any possible
downsizing from small-size DPPP motors to extra-small-size DPPP motors.
Furthermore, at TSL 8 and 7, small-size and standard-size DPPP motors
are both set at EL 6. Therefore, DOE did not consider any downsizing at
these TSLs. At TSL 6, based on a review of the 2021 DPPP Database, DOE
identified representative unit 2A as a candidate for downsizing.
Therefore, at TSL 6, DOE assumed that the majority of shipments of
standard-size DPPP motors used in small-size self-priming pool pumps
(80 percent) would downsize to small-size DPPP motors. For standard-
size DPPP motors used in standard-size non-self-priming pumps (i.e.,
representative unit 5), DOE did not identify DPPP models with oversized
DPPP motors in its 2021 DPPP Database and did not assume any
downsizing. 87 FR 37122, 37149-37150.
DOE did not receive any comments on its approach to establish
standards-case shipments projections and maintain the same methodology
in this final rule with the following update. For those California
consumers that elect to purchase a new DPPP rather than a replacement
variable-speed motor in the no-new-standards case (based on the
discussion in section IV.F.8 of this document), at the TSLs for which
the DPPP motor efficiency levels are set at or above the level
equivalent to the PCBP, small-size self-priming, small and standard-
size non-self-priming DPPP standards, DOE assumed that these California
consumers would select to purchase a replacement motor rather than a
new DPPP. This results in an increase of shipments of replacement DPPP
motors sold alone and a decrease of shipments of motors sold in DPPP at
these TSLs, for those DPPP applications. See chapter 9 of the final
rule TSD for more details.
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.\106\ (``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 DPPP motors sold from 2026 through 2055, except at TSL 7 where for
small size motors at TSL 7, the analysis considers DPPP motors sold
from 2028 through 2055.\107\
---------------------------------------------------------------------------
\106\ The NIA accounts for impacts in the 50 States and U.S.
territories.
\107\ Because the anticipated compliance date is late in the
year, for analytical purposes, DOE conducted the analysis for
shipments in 2026-2055 and 2028-2055.
---------------------------------------------------------------------------
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.
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 final rule. Discussion of these inputs and methods
follows the table. See chapter 10 of the final rule TSD for further
details.
[[Page 67006]]
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....... 2026 (2028 at TSL 7 for small-size
DPPP motors) (first full year).
Efficiency Trends................. No-new-standards case: shifted 1
percent per year of the market
share in the single-speed levels to
the variable-speed efficiency
levels. Standard cases: shifted 1
percent per year of the market
share in the single-speed levels to
the variable-speed efficiency
levels.
Annual Energy Consumption per Unit Annual weighted-average values are a
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.
Annual Energy Cost per Unit....... Annual weighted-average values as a
function of the annual energy
consumption per unit and energy
prices.
Repair and Maintenance Cost per Annual values do not change with
Unit. efficiency level.
Energy Price Trends............... AEO 2023 projections (to 2050) and
held constant thereafter.
Energy Site-to-Primary and FFC A time-series conversion factor
Conversion. based on AEO 2023.
Discount Rate..................... Three and seven percent.
Present Year...................... 2024.
------------------------------------------------------------------------
1. Product 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 product classes for the year of anticipated compliance with
an amended or new standard. To project the trend in efficiency absent
amended standards for DPPP motors over the entire shipments projection
period, DOE relied on the same approach described in section IV.F.8
this document and shifted 1 percent per year of the market share in the
single-speed levels to the variable-speed efficiency levels. The
approach is further described in chapter 10 of the final rule TSD.
For the standards cases, DOE used a ``roll-up'' scenario to
establish the shipment-weighted efficiency for the year that standards
are assumed to become effective (2026 or 2028). 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.
In the June 2022 NOPR, to develop standards case efficiency trends
after the first full year of compliance (2026 or 2028), DOE also
shifted 1 percent per year of the market share in the single-speed
levels to the variable-speed efficiency levels. 87 FR 37122, 37151.
This approach is consistent with the assumption made in the 2017 DPPP
DFR. See section 8.4 of the June 2022 NOPR TSD. DOE did not receive any
comments on this assumption and retained the same approach in the final
rule.
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
AEO 2023. 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. DOE did not find any
data on the rebound effect specific to DPPP motors and, in the June
2022 NOPR, DOE did not apply a rebound effect. 87 FR 37122, 37151. DOE
did not receive any comments on this topic and maintains the same
approach in this final rule.
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 \108\
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 and 13A of the final rule TSD.
---------------------------------------------------------------------------
\108\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009.
Available at www.eia.gov/analysis/pdfpages/0581(2009)index.php (last
accessed September 2, 2021).
---------------------------------------------------------------------------
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
[[Page 67007]]
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 DPPP
motors price trends based on historical PPI data. DOE applied the same
trends to project prices for each equipment class at each considered
efficiency level. By 2055, which is the end date of the projection
period, the average DPPP motor price is projected to drop between 0 and
52 percent depending on the efficiency level relative to 2026. DOE's
projection of product prices is described in appendix 10C of the final
rule TSD.
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 DPPP
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 10C of the final rule TSD.
The energy cost savings are calculated using the estimated energy
savings in each year and the projected price of the appropriate form of
energy. To estimate energy prices in future years, DOE multiplied the
average regional energy prices by the projection of annual national-
average residential energy price changes in the Reference case from AEO
2023, which has an end year of 2050. To estimate price trends after
2050, DOE used the average of 2046 to 2050 prices, held constant. As
part of the NIA, DOE also analyzed scenarios that used inputs from
variants of the AEO 2023 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 10D of the final rule TSD.
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
final rule, DOE estimated the NPV of consumer benefits using both a 3-
percent and a 7-percent real discount rate. DOE uses these discount
rates in accordance with guidance provided by the Office of Management
and Budget (``OMB'') to Federal agencies on the development of
regulatory analysis.\109\ 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.
---------------------------------------------------------------------------
\109\ 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 Feb. 2, 2023).
---------------------------------------------------------------------------
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.
In the June 2022 NOPR, DOE analyzed the impacts of the considered
standard levels on one subgroup: senior-only households. The analysis
used subsets of the RECS 2015 sample composed of households that meet
the criteria for the subgroup. DOE used the LCC and PBP spreadsheet
model to estimate the impacts of the considered efficiency levels on
this subgroup. DOE did not evaluate low-income consumer subgroup
impacts because the sample size of the subgroup was too small for
meaningful analysis. 87 FR 37122, 37152 FN97.
NEMA and PHTA commented that DOE should consider the economic
impact on lower median income and underserved communities whose
consumers utilize above-ground and storable pools that typically fall
within the small fractional motor category currently requiring a
variable-speed motor in the NOPR. NEMA and PHTA commented that there
are 3.3 million permanent above-ground pools in the United States; in
2020, there were 227,000 new above-ground pools installed and in 2021
this number increased to 247,000 (compared to 96,000 in-ground in 2020
and 117,000 in-ground in 2021); the average above-ground pool price in
2021 was $3,615 compared to $56,000 for the average in-ground pool.
(PHTA and NEMA, No. 92 at p. 5) PHTA commented that lower-income
consumers and underserved communities would be more negatively impacted
by a variable-speed requirement for small fractional motors because of
the use of such motors in above-ground and storable pools. (PHTA, No.
100 at p. 4)
In the June 2022 NOPR, DOE did not evaluate low-income consumer
subgroup impacts because the sample size of the subgroup was too small
for meaningful analysis. 87 FR 37122, 37186 FN97. In this final rule,
DOE updated the sample based on RECS 2020 and found that RECS 2020 only
included 37 low-income consumer samples representing 2.6% of U.S
households with a pool.\110\ Therefore, in this final rule, DOE did not
evaluate low-income consumer subgroup impacts because the sample size
of the subgroup continues to be too small for meaningful analysis.
---------------------------------------------------------------------------
\110\ After adjusting the RECS sample to represent the
geographic distribution of above ground pools, this results in 2.5
percent of consumers of above-ground pools that are low-income.
---------------------------------------------------------------------------
For this final rule, DOE analyzed the impacts of the considered
standard levels on senior-only households. The analysis used subsets of
the RECS 2020 sample composed of households that meet the criteria for
the considered subgroup. DOE used the LCC and PBP spreadsheet model to
estimate the impacts of the considered efficiency levels on these
subgroups. Chapter 11 in the final rule TSD describes the consumer
subgroup analysis.
J. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the financial impacts of new
energy conservation standards on manufacturers of DPPP 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 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
[[Page 67008]]
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 equipment. The key GRIM outputs are the
INPV, which is the sum of industry annual cash flows over the analysis
period, discounted using the industry-weighted average cost of capital,
and the impact to domestic manufacturing employment. The model uses
standard accounting principles to estimate the impacts of 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 standards,
the GRIM estimates a range of possible impacts under different
manufacturer markup scenarios.
The qualitative part of the MIA addresses manufacturer
characteristics and market trends. Specifically, the MIA considers such
factors as a potential standard's impact on manufacturing capacity,
competition within the industry, the cumulative impact of other DOE and
non-DOE regulations, and impacts on manufacturer subgroups. The
complete MIA is outlined in chapter 12 of the final rule TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase
1 of the MIA, DOE prepared a profile of the DPPP motors manufacturing
industry based on the market and technology assessment, preliminary
manufacturer interviews, and publicly available information. This
included a top-down analysis of DPPP 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 DPPP motors manufacturing industry,
including company filings of form 10-K from the SEC,\111\ corporate
annual reports, the U.S. Census Bureau's ``Economic Census,'' \112\ and
reports from Dunn & Bradstreet.\113\
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\111\ See online at www.sec.gov/edgar.shtml (Last accessed on
January 13, 2023).
\112\ See online at www.census.gov/programs-surveys/asm/data/tables.html (Last accessed on January 13, 2023).
\113\ See online at app.avention.com (Last accessed on January
13, 2023).
---------------------------------------------------------------------------
In Phase 2 of the MIA, DOE prepared a framework industry cash-flow
analysis to quantify the potential impacts of new energy conservation
standards. The GRIM uses several factors to determine a series of
annual cash flows starting with the announcement of the standard and
extending over a 30-year period following the compliance date of the
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 DPPP 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 standards
or that may not be accurately represented by the average cost
assumptions used to develop the industry cash flow analysis. Such
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 of this document, ``Review under the Regulatory
Flexibility Act'' and in chapter 12 of the final rule TSD.
2. Government Regulatory Impact Model and Key Inputs
DOE uses the GRIM to quantify the changes in cash flow due to new
standards that result in a higher or lower industry value. The GRIM
uses a standard, annual discounted cash-flow analysis that incorporates
manufacturer costs, manufacturer 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 energy conservation standards. The GRIM
spreadsheet uses the inputs to arrive at a series of annual cash flows,
beginning in 2024 (the base year of the analysis) and continuing to
2055. DOE calculated INPVs by summing the stream of annual discounted
cash flows during this period. For manufacturers of DPPP motors, DOE
used a real discount rate of 7.2 percent, which was derived from
industry financials and then modified according to feedback received
during manufacturer interviews.
The GRIM calculates cash flows using standard accounting principles
and compares changes in INPV between the no-new-standards case and each
standards case. The difference in INPV between the no-new-standards
case and a standards case represents the financial impact of the new
energy conservation standards on manufacturers. As discussed
previously, DOE developed critical GRIM inputs using a number of
sources, including publicly available data, results of the engineering
analysis, 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 of this
document. Additional details about the GRIM, the discount rate, and
other financial parameters can be found in chapter 12 of the final rule
TSD.
a. Manufacturer Production Costs
Manufacturing more efficient equipment is typically more expensive
than manufacturing baseline equipment due to the use of more complex
components, which are typically more costly than baseline components.
The changes in the MPCs of covered equipment can affect the revenues,
gross margins, and cash flow of the industry.
DOE initially used data from the January 2017 Direct Final Rule to
determine the MSP of DPPP
[[Page 67009]]
motors. Specifically, DOE used Table 5.7.1 of the January 2017 Direct
Final Rule TSD, which estimated the MSPs of DPPP motors used in the
analysis. For this final rule DOE adjusted the MSPs used in the June
2022 NOPR from 2020 dollars into 2021 dollars. For a complete
description of the MPCs, see chapter 5 of the final rule TSD.
b. Shipments Projections
The GRIM estimates manufacturer revenues based on total unit
shipment projections and the distribution of those shipments by
efficiency level. Changes in sales volumes and efficiency mix over time
can significantly affect manufacturer finances. For this analysis, the
GRIM uses the NIA's annual shipment projections derived from the
shipments analysis from 2024 (the base year) to 2055 (the end year of
the analysis period). See chapter 9 of the final rule TSD for
additional details.
c. Product and Capital Conversion Costs
New energy conservation standards could cause manufacturers to
incur conversion costs to bring their production facilities and
equipment designs into compliance. DOE evaluated the level of
conversion-related expenditures that would be needed to comply with
each considered efficiency level in each equipment class. For the MIA,
DOE classified these conversion costs into two major groups: (1)
product conversion costs; and (2) capital conversion costs. Product
conversion costs are investments in research, development, testing,
marketing, and other non-capitalized costs necessary to make equipment
designs comply with new energy conservation standards. Capital
conversion costs are investments in property, plant, and equipment
necessary to adapt or change existing production facilities such that
new compliant equipment designs can be fabricated and assembled.
DOE continued to use the conversion costs estimates form the June
2022 NOPR. DOE updated these conversion cost estimates from 2020
dollars to 2022 dollars using the PPI NAICS code 335312 (motor and
generator manufacturing).\114\ In the June 2022 NOPR, DOE assumed that
DPPP motor manufacturers would not incur any capital conversion costs
for efficiency levels that single-speed or dual-speed motors would be
able to meet. The same production equipment currently used to
manufacture single-speed and dual-speed motors would still be able to
be used to manufacture more efficient single- and dual-speed motors.
However, DOE did assume that DPPP motor manufacturers would incur
capital conversion costs at efficiency levels that variable-speed
motors would be needed to meet the analyzed energy conservation
standards. 87 FR 37122, 37153.
---------------------------------------------------------------------------
\114\ www.bls.gov/ppi/databases/ (last accessed on February 9,
2023).
---------------------------------------------------------------------------
Additional production equipment would be needed to manufacture both
additional variable-speed motor models and a larger production volume
of variable-speed motors than are currently being produced. DOE used
feedback from manufacturer interviews to estimate the cost of adding a
production line to manufacture variable-speed motors. DOE then
estimated the number of additional variable-speed production lines
needed at each TSL, based on the increase in variable-speed shipments
estimated at the analyzed TSL and the number of DPPP motor
manufacturers that would need to introduce variable-speed motor models
to meet the analyzed TSL.
DOE assumed that DPPP motor manufacturers would not incur any
additional product conversion costs for the standard size equipment
classes. All DPPP motor manufacturers currently manufacture multiple
variable-speed motor models in the standard size equipment classes.
Additionally, the current DOE energy conservation standard for DPPPs
that most commonly use the standard size DPPP motors use variable speed
motors to meet those efficiency requirements. Therefore, almost all
standard size DPPP motors sold as part of a new DPPP are already
variable-speed motors. However, DOE did assume that DPPP motor
manufacturers would incur product conversion costs for the other
equipment classes at each analyzed efficiency level.
Additionally, DPPP motor models would need to be introduced for the
extra small-size and small-size DPPP motor equipment classes at each
efficiency level analyzed. To evaluate the level of product conversion
costs manufacturers would likely incur to comply with the analyzed
energy conservation standards for these equipment classes, DOE used a
model database to estimate the number of DPPP motor models that would
have to be redesigned at each efficiency level for each equipment
class. In general, DOE assumes all conversion-related investments occur
between the year of publication of the final rule and the year by which
manufacturers must comply with the new standards.
PHTA and NEMA commented that manufacturers have already made
investments that ranged between $50,000 and $6.5 million to comply with
the January 2017 Direct Final Rule and that in order to comply with the
standards proposed in the June 2022 NOPR, DPPP motor and DPPP
manufacturers may have to make investments that are 10 times larger
than the investments required to comply with the January 2017 Direct
Final Rule. Additionally, PHTA and NEMA stated that some of the
investments that were made to comply with the January 2017 Direct Final
Rule will not be able to be recouped by the time compliance with the
DPPP motor energy conservation standards are required. (PHTA and NEMA,
No. 92 at p. 8) DOE accounted for these additional investments that
DPPP motor manufacturers will have to make to comply with the analyzed
energy conservation standards for DPPP motors, in the form of
conversion costs. These investments are displayed as conversion costs
in Table V.15 and Table V.16.
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
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 markups to the
MPCs estimated in the engineering analysis for each product class and
efficiency level. Modifying these markups in the standards cases yield
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 energy conservation standards: (1)
a preservation of gross margin scenario; and (2) a preservation of
operating profit scenario. These scenarios lead to different
manufacturer markup values that, when applied to the MPCs, result in
varying revenue and cash flow impacts.
Under the preservation of gross margin scenario, DOE applied a
single uniform ``gross margin percentage'' across all efficiency
levels, which assumes that manufacturers would be able to maintain the
same amount of profit as a percentage of revenues at all efficiency
levels within an equipment class. DOE continued to use a
[[Page 67010]]
manufacturer markup of 1.37 for all DPPP motors, which is the same
manufacturer markup that was used in the June 2022 NOPR.\115\ This
manufacturer markup scenario represents the upper bound to industry
profitability under new energy conservation standards.
---------------------------------------------------------------------------
\115\ 87 FR 37122, 37154.
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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 MPC. Under this
scenario, as the MPCs increase, manufacturers are generally required to
reduce the manufacturer markup to maintain a cost competitive offering
in the market. Therefore, gross margin (as a percentage) shrinks in the
standards cases. This manufacturer markup scenario represents the lower
bound to industry profitability under new energy conservation
standards.
A comparison of industry financial impacts under the two
manufacturer markup scenarios is presented in section V.B.2.a of this
document.
3. Manufacturer Interviews
DOE conducted interviews with manufacturers prior to the
publication of the June 2022 NOPR. In these 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 new energy
conservation standards 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.
Some manufacturers stated they only produce single-speed and dual-
speed motors within the small-size equipment class (0.5 <= THP < 1.15)
and no longer supply DPPP motors used in new DPPP in that range to the
California market after the CEC standard took effect. These
manufacturers stated that they would need to design variable-speed
motor models to meet any energy conservation standard that would
require a variable-speed motor for the small-size equipment class.
Additionally, these manufacturers would need to build additional
production lines or make significant changes to existing single-speed
or dual-speed production lines to be able to meet energy conservation
standards requiring variable-speed DPPP motors for this equipment
class. DOE included the capital and product conversion costs necessary
for these DPPP motor manufacturers to introduce variable-speed DPPP
motor models for the small-size equipment class.
4. Comments From Interested Parties
Several interested parties commented on DOE's NOPR MIA. These
comments were made either in writing during the comment period
following the publication of the June 2022 NOPR or during the NOPR
public meeting for DPPP motors.
PHTA and NEMA commented that the lack of timing alignment between
DPPP and DPPP motors standards will impact manufacturer's ability to
make proper investments and product design if the DPPP motor energy
conservation standards make the investments made for the DPPP energy
conservation standards moot. (PHTA and NEMA, No. 92 at p. 8) PHTA and
NEMA also commented that the lack of harmonization between the DPPP
energy conservation standards and the DPPP motor energy conservation
standard proposed in the NOPR could result in manufacturers being
required to produce multiple, separate, motor types to serve
aftermarket applications versus OEM applications. PHTA and NEMA stated
that harmonization between the two rules would reduce overall
regulatory burden on DPPP motor manufacturers by allowing manufacturers
to leverage economies of scale. (PHTA and NEMA, No. 92 at p. 13)
Pentair also commented that the investments spent to meet the DPPP rule
would be wasted because of the new proposal. (Pentair, No. 90 at p. 1)
The compliance date for the DPPP energy conservation standards occurred
on July 19, 2021. As part of this final rule, and the NOPR, MIA, DOE
examined the additional investments that DPPP motor manufacturers will
have to make to comply with the analyzed energy conservation standards
for DPPP motors. DOE used the methodology described in section IV.J.2.c
of this document to estimate the conversion costs for each analyzed
TSL. DOE incorporated these conversion costs into the cash flow
analysis presented in section V.B.2.a of this document.
Additionally, PHTA and NEMA commented that complex DPPP motor
energy conservation standards superimposed on the DPPP energy
conservation standards which are not aligned will make compliance with
both energy conservation standards matters difficult for manufacturers.
PHTA and NEMA stated it is essential that DOE align the performance
requirements of the DPPP energy conservation standards with the
requirements of the DPPP motors energy conservation standards in order
to facilitate compliance with both standards. (PHTA and NEMA, No. 92 at
pp. 8-9) PHTA and NEMA also expressed concerns on how the regulatory
burden of complying with both the DPPP and DPPPM regulations, that are
not align in the performance requirements and in the timing, could be
burdensome on DPPP motor manufacturers. (PHTA and NEMA, No. 92 at p.
13)
EPCA directs DOE to establish energy conservation standards for
DPPP motors that are designed to achieve the maximum improvement in
energy efficiency that are 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)) As previously stated in this section, DOE accounted for
the additional investments that DPPP motor manufacturers will have to
make to comply with the analyzed energy conservation standards for DPPP
motors. DOE examined the regulatory burden on DPPP motor manufacturers
when deciding what energy conservation standard was technologically
feasible and economically justified in section V.C. of this document.
Lastly, DOE may consider separately coordinating a similar compliance
timeline with any upcoming DPPP rulemaking.
Hayward commented that they have already made substantial
investments to comply with DPPP energy conservation standards and noted
that if they knew DOE planned to initiate DPPP motor energy
conservation standards with more stringent requirements than the DPPP
energy conservation standards their strategic direction and investments
would have been very different. Additionally, Hayward states that if
DOE decides against the implementation of a UL 1004-10 based rule, then
they requested a compliance date of at least 5 years following
effectivity. (Hayward, No. 93. at p. 2) DOE acknowledges that it is
adopting more stringent energy conservation standards for small-size
DPPP motors in this final rule than the small-size DPPP energy
conservation standards established in the January 2017 Direct Final
Rule. DOE notes that the compliance date for DPPPs was on July 19,
2021, while the compliance date for energy conservation standards for
these small-size DPPP motors is in 2028, approximately seven years
after the compliance date for the DPPP energy conservation standards.
Additionally, DOE has initiated an effort to determine whether to amend
the current energy conservation standards for DPPPs with
[[Page 67011]]
the publication of an RFI. 87 FR 3461. If DOE proposes to amend energy
conservation standards for DPPPs in a future rulemaking, DOE will
consider the impacts of the DPPP motor energy conservation standards
that are adopted in this rulemaking.
K. Emissions Analysis
The emissions analysis consists of two components. The first
component estimates the effect of potential energy conservation
standards on power sector and site (where applicable) combustion
emissions of CO2, NOX, SO2, and Hg.
The second component estimates the impacts of potential standards on
emissions of two additional greenhouse gases, CH4 and
N2O, as well as the reductions in emissions of other gases
due to ``upstream'' activities in the fuel production chain. These
upstream activities comprise extraction, processing, and transporting
fuels to the site of combustion.
The analysis of electric power sector emissions of CO2,
NOX, SO2, and Hg uses emissions intended to
represent the marginal impacts of the change in electricity consumption
associated with 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 final rule TSD. The analysis presented
in this notice uses projections from AEO 2023. 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).\116\
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\116\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12,
2021).
---------------------------------------------------------------------------
FFC upstream emissions, which include emissions from fuel
combustion during extraction, processing, and transportation of fuels,
and ``fugitive'' emissions (direct leakage to the atmosphere) of
CH4 and CO2, are estimated based on the
methodology described in chapter 15 of the final rule TSD.
The emissions intensity factors are expressed in terms of physical
units per MWh or MMBtu of site energy savings. For power sector
emissions, specific emissions intensity factors are calculated by
sector and end use. Total emissions reductions are estimated using the
energy savings calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
DOE's no-new-standards case for the electric power sector reflects
the AEO, which incorporates the projected impacts of existing air
quality regulations on emissions. AEO 2023 generally represents current
legislation and environmental regulations, including recent government
actions, that were in place at the time of preparation of AEO 2023,
including the emissions control programs discussed in the following
paragraphs.\117\
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\117\ For further information, see the Assumptions to AEO 2022
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 May 23, 2023).
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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.\118\ AEO 2023
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.
---------------------------------------------------------------------------
\118\ CSAPR requires states to address annual emissions of
SO2 and NOX, precursors to the formation of
fine particulate matter (``PM2.5'') pollution, in order
to address the interstate transport of pollution with respect to the
1997 and 2006 PM2.5 National Ambient Air Quality
Standards (``NAAQS''). CSAPR also requires certain states to address
the ozone season (May-September) emissions of NOX, a
precursor to the formation of ozone pollution, in order to address
the interstate transport of ozone pollution with respect to the 1997
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a
supplemental rule that included an additional five states in the
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011)
(Supplemental Rule), and EPA issued the CSAPR Update for the 2008
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
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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 AEO 2023.
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
AEO 2023 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
AEO 2023, which incorporates the MATS.
[[Page 67012]]
L. Monetizing Emissions Impacts
As part of the development of this final rule, for the purpose of
complying with the requirements of Executive Order 12866, DOE
considered the estimated monetary benefits from the reduced emissions
of CO2, CH4, N2O, NOX, and
SO2 that are expected to result from each of the TSLs
considered. In order to make this calculation analogous to the
calculation of the NPV of consumer benefit, DOE considered the reduced
emissions expected to result over the lifetime of 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 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).
1. Monetization of Greenhouse Gas Emissions
DOE estimates the monetized benefits of the reductions in emissions
of CO2, CH4, and N2O by using a
measure of the SC of each pollutant (e.g., ``SC-CO2'').
These estimates represent the monetary value of the net harm to society
associated with a marginal increase in emissions of these pollutants in
a given year, or the benefit of avoiding that increase. These estimates
are intended to include (but are not limited to) climate-change-related
changes in net agricultural productivity, human health, property
damages from increased flood risk, disruption of energy systems, risk
of conflict, environmental migration, and the value of ecosystem
services.
DOE exercises its own judgment in presenting monetized climate
benefits as recommended by applicable Executive orders, and DOE would
reach the same conclusion presented in this rulemaking in the absence
of the social cost of greenhouse gases. That is, the social costs of
greenhouse gases, whether measured using the February 2021 interim
estimates presented by the Interagency Working Group on the Social Cost
of Greenhouse Gases (``IWG'') 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 processes, peer-reviewed methodologies, the
best science available at the time of that process, and with input from
the public. Specifically, in 2009, the IWG, which 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 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.119
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).\120\ 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'' (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.
---------------------------------------------------------------------------
\119\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold,
and A. Wolverton. Incremental CH4 and N2O
mitigation benefits consistent with the US Government's SC-
CO2 estimates. Climate Policy. 2015. 15(2): pp. 272-298.
\120\ 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.
---------------------------------------------------------------------------
On January 20, 2021, President Biden issued Executive Order 13990,
which re-
[[Page 67013]]
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
rulemaking. 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 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 United States and its
citizens--is for all countries to base their policies on global
estimates of damages. As a member of the IWG involved in development of
the February 2021 SC-GHG TSD, DOE agrees with this assessment and,
therefore, in this proposed 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 underestimation
of total damages that accrue to the citizens and residents of the
United States 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,\121\ and
recommended that discount rate uncertainty and relevant aspects of
intergenerational ethical considerations be accounted for in selecting
future discount rates.
---------------------------------------------------------------------------
\121\ Interagency Working Group on Social Cost of Carbon. Social
Cost of Carbon for Regulatory Impact Analysis under Executive Order
12866. 2010. United States Government. www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf (last accessed April 15,
2022). 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. www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact
(last accessed April 15, 2022). 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). 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. www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf (last accessed January 18, 2022).
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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-percent and 7-percent 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-percent discount
rate is not appropriate to apply to value the social cost of greenhouse
gases in the analysis presented in this document.
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
[[Page 67014]]
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 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 best 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.\122\ 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 IAMs, 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.
---------------------------------------------------------------------------
\122\ 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/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf/.
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DOE's derivations of the SC-CO2, SC-N2O, and
SC-CH4 values used for this final rule are discussed in the
following sections, and the results of DOE's analyses estimating the
benefits of the reductions in emissions of these GHGs are presented in
section V.B.6 of this document.
a. Social Cost of Carbon
The SC-CO2 values used for this final rule were based on
the values developed for the IWG's February 2021 TSD. Table IV.11 shows
the updated sets of SC-CO2 estimates from the IWG's TSD in
5-year increments from 2020 to 2050. The full set of annual values that
DOE used is presented in appendix 14A of the final rule TSD. For
purposes of capturing the uncertainties involved in regulatory impact
analysis, DOE has determined it is appropriate to include all four sets
of SC-CO2 values, as recommended by the IWG.\123\
---------------------------------------------------------------------------
\123\ 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 and statistic
-----------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------
[[Page 67015]]
For 2051 to 2070, DOE used SC-CO2 estimates published by
EPA, adjusted to 2020$.\124\ These estimates are based on methods,
assumptions, and parameters identical to the 2020-2050 estimates
published by the IWG.
---------------------------------------------------------------------------
\124\ See EPA, Revised 2023 and Later Model Year Light-Duty
Vehicle GHG Emissions Standards: Regulatory Impact Analysis,
Washington, DC, December 2021. Available at nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed February 21, 2023).
---------------------------------------------------------------------------
DOE multiplied the CO2 emissions reduction estimated for
each year by the SC-CO2 value for that year in each of the
four cases. DOE adjusted the values to 2022$ using the implicit price
deflator for gross domestic product (``GDP'') from the Bureau of
Economic Analysis. To calculate a present value of the stream of
monetary values, DOE discounted the values in each of the four cases
using the specific discount rate that had been used to obtain the SC-
CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
The SC-CH4 and SC-N2O values used for this
final rule were based on the values developed for the February 2021
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 14A of the final rule TSD. To capture the
uncertainties involved in regulatory impact analysis, DOE has
determined it is appropriate to include all four sets of SC-
CH4 and SC-N2O values, as recommended by the IWG.
DOE derived values after 2050 using the approach described above for
the SC-CO2.
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. DOE
adjusted the values to 2022$ using the implicit price deflator for GDP
from the Bureau of Economic Analysis. To calculate a present value of
the stream of monetary values, DOE discounted the values in each of the
cases using the specific discount rate that had been used to obtain the
SC-CH4 and SC-N2O estimates in each case.
2. Monetization of Other Emissions Impacts
For this 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.\125\ 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 combined the EPA
benefit per ton estimates with regional information on electricity
consumption and emissions to define weighted-average national values
for NOX and SO2 (See appendix 14B of the final
rule TSD).
---------------------------------------------------------------------------
\125\ Estimating the Benefit per Ton of Reducing
PM2.5 Precursors from 21 Sectors. Available at
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.
The Joint SC-GHG Commenters stated that DOE appropriately applies
the social cost estimates developed by the Interagency Working Group on
the Social Cost of Greenhouse Gases to its analysis of emissions
reduction benefits. The Joint SC-GHG Commenters stated that there are
numerous legal, economic, and policy justifications that further DOE's
adoption of the Working Group's climate-damage valuations. They added
that DOE should consider conducting sensitivity analysis using a sound
domestic-only social cost estimate as a backstop, and should explicitly
conclude that the rule is cost-benefit justified even using a domestic-
only valuation that may still undercount climate benefits. They also
stated that their comments offer additional justification for adopting
the range of discount rates endorsed by the Working Group and urged DOE
to consider providing additional sensitivity analysis using discount
rates of 2 percent or lower for climate impacts. Lastly, the Joint SC-
GHG Commenters commented that DOE should clearly state that any
criticisms of the SC-GHG are moot in this rulemaking because the
proposed rule is easily cost-justified without any climate benefits.
(Joint SC-GHG Commenters, No.95 at. pp. 1-3)
In response, DOE maintains that the reasons for using global
measures of the SC-GHG previously discussed (See section IV.L.1 of this
document) are sufficient for the purposes of this rulemaking. DOE notes
that further discussion of this topic is contained in the February 2021
SC-GHG TSD, and DOE agrees with the assessment therein. Regarding
conducting sensitivity analysis using a domestic-only social cost
estimate, DOE agrees with the assessment in the February 2021 SC-GHG
TSD that the only currently-available quantitative characterization of
domestic damages from GHG emissions is both incomplete and an
underestimate of the share of total damages that accrue to the citizens
and residents of the U.S. See section 2 of the February 2021 SC-GHG
TSD. Therefore, it would be of questionable value to conduct the
suggested sensitivity analysis at this time. DOE considered
[[Page 67016]]
performing sensitivity analysis using discount rates lower than 2.5%
for climate impacts, as suggested by the IWG, but it concluded that
such analysis would not add meaningful information in the context of
this rulemaking.
As noted by the Joint SC-GHG Commenters and previously stated by
DOE in section IV.L.1 of this document, the final rule is economically
justified without inclusion of climate benefits. See Section V.C.1 of
this document for more discussion on economic justification.
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 AEO 2023. 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
AEO 2023 Reference case and various side cases. Details of the
methodology are provided in the appendices to chapters 13 and 15 of the
final rule TSD.
The output of this analysis is a set of time-dependent coefficients
that capture the change in electricity generation, primary fuel
consumption, installed capacity, and power sector emissions due to a
unit reduction in demand for a given end use. These coefficients are
multiplied by the stream of electricity savings calculated in the NIA
to provide estimates of selected utility impacts of potential new 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 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.\126\ 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.
---------------------------------------------------------------------------
\126\ 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/resources/methodologies/RIMSII-user-guide (last accessed Feb. 2, 2023).
---------------------------------------------------------------------------
DOE estimated indirect national employment impacts for the standard
levels considered in this final rule using an input/output model of the
U.S. economy called Impact of Sector Energy Technologies version 4
(``ImSET'').\127\ 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.
---------------------------------------------------------------------------
\127\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W.
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model
Description and User's Guide. 2015. Pacific Northwest National
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------
DOE notes that ImSET is not a general equilibrium forecasting
model, and that the uncertainties involved in projecting employment
impacts especially change in the later years of the analysis. Because
ImSET does not incorporate price changes, the employment effects
predicted by ImSET may overestimate actual job impacts over the long
run for this rule. Therefore, DOE used ImSET only to generate results
for near-term timeframes (2026-2030 or 2028-2030), where these
uncertainties are reduced. For more details on the employment impact
analysis, see chapter 16 of the final rule TSD.
One of the inputs to the employment impact analysis is the fraction
of shipments that are imported vs. domestically manufactured. In the
June 2022 NOPR, DOE assumed the fraction of DPPP motors shipments that
are imported vs. domestically manufactured was identical to small
electric motors and assumed a 40 percent were imported vs 60 percent
were domestically manufactured. See Chapter 15 of the June NOPR TSD.
PHTA and NEMA commented that DOE estimated that 60 percent of pool
pump motors are manufactured domestically, with the remaining 40
percent imported. PHTA and NEMA commented that DOE did not conduct
manufacturer interviews specific to DPPPM and that much of the analyses
relies on market research conducted in 2016 to support the energy
conservation standard established for DPPP. PTHA and NEMA commented
that while DPPPM are often sold as a component of DPPP, there are
different market characteristics that manufacturers feel necessitate
new interviews, focused specifically on DPPPM. (PHTA and NEMA, No. 92
at p. 7)
In this final rule, DOE revised the fraction of DPPP motors
shipments that are imported vs. domestically manufactured used in the
employment impact analysis to align with the estimates from the
manufacturer impact analysis specific to DPPP motors (See section IV.J
of this document) and assumed 50 percent of DPPP motors shipments are
imported vs. 50 percent are domestically manufactured.\128\
[[Page 67017]]
Finally, DOE notes that DOE conducted DPPP motor manufacturer
interviews as part of the June 2022 NOPR, as discussed in the
manufacturer impact analysis, and incorporated feedback to estimate
this fraction.
---------------------------------------------------------------------------
\128\ In the NOPR, DOE assumed that 40 percent of DPPP motors
are imported based on estimates for small electric motors. In the
final rule, DOE revised the percentage imported to be more specific
to DPPP motors and align with the estimate used in the MIA.
---------------------------------------------------------------------------
V. Analytical Results and Conclusion
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for DPPP
motors. It addresses the TSLs examined by DOE, the projected impacts of
each of these levels if adopted as energy conservation standards for
DPPP motors, and the standards levels that DOE is adopting in this
final rule. Additional details regarding DOE's analyses are contained
in the final rule TSD supporting this document.
A. Trial Standard Levels
In general, DOE typically evaluates potential 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 the 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 final rule, DOE analyzed the
benefits and burdens of eight TSLs for DPPP motors. DOE developed TSLs
that combine specific efficiency levels for each of the DPPP motor
equipment classes analyzed by DOE. The TSLs that were chosen in the
final rule represent DPPP motors at maximum technologically feasible
(``max-tech'') energy efficiency levels and similar performance (i.e.,
variable-speed, two-speed, multi-speed, and/or single-speed). DOE
presents the results for the TSLs in this document, while the results
for all efficiency levels that DOE analyzed are in Chapter 8 the final
rule TSD.\129\
---------------------------------------------------------------------------
\129\ 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 Chapter 8.
---------------------------------------------------------------------------
Table V.1 and Table V.2 presents the TSLs and the corresponding
efficiency levels that DOE has identified for potential amended energy
conservation standards for DPPP motors. TSL 8 represents the max-tech
energy efficiency for all equipment classes, as well as freeze
protection control requirements for DPPP motors greater than and equal
to 0.5 THP. TSL 7 represents the California CEC standards \130\ and
includes a variable-speed requirement for DPPP motors at or above 0.5
THP, an EL 1 efficiency requirement below 0.5 THP, and freeze-
protection control requirements for DPPP motors greater than and equal
to 0.5 THP. TSL 6 represents the performance requirements included in
UL 1004-10:2022, which ensures DPPP motors operate similarly to motors
in DPPPs that comply with the DOE standards at 10 CFR 431.465(f) and
includes a variable-speed requirement for DPPP motors at or above 1.15
THP, an EL 1 efficiency requirement below 1.15 THP, and freeze-
protection control requirements for DPPP motors greater than and equal
to 1.15 THP. TSL 5 represents the two-speed/multi-speed DPPP motor EL 5
level for applicable equipment classes and freeze-protection control
requirements for DPPP motors greater than and equal to 0.5 THP. TSL 4
represents the two-speed/multi-speed DPPP motor EL 4 level for
applicable equipment classes and freeze protection control requirements
for DPPP motors greater than and equal to 0.5 THP. TSL 3 represents the
two-speed/multi-speed DPPP motor EL 3 level for applicable equipment
classes and freeze-protection control requirements for DPPP motors
greater than and equal to 0.5 THP. TSL 2 represents the highest-
efficiency single-speed DPPP motor level for all equipment classes. TSL
1 represents the medium-efficiency single-speed DPPP motor level for
all equipment classes.
---------------------------------------------------------------------------
\130\ Best approximation based on the efficiency level analyzed.
---------------------------------------------------------------------------
In addition, as discussed in section III.A of this document, for
all TSLs, DOE considered a 2-year lead time resulting in a first full
year of compliance of 2026, except for small-size DPPP motors at TSL 7
where DOE uses a 4-year compliance lead time, resulting in a first full
year of compliance year of 2028.
Table V.1--Trial Standard Levels for DPPP Motors--EL Mapping
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
TSL TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Extra-small (<0.5 THP)........... EL 1............. EL 2............. EL 2............. EL 2............. EL 2............. EL 1............. EL 1 (2026)............. EL 2
Small-size (0.5 <= THP < 1.15)... EL 1............. EL 2............. EL 3 *........... EL 4 *........... EL 5 *........... EL 1............. EL 6 * (2028)........... EL 6 *
Standard-size (1.15 <= THP <= 5). EL 1............. EL 2............. EL 3 *........... EL 4 *........... EL 5 *........... EL 6 *........... EL 6 * (2026)........... EL 6 *
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Includes freeze protection control requirements.
Note: the analysis uses 2026 as the first full year of compliance except at TSL 7, where the first full year of compliance varies by equipment class as indicated in the table.
Table V.2--Trial Standard Levels for DPPP Motors--Description
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
TSL TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Extra-small (<0.5 THP).......... Medium Efficiency High Efficiency High Efficiency High Efficiency High Efficiency Medium Efficiency Medium Efficiency High Efficiency
Single Speed. Single Speed. Single Speed. Single Speed. Single Speed. Single Speed. Single Speed Single Speed.
(2026).
Small-size (0.5 <= THP < 1.15).. Medium Efficiency High Efficiency Two and multi- Two and multi- Two and multi- Medium Efficiency Variable-Speed * Variable-Speed.*
Single Speed. Single Speed. speed EL 3 *. speed EL 4 *. speed EL 5 *. Single Speed. (2028).
Standard-size (1.15 <= THP <= 5) Medium Efficiency High Efficiency Two and multi- Two and multi- Two and multi- Variable-Speed *.. Variable-Speed * Variable-Speed.*
Single Speed. Single Speed. speed EL 3 *. speed EL 4 *. speed EL 5 *. (2026).
General Description............. Medium Efficiency High Efficiency two and multi- two and multi- two and multi- UL 1004-10:2022 CEC Standards..... Max-tech.
Single Speed. Single Speed. speed EL3 where speed EL4 where speed EL5 where requirements.
applicable. applicable. applicable.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Includes freeze protection control requirements.
Note: the analysis uses 2026 as the first full year of compliance except at TSL 7, where the first full year of compliance varies by equipment class as indicated in the table.
[[Page 67018]]
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on DPPP motors consumers by
looking at the effects that potential 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 final rule
TSD provides detailed information on the LCC and PBP analyses.
Table V.2 through Table V.7 show the LCC and PBP results for the
TSLs considered for each product class. In the first of each pair of
tables, the simple payback is measured relative to the baseline
product. In the second table, the 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.2--Average LCC and PBP Results for Extra-Small-Size DPPP Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------- Simple Average
TSL Efficiency Lifetime payback lifetime
level Installed First year's operating LCC (years) (years)
cost operating cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
0 $65 $72 $236 $301 .......... 3.6
1,6,7.......................................................... 1 77 59 192 269 0.9 3.6
2-5,8.......................................................... 2 115 54 177 292 2.8 3.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
Table V.3--Average LCC Savings Relative to the No-New-Standards Case for Extra-Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------
Percent of
TSL Efficiency level Average LCC consumers that
savings * experience net
(2022$) cost (%)
----------------------------------------------------------------------------------------------------------------
1,6,7....................................... 1............................. $3 0
2-5,8....................................... 2............................. (12) 59
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V.4--Average LCC and PBP Results for Small-Size DPPP Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------- Simple Average
TSL Efficiency Lifetime payback lifetime
level Installed First year's operating LCC (years) (years)
cost operating cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
0 $156 $241 $843 $999 .......... 3.9
1,6............................................................ 1 177 196 685 862 0.5 3.9
2.............................................................. 2 218 180 628 846 1.0 3.9
3.............................................................. 3 383 190 678 1,060 4.5 3.9
4.............................................................. 4 412 166 590 1,001 3.4 3.9
5.............................................................. 5 443 158 561 1,003 3.4 3.9
7,8............................................................ 6 655 92 361 1,017 3.4 3.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
[[Page 67019]]
Table V.5--Average LCC Savings Relative to the No-New-Standards Case for Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------
Percent of
TSL Efficiency level Average LCC consumers that
savings * experience net
(2022$) cost (%)
----------------------------------------------------------------------------------------------------------------
1,6......................................... 1............................. $10 0
2........................................... 2............................. 14 24
3........................................... 3............................. (54) 52
4........................................... 4............................. (12) 46
5........................................... 5............................. (16) 50
7,8......................................... 6............................. 4 44
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V.6--Average LCC and PBP Results for Standard-Size DPPP Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------- Simple Average
TSL Efficiency Lifetime payback lifetime
level Installed First year's operating LCC (years) (years)
cost operating cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
0 $308 $651 $2,637 $2,945 .......... 4.8
1.............................................................. 1 368 558 2,264 2,633 0.7 4.8
2.............................................................. 2 412 517 2,098 2,510 0.8 4.8
3.............................................................. 3 574 319 1,306 1,879 0.8 4.8
4.............................................................. 4 613 284 1,163 1,776 0.8 4.8
5.............................................................. 5 654 259 1,063 1,717 0.9 4.8
6-8............................................................ 6 847 243 1,056 1,903 1.3 4.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
Table V.7--Average LCC Savings Relative to the No-New-Standards Case for Standard-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------
Percent of
TSL Efficiency level Average LCC consumers that
savings * experience net
(2022$) cost (%)
----------------------------------------------------------------------------------------------------------------
1........................................... 1............................. $26 0
2........................................... 2............................. 44 2
3........................................... 3............................. 109 18
4........................................... 4............................. 141 17
5........................................... 5............................. 151 19
6-8......................................... 6............................. 236 2
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on senior-only households. Table V.8 through Table V.13
compare the average LCC savings and PBP at each efficiency level for
the consumer subgroups with similar metrics for the entire consumer
sample for DPPP motors. In most cases, the average LCC savings and PBP
for senior-only households at the considered efficiency levels are not
substantially different from the average for all households. Chapter 11
of the final rule TSD presents the complete LCC and PBP results for the
subgroups.
Table V.8--Comparison of Average LCC Savings and PBP for Consumer Subgroup and All Households for Equipment
Class 1 Extra-Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
Average life-cycle cost Simple payback period (years)
savings (2022$) -------------------------------
TSL EL --------------------------------
Senior-only Senior-only All households
households All households households
----------------------------------------------------------------------------------------------------------------
1,6,7........................... 1 $3 $3 0.9 0.9
2-5,8........................... 2 (12) (12) 2.7 2.8
----------------------------------------------------------------------------------------------------------------
[[Page 67020]]
Table V.9--Comparison of Fraction of Consumers Experiencing Net Benefit and Net Cost for Consumer Subgroup and
All Households for Equipment Class 1 Extra-Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
Percent of consumers that Percent of consumers that
experience net cost (%) experience net benefit (%)
TSL EL ---------------------------------------------------------------
Senior-only Senior-only
households All households households All households
----------------------------------------------------------------------------------------------------------------
1,6,7........................... 1 0 0 8 8
2-5,8........................... 2 58 59 8 8
----------------------------------------------------------------------------------------------------------------
Table V.10--Comparison of Average LCC Savings and PBP for Consumer Subgroup and All Households for Equipment
Class 2 Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
Average life-cycle cost Simple payback period (years)
savings (2022$) -------------------------------
TSL EL --------------------------------
Senior-only Senior-only All households
households All households households
----------------------------------------------------------------------------------------------------------------
1,6............................. 1 $11 $10 0.4 0.5
2............................... 2 18 14 0.9 1.0
3............................... 3 (47) (54) 4.1 4.5
4............................... 4 (0) (12) 3.1 3.4
5............................... 5 (2) (16) 3.2 3.4
7,8............................. 6 33 4 3.1 3.4
----------------------------------------------------------------------------------------------------------------
Table V.11--Comparison of Fraction of Consumers Experiencing Net Benefit and Net Cost for Consumer Subgroup and
All Households for Equipment Class 2 Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
Percent of consumers that Percent of consumers that
experience net cost (%) experience net benefit (%)
TSL EL ---------------------------------------------------------------
Senior-only Senior-only
households All households households All households
----------------------------------------------------------------------------------------------------------------
1,6............................. 1 0 0 6 6
2............................... 2 23 24 25 24
3............................... 3 51 52 14 13
4............................... 4 45 46 27 27
5............................... 5 48 50 27 26
7,8............................. 6 42 44 29 27
----------------------------------------------------------------------------------------------------------------
Table V.12--Comparison of Average LCC Savings and PBP for Consumer Subgroup and All Households for Equipment
Class 3 Standard-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
Average life-cycle cost Simple payback period (years)
savings (2022$) -------------------------------
TSL EL --------------------------------
Senior-only Senior-only All households
households All households households
----------------------------------------------------------------------------------------------------------------
1............................... 1 $29 $26 0.6 0.7
2............................... 2 50 44 0.7 0.8
3............................... 3 128 109 0.7 0.8
4............................... 4 165 141 0.8 0.8
5............................... 5 178 151 0.8 0.9
6-8............................. 6 269 236 1.2 1.3
----------------------------------------------------------------------------------------------------------------
[[Page 67021]]
Table V.13--Comparison of Fraction of Consumers Experiencing Net Benefit and Net Cost for Consumer Subgroup and
All Households for Equipment Class 3 Standard-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
Percent of consumers that Percent of consumers that
experience net cost (%) experience net benefit (%)
TSL EL ---------------------------------------------------------------
Senior-only Senior-only
households All households households All households
----------------------------------------------------------------------------------------------------------------
1............................... 1 0 0 8 8
2............................... 2 2 2 17 17
3............................... 3 18 18 24 23
4............................... 4 17 17 29 29
5............................... 5 18 19 29 29
6-8............................. 6 2 2 17 18
----------------------------------------------------------------------------------------------------------------
c. Rebuttable Presumption Payback
As discussed in section III.E.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. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(iii)) In calculating a rebuttable presumption payback
period for each of the considered TSLs, DOE used discrete values, and,
as required by EPCA, based the energy use calculation on the DOE test
procedures for DPPP 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.14 presents the rebuttable-presumption payback periods for
the considered TSLs for DPPP motors. While DOE examined the rebuttable-
presumption criterion, it considered whether the standard levels
considered for this rule are economically justified through a more
detailed analysis of the economic impacts of those levels, pursuant to
42 U.S.C. 6295(o)(2)(B)(i), that considers the full range of impacts to
the consumer, manufacturer, Nation, and environment. The results of
that analysis serve as the basis for DOE to definitively evaluate the
economic justification for a potential standard level, thereby
supporting or rebutting the results of any preliminary determination of
economic justification.
Table V.14--Rebuttable-Presumption Payback Periods (Years)
----------------------------------------------------------------------------------------------------------------
Trial standard level
Equipment class ---------------------------------------------------------------
1 2 3 4 5 6 7 8
----------------------------------------------------------------------------------------------------------------
Extra-small-size................................ 0.9 2.7 2.7 2.7 2.7 0.9 0.9 2.7
Small-size...................................... 0.4 0.9 3.8 3.0 3.0 0.4 2.7 2.7
Standard-size................................... 0.5 0.6 0.7 0.7 0.8 1.0 1.0 1.0
----------------------------------------------------------------------------------------------------------------
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of new energy
conservation standards on manufacturers of DPPP motors. The next
section describes the expected impacts on manufacturers at each
considered TSL. Chapter 12 of the final rule TSD explains the analysis
in further detail.
a. Industry Cash Flow Analysis Results
In this section, DOE provides GRIM results from the analysis, which
examines changes in the industry that would result from new standards.
The following tables summarize the estimated financial impacts
(represented by changes in INPV) of potential new energy conservation
standards on manufacturers of DPPP motors, as well as the conversion
costs that DOE estimates manufacturers of DPPP motors would incur at
each TSL.
As discussed in section IV.J.2.d of this document, DOE modeled two
manufacturer markup scenarios to evaluate a range of cash flow impacts
on the DPPP motor industry: (1) the preservation of gross margin
scenario and (2) the preservation of operating profit scenario. DOE
considered the preservation of gross margin scenario by applying a
``gross margin percentage'' for each equipment class across all
efficiency levels. As MPCs increase with efficiency, this scenario
implies that the absolute dollar markup will increase. DOE assumed a
manufacturer markup of 1.37 for all DPPP motors. Because this scenario
assumes that a manufacturer's absolute dollar markup would increase as
MPCs increase in the standards cases, it represents the upper-bound to
industry profitability under new energy conservation standards.
The preservation of operating profit scenario reflects
manufacturers' concerns about their inability to maintain margins as
MPCs increase to meet higher efficiency levels. In this scenario, while
manufacturers make the necessary investments required to convert their
facilities to produce compliant equipment, operating profit remains the
same in absolute dollars, but decreases as a percentage of revenue.
Each of the modeled manufacturer markup scenarios results in a
unique set of cash-flows and corresponding industry values at each TSL.
In the following discussion, the INPV results refer to the difference
in industry value between the no-new-standards case and each standards
case resulting from the sum of discounted cash-flows from 2024 through
2055. To provide perspective on the short-run cash-flow impact, DOE
includes in the discussion of results a comparison of free cash flow
between the no-new-standards case and the standards case at each TSL in
the year before new standards are required.
Table V.15 and Table V.16 show the MIA results for DPPP motor
manufacturers at each TSL using the manufacturer markup scenarios
previously described.
[[Page 67022]]
Table V.15--Manufacturer Impact Analysis for Dedicated-Purpose Pool Pump Motors--Preservation of Gross Margin Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-new- Trial standard level *
Units standards -----------------------------------------------------------------------
case 1 2 3 4 5 6 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................ 2022$ millions................ 661 663 672 684 695 708 675 740 755
Change in INPV...................... 2022$ millions................ .......... 2.6 11.3 23.3 34.5 47.0 14.1 79.0 94.1
%............................. .......... 0.4 1.7 3.5 5.2 7.1 2.1 12.0 14.2
Product Conversion Costs............ 2022$ millions................ .......... 0.2 0.9 7.5 7.6 7.9 0.2 10.6 10.7
Capital Conversion Costs............ 2022$ millions................ .......... 0.0 0.0 7.8 7.8 7.8 21.3 45.6 45.6
Total Investment Required........... 2022$ millions................ .......... 0.2 0.9 15.3 15.4 15.7 21.5 56.2 56.4
Free Cash Flow (2025)............... 2022$ millions................ 31.2 31.1 30.8 23.6 23.6 23.4 19.4 9.9 1.4
Change in Free Cash Flow............ 2022$ millions................ .......... (0.1) (0.4) (7.6) (7.6) (7.7) (11.8) (21.2) (29.8)
%............................. .......... (0.2) (1.3) (24.2) (24.4) (24.8) (37.8) (68.1) (95.5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate a negative number. Some numbers may not sum exactly due to rounding.
Table V.16--Manufacturer Impact Analysis for Dedicated-Purpose Pool Pump Motors--Preservation of Operating Profit Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-new- Trial standard level *
Units standards -----------------------------------------------------------------------
case 1 2 3 4 5 6 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................ 2022$ millions................ 661 660 655 622 617 612 559 47 436
Change in INPV...................... 2022$ millions................ .......... (0.8) (6.2) (38.9) (43.4) (48.5) (101.4) (214.2) (224.4)
%............................. .......... (0.1) (0.9) (5.9) (6.6) (7.3) (15.3) (32.4) (34.0)
Product Conversion Costs............ 2022$ millions................ .......... 0.2 0.9 7.5 7.6 7.9 0.2 10.6 10.7
Capital Conversion Costs............ 2022$ millions................ .......... 0.0 0.0 7.8 7.8 7.8 21.3 45.6 45.6
Total Investment Required........... 2022$ millions................ .......... 0.2 0.9 15.3 15.4 15.7 21.5 56.2 56.4
Free Cash Flow (2025)............... 2022$ millions................ 31.2 31.1 30.8 23.6 23.6 23.4 19.4 9.9 1.4
Change in Free Cash Flow............ 2022$ millions................ .......... (0.1) (0.4) (7.6) (7.6) (7.7) (11.8) (21.2) (29.8)
%............................. .......... (0.2) (1.3) (24.2) (24.4) (24.8) (37.8) (68.1) (95.5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate a negative number. Some numbers may not sum exactly due to rounding.
At TSL 8, DOE estimated that the impact on INPV would range from -
$224.4 million to $94.1 million, or a change in INPV of -34.0 percent
to 14.2 percent. At TSL 8, industry free cash flow is $1.4 million,
which is a decrease of approximately $29.8 million compared to the no-
new-standards case value of $31.2 million in 2025, the year leading up
to new standards.
TSL 8 will set the energy conservation standards at EL 6 for both
the small size and standard size DPPP motor equipment classes and at EL
2 for the extra-small size DPPP motor equipment class. This represents
max-tech for all DPPP motor equipment classes. DOE estimated that 33
percent of all extra-small size DPPP motor shipments; 22 percent of all
small size DPPP motor shipments; and 62 percent of all standard size
DPPP motor shipments will already meet the efficiency levels analyzed
at TSL 8 by 2026, in the no-new-standards case.
At TSL 8, DPPP motor manufacturers would need to redesign all small
size and standard size DPPP motors that do not use variable-speed
controls and would need to redesign all extra-small size DPPP motors
not using the most efficient single-speed motors. DOE estimated that
this redesign effort would cost manufacturers approximately $10.7
million in product conversion costs. In addition to these product
conversion costs, DPPP motor manufacturers would need to increase their
variable-speed DPPP motor manufacturing production capacity for both
the small size and standard size DPPP motors. DOE estimated that
expanding their production capacity would cost manufacturers
approximately $45.6 million in capital conversion costs at TSL 8.
At TSL 8, the shipment weighted average MPC for all DPPP motors
increases by 60.0 percent relative to the no-new-standards case
shipment weighted average MPC for all DPPP motors in 2026. In the
preservation of gross margin scenario, manufacturers fully pass on this
cost increase to customers. The increase in the shipment weighted
average MPC for DPPP motors outweighs the $56.4 million in conversion
costs, causing a positive change in INPV at TSL 8 in the preservation
of gross margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. In this scenario, the 60.0 percent shipment
weighted average MPC increase results in a reduction in the
manufacturer margin after the compliance year. This reduction in the
manufacturer margin and the $56.4 million in conversion costs incurred
by manufacturers cause a negative change in INPV at TSL 8 in the
preservation of operating profit scenario.
At TSL 7, DOE estimated that the impact on INPV would range from -
$214.2 million to $79.0 million, or a change in INPV of -32.4 percent
to 12.0 percent. At TSL 7, industry free cash flow is $9.9 million,
which is a decrease of approximately $21.2 million compared to the no-
new-standards case value of $31.2 million in 2025, the year leading up
to new standards for standard size and extra-small size DPPP
motors.\131\
---------------------------------------------------------------------------
\131\ The analyzed compliance year for small size DPPP motors is
2028. However, DOE presents the year with the largest decrease in
manufacturer cash flow, which is still 2025 for TSL 7.
---------------------------------------------------------------------------
TSL 7 sets the energy conservation standards at EL 6 for both the
small size and standard size DPPP motor equipment classes and at EL 1
for the extra-small size DPPP motor equipment class. This represents
max-tech for the small size and standard size DPPP
[[Page 67023]]
motor equipment classes. DOE estimates that 93 percent of all extra-
small size DPPP motor shipments; 24 percent of all small size DPPP
motor shipments; and 62 percent of all standard size DPPP motor
shipments would already meet or exceed the efficiency levels analyzed
at TSL 7 by 2026 for the extra-small and standard size DPPP motors and
by 2028 for the small size DPPP motors, in the no-new-standards case.
At TSL 7, DPPP motor manufacturers would need to redesign all small
size and standard size DPPP motors that do not use variable-speed
controls and would need to redesign some extra-small size DPPP motors
to meet EL 1. DOE estimated that this redesign effort would cost
manufacturers approximately $10.6 million in product conversion costs.
In addition to these product conversion costs, DPPP motor manufacturers
would need to increase their variable-speed DPPP motor manufacturing
production capacity for both the small size and standard size DPPP
motors. DOE estimated that expanding their production capacity would
cost manufacturer approximately $45.6 million in capital conversion
costs at TSL 7.
At TSL 7, the shipment weighted average MPC for all DPPP motors
increases by 46.5 percent relative to the no-new-standards case
shipment weighted average MPC for all DPPP motors. In the preservation
of gross margin scenario, manufacturers can fully pass on this cost
increase to customers. The increase in the shipment weighted average
MPC for DPPP motors outweighs the $56.2 million in conversion costs,
causing a positive change in INPV at TSL 7 in the preservation of gross
margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. In this scenario, the 46.5 percent shipment
weighted average MPC increase results in a reduction in the
manufacturer margin after the compliance year. This reduction in the
manufacturer margin and the $56.2 million in conversion costs incurred
by manufacturers cause a negative change in INPV at TSL 7 in the
preservation of operating profit scenario.
At TSL 6, DOE estimated that the impact on INPV would range from -
l$101.4 million to $14.1 million, or a change in INPV of -15.3 percent
to 2.1 percent. At TSL 6, industry free cash flow is $19.4 million,
which is a decrease of approximately $11.8 million compared to the no-
new-standards case value of $31.2 million in 2025, the year leading up
to new standards.
TSL 6 would set the energy conservation standards at EL 6 for the
standard size DPPP motor equipment class and at EL 1 for both the
extra-small size and small size DPPP motor equipment classes. This
represents max-tech for the standard size DPPP motor equipment class.
DOE estimates that 93 percent of all extra-small size DPPP motor
shipments; 95 percent of all small size DPPP motor shipments; and 62
percent of all standard size DPPP motor shipments would already meet or
exceed the efficiency levels analyzed at TSL 6 by 2026, in the no-new-
standards case.
At TSL 6, DPPP motor manufacturers would need to redesign all
standard size DPPP motors that do not use variable-speed controls and
would need to redesign some extra-small size and small size DPPP motors
to meet EL 1. DOE estimated that this redesign effort would cost
manufacturers approximately $0.2 million in product conversion costs.
In addition to these product conversion costs, DPPP motor manufacturers
would need to increase their variable-speed DPPP motor manufacturing
production capacity for the standard size DPPP motor equipment class.
DOE estimated that expanding their production capacity would cost
manufacturer approximately $21.3 million in capital conversion costs at
TSL 6.
At TSL 6, the shipment weighted average MPC for all DPPP motors
increases by 22.0 percent relative to the no-new-standards case
shipment weighted average MPC for all DPPP motors. In the preservation
of gross margin scenario, manufacturers can fully pass on this cost
increase to customers. The increase in the shipment weighted average
MPC for DPPP motors outweighs the $21.5 million in conversion costs,
causing a positive change in INPV at TSL 6 in the preservation of gross
margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. In this scenario, the 22.0 percent shipment
weighted average MPC increase results in a reduction in the
manufacturer margin after the compliance year. This reduction in the
manufacturer margin and the $21.5 million in conversion costs incurred
by manufacturers cause a negative change in INPV at TSL 6 in the
preservation of operating profit scenario.
At TSL 5, DOE estimated that the impact on INPV would range from -
$48.5 million to $47.0 million, or a change in INPV of -7.3 percent to
7.1 percent. At TSL 5, industry free cash flow is $23.4 million, which
is a decrease of approximately $7.7 million compared to the no-new-
standards case value of $31.2 million in 2025, the year leading up to
new standards.
TSL 5 would set the energy conservation standards at EL 5 for both
the small size and standard size DPPP motor equipment classes and at EL
2 for the extra-small size DPPP motor equipment class. DOE estimates
that 33 percent of all extra-small size DPPP motor shipments; 23
percent of all small size DPPP motor shipments; and 63 percent of all
standard size DPPP motor shipments would already meet or exceed the
efficiency levels analyzed at TSL 5 by 2026, in the no-new-standards
case.
At TSL 5, DPPP motor manufacturers would need to redesign some
small size and standard size DPPP motors to meet EL 5 (which is likely
to require the most efficient dual-speed motor) and would need to
redesign some extra-small size DPPP motors to meet EL 2. DOE estimated
that this redesign effort would cost manufacturers approximately $7.9
million in product conversion costs. In addition to these product
conversion costs, DPPP motor manufacturers would need to increase their
dual-speed DPPP motor manufacturing production capacity for the small
size and standard size DPPP motor equipment classes. DOE estimated that
expanding their production capacity would cost manufacturer
approximately $7.8 million in capital conversion costs at TSL 5.
At TSL 5, the shipment weighted average MPC for all DPPP motors
increases by 20.2 percent relative to the no-new-standards case
shipment weighted average MPC for all DPPP motors. In the preservation
of gross margin scenario, manufacturers can fully pass on this cost
increase to customers. The increase in the shipment weighted average
MPC for DPPP motors outweighs the $15.7 million in conversion costs,
causing a positive change in INPV at TSL 5 in the preservation of gross
margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. In this scenario, the 20.2 percent shipment
weighted average MPC increase results in a reduction in the
manufacturer margin after the
[[Page 67024]]
compliance year. This reduction in the manufacturer margin and the
$15.7 million in conversion costs incurred by manufacturers cause a
negative change in INPV at TSL 5 in the preservation of operating
profit scenario.
At TSL 4, DOE estimated that the impact on INPV would range from -
$43.4 million to $34.5 million, or a change in INPV of -6.6 percent to
5.2 percent. At TSL 4, industry free cash flow is $23.6 million, which
is a decrease of approximately $7.6 million compared to the no-new-
standards case value of $31.2 million in 2025, the year leading up to
new standards.
TSL 4 would set the energy conservation standards at EL 4 for both
the small size and standard size DPPP motor equipment classes and at EL
2 for the extra-small size DPPP motor equipment class. DOE estimates
that 33 percent of all extra-small size DPPP motor shipments; 25
percent of all small size DPPP motor shipments; and 64 percent of all
standard size DPPP motor shipments would already meet or exceed the
efficiency levels analyzed at TSL 4 by 2026, in the no-new-standards
case.
At TSL 4, DPPP motor manufacturers would need to redesign some
small size and standard size DPPP motors to meet EL 4 (which is likely
to require an intermediate efficient dual-speed motor) and would need
to redesign some extra-small size DPPP motors to meet EL 2. DOE
estimated that this redesign effort would cost manufacturers
approximately $7.6 million in product conversion costs. In addition to
these product conversion costs, DPPP motor manufacturers would need to
increase their dual-speed DPPP motor manufacturing production capacity
for the small size and standard size DPPP motor equipment classes. DOE
estimated that expanding their production capacity would cost
manufacturer approximately $7.8 million in capital conversion costs at
TSL 4.
At TSL 4, the shipment weighted average MPC for all DPPP motors
increases by 17.0 percent relative to the no-new-standards case
shipment weighted average MPC for all DPPP motors. In the preservation
of gross margin scenario, manufacturers can fully pass on this cost
increase to customers. The increase in the shipment weighted average
MPC for DPPP motors outweighs the $15.4 million in conversion costs,
causing a positive change in INPV at TSL 4 in the preservation of gross
margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. In this scenario, the 17.0 percent shipment
weighted average MPC increase results in a reduction in the
manufacturer margin after the compliance year. This reduction in the
manufacturer margin and the $15.4 million in conversion costs incurred
by manufacturers cause a negative change in INPV at TSL 4 in the
preservation of operating profit scenario.
At TSL 3, DOE estimated that the impact on INPV would range from -
$38.9 million to $23.3 million, or a change in INPV of -5.9 percent to
3.5 percent. At TSL 3, industry free cash flow is $23.6 million, which
is a decrease of approximately $7.6 million compared to the no-new-
standards case value of $31.2 million in 2025, the year leading up to
new standards.
TSL 3 would set the energy conservation standards at EL 3 for both
the small size and standard size DPPP motor equipment classes and at EL
2 for the extra-small size DPPP motor equipment class. DOE estimates
that 33 percent of all extra-small size DPPP motor shipments; 31
percent of all small size DPPP motor shipments; and 66 percent of all
standard size DPPP motor shipments would already meet or exceed the
efficiency levels analyzed at TSL 3 by 2026, in the no-new-standards
case.
At TSL 3, DPPP motor manufacturers would need to redesign some
small size and standard size DPPP motors to meet EL 3 (which is likely
to require a dual-speed motor) and would need to redesign some extra-
small size DPPP motors to meet EL 2. DOE estimated that this redesign
effort would cost manufacturers approximately $7.5 million in product
conversion costs. In addition to these product conversion costs, DPPP
motor manufacturers would need to increase their dual-speed DPPP motor
manufacturing production capacity for the small size and standard size
DPPP motor equipment classes. DOE estimated that expanding their
production capacity would cost manufacturer approximately $7.8 million
in capital conversion costs at TSL 3.
At TSL 3, the shipment weighted average MPC for all DPPP motors
increases by 14.2 percent relative to the no-new-standards case
shipment weighted average MPC for all DPPP motors. In the preservation
of gross margin scenario, manufacturers can fully pass on this cost
increase to customers. The increase in the shipment weighted average
MPC for DPPP motors outweighs the $15.3 million in conversion costs,
causing a positive change in INPV at TSL 3 in the preservation of gross
margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. In this scenario, the 14.2 percent shipment
weighted average MPC increase results in a reduction in the
manufacturer margin after the compliance year. This reduction in the
manufacturer margin and the $15.3 million in conversion costs incurred
by manufacturers cause a negative change in INPV at TSL 3 in the
preservation of operating profit scenario.
At TSL 2, DOE estimated that the impact on INPV would range from -
$6.2 million to $11.3 million, or a change in INPV of -0.9 percent to
1.7 percent. At TSL 2, industry free cash flow is $30.8 million, which
is a decrease of approximately $0.4 million compared to the no-new-
standards case value of $31.2 million in 2025, the year leading up to
new standards.
TSL 2 would set the energy conservation standards at EL 2 for all
DPPP motor equipment classes. DOE estimates that 33 percent of all
extra-small size DPPP motor shipments; 58 percent of all small size
DPPP motor shipments; and 78 percent of all standard size DPPP motor
shipments would already meet or exceed the efficiency levels analyzed
at TSL 2 by 2026, in the no-new-standards case.
At TSL 2, DPPP motor manufacturers would need to redesign some
small size and standard size DPPP motors to meet EL 2 (which is likely
to require the most efficient single-speed motor) and would need to
redesign some extra-small size DPPP motors to meet EL 2. DOE estimated
that this redesign effort would cost manufacturers approximately $0.9
million in product conversion costs. DOE estimated that DPPP motor
manufacturers have the existing production capacity to manufacturer
more efficient single-speed DPPP motors and would not incur any
additional capital conversion costs at TSL 2.
At TSL 2, the shipment weighted average MPC for all DPPP motors
increases by 3.9 percent relative to the no-new-standards case shipment
weighted average MPC for all DPPP motors. In the preservation of gross
margin scenario, manufacturers can fully pass on this cost increase to
customers. The increase in the shipment weighted average MPC for DPPP
motors outweighs the $0.9 million in conversion costs, causing a
positive
[[Page 67025]]
change in INPV at TSL 2 in the preservation of gross margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. In this scenario, the 3.9 percent shipment
weighted average MPC increase results in a reduction in the
manufacturer margin after the compliance year. This reduction in the
manufacturer margin and the $0.9 million in conversion costs incurred
by manufacturers cause a negative change in INPV at TSL 2 in the
preservation of operating profit scenario.
At TSL 2, DOE estimated that the impact on INPV would range from -
$0.8 million to $2.6 million, or a change in INPV of -0.1 percent to
0.4 percent. At TSL 1, industry free cash flow is $31.1 million, which
is a decrease of approximately $0.1 million compared to the no-new-
standards case value of $31.2 million in 2025, the year leading up to
new standards.
TSL 1 would set the energy conservation standards at EL 1 for all
DPPP motor equipment classes. DOE estimates that 93 percent of all
extra-small size DPPP motor shipments; 95 percent of all small size
DPPP motor shipments; and 86 percent of all standard size DPPP motor
shipments would already meet or exceed the efficiency levels analyzed
at TSL 1 by 2026, in the no-new-standards case.
At TSL 1, DPPP motor manufacturers would need to redesign some
extra-small size, small size, and standard size DPPP motors to meet EL
1 (which is likely to require an intermediate efficient single-speed
motor). DOE estimated that this redesign effort would cost
manufacturers approximately $0.2 million in product conversion costs.
DOE estimated that DPPP motor manufacturers have the existing
production capacity to manufacturer more efficient single-speed DPPP
motors and would not incur any additional capital conversion costs at
TSL 1.
At TSL 1, the shipment weighted average MPC for all DPPP motors
increases by 1.2 percent relative to the no-new-standards case shipment
weighted average MPC for all DPPP motors. In the preservation of gross
margin scenario, manufacturers can fully pass on this cost increase to
customers. The increase in the shipment weighted average MPC for DPPP
motors outweighs the $0.2 million in conversion costs, causing a
positive change in INPV at TSL 1 in the preservation of gross margin
scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. In this scenario, the 1.2 percent shipment
weighted average MPC increase results in a reduction in the
manufacturer margin after the compliance year. This reduction in the
manufacturer margin and the $0.2 million in conversion costs incurred
by manufacturers cause a negative change in INPV at TSL 1 in the
preservation of operating profit scenario.
b. Direct Impacts on Employment
To quantitatively assess the potential impacts of new energy
conservation standards on direct employment in the DPPP 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.
Production employees are those who are directly involved in
fabricating and assembling products within an original equipment
manufacturer facility. Workers performing services that are closely
associated with production operations, such as materials handling tasks
using forklifts, are included as production labor, as well as line
supervisors.
DOE used the GRIM to calculate the number of production employees
from labor expenditures. DOE used statistical data from the U.S. Census
Bureau's 2021 Annual Survey of Manufacturers \132\ (``ASM'') and the
results of the engineering analysis to calculate industry-wide labor
expenditures. Labor expenditures related to product manufacturing
depend on the labor intensity of the product, the sales volume, and an
assumption that wages remain fixed in real terms over time. The total
labor expenditures in the GRIM were then converted to domestic
production employment levels by dividing production labor expenditures
by the annual payment per production worker.
---------------------------------------------------------------------------
\132\ www.census.gov/programs-surveys/asm/data/tables.html.
---------------------------------------------------------------------------
Non-production employees account for those workers that are not
directly engaged in the manufacturing of the covered product. This
could include sales, human resources, engineering, and management. DOE
estimated non-production employment levels by multiplying the number of
DPPP motor production workers by a scaling factor. The scaling factor
is calculated by taking the ratio of the total number of employees, and
the total number of production workers associated with the industry
NAICS code 335312, which covers DPPP motor manufacturing. Using the
GRIM, DOE estimates that there would be approximately 405 domestic
production workers and approximately 232 non-production workers for
DPPP motors in 2026 in the absence of new energy conservation
standards. Table V.17 shows the range of the impacts of energy
conservation standards on U.S. production of DPPP motors.
Table V.17--Total Number of Domestic Dedicated-Purpose Pool Pump Motor Production Workers in 2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-new- Trial standard level *
standards -----------------------------------------------------------------------------------
case 1 2 3 4 5 6 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Domestic Production Workers in 2026.................... 405 410 421 463 474 487 494 513 648
Domestic Non-Production Workers in 2026................ 232 235 241 265 272 279 283 294 371
Total Direct Employment in 2026........................ 637 645 662 728 746 766 777 807 1,019
Potential Changes in Total Direct Employment in 2026... ........... 0-8 0-25 0-91 0-109 0-129 (163)-140 (281)-170 (281)-382
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 67026]]
The direct employment impacts shown in Table V.17 represent the
potential changes in direct employment that could result following the
compliance date for the DPPP motors covered in this rulemaking.
Employment could increase or decrease due to the labor content of the
equipment being manufactured domestically or if manufacturers decided
to move production facilities abroad because of the new standards. At
the less severe end of the range, DOE assumes that all manufacturers
continue to manufacture the same scope of the equipment domestically
after compliance with the analyzed new standards. The other end of the
range assumes that some domestic manufacturing either is eliminated or
moves abroad due to the analyzed new standards.
DOE assumes that for DPPP motors, manufacturing is only potentially
negatively impacted at TSLs that would most likely require variable-
speed DPPP motors. At these TSLs, the maximum number of employees that
could be eliminated are the number of domestic employees that would be
manufacturing single-speed and dual-speed DPPP motors in the absence of
new energy conservation standards. DOE estimated that there would be
approximately 76 domestic production employees and 43 non-production
employees involved in the production and sale of single-speed and dual-
speed small-size DPPP motors (for a total of 119 total employees) in
2026 in the absence of new DPPP motor standards. DOE also estimated
that there would be approximately 104 domestic production employees and
59 non-production employees involved in the production and sale of
single-speed and dual-speed standard-size DPPP motors (for a total of
163 total employees) in 2026 in the absence of new DPPP motor
standards. However, DOE notes that motors used in DPPPs are frequently
used in other non-DPPP applications and motor manufacturers may choose
to continue to manufacture single-speed and dual-speed motors (even at
TSL 6, TSL 7, and TSL 8) that would be allowed to be used in other non-
DPPP applications. If manufacturers choose to do this, there would
likely not be a significant impact on the overall domestic motor
employment.
c. Impacts on Manufacturing Capacity
DOE did not identify any significant capacity constraints for the
design options being evaluated for this final rule. The design options
evaluated for this final rule are available as equipment that is on the
market currently. The materials used to manufacture DPPP motor models
at all efficiency levels are widely available on the market. While
there were a limited number of small size variable-speed DPPP motor
models currently on the market, all manufacturers are capable of
manufacturing standard size variable-speed DPPP motor models and would
be able to manufacture small size variable-speed DPPP motor models if
they choose to make the investments described in section IV.J.2.c of
this document. As a result, DOE does not anticipate that the industry
would likely experience any capacity constraints directly resulting
from energy conservation standards at any of the TSLs considered.
d. Impacts on Subgroups of Manufacturers
As discussed in section IV.J.1 of this document, using average cost
assumptions to develop an industry cash-flow estimate may not be
adequate for assessing differential impacts among manufacturer
subgroups. Small manufacturers, niche manufacturers, and manufacturers
exhibiting a cost structure substantially different from the industry
average could be affected disproportionately. DOE used the results of
the industry characterization to group manufacturers exhibiting similar
characteristics. Consequently, DOE identified small business
manufacturers as a subgroup for a separate impact analysis.
For the small business subgroup analysis, DOE applied the small
business size standards published by the Small Business Administration
(``SBA'') to determine whether a company is considered a small
business. The size standards are codified at 13 CFR part 121. To be
categorized as a small business under NAICS code 335312, ``Motor and
Generator Manufacturing'' a DPPP motor manufacturer and its affiliates
may employ a maximum of 1,250 employees. The 1,250-employee threshold
includes all employees in a business's parent company and any other
subsidiaries. Based on this classification, DOE identified one
potential manufacturer that could qualify as domestic small businesses.
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer burden involves looking at the
cumulative impact of multiple DOE standards and the regulatory actions
of other Federal agencies and States that affect the manufacturers of 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.
Multiple regulations affecting the same manufacturer can strain profits
and lead companies to abandon product lines or markets with lower
expected future returns than competing products. For these reasons, DOE
conducts an analysis of cumulative regulatory burden as part of its
rulemakings pertaining to appliance efficiency.
DOE evaluates product-specific regulations that will take effect
approximately 3 years before or after the 2026 compliance date of any
new energy conservation standards for DPPP motors. This information is
presented in Table V.18.
Table V.18--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting
Dedicated-Purpose Pool Pump Motor Manufacturers
----------------------------------------------------------------------------------------------------------------
Number of Industry
Federal energy conservation Number of manufacturers Approximately Industry conversion
standard Mfrs * affected from standards year conversion costs costs/ product
this rule ** (millions) (%)
----------------------------------------------------------------------------------------------------------------
Distribution Transformers 88 27 1 2027 \133\ $343 2.7
FR 1722 (Jan. 11, 2023) (2021$)
[dagger]....................
Electric Motors 88 FR 36066 74 5 2027 $468 (2021$) 2.6
(Jun. 1, 2023)..............
----------------------------------------------------------------------------------------------------------------
* This column presents the total number of manufacturers identified in the energy conservation standard rule
contributing to cumulative regulatory burden.
[[Page 67027]]
** This column presents the number of manufacturers producing DPPP 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 NOPR publications. Values may change on publication of a final rule.
Fluidra identified the following regulations and certification
standards that apply to DPPP and DPPP motors that may contribute to the
cumulative regulator burden for DPPP motor manufacturers: DOE's January
2017 Final Rule (for DPPPs); DPPP UL 1081; DPPP motor UL 1004-1, 1004-
4, and 1004-7; NSF-50; and CEC title 20. (Fluidra, No. 91 at p. 4) As
part of the cumulative regulatory burden, DOE specifically looks to
mitigate the overlapping effects on manufacturers of new or revised DOE
standards and other regulatory actions affecting the same products or
equipment (10 CFR part 430 appendix A to subpart C) DOE acknowledges
that DPPP manufacturers use DPPP motors in their equipment and that
change to energy conservation standards to DPPP motors could impact
DPPPs. The compliance date for DPPPs was on July 19, 2021. DOE
considered these energy conservation standards when determining what
energy conservation standards are technologically feasible and
economically justified in section V.C. of this document. Specifically,
DOE is setting the compliance date for small-size DPPP motors to be 4
years after the publication of this final rule to allow DPPP motor
manufacturers additional time to comply with energy conservation
standards for those DPPP motors.
---------------------------------------------------------------------------
\133\ ;This is the sum of the total conversion costs listed in
Table V.46 (TSL 4), which is $270.6 million; Table V.48 (TSL 5),
which is $69.4 million; and Table V.50 (TSL 2), which is $3.1
million. 88 FR 1722, 1809-1814.
---------------------------------------------------------------------------
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 new
standards for DPPP 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 first full year of
anticipated compliance with amended standards (2026-2055).\134\ Table
V.15 presents DOE's projections of the national energy savings for each
TSL considered for DPPP motors. The savings were calculated using the
approach described in section IV.H of this document.
---------------------------------------------------------------------------
\134\ As discussed in section III.A of this document, for all
TSLs DOE considered a 2-year lead time resulting in a first full
year of compliance of 2026, except for small-size DPPP motors at TSL
7 where DOE uses a 4-year compliance lead time, resulting in a
compliance year of 2028. In this case, DOE considered 28 years of
shipments (2028-2055).
Table V.19--Cumulative National Energy Savings for DPPP Motors; 30 Years of Shipments
----------------------------------------------------------------------------------------------------------------
Trial standard levels
-------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
----------------------------------------------------------------------------------------------------------------
(quads)
----------------------------------------------------------------------------------------------------------------
Primary energy.................. 0.11 0.20 0.68 0.88 0.99 0.93 1.52 1.56
FFC energy...................... 0.11 0.20 0.70 0.90 1.01 0.96 1.56 1.60
----------------------------------------------------------------------------------------------------------------
Note: the analysis considers 30 years for shipments starting in 2026 (2026-2055) except at TSL 7 for small-size
DPPP motors where DOE considers shipments in 2028-2055.
OMB Circular A-4 \135\ 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.\136\ The review timeframe established in EPCA is generally
not synchronized with the product lifetime, product manufacturing
cycles, or other factors specific to DPPP 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.16. The impacts are counted over the lifetime of DPPP motors
purchased in 2026-2034, except at TSL 7 for small-size DPPP motors
where impacts are counted over the lifetime of DPPP motors purchased in
2028-2036.
---------------------------------------------------------------------------
\135\ 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 1, 2021).
\136\ 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 and for this product, DOE is setting compliance
periods of 2 and 4 years.
[[Page 67028]]
Table V.20--Cumulative National Energy Savings for DPPP Motors; 9 Years of Shipments
----------------------------------------------------------------------------------------------------------------
Trial standard levels
-------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
----------------------------------------------------------------------------------------------------------------
(quads)
----------------------------------------------------------------------------------------------------------------
Primary energy.................. 0.03 0.06 0.21 0.26 0.29 0.28 0.46 0.45
FFC energy...................... 0.03 0.06 0.21 0.27 0.30 0.29 0.47 0.47
----------------------------------------------------------------------------------------------------------------
Note: the analysis considers 9 years for shipments starting in 2026 (2026-2034) except at TSL 7 for small-size
DPPP motors where DOE considers shipments in 2028-2034.
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 DPPP motors.
In accordance with OMB's guidelines on regulatory analysis,\137\ DOE
calculated NPV using both a 7-percent and a 3-percent real discount
rate. Table V.17 shows the consumer NPV results with impacts counted
over the lifetime of products purchased in 2026-2055 or 2028-2055.
---------------------------------------------------------------------------
\137\ 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
July 1, 2021).
Table V.21--Cumulative Net Present Value of Consumer Benefits for DPPP motors; 30 Years of Shipments
----------------------------------------------------------------------------------------------------------------
Trial standard levels
Discount rate -------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
----------------------------------------------------------------------------------------------------------------
(billion 2022$)
----------------------------------------------------------------------------------------------------------------
3 percent....................... 0.85 1.27 2.29 3.58 3.92 7.97 10.16 10.06
7 percent....................... 0.48 0.72 1.16 1.87 2.06 4.49 5.37 5.28
----------------------------------------------------------------------------------------------------------------
Note: the analysis considers 30 years for shipments starting in 2026 (2026-2055) except at TSL 7 for small-size
DPPP motors where DOE considers shipments in 2028-2055.
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V.18. The impacts are counted over the
lifetime of products purchased in 2026-2034 or 2028-2036. As mentioned
previously, such results are presented for informational purposes only
and are not indicative of any change in DOE's analytical methodology or
decision criteria.
Table V.22--Cumulative Net Present Value of Consumer Benefits for DPPP Motors; 9 Years of Shipments
----------------------------------------------------------------------------------------------------------------
Trial standard levels
Discount rate -------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
----------------------------------------------------------------------------------------------------------------
(billion 2022$)
----------------------------------------------------------------------------------------------------------------
3 percent....................... 0.32 0.50 0.79 1.25 1.39 2.91 3.16 2.96
7 percent....................... 0.25 0.38 0.56 0.91 1.00 2.25 2.35 2.19
----------------------------------------------------------------------------------------------------------------
Note: the analysis considers 9 years for shipments starting in 2026 (2026-2034) except at TSL 7 for small-size
DPPP motors where DOE considers shipments in 2028-2034.
The previous results reflect the use of a default trend to estimate
the change in price for DPPP motors over the analysis period (see
section IV.F.1 of this document). DOE also conducted a sensitivity
analysis that considered one scenario with a lower rate of price
decline than the reference case and one scenario with a higher rate of
price decline than the reference case. The results of these alternative
cases are presented in appendix 10C of the final rule TSD. In the high-
price-decline case, the NPV of consumer benefits is higher than in the
default case. In the low-price-decline case, the NPV of consumer
benefits is lower than in the default case.
c. Indirect Impacts on Employment
DOE estimates that amended energy conservation standards for DPPP
motors will 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 (2026-2030 or
2028-2030), where these uncertainties are reduced.
The results suggest that the adopted standards are likely to have a
negligible impact on the net demand for labor in the economy. The net
change in jobs is so small that it would be imperceptible in national
labor statistics and might be offset by other, unanticipated effects on
employment. Chapter 16 of the final
[[Page 67029]]
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 has
concluded that the standards adopted in this final rule will not lessen
the utility or performance of the DPPP motors under consideration in
this rulemaking. Manufacturers of these products currently offer units
that meet or exceed the adopted standards.
5. Impact of Any Lessening of Competition
DOE considered any lessening of competition that would be likely to
result from new or amended standards. As discussed in section
III.F.1.e, EPCA directs the Attorney General of the United States
(``Attorney General'') to determine the impact, if any, of any
lessening of competition likely to result from a proposed standard and
to transmit such determination in writing to the Secretary within 60
days of the publication of a proposed rule, together with an analysis
of the nature and extent of the impact. To assist the Attorney General
in making this determination, DOE provided the Department of Justice
(``DOJ'') with copies of the NOPR and the TSD for review. In its
assessment letter responding to DOE, DOJ ultimately stated that they do
not have sufficient information to conclude that the proposed energy
conservation standards for DPPP motor are likely to have a significant
adverse impact on competition. DOE is publishing the Attorney General's
assessment at the end of this final rule.
6. Need of the Nation To Conserve Energy
Enhanced energy efficiency, where economically justified, improves
the Nation's energy security, strengthens the economy, and reduces the
environmental impacts (costs) of energy production. Reduced electricity
demand due to energy conservation standards is also likely to reduce
the cost of maintaining the reliability of the electricity system,
particularly during peak-load periods. Chapter 15 in the final rule TSD
presents the estimated impacts on electricity 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 DPPP motors is expected to yield environmental benefits
in the form of reduced emissions of certain air pollutants and
greenhouse gases. Table V.19 provides DOE's estimate of cumulative
emissions reductions expected to result from the TSLs considered in
this rulemaking. The emissions were calculated using the multipliers
discussed in section IV.K of this document. DOE reports annual
emissions reductions for each TSL in chapter 13 of the final rule TSD.
Table V.23--Cumulative Emissions Reduction for DPPP Motors; 30 Years of Shipments
----------------------------------------------------------------------------------------------------------------
Trial standard level
-------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....... 2.02 3.82 13.04 16.82 18.84 17.94 28.52 29.60
CH4 (thousand tons)............. 0.16 0.30 1.02 1.31 1.47 1.40 2.21 2.31
N2O (thousand tons)............. 0.02 0.04 0.14 0.18 0.21 0.19 0.31 0.32
NOX (thousand tons)............. 1.02 1.94 6.63 8.54 9.56 9.09 14.41 15.00
SO2 (thousand tons)............. 0.68 1.29 4.40 5.68 6.36 6.05 9.63 10.01
Hg (tons)....................... 0.00 0.01 0.03 0.04 0.04 0.04 0.07 0.07
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....... 0.19 0.36 1.22 1.58 1.77 1.69 2.71 2.79
CH4 (thousand tons)............. 17.21 32.32 110.54 142.86 160.08 152.29 244.97 252.18
N2O (thousand tons)............. 0.00 0.00 0.01 0.01 0.01 0.01 0.01 0.01
NOX (thousand tons)............. 2.95 5.54 18.94 24.48 27.43 26.09 41.99 43.22
SO2 (thousand tons)............. 0.01 0.02 0.08 0.11 0.12 0.11 0.18 0.19
Hg (tons)....................... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....... 2.21 4.18 14.27 18.40 20.61 19.63 31.23 32.39
CH4 (thousand tons)............. 17.37 32.62 111.56 144.17 161.55 153.69 247.18 254.49
N2O (thousand tons)............. 0.02 0.04 0.15 0.19 0.21 0.20 0.32 0.34
NOX (thousand tons)............. 3.97 7.48 25.57 33.02 36.99 35.18 56.40 58.22
SO2 (thousand tons)............. 0.70 1.32 4.49 5.79 6.48 6.16 9.81 10.20
Hg (tons)....................... 0.00 0.01 0.03 0.04 0.04 0.04 0.07 0.07
----------------------------------------------------------------------------------------------------------------
Note: the analysis considers 30 years for shipments starting in 2026 (2026-2055) except at TSL 7 for small-size
DPPP motors where DOE considers shipments in 2028-2055.
As part of the analysis for this rule, DOE estimated monetary
benefits likely to result from the reduced emissions of CO2
that DOE estimated for each of the considered TSLs for DPPP motors.
Section IV.L.1.a of this document discusses the estimated SC-
CO2 values that DOE used. Table V.19 presents the value of
CO2 emissions reduction at each TSL for each of the SC-
CO2 cases. The time-series of annual values is presented for
the selected TSL in chapter 14 of the final rule TSD.
[[Page 67030]]
Table V.24--Present Value of CO2 Emissions Reduction for DPPP Motors; 30 Years of Shipments
----------------------------------------------------------------------------------------------------------------
SC-CO2 case
-----------------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(million 2022$)
-----------------------------------------------------------------------
1....................................... 29 112 171 340
2....................................... 55 213 324 646
3....................................... 187 726 1,106 2,207
4....................................... 240 934 1,423 2,840
5....................................... 268 1,045 1,593 3,178
6....................................... 256 997 1,519 3,030
7....................................... 400 1,570 2,397 4,778
8....................................... 420 1,638 2,499 4,984
----------------------------------------------------------------------------------------------------------------
Note: the analysis considers 30 years for shipments starting in 2026 (2026-2055) except at TSL 7 for small-size
DPPP motors where DOE considers shipments in 2028-2055.
As discussed in section IV.L.2, 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
DPPP motors. Table V.21 presents the value of the CH4
emissions reduction at each TSL, and Table V.22 presents the value of
the N2O emissions reduction at each TSL. The time-series of
annual values is presented for the selected TSL in chapter 14 of the
final rule TSD.
Table V.25--Present Value of Methane Emissions Reduction for DPPP Motors; 30 Years of Shipments
----------------------------------------------------------------------------------------------------------------
SC-CH4 case
-----------------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(million 2022$)
-----------------------------------------------------------------------
1....................................... 10 27 36 71
2....................................... 19 50 68 134
3....................................... 65 172 234 457
4....................................... 83 222 302 590
5....................................... 93 249 338 661
6....................................... 89 237 322 628
7....................................... 141 379 517 1,007
8....................................... 146 391 533 1,040
----------------------------------------------------------------------------------------------------------------
Note: the analysis considers 30 years for shipments starting in 2026 (2026-2055) except at TSL 7 for small-size
DPPP motors where DOE considers shipments in 2028-2055.
Table V.26--Present Value of Nitrous Oxide Emissions Reduction for DPPP Motors; 30 Years of Shipments
----------------------------------------------------------------------------------------------------------------
SC-N2O case
-----------------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(million 2022$)
-----------------------------------------------------------------------
1....................................... 0.1 0.4 0.6 1.1
2....................................... 0.2 0.8 1.2 2.0
3....................................... 0.7 2.6 3.9 6.9
4....................................... 0.9 3.4 5.1 8.9
5....................................... 1.0 3.8 5.7 10.0
6....................................... 1.0 3.6 5.4 9.5
7....................................... 1.6 5.6 8.5 14.9
8....................................... 1.6 5.9 8.9 15.6
----------------------------------------------------------------------------------------------------------------
Note: the analysis considers 30 years for shipments starting in 2026 (2026-2055) except at TSL 7 for small-size
DPPP motors where DOE considers shipments in 2028-2055.
[[Page 67031]]
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, however, that the adopted standards would be economically
justified even without inclusion of monetized benefits of reduced GHG
emissions.
DOE also estimated the monetary value of the economic benefits
associated with NOX and SO2 emissions reductions
anticipated to result from the considered TSLs for DPPP motors. The
dollar-per-ton values that DOE used are discussed in section IV.L of
this document. Table V.23 presents the present value for NOX
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and Table V.24 presents similar results for
SO2 emissions reductions. The results in these tables
reflect application of EPA's low dollar-per-ton values, which DOE used
to be conservative. The time-series of annual values is presented for
the selected TSL in chapter 14 of the final rule TSD.
Table V.27--Present Value of NOX Emissions Reduction for DPPP Motors; 30
Years of Shipments
------------------------------------------------------------------------
TSL 7% Discount rate 3% Discount rate
------------------------------------------------------------------------
(million 2022$)
-------------------------------------
1................................. 116 221
2................................. 222 420
3................................. 759 1,433
4................................. 972 1,847
5................................. 1,086 2,068
6................................. 1,040 1,967
7................................. 1,613 3,139
8................................. 1,698 3,250
------------------------------------------------------------------------
Note: the analysis considers 30 years for shipments starting in 2026
(2026-2055) except at TSL 7 for small-size DPPP motors where DOE
considers shipments in 2028-2055.
Table V.28--Present Value of SO2 Emissions Reduction for DPPP Motors; 30
Years of Shipments
------------------------------------------------------------------------
TSL 3% Discount rate 7% Discount rate
------------------------------------------------------------------------
(million 2022$)
-------------------------------------
1................................. 29 54
2................................. 56 102
3................................. 190 348
4................................. 243 449
5................................. 272 502
6................................. 260 477
7................................. 399 756
8................................. 424 789
------------------------------------------------------------------------
Note: the analysis considers 30 years for shipments starting in 2026
(2026-2055) except at TSL 7 for small-size DPPP motors where DOE
considers shipments in 2028-2055.
Not all the public health and environmental benefits from the
reduction of greenhouse gases, NOX, and SO2 are
captured in the values above, and additional unquantified benefits from
the reductions of those pollutants as well as from the reduction of
direct PM and other co-pollutants may be significant. DOE has not
included monetary benefits of the reduction of Hg emissions because the
amount of reduction is very small.
7. Other Factors
The Secretary of Energy, in determining whether a standard is
economically justified, may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) No
other factors were considered in this analysis.
8. Summary of Economic Impacts
Table V.25 presents the NPV values that result from adding the
estimates of the economic benefits resulting from reduced GHG and
NOX and SO2 emissions to the NPV of consumer
benefits calculated for each TSL considered in this rulemaking. The
consumer benefits are domestic U.S. monetary savings that occur as a
result of purchasing the covered equipment, and are measured for the
lifetime of products shipped in 2026-2055, except at TSL 7 for small-
size DPPP motors where impacts are counted over the lifetime of DPPP
motors purchased in 2028-2055.
The climate benefits associated with reduced GHG emissions
resulting from the adopted standards are global benefits, and are also
calculated based on the lifetime of DPPP motors shipped in 2026-2055,
except at TSL 7 for small-size DPPP motors where impacts are counted
over the lifetime of DPPP motors purchased in 2028-2055.
[[Page 67032]]
Table V.29--Consumer NPV Combined With Present Value of Climate Benefits and Health Benefits
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8
----------------------------------------------------------------------------------------------------------------
3% discount rate for Consumer NPV and Health Benefits (billion 2022$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.......... 1.2 1.9 4.3 6.2 6.9 10.8 14.6 14.7
3% Average SC-GHG case.......... 1.3 2.1 5.0 7.0 7.8 11.6 16.0 16.1
2.5% Average SC-GHG case........ 1.3 2.2 5.4 7.6 8.4 12.3 17.0 17.1
3% 95th percentile SC-GHG case.. 1.5 2.6 6.7 9.3 10.3 14.1 19.9 20.1
----------------------------------------------------------------------------------------------------------------
7% discount rate for Consumer NPV and Health Benefits (billion 2022$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.......... 0.7 1.1 2.4 3.4 3.8 6.1 7.9 8.0
3% Average SC-GHG case.......... 0.8 1.3 3.0 4.2 4.7 7.0 9.3 9.4
2.5% Average SC-GHG case........ 0.8 1.4 3.5 4.8 5.4 7.6 10.3 10.4
3% 95th percentile SC-GHG case.. 1.0 1.8 4.8 6.5 7.3 9.5 13.2 13.4
----------------------------------------------------------------------------------------------------------------
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 previously. (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 final rule, DOE considered the impacts of standards for
DPPP 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, 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 DPPP Motor Standards
Table V.26 and Table V.27 summarize the quantitative impacts
estimated for each TSL for DPPP motors. The national impacts are
measured over the lifetime of DPPP motors purchased in the 30-year
period that begins in the anticipated year of compliance with amended
standards (2026-2055).\138\ 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.
---------------------------------------------------------------------------
\138\ As discussed in section III.A of this document, for all
TSLs DOE considered a 2-year lead time resulting in a first full
year of compliance of 2026, except for small-size DPPP motors at TSL
7 where DOE uses a 4-year compliance lead time, resulting in a
compliance year of 2028. In this case, DOE considered 28 years of
shipments (2028-2055).
Table V.30--Summary of Analytical Results for DPPP Motors TSLs--National Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8
----------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings
----------------------------------------------------------------------------------------------------------------
Quads................................... 0.11 0.20 0.70 0.90 1.01 0.96 1.56 1.60
----------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)............... 2.2 4.2 14.3 18.4 20.6 19.6 31.2 32.4
CH4 (thousand tons)..................... 17.4 32.6 111.6 144.2 161.6 153.7 247.2 254.5
N2O (thousand tons)..................... 0.02 0.04 0.15 0.19 0.21 0.20 0.32 0.34
SO2 (thousand tons)..................... 0.7 1.3 4.5 5.8 6.5 6.2 9.8 10.2
NOX (thousand tons)..................... 4.0 7.5 25.6 33.0 37.0 35.2 56.4 58.2
Hg (tons)............................... 0.00 0.01 0.03 0.04 0.04 0.04 0.07 0.07
----------------------------------------------------------------------------------------------------------------
Present Value of Benefits and Costs (3% discount rate, billion 2022$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......... 1.0 1.9 6.4 8.2 9.2 8.8 14.0 14.5
Climate Benefits *...................... 0.1 0.3 0.9 1.2 1.3 1.2 2.0 2.0
Health Benefits **...................... 0.3 0.5 1.8 2.3 2.6 2.4 3.9 4.0
Total Benefits [dagger]................. 1.4 2.7 9.1 11.7 13.1 12.4 19.9 20.6
[[Page 67033]]
Consumer Incremental Product Costs...... 0.1 0.6 4.1 4.7 5.3 0.8 3.9 4.4
Consumer Net Benefits................... 0.8 1.3 2.3 3.6 3.9 8.0 10.2 10.1
Total Net Benefits...................... 1.3 2.1 5.0 7.0 7.8 11.6 16.0 16.1
----------------------------------------------------------------------------------------------------------------
Present Value of Benefits and Costs (7% discount rate, billion 2022$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......... 0.6 1.1 3.7 4.8 5.3 5.1 7.9 8.3
Climate Benefits *...................... 0.1 0.3 0.9 1.2 1.3 1.2 2.0 2.0
Health Benefits **...................... 0.1 0.3 0.9 1.2 1.4 1.3 2.0 2.1
Total Benefits [dagger]................. 0.8 1.6 5.6 7.1 8.0 7.6 11.9 12.5
Consumer Incremental Product Costs...... 0.1 0.4 2.5 2.9 3.3 0.6 2.6 3.0
Consumer Net Benefits................... 0.5 0.7 1.2 1.9 2.1 4.5 5.4 5.3
Total Net Benefits...................... 0.8 1.3 3.0 4.2 4.7 7.0 9.3 9.4
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with DPPP motors shipped in 2026-2055, except at TSL
7 for small-size DPPP motors where shipments in 2028-2055 are considered. These results include benefits to
consumers which accrue after 2055 from the products shipped in 2026-2055 (or 2028-2055).
* 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 DOE does not have a single central SC-GHG point estimate. DOE emphasizes the
importance and value of considering the benefits calculated using all four sets of SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.
Table V.31--Summary of Analytical Results for DPPP Motors TSLs--Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (million 2022$) (No-new-standards 660-663 655-672 622-684 617-695 612-708 559-675 447-740 436-755
case INPV = 661)...............................
Industry NPV (% change)......................... (0.1)-0.4 (0.9)-1.7 (5.9)-3.5 (6.6)-5.2 (7.3)-7.1 (15.3)-2.1 (32.4)-12.0 (34.0)-14.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Average LCC Savings (2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Extra-Small-Size................................ $3 ($12) ($12) ($12) ($12) $3 $3 ($12)
Small-Size...................................... 10 14 ($54) ($12) ($16) 10 4 4
Standard-Size................................... 26 44 109 141 151 236 236 236
Shipment-Weighted Average *..................... 19 31 44 79 83 144 141 141
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Extra-Small-Size................................ 0.9 2.8 2.8 2.8 2.8 0.9 0.9 2.8
Small-Size...................................... 0.5 1.0 4.5 3.4 3.4 0.5 3.4 3.4
Standard-Size................................... 0.7 0.8 0.8 0.8 0.9 1.3 1.3 1.3
Shipment-Weighted Average *..................... 0.6 0.9 2.2 1.9 1.9 1.0 2.1 2.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of Consumers that Experience a Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Extra-Small-Size................................ 0.5% 59% 59% 59% 59% 0.5% 0.5% 59%
Small-Size...................................... 0.0 24 52 46 50 0 44 44
Standard-Size................................... 0.1 2 18 17 19 2 2 2
Shipment-Weighted Average *..................... 0.1 12 32 29 32 1 18 19
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* Weighted by shares of each equipment class in total projected shipments in 2026.
DOE first considered TSL 8, which represents the max-tech
efficiency levels for all equipment classes and freeze protection
control requirements for DPPP motors greater than and equal to 0.5 THP.
TSL 8 would save an estimated 1.60 quads of energy, an amount DOE
considers significant. Under TSL 8, the NPV of consumer benefit would
be $5.3 billion using a discount rate of 7 percent, and $10.1 billion
using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 8 are 32.4 Mt of
CO2, 10.2 thousand tons of SO2, 58.2 thousand
tons of NOX, 0.07 tons of Hg, 254.5 thousand tons of
CH4, and 0.34 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 8 is $2.0 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 8 is $2.1 billion using a 7-percent discount rate and $4.0 billion
using a 3-percent discount rate.
[[Page 67034]]
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 8 is $9.4
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 8 is $16.1 billion. The estimated total
NPV is provided for additional information, however DOE primarily
relies upon the NPV of consumer benefits when determining whether a
standard level is economically justified.
At TSL 8, the average LCC impact is a loss of $12 for extra-small-
size DPPP motors, a saving of $4 for small-size DPPP motors, and $236
for standard-size DPPP motors. The simple payback period is 2.8 years
for extra-small-size DPPP motors, 3.4 years for small-size DPPP motors,
and 1.3 years for standard-size DPPP motors. The fraction of consumers
experiencing a net LCC cost is 59 percent for extra-small-size DPPP
motors, 44 percent for small-size DPPP motors, and 2 percent for
standard-size DPPP motors.
At TSL 8, the projected change in INPV ranges from a decrease of
$224.4 million to an increase of $94.1 million, which corresponds to a
decrease of 34.0 percent and an increase of 14.2 percent, respectively.
DOE estimates that industry must invest $56.4 million to comply with
standards set at TSL 8. DOE estimates that approximately 33 percent of
extra-small size DPPP motor shipments, 22 percent of small size DPPP
motors shipments, and 62 percent of standard size DPPP motor shipments
would meet the efficiency levels analyzed at TSL 8, in the no-new-
standards case. At TSL 8, most DPPP motor manufacturers would be
required to redesign all of their small size DPPP motor models to be
variable-speed motors covered by this rulemaking. It is unclear if most
manufacturers would have the engineering capacity to complete the
necessary redesigns within a 2-year compliance period (between the
publication of this final rule and the analyzed compliance date of 2028
for this TSL). If manufacturers require more than 2 years to redesign
all of their covered DPPP motor models, they will likely prioritize
redesigns based on sales volume. There is a risk that some small size
DPPP motor models will become either temporarily or permanently
unavailable after the analyzed compliance date for this TSL, given a 2-
year compliance period.
The Secretary concludes that at TSL 8 for DPPP motors, the benefits
of energy savings, positive NPV of consumer benefits, emission
reductions, and the estimated monetary value of the emissions
reductions are outweighed by the economic burden on many consumers and
the impacts on manufacturers, including the lack of manufacturers
currently offering small size DPPP motor models meeting the efficiency
levels required at this TSL and the potential for most DPPP motor
manufacturers to redesign their entire small size DPPP motors models in
the analyzed 2 year compliance period for this TSL. A majority of
extra-small-size DPPP motor consumers (59 percent) would experience a
net cost and the average LCC savings would be negative. The potential
reduction in INPV could be as high as 34.0 percent. Consequently, the
Secretary has concluded that TSL 8 is not economically justified.
DOE then considered TSL 7, which represents the California CEC
standards \139\ and includes a variable-speed requirement for DPPP
motors at or above 0.5 THP, an EL 1 efficiency requirement below 0.5
THP, and freeze-protection control requirements for DPPP motors greater
than and equal to 0.5 THP. In addition, as discussed in section III.A
of this document, this TSL uses a 4-year compliance lead time for
small-size DPPP motors, resulting in a first full year of compliance
year of 2028 (for all other equipment classes, a compliance lead time
of 2 years is applied). TSL 7 would save an estimated 1.56 quads of
energy, an amount DOE considers significant. Under TSL 7, the NPV of
consumer benefit would be $5.4 billion using a discount rate of 7
percent, and $10.2 billion using a discount rate of 3 percent.
---------------------------------------------------------------------------
\139\ Best approximation based on the efficiency level analyzed.
---------------------------------------------------------------------------
The cumulative emissions reductions at TSL 7 are 31.2 Mt of
CO2, 9.8 thousand tons of SO2, 56.4 thousand tons
of NOX, 0.07 tons of Hg, 247.2 thousand tons of
CH4, and 0.32 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 7 is $2.0 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 7 is $2.0 billion using a 7-percent discount rate and $3.9 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 7 is $9.3
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 7 is $16.0 billion. The estimated total
NPV is provided for additional information, however DOE primarily
relies upon the NPV of consumer benefits when determining whether a
standard level is economically justified.
At TSL 7, the average LCC impact is a savings of $3 for extra-
small-size DPPP motors, $4 for small-size DPPP motors, and $236 for
standard-size DPPP motors. The simple payback period is 0.9 years for
extra-small-size DPPP motors, 3.4 years for small-size DPPP motors, and
1.3 years for standard-size DPPP motors. The fraction of consumers
experiencing a net LCC cost is 0.5 percent for extra-small-size DPPP
motors, 4 percent for small-size DPPP motors, and 2 percent for
standard-size DPPP motors.
At TSL 7, the projected change in INPV ranges from a decrease of
$214.2 million to an increase of $79.0 million, which correspond to a
decrease of 32.4 percent and an increase of 12.0 percent, respectively.
DOE estimates that industry must invest $56.2 million to comply with
standards set at TSL 7. DOE estimates that approximately 93 percent of
extra-small size DPPP motor shipments, 24 percent of small size DPPP
motors shipments, and 62 percent of standard size DPPP motor shipments
would meet the efficiency levels analyzed at TSL 7, in the no-new-
standards case. At TSL 7, most DPPP motor manufacturers would be
required to redesign almost all of their small size DPPP motor models
to be variable-speed motors covered by this rulemaking. However, as
previously stated DPPP motor manufacturers would have 4 years to
complete this redesign process for the small size DPPP motor models.
After considering the analysis and weighing the benefits and
burdens, the Secretary has concluded that a standard set at TSL 7 for
DPPP motors is economically justified. At this TSL, the average LCC
savings are positive for each equipment classes for which a new
standard is considered. An estimated 18 percent of all DPPP motor
consumers experience a net cost. The FFC national energy savings are
significant and the NPV of consumer benefits is positive at TSL 7 using
both a 3-percent and 7-percent discount rate. Notably, the benefits to
consumers vastly outweigh the cost to manufacturers. At TSL 7, the NPV
of consumer benefits, even measured at the more conservative discount
rate of 7 percent, is over 25 times higher than the maximum estimated
manufacturers' loss in INPV. The standard levels at TSL 7 are
[[Page 67035]]
economically justified even without weighing the estimated monetary
value of emissions reductions. When those emissions reductions are
included--representing $2.0 billion in climate benefits (associated
with the average SC-GHG at a 3-percent discount rate), and $3.9 billion
(using a 3-percent discount rate) or $2.0 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 new
energy conservation standards, DOE notes while the average LCC savings
for extra-small-size DPPP motors are negative at TSL 8, they are
positive at TSL 7 and the average LCC savings for standard-size and
small size DPPP motors are the same at TSL 7 and TSL 8. In addition, as
compared to TSL 8, TSL 7 has smaller percentages of electric motor
consumers experiencing a net cost, a lower maximum decrease in INPV,
lower manufacturer conversion costs and allow manufacturers 4 years to
redesign their small size DPPP motor models to meet the efficiency
levels required at TSL 7, compared to 2 years at TSL 8. Across all
consumers, TSL 7 represents the largest average LCC savings for each
equipment class of any TSL.
Although DOE considered new standard levels for DPPP motors by
grouping the efficiency levels for each equipment class into TSLs, DOE
evaluates all analyzed efficiency levels in its analysis. For standard-
size and small-size DPPP motors, TSL 7 (i.e., the adopted TSL) includes
the max-tech efficiency levels, which is the maximum level determined
to be technologically feasible. For extra-small-size DPPP motors, TSL 7
represents the efficiency level that is one level below the max-tech
efficiency level. As discussed previously, the max-tech efficiency
levels for extra-small-size DPPP motor would result in negative LCC
savings and a majority of consumers experiencing a net LCC cost. The
benefits of max-tech efficiency levels for extra-small-size DPPP motors
do not outweigh the negative impacts to consumers and manufacturers.
Therefore, DOE has concluded that the max-tech efficiency levels are
not justified. The ELs at the adopted TSL result in average positive
LCC savings for each equipment class, 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 7 in the preceding paragraphs.
Therefore, based on the previous considerations, DOE adopts the
energy conservation standards for DPPP motors at TSL 7. The new energy
conservation standards for DPPP motors, which are expressed in full-
load efficiency and design requirements, are shown in Table V.28.
Table V.28--Energy Conservation Standards for DPPP Motors (TSL 7)
----------------------------------------------------------------------------------------------------------------
Performance
standard: full- Design requirement: Design requirement:
Motor total horsepower (THP) load efficiency speed capability freeze protection Compliance date
(%)
----------------------------------------------------------------------------------------------------------------
THP < 0.5....................... 69 None............... None............... September 29,
2025.
0.5 <= THP < 1.15............... ................ Variable speed Only for DPPP September 28,
control *. motors with freeze 2027.
protection
controls **.
1.15 <= THP <= 5................ ................ Variable speed Only for DPPP September 29,
control *. motors with freeze 2025.
protection
controls **.
----------------------------------------------------------------------------------------------------------------
* A variable speed motor is a DPPP motor that meets the definition of ``variable-speed control dedicated-purpose
pool pump motor'' as defined by UL 1004-10:2022.
** DPPP motors with freeze protection controls are to be shipped with the freeze protection feature disabled, or
with the following user-adjustable default settings: (a) the dry-bulb air temperature setting shall be no
greater than 40 [deg]F; (b) the run time setting shall be no greater than 1 hour (before the temperature is
rechecked); and (c) the motor speed in freeze protection mode shall not be more than half of the maximum
operating speed.
2. Annualized Benefits and Costs of the Adopted Standards
The benefits and costs of the adopted standards can also be
expressed in terms of annualized values. The annualized net benefit is
(1) the annualized national economic value (expressed in 2022$) of the
benefits from operating products that meet the adopted standards
(consisting primarily of operating cost savings from using less
energy), minus increases in product purchase costs and (2) the
annualized monetary value of the climate and health benefits.
Table V.29 shows the annualized values for DPPP motors under TSL 7,
expressed in 2022$. The results under the primary estimate are as
follows.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reductions, and the 3-percent
discount rate case for GHG social costs, the estimated cost of the
adopted standards for DPPP motors is $221 million per year in increased
equipment installed costs, while the estimated annual benefits are $684
million from reduced equipment operating costs, $103 million in GHG
reductions, and $173 million from reduced NOX and
SO2 emissions. In this case, the net benefit amounts to $739
million per year.
Using a 3-percent discount rate for consumer benefits and costs and
NOX and SO2 reductions, and the 3-percent
discount rate case for GHG social costs, the estimated cost of the
adopted standards for DPPP motors is $204 million per year in increased
equipment installed costs, while the estimated annual benefits are $738
million from reduced equipment operating costs, $103 million in GHG
reductions, and $205 million from reduced NOX and
SO2 emissions. In this case, the net benefit amounts to $841
million per year.
[[Page 67036]]
Table V.29--Annualized Monetized Benefits and Costs of Adopted Standards (TSL 7) for DPPP Motors
----------------------------------------------------------------------------------------------------------------
Million 2022$/year
-----------------------------------------------------------------
Low-net-benefits High-net-benefits
Primary estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings............... 738 721 760
Climate Benefits *............................ 103 103 103
Health Benefits **............................ 205 205 205
Total Monetized Benefits [dagger]............. 1,046 1029 1,068
Consumer Incremental Equipment Costs.......... 204 235 173
Monetized Net Benefits........................ 841 793 895
Change in Producer Cashflow (INPV (17)-6 (17)-6 (17)-6
[dagger][dagger])............................
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings............... 684 671 703
Climate Benefits * (3% discount rate)......... 103 103 103
Health Benefits **............................ 173 173 173
Total Monetized Benefits [dagger]............. 960 947 979
Consumer Incremental Equipment Costs.......... 221 250 190
Monetized Net Benefits........................ 739 696 790
Change in Producer Cashflow (INPV (17)-6 (17)-6 (17)-6
[dagger][dagger])............................
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with DPPP motors shipped in 2026-2055, except for
small-size DPPP motors where shipments in 2028-2055 are considered. These results include benefits to
consumers which accrue after 2055 from the products shipped in 2026-2055 (or 2028-2055). The Primary, Low Net
Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO2023 Reference
case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental
equipment costs reflect a medium decline rate in the Primary Estimate, an increasing rate in the Low Net
Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to derive
projected price trends are explained in sections IV.F.1 and 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
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
sets of 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. 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.
[dagger][dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's NIA includes
all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the
manufacturer to manufacture the equipment and ending with the increase in price experienced by the consumer.
DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J
of this document. In the detailed MIA, DOE models manufacturers' pricing decisions based on assumptions
regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is
the rule's expected impact on the INPV. The change in INPV is the present value of all changes in industry
cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins.
Annualized change in INPV is calculated using the industry weighted average cost of capital value of 7.2% that
is estimated in the manufacturer impact analysis (see chapter 12 of the Final Rule TSD for a complete
description of the industry weighted average cost of capital). For DPPP motors, those values are -$17 million
and $6 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically
justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two
markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in
the calculation of Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit
Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in
proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized
change in INPV in the above table, drawing on the MIA explained further in section IV.J of this document, to
provide additional context for assessing the estimated impacts of this rule to society, including potential
changes in production and consumption, which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE were
to include the INPV into the annualized net benefit calculation for this final rule, the annualized net
benefits would range from $824 million to $847 million at 3-percent discount rate and range from $722 million
to $745 million at 7-percent discount rate.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14904
Executive Order (``E.O.'') 12866, ``Regulatory Planning and
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving
Regulation and Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011), and
amended by E.O. 14094, ``Modernizing Regulatory Review,'' 88 FR 21879
(April 11, 2023), requires agencies, to the extent permitted by law, to
(1) propose or adopt a regulation only upon a reasoned determination
that its benefits justify its costs (recognizing that some benefits and
costs are difficult to quantify); (2) tailor regulations to impose the
least burden on society, consistent with obtaining regulatory
objectives, taking into account, among other things, and to the extent
practicable, the costs of cumulative regulations; (3) select, in
choosing among alternative regulatory approaches, those approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts;
and equity); (4) to the extent feasible, specify performance
objectives, rather than specifying the behavior or manner of compliance
that regulated entities must adopt; and (5) identify and assess
available alternatives to direct regulation, including providing
economic incentives to encourage the
[[Page 67037]]
desired behavior, such as user fees or marketable permits, or providing
information upon which choices can be made by the public. DOE
emphasizes as well that E.O. 13563 requires agencies to use the best
available techniques to quantify anticipated present and future
benefits and costs as accurately as possible. In its guidance, the
Office of Information and Regulatory Affairs (``OIRA'') in the Office
of Management and Budget (``OMB'') has emphasized that such techniques
may include identifying changing future compliance costs that might
result from technological innovation or anticipated behavioral changes.
For the reasons stated in the preamble, this final regulatory action is
consistent with these principles.
Section 6(a) of E.O. 12866 also requires agencies to submit
``significant regulatory actions'' to OIRA for review. OIRA has
determined that this final regulatory action constitutes a
``significant regulatory action'' within the scope of section 3(f)(1)
of E.O. 12866, as amended by E.O. 14094. Accordingly, pursuant to
section 6(a)(3)(C) of E.O. 12866, DOE has provided to OIRA an
assessment, including the underlying analysis, of benefits and costs
anticipated from the final regulatory action, together with, to the
extent feasible, a quantification of those costs; and an assessment,
including the underlying analysis, of costs and benefits of potentially
effective and reasonably feasible alternatives to the planned
regulation, and an explanation why the planned regulatory action is
preferable to the identified potential alternatives. These assessments
are summarized in this preamble and further detail can be found in the
technical support document for this final rule.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation 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 has prepared the
following FRFA for the products that are the subject of this final
rule.
For manufacturers of DPPP motors, the SBA has set a size threshold,
which defines those entities classified as ``small businesses'' for the
purposes of the statute. DOE used the SBA's small business size
standards to determine whether any small entities would be subject to
the requirements of the rule. (See 13 CFR part 121.) The size standards
are listed by North American Industry Classification System (``NAICS'')
code and industry description and are available at www.sba.gov/document/support-table-size-standards. Manufacturing of DPPP motors is
classified under NAICS 335312, ``Motor and Generating Manufacturing.''
The SBA sets a threshold of 1,250 employees or fewer for an entity to
be considered as a small business for this category.
1. Need for, Objectives of, and Legal Basis for, Rule
The need for, and objective of this final rule are stated elsewhere
in the preamble and not repeated here.
2. Significant Comments in Response to the IRFA
DOE received one comment with respect to the initial regulatory
flexibility analysis. PHTA and NEMA commented that are not aware of any
domestic DPPP motor manufacturer that qualifies as a small business.
(PHTA and NEMA, No. 92 at p.13) However, based on information gathered
from DPPP motor manufacturer websites, DOE identified one DPPP motor
manufacturer that sells DPPP motors covered by this rulemaking and has
fewer than 1,250 employees. Additionally, PHTA and NEMA commented that
they are aware of one domestic DPPP manufacturer that is a small
business and encouraged DOE to verify any impacts of the DPPP motors
energy conservation standards on that DPPP small business. (PHTA and
NEMA, No. 92 at p.13) DOE conducted an MIA on the manufacturers of the
equipment that are being regulated by this rulemaking, which is DPPP
motors. DOE did not conduct a MIA on manufacturers of products or
equipment that use DPPP motors in the products or equipment they
manufacture.
3. Comments Filed by the Chief Counsel for Advocacy
The SBA's Chief Counsel for Advocacy did not submit comments on
this rulemaking.
4. Description on Estimated Number of Small Entities Regulated
DOE reviewed the standard levels considered in this final rule
under the provisions of the Regulatory Flexibility Act and the
procedures and policies published on February 19, 2003. During its
market survey, DOE used publicly available information to identify
potential small manufacturers. DOE's research involved industry trade
association membership directories (e.g., AHRI), information from
previous rulemakings, individual company websites, and market research
tools (e.g., D&B Hoover's reports) to create a list of companies that
manufacture DPPP motors.
As previously stated, manufacturing of DPPP motors is classified
under NAICS 335312, ``Motor and Generator Manufacturing,'' for which
the SBA sets a threshold of 1,250 employees or fewer for an entity to
be considered as a small business. DOE screened out companies that do
not offer products impacted by this rulemaking, do not meet the
definition of a ``small business,'' or are foreign owned and operated.
DOE identified five companies that manufacture DPPP motors for the
domestic market, of those DOE determined that one company met the SBA
definition of a small business. DOE contacted this small business
regarding a discussion of potential DPPP motor standards, but the small
business was not interested in discussing potential impacts of energy
conservation standards on DPPP motors.
5. Description and Estimate of Compliance Requirements Including
Differences in Cost, if Any, for Different Groups of Small Entities
DOE reviewed the website and catalog offerings of the identified
small business and determined that the manufacturer offers extra-small
size DPPP motors and standard size DPPP motors that would meet
requirements under the adopted standards. However, the small business
does not manufacturer any small size DPPP motors that would meet the
requirements under the adopted standard for small size DPPP motors.
Therefore, if the manufacturer chooses to continue to sell small size
DPPP motors, this small business is expected to need to introduce at
least one variable-speed, small size DPPP motor model in order to
comply with the energy conservation standards adopted in this final
rule.
There are two types of costs the small business could incur due to
the adopted standards for DPPP motors: product conversion costs and
capital conversion
[[Page 67038]]
costs. Product conversion costs are investments in R&D, testing,
marketing, and other non-capitalized costs necessary to make equipment
designs comply with new energy conservation standards. Capital
conversion costs are investments in property, plant, and equipment
necessary to adapt or change existing production facilities such that
new compliant equipment designs can be fabricated and assembled.
DOE anticipates that the small business will incur approximately
$1.1 million in product conversion costs--accounting for the
compensation of four full-time engineers for 24 months of product
design and testing work--and approximately $2.5 million in capital
conversion costs to build a suitable production line to manufacture one
small size DPPP motor model that would comply with the energy
conservation standards for the small size DPPP motors adopted in this
final rule. Therefore, this small business would incur a total of
approximately $3.6 million in conversion costs. DOE was able to
identify an annual revenue estimate of approximately $28.2 million for
the small business. The $3.6 million in conversion cost represents
approximately 12.8 percent of the estimated annual revenue of the small
business.
DOE assumes that this small DPPP motor manufacturer would spread
these costs over the four-year compliance timeframe, as standards
require compliance for the small size DPPP motors four years after the
publication of this final rule. Therefore, DOE assumes that this small
business would incur on average about $900,000 or approximately 3.2
percent of its annual revenue in each of the four years leading up to
the compliance date for small size DPPP motors.
6. Significant Alternatives to the Rule
The discussion in the previous section analyzes impacts on small
businesses that would result from the adopted standards, represented by
TSL 7. In reviewing alternatives to the adopted standards, DOE examined
energy conservation standards set at lower efficiency levels. While TSL
1 through TSL 6 would reduce the impacts on small business
manufacturers, it would come at the expense of a reduction in energy
savings and consumer NPV. TSL 1 achieves 93 percent lower energy
savings and 91 percent lower consumer net benefits compared to the
energy savings and consumer net benefits at TSL 7. TSL 2 achieves 87
percent lower energy savings and 87 percent lower consumer net benefits
compared to the energy savings and consumer net benefits at TSL 7. TSL
3 achieves 55 percent lower energy savings and 78 percent lower
consumer net benefits compared to the energy savings and consumer net
benefits at TSL 7. TSL 4 achieves 42 percent lower energy savings and
65 percent lower consumer net benefits compared to the energy savings
and consumer net benefits at TSL 7. TSL 5 achieves 35 percent lower
energy savings and 62 percent lower consumer net benefits compared to
the energy savings and consumer net benefits at TSL 7. TSL 6 achieves
39 percent lower energy savings and 16 percent lower consumer net
benefits compared to the energy savings and consumer net benefits at
TSL 7.
DOE believes that establishing standards at TSL 7 balances the
benefits of the energy savings at TSL 7 with the potential burdens
placed on DPPP motors manufacturers, including the one small business
manufacturer. Accordingly, DOE is not adopting one of the other TSLs
considered in the analysis, or the other policy alternatives examined
as part of the regulatory impact analysis and included in chapter 17 of
the final rule TSD.
C. Review Under the Paperwork Reduction Act
Manufacturers of DPPP motors must certify to DOE that their
products comply with any applicable energy conservation standards. In
certifying compliance, manufacturers must test their products according
to the DOE test procedures for DPPP motors, including any amendments
adopted for those test procedures. DOE has established regulations for
the certification and recordkeeping requirements for all covered
consumer products and commercial equipment, including DPPP motors. (See
generally 10 CFR part 429). The collection-of-information requirement
for the certification and recordkeeping is subject to review and
approval by OMB under the Paperwork Reduction Act (``PRA''). This
requirement has been approved by OMB under OMB control number 1910-
1400. Public reporting burden for the certification is estimated to
average 35 hours per response, including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
Certification data will be required for DPPP motors; however, DOE
is not adopting certification or reporting requirements for DPPP motors
in this final rule. Instead, DOE will consider proposals to establish
certification requirements and reporting for DPPP 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 action rule in accordance with NEPA
and DOE's NEPA implementing regulations (10 CFR part 1021). DOE has
determined that this rule qualifies for categorical exclusion under 10
CFR part 1021, subpart D, appendix B5.1 because it is a rulemaking that
establishes energy conservation standards for consumer 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. For the reasons described below, DOE has
examined this final rule and
[[Page 67039]]
has determined that this rule meets the relevant standards of E.O.
13132.
E.O. 13132 includes special requirements for preemption, including
that Federal agencies must only construe a Federal statute to preempt
State law where the statute includes express preemption or some other
clear evidence that Congress intended preemption of State law, or where
the exercise of State authority conflicts with the exercise of Federal
authority under the Federal statute. EPCA governs and prescribes
express Federal preemption of State regulations as to energy
conservation for the equipment that are the subject of this final rule.
As such, any State regulation regarding the energy efficiency or use of
DPPP motors will be preempted on the compliance dates listed in the
DATES section. 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)
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation (1)
clearly specifies the preemptive effect, if any, (2) clearly specifies
any effect on existing Federal law or regulation, (3) provides a clear
legal standard for affected conduct while promoting simplification and
burden reduction, (4) specifies the retroactive effect, if any, (5)
adequately defines key terms, and (6) addresses other important issues
affecting clarity and general draftsmanship under any guidelines issued
by the Attorney General. Section 3(c) of E.O. 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. DOE has completed the
required review and determined that, to the extent permitted by law,
this final rule meets the relevant standards of E.O. 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a regulatory action likely to result in a rule that may cause the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector of $100 million or more in any one year
(adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. On March 18, 1997, DOE published
a statement of policy on its process for intergovernmental consultation
under UMRA. 62 FR 12820. DOE's policy statement is also available at
www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
DOE has concluded that this final rule may require expenditures of
$100 million or more in any one year by the private sector. Such
expenditures may include (1) investment in research and development and
in capital expenditures by DPPP motors manufacturers in the years
between the final rule and the compliance date for the new standards
and (2) incremental additional expenditures by consumers to purchase
higher-efficiency DPPP 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 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 the economic analysis requirements that apply
under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of this document and the TSD for this
final rule respond to those requirements.
Under section 205 of UMRA, 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(o)(A) through 42 U.S.C. 6316(a), this
final rule establishes new energy conservation standards for DPPP
motors that are designed to achieve the maximum improvement in energy
efficiency that DOE has determined to be both technologically feasible
and economically justified. A full discussion of the alternatives
considered by DOE is presented in chapter 17 of the TSD for this final
rule.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This rule would not have any impact on the autonomy or integrity of the
family as an institution. Accordingly, DOE has concluded that it is not
necessary to prepare a Family Policymaking Assessment.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March
18, 1988), DOE has determined that this rule would not result in any
takings that might require compensation under the Fifth Amendment to
the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to
review most disseminations of information to the public under
information quality guidelines established by each agency pursuant to
general guidelines issued by OMB. OMB's guidelines were published at 67
FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR
62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving
Implementation of the
[[Page 67040]]
Information Quality Act (April 24, 2019), DOE published updated
guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE
has reviewed this final rule under the OMB and DOE guidelines and has
concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13211
E.O. 13211, ``Actions Concerning Regulations That Significantly
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22,
2001), requires Federal agencies to prepare and submit to OIRA at OMB,
a Statement of Energy Effects for any significant energy action. A
``significant energy action'' is defined as any action by an agency
that promulgates or is expected to lead to promulgation of a final
rule, and that (1) is a significant regulatory action under Executive
Order 12866, or any successor order; and (2) is likely to have a
significant adverse effect on the supply, distribution, or use of
energy, or (3) is designated by the Administrator at OIRA as a
significant energy action. For any significant energy action, the
agency must give a detailed statement of any adverse effects on energy
supply, distribution, or use should the proposal be implemented, and of
reasonable alternatives to the action and their expected benefits on
energy supply, distribution, and use.
DOE has concluded that this regulatory action, which sets forth new
energy conservation standards for DPPP motors, is not a significant
energy action because the standards are not likely to have a
significant adverse effect on the supply, distribution, or use of
energy, nor has it been designated as such by the Administrator at
OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects
on this final rule.
L. Information Quality
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (``OSTP''), issued its Final Information
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan.
14, 2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the Bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
the agency reasonably can determine will have, or does have, a clear
and substantial impact on important public policies or private sector
decisions.'' 70 FR 2664, 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and the analyses
that are typically used and prepared a report describing that peer
review.\140\ 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.\141\
---------------------------------------------------------------------------
\140\ 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 2/6/2023).
\141\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. 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).
N. Description of Materials Incorporated by Reference
In this final rule, DOE incorporates by reference UL 1004-10:2022.
UL 1004-10:2022 establishes scope and definition requirements for
certain DPPP motors and describes methods to verify the product-
specific enforcement requirements. UL 1004-10:2022 is readily available
at UL's website at https://www.shopulstandards.com/ProductDetail.aspx?productId=UL1004-10_1_S_20200228.
VII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this final
rule.
List of Subjects
10 CFR Part 429
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Incorporation
by reference, Reporting and recordkeeping requirements.
10 CFR Part 431
Administrative practice and procedure, Confidential business
information, Energy conservation test procedures, Incorporation by
reference, and Reporting and recordkeeping requirements.
Signing Authority
This document of the Department of Energy was signed on July 27,
2023, by Francisco Alejandro Moreno, Acting Assistant Secretary for
Energy Efficiency and Renewable Energy, pursuant to delegated authority
from the Secretary of Energy. That document with the original signature
and date is maintained by DOE. For administrative purposes only, and in
compliance with requirements of the Office of the Federal Register, the
undersigned DOE Federal Register Liaison Officer has been authorized to
sign and submit the document in electronic format for 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 September 15, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons set forth in the preamble, DOE amends parts 429 and
431 of chapter II, subchapter D, of title 10 of the Code of Federal
Regulations, as set forth below:
PART 429--CERTIFICATION, COMPLIANCE, AND ENFORCEMENT FOR CONSUMER
PRODUCTS AND COMMERCIAL AND INDUSTRIAL EQUIPMENT
0
1. The authority citation for part 429 continues to read as follows:
Authority: 42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.
0
2. Amend Sec. 429.4 by adding paragraph (h) to read as follows:
Sec. 429.4 Materials incorporated by reference.
* * * * *
(h) UL. Underwriters Laboratories, 333 Pfingsten Road, Northbrook,
IL 60062; (841) 272-8800; www.ul.com.
[[Page 67041]]
(1) UL 1004-10 (``UL 1004-10:2022''), Standard for Safety for Pool
Pump Motors, Revised First Edition, Dated March 24, 2022; IBR approved
for Sec. 429.134.
(2) [Reserved]
0
3. Amend Sec. 429.134 by adding paragraph (ee) to read as follows:
Sec. 429.134 Product-specific enforcement provisions.
* * * * *
(ee) Dedicated-purpose pool pump motors. (1) To verify the
dedicated-purpose pool pump motor variable speed capability, a test in
accordance with section 5 of UL 1004-10:2022 (incorporated by
reference, see Sec. 429.4) will be conducted.
(2) To verify that dedicated-purpose pool pump motor comply with
the applicable freeze protection design requirements, a test in
accordance with section 6 of UL 1004-10:2022 will be conducted.
PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND
INDUSTRIAL EQUIPMENT
0
4. 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
5. Amend Sec. 431.481 by revising paragraph (b) to read as follows:
Sec. 431.481 Purpose and scope.
* * * * *
(b) Scope. The requirements of this subpart apply to dedicated-
purpose pool pump motors, as specified in paragraphs 1.2, 1.3 and 1.4
of UL 1004-10:2022 (incorporated by reference, see Sec. 431.482).
* * * * *
0
6. Amend Sec. 431.482 by revising paragraphs (a) and (c)(1) to read as
follows:
Sec. 431.482 Materials incorporated by reference.
(a) Certain material is incorporated by reference into this subpart
with the approval of the Director of the Federal Register in accordance
with 5 U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other
than that specified in this section, the Department of Energy (DOE)
must publish a document in the Federal Register and the material must
be available to the public. All approved incorporation by reference
(IBR) material is available for inspection at DOE, and at the National
Archives and Records Administration (NARA). Contact DOE at: the U.S.
Department of Energy, Office of Energy Efficiency and Renewable Energy,
Building Technologies Program, 1000 Independence Ave SW, EE-5B,
Washington, DC 20585, (202) 586-9127, [email protected], https://www.energy.gov/eere/buildings/building-technologies-office. For
information on the availability of this material at NARA, visit
www.archives.gov/federal-register/cfr/ibr-locations.html or email
[email protected]. The material may be obtained from the sources
in the following paragraphs of this section:
* * * * *
(c) * * *
(1) UL 1004-10 (``UL 1004-10:2022''), Standard for Safety for Pool
Pump Motors, Revised First Edition, Dated March 24, 2022; IBR approved
for Sec. Sec. 431.481 and 431.483.
* * * * *
0
7. Revise Sec. 431.483 to read as follows:
Sec. 431.483 Definitions.
The definitions applicable to this subpart are defined in section 2
``Glossary'' of UL 1004-10:2022 (incorporated by reference, see Sec.
431.482). In addition, the following definition applies:
Basic model means all units of dedicated purpose pool pump motors
manufactured by a single manufacturer, that are within the same
equipment class, have electrical characteristics that are essentially
identical, and do not have any differing physical or functional
characteristics that affect energy consumption or efficiency.
0
8. Add Sec. 431.485 to subpart Z to read as follows:
Sec. 431.485 Energy conservation standards.
(a) For the purpose of paragraphs (b), (c) and (d) of this section,
``THP'' means dedicated-purpose-pool pump motor total horsepower.
(b) Each dedicated-purpose pool pump motor manufactured starting on
September 29, 2025, with a THP less than 0.5 THP, must have a full-load
efficiency that is not less than 69 percent.
(c) Each dedicated-purpose pool pump motor manufactured starting on
the dates provided in table 1 to this paragraph (c) with a THP greater
than or equal to 0.5 THP must be a variable speed control dedicated-
purpose pool pump motor, and must follow the requirements in paragraph
(d) of this section.
Table 1 to Paragraph (c)
------------------------------------------------------------------------
Equipment class Compliance date
------------------------------------------------------------------------
Small-size (0.5 <= THP <1.15)............. September 28, 2027.
Standard-size (1.15 <= THP <= 5).......... September 29, 2025.
------------------------------------------------------------------------
(d) All dedicated-purpose pool pump motors with a THP greater than
or equal to 0.5 THP and distributed in commerce with freeze protection
controls, must be shipped with freeze protection disabled or with the
following user-adjustable settings:
(1) The default dry-bulb air temperature setting is no greater than
40 [deg]F;
(2) The default run time setting shall be no greater than 1 hour
(before the temperature is rechecked); and
(3) The default motor speed (in revolutions per minute, or rpm) in
freeze protection mode shall not be more than half of the maximum
operating speed.
[FR Doc. 2023-20343 Filed 9-27-23; 8:45 am]
BILLING CODE 6450-01-P