[Federal Register Volume 89, Number 77 (Friday, April 19, 2024)]
[Rules and Regulations]
[Pages 28856-28965]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07831]
[[Page 28855]]
Vol. 89
Friday,
No. 77
April 19, 2024
Part II
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for General
Service Lamps; Final Rule
Federal Register / Vol. 89, No. 77 / Friday, April 19, 2024 / Rules
and Regulations
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DEPARTMENT OF ENERGY
10 CFR Part 430
[EERE-2022-BT-STD-0022]
RIN 1904-AF43
Energy Conservation Program: Energy Conservation Standards for
General Service Lamps
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 general
service lamps (``GSLs''). EPCA also requires the U.S. Department of
Energy (``DOE'') to periodically determine whether more stringent
standards would be technologically feasible and economically justified
and would result in significant energy savings. In this final rule, DOE
is adopting amended energy conservation standards for GSLs. DOE has
determined that the amended energy conservation standards for these
products would result in significant conservation of energy and are
technologically feasible and economically justified.
DATES: The effective date of this rule is July 3, 2024. Compliance with
the amended standards established for GSLs in this final rule is
required on and after July 25, 2028.
The incorporation by reference of certain material listed in this
rule is approved by the Director of the Federal Register on July 3,
2024. The incorporation by reference of certain other material listed
in this rule was approved by the Director of the Federal Register as of
September 30, 2022.
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 at www.regulations.gov/docket/EERE-2022-BT-STD-0022. 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. Bryan Berringer, 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. Telephone: (202) 586-0371. Email:
[email protected].
Ms. Laura Zuber, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121.
Telephone: (240) 306-7651. Email: [email protected].
SUPPLEMENTARY INFORMATION: DOE maintains a previously approved
incorporation by reference for: ANSI C78.79-2014 (R2020) and
incorporates by reference the following industry standard into 10 CFR
part 430:
UL 1598C, Standard for Safety for Light-Emitting Diode (LED)
Retrofit Luminaire Conversion Kits, First edition, dated January 16,
2014 (including revisions through November 17, 2016) (``UL 1598C-
2016'').
A copy of UL 1598C may be obtained from the Underwriters
Laboratories, Inc. (UL), 2600 NW Lake Rd., Camas, WA 98607-8542
(www.UL.com).
For a further discussion of this standard, see section VI.M 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 GSLs
III. General Discussion
A. General Comments
B. Scope of Coverage
C. Test Procedure
D. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
E. Energy Savings
1. Determination of Savings
2. Significance of Savings
F. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Savings in Operating Costs Compared to Increase in Price
(Life-Cycle Cost (``LCC'') and Payback Period Analysis (``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. Scope of Coverage
1. Supporting Definitions
2. Definition of Circadian-Friendly Integrated Light-Emitting
Diode (``LED'') Lamp
3. Scope of Standards
4. Scope of Metrics
a. Lifetime
b. Color Rendering Index (``CRI'')
c. Power Factor
d. Summary of Metrics
5. Test Procedure
B. Market and Technology Assessment
1. Concerns Regarding LED Lamp Technology
a. Health Impacts
b. Lamp Attributes
c. Application
d. Consumer Costs and Manufacturer Impacts
2. Product Classes
a. Lamp Cover
b. Lamp Dimensions
c. Non-Integrated Standby Operation
d. Tunability
e. Non-Illumination Features
f. Product Class Summary
3. Technology Options
C. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
D. Engineering Analysis
1. Efficiency Analysis
a. Representative Product Classes
b. Baseline Efficiency
c. More Efficacious Substitutes
d. Higher Efficiency Levels
e. Scaling of Non-Representative Product Classes
f. Summary of All Efficacy Levels
2. Cost Analysis
E. Energy Use Analysis
1. Operating Hours
a. Residential Sector
b. Commercial Sector
2. Input Power
3. Lighting Controls
F. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Product Lifetime
6. Residual Value
7. Disposal Cost
8. Discount Rates
a. Residential
b. Commercial
9. Efficacy Distribution in the No-New-Standards Case
10. LCC Savings Calculation
11. Payback Period Analysis
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G. Shipments Analysis
1. Shipments Model
a. Lamp Demand Module
b. Price-Learning Module
c. Market-Share Module
H. National Impact Analysis
1. National Energy Savings
a. Smart Lamps
b. Unit Energy Consumption Adjustment To Account for GSL Lumen
Distribution for the Integrated Omnidirectional Short Product Class
c. Unit Energy Consumption Adjustment To Account for Type A
Integrated Omnidirectional Long Lamps
2. 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. Manufacturer Markup Scenarios
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous Oxide
c. Sensitivity Analysis Using EPA's New SC-GHG Estimates
2. Monetization of Other Emissions Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
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 GSL Standards
2. Annualized Benefits and Costs of the Adopted Standards
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
B. Review Under the Regulatory Flexibility Act
1. Need for, and Objectives of, Rule
2. Significant Issues Raised by Public Comments in Response to
the Initial Regulatory Flexibility Analysis (``IRFA'')
3. Description and Estimated Number of Small Entities Affected
4. Description of Reporting, Recordkeeping, and Other Compliance
Requirements
5. Significant Alternatives Considered and Steps Taken To
Minimize Significant Economic Impacts on Small Entities
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. Description of Materials Incorporated by Reference
N. Congressional Notification
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 B of EPCA \2\ established the Energy
Conservation Program for Consumer Products Other Than Automobiles. (42
U.S.C. 6291-6309) These products include GSLs, the subject of this
rulemaking.
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\1\ All references to EPCA in this document refer to the statute
as amended through the
Energy Act of 2020, Public Law 116-260 (Dec. 27, 2020), which
reflect the last statutory amendments that impact parts A and A-1 of
EPCA.
\2\ For editorial reasons, upon codification in the U.S. Code,
part B was redesignated part A.
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This is the second rulemaking cycle for GSLs. As a result of the
first rulemaking cycle initiated per 42 U.S.C. 6295(i)(6)(A), on May 9,
2022, DOE codified a prohibition on the sale of any GSLs that do not
meet a minimum efficacy standard of 45 lumens per watt. (87 FR 27439)
There are existing DOE energy conservation standards higher than 45
lumens per watt for medium base compact fluorescent lamps (``MBCFLs''),
which are types of GSLs. 70 FR 60407 (Oct. 18, 2005). DOE is issuing
this final rule pursuant to multiple provisions in EPCA. First, EPCA
requires that DOE initiate a second rulemaking cycle by January 1,
2020, to determine whether standards in effect for general service
incandescent lamps (``GSILs'') should be amended with more stringent
energy conservation standards and if the exemptions for certain
incandescent lamps should be maintained or discontinued. Consistent
with the first review, this second review of energy conservation
standards, the scope of rulemaking is not limited to incandescent
technologies. (42 U.S.C. 6295(i)(6)(B)(ii))
Second, EPCA also provides that not later than 6 years after
issuance of any final rule establishing or amending a standard, DOE
must publish either a notice of determination that standards for the
product do not need to be amended, or a notice of proposed rulemaking
including new proposed energy conservation standards (proceeding to a
final rule, as appropriate). (42 U.S.C. 6295(m)) Third, 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. 6295(o)(2)(A)) Furthermore, the new or amended standard must
result in a significant conservation of energy. (42 U.S.C.
6295(o)(3)(B)) Lastly, 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 a product. (42 U.S.C.
6295(p)(1))
In accordance with these and other statutory provisions discussed
in this document, DOE analyzed the benefits and burdens of six trial
standard levels (``TSLs'') for GSLs. The TSLs and their associated
benefits and burdens are discussed in detail in sections V.A through
V.C of this document. As discussed in section V.C of this document, DOE
has determined that TSL 6 represents the maximum improvement in energy
efficiency that is technologically feasible and economically justified.
The adopted standards, which are expressed in minimum lumens (``lm'')
output per watt (``W'') of a lamp or lamp efficacy (``lm/W''), are
shown in table I.1. These standards apply to all products listed in
table I.1 and manufactured in, or imported into, the United States
starting on July 25, 2028.
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A. Benefits and Costs to Consumers
Table I.2 summarizes DOE's evaluation of the economic impacts of
the adopted standards on consumers of GSLs, as measured by the average
life-cycle cost (``LCC'') savings and the simple payback period
(``PBP'').\3\ The average LCC savings are positive for all product
classes, and the PBP is less than the average lifetime of GSLs, which
varies by product class and efficiency level (see section IV.F.5 of
this document).
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\3\ The average LCC savings refer to consumers that are affected
by a standard and are measured relative to the efficiency
distribution in the no-new-standards case, which depicts the market
in the first full 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.D of this
document).
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DOE's analysis of the impacts of the adopted standards on consumers
is described in section V.B.1 of this document.
B. Impact on Manufacturers
The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the base year through the
end of the analysis period (2024-2058). Using a real discount rate of
6.1 percent, DOE estimates that the INPV for manufacturers of GSLs in
the case without new and amended standards is $2,108 million in 2022$.
Under the adopted standards, DOE estimates the change in INPV to range
from -15.3 percent to -7.3 percent, which is approximately -$322
million to -$155 million. In order to bring products into compliance
with new and amended standards, it is estimated that industry will
incur total conversion costs of $430 million.
DOE's analysis of the impacts of the adopted standards on
manufacturers is described in sections IV.J and V.B.2 of this document.
C. National Benefits and Costs 4
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\4\ All monetary values in this document are expressed in 2022
dollars.
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DOE's analyses indicate that the adopted energy conservation
standards for GSLs would save a significant amount of energy. Relative
to the case without amended standards, the lifetime energy savings for
GSLs purchased in the 30-year period that begins in the anticipated
first full year of compliance with the amended standards (2029-2058)
amount to 4.0 quadrillion British thermal units (``Btu''), or quads.\5\
This represents a savings of 17 percent relative to the energy use of
these products in the case without amended standards (referred to as
the ``no-new-standards case'').
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\5\ 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 0 of this document.
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The cumulative net present value (``NPV'') of total consumer
benefits of the standards for GSLs ranges from $8.5 billion (at a 7-
percent discount rate) to $22.2 billion (at a 3-percent discount rate).
This NPV expresses the estimated total value of future operating-cost
savings minus the estimated increased product costs for GSLs purchased
during the period 2029-2058.
In addition, the adopted standards for GSLs 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 70.3 million metric tons (``Mt'') \6\ of carbon
dioxide (``CO2''), 22.1 thousand tons of sulfur dioxide
(``SO2''), 133.3 thousand tons of nitrogen oxides
(``NOX''), 608.1 thousand tons of methane
(``CH4''), 0.70 thousand tons of nitrous oxide
(``N2O''), and 0.15 tons of mercury (``Hg'').\7\ The
estimated cumulative reduction in CO2 emissions through 2030
amounts to 0.61 Mt, which is equivalent to the emissions resulting from
the annual electricity use of more than one hundred thousand homes.
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\6\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\7\ DOE calculated emissions reductions relative to the no-new-
standards-case, which reflects key assumptions in the Annual Energy
Outlook 2023 (``AEO2023''). AEO2023 reflects, to the extent
possible, laws and regulations adopted through mid-November 2022,
including the Inflation Reduction Act. See section IV.K of this
document for further discussion of AEO2023 assumptions that affect
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 (in terms of benefit
per ton of GHG avoided) developed by an Interagency Working Group on
the Social Cost of Greenhouse Gases (``IWG'').\8\ 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 are estimated to be $3.8
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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\8\ To monetize the benefits of reducing GHG emissions this
analysis uses the interim estimates presented in the Technical
Support Documents: 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''). Available at
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 (``EPA''),\9\ as discussed in
section IV.L of this document. DOE estimated the present value of the
health benefits would be $2.9 billion using a 7-percent discount rate,
and $7.5 billion using a 3-percent discount rate.\10\ DOE is currently
only
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monetizing health benefits from changes in ambient fine particulate
matter (``PM2.5'') concentrations from two precursors
(SO2 and NOX), and from changes in ambient ozone
from one precursor (for 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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\9\ U.S. Environmental Protection Agency. 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.
\10\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
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Table 1.3 summarizes the monetized benefits and costs expected to
result from the amended standards for GSLs. There are other important
unquantified effects, including certain unquantified climate benefits,
unquantified public health benefits from the reduction of toxic air
pollutants and other emissions, unquantified energy security benefits,
and distributional effects among others.
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The benefits and costs of the amended standards can also be
expressed in terms of annualized values. The monetary values for the
total annualized net benefits are (1) the reduced consumer operating
costs, minus (2) the increase in product purchase prices and
installation costs, plus (3) the value of climate and health benefits
of emission reductions, all annualized.\11\
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\11\ 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., 2020 or 2030), 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 monetary savings that occur as a result of purchasing the
covered products and are measured for the lifetime of GSLs shipped
during the period 2029-2058. The benefits associated with reduced
emissions achieved as a result of the adopted standards are also
calculated based on the lifetime of GSLs shipped during the period
2029-2058. Total benefits for both the 3-percent and 7-percent cases
are presented using the average GHG social costs with a 3-percent
discount rate. Estimates of SC-GHG values are presented for all four
discount rates in section V.B.8 of this document.
Table I.4 presents the total estimated monetized benefits and costs
associated with the amended 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 cost of the standards adopted
in this rule is $301.4 million per year in increased equipment costs,
while the estimated annual benefits are $1,193.6 million in reduced
equipment operating costs, $217.7 million in climate benefits, and
$303.2 million in health benefits. In this case, the net benefit would
amount to $1,413.1 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the standards is $292.2 million per year in increased
equipment costs, while the estimated annual benefits are $1,564.6
million in reduced operating costs, $217.7 million in climate benefits,
and $430.8 million in health benefits. In this case, the net benefit
would amount to $1,920.9 million per year.
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DOE's analysis of the national impacts of the adopted standards is
described in sections IV.H, 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, with regard to
technological feasibility, products achieving these standard levels are
already commercially available for all product classes covered by this
final rule. As for economic justification, DOE's analysis shows that
the benefits of the standards exceed, to a great extent, 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 cost of the
standards for GSLs is $301.4 million per year in increased GSL costs,
while the estimated annual benefits are $1,193.6 million in reduced GSL
operating costs, $217.7 million in climate benefits, and $303.2 million
in health benefits. The net benefit amounts to $1,413.1 million per
year. While DOE presents monetized climate benefits, DOE would reach
the same conclusion presented in this rulemaking in the absence of the
benefits of the social cost of greenhouse gases.
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.\12\ 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.
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\12\ 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).
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As previously mentioned, the standards are projected to result in
estimated national energy savings of 4.0 quad full-fuel-cycle
(``FFC''), the equivalent of the primary annual energy use of 261
million homes. In addition, they are projected to reduce CO2
emissions by 70.3 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.
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 GSLs.
A. Authority
EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, part
B of EPCA established the Energy Conservation Program for Consumer
Products Other Than Automobiles. These products include GSLs, the
subject of this document. (42 U.S.C. 6295 (i) (6)) EPCA directs DOE to
conduct future rulemakings to determine whether to amend these
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standards. Id. EPCA further provides that, not later than 6 years after
the issuance of any final rule establishing or amending a standard, DOE
must publish either a notice of determination that standards for the
product do not need to be amended, or a notice of proposed rulemaking
(``NOPR'') including new proposed energy conservation standards
(proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(1))
EPCA directs DOE to conduct two rulemaking cycles to evaluate
energy conservation standards for GSLs. (42 U.S.C. 6295(i)(6)(A)-(B))
For the first rulemaking cycle, EPCA directed DOE to initiate a
rulemaking process prior to January 1, 2014, to determine whether: (1)
to amend energy conservation standards for GSLs and (2) the exemptions
for certain incandescent lamps should be maintained or discontinued.
(42 U.S.C. 6295(i)(6)(A)(i)) That rulemaking was not to be limited to
incandescent lamp technologies and was required to include a
consideration of a minimum standard of 45 lm/W for GSLs. (42 U.S.C.
6295(i)(6)(A)(ii)) EPCA required that if the Secretary determined that
the standards in effect for GSILs should be amended, a final rule must
be published by January 1, 2017, with a compliance date at least 3
years after the date on which the final rule is published. (42 U.S.C.
6295(i)(6)(A)(iii)) The Secretary was also required to consider phased-
in effective dates after considering certain manufacturer and retailer
impacts. (42 U.S.C. 6295(i)(6)(A)(iv)) If DOE failed to complete a
rulemaking in accordance with 42 U.S.C. 6295(i)(6)(A)(i)-(iv), or if a
final rule from the first rulemaking cycle did not produce savings
greater than or equal to the savings from a minimum efficacy standard
of 45 lm/W, the statute provides a ``backstop'' under which DOE was
required to prohibit sales of GSLs that do not meet a minimum 45 lm/W
standard. (42 U.S.C. 6295(i)(6)(A)(v)). DOE did not complete a
rulemaking in accordance with the statutory criteria, and so
accordingly codified this backstop requirement in a rule issued on May
9, 2022 (``May 2022 Backstop Final Rule''). 87 FR 27439.
EPCA further directs DOE to initiate a second rulemaking cycle by
January 1, 2020, to determine whether standards in effect for GSILs
(which are a subset of GSLs) should be amended with more stringent
maximum wattage requirements than EPCA specifies, and whether the
exemptions for certain incandescent lamps should be maintained or
discontinued. (42 U.S.C. 6295(i)(6)(B)(i)) As in the first rulemaking
cycle, the scope of the second rulemaking is not limited to
incandescent lamp technologies. (42 U.S.C. 6295(i)(6)(B)(ii)) As
previously stated in section I of this document, DOE is publishing this
final rule pursuant to this second cycle of rulemaking, as well as
section (m) of 42 U.S.C. 6295.
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 specifically include
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293),
labeling provisions (42 U.S.C. 6294), energy conservation standards (42
U.S.C. 6295), and the authority to require information and reports from
manufacturers (42 U.S.C. 6296).
Federal energy efficiency requirements for covered products
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6297(a)-(c)) 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. 6297(d).)
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered product. (42 U.S.C.
6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products
must use the prescribed DOE test procedure as the basis for certifying
to DOE that their products comply with the applicable energy
conservation standards adopted under EPCA and when making
representations to the public regarding the energy use or efficiency of
those products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, DOE must use
these test procedures to determine whether the products comply with
standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The DOE test
procedures for GSLs appear at title 10 of the Code of Federal
Regulations (``CFR'') part 430, subpart B, appendices R, W, BB, and DD.
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including GSLs. Any new or
amended standard for a covered product must be designed to achieve the
maximum improvement in energy efficiency that the Secretary of Energy
determines is technologically feasible and economically justified. (42
U.S.C. 6295(o)(2)(A)) Furthermore, DOE may not adopt any standard that
would not result in the significant conservation of energy. (42 U.S.C.
6295(o)(3)) Moreover, DOE may not prescribe a standard (1) for certain
products, including GSLs, 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.
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. 6295(o)(2)(B)(i)) DOE must make
this determination after receiving comments on the proposed standard,
and by considering, to the greatest extent practicable, the following
seven statutory factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered products that are likely to result from the standard;
(3) The total projected amount of energy (or, as applicable, water)
savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (``Secretary'') considers
relevant.
(42 U.S.C. 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. 6295(o)(2)(B)(iii))
EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing
any amended standard that either increases the maximum allowable energy
use or decreases the
[[Page 28866]]
minimum required energy efficiency of a covered product. (42 U.S.C.
6295(o)(1)) Also, the Secretary may not prescribe an amended or new
standard if interested persons have established by a preponderance of
the evidence that the standard is likely to result in the
unavailability in the United States 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.
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. 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. 6295(q)(2))
Finally, pursuant to the amendments contained in the Energy
Independence and Security Act of 2007 (``EISA''), Public Law 110-140,
any final rule for new or amended energy conservation standards
promulgated after July 1, 2010, is required to address standby mode and
off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE
adopts a standard for a covered product after that date, it must, if
justified by the criteria for adoption of standards under EPCA (42
U.S.C. 6295(o)), incorporate standby mode and off mode energy use into
a single standard, or, if that is not feasible, adopt a separate
standard for such energy use for that product. (42 U.S.C.
6295(gg)(3)(A)-(B)) DOE determined that it is not feasible for GSLs
included in the scope of this rulemaking to meet the off mode criteria
because there is no condition in which a GSL connected to main power is
not already in a mode accounted for in either active or standby mode.
DOE notes the existence of commercially available GSLs that operate in
standby mode. DOE's current test procedures and standards for GSLs
address standby mode, as do the amended standards adopted in this final
rule.
B. Background
1. Current Standards
This is the second cycle of energy conservation standards
rulemakings for GSLs. As noted in section II.B.2 of this document, DOE
has codified the statutory backstop requirement prohibiting sales of
GSLs that do not meet a 45 lm/W requirement. Because incandescent and
halogen GSLs are not able to meet the 45 lm/W requirement, they are not
being considered in this analysis. The analysis does take into
consideration existing standards for MBCFLs by ensuring that the
adopted levels do not decrease the existing minimum required energy
efficiency of MBCFLs in violation of EPCA's anti-backsliding provision,
which precludes DOE from amending an existing energy conservation
standard to permit greater energy use or a lesser amount of energy
efficiency (see 42 U.S.C. 6295(o)(1)). The current standards for MBCFLs
are summarized in table II.1. 10 CFR 430.32(u).
[GRAPHIC] [TIFF OMITTED] TR19AP24.006
[[Page 28867]]
MBCFLs fall within the Integrated Omnidirectional Short product
class (see section IV.B.2 of this document for further details on
product classes). Because DOE determined that a lamp cover (i.e., bare
or covered) is not a feature that justifies separate standards in this
analysis, the baseline efficacy requirements are determined by lamp
wattage. Therefore, for products with wattages less than 15 W that fall
into the Integrated Omnidirectional Short product class, DOE set the
baseline efficacy at 45 lm/W (the highest of the existing standards for
that wattage range) to prevent increased energy usage in violation of
EPCA's anti-backsliding provision. For products with wattages greater
than or equal to 15 W that fall into the Integrated Omnidirectional
Short product class, DOE set the baseline efficacy at 60 lm/W to
prevent increased energy usage in violation of EPCA's anti-backsliding
provision. Table II.2 shows the baseline efficacy requirements for the
Integrated Omnidirectional Short product class.
[GRAPHIC] [TIFF OMITTED] TR19AP24.007
2. History of Standards Rulemaking for GSLs
Pursuant to its statutory authority to complete the first cycle of
rulemaking for GSLs, DOE published a NOPR on March 17, 2016 (``March
2016 NOPR''), that addressed the first question that Congress directed
it to consider--whether to amend energy conservation standards for
GSLs. 81 FR 14528, 14629-14630 (Mar. 17, 2016). In the March 2016 NOPR,
DOE stated that it would be unable to undertake any analysis regarding
GSILs and other incandescent lamps because of a then-applicable
congressional restriction (``the Appropriations Rider''). See 81 FR
14528, 14540-14541. The Appropriations Rider prohibited expenditure of
funds appropriated by that law to implement or enforce: (1) 10 CFR
430.32(x), which includes maximum wattage and minimum rated lifetime
requirements for GSILs; and (2) standards set forth in section
325(i)(1)(B) of EPCA (42 U.S.C. 6295(i)(1)(B)), which sets minimum lamp
efficiency ratings for incandescent reflector lamps (``IRLs''). Under
the Appropriations Rider, DOE was restricted from undertaking the
analysis required to address the first question presented by Congress,
but was not so limited in addressing the second question--that is, DOE
was not prevented from determining whether the exemptions for certain
incandescent lamps should be maintained or discontinued. To address
that second question, on October 18, 2016, DOE published a Notice of
Proposed Definition and Data Availability (``October 2016 NOPDDA''),
which proposed to amend the definitions of GSIL, GSL, and related
terms. 81 FR 71794, 71815 (Oct. 18, 2016). The Appropriations Rider,
which was originally adopted in 2011 and readopted and extended
continuously in multiple subsequent legislative actions, expired on May
5, 2017, when the Consolidated Appropriations Act, 2017 was
enacted.\13\
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\13\ See Consolidated Appropriations Act of 2017 (Pub. L. 115-
31, div. D, tit. III); see also Consolidated Appropriations Act,
2018 (Pub. L. 115-141).
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On January 19, 2017, DOE published two final rules concerning the
definitions of GSL, GSIL, and related terms (``January 2017 Definition
Final Rules''). 82 FR 7276; 82 FR 7322. The January 2017 Definition
Final Rules amended the definitions of GSIL and GSL by bringing certain
categories of lamps that had been excluded by statute from the
definition of GSIL within the definitions of GSIL and GSL. DOE
determined to use two final rules in 2017 to amend the definitions of
GSIL and GSLs in order to address the majority of the definition
changes in one final rule and the exemption for IRLs in the second
final rule. These two rules were issued simultaneously, with the first
rule eschewing a determination regarding the existing exemption for
IRLs in the definition of GSL and the second rulemaking discontinuing
that exemption from the GSL definition. 82 FR 7276, 7312; 82 FR 7322,
7323. As in the October 2016 NOPDDA, DOE stated that the January 2017
Definition Final Rules related only to the second question that
Congress directed DOE to consider, i.e., whether to maintain or
discontinue ``exemptions'' for certain incandescent lamps. 82 FR 7276,
7277; 82 FR 7322, 7324 (see 42 U.S.C. 6295(i)(6)(A)(i)(II)). That is,
neither of the two final rules issued on January 19, 2017, established
energy conservation standards applicable to GSLs. DOE explained that
the Appropriations Rider prevented it from establishing, or even
analyzing, standards for GSILs. 82 FR 7276, 7278. Instead, DOE
explained that it would either impose standards for GSLs in the future
pursuant to its authority to develop GSL standards or apply the
backstop standard prohibiting the sale of lamps not meeting a 45 lm/W
efficacy standard. 82 FR 7276, 7277-7278. The two final rules were to
become effective as of January 1, 2020.
On March 17, 2017, the National Electrical Manufacturers
Association (``NEMA'') filed a petition for review of the January 2017
Definition Final Rules in the U.S. Court of Appeals for the Fourth
Circuit. National Electrical Manufacturers Association v. United States
Department of Energy, No. 17-1341. NEMA claimed that DOE ``amend[ed]
the statutory definition of `general service lamp' to include lamps
that Congress expressly stated were `not include[d]' in the
definition'' and adopted an ``unreasonable and unlawful interpretation
of the statutory definition.'' Pet. 2. Prior to merits briefing, the
parties reached a settlement agreement under which DOE agreed, in part,
to issue a notice of data availability requesting data for GSILs and
other incandescent lamps to assist DOE in determining whether standards
for GSILs should be amended (the first question of the rulemaking
required by 42 U.S.C. 6295(i)(6)(A)(i)).
With the removal of the Appropriations Rider in the Consolidated
Appropriations Act, 2017, DOE was no longer restricted from undertaking
the analysis and decision-
[[Page 28868]]
making required to address the first question presented by Congress,
i.e., whether to amend energy conservation standards for GSLs,
including GSILs. Thus, on August 15, 2017, DOE published a notice of
data availability (``NODA'') and request for information seeking data
for GSILs and other incandescent lamps (``August 2017 NODA''). 82 FR
38613.
The purpose of the August 2017 NODA was to assist DOE in
determining whether standards for GSILs should be amended. (42 U.S.C.
6295(i)(6)(A)(i)(I)) Comments submitted in response to the August 2017
NODA also led DOE to reconsider the decisions it had already made with
respect to the second question presented to DOE--whether the exemptions
for certain incandescent lamps should be maintained or discontinued. 84
FR 3120, 3122 (see 42 U.S.C. 6295(i)(6)(A)(i)(II)). As a result of the
comments received in response to the August 2017 NODA, DOE also
reassessed the legal interpretations underlying certain decisions made
in the January 2017 Definition Final Rules. Id.
On February 11, 2019, DOE published a NOPR that proposed to
withdraw the revised definitions of GSL, GSIL, and the new and revised
definitions of related terms that were to go into effect on January 1,
2020 (``February 2019 Definition NOPR''). 84 FR 3120. In a final rule
published September 5, 2019, DOE finalized the withdrawal of the
definitions in the January 2017 Definition Final Rules and maintained
the existing regulatory definitions of GSL and GSIL, which are the same
as the statutory definitions of those terms (``September 2019
Withdrawal Rule''). 84 FR 46661. The September 2019 Withdrawal Rule
revisited the same primary question addressed in the January 2017
Definition Final Rules, namely, the statutory requirement for DOE to
determine whether ``the exemptions for certain incandescent lamps
should be maintained or discontinued.'' 42 U.S.C. 6295(i)(6)(A)(i)(II)
(see 84 FR 46661, 46667). In the rule, DOE also addressed its
interpretation of the statutory backstop at 42 U.S.C. 6295(i)(6)(A)(v)
and concluded the backstop had not been triggered. 84 FR 46661, 46663-
46664. DOE reasoned that 42 U.S.C. 6295(i)(6)(A)(iii) ``does not
establish an absolute obligation on the Secretary to publish a rule by
a date certain.'' 84 FR 46661, 46663. ``Rather, the obligation to issue
a final rule prescribing standards by a date certain applies if, and
only if, the Secretary makes a determination that standards in effect
for GSILs need to be amended.'' Id. DOE further stated that, since it
had not yet made the predicate determination on whether to amend
standards for GSILs, the obligation to issue a final rule by a date
certain did not yet exist and, as a result, the condition precedent to
the potential imposition of the backstop requirement did not yet exist
and no backstop requirement had yet been triggered. 84 FR 46661, 46664.
Similar to the January 2017 Definition Final Rules, the September
2019 Withdrawal Rule clarified that DOE was not determining whether
standards for GSLs, including GSILs, should be amended. DOE stated it
would make that determination in a separate rulemaking. 84 FR 46661,
46662. DOE initiated that separate rulemaking by publishing a notice of
proposed definition (``NOPD'') on September 5, 2019 (``September 2019
NOPD''), regarding whether standards for GSILs should be amended. 84 FR
46830. In conducting its analysis for that notice, DOE used the data
and comments received in response to the August 2017 NODA and relevant
data and comments received in response to the February 2019 Definition
NOPR, and DOE tentatively determined that the current standards for
GSILs do not need to be amended because more stringent standards are
not economically justified. 84 FR 46830, 46831. DOE finalized that
tentative determination on December 27, 2019 (``December 2019 Final
Determination''). 84 FR 71626. DOE also concluded in the December 2019
Final Determination that because it had made the predicate
determination not to amend standards for GSILs, there was no obligation
to issue a final rule by January 1, 2017, and, as a result, the
backstop requirement had not been triggered. 84 FR 71626, 71636.
Two petitions for review were filed in the U.S. Court of Appeals
for the Second Circuit challenging the September 2019 Withdrawal Rule.
The first petition was filed by 15 States,\14\ New York City, and the
District of Columbia. See New York v. U.S. Department of Energy, No.
19-3652 (2d Cir., filed Nov. 4, 2019). The second petition was filed by
six organizations \15\ that included environmental, consumer, and
public housing tenant groups. See Natural Resources Defense Council v.
U.S. Department of Energy, No. 19-3658 (2d Cir., filed Nov. 4, 2019).
The petitions were subsequently consolidated. On May 9, 2022, DOE
published a final rule that revised the determination at issue in these
consolidated cases and adopted new regulations in accordance with that
revision. 87 FR 27439. In August 2022, the petitioners moved the court
to dismiss the petitions for review, which the court granted.
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\14\ The petitioning States are the States of New York,
California, Colorado, Connecticut, Illinois, Maryland, Maine,
Michigan, Minnesota, New Jersey, Nevada, Oregon, Vermont, and
Washington and the Commonwealth of Massachusetts.
\15\ The petitioning organizations are the Natural Resources
Defense Council, Sierra Club, Consumer Federation of America,
Massachusetts Union of Public Housing Tenants, Environment America,
and U.S. Public Interest Research Group.
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Additionally, in two separate petitions also filed in the Second
Circuit, groups of petitioners that were essentially identical to those
that filed the lawsuit challenging the September 2019 Withdrawal Rule
challenged the December 2019 Final Determination. See Natural Resources
Defense Council v. U.S. Department of Energy, No. 20-699 (2d Cir.,
filed Feb. 25, 2020); New York v. U.S. Department of Energy, No. 20-743
(2d Cir., filed Feb. 28, 2020). These petitions were also dismissed in
August 2022.
On January 20, 2021, President Biden issued Executive Order
(``E.O.'') 13990, ``Protecting Public Health and the Environment and
Restoring Science to Tackle the Climate Crisis.'' 86 FR 7037. Section 1
of E.O. 13990 lists a number of policies related to the protection of
public health and the environment, including reducing greenhouse gas
emissions and bolstering the Nation's resilience to climate change. 86
FR 7037, 7041. Section 2 of E.O. 13990 instructs all agencies to review
``existing regulations, orders, guidance documents, policies, and any
other similar agency actions promulgated, issued, or adopted between
January 20, 2017, and January 20, 2021, that are or may be inconsistent
with, or present obstacles to, [these policies].'' Id. Agencies are
then directed, as appropriate and consistent with applicable law, to
consider suspending, revising, or rescinding these agency actions and
to immediately commence work to confront the climate crisis. Id.
In accordance with E.O. 13990, DOE published a request for
information (``RFI'') on May 25, 2021, initiating a reevaluation of its
prior determination that the Secretary was not required to implement
the statutory backstop requirement for GSLs (``May 2021 Backstop
RFI''). 86 FR 28001. DOE solicited information regarding the
availability of lamps that would satisfy a minimum efficacy standard of
45 lm/W, as well as other information that may be relevant to a
possible implementation of the statutory backstop. Id. On December 13,
2021, DOE published a NOPR proposing to codify in the CFR the 45 lm/W
backstop requirement for GSLs (``December 2021 Backstop
[[Page 28869]]
NOPR''). 86 FR 70755. On May 9, 2022, DOE published a final rule
codifying the 45 lm/W backstop requirement (``May 2022 Backstop Final
Rule''). 87 FR 27439. In the May 2022 Backstop Final Rule, DOE
determined the backstop requirement applies because DOE failed to
complete a rulemaking for GSLs in accordance with certain statutory
criteria in 42 U.S.C. 6295(i)(6)(A). When DOE published the May 2022
Backstop Final Rule, it also released an enforcement policy statement
for GSLs.\16\ In response to lead-in time concerns raised by members of
the industry and comments supporting immediate enforcement, DOE
outlined a progressive enforcement model where it would exercise its
discretion when taking enforcement action.
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\16\ Enforcement Policy Statement--General Service Lamps, April
26, 2022, available at: www.energy.gov/sites/default/files/2022-04/GSL_EnforcementPolicy_4_25_22.pdf.
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On August 19, 2021, DOE published a NOPR to amend the current
definitions of GSL and GSIL and adopt associated supplemental
definitions to be defined as previously set forth in the January 2017
Definition Final Rules (``August 2021 Definition NOPR''). 86 FR 46611.
On May 9, 2022, DOE published a final rule adopting definitions of GSL
and GSIL and associated supplemental definitions as set forth in the
August 2021 Definition NOPR (``May 2022 Definition Final Rule''). 87 FR
27461.
Upon issuance of the May 2022 Backstop Final Rule and the May 2022
Definition Final Rule, DOE concluded the first cycle of GSL rulemaking
required by 42 U.S.C. 6295(i)(6)(A). EPCA directs DOE to initiate this
second cycle of rulemaking procedure no later than January 1, 2020. 42
U.S.C. 6295(i)(6)(B) However, DOE is delayed in initiating this second
cycle because of the Appropriations Rider, DOE's evolving position
under the first rulemaking cycle, and the associated delays that
resulted in DOE certifying the backstop requirement for GSLs two years
after the January 1, 2020, date specified in the statute.
On January 11, 2023, DOE published a NOPR (``January 2023 NOPR''),
pursuant to this second cycle of rulemaking as well as 42 U.S.C.
6295(m). 88 FR 1638 (Jan. 11, 2023).
DOE received 17 comments in response to the January 2023 NOPR from
the interested parties listed in table II.3. DOE also received 158
comments from private citizens.
BILLING CODE 6450-01-P
[[Page 28870]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.008
BILLING CODE 6450-01-C
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\17\
To the extent that interested parties have provided written comments
that are substantively consistent with any oral comments provided
during the February 1, 2023, 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.
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\17\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for GSLs. (Docket No. EERE-2022-BT-
STD-0022, which is maintained at www.regulations.gov.) The
references are arranged as follows: (commenter name, comment docket
ID number, page of that document).
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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 and discusses general comments received
from interested parties. As specified in section I, the adopted
standards in this final rule are expressed as lumens per watt (``lm/
W'') of a lamp or lamp efficacy. In this document the terms efficacy
and efficiency both refer to lm/W of the lamp.
NEMA supported DOE's statements in the January 2023 NOPR regarding
EPCA's preemption provisions to state regulation. NEMA stated that in
the final rule, DOE clearly specified the preemptive effect on all
covered products that meet the Federal definition of a GSL in
accordance with E.O. 13132 as well as the timing of the effect in
accordance with E.O. 12988. NEMA stated that this clarification will
prevent confusion that may otherwise arise due to a patchwork of
differing State regulations that had previously been implemented prior
to May 9, 2022, when DOE published the May 2022 Backstop Final Rule.
(NEMA, No. 183 at p. 21)
Regarding comments received on Federal preemption, in the January
2023 NOPR (88 FR 1638, 1644) and in this final rule (see section II.A
of this
[[Page 28871]]
document), DOE specifies that Federal energy efficiency requirements
for covered products established under EPCA generally supersede State
laws and regulations concerning energy conservation testing, labeling,
and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers
of Federal preemption for particular State laws or regulations, in
accordance with the procedures and other provisions set forth under
EPCA (see 42 U.S.C. 6297(d)). For the first cycle of the GSL
rulemaking, EPCA provided California and Nevada with certain preemption
allowances (see 42 U.S.C. 6295(i)(6)(A)(vi)). However, these allowances
do not apply to this second cycle of GSL rulemaking (see 42 U.S.C.
6295(i)(6)(B)).
CLASP recommended that DOE, in partnership with the U.S.
Environmental Protection Agency (``EPA'') and the Consumer Product
Safety Commission (``CPSC''), implement a national policy banning
fluorescent lighting on the basis of toxicity due to the mercury
content contained in all fluorescent lamps, which is already adopted in
California and Vermont and is under consideration in several other
States. CLASP commented that such a national regulation would help to
accelerate market shift to LED lamps and promote even more cost-
effective energy savings in the United States. CLASP recommended that
DOE prioritize an advanced schedule for the phase-out of fluorescent
lighting at increased rates of efficacy, as it would yield several
benefits across various DOE objectives. CLASP stated that replacing
fluorescent bulbs with retrofittable LED bulbs (i.e., plug-and-play,
drop-in replacements that require no rewiring) will eliminate mercury
and cut lighting-related power consumption in half and will reduce
CO2 and Hg emissions from power stations. CLASP also noted
that LED bulbs last 2-3 times longer than fluorescent bulbs, reducing
the volume of municipal waste generated. CLASP further stated that LCC
studies had shown LED bulbs to have the lowest associated energy
utilization and lowest environmental impact compared to other lighting
technologies. (CLASP, No. 177 at pp. 4-5)
CLASP also recommended that DOE work with EPA to update ENERGY STAR
requirements for lamp efficacy levels to at least double the current
level of 80 lm/W in an effort to further support this GSL regulation by
creating a market `pull' for higher efficacy lamps. CLASP stated that
an update to ENERGY STAR is necessary to discontinue the inclusion of
CFLs in the program, as seven fluorescent lamps are currently
recognized by ENERGY STAR while Africa, Europe, and India are phasing
out fluorescent lighting. (CLASP, No. 177 at p. 5) NEMA noted EPA's
intention to sunset all ENERGY STAR lighting programs except for a new
program for recessed lighting, recognizing its significant energy
savings. NEMA supported the more focused continuation of this ENERGY
STAR program to maintain minimum levels of quality and performance.
(NEMA, No. 183 at p. 19)
The scope of this rule is to evaluate energy conservation standards
for GSLs (see section II.A of this document) which does not include
general service fluorescent lamps or other fluorescent lamps (see
definition of GSLs at 10 CFR 430.2). DOE considers out-of-scope lamps
such as fluorescent lamps in the shipment and NIA analyses (see
respectively, sections IV.G and IV.H of this document). Additionally,
the scope of this rule does not include updating requirements set by
EPA's ENERGY STAR program. Note that on March 13, 2023, EPA announced
it will be sunsetting ENERGY STAR specifications for lamps and
luminaires effective December 31, 2024, with the exception of recessed
downlights, which would be covered by a new specification.\18\
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\18\ ENERGY STAR Lighting Sunset--March 13, 2023. Available at:
www.energystar.gov/sites/default/files/asset/document/ENERGY%20STAR%20Lighting%20Sunset%20Memo.pdf.
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As noted in section II.A of this document and in the January 2023
NOPR per 42 U.S.C. 6295(i)(6)(B)(iv)(I)-(II), the Secretary shall
consider phased-in effective dates after considering certain
manufacturer and retailer impacts. In the January 2023 NOPR, DOE
requested comments on whether phased-in effective dates were necessary
for the proposed GSL standards. 88 FR 1638, 1656. Westinghouse stated
its preference for a single effective date for the standard, as phased-
in effective dates would make things more complicated. (Westinghouse,
Public Meeting Transcript, No. 27 at p. 13). NEMA stated its support
for the implementation of one effective date versus phased-in effective
dates. (NEMA, No. 183 at p. 5) DOE did not receive any requests for a
phased-in effective date approach. Regarding the standards being
adopted in this final rule, DOE does not find any particular reason(s)
that phased-in effective dates would be of value for manufacturers or
retailers and thus has determined the adopted standards will become
effective on one date. Specifically, DOE reviewed the market and did
not find impacts on manufacturers and retailers would differ by product
class.
Several comments from private citizens stated that free-market
forces should direct the lighting market instead of government
regulation and that there should be less government interference with
consumer choices. Additionally, EEI commented that if the proposed
standard is not revised, many consumers will realize direct economic
losses, and that by setting the standard at near maximum TSLs, DOE will
make it very difficult for electric companies to justify investments in
future lighting efficiency rebate programs. EEI stated that according
to a recent EEI report, electric companies spent nearly $7 billion on
efficiency programs in 2021, saving 237 billion kWh of electricity--
enough to power 33 million U.S. homes for one year. Citing a meta-
analysis by the Lawerence Berkeley National Laboratory, from 2010
through 2018, EEI stated that residential lighting programs were
responsible for 48 percent of all residential program savings (i.e.,
14.8 percent of all market sectors). EEI added that the levelized cost
to save a kWh of electricity through residential lighting programs is
extremely cost-effective at just over 1 cent per kWh. (EEI, No. 181 at
pp. 2-3)
When evaluating energy conservation standards for products, DOE
determines whether a standard is economically justified based on
several factors, including consumer impacts and lessening of the
utility or the performance likely to result from the imposition of the
standard, as it did in this rulemaking. 42 U.S.C. 6295(o)(2)(B)(i).
Therefore, DOE's analysis accounts for the impacts on consumers.
Additionally, E.O. 12866 directs DOE to assess 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 (see chapter 16 of the final rule
TSD).
In response to the January 2023 NOPR, DOE received several comments
in support of the proposed rule including the proposed TSL. 88 FR 1638,
1706-1708. CLASP stated that it agreed with DOE's finding that setting
new energy conservation standards for GSLs would benefit the United
States by delivering significant, cost-effective energy savings that
are both technologically feasible and economically justified. (CLASP,
No. 177 at p. 1) Earthjustice commented that the January 2023 NOPR
demonstrates that even with DOE's recent implementation of the EPCA
statutory backstop
[[Page 28872]]
standard, GSLs continue to hold significant potential for additional
cost-effective energy savings and air pollutant emissions reductions.
(Earthjustice, No. 179 at p. 1) The CA IOUs stated that after DOE ends
its enforcement discretion of the 45 lm/W backstop standard, all GSLs
on the market will be light-emitting diode (``LED'') lamps or compact
fluorescent lamps (``CFLs''), with LED GSLs offering many efficacies.
The CA IOUs encouraged DOE to finalize this rule before June 2024 to
ensure the legal durability of this and future GSL standards. (CA IOUs,
No. 167 at p. 2) The CEC also stated its general support for DOE's
efforts to improve the minimum efficacy for GSLs, which they stated
will move the market to high-efficacy LED lighting. The CEC commented
that California has been able to provide a test market as the world's
fourth-largest economy for high-quality and high-efficacy LEDs since
January 1, 2018. The CEC commented that the success of California's
standards demonstrates the technological feasibility and economic
justification of pursuing minimum efficacy standards for GSLs. (CEC,
No. 176 at pp. 1-2)
NYSERDA stated its support for TSL 6 as proposed in the NOPR, as
this TSL represents all product categories at their maximum
technologically feasible (``max-tech'') standard efficiencies.
(NYSERDA, No. 166 at pp. 1-2) NEMA stated that with the exception of
the new product classes it had suggested, for all other product classes
DOE should adopt TSL 5, because TSL 5 represents the maximum NPV and
maintains design flexibility for lamps of varying lengths to produce
sufficient light while meeting various application requirements.
Specifically, NEMA stated that TSL 6 would require max-tech performance
for linear LED lamps designed to replace fluorescent tubes. NEMA stated
that linear LED lamps provide lower lumens, which may hinder
manufacturers from producing lamps able to provide the appropriate
amount of light to meet the max-tech performance standard of efficiency
or efficacy level (``EL'') 7 (see section IV.D.1.d of this document for
full comment and response). Finally, NEMA stated that because TSL 5 and
TSL 6 save energy, have similar payback periods, and represent the
maximum NPV, NEMA members believe DOE should adopt TSL 5 to best
balance consumer cost and benefit. (NEMA, No. 183 at p. 20) ASAP et al.
commented that DOE should not adopt TSL 5 as an alternative to TSL 6,
as DOE should adopt the standard that represents the maximum
improvement in energy efficiency that is technically feasible and
economically justified, which is TSL 6. ASAP et al. commented that
adopting a lower level would not fulfill DOE's statutory obligations
and would needlessly result in additional energy waste and greenhouse
gas and other emissions. (ASAP et al., No. 174 at p. 5)
In this final rule DOE is adopting TSL 6 as proposed in the January
2023 NOPR. 88 FR 1638, 1708. DOE discusses the benefits and burdens of
each TSL considered and DOE's conclusion in section V.C of this
document. As discussed in that section, TSL 6 represents the maximum
energy savings that are technically feasible and economically
justified, as required by EPCA. Regarding requiring the max-tech level
for linear LED lamps at TSL 6, all max-tech efficiency levels in this
analysis are based on existing products available on the market.
B. Scope of Coverage
This rulemaking covers all consumer products that meet the
definition of ``general service lamp'' as codified at 10 CFR 430.2.
While all GSLs are subject to the 45 lm/W sales prohibition at 10 CFR
430.32(dd), not all GSLs are subject to the amended standards adopted
in this final rule, though DOE may consider amended standards for them
in a future rulemaking (see section IV.A.3 of this document).
C. Test Procedure
EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293)
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. DOE's
current energy conservation standards for GSLs are expressed in terms
of lumens per watt (``lm/W''). GSILs and certain IRLs, CFLs, and LED
lamps are GSLs. DOE's test procedures for GSILs and IRLs are set forth
at 10 CFR part 430, subpart B, appendix R. DOE's test procedure for
CFLs is set forth at 10 CFR part 430, subpart B, appendix W. DOE's test
procedure for integrated LED lamps is set forth at 10 CFR part 430,
subpart B, appendix BB. DOE's test procedure for GSLs that are not
GSILs, IRLs, CFLs, or integrated LED lamps is set forth at 10 CFR part
430, subpart B, appendix DD.
D. Technological Feasibility
1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
rulemaking. As the first step in such an analysis, DOE develops a list
of technology options for consideration in consultation with
manufacturers, design engineers, and other interested parties. DOE then
determines which of those means for improving efficiency are
technologically feasible. DOE considers technologies incorporated in
commercially available products or in working prototypes to be
technologically feasible. See sections 6(b)(3)(i) and 7(b)(1) of
appendix A to 10 CFR part 430, subpart C (``Process Rule'').
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. See
section 7(b)(2)-(5) of the Process Rule. Section IV.C of this document
discusses the results of the screening analysis for GSLs, 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 a new or 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. 6295(p)(1))
Accordingly, in the engineering analysis, DOE determined the maximum
technologically feasible (``max-tech'') improvements in energy
efficiency for GSLs, 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.D.1.c of this final rule and in chapter 5 of the final rule TSD.
[[Page 28873]]
E. Energy Savings
1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to GSLs purchased in the 30-year
period that begins in the first full year of compliance with the
amended standards (2029-2058).\19\ The savings are measured over the
entire lifetime of GSLs purchased in the 30-year analysis period, i.e.,
including savings until the longest-lifetime GSL purchased in 2058 is
retired from service in 2091. 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 amended energy conservation standards.
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\19\ DOE also presents a sensitivity analysis that considers
impacts for products shipped in a 9-year period.
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DOE used its national impact analysis (``NIA'') spreadsheet models
to estimate national energy savings (``NES'') from potential amended
standards for GSLs. The NIA model (described in section IV.H of this
document) calculates energy savings in terms of site energy, which is
the energy directly consumed by products at the locations where they
are used. For electricity, DOE reports national energy savings in terms
of primary energy savings, which is the savings in the energy that is
used to generate and transmit the site electricity. 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.\20\ 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.1 of this document.
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\20\ 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).
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2. Significance of Savings
To adopt any new or amended standards for a covered product, DOE
must determine that such action would result in significant energy
savings. (42 U.S.C. 6295(o)(3)(B)).
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\21\ 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.
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\21\ The numeric threshold for determining the significance of
energy savings established in a final rule published on February 14,
2020 (85 FR 8626, 8670), was subsequently eliminated in a final rule
published on Dec. 13, 2021 (86 FR 70892).
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As stated, the standard levels adopted in this final rule are
projected to result in national energy savings of 4.0 quad, the
equivalent of the primary annual energy use of 261 million homes. 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. 6295(o)(3)(B).
F. Economic Justification
1. Specific Criteria
As noted previously, EPCA provides seven factors to be evaluated in
determining whether a potential energy conservation standard is
economically justified. (42 U.S.C. 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 new or 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 (Life-Cycle
Cost (``LCC'') and Payback Period Analysis (``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.
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
[[Page 28874]]
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. 6295(o)(2)(B)(i)(III)) As
discussed in section IV.H of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes, and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data
available to DOE, the standards adopted in this document would not
reduce the utility or performance of the products under consideration
in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a standard. (42 U.S.C. 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. 6295(o)(2)(B)(ii)) To assist the
Department of Justice (``DOJ'') in making such a determination, DOE
transmitted copies of its proposed rule and the NOPR TSD to the
Attorney General for review, with a request that the DOJ provide its
determination on this issue. In its assessment letter responding to
DOE, DOJ concluded that it does not have evidence that the new proposed
energy conservation standards for GSLs are substantially likely to
adversely impact competition. 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. 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 of this document.
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 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
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard is less than three times the value of
the first year's energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. 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. 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 GSLs. 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 impact 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: www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=4. Additionally,
DOE used output from the latest version of the Energy Information
Administration's (``EIA's'') Annual
[[Page 28875]]
Energy Outlook (``AEO'') for the emissions and utility impact analyses.
A. Scope of Coverage
This rulemaking covers all consumer products that meet the
definition of ``general service lamps'' as codified at 10 CFR 430.2.
While all GSLs are subject to the 45 lm/W sales prohibition at 10 CFR
430.32(dd), DOE is not adopting amended energy conservation standards
in this final rule for all GSLs, though DOE may consider amended
standards for them in a future rulemaking. In this rulemaking, DOE is
analyzing and adopting amended standards for CFLs and general service
LED lamps that have a lumen output within the range of 310-3,300
lumens; have an input voltage of 12 volts or 24 volts, at or between
100 to 130 volts, at or between 220 to 240 volts, or of 277 volts for
integrated lamps, or are able to operate at any voltage for non-
integrated lamps; and do not fall into any exclusion from the GSL
definition at 10 CFR 430.2. In this rulemaking as specified in Sec.
430.32(dd)(1)(iv)(C), DOE is not analyzing and adopting amended
standards for general service organic LED lamps and any GSL that (1) is
a non-integrated lamp that is capable of operating in standby mode and
is sold in packages of two lamps or less; (2) is designed and marketed
as a lamp that has at least one setting that allows the user to change
the lamp's CCT and has no setting in which the lamp meets the
definition of a colored lamp (as defined in 10 CFR 430.2); and is sold
in packages of two lamps or less; (3) is designed and marketed as a
lamp that has at least one setting in which the lamp meets the
definition of a colored lamp (as defined in 10 CFR 430.2) and at least
one other setting in which it does not meet the definition of colored
lamp (as defined in 10 CFR 430.2) and is sold in packages of two lamps
or less; or (4) is designed and marketed as a lamp that has one or more
component(s) offering a completely different functionality (e.g., a
speaker, a camera, an air purifier, etc.) where each component is
integrated into the lamp but does not affect the light output of the
lamp (e.g., does not turn the light on/off, dim the light, change the
color of the light, etc.), is capable of operating in standby mode, and
is sold in packages of two lamps or less. See section IV.A.3 of this
document for further details. 42 U.S.C. 6295(i)(6)(B)(ii) of EPCA
provides that this rulemaking's scope shall not be limited to
incandescent technologies. In accordance with this provision, the scope
of this rulemaking encompasses other GSLs in addition to GSILs.
General service lamp means a lamp that has an American National
Standards Institute (``ANSI'') base; is able to operate at a voltage of
12 volts or 24 volts, at or between 100 to 130 volts, at or between 220
to 240 volts, or at 277 volts for integrated lamps, or is able to
operate at any voltage for non-integrated lamps; has an initial lumen
output of greater than or equal to 310 lumens (or 232 lumens for
modified spectrum general service incandescent lamps) and less than or
equal to 3,300 lumens; is not a light fixture; is not an LED downlight
retrofit kit; and is used in general lighting applications. General
service lamps include, but are not limited to, general service
incandescent lamps, compact fluorescent lamps, general service light-
emitting diode lamps, and general service organic light emitting diode
lamps. General service lamps do not include: (1) Appliance lamps; (2)
Black light lamps; (3) Bug lamps; (4) Colored lamps; (5) G shape lamps
with a diameter of 5 inches or more as defined in ANSI C79.1-2002; (6)
General service fluorescent lamps; (7) High intensity discharge lamps;
(8) Infrared lamps; (9) J, JC, JCD, JCS, JCV, JCX, JD, JS, and JT shape
lamps that do not have Edison screw bases; (10) Lamps that have a wedge
base or prefocus base; (11) Left-hand thread lamps; (12) Marine lamps;
(13) Marine signal service lamps; (14) Mine service lamps; (15) MR
shape lamps that have a first number symbol equal to 16 (diameter equal
to 2 inches) as defined in ANSI C79.1-2002, operate at 12 volts, and
have a lumen output greater than or equal to 800; (16) Other
fluorescent lamps; (17) Plant light lamps; (18) R20 short lamps; (19)
Reflector lamps that have a first number symbol less than 16 (diameter
less than 2 inches) as defined in ANSI C79.1-2002 and that do not have
E26/E24, E26d, E26/50x39, E26/53x39, E29/28, E29/53x39, E39, E39d,
EP39, or EX39 bases; (20) S shape or G shape lamps that have a first
number symbol less than or equal to 12.5 (diameter less than or equal
to 1.5625 inches) as defined in ANSI C79.1-2002; (21) Sign service
lamps; (22) Silver bowl lamps; (23) Showcase lamps; (24) Specialty MR
lamps; (25) T shape lamps that have a first number symbol less than or
equal to 8 (diameter less than or equal to 1 inch) as defined in ANSI
C79.1-2002, nominal overall length less than 12 inches, and that are
not compact fluorescent lamps; and (26) Traffic signal lamps. 10 CFR
430.2.
The definitions for compact fluorescent lamps, general service
light-emitting diode lamps, and general service organic light emitting
diode lamps, and other terms used in the GSL definition are also
specified in 10 CFR 430.2.
Additionally, 42 U.S.C. 6295(i)(6)(B)(i)(II) directs DOE to
consider whether the exemptions for certain incandescent lamps should
be maintained or discontinued. In the January 2023 NOPR, DOE reviewed
the regulatory definitions of GSL, GSIL, and supporting definitions
adopted in the May 2022 Definition Final Rule and determined that no
amendments are needed with regards to the maintenance or
discontinuation of exemptions for certain incandescent lamps. 88 FR
1638, 1651. DOE received no comments regarding this assessment. DOE
maintains this assessment in this final rule.
1. Supporting Definitions
In the January 2023 NOPR, DOE proposed minor updates to clarify
certain supplemental definitions adopted in the May 2022 Definition
Final Rule. In the January 2023 NOPR, DOE proposed to amend the
existing definition of LED downlight retrofit kit to specify that it
must be a retrofit kit classified or certified to Underwriters
Laboratories (``UL'') 1598C-2014.\22\ 88 FR 1638, 1652.
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\22\ UL, UL1598C Standard for Safety Light-Emitting Diode (LED)
Retrofit Luminaire Conversion Kits. Approved November 17, 2016.
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NEMA requested that DOE reference UL 1598C generally, without
reference to a specific publication year. NEMA noted that American
National Standards publications (e.g., ANSI/UL 1598C) are dynamic with
revisions continuously evaluated, refined, voted upon, published, and
implemented by subject matter experts seeking to improve the utility of
these publications in the market. NEMA stated that by specifying a
publication year, DOE would be unnecessarily forgoing the benefit of
revisions to this important consumer safety standard and working
against the standards' adoption in the broader market. (NEMA, No. 183
at p. 3).
The GSL definition states that a GSL is not an LED downlight
retrofit kit. 10 CFR 430.2. Therefore, the definition of LED downlight
retrofit kit informs what is or is not a GSL. DOE reviewed UL 1598C-
2014 before proposing that a LED downlight retrofit kit be classified
or certified to the standard. 88 FR 1638, 1652. DOE would need to
review updates in any new version of the standard to assess any impacts
on the LED downlight retrofit kit definition and subsequently on the
GSL definition. If DOE does not specify the version of the UL 1598C
standard, it may result in
[[Page 28876]]
changes to these definitions that have not been reviewed by DOE and/or
put forth for public comment. Therefore, in this final rule, DOE is
adopting the definition for LED downlight retrofit kit with reference
to UL 1598C-2014 as proposed in the January 2023 NOPR. Further, note
that the edition of UL 1598C DOE reviewed and proposed for
incorporation in the January 2023 NOPR was the first edition dated
January 16, 2014, including revisions through November 17, 2016. To
ensure the appropriate version is being referenced and to align with
the referencing of industry standards in other definitions, DOE is
specifying the year when referencing UL 1598C in the LED downlight
retrofit kit definition as UL 1598C-2016 in this final rule.
In the January 2023 NOPR, DOE also proposed to update the industry
standards referenced in the definitions of ``Reflector lamp'' and
``Showcase lamp.'' Specifically, DOE proposed to remove the reference
to ANSI C78.20-2003 \23\ from the definitions of ``Showcase lamp'' and
``Reflector lamp.'' ANSI C78.20-2003 is an industry standard for A, G,
PS, and similar shapes with E26 bases and therefore is not relevant to
these lamp types. Further, ANSI has replaced another industry standard,
ANSI C79.1-2002,\24\ with ANSI C78.79-2014 (R2020).\25\ Accordingly,
DOE proposed to update the following supporting definitions that
currently reference ANSI C79.1-2002 to reference ANSI C78.79-2014
(R2020): (1) ``Specialty MR lamp'' definition; (2) ``Reflector lamp''
definition; (3) ``General service incandescent lamp'' definition with
respect to a G shape lamp with a diameter of 5 inches or more; and (4)
``General service lamp'' definition with respect to G shape lamps with
a diameter of 5 inches or more; MR shape lamps that have a first number
symbol equal to 16; Reflector lamps that have a first number symbol
less than 16; S shape or G shape lamps that have a first number symbol
less than or equal to 12.5; T shape lamps that have a first number
symbol less than or equal to 8. 88 FR 1638, 1652. DOE received no
comments on this proposal. Therefore, in this final rule, DOE adopts
the updates to industry standards referenced in these supporting
definitions as proposed in the January 2023 NOPR.
---------------------------------------------------------------------------
\23\ American National Standards Institute, ANSI C78.20-2003
American National Standard for Electric Lamps--A, G, PS, and Similar
Shapes with E26 Medium Screw Bases. Approved Oct. 30, 2003.
\24\ American National Standards Institute, ANSI C79.1-2002
American National Standard For Electric Lamps--Nomenclature for
Glass Bulbs Intended for Use with Electric Lamps. Approved Sept. 16,
2002.
\25\ American National Standards Institute, ANSI C 78.79-2014
(R2020) American National Standard for Electric Lamps--Nomenclature
for Envelope Shapes Intended for Use with Electric Lamps. Approved
Jan. 17, 2020.
---------------------------------------------------------------------------
DOE received a comment regarding the term ``general service.''
Seasonal Specialties commented that there does not seem to be a
definition for ``general service'', and it is unclear what ``general
service'' includes and excludes. (Seasonal Specialties, Public Meeting
Transcript, No. 27 at pp. 18-19)
As noted previously in section IV.A of this document, the
definition of GSL in 10 CFR 430.2 specifies a GSL must have an ANSI
base, operate in certain voltage ranges, and have lumens in certain
lumens ranges. It also identifies lamp types that are GSLs as well as
26 lamp types that are exempt from the GSL definition. Hence, DOE finds
that the GSL definition in 10 CFR 430.2 clearly specifies what is or is
not a GSL and no other definitions are necessary.
Additionally, DOE received comments on the definition of standby
power. NEMA recommended that DOE revise the definition of ``Standby
mode,'' because the current definition focuses only on the energy
consumption of a lamp's standby mode condition and not the reason that
it operates on standby (i.e., a lamp's functional capabilities). NEMA
stated that the definition of ``Standby mode'' in the January 2023 NOPR
TSD could become problematic and restrictive as the category more fully
develops. NEMA recommended that DOE instead replace the term ``Standby
mode'' with ``Lamp capable of operating in standby mode'' and to denote
it as an ``an energy-using product.'' (NEMA, No. 183 at p. 9) Lutron
commented that it supports NEMA's revisions to the January 2023 NOPR
definition of ``standby mode.'' (Lutron, No. 182 at p. 8)
The definition of ``standby mode'' is a statutory definition
specified in 42 U.S.C. 6295(gg)(1)(iii). In appendix A of the January
2023 NOPR TSD, DOE repeated this definition as it appears in 42 U.S.C.
6295(gg)(1)(iii) and is codified in 10 CFR 430.2. This definition
specifies that standby mode means the condition in which an energy-
using product is connected to a main power source; and offers certain
user-oriented or protective functions. (see 42 U.S.C. 6295(gg)(1)(iii),
10 CFR 430.2)
NEMA's suggested changes would add language that states, ``Lamps
capable of operating in standby mode.'' However, this definition
applies to all covered products, not only lamps. Further, in the
January 2023 NOPR, DOE proposed a table to codify the proposed GSL
standards in the CFR. This table included the column ``Standby Mode
Operation'' indicating the lamps that are capable of standby mode
operation and those that are not and the standards to which they would
be subject. 88 FR 1638, 1718. Therefore, proposed GSL standards and
those adopted in this rulemaking would clearly indicate the difference
between lamps capable of operating in standby mode and those that are
not. NEMA also suggested adding language that specifies the product in
standby mode as ``an energy-using product.'' This language is already
present in the existing definition. Finally, NEMA's concern that the
definition does not focus on the lamp's functional capabilities that
require it to operate in standby mode is addressed in paragraph 2 of
the definition, which describes the additional user-oriented or
protective functions the product offers. Hence, because it is a
statutory definition and changing it would not have a substantive
impact on clarity or accuracy, DOE is not amending the definition of
``Standby mode'' in this final rule.
2. Definition of Circadian-Friendly Integrated Light-Emitting Diode
(``LED'') Lamp
In the January 2023 NOPR, DOE proposed a definition for
``circadian-friendly integrated LED lamp'' and proposed that lamps
meeting that definition be excluded from the GSL definition. DOE
identified commercially available integrated LED lamps that are
marketed as aiding in the human sleep-wake (i.e., circadian) cycle by
changing the light spectrum and also observed that their efficacies
ranged from 47.8 lm/W to 85.7 lm/W. Specifically, DOE proposed to
define ``circadian-friendly integrated LED lamp'' as an integrated LED
lamp that (1) is designed and marketed for use in the human sleep-wake
(circadian) cycle; (2) is designed and marketed as an equivalent
replacement for a 40 W or 60 W incandescent lamp; (3) has at least one
setting that decreases or removes standard spectrum radiation emission
in the 440 nm to 490 nm wavelength range; and (4) is sold in packages
of two lamps or less. 88 FR 1638, 1652. In addition, based on the
potential utility they offer and DOE's tentative findings that such
lamps did not have high efficacy values, DOE proposed to exclude them
from meeting the definition of GSLs.
DOE received several comments regarding the proposed definition and
exemption of the circadian-friendly integrated LED lamp, including
[[Page 28877]]
comments questioning DOE's authority to exempt them from the GSL
definition.
Earthjustice and ASAP et al. stated that DOE lacks the legal
authority to exempt these lamps and doing so would violate the anti-
backsliding provision. (Earthjustice, No. 179 at pp. 1-3; ASAP et al.,
No. 174 at pp. 1-2) Earthjustice commented that the proposed GSL
exemption for circadian-friendly LED lamps would mean that these lamps
would no longer be subject to the 45 lm/W backstop standard level or
any standard, an action EPCA's anti-backsliding provision explicitly
forbids. Regarding authority, Earthjustice commented that the January
2023 NOPR cited no EPCA provision for excluding circadian-friendly
integrated LED lamps from the GSL definition, indicating that such
authority does not exist. Earthjustice commented that EPCA grants DOE
explicit authority to enlarge the scope of GSLs to encompass any lamps
``used to satisfy lighting applications traditionally served by general
service incandescent lamps'' but offers limited authority to grant
exemptions. Further, Earthjustice stated that the requirement per EPCA
that DOE complete a rulemaking to consider whether ``the exemptions for
certain incandescent lamps should be maintained or discontinued'' (see
42 U.S.C. 6295(i)(6)(A)(i)(II)) is not applicable in this case.
Earthjustice stated that EPCA authorizes DOE to exclude: (1) from the
term ``medium base compact fluorescent lamp'' any lamp that is
``designed for special applications'' and ``unlikely to be used in
general purpose applications'' (see 42 U.S.C. 6291(30)(S)(ii)(II)); and
(2) from the terms ``fluorescent lamp'' and ``incandescent lamp'' any
lamp to which DOE makes ``a determination that standards for such lamp
would not result in significant energy savings because such lamp is
designed for special applications or has special characteristics not
available in reasonably substitutable lamp types'' (see 42 U.S.C.
6291(30)(E)). Earthjustice stated that neither of these two provisions
authorizes DOE to exclude products from the definition of GSLs because
GSLs need not meet the definitions of MBCFL, fluorescent lamp, or
incandescent lamp to be covered as GSLs. Earthjustice concluded by
stating that because the proposed action for circadian-friendly LED
lamps does not fit into one of the categories of exemptions DOE is
statutorily authorized to create, the proposed action is unlawful, and
that where a statute confers authority on an agency to create specific
exemptions, broader authority to create other types of exemptions
cannot be inferred. (Earthjustice, No. 179 at pp. 1-3)
NEMA stated that the proposed circadian-friendly integrated LED
lamp exemption could lead to standards being set at the State level,
resulting in a patchwork of product regulations. NEMA recommended that
DOE finalize a rule that creates no exemptions and sets minimum ELs for
all GSLs, regardless of product claims. NEMA recommended that DOE work
with stakeholders to develop better, more useful definitions, and to
set minimum ELs for energy conservation standards that will allow the
market to develop and mature. (NEMA, No. 183 at p. 4).
Based on the comment received, DOE does not have sufficient
information to establish a separate product class for circadian-
friendly integrated LED lamps. (See 42 U.S.C. 6295(q)) Therefore, DOE
is not exempting circadian-friendly integrated LED lamps from the GSL
definition in this final rule. As a result, these lamps will be subject
to the standards for GSLs.
With regards to the specific definition of circadian-friendly
lamps, CLASP, NYSERDA, and the CEC commented that DOE's proposed
definition of circadian-friendly integrated LED lamps is too broad and
recommended that DOE include more specific requirements. (CEC, No. 176
at p. 3; NYSERDA, No. 166 at pp. 2-3; CLASP, No. 177 at pp. 3-4)
Specifically, NYSERDA stated that the proposed definition called only
for a ``decrease'' in blue light without providing more strict specific
guidance (i.e., ``decreasing by 90 percent'') or requiring removal of
blue light. NYSERDA commented that the definition could be met by
minimal design modifications targeting blue wavelengths, with the
result that inefficient LED lamps in popular form factors could
continue to be available without producing positive health outcomes.
(NYSERDA, No. 166 at pp. 2-3) CLASP also recommended that DOE not
include language like ``one setting that decreases or removes standard
spectrum radiation'' and rather specify that such lamps should only--
and always--operate in this modified mode. CLASP offered the example of
DOE subjecting ``modified-spectrum'' GSLs which had a neodymium coating
on the glass to an adjusted efficacy level because of the modified-
spectrum feature. (CLASP, No. 177 at pp. 3-4) NYSERDA also stated that
the other criteria in DOE's proposed definition (i.e., marketing,
replacement wattage, and packaging) could also be easily adjusted to
meet the definition through minimal manufacturer changes. (NYSERDA, No.
166 at pp. 2-3) EEI stated that it was unclear how efficiency connected
to DOE's proposed criteria that circadian-friendly integrated LED lamps
be sold in packages of two lamps or less. Regarding the criteria that
the lamp be designed and marketed as an equivalent replacement for a 40
W or 60 W incandescent lamp, EEI stated that there could be
replacements for other wattage equivalents such as 100 W incandescent
or 72 W halogen. (EEI, Public Meeting Transcript, No. 27 at pp. 19-20)
DOE believes at this time that circadian friendly integrated LED
lamps do not possess unique attributes compared to other GSLs. There is
no consensus on specific lamp attributes that meaningfully impact the
human circadian cycle. The human circadian system's response curves are
not yet fully understood and the proper dosing of light to achieve
circadian effects has not been standardized. Therefore, DOE finds that
an accurate definition of a circadian-friendly integrated LED lamp is
not possible and the claim that these lamps provide unique utility is
not accurate at this time. Accordingly, DOE is declining to adopt a
definition of circadian-friendly integrated LED lamp at this time,
which is consistent with comments on the proposed rule. As noted above,
DOE is not exempting circadian-friendly integrated LED lamps from the
GSL definition in this final rule and as a result, these lamps will be
subject to the standards for GSLs.
3. Scope of Standards
In the January 2023 NOPR, DOE stated that it was not assessing
standards for general service organic light-emitting diode (``OLED'')
lamps, a type of GSL, in this rulemaking. 88 FR 1638, 1653. Due to the
lack of commercially available GSLs that use OLED technology, in the
January 2023 NOPR DOE determined that it is unclear whether the
efficacy of these products can be increased. DOE tentatively determined
that standards for these lamps would not be technologically feasible
and did not evaluate them in the January 2023 NOPR. DOE did not receive
any comments on this proposal. In this final rule, DOE continues to not
evaluate standards for general service OLED lamps for the reasons
stated previously.
DOE received comments that it should create separate product
classes and thereby standards for each of the following lamp types: (1)
lamps that change the lamp's correlated color temperature (``CCT'');
(2) lamps that change the lamp to be a colored lamp; (3) lamps that are
capable of operating
[[Page 28878]]
in standby mode and have at least one additional feature that does not
control light output; and (4) lamps that are non-integrated and capable
of operating in standby mode. In this rulemaking, DOE did not analyze
amended standards for these lamp categories because DOE lacks
sufficient information about the performance of these lamps given the
rapidly evolving market. DOE has carefully reviewed the lamp categories
and determined that because the markets for these lamps are rapidly
developing, DOE is unable to make a clear and accurate determination
regarding the consumer utility, how various technology options would
affect the efficiency, and the maximum technologically feasible
efficiency of these lamps, which prevents DOE from determining whether
a specific standard for these lamps would be economically justified at
this time. Accordingly, DOE did not consider standards for these lamps
in this rulemaking. DOE may evaluate amended standards for these lamps
in a future rulemaking. DOE notes that these lamps are still subject to
the 45 lm/W sales prohibition at 10 CFR 430.32(dd). For a full
discussion of these comments and DOE's responses, see section IV.B.2 of
this document.
In the January 2023 NOPR, DOE proposed to exempt circadian-friendly
integrated LED lamp (see section IV.A.2 of this document) from amended
standards because these lamps offered a utility to consumers in the
form of aiding in the human sleep-wake (i.e., circadian) cycle and also
these lamps did not have high efficacies. 88 FR 1638, 1652. DOE
received several comments citing concerns regarding potential loopholes
resulting from such an exemption from standards. ASAP et al., CLASP,
NYSERDA, and the CEC commented that DOE's proposal to exclude
circadian-friendly integrated LED lamps from GSL regulation would risk
creating a loophole and allow inefficient lamps on the market. (CEC,
No. 176 at p. 3; NYSERDA, No. 166 at pp. 2-3; CLASP, No. 177 at pp. 3-
4; ASAP et al., No. 174 at pp. 1-2) NEMA stated that the circadian-
friendly integrated lamp definition and exemption could provide
manufacturers an opportunity to evade regulations. (NEMA, No. 183 at p.
4) DOE also received comments on the utility of circadian-friendly
integrated LED lamps. NYSERDA commented that these lamps provide
general illumination and found no clear evidence of a utility that
justified exempting the lamps. (NYSERDA, No. 166 at p. 2) NEMA stated
that the human circadian system's response curves are not yet fully
understood and the proper dosing of light to achieve circadian effects
has not been standardized. NEMA noted that IES RP-46 Recommended
Practice: Supporting the Physiological and Behavioral Effects of
Lighting in Interior Daytime Environments is still in development. NEMA
commented some spectrally tunable lamps are marketed with ``circadian
features'' entrainment but there are reasons to dismiss such claims
because the ability to affect circadian entrainment is not a product
attribute but a matter of proper lighting product application (i.e.,
attention to timing, intensity, spectrum and duration of the applied
light). Further NEMA commented that the two circadian-friendly
integrated LED lamps cited in the January 2023 NOPR could be applied in
such a way as to not produce the claimed circadian effects and offer a
limited representation of the circadian entrainment potential as they
only decrease or remove blue light to promote better sleep while other
products can be programmed to provide more or less blue light by time
of day. (NEMA, No. 183 at pp. 3-4)
DOE also received comments addressing DOE's observed lower efficacy
of the circadian-friendly integrated LED lamps and suggestions to
establish appropriate standards for these lamps instead of exempting
them from standards. ASAP et al. commented that DOE's proposal to
exempt circadian-friendly integrated LED lamps because it had observed
an efficacy range of 47.8 lm/W to 85.7 lm/W suggested DOE assumed that
the lower efficacy is representative of this technology. ASAP et al.
stated that this may not be the case, as many common integrated
omnidirectional short lamps on the market today have efficacies of 80-
90 lm/W, which is similar to those of some of the circadian-friendly
lamps identified by DOE. (ASAP et al., No. 174 at pp. 1-2) CLASP and
ASAP et al. commented that circadian-friendly lamps are based on the
same design principles as other LED lamps (e.g., improved drivers and
LED chips) and therefore can be made more efficient in the same way.
CLASP and ASAP et al. commented that, rather than exempting the lamps,
DOE should determine the technologically justified efficacy adjustment
for these lamps. (ASAP et al., No. 174 at pp. 1-2; CLASP, No. 177 at
pp. 3-4)
Similarly, NYSERDA, the CEC, and the CA IOUs recommended that DOE
consider establishing a separate product class targeting circadian-
friendly products at a level slightly lower than currently proposed for
most product classes of GSLs. (NYSERDA, No. 166 at pp. 2-3; CA IOUs,
No. 167 at p. 3; CEC, No. 176 at p. 3-4) NYSERDA commented that such a
product class should include a clear definition and serve a specific
health utility. (NYSERDA, No. 166 at pp. 2-3) The CEC also stated that
the definition should include specific and objective features, such as
color shifting, that can provide a basis for determining the additional
power required to efficiently provide one or more specific circadian
benefits. (CEC, No. 176 at p. 3-4) NYSERDA and the CEC stated that the
product class approach based on a well-defined lamp type would achieve
DOE's intent to preserve the circadian-friendly integrated LED lamps
while limiting a loophole that would result in inefficient LED lamps on
the market. (NYSERDA, No. 166 at pp. 2-3; CEC, No. 176 at p. 3-4) The
CA IOUs commented that circadian-friendly integrated LED lamps are in
early stages of development and there is no industry-wide definition of
``circadian-friendly'' lighting. The CA IOUs recommended that
circadian-friendly integrated LED lamps be defined as proposed in the
January 2023 NOPR but be subjected to a reasonable minimum luminous
efficacy requirement. Additionally, the CA IOUs recommended that DOE
require manufacturers to report shipments of circadian-friendly
integrated LED lamps and issue public reports on shipment growth. The
CA IOUs added that DOE could then make informed adjustments to the
definition and standards as necessary for circadian-friendly integrated
LED lamps in a future GSL rulemaking. (CA IOUs, No. 167 at p. 3)
Based on the comments received, there is no clear consensus on
specific lamp attributes that meaningfully impact the human circadian
cycle. The human circadian system's response curves are not yet fully
understood and the proper dosing of light to achieve circadian effects
has not been standardized. Further, as pointed out by the commenters,
there are circadian-friendly integrated LED lamps with comparable
efficacies to other GSLs. As a result, DOE does not have sufficient
information to establish a separate product class for circadian-
friendly integrated LED lamps. (See 42 U.S.C. 6295(q)) And as
Earthjustice noted, DOE agrees that the proposed GSL exemption for
circadian-friendly LED lamps would mean that these lamps would no
longer be subject to the 45 lm/W backstop standard level or any
standard, an action EPCA's anti-backsliding provision explicitly
forbids. Consistent with these and the above comments, DOE is including
circadian-friendly
[[Page 28879]]
integrated LED lamps within the scope of amended standards. DOE notes,
however, that it could decide not to amend existing standards for
circadian-friendly integrated LED lamps in a future rulemaking if so
warranted by a product class designation.
Relatedly, while all GSLs are subject to the 45 lm/W sales
prohibition at 10 CFR 430.32(dd), not all GSLs are subject to the
amended standards adopted in this final rule, though DOE may consider
amended standards for them in a future rulemaking. In this rulemaking,
DOE is analyzing and adopting amended standards for CFLs and general
service LED lamps that have a lumen output within the range of 310-
3,300 lumens; have an input voltage of 12 volts or 24 volts, at or
between 100 to 130 volts, at or between 220 to 240 volts, or of 277
volts for integrated lamps, or are able to operate at any voltage for
non-integrated lamps; and do not fall into any exclusion from the GSL
definition at 10 CFR 430.2. In this rulemaking as specified in Sec.
430.32(dd)(1)(iv)(C), DOE is not analyzing and adopting amended
standards for general service organic LED lamps and any GSL that:
(1) Is a non-integrated lamp that is capable of operating in
standby mode and is sold in packages of two lamps or less;
(2) Is designed and marketed as a lamp that has at least one
setting that allows the user to change the lamp's CCT and has no
setting in which the lamp meets the definition of a colored lamp (as
defined in 10 CFR 430.2); and is sold in packages of two lamps or less;
(3) Is designed and marketed as a lamp that has at least one
setting in which the lamp meets the definition of a colored lamp (as
defined in 10 CFR 430.2) and at least one other setting in which it
does not meet the definition of colored lamp (as defined in 10 CFR
430.2) and is sold in packages of two lamps or less; or
(4) Is designed and marketed as a lamp that has one or more
component(s) offering a completely different functionality (e.g., a
speaker, a camera, an air purifier, etc.) where each component is
integrated into the lamp but does not affect the light output of the
lamp (e.g., does not turn the light on/off, dim the light, change the
color of the light, etc.), is capable of operating in standby mode, and
is sold in packages of two lamps or less. Lamps that would not meet
these criteria and therefore would not be exempt from standards would
be lamps that have integrated motion sensors that affect light output,
lamps with internal battery backup used for light output, and lamps
designed and marketed as dusk to dawn lamps.
Please note that DOE is not exempting circadian-friendly integrated
LED lamps from the GSL definition or the scope of standards in this
final rule. As a result, these lamps will be subject to the standards
for GSLs.
4. Scope of Metrics
As stated in section II.A, this rulemaking is being conducted
pursuant to 42 U.S.C. 6295(i)(6)(B) and (m). Under 42 U.S.C.
6295(i)(6)(B)(i)(I), DOE is required to determine whether standards in
effect for GSILs should be amended to reflect lumen ranges with more
stringent maximum wattage than the standards specified in paragraph
(1)(A) (i.e., standards enacted by section 321(a)(3)(A)(ii) of EISA
\26\). The scope of this analysis is not limited to incandescent lamp
technologies and thus encompasses all GSLs. In the January 2023 NOPR,
DOE explained that the May 2022 Backstop Final Rule codified the
statutory backstop requirement in 42 U.S.C. 6295(i)(6)(A)(v)
prohibiting sales of GSLs that do not meet a 45 lm/W efficacy standard.
Because incandescent and halogen GSLs would not be able to meet the 45
lm/W requirement, they are not considered in the analysis for this
rulemaking. In the January 2023 NOPR, DOE discussed its decision to use
minimum lumens per watt as the metric for measuring lamp efficiency for
GSLs rather than maximum wattage of a lamp. 88 FR 1638, 1653. DOE did
not receive comments on this decision. In this final rule, DOE
continues to use minimum lumens per watt as the metric for measuring
lamp efficiency for GSLs.
---------------------------------------------------------------------------
\26\ This provision was to be codified as an amendment to 42
U.S.C. 6295(i)(1)(A). But because of an apparent conflict with
section 322(b) of EISA, which purported to ``strik[e] paragraph
(1)'' of section 6295(i) and replace it with a new paragraph (1),
neither this provision nor other provisions of section
321(a)(3)(A)(ii) of EISA that were to be codified in 42 U.S.C.
6295(i)(1) were ever codified in the U.S. Code. Compare EISA,
section 321(a)(3)(A)(ii), with 42 U.S.C. 6295(i)(1). It appears,
however, that Congress's intention in section 322(b) of EISA was to
replace the existing paragraph (1), not paragraph (1) as amended in
section 321(a)(3). Indeed, there is no reason to believe that
Congress intended to strike these new standards for GSILs. DOE has
thus issued regulations implementing these uncodified provisions.
See, e.g., 10 CFR 430.32(x) (implementing standards for GSILs, as
set forth in section 321(a)(3)(A)(ii) of EISA).
---------------------------------------------------------------------------
In the January 2023 NOPR, DOE also discussed proposed updates to
existing metrics and the proposed addition of new metrics for GSLs.
These included updating the existing lumen maintenance at 1,000 hours
and at 40 percent of lifetime, rapid cycle stress test, lifetime
requirements, and adding a power factor and start time requirement for
MBCFLs. DOE also proposed adding a power factor requirement for
integrated LED lamps. Finally, DOE proposed codifying color rendering
index (``CRI'') requirements for lamps that are intended for a general
service or general illumination application (whether incandescent or
not); have a medium screw base or any other screw base not defined in
ANSI C81.61-2006 \27\; are capable of being operated at a voltage at
least partially within the range of 110 to 130 volts; and are
manufactured or imported after December 31, 2011 as specified in
section 321(a) of EISA. 88 FR 1638, 1653. The following sections
discuss the comments received on these proposals.
---------------------------------------------------------------------------
\27\ American National Standards, ``for electrical lamp bases--
Specifications for Bases (Caps) for Electric Lamps,'' approved
August 25, 2006.
---------------------------------------------------------------------------
a. Lifetime
NYSERDA commented that it supports DOE's proposed increase to a
10,000-hour lifetime for MBCFLs and recommended DOE consider adding a
10,000-hour-minimum requirement for LED lamps to ensure consumer needs
are met. (NYSERDA, No. 166 at p. 3)
DOE only has authority to amend the lifetime requirement for
MBCFLs, not LED lamps. The Energy Policy Act of 2005 (``EPAct 2005'')
amended EPCA by establishing energy conservation standards for MBCFLs,
which were codified by DOE in an October 2005 final rule. 70 FR 60413.
Performance requirements were specified for five metrics: (1) minimum
initial efficacy; (2) lumen maintenance at 1,000 hours; (3) lumen
maintenance at 40 percent of lifetime; (4) rapid cycle stress; and (5)
lamp life. (42 U.S.C. 6295(bb)(1)) In addition to revising the existing
requirements for MBCFLs, DOE has the authority to establish
requirements for additional metrics including CRI, power factor,
operating frequency, and maximum allowable start time based on the
requirements prescribed by the August 9, 2001 ENERGY STAR[supreg]
Program Requirements for CFLs Version 2.0, or establish other
requirements after considering energy savings, cost effectiveness, and
consumer satisfaction. (42 U.S.C. 6295(bb)(2)-(3)) Based on this
authority, in the January 2023 NOPR, DOE proposed to update the
existing lifetime requirement for MBCFLs. The only metric that DOE
proposed for LED lamps was a minimum power factor for integrated LED
lamps. DOE finds that it has the authority to set this metric because
power factor impacts energy use. A low power factor product is
inefficient and
[[Page 28880]]
requires an increase in an electric utility's generation and
transmission capacity. (See further details on the power factor
requirement for integrated LED lamps in section IV.A.4.c of this
document.)
b. Color Rendering Index (``CRI'')
NYSERDA stated its support for the inclusion of a minimum of 80 CRI
for non-modified-spectrum GSLs, noting that an 80 CRI or above has been
demonstrated to ensure sufficient visual acuity for general
illumination situations. (NYSERDA, No. 166 at p. 3) EEI stated that
while a CRI of 80 was adequate, a higher CRI is always better and a CRI
of 90 would be preferable, if possible. (EEI, Public Meeting
Transcript, No. 27 at pp. 24-26) NEMA stated its support for DOE's
proposal to codify a minimum CRI of 80 but requested the requirement
apply to all GSLs within the scope of the rulemaking rather than only
to those with medium screw bases or any other screw base not defined in
ANSI C81.61-2006, as specified in the January 2023 NOPR. NEMA stated
that the proposed CRI requirement excludes many lamps in the scope of
this regulation that are already normalized at a minimum CRI of 80 due
to consumer preference and therefore their inclusion in the requirement
would pose no regulatory burden for manufacturers. Further, NEMA stated
its concern that as an offset to the new efficacy and performance
requirements, the removal of a consistent regulated threshold will
incentivize market introduction of lower CRI products. Additionally,
NEMA stated that to its knowledge, there are no modified-spectrum
incandescent lamps in the U.S. market today and recommended that all
mentions of ``modified spectrum'' be excluded from the final rule. In
the event that regulatory requirements for this product category must
be maintained, NEMA recommended that all requirements for modified
spectrum lamps be made identical to those of the non-modified spectrum
lamps. (NEMA, No. 183 at p. 5)
These CRI requirements are from section 321(a) of EISA, which
amended 42 U.S.C. 6295(i)(1). But because of an apparent conflict with
section 322(b) of EISA, which purported to strike paragraph (1) of 42
U.S.C. 6295(i) and replace it with a new paragraph (1), neither this
provision nor other provisions of section 321(a)(3)(A)(ii) of EISA that
were to be codified in 42 U.S.C. 6295(i)(1) were ever codified in the
U.S. Code. It has been DOE's position that Congress's intention in
section 322(b) of EISA was to replace the existing paragraph (1), not
the newly amended paragraph (1). There is no reason to believe that
Congress intended to amend 42 U.S.C. 6295(i) to include requirements
for CRI only to delete those the requirements in the same Act. See 88
FR 1638, 1653. In the January 2023 NOPR, DOE proposed to codify the CRI
requirements in section 321(a) of EISA and mistakenly included a 2028
compliance date for CRI requirements. 88 FR 1638, 1654, 1719. However,
section 321(a)(3)(A)(ii) of EISA and 42 U.S.C. 6295(i)(1) specify that
these CRI requirements apply to lamps manufactured or imported after
December 31, 2011. Because DOE lacks the legal authority to change the
compliance date of CRI requirements established in EISA, DOE is
declining to codify the CRI requirements in this rulemaking and will,
instead, conduct a separate rulemaking to codify these requirements.
c. Power Factor
In the January 2023 NOPR, DOE proposed a minimum power factor
requirement of 0.5 for MBCFLs and 0.7 for integrated LED lamps. 88 FR
1638, 1654. The CEC stated its support for DOE's proposal to include a
minimum power factor for MBCFLs and integrated LED lamps. The CEC
stated that as the number of LED lamps increases, harmonic waves sent
over the power grid can cause issues, requiring expensive equipment to
correct such issues and if uncorrected, harmonic waves will reduce the
quality of power delivered to all electrical loads, including lamps,
and the grid will experience avoidable losses. (CEC, No. 176 at pp. 4-
5) NYSERDA stated its support for a power factor requirement of 0.7 for
integrated LED lamps as established by ENERGY STAR. (NYSERDA, No. 166
at p. 3)
Hawaii State Energy Office (``HSEO'') stated that it supported a
minimum power factor of 0.9 with certain exemptions for specialty
lamps. HSEO further stated that regarding lamps of less than 5 W, given
the efficacy of CFLs and LED lamps, 0.7 would be an appropriate minimum
power factor. (HSEO, Public Meeting Transcript, No. 27 at p. 36) EEI
also stated that both CFLs and LED lamps should have power factors over
0.9 as low power factors are not good for the grid and there are
commercial customers that face financial penalties if their power
factors go below 0.9. (EEI, Public Meeting Transcript, No. 27 at pp.
24-26)
NEMA recommended that DOE specify minimum power factors by wattage
rather than setting a minimum power factor for all integrated LED
lamps. NEMA stated that DOE should adopt the power factor requirements
set forth in ANSI C82.77-10 without modification. Specifically, in its
comment NEMA provides a table from ANSI C82.77-10 with the following
power factor requirements: no minimum power factor for lamps less than
or equal to 5 W, a minimum power factor of 0.57 for lamps 5 W to 25 W
inclusive, and a minimum power factor of 0.86 for lamps greater than
25W. (Note: The table also specifies requirements for the minimum
displacement factor, but it is not clear from NEMA's statements whether
it is recommending DOE should require this additional requirement.)
NEMA also noted that ENERGY STAR requirements are similarly less strict
for low power lamps--i.e., no minimum power factor for lamps less than
or equal to 5 W, a minimum power factor of 0.6 for lamps greater than
5W to less than or equal to 10 W, and a minimum power factor of 0.7 for
lamps greater than 10W. (NEMA, No. 183 at pp. 4-5, 40-41)
NEMA provided several reasons for using the wattage-tiered approach
to power factor requirements specified in ANSI C82.77-10. NEMA stated
that these requirements align with the International Electrotechnical
Commission (``IEC'') standard and Global Lighting Association
recommendations. NEMA stated that any reduction of imaginary current
(which causes electrical losses in the equipment of the power company)
from the proposed increase in power factor will be minimal compared to
that due to the proposed increases in efficacy. NEMA stated that a
single higher power factor requirement for products of all wattages
will increase the amount of electronics in lamps and thereby the size
of the lamps, especially posing a problem for small, low power lamps,
and increasing the manufacturing burden to achieve the regulated
efficacies. NEMA also stated that additional electronics required to
achieve the higher power factor causes a small, unavoidable decrease in
efficacy. Further, NEMA stated that there is a correlation between low
power lamps and low power factor. (NEMA, No. 183 at pp. 4-5)
Regarding data available for determining an appropriate power
factor requirement, Signify and Westinghouse stated that databases from
sources such as ENERGY STAR contain a limited number of products that
are not always representative of the entire market and DOE should be
cautious of using them to develop requirements that apply to all lamps
on the market. (Signify, Public Meeting Transcript, No. 27 at p. 29;
[[Page 28881]]
Westinghouse, Public Meeting Transcript, No. 27 at pp. 30-31)
In the January 2023 NOPR and in this final rule, DOE considered
ENERGY STAR Lamps Specification V2.1 requirements,\28\ industry
standards, and characteristics of lamps in the current market when
selecting power factor requirements for MBCFL and integrated LED lamps.
88 FR 1638, 1654. The assessment of lamps in the current market was
based on the lamps database developed for the NOPR analysis and this
final rule analysis (see section IV.D of this document). This lamps
database is a comprehensive accounting of lamps on the market as it
includes data from manufacturer catalogs, DOE's compliance
certification database, retailer websites, and the ENERGY STAR
Certified Light Bulbs database. Hence, DOE considered power factor
requirements based on data that is representative of all lamps on the
market.
---------------------------------------------------------------------------
\28\ ENERGY STAR Lamps Specification V2.1, ENERGY STAR Program
Requirements for Lamps
(Light Bulbs), January 2, 2017. Available at:
www.energystar.gov/sites/default/files/ENERGY%20STAR%20Lamps%20V2.1%20Final%20Specification.pdf.
---------------------------------------------------------------------------
Passive and active technologies that can correct power factors in
lamps are commercially available and the circuitry used in power factor
correction is made to be very efficient, while consuming small amounts
of power. DOE reviewed the current U.S. market via its lamps database
used in this analysis (see section IV.D of this document) and found
that about 98 percent of integrated LED lamps have power factors of 0.7
or greater. DOE also found numerous low-wattage LED lamps from 2 to 5
W, on the market, that are within the covered lumen range of GSLs, have
a power factor of 0.7 or greater, and meet the max tech levels for
integrated LED lamps. Hence, DOE finds that a power factor requirement
of 0.7 for integrated LED lamps is achievable for lamps across all
wattages and does not prevent these lamps from meeting or exceeding the
max-tech levels across the full lumen range. Therefore, in this final
rule, DOE is adopting the power factor requirements as proposed in the
January 2023 NOPR for MBCFLs and integrated LED lamps.
d. Summary of Metrics
Table IV.1 summarizes the non-efficacy metrics being adopted in
this rulemaking (efficacy metrics are discussed in the engineering
analysis; see section IV.D of this document). For MBCFLs, performance
requirements were specified for five metrics: (1) minimum initial
efficacy; (2) lumen maintenance at 1,000 hours; (3) lumen maintenance
at 40 percent of lifetime; (4) rapid cycle stress; and (5) lamp life.
(42 U.S.C. 6295(bb)(1)) In addition to revising the existing
requirements for MBCFLs, DOE has the authority to establish
requirements for additional metrics including CRI, power factor,
operating frequency, and maximum allowable start time based on the
requirements prescribed by the August 9, 2001 ENERGY STAR[supreg]
Program Requirements for CFLs Version 2.0, or establish other
requirements after considering energy savings, cost effectiveness, and
consumer satisfaction. (42 U.S.C. 6295(bb)(2)-(3)) DOE is also
establishing a minimum power factor for integrated LED lamps. DOE finds
that it has the authority to set this metric because power factor
impacts energy use. (42 U.S.C. 6295(bb)(3)(B)) A low power factor
product is inefficient and requires an increase in an electric
utility's generation and transmission capacity. DOE has determined that
these new metrics for MBCFLs and integrated LED lamps will provide
consumers with increased energy savings and/or consumer satisfaction
for those products capable of achieving the adopted standard levels.
DOE has existing test procedures for the metrics being proposed. (See
sections III.C and IV.A.5 of this document for more information on test
procedures for GSLs.) Further, DOE has concluded that the new metrics
being adopted in this rule will not result in substantial testing
burden, as many manufacturers already test their products according to
these metrics.
[[Page 28882]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.009
5. Test Procedure
As noted in section III.C of this document, GSILs and certain IRLs,
CFLs, and LED lamps are GSLs. DOE's test procedures for GSILs and IRLs
are set forth at 10 CFR part 430, subpart B, appendix R. DOE's test
procedure for CFLs is set forth at 10 CFR part 430, subpart B, appendix
W. DOE's test procedure for integrated LED lamps is set forth at 10 CFR
part 430, subpart B, appendix BB. DOE's test procedure for GSLs that
are not GSILs, IRLs, CFLs, or integrated LED lamps is set forth at 10
CFR part 430, subpart B, appendix DD.
DOE received comments on some of DOE's test procedures applicable
to GSLs. NEMA stated that section 3.1.4 in appendix BB and section 3.5
in appendix DD specifies testing be done at the ``maximum input power''
and for a color-tunable (multi-primary) lamp this will typically occur
when all LED packages within are driven at 100-percent output. NEMA
stated that when all primary color sources (e.g., R, G, B, and W) are
at full output, the chromaticity coordinates of the whole lamp may not
be on or even close to the blackbody locus, about which white light
chromaticities are standardized. Further, NEMA stated that depending on
the exact parameters of the LED packages within, the chromaticity
coordinates for this operating condition may not be in the range for
which the color-rendering index, as defined in International Commission
on Illumination 13.3, is a valid metric. NEMA stated that at the
maximum input power condition, the lamp may not be operating as a GSL,
but as a colored lamp. NEMA further commented that section 5.1 of the
ENERGY STAR lamps V2.1 specification states that testing is to be done
at the most consumptive white light setting covered by the
specification. NEMA stated that this approach guarantees a tested lamp
will operate in the GSL region with a chromaticity defined by ANSI
C78.377 and accepted as ``white'' light. NEMA stated that DOE should
amend its test procedures to require testing for color-tunable lamps at
the highest input power nominal white chromaticity as defined in ANSI
C78.377. (NEMA, No. 183 at pp. 21-22)
NEMA further stated that lamps with four or more primary colors
exhibit a wider gamut area and will be able to produce a consumer-
selected chromaticity with many different settings of those primaries.
NEMA commented that, for example, a lamp may have one mode to maximize
light output and another to maximize color rendering, and that the
input power is likely to differ among modes. NEMA recommended that
where the same chromaticity can be achieved with multiple primary
settings, DOE should allow the manufacturer to determine the test
conditions and provide instruction for how to repeat the condition for
the highest input power white light chromaticity as per ANSI C78.377.
(NEMA, No. 183 at pp. 21-22)
DOE is exempting from standards adopted in this final rule lamps
that allow consumers to change the lamp from a non-colored lamp to a
colored lamp (as defined in 10 CFR 430.2), which is referred to in
NEMA's comment as a color tunable lamp. DOE appreciates NEMA's comments
on how the test procedure might be amended to better address these
products and encourages NEMA to submit them during an active rulemaking
to amend the test procedure for integrated LED lamps and other GSLs.
DOE is not amending any test procedure in this final rule.
NEMA stated that section 3.4 of appendix DD states to operate non-
integrated LED lamps at the
[[Page 28883]]
manufacturer declared input voltage and current, which only provides a
partial description of the testing conditions and does not represent a
repeatable test condition for Type A or Type C linear LED lamps
(``TLEDs''). NEMA stated it is repeating the point made in the 2016 GSL
test procedure rulemaking that frequency and waveform are important
parameters that vary among LED lamps. NEMA stated that DOE should amend
the test procedure to allow testing with a manufacturer-designated
commercial ballast in alignment with ANSI C78.53, and DOE should accept
ANSI C78.53 testing for compliance with this rule. NEMA stated that
manufacturers would specify performance ratings, indicate a ballast
factor associated with those ratings, and identify the compatible
ballast type and model. (NEMA, No. 183 at p. 21)
In the January 2023 NOPR, DOE did not propose amendments to the GSL
test procedures. DOE cannot amend a test procedure without allowing
opportunity for comment on proposed changes. DOE notes that it received
similar comments regarding testing non-integrated LED lamps in response
to the test procedure rulemaking for GSLs that culminated in a final
rule published on October 20, 2016 (``October 2016 TP Final Rule''). 81
FR 72493. In that final rule, DOE concluded that requiring
manufacturers to specify input voltage and current and operate the lamp
at full light output resulted in a repeatable test procedure that
allows for performance to be more fairly compared. 81 FR 72493, 72496.
DOE will consider the comments including new information regarding
testing of non-integrated LED lamps provided in this rulemaking in a
future test procedure rulemaking.
B. 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 GSLs. 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. Concerns Regarding LED Lamp Technology
DOE received 158 comments from private citizens.\29\ The comments,
along with those from Soft Lights and Friends of Merrymeeting Bay,
focused on various concerns regarding LED lamp technology including
health impacts, lamp attributes, application, consumer costs, and
manufacturer impacts. In this rulemaking, LED lamp technology is
considered as a means for improving the energy efficiency of GSLs (see
section IV.C of this document) and will be needed to achieve the
standards being adopted in this final rule (see section V.C of this
document). DOE has reviewed the concerns expressed in comments from
private citizens and continues to consider LED lamp technology as a
means for improving energy efficiency of GSLs in this rulemaking. The
sections below provide a general summary of the comments received from
private citizens and DOE responses.
---------------------------------------------------------------------------
\29\ Comments submitted in response to the January 2023 NOPR,
including comments from private citizens can be found in the docket
of DOE's rulemaking to develop energy conservation standards for
GSLs at www.regulations.gov/docket/EERE-2022-BT-STD-0022/comments.
---------------------------------------------------------------------------
a. Health Impacts
DOE received comments from private citizens that LED lamps can lead
to adverse health effects (e.g., headaches, eye strain, sleep issues,
seizures). Commenters stated that this was due to the blue light that
LED lamps emit and their overall brightness, which are issues that do
not occur with incandescent or halogen lamps. In the May 2022 Backstop
Final Rule and May 2022 Definition Final Rule DOE also received
comments on potential adverse health effects of LED lamps. In the May
2022 Backstop Rule, DOE responded to these comments, stating that DOE
researched studies and other publications to ascertain any known
impacts of LED lamps on human health and has not found any evidence
concluding that LED lighting used for general lighting applications
directly results in adverse health effects. 87 FR 27439, 27457. In the
May 2022 Definition Final Rule, DOE also stated it had considered the
comments. DOE further stated it had considered the potential for health
benefits of emissions reductions from reducing energy use by the
covered products. In that rule, DOE maintained that the final rule's
definitional changes appropriately promote EPCA's goals for increasing
the energy efficiency of covered products through the establishment and
amendment of energy conservation standards and promoting conservation
measures when feasible. 42 U.S.C. 6291 et seq., as amended. 87 FR
27461, 27468. (See May 2022 Backstop Final Rule and May 2022 Definition
Final Rule for full comments and responses.) Additionally, Soft Lights
filed a petition requesting DOE withdraw the May 2022 Backstop Final
Rule and May 2022 Definition Final Rule. Soft Lights' petition asserted
that LED lamps do not provide uniform illumination, do not emit light
that disperses following the inverse square law, and are not regulated
with regards to comfort, health or safety by the U.S. Food and Drug
Administration (``FDA''). DOE denied the petition stating that granting
Soft Light's request would be inconsistent with statutory law. Further,
DOE declined to comment on Soft Light's assertion that the FDA has
failed to publish comfort, health, or safety regulations for LEDs,
stating these arguments are not for consideration by DOE. DOE also
stated it is not aware of any prohibition on the use of LED lighting
that would have impacted its rulemakings. 88 FR 16869, 16870. DOE notes
that the FDA has authority to regulate certain aspects of LED products
as radiation-emitting devices and has issued performance standards for
certain types of light-emitting products.\30\ Currently, there are no
FDA performance standard for LED products in part 1040. DOE is not
currently aware or any prohibition on the use of LED lighting that
would impact this rulemaking.
---------------------------------------------------------------------------
\30\ See, the Federal Food, Drug and Cosmetic Act section 531 et
seq.; 21 U.S.C. 360KK; and 21 CFR part 1040.
---------------------------------------------------------------------------
In this final rule, DOE maintains its responses in previous
rulemakings and petition denials regarding potential adverse health
impacts of LED lamps.
DOE also received comments that LED lamps have adverse health
effects on animal and plant life. Commenters stated that LED lamps
contain toxic waste, plastic waste, and substances that pollute the
land and water. DOE has not found any information or data indicating
LED lamps contain toxic waste. In reviewing general guidelines for
disposing of LED lamps, DOE found that either there is no guidance, or
the guidance is to recycle them as electronic products. Hence DOE finds
that LED lamps are similar in terms of the waste
[[Page 28884]]
produced by any other electronic products. Given LED lamp lifetime,
most LED lamps will last longer and therefore not need to be replaced
as frequently as other lamp technologies, leading to less waste.
Further, DOE's research found no sources indicating that LED lamps
covered under the GSL definition have adverse impacts on animal or
plant life.
Based on the previous assessments, DOE continues to consider LED
lamp technology as a means for improving energy efficiency of GSLs in
this rulemaking (see section IV.C of this document).
b. Lamp Attributes
DOE received comments that LED lamps are failing prematurely (e.g.,
burning out or changing color) before their marketed lifetime (e.g.,
failure at 6 months, at 10 percent of marketed lifetime). Commenters
attributed this to overheating of components. DOE reviewed the latest
industry articles, journals, and research reports on this topic. DOE's
research indicates that premature LED lamp failure can be attributable
to factors including poorly designed lamps, power surges, or
incompatible fixtures, among others. However, DOE has not found data or
reports indicating that premature LED lamp failure is a significant
problem with lamps offered on the market.
Flicker in LED lamps was also cited as an issue by commenters.
Commenters stated that this could be due to installing LED lamps on
existing dimmers. DOE reviewed the latest industry articles, journals,
and research reports on this topic. While flicker was an issue in the
early stages of LED lamp technology development, DOE's research has
indicated no evidence that it remains a prevalent issue with lamps
currently on the market. Flicker in LED lamps can occur due to use with
an incompatible dimmer switch. Not all incandescent/halogen dimmers
(i.e., phase-cut control dimmers) are incompatible with LED technology.
NEMA's Solid State Lighting (``SSL'') 7A, which provides basic
requirements for phase-cut dimming of LED light sources, includes a
list of forward phase-cut dimmers and scenarios in which they can be
compatible with LED technology (e.g., up to 125 W LED load). Further,
in response to the May 2022 Definition Final Rule, NEMA had estimated
520 million out of 665 million decorative lamps on mostly switch-
controlled sockets have already been converted to LED technology. DOE
finds that NEMA's comment indicates that almost 80 percent of
decorative lamps on switch-controlled sockets have already been
converted to LED technology without a significant negative market
reaction. 87 FR 27461, 27468. Further, manufacturers such as Signify,
Green Creative, and Waveform Lighting are developing LED lamps that are
compatible with a wider range of dimmer switches.
DOE also received comments that LED lamps emit unnatural blueish
light that is too bright for regular use making them an inadequate
replacement for incandescent and halogen lamps which emit light that
mimics natural sunlight more closely. However, LED lamps are sold in a
variety of color temperatures including the traditional 2700 K warm
white CCT typically found in incandescent lamps. DOE's review of the
market, including offerings at major retailers, indicates that these
LED lamps are widely available on the market.
DOE received comments that LED lamps should be labeled with their
peak luminance and this metric should be regulated. Commenters stated
that the correct metric for measuring LED visible radiation is
luminance (candela per square meter). Commenters further stated that
the metric of lumens per watts can eliminate innovation with
ultraviolet (``UV'') and infrared (``IR'') wavelengths that are used
for color rendering and health benefits. Regarding labeling, the
Federal Trade Commission specifies labeling requirements for products
including GSLs (see 16 CFR 305.5(c)). As noted in section IV.A.4, this
rulemaking uses lumens per watt as the metric to measure efficiency of
GSLs. Lumens do include the measure of candela as they are the luminous
flux emitted within a unit solid angle (one steradian) by a point
source having a uniform luminous intensity of one candela.\31\
Additionally, lumens are the measure by which lamp manufacturers
specify light output on lamp specification sheets.
---------------------------------------------------------------------------
\31\ Illuminating Engineering Society, ``Lumens.'' Available at
www.ies.org/definitions/lumen/.
---------------------------------------------------------------------------
DOE also received comments that the owner's manuals for garage door
openers state that they are designed for incandescent lamps and LED
lamps can cause interference with the remote door openers. DOE reviewed
the websites of manufacturers of the garage door openers mentioned in
these comments. The websites cite universal LED lamps that can be used
with garage door openers and would not cause interference. Further,
Lighting Supply, a distributor of lamps for garages, states on its
website that interference is primarily an issue with LED lamps from
unknown manufacturers as most known brands are certified by the Federal
Communications Commission, which requires lamps to have shielding
within them to mitigate any radio frequency interference.
Additionally, DOE received comments that the use of LEDs in vehicle
lights makes these lights bright and strenuous to eyes, creating
hazardous driving conditions. In the analysis for the January 2017
Definition Final Rules, DOE determined that certain voltages and/or
base types are typical for specialty lighting applications and excluded
them from the GSL definition. 82 FR 7267, 7306, 7310. Typical specialty
lighting applications include lamps used in vehicles.
Finally, DOE received comments that LED streetlights are too bright
and when they degrade, the lights turn purple, flash on and off, and
eventually burn out after a couple of years. DOE also received comments
that LED lamps contribute to light pollution in the night sky. In
response to similar comments received, in the May 2022 Backstop Final
Rule DOE noted that the GSL definition excludes lamps with lumens
greater than 3,300 and stated that streetlamps and lighting for
construction applications are generally 5,000 lumens or greater. 87 FR
27439, 27457. Further, DOE's research of street lighting products shows
that most products are sold as complete fixtures rather than as
individual lamps and, therefore, would not fall within the GSL
definition. As such, the lamps relevant to these comments are generally
not covered as GSLs and therefore, not within the scope of the
rulemaking.
Based on the above assessments, DOE does not find that there are
issues with the lamp attributes of GSL LED lamps and continues to
consider LED lamp technology as a means for improving the energy
efficiency of GSLs (see section IV.C of this document).
c. Application
DOE received comments that LED lamps are too large to replace
incandescent lamps in preexisting fixtures. Some commenters provided
specifics--i.e., B10 shape, E12 base LED lamps are 4 to 4.8 inches in
length and 1.4 to 1.6 inches in width whereas their incandescent
counterparts measure 3.8 inches in length and 1.25 inches in width. DOE
reviewed several major manufacturer catalog and retailer websites and
compared the specifications of the incandescent and LED version of B10
shape, E12 base lamps and found that the difference in width ranges
from 0 to 0.05 inches and the difference in length ranges is 0.0 to 0.1
inches. DOE finds that these
[[Page 28885]]
differences in width and length are not as large as cited by the
commenters and therefore, would likely not affect the usability of
these lamps within existing fixtures. Hence, DOE does not find the size
of LED lamps to be prohibitive of being used in existing fixtures.
DOE also received comments that LED lamps are inaccurately marketed
to be used in enclosed fixtures and the comments further stated that
LED lamp components are more sensitive to overheating so they are prone
to premature failure due to the increased heat inside enclosed
fixtures. DOE reviewed the latest industry articles, journals, and
research reports on this topic. DOE's research found no evidence that
lamps specifically rated for use in an enclosed fixture are failing due
to use in an enclosed fixture; nor has it found this to be a reported
issue within the lighting industry.
DOE received comments that the CRI of LED lamps is worse than
incandescent lamps and high-CRI and red-rendering (R9) LED lamps cannot
meet the proposed standards and would eliminate innovation of better
color rendering LED lamps. DOE's analysis ensures that a range of lamp
characteristics such as lumens, CCT, and CRI are available at the
highest levels of efficacy. This includes products with high CRIs
(i.e., 90 or above). (See section IV.D.1.d of this document for more
details.)
For the concerns noted above by commentators DOE did a thorough
assessment of products and reviewed the latest industry articles,
journals, and research reports on these topics. DOE was unable to find
data or evidence showing that these concerns are being cited as
prevalent and/or significant issues in the lamp market. Based on the
assessments above, DOE does not find that there are issues with the use
and application of GSL LED lamps and therefore continues to consider
LED lamp technology as a means for improving the energy efficiency of
GSLs (see section IV.C of this document).
d. Consumer Costs and Manufacturer Impacts
DOE received comments that LED lamps are not as cost efficient
compared to incandescent and halogen lamps. Commenters stated that
incandescent lamps are 100-percent energy efficient and pay for
themselves when the outside temperature is below room temperature by
reducing the need for heat systems. Commenters also stated that due to
the cost of the LED lamps as well as the cost of upgrading to an
appropriate dimmer, the final costs end up being more than the
projected savings. Commenters stated DOE's estimate that switching to
LED lamps could save $3 billion per year equates to around $2 per month
per household, which should not be considered significant. DOE also
received comments that the best way to conserve energy is to use lights
less often regardless of lamp technology. DOE notes that May 2022
Backstop Final Rule codified a 45 lm/W requirement that incandescent
and halogen lamps are unable to meet. Therefore, incandescent and
halogen lamps were not analyzed as options available to consumers
during the analysis period for this final rule. DOE does not anticipate
that consumers will need to upgrade their dimmer under a standard
compared to the dimmers that would be used with CFLs and LED lamps
available in the no-new-standards case. With respect to the
significance of savings, DOE notes that most households own a
significant number of GSLs (the 2015 U.S. Lighting Market
Characterization report estimates an average of over 50 lamps per
household \32\). The household-level savings will be significantly
higher than the savings associated with a single purchase. For details
on consumer cost savings from these standards being adopted in this
final rule, see sections V.B.1 and V.B.3.b. of this document. DOE
agrees that energy savings can be had from a reduction in operating
hours but notes this is also the case under a standard, and DOE does
not estimate a change in operating hours under a standard. (See section
IV.H.1 of this document for discussion.)
---------------------------------------------------------------------------
\32\ Navigant Consulting, Inc. 2015 U.S. Lighting Market
Characterization. 2017. U.S. Department of Energy: Washington, DC
Report No. DOE/EE-1719. (Last accessed August 10, 2023.)
www.energy.gov/eere/ssl/downloads/2015-us-lighting-market-characterization.
---------------------------------------------------------------------------
2. Product Classes
When evaluating and establishing energy conservation standards, DOE
may establish separate standards for a group of covered products (i.e.,
establish a separate product 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 justifies a different standard. (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 January 2023 NOPR, DOE proposed product class divisions
based on lamp component location (i.e., location of ballast/driver);
capability of operating in standby mode; directionality (i.e.,
omnidirectional versus directional); and lamp length (i.e., 45 inches
or longer [``long''] or less than 45 inches [``short'']) as product
class setting factors. 88 FR 1638, 1656. In chapter 3 of the final rule
TSD, DOE discusses factors it ultimately determined were not
performance-related features that justify different standard levels;
including lamp technology, lumen package, lamp cover, dimmability, base
type, lamp spectrum, CRI, and CCT. See chapter 3 of the final rule TSD
for further discussion.
DOE received several comments on product class setting factors
including lamp cover, lamp length, tunability, and non-illumination
features. These comments are discussed in the following sections.
a. Lamp Cover
In the January 2023 NOPR, DOE considered lamp cover as a
performance-related feature that justified a different standard level
but determined that it was not such a feature (see chapter 3 of the
January 2023 NOPR TSD). NEMA stated that when visible, frosted lamps
reduce glare, although they are slightly less efficient. While max-tech
performance may be achievable with clear lamps, they represent only a
portion of the GSL market. (NEMA, No. 183 at p. 20)
In the January 2023 NOPR, DOE considered the impact of a lamp cover
(e.g., added glass, silicone coating) over the main light source, which
can reduce the lumen output of the lamp. The lamp cover adds a white
finish to these lamps, and they are sometimes referred to as frosted
lamps. By contrast, lamps without a cover are sometimes referred to as
bare or clear. In some cases, covered lamps may offer utility to
consumers as they more closely resemble traditional lighting
technologies and are frequently utilized where a lamp is visible (e.g.,
without a lamp shade). DOE examined the difference in efficacies of
lamps that have a cover versus those that do not. DOE found that while
a cover could generally decrease efficacy, it could also increase it,
such as when a phosphor coating transforms light emitted from LEDs into
visible light. DOE also determined that many LED lamps that have covers
have high efficacies. GSLs without a cover (i.e., clear, bare) are
mainly in the Integrated Omnidirectional Short product class. This
product class also has lamps with covers (i.e., frosted lamps). DOE's
analysis shows that both the frosted and
[[Page 28886]]
clear lamps in this product class can meet the max-tech EL identified
in the January 2023 GSL NOPR and in this analysis. Hence, for the
reasons provided in the January 2023 NOPR and above, DOE is not
creating a product class for covered versus bare products in this final
rule.
b. Lamp Dimensions
In the January 2023 NOPR, DOE stated it observed that pin base LED
lamp replacements with 2G11 bases and lengths close to 2 feet are less
efficacious than 2-foot linear LED lamps. To further understand this
observation on lamp length, DOE requested comments on, assuming all
other attributes are the same, how the efficacy of pin base LED lamp
replacements compares to that of linear LED lamps. 88 FR 1638, 1657.
NEMA commented that DOE should avoid assuming that pin base LED
retrofit lamps and linear LED retrofit lamps have similar luminous
efficacy because they differ in shape, size, directionality, and
operating environments. NEMA stated that pin base retrofit lamps and
linear LED retrofit lamps differ in the following ways: (1) pin base
LED lamps designed to replace legacy CFLs either do not have the same
single straight tube shape or are designed to take advantage of LED
package directionality to provide more directional illumination; (2)
pin base LED lamps must fit within a much smaller, shorter, and
narrower luminaire type and application than linear LED retrofit lamps
and are designed to direct light output either horizontally or
vertically, depending on the luminaire type and application; and (3)
typically, the thermal environment differs greatly between these
applications, resulting in different efficiency expectations. NEMA
stated that only in limited cases when the lamps have the same shape
and directionality of light output is the luminous efficacy of a pin
base LED retrofit lamp and linear LED retrofit lamp directly
comparable. (NEMA, No. 183 at p. 6)
In the January 2023 NOPR, DOE requested comment on the observed
lower pin base LED lamps with 2G11 base and close to 2-feet length
(typically used as replacements for pin base CFLs) having a lower
efficacy than linear LED lamps 2 feet in length (88 FR 1638, 1657), as
DOE expected them to achieve similar levels of efficacy due to
similarity in length. DOE appreciates NEMA's comments, which help
inform the differences between these two lamp configurations and
potential impacts on efficacy. Because they are both less than 45
inches in length, DOE groups them in the same product class (i.e.,
either the Integrated Omnidirectional Short product class or the Non-
integrated Omnidirectional Short product class) (see table IV.2 for
product class division summary). In the January 2023 NOPR and in this
final rule, DOE did not observe that the difference in efficacy between
these two lamp configurations is substantial enough to result in a loss
of the consumer utility provided by each lamp. DOE's analysis indicates
that both pin base LED lamps with a 2G11 base close to 2 feet in length
and linear LED lamps that are 2 feet can meet the max-tech ELs
considered for the Non-integrated Omnidirectional Short product class
(see section IV.D.1.d of this document). Therefore, DOE does not find
that adjustments to product class setting factors are necessary.
In the January 2023 NOPR, DOE observed that 4-foot T5 and 8-foot T8
linear LED lamps were not reaching the same efficacies as 4-foot T8
linear LED lamps. DOE tentatively concluded that this is not due to a
technical constraint due to diameter but rather lack of product
development of 4-foot T5 and 8-foot T8 linear LED lamps. DOE requested
comments and data on the impact of diameter on efficacy for linear LED
lamps. 88 FR 1638, 1656-1657.
Westinghouse stated that for linear fluorescent tubes a smaller
diameter means higher efficacy, for LED lamps it is the inverse as a
smaller diameter means less space for electronics and thermal
management. (Westinghouse, Public Meeting Transcript, No. 27 at pp. 42-
43) DOE appreciates Westinghouse's comments, which help inform the
impact of diameter on linear LED lamps. Linear LED lamps of both T5 and
T8 diameters are grouped in the Integrated Omnidirectional Long product
class (see table IV.2 for product class division summary) and both can
meet the max-tech ELs. Hence, adjustments to product class setting
factors are not necessary.
c. Non-Integrated Standby Operation
NEMA commented that none of DOE's proposed product classes included
LED smart and connected lamps that are also non-integrated. To account
for these products, NEMA recommended the following product classes: (1)
Non-integrated Omnidirectional short (with standby) capturing the low
voltage LED retrofit lamps less than 45 inches in length, (2) Non-
integrated Omnidirectional long (with standby) capturing lamps
operating on non-building mains 45 inches or more in length, and (3)
Non-integrated Directional (with standby) capturing LED lamps designed
to replace legacy CFLs. NEMA specified that all of these lamps would
require operating on a remote driver or legacy fluorescent or high-
intensity discharge (``HID'') ballast. (NEMA, No. 183 at p. 6)
In the January 2023 NOPR, DOE proposed only standby mode operation
as a product class setting factor for integrated lamps. At the time of
the January 2023 NOPR analysis, DOE did not observe non-integrated GSLs
with standby mode power consumption. 88 FR 1638, 1657, 1667. Based on a
review of the market for this final rule analysis, DOE identified non-
integrated LED lamps that have standby mode power operation capability
allowing the lamp to have dimming controls. For example, DOE identified
a linear LED lamp that is designed to operate on fluorescent lamp
ballast (i.e., Type B), to have additional circuitry contained within
the lamp that interprets the signal from the ballast and changes the
light output accordingly. Hence, because the standby mode operation of
this lamp is not solely external to the lamp (i.e., in the ballast or
driver) but also part of the lamp itself, DOE considers it as having
standby mode operation capability and therefore standby mode power
consumption.
Because the market for these non-integrated LED lamps that have
standby mode power operation capability is rapidly developing, DOE is
unable to make a clear and accurate determination regarding the
consumer utility, how various technology options would affect the
efficiency, and maximum technologically feasible efficiency of these
lamps, which prevents DOE from determining whether a specific standard
for these lamps would be economically justified at this time.
Accordingly, DOE did not consider amended standards for these lamps in
this rulemaking. DOE may evaluate amended standards for these products
in a future rulemaking. DOE notes that these lamps are still subject to
the 45 lm/W sales prohibition at 10 CFR 430.32(dd). The criteria that
non-integrated GSLs with standby mode power operation capability must
meet to be exempt from amended standards adopted in this final rule is
specified in section IV.A.3 of this document.
d. Tunability
NEMA and Lutron stated that DOE incorrectly assumed that all lamps
capable of operating in standby mode are fundamentally the same as
lamps without standby functionality but with the addition of wireless
communication components. NEMA and Lutron stated that because of this
assumption, DOE did not create product classes for tunable white lamps
and color tunable lamps. (NEMA, No. 183 at p. 8; Lutron,
[[Page 28887]]
No. 182 at p. 2) NEMA stated that including these additional categories
will allow for a thorough analysis of lamps capable of operating in
standby mode by the next rulemaking in 2028--which may result in the
need for separate categories, different efficacy curves, and amended
test procedures--and will allow DOE to set efficacy levels without
restricting innovation in the coming years. (NEMA, No. 183 at pp. 13-
14) Lutron stated that the product classes and scaling approach for
standby mode proposed in the January 2023 NOPR would limit innovation
and potentially regulate out of the market many lamps capable of
dynamic color tuning and dynamic spectral tuning. (Lutron, No. 182 at
pp. 2-3)
NEMA and Lutron stated that for these lamps DOE should set separate
product classes and adopt ELs proposed in the January 2023 NOPR as
follows: (1) Tunable white integrated omnidirectional lamps capable of
operating in standby mode subject to EL 6; (2) Tunable white integrated
directional lamps capable of operating in standby mode subject to EL 4;
(3) Full-color tunable integrated omnidirectional lamps capable of
operating in standby mode subject to EL 4; and (4) Full-color tunable
integrated directional lamps capable of operating in standby mode
subject to EL 4. (NEMA, No. 183 at p. 8; Lutron, No. 182 at p. 3)
NEMA and Lutron defined ``tunable white'' as a feature allowing the
end user to adjust the light output to create different colors of white
light; in which tuning must be capable of altering the color appearance
along the black body curve from two or more LED colors, where each LED
color is inside one of those defined by ANSI-defined (ANSI C78.377)
white correlated color temperature ranges (i.e., between 2700 K and
6500 K) inside of the seven-step MacAdam ellipse or the ANSI
quadrangles. NEMA and Lutron defined ``full color tunable'' as a
feature allowing the end user to adjust the light output to create
white or colored white; in which tuning must include white light that
can alter the color appearance along the black body curve by
dynamically tuning color from three of more colors of LEDs where at
least one LED extends to colors beyond the ANSI-defined (ANSI C78.377)
white correlated color temperature ranges (i.e., between 2700 K and
6500 K) outside of the seven-step MacAdam ellipse or the ANSI
quadrangles. (NEMA, No. 183 at p. 14; Lutron, No. 182 at p. 2)
Lutron and NEMA provided comments on the impact on efficacy due to
the tunable features of these lamps. Lutron commented that tunable
lamps are less efficacious than a single-chromaticity lamp \33\ because
tunable lamps require: (1) effective LED color mixing on a small light-
emitting surface, which leads to higher LED current densities; (2) a
control system to vary intensity of each LED color; and (3) optics to
mix LED colors into the appropriate beam pattern. Lutron estimated a
10-percent efficacy loss independent from the power consumed in standby
mode. (Lutron, No. 182 at p. 6)
---------------------------------------------------------------------------
\33\ Commenters use ``static'' white lamps and single
chromaticity lamps interchangeably and DOE assumes these terms
identify lamps that are non-tunable.
---------------------------------------------------------------------------
Lutron stated it is possible for static white lamps to meet the
proposed EL requirement by employing highly efficacious white LEDs in
efficient configurations. Lutron stated, in contrast, tunable white
lamps employ a second color LED close to the blackbody locus at a
different CCT and color tunable lamps employ three or more colors of
LEDs where at least one LED is far from the blackbody locus. Lutron
stated that these additional color LEDs are less efficacious because
the human eye is insensitive to light radiated from LEDs at colors far
from green (555 nm), such as red (620 nm) or blue (470 nm). (Lutron,
No. 182 at pp. 4-5, 6) NEMA provided the example that having the
functionality of selecting ``warm white'' (i.e., a setting
corresponding to nominally 2700 K on the blackbody locus) may require
both white LEDs and lower efficacy LEDs, such as red and blue, to
achieve the precise color point. NEMA stated primary color LEDs are
placed farther out in the color space, expanding the gamut area, which
represents the number of colors, including shades of white, the lamp
can produce. NEMA stated that the result is a loss in efficacy compared
to a single chromaticity lamp containing only 2700 K LEDs and that this
loss is in addition to the efficacy reduction caused by the lamp's
standby power functionality. (NEMA, No. 183 at p. 10)
Lutron also stated that, compared to tunable white lamps, full-
color-tunable lamps introduce at least one color far from the blackbody
locus to achieve the desired utility, and because the human eye is less
sensitive to wavelengths far from green, there is an impact on efficacy
beyond the impacts described for white tunable lamps. As an example,
Lutron stated that 1400 K or lower, which is a setting that may provide
more consumer comfort, can't be achieved without a higher intensity of
red LEDs. Lutron commented that greater control of color variation and
accuracy, color quality, beam angle, and other aspects can require
higher-end LEDs, more sophisticated designs, and innovative
constructions that prevent the lamps from achieving high efficacy
levels. (Lutron, No. 182 at p. 5-6)
Lutron and NEMA also provided comments on the utility of tunable
lamps. Lutron and NEMA stated that tunable white lamps and color
tunable lamps are a growing sector of the market. (Lutron, No. 182 at
pp. 7-8; NEMA, No. 183 at p. 10) Lutron stated that tunable lamps offer
capabilities such as dimming, scene selection, geo-fencing, event
scheduling, programmability and demand response to further achieve
energy savings. (Lutron, No. 182 at p. 7) Lutron and NEMA stated that
sectors such as retail, hospitality, restaurants, bars, entertainment,
museums, theme parks, and architectural use lighting with deep dimming,
warm dimming, CCT control, and color saturation to create unique
consumer experiences. (Lutron, No. 182 at p. 7; NEMA, No. 183 at p. 10)
Lutron cited DOE's web page on ``Understanding LED Color-Tunable
Products'' as noting that offices using white light during work hours
could shift to evening get-togethers with saturated mood-setting colors
without using additional color lamps that are exempted from DOE
standards and therefore may not be efficacious. (Lutron, No. 182 at pp.
6-7) Lutron stated that one of the key benefits of all color tunable
lamps is the ability to control colors and match chromaticity and also
manipulate light and color intensities to affect moods and create
effects. Lutron commented that tunable white lamps offer users multiple
similar benefits as color tunable lamps, such as simulating daylight or
candlelight to set a mood without the use of additional lighting or to
match existing light to provide light consistency in a space. Lutron
also stated that the ability to change the intensity and color of white
light has been incorporated into green building and healthy building
standards, particularly the WELL standard, operated by the
International WELL Building Institute. (Lutron, No. 182 at p. 7)
NEMA also raised concerns regarding the DOE test procedure and its
applicability for color tunable GSLs. Specifically, NEMA stated that
DOE's test procedure for GSLs requires testing at maximum input power
at which setting a color tunable lamp may not be operating as a GSL,
but as a colored lamp. NEMA further noted that a lamp may have one mode
to maximize light output and another to maximize color
[[Page 28888]]
rendering, and that the input power is likely to differ among modes.
(NEMA, No. 183 at pp. 21-22) (See further discussion of these comments
in section IV.A.5 of this document).
Because the market for these tunable lamps is rapidly developing,
DOE is unable to make a clear and accurate determination regarding the
consumer utility, how various technology options would affect the
efficiency, and maximum technologically feasible efficiency of these
lamps, which prevents DOE from determining whether a specific standard
for these lamps would be economically justified at this time.
Accordingly, DOE did not consider amended standards for these lamps in
this rulemaking. DOE may evaluate amended standards for these products
in a future rulemaking. DOE notes that these lamps are still subject to
the 45 lm/W sales prohibition at 10 CFR 430.32(dd). The criteria that
tunable white GSLs and color tunable GSLs must meet to be exempt from
amended standards adopted in this final rule is specified in section
IV.A.3 of this document.
e. Non-Illumination Features
NEMA stated that there are multi-functional lighting products
without wireless communication components that include power-consuming
non-lighting features when the product is not generating light. NEMA
gave examples of outdoor lamps with motion sensors for home security,
outdoor dusk-to-dawn lamps with ambient light sensors, and indoor lamps
with an internal battery backup to be used as a flashlight for use
during a power outage. NEMA stated that the January 2023 NOPR did not
accommodate these products and elimination of their security/safety
features would be a mistake and impede further innovation and
development for future generations of similar products. NEMA stated
that for these lamps, DOE's approach of determining ELs for lamps with
standby mode power by adding 0.5 W to ELs for similar non-standby mode
lamps, assuming all else being equal, was not correct. NEMA stated that
for these lamps DOE should set separate product classes and adopt ELs
proposed in the January 2023 NOPR as follows: (1) Omnidirectional lamps
capable of operating on standby mode, incorporating energy-consuming
non-illumination feature(s) subject to EL 4 and (2) Directional lamps
capable of operating on standby mode, incorporating energy-consuming
non-illumination feature(s) subject to EL 4. (NEMA, No. 183 at pp. 13-
14)
NEMA provided comments on the impact on efficacy due to the non-
illumination features of these lamps. As an example, NEMA stated that a
lamp with a speaker has unavoidably lower efficacy than lamps with no
additional features. NEMA stated that a lamp with Bluetooth speaker
functionality would be roughly 30 percent lower in efficacy compared to
the equivalent light output single-chromaticity lamp without integrated
speakers. NEMA stated that these lamps provide desirable features for
consumers, who will often purchase and install several of the lamps in
a room. (NEMA, No. 183 at pp. 11-12) Additionally, NEMA stated that
unless a lamp offers a physical switch or an app-based method for
disabling the power from non-illumination features, the only way to
measure the lamp's luminous efficacy independent of the non-
illumination features is to disassemble the product and identify the
appropriate solder traces to cut. (NEMA, No. 183 at p. 12)
NEMA stated that many smart lamps offer additional functionality
and added consumer benefit while providing energy-saving features such
as dimming, scheduling, high end trim, and demand response via digital
programming or manual setting of these features. NEMA stated the
International Energy Agency (``IEA'') SSL Annex Task 7, notes a large
market potential for internet-connected lighting systems in the
residential sector, including illumination and non-illumination
functionality such as: on/off control; changing CCT; dimming; motion
detection; daylight sensing to trigger automated lighting changes;
temperature and humidity sensing to control heating and air
conditioning; Wi-Fi signal boosting; smoke detection; security systems
including cameras; security-initiated lighting response; integrated
audio; baby monitoring; and energy consumption monitoring. NEMA,
however, disagreed with the assumption in the IEA report that smart
lamp penetration is limited to the residential sector and cited
applications in retail and hospitals. NEMA gave the example of the
usefulness of circadian entrainment smart lamp features in nursing
homes, congregate care, and independent living facilities, etc. (NEMA,
No. 183 at pp. 9, 12-13)
The CA IOUs commented that DOE's proposal may inadvertently
restrict the development of new types of lighting products that offer
additional capabilities that consumers desire, such as light sensors,
Wi-Fi or Bluetooth, speakers, cameras, or LAN links. The CA IOUs
commented these additional features often require standby energy
consumption that is higher than would be allowed in DOE's proposed
standards and to not eliminate them recommended DOE consider different
luminous efficacy requirements for GSLs with only lighting-related
features and for combination GSLs with non-lighting-related features.
(CA IOUs, No. 167 at p. 2)
Because the market for lamps with non-illumination features (i.e.,
features that do not control light output) is rapidly developing, DOE
is unable to make a clear and accurate determination regarding the
consumer utility, how various technology options would affect the
efficiency, and maximum technologically feasible efficiency of these
lamps, which prevents DOE from determining whether a specific standard
for these lamps would be economically justified. Accordingly, DOE did
not consider amended standards for these lamps in this rulemaking. DOE
may evaluate amended standards for these products in a future
rulemaking. DOE notes that these lamps are still subject to the 45 lm/W
sales prohibition at 10 CFR 430.32(dd) The criteria that GSLs with a
non-illumination feature and standby mode power operation capability
must meet to be exempt from amended standards adopted in this final
rule is specified in section IV.A.3 of this document.
f. Product Class Summary
In summary, in this final rule analysis, DOE is considering the
same product class setting factors as those considered in the January
2023 NOPR, as shown in table IV.2. To avoid any confusion as to what
lamp types are included in these product classes and therefore subject
to the amended standards being adopted in this final rule, DOE is
adding two clarifications to the GSL standards table being codified in
the CFR by this final rule. Firstly, for all Directional product
classes, DOE is specifying in the GSL standards table in the CFR that a
directional lamp is a lamp that meets the definition of reflector lamp
as defined in 10 CFR 430.2. Secondly, for the Non-integrated
Omnidirectional Short product class, DOE is specifying in the GSL
standards table in the CFR that this product class comprises, but is
not limited to, lamps that are pin base CFLs and pin base LED lamps
designed and marketed as replacements of pin base CFLs.
[[Page 28889]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.010
3. Technology Options
In the technology assessment, DOE identifies technology options
that are feasible means of improving lamp efficacy. This assessment
provides the technical background and structure on which DOE bases its
screening and engineering analyses. To develop a list of technology
options, DOE reviewed manufacturer catalogs, recent trade publications
and technical journals, and consulted with technical experts. In the
January 2023 NOPR, DOE identified 21 technology options that would be
expected to improve GSL efficacy, as measured by the applicable DOE
test procedure. The technology options were differentiated by those
that improve the efficacy of CFLs versus those that improve the
efficacy of LED lamps. 88 FR 1638, 1657.
With regards to the technology option of improved secondary optics
for LED lamp technology, NEMA stated it is important to note that
frosted bulbs, while slightly reducing light output, mitigate glare in
LED lamp designs and in doing so provide consumer-desired utility.
(NEMA, No. 183 at p. 7) DOE reviewed the utility and efficacy of
frosted lamps when evaluating lamp cover as a potential product class
setting factor (see IV.B.2.a of this document for the detailed
discussion). Additionally, NEMA requested that DOE adopt the
standardized terminology from ANSI/IES LS-1-22 \34\ to ensure clarity
in rulemaking discussions. NEMA noted that the term ``LED chip,'' as
used in the January 2023 NOPR, is a non-standardized term with ample
room for interpretation. (NEMA, No. 183 at p. 7). DOE appreciates
NEMA's comment. In chapter 3 of the January 2023 NOPR TSD DOE had
specified that the LED die, along with its electrode contacts and any
optional additional layers, is referred to as the ``LED chip.'' This
description of the LED chip aligns with the definition of LED package
\35\ specified in ANSI/IES LS-1-22. For further clarity and consistency
with industry definitions (i.e., ANSI/IES LS-1-22), DOE has replaced
references to ``LED chip'' with ``LED package'' in this final rule
notice and TSD. Additionally, in review of the nomenclature used in the
January 2023 NOPR and TSD to describe the technology option of reduced
current density, DOE stated that the LED package is driven at lower
currents. 88 FR 1638, 1657-1658 (see chapter 3 of January 2023 NOPR
TSD). Because ANSI/IES LS-1-22 defines LED array or module \36\ as an
assembly of LED packages intended to be connected to the LED driver,
DOE finds that it is more appropriate to phrase this technology option
as the LED array or module being driven at lower currents.
---------------------------------------------------------------------------
\34\ American National Standards Institute/Illuminating
Engineering Society, ANSI/IES LS-1-22, ``Lighting Science:
Nomenclature and Definitions for Illuminating Engineering.''
Approved Nov. 2, 2021.
\35\ ANSI/IES LS-1-22 defines ``LED package'' as an assembly of
one or more light emitting diode (LED) dies that includes wire bond
or other type of electrical connections, possibly with an optical
element and thermal, mechanical, and electrical interfaces. Power
source and ANSI standardized base are not incorporated into the
device. The device cannot be connected directly to the branch
circuit. Available at www.ies.org/definitions/led-package/.
\36\ ANSI/IES LS-1-22 defines ``LED array or module'' as an
assembly of light emitting diode (LED) packages (components), or
dies on a printed circuit board or substrate, possibly with optical
elements and additional thermal, mechanical, and electrical
interfaces that are intended to connect to the load side of an LED
driver. Power source and ANSI standard base are not incorporated
into the device. The device cannot be connected directly to the
branch circuit. Available at www.ies.org/definitions/led-array-or-module/.
---------------------------------------------------------------------------
In this final rule as in the January 2023 NOPR, DOE is considering
the technology options as shown in table IV.3.
BILLING CODE 6450-01-P
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[GRAPHIC] [TIFF OMITTED] TR19AP24.011
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[GRAPHIC] [TIFF OMITTED] TR19AP24.012
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[GRAPHIC] [TIFF OMITTED] TR19AP24.013
BILLING CODE 6450-01-C
C. 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 result in the unavailability of any covered
product type with performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as products generally available in the United States at the time,
it will not be considered further.
(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 efficiency level, it will not be considered further, due to the
potential for monopolistic concerns.
10 CFR part 430, subpart C, appendix A, sections 6(b)(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.
The subsequent sections include comments from interested parties
pertinent to the screening criteria, DOE's evaluation of each
technology option against the screening analysis criteria, and whether
DOE determined that a technology option should be excluded (``screened
out'') based on the screening criteria.
1. Screened-Out Technologies
In the January 2023 NOPR, DOE proposed to screen out multi-photon
phosphors for CFLs, and quantum dots and improved emitter materials for
LED lamps based on the first criterion on technological feasibility.
DOE did not find evidence that multi-photon phosphors, quantum dots, or
improved emitter materials are being used in commercially available
products or prototypes. DOE also proposed to screen out AC LEDs based
on the second and third criteria: respectively, practicability to
manufacture, install, and service and adverse impacts on product
utility or product. The only commercially available AC LED lamps that
DOE found were G-shapes between 330 and 360 lumens or candle shapes
between 220 and 400 lumens. Therefore, it is unclear whether the
technology could be made for a wide range of products on a commercial
scale and in particular for those being considered in this document. 88
FR 1638, 1658.
NEMA stated that it agrees with DOE's proposal to screen out AC
LEDs as well as quantum dots and improved emitter materials for LED
lamps. (NEMA, No. 183 at p. 7)
In this final rule as in the January 2023 NOPR, for reasons stated
above, DOE continues to screen out the technologies of multi-photon
phosphors for CFLs and quantum dots, improved emitter materials, and AC
LEDs for LED lamps.
2. Remaining Technologies
In the January 2023 NOPR, DOE considered active thermal management
for LED lamp technology as a design option, among others. 88 FR 1638,
1658. NEMA commented that active thermal management is not typically
required or beneficial for products included in the GSL definition and
therefore should not be factored in when providing a deviation from the
GSL requirements without standby power. NEMA stated that products
outside the scope of the GSL definition, namely small size devices with
a lumen output of greater than 3,300 lumens, can be dependent upon and
benefit from active thermal management, but that this should not be
taken into consideration for this rulemaking. NEMA added that
manufacturers should not be constrained from utilizing their design
freedom to add active thermal management to a product covered by the
scope of this rule if the final product meets the requirements and
includes the full impacts of the thermal management. (NEMA, No. 183 at
pp. 7-8) DOE has not found evidence that the design option of active
thermal management is limited to lamps with lumen outputs greater than
3,300 lumens. Additionally, DOE identifies all possible technology
options and subsequently design options that manufacturers can utilize
to increase the efficacy of their lamps. DOE is not specifying the
design options manufacturers must or must not use to achieve higher
efficacies for their lamps. Therefore, in this final rule, DOE
continues to consider active thermal management as a valid design
option.
Through a review of each technology, DOE concludes that all of the
other identified technologies listed in section IV.B.3 of this document
met all five screening criteria to be examined further as design
options in DOE's final rule analysis. In summary, DOE did not screen
out the following technology options:
CFL Design Options
Highly Emissive Electrode Coatings
Higher Efficiency Lamp Fill Gas Composition
Higher Efficiency Phosphors
Glass Coatings
Cold Spot Optimization
Improved Ballast Components
Improved Ballast Circuit Design
Higher Efficiency Reflector Coatings
Change to LEDs
LED Design Options
Efficient Down Converters (with the exception of quantum dot
technologies)
Improved Package Architectures
Alternative Substrate Materials
Improved Thermal Interface Materials
[[Page 28893]]
Improved LED Device Architectures
Optimized Heat Sink Design
Active Thermal Management Systems
Improved Primary Optics
Improved Secondary Optics
Improved Driver Design
Reduced Current Density
DOE determined that these technology options are technologically
feasible because they are being used or have previously been used in
commercially available products or working prototypes. DOE also finds
that all of the remaining technology options meet the other screening
criteria (i.e., practicable to manufacture, install, and service and do
not result in adverse impacts on consumer utility, product
availability, health, or safety). For additional details, see chapter 4
of the final rule TSD.
D. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of GSLs. 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
products, DOE considers technologies and design option combinations not
eliminated by the screening analysis. For each product class, DOE
estimates the baseline cost, as well as the incremental cost for the
product at efficiency levels above the baseline. The output of the
engineering analysis is a set of cost-efficiency ``curves'' that are
used in downstream analyses (i.e., the LCC and PBP analyses and the
NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing products (in other words, based on
the range of efficiencies and efficiency level ``clusters'' that
already exist on the market). Using the design option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended
using the design option approach to interpolate to define ``gap fill''
levels (to bridge large gaps between other identified efficiency
levels) and/or to extrapolate to the ``max-tech'' level (particularly
in cases where the ``max-tech'' level exceeds the maximum efficiency
level currently available on the market).
In this rulemaking, DOE applied an efficiency-level approach. For
GSLs, ELs are determined as lumens per watt which is also referred to
as the lamp's efficacy (see section IV.A.4 of this document). DOE
derives ELs in the engineering analysis and end-user prices in the cost
analysis. DOE estimates the end-user price of GSLs directly because
reverse-engineering a lamp is impractical as the lamps are not easily
disassembled. By combining the results of the engineering analysis and
the cost analysis, DOE derives typical inputs for use in the LCC and
NIA. Section IV.D.2 of this document discusses the cost analysis (see
chapter 5 of the final rule TSD for further details).
The engineering analysis is generally based on commercially
available lamps that incorporate the design options identified in the
technology assessment and screening analysis. See chapters 3 and 4 of
the final rule TSD for further information on technology and design
options. For the January 2023 NOPR engineering analysis, DOE developed
a lamps database using data from manufacturer catalogs, ENERGY STAR
Certified Light Bulbs database,\37\ DOE's compliance certification
database,\38\ and retailer websites. DOE used performance data of lamps
from these sources in the following general order of priority: DOE's
compliance certification database, manufacturer catalog, ENERGY STAR
database, and retailer websites. In addition, DOE reviewed applicable
lamps in the CEC's Appliance Efficiency Database.\39\ 88 FR 1638, 1659.
For this final rule analysis, DOE updated this database in mid-2022
with the most recent data available from these data sources.
---------------------------------------------------------------------------
\37\ The most recent ENERGY STAR Certified Light Bulbs database
can be found at www.energystar.gov/productfinder/product/certified-light-bulbs/results (last accessed June 17, 2020).
\38\ DOE's compliance certification database can be found at
www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A*
(last accessed June 17, 2020).
\39\ The most recent CEC Appliance Efficiency Database can be
found at www.energy.ca.gov/appliances/ (last accessed June 17,
2020).
---------------------------------------------------------------------------
The methodology consists of the following steps: (1) selecting
representative product classes, (2) selecting baseline lamps, (3)
identifying more efficacious substitutes, and (4) developing efficiency
levels by directly analyzing representative product classes and then
scaling those efficiency levels to non-representative product classes.
The details of the engineering analysis are discussed in chapter 5 of
the final rule TSD.
a. Representative Product Classes
In the case where a covered product has multiple product classes,
DOE identifies and selects certain product classes as
``representative'' and concentrates its analytical effort on those
classes. DOE chooses product classes as representative primarily
because of their high market volumes and/or unique characteristics. DOE
then scales its analytical findings for those representative product
classes to other product classes that are not directly analyzed.
In the January 2023 NOPR, DOE proposed to establish eight product
classes: (1) Integrated Omnidirectional Short Standby Mode, (2)
Integrated Omnidirectional Short Non-standby Mode, (3) Integrated
Directional Standby Mode, (4) Integrated Directional Non-standby Mode,
(5) Integrated Omnidirectional Long, (6) Non-integrated Omnidirectional
Short, (7) Non-integrated Omnidirectional Long, and (8) Non-integrated
Directional. Because of the distinctive difference in design, the
Directional and Omnidirectional product classes cannot be scaled from
each other and were directly analyzed. For the same reasons, Long (45
inches or longer) and Short (shorter than 45 inches) product classes as
well as Integrated (all components within lamp) and Non-integrated
(ballast/driver external to lamp) were directly analyzed. The exception
was that DOE scaled the Non-integrated Omnidirectional Long product
class from the Integrated Omnidirectional Long product class. DOE
determined that lamps in both these product classes are same in shape
and size, and tentatively concluded the internal versus external
components would not preclude them from being scaled from or to one
another. 88 FR 1638, 1659-1660.
DOE did not receive any comments on the product classes chosen to
be representative. In this final rule, DOE continues to directly
analyze (i.e., consider as representative) the product
[[Page 28894]]
classes in the January 2023 NOPR and shown in grey shading in table
IV.4. See details in chapter 5 of this final rule TSD.
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b. Baseline Efficiency
For each product 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 class represents the characteristics of
a product 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.
Because certain products within the scope of this rulemaking have
existing standards, GSLs that fall within the same product class as
these lamps must meet the existing standard in order to prevent
backsliding of current standards in violation of EPCA. (See 42 U.S.C.
6295(o)(1)) Specifically, the Integrated Omnidirectional Short product
class consists of MBCFLs for which there are existing DOE standards.
The other product classes do not have existing DOE standards but are
subject to the statutory backstop requirement of 45 lm/W. In the
January 2023 NOPR, DOE selected baseline lamps that are the most
common, least efficacious lamps that meet existing energy conservation
standards. Specific lamp characteristics were used to characterize the
most common lamps purchased by consumers (e.g., wattage, CCT, CRI, and
lumen output). 88 FR 1638, 1660-1661. Because incandescent and halogen
lamps cannot meet the 45 lm/W backstop requirement for GSLs, DOE did
not analyze these lamps at the baseline or at higher ELs in the January
2023 NOPR.
NEMA stated that its member companies have noted for years that
DOE's analyses do not account for the ongoing importation of non-
compliant outlawed lamps that NEMA members will not manufacture. NEMA
commented that, by its estimation, there are hundreds of GSL
manufacturers globally who do not follow DOE regulations and instead
circumvent legal challenges by closing and reopening their businesses
under a variety of names. NEMA stated that it would be much closer to
agreeing with DOE's baseline lamp selections if the selections
reflected the market impact of these illicit offerings. (NEMA, No. 183
at p. 8)
DOE does not find that the baseline lamp characteristics identified
in the January 2023 NOPR are invalid. DOE's analyses for rulemakings
assume compliance with current applicable standards. DOE's Office of
Enforcement leads DOE's efforts to ensure manufacturers deliver
products that meet energy conservation standards.\40\ DOE also provides
information on its website on how to report on any regulation
violations (see www.energy.gov/gc/report-appliance-regulation-violation). DOE would welcome any information that NEMA may have on
potentially non-compliant manufacturers.
---------------------------------------------------------------------------
\40\ DOE, ``Office of the Assistant General Counsel for
Enforcement.'' Available at www.energy.gov/gc/office-assistant-general-counsel-enforcement.
---------------------------------------------------------------------------
In this final rule, DOE continues to analyze the baseline lamps
identified in the January 2023 NOPR as shown in table IV.5. See chapter
5 of this final rule TSD for further details.
[[Page 28895]]
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c. More Efficacious Substitutes
In the January 2023 NOPR, DOE selected more-efficacious
replacements for the baseline lamps considered within each
representative product class. DOE considered only technologies that met
all five criteria in the screening analysis. These selections were made
such that the more efficacious substitute lamp saved energy and had
light output within 10 percent of the baseline lamp's light output,
when possible. DOE also sought to keep characteristics of substitute
lamps, such as CCT, CRI, and lifetime, as similar as possible to the
baseline lamps. DOE selected more efficacious substitutes with the same
base type as the baseline lamp since replacing a lamp with a lamp of a
different base type would potentially require a fixture or socket
change and thus is considered an unlikely replacement. In identifying
the more efficacious substitutes, DOE utilized the lamps database of
commercially available GSLs it developed for this analysis (see section
IV.D.1 of this document). 88 FR 1638, 1662. As noted, non-integrated
lamps are operated on an external ballast or driver. Hence for the Non-
integrated Omnidirectional Short product class, DOE compiled catalog
data of non-integrated CFL ballasts in order to estimate the system
power ratings and initial lumen outputs of the representative lamp-and-
ballast systems in this class. A lamp-and-ballast system input power
depends on the total lamp arc power operated by the ballast and the
ballast's efficiency, or BLE. 88 FR 1638, 1664.
DOE received comments regarding the Non-integrated Omnidirectional
Short product class. Westinghouse stated that the G24q base lamp
identified for the Non-integrated Omnidirectional Short product class
is likely not omnidirectional and therefore, may not be the best lamp
to analyze. Westinghouse stated that LED lamps designed to replace pin
base CFLs are not actually omnidirectional but directional lamps
designed to be used in specific luminaires based on the direction the
consumer desires light to flow, and therefore, possibly not the right
lamp type to use. (Westinghouse, Public Meeting Transcript, No. 27 at
p. 54)
In DOE's analysis of the LED replacements for pin base CFLs, DOE
reviewed marketing information and lamp specification sheets and spoke
to manufacturers' product support. Based on this review, it is clear
that the more efficacious LED lamps identified for the Non-integrated
Omnidirectional Short product class are designed and marketed to be
replacements for pin base CFLs. These LED lamps have shapes and base
types designed to fit in existing fixtures that employ pin base CFLs.
Additionally, as noted in the January 2023 NOPR, DOE learned that
because the LED lamp replacements for pin base CFLs identified are
designed to emit light in one direction, they emit fewer lumens than
their CFL counterparts which are designed to emit light in all
directions (i.e., omnidirectional). Therefore, in a fixture the 26 W
CFL and its equivalent LED lamp emit similar lumen outputs, as some of
the CFL omnidirectional light is lost within the fixture. 88 FR 1638,
1663. Hence, DOE groups pin base CFLs and their replacement pin base
LED lamps in the Non-integrated Omnidirectional Short product class. To
minimize any confusion, in the table that will codify in the CFR
standards adopted in this final rule, DOE is specifying that the Non-
integrated Omnidirectional Short product class includes pin base LED
lamps designed and marketed to replace pin base CFLs (see section
IV.B.2.f of this document).
In this final rule, DOE maintains the more efficacious substitutes
selected in the January 2023 NOPR as shown in table IV.6 through table
IV.10. (In these tables the A-value is a variable in the equation form
(a curve) that specifies the minimum efficacy standard for GSLs. The A-
value specifies the height of the equation form and thereby indicates
the level of efficacy (see section IV.D.1.d of this document)). DOE
also continues to use the methodology used in the January 2023 NOPR to
calculate the lamp-and-ballast system input power of the more
efficacious substitutes in Non-integrated Omnidirectional Short product
class. See chapter 5 of this final rule TSD for further details.
BILLING CODE 6450-01-P
[[Page 28896]]
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[GRAPHIC] [TIFF OMITTED] TR19AP24.017
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BILLING CODE 6450-01-C
d. Higher Efficiency Levels
As part of DOE's analysis, the maximum available efficiency level
is the highest efficiency unit currently available on the market. DOE
also defines a ``max-tech'' efficiency level to represent the maximum
possible efficiency for a given product.
In the January 2023 NOPR, using the more efficacious substitutes
identified, DOE developed ELs for each representative product class
based on the consideration of several factors, including: (1) the
design options associated with the specific lamps being studied (e.g.,
grades of phosphor for CFLs, improved package architecture for LED
lamps); (2) the ability of lamps across the applicable lumen range to
comply with the standard level of a given product class; and (3) the
max-tech level. Additionally, in the January 2023 NOPR, using the lamps
database of commercially available GSLs, DOE conducted regression
analyses to identify the equation form that best fits the GSL data. DOE
determined a sigmoid equation is the best fit equation form to capture
the relationship between wattage and lumens across all ranges for GSLs.
The equation determines the minimum efficacy based on the measured
lumen output of the lamp. The A-value in the equations is a value that
can be changed to move the equation curve up or down and thereby change
the minimum required efficacy. 88 FR 1638, 1665. DOE did not receive
comments on the equation form used to set ELs in the January 2023 NOPR.
In this final rule, DOE is continuing to use the same equation form as
it is shown in table IV.11.
[GRAPHIC] [TIFF OMITTED] TR19AP24.021
[[Page 28898]]
DOE received comments on higher efficiency levels considered in the
January 2023 NOPR that are detailed in the following sections.
Max-Tech
ASAP et al. stated DOE should reevaluate max-tech ELs presented in
the January 2023 NOPR because DOE's analysis was based on lamp models
available in June 2020 and lamps with higher efficacies appear to be
currently available. Specifically, ASAP et al. stated that ENERGY STAR
listed a 5.9 W, 800 lumen integrated omnidirectional short lamp with an
efficacy of 135.6 lm/W while DOE had presented the max-tech lamp at
124.6 lm/W for the same lamp type at the same lumens. ASAP et al. and
NYSERDA stated that integrated omnidirectional short lamps available in
Europe have efficacies as high as 200 lm/W. (ASAP et al., No. 174 at p.
2; NYSERDA, No. 166 at pp. 1-2)
CLASP also expressed concern that the LED lamp data on which DOE
based its analysis is from mid-2020 and therefore, does not reflect
products on the market today. CLASP stated that as a result, DOE's
proposal uses efficacy levels that are too low and prices for LED lamps
that are too high. CLASP commented that LED products are continuing to
improve by around 5 percent per annum as projected by DOE's own SSL R&D
program, and therefore, using older lamps means ELs are about 15
percent too low. (CLASP, No. 177 at p. 1) NYSERDA commented that the
proposed max-tech levels are significantly below the technical
potential across LED products and, as shown by DOE's Solid State
Lighting research efforts, LEDs have the potential to reach 200 lm/W or
higher. (NYSERDA, No. 166 at pp. 1-2)
In the January 2023 NOPR, DOE developed a lamps database using data
from manufacturer catalogs, ENERGY STAR Certified Light Bulbs database,
DOE's compliance certification database, and retailer websites. In
addition, DOE reviewed applicable lamps in the CEC's Appliance
Efficiency Database. This data was collected in June 2020 (see
footnoted citations in January 2023 NOPR). 88 FR 1638, 1659. For this
final rule analysis, DOE updated the lamps database with data collected
mid-2022. Using this updated data, DOE reviewed the max-tech levels and
determined that no changes are necessary from what was proposed in the
January 2023 NOPR.
Regarding the 5.9 W integrated omnidirectional short lamp at 135.6
lm/W cited by ASAP et al., this lamp has a CRI in the 90s. As stated in
section IV.D.1.b of this document, DOE's analysis ensures that the
baseline lamp just meet standards and has characteristics similar to
the most common lamps purchased by consumers in the respective product
classes (e.g., wattage, CCT, CRI, and lumen output). Because the
baseline lamp for the Integrated Omnidirectional Short product class
has a CRI in the 80s, DOE did not consider lamps with CRIs in the 90s
as appropriate substitutes. Hence, DOE did not identify the 5.9 W lamp
at 135.6 lm/W as a more efficacious substitute representative of an EL.
(See table IV.5 and January 2023 NOPR (88 FR 1638, 1661)). Regarding
projections of LED efficacy increases by DOE's SSL R&D, as noted in
section IV.C of this document, design options used to establish ELs
must meet five screen criteria, including practicability to
manufacture, install, and service. Hence, DOE bases its analysis on
lamps that use design options that are incorporated in commercially
available products or working prototypes, and not projected efficacies.
NEMA stated the max-tech level proposed in the January 2023 NOPR
for linear LED lamps should not be considered. NEMA stated that linear
LED lamps are designed to provide the same illumination levels as
fluorescent tubes but with lower lumens by utilizing internal luminaire
optics to redirect light where it is needed while fluorescent tubes
emit light in all directions. NEMA added that because LED tubes are
intended to produce the same delivered lumen output to a target area,
considering more efficacious substitute lamps that provide lower lumens
may hinder manufacturers from producing lamps able to provide the
appropriate amount of light to meet the max-tech performance standard
of EL 7. (NEMA, No. 183 at p. 20)
The Integrated Omnidirectional Long product class consists of
linear tubular LED lamps 45 inches or longer that are Type B or Type A/
B (i.e., have an internal driver and connect to the main line voltage).
In the January 2023 NOPR for this product class, DOE identified a 15 W
4-foot T8 linear LED lamp with a medium bipin base, 1,800 lumens,
lifetime of 50,000 hours, CRI of 80, and CCT of 4,000 K as the baseline
lamp (see table IV.5). 88 FR 1638, 1661. In its engineering analysis,
DOE identifies more efficacious substitutes that save energy, have
light output within 10 percent of baseline lamp, and have
characteristics similar to this baseline lamp. Lumen output is kept
constant within the 10 percent tolerance to ensure consumer utility of
more efficacious substitutes. Hence for the Integrated Omnidirectional
Long product class lumen outputs of more efficacious substitutes at
each EL including at the max-tech level were within 10 percent of the
baseline lamp lumens (see table IV.7). 88 FR 1638, 1663. Further, as
noted in section IV.D.1, in the January 2023 NOPR, and in this final
rule, DOE used a database of commercially available lamps to identify
baseline lamps and more efficacious substitutes. Hence, the max-tech
level for this product class is based on commercially available linear
LED lamps and therefore is technologically feasible.
Quality Metrics
The CEC acknowledged that DOE stated in the January 2023 NOPR that
there is value in ensuring a range of lamp characteristics such as
lumens, CRI, and CCT are available at max-tech levels. The CEC stated,
however, that when evaluating technological feasibility of max-tech or
minimum lumen-per-watt requirements DOE should, in addition to raising
minimum efficacy levels, consider other lamp quality characteristics
such as color fidelity, noise, flicker, and rated life. (CEC, No. 176
at pp. 2-3) The CEC commented that California has shown that high-
efficacy, high-quality LEDs are both economically justified and
technologically feasible, and DOE should establish minimum energy
conservation standards that encourage innovation and provide consumers
with the best options for general illumination. The CEC added that such
standards will ensure a robust lamp market that saves consumers money,
reduce the unnecessary consumption of energy, and address climate
change by avoiding the release of unnecessary GHGs. (CEC, No. 176 at p.
5)
Further, the CEC stated its concern that not considering quality
characteristics in the development of efficiency levels would result in
a race to the bottom (e.g., a driverless lamp that achieves a slightly
higher lm/W by avoiding AC to DC-conversion at the cost of flickering).
The CEC stated that inclusion of quality characteristics in DOE's
analysis would ensure that lamps with higher quality emitters and
drivers are not excluded from or disadvantaged in the U.S. market.
Further, the CEC commented that DOE's consideration of quality
characteristics would provide the opportunity for California to align
its existing and future minimum efficiency levels for GSLs more closely
with Federal levels. The CEC stated that it is not recommending the
creation of a separate product class for high-quality lighting because
a single standard that
[[Page 28899]]
recognizes quality as an essential element of max-tech would be
preferable. The CEC stated that it does, however, see establishing a
separate product class based on specific quality criteria as an
alternative for balancing quality and energy performance concerns, as
well as ensuring a compliance path for high-performing products without
lowering energy efficiency standards for baseline products. (CEC, No.
176 at pp. 2-3)
Additionally, the CEC requested that DOE consider the lumen
disadvantage of providing good color rendering, in particular of red
light. The CEC stated that lumens factor in the eye's perception of
brightness according to a particular wavelength resulting in a
disincentive to use red light in the lamp's spectrum as 1 unit of green
light is worth 10 units of red light at the same power. The CEC stated
this creates a conflict between costs, consumer preferences, and the
lm/W standard, and is particularly impactful for consumers that prefer
light at 2700 K, which has more red light. (CEC, No. 176 at pp. 2-3)
In its comment the CEC names color fidelity, noise, flicker and
rated life as parameters to consider when evaluating minimum efficiency
levels. In this analysis, DOE takes into account lamp characteristics
provided in manufacturer's lamp specification sheets. Parameters
specific to noise and flicker are not typically provided as part of
lamp specifications and therefore DOE was unable to consider them.
DOE's analysis does not focus only on whether a lamp has a higher
efficacy. As mentioned in the CEC's comment DOE confirms that a range
of lamp characteristics such as lumens, lifetime, CCT, and CRI are
available at the highest levels of ELs considered, including lamps that
offer good color rendering such as lamps with CRI in the 90s and high
lifetimes such as lamps with 50,000 hours.
Further as stated in sections IV.D.1.b and IV.D.1.d of this
document, DOE identifies baseline lamps that have characteristics
typical of the product class such as CCT, CRI, and lifetime, and
selects more efficacious substitutes that have similar characteristics.
Hence DOE ensures that characteristics common for lamps on the market
are not sacrificed at higher ELs. A lamp able to both achieve a set of
characteristics common in the market and a higher efficacy is
indicative of a product that meets consumer preferences as well as
energy efficiency. Hence, DOE finds that DOE's analysis accounts for
quality of lamps.
Anti-Backsliding Provision
In the January 2023 NOPR, because the Integrated Omnidirectional
Short product class consists of MBCFLs which have existing standards,
DOE assessed whether the initial ELs are equal to or more stringent
than the existing standards (i.e., that backsliding would not occur if
the proposed ELs were adopted) and ensured that the proposed ELs did
not result in less stringent standards than existing ones in violation
of EPCA's anti-backsliding provision. DOE determined that for products
with lumens less than 424, the initial EL 1 equation would result in an
efficacy requirement less than the 45 lm/W MBCFL standard. Similarly,
for products with lumens less than 371, the initial EL 2 equation would
result in an efficacy requirement less than the 45 lm/W MBCFL standard.
Hence, DOE proposed at EL 1 and EL 2 products with respectively, lumens
less than 424 and lumens less than 371 must meet a minimum efficacy
requirement of 45 lm/W and for all other lumen ranges meet the minimum
efficacy requirement based on the equation line of EL 1 or EL 2, as
applicable. 88 FR 1638, 1655-1656. DOE did not propose lumen ranges at
which the minimum efficacy requirement must be the 45 lm/W standard and
not the equation line for any other product classes.
Westinghouse stated the proposed EL 1 and EL 2 for the Non-
integrated Omnidirectional Short (no standby mode) product class may
also require minimums to prevent falling below the current standard.
Specifically, Westinghouse stated at 310 to about 400 lumens, products
fall below 45 lm/W. (Westinghouse, Public Meeting Transcript, No. 27 at
pp. 64-65)
In this final rule, DOE reviewed potential backsliding resulting
from ELs under consideration for all product classes, as all product
classes are subject to the 45 lm/W backstop requirement. Based on this
analysis, for the Integrated Omnidirectional Short (not capable of
operating on standby mode) product class, DOE identified an error in
its calculation of the lumen range that would result in an efficacy
requirement less than the 45 lm/W. DOE is correcting that error in this
final rule. For the Integrated Omnidirectional Short product class (not
capable of operating on standby mode) for products with lumens less
than 425 (rather than 424 as specified in the January 2023 NOPR), the
initial EL 1 equation would result in an efficacy requirement less than
the 45 lm/W standard. Similarly, for products with lumens less than 372
(rather than 371 as specified in the January 2023 NOPR), the initial EL
2 equation would result in an efficacy requirement less than the 45 lm/
W standard. Hence, at EL 1 and EL 2, products with, respectively,
lumens less than 425 and lumens less than 372 must meet a minimum
efficacy requirement of 45 lm/W. Regarding other lumen ranges, at EL 1,
products with lumens equal to 425 and less than or equal to 3,300 meet
the minimum efficacy requirement based on the equation line of EL 1;
and at EL 2, products with lumens equal to 372 and less than or equal
to 3,300 lumens meet the minimum efficacy requirement based on the
equation line of EL 2.
Further, DOE determined that for the Non-Integrated Omnidirectional
Short product class for products with lumens less than 637, the initial
EL 1 equation would result in an efficacy requirement less than the 45
lm/W standard. Similarly, for products with lumens less than 332, the
initial EL 2 equation, would result in an efficacy requirement less
than the 45 lm/W standard. Therefore, at EL 1 and EL 2 products with
respectively, lumens less than 637 and lumens less than 332 must meet a
minimum efficacy requirement of 45 lm/W. Regarding other lumen ranges,
at EL 1, products with lumens equal to 637 and less than or equal to
3300 meet the minimum efficacy requirement based on the equation line
of EL 1; and at EL 2 products with lumens equal to 332 and less than or
equal to 3,300 lumens meet the minimum efficacy requirement based on
the equation line of EL 2.
e. Scaling of Non-Representative Product Classes
In this January 2023 NOPR, DOE scaled the Non-integrated
Omnidirectional Long product class from the representative Integrated
Omnidirectional Long product class because the lamps in these product
classes are the same in shape and size, and therefore could be scaled
from or to one another. Because the linear shapes are substantively
more prevalent than the U-shape lamps, DOE compared efficacies of
linear tubular LED lamp pairs that had the same manufacturer, initial
lumen output, length, CCT, lifetime, CRI range in the 80s and differed
only in being integrated (Type B \41\) or non-integrated (Type A).
Based
[[Page 28900]]
on this analysis, DOE applied a 10.7 percent efficacy increase to the
efficacy at each EL of the Integrated Omnidirectional Long product
class to calculate the efficacies of ELs for the Non-integrated
Omnidirectional Long product class. The scaled efficacies of the ELs
were then used to calculate the corresponding A-values. 88 FR 1638,
1667. DOE received no comments on the scaling of the Non-integrated
Omnidirectional Long product class. In this final rule, DOE continues
to use the methodology and results of this approach.
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\41\ Type A lamps have an internal driver and connect to the
existing fluorescent lamp ballast; (2) Type B lamps have an internal
driver and connect to the main line voltage; and (3) Type C lamps
connect to an external, remote driver. In this analysis, DOE
considers Type A and Type C lamps as non-integrated lamps because
they require an external component to operate, whereas Type B and
Type A/B lamps are integrated lamps as they can be directly
connected to the main line voltage.
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In the January 2023 NOPR, DOE scaled standby product classes from
similar non-standby product classes. Based on test data, DOE found that
standby power consumption was 0.5 W or less for the vast majority of
lamps available. Therefore, DOE assumed a typical wattage constant for
standby mode power consumption of 0.5 W and added this wattage to the
rated wattage of the non-standby mode representative units to calculate
the expected efficacy of lamps with the addition of standby mode
functionality. DOE then used the expected efficacy of the lamps with
the addition of standby mode functionality at each efficiency level to
calculate the corresponding A-value. DOE assumed the lumens for a lamp
with the addition of standby mode functionality were the same as for
the non-standby mode representative units. 88 FR 1638, 1667.
DOE received comments on its approach of scaling standby mode
product classes. ASAP et al. stated that DOE should set a separate
standard for standby mode rather than the proposed integrated efficacy
metric that combines standby mode and active mode power. ASAP et al.
stated that a seemingly small tradeoff between active and standby mode
wattage would result in a large percent increase in annual energy
consumed due to the significantly greater number of operating hours in
standby mode compared to active mode. ASAP et al. commented that, given
DOE's estimates that 50 percent of lamps will include standby power by
the end of the analysis period, failing to incorporate standby power in
a way that captures its contribution to total energy use could have
significant implications for national energy consumption associated
with GSLs. ASAP et al. stated that if DOE decides not to set a separate
standby standard, it should use a standby value of 0.2 W in setting the
efficacy levels for lamps with standby power. ASAP et al. stated that,
in the January 2023 NOPR, DOE stated that it used 0.2 W in the
calculation of lamp unit energy consumption for all lamps with standby
power because California requires state-regulated LED lamps to have
standby power less than 0.2 W and it is likely that manufacturers sell
the same lamp model across the United States. ASAP et al. stated that,
when determining the standards for products with standby power, DOE
instead used 0.5 W as a conservative estimate of standby power. ASAP et
al. further stated that, while it acknowledges DOE performed standby
mode power testing, there are also nearly 2,400 models of GSLs in
California's compliance database meeting the 0.2 W standby power
minimum. (ASAP et al., No. 174 at pp. 3-5) The CEC also recommended
that DOE set a separate standard limiting standby mode power
consumption to 0.2 W in alignment with California's standards, rather
than a power that varies with a lamp's lumen output. The CEC provided
the example that based on DOE's current proposal for integrated
omnidirectional short lamps, the standby power is about 0.5 W for 800
lumen lamps and would be 1.9 W for 3,300 lumen lamps. It noted that
over 700 connected lamp models certified to the CEC database meet the
0.2 W standby mode power consumption requirement. (CEC, No. 176 at p.
4)
In the January 2023 NOPR, DOE tentatively determined that an
integrated metric for active mode and standby mode was the most
appropriate approach for establishing ELs for standby mode product
classes. Hence, in the January 2023 NOPR, for GSLs with standby mode
functionality, the energy efficiency standards set an assumed power
consumption attributable to standby mode. It is possible for a lamp
with standby mode power consumption greater than the assumed value to
comply with the applicable energy efficiency standard, but only if the
decreased efficiency of standby mode was offset by an increased
efficiency in active mode. This ability for manufacturers to trade off
efficiency between active mode efficiency and standby mode efficiency
is a function of integrating the efficiencies into a single standard
and is consistent with EPCA. EPCA directs DOE to incorporate, if
feasible, standby mode and active mode into a single standard. (42
U.S.C. 6295(gg)(3)(A)) The integration of efficacies of multiple modes
into a single standard allows for this type of trade-off. The combined
energy consumption of a GSL in active mode and standby mode must result
in an efficiency that is equal to or less than the applicable standard.
88 FR 1639, 1667.
Because an integrated metric provides flexibility in lamp design
and a balance of active mode and standby mode efficiency in a lamp, DOE
continues to use this approach in this final rule for determining the
ELs for standby mode product classes. Regarding the use of 0.2 W
instead of 0.5 W, as stated in the January 2023 NOPR, DOE found that
standby power consumption was 0.5 W or less for the vast majority of
lamps available. 88 FR 1638, 1667. (See appendix 5A of the final rule
TSD for more information on the test results.) The purpose of the
energy use analysis is to estimate representative values of actual
energy consumption. The significant number of lamps available that
consume 0.2 W or less in standby power and the requirement that lamps
with standby power sold in California (a significant fraction of the
GSL market) consume less than 0.2 W continues to suggest that 0.2 W is
a reasonable estimate of representative standby energy consumption (see
section IV.E of this document for further details on the energy use
analysis). In this final rule, DOE is continuing to take a conservative
approach because this is still a developing market and using 0.5 W as
it did in the January 2023 NOPR to scale the ELs for standby mode
product classes from the ELs of similar non-standby mode power classes.
f. Summary of All Efficacy Levels
Table IV.12 displays the efficacy requirements for each level
analyzed by product class. The non-standby and standby Integrated
Omnidirectional Short and Non-Integrated Omnidirectional product
classes EL 1 and EL 2 have different requirements for lower and higher
lumens. This is to ensure that lamps in the Integrated Omnidirectional
Short product classes already subject to an existing standard are not
subject to a less stringent standard (i.e., that backsliding in
violation of 42 U.S.C. 6295(o)(1) is not occurring) (see section
IV.D.1.d of this document for further information). The representative
product classes are shown in grey, and all others are scaled product
classes. (Note: In the January 2023 NOPR, for the Integrated
Omnidirectional Long product class DOE had decided to lower the A-value
of EL 6 (max tech level) from 74.1 to 71.7. 88 FR 1638, 1666. However,
in table VI.15, ``Proposed Efficacy Levels of GSLs'' and table VII.30,
``Proposed Amended Energy Conservation Standards for GSLs'' in the
January 2023 NOPR, the A-value appeared as 74.1 instead of 71.7. 88 FR
1638, 1668, 1708. This has been corrected in the table below and all
relevant tables in this final rule.)
BILLING CODE 6450-01-P
[[Page 28901]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.022
[[Page 28902]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.023
BILLING CODE 6450-01-C
2. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, the availability and timeliness of purchasing the GSLs on the
market. The cost approaches are summarized as follows 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.
Catalog teardowns: In lieu of physically deconstructing a
product, DOE identifies each component using parts diagrams (available
from manufacturer websites or appliance repair websites, for example)
to develop the bill of materials for the product.
Price surveys: If neither a physical nor catalog teardown
is feasible (for example, for tightly integrated products such as
fluorescent lamps, which are infeasible to disassemble and for which
parts diagrams are unavailable) or cost-prohibitive and otherwise
impractical (e.g. large commercial boilers), DOE conducts price surveys
using publicly available pricing data published on major online
retailer websites and/or by soliciting prices from distributors and
other commercial channels.
In the present case, DOE conducted the analysis using a price
survey approach. Typically, DOE develops manufacturing selling prices
(``MSPs'') for covered products and applies markups to create end-user
prices to use as inputs to the LCC analysis and NIA. Because GSLs are
difficult to reverse-engineer (i.e., not easily disassembled), DOE
directly derives end-user prices for the lamps covered in this
rulemaking. The end-user price refers to the product price a consumer
pays before tax and installation. Because non-integrated CFLs operate
with a ballast in practice, DOE also developed prices for ballasts that
operate those lamps.
In the January 2023 NOPR, DOE reviewed and used publicly available
retail prices to develop end-user prices for GSLs. DOE observed a range
of end-user prices paid for a lamp, depending on the distribution
channel through which the lamp was purchased. DOE identified the
following four main distribution channels: Small Consumer-Based
Distributors (i.e., internet
[[Page 28903]]
retailers); Large Consumer-Based Distributors: (i.e., home centers,
mass merchants, and hardware stores); Electrical Distributors; and
State Procurement. For each distribution channel, DOE calculated an
aggregate price for the representative lamp unit at each EL using the
average prices for the representative lamp unit and similar lamp
models. DOE ensured there was sufficient data to determine average
prices and employed the interquartile range (IQR) calculation, a common
statistical rule used to identify outliers in a dataset. When
sufficient data were not available at a specific distribution channel
to develop a representative unit price at an EL, DOE extrapolated
pricing from lamps in the product class as similar as possible to the
representative unit and with available pricing data. DOE employed price
trends observed from the larger dataset of GSL prices as well as
scaling factors. Because the lamps included in the calculation were
equivalent to the representative lamp unit in terms of performance and
utility (i.e., had similar wattage, CCT, shape, base type, CRI), DOE
considered the pricing of these lamps to be representative of the
technology of the EL. DOE developed average end-user prices for the
representative lamp units sold in each of the four main distribution
channels analyzed. DOE then calculated an average weighted end-user
price using estimated shipments through each distribution channel. For
shipment weightings, DOE used one set of shipment percentages
reflecting commercial products for the Non-integrated Omnidirectional
Short, Non-integrated Directional, and Integrated Omnidirectional Long
product classes and another set of shipment percentages reflecting
residential products for the Integrated Omnidirectional Short and
Integrated Directional product classes. DOE grouped the Integrated
Omnidirectional Long product class in the commercial product categories
as these are mainly linear tubular LED lamps used as replacements for
linear fluorescents in commercial spaces. DOE also determined prices
for CFL ballasts by comparing the blue book prices of CFL ballasts with
comparable fluorescent lamp ballasts and developing a scaling factor to
apply to the end-user prices of the fluorescent lamp ballasts developed
for the final rule that was published on November 14, 2011. 76 FR
70548. 88 FR 1638, 1669.
NEMA stated that it could not comment on end-user pricing and
referred DOE to individual manufacturer interviews. (NEMA, No. 183 at
p. 1) The CA IOUs stated their interest in whether DOE accounted for
the impact of mid and upstream energy efficiency program incentives on
its retail prices. The CA IOUs stated that DOE's collected retail
prices may reflect, depending on the geographic region and rebate
program, significant rebates that are applied further up the
distribution channel stream and not reflected in manufacturer costs.
(CA IOUs, Public Meeting Transcript, No. 27 at pp. 74-75)
When collecting retail prices, DOE recorded the regular prices
rather than any discounted or sale prices specified by the retailer.
DOE made no adjustment to retail prices for rebate programs. Rebate
programs can vary in terms of geography, rebate amount as well as to
the extent they are utilized, among other things. Hence it is difficult
for DOE to determine the impact of mid or upstream rebate programs on
retail price, if any, that is consistently applicable at a national
level. The cost analysis in this rulemaking employs a consistent
methodology in developing the final consumer prices that are used in
the LCC analysis and development of MPC and MSP. Further, EPA's ENERGY
STAR Lighting Program has noted that in recent years utility programs
have been declining in anticipation of Federal standards, which would
result in a new baseline that would make it difficult for utilities to
justify their rebates.\42\
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\42\ EPA ENERGY STAR Lighting Program, ``ENERGY STAR Lighting
Sunset Proposal Memo.'' Available at: www.energystar.gov/sites/default/files/asset/document/ENERGY%20STAR%20Lighting%20Sunset%20Proposal%20Memo.pdf (last
accessed Aug. 22, 2023).
---------------------------------------------------------------------------
Hence, in this final rule, DOE continues to use the methodology and
results of the cost analysis as determined in the January 2023 NOPR.
The end-user prices are detailed in chapter 5 of the final rule TSD.
These end-user prices are used to determine an MSP using a distribution
chain markup. DOE developed an average distribution chain markup by
examining the annual Securities and Exchange Commission (``SEC'') 10-K
reports filed by publicly traded retail stores that sell GSLs. See
section IV.J.2.a of this document for further details.
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of GSLs 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 GSL
efficacy. The energy use analysis estimates the range of energy use of
GSLs 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. To develop annual energy use estimates, DOE
multiplied GSL input power by the number of hours of use (``HOU'') per
year and a factor representing the impact of controls.
DOE analyzed energy use in the residential and commercial sectors
separately but did not explicitly analyze GSLs installed in the
industrial sector. This is because far fewer GSLs are installed in that
sector compared to the commercial sector, and the average operating
hours for GSLs in the two sectors were assumed to be approximately
equal. In the energy use and subsequent analyses, DOE analyzed these
sectors together (using data specific to the commercial sector) and
refers to the combined sector as the commercial sector.
1. Operating Hours
a. Residential Sector
To determine the average HOU of Integrated Omnidirectional Short
GSLs in the residential sector, DOE collected data from a number of
sources. Consistent with the approach taken in the January 2023 NOPR,
DOE used data from various regional field-metering studies of GSL
operating hours conducted across the United States. (88 FR 1669-1670)
DOE determined the regional variation in average HOU using average HOU
data from the regional metering studies, which are listed in the energy
use chapter (chapter 6 of the final rule TSD). Specifically, DOE
determined the average HOU for each of the reportable domains (i.e.,
state, or group of states) used in the EIA 2009 Residential Energy
Consumption Survey (``RECS'').\43\ For regions without HOU metered
data, DOE used data from adjacent regions. DOE estimated the national
weighted-average HOU of Integrated Omnidirectional Short GSLs in the
residential sector to be 2.3 hours per day.
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\43\ U.S. Department of Energy-Energy Information
Administration. 2009 RECS Survey Data. Available at www.eia.gov/consumption/residential/data/2009/(last accessed Aug. 1, 2023).
---------------------------------------------------------------------------
For lamps in the other GSL product classes, DOE estimated average
HOU by scaling the average HOU from the Integrated Omnidirectional
Short product class. Scaling factors were developed based on the
distribution of room types that particular lamp types
[[Page 28904]]
(e.g., reflector or linear) are typically installed in, and the
associated HOU for those room types. Room-specific average HOU data
came from NEEA's ``2014 Residential Building Stock Assessment Metering
Study'' (``RBSAM'') \44\ and room distribution data by lamp type came
from a 2010 KEMA report.\45\ See chapter 6 of this final rule TSD for
more detail. DOE notes that its approach assumes that the ratio of
average HOU for reflector or linear lamps to A-line lamps will be
approximately the same across the United States, even if the average
HOU varies by geographic location. DOE estimated the national weighted-
average HOU of Integrated Directional and Non-integrated Directional
GSLs to be 2.9 hours per day and Integrated Omnidirectional Long GSLs
to be 2.1 hours per day in the residential sector.
---------------------------------------------------------------------------
\44\ Ecotope Inc. Residential Building Stock Assessment:
Metering Study. 2014. Northwest Energy Efficiency Alliance: Seattle,
WA. Report No. E14-283. Available at neea.org/resources/2011-rbsa-metering-study (last accessed Aug. 10, 2023).
\45\ KEMA, Inc. Final Evaluation Report: Upstream Lighting
Program: Volume 2. 2010. California Public Utilities Commission,
Energy Division: Sacramento, CA. Report No. CPU0015.02.
www.calmac.org/publications/FinalUpstreamLightingEvaluationReport_Vol2_CALMAC.pdf (last accessed
Aug. 10, 2023).
---------------------------------------------------------------------------
DOE assumes that operating hours do not vary by light source
technology. Although some metering studies observed higher hours of
operation for CFL GSLs compared to all GSLs--such as NMR Group, Inc.'s
``Northeast Residential Lighting Hours-of-Use Study'' \46\ and the
``Residential Lighting End-Use Consumption Study'' (``RLEUCS'') \47\--
DOE assumes that the higher HOU found for CFL GSLs were based on those
lamps disproportionately filling sockets with higher HOU at the time of
the studies. This would not be the case during the analysis period,
when CFL and LED GSLs are expected to fill all GSL sockets. DOE assumes
that it is appropriate to apply the HOU estimate for all GSLs to CFLs
and LEDs, as only CFLs and LEDs will be available during the analysis
period, consistent with DOE's approach in the January 2023 NOPR. This
assumption is equivalent to assuming no rebound in operating hours as a
result of more efficacious technologies filling sockets currently
filled by less efficacious technologies.
---------------------------------------------------------------------------
\46\ NMR Group, Inc. and DNV GL. Northeast Residential Lighting
Hours-of-Use Study. 2014. Connecticut Energy Efficiency Board, Cape
Light Compact, Massachusetts Energy Efficiency Advisory Council,
National Grid Massachusetts, National Grid Rhode Island, New York
State Energy Research and Development Authority. Available at
app.box.com/s/o1f3bhbunib2av2wiblu/1/1995940511/17399081887/1 (last
accessed Aug. 10, 2023).
\47\ DNV KEMA Energy and Sustainability and Pacific Northwest
National Laboratory. Residential Lighting End-Use Consumption Study:
Estimation Framework and Baseline Estimates. 2012. U.S. Department
of Energy: Washington, DC. Available at: www1.eere.energy.gov/buildings/publications/pdfs/ssl/2012_residential-lighting-study.pdf
(last accessed Aug. 10, 2023).
---------------------------------------------------------------------------
The operating hours of lamps in actual use are known to vary
significantly based on the room type in which the lamp is located;
therefore, DOE estimated this variability by developing HOU
distributions for each room type using data from NEEA's 2014 RBSAM, a
metering study of 101 single-family houses in the Northwest. DOE
assumed that the shape of the HOU distribution for a particular room
type would be the same across the U.S., even if the average HOU for
that room type varied by geographic location. To determine the
distribution of GSLs by room type, DOE used data from NEEA's 2016-2017
RBSAM for single-family homes,\48\ which included GSL room-distribution
data for more than 700 single-family homes throughout the Northwest.
---------------------------------------------------------------------------
\48\ Northwest Energy Efficiency Alliance. ``Residential
Building Stock Assessment II: Single-Family Homes Report: 2016-
2017.'' 2019. Northwest Energy Efficiency Alliance. Available at:
neea.org/img/uploads/Residential-Building-Stock-Assessment-II-Single-Family-Homes-Report-2016-2017.pdf (last accessed Aug. 10,
2023).
---------------------------------------------------------------------------
In response to the January 2023 NOPR, NEMA agreed with the data and
methodology DOE used to estimate residential HOU. (NEMA, No. 183 at p.
15)
b. Commercial Sector
For each commercial building type presented in the ``2015 U.S.
Lighting Market Characterization'' (``LMC''), DOE determined average
HOU based on the fraction of installed lamps utilizing each of the
light source technologies typically used in GSLs and the HOU for each
of these light source technologies for integrated omnidirectional
short, integrated directional, non-integrated directional, and non-
integrated omnidirectional GSLs.\49\ For integrated omnidirectional
long GSLs, DOE used the data from the 2015 LMC pertaining to linear
fluorescent lamps. DOE estimated the national-average HOU for the
commercial sector by mapping the LMC building types to the building
types used in Commercial Buildings Energy Consumption Survey
(``CBECS'') 2012,\50\ and then weighting the building-specific HOU for
GSLs by the relative floor space of each building type as reported in
the 2015 LMC. The national weighted-average HOU for integrated
omnidirectional short, integrated directional, non-integrated
directional, and non-integrated omnidirectional GSLs in the commercial
sector were estimated at 11.5 hours per day. The national weighted-
average HOU for integrated omnidirectional long GSLs in the commercial
sector were estimated at 8.1 hours per day.
---------------------------------------------------------------------------
\49\ Navigant Consulting, Inc. ``2015 U.S. Lighting Market
Characterization.'' 2017. U.S. Department of Energy: Washington, DC.
Report No. DOE/EE-1719. Available at: Energy.gov/eere/ssl/downloads/2015-us-lighting-market-characterization (last accessed Aug. 10,
2023).
\50\ U.S. Department of Energy--Energy Information
Administration. ``2012 Commercial Buildings Energy Consumption
Survey (CBECS).'' 2012. Available at: www.eia.gov/consumption/commercial/data/2012/ (last accessed Aug. 10, 2023).
---------------------------------------------------------------------------
To capture the variability in HOU for individual consumers in the
commercial sector, DOE used data from NEEA's ``2019 Commercial Building
Stock Assessment'' (``CBSA'').\51\ Similar to the residential sector,
DOE assumed that the shape of the HOU distribution from the CBSA was
similar for the U.S. as a whole.
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\51\ Cadmus Group. Commercial Building Stock Assessment 4 (2019)
Final Report. 2020. Northwest Energy Efficiency Alliance: Seattle,
WA. neea.org/resources/cbsa-4-2019-final-report (last accessed Aug.
10, 2023).
---------------------------------------------------------------------------
In response to the January 2023 NOPR, NEMA agreed with the data and
methodology DOE used to estimate commercial HOU. (NEMA, No. 183 at p.
15)
2. Input Power
The input power used in the energy use analysis is the input power
presented in the engineering analysis (section IV.D.1.c of this
document) for the representative lamps considered in this rulemaking.
3. Lighting Controls
For GSLs that operate with controls, DOE assumed an average energy
reduction of 30 percent, which is based on a meta-analysis of field
measurements of energy savings from commercial lighting controls by
Williams, et al.\52\ Because field measurements of energy savings from
controls in the residential sector are very limited, DOE assumed that
controls would have the same impact as in the commercial sector.
---------------------------------------------------------------------------
\52\ Williams, A., B. Atkinson, K. Garbesi, E. Page, and F.
Rubinstein. Lighting Controls in Commercial Buildings. LEUKOS. 2012.
8(3): pp. 161-180.
---------------------------------------------------------------------------
In response to the January 2023 NOPR, NEMA commented that the
results of the meta-analysis DOE relied on to estimate 30 percent
energy savings are not accurate because LED technology was not in
general use at that time. NEMA suggested--based on a DesignLights
Consortium report \53\
[[Page 28905]]
showing average savings of 49 percent for networked lighting controls--
that DOE use a range of 30-49 percent energy savings from controls.
(NEMA, No. 183 at p. 15) DOE appreciates NEMA identifying this report;
however, because the meta-analysis DOE has relied on incorporates a
variety of control strategies, DOE believes the meta-analysis is likely
more representative of potential savings than the results of a study
looking only at networked lighting controls. DOE has thus continued to
use 30 percent energy savings for controls in its reference scenario.
However, due to the inherent uncertainty in estimating energy savings
from controls, DOE also analyzed a scenario in which controls are
assumed to result in a 49 percent reduction in energy use. The results
of this analysis can be found in appendix 7B of the final rule TSD.
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\53\ Wen, Y.-J., E. Kehmeier, T. Kisch, A. Springfield, B.
Luntz, and M. Frey. Energy Savings from Networked Lighting Control
(NLC) Systems with and without LLLC. 2020. Energy Solutions:
Oakland, CA. Available at: www.designlights.org/resources/reports/report-energy-savings-from-networked-lighting-control-nlc-systems-with-and-without-lllc/ (last accessed Aug. 10, 2023).
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For this final rule, DOE assumed that the controls penetration of 9
percent reported in the 2015 LMC is representative of integrated
omnidirectional short GSLs. DOE estimated different controls
penetrations for integrated omnidirectional long and integrated and
non-integrated directional GSLs. The 2015 LMC reports a controls
penetration of 0 percent for linear fluorescent lamps in the
residential sector; therefore, DOE assumed that no residential
integrated omnidirectional long lamps are operated on controls. To
estimate controls penetrations for integrated directional and non-
integrated directional GSLs, DOE scaled the controls penetration for
integrated omnidirectional short GSLs based on the distribution of room
types that reflector lamps are typically installed in relative to A-
type GSLs, and the controls penetration by room type from the 2010 KEMA
report. Based on this analysis, DOE estimated the controls penetrations
for integrated directional and non-integrated directional GSLs at 10
percent.
In response to the January 2023 NOPR, NEMA recommended that DOE use
a controls penetration of 1 percent or 2 percent for integrated
omnidirectional long lamps. NEMA also commented that DOE should not
rely on the 2015 LMC to estimate controls penetration due to the 2015
LMC being outdated and also showing less controls penetration than the
previous 2010 LMC report. NEMA estimated that approximately 20 percent
of residential lamps are connected to lighting controls and provided
multiple explanations for the increased controls penetration. (NEMA,
No. 183 at pp. 15-17) DOE has continued to use the 2015 LMC to estimate
controls penetration in this final rule because the 2015 LMC estimates
are the best nationally representative estimates that DOE has for
integrated omnidirectional long lamps, assuming a 2 percent controls
penetration for those lamps (as opposed to 0 percent) would have very
minor impacts on the energy use and LCC results. For the other lamp
types, DOE agrees that there is more uncertainty with the estimated
controls penetration. As a result, DOE has analyzed a scenario in which
the controls penetration is assumed to be 20 percent for all product
classes other than integrated omnidirectional long. The results of this
analysis can be found in appendix 7B of the final rule TSD.
For this final rule, DOE maintains its assumption in the January
2023 NOPR that the fraction of CFLs and LED lamps on controls is the
same. By maintaining the same controls fraction for both technologies
derived from estimates for all GSLs, DOE's estimates of energy savings
may be slightly conservative compared to a scenario where fewer CFLs
are on dimmers. Additionally, DOE's shipments model projects that only
2.3 percent of residential shipments in the integrated omnidirectional
short product class and 0.3 percent of residential shipments in the
integrated directional product class will be CFLs by 2029, indicating
that the control fraction for CFLs will not significantly impact the
overall results of DOE's analysis.
In the reference scenario, DOE assumed the fraction of residential
GSLs on external controls remain fixed throughout the analysis period
at 9 percent for integrated omnidirectional short GSLs, 10 percent for
integrated directional and non-integrated directional GSLs, and 0
percent for integrated omnidirectional long GSLs. The national impact
analysis does, however, assume an increasing fraction of residential
LED GSLs that operate with controls in the form of smart lamps, as
discussed in section IV.H.1.a of this document.
DOE assumed that building codes would drive an increase in floor
space utilizing controls in the commercial sector in this final rule,
similar to its assumption in the January 2023 NOPR (see appendix 9C of
this final rule TSD). By the assumed first full year of compliance
(2029), DOE estimated 36 percent of commercial GSLs in all product
classes will operate on controls. In response to the January 2023 NOPR,
NEMA commented that an estimated 50 percent of commercial GSLs operate
on controls. (NEMA, No. 183 at p. 17) Without data to corroborate a
different value, DOE has continued to assume 36 percent of commercial
GSLs operate on controls in its reference scenario because DOE believes
the data sources it used and the analysis it conducted to estimate
commercial controls penetration in the compliance year provide a
nationally representative estimate. However, based on NEMA's input, DOE
has analyzed a scenario in which 50 percent of commercial GSLs operate
on controls. The results of this analysis can be found in appendix 7B
of the final rule TSD.
Chapter 6 of the final rule TSD provides details on DOE's energy
use analysis for GSLs.
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
GSLs. The effect of new or amended energy conservation standards on
individual consumers usually involves a reduction in operating cost and
an increase in purchase cost. DOE used the following two metrics to
measure consumer impacts:
The LCC is the total consumer expense of an appliance or
product over the life of that product, consisting of total installed
cost (manufacturer selling price, distribution chain markups, sales
tax, and installation costs) plus operating costs (expenses for energy
use, maintenance, and repair). To compute the operating costs, DOE
discounts future operating costs to the time of purchase and sums them
over the lifetime of the product.
The PBP is the estimated amount of time (in years) it
takes consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
at higher efficiency levels by the change in annual operating cost for
the year that amended or new standards are assumed to take effect.
For a GSL standard case (i.e., case where a standard would be in
place at a particular TSL), DOE measured the LCC savings resulting from
the estimated efficacy distribution under the considered standard
relative to the estimated efficacy distribution in the no-new-standards
case. The efficacy distributions include market trends that can result
in some lamps with efficacies
[[Page 28906]]
that exceed the minimum efficacy associated with the standard under
consideration. In contrast, the PBP only considers the average time
required to recover any increased first cost associated with a purchase
at a particular EL 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
potential residential consumers and commercial customers. Separate
calculations were conducted for the residential and commercial sectors.
DOE developed consumer samples based on the 2020 RECS \54\ and the 2018
CBECS \55\ for the residential and commercial sectors, respectively.
For each consumer in the sample, DOE determined the energy consumption
for the lamp purchased and the appropriate electricity price. By
developing representative consumer samples, the analysis captured the
variability in energy consumption and energy prices associated with the
use of GSLs.
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\54\ U.S. Department of Energy--Energy Information
Administration. 2020 Residential Energy Consumption Survey (RECS).
2020. www.eia.gov/consumption/residential/data/2020/. Last accessed
August 10, 2023.
\55\ U.S. Department of Energy--Energy Information
Administration. 2018 Commercial Buildings Energy Consumption Survey
(CBECS). 2021. Available at www.eia.gov/consumption/commercial/data/2018/ (last accessed Aug. 10, 2023).
---------------------------------------------------------------------------
DOE added sales tax, which varied by state, and installation cost
(for the commercial sector) to the cost of the product developed in the
product price determination to determine the total installed cost.
Inputs to the calculation of operating expenses include annual energy
consumption, energy prices and price projections, lamp lifetimes, and
discount rates. DOE created distributions of values for lamp lifetimes,
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 GSL consumer samples. The model
calculated the LCC and PBP for a sample of 10,000 consumers per
simulation run. The analytical results include a distribution of 10,000
data points showing the range of LCC savings. 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. DOE calculated
the LCC and PBP for consumers of GSLs as if each were to purchase a new
product in the expected first full year of required compliance with
amended standards. As discussed in section II of this document, since
compliance with the statutory backstop requirement for GSLs commenced
on July 25, 2022, DOE would set a 6-year compliance date of July 25,
2028, for consistency with requirements in 42 U.S.C. 6295(m)(4)(B) and
42 U.S.C. 6295(i)(6)(B)(iii). Therefore, because the compliance date
would be in the second half of 2028, for purposes of its analysis, DOE
used 2029 as the first full year of compliance with any amended
standards for GSLs.
Table IV.13 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 7
of the final rule TSD and its appendices.
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1. Product Cost
To calculate consumer product costs, DOE typically multiplies the
manufacturer production costs (``MPCs'') developed in the engineering
analysis by the markups along with sales taxes. For GSLs, the
engineering analysis determined end-user prices for 2020 directly;
therefore, for the LCC analysis, the only adjustment was to adjust the
prices to 2022$ using the implicit price deflator for gross domestic
product (``GDP'') from the Bureau of Economic Analysis \56\ and add
sales taxes, which were assigned to each household or building in the
LCC sample based on its location.
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\56\ www.bea.gov/data/prices-inflation/gdp-price-deflator (last
accessed March 5, 2024).
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DOE also used a price-learning analysis to account for changes in
LED lamp prices that are expected to occur between the time for which
DOE has data for lamp prices (2020) and the assumed first full year of
compliance of the rulemaking (2029). For details on the price-learning
analysis, see section IV.G.1.b of this document.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. DOE assumed an
installation cost of $1.73 per installed commercial GSL--based on an
estimated lamp installation time of 5 minutes from RSMeans \57\ and
hourly wage data from the U.S. Bureau of Labor Statistics \58\--but
zero installation cost for residential GSLs.
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\57\ RSMeans. Facilities Maintenance & Repair Cost Data 2013.
2012. RSMeans: Kingston, MA.
\58\ U.S. Department of Labor-Bureau of Labor Statistics.
``Occupational Employment and Wages, May 2021: 49-9071 Maintenance
and Repair Workers, General.'' Available at: www.bls.gov/oes/2021/may/oes499071.htm (last accessed April 13, 2022).
---------------------------------------------------------------------------
3. Annual Energy Consumption
For each sampled household or commercial building, DOE determined
the energy consumption for a GSL at different efficiency levels using
the
[[Page 28908]]
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. DOE generally
applies 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.
In this final rule, consistent with the January 2023 NOPR, DOE used
marginal electricity prices to estimate electricity costs for both the
incremental change in energy use and the energy use in the no-new-
standards case due to the calculated annual electricity cost for some
regions and efficiency levels being negative when using average
electricity prices for the energy use of the product purchased in the
no-new-standards case. Negative costs can occur in instances where the
marginal electricity cost for the region and the energy savings
relative to the baseline for the given efficiency level are large
enough that the incremental cost savings exceed the baseline cost.
DOE derived electricity prices in 2022 using data from the 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).\59\ For the commercial sector, DOE
calculated electricity prices using the methodology described in
Coughlin and Beraki (2019).\60\
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\59\ 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.
\60\ 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. DOE
assigned marginal prices to each household in the LCC sample based on
its location. DOE also assigned marginal prices to each commercial
building in the LCC sample based on its location and annual energy
consumption. For a detailed discussion of the development of
electricity prices, see chapter 7 of the Final Rule TSD.
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 the Annual
Energy Outlook 2023 (AEO2023), which has an end year of 2050.\61\ To
estimate price trends after 2050, DOE assumed that the regional prices
would remain at the 2050 value.
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\61\ EIA. Annual Energy Outlook 2023. Available at: www.eia.gov/outlooks/aeo/ (last accessed Aug. 10, 2023).
---------------------------------------------------------------------------
DOE used the electricity price trends associated with the AEO
Reference case, which is a business-as-usual estimate, given known
market, demographic, and technological trends. DOE also included AEO
High Economic Growth and AEO Low Economic Growth scenarios in the
analysis. The high- and low-growth cases show the projected effects of
alternative economic growth assumptions on energy prices, and the
results can be found in appendix 9D of the final rule TSD.
5. Product Lifetime
In this final rule, DOE considered the GSL lifetime to be the
service lifetime (i.e., the age at which the lamp is retired from
service). For the representative lamps in this analysis, DOE used the
same lifetime methodology as in the January 2023 NOPR. This methodology
uses Weibull survival models to calculate the probability of survival
as a function of lamp age. In the analysis, DOE considered the lamp's
rated lifetime (taken from the engineering analysis), sector- and
product class-specific HOU distributions, typical renovation timelines,
and effects of on-time cycle length, which DOE assumed only applied to
residential CFL GSLs.
For a detailed discussion of the development of lamp lifetimes, see
appendix 7C of the final rule TSD.
6. Residual Value
The residual value represents the remaining dollar value of
surviving lamps at the end of the LCC analysis period (the lifetime of
the shortest-lived GSL in each product class), discounted to the first
full year of compliance. To account for the value of any lamps with
remaining life to the consumer, the LCC model applies this residual
value as a ``credit'' at the end of the LCC analysis period. Because
DOE estimates that LED GSLs undergo price learning, the residual value
of these lamps is calculated based on the lamp price at the end of the
LCC analysis period.
7. Disposal Cost
Disposal cost is the cost a consumer pays to dispose of their
retired GSLs. DOE assumed that 35 percent of CFLs are recycled (this
fraction remains constant over the analysis period), and that the
disposal cost is $0.70 per lamp for commercial consumers. Disposal
costs were not applied to residential consumers. Because LED lamps do
not contain mercury, DOE assumes no disposal costs for LED lamps in
both the residential and commercial sectors.
8. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to residential and commercial consumers to estimate the present value
of future operating cost savings. The subsections below provide
information on the derivation of the discount rates by sector. See
chapter 7 of the final rule TSD for further details on the development
of discount rates.
a. Residential
DOE estimated a distribution of residential discount rates for GSLs
based on the opportunity cost of consumer funds. DOE applies weighted
average discount rates calculated from consumer debt and asset data,
rather than marginal or implicit discount rates.\62\ The LCC analysis
estimates net present value over the lifetime of the product, so the
appropriate discount rate will reflect the general opportunity cost of
household funds, taking this time scale into account. Given the long
time horizon modeled in the LCC, 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
[[Page 28909]]
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.
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\62\ 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
\63\ (``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 4.2
percent.
---------------------------------------------------------------------------
\63\ 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 Aug. 10, 2023).
---------------------------------------------------------------------------
b. Commercial
For commercial consumers, DOE used the cost of capital 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 the cost of capital is the weighted-average
cost to the firm of equity and debt financing. This corporate finance
approach is referred to as the weighted-average cost of capital. DOE
used currently available economic data in developing commercial
discount rates, with Damadoran Online being the primary data
source.\64\ The average discount rate across the commercial building
types is 6.8 percent.
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\64\ Damodaran, A. Data Page: Historical Returns on Stocks,
Bonds and Bills-United States. 2023. pages.stern.nyu.edu/~adamodar/
(last accessed August 10, 2023).
---------------------------------------------------------------------------
9. Efficacy 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
TSL, DOE's LCC analysis considered the projected distribution (market
shares) of product efficacies under the no-new-standards case (i.e.,
the case without amended or new energy conservation standards) and each
of the standard cases (i.e., the cases where a standard would be set at
each TSL) in the assumed first full year of compliance.
To estimate the efficacy distribution of GSLs for 2029, DOE used a
consumer-choice model based on consumer sensitivity to lamp price,
lifetime, energy savings, and mercury content, as measured in a market
study, as well as on consumer preferences for lighting technology as
revealed in historical shipments data. DOE also included consumer
sensitivity to dimmability in the market-share model for non-linear
lamps to capture the better dimming performance of LED lamps relative
to CFLs. Dimmability was excluded as a parameter in the market-share
model for linear lamps because DOE assumed that this feature was
equivalently available among lamp options in the consumer-choice model.
Consumer-choice parameters were derived from consumer surveys of the
residential sector. DOE was unable to obtain appropriate data to
directly calibrate parameters for consumers in the commercial sector.
Due to a lack of data to support an alternative set of parameters, DOE
assumed the same parameters in the commercial sector. For further
information on the derivation of the market efficacy distributions, see
section IV.G of this document and chapter 8 of the final rule TSD.
The estimated market shares for the no-new-standards case and each
standards case for GSLs are determined by the shipments analysis and
are shown in table IV.14 through table IV.18. A description of each of
the TSLs is located in section V.A of this document.
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BILLING CODE 6450-01-C
10. LCC Savings Calculation
In the reference scenario, DOE calculated the LCC savings at each
TSL based on the change in average LCC for each standards case compared
to the no-new-standards case, considering the efficacy distribution of
products derived by the shipments analysis. This approach allows
consumers to choose products that are more efficient than the standard
level and is intended to more accurately reflect the impact of a
potential standard on consumers.
DOE used the consumer-choice model in the shipments analysis to
determine the fraction of consumers that purchase each lamp option
under a standard, but the model is unable to track the purchasing
decision for individual consumers in the LCC sample. However, DOE must
track any difference in purchasing decision for each consumer in the
sample in order to determine the fraction of consumers who experience a
net cost. Therefore, DOE assumed that the rank order of consumers, in
terms of the efficacy of the product they purchase, is the same in the
no-new-standards case as in the standards cases. In other words, DOE
assumed that the consumers who purchased the most-efficacious products
in the no-new-standards case would continue to do so in standards
cases, and similarly, those consumers who purchased the least
efficacious products in the no-new-standards case would continue to do
so in standards cases. This assumption is only relevant in determining
the fraction of consumers who experience a net cost in the LCC savings
calculation and has no effect on the estimated national impact of a
potential standard.
11. 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.
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 amended standards would be
required.
G. Shipments Analysis
DOE uses projections of annual product shipments to calculate the
national impacts of potential amended or new energy conservation
standards on energy use, NPV, and future manufacturer cash flows.\65\
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.
---------------------------------------------------------------------------
\65\ 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. Shipments Model
The shipments model projects shipments of GSLs over a thirty-year
analysis period for the no-new-standards case and for all standards
cases. Consistent with the May 2022 Backstop Final Rule, DOE developed
a shipments model that implements the 45 lm/W minimum efficiency
requirement for GSLs in 2022 in the no-new-standards case and all
standards cases. Accurate modeling of GSL shipments also requires
modeling, in the years prior to 2022, the demand and market shares of
those lamps that are eliminated by the implementation of the 45 lm/W
minimum efficiency requirement, as well as general service fluorescent
lamps (``GSFLs''), because replacements of these lamps are a source of
demand for in-scope products.
Separate shipments projections are calculated for the residential
sector and for the commercial sector. The shipments model used to
estimate GSL lamp shipments for this rulemaking has three main
interacting elements: (1) a lamp demand module that estimates the
demand for GSL lighting for each year of the analysis period; (2) a
price-learning module that projects future prices based on historic
price trends; and (3) a market-share module that assigns shipments to
the available lamp options.
a. Lamp Demand Module
The lamp demand module first estimates the national demand for GSLs
in each year. The demand calculation assumes that sector-specific
lighting capacity (maximum lumen output of installed lamps) remains
fixed per square foot of floor space over the analysis period, and
total floor space changes over the analysis period according to the
EIA's AEO2023 projections of U.S. residential and commercial floor
space.\66\ For linear lamps, DOE assumed that there is no new demand
from floorspace growth due to the increasing prevalence of integral LED
luminaires in new commercial construction.
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\66\ U.S. Department of Energy--Energy Information
Administration. Annual Energy Outlook 2023 with projections to 2050.
Washington, DC Report No. AEO2023. U.S. Department of Energy--Energy
Information Administration. Annual Energy Outlook 2023 with
projections to 2050. Washington, DC. Report No. AEO2023. Available
at: www.eia.gov/outlooks/aeo/ (last accessed Aug. 21, 2023).
---------------------------------------------------------------------------
A lamp turnover calculation estimates demand for new lamps in each
year based on the growth of floor space in each year, the expected
demand for replacement lamps, and sector-specific assumptions about the
distribution of per-lamp lumen output desired by consumers. The demand
for replacements is computed based on the historical shipments of lamps
and the probability of lamp failure as a function of age. DOE used
rated lamp lifetimes (in hours) and expected usage patterns in order to
derive these probability distributions (see section IV.F.5 of this
document for further details on the derivation of lamp lifetime
distributions).
The lamp demand module also accounts for the reduction in GSL
demand due to the adoption of integral LED luminaires into lighting
applications traditionally served by GSLs, both prior to and during the
analysis period. For non-linear lamps in each year, an increasing
portion of demand capped at 15 percent is assumed to be met by integral
LED luminaires modeled as a Bass diffusion
[[Page 28913]]
curve \67\ as in the January 2023 NOPR. For linear lamps, DOE assumes
that 8.2 percent of stock is replaced each year with integrated LED
fixtures in order to account for retrofits and renovations, and that
demand comes from replacement of failures in the remaining stock. This
annual rate of stock replacement is based on a projection of commercial
lighting stock composition through 2050 produced for AEO2023.\68\
Further details on the assumptions used to model these market
transitions are presented in chapter 8 of the final rule TSD.
---------------------------------------------------------------------------
\67\ Bass, FM. A New Product Growth Model for Consumer Durables.
Management Science. 1969. 15(5): pp. 215-227. Bass, FM. A New
Product Growth Model for Consumer Durables. Management Science 1969.
15(5): pp. 215-227.
\68\ U.S. Department of Energy--Energy Information
Administration. Annual Energy Outlook 2023 with Projections to 2050.
Washington, DC. Report No. AEO2023. Available at: www.eia.gov/outlooks/aeo/ (last accessed Aug. 21, 2023).
---------------------------------------------------------------------------
NEMA commented that it does not believe the current conversion rate
of linear lamp stock to integrated fixtures is likely to be maintained
in the long term. (NEMA, No. 183 at p. 18) In addition, NEMA commented
that sustainability goals for new construction are likely to support
the linear lamp market of the future. (NEMA, No. 183 at p. 18) DOE
acknowledges that there is uncertainty in the rate at which integrated
fixtures will replace linear lamps fixtures, as well as uncertainty in
the persistence of demand for linear lamps in applications that were
not explicitly analyzed. In order to account for the possibility that
shipments remain higher than those projected in this Final Rule
analysis, DOE modeled a scenario where a smaller percentage of stock is
removed each year. This lower attrition rate is based on estimates made
in DOE's 2019 Forecast of Solid-State Lighting in General Illumination
Applications,\69\ and results in a more gradual reduction in the size
of the linear lamp market. The national impacts of this shipments
scenario are presented in appendix 9D of the final rule TSD.
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\69\ Navigant Consulting, Inc. Energy Savings Forecast of Solid-
State Lighting in General Illumination Applications. 2019. U.S.
Department of Energy: Washington, DC. Report No. DOE/EERE 2001.
Available at: www.energy.gov/eere/ssl/downloads/2019-ssl-forecast-report (last accessed March 15, 2023).
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For this final rule, DOE assumed the implementation of a 45 lm/W
minimum efficiency requirement for GSLs in 2022, consistent with the
May 2022 Backstop Final Rule. DOE notes that CFL and LEDs make up 79
percent of A-line lamp sales in 2021 based on data collected from NEMA
A-line lamp indices, indicating that the market has moved rapidly
towards increasing production capacity for CFL and LED
technologies.\70\
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\70\ National Electrical Manufacturers Association. Lamp
Indices. Available at www.nema.org/analytics/lamp-indices (last
accessed Aug. 24, 2023).
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As in the January 2023 NOPR, for the integrated omnidirectional
short product class, DOE developed separate shipments projections for
A-line lamps and for non-A-line lamps (candelabra, intermediate and
medium-screw base lamps including, B, BA, C, CA, F, G and T-shape
lamps) to capture the different market drivers between the two types of
lamps. Based on an analysis of online product offerings, DOE assumed
that the prices of lamp options at each EL would be approximately the
same for A-line and non-A-line integrated omnidirectional short lamps,
but scaled the power consumption of non-A-line lamps to be
representative of a 450 lumen lamp. Although modelled separately,
results for A-line and non-A-line lamps are aggregated into the
integrated omnidirectional short product class throughout this final
rule analysis.
b. Price-Learning Module
The price-learning module estimates lamp prices in each year of the
analysis period using a standard price-learning model,\71\ which
relates the price of a given technology to its cumulative production,
as represented by total cumulative shipments. Cumulative shipments are
determined for each GSL lighting technology under consideration in this
analysis (CFL and LED) at the start of the analysis period and are
augmented in each subsequent year of the analysis based on the
shipments determined for the prior year. New prices for each lighting
technology are calculated from the updated cumulative shipments
according to the learning (or experience) curve for each technology.
The current year's shipments, in turn, affect the subsequent year's
prices. Because LED lamps are a relatively young technology, their
cumulative shipments increase relatively rapidly and hence they undergo
a substantial price decline during the shipments analysis period. For
simplicity, shipments of integrated omnidirectional long lamps were not
included in the cumulative shipments total used to determine the price
learning rate for LED GSLs, as shipments of those lamps would not
contribute significantly to the total cumulative LED shipments or the
resulting LED GSL learning rate, but integrated omnidirectional long
GSLs were assumed to experience the same rate of price decline as all
LED GSLs. DOE assumed that CFLs and GSFLs undergo no price learning in
the analysis period due to the long history of these lamps in the
market.
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\71\ Taylor, M. and S.K. Fujita. Accounting for Technological
Change in Regulatory Impact Analyses: The Learning Curve Technique.
2013. Lawrence Berkeley National Laboratory: Berkeley, CA. Report
No. LBNL-6195E. (Last accessed August 5, 2021) eta.lbl.gov/publications/accounting-technological-change. Taylor, M. and S.K.
Fujita. Accounting for Technological Change in Regulatory Impact
Analyses: The Learning Curve Technique. 2013. Lawrence Berkeley
National Laboratory: Berkeley, CA. Report No. LBNL-6195E. (Last
accessed August 5, 2021) eta.lbl.gov/publications/accounting-technological-change. (last accessed Aug. 5, 2021).
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c. Market-Share Module
The market-share module apportions the lamp shipments in each year
among the different lamp options developed in the engineering analysis.
DOE used a consumer-choice model based on consumer sensitivity to lamp
price, lifetime, energy savings, and mercury content, as measured in a
market study, as well as on consumer preferences for lighting
technology as revealed in historical shipments data. DOE also included
consumer sensitivity to dimmability in the market-share model for non-
linear lamps to capture the better dimming performance of LED lamps
relative to CFLs. Dimmability was excluded as a parameter in the
market-share model for linear lamps because DOE assumed that this
feature was equivalently available among lamp options in the consumer-
choice model. GSFL substitute lamp options were included in the
consumer-choice model for integrated omnidirectional long lamps, as
such GSFLs can serve as substitutes for linear LED lamps. Specifically,
the 4-foot T8 lamp options described in the 2023 GSFL Final
Determination analysis (see 88 FR 9118-9136) were included as lamp
options to more accurately estimate the impact of any potential
standard on costs and energy use in the broader linear lamp market.
The market-share module assumes that, when replacing a lamp,
consumers will choose among all of the available lamp options.
Substitution matrices were developed to specify the product choices
available to consumers. The available options depend on the case under
consideration; in each of the standards cases corresponding to the
different TSLs, only those lamp options at or above the particular
standard level, and relevant alternative lamps, are considered to be
available. The market-share module also incorporates a limit on the
diffusion of LED technology into the market using the widely accepted
[[Page 28914]]
Bass adoption model,\72\ the parameters of which are based on data on
the market penetration of LED lamps published by NEMA,\73\ as discussed
previously. In this way, the module assigns market shares to available
lamp options, based on observations of consumer preferences. DOE also
used a Bass adoption model to estimate the diffusion of LED lamp
technologies into the non-integrated product class and assumes that
non-integrated LED lamp options became available starting in 2015.
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\72\ Bass, F.M. A New Product Growth Model for Consumer
Durables. Management Science. 1969. 15(5): pp. 215-227.Bass, F.M. A
New Product Growth Model for Consumer Durables. Management Science.
1969. 15(5): pp. 215-227.
\73\ National Electrical Manufacturers Association. Lamp
Indices. Available at: www.nema.org/analytics/lamp-indices (last
accessed Aug. 24, 2023).
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In response to the January 2023 NOPR, EEI commented that, as
proposed, the efficacy requirement of 120 lm/W for most types of
lighting would eliminate 98 percent of the highest-efficiency light
bulbs currently available to consumers. (EEI, No. 181 at pp. 2-3)
NYSERDA commented that findings from its December 2020 study of sales
and shipments of GSLs in New York underscores the feasibility of the
NOPR's updated standards as LEDs made up 73 percent of all GSLs sold in
New York in 2020 and that rate continues to grow. (NYSERDA, No. 166 at
p. 3) The CA IOUs cited CEC's MAEDbS, which lists 15,313 integrated,
single-ended LED lamps with lighting outputs between 800 and 1100
lumens, all complying with the light quality criteria in California's
Appliance Efficiency Regulations. The CA IOUs noted that 14 percent of
these lamps claim an efficacy of 120 lm/W or higher and would likely
meet DOE's proposed standard, and the CA IOUs commented they anticipate
a larger share of marketable GSLs will exceed the efficacy requirements
when the new standard becomes effective. (CA IOUs, No. 167 at p. 2).
For the shipments model, DOE included the impact of historically
observed trends in LED efficacy based on the 2019 DOE Solid State
Lighting report,\74\ which projects that the average efficacy of the
non-linear LED GSLs will likely exceed the efficacy of the most
efficacious (max-tech) lamp options considered in the engineering
analysis in future years. As detailed in section IV.F.9 of this
document, DOE projects that in the no-new-standards case by 2029, the
fraction of GSLs at or above max-tech is at least 13 precent for all
product classes, and considerably higher for some. More information on
the efficacy trend data can be found in chapter 8 of the final rule
TSD. Additionally, DOE does not anticipate a decrease in manufacturing
capacity of products that will be able to meet the proposed standard by
the compliance date (see section V.B.2 of this document for details).
---------------------------------------------------------------------------
\74\ Navigant Consulting, Inc. Energy Savings Forecast of Solid-
State Lighting in General Illumination Applications. 2019. U.S.
Department of Energy: Washington, DC. Report No. DOE/EERE 2001.
Available at www.energy.gov/eere/ssl/downloads/2019-ssl-forecast-report (last accessed Feb. 23, 2022).
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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.\75\ (``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 GSLs sold from 2029 through 2058.
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\75\ The NIA accounts for impacts in the 50 states and U.S.
territories.
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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
and, in the case of integrated omnidirectional long lamps, out-of-scope
alternatives such as GSFLs.
DOE takes analytical results from the shipments model and
calculates the energy savings and the national consumer costs and
savings from each TSL. Analytical results and inputs to the model are
presented in the form of a spreadsheet. Interested parties can review
DOE's analyses by changing various input quantities within the
spreadsheet. The NIA uses typical values (as opposed to probability
distributions) as inputs.
Table IV.19 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 9 of the final rule TSD for further
details.
BILLING CODE 6450-01-P
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[GRAPHIC] [TIFF OMITTED] TR19AP24.030
BILLING CODE 6450-01-C
1. 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
AEO2023. 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. In the case of lighting,
the rebound effect could be manifested in increased HOU or in increased
lighting density (lamps per square foot). In the January 2023 NOPR, DOE
assumed no rebound effect in both the residential and commercial
sectors for consumers switching from CFLs to LED lamps or from less
efficacious LED lamps to more efficacious LED lamps. This is due to the
relatively small incremental increase in efficacy between CFLs and LED
GSLs or less efficacious LED lamps and more efficacious LED lamps, as
well as an examination of DOE's 2001, 2010, and 2015 U.S. LMC studies,
which indicates that there has been a reduction in total lamp operating
hours in the residential sector concomitant with increases in lighting
efficiency. Consistent with the residential sector, DOE does not expect
there to be any rebound effect associated with the commercial sector.
Therefore, DOE assumed no rebound effect in all final rule scenarios
for both the residential and commercial sectors.
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 \76\
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 9B of the final rule TSD.
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\76\ 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/forecasts/aeo/index.cfm (last
accessed April 21, 2022).
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EEI commented that DOE's utilization of a fossil fuel equivalent
marginal heat rate for electricity generated from
[[Page 28916]]
renewable sources is inconsistent with prior DOE recommendations for
all appliance standards rulemakings. EEI commented that by assigning a
fossil heat rate to renewable energy as if that energy has an emissions
impact (when in fact no carbon emissions are associated with the
electricity generated), DOE's analysis does not accurately capture the
emissions profile of clean energy resources deployed by the sector at
large scale. EEI commented that DOE should use a more appropriate
methodology for this rulemaking to accurately capture the ongoing clean
energy transition, such as the ``captured energy'' approach. Otherwise,
EEI commented, DOE's use of fossil-fuel marginal heat rates results in
at least a 3x overstatement of the amount of primary energy that would
be saved if new efficiency standards for consumer light bulbs are
promulgated. (EEI, No. 181 at pp. 2-3)
As previously mentioned, DOE converts electricity consumption and
savings to primary energy using annual conversion factors derived from
the AEO. Traditionally, EIA has used the fossil fuel equivalency
approach to report noncombustible renewables' contribution to total
primary energy. The fossil fuel equivalency approach applies an
annualized weighted-average heat rate for fossil fuel power plants to
the electricity generated (in kWh) from noncombustible renewables. EIA
recognizes that using captured energy (the net energy available for
direct consumption after transformation of a noncombustible renewable
energy into electricity) or incident energy (the mechanical, radiation,
or thermal energy that is measurable as the ``input'' to the device)
are possible approaches for converting renewable electricity to a
common measure of primary energy, but it continues to use the fossil
fuel equivalency approach in the AEO and other reporting of energy
statistics. DOE contends that it is important for it to maintain
consistency with EIA in DOE's accounting of primary energy savings from
energy efficiency standards. This method for calculating primary energy
savings has no effect on the estimation of impacts of standards on
emissions, which uses a different approach (see chapter 9 of the final
rule TSD).
a. Smart Lamps
Integrated GSLs with standby functionality, henceforth referred to
as smart lamps, were not explicitly analyzed in the shipments analysis
for this final rule. To account for the additional standby energy
consumption from smart lamps in the NIA, DOE assumed that smart lamps
would make up an increasing fraction of Integrated Omnidirectional
Short, Integrated Directional, Non-integrated Directional, and Non-
integrated Omnidirectional lamps in the residential sector following a
Bass adoption curve. DOE assumes for this final rule that smart lamp
penetration is limited to the residential sector.
In response to the January 2023 NOPR, NEMA objected to DOE's
assumption that integrated lamps with standby functionality are
fundamentally similar to lamps without standby functionality but with
the addition of wireless communication components and the associated
consumption of power in standby mode. NEMA noted that the variety of
features that lamps capable of operating on standby power may offer has
greatly expanded in recent years and includes functionality such as
dimming, scheduling, high end trim, and demand response. (NEMA, No. 183
at p. 9-10) DOE notes that the representative lamps without standby
power consumption that were used as the basis for scaling are also
capable of dimming. DOE is not aware of data indicating how scheduling,
high end trim and demand response functionality impact the energy
consumption of smart GSLs with these features, but assumed that smart
GSLs offer similar fractional energy savings (30 percent) from controls
as representative GSLs used with dimming controls.
NEMA commented on the growing popularity of smart LED lamps, noting
that nearly 10 million households use smart speakers to control
lighting, based on data from EIA and RECS. (NEMA, No. 183 at p. 10)
However, NEMA commented that it could not predict the market share for
smart lamps by the end of the analysis period, noting how much the
lighting market has changed in the last 35 years. (NEMA, No. 183 at p.
18) For this final rule, DOE continued to assume that there was an
increase in the fraction of LED lamps that are smart lamps over the
shipments analysis period. In the absence of information to support an
alternative projection, DOE continued to assume that the market
penetration of smart lamps in the residential sector reached 50 percent
by the end of the analysis period.
DOE assumed a standby power of 0.2 W per smart lamp in alignment
with standby requirements in California Code of Regulations--Title 20,
as it is assumed that manufacturers would typically sell the same smart
lamp models in California as in the rest of the U.S.\77\ DOE further
assumed that the majority of smart lamps would be standalone and not
require the need of a hub.
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\77\ California Energy Commission. California Code of
Regulations: Title 20--Public Utilities and Energy. May 2018.
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More details on the incorporation of smart lamps in DOE's analysis
can be found in chapter 9 of the TSD.
b. Unit Energy Consumption Adjustment To Account for GSL Lumen
Distribution for the Integrated Omnidirectional Short Product Class
The engineering analysis provides representative units within the
lumen range of 750-1,049 lumens for the integrated omnidirectional
short product class. For the NIA, DOE adjusted the energy use of the
representative units for the integrated omnidirectional short product
class to account for the full distribution of GSL lumen outputs (i.e.,
310-2,600 lumens).
Using the lumen range distribution for integrated omnidirectional
short A-line lamps developed originally for the March 2016 NOPR and
used in the January 2023 NOPR, DOE calculated unit energy consumption
(``UEC'') scaling factors to apply to the energy use of the integrated
omnidirectional short representative lamp options by taking the ratio
of the stock-weighted wattage equivalence of the full GSL lumen
distribution to the wattage equivalent of the representative lamp bin
(750-1,049 lumens). DOE applied a UEC scaling factor of 1.15 for the
residential sector and 1.21 for the commercial sector for integrated
omnidirectional short A-line lamps.
c. Unit Energy Consumption Adjustment To Account for Type A Integrated
Omnidirectional Long Lamps
The representative units in the engineering analysis for the
integrated omnidirectional long product class represent Type B lamp
options. To account for Type A lamps that were not explicitly modeled,
DOE scaled the energy consumption values of Type B integrated
omnidirectional long lamp options based on the relative energy
consumption of equivalent Type A lamps. DOE assumed a 60/40 market
share of Type B and Type A linear LED lamps, respectively, based on
product offerings in the Design Lights Consortium database, which was
held constant throughout the analysis period.
2. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers are (1) total
[[Page 28917]]
annual installed cost, (2) total annual operating costs (energy costs
and repair and maintenance costs), and (3) a discount factor to
calculate the present value of costs and savings. DOE calculates net
savings each year as the difference between the no-new-standards case
and each standards case in terms of total savings in operating costs
versus total increases in installed costs. DOE calculates operating
cost savings over the lifetime of each product shipped during the
projection period.
As discussed in section IV.G.1.b of this document, DOE developed
LED lamp prices using a price-learning module incorporated in the
shipments analysis. By 2058, which is the end date of the forecast
period, the average LED GSL price is projected to drop 33 percent
relative to 2022 in the no-new-standards case. DOE's projection of
product prices as described in chapter 8 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 GSLs. In
addition to the default price trend, DOE considered two product price
sensitivity cases: (1) a high price decline case based on a higher
price learning rate and (2) a low price decline case based on a lower
price learning rate. The derivation of these price trends and the
results of these sensitivity cases are described in appendix 9D of the
final rule TSD.
The operating cost savings are primarily energy cost savings, which
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 AEO2023, which has an end year
of 2050. For years after 2050, DOE maintained the 2050 electricity
price. As part of the NIA, DOE also analyzed scenarios that used inputs
from variants of the AEO2023 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 9D 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.\78\ 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.
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\78\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars (last accessed March 22, 2024).
DOE used the prior version of Circular A-4 (September 17, 2003) in
accordance with the effective date of the November 9, 2023 version.
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I. Consumer Subgroup Analysis
In analyzing the potential impact of new or amended energy
conservation standards on consumers, DOE evaluates the impact on
identifiable subgroups of consumers that may be disproportionately
affected by a new or amended national standard. The purpose of a
subgroup analysis is to determine the extent of any such
disproportional impacts. DOE evaluates impacts on particular subgroups
of consumers by analyzing the LCC impacts and PBP for those particular
consumers from alternative standard levels. For this final rule, DOE
analyzed the impacts of the considered standard levels on two
subgroups: (1) low-income households and (2) small businesses. The
residential low-income household analysis used a subset of the RECS
2020 sample composed of households that are at or below the poverty
line. DOE analyzed only the low-income households that are responsible
for paying their electricity bill in this analysis. RECS 2020 indicates
that approximately 15% of low-income renters are not responsible for
paying their electricity bills. Such consumers may incur a net cost
(depending on if they purchase their own GSLs or not). DOE notes that
this is only relevant for the integrated omnidirectional short GSL
product class, as low-income households that purchase integrated
directional GSLs would still experience a net benefit even if they are
not responsible for paying their electricity bill and low-income
households are assumed not to purchase lamps in other GSL product
classes, which are uncommon in the residential sector.
The analysis of commercial small businesses uses the CBECS 2018
sample (as in the full-sample LCC analysis) but applies discount rates
specific to small businesses. DOE used the analytical framework and
inputs described in section IV.F of this document.
Chapter 10 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 and
amended energy conservation standards on manufacturers of GSLs and to
estimate the potential impacts of such standards on employment and
manufacturing capacity. The MIA has both quantitative and qualitative
aspects and includes analyses of projected industry cash flows, the
INPV, investments in research and development (``R&D'') and
manufacturing capital, and domestic manufacturing employment.
Additionally, the MIA seeks to determine how new and amended energy
conservation standards might affect manufacturing employment, capacity,
and competition, as well as how standards contribute to overall
regulatory burden. Finally, the MIA serves to identify any
disproportionate impacts on manufacturer subgroups, including small
business manufacturers.
The quantitative part of the MIA primarily relies on the Government
Regulatory Impact Model (``GRIM''), an industry cash flow model with
inputs specific to this rulemaking. The key GRIM inputs include data on
the industry cost structure, unit production costs, product shipments,
manufacturer markups, and investments in R&D and manufacturing capital
required to produce compliant products. The key GRIM outputs are the
INPV, which is the sum of industry annual cash flows over the analysis
period, discounted using the industry-weighted average cost of capital,
and the impact to domestic manufacturing employment. The model uses
standard accounting principles to estimate the impacts of more-
stringent energy conservation standards on a given industry by
comparing changes in INPV and domestic manufacturing employment between
a no-new-standards case and the various standards cases (i.e., TSLs).
To capture the uncertainty relating to manufacturer pricing strategies
following new and amended standards, the GRIM estimates a range of
possible impacts under different manufacturer markup scenarios.
The qualitative part of the MIA addresses manufacturer
characteristics
[[Page 28918]]
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 11 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
and amended standards that result in a higher or lower industry value.
The GRIM uses a standard, annual discounted cash-flow analysis that
incorporates manufacturer costs, 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 and amended 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 2058. DOE calculated INPVs by summing the stream of
annual discounted cash flows during this period. For manufacturers of
GSLs, DOE used a real discount rate of 6.1 percent, which was derived
from industry financials.
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 new and
amended energy conservation standards on GSL 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 previous rulemaking public comments. 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 11 of the final rule TSD.
a. Manufacturer Production Costs
Manufacturing more efficient products is typically more expensive
than manufacturing baseline products due to the use of more complex
components, which are typically more costly than baseline components.
The changes in the MPCs of covered products can affect the revenues,
gross margins, and cash flow of the industry. Typically, DOE develops
MPCs for the covered products using reverse-engineering. These costs
are used as an input to the LCC analysis and NIA. However, because
lamps are difficult to reverse-engineer, DOE directly derived end-user
prices and then used those prices in conjunction with average
distribution chain markups and manufacturer markups to calculate the
MPCs of GSLs.
To determine MPCs of GSLs from the end-user prices, DOE divided the
end-user price by the average distribution chain markup and then again
by the average manufacturer markup of the representative GSLs at each
EL. In the January 2023 NOPR, DOE used the SEC 10-Ks of publicly traded
GSL manufacturers to estimate the manufacturer markup of 1.55 for all
GSLs in this rulemaking. DOE used the SEC 10-Ks of the major publicly
traded lighting retailers to estimate the distribution chain markup of
1.52 for all GSLs. DOE asked for comment on the use of these values and
NEMA stated that it cannot comment on the average distribution chain
markup and referred DOE to individual manufacturer interviews for this
information. (NEMA, No. 183 at p. 19) The estimated manufacturer markup
and the estimated average distribution chain markup values that were
used in the January 2023 SNOPR were based on information provided
during manufacturer interviews. Therefore, DOE continues to use the
same values in this final rule analysis that were used in the January
2023 NOPR.
For a complete description of end-user prices, see the cost
analysis in section IV.D.2 of this document.
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, DOE
developed a consumer-choice-based model to estimate shipments of GSLs.
The model projects consumer purchases (and hence shipments) based on
sector-specific consumer sensitivities to first cost, energy savings,
lamp lifetime, and lamp mercury content. The shipments analysis
projects shipments from 2024 (the base year) to 2058 (the end year of
the analysis period). See chapter 8 of the final rule TSD for
additional details.
c. Product and Capital Conversion Costs
New and amended energy conservation standards could cause
manufacturers to incur conversion costs to bring their production
facilities and product designs into compliance. DOE evaluated the level
of conversion-related expenditures that would be needed to comply with
each considered efficiency level in each product 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 product
designs comply with new and amended energy conservation standards.
Capital conversion costs are investments in property, plant, and
equipment necessary to adapt or change existing production facilities
such that new compliant product designs can be fabricated and
assembled.
In the January 2023 NOPR, DOE conducted a bottom-up analysis to
calculate the product conversion costs for GSL manufacturers for each
product class at each EL. To conduct this bottom-up analysis, DOE used
manufacturer input from manufacturer interviews regarding the average
amount of engineering time to design a new product or remodel an
existing model. DOE then estimated the number of GSL models that would
need to be re-modeled or introduced into the market for each product
class at each EL using DOE's database of existing GSL models and the
distribution of shipments from the shipments analysis (see section IV.G
of this document).
DOE assumed GSL manufacturers would not re-model non-compliant CFL
models into compliant CFL models, even if it is possible for the
remodeled CFLs to meet the analyzed energy conservation standards.
Additionally, DOE assumed that GSL manufacturers would not need to
introduce any new LED lamp models due to CFL models not being able to
meet the analyzed energy conservation standards.\79\ However, DOE
assumed that all non-compliant LED lamp models would be remodeled to
meet the analyzed energy conservation standards.
---------------------------------------------------------------------------
\79\ Based on the Shipment Analysis, LED lamp sales exceed 95
percent of the total GSL sales for every analyzed product class by
2029 (the first full year of compliance). DOE assumed there are
replacement LED lamps for all CFL models.
---------------------------------------------------------------------------
Based on feedback in manufacturer interviews, DOE assumed that most
LED lamp models would be remodeled between the estimated publication of
this rulemaking's final rule and the estimated date by which energy
conservation standards are required, even in the absence of DOE energy
conservation standards for GSLs.
[[Page 28919]]
Additionally, DOE estimated that remodeling a non-compliant LED lamp
model that would already be scheduled to be remodeled into a compliant
one would require an additional month of engineering time per LED lamp
model.\80\
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\80\ Based on feedback from manufacturers, DOE estimates that
most LED lamp models are remodeled approximately every 2 to 3 years
and it takes manufacturers approximately 6 months of engineering
time to remodel one LED lamp model. DOE is therefore estimating that
it would take manufacturers approximately 7 months (one additional
month) to remodel a non-compliant LED lamp model into a compliant
LED lamp model, due to the extra efficacy and any other requirement
induced by DOE's standards.
---------------------------------------------------------------------------
DOE assumed that capital conversion costs would only be necessary
if GSL manufacturers would need to increase the production volume of
LED lamps in the standards case compared to the no-new-standards case
and if existing LED lamp production capacity did not already exist to
meet this additional market demand for LED lamps. Based on the
shipments analysis, the volume of LED lamp sales in the years leading
up to 2029 exceeds the volume of LED lamp sales in 2029 (the first full
year of compliance) for every product class at all TSLs. Therefore, DOE
assumed no capital conversion costs as GSL manufacturers would not need
to make any additional investments in production equipment to maintain,
or reduce, their LED lamp production volumes from the previous year.
DOE asked for comment on the methodology used to calculate product
and capital conversion costs for GSLs in January 2023 NOPR. DOE did not
receive any comments on this methodology. Therefore, DOE continued to
use this methodology for this final rule analyses. DOE updated all
engineering labor costs from 2021 dollars that were used in the January
2023 NOPR to 2022 dollars for this final rule analysis.
In general, DOE assumes all conversion-related investments occur
between the publication of this final rule and the year by which
manufacturers must comply with the new and amended standards. The
conversion cost figures used in the GRIM can be found in section
V.B.2.a of this document. For additional information on the estimated
capital and product conversion costs, see chapter 11 of the final rule
TSD.
d. Manufacturer 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 case yields
different sets of impacts on manufacturers. For the MIA, DOE modeled
two standards-case markup scenarios to represent uncertainty regarding
the potential impacts on prices and profitability for manufacturers
following the implementation of amended energy conservation standards:
(1) a preservation of gross margin scenario; and (2) a preservation of
operating profit scenario. These scenarios lead to different markup
values that, when applied to the MPCs, result in varying revenue and
cash flow impacts.
Under the preservation of gross margin percentage 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 a product class. DOE continued to use a
manufacturer markup of 1.55 for all GSLs, which corresponds to a gross
margin of 35.5 percent, and the same manufacturer markup that was used
in the January 2023 NOPR. This manufacturer markup scenario represents
the upper bound to industry profitability under new and amended energy
conservation standards and is the manufacturer markup scenario that is
used in all consumer analyses (e.g., LCC, NIA).
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 manufacturer production
costs. Under this scenario, as the MPCs increase, manufacturers reduce
their margins (on a percentage basis) to a level that maintains the no-
new-standards case operating profit (in absolute dollars). The implicit
assumption behind this scenario is that the industry can only maintain
its operating profit in absolute dollars after compliance with new and
amended standards. Therefore, operating profit in percentage terms is
reduced between the no-new-standards case and the analyzed standards
cases. DOE adjusted the margins in the GRIM at each TSL to yield
approximately the same earnings before interest and taxes in the
standards cases in the year after the first full year of compliance of
the new and amended standards as in the no-new-standards case. This
scenario represents the lower bound to industry profitability under new
and amended energy conservation standards.
A comparison of industry financial impacts under the two markup
scenarios is presented in section V.B.2.a of this document.
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 12A in the final rule TSD. The analysis presented
in this final rule uses projections from AEO2023. 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'').\81\
---------------------------------------------------------------------------
\81\ 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 12 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.
[[Page 28920]]
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. AEO2023 reflects, to the extent
possible, laws and regulations adopted through mid-November 2022,
including the emissions control programs discussed in the following
paragraphs the emissions control programs discussed in the following
paragraphs, and the Inflation Reduction Act.\82\
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\82\ For further information, see the Assumptions to AEO2023
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 August 21, 2023).
---------------------------------------------------------------------------
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.\83\ The AEO2023
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.
---------------------------------------------------------------------------
\83\ 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).
---------------------------------------------------------------------------
However, beginning in 2016, SO2 emissions began to fall
as a result of the Mercury and Air Toxics Standards (``MATS'') for
power plants.\84\ 77 FR 9304 (Feb. 16, 2012). The final rule
establishes power plant emission standards for mercury, acid gases, and
non-mercury metallic toxic pollutants. 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 AEO2023.
---------------------------------------------------------------------------
\84\ In order to continue operating, coal power 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.
---------------------------------------------------------------------------
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
AEO2023 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
AEO2023, which incorporates the MATS.
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 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 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 using SC-GHG values that
were based on the interim values presented in the Technical Support
Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
[[Page 28921]]
Estimates under Executive Order 13990, published in February 2021 by
the IWG (``February 2021 SC-GHG TSD''). The SC-GHG 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, the SC-GHG 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-GHG therefore, reflects the societal value of reducing emissions
of the gas in question by one metric ton. The SC-GHG 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. DOE continues to evaluate recent developments in the
scientific literature, including the updated SC-GHG estimates published
by the EPA in December 2023 within their rulemaking on oil and natural
gas sector sources.\85\ For this rulemaking, DOE used these updated SC-
GHG values to conduct a sensitivity analysis of the value of GHG
emissions reductions associated with alternative standards for GSLs
(see section IV.L.1.c of this document).
---------------------------------------------------------------------------
\85\ U.S. EPA. (2023). Supplementary Material for the Regulatory
Impact Analysis for the Final Rulemaking, ``Standards of Performance
for New, Reconstructed, and Modified Sources and Emissions
Guidelines for Existing Sources: Oil and Natural Gas Sector Climate
Review'': EPA Report on the Social Cost of Greenhouse Gases:
Estimates Incorporating Recent Scientific Advances. Washington, DC:
U.S. EPA. www.epa.gov/controlling-air-pollution-oil-and-natural-gas-operations/epas-final-rule-oil-and-natural-gas.
---------------------------------------------------------------------------
The SC-GHG estimates presented here were developed over many years,
using peer-reviewed methodologies, transparent process, the best
science available at the time of that process, and with input from the
public. Specifically, in 2009, the IWG, that included the DOE and other
executive branch agencies and offices was established to ensure that
agencies were using the best available science and to promote
consistency in the social cost of carbon (SC-CO2) values
used across agencies. The IWG published SC-CO2 estimates in
2010 that were developed from an ensemble of three widely cited
integrated assessment models (IAMs) that estimate global climate
damages using highly aggregated representations of climate processes
and the global economy combined into a single modeling framework. The
three IAMs were run using a common set of input assumptions in each
model for future population, economic, and CO2 emissions
growth, as well as equilibrium climate sensitivity--a measure of the
globally averaged temperature response to increased atmospheric
CO2 concentrations. These estimates were updated in 2013
based on new versions of each IAM. In August 2016 the IWG published
estimates of the social cost of methane (SC-CH4) and nitrous
oxide (SC-N2O) using methodologies that are consistent with
the methodology underlying the SC-CO2 estimates. The
modeling approach that extends the IWG SC-CO2 methodology to
non-CO2 GHGs has undergone multiple stages of peer review.
The SC-CH4 and SC-N2O estimates were developed by
Marten et al.\86\ 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.\87\ 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.
---------------------------------------------------------------------------
\86\ 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.
\87\ 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.
Available at nap.nationalacademies.org/catalog/24651/valuing-climate-damages-updating-estimation-of-the-social-cost-of.
---------------------------------------------------------------------------
On January 20, 2021, President Biden issued Executive Order 13990,
which re-established the IWG and directed it to ensure that the U.S.
Government's estimates of the social cost of carbon and other
greenhouse gases reflect the best available science and the
recommendations in the National Academies 2017 report. 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 that takes into consideration the advice in the
National Academies 2017 report 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
[[Page 28922]]
activities by other countries, as those international mitigation
actions will provide a benefit to U.S. citizens and residents by
mitigating climate impacts that affect U.S. citizens and residents. A
wide range of scientific and economic experts have emphasized the issue
of reciprocity as support for considering global damages of GHG
emissions. If the United States does not consider impacts on other
countries, it is difficult to convince other countries to consider the
impacts of their emissions on the United States. The only way to
achieve an efficient allocation of resources for emissions reduction on
a global basis--and so benefit the U.S. and its citizens--is for all
countries to base their policies on global estimates of damages. As a
member of the IWG involved in the development of the February 2021 SC-
GHG TSD, DOE agrees with this assessment and, therefore, in this final
rule DOE centers attention on a global measure of SC-GHG. This approach
is the same as that taken in DOE regulatory analyses from 2012 through
2016. A robust estimate of climate damages that accrue only to U.S.
citizens and residents does not currently exist in the literature. As
explained in the February 2021 SC-GHG TSD, existing estimates are both
incomplete and an underestimate of total damages that accrue to the
citizens and residents of the U.S. because they do not fully capture
the regional interactions and spillovers previously discussed, 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 (estimated to be 7 percent under OMB's 2003 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 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,\88\ and
recommended that discount rate uncertainty and relevant aspects of
intergenerational ethical considerations be accounted for in selecting
future discount rates.
---------------------------------------------------------------------------
\88\ Interagency Working Group on Social Cost of Carbon. Social
Cost of Carbon for Regulatory Impact Analysis under Executive Order
12866. 2010. United States Government. Available at 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.
Available at 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. Available at www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf (last
accessed Jan. 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. Available at: www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf (last
accessed January 18, 2022).
---------------------------------------------------------------------------
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's 2003 Circular
A-4 recommends using 3% and 7% discount rates as ``default'' values,
Circular A-4 also reminds agencies that ``different regulations may
call for different emphases in the analysis, depending on the nature
and complexity of the regulatory issues and the sensitivity of the
benefit and cost estimates to the key assumptions.'' On discounting,
Circular A-4 recognizes that ``special ethical considerations arise
when comparing benefits and costs across generations,'' and Circular A-
4 acknowledges that analyses may appropriately ``discount future costs
and consumption benefits . . . at a lower rate than for
intragenerational analysis.'' In the 2015 Response to Comments on the
Social Cost of Carbon for Regulatory Impact Analysis, OMB, DOE, and the
other IWG members recognized that ``Circular A-4 is a living document''
and ``the use of 7 percent is not considered appropriate for
intergenerational discounting. There is wide support for this view in
the academic literature, and it is recognized in Circular A-4 itself.''
Thus, DOE concludes that a 7% discount rate is not appropriate to apply
to value the social cost of greenhouse gases in the analysis presented
in this analysis.
To calculate the present and annualized values of climate benefits,
DOE uses the same discount rate as the rate used to discount the value
of damages from future GHG emissions, for internal consistency. That
approach to discounting follows the same approach that the February
2021 SC-GHG TSD recommends ``to ensure internal consistency--i.e.,
future damages from climate change using the SC-GHG at 2.5 percent
should be discounted to the base year of the analysis using the same
2.5 percent rate.'' DOE has also consulted the National Academies' 2017
recommendations on how SC-GHG estimates can ``be combined in RIAs with
other cost and benefits estimates that may use different discount
rates.'' The National Academies reviewed several options, including
``presenting all discount rate combinations of other costs and benefits
with [SC-GHG] estimates.''
As a member of the IWG involved in the development of the February
2021 SC-GHG TSD, DOE agrees with the above assessment and will continue
to follow developments in the literature pertaining to this issue.
While the IWG works to assess how best to incorporate the latest, peer
reviewed science to develop an updated set of SC-GHG estimates, it set
the interim estimates to be the most recent estimates developed by the
IWG prior to the group being disbanded in 2017. The estimates rely on
the same models and harmonized inputs and are calculated using a range
of discount rates. As explained in the February 2021 SC-GHG TSD, the
IWG has recommended that agencies revert to the same set of four values
drawn from the SC-GHG distributions based on three discount rates as
were used in regulatory analyses between 2010 and 2016 and were subject
to public comment. For each discount rate, the IWG combined the
distributions across models and socioeconomic emissions scenarios
(applying equal weight to 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
[[Page 28923]]
from climate change. As explained in the February 2021 SC-GHG TSD, and
DOE agrees, this update reflects the immediate need to have an
operational SC-GHG for use in regulatory benefit-cost analyses and
other applications that was developed using a transparent process,
peer-reviewed methodologies, and the science available at the time of
that process. Those estimates were subject to public comment in the
context of dozens of proposed rulemakings as well as in a dedicated
public comment period in 2013.
IPI commented that even though the proposed rule's costs would
exceed its benefits without considering climate effects, DOE
appropriately applies the social cost estimates developed by the
Interagency Working Group on the Social Cost of Greenhouse Gases to its
analysis of climate benefits. IPI commented that DOE should consider
applying sensitivity analysis using EPA's draft climate-damage
estimates released in November 2022, as EPA's work faithfully
implements the roadmap laid out in 2017 by the National Academies of
Sciences and applies recent advances in the science and economics on
the costs of climate change. (IPI, No. 175 at pp. 1-3)
DOE typically does not conduct analyses using draft inputs that are
still under review. DOE notes that because the EPA's draft estimates
are considerably higher than the IWG's interim SC-GHG values applied
for this final rule, an analysis that used the draft values would
result in significantly greater climate-related benefits. However, such
results would not affect DOE's decision in this final rule.
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.\89\ Second, the IAMs used to produce these interim estimates do
not include all of the important physical, ecological, and economic
impacts of climate change recognized in the climate change literature
and the science underlying their ``damage functions''--i.e., the core
parts of the IAMs that map global mean temperature changes and other
physical impacts of climate change into economic (both market and
nonmarket) damages--lags behind the most recent research. For example,
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the integrated assessment models, their
incomplete treatment of adaptation and technological change, the
incomplete way in which inter-regional and intersectoral linkages are
modeled, uncertainty in the extrapolation of damages to high
temperatures, and inadequate representation of the relationship between
the discount rate and uncertainty in economic growth over long time
horizons. Likewise, the socioeconomic and emissions scenarios used as
inputs to the models do not reflect new information from the last
decade of scenario generation or the full range of projections. The
modeling limitations do not all work in the same direction in terms of
their influence on the SC-CO2 estimates. However, as
discussed in the February 2021 SC-GHG 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.
---------------------------------------------------------------------------
\89\ Interagency Working Group on Social Cost of Greenhouse
Gases. 2021. Technical Support Document: Social Cost of Carbon,
Methane, and Nitrous Oxide Interim Estimates under Executive Order
13990. February. United States Government. Available at
www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/.
---------------------------------------------------------------------------
DOE's derivations of the SC-CO2, SC-N2O, and
SC-CH4 values used for this NOPR 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, which are shown
in table IV.20 in five-year increments from 2020 to 2050. The set of
annual values that DOE used, which was adapted from estimates published
by EPA,\90\ is presented in appendix 13A of the final rule TSD. These
estimates are based on methods, assumptions, and parameters identical
to the estimates published by the IWG (which were based on EPA
modeling), and include values for 2051 to 2070. DOE expects additional
climate benefits to accrue for products still operating after 2070, but
a lack of available SC-CO2 estimates for emissions years
beyond 2070 prevents DOE from monetizing these potential benefits in
this analysis.
---------------------------------------------------------------------------
\90\ 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 Feb. 21, 2023).
[GRAPHIC] [TIFF OMITTED] TR19AP24.031
[[Page 28924]]
NYSERDA commented that the assumption used by DOE in the NOPR
regarding SC-CO2 based on current Federal guidance is
significantly lower than that established by the New York Department of
Environmental Conservation, and DOE may be underestimating the climate
benefits from this proposed standard. (NYSERDA, No. 166 at p. 3)
The IWG is preparing new SC-GHG values that reflect the current
state of science related to climate change and its impacts. Until such
values have been finalized, DOE continues to use the interim values in
the February 2021 TSD. DOE agrees that the climate benefits from the
proposed standard may be underestimated in the NOPR, but such
underestimation has no bearing on DOE's decision in the NOPR or in this
final rule.
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 SC-
GHG TSD. Table IV.21 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 13-A 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.
[GRAPHIC] [TIFF OMITTED] TR19AP24.032
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
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 cases using the specific discount
rate that had been used to obtain the SC-CH4 and SC-
N2O estimates in each case.
c. Sensitivity Analysis Using EPA's New SC-GHG Estimates
In the regulatory impact analysis of EPA's December 2023 Final
Rulemaking, ``Standards of Performance for New, Reconstructed, and
Modified Sources and Emissions Guidelines for Existing Sources: Oil and
Natural Gas Sector Climate Review,'' EPA estimated climate benefits
using a new set of Social Cost of Greenhouse Gas (SC-GHG) estimates.
These estimates incorporate recent research addressing recommendations
of the National Academies (2017), responses to public comments on an
earlier sensitivity analysis using draft SC-GHG estimates, and comments
from a 2023 external peer review of the accompanying technical
report.\91\
---------------------------------------------------------------------------
\91\ For further information about the methodology used to
develop these values, public comments, and information pertaining to
the peer review, see https://www.epa.gov/environmental-economics/scghg.
---------------------------------------------------------------------------
The full set of annual values is presented in appendix 13C of the
direct final rule TSD. Although DOE continues
[[Page 28925]]
to review EPA's estimates, for this rulemaking, DOE used these new SC-
GHG values to conduct a sensitivity analysis of the value of GHG
emissions reductions associated with alternative standards for GSLs.
This sensitivity analysis provides an expanded range of potential
climate benefits associated with amended standards. The final year of
EPA's new estimates is 2080; therefore, DOE did not monetize the
climate benefits of GHG emissions reductions occurring after 2080.
The results of the sensitivity analysis are presented in appendix
13C of the final rule TSD. The overall climate benefits are larger when
using EPA's higher SC-GHG estimates, compared to the climate benefits
using the more conservative IWG SC-GHG estimates. However, DOE's
conclusion that the standards are economically justified remains the
same regardless of which SC-GHG estimates are used.
2. Monetization of Other Emissions Impacts
For the 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 EPA's
Benefits Mapping and Analysis Program.\92\ 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 period; for
years beyond 2040, the values are held constant. DOE combined the EPA
regional benefit-per-ton estimates with regional information on
electricity consumption and emissions from AEO2023 to define weighted-
average national values for NOX and SO2 (see
appendix 13B of the final rule TSD).
---------------------------------------------------------------------------
\92\ U.S. Environmental Protection Agency. ``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-directly-emitted-pm25-pm25-precursors-and-ozone-precursors.
---------------------------------------------------------------------------
DOE multiplied the site emissions reduction (in tons) in each year
by the associated $/ton values, and then discounted each series using
discount rates of 3 percent and 7 percent as appropriate.
M. Utility Impact Analysis
The utility impact analysis estimates the changes in installed
electrical capacity and generation projected to result for each
considered TSL. The analysis is based on published output from the NEMS
associated with AEO2023. 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
AEO2023 Reference case and various side cases. Details of the
methodology are provided in the appendices to chapter 14 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.\93\ 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.
---------------------------------------------------------------------------
\93\ See U.S. Department of Commerce--Bureau of Economic
Analysis. Regional Multipliers: A User Handbook for the Regional
Input-Output Modeling System (``RIMS II''). 1997. U.S. Government
Printing Office: Washington, DC. Available at www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed July 1, 2021).
---------------------------------------------------------------------------
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'').\94\ 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.
---------------------------------------------------------------------------
\94\ 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 changes in the later years of the analysis. Because
ImSET does not incorporate price changes, the employment effects
predicted by ImSET may over-estimate actual job impacts over the long
run for this rule. Therefore, DOE used ImSET only to generate results
for near-term timeframes (2029), where these uncertainties are reduced.
For more
[[Page 28926]]
details on the employment impact analysis, see chapter 15 of the final
rule TSD.
V. Analytical Results and Conclusions
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for GSLs.
It addresses the TSLs examined by DOE, the projected impacts of each of
these levels if adopted as energy conservation standards for GSLs, 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 new or 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 product classes, to
the extent that there are such interactions, and price elasticity of
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 six TSLs for GSLs. DOE developed TSLs that
combine efficiency levels for each analyzed product class. These TSLs
were developed by combining specific efficiency levels for each of the
GSL product classes analyzed by DOE. TSL 1 represents a modest increase
in efficiency, with CFL technology retained as an option for product
classes that include fluorescent lamps, including the Integrated
Omnidirectional Short and Non-integrated Omnidirectional product
classes. TSL 2 represents a moderate standard level that can only be
met by LED options for all product classes. TSL 3 increases the
stringency for the Integrated Omnidirectional Short, Integrated
Omnidirectional Long and Integrated Directional product classes, and
represents a significant increase in NES compared to TSLs 1 and 2. TSL
4 increases the standard level for the Integrated Omnidirectional Short
product class, as well as the expected NES. TSL 5 represents the
maximum NPV. TSL 6 represents max-tech. DOE presents the results for
the TSLs in this document, while the results for all efficiency levels
that DOE analyzed are in the final rule TSD.
Table V.1 presents the TSLs and the corresponding efficiency levels
that DOE has identified for potential amended energy conservation
standards for GSLs.
[GRAPHIC] [TIFF OMITTED] TR19AP24.033
DOE constructed the TSLs for this final rule to include ELs
representative of ELs with similar characteristics (i.e., using similar
technologies and/or efficiencies, and having roughly comparable
equipment availability) or representing significant increases in
efficiency and energy savings. The use of representative ELs provided
for greater distinction between the TSLs. While representative ELs were
included in the TSLs, DOE considered all efficiency levels as part of
its analysis.\95\
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\95\ Efficiency levels that were analyzed for this final rule
are discussed in section 0 of this document. Results by efficiency
level are presented in TSD chapter 8.
---------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on GSL consumers by looking at
the effects that potential amended standards at each TSL would have on
the LCC and PBP. DOE also examined the impacts of potential standards
on selected consumer subgroups. These analyses are discussed in the
following sections.
a. Life-Cycle Cost and Payback Period
In general, higher-efficiency products affect consumers in two
ways: (1) purchase price increases and (2) annual operating costs
decrease. Inputs used for calculating the LCC and PBP include total
installed costs (i.e., product price plus installation costs), and
operating costs (i.e., annual energy use, energy prices, energy price
trends, repair costs, and maintenance costs). The LCC calculation also
uses product lifetime and a discount rate. Chapter 7 of the final rule
TSD provides detailed information on the LCC and PBP analyses.
Table V.2 through table V.11 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 based on the
changes in the efficacy distribution under a standard relative to the
efficacy distribution in the no-new-standards case in the first full
year of compliance (see section IV.F.9 of this document). Because some
consumers purchase products with higher efficiency than the minimum
allowed under a standard in the no-new-standards case, the average
savings can differ from 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
[[Page 28927]]
LCC increases at a given TSL experience a net cost.
BILLING CODE 6450-01-P
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[[Page 28928]]
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[[Page 28929]]
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[[Page 28932]]
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[GRAPHIC] [TIFF OMITTED] TR19AP24.043
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on low-income households and small businesses. Table
V.12 and 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 GSLs. In most cases, the average LCC
savings and PBP for low-income households and small businesses at the
considered efficiency levels are not substantially different from the
average for all consumers. Chapter 10 of the final rule TSD presents
the complete LCC and PBP results for the subgroups.
[[Page 28933]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.044
[[Page 28934]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.045
c. Rebuttable Presumption Payback
As discussed in section IV.F.11 of this document, EPCA establishes
a rebuttable presumption that an energy conservation standard is
economically justified if the increased purchase cost for a product
that meets the standard is less than three times the value of the
first-year energy savings resulting from the standard. In calculating a
rebuttable presumption payback period for each of the considered TSLs,
DOE used discrete values, and as required by EPCA, based the energy use
calculation on the DOE test procedures for GSLs. In contrast, the PBPs
presented in section V.B.1.a of this document were calculated using
[[Page 28935]]
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 GSLs. 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.
[GRAPHIC] [TIFF OMITTED] TR19AP24.046
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of new and amended
energy conservation standards on manufacturers of GSLs. The next
section describes the expected impacts on manufacturers at each
considered TSL. Chapter 11 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 a standard. The
following tables summarize the estimated financial impacts (represented
by changes in INPV) of potential new and amended energy conservation
standards on manufacturers of GSLs, as well as the conversion costs
that DOE estimates manufacturers of GSLs would incur at each TSL. To
evaluate the range
[[Page 28936]]
of cash flow impacts on the GSL industry, DOE modeled two manufacturer
markup scenarios using different assumptions that correspond to the
range of anticipated market responses to new and amended energy
conservation standards: (1) the preservation of gross margin scenario
and (2) the preservation of operating profit scenario, as previously
described in section IV.J.2.d of this document.
Each of the modeled scenarios results in a unique set of cash flows
and corresponding industry values at each TSL for GSL manufacturers. In
the following discussion, the INPV results refer to the difference in
industry value between the no-new-standards case and each standards
case (i.e., TSLs) resulting from the sum of discounted cash flows from
2024 through 2058. 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 and amended standards are required.
DOE presents the range in INPV for GSL manufacturers in table V.15
and table V.16. DOE presents the impacts to industry cash flows and the
conversion costs in table V.17.
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[GRAPHIC] [TIFF OMITTED] TR19AP24.048
[GRAPHIC] [TIFF OMITTED] TR19AP24.049
BILLING CODE 6450-01-C
At TSL 6, DOE estimates the change in INPV will range from -$322
million to -$155 million, which represents a change in INPV of -15.3
percent to -7.3 percent, respectively. At TSL 6, industry free cash
flow decreases to -$49 million, which represents a decrease of
approximately 141 percent, compared to the no-new-standards case value
of $119 million in 2028, the year before the first full year of
compliance.
TSL 6 sets the efficacy level at EL 7 for the Integrated
Omnidirectional Short product class, which is max-tech; at EL 6 for the
Integrated Omnidirectional Long product class, which is max-tech; at EL
5 for the Integrated Directional product class, which is max-tech; and
at EL 3 for the Non-Integrated Omnidirectional Short and Non-Integrated
Directional product classes, which is max-tech for those product
classes. DOE estimates that
[[Page 28937]]
approximately 17 percent of the Integrated Omnidirectional Short
product class shipments; approximately 14 percent of the Integrated
Omnidirectional Long product class shipments; approximately 35 percent
of the Integrated Directional product class shipments; approximately 54
percent of the Non-Integrated Omnidirectional Short product class
shipments; and approximately 26 percent of the Non-Integrated
Directional product class shipments will meet the ELs required at TSL 6
in 2029, the first full year of compliance of new and amended
standards.
DOE does not expect manufacturers to incur any capital conversion
costs at TSL 6. At TSL 6, additional LED lamp production capacity is
not expected to be needed to meet the expected volume of LED lamp
shipments, as GSL manufacturers are expected to produce more LED lamps
for every product class in the years leading up to 2029 than in 2029,
the first full year of compliance of new and amended standards. DOE
estimates approximately $430 million in product conversion costs as
most LED lamps may need to be re-modeled to meet ELs required at TSL 6.
DOE does not estimate any conversion costs for CFL models as GSL
manufacturers are expected to discontinue all CFLs for any standard
level beyond TSL 1.
At TSL 6, the shipment weighted-average MPC increases moderately by
approximately 12.9 percent relative to the no-new-standards case MPC.
In the preservation of gross margin scenario, this increase in MPC
causes an increase in manufacturer free cash flow. However, the $430
million in conversion costs estimated at TSL 6, ultimately results in a
moderately negative change in INPV at TSL 6 under the preservation of
gross margin scenario.
Under the preservation of operating profit scenario, the moderate
increase in the shipment weighted-average MPC results in a slightly
lower average manufacturer markup of 1.53 (compared to the 1.55
manufacturer markup used in the no-new-standards case). This slightly
lower average manufacturer markup and the $430 million in conversion
costs result in a moderately negative change in INPV at TSL 6 under the
preservation of operating profit scenario.
At TSL 5, DOE estimates the change in INPV will range from -$316
million to -$154 million, which represents a change in INPV of -15.0
percent to -7.3 percent, respectively. At TSL 5, industry free cash
flow decreases to -$47 million, which represents a decrease of
approximately 140 percent, compared to the no-new-standards case value
of $119 million in 2028, the year before the first full year of
compliance.
TSL 5 sets the efficacy level at EL 7 for the Integrated
Omnidirectional Short product class, which is max-tech; at EL 5 for the
Integrated Omnidirectional Long product class; at EL 5 for the
Integrated Directional product class, which is max-tech; and at EL 3
for the Non-Integrated Omnidirectional Short and Non-Integrated
Directional product classes, which is max-tech for those product
classes. DOE estimates that approximately 17 percent of the Integrated
Omnidirectional Short product class shipments; approximately 28 percent
of the Integrated Omnidirectional Long product class shipments;
approximately 35 percent of the Integrated Directional product class
shipments; approximately 54 percent of the Non-Integrated
Omnidirectional Short product class shipments; and approximately 26
percent of the Non-Integrated Directional product class shipments will
meet or exceed the ELs required at TSL 5 in 2029, the first full year
of compliance of new and amended standards.
DOE does not expect manufacturers to incur any capital conversion
costs at TSL 5. At TSL 5, additional LED lamp production capacity is
not expected to be needed to meet the expected volume of LED lamp
shipments, as GSL manufacturers are expected to produce more LED lamps
for every product class in the years leading up to 2029 than in 2029,
the first full year of compliance of new and amended standards. DOE
estimates approximately $426 million in product conversion costs as
most LED lamps may need to be re-modeled to meet ELs required at TSL 5.
DOE does not estimate any conversion costs for CFL models as GSL
manufacturers are expected to discontinue all CFLs for any standard
level beyond TSL 1.
At TSL 5, the shipment weighted-average MPC increases moderately by
approximately 12.8 percent relative to the no-new-standards case MPC.
In the preservation of gross margin scenario, this increase in MPC
causes an increase in manufacturer free cash flow. However, the $429
million in conversion costs estimated at TSL 5, ultimately results in a
moderately negative change in INPV at TSL 5 under the preservation of
gross margin scenario.
Under the preservation of operating profit scenario, the moderate
increase in the shipment weighted-average MPC results in a slightly
lower average manufacturer markup of 1.53 (compared to the 1.55
manufacturer markup used in the no-new-standards case). This slightly
lower average manufacturer markup and the $429 million in conversion
costs result in a moderately negative change in INPV at TSL 5 under the
preservation of operating profit scenario.
At TSL 4, DOE estimates the change in INPV will range from -$219
million to -$149 million, which represents a change in INPV of -10.4
percent to -7.1 percent, respectively. At TSL 4, industry free cash
flow decreases to -$33 million, which represents a decrease of
approximately 127 percent, compared to the no-new-standards case value
of $119 million in 2028, the year before the first full year of
compliance.
TSL 4 sets the efficacy level at EL 6 for the Integrated
Omnidirectional Short product class; at EL 5 for the Integrated
Omnidirectional Long product class; at EL 5 for the Integrated
Directional product class, which is max-tech; at EL 3 for the Non-
Integrated Omnidirectional Short product class, which is max-tech; and
at EL 1 for the Non-Integrated Directional product class. DOE estimates
that approximately 31 percent of the Integrated Omnidirectional Short
product class shipments; approximately 28 percent of the Integrated
Omnidirectional Long product class shipments; approximately 35 percent
of the Integrated Directional product class shipments; approximately 54
percent of the Non-Integrated Omnidirectional Short product class
shipments; and approximately 74 percent of the Non-Integrated
Directional product class shipments will meet or exceed the ELs
required at TSL 4 in 2029, the first full year of compliance of new and
amended standards.
DOE does not expect manufacturers to incur any capital conversion
costs at TSL 4. At TSL 4, additional LED lamp production capacity is
not expected to be needed to meet the expected volume of LED lamp
shipments, as GSL manufacturers are expected to produce more LED lamps
for every product class in the years leading up to 2029 than in 2029,
the first full year of compliance of new and amended standards. DOE
estimates approximately $394 million in product conversion costs as
many LED lamps may need to be re-modeled to meet ELs required at TSL 4.
DOE does not estimate any conversion costs for CFL models as GSL
manufacturers are expected to discontinue all CFLs for any standard
level beyond TSL 1.
At TSL 4, the shipment weighted-average MPC increases moderately by
approximately 10.4 percent relative to the no-new-standards case MPC.
In the preservation of gross margin scenario, this increase in MPC
causes an increase
[[Page 28938]]
in manufacturer free cash flow. However, the $394 million in conversion
costs estimated at TSL 4, ultimately results in a moderately negative
change in INPV at TSL 4 under the preservation of gross margin
scenario.
Under the preservation of operating profit scenario, the moderate
increase in the shipment weighted-average MPC results in a slightly
lower average manufacturer markup of 1.54 (compared to the 1.55
manufacturer markup used in the no-new-standards case). This slightly
lower average manufacturer markup and the $394 million in conversion
costs result in a moderately negative change in INPV at TSL 4 under the
preservation of operating profit scenario.
At TSL 3, DOE estimates the change in INPV will range from -$200
million to -$159 million, which represents a change in INPV of -9.5
percent to -7.5 percent, respectively. At TSL 3, industry free cash
flow decreases to -$16 million, which represents a decrease of
approximately 113 percent, compared to the no-new-standards case value
of $119 million in 2028, the year before the first full year of
compliance.
TSL 3 sets the efficacy level at EL 5 for the Integrated
Omnidirectional Short product class; at EL 5 for the Integrated
Omnidirectional Long product class; at EL 5 for the Integrated
Directional product class, which is max-tech; at EL 3 for the Non-
Integrated Omnidirectional Short product class, which is max-tech; and
at EL 1 for the Non-Integrated Directional product class. DOE estimates
that approximately 45 percent of the Integrated Omnidirectional Short
product class shipments; approximately 28 percent of the Integrated
Omnidirectional Long product class shipments; approximately 35 percent
of the Integrated Directional product class shipments; approximately 54
percent of the Non-Integrated Omnidirectional Short product class
shipments; and approximately 74 percent of the Non-Integrated
Directional product class shipments will meet or exceed the ELs
required at TSL 3 in 2029, the first full year of compliance of new and
amended standards.
DOE does not expect manufacturers to incur any capital conversion
costs at TSL 3. At TSL 3, additional LED lamp production capacity is
not expected to be needed to meet the expected volume of LED lamp
shipments, as GSL manufacturers are expected to produce more LED lamps
for every product class in the years leading up to 2029 than in 2029,
the first full year of compliance of new and amended standards. DOE
estimates approximately $356 million in product conversion costs as
many LED lamps may need to be re-modeled to meet ELs required at TSL 3.
DOE does not estimate any conversion costs for CFL models as GSL
manufacturers are expected to discontinue all CFLs for any standard
level beyond TSL 1.
At TSL 3, the shipment weighted-average MPC increases by
approximately 6.7 percent relative to the no-new-standards case MPC. In
the preservation of gross margin scenario, this increase in MPC causes
an increase in manufacturer free cash flow. However, the $356 million
in conversion costs estimated at TSL 3, ultimately results in a
moderately negative change in INPV at TSL 3 under the preservation of
gross margin scenario.
Under the preservation of operating profit scenario, the increase
in the shipment weighted-average MPC results in a slightly lower
average manufacturer markup. This slightly lower average manufacturer
markup and the $356 million in conversion costs result in a moderately
negative change in INPV at TSL 3 under the preservation of operating
profit scenario.
At TSL 2, DOE estimates the change in INPV will range from -$166
million to -$159 million, which represents a change in INPV of -7.9
percent to -7.6 percent, respectively. At TSL 2, industry free cash
flow decreases to $37 million, which represents a decrease of
approximately 69 percent, compared to the no-new-standards case value
of $119 million in 2028, the year before the first full year of
compliance.
TSL 2 sets the efficacy level at EL 3 for the Integrated
Omnidirectional Short product class; at EL 3 for the Integrated
Omnidirectional Long product class; at EL 3 for the Integrated
Directional product class; at EL 3 for the Non-Integrated
Omnidirectional Short product class, which is max-tech; and at EL 1 for
the Non-Integrated Directional product class. DOE estimates that
approximately 98 percent of the Integrated Omnidirectional Short
product class shipments; approximately 57 percent of the Integrated
Omnidirectional Long product class shipments; approximately 73 percent
of the Integrated Directional product class shipments; approximately 54
percent of the Non-Integrated Omnidirectional Short product class
shipments; and approximately 74 percent of the Non-Integrated
Directional product class shipments will meet or exceed the ELs
required at TSL 2 in 2029, the first full year of compliance of new and
amended standards.
DOE does not expect manufacturers to incur any capital conversion
costs at TSL 2. At TSL 2, additional LED lamp production capacity is
not expected to be needed to meet the expected volume of LED lamp
shipments, as GSL manufacturers are expected to produce more LED lamps
for every product class in the years leading up to 2029 than in 2029,
the first full year of compliance of new and amended standards. DOE
estimates approximately $233 million in product conversion costs as
some LED lamps may need to be re-modeled to meet ELs required at TSL 2.
DOE does not estimate any conversion costs for CFL models as GSL
manufacturers are expected to discontinue all CFLs for any standard
level beyond TSL 1.
At TSL 2, the shipment weighted-average MPC slightly increases by
approximately 0.2 percent relative to the no-new-standards case MPC. In
the preservation of gross margin scenario, this slight increase in MPC
causes a marginal increase in manufacturer free cash flow. However, the
$233 million in conversion costs estimated at TSL 2, ultimately results
in a moderately negative change in INPV at TSL 2 under the preservation
of gross margin scenario.
Under the preservation of operating profit scenario, the slight
increase in the shipment weighted-average MPC results in a slightly
lower average manufacturer markup. This slightly lower average
manufacturer markup and the $233 million in conversion costs result in
a moderately negative change in INPV at TSL 2 under the preservation of
operating profit scenario.
At TSL 1, DOE estimates the change in INPV will range from -$60
million to -$54 million, which represents a change in INPV of -2.8
percent to -2.6 percent, respectively. At TSL 1, industry free cash
flow decreases to $88 million, which represents a decrease of
approximately 26 percent, compared to the no-new-standards case value
of $119 million in 2028, the year before the first full year of
compliance.
TSL 1 sets the efficacy level at EL 2 for the Integrated
Omnidirectional Short product class; at EL 1 for the Integrated
Omnidirectional Long product class; at EL 1 for the Integrated
Directional product class; at EL 1 for the Non-Integrated
Omnidirectional Short product class; and at EL 1 for the Non-Integrated
Directional product class. DOE estimates that approximately 99 percent
of the Integrated Omnidirectional Short product class shipments;
approximately 86 percent of the Integrated Omnidirectional Long product
class shipments; approximately 99 percent of the Integrated Directional
[[Page 28939]]
product class shipments; approximately 97 percent of the Non-Integrated
Omnidirectional Short product class shipments; and approximately 74
percent of the Non-Integrated Directional product class shipments will
meet or exceed the ELs required at TSL 1 in 2029, the first full year
of compliance of new and amended standards.
DOE does not expect manufacturers to incur any capital conversion
costs at TSL 1. At TSL 1, additional LED lamp production capacity is
not expected to be needed to meet the expected volume of LED lamp
shipments, as GSL manufacturers are expected to produce more LED lamps
for every product class in the years leading up to 2029 than in 2029,
the first full year of compliance of new and amended standards. DOE
estimates approximately $87 million in product conversion costs. Most,
but not all, LED lamps would meet the ELs required at TSL 1, and
therefore would not need to be re-modeled.
At TSL 1, the shipment weighted-average MPC slightly increases by
approximately 0.9 percent relative to the no-new-standards case MPC. In
the preservation of gross margin scenario, this slight increase in MPC
causes a marginal increase in manufacturer free cash flow. However, the
$87 million in conversion costs estimated at TSL 1, ultimately results
in a slightly negative change in INPV at TSL 1 under the preservation
of gross margin scenario.
Under the preservation of operating profit scenario, the slight
increase in the shipment weighted-average MPC results in a slightly
lower average manufacturer markup. This slightly lower average
manufacturer markup and the $87 million in conversion costs result in a
slightly negative change in INPV at TSL 1 under the preservation of
operating profit scenario.
b. Direct Impacts on Employment
Based on previous manufacturer interviews and public comments from
GSL rulemaking documents previously published, DOE determined that
there are no GSL manufacturers that manufacture CFLs in the United
States, as all CFLs sold in the United States are manufactured abroad.
Some of these CFL manufacturing facilities are owned by the GSL
manufacturer and others outsource their CFL production to original
equipment manufacturers located primarily in Asia. However, several GSL
manufacturers that sell CFLs in the United States have domestic
employees responsible for the R&D, marketing, sales, and distribution
of CFLs.
In the January 2023 NOPR, DOE estimated that in the no-new-
standards case there could be approximately 30 domestic employees
dedicated to the non-production aspects of CFLs in 2029, the first full
year of compliance for GSL standards. DOE estimates GSL manufacturers
selling CFLs in the U.S. could reduce or eliminate up to 30 domestic
non-production employees if CFLs are not able to meet the adopted new
and amended standards. DOE predicts that CFLs would not be able to meet
energy conservation standards set at TSL 2 or higher.
While most LED lamp manufacturing is done abroad, there is a
limited number of LED lamps and LED lamp components covered by this
rulemaking that are manufactured domestically. EEI recalled that
domestic light bulb factories shut down due to Federal action around
2010-2011, and that with other products, manufacturers have moved
production overseas to lower costs. EEI inquired whether the employment
analysis accounted for the percentage of GSLs manufactured in the
United States versus overseas. (EEI, Public Meeting Transcript, No. 27
at p. 119-121)
Additionally, DOE received comments from private citizens \96\ that
stated heavy regulation of lamps has forced many American-based
factories to shut down, removing a number of jobs for American
manufacturers. Commenters stated that DOE should be trying to keep
these manufacturers in the United States instead of relying on subpar
products from overseas.
---------------------------------------------------------------------------
\96\ Comments submitted in response to the January 2023 NOPR,
including comments from private citizens can be found in the docket
of DOE's rulemaking to develop energy conservation standards for
GSLs at www.regulations.gov/docket/EERE-2022-BT-STD-0022/comments.
---------------------------------------------------------------------------
DOE estimated that over 90 percent of GSLs sold in the United
States are manufactured abroad. The previous lamp factory shutdowns
referenced by the interested parties were specifically caused by
changes in lighting technologies being manufactured. All GSL
manufacturing that occurs domestically that is covered by this
rulemaking uses LED technology. DOE assumes that all GSL manufacturers
manufacturing LED lamps in the U.S. would continue to manufacture LED
lamps in the U.S. after compliance with standards and therefore would
not reduce or eliminate any domestic production or non-production
employees involved in manufacturing or selling of LED lamps.
DOE did not estimate a potential increase in domestic production
employment due to energy conservation standards, as existing domestic
LED lamp manufacturing represents a small portion of LED lamp
manufacturing overall and would not necessarily increase as LED lamp
sales increase. Therefore, DOE estimates that GSL manufacturers could
reduce or eliminate up to 30 domestic non-production employees (that
are associated with the non-production of CFLs) for all TSLs higher
than TSL 2 (i.e., at TSLs 3-6).
c. Impacts on Manufacturing Capacity
Based on the final rule shipments analysis, the quantity of LED
lamps sold for all product classes reaches approximately 566 million in
2024 and then declines to approximately 400 million by 2029, the first
full year of compliance for GSL standards, in the no-new-standards
case. This represents a decrease of approximately 30 percent from 2024
to 2029. Based on the final rule shipments analysis, while all TSLs
project an increase in number of LED lamps sold in 2029 (in the
standards cases) compared to the no-new standards case, the number of
LED lamps sold in 2029 (for all TSLs), is smaller than the number of
LED lamps sold in the years leading up to 2029. Therefore, DOE assumed
that GSL manufacturers would be able to maintain their 2028 LED lamp
production capacity in 2029 and manufactures would be able to meet the
LED lamp production capacity for all TSLs in 2029.
DOE does not anticipate that manufacturing the same, or slightly
fewer, quantity of LED lamps that are more efficacious would impact the
production capacity for LED manufacturers.
d. Impacts on Subgroups of Manufacturers
Using average cost assumptions to develop an industry cash-flow
estimate may not be adequate for assessing differential impacts among
manufacturer subgroups. Small manufacturers, niche 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
[[Page 28940]]
company is considered a small business. The size standards are codified
at 13 CFR part 121. To be categorized as a small business under North
American Industry Classification System (``NAICS'') code 335139,
``electric lamp bulb and other lighting equipment manufacturing'' a GSL
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. DOE identified
more than 300 GSL manufacturers that qualify as small businesses.
The small business subgroup analysis is discussed in more detail in
section VI.B and in chapter 11 of the final rule TSD.
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 first full year of compliance
(i.e., 2029) of the new and amended energy conservation standards for
GSLs. This information is presented in table V.18.
[GRAPHIC] [TIFF OMITTED] TR19AP24.050
3. National Impact Analysis
This section presents DOE's estimates of the national energy
savings and the NPV of consumer benefits that would result from each of
the TSLs considered as potential amended standards.
a. Significance of Energy Savings
To estimate the energy savings attributable to potential amended
standards for GSLs, 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 (2029-2058). Table V.19
presents DOE's projections of the national energy savings for each TSL
considered for GSLs. The savings were calculated using the approach
described in section IV.H of this document.
BILLING CODE 6450-01-P
[[Page 28941]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.051
OMB Circular A-4 \97\ 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.\98\ The review timeframe established in EPCA is generally
not synchronized with the product lifetime, product manufacturing
cycles, or other factors specific to GSLs. Thus, such results are
presented for informational purposes only and are not indicative of any
change in DOE's
[[Page 28942]]
analytical methodology. The NES sensitivity analysis results based on a
9-year analytical period are presented in table V.20. The impacts are
counted over the lifetime of GSLs purchased during the period 2029-
2037.
---------------------------------------------------------------------------
\97\ 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
Aug. 21, 2023).
\98\ 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. (42 U.S.C.
6295(m)). 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.
[GRAPHIC] [TIFF OMITTED] TR19AP24.052
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 GSLs. In
accordance with OMB's guidelines on regulatory analysis,\99\ DOE
calculated NPV using both a 7-percent and a 3-percent real discount
rate. Table V.21 shows the consumer NPV results with impacts counted
over the lifetime of products purchased during the period 2029-2058.
---------------------------------------------------------------------------
\99\ 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
March 25, 2022).
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[[Page 28943]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.053
The NPV results based on the aforementioned 9-year analytical
period are presented in table V.22. The impacts are counted over the
lifetime of products purchased during the period 2029-2037. 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.
[[Page 28944]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.054
BILLING CODE 6450-01-C
The previous results reflect the use of a default trend to estimate
the change in price for GSLs over the analysis period (see sections
IV.G and IV.H of this document). As part of the NIA, DOE also analyzed
high and low benefits scenarios that use inputs from variants of the
AEO2023 Reference case. For the high benefits scenario, DOE uses the
AEO2023 High Economic Growth scenario, which has a higher energy price
trend relative to the Reference case, as well as a lower price learning
rate. The lower learning rate in this scenario slows the adoption of
more efficacious lamp options in the no-new-standards case, increasing
the available energy savings attributable to a standard. For the low
benefits scenario, DOE uses the AEO2023 Low Economic Growth scenario,
which has a lower energy price trend relative to the Reference case, as
well as a higher price learning rate. The higher learning rate in this
scenario accelerates the adoption of more efficacious lamp options in
the no-new-standards case (relative to the Reference scenario)
decreasing the available energy savings attributable to a standard. NIA
results based on these cases are presented in appendix 9D of the final
rule TSD.
c. Indirect Impacts on Employment
DOE estimates that amended energy conservation standards for GSLs
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
[[Page 28945]]
years of the analysis. Therefore, DOE generated results for near-term
timeframes (2029-2032), 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 15 of the final rule TSD presents detailed results
regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
As discussed in section IV.C.1.b of this document, DOE has
concluded that the standards adopted in this final rule will not lessen
the utility or performance of the GSLs 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
of this document, 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 concluded that the proposed
energy conservation standards for GSLs are unlikely 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 14 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 GSLs is additionally expected to yield environmental
benefits in the form of reduced emissions of certain air pollutants and
greenhouse gases. Table V.23 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 12 of the final rule TSD.
BILLING CODE 6450-01-P
[[Page 28946]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.055
BILLING CODE 6450-01-C
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 GSLs. Section
IV.L.1.a of this document discusses the estimated SC-CO2
values that DOE used. Table V.24 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 28947]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.056
As discussed in section IV.L.1.b of this document, DOE estimated
the climate benefits likely to result from the reduced emissions of
methane and N2O that DOE estimated for each of the
considered TSLs for GSLs. Table V.25 presents the value of the
CH4 emissions reduction at each TSL, and table V.26 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 13 of the final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR19AP24.057
[GRAPHIC] [TIFF OMITTED] TR19AP24.058
DOE is well aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
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
[[Page 28948]]
well as other methodological assumptions and issues. DOE notes 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 GSLs. The dollar-
per-ton values that DOE used are discussed in section IV.L of this
document. Table V.27 presents the present value for NOX
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and table V.28 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 13 of the final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR19AP24.059
[GRAPHIC] [TIFF OMITTED] TR19AP24.060
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.
DOE emphasizes that the emissions analysis, including the SC-GHG
analysis, presented in this final rule and TSD was performed in support
of the cost-benefit analyses required by Executive Order 12866, and is
provided to inform the public of the impacts of emissions reductions
resulting from each TSL considered.
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.29 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 GSLs, and are measured for the
lifetime of products shipped during the period 2029-2058. 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 GSLs shipped during the period 2029-2058.
[[Page 28949]]
[GRAPHIC] [TIFF OMITTED] TR19AP24.061
C. Conclusion
When considering new or amended energy conservation standards, the
standards that DOE adopts for any type (or class) of covered product
must be designed to achieve the maximum improvement in energy
efficiency that the Secretary determines is technologically feasible
and economically justified. (42 U.S.C. 6295(o)(2)(A)) 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. 6295(o)(2)(B)(i)) The new or
amended standard must also result in significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B)).
For this final rule, DOE considered the impacts of amended
standards for GSLs 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.
DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy
savings in the absence of government intervention. Much of this
literature attempts to explain why consumers appear to undervalue
energy efficiency improvements. There is evidence that consumers
undervalue future energy savings as a result of (1) a lack of
information; (2) a lack of sufficient salience of the long-term or
aggregate benefits; (3) a lack of sufficient savings to warrant
delaying or altering purchases; (4) excessive focus on the short term,
in the form of inconsistent weighting of future energy cost savings
relative to available returns on other investments; (5) computational
or other difficulties associated with the evaluation of relevant
tradeoffs; and (6) a divergence in incentives (for example, between
renters and owners, or builders and purchasers). Having less than
perfect foresight and a high degree of uncertainty about the future,
consumers may trade off these types of investments at a higher-than-
expected rate between current consumption and uncertain future energy
cost savings.
Consumers value a variety of attributes in general service lamps.
These attributes can factor into consumer purchasing decisions along
with initial purchase and operating costs. For example, DOE analyzed
consumer preferences for lifetime, presence of mercury, and dimmability
in its modeling of consumer purchasing decisions for GSLs. Non-
efficiency preferences such as consumer loyalty to a particular brand
is not captured by DOE's model. DOE also does not explicitly model
shape or color temperature as the former is typically a function of a
fixture and DOE assumes the latter does not typically impact price or
efficiency; though both could theoretically factor into consumer
decisions. General considerations for consumer welfare and preferences,
consumer choice decision modeling, and discrete choice estimation are
areas DOE plans to explore further in a forthcoming rulemaking action
related to the agency's updates to its overall analytic framework.
In DOE's current regulatory analysis, potential changes in the
benefits and costs of a regulation due to changes in consumer purchase
decisions are included in two ways. First, if consumers forego the
purchase of a product in the standards case, this decreases sales for
product manufacturers, and the impact on manufacturers attributed to
lost revenue is included in the MIA. Second, DOE accounts for energy
savings attributable only to products actually used by consumers in the
standards case; if a standard decreases the number of products
purchased by consumers, this decreases the potential energy savings
from an energy conservation standard. DOE provides estimates of
shipments and changes in the volume of product purchases in chapter 8
of the final rule TSD. However, DOE's current analysis does not
explicitly control for heterogeneity in consumer preferences,
preferences across subcategories of products or specific features, or
consumer price sensitivity variation according to household
income.\100\
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\100\ P.C. Reiss and M.W. White. Household Electricity Demand,
Revisited. Review of Economic Studies. 2005. 72(3): pp. 853-883.
doi: 10.1111/0034-6527.00354.
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While DOE is not prepared at present to provide a fuller
quantifiable framework for estimating the benefits and costs of changes
in consumer
[[Page 28950]]
purchase decisions due to an energy conservation standard, DOE is
committed to developing a framework that can support empirical
quantitative tools for improved assessment of the consumer welfare
impacts of appliance standards. DOE has posted a paper that discusses
the issue of consumer welfare impacts of appliance energy conservation
standards, and potential enhancements to the methodology by which these
impacts are defined and estimated in the regulatory process.\101\ DOE
welcomes comments on how to more fully assess the potential impact of
energy conservation standards on consumer choice and how to quantify
this impact in its regulatory analysis in future rulemakings.
---------------------------------------------------------------------------
\101\ Sanstad, A.H. Notes on the Economics of Household Energy
Consumption and Technology Choice. 2010. Lawrence Berkeley National
Laboratory. Available at www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf (last accessed July
1, 2021).
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1. Benefits and Burdens of TSLs Considered for GSL Standards
Table V.30 and table V.31 summarize the quantitative impacts
estimated for each TSL for GSLs. The national impacts are measured over
the lifetime of GSLs purchased in the 30-year period that begins in the
anticipated first full year of compliance with amended standards (2029-
2058). 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 document 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.
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DOE first considered TSL 6, which represents the max-tech
efficiency levels. TSL 6 would save an estimated 4.03 quads of energy,
an amount DOE considers significant. Under TSL 6, the NPV of consumer
benefit would be $8.45 billion using a discount rate of 7 percent, and
$22.16 billion using a discount rate of 3 percent.
In the alternative analysis scenario discussed in section IV.G.1.a
of this document wherein the market for linear lamps declines at a
lower rate than in the reference scenario, energy savings at TSL 6
would be higher by 0.57 quads, while the total NPV of consumer benefit
would increase by $0.55 billion using a discount rate of 7 percent, and
$1.75 billion using a discount rate of 3 percent. See Appendix 9D of
the final rule TSD for details.
The cumulative emissions reductions at TSL 6 are 70 Mt of
CO2, 22 thousand tons of SO2, 133 thousand tons
of NOX, 0.15 tons of Hg, 608 thousand tons of
CH4, and 0.70 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 6 is $3.79 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 6 is $2.87 billion using a 7-percent discount rate and $7.50
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 6 is $15.11
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 6 is $33.45 billion.
At TSL 6 in the residential sector, the largest product classes are
Integrated Omnidirectional Short GSLs, including traditional pear-
shaped, candle-shaped, and globe-shaped GSLs, and Integrated
Directional GSLs, including reflector lamps commonly used in recessed
cans, which together account for 92 percent of annual shipments. The
average LCC impact is a savings of $0.55 and $3.17 and a simple payback
period of 0.9 years and 0.0 years, respectively, for those product
classes. The fraction of purchases associated with a net LCC cost is
24.0 percent and 0.0 percent, respectively. In the commercial sector,
the largest product classes are Integrated Omnidirectional Short GSLs
and Integrated Omnidirectional Long GSLs, including tubular LED GSLs
often referred to as TLEDs, which together account for 81 percent of
annual shipments. The average LCC impact is a savings of $0.94 and
$4.16 and a simple payback period of 0.6 years and 3.3 years,
respectively, for those product classes. The fraction of purchases
associated with a net LCC cost is 10.8 and 2.9 percent, respectively.
Overall, 18.0 percent of GSL purchases are associated with a net cost
and the average LCC savings are positive for all product classes.
At TSL 6, an estimated 23.9 percent of purchases of Integrated
Omnidirectional Short GSLs and 0.0 percent of purchases of Integrated
Directional GSLs by low-income households are associated with a net
cost. While 23.9 percent of purchases of Integrated Omnidirectional
Short GSLs by low-income households would be associated with a net
cost, DOE notes that a third of those purchases have a net cost of no
more than $0.25 and nearly 75 percent of those purchases have a net
cost of no more than $1.00. Moreover, DOE notes that the typical low-
income household has multiple Integrated Omnidirectional Short GSLs.
Based on the average total number of lamps in a low-income household
(23, based on RECS) and the average fraction of lamps in the
residential sector that are Integrated Omnidirectional Short GSLs (78
percent, based on DOE's
[[Page 28954]]
shipments analysis), DOE estimates that low-income households would
have approximately 19 Integrated Omnidirectional Short GSLs, on
average. An analysis accounting for multiple lamp purchases would show
that significantly fewer low-income consumers experience a net cost at
the household level than on a per-purchase basis. For example, assuming
low-income households purchase two lamps per year over a period of 7
years (corresponding to the average service life of the baseline
Integrated Omnidirectional Short lamp), DOE estimates that only 9.0
percent of low-income households would experience a net cost and 91.0
percent would experience a net benefit.
At TSL 6, the projected change in INPV ranges from a decrease of
$322 million to a decrease of $155 million, which corresponds to
decreases of 15.3 percent and 7.3 percent, respectively. DOE estimates
that approximately 83 percent of the Integrated Omnidirectional Short
product class shipments; approximately 86 percent of the Integrated
Omnidirectional Long product class shipments; approximately 65 percent
of the Integrated Directional product class shipments; approximately 46
percent of the Non-Integrated Omnidirectional Short product class
shipments; and approximately 74 percent of the Non-Integrated
Directional product class shipments will not meet the ELs required at
TSL 6 in 2029, the first full year of compliance of new and amended
standards. DOE estimates that industry must invest $430 million to
redesign these non-compliant models into compliant models in order to
meet the ELs analyzed at TSL 6. DOE assumed that most, if not all, LED
lamp models would be remodeled between the publication of this final
rule and the compliance date, even in the absence of DOE energy
conservation standards for GSLs. Therefore, GSL energy conservation
standards set at TSL 6 would require GSL manufacturers to remodel their
GSL models to a higher efficacy level during their regularly scheduled
remodel cycle, due to energy conservation standards. GSL manufacturers
would incur additional engineering costs to redesign their LED lamps to
meet this higher efficacy requirement. DOE did not estimate that GSL
manufacturers would incur any capital conversion costs as the volume of
LED lamps manufactured in 2029 (the first full year of compliance)
would be fewer than the volume of LED lamps manufactured in the
previous year, 2028, even at TSL 6. Additionally, DOE did not estimate
that manufacturing more efficacious LED lamps would require additional
or different capital equipment or tooling.
After considering the analysis and weighing the benefits and
burdens, the Secretary has concluded that at a standard set at TSL 6
for GSLs is economically justified. At this TSL, the average LCC
savings for all product classes is positive. An estimated 18.0 percent
of all GSL purchases are associated with a net cost. While 23.9 percent
of purchases of Integrated Omnidirectional Short GSLs by low-income
households would be associated with a net cost, a third of those
purchases have a net cost of no more than $0.25 and nearly 75 percent
of those purchases have a net cost of no more than $1.00. And
significantly fewer low-income consumers experience a net cost at the
household level after accounting for multiple lamp purchases. The FFC
national energy savings are significant and the NPV of consumer
benefits is positive using both a 3-percent and 7-percent discount
rate. Notably, the benefits to consumers vastly outweigh the cost to
manufacturers. At TSL 6, the NPV of consumer benefits, even measured at
the more conservative discount rate of 7 percent is over 26 times
higher than the maximum estimated manufacturers' loss in INPV. The
standard levels at TSL 6 are economically justified even without
weighing the estimated monetary value of emissions reductions. When
those emissions reductions are included--representing $3.79 billion in
climate benefits (associated with the average SC-GHG at a 3-percent
discount rate), and $7.50 billion (using a 3-percent discount rate) or
$2.87 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. 86 FR 70892, 70908. Although DOE has not conducted a comparative
analysis to select the amended energy conservation standards, DOE notes
that the selected standard level represents the maximum improvement in
energy efficiency for all product classes and is only $0.1 billion less
than the maximum consumer NPV, represented by TSL 5, at both 3 and 7
percent discount rates. Additionally, compared to TSL 5, Integrated
Omnidirectional Long purchases are 0.2 percent more likely to be
associated with a net cost at TSL 6, but NES is an additional 0.02
quads in the reference scenario and an additional 0.2 quads in the
scenario where the linear lamp market persists longer. Compared to TSL
4, Integrated Omnidirectional Short purchases at TSL 6 are
approximately 1 percent more likely to be associated with a net cost,
but NES is an additional 0.3 quads and NPV is an additional $1.2
billion at 3 percent discount rate and $0.3 billion at 7 percent
discount rate. Compared to TSL 1 or 2, while 22 percent of Integrated
Omnidirectional Short purchases at TSL 6 are associated with a net
cost, compared to 1 percent at TSL 1 or 2, NES is more than 3 quads
larger at TSL 6 and NPV is greater by more than $18 billion at 3
percent discount rate and more than $6 billion at 7 percent discount
rate. These additional savings and benefits at TSL 6 are significant.
DOE considers the impacts to be, as a whole, economically justified at
TSL 6.
Although DOE considered proposed amended standard levels for GSLs
by grouping the efficiency levels for each product class into TSLs, DOE
evaluates all analyzed efficiency levels in its analysis. DOE notes
that among all possible combinations of ELs, the proposed standard
level represents the maximum NES and differs from the maximum consumer
NPV by only $0.1 billion.
Therefore, based on the previous considerations, DOE adopts the
energy conservation standards for GSLs at TSL 6. The amended energy
conservation standards for GSLs, which are expressed as lm/W, are shown
in table V.32.
[[Page 28955]]
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2. Annualized Benefits and Costs of the Adopted Standards
The benefits and costs of the adopted standards can also be
expressed in terms of annualized values. The annualized net benefit is
(1) the annualized national economic value (expressed in 2022$) 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.33 shows the annualized values for GSLs under TSL 6,
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 GSLs is $301.4 million per year in increased
equipment installed costs, while the estimated annual benefits are
$1,193.6 million from reduced equipment operating costs, $217.7 million
in GHG reductions, and $303.2 million from reduced NOX and
SO2 emissions. In this case, the net benefit amounts to
$1,413.1 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the adopted standards for GSLs is $292.2 million per
year in increased equipment costs, while the estimated annual benefits
are $1,564.6 million in reduced operating costs, $217.7 million from
GHG reductions, and $430.8 million from reduced NOX and
SO2 emissions. In this case, the net benefit amounts to
$1,920.9 million per year.
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VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
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 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 rulemaking.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (``IRFA'')
and a final regulatory flexibility analysis (``FRFA'') for any rule
that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by E.O. 13272, ``Proper Consideration of Small Entities in Agency
Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published procedures and
policies on February 19, 2003, to ensure that the potential impacts of
its rules on small entities are properly considered during the
rulemaking process. 68 FR 7990. DOE has made its procedures and
policies available on the Office of the General Counsel's website
(www.energy.gov/gc/office-general-counsel). DOE has prepared the
following FRFA for the products that are the subject of this
rulemaking.
For manufacturers of GSLs, 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 GSLs is
classified under NAICS 335139, ``electric lamp bulb and other lighting
equipment 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, and Objectives of, Rule
EPCA directs DOE to conduct two rulemaking cycles to evaluate
energy conservation standards for GSLs. (42 U.S.C. 6295(i)(6)(A)-(B))
If DOE failed to complete the first rulemaking in accordance with 42
U.S.C. 6295(i)(6)(A)(i)-(iv), or if a final rule from the first
rulemaking cycle did not produce savings greater than or equal to the
savings from a minimum efficacy standard of 45 lm/W, the statute
provides a ``backstop'' under which DOE was required to prohibit sales
of
[[Page 28959]]
GSLs that do not meet a minimum 45 lm/W standard. (42 U.S.C.
6295(i)(6)(A)(v)). As a result of DOE's failure to complete a
rulemaking in accordance with the statutory criteria, DOE codified this
backstop requirement in the May 2022 Backstop Final Rule. 87 FR 27439.
EPCA further directs DOE to initiate a second rulemaking cycle by
January 1, 2020, to determine whether standards in effect for GSILs
(which are a subset of GSLs) should be amended with more stringent
maximum wattage requirements than EPCA specifies, and whether the
exemptions for certain incandescent lamps should be maintained or
discontinued. (42 U.S.C. 6295(i)(6)(B)(i)) As in the first rulemaking
cycle, the scope of the second rulemaking is not limited to
incandescent lamp technologies. (42 U.S.C. 6295(i)(6)(B)(ii)) DOE is
publishing this final rule pursuant to this second cycle of rulemaking,
as well as section (m) of 42 U.S.C. 6295.
2. Significant Issues Raised by Public Comments in Response to the
Initial Regulatory Flexibility Analysis (``IRFA'')
DOE did not receive any substantive comments on the IRFA that was
published in the January 2023 NOPR.
3. Description and Estimated Number of Small Entities Affected
For manufacturers of GSLs, the SBA has set a size threshold, which
defines those entities classified as ``small businesses'' for the
purposes of the statute. The SBA sets a threshold of 1,250 employees or
less for an entity to be considered as a small business for this
category.
DOE created a database of GSLs covered by this rulemaking using
publicly available information. DOE's research involved information
from DOE's compliance certification database,\102\ EPA's ENERGY STAR
Certified Light Bulbs Database,\103\ manufacturers' websites, and
retailer websites. DOE found over 800 companies that sell GSLs covered
in this rulemaking. Using information from D&B Hoovers, DOE screened
out companies that have more than 1,250 employees, are completely
foreign owned and operated, or do not manufacture GSLs in the United
States. Based on the results of this analysis, DOE estimates there are
approximately 261 small businesses that assemble GSLs covered by this
rulemaking. Even though these small entities do not manufacture the
main technological components that comprise the GSL and instead import
the LEDs, LED packages, and LED drivers for inclusion in the GSLs, DOE
is identifying them because they are doing some type of assembling in
the United States. In the January 2023 NOPR, DOE included several small
businesses that sell CFLs in the IRFA. However, as previously stated in
section V.B.2.b of this document, there are no CFLs that are
manufactured in the United States. The 21 companies identified in the
January 2023 NOPR IRFA that sell CFLs do not manufacture any covered
GSLs in the United States and therefore, do not meet the definition of
a small business manufacturer. Based on DOE's updated analysis, DOE
identified approximately 261 small businesses that assemble covered
GSLs in the United States and do not manufacture the LEDs, LED
packages, or LED drivers that are used in the LED lamps that they
assemble. Instead, all of these small businesses purchase LEDs, LED
packages, and LED drivers as components from component manufacturers
abroad and then assemble these purchased components into the LED lamps
that they sell.
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\102\ www.regulations.doe.gov/certification-data.
\103\ ENERGY STAR Qualified Lamps Product List,
www.energystar.gov/productfinder/product/certified-light-bulbs/results (last accessed May 2, 2022).
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4. Description of Reporting, Recordkeeping, and Other Compliance
Requirements
For the 261 small businesses that assemble GSLs covered by this
rulemaking, these small businesses will be required to remodel many of
the LED lamps they assemble due to the adopted energy conservation
standards. However, since the primary driver of efficacy is the LEDs,
LED packages, and LED drivers, these GSL assemblers are believed to be
minimally impacted by the adopted energy conservation standards. Small
businesses assembling GSLs could be required to spend additional
engineering time to integrate the more efficacious components that they
purchase from component manufacturers to be able to meet the adopted
energy conservation standards for any LED lamp models that do not meet
the adopted energy conservation standards. DOE anticipates that most
small businesses will be able to meet the adopted energy conservation
standards by using more efficacious components such as LEDs, LED
packages, and/or LED drivers in the LED lamp models that they assemble.
DOE was not able to identify any small businesses that manufacturer
their own LEDs, LED packages, or LED drivers that are used in the LED
lamps that they assemble. Therefore, small businesses would most likely
be able to meet the adopted energy conservation standards by purchasing
more efficacious LEDs, LED packages, and/or LED drivers as a purchased
part to their LED lamps. Additionally, the process of assembling LED
lamps is not likely to require any additionally production equipment or
tooling in the assembly process, or any significant changes to the
assembly process when using more efficacious LEDs, LED packages, or LED
drivers in their LED lamps.
The methodology DOE used to estimate product conversion costs for
this final rule analysis is described in section IV.J.2.c of this
document. At the adopted standards, TSL 6, DOE estimates that all
manufacturers would incur approximately $430 million in product
conversion costs. These estimated product conversion costs, at TSL 6,
represent approximately 4.1 percent of annual revenue over the
compliance period.\104\ While small manufacturers are likely to have
lower per-model sales volumes than larger manufacturers, DOE was not
able to identify any small business that manufacturers the LEDs, LED
packages, or LED drivers used in their LED lamps--which is the primary
technology driving the conversion expenses. Therefore, small businesses
that assemble GSLs would most likely spend less engineering resources
compared to GSL manufacturers that do manufacture their own LEDs, LED
packages and/or LED drivers. Additionally, GSL manufacturer revenue
from LED lamps is estimated to be approximately $1,735 million in 2029,
the first full year of compliance, at TSL 6 compared to $1,547 million
in the no-new-standards case. This represents an increase of
approximately 12 percent in annual revenue generated from the sales of
LED lamps, since LED lamps will be the only technology capable of
meeting the adopted standards. DOE conservatively estimates that small
GSL manufacturers exclusively selling LED lamps would incur no more
than 4.1 percent of their annual revenue over the compliance period to
redesign non-compliant LED lamps into compliant LED lamps that will
meet the adopted standards (i.e., TSL 6).
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\104\ The total estimated revenue between 2024, the final rule
publication year, and 2028, the compliance year, is approximately,
$10,465 million. $430 (million) / $10,465 (million) = 4.1%.
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[[Page 28960]]
5. Significant Alternatives Considered and Steps Taken To Minimize
Significant Economic Impacts on Small Entities
The discussion in the previous section analyzes impacts on small
businesses that would result from the adopted standards, represented by
TSL 6. In reviewing alternatives to the adopted standards, DOE examined
energy conservation standards set at lower efficiency levels. While TSL
1 through TSL 5 would reduce the impacts on small business
manufacturers, it would come at the expense of a reduction in energy
savings. TSL 1 achieves 96 percent lower energy savings compared to the
energy savings at TSL 6. TSL 2 achieves 87 percent lower energy savings
compared to the energy savings at TSL 6. TSL 3 achieves 21 percent
lower energy savings compared to the energy savings at TSL 6. TSL 4
achieves 7 percent lower energy savings compared to the energy savings
at TSL 6. TSL 5 achieves 0.4 percent lower energy savings compared to
the energy savings at TSL 6.
Establishing standards at TSL 6 balances the benefits of the energy
savings at TSL 6 with the potential burdens placed on GSL
manufacturers, including small business manufacturers. 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 16 of the final rule TSD.
Additional compliance flexibilities may be available through other
means. EPCA provides that a manufacturer whose annual gross revenue
from all of its operations does not exceed $8 million may apply for an
exemption from all or part of an energy conservation standard for a
period not longer than 24 months after the effective date of a final
rule establishing the standard. (42 U.S.C. 6295(t)) Additionally,
manufacturers subject to DOE's energy efficiency standards may apply to
DOE's Office of Hearings and Appeals for exception relief under certain
circumstances. Manufacturers should refer to 10 CFR part 430, subpart
E, and 10 CFR part 1003 for additional details.
C. Review Under the Paperwork Reduction Act
Manufacturers of GSLs 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 GSLs, 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 GSLs. (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.
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 proposed 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. DOE has examined this rule and has determined
that it would not have a substantial direct effect on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government. EPCA governs and prescribes Federal preemption of State
regulations as to energy conservation for the products that are the
subject of this final rule. States can petition DOE for exemption from
such preemption to the extent, and based on criteria, set forth in
EPCA. (42 U.S.C. 6297) Therefore, no further action is required by E.O.
13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation (1)
clearly specifies the preemptive effect, if any, (2) clearly specifies
any effect on existing Federal law or regulation, (3) provides a clear
legal standard for affected conduct while promoting simplification and
burden reduction, (4) specifies the retroactive effect, if any, (5)
adequately defines key terms, and (6) addresses other important issues
affecting clarity and general draftsmanship under any guidelines issued
by the Attorney General. Section 3(c) of E.O. 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. DOE has completed the
required review and determined that, to
[[Page 28961]]
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 GSLs 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 GSLs, 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. This
SUPPLEMENTARY INFORMATION section and the TSD for this final rule
respond to those requirements.
Under section 205 of UMRA, DOE 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(i)(6)(A)-(B)), this final rule establishes amended energy
conservation standards for GSLs that are designed to achieve the
maximum improvement in energy efficiency that DOE has determined to be
both technologically feasible and economically justified, as required
by 6295(o)(2)(A) and 6295(o)(3)(B). A full discussion of the
alternatives considered by DOE is presented in chapter 16 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 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 of OIRA as a
significant energy action. For any significant energy action, the
agency must give a detailed statement of any adverse effects on energy
supply, distribution, or use should the proposal be implemented, and of
reasonable alternatives to the action and their expected benefits on
energy supply, distribution, and use.
DOE has concluded that this regulatory action, which sets forth
amended energy conservation standards for GSLs, 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
[[Page 28962]]
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.\105\ 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 DOE's analyses. DOE is in the
process of evaluating the resulting report.\106\
---------------------------------------------------------------------------
\105\ The 2007 ``Energy Conservation Standards Rulemaking Peer
Review Report'' is available at: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last accessed March 24, 2022).
\106\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------
M. Description of Materials Incorporated by Reference
UL 1598C-2016 is an industry accepted test standard that provides
requirements for LED downlight retrofit kits. To clarify the scope of
the standards adopted in this final rule, DOE is updating the
definition for ``LED Downlight Retrofit Kit'' to reference UL 1598C-
2016 in the definition. UL 1598C-2016 is reasonably available on UL's
website at www.shopulstandards.com/Default.aspx.
ANSI C78.79-2014 (R2020) (``ANSI C78.79-2020'') is referenced in
the amendatory text of this document but has already been approved for
the sections where it appears. No changes are being made to the IBR
material.
N. 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 the Office of Information and Regulatory Affairs has
determined that the rule meets the criteria set forth in 5 U.S.C.
804(2).
VII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this final
rule.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Incorporation by reference, Intergovernmental relations, Reporting and
recordkeeping requirements, Small businesses.
Signing Authority
This document of the Department of Energy was signed on April 9,
2024, by Jeffrey M. Marootian, Principal Deputy 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 April 9, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons set forth in the preamble, DOE amends part 430 of
chapter II, subchapter D, of title 10 of the Code of Federal
Regulations, as set forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
0
1. The authority citation for part 430 continues to read as follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
0
2. Amend Sec. 430.2 by:
0
a. Revising the definitions for ``General service incandescent lamp''
and ``General service lamp'';
0
b. Removing the definition ``LED Downlight Retrofit Kit'' and adding
the definition ``LED downlight retrofit kit'' in its place;
0
c. Revising the definitions of ``Reflector lamp'', ``Showcase lamp'',
and ``Specialty MR lamp''.
The revisions and addition read as follows:
Sec. 430.2 Definitions.
* * * * *
General service incandescent lamp means a standard incandescent or
halogen type lamp that is intended for general service applications;
has a medium screw base; has a lumen range of not less than 310 lumens
and not more than 2,600 lumens or, in the case of a modified spectrum
lamp, not less than 232 lumens and not more than 1,950 lumens; and is
capable of being operated at a voltage range at least partially within
110 and 130 volts; however, this definition does not apply to the
following incandescent lamps--
(1) An appliance lamp;
(2) A black light lamp;
(3) A bug lamp;
(4) A colored lamp;
(5) A G shape lamp with a diameter of 5 inches or more as defined
in ANSI C78.79-2020 (incorporated by reference; see Sec. 430.3);
(6) An infrared lamp;
(7) A left-hand thread lamp;
(8) A marine lamp;
(9) A marine signal service lamp;
(10) A mine service lamp;
(11) A plant light lamp;
(12) An R20 short lamp;
(13) A sign service lamp;
(14) A silver bowl lamp;
(15) A showcase lamp; and
(16) A traffic signal lamp.
General service lamp means a lamp that has an ANSI base; is able to
operate at a voltage of 12 volts or 24 volts, at or between 100 to 130
volts, at or between 220 to 240 volts, or of 277 volts for integrated
lamps (as set out in this definition), or is able to operate at any
voltage for non-integrated lamps (as set out in this definition); has
an initial lumen output of greater than or equal to 310 lumens (or 232
lumens for modified spectrum general service incandescent lamps) and
less than or equal to 3,300 lumens; is not a light fixture; is not an
LED downlight retrofit kit; and is used in general lighting
applications. General service lamps include, but are not limited to,
general service incandescent lamps, compact fluorescent lamps, general
service light-emitting diode lamps, and general service organic light
emitting diode lamps. General service lamps do not include:
(1) Appliance lamps;
[[Page 28963]]
(2) Black light lamps;
(3) Bug lamps;
(4) Colored lamps;
(5) G shape lamps with a diameter of 5 inches or more as defined in
ANSI C78.79-2020 (incorporated by reference; see Sec. 430.3);
(6) General service fluorescent lamps;
(7) High intensity discharge lamps;
(8) Infrared lamps;
(9) J, JC, JCD, JCS, JCV, JCX, JD, JS, and JT shape lamps that do
not have Edison screw bases;
(10) Lamps that have a wedge base or prefocus base;
(11) Left-hand thread lamps;
(12) Marine lamps;
(13) Marine signal service lamps;
(14) Mine service lamps;
(15) MR shape lamps that have a first number symbol equal to 16
(diameter equal to 2 inches) as defined in ANSI C78.79-2020
(incorporated by reference; see Sec. 430.3), operate at 12 volts, and
have a lumen output greater than or equal to 800;
(16) Other fluorescent lamps;
(17) Plant light lamps;
(18) R20 short lamps;
(19) Reflector lamps (as set out in this definition) that have a
first number symbol less than 16 (diameter less than 2 inches) as
defined in ANSI C78.79-2020 (incorporated by reference; see Sec.
430.3) and that do not have E26/E24, E26d, E26/50x39, E26/53x39, E29/
28, E29/53x39, E39, E39d, EP39, or EX39 bases;
(20) S shape or G shape lamps that have a first number symbol less
than or equal to 12.5 (diameter less than or equal to 1.5625 inches) as
defined in ANSI C78.79-2014 (R2020) (incorporated by reference; see
Sec. 430.3);
(21) Sign service lamps;
(22) Silver bowl lamps;
(23) Showcase lamps;
(24) Specialty MR lamps;
(25) T shape lamps that have a first number symbol less than or
equal to 8 (diameter less than or equal to 1 inch) as defined in ANSI
C78.79-2020 (incorporated by reference; see Sec. 430.3), nominal
overall length less than 12 inches, and that are not compact
fluorescent lamps (as set out in this definition);
(26) Traffic signal lamps.
* * * * *
LED downlight retrofit kit means a product designed and marketed to
install into an existing downlight, replacing the existing light source
and related electrical components, typically employing an ANSI standard
lamp base, either integrated or connected to the downlight retrofit by
wire leads, and is a retrofit kit classified or certified to UL 1598C-
2016 (incorporated by reference; see Sec. 430.3). LED downlight
retrofit kit does not include integrated lamps or non-integrated lamps.
* * * * *
Reflector lamp means a lamp that has an R, PAR, BPAR, BR, ER, MR,
or similar bulb shape as defined in ANSI C78.79-2020 (incorporated by
reference; see Sec. 430.3) and is used to provide directional light.
* * * * *
Showcase lamp means a lamp that has a T shape as specified in ANSI
C78.79-2020 (incorporated by reference; see Sec. 430.3), is designed
and marketed as a showcase lamp, and has a maximum rated wattage of 75
watts.
* * * * *
Specialty MR lamp means a lamp that has an MR shape as defined in
ANSI C78.79-2020 (incorporated by reference; see Sec. 430.3), a
diameter of less than or equal to 2.25 inches, a lifetime of less than
or equal to 300 hours, and that is designed and marketed for a
specialty application.
* * * * *
0
3. Amend Sec. 430.3 by adding paragraph (y)(4) to read as follows:
Sec. 430.3 Materials incorporated by reference.
* * * * *
(y) * * *
(4) UL 1598C (``UL 1598C-2016''), Standard for Safety for Light-
Emitting Diode (LED) Retrofit Luminaire Conversion Kits, First edition,
dated January 16, 2014 (including revisions through November 17, 2016);
IBR approved for Sec. 430.2.
0
4. Amend Sec. 430.32 by:
0
a. Removing and reserving paragraph (u); and
0
b. Revising paragraphs (x) and (dd).
The revisions read as follows:
Sec. 430.32 Energy and water conservation standards and their
compliance dates.
* * * * *
(x) Intermediate base incandescent lamps and candelabra base
incandescent lamps. (1) Subject to the sales prohibition in paragraph
(dd) of this section, each candelabra base incandescent lamp shall not
exceed 60 rated watts.
(2) Subject to the sales prohibition in paragraph (dd) of this
section, each intermediate base incandescent lamp shall not exceed 40
rated watts.
* * * * *
(dd) General service lamps. Beginning July 25, 2022, the sale of
any general service lamp that does not meet a minimum efficacy standard
of 45 lumens per watt is prohibited.
(1) Energy conservation standards for general service lamps:
(i) General service incandescent lamps manufactured after the dates
specified in the following tables, except as described in paragraph
(dd)(1)(ii) of this section, shall have a color rendering index greater
than or equal to 80 and shall have a rated wattage no greater than, and
a lifetime no less than the values shown in the table as follows:
General Service Incandescent Lamps
----------------------------------------------------------------------------------------------------------------
Minimum lifetime Maximum rate
Rated lumen ranges * (hrs) wattage Compliance date
----------------------------------------------------------------------------------------------------------------
(A) 1490-2600.......................................... 1,000 72 1/1/2012
(B) 1050-1489.......................................... 1,000 53 1/1/2013
(C) 750-1049........................................... 1,000 43 1/1/2014
(D) 310-749............................................ 1,000 29 1/1/2014
----------------------------------------------------------------------------------------------------------------
* Use lifetime determined in accordance with Sec. 429.66 of this chapter to determine compliance with this
standard.
(ii) Modified spectrum general service incandescent lamps
manufactured after the dates specified in the following table shall
have a color rendering index greater than or equal to 75 and shall have
a rated wattage no greater than, and a lifetime no less than the values
shown in the table as follows:
[[Page 28964]]
Modified Spectrum General Service Incandescent Lamps
----------------------------------------------------------------------------------------------------------------
Minimum lifetime Maximum rate
Rated lumen ranges \1\ (hrs) wattage Compliance date
----------------------------------------------------------------------------------------------------------------
(A) 1118-1950.......................................... 1,000 72 1/1/2012
(B) 788-1117........................................... 1,000 53 1/1/2013
(C) 563-787............................................ 1,000 43 1/1/2014
(D) 232-562............................................ 1,000 29 1/1/2014
----------------------------------------------------------------------------------------------------------------
\1\ Use lifetime determined in accordance with Sec. 429.66 of this chapter to determine compliance with this
standard.
(iii) A bare or covered (no reflector) medium base compact
fluorescent lamp manufactured on or after January 1, 2006, must meet or
exceed the following requirements:
------------------------------------------------------------------------
Factor Requirements
------------------------------------------------------------------------
Minimum initial lamp
Labeled wattage efficacy (lumens per
Configuration \1\ (watts) watt) must be at
least:
------------------------------------------------------------------------
(A) Bare Lamp:
(1) Labeled Wattage 45.0
<15.
(2) Labeled Wattage 60.0
>=15.
(B) Covered Lamp (no
reflector):
(1) Labeled Wattage 40.0
<15.
(2) 15<= Labeled 48.0
Wattage <19.
(3) 19<= Labeled 50.0
Wattage <25.
(4) Labeled Wattage 55.0
>=25.
------------------------------------------------------------------------
\1\ Use labeled wattage to determine the appropriate efficacy
requirements in this table; do not use measured wattage for this
purpose.
(iv) Each general service lamp manufactured on or after July 25,
2028 must have:
(A) A power factor greater than or equal to 0.7 for integrated LED
lamps (as defined in Sec. 430.2) and 0.5 for medium base compact
fluorescent lamps (as defined in Sec. 430.2); and
(B) A lamp efficacy greater than or equal to the values shown in
the table as follows:
----------------------------------------------------------------------------------------------------------------
Standby mode
Lamp type Length operation \3\ Efficacy (lm/W)
----------------------------------------------------------------------------------------------------------------
(1) Integrated Omnidirectional.. Short (<45 inches).............. No Standby Mode 123/(1.2+e-
Operation. \0.005*\(\Lumens-
200\))) + 25.9
(2) Integrated Omnidirectional.. Long (>=45 inches).............. No Standby Mode 123/(1.2+e-
Operation. \0.005*\(\Lumens-
200\))) + 71.7
(3) \1\ Integrated Directional.. All Lengths..................... No Standby Mode 73/(0.5+e-
Operation. \0.0021*\(\Lumens+1000
\))) - 47.2
(4) \2\ Non-integrated Short (<45 inches).............. No Standby Mode 122/(0.55+e-
Omnidirectional. Operation. \0.003*\(\Lumens+250\)
)) - 83.4
(5) \1\ Non-integrated All Lengths..................... No Standby Mode 67/(0.45+e-
Directional. Operation. \0.00176*\(\Lumens+131
0\))) - 53.1
(6) Integrated Omnidirectional.. Short (<45 inches).............. Standby Mode 123/(1.2+e-
Operation. \0.005*\(\Lumens-
200\))) + 17.1
(7) \1\ Integrated Directional.. All Lengths..................... Standby Mode 73/(0.5+e-
Operation. \0.0021*\(\Lumens+1000
\)) - 50.9
(8) Non-integrated Long (>=45 inches).............. No Standby Mode 123/(1.2+e-
Omnidirectional. Operation. \0.005*\(\Lumens-
200\))) + 93.0
----------------------------------------------------------------------------------------------------------------
\1\ This lamp type comprises of directional lamps. A directional lamp is a lamp that meets the definition of
reflector lamp as defined in Sec. 430.2.
\2\ This lamp type comprises of, but is not limited to, lamps that are pin base compact fluorescent lamps
(``CFLs'') and pin base light-emitting diode (``LED'') lamps designed and marketed as replacements of pin base
CFLs.
\3\ Indicates whether or not lamps are capable of operating in standby mode operation.
(C) The standards described in paragraph (dd)(1)(iv) of this
section do not apply to a general service lamp that:
(1) Is a general service organic light-emitting diode (OLED) lamps
(as defined in Sec. 430.2);
(2) Is a non-integrated lamp that is capable of operating in
standby mode and is sold in packages of two lamps or less;
(3) Is designed and marketed as a lamp that has at least one
setting that allows the user to change the lamp's correlated color
temperature (CCT) and has no setting in which the lamp meets the
definition of a colored lamp (as defined in Sec. 430.2); and is sold
in packages of two lamps or less;
[[Page 28965]]
(4) Is designed and marketed as a lamp that has at least one
setting in which the lamp meets the definition of a colored lamp (as
defined in Sec. 430.2) and at least one other setting in which it does
not meet the definition of colored lamp (as defined in Sec. 430.2) and
is sold in packages of two lamps or less; or
(5) Is designed and marketed as a lamp that has one or more
component(s) offering a completely different functionality (e.g., a
speaker, a camera, an air purifier, etc.) where each component is
integrated into the lamp but does not affect the light output of the
lamp (e.g., does not turn the light on/off, dim the light, change the
color of the light, etc.), is capable of operating in standby mode, and
is sold in packages of two lamps or less.
(2) Medium base CFLs (as defined in Sec. 430.2) manufactured on or
after the dates specified in the following table shall meet or exceed
the following standards:
------------------------------------------------------------------------
Requirements for Requirements for
MBCFLs MBCFLs
Metrics manufactured on or manufactured on or
after January 1, after July 25,
2006 2028
------------------------------------------------------------------------
(i) Lumen Maintenance at 1,000 >=90.0%........... >=90.0%.
Hours.
(ii) Lumen Maintenance at 40 >=80.0%........... >=80.0%.
Percent of Lifetime\1\.
(iii) Rapid Cycle Stress Test... At least 5 lamps At least 5 lamps
must meet or must meet or
exceed the exceed the
minimum number of minimum number of
cycles. cycles.
All MBCFLs: Cycle MBCFLs with start
once per every time >100 ms:
two hours of Cycle once per
lifetime \1\. hour of lifetime
\1\ or a maximum
of 15,000 cycles.
MBCFLs with a
start time of
<=100 ms: Cycle
once per every
two hours of
lifetime.\1\
(iv) Lifetime \1\............... >=6,000 hours..... >=10,000 hours.
(v) Start time.................. No requirement.... The time needed
for a MBCFL to
remain
continuously
illuminated must
be within:
{1{time} one
second of
application of
electrical power
for lamp with
standby mode
power {2{time}
750 milliseconds
of application of
electrical power
for lamp without
standby mode
power.
------------------------------------------------------------------------
\1\ Lifetime refers to lifetime of a compact fluorescent lamp as defined
in Sec. 430.2.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix A--Letter From Department of Justice to the Department of
Energy
U.S. Department of Justice
Antitrust Division
RFK Main Justice Building
950 Pennsylvania Avenue NW
Washington, DC 20530-0001
March 13, 2023
Ami Grace-Tardy
Assistant General Counsel for Legislation,
Regulation and Energy Efficiency
U.S. Department of Energy
1000 Independence Avenue SW
Washington, DC 20585
Dear Assistant General Counsel Grace-Tardy:
I am responding to your January 11, 2023 letter seeking the
views of the Attorney General about the potential impact on
competition of proposed energy conservation standards for general
service lamps.
Your request was submitted under Section 325(o)(2)(B)(i)(V) of
the Energy Policy and Conservation Act, as amended (ECPA), 42 U.S.C.
6295(o)(2)(B)(i)(V), which requires the Attorney General to make a
determination of the impact of any lessening of competition that is
likely to result from the imposition of proposed energy conservation
standards. The Attorney General's responsibility for responding to
requests from other departments about the effect of a program on
competition has been delegated to the Assistant Attorney General for
the Antitrust Division in 28 CFR 0.40(g). The Assistant Attorney
General for the Antitrust Division has authorized me, as the Policy
Director for the Antitrust Division, to provide the Antitrust
Division's views regarding the potential impact on competition of
proposed energy conservation standards on his behalf.
In conducting its analysis, the Antitrust Division examines
whether a proposed standard may lessen competition, for example, by
substantially limiting consumer choice or increasing industry
concentration. A lessening of competition could result in higher
prices to manufacturers and consumers.
We have studied in detail the Notice of Proposed Rulemaking
(NOPR) regarding energy conservation standards for general service
lamps, as well as the Technical Support Document (TSD) that
accompanied it, both of which you transmitted to us under cover of
your January 11 letter. We also attended via Webinar the February 1,
2023 Public Meeting held by the Department of Energy on the general
service lamps NOPR and reviewed the related public comments.
The Division previously reviewed a related standard, contained
in a Notice of Proposed Rulemaking published at 81 FR 14,528, on
Mar. 17, 2016. Subsequently, the Division advised that it did not
have evidentiary basis to conclude that that proposed standard for
general service lamps was likely to adversely impact competition.
The Division also advised that its conclusion was subject to
significant uncertainty due to substantial marketplace changes that
the standard would likely cause. Similarly, based on our review of
the new standard, the Division does not have evidence that the new
proposed standard for general service lamps are substantially likely
to adversely impact competition.
Sincerely,
David G.B. Lawrence,
Policy Director.
[FR Doc. 2024-07831 Filed 4-18-24; 8:45 am]
BILLING CODE 6450-01-P