Energy Conservation Program: Test Procedures for Distribution Transformers, 24972-25008 [06-3165]

Agencies

• DEPARTMENT OF ENERGY
• Office of Energy Efficiency and Renewable Energy
• Energy Efficiency and Renewable Energy Office

[Federal Register Volume 71, Number 81 (Thursday, April 27, 2006)]
[Rules and Regulations]
[Pages 24972-25008]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-3165]



[[Page 24971]]

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Part III





Department of Energy





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Office of Energy Efficiency and Renewable Energy



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10 CFR Part 431



Energy Conservation Program: Test Procedures for Distribution 
Transformers; Final Rule

Federal Register / Vol. 71, No. 81 / Thursday, April 27, 2006 / Rules 
and Regulations

[[Page 24972]]


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DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 431

[Docket No. EE-TP-98-550]
RIN 1904-AA85


Energy Conservation Program: Test Procedures for Distribution 
Transformers

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Final rule.

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SUMMARY: Pursuant to Sections 323(b)(10) and 346(a) of the Energy 
Policy and Conservation Act, as amended, (EPCA or the Act), 42 U.S.C. 
6293(b)(10) and 6317(a), the Department of Energy (DOE or the 
Department) promulgates a rule prescribing test procedures for 
measuring the energy efficiency of distribution transformers under 
EPCA, definitions to delineate the products covered by the test 
procedures, provisions (including a sampling plan) manufacturers must 
use to implement the test procedures, provisions to allow manufacturers 
to use calculation methods to determine the efficiency of some of their 
models, and enforcement testing for distribution transformers. The 
Department will use the new test procedures in evaluating what energy 
conservation standards are warranted for distribution transformers 
other than the low-voltage dry-type. When DOE promulgates such 
standards, then the test procedures and other provisions adopted today 
will be used to determine the efficiencies and assess compliance of the 
transformers subject to these standards. For low-voltage dry-type 
distribution transformers, the new standards prescribed for them in 
section 325(y) of EPCA, 42 U.S.C. 6295(y), go into effect on January 1, 
2007, and all of the provisions of today's rule will become applicable 
to those transformers at that time.

EFFECTIVE DATE: This final rule is effective May 30, 2006, except for 
Sec.  431.197(a)(4)(i), section 6.2(f) of Appendix A and section 6.2(b) 
and (c) of Appendix A which contain information collection requirements 
that have not been approved by the Office of Management and Budget 
(OMB). The Office of Energy Efficiency and Renewable Energy will 
publish a document in the Federal Register announcing the effective 
date.

FOR FURTHER INFORMATION CONTACT: Cyrus Nasseri, Project Manager, Test 
Procedures for Distribution Transformers, Docket No. EE-TP-98-550, 
United States (U.S.) Department of Energy, Energy Efficiency and 
Renewable Energy, Building Technologies Program, EE-2J, 1000 
Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-9138, 
email: cyrus.nasseri@ee.doe.gov.
    Francine Pinto, Esq., U.S. Department of Energy, Office of General 
Counsel, GC-72, 1000 Independence Avenue, SW., Washington, DC 20585-
0121, (202) 586-9507, email: Francine.Pinto@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

I. Introduction
    A. Authority and Background
    B. Summary of the Final Rule
II. Discussion
    A. General
    B. Transformers Subject to the Test Procedure--Definition of 
Distribution Transformer
    1. General
    2. Incorporation and Definition of EPCA's Exclusions--General
    3. Specific EPCA Exclusions
    a. Transformers with Tap Ranges of 20 Percent or More and 
Special Impedance Transformers
    b. Testing Transformers
    c. Grounding Transformers
    4. Other Exclusions Considered
    5. Rebuilt or Refurbished Distribution Transformers
    6. Coverage of Liquid-Filled Transformers
    C. Test Procedure for Distribution Transformers
    1. General Discussion
    2. Specific Provisions of the Test Procedure
    a. Testing Harmonic Transformers
    b. Determining Winding Temperatures
    c. Test Set Neutrals
    d. Losses from Auxiliary Devices
    e. Testing of Multiple Voltage Transformers
    f. Short-Circuiting Conductor Strap
    g. Revisions Suggested by NEMA in TP 2-2005
    h. Language Corrections as to Conversion of the Resistance 
Measurement to the Reference Temperature and Conducting the No-Load 
Loss Test
    D. Basic Model
    1. General Discussion
    2. Definition of a Basic Model
    E. Manufacturer's Determination of Efficiency
    1. General Discussion
    2. Sampling Plan
    3. Alternative Efficiency Determination Method (AEDM)
    F. Enforcement Procedures
III. Procedural Requirements
    A. Review Under Executive Order 12866
    B. Review Under the Regulatory Flexibility Act of 1980
    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 of 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Under Section 32 of the Federal Energy Administration 
Act of 1974
    M. Congressional Notification
IV. Approval of the Office of the Secretary

I. Introduction

A. Authority and Background

    Part C of Title III of the Energy Policy and Conservation Act 
(EPCA) provides for an energy conservation program for certain 
industrial equipment. (42 U.S.C. 6311-6317) Section 346 of EPCA states 
that the Secretary of Energy (Secretary) must prescribe testing 
requirements and energy conservation standards for those ``distribution 
transformers'' for which the Secretary determines that standards 
``would be technologically feasible and economically justified, and 
would result in significant energy savings.'' (42 U.S.C. 6317(a)) The 
recent amendments to EPCA set forth in the Energy Policy Act of 2005 
(EPACT 2005), Pub. L. 109-58, accomplish the following for this 
equipment: (1) Section 321(35) of EPCA now defines ``distribution 
transformer'' (42 U.S.C. 6291(35)), (2) Section 323(b)(10) of EPCA 
provides that the testing requirements ``shall be based on the 
`Standard Test Method for Measuring the Energy Consumption of 
Distribution Transformers' prescribed by the National Electrical 
Manufacturers Association (NEMA TP 2-1998).'' (42 U.S.C. 
6293(b)(10)),\1\ and (3) section 325(y) of EPCA prescribes minimum 
efficiency levels for low-voltage dry-type distribution transformers 
(42 U.S.C. 6295(y)).
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    \1\ Section 323(b)(10)(B) also provides that the Department may 
``review and revise'' the test procedures established under that 
subparagraph. (42 U.S.C. 6293(b)(10)(B))
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    On October 22, 1997, the Department issued a notice setting forth 
its determination (hereafter referred to as the ``Determination'') 
that, based on the best information it had available, energy 
conservation standards for electric distribution transformers appeared 
to be technologically feasible and economically justified, and were 
likely to result in significant energy savings. 62 FR 54809.
    The Department subsequently began the process for its issuance of 
test procedures for distribution transformers. On February 10, 1998, 
the Department held a public workshop (the ``1998 workshop'') to 
discuss the following issues: (a) Whether DOE

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should adopt national and international consensus standards as its test 
procedures for determining the energy efficiency of distribution 
transformers, (b) defining the transformers that the test procedures 
will cover, (c) whether, and to what extent, there is a burden on 
industry, especially on manufacturers, because of additional testing 
and data processing, (d) the definition of ``basic model'' for 
distribution transformers, (e) the sampling plan for units to be 
tested, (f) the selection of an energy consumption measure for 
distribution transformers, (g) the selection of reference temperatures, 
(h) the requirements for applying corrections to measurement data, and 
(i) the requirements for quality assurance in testing. The Department 
also gave interested parties an opportunity to submit written comments 
on these issues.
    In 1998, the National Electrical Manufacturers Association (NEMA) 
published ``NEMA Standards Publication No. TP 2-1998, Standard Test 
Method for Measuring the Energy Consumption of Distribution 
Transformers,'' (NEMA TP 2-1998) a publication that extracts and 
presents pertinent parts of the current industry standards for 
distribution transformer efficiency testing. NEMA TP 2-1998 also 
presents a weighted average method to compute the energy efficiency of 
transformers, in order to demonstrate compliance with the efficiency 
levels in NEMA Standard TP 1-1996 (NEMA TP 1).\2\ Comments received at 
the 1998 workshop, written comments associated with this workshop, and 
NEMA TP 2-1998 formed the basis for preparing the November 12, 1998, 
Notice of Proposed Rulemaking (the ``1998 proposed rule'') in this 
proceeding. 63 FR 63359.
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    \2\ NEMA TP 1 contains suggested efficiency levels. Its full 
name and title are ``NEMA Standards Publication No. TP 1-1996, Guide 
for Determining Energy Efficiency for Distribution Transformers.'' 
NEMA TP 1 was updated in 2002, with modifications to some of the 
efficiency levels.
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    In the 1998 proposed rule, the Department proposed to adopt testing 
methods that (1) it could use to evaluate distribution transformers 
during the development of efficiency standards, and (2) manufacturers 
and DOE would use to determine the efficiency of the transformers which 
the standards would cover. DOE proposed to incorporate by reference as 
its test methods the provisions from either the Institute of Electrical 
and Electronics Engineers (IEEE) Standards C57.12.90-1993 and 
C57.12.91-1993 (using IEEE C57.12.00-1993 as an additional reference 
source), or NEMA TP 2-1998. The 1998 proposed rule also included 
proposed definitions of ``distribution transformer'' and related terms, 
of terms used in the test procedure provisions, and of ``basic model.'' 
It also proposed a sampling plan for applying the test procedures to 
perform compliance testing. The sampling approach was based on the plan 
for compliance testing in 10 Code of Federal Regulations (CFR) Part 
430, which contains energy efficiency requirements for consumer 
products, but tailored to distribution transformers and with a minimum 
sample size of five units. The Department selected this approach 
because it appeared to provide a satisfactory balance between assuring 
the accuracy of efficiency ratings for distribution transformers and 
minimizing the testing burden on manufacturers. The Department also 
sought comment on three alternative compliance approaches for basic 
models produced in small numbers.
    DOE held a public meeting on January 6, 1999, on the 1998 proposed 
rule and received nine written comments. After reviewing the oral and 
written comments, DOE concluded that the comments raised a number of 
significant issues that required additional analysis. On June 23, 1999, 
the Department reopened the comment period on the 1998 proposed rule, 
64 FR 33431, (the ``1999 reopening notice'') to provide an opportunity 
for additional public comment on the following issues: (a) The 
suitability of NEMA TP 2-1998 for adoption as the DOE test procedure; 
(b) the adequacy of stakeholder opportunity to review NEMA TP 2-1998; 
(c) the transformers covered under the definition of ``distribution 
transformer;'' (d) the suitability of the definition of ``basic model'' 
for the purpose of grouping transformers to limit the test burden; and 
(e) the appropriateness of the proposed sampling plan and a number of 
alternatives for demonstrating compliance. The Department received five 
comments in response to the 1999 reopening notice.
    On the basis of these comments, two additional comments it received 
subsequently, and its review of the issues raised by the 1998 proposed 
rule and the 1999 reopening notice, the Department issued a 
supplemental notice of proposed rulemaking (SNOPR). 69 FR 45506 (July 
29, 2004). In the SNOPR, DOE proposed to adopt (1) a new ``stand 
alone'' test procedure for distribution transformers, drafted by the 
Department and consisting almost entirely of test methods contained in 
NEMA TP 2-1998 and other existing industry standards, (2) revised 
definitions to establish which transformers the test procedure covers, 
(3) a new definition of ``basic model'' and a new sampling plan, to 
implement the test procedures, (4) provisions to allow manufacturers to 
use calculation methods, instead of testing, to determine the 
efficiency of some of their models, and (5) enforcement procedures, 
including a testing protocol, for distribution transformers. DOE held a 
public meeting on September 27, 2004, on the SNOPR (the ``2004 public 
meeting'') and received six written comments.
    Concurrently with this rulemaking, the Department has evaluated the 
establishment of energy conservation standards for distribution 
transformers. On October 2, 2000, the Department made available a 
Framework Document for Distribution Transformer Energy Conservation 
Standards Rulemaking, which was the subject of a public workshop on 
November 1, 2000, and on which stakeholders submitted written comments 
before and after the workshop. 65 FR 59761 (October 6, 2000). 
Thereafter, the Department visited manufacturers of distribution 
transformers and posted on DOE's website \3\ several draft reports 
concerning the development of standards for these transformers. On the 
same day that it published the SNOPR, DOE issued an Advance Notice of 
Proposed Rulemaking (ANOPR) for distribution transformer standards. 69 
FR 45376 (July 29, 2004). Several of the written comments DOE received 
in response to the ANOPR address issues raised in the SNOPR, and the 
Department has referenced them in the docket of this rulemaking and has 
considered them in formulating today's final rule.
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    \3\ https://www.eere.energy.gov/buildings/appliance_standards/
commercial/dist_transformers.html
_____________________________________-

 On October 18, 2005, the Department published a final rule to place 
in its regulations the energy conservation standards, and related 
definitions, that Congress prescribed in EPACT 2005 for certain 
consumer products and commercial and industrial equipment. 70 FR 60407. 
The rule included the definitions for ``distribution transformer'' and 
``low-voltage dry-type distribution transformer,'' and the standards 
for low-voltage dry-type distribution transformers, that were contained 
in EPACT 2005. 10 CFR sections 431.192 and 431.196. The Department put 
the provisions for all of the commercial and industrial products 
covered by EPACT 2005, including those for distribution transformers, 
in 10 CFR Part 431. 70 FR 60414-18. In the prior Federal Register 
notices dealing

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with test procedures for distribution transformers, DOE had proposed 
adding a new part 432 to include requirements for distribution 
transformers. 63 FR 63376, 63369; 69 FR 45517, 45520. As a result of 
DOE's decision, in response to EPACT 2005, to incorporate provisions 
for distribution transformers into 10 CFR Part 431, today's final rule 
places the new test procedures for this equipment in Subpart K to 10 
CFR Part 431.

B. Summary of the Final Rule

    The test procedure in today's rule is based on the test methods 
contained in NEMA TP 2-1998 \4\ and IEEE Standards C57.12.90-1999 and 
C57.12.91-2001. Initially, the Department will use the test procedure 
to evaluate distribution transformers for which it is currently 
developing energy conservation standards. When DOE promulgates such 
standards, the Department will then require manufacturers to use the 
test procedure to determine compliance with the standards and as a 
basis for their efficiency representations for covered transformers. 
The Department would also use the test procedure in any enforcement 
proceeding concerning compliance with such standards and related 
labeling requirements. In addition, the test procedures will become 
mandatory for all of these purposes--compliance determination, 
representations and enforcement--for low-voltage dry-type distribution 
transformers when standards go into effect for them, pursuant to 42 
U.S.C. 6295(y), on January 1, 2007.
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    \4\ In September 2005, NEMA provided the Department with its 
revised test procedure document, TP 2-2005, which is similar to the 
rule language in the SNOPR. The Department has treated this 
submission as a comment on the SNOPR, has incorporated into today's 
rule a number of the changes that this revision made to the SNOPR's 
rule language, and addressed below the significant differences 
between the revision and the SNOPR.
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    The language of today's rule sets forth all testing requirements, 
without reference to other sources, for determining the energy 
efficiency of distribution transformers. Measurement of electric power 
consumed by the transformer is in the form of no-load and load losses. 
The rule specifies methods with which to measure the temperature, 
current, voltage, extent of distortion in voltage waveform, and direct 
current resistance of the windings. The rule also prescribes provisions 
for calculating efficiency. The testing methods are largely the same as 
those proposed in the SNOPR, with several clarifying changes and a few 
changes to provide manufacturers with greater flexibility.
    Today's rule amends the definition of ``distribution transformer'' 
that DOE recently adopted, 70 FR 60416, by adding capacity limits (the 
same ones the Department proposed in the SNOPR), making minor language 
and format changes, and clarifying the exclusion of transformers with 
tap ranges greater than 20 percent. As discussed below, today's 
definition conforms to, and incorporates the relevant language from, 
the definition that EPACT 2005 added to EPCA. (42 U.S.C. 6291(35)) The 
Department's definition establishes which transformers the test 
procedure covers. It uses the approach DOE proposed in the SNOPR--a 
broad definition with numerical criteria, but narrowed by the exclusion 
of specific types of transformers, many of which are not commonly 
understood to be distribution transformers. The numerical criteria 
(except for the added capacity limits) and the exclusions are the same 
as those in EPCA's new definition. They include virtually the same 
primary and secondary voltage ranges the Department proposed in the 
SNOPR, most of the exclusions DOE proposed, and no additional 
exclusions. Today's definition of distribution transformer, however, 
does not include the exclusions of K-factor and harmonic mitigating 
distribution transformers, which DOE proposed in the SNOPR but which 
are absent from the EPCA definition. Stakeholders will have the 
opportunity in the energy conservation standards rulemaking to comment 
to the Department on whether standards should apply to these 
transformers.
    Today's rule contains several features designed to reduce the 
number of transformers that manufacturers would have to test. First, 
the Department allows manufacturers to group models into ``basic 
models'' for testing purposes, and defines ``basic model'' as proposed 
in the SNOPR, with minor clarifications. Second, the rule includes the 
same type of compliance sampling plan proposed in the SNOPR, except 
that the sampling plan tolerance is based on a single-unit sample 
tolerance (confidence limit) of eight percent, rather than the five 
percent DOE proposed. And third, today's rule allows manufacturers to 
use alternative methods, other than testing, to determine the 
efficiency of some basic models. The rule incorporates the SNOPR 
proposal except that manufacturers need not use a different method for 
each of the following groups of distribution transformers: low-voltage 
dry-type, medium-voltage dry-type, and liquid-immersed. Manufacturers 
can use a single method for transformers in two or all three of these 
groups so long as the method is validated separately in each of the 
groups for which the manufacturer uses it. Today's rule also contains 
the enforcement procedures proposed in the SNOPR, including a testing 
protocol, modified to be consistent with the revised compliance 
sampling plan tolerance. Finally, the Department is republishing in 
this rule, without substantive change, the standards for low-voltage 
dry-type distribution transformers that it originally codified at 70 FR 
70417. Today's rule contains a revised table that has a clearer, more 
appropriate format than the table in the original rule. The table also 
includes the reference conditions for the standards, which DOE 
inadvertently omitted from the initial codification but which are 
essential elements of the standards, as set forth in Table 4-2 of NEMA 
TP 1-2002, from which EPCA incorporates the standards. (42 U.S.C. 
6295(y))

II. Discussion

A. General

    Representatives of several organizations attended the public 
meeting on September 27, 2004, including trade associations (Copper 
Development Association, National Electrical Manufacturers Association 
(NEMA), and National Rural Electric Cooperative Association), 
transformer manufacturers (Acme Electric Corporation (ACME), ERMCO 
Distribution Transformers (ERMCO), Federal Pacific Transformer (Federal 
Pacific or FPT), Kuhlman Electric Corporation, Pemco Corporation 
(Pemco), and Howard Industries, Inc. (Howard Industries or Howard)), a 
core steel manufacturer (AK Steel Corporation), electric utility 
companies (Georgia Power Company and Ameren Services), the Canadian 
Government (Natural Resources Canada), the National Institute of 
Standards and Technology (NIST) of the U.S. Department of Commerce, and 
private research/consulting entities (BB&F Associates, Lawrence 
Berkeley National Laboratory, Merritt and Associates, Navigant 
Consulting, Inc., and Optimized Program Services, Inc.). NEMA also 
submitted a written statement in advance of the public meeting. 
Following the public meeting, ERMCO, Federal Pacific, Howard 
Industries, Cooper Power Systems (Cooper) and NEMA each submitted a 
written statement. In addition, the Department received ten comments in 
its energy conservation standards rulemaking that pertained to both the

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test procedure and the energy conservation standards rulemakings. 
Therefore, the Department cross-referenced these comments from the 
energy conservation standards docket (EE-RM/STD-00-550) to this 
proceeding. The ten cross-referenced comments were submitted by Pemco, 
ERMCO, Harmonics Limited, NEMA, Federal Pacific, HVOLT, Inc. (HVOLT), 
Oregon Department of Energy (ODOE), Howard Industries, Power Quality 
International (PQI) and EMS International Consulting (EMS).
    The following summarizes the issues addressed in the preamble of 
the SNOPR and discusses in detail the points on which significant 
comments were presented during and after the public meeting.

B. Transformers Subject to the Test Procedure--Definition of 
Distribution Transformer

1. General
    Although EPCA directed DOE to prescribe energy conservation 
standards and test procedures for certain ``distribution transformers'' 
(42 U.S.C. 6317(a)), until recently the Act did not define that term. 
Therefore, the Department undertook to adopt such a definition in this 
rulemaking. It proposed a definition in the 1998 proposed rule, 63 FR 
63362-63, 63369-70, addressed the issue again in the 1999 reopening 
notice, 64 FR 33432-34, and proposed a substantially revised definition 
in the SNOPR. 69 FR 45506. That revised definition included 
transformers meeting numerical criteria as to primary and secondary 
voltage and capacity, and excluded specifically listed types of 
transformers. 69 FR 45509-10, 45520-22. The Department designed that 
definition primarily to (1) encompass within ``distribution 
transformer'' only those transformers commonly understood to be 
distribution transformers, i.e. those made for the distribution of 
electricity, and (2) exclude those distribution transformers for which 
standards clearly would not produce significant energy savings. 69 FR 
45509-10.
    EPACT 2005 recently revised EPCA to include a definition of 
``distribution transformer'' (42 U.S.C. 6291(35)), thus filling the gap 
DOE had sought to fill with its own definition. As part of the final 
rule mentioned above, to place in the CFR certain provisions prescribed 
in EPACT 2005, the Department incorporated this new definition, almost 
verbatim, into 10 CFR section 431.192. 70 FR 60407, 60416-17. (In the 
paragraphs that follow, the new definition is referred to as the 
``EPCA'' or ``new'' definition.) The EPCA definition is similar in 
approach and content to the definition proposed in the SNOPR. It 
includes numerical criteria--a maximum input voltage and frequency that 
are similar to those in the SNOPR definition, and a maximum output 
voltage that is identical--as well as a list of excluded transformers 
that is quite similar to the SNOPR's list of excluded transformers. 
(The differences between EPCA's list of exclusions and the SNOPR's list 
are discussed below. Today's rule adheres to the EPCA list.) The new 
definition also authorizes DOE to add to the list of exclusions any 
type of transformer that meets certain criteria.
    One significant difference exists, however, between the numerical 
criteria in the EPCA and SNOPR definitions. No capacity ranges are 
stated in the new definition, whereas the SNOPR definition limits the 
term ``distribution transformer'' to liquid immersed units with a 
capacity of 10 kVA to 2500 kVA, and dry-type units with a capacity of 
15 kVA to 2500 kVA. (The Department has been using a similar definition 
to delineate the transformers it is evaluating in the standards 
rulemaking. 69 FR 45381-45384.) Transformers outside of these ranges 
are not typically used for electricity distribution, which is the 
commonly understood function of a distribution transformer. The 
Department received no adverse comment on these proposed ranges. 
Moreover, NEMA agreed with the proposed lower capacity limit for dry-
type transformers, indicating that efficiency standards for 
transformers with lower kVA ratings would fail to meet the criteria in 
section 346 of EPCA. (NEMA, No. 39 at p. 2; Public Meeting Transcript, 
No. 42.11 at p. 22) \5\ But notwithstanding the lack of any explicit 
capacity limits in the EPCA definition of distribution transformer, as 
a practical matter an upper capacity limit is implicit in that 
definition. A transformer's capacity is to some extent tied to its 
primary (input) and secondary (output) voltages. Therefore, the maximum 
limits for primary and secondary voltages, of 34.5 kilovolts and 600 
volts, respectively, in the EPCA definition have the practical effect 
of limiting transformers that meet the definition to those with a 
maximum capacity in the range of approximately 3750 to 5000 kVA, or 
possibly slightly higher. The voltage limits in the EPCA definition, 
however, subsume no lower limit on capacity.
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    \5\ A notation in the form ``NEMA, No. 39 at p. 2'' identifies a 
written comment the Department has received and has included in the 
docket of this rulemaking. This particular notation refers to a 
comment (1) by the National Electrical Manufacturers Association 
(NEMA), (2) in document number 39 in the docket of this rulemaking 
(maintained in the Resource Room of the Building Technologies 
Program), and (3) appearing on page 2 of document number 39. 
Likewise, ``Public Meeting Transcript, No. 42.11 at p. 22,'' for 
example, would refer to page 22 of the transcript of the ``Public 
Meeting on Test Procedures for Distribution Transformers'' held in 
Washington, DC, September 27, 2005, which is document number 42.11 
in the docket of this rulemaking.
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    It is unclear whether ``distribution transformer'' as now defined 
in EPCA and DOE's regulations is, or can be, subject to capacity ranges 
other than the just-mentioned upper limit. On the one hand, the new 
definition includes no such capacity limitation, and it authorizes DOE 
to exclude from the definition, by rule, any transformer if it is 
designed for a special application, is unlikely to be used in a general 
purpose application, and significant energy savings would not result 
from applying standards to it. (42 U.S.C. 6291(35)(B)(iii)) This 
suggests that unless, and until, DOE acts and identifies capacity 
ranges that meet these criteria, they are not part of the new 
definition of distribution transformer. On the other hand, it is 
uncertain whether Congress intended to regulate as distribution 
transformers units outside of the capacity ranges in the SNOPR, because 
few are used to distribute electricity. In addition, at the same time 
it enacted the new distribution transformer definition, Congress also 
directed use of, and incorporated into EPCA, provisions of NEMA TP 2-
1998 and NEMA TP 1-2002, respectively (42 U.S.C. 6293(b)(10) and 
6295(y)), both of which apply only to transformers with capacity ranges 
similar to those in the SNOPR definition. Thus, Congress may have 
intended to limit the term ``distribution transformer'' to transformers 
within the capacity ranges that normally characterize transformers that 
distribute electricity. If so, that would mean the Department's 
authority to regulate the efficiency of transformers under 42 U.S.C. 
6317 would be limited to transformers within these capacity ranges.
    Given the inclusive language of EPCA's definition of distribution 
transformer, however, the Department is not prepared at this point to 
infer that EPCA imposes this limitation. The Department also does not 
possess information on whether transformers outside of these ranges 
would meet the criteria in 42 U.S.C. 6291(35)(B)(iii), particularly the 
one on energy savings from applying standards, for exclusion from the 
definition of distribution transformer. The standards rulemaking

[[Page 24976]]

for distribution transformers, in which DOE would develop such 
information, and this test procedure rulemaking to a slightly lesser 
extent, have focused almost entirely on transformers within the 
capacity ranges. Thus, at the present time, DOE is proceeding on the 
premise that ``distribution transformer'' as defined in EPCA includes 
transformers outside the capacity ranges in the SNOPR.
    One option, therefore, would be for the Department to retain this 
definition in its rules, not revise it in today's rule, and apply it in 
any standards rulemaking as well. That would have little or no impact 
on adoption of the test procedures in today's rule, but it might delay 
issuance of the rule. The Department believes that the test procedures 
as proposed in the SNOPR and revised for inclusion in today's rule 
would be valid for determining the efficiency of transformers with 
capacities up to the limits implicit in EPCA's definition, and below 
the lower end of the proposed ranges proposed in the SNOPR. 
Nevertheless, because DOE had not proposed to apply the test procedure 
to transformers with such capacities, it would have to provide some 
opportunity for public comment on the applicability of the test 
procedure to those transformers. Doing so could delay completion of 
this rulemaking.
    The impact in the standards rulemaking, of applying the EPCA 
definition without capacity limits, would be much greater than the 
impact of doing so in this test procedure rulemaking. Formulating 
standards for a product involves developing an understanding of, and 
evaluating, factors such as the nature of the product, its market, the 
technical feasibility of potential efficiency improvements, the 
manufacturing costs of such improvements, the resulting energy savings, 
the cost of the improved product(s) to purchasers, the impact of 
efficiency standards on manufacturers and utilities, and environmental 
and employment impacts, as well as other factors unique to a particular 
product. The Department has been engaged in such activities with 
respect to distribution transformers for over five years, examining for 
the most part products within the capacity ranges in the SNOPR 
definition of distribution transformer. It is now developing proposed 
standards for these products. To expand that rulemaking now to include 
transformers outside these ranges would impose a substantial burden on 
DOE, and would substantially delay the rulemaking by requiring that the 
Department go back to the beginning of the process of evaluating 
standards for these additional transformers. Neither DOE nor 
stakeholders contemplated that the standards rulemaking would cover 
these additional transformers. To the contrary, as indicated above, 
interested parties had reached a consensus as to the transformers to be 
covered in the standards rulemaking, and expect that DOE will now move 
as promptly as possible to promulgate standards for these transformers.
    Another possibility would be for the Department to attempt to 
preserve the current scope of the standards and test procedure 
rulemakings by pursuing exclusion from the definition of distribution 
transformer, under 42 U.S.C. 6291(35)(B)(iii), of transformers with 
capacities outside the ranges specified in the SNOPR definition. This 
too would delay the rulemakings. For DOE to gather relevant information 
and assess whether transformers above and below the SNOPR's capacity 
ranges meet the criteria in 42 U.S.C. 6291(35)(B)(iii), would be 
burdensome and time consuming. And if DOE determined exclusion of these 
transformers to be warranted, it would have to undertake additional 
rulemaking proceedings to achieve such exclusion. Moreover, if DOE were 
to conclude that these transformers do not meet the criteria for 
exclusion, DOE would be in essentially the same position it is in now.
    The Department is determined to avoid further delays in the 
rulemakings on standards and test procedures for distribution 
transformers. Therefore, it does not wish either to expand these 
rulemakings to cover transformers outside the SNOPR's capacity ranges, 
or to pursue at this time exclusion of such transformers from the 
definition of distribution transformer. Furthermore, the transformers 
within these capacity ranges clearly are within the new EPCA definition 
of distribution transformer, so the Department is authorized to pursue 
standards for them, and DOE believes there are ample grounds to 
conclude that such standards are warranted under the criteria of 
section 346(a) of EPCA, 42 U.S.C. 6317(a).
    For these reasons, Sec.  431.192 of today's final rule modifies the 
EPCA definition of distribution transformer that was recently 
incorporated into the DOE rules by adding to it the kVA capacity 
limitations in the SNOPR definition. This definition will not include, 
as it could not, any transformers excluded from the EPCA definition, 
and today's test procedure and any standards rulemaking will not cover 
such transformers. The Department is adopting this definition, with its 
capacity limitations, for the purpose of delineating the coverage of 
today's rule, as well as the transformers that will be evaluated in the 
current standards rulemaking for distribution transformers. The 
inclusion of the capacity limitations in today's definition does not 
mean that DOE has concluded that the EPCA definition of distribution 
transformer includes such limitations. Rather, at some point after 
completion of the current rulemakings as to distribution transformers, 
the Department intends to evaluate transformers with larger and smaller 
capacities than those included in today's definition, review how EPCA 
should be construed with regard to those transformers, and decide what 
if any action to take with regard to adoption of efficiency 
requirements for such transformers. If DOE adopts efficiency 
requirements for any of these transformers, it would amend the 
definition of ``distribution transformer'' in its regulations 
accordingly.
    Finally, the capacity limitations in today's definition of 
``distribution transformer'' will have no effect on the existing 
requirements for low-voltage dry-type distribution transformers. EPCA 
sets forth a definition and standards for this equipment, 42 U.S.C. 
6291(38) and 6295(y), which DOE incorporated into its regulations at 10 
CFR sections 431.192 and 431.196(a). Because the definition states that 
a ``low-voltage dry-type distribution transformer'' is a ``distribution 
transformer'' that meets certain criteria, the addition of capacity 
limits to the definition of ``distribution transformer'' could be read 
as affecting what constitutes a ``low-voltage dry-type distribution 
transformer'' under the regulation. As stated above, however, the 
maximum limits for primary and secondary voltages of 34.5 kilovolts and 
600 volts, respectively, in EPCA's definition of ``distribution 
transformer,'' in effect limit transformers that meet that definition 
to those with a maximum capacity of approximately 3750 to 5000 kVA. 
Similarly, one of the criteria for a ``low-voltage dry-type 
distribution transformer'' is that its primary voltage not exceed 600 
volts, 10 CFR section 431.192, which contemplates a secondary voltage 
much lower than 600 volts. The obvious effect of this is that a 
transformer will be a ``low-voltage dry-type distribution transformer'' 
under the regulations only if its maximum capacity is far less than 
3750 kVA, and in all likelihood less than the 2500 kVA maximum in 
today's definition of distribution transformer. In addition,

[[Page 24977]]

EPCA and DOE rules prescribe standards for low-voltage dry-type 
distribution transformers only with kVA's within the range of 15 to 
1000, 42 U.S.C. 6295(y) and 10 CFR section 431.196(a), which are within 
the 15 to 2500 kVA range that today's definition of ``distribution 
transformer'' incorporates for dry-type transformers. For these 
reasons, the capacity limitation in today's definition of 
``distribution transformer'' has no impact on the current DOE and EPCA 
requirements for low-voltage dry-type distribution transformers.
2. Incorporation and Definition of EPCA's Exclusions--General
    As indicated above, DOE incorporated into its rules the new EPCA 
definition of distribution transformer, including the language listing 
specific types of excluded transformers and authorizing DOE to add to 
that list. 70 FR 60416-17. Upon further review, the Department has 
decided to adopt in Section 431.192 of today's rule several editorial, 
clarifying and format changes to the language concerning the 
exclusions.
    To begin with, this language states that the term ``distribution 
transformer'' does not include ``a transformer that is designed to be 
used in a special purpose application and is unlikely to be used in 
general purpose applications, such as [the list of specifically 
excluded transformers]'' (42 U.S.C. 6291(35)(B)(ii); 70 FR 60416-17) At 
first reading, this language appears to exclude unspecified types of 
transformers that meet the criteria just quoted, and to introduce a 
list consisting of specific illustrations of the transformers excluded. 
However, the very next paragraph of the definition states that DOE may, 
``by rule,'' exclude ``any transformer not listed'' which meets 
criteria that, in substantial part, are virtually identical to the 
criteria just quoted. (42 U.S.C. 6291(35)(B)(iii); 70 FR 60416) If the 
definition were read as excluding any transformer, in addition to those 
specifically listed, that met these criteria, this would obviate and 
render null the provision authorizing DOE to exclude additional 
transformers that meet these criteria, but only through rulemaking. The 
Department believes, however, that the soundest construction of these 
provisions is that transformers not specifically listed in the 
definition can be excluded only through a DOE rulemaking, thus 
providing certainty as to which transformers are covered at any given 
point in time. Use of the language quoted at the beginning of this 
paragraph to introduce the list of specifically excluded transformers 
serves to describe those transformers, and helps indicate the types of 
transformers the statute authorizes DOE to exclude by rule. Therefore, 
because this provision does not actually delineate excluded 
transformers, and in order to avoid confusion as to the function of 
this language, DOE in today's rule has amended section 431.192 by 
excluding it.
    As just indicated, DOE incorporated into its definition of 
distribution transformer language from EPCA that authorizes DOE to add 
to the list of excluded transformers. (42 U.S.C. 62912(35)(B)(iii); 70 
FR 60416-17) Because this language authorizes action by DOE and does 
not actually describe transformers that are not ``distribution 
transformers,'' upon further reflection the Department believes that 
the language need not be included in the definition in the DOE rules. 
Therefore, the Department has amended its definition of ``distribution 
transformer'' by omitting this language from section 431.92 of today's 
rule.
    As to the specific exclusions, the Department indicated when it 
adopted the EPCA definition, 70 FR 60408, that the definition uses 
incorrect terms in its exclusions of ``Uninterruptible Power System 
[UPS] transformer, impedance transformer, * * * [and] sealed and 
nonventilating transformer.'' (42 U.S.C. 6291(35)(B)(ii)) In accordance 
with its expressed intention to address such minor drafting problems in 
future rulemaking proceedings, where Congress has not already done so, 
70 FR 60408, in today's rule DOE is amending its definition of 
distribution transformer to correct use of these terms. First, UPS 
transformers are commonly referred to as ``Uninterruptible Power Supply 
transformers,'' not ``Uninterruptible Power System transformers,'' and 
therefore DOE adopts the former term in today's rule. Second, every 
transformer has an impedance, but only transformers with impedances 
outside of normal ranges, i.e., ``special-impedance'' transformers, 
warrant exclusion from standards. The Department had proposed to 
exclude such transformers from its definition of distribution 
transformer in the SNOPR, and NEMA excludes them from coverage of NEMA 
TP 1 and TP 2. Therefore, DOE construes EPCA as excluding ``special 
impedance'' transformers, and today's rule substitutes that term for 
``impedance'' in the list of exclusions. Third, IEEE standards define 
``sealed'' transformers separately from ``nonventilated'' transformers, 
treating them as two different types of transformers. The definitions 
are such that it would be highly unlikely for a particular transformer 
to be both ``sealed'' and ``nonventilated.'' In the SNOPR, DOE treated 
them as two separate exclusions from the term ``distribution 
transformer,'' as it believes is appropriate. In light of the 
foregoing, DOE construes EPCA as containing separate exclusions for 
sealed and nonventilated transformers, and today's rule so provides.
    The Department has also changed the format for the specific 
exclusions in section 431.192 of today's rule, and adopted the approach 
in the SNOPR, by placing the exclusions in a numbered list, rather than 
simply listing them seriatim in a single paragraph. The Department 
believes this will make the rule easier to read and use.
    Finally, conforming to the approach in EPCA, DOE's recently adopted 
rule lists the 12 types of transformers it excludes from the term 
``distribution transformer,'' but contains no definition for any of 
them. 70 FR 60416-17. In the SNOPR, DOE proposed definitions for the 
transformers it proposed to exclude. The Department believes such 
definitions are warranted because they help to clarify exactly which 
transformers are covered. Today's rule includes seven definitions drawn 
from IEEE standards, and five that DOE developed based on industry 
catalogues, practice and nomenclature. DOE believes they represent a 
reasonable construction of the EPCA exclusions. Except as indicated in 
the discussion below of the definitions of special impedance, testing 
and grounding transformers, they are the same definitions DOE proposed 
in the SNOPR.
3. Specific EPCA Exclusions
a. Transformers With Tap Ranges of 20 Percent or More and Special 
Impedance Transformers
    EPCA and the Department's recently adopted rule exclude from the 
definition of ``distribution transformer'' transformers with ``multiple 
voltage taps, the highest of which equals at least 20 percent more than 
the lowest.'' 42 U.S.C. 6291(35)(B)(i); 70 FR 60416. The Department 
reads this language as excluding transformers with a tap range of 20 
percent or more. It is similar to the exclusion in the SNOPR of 
transformers with a tap range greater than 15 percent. The language 
EPCA uses for this exclusion, however, is ambiguous.
    Each distribution transformer with multiple voltage taps has a 
nominal voltage at which it normally operates and other voltages 
(taps), typically

[[Page 24978]]

above and below its nominal voltage at which it can also operate. The 
voltage taps enable the transformer to be connected to distribution 
lines at these other voltages. The tap range represents the difference 
between the highest and lowest voltage taps relative to the nominal 
voltage, expressed as a percentage. It is unclear whether, under the 
EPCA exclusion, a transformer's tap range is determined by computing 
the percentage of the voltage difference between its lowest and highest 
voltage taps relative to the voltage of the lower tap, or, as the 
industry has traditionally done, by adding the sum of the percentages 
by which the highest and the lowest voltage taps deviate from the 
nominal voltage. (The traditional industry method is equivalent to the 
percentage of the difference between the lowest and highest voltage 
taps relative to the nominal voltage.) These two approaches generally 
yield two different results for tap range value for any given 
transformer with multiple voltage taps. For example, a 600-volt primary 
transformer with two 2.5-percent taps above and four 2.5-percent taps 
below the nominal, with the highest tap being 630 volts and the lowest 
540 volts, would normally be referred to as having a tap range of 15 
percent (i.e., 6 times 2.5 percent, or 90 volts as a percentage of 600 
volts = 15 percent). Similarly, a 600-volt primary with three 2.5-
percent taps above and three 2.5-percent taps below the nominal, with 
the highest tap being 645 volts and the lowest 555 volts, would also be 
referred to under the traditional industry approach as having a tap 
range of 15 percent. However, if the tap percentages for these 
transformers were calculated as a percentage of the voltage rating of 
the lowest tap (540 volts and 555 volts in these examples), these two 
transformers would have a tap range of 16.2 percent and a 16.7 percent, 
respectively.
    The Department believes that EPCA's exclusion of transformers with 
a tap range of 20 percent or more is best construed as reflecting 
standard industry practice, such that tap ranges do not vary with the 
voltage rating of the lowest tap. Rather, tap range should be 
calculated, and excluded transformers identified, based on the industry 
practice of calculating the transformer's percent tap range relative to 
the nominal voltage of the transformer. Accordingly, the Department 
interprets EPCA as excluding transformers from the definition of 
``distribution transformer'' when the aggregate of the transformer's 
highest to lowest tap voltages, relative to the nominal voltage, equals 
at least 20 percent. In section 431.192 of today's rule, the Department 
has incorporated this interpretation into its regulations by adding 
clarifying language to amend the regulation containing this exclusion 
that it adapted from EPCA in 70 FR 60416.
    The Department also notes that EPCA includes this exclusion in a 
separate paragraph, rather than in the list that comprises the other 
exclusions from the definition of ``distribution transformer.'' (42 
U.S.C. 6291(35)(B)(i)-(ii)) See 70 FR 60416. To present this exclusion 
in the same format as the other exclusions, in section 431.192 of 
today's rule the Department has added ``Transformer with Tap Range of 
20 percent or more'' to the list of exclusions and defined that term 
using the EPCA language that contains the exclusion, modified as just 
indicated.
    As indicated above, the Department had proposed in the SNOPR to 
exclude transformers with tap ranges greater than 15 percent. 69 FR 
45110, 45420-22. Pemco, a manufacturer, expressed the concern that, if 
the Department declines to adopt efficiency standards for distribution 
transformers with a tap range of greater than 15 percent (currently the 
standard tap range for low voltage dry-type transformers), 
manufacturers might begin producing transformers with a slightly larger 
tap range, and such transformers would not be covered by standards. 
(Pemco, No. 48 at p. 2) That could create a significant loophole under 
the regulations. Since the 20-percent tap range is larger than the 
previously proposed 15-percent range, exclusion of transformers with 
tap ranges of at least 20 percent should reduce the risk that 
transformers with slightly larger tap ranges would be produced in order 
to avoid coverage. But that risk will not be completely eliminated.
    The exclusion of special impedance transformers, as provided in 
EPCA, as recently incorporated by DOE into 10 CFR section 431.192, and 
as previously proposed by DOE in the SNOPR, raises a similar issue. The 
issue is brought into focus by DOE's proposed definition for these 
transformers in the SNOPR. The proposed definition specified a normal 
impedance range for each standard kVA rating, and stated that a 
``special-impedance transformer'' would be any transformer with an 
impedance outside the applicable range. Any such transformer would not 
be a ``distribution transformer'' covered by the proposed rule. 69 FR 
45510-11, 45520-22. No commenter objected to this exclusion, and only 
one specifically addressed it. Howard Industries recommends that DOE 
replace its proposed normal impedance ranges with ranges included in 
Howard's comments, which are more in line with ranges ANSI uses to 
delineate special impedance transformers and on which most utility 
systems are based. (Howard, No. 55 at p. 3) For most kVA levels, DOE's 
proposed ranges are broader than Howard's. Hence, DOE's ranges would 
result in exclusion of fewer transformers, by classifying fewer as 
``special impedance.'' In its revised test procedure document, NEMA TP 
2-2005, NEMA incorporated DOE's proposed normal impedance ranges. 
(NEMA, No. 60 Attachment 1 at pp. 5-6)
    The Department is concerned that some transformers designed for 
electricity distribution could be manufactured with impedances outside 
normal ranges so that they would not be subject to otherwise applicable 
efficiency standards. Such transformers could be less expensive to 
manufacture than normal impedance transformers manufactured in 
compliance with the standards, and therefore could have a competitive 
advantage over standards-compliant distribution transformers. If this 
occurred, it would subvert the standards. At best, the manufacturer(s) 
of such new, non-complying transformers would sell them in place of 
complying products they would otherwise have sold, and the product 
would have a share of the market for which DOE analysis demonstrated 
that standards were technologically feasible and economically 
justified. This would reduce energy savings below the levels that 
standards under EPCA are designed to achieve, and reduce the benefits 
transformer consumers and the public would realize from the standards. 
At worst, to avoid significant losses of market share to the competing, 
non-complying transformer, other manufacturers would be forced to 
produce the same type of non-complying unit. In that case, all or most 
of the benefit of standards could be lost.
    The Department believes that use of the impedance ranges in the 
proposed rule, to delineate special impedance transformers, is a 
reasonable implementation of EPCA's exclusion of these transformers. 
This is the same approach, discussed above, that EPCA follows in its 
exclusion of transformers with non-standard tap ranges, in that only 
transformers that are considerably outside the normal ranges are 
excluded from coverage. To construe EPCA otherwise, that is, to 
construe it as excluding from coverage any transformer that falls 
outside the current, standard normal impedance ranges, could spawn a 
new generation of distribution transformers with impedances outside 
these ranges, which

[[Page 24979]]

would not be subject to Federal efficiency standards and test 
procedures. As just mentioned, this could subvert DOE's energy 
efficiency standards. NEMA's inclusion of DOE's proposed impedance 
ranges in the revised TP 2 standard provided to the Department, and the 
fact that only one commenter objected to them, indicate they are a 
sound basis for delineating the special impedance transformers that are 
excluded from coverage under today's rule and DOE's efficiency 
standards. Therefore, section 431.192 of today's rule retains the 
SNOPR's proposed definition of the ``special-impedance transformers'' 
excluded from the term ``distribution transformer.''
    The Department recognizes that this approach may not prevent 
attempts to circumvent its efficiency requirements through manufacture 
of distribution transformers that appear to, or do, fall just within 
this exclusion or the exclusion of transformers with tap ranges of 20 
percent or more. Such transformers could conceivably be manufactured 
for use in standard applications to distribute electricity in power 
distribution systems, but with efficiencies below those required by 
DOE's standards. Indeed, other exclusions from today's definition of 
distribution transformer could also be exploited to justify manufacture 
of transformers, for standard distribution applications, that do not 
meet DOE standards. The Department believes one such example may be the 
exclusion for drive (isolation) transformers. Such transformers can be 
similar to standard distribution transformers. A manufacturer might be 
able to produce and market, for standard distribution uses, a 
transformer that does not meet DOE efficiency standards but that 
clearly, or arguably meets, DOE's definition of ``drive (isolation) 
transformer,'' and claim that it is not a ``distribution transformer'' 
as defined by DOE.
    The Department intends to strictly and narrowly construe the 
exclusions from the definition of ``distribution transformer.'' It will 
also take appropriate steps, including enforcement action if necessary, 
if any manufacturer or other party erroneously invokes one of the 
exclusions as a basis for marketing a transformer that is a 
``distribution transformer'' under today's rule but does not meet DOE 
standards. Moreover, to the extent transformers that do fall within the 
exclusions begin to be marketed for standard distribution applications, 
or find widespread use in such applications, DOE will examine whether 
re-defining the relevant exclusions, and/or legislative action, is 
warranted.
b. Testing Transformers
    EPCA, and DOE's recent rule, also exclude a ``testing transformer'' 
from the definition of distribution transformer, 42 U.S.C. 
6291(35)(B)(ii) and 70 FR 60416, as does section 431.192 of today's 
rule. The Department proposed this exclusion in the SNOPR. 63 FR 63363; 
69 FR 45510. No stakeholder commented on it, in response to either the 
NOPR or SNOPR, except that in its revised TP 2-2005 document, NEMA 
deleted the following sentence from the SNOPR's proposed definition of 
``testing transformer'': ``This type of transformer is also commonly 
known as an Instrument Transformer.'' (NEMA, No. 60 Attachment 1 at p. 
7) An instrument transformer, however, is a type of transformer used 
for extending the voltage and current ranges of measuring and control 
instruments--such as voltmeters, ammeters, wattmeters, and relays--and 
is not the same as a testing transformer that supplies power to test 
electrical equipment. The Department recognizes that it erroneously 
included this sentence in the SNOPR definition of testing transformer 
and has deleted it from today's rule.
    The Department believes that this error would not have lead 
stakeholders to infer that DOE had proposed to specifically exclude 
instrument transformers from the definition of ``distribution 
transformer'' in the SNOPR, for two reasons. First, the remainder of 
the proposed definition of testing transformer clearly did not include 
instrument transformers, and second, contrary to the incorrect 
sentence, testing transformers are not commonly known as instrument 
transformers. Nevertheless, to the extent the proposed rule may have 
been read to specifically exclude instrument transformers, DOE believes 
such an exclusion is unnecessary and unwarranted. The revised NEMA TP 
2-2005 contains no such exclusion. Moreover, an instrument transformer 
would be designed to handle less power than the lower capacity limits 
(10 kVA for liquid-immersed and 15 kVA for dry-type) in today's 
definition of distribution transformer, unless it was also designed to 
distribute electricity. In the former case, the transformer would not 
be covered under today's rule (or under the SNOPR) even absent a 
specific exclusion, rendering an exclusion unnecessary. In the latter 
case, it should be covered, and subject to DOE efficiency standards and 
test procedures, as a ``distribution transformer.'' Hence, there is no 
reason to consider further the exclusion of ``instrument transformers'' 
from today's definition of distribution transformer.
c. Grounding Transformers
    Finally, section 431.192 of today's final rule contains a 
clarifying modification to the SNOPR's definition of ``grounding 
transformer.'' That definition referred to ``[a]n autotransformer with 
a zig-zag winding arrangement.'' 69 FR 45521. The Department has since 
become aware that this language is internally inconsistent, because an 
autotransformer with a zig-zag winding cannot be an autotransformer as 
defined in the rule, nor does it meet industry's conventional 
understanding of the term. The Department used the term autotransformer 
in the proposed grounding transformer definition to describe a type of 
transformer that does not have a separate physical secondary winding 
(unlike a conventional transformer). But although a three-phase 
autotransformer has three coils constituting the primary winding only, 
and no separate secondary winding, a section of each primary coil is 
``tapped-off'' to create, in effect, a secondary winding. A grounding 
transformer, however, has only a primary winding, and no secondary 
winding output. In today's rule, in the definition of ``grounding 
transformer,'' the Department has replaced the reference to an 
autotransformer with a reference to a transformer with a primary 
winding and no secondary winding.
4. Other Exclusions Considered
    The bulk of the comments on the SNOPR's definition of distribution 
transformer advocated eliminating or narrowing exclusions DOE had 
proposed, or adding other exclusions. EPACT 2005 incorporated none of 
these exclusions into EPCA.
    In the SNOPR, DOE had proposed to exclude both harmonic mitigating 
transformers and K-factor (also referred to as ``harmonic tolerating'') 
transformers at K-13 and higher, largely based on its view that: (1) 
regulating them would not save significant amounts of energy, and (2) 
they are sufficiently expensive that there is little risk they would be 
purchased in place of more efficient transformers that would be subject 
to standards. 69 FR 45511, 45520-21. The Department also indicated its 
belief that few harmonic mitigating transformers would be commonly 
understood to be distribution transformers. 69 FR 45511. No commenter 
advocated retention of either exclusion, and several supported 
eliminating or narrowing them.

[[Page 24980]]

Supporting elimination of both exclusions, NEMA stated that the 
exclusions could be used to avoid efficiency standards. (NEMA, No. 39 
at p. 2 and No. 47 at p. 2; Public Meeting Transcript, No. 42.11 at p. 
22; NEMA No. 51 at p. 2) The Oregon Department of Energy raised doubts 
that these transformers would be unable to meet standards and saw no 
rationale for excluding them. (ODOE, No. 54 at p. 2) Harmonics Limited 
believes the market for them is large and growing, that use of K-rated 
transformers to circumvent existing standards has resulted in greater 
energy consumption, and harmonic transformers can both comply with 
standards and address harmonics issues. (Harmonics Limited, No. 50 at 
p. 1) ACME and Pemco advocated elimination of the exclusion for K-
factor transformers (Public Meeting Transcript, No. 42.11 at pp. 32-33; 
Pemco, No. 48 at p. 2), and EMS International Consulting, Inc. (EMS) 
advocated elimination of the exclusion for harmonic mitigating 
transformers. (EMS, No. 57 at p. 3) In addition, EMS recommended that 
DOE cover K-rated transformers (up to a certain level which EMS did not 
specify), and Federal Pacific recommended narrowing the K-factor 
exclusion for transformers rated up to 300 kVA and broadening it for 
transformers above 300 kVA, both on grounds similar to those advanced 
by commenters who advocated its elimination. (EMS, No. 57 at p. 2; FPT, 
No. 44 at pp. 2-3 and No. 52 at p. 2)
    Based on these comments, and upon further review, DOE has concluded 
there is not a sufficient basis at this point to exclude harmonic 
mitigating or K-factor transformers from the definition of distribution 
transformer. In essence, the Department proposed in the SNOPR to 
exclude these transformers on the grounds that they are not 
``distribution transformers,'' and that energy conservation standards 
for them would fail to meet the EPCA criteria in 42 U.S.C. 6317(a)(1) 
because such standards would not save substantial amounts of energy 
and/or be economically justified. Concerning the first point, as 
discussed above, EPCA, as amended in EPACT 2005, now defines the term 
``distribution transformer.'' Harmonic mitigating and K-factor 
transformers do not per se fail to meet the numerical criteria in this 
definition, nor are they in the definition's list of excluded 
transformers. (42 U.S.C. 6291(35)(A) and (B)(i)-(ii))
    EPCA, as recently amended, now authorizes DOE, however, to exclude 
by rule any transformer if it is designed for a special application, if 
it is unlikely to be used in a general purpose application, and if 
significant energy savings would not result from applying standards to 
it. (42 U.S.C. 6291(35)(B)(iii)) DOE previously relied on general 
information to support the views expressed in the SNOPR that harmonic 
mitigating and K-factor transformers would not be used for general 
purpose distribution applications, and that standards for them would 
not save significant amounts of energy. However, these conclusions were 
somewhat negated by the comments that these transformers could be sold 
in place of distribution transformers that are subject to standards, 
and that their use is increasingly common. Also, the Department is not 
aware of any more concrete information or anal