Energy Conservation Program: Energy Conservation Standards for Battery Chargers and External Power Supplies, 18478-18649 [2012-6042]

Download as PDF 18478 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules DEPARTMENT OF ENERGY 10 CFR Part 430 [Docket Number EERE–2008–BT–STD– 0005] RIN 1904–AB57 Energy Conservation Program: Energy Conservation Standards for Battery Chargers and External Power Supplies Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Notice of proposed rulemaking (NOPR) and public meeting. AGENCY: The Energy Policy and Conservation Act (EPCA) prescribes energy conservation standards for various consumer products and commercial and industrial equipment, including battery chargers and external power supplies (EPSs). EPCA also requires the U.S. Department of Energy (DOE) to determine whether more stringent, amended standards for these products are technologically feasible, economically justified, and would save a significant amount of energy. In this notice, DOE proposes amended energy conservation standards for Class A EPSs and new energy conservation standards for non-Class A EPSs and battery chargers. The notice also announces a public meeting to receive comment on these proposed standards and associated analyses and results. DATES: DOE will hold a public meeting on Wednesday, May 2, 2012 from 9 a.m. to 5 p.m., in Washington, DC. The meeting will also be broadcast as a webinar. See section VII, ‘‘Public Participation,’’ for webinar registration information, participant instructions, and information about the capabilities available to webinar participants. DOE will accept comments, data, and information regarding this notice of proposed rulemaking (NOPR) before and after the public meeting, but no later than May 29, 2012. See section VI, ‘‘Public Participation,’’ for details. ADDRESSES: The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 8E–089, 1000 Independence Avenue SW., Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at (202) 586–2945. Please note that foreign nationals visiting DOE Headquarters are subject to advance security screening procedures. Any foreign national wishing to participate in the meeting should advise DOE as soon as possible by contacting Ms. Edwards to initiate the necessary procedures. Please also note that those wishing to bring laptops sroberts on DSK6SPTVN1PROD with PROPOSALS SUMMARY: VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 into the Forrestal Building will be required to obtain a property pass. Visitors should avoid bringing laptops, or allow an extra 45 minutes. Any comments submitted must identify the NOPR for Energy Conservation Standards for Battery Chargers and External Power Supplies, and provide docket number EE–2008– BT–STD–0005 and/or regulatory information number (RIN) number 1904–AB57. Comments may be submitted using any of the following methods: 1. Federal eRulemaking Portal: https:// www.regulations.gov. Follow the instructions for submitting comments. 2. Email: BC&EPS_ECS@ee.doe.gov. Include the docket number and/or RIN in the subject line of the message. 3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, Mailstop EE–2J, 1000 Independence Avenue SW., Washington, DC, 20585–0121. If possible, please submit all items on a CD. It is not necessary to include printed copies. 4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, 950 L’Enfant Plaza, SW., Suite 600, Washington, DC, 20024. Telephone: (202) 586–2945. If possible, please submit all items on a CD. It is not necessary to include printed copies. Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to Office of Energy Efficiency and Renewable Energy through the methods listed above and by email to Chad_S_ Whiteman@omb.eop.gov. For detailed instructions on submitting comments and additional information on the rulemaking process, see section VII of this document (Public Participation). Docket: The docket is available for review at regulations.gov, including Federal Register notices, framework documents, public meeting attendee lists and transcripts, comments, and other supporting documents/materials. All documents in the docket are listed in the regulations.gov index. However, not all documents listed in the index may be publicly available, such as information that is exempt from public disclosure. A link to the docket web page can be found at: https://www1.eere.energy.gov/ buildings/appliance_standards/ residential/battery_external.html. This web page will contain a link to the docket for this notice on the regulations.gov site. The regulations.gov PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 web page will contain simple instructions on how to access all documents, including public comments, in the docket. See section VII for information on how to submit comments through regulations.gov. For further information on how to submit or review public comments or participate in the public meeting, contact Ms. Brenda Edwards at (202) 586–2945 or email: Brenda.Edwards@ee. doe.gov. FOR FURTHER INFORMATION CONTACT: Mr. Victor Petrolati, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, EE–2J, 1000 Independence Avenue SW., Washington, DC, 20585–0121. Telephone: (202) 586–4549. Email: Victor.Petrolati@ee.doe.gov. Mr. Michael Kido, U.S. Department of Energy, Office of the General Counsel, GC–71, 1000 Independence Avenue SW., Washington, DC 20585–0121. Telephone: (202) 586–8145. Email: michael.kido@hq.doe.gov. SUPPLEMENTARY INFORMATION: Table of Contents I. Summary of the Proposed Rule A. Benefits and Costs to Consumers B. Impact on Manufacturers C. National Benefits II. Introduction A. Authority B. Background 1. Current Standards 2. History of Standards Rulemaking for Battery Chargers and External Power Supplies III. General Discussion A. Test Procedures 1. External Power Supply Test Procedures 2. Battery Charger Test Procedures B. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels a. External Power Supply Max-Tech Levels b. Battery Charger Max-Tech Levels C. Energy Savings 1. Determination of Savings 2. Significance of Savings D. Economic Justification 1. Specific Criteria a. Economic Impact on Manufacturers and Consumers b. Life-Cycle Costs c. Energy Savings d. Lessening of Utility or Performance of Products e. Impact of Any Lessening of Competition f. Need for National Energy Conservation 2. Rebuttable Presumption IV. Methodology and Discussion A. Market and Technology Assessment 1. Products Included in This Rulemaking a. External Power Supplies b. Battery Chargers c. Wireless Power d. Unique Products E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 2. Market Assessment a. Market Survey b. Non-Class A External Power Supplies c. Application Shipments d. Efficiency Distributions 3. Product Classes a. External Power Supply Product Classes b. Battery Charger Product Classes 4. Technology Assessment a. EPS Efficiency Metrics b. EPS Technology Options c. High-Power EPSs d. Power Factor e. Battery Charger Modes of Operation and Performance Parameters f. Battery Charger Technology Options B. Screening Analysis C. Engineering Analysis 1. Engineering Analysis for External Power Supplies a. Representative Product Classes and Representative Units b. EPS Candidate Standard Levels (CSLs) c. EPS Engineering Analysis Methodology d. EPS Engineering Results e. EPS Equation Scaling 2. Engineering Analysis for Battery Chargers a. Representative Units b. Battery Charger Efficiency Metrics c. Calculation of Unit Energy Consumption d. Battery Charger Candidate Standard Levels (CSLs) e. Test and Teardowns f. Manufacturer Interviews g. Design Options h. Cost Model i. Battery Charger Engineering Results j. Scaling of Battery Charger Candidate Standard Levels D. Markups to Determine Product Price E. Energy Use Analysis F. Life-Cycle Cost and Payback Period Analyses 1. Manufacturer Selling Price 2. Markups 3. Sales Tax 4. Installation Cost 5. Maintenance Cost 6. Product Price Forecast 7. Unit Energy Consumption 8. Electricity Prices 9. Electricity Price Trends 10. Lifetime 11. Discount Rate 12. Sectors Analyzed 13. Base Case Market Efficiency Distribution 14. Compliance Date 15. Payback Period Inputs G. National Impact Analysis 1. Shipments 2. Shipment Growth Rate 3. Product Class Lifetime 4. Forecasted Efficiency in the Base Case and Standards Cases 5. Product Price Forecast 6. Unit Energy Consumption and Savings 7. Unit Costs 8. Repair and Maintenance Cost per Unit 9. Energy Prices 10. Site-to-Source Energy Conversion 11. Discount Rates 12. Benefits From Effects of Standards on Energy Prices H. Consumer Subgroup Analysis VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 I. Manufacturer Impact Analysis 1. Overview 2. EPS MIA a. EPS GRIM Key Inputs b. Comments From Interested Parties Related to EPSs c. High-Power EPS Manufacturer Interviews 3. Battery Charger MIA a. Battery Charger GRIM Key Inputs b. Battery Charger Comments From Interested Parties 4. Comments From Interested Parties Related to EPSs and Battery Chargers a. Cumulative Burden b. Competition 5. Manufacturer Interviews a. Product Groupings b. Competition From Substitutes c. Test Procedure Concerns d. Multiple Regulation of EPSs and Battery Chargers e. Profitability Impacts f. Potential Changes to Product Utility J. Employment Impact Analysis K. Utility Impact Analysis L. Emissions Analysis M. Monetizing Carbon Dioxide and Other Emissions Impacts 1. Social Cost of Carbon a. Monetizing Carbon Dioxide Emissions b. Social Cost of Carbon Values Used in Past Regulatory Analyses c. Current Approach and Key Assumptions d. Valuation of Other Emissions Reductions N. Discussion of Other Comments O. Marking Requirements P. Reporting Requirements V. Analytical Results A. Trial Standard Levels 1. External Power Supply TSLs 2. Battery Charger TSLs 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. Cash-Flow Analysis Results b. Impacts on Employment c. Impacts on Manufacturing Capacity d. Impacts on Sub-Group 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 C. Proposed Standards 1. External Power Supplies a. Product Class B—Direct Operation External Power Supplies b. Product Class X—Multiple-Voltage External Power Supplies c. Product Class H—High-Power External Power Supplies d. Product Class N—Indirect-Operation External Power Supplies PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 18479 2. Battery Chargers a. Low-Energy, Inductive Charging Battery Chargers, Product Class 1 b. Low-Energy, Non-Inductive Charging Battery Chargers, Product Classes 2, 3, and 4 c. Medium-Energy Battery Chargers, Product Classes 5 and 6 d. High-Energy Battery Chargers, Product Class 7 e. Battery Chargers With a DC Input of Less Than 9 V, Product Class 8 f. Battery Chargers With a DC Input Greater Than 9 V, Product Class 9 g. AC Output Battery Chargers, Product Class 10 3. Summary of Benefits and Costs (Annualized) of Proposed Standards for External Power Supplies 4. Summary of Benefits and Costs (Annualized) of Proposed Standards for Battery Chargers VI. Procedural Issues and Regulatory Review A. Review Under Executive Order 12866 and 13563 B. Review Under the Regulatory Flexibility Act 1. Description and Estimated Number of Small Entities Regulated a. Methodology for Estimating the Number of Small Entities b. Manufacturer Participation c. Battery Charger Industry Structure d. Comparison Between Large and Small Entities 2. Description and Estimate of Compliance Requirements c. Summary of Compliance Impacts 3. Duplication, Overlap, and Conflict With Other Rules and Regulations 4. Significant Alternatives to the Proposed Rule C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 458 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 459 K. Review Under Executive Order 13211 L. Review Under the Information Quality Bulletin for Peer Review VII. Public Participation A. Attendance at Public Meeting B. Procedure for Submitting Prepared General Statements for Distribution C. Conduct of Public Meeting D. Submission of Comments E. Issues on Which DOE Seeks Comment VIII. Approval of the Office of the Secretary List of Tables Table I–1. Proposed Energy Conservation Standards for Direct Operation External Power Supplies Table I–2. Proposed Energy Conservation Standards for Battery Chargers Table I–3. Impacts of Proposed Standards on Consumers of External Power Supplies E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS 18480 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Table I–4. Impacts of Proposed Standards on Consumers of Battery Chargers Table I–5. External Power Supply Product Classes Table I–6. Annualized Benefits and Costs of Proposed Standards for External Power Supplies Shipped in 2013–2042 Table I–7. Battery Charger Product Classes Table I–8. Annualized Benefits and Costs of Proposed Standards for Battery Chargers Shipped in 2013–2042 Table II–1. Federal Active Mode Energy Efficiency Standards for Class A External Power Supplies Table II–2. Stakeholders Providing Comments on the Preliminary Analysis Table III–1 Reduction in Energy Consumption at Max-Tech for Battery Chargers Table IV–1 Preliminary Analysis Product Classes Table IV–2 External Power Supply Product Classes Used in the NOPR Table IV–3 Battery Charger Product Classes Table IV–4 Summary of EPS CSLs for Product Classes B, C, D, and E Table IV–5 Summary of EPS CSLs for Product Class X Table IV–6 Summary of EPS CSLs for Product Class H Table IV–7 2.5W EPS Engineering Analysis Results Table IV–8 18W EPS Engineering Analysis Results Table IV–9 60W EPS Engineering Analysis Results Table IV–10 120W EPS Engineering Analysis Results Table IV–11 203W EPS Engineering Analysis Results Table IV–12 345W EPS Engineering Analysis Results Table IV–13 The Battery Charger Representative Units for each Product Class Table IV–14 CSLs Equivalent to California Proposed Standards Table IV–15 Supplemental Values for Product Classes 10a and 10b Table IV–16 Product Class 1 (Inductive Chargers) Engineering Analysis Results Table IV–17 Product Class 2 (Low-Energy, Low-Voltage) Engineering Analysis Results Table IV–18 Product Class 3 (Low-Energy, Medium-Voltage) Engineering Analysis Results Table IV–19 Product Class 4 (Low-Energy, High-Voltage) Engineering Analysis Results Table IV–20 Product Class 5 (MediumEnergy, Low-Voltage) Engineering Analysis Results Table IV–21 Product Class 6 (MediumEnergy, High-Voltage) Engineering Analysis Results Table IV–22 Product Class 7 (High-Energy) Engineering Analysis Results Table IV–23 Product Class 8 (Low-Voltage DC Input) Engineering Analysis Results Table IV–24 Product Class 9 (High-Voltage DC Input) Engineering Analysis Results Table IV–25 Product Class 10 (AC Input, AC Output) Engineering Analysis Results Table IV–26 Summary of Inputs and Key Assumptions Used in the Preliminary Analysis and NOPR LCC Analyses VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 Table IV–27 EPS Life-Cycle Cost Savings With 4-Year Lifteime Assumptions Table IV–28 EPS Life-Cycle Cost Savings With Alternative (2-Year) Lifetime Assumptions Table IV–29 Summary of Inputs, Sources and Key Assumptions for the National Impact Analysis Table IV–30 Changes to Base Case Efficiency Distributions to Account for CEC Standards Table IV–31 Social Cost of CO2, 2010–2050 (in 2007 Dollars per Metric Ton) Table IV–32 Proposed Efficiency Marking Protocol for Battery Chargers Table IV–33 Proposed Location for Battery Charger Marking Table V–1 Trial Standard Levels for External Power Supplies Table V–2 Trial Standard Levels for Battery Chargers Table V–3 LCC Savings and Payback Period for DC Output, Basic-Voltage External Power Supplies Table V–4 LCC Savings and Payback Period for Non-Class A External Power Supplies Table V–5 LCC Savings and Payback Period for Battery Chargers Table V–6 DC Output, Basic-Voltage External Power Supplies: Low-Income Consumer Subgroup Table V–7 Non-Class A External Power Supplies: Low-Income Consumer Subgroup Table V–8 Battery Chargers: Low-Income Consumer Subgroup Table V–9 DC Output, Basic-Voltage External Power Supplies: Small Business Consumer Subgroup Table V–10 Battery Chargers: Small Business Consumer Subgroup Table V–11 DC Output, Basic-Voltage External Power Supplies: Top Tier Marginal Electricity Price Consumer Subgroup Table V–12 Non-Class A External Power Supplies: Top Tier Marginal Electricity Price Consumer Subgroup Table V–13 Battery Chargers: Top Tier Marginal Electricity Price Consumer Subgroup Table V–14 Manufacturer Impact Analysis for Product Classes B, C, D, and E—Flat Markup Scenario Table V–15 Manufacturer Impact Analysis for Product Classes B, C, D, and E— Preservation of Operating Profit Markup Scenario Table V–16 Manufacturer Impact Analysis for Product Class X EPS—Flat Markup Scenario Table V–17 Manufacturer Impact Analysis for Product Class X EPS—Preservation of Operating Scenario Table V–18 Manufacturer Impact Analysis for Product Class H EPS—Flat Markup Scenario Table V–19 Manufacturer Impact Analysis for Product Class H EPS—Preservation of Operating Profit Markup Scenario Table V–20 Applications in Product Class 1 Table V–21 Cash Flow Results—Product Class 1—Flat Markup Scenario Table V–22 Cash Flow Results—Product Class 1—Pass Through Markup Scenario PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 Table V–23 Cash Flow Results—Product Class 1—Constant Price Markup Scenario Table V–24 Applications in Product Classes 2, 3, and 4 Table V–25 Cash Flow Results—Product Classes 2, 3, and 4—Flat Markup Scenario Table V–26 Cash Flow Results—Product Classes 2, 3, and 4—Pass Through Markup Scenario Table V–27 Cash Flow Results—Product Classes 2, 3, and 4—Constant Price Markup Scenario Table V–28 Cash Flow Results—Product Classes 2, 3, and 4—Pass Through Markup Scenario—Consumer Electronics Table V–29 Cash Flow Results—Product Classes 2, 3, and 4—Pass Through Markup Scenario—Power Tools Table V–30 Cash Flow Results—Product Classes 2, 3, and 4—Pass Through Markup Scenario—Small Appliances Table V–31 Applications in Product Classes 5 and 6 Table V–32 Cash Flow Results—Product Classes 5 and 6—Flat Markup Scenario Table V–33 Cash Flow Results—Product Classes 5 and 6—Pass Through Markup Scenario Table V–34 Cash Flow Results—Product Classes 5 and 6—Constant Price Markup Scenario Table V–35 Applications in Product Class 7 Table V–36 Cash Flow Results—Product Class 7—Flat Markup Scenario Table V–37 Cash Flow Results—Product Class 7—Pass Through Markup Scenario Table V–38 Cash Flow Results—Product Class 7—Constant Price Markup Scenario Table V–39 Applications in Product Class 8 Table V–40 Cash Flow Results—Product Class 8—Flat Markup Scenario Table V–41 Cash Flow Results—Product Class 8—Pass Through Markup Scenario Table V–42 Cash Flow Results—Product Class 8—Constant Price Markup Scenario Table V–43 Applications in Product Class 9 Table V–44 Applications in Product Class 10 Table V–45 Cash Flow Results—Product Class 10—Flat Markup Scenario Table V–46 Cash Flow Results—Product Class 10—Pass Through Markup Scenario Table V–47 Cash Flow Results—Product Class 10—Constant Price Markup Scenario Table V–48 Base Case Manufacturer Impact Analysis for All Battery Charger Product Classes Due to the CEC Standard Table V–49 External Power Supplies: Cumulative National Energy Savings in Quads Table V–50 Battery Chargers: Cumulative National Energy Savings in Quads Table V–51 Cumulative Net Present Value of Consumer Benefits for External Power Supplies, 3-Percent Discount Rate (2010$ millions) Table V–52 Cumulative Net Present Value of Consumer Benefits for External Power Supplies, 7-Percent Discount Rate (2010$ millions) E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Table V–53 Cumulative Net Present Value of Consumer Benefits for Battery Chargers, 3-Percent Discount Rate (2010$ millions) Table V–54 Cumulative Net Present Value of Consumer Benefits for Battery Chargers, 7-Percent Discount Rate (2010$ millions) Table V–55 Cumulative Emissions Reduction for 2013–2042 Under External Power Supply TSLs Table V–56 Cumulative Emissions Reduction for 2013–2042 Under Battery Charger TSLs Table V–57 External Power Supply Product Class B: Estimates of Global Present Value of CO2 Emissions Reduction Under TSLs Table V–58 External Power Supply Product Classes B, C, D, and E: Estimates of Global Present Value of CO2 Emissions Reduction Under TSLs Table V–59 External Power Supply Product Class X: Estimates of Global Present Value of CO2 Emissions Reduction Under TSLs Table V–60 External Power Supply Product Class H: Estimates of Global Present Value of CO2 Emissions Reduction Under TSLs Table V–61 Battery Charger Product Class 1: Estimates of Global Present Value of CO2 Emissions Reduction Under TSLs Table V–62 Battery Chargers Product Classes 2, 3, 4: Estimates of Global Present Value of CO2 Emissions Reduction Under TSLs Table V–63 Battery Chargers Product Classes 5, 6: Estimates of Global Present Value of CO2 Emissions Reduction Under TSLs Table V–64 Battery Chargers Product Class 7: Estimates of Global Present Value of CO2 Emissions Reduction Under TSLs Table V–65 Battery Chargers Product Class 8: Estimates of Global Present Value of CO2 Emissions Reduction Under TSLs Table V–66 Battery Chargers Product Class 10: Estimates of Global Present Value of CO2 Emissions Reduction Under TSLs Table V–67 External Power Supply Product Class B: Estimates of Domestic Present Value of CO2 Emissions Reduction Under TSLs Table V–68 External Power Supply Product Classes B, C, D, E: Estimates of Domestic Present Value of CO2 Emissions Reduction Under TSLs Table V–69 External Power Supply Product Class X: Estimates of Domestic Present Value of CO2 Emissions Reduction Under TSLs Table V–70 External Power Supply Product Class H: Estimates of Domestic Present Value of CO2 Emissions Reduction Under TSLs Table V–71 Battery Charger Product Class 1: Estimates of Domestic Present Value of CO2 Emissions Reduction Under TSLs Table V–72 Battery Charger Product Classes 2, 3, 4: Estimates of Domestic Present Value of CO2 Emissions Reduction Under TSLs Table V–73 Battery Charger Product Classes 5, 6: Estimates of Domestic Present Value of CO2 Emissions Reduction Under TSLs VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 Table V–74 Battery Charger Product Class 7: Estimates of Domestic Present Value of CO2 Emissions Reduction Under TSLs Table V–75 Battery Charger Product Class 8: Estimates of Domestic Present Value of CO2 Emissions Reduction Under TSLs Table V–76 Battery Charger Product Class 10: Estimates of Domestic Present Value of CO2 Emissions Reduction Under TSLs Table V–77 Estimates of Present Value of NOX Emissions Reduction Under External Power Supply TSLs Table V–78 Estimates of Present Value of NOX Emissions Reduction Under Battery Charger TSLs Table V–79 Adding Net Present Value of Consumer Savings to Present Value of Monetized Benefits from CO2 and NOX Emissions Reductions Under TSL 1 for Battery Chargers Product Classes 2, 3, 4 Table V–80 Results of Adding Net Present Value of Consumer Savings (at 7% Discount Rate) to Net Present Value of Monetized Benefits from CO2 and NOX Emissions Reductions Under External Power Supply TSLs Table V–81 Results of Adding Net Present Value of Consumer Savings (at 3% Discount Rate) to Net Present Value of Monetized Benefits from CO2 and NOX Emissions Reductions External Power Supply TSLs Table V–82 Results of Adding Net Present Value of Consumer Savings (at 7% Discount Rate) to Net Present Value of Monetized Benefits from CO2 and NOX Emissions Reductions Under Battery Charger TSLs Table V–83 Results of Adding Net Present Value of Consumer Savings (at 3% Discount Rate) to Net Present Value of Monetized Benefits from CO2 and NOX Emissions Reductions Under Battery Charger TSLs Table V–84 Selected National Impacts of Aligning Federal Standards with California Standards Table V–85 Summary of Results for Product Class B External Power Supplies Table V–86 Proposed Standards for EPSs in Product Classes B, C, D, and E Table V–87 Proposed Standards for Product Class X External Power Supplies Table V–88 Proposed Standards for Multiple-Voltage External Power Supplies Table V–89 Proposed Standards for HighPower External Power Supplies Table V–90 Proposed Standards for HighPower External Power Supplies Table V–91 Applications of Indirect Operation External Power Supplies Table V–92 Summary of Results for Battery Charger Product Class 1 Table V–93 Proposed Standard for Product Class 1 Table V–94 Summary of Results for Battery Charger Product Classes 2, 3, and 4 Table V–95 Proposed Standard for Product Classes 2, 3, and 4 Table V–96 Summary of Results for Battery Charger Product Classes 5 and 6 Table V–97 Proposed Standard for Product Classes 5 and 6 Table V–98 Summary of Results for Battery Charger Product Class 7 PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 18481 Table V–99 Proposed Standard for Product Class 7 Table V–100 Summary of Results for Battery Charger Product Class 8 Table V–101 Proposed Standard for Product Class 8 Table V–102 Summary of Results for Battery Charger Product Class 10 Table V–103 Proposed Standard for Product Class 10 Table V–104 Annualized Benefits and Costs of Proposed Standards for EPSs Table V–105 Annualized Benefits and Costs of Proposed Standards for Battery Chargers Table VI–1 Estimated Capital Conservation Costs for a Typical Small Business (2010$ million) Table VI–2 Estimated Product Conversion Costs for a Typical Small Business (2010$ million) Table VI–3 Estimated Total Conversion Costs for a Typical Small Business (2010$ million) I. Summary of the Proposed Rule Title III, Part B 1 of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94–163 (42 U.S.C. 6291–6309, as codified), established the Energy Conservation Program for Consumer Products Other Than Automobiles. Pursuant to EPCA, any new or amended energy conservation standard that DOE prescribes for certain products, such as battery chargers and external power supplies (EPSs), shall be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)). Furthermore, the new or amended standard must result in a significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)). In accordance with these and other statutory provisions discussed in this notice, DOE proposes amended energy conservation standards for Class A EPSs and new energy conservation standards for nonClass A EPSs and battery chargers. The proposed standards for direct operation EPSs, which are the minimum average efficiency in active mode and the maximum power consumption in noload mode expressed as a function of the nameplate output power, are shown in Table I.1. The proposed standards for battery chargers, which consist of a set of maximum annual energy consumption levels expressed as a function of battery energy, are shown in Table I–2. These proposed standards, if adopted, would apply to all products listed in Table I.1 and Table I–2 and manufactured in, or imported into, the United States on or after July 1, 2013. In addition to being technologically 1 For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A. E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS feasible and economically justified, DOE’s proposed standards were also designed to maximize the net monetized VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 benefits, as explained further below in this notice. BILLING CODE 6450–01–P PO 00000 Frm 00006 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.000</GPH> 18482 EP27MR12.002</GPH> BILLING CODE 6450–01–C VerDate Mar<15>2010 22:02 Mar 26, 2012 18483 Jkt 226001 PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.001</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18484 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules economic impacts of the proposed standards on individual consumers are generally positive. For example, the estimated average life-cycle cost (LCC) savings are $1.52 for product class 1, $0.16 for product class 2, $0.35 for product class 3, $0.43 for product class 4, $33.79 for product class 5, $40.78 for product class 6, $38.26 for product class 7, $3.04 for product class 8, and $8.30 for product class 10.4 BILLING CODE 6450–01–C B. Impact on Manufacturers to the industry from the base year through the end of the analysis period (2011 to 2042). Using a real discount rate of 7.1 percent, DOE estimates that The industry net present value (INPV) is the sum of the discounted cash flows 2 The LCC is the total consumer expense over the life of a product, consisting of purchase and installation costs plus operating costs (expenses for energy use, maintenance and repair). To compute the operating costs, DOE discounts future operating costs to the time of purchase and sums them over the lifetime of the product. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 3 As explained in V.B.1.a, DOE uses the median payback period rather than the mean payback period to dampen the effect of outliers on the data. 4 The LCC is the total consumer expense over the life of a product, consisting of purchase and installation costs plus operating costs (expenses for PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 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. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.004</GPH> cycle cost (LCC) savings are from ¥$0.45 to $0.69 for product class B, depending on the representative unit, $2.07 for product class X, and $129.08 for product class H.2 EP27MR12.003</GPH> (LCC) savings and the median payback period. The projected economic impacts of the proposed standards on individual consumers are generally positive. For example, the estimated average life- Table I–4 presents DOE’s evaluation of the economic impacts of the proposed standards on consumers of battery chargers, as measured by the average life-cycle cost (LCC) savings and the median payback period. The projected sroberts on DSK6SPTVN1PROD with PROPOSALS A. Benefits and Costs to Consumers Table I–3 presents DOE’s evaluation of the economic impacts of the proposed standards on consumers of EPSs, as measured by the average life-cycle cost Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18485 For battery chargers, DOE estimates that the INPV for manufacturers of applications that include battery chargers is between $53.918 and $53.205 billion in 2010$ using a real discount rate of 9.1 percent. Under the proposed standards, DOE expects that manufacturers may lose up to 10.2 percent of their INPV, which is approximately $5.428 billion in 2010$. Based on DOE’s interviews with the manufacturers of battery chargers, DOE does not expect any domestic plant closings or significant change in employment, since DOE only identified one domestic battery charger manufacturer. The cumulative national net present value (NPV) of total consumer costs and savings of the proposed standards in 2010$ ranges from $0.79 billion (at a 7-percent discount rate) to $1.87 (at a 3percent discount rate) for EPSs. This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for products purchased in 2013–2042, discounted to 2011. In addition, the proposed standards would have significant environmental benefits. The energy saved is in the form of electricity, would result in cumulative greenhouse gas emission reductions of 46.5 million metric tons (Mt) 5 of carbon dioxide (CO2) in 2013– 2042. During this period, the proposed standards would result in emissions reductions of 38 thousand tons of nitrogen oxides (NOX) and 0.25 tons (t) of mercury (Hg).6 DOE estimates the net VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 5 A metric ton is equivalent to 1.1 short tons. Results for NOX and Hg are given in short tons. PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 C. National Benefits External Power Supplies DOE’s analyses indicate that the proposed standards would save a significant amount of energy over 30 years (2013–2042)—an estimated 0.99 quads of cumulative energy for EPSs. The product classes at issue are comprised of the following groupings of EPS products listed below. 6 DOE calculates emissions reductions relative to the most recent version of the Annual Energy Outlook (AEO) Reference case forecast. This forecast accounts for regulatory emissions reductions from in-place regulations, including the Clean Air Interstate Rule (CAIR, 70 FR 25162 (May 12, 2005)), but not the Clean Air Mercury Rule (CAMR, 70 FR 28606 (May 18, 2005)). Subsequent regulations, including the finalized CAIR E:\FR\FM\27MRP2.SGM Continued 27MRP2 EP27MR12.005</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS the INPV for manufacturers of EPSs is $0.276 billion in 2010$. Under the proposed standards, DOE expects that manufacturers may lose up to 34.1 percent of their INPV, which is approximately $0.094 billion in 2010$. Based on DOE’s interviews with the manufacturers of EPSs and because DOE did not identify any domestic EPS production, DOE does not expect any domestic plant closings or any significant change in employment, since the vast majority, if not all EPS production occurs abroad. 18486 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules present monetary value of the CO2 emissions reduction is between $0.20 and $2.95 billion, expressed in 2010$ and discounted to 2011. DOE also estimates the net present monetary value of the NOX emissions reduction, expressed in 2010$ and discounted to 2011, is between $6.11 and $62.79 million at a 7-percent discount rate, and between $10.97 and $112.73 million at a 3-percent discount rate.7 The benefits and costs of today’s proposed standards, for products sold in 2013–2042, can also be expressed in terms of annualized values. The annualized monetary values are the sum of (1) the annualized national economic value of the benefits from consumer operation of products that meet the proposed standards (consisting primarily of operating cost savings from sroberts on DSK6SPTVN1PROD with PROPOSALS replacement rule, the Cross-State Air Pollution rule issued on July 6, 2011, do not appear in the forecast. On December 30, 2011, the D.C. Circuit stayed CSAPR while ordering EPA to continue administering the also remanded 2005 Clean Air Interstate Rule (CAIR, which has a similar structure, but with less stringent budgets and less restrictive trading provisions) and tentatively set a briefing schedule to allow the case to be heard by April 2012. 7 DOE is aware of multiple agency efforts to determine the appropriate range of values used in evaluating the potential economic benefits of reduced Hg emissions. DOE has decided to await further guidance regarding consistent valuation and reporting of Hg emissions before it once again monetizes Hg in its rulemakings. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 using less energy, minus increases in equipment purchase and installation costs, which is another way of representing consumer NPV), and (2) the annualized monetary value of the benefits of emission reductions, including CO2 emission reductions.8 The value of the CO2 reductions, otherwise known as the Social Cost of Carbon (SCC), is calculated using a range of values per metric ton of CO2 developed by a recent interagency process. The derivation of the SCC values is discussed in section IV.M. Although combining the values of operating savings and CO2 reductions provides a useful perspective, two issues should be considered. First, the national operating savings are domestic U.S. consumer monetary savings that occur as a result of market transactions while the value of CO2 reductions is based on a global value. Second, the assessments of operating cost savings and CO2 savings are performed with different methods that use quite different time frames for analysis. The national operating cost savings is measured for the lifetime of EPSs shipped in 2013–2042. The SCC values, on the other hand, reflect the present value of all future climate-related impacts resulting from the emission of 8 The process that DOE used to convert the timeseries of costs and benefits into annualized values is explained in section V.C.3 of this notice. PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 one ton of carbon dioxide in each year. These impacts continue well beyond 2100. Table I–6 shows the annualized values for today’s proposed standards for EPSs. (All monetary values below are expressed in 2010$.) The results under the primary estimate are as follows. Using a 7-percent discount rate for benefits and costs other than CO2 reduction, for which DOE used a 3percent discount rate along with the SCC series corresponding to a value of $22.3/ton in 2010, the cost of the standards proposed in today’s rule is $251.9 million per year in increased equipment costs, while the annualized benefits are $325.2 million per year in reduced equipment operating costs, $52.3 million in CO2 reductions, and $3.2 million in reduced NOX emissions. In this case, the net benefit amounts to $128.7 million per year. Using a 3percent discount rate for all benefits and costs and the SCC series corresponding to a value of $22.3/ton in 2010, the cost of the standards proposed in today’s rule is $247.3 million per year in increased equipment costs, while the benefits are $348.2 million per year in reduced operating costs, $52.3 million in CO2 reductions, and $3.3 million in reduced NOX emissions. In this case, the net benefit amounts to $156.6 million per year. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 18487 BILLING CODE 6450–01–C VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.006</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18488 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules would outweigh the burdens (loss of INPV for manufacturers and LCC increases for some consumers). DOE also considered more-stringent and less stringent energy use levels as trial standard levels, and is still considering them in this rulemaking. However, DOE has tentatively concluded that the potential burdens of the more-stringent energy use levels would outweigh the projected benefits. Based on consideration of the public comments DOE receives in response to this notice and related information collected and analyzed during the course of this rulemaking effort, DOE may adopt energy use levels presented in this notice that are either higher or lower than the proposed standards, or some combination of level(s) that incorporate the proposed standards in part. The cumulative national net present value (NPV) of total consumer costs and savings of the proposed standards in 2010$ ranges from $6.04 billion (at a 7percent discount rate) to $10.96 billion (at a 3-percent discount rate) for battery chargers. This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for products purchased in 2013–2042, discounted to 2011. In addition, the proposed standards would have significant environmental benefits. The savings would result in cumulative greenhouse gas emission reductions of 62.9 Mt of CO2 in 2013– 2042. During this period, the proposed VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 Battery Chargers DOE’s analyses for battery chargers indicate that the proposed standards would save a significant amount of energy over 30 years (2013–2042)—an estimated 1.36 quads of cumulative energy for battery chargers. The product classes at issue are comprised of the groupings of battery chargers listed in Table I–7. Each product class grouping was established based on the battery charger’s input/ output type, and further divided into product classes according to battery energy and voltage. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.007</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. DOE further notes that products achieving these standard levels are already commercially available for all product classes covered by today’s proposal for EPSs, other than product class H (highpower EPSs). Based on the analyses described above, DOE has tentatively concluded that the benefits of the proposed standards to the Nation (energy savings, positive NPV of consumer benefits, consumer LCC savings, and emission reductions) Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS standards would result in emissions reductions of 52 thousand tons of NOX and 0.35 tons of mercury. DOE estimates the net present monetary value of the CO2 emissions reduction is between $0.27 and $4.04 billion, expressed in 2010$ and discounted to 2011. DOE also estimates the net present monetary value of the NOX emissions reduction, expressed in 2010$ and discounted to 2011, is between $8.19 and $84.14 million at a 7-percent discount rate, and between $14.88 and $153.05 million at a 3-percent discount rate. The benefits and costs of today’s proposed standards, for products sold in 2013–2042, can also be expressed in terms of annualized values. The annualized monetary values are the sum of (1) the annualized national economic value of the benefits from consumer operation of products that meet the proposed standards (consisting primarily of operating cost savings from using less energy, minus increases in equipment purchase and installation costs, which is another way of representing consumer NPV), and (2) the annualized monetary value of the benefits of emission reductions, including CO2 emission reductions. The VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 value of the CO2 reductions is calculated using a range of values per metric ton of CO2 developed by a recent interagency process. The derivation of the SCC values is discussed in section IV.M. Although combining the values of operating savings and CO2 reductions provides a useful perspective, two issues should be considered. First, the national operating savings are domestic U.S. consumer monetary savings that occur as a result of market transactions while the value of CO2 reductions is based on a global value. Second, the assessments of operating cost savings and CO2 savings are performed with different methods that use quite different time frames for analysis. The national operating cost savings is measured for the lifetime of battery chargers shipped in 2013–2042. The SCC values, on the other hand, reflect the present value of all future climaterelated impacts resulting from the emission of one ton of carbon dioxide in each year. These impacts continue well beyond 2100. Table I–8 shows the annualized values for today’s proposed standards for battery chargers. (All monetary PO 00000 Frm 00013 Fmt 4701 Sfmt 4702 18489 values below are expressed in 2010$.) The results under the primary estimate are as follows. Using a 7-percent discount rate for benefits and costs other than CO2 reduction, for which DOE used a 3-percent discount rate along with the SCC series corresponding to a value of $22.3/ton in 2010, the standards proposed in today’s rule result in $110.0 million per year in equipment costs savings, and the annualized benefits are $447.2 million per year in reduced equipment operating costs, $71.6 million in CO2 reductions, and $4.3 million in reduced NOX emissions. In this case, the benefit amounts to $633.0 million per year. Using a 3-percent discount rate for all benefits and costs and the SCC series corresponding to a value of $22.3/ton in 2010, the standards proposed in today’s rule result in $107.9 million per year in equipment costs savings, and the benefits are $485.2 million per year in reduced operating costs, $71.6 million in CO2 reductions, and $4.5 million in reduced NOX emissions. In this case, the net benefit amounts to $669.3 million per year. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules BILLING CODE 6450–01–C 9 The incremental product costs for battery chargers are negative because of a shift in VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 technology from linear power supplies to switch PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 mode power for the larger battery chargers in product classes 5, 6, and 7. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.008</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18490 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. DOE further notes that products achieving these standard levels are already commercially available for all product classes covered by today’s proposal for battery chargers, other than product class 10 (AC output). Based on the analyses described above, DOE has tentatively concluded that the benefits of the proposed standards to the Nation (energy savings, positive NPV of consumer benefits, consumer LCC savings, and emission reductions) would outweigh the burdens (loss of INPV for manufacturers and LCC increases for some consumers). DOE also considered more-stringent and less-stringent energy use levels as trial standard levels, and is still considering them in this rulemaking. However, DOE has tentatively concluded that the potential burdens of the more-stringent energy use levels would outweigh the projected benefits. Based on consideration of the public comments DOE receives in response to this notice and related information collected and analyzed during the course of this rulemaking effort, DOE may adopt energy use levels presented in this notice that are either higher or lower than the proposed standards, or some combination of level(s) that incorporate the proposed standards in part. sroberts on DSK6SPTVN1PROD with PROPOSALS II. Introduction The following section briefly discusses the statutory authority underlying today’s proposal, as well as some of the relevant historical background related to the establishment of standards for battery chargers and EPSs. A. Authority Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94–163 (42 U.S.C. 6291–6309, as codified) established the Energy Conservation Program for Consumer Products Other Than Automobiles,10 a program covering most major household appliances (collectively referred to as ‘‘covered products’’), which includes battery chargers and EPSs. (42 U.S.C. 6295(u)) (DOE notes that under 42 U.S.C. 6295(m), the agency must periodically review its already established energy 10 For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 conservation standards for a covered product. Under this requirement, the next review that DOE would need to conduct must occur no later than six years from the issuance of a final rule establishing or amending a standard for a covered product.) Pursuant to EPCA, DOE’s energy conservation program for covered products consists essentially of four parts: (1) Testing; (2) labeling; (3) the establishment of Federal energy conservation standards; and (4) certification and enforcement procedures. The Federal Trade Commission (FTC) is primarily responsible for labeling, and DOE implements the remainder of the program. 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. 6293) Manufacturers of covered products must use the prescribed DOE test procedure as the basis for certifying to DOE that their products comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of those products. (42 U.S.C. 6293(c)) Similarly, DOE must use these test procedures to determine whether the products comply with standards adopted pursuant to EPCA. See 42 U.S.C. 6295(s). As stated below in Section II.B.2 the DOE test procedures for battery chargers and EPSs currently appear at title 10, Code of Federal Regulations (CFR), part 430, subpart B, appendices Y and Z, respectively. DOE must follow specific statutory criteria when prescribing amended standards for covered products. As indicated above, any amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, EPCA precludes DOE from adopting any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not prescribe a standard: (1) For certain products, including battery chargers and EPSs, if no test procedure has been established for the product, or (2) if DOE determines by rule that the proposed standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)–(B)) 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)) PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 18491 DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven factors: 1. The economic impact of the standard on manufacturers and consumers of the products subject to the standard; 2. The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the imposition of the standard; 3. The total projected amount of energy, or as applicable, water, savings likely to result directly from the imposition of the standard; 4. Any lessening of the utility or the performance of the covered products likely to result from the imposition of the standard; 5. The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard; 6. The need for national energy and water conservation; and 7. Other factors the Secretary of Energy (Secretary) considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) EPCA, as codified, also contains what is known as an ‘‘anti-backsliding’’ provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States of any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6295(o)(4)) Further, EPCA, 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. See 42 U.S.C. 6295(o)(2)(B)(iii). E:\FR\FM\27MRP2.SGM 27MRP2 18492 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS Additionally, 42 U.S.C. 6295(q)(1) specifies requirements when promulgating a standard for a type or class of covered product that has two or more subcategories. DOE must specify a different standard level than that which applies generally to such type or class of products for any group of covered products that have the same function or intended use if DOE determines that covered products within such group (A) consume a different kind of energy from that consumed by other covered products within such type (or class) or (B) have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard . (42 U.S.C. 6294(q)(1)). In determining whether a performance-related feature justifies a different standard for a group of products, DOE must consider such factors as the utility of the feature to the consumer and other factors DOE deems appropriate. Id. Any rule prescribing such a standard must include an explanation of the basis on which such higher or lower level was established. (42 U.S.C. 6295(q)(2)) Federal energy conservation requirements generally supersede State laws or regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a)–(c)) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under 42 U.S.C. 6297(d). Finally, pursuant to the amendments contained in section 310(3) of EISA 2007, any final rule for new or amended energy conservation standards promulgated after July 1, 2010, are required to address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 adopts a standard for a covered product after that date, it must, if justified by the criteria for adoption of standards in under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and off mode energy use into the 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’s current test procedures for battery chargers and EPSs already address standby-mode and off-mode energy use. The standards for EPSs also address this energy use; currently there are no standards for battery chargers. In this rulemaking, DOE intends to incorporate such energy use into any new or amended energy conservation standards it adopts in the final rule. DOE has also reviewed this regulation pursuant to Executive Order 13563, issued on January 18, 2011 (76 FR 3281 (Jan. 21, 2011)). EO 13563 is supplemental to and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, agencies are required by Executive Order 13563 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 PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 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 Executive Order 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 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, DOE believes that today’s NOPR is consistent with these principles, including the requirement that, to the extent permitted by law, benefits justify costs and that net benefits are maximized. Consistent with EO 13563, and the range of impacts analyzed in this rulemaking, the energy efficiency standards proposed herein by DOE achieves maximum net benefits. B. Background 1. Current Standards Section 301 of EISA 2007 established minimum energy conservation standards for Class A EPSs, which became effective on July 1, 2008. (42 U.S.C. 6295(u)(3)(A)) These standards provided an active mode efficiency level and a no-load power consumption rate. The current standards are set forth in Table II.1 and Table II.2, respectively. E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 2. History of Standards Rulemaking for Battery Chargers and External Power Supplies Section 135 of the Energy Policy Act of 2005 (EPACT 2005), Public Law 109– 58 (Aug. 8, 2005), amended sections 321 and 325 of EPCA by defining the terms ‘‘battery charger’’ and ‘‘external power supply.’’ That provision also directed DOE to prescribe definitions and test procedures related to the energy consumption of battery chargers and external power supplies and to issue a final rule that determines whether energy conservation standards shall be issued for battery chargers and external power supplies or classes of battery chargers and external power supplies. (42 U.S.C. 6295(u)(1)(A) and (E)) On December 8, 2006, DOE complied with the first of these requirements by publishing a final rule that prescribed test procedures for a variety of products. 71 FR 71340, 71365–71375. That rule, which was codified in multiple sections of the Code of Federal Regulations (CFR), included definitions and test procedures for battery chargers and EPSs. As stated above, the test procedures for these products are found in 10 CFR Part 430, Subpart B, Appendix Y (‘‘Uniform Test Method for Measuring the Energy Consumption of Battery Chargers’’) and 10 CFR Part 430, Subpart B, Appendix Z (‘‘Uniform Test Method for Measuring the Energy Consumption of External Power Supplies’’). On December 19, 2007, Congress enacted EISA 2007, which, among other things, amended sections 321, 323, and 325 of EPCA. As part of these amendments, EISA 2007 altered the EPS definition. Under the definition VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 previously set by EPACT 2005, the statute defined an EPS as an external power supply circuit ‘‘used to convert household electric current into DC current or lower-voltage AC current to operate a consumer product.’’ (42 U.S.C. 6291(36)(A)) Section 301 of EISA 2007 amended that definition by creating a subset of EPSs called ‘‘Class A External Power Supplies.’’ This new subset of products consisted of those EPSs that can convert to only 1 AC or DC output voltage at a time and have a nameplate output power of no more than 250 watts (W). The definition excludes any device requiring Federal Food and Drug Administration (FDA) listing and approval as a medical device in accordance with section 513 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360c) or one that powers the charger of a detachable battery pack or charges the battery of a product that is fully or primarily motor operated. (42 U.S.C. 6291(36)(C)) Section 301 of EISA 2007 also established energy conservation standards for Class A EPSs that became effective on July 1, 2008, and directed DOE to conduct an energy conservation standards rulemaking to review those standards. Additionally, section 309 of EISA 2007 amended section 325(u)(1)(E) of EPCA (42 U.S.C. 6295(u)(1)(E)) by directing DOE to issue a final rule that prescribes energy conservation standards for battery chargers or classes of battery chargers or to determine that no energy conservation standard is technologically feasible and economically justified. DOE is bundling this battery charger rulemaking proceeding with the requirement to review and consider amending the energy conservation standards for Class A EPSs. The new rulemaking requirements contained in sections 301 PO 00000 Frm 00017 Fmt 4701 Sfmt 4702 and 309 of EISA 2007 effectively superseded the prior determination analysis that EPACT 2005 required DOE to conduct. Section 309 of EISA 2007 also instructed DOE to issue a final rule to determine whether DOE should issue energy conservation standards for external power supplies or classes of external power supplies no later than two years after EISA 2007’s enactment. (42 U.S.C. 6295(u)(1)(E)(i)(I)) Because Congress already set standards for Class A devices, DOE interpreted this determination requirement as applying solely to assessing whether energy conservation standards are warranted for EPSs that fall outside of the Class A definition (i.e. non-Class A EPSs). NonClass A EPSs include those devices that have a nameplate output power greater than 250 watts, are able to convert to more than one AC or DC output voltage simultaneously, and are specifically excluded from coverage under the Class A EPS definition in EISA 2007 by virtue of their application—e.g., EPSs used with medical devices.11 DOE determined that standards are warranted for non-Class A EPSs. See 75 FR 27170 (May 14, 2010). Given the similarities between battery chargers and non-Class A and Class A EPSs, DOE is handling all three product groups in a single standards rulemaking. Finally, section 310 of EISA 2007 established definitions for active, standby, and off modes, and directed DOE to amend its existing test procedures for battery chargers and EPSs to measure the energy consumed in standby mode and off mode. (42 11 To help ensure that the standards Congress set were not applied in an overly broad fashion, DOE applied the statutory exclusion not only to those EPSs that require FDA listing and approval but also to any EPS that provides power to a medical device. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.010</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Currently, no Federal energy conservation standards apply to nonClass A EPSs or battery chargers. 18493 sroberts on DSK6SPTVN1PROD with PROPOSALS 18494 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules U.S.C. 6295(gg)(2)(B)(i)) Consequently, DOE published a final rule incorporating standby- and off-mode measurements into the DOE test procedure. 74 FR 13318, 13334–13336 (March 27, 2009) Additionally, DOE amended the test procedure for battery chargers to include an active mode measurement for battery chargers and made certain amendments to the test procedure for EPSs. 76 FR 31750 (June 1, 2011). DOE initiated its current rulemaking effort for these products by issuing the Energy Conservation Standards Rulemaking Framework Document for Battery Chargers and External Power Supplies (the framework document). See https://www1.eere.energy.gov/ buildings/appliance_standards/ residential/pdfs/ bceps_frameworkdocument.pdf. The framework document explained the issues, analyses, and process DOE anticipated using to develop energy efficiency standards for those products. DOE also published a notice announcing the availability of the framework document, announcing a public meeting to discuss the proposed analytical framework, and inviting written comments concerning the development of standards for battery chargers and EPSs. 74 FR 26816 (June 4, 2009) DOE held a public meeting on July 16, 2009, to discuss the analyses and issues identified in the framework document. At the meeting, DOE described the different analyses it would conduct, the methods proposed for conducting them, and the relationships among the various analyses. Manufacturers, trade associations, environmental advocates, regulators, and other interested parties attended the meeting. The comments received at the public meeting and during the subsequent comment period helped DOE identify and resolve issues involved in this rulemaking. Following the framework document public meeting, DOE published on November 3, 2009, a Notice of Proposed Determination to examine the feasibility and related economic costs and benefits of setting energy conservation standards for non-Class A EPSs. 74 FR 56928. This notice was followed by a final determination published on May 14, 2010, 75 FR 27170, which concluded that energy conservation standards for non-Class A EPSs appear to be technologically feasible and economically justified, and would be likely to result in significant energy savings. Consequently, DOE decided to include non-Class A EPSs in the present energy conservation standards VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 rulemaking for battery chargers and EPSs. DOE then gathered additional information and performed preliminary analyses for the purpose of developing potential amended energy conservation standards for Class A EPSs and new energy conservation standards for battery chargers and non-Class A EPSs. This process culminated in DOE’s announcement in the Federal Register on September 15, 2010, of the preliminary analysis public meeting, at which DOE discussed and received comments on the following matters: the product classes DOE analyzed; the analytical framework, models, and tools that DOE was using to evaluate potential standards; the results of the preliminary analyses performed by DOE; and potential standard levels under consideration. 75 FR 56021 (the September 2010 notice). DOE also invited written comments on these subjects and announced the availability on its Web site of a preliminary technical support document (preliminary TSD) it had prepared to inform interested parties and enable them to provide comments.12 Id. Finally, DOE stated its interest in receiving views concerning other relevant issues that participants believed would affect energy conservation standards for battery chargers and EPSs, or that DOE should address in this NOPR. Id. at 56024. The preliminary TSD provides an overview of the activities DOE undertook in developing standards for battery chargers and EPSs, and discusses the comments DOE received in response to the framework document. It also describes the analytical framework that DOE used (and continues to use) in this rulemaking, including a description of the methodology, the analytical tools, and the relationships among the various analyses that are part of the rulemaking. The preliminary TSD presents and describes in detail each analysis DOE had performed up to that point, including descriptions of inputs, sources, methodologies, and results. These analyses were as follows: • A market and technology assessment addressed the scope of this rulemaking, identified the potential classes for battery chargers and EPSs, characterized the markets for these products, and reviewed techniques and approaches for improving their efficiency; 12 The preliminary TSD is available at: https:// www1.eere.energy.gov/buildings/appliance_ standards/residential/battery_external_preliminary analysis_tsd.html. PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 • A screening analysis reviewed technology options to improve the efficiency of battery chargers and EPSs, and weighed these options against DOE’s four prescribed screening criteria: (1) Technological feasibility, (2) practicability to manufacture, install, and service, (3) impacts on equipment utility or equipment availability, (4) adverse impacts on health or safety; • An engineering analysis estimated the increases in manufacturer selling prices (MSPs) associated with more energy-efficient battery chargers and EPSs; • An energy use analysis estimated the annual energy use in the field of battery chargers and EPSs as a function of efficiency levels; • A markups analysis converted estimated manufacturer selling price (MSP) increases derived from the engineering analysis to consumer prices; • A life-cycle cost analysis calculated, at the consumer level, the discounted savings in operating costs throughout the estimated average life of the product, compared to any increase in installed costs likely to result directly from the imposition of a given standard; • A payback period (PBP) analysis estimated the amount of time it would take consumers to recover the higher expense of purchasing more energy efficient products through lower operating costs; • A shipments analysis estimated shipments of battery chargers and EPSs over the 30-year analysis period (2013– 2042), which were used in performing the national impact analysis (NIA); • A national impact analysis assessed the national energy savings (NES), and the national net present value of total consumer costs and savings, expected to result from specific, potential energy conservation standards for battery chargers and EPSs; and • A preliminary manufacturer impact analysis took the initial steps in evaluating the effects new or amended efficiency standards may have on manufacturers. In the September 2010 notice, DOE summarized the nature and function of the following analyses: (1) Engineering, (2) energy use analysis, (3) markups to determine installed prices, (4) LCC and PBP analyses, and (5) national impact analysis. Id. at 56023–56024. DOE held a public meeting on October 13, 2010, to discuss its preliminary analysis. At this meeting, DOE presented the methodologies and results of the analyses set forth in the preliminary TSD. Major topics discussed at the meeting included, among others, the regulation of EPSs for motorized applications and applications E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18495 Electronics Association (CEA, No. 46), the Power Tool Institute, Inc. (PTI, No. 45); and the Wireless Power Consortium (WPC, No. 40)), six manufacturers (Cobra Electronics Corp. (Cobra, No. 51); Lester Electrical of Nebraska, Inc. (Lester) (Lester, No. 50); Motorola, Inc. (Motorola, No. 48); Philips Electronics North America Corp. (Philips, No. 41); Stanley Black & Decker (SBD, No. 44); and Wahl Clipper Corporation (Wahl, No. 53)), and several energy efficiency advocates, including a number of utilities (Pacific Gas and Electric Company, San Diego Gas and Electric Company, Southern California Gas Company, and Southern California Edison, collectively organized as the California Investor Owned Utilities (California IOUs, No. 43); Northeast Energy Efficiency Partnerships (NEEP, No. 49); and a joint comment from Pacific Gas and Electric Company, Southern California Gas Company, San Diego Gas and Electric Company, Southern California Edison, Appliance Standards Awareness Project, Northeast Energy Efficiency Partnerships, Northwest Energy Efficiency Alliance, American Council for an EnergyEfficient Economy, and Natural Resources Defense Council (PG&E, et al., No. 47)). These commenters, along with those that provided oral comments at the preliminary analysis public meeting, are summarized in Table II–2. Following the close of the formal public comment period, DOE also received a clarification statement regarding an earlier submission to which ASAP joined with other commenters (ASAP, No. 55) and a proposal for DOE to adopt an efficiency marking protocol for battery chargers from the Natural Resources Defense Council (NRDC, No. 56). III. General Discussion prescribing the proposed amended standards for battery chargers and EPSs. The following section discusses various technical aspects related to this proposed rulemaking. In particular, it addresses aspects involving the test procedures for battery chargers and EPSs, the technological feasibility of potential standards to assign to these products, and the potential energy savings and economic justification for A. Test Procedures To help analyze the proposal for the products covered under today’s rulemaking, DOE applied the recently amended test procedures for EPSs and battery chargers. The following sections explain how DOE applied these 13 A parenthetical reference at the end of a quotation or paraphrase provides the location of the item in the public record. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00019 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.011</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS with detachable batteries (MADB EPSs), criteria for establishing separate product classes, and assumptions made by DOE on the usage of certain products. The comments received since publication of the September 2010 notice, including those received at the preliminary analysis public meeting, have contributed to DOE’s proposed resolution of the issues noted by interested parties. This NOPR quotes and summarizes many of these comments, and responds to the issues they raised.13 DOE received written comments on the preliminary analysis from four industry groups (the Association of Home Appliance Manufacturers (AHAM, No. 42); the Consumer 18496 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules procedures in evaluating the standards that are being proposed. sroberts on DSK6SPTVN1PROD with PROPOSALS 1. External Power Supply Test Procedures DOE used its recently modified EPS test procedure as the basis for evaluating EPS efficiency in the NOPR. This procedure, which was recently codified in appendix Z to subpart B of 10 CFR part 430 (‘‘Uniform Test Method for Measuring the Energy Consumption of EPSs’’), includes a means to account for the energy consumption from multiplevoltage EPSs and clarifies the manner in which to test those devices that communicate with their loads. See 76 FR 31750, 31782–31783 (June 1, 2011). The term ‘‘load communication’’ refers to the ability of an EPS to identify whether a given load is compatible with the product that is being powered. See id. at 31752–31753. The amended test procedure produces two key outputs relevant to today’s proposal. In particular, the procedure provides measurements for active mode efficiency and no-load mode power consumption. For single output voltage EPSs, active-mode conversion efficiency is the ratio of output power to input power. DOE averages the efficiency at four loading conditions—25, 50, 75, and 100 percent of maximum rated output current. For multiple-voltage EPSs, the test procedure produces these same four efficiency measurements, but does not average them. For both single-voltage and multiple-voltage EPSs, DOE measures the power consumption of the EPS when disconnected from the consumer product, which is termed noload power consumption. If the EPS has an on-off switch, the switch is placed in the ‘‘on’’ position when making this measurement. 2. Battery Charger Test Procedures The initial battery charger test procedure, 71 FR 71340, 71368 (Dec. 8, 2006), included a means to measure battery charger energy consumption in ‘‘maintenance’’ and ‘‘no-battery’’ modes. These are non-active modes of operation for a battery charger and neither mode is the primary (i.e. active) mode of operation for a battery charger. A battery charger is in maintenance mode when the battery it is designed to charge is fully charged, but is still plugged into the charger—i.e. the charger is maintaining the charge in the battery. Standby mode, also known as no-battery mode, occurs when a battery charger is plugged into the wall (or power source), but the battery has been removed. The test procedure was amended to include measurements (or metrics) to account for the energy consumption that takes VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 place in a battery charger during all modes of operation—active (i.e. the energy consumed by a battery charger while charging a battery), maintenance (i.e. the energy consumed to maintain the charge of a battery that has already been fully charged), standby (the energy consumed when a battery charger is plugged in, but the battery is removed from the device), and off (i.e. the energy consumed while a charger is plugged in but is switched off) modes. 76 FR 31750. In analyzing the various products in preparation of the preliminary analysis, DOE relied on a test procedure that was largely based on a procedure that had been developed by the California Energy Commission (CEC). That procedure also served as the basis for DOE’s 2010 proposal to amend the procedure to account for active mode energy consumption during testing. 75 FR 16958 (April 2, 2010). The proposed procedure DOE employed had two key differences from the CEC procedure. First, it employed a shortened test procedure for battery chargers whose output power to the battery stabilizes within 24 hours. Second, the procedure employed a reversed charge/discharge testing order from that specified in the CEC procedure. DOE proposed switching the order such that the proposal used a preparatory charge, followed by a measured discharge, followed by a measured charge. The final rule dropped this approach in favor of the order prescribed in the CEC procedure— i.e. preparatory discharge, a measured charge, and a measured discharge. DOE applied this amended test procedure when analyzing the potential energy efficiency levels for battery chargers. B. Technological Feasibility The following sections address the manner in which DOE assessed the technological feasibility of potential standard levels. Energy conservation standards promulgated by DOE must be technologically feasible. Separate analyses were conducted for EPSs and battery chargers. 1. General In each standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that have the potential to improve product or equipment efficiency. To conduct the analysis, DOE develops a list of design options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determines which of these means for improving efficiency are technologically PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 feasible. DOE considers a design option to be technologically feasible if it is currently in use by the relevant industry, or if a working prototype exists. See 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i), which provides that ‘‘[t]echnologies incorporated in commercially available products or in working prototypes will be considered technologically feasible.’’ Once DOE has determined that particular design options are technologically feasible, it evaluates each of these design options using the following additional screening criteria: (1) Practicability to manufacture, install, or service; (2) adverse impacts on product utility or availability; and (3) adverse impacts on health or safety. (10 CFR part 430, subpart C, appendix A, section 4(a)(4)). Section IV.B of this notice discusses the results of the screening analysis for battery chargers and EPSs, particularly the designs DOE considered, those it screened out, and those that are the basis for the trial standard levels (TSLs) in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the TSD. Additionally, DOE notes that it has received no interested party comments regarding patented technologies and proprietary designs that would prohibit all manufacturers from achieving the energy conservation standards proposed in today’s rule. At this time, DOE believes that the proposed standards for the products covered as part of this rulemaking will not mandate the use of any such technologies, but requests additional information regarding proprietary designs and patented technologies. 2. Maximum Technologically Feasible Levels When proposing an amended standard for a type or class of covered product, DOE 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)). DOE determined the maximum technologically feasible (‘‘max-tech’’) efficiency level, as required by section 325(o) of EPCA, by interviewing manufacturers, vetting their data with subject matter experts, and presenting the results for public comment. (42 U.S.C. 6295(o)). a. External Power Supply Max-Tech Levels DOE conducted several rounds of interviews with manufacturers of EPSs, integrated circuits for EPSs, and E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules applications using EPSs. All of the manufacturers interviewed identified ways that EPSs could be modified to achieve efficiencies higher than those available with current products. These manufacturers also described the costs of achieving those efficiency improvements, which DOE examines in detail in chapter 5 of the TSD. DOE independently verified the accuracy of the information described by manufacturers.14 Verifying this information required examining and testing products at the best-in-market efficiency level and determining what design options could still be added to improve their efficiency. By comparing the improved best-in-market designs (using predicted performance and cost) to the estimates provided by manufacturers, DOE was able to assess the reasonableness of the max-tech levels developed. DOE solicited comment on its review of the max-tech CSLs prepared for the preliminary analysis—particularly with respect to its initial view that 2.5W EPSs may be able to achieve a max-tech efficiency of 80% rather than the lower efficiency suggested by manufacturers (See Chapter 5 of the TSD for details on how DOE aggregated manufacturer data). During interviews conducted in preparation for the NOPR, manufacturers confirmed that an 80% efficiency level is achievable for 2.5W EPSs, but not without a decrease in utility. Manufacturers stated that reaching that efficiency level would require an increase in the form factor (i.e. the geometry of the design), which would make these devices larger. The increased size of the EPS would, in the manufacturers’ views, constitute a decreased utility that would be undesirable to consumers because of demands for smaller and lighter sroberts on DSK6SPTVN1PROD with PROPOSALS 14 In confirming this information, DOE obtained technical assistance from two subject matter experts—Robert Gourlay of RDG Engineering in Northridge, CA and Jon Wexler, an independent and solo consultant in Los Angeles, CA. These two experts were selected after having been found through the Institute of Electrical and Electronics Engineers (IEEE). Together, they have over 30 years of combined experience with power supply design. The experts relied on their years of experience to evaluate the validity of both the design and the general cost of the max-tech efficiency levels provided by manufacturers. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 products. In light of this possibility, DOE used a max-tech efficiency value of 74.8%, which represents the average max-tech efficiency level predicted by manufacturers, to characterize CSL 4. The aggregated responses from manufacturers are discussed in chapter 5 of the TSD. DOE created the max-tech (CSL 4) equations for average efficiency and noload power using curve-fits (i.e. creating a continuous mathematical expression to represent the trend of the data as accurately as possible) of the aggregated manufacturer data (see chapter 5 of the TSD for details on curve fits). DOE created the equations for no-load power based on a curve fit of the no-load power among the four representative units. For both the average efficiency and no-load power CSL equations, DOE used equations similar to those for CSL 1, involving linear and logarithmic terms in the nameplate output power. DOE chose the divisions at 1 watt and 49 watts in the CSL 4 equations to ensure consistency with the nameplate output power divisions between the equations for CSL 1. In the determination for non-Class A EPSs, DOE created CSLs based on test and teardown data as well as manufacturer interview data consistent with the Class A EPS methodology. See 75 FR 27170, 27174–27175. DOE also stated in Chapter 5 of the preliminary analysis TSD that it might further evaluate additional CSLs should that become necessary pending later analysis, including revising the maxtech CSLs for all the representative units. For the NOPR, DOE has chosen to add a new max-tech CSL for high-power EPSs while the max-tech for multiplevoltage EPSs remains unchanged from the preliminary analysis. Based on its analysis, DOE ascertained that 345W EPSs are able to achieve comparable efficiencies to 120W EPSs because efficiency tends to improve with higher nameplate output power before leveling off regardless of output power. Because of the diminishing returns of this trend, there would be no appreciable difference in the achievable efficiency of a 120W EPS and a 345W EPS. Therefore, DOE scaled its 120W EPS cost-efficiency PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 18497 curve using its voltage scaling method, outlined in Chapter 5 of the TSD, to generate the max-tech CSL for 345W EPSs. The max-tech no-load metric was chosen by assuming that three 120W EPSs could theoretically be connected to deliver 345 watts to a load (i.e. three 120W EPSs yield a 360W load). Consequently, in analyzing the potential cost-efficiency curves for these products, the no-load metric DOE created for CSL 4 is three times greater than the no load used for the 120W equivalent CSL. b. Battery Charger Max-Tech Levels The preliminary analysis did not include max-tech efficiency levels for five of the ten product classes that are being addressed today. DOE omitted levels for these product classes because manufacturers did not provide information on levels of performance that would be technologically feasible and more efficient than the current bestin-market devices. DOE’s preliminary analyses typically rely heavily on manufacturer input in framing potential max-tech levels for discussion and comment. In preparing today’s NOPR, which includes max-tech levels for the ten classes initially addressed in DOE’s preliminary analysis, DOE developed a means to create max-tech levels for those classes that were previously not assigned max-tech levels. For the product classes that DOE was previously unable to generate max-tech efficiency levels, DOE used multiple approaches to develop levels for these classes. DOE once again solicited manufacturers for information and extrapolated performance parameters from its best-in-market efficiency levels. Extrapolating from the best-in-market performance efficiency levels required an examination of the devices. From this examination, DOE determined which design options could be applied and what affects they would likely have on the various battery charger performance parameters. The table below shows the reduction in energy consumption when increasing efficiency from the baseline to the max-tech efficiency level. E:\FR\FM\27MRP2.SGM 27MRP2 18498 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules TABLE III–1—REDUCTION IN ENERGY CONSUMPTION AT MAX-TECH FOR BATTERY CHARGERS Max-Tech unit energy consumption (kWh/yr) Product class 1 (Low-Energy, Inductive) ........................................................................................................................................ 2 (Low-Energy, Low-Voltage) .................................................................................................................................. 3 (Low-Energy, Medium-Voltage) ............................................................................................................................ 4 (Low-Energy, High-Voltage) ................................................................................................................................. 5 (Medium-Energy, Low-Voltage) ............................................................................................................................ 6 (Medium-Energy, High-Voltage) ........................................................................................................................... 7 (High-Energy) ....................................................................................................................................................... 8 (DC to DC, <9V Input) .......................................................................................................................................... 9 (DC to DC, ≥9V Input) .......................................................................................................................................... 10a (AC Output, No AVR) ....................................................................................................................................... 10b (AC Output, AVR) ............................................................................................................................................. Additional discussion of DOE’s maxtech efficiency levels and comments received in response to the preliminary analysis can be found in the discussion of candidate standard levels in section IV.C.2.d. Specific details regarding which design options were considered for the max-tech efficiency levels (and all other CSLs) can be found in Chapter 5 of the accompanying TSD. sroberts on DSK6SPTVN1PROD with PROPOSALS C. Energy Savings The following discussion addresses the various steps DOE used to assess the potential energy savings that DOE projects will likely accrue from the various standard levels that were examined. 1. Determination of Savings DOE used its NIA spreadsheet model to estimate energy savings from amended standards for the battery chargers and EPS products that are the subject of this rulemaking.15 For each TSL, DOE forecasted energy savings beginning in 2013, the year that manufacturers would be required to comply with amended standards, and ending in the last year products shipped in 2042 would be retired. DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between the standards case and the base case. The base case represents the forecast of energy consumption in the absence of amended mandatory efficiency standards and considers market demand for more-efficient products. The NIA spreadsheet model calculates the electricity savings in ‘‘site energy’’ expressed in kilowatt-hours (kWh). Site energy is the energy directly consumed by battery chargers and EPSs at the 15 The NIA spreadsheet model is described in section IV.G of this notice. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 locations where they are used. DOE reports national energy savings on an annual basis in terms of the aggregated source (primary) energy savings, which is the savings in the energy that is used to generate and transmit the site energy. (See chapter 10 of the TSD.) To convert site energy to source energy, DOE derived annual conversion factors from the model used to prepare the Energy Information Administration’s (EIA) Annual Energy Outlook 2010 (AEO2010). 2. Significance of Savings As noted above, 42 U.S.C. 6295(o)(3)(B) any standard that DOE sets must result in ‘‘significant’’ energy savings. While the term ‘‘significant’’ is not defined in the Act, the U.S. Court of Appeals, in Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated that Congress intended ‘‘significant’’ energy savings in this context to be savings that were not ‘‘genuinely trivial.’’ The energy savings for all of the TSLs considered in this rulemaking are nontrivial, and, therefore, DOE considers them ‘‘significant’’ within the meaning of section 325 of EPCA. D. Economic Justification This section summarizes the manner in which DOE estimated the economic impacts for the various potential standards that it evaluated. Among the aspects considered by DOE were the economic impacts on both manufacturers and consumers, life cycle costs, the amount of projected energy savings, product utility and performance, impacts on competition, and the general need to conserve energy. 1. Specific Criteria As noted in section II.B, EPCA provides seven factors to be evaluated in determining whether a potential energy PO 00000 Frm 00022 Fmt 4701 Sfmt 4702 Reduction of energy consumption relative to the baseline (percentage) 1.29 0.81 0.75 3.01 15.35 16.79 131.44 0.19 0.13 4.95 8.58 85 91 94 92 82 86 46 79 83 92 92 conservation standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)) 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 new and amended standards on manufacturers, DOE first determines the quantitative impacts using an annual cash-flow approach. This step includes both a short-term assessment—based on the cost and capital requirements during the period between the issuance of a regulation and when entities must comply with the regulation—and a longterm assessment over a 30-year analysis period. The industry-wide impacts analyzed include INPV (which values the industry on the basis of expected future cash flows), cash flows by year, changes in revenue and income, and other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including 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 different DOE regulations and other regulatory requirements on manufacturers. For individual consumers, measures of economic impact include the changes in LCC and the PBP associated with new or amended standards. The LCC, specified separately in EPCA as one of the seven factors to be considered in determining the economic justification for a new or amended standard, 42 U.S.C. 6295(o)(2)(B)(i)(II), is discussed in the following section. For consumers E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS in the aggregate, DOE also calculates the national net present value of the economic impacts on consumers over the forecast period used in a particular rulemaking. b. Life-Cycle Costs The LCC is the sum of the purchase price of a product (including its installation) and the operating expense (including energy and maintenance expenditures) discounted over the lifetime of the product. For each battery charger product class and EPS representative unit, DOE calculated both LCC and LCC savings for various efficiency levels. The LCC analysis required a variety of inputs, such as product prices, electricity prices, product lifetimes, base case efficiency distributions, annual unit energy consumption, and discount rates. To characterize variability in electricity pricing, DOE established regional differences in electricity prices. To account for uncertainty and variability in other inputs, such as discount rates, DOE used a distribution of values with probabilities assigned to each value. DOE then sampled the values of these inputs from the probability distributions for each consumer. The analysis produced a range of LCCs. A distinct advantage of this approach is that DOE can identify the percentage of consumers achieving LCC savings due to an increased energy conservation standard, in addition to the average LCC savings. DOE presents only average LCC savings in this NOPR; however, additional details showing the distribution of results can be found in chapter 8 and appendix 8B of the TSD. In the LCC analysis, DOE determined the input values for a wide array of enduse applications that are powered by battery chargers or EPSs. There are typically multiple applications within every representative unit and product class that DOE analyzed. As such, DOE considered a wide array of input values for each unit analyzed. The lifetime, markups, base case market efficiency distribution, and unit energy consumption all vary based on the application. In the analysis, DOE sampled an application based on its shipment-weighting within the representative unit or product class. When an application was sampled, its unique inputs were selected for calculating the LCC and PBP. For further detail regarding application sampling, see appendix 8C of the TSD. In its written comments, AHAM stated that the MIA and LCC calculations should be the most important considerations when determining where to set the standard VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 level. (AHAM, No. 42 at p. 15) DOE considered many criteria when selecting the proposed standard level, including impacts on manufacturers, consumers, the Nation, and environmental impacts. DOE weighed the impacts from each of these analyses in determining the proposed standard level. c. Energy Savings While significant conservation of energy is a separate statutory requirement for imposing an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) DOE uses the NIA spreadsheet results in its consideration of total projected energy savings. d. Lessening of Utility or Performance of Products In establishing classes of products, and in evaluating design options and the impact of potential standard levels, DOE sought to develop standards for EPSs and battery chargers that would not lessen the utility or performance of these products. None of the TSLs presented in today’s NOPR would substantially reduce the utility or performance of the products under consideration in the rulemaking. DOE received no comments that standards for battery chargers and EPSs would increase their size and reduce their convenience, increase the length of time to charge a product, shorten the intervals between chargers, or any other significant adverse impacts on consumer utility. However, based on DOE’s preliminary examination of the information before it, including interviews with manufacturers, manufacturers may reduce the availability of features that increase energy use, such as LED indicator lights, in an effort to meet any standard levels promulgated as a result of this rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Manufacturers indicated that these changes would only be made if their customers would not be averse to the change in utility. DOE requests interested party feedback, including any substantive data, regarding today’s proposed standard levels and the potential for lessening of utility or performance related features. e. Impact of Any Lessening of Competition EPCA directs DOE to consider any lessening of competition that is likely to result from standards. It also directs the Attorney General of the United States PO 00000 Frm 00023 Fmt 4701 Sfmt 4702 18499 (Attorney General) to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary 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)(i)(V) and (B)(ii)) DOE has transmitted a copy of today’s proposed rule to the Attorney General and has requested that the Department of Justice (DOJ) provide its determination on this issue. DOE will address the Attorney General’s determination, if any, in the final rule. f. Need for National Energy Conservation Certain benefits of the proposed standards are likely to be reflected in improvements to the security and reliability of the Nation’s energy system. Reductions in the demand for electricity may also result in reduced costs for maintaining the reliability of the Nation’s electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the Nation’s needed power generation capacity. Energy savings from the proposed standards are also likely to result in environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases associated with energy production. DOE reports the environmental effects from the proposed standards for battery chargers and EPSs, and from each TSL it considered, in the environmental assessment contained in chapter 15 of the TSD. DOE also reports estimates of the economic value of emissions reductions resulting from the considered TSLs in chapter 16 of the TSD. 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 of 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 payback period of potential standards for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable presumption test. However, DOE routinely conducts an economic analysis that considers the full range of impacts to the consumer, manufacturer, E:\FR\FM\27MRP2.SGM 27MRP2 18500 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Nation, and environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE to definitively evaluate 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 V.B.1.c of this NOPR and chapter 8 of the TSD. IV. Methodology and Discussion DOE used three spreadsheet tools to estimate the impact of today’s proposed standards. The first spreadsheet calculates LCCs and payback periods of potential standards. The second provides shipments forecasts, and then calculates national energy savings and net present value impacts of potential standards. Finally, DOE assessed manufacturer impacts, largely through use of the Government Regulatory Impact Model (GRIM). All three spreadsheet tools will be made available online at the rulemaking Web site: https://www1.eere.energy.gov/buildings/ appliance_standards/residential/ battery_external.html. Additionally, DOE estimated the impacts on utilities and the environment that would be likely to result from the setting of standards for battery chargers and EPSs. DOE used a version of EIA’s National Energy Modeling System (NEMS) for the utility and environmental analyses. The NEMS model simulates the energy sector of the U.S. economy. EIA uses NEMS to prepare its Annual Energy Outlook, a widely known energy forecast for the United States. The version of NEMS used for appliance standards analysis is called NEMS–BT,16 and is based on the AEO version with minor modifications.17 NEMS–BT offers a sophisticated picture of the effect of standards because it accounts for the interactions between the various energy supply and demand sectors and the economy as a whole. sroberts on DSK6SPTVN1PROD with PROPOSALS A. Market and Technology Assessment When beginning an energy conservation standards rulemaking, 16 BT stands for DOE’s Building Technologies Program. 17 The EIA allows the use of the name ‘‘NEMS’’ to describe only an AEO version of the model without any modification to code or data. Because the present analysis entails some minor code modifications and runs the model under various policy scenarios that deviate from AEO assumptions, the name ‘‘NEMS–BT’’ refers to the model as used here. For more information on NEMS, refer to The National Energy Modeling System: An Overview, DOE/EIA–0581 (98) (Feb.1998), available at: https://tonto.eia.doe.gov/ FTPROOT/forecasting/058198.pdf. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 DOE develops information that provides an overall picture of the market for the products concerned, including the purpose of the products, the industry structure, and market characteristics. This activity includes both quantitative and qualitative assessments, based primarily on publicly available information. The subjects addressed in the market and technology assessment for this rulemaking include a determination of the scope of this rulemaking; product classes and manufacturers; quantities and types of products sold and offered for sale; retail market trends; regulatory and nonregulatory programs; and technologies or design options that could improve the energy efficiency of the product(s) under examination. See chapter 3 of the TSD for further detail. 1. Products Included in This Rulemaking This section addresses the scope of coverage for today’s proposal, stating which products would be subject to new or amended standards. The numerous comments DOE received on the scope of today’s proposal are also summarized and addressed in this section. a. External Power Supplies The term ‘‘external power supply’’ refers to an external power supply circuit that is used to convert household electric current into DC current or lower-voltage AC current to operate a consumer product. (42 U.S.C. 6291(36)(A)) EPCA, as amended by EISA 2007, also prescribes the criteria for a subcategory of EPSs—those classified as Class A EPSs (or in context, ‘‘Class A’’). A Class A EPS is a device that: 1. Is designed to convert line voltage AC input into lower voltage AC or DC output; 2. is able to convert to only one AC or DC output voltage at a time; 3. is sold with, or intended to be used with, a separate end-use product that constitutes the primary load; 4. is contained in a separate physical enclosure from the end-use product; 5. is connected to the end-use product via a removable or hard-wired male/ female electrical connection, cable, cord, or other wiring; and 6. has nameplate output power that is less than or equal to 250 watts. See 42 U.S.C. 6291(36)(C)(i). The Class A definition excludes any device that either (a) requires Federal Food and Drug Administration listing and approval as a medical device in accordance with section 513 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360c) or (b) powers the PO 00000 Frm 00024 Fmt 4701 Sfmt 4702 charger of a detachable battery pack or charges the battery of a product that is fully or primarily motor operated. See 42 U.S.C. 6291(36)(C)(ii). Based on DOE’s examination of product information, all EPSs appear to share four of the six criteria under the Class A definition in that all are: • Designed to convert line voltage AC input into lower voltage AC or DC output; • Sold with, or intended to be used with, a separate end-use product that constitutes the primary load; • Contained in a separate physical enclosure from the end-use product; and • Connected to the end-use product via a removable or hard-wired male/ female electrical connection, cable, cord, or other wiring. DOE refers to an EPS that falls outside of Class A as a non-Class A EPS (or, in context, ‘‘non-Class A’’). Examples of such devices include EPSs that can convert power to more than one output voltage at a time (multiple voltage), EPSs that have nameplate output power exceeding 250 watts (high-power), EPSs used to power medical devices, and EPSs that provide power to the battery chargers of motorized applications and detachable battery packs (MADB). After examining the potential for energy savings that could result from standards for non-Class A devices, DOE concluded that standards for these devices would be likely to result in significant energy savings and be technologically feasible and economically justified. 75 FR 27170 (May 14, 2010). Thus, DOE is examining the possibility of setting standards for all types of EPSs within the scope of today’s notice. In the preliminary analysis, DOE treated only those wall adapters that lacked charge control as EPSs; those with charge control were not considered to be EPSs. (Charge control relates to regulating the amount of current being delivered to a battery.) Under that approach, a given wall adapter without charge control capability could be considered both as an EPS and as a part of a battery charger. If that approach were adopted, such a wall adapter would be subject to whatever EPS standard that DOE may set and would also, indirectly, help the battery charger of which it is a part to meet whatever battery charger standard that DOE may set. In essence, the EPS would need to satisfy a prescribed level of efficiency, which could create certain design restrictions on manufacturers seeking to optimize the overall efficiency of the battery charger. In the following paragraphs, DOE summarizes and addresses the comments it received on (1) whether to E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules set EPS standards for wall adapters that are part of battery chargers, (2) whether the absence of charge control circuitry should be the basis for regulating such wall adapters, and (3) if so, appropriate methods for determining whether a given wall adapter contains charge control. DOE received a few comments urging DOE to regulate these types of EPSs—which are part of a battery charger system—as part of the overall battery charger and also as an EPS to help ensure that whatever EPS is used in such a charger system meets a minimum level of efficiency. Several other parties, however, objected to requiring that these EPSs also meet separate EPS standards. Comments focused mainly on MADB EPSs, but some pertained to EPSs generally. In response to these comments, DOE is proposing a new approach, namely, to evaluate whether an EPS can directly operate an end-use consumer product and to create a new product class for those EPSs that cannot directly operate an end-use consumer product. DOE is considering this approach in light of the substantial resistance by the industry to the initial approach presented during the preliminary analysis phase. Energy efficiency advocates favored requiring certain EPSs that are part of battery chargers to also meet separate EPS standards—in particular, for those EPSs that do not perform charge control functions. PG&E, et al. expressed their strong support for this approach and cited research showing that improving the efficiency of a power supply helps improve the efficiency of a battery charger. In addition, PG&E commented that a single EPS definition (rather than one for Class A and another for nonClass A) would reduce the complexity of compliance and enforcement as well as the potential for loopholes. (PG&E, et al., No. 47 at p. 3–4) NEEP also expressed its support for this approach and added that DOE’s initial research shows that there are a limited number of cases where EPSs would be regulated under both standards. (NEEP, No. 49 at pp. 1–2) The California IOUs and PG&E, et al. expressed their support for using the ENERGY STAR EPS definition to determine whether a wall adapter is an EPS. (California IOUs, No. 43 at p. 9; PG&E, et al., No. 47 at p. 4) AHAM, PTI, and Wahl Clipper agreed with DOE and the efficiency advocates that MADB wall adapters should be regulated, but not under multiple efficiency requirements. Instead, they urged DOE to regulate these items as battery charger components but not as EPSs. (AHAM, No. 42 at pp. 2, 3, 13; PTI, No. 45 at p. 4; Wahl, No. 53 at p. 1) PTI argued that a MADB wall adapter VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 cannot be an EPS because it is not used ‘‘to operate a consumer product.’’ According to PTI, a MADB wall adapter operates a battery charger, but a battery charger is not a consumer product because battery chargers are not themselves ‘‘distributed in commerce for personal use or consumption by individuals.’’ Thus, in its view, MADB wall adapters are not EPSs. (PTI, No. 45 at pp. 3–4; Pub. Mtg. Tr., No. 57 at p. 74) AHAM argued that subjecting a product to multiple energy efficiency requirements (1) ‘‘makes no sense,’’ (2) could cause manufacturers to be in ‘‘constant redesign mode’’ if EPS and battery charger standards change at different times, and (3) would be an undue burden. (AHAM, No. 42 at pp. 4– 5) AHAM contended further that the EPS active mode test is inappropriate and inaccurate for MADB wall adapters, as they are never used in the manner tested under that procedure. Consequently, in AHAM’s view, requiring that these types of wall adapters be tested under the EPS test procedure would not enable DOE to meet its obligation to test products in a manner representative of their actual use. (AHAM, No. 42 at p. 6) Wahl Clipper echoed AHAM’s concerns that the EPS test procedure is inappropriate for MADB wall adapters and noted that unsynchronized battery charger and EPS standards would force manufacturers to constantly redesign their products. Wahl Clipper added that manufacturers ‘‘do not know if future standards levels will make it impossible to meet both regulations at the same time since there is no correlation between the two regulations.’’ (Wahl, No. 53 at p. 1) Others had similar concerns about setting standards for Class A devices that are part of battery chargers. CEA, Cobra Electronics, and Motorola objected to regulating any wall adapter as both an EPS and a component of a battery charger. These parties drew attention to the burden that multiple energy efficiency requirements would impose on manufacturers—small businesses in particular. CEA commented that its ‘‘foremost concern is DOE’s contemplation of a ‘double jeopardy’ regulatory situation whereby a single charging device would be subject to two different test procedures and two different sets of regulatory requirements,’’ and added that such a situation would be ‘‘unreasonable and unnecessary—and would be particularly onerous for small businesses.’’ (CEA, No. 46 at pp. 1–2) Cobra Electronics, which markets and sells two-way radios and mobile navigation devices, commented that ‘‘having to be regulated PO 00000 Frm 00025 Fmt 4701 Sfmt 4702 18501 under two standards for a product which is infrequently used is an unreasonable burden for small companies when added to the burden of other recent regulations.’’ (Cobra, No. 51 at p. 1) Motorola also agreed with CEA that the energy efficiency of EPSs should not be regulated in two different product categories (battery chargers and EPSs) and added that ‘‘given the likely high performance standards that will be set for battery chargers, it would be nearly impossible for an external power supply to comprise part of a [standardscompliant] battery charger if it were not itself highly efficient.’’ (Motorola, No. 48 at pp. 1–2) AHAM also asserted that DOE risks overestimating energy savings if it does not determine how to remove the overlap between battery charger and EPS energy savings. AHAM emphasized the importance of accurately quantifying the extent to which energy savings from battery charger and EPS standards might overlap so that DOE can accurately project the potential energy savings from potential standards. (AHAM, Pub. Mtg. Tr., No. 57 at p. 112) After carefully considering all of these comments, DOE has tentatively decided to adopt a broad scope and to propose an approach in which EPS standards could apply to all devices that meet the EPS definition prescribed by EPCA. See 42 U.S.C. 6291(36)(A). Those standards prescribed by Congress, namely, those for Class A devices, will remain in effect, and DOE, despite the objections raised by CEA and others, has no authority to remove these standards, although these standards could be amended to increase their stringency. With regard to non-Class A EPSs that are components of battery chargers, DOE has the option to propose new efficiency standards for these devices, including those devices that perform charge control functions. To help it ascertain whether a given wall adapter performs charge control functions, DOE sought comment during the preliminary analysis phase on seven methods it presented to determine whether charge control is present in a wall adapter. See Preliminary TSD, appendix 3–C (detailing the methods DOE considered for determining whether a wall adapter contains charge control). In the preliminary analysis, DOE used a method it called ‘‘Energy Star Inspection,’’ which is based on parts (f) and (g) of the ENERGY STAR program’s definition of an EPS. (‘‘ENERGY STAR Program Requirements for Single Voltage External Ac-Dc and Ac-Ac Power Supplies, Eligibility Criteria (Version E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS 18502 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 2.0)’’ 18) This method considers certain easily observable physical characteristics of the wall adapter. Under this approach, a wall adapter that meets either of the following two criteria would be exempt from having to satisfy separate EPS standards and would instead be treated simply as a battery charger component: (1) The wall adapter has batteries or battery packs that physically attach directly (including those that are removable) to the power supply unit; or (2) the wall adapter has a battery chemistry or type selector switch AND an indicator light or state of charge meter. As noted above, DOE received comments from the California IOUs and PG&E that supported using this method. PTI contended that DOE neglected to include MADB wall adapters in its preliminary assessment of the seven methods and requested that DOE include these products in any future analysis of possible charge control criteria. (PTI, No. 45 at p. 4) AHAM viewed the presence of charge control in a wall adapter as irrelevant. In its view, DOE should ask whether a given wall adapter is a MADB device, as all MADB wall adapters should be excluded from any EPS standards. (AHAM, No. 42 at p. 12) DOE received no other comments on the appropriateness of the Energy Star Inspection method or any of the six other methods it considered for identifying charge control in wall adapters. At this time, DOE does not believe that such an exclusion from the EPS scope of coverage is warranted. It is DOE’s understanding that most, if not all, of the MADB wall adapters that DOE proposes to add to the EPS scope of coverage are already subject to, and satisfy, the EPS standards currently in place in California. The California standard applies the same efficiency level that already applies to Class A EPSs nationwide. See California Energy Commission, ‘‘2009 Appliance Efficiency Regulations,’’ August 2009, CEC–400–2009–013, Table U–1 on p. 134. This efficiency level is referred to as Level IV in the International Efficiency Marking Protocol for External Power Supplies.19 Comments from manufacturers and the California IOUs also support this finding. (California IOUs, No. 43 at p. 9) DOE is not aware of any products powered by battery chargers and EPSs that are not designed, 18 https://www.energystar.gov/ia/partners/ product_specs/program_reqs/eps_prog_req.pdf. 19 U.S. EPA, ‘‘International Efficiency Marking Protocol for External Power Supplies,’’ October 2008, available at Docket No. 62. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 manufactured, and packaged for distribution throughout the country. It is DOE’s understanding that products that use EPSs are designed, manufactured and packaged for distribution throughout the United States. Assuming that this understanding is correct, that fact indicates it is highly unlikely that manufacturers are producing one set of products for California and another set for the remaining states. Notably, California’s EPS standards apply only to devices that meet the ENERGY STAR definition of an EPS,20 but do not meet the Class A definition established by EISA 2007. (California Energy Commission, ‘‘2009 Appliance Efficiency Regulations,’’ August 2009, CEC–400–2009–013) This situation stems in large part from California’s adoption of the ENERGY STAR definition of an EPS when it first established energy conservation standards for these devices. Once Congress subsequently established standards for Class A EPSs, these Class A devices were removed from the scope of the California standards, leaving behind a set of devices California now refers to as ‘‘state-regulated EPSs.’’ As a result, these state-regulated EPSs are those devices that meet the ENERGY STAR definition of an EPS but do not fall under the Class A definition— specifically medical and MADB EPSs. (Multiple-voltage and high-power EPSs do not meet the ENERGY STAR definition but satisfy the Federal definition of an EPS.) Due to differences between the ENERGY STAR and Federal statutory definitions of an EPS, there could be MADB devices that meet the Federal statutory definition that are not stateregulated. For example, a MADB EPS that has a battery type selector switch and an indicator light, and thus does not meet the ENERGY STAR definition of 20 For the purposes of EPA’s ENERGY STAR specification, an external power supply: (a) Is designed to convert line voltage ac input into lower voltage ac or dc output; (b) is able to convert to only one output voltage at a time; (c) is sold with, or intended to be used with, a separate end-use product that constitutes the primary load; (d) is contained in a separate physical enclosure1 from the end-use product; (e) is connected to the end-use product via a removable or hard-wired male/female electrical connection, cable, cord or other wiring; (f) does not have batteries or battery packs that physically attach directly (including those that are removable) to the power supply unit; (g) does not have a battery chemistry or type selector switch AND an indicator light or state of charge meter (e.g., a product with a type selector switch AND a state of charge meter is excluded from this specification; a product with only an indicator light is still covered by this specification); and (h) has nameplate output power less than or equal to 250 watts. (See https://www.energystar.gov/ia/partners/ product_specs/program_reqs/eps_prog_req.pdf.) PO 00000 Frm 00026 Fmt 4701 Sfmt 4702 an EPS, would not be covered either by the current Federal or California standards. However, as a practical matter, DOE has not identified any MADB products that meet the Federal statutory definition of an EPS but do not also meet the ENERGY STAR definition. Thus, DOE is unaware of any MADB products that are not already subject to California energy efficiency standards that are within the EPS scope of coverage being contemplated today. DOE seeks comment on the accuracy of this belief and specific examples of such products, if they exist. As noted above, some parties commented that requiring wall adapters that are part of battery chargers to be tested according to the EPS test procedure would impose an undue burden on manufacturers and would be inappropriate and result in inaccurate projections of estimated energy savings. In response to these comments, DOE notes that Congress prescribed the definitions of what constitutes an EPS. It did not provide for any exceptions that would exclude those EPSs that are components of another product. Given this situation, DOE must assume that Congress was aware of the fact that some battery chargers use EPSs and that it structured these statutory provisions to allow for the possibility that all EPSs would be required to meet some minimum level of efficiency that would also improve the efficiency of those products that used these more efficient devices. As to how to measure the energy performance of these devices, DOE believes that these wall adapters can be evaluated using the existing EPS test procedure. See 10 CFR part 430, subpart B, appendix Z (detailing the procedure to follow when measuring the energy consumption of an EPS). In fact, this test procedure already is used to demonstrate compliance with existing Federal standards, in the case of Class A EPSs, and California standards, in the case of most MADB EPSs.21 The test procedure is designed to assess the energy performance of an EPS while in active mode by measuring its activemode efficiency at 25, 50, 75, and 100 percent of nameplate output current and then computing the simple arithmetic average of these four values. DOE believes that this test procedure yields a meaningful and representative measure of an EPS’s active-mode efficiency because, along with the noload mode power measurement, it 21 California has adopted the Federal EPS test procedure as part of its regulatory requirements. (California Code of Regulations, Title 20, Section 1604). E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules covers the full range of outputs the device may be called on to provide in the field. This is true of EPSs that are not part of battery chargers as well as those that are. Thus, the EPS test procedure is appropriately applied to all EPSs, including those that are part of battery chargers. Regarding PTI’s argument that MADB wall adapters cannot, by definition, be EPSs because they operate battery chargers (which, in its view, are not consumer products), DOE disagrees. First, a battery charger is a consumer product by virtue of its inclusion by Congress under Part A of EPCA, 42 U.S.C. 6291(32), which addresses the regulation of consumer products. A consumer product is any article of a type that consumes or is designed to consume energy and which, to any significant extent, is distributed in commerce for personal use or consumption by individuals. See 42 U.S.C. 6291(1). The fact that a battery charger is a device that charges batteries for consumer products does not imply that chargers are not themselves consumer products, particularly since the definition contemplates the inclusion of those devices ‘‘in other consumer products, ’’ which indicates that Congress viewed battery chargers as a separate, and individual, consumer product. Second, EPSs are also consumer products for similar reasons. Third, a MADB wall adapter satisfies the EPS definition since it ‘‘convert[s] household electric current * * * to operate a consumer product.’’ See 42 U.S.C. 6291(36)(A) (emphasis added). Whether the MADB wall adapter is considered to operate a battery charger, which is a consumer product, or is considered to enable the end-use consumer product to operate (by supplying energy to the battery, which in turn operates the end-use product), a MADB wall adapter falls squarely within the EPS definition because it is taking household electric current to operate a consumer product. Accordingly, in DOE’s view, MADB wall adapters are EPSs. However, in view of the concerns raised by industry commenters, DOE believes there may be merit in distinguishing between a direct operation EPS and an indirect operation EPS. In particular, some EPSs are able to directly power an end-use consumer product (e.g., a wireless Internet router), while others cannot. This distinction may be necessary because DOE believes that less stringent EPS standards may be appropriate for indirect operation EPSs, which cannot directly operate an enduse consumer product. As explained VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 later, DOE is proposing a means to differentiate between these two types of EPSs and to set different efficiency standards for them. DOE’s proposed approach to regulating these products is described in more detail in sections IV.A.3 and V.C below. DOE notes that while Congress amended EPCA to exempt certain EPSs used in security and life safety alarms and surveillance systems from the noload mode power requirements that apply generally to Class A EPSs manufactured prior to July 1, 2017, see Public Law 111–360 (Jan. 4, 2011), such systems would be subject to the proposed active mode standards under consideration in this NOPR. See 42 U.S.C. 6295(u)(3)(E)(ii) (exempting security and life safety alarms and surveillance systems solely from noload requirements). DOE further notes that it has recently identified an important emerging EPS application: solid-state lighting (SSL). SSL technology is used in both the residential and commercial sectors for desk lamps, under-cabinet lighting, accent lighting, and many other purposes. Most of the SSL luminaires (fixtures) DOE has identified have integral power supplies, but some use power supplies that appear to meet the EPS definition. Some of these EPSs plug into an outlet, while others are hard wired into the electrical system. DOE has not yet identified any relevant technical differences between these EPSs and those for laptops, cell phones, and other electronic equipment that it has analyzed in detail as part of today’s notice. DOE did not include SSL technology in its NOPR analysis because so few SSL products with EPSs were sold in 2009, the base year for shipments. However, because of the rapid proliferation of these products, DOE may consider revising its analysis to include SSL products in determining the final standards for EPSs. DOE invites comment on SSL EPSs, specifically on whether there are any differences between SSL EPSs and other EPSs that might warrant treating them as a separate product class. b. Battery Chargers A battery charger is a device that charges batteries for consumer products, including battery chargers embedded in other consumer products. (42 U.S.C. 6291(32)) All devices that meet this definition are within the scope of this rulemaking. Like EPSs, battery chargers are used in conjunction with other end-use consumer products, such as cell phones and digital cameras. However, unlike EPSs, the battery charger definition PO 00000 Frm 00027 Fmt 4701 Sfmt 4702 18503 prescribed by Congress is not limited solely to products powered from AC mains, i.e., those products that are plugged into a wall outlet. Further, battery chargers may be wholly embedded in another consumer product, wholly separate from another consumer product, or partially inside and partially outside another consumer product. The California IOUs commented that they ‘‘agree with DOE’s wide-reaching consumer battery charger scope proposed in the preliminary [TSD],’’ as they believe ‘‘it will ultimately enable DOE to identify more cost-effective savings opportunities.’’ (California IOUs, No. 43 at p. 2) Several other parties requested that DOE exclude golf car chargers and in-vehicle chargers from potential battery charger regulations. Lester argued that ‘‘golf cars do not meet the definition of a consumer product’’ because they are primarily purchased by businesses rather than individuals, adding that the leading golf car manufacturer in the United States sells the vast majority of its golf cars to businesses rather than individuals— specifically 96 percent in 2009 and 97.5 percent in 2010. (Lester, No. 50 at p. 1) As indicated above, the statutory definition of ‘‘consumer product’’ is a broad one. The extent of that breadth indicates that Congress had contemplated that this definition would encompass a wide variety of products. DOE’s research indicates that approximately 10.6 percent of all new battery-powered golf cars sold each year in the United States are sold to individuals.22 While DOE has no reason to question Lester’s claim that the leading golf car manufacturer sells almost all of its golf cars to businesses, there are clearly manufacturers that sell a significant number of golf cars to individuals. Further, there is no identifiable difference between battery chargers for golf cars sold to individuals and those for golf cars sold to golf courses and other businesses. Thus, DOE continues to believe that golf cars are a type of consumer product. The distinction between consumer products and industrial equipment has been previously addressed by DOE. See https://www1.eere.energy.gov/buildings/ appliance_standards/pdfs/cce_faq.pdf. Lester also commented that in certain industrial applications the benefits of less energy-efficient, transformer-based 22 International Market Solutions, Golf Car-Type Vehicles and the Emerging Market for Small, TaskOriented Vehicles in the United States; Trends 2000–2006, Forecasts to 2012, December 2007. For more information about this report or to purchase a copy, email icaworld@optonline.net. E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS 18504 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules battery chargers outweigh those of more energy-efficient, switch mode battery chargers and that business managers are skilled in making the proper choice of battery charger based on a consideration of all the relevant factors. (Lester, No. 50 at pp. 2–3) In this context, Lester argued that businesses that purchase golf cars should be allowed to make their own decisions regarding the energy performance of the battery chargers they purchase, implying that there is no need for energy conservation standards for this product. DOE notes that, in general, the energy conservation standards that it sets must satisfy a series of criteria. See generally 42 U.S.C. 6295(o). Among these criteria is the need to ensure the continued utility of the regulated product. Consistent with this requirement, DOE will take this factor into account when setting standards for battery chargers. CEA commented that because invehicle chargers do not consume energy from the utility grid, they should not be covered by DOE. (CEA, No. 46 at p. 3) Motorola made similar statements and concluded that electronics that do not connect to the utility grid should be excluded from coverage. Motorola added that since DOE could not demonstrate cost savings associated with the potential efficiency standards that were under consideration for these products, these devices should not be regulated. (Motorola, No. 48 at pp. 2, 3) Cobra also expressed concerns over this product class and stated that quantifying the effect of battery chargers that obtain energy from 12V car batteries seems inaccurate and urged DOE to drop this product class from consideration. Cobra added that it was too difficult to accurately assess the economic impact of standards on 12V in-vehicle chargers because of difficulties inherent in accurately estimating gasoline savings. (Cobra, No. 51 at p. 3) DOE is aware that consumer products ‘‘designed solely for use in recreational vehicles and other mobile equipment’’ are, by law, specifically excluded from coverage as consumer products. (42 U.S.C. 6292) Thus, a battery charger designed solely for use in recreational vehicles (RVs) and other mobile equipment would not be subject to battery charger standards. DOE has identified several consumer products— most prominently portable GPS navigators—that are commonly sold with 12V power adapters. However, DOE is not aware of any batteryoperated consumer products that operate within a vehicle that cannot also be charged by alternate means, specifically from a 5V USB power VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 source or from mains through a wall adapter. (For example, a GPS device may be plugged into a home computer via a USB port to receive power and to download data updates to the device’s memory.) In other words, these products are not designed solely for use in recreational vehicles and other mobile equipment. DOE seeks comment on whether any products exist that can only be operated on 12V. DOE also seeks comment on whether a device that can be powered only from a 12V power outlet can be assumed to be designed solely for use in recreational vehicles (RVs) and other mobile equipment, or whether other 12V power sources exist that could power battery chargers. Lastly, DOE seeks comment on whether there are battery chargers with DC inputs other than 5V and 12V. DOE also considered whether the above exclusion also applies to battery chargers that charge mobile equipment such as golf cars, wheelchairs, and electric scooters. DOE has preliminarily determined that this exclusion does not apply to those types of battery chargers, for two reasons. First, the statute, by specifying that a device be ‘‘designed solely for use in’’ a recreational vehicle or mobile equipment, appears to exclude only those devices that obtain power from recreational vehicles and other mobile equipment, not those that provide power to recreational vehicles and other mobile equipment. For example, a refrigerator designed solely for use in an RV obtains its power from the RV and, thus, is not a covered product, whereas a battery charger that is designed solely to charge the batteries of an electric bicycle obtains its power from another power source external to the bicycle (e.g., AC mains) and, thus, is a covered product. Second, EPCA excludes from coverage those consumer products ‘‘designed solely for use in recreational vehicles and other mobile equipment.’’ DOE has found that many battery chargers that charge mobile equipment are not contained entirely within that equipment, but rather operate only partly within, or entirely outside of, that equipment. (Examples of such chargers include those for many wheelchairs and lawn mowers.) In DOE’s view, such a device is not operated solely in the mobile equipment and, thus, is not excluded from coverage. DOE welcomes comment on whether its understanding of how these devices operate is accurate. As to the general concern regarding the calculation of potential benefits and savings from standards for in-vehicle chargers, DOE notes that it is no longer considering these savings in order to PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 avoid any potential conflict with the exclusions set out in EPCA. c. Wireless Power The Wireless Power Consortium (WPC), which represents companies engaged in the emerging technology of wireless transfer of energy to both power and charge consumer products, commented that it does not believe that a ‘‘wireless power transducer is either an EPS or a battery charger’’ and recommended that a new category of inductive power supply be introduced for power supplies having inductive output. WPC explained that it is possible for the various components needed for these products, such as the transmitter transducers and receiver transducers, to be manufactured by different companies and sold separately. WPC further noted that it has not yet been determined how to address the independence of transmitter and receiver transducers in regards to overall system efficiency. As a result, ‘‘requirements for efficiency should be deferred until the technology is better understood and methods for accurately measuring the efficiency are developed.’’ (WPC, No. 42 at p. 2) Similarly, CEA requested that DOE categorize wireless power systems independently of battery chargers or EPSs to avoid regulatory mandates that could harm innovation in the emerging area of wireless power. CEA cited the technology’s ability to charge or interact with multiple devices for multiple purposes simultaneously and to provide real-time power to appliances without batteries at a variety of power levels and transmitting efficiencies. (CEA, No. 46 at pp. 2–3) Philips, in reference to wireless power, expressed concern that DOE ‘‘might inadvertently take regulatory action that could have the unintended effect of stifling this new technology.’’ (Philips, No. 41 at p. 3). DOE has observed that a number of new products have entered the marketplace in recent years that use wireless power technology in order to charge small consumer electronics products such as digital music players and mobile phones. Some of these products transfer power using induction while others use conduction or a galvanic (i.e., current-carrying) connection. Products are also sold in a variety of different configurations, as noted in WPC’s comment, with some transmitters and receivers sold separately, while others are sold together as a system. There are a number of different types of products under the broad umbrella of ‘‘wireless power,’’ including both battery chargers and EPSs. DOE E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS analyzed one type, namely inductive battery chargers for wet environments (product class 1), and is proposing standards for these products today. In the preliminary analysis, DOE did not differentiate any other wireless power battery chargers from their conventional wired counterparts. DOE continues to believe that wireless power products that meet the definition of a battery charger, whether inductive or galvanic, are covered products. However, DOE also agrees with CEA that the ability to charge multiple devices simultaneously and wirelessly offers a unique utility to consumers that could adversely and inadvertently be affected by standards. Because of this fact, and the immaturity of the technology, which collectively explain the absence of energy efficiency performance data on these products, DOE is not proposing standards for these types of products. Instead, DOE is proposing to create a separate product class for these products and to defer analysis of these products to a later standards rulemaking. Therefore, in today’s rulemaking, DOE has reserved a section in the CFR for an 11th battery charger product class for products that use wireless power, in a dry environment, to charge consumer products. With regard to the applicability of EPS standards to wireless power products, DOE reiterates that, by definition, an EPS ‘‘is used to convert household electric current into DC current or lower-voltage AC current to operate a consumer product.’’ (42 U.S.C. 6291(36)(A)) Some wireless power transmitter pads are sold by themselves and, thus, are consumer products in their own right. Other wireless power transmitter pads are sold along with a power receiver. Such a product constitutes a battery charger or a large portion of a battery charger, which also is a consumer product. Hence, in both cases, a wall adapter that provides power to the wireless power transmitter pad is an EPS. d. Unique Products Through additional market study of battery chargers and external power supplies since the preliminary analysis, DOE has found certain ‘‘unique’’ products that exhibit characteristics spanning several of the proposed BCEPS product classes, which make them difficult to classify within the scope of this rulemaking. These products possess traits inherent to both battery chargers and external power supplies and/or were designed for multiple simultaneous end-use consumer applications. In one example, a product VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 DOE examined supplied power to an answering machine equipped with two charging stations for a wireless headset and a cordless handset. The power converter itself provided two separate outputs at the same nameplate output voltage, but with different current limits on each. One output was dedicated to charging the wireless headset and one output was used to power the answering machine and charge the cordless handset. Under the definitions DOE has used to classify battery chargers and EPSs to this point, this product could be considered a multiple-voltage EPS, a multi-port battery charger, or even a distinct single-voltage EPS and a battery charger depending on how the terms are applied. DOE has invested considerable effort in properly analyzing the design tendencies of battery chargers and EPSs and believes that the vast majority of these products can be classified under the definitions of this proposed rule. DOE also believes that manufacturers, who are most familiar with how their products function and their intended use, should be able to appropriately determine what type of product they are selling and therefore which standard is appropriate based on DOE’s proposed definitions. DOE requests any interested party information regarding products that may seem to fall into multiple product classes. 2. Market Assessment a. Market Survey To characterize the market for battery chargers and EPSs, DOE gathered information on the products that use them. DOE refers to these products as end-use consumer products or battery charger and EPS ‘‘applications.’’ This method was chosen for two reasons. First, battery chargers and EPSs are nearly always integrated into, bundled with, or otherwise intended to be used with a given application; therefore, the demand for applications drives the demand for battery chargers and EPSs. Second, because most battery chargers and EPSs are not stand-alone products, their usage profiles, energy consumption, and power requirements are all determined by the associated application. DOE began the development of the preliminary analysis by analyzing online and brick-and-mortar retail outlets to determine which applications use battery chargers and EPSs and which battery charger and EPS technologies are most prevalent. Because the market for battery charger and EPS applications continues evolving, DOE updated the market PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 18505 survey to identify new applications and determine whether any relevant attributes of existing applications had changed significantly between the preliminary analysis and NOPR phases of the rulemaking. In order to more accurately characterize the market for battery chargers and EPSs, DOE analyzed the following new applications: Media tablets, mobile Internet hotspots, smartphones, and wireless charging stations. To simplify the analysis, DOE removed external media drives, radiocontrolled cars (hobby grade), and electronic pest repellents, all of which had low or unsupported shipments estimates. Battery chargers and EPSs for such applications and any other applications not explicitly analyzed in the market assessment would still be subject to the standards proposed in today’s notice as long as they meet the definition of a covered product outlined in sections A.1.a and A.1.b, above. DOE also combined Wi-Fi access points with LAN equipment and merged weed trimmers and hedge trimmers into a single application (rechargeable garden care products). Finally, DOE identified EPS applications that now also commonly contain rechargeable batteries and use battery chargers, including LAN equipment and video game consoles. Chapter 3 of the TSD discusses all of these market assessment updates in further detail. As noted in section IV.A.1.a above, DOE is considering including EPSs for SSL luminaires when it updates its analysis prior to issuing a final rule. DOE welcomes comment on the size of the market for these products, what proportion of SSL luminaires use EPSs, the efficiency of those EPSs, and usage patterns. The California IOUs suggested that DOE consider two additional products for inclusion in battery charger product class 10 (AC output): emergency uninterruptible power supplies (UPSs) for cordless phones and emergency backup for security systems. (California IOUs, No. 43 at p. 7) Battery charger product class 10 is reserved for products that output AC power from the battery. UPSs were the only applications that met this criterion. Due to the small number of UPSs for cordless phones shipped annually, DOE did not include this application in its quantitative analysis for product class 10, despite its inclusion in this class. DOE recognizes that many home security systems contain rechargeable emergency backup batteries; however, because those backup batteries output DC power in order to operate the electronics in the security system, DOE placed these E:\FR\FM\27MRP2.SGM 27MRP2 18506 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS chargers in product class 2. Although DOE recognizes that there are battery charger and EPS applications that it did not analyze, it tentatively believes that it has included within its analysis all major applications and, thus, has accurately characterized battery charger and EPS energy consumption and savings potential for each product class. b. Non-Class A External Power Supplies In addition, DOE expanded its analysis of applications that use nonClass A EPSs, including multiplevoltage and high-power EPSs, those EPSs that are used with medical devices, and EPSs used with (1) motoroperated battery charger applications and (2) the chargers of detachable batteries (i.e. collectively, MADB devices). In the preliminary analysis, DOE relied upon market information it had collected prior to publishing the notice of proposed determination for non-Class A EPSs in November 2009. Because updated information was available following the preliminary analysis, DOE revisited non-Class A EPSs while conducting its NOPR-phase market survey. DOE found that multiple-voltage EPSs are used in fewer applications today than they were at the time of the first survey. Specifically, DOE removed inkjet imaging equipment from the multiple-voltage EPS product class, leaving the Xbox 360 (a video game console) as the only application for these devices. DOE also reclassified medical EPSs based on the power requirements stated on retailer Web sites and updated lifetime and shipments estimates for medical devices. Philips commented that medical devices are expected to last longer than other consumer products and suggested using expected lifetimes of six to ten years for these products. (Philips, No. 41 at pp. 2–3) In the preliminary analysis, DOE estimated the product lifetimes for all medical devices analyzed to be greater than six years based on input from medical EPS manufacturers. Philips’ comment, combined with independent market research, helped DOE to confirm its preliminary estimates for the NOPR. All of DOE’s shipment and lifetime assumptions are documented in the market workbook that accompanies chapter 3 of the TSD. c. Application Shipments DOE relied on published market research to estimate base-year shipments for all applications. The baseyear was changed from 2008 to 2009 for the NOPR, and application shipments were updated wherever supporting data VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 were available. DOE estimated that in 2009 a total of 345 million EPSs and 437 million battery chargers shipped for final sale in the United States. Philips commented that DOE understated the shipments estimate for products in battery charger product class 1— inductive chargers for use in wet environments. In the preliminary analysis DOE assumed annual shipments of 5.35 million units, but Philips recommended using an estimate that is ‘‘closer to 15 million’’ units. (Philips, No. 41 at p. 2) Philips later explained how it derived this estimate from proprietary market data and its knowledge of the toothbrush market. In the NOPR-stage analysis, DOE used the shipments estimate recommended by Philips. One significant update to the market assessment methodology was to estimate the proportion of battery chargers and EPSs used exclusively in the commercial sector. Commercial users pay commercial electricity rates, which are lower than residential electricity rates, and, therefore, the cost savings they would enjoy from an energy conservation standard would be lower. DOE identified applications that were likely to be used in office buildings, restaurants, or commercial construction sites, for example, in order to more accurately estimate energy cost savings in the life-cycle cost (LCC) analysis and national impact analysis. Data on commercial shipments were not readily available for most applications; therefore, DOE assumed similar commercial market shares among similar office and telecommunications applications. In the case of power tools, DOE assumed that commercial and residential spaces have similar repair and maintenance needs and, thus, used the ratio of commercial to residential floor space in the United States as a proxy for each sector’s share of total power tool shipments. DOE seeks comment on which battery charger and EPS applications are used in the commercial sector, what fraction of shipments are to the commercial sector, and how product lifetimes and usage may differ between residential and commercial settings. (See Issue 2 under ‘‘Issues on Which DOE Seeks Comment’’ in section VII.E of this notice.) See chapter 3 of the TSD for more information on DOE’s commercial sector market share estimates. d. Efficiency Distributions In the preliminary analysis, DOE estimated separate base-case market efficiency distributions for each battery charger product class and a single efficiency distribution for all Class A PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 EPSs analyzed in the LCC and national impact analyses. AHAM commented that there are currently more EPSs in the market with efficiencies at levels higher than the EISA standard than what DOE estimated in the preliminary analysis; however, AHAM did not provide any specific data to support its claim. (AHAM, Pub. Mtg. Tr., No. 57 at p. 121) On the other hand, Cobra Electronics commented that most manufacturers of lower cost products use linear EPSs that just meet the current Federal standard rather than more efficient switch mode power supplies because of the higher costs involved with using that more efficient technology. (Cobra, No. 51 at p. 3) DOE incorporated these stakeholder comments into its updated efficiency distribution estimates but largely relied upon product testing and other market research to estimate base-case efficiency distributions. Further detail is contained in TSD chapter 3 and the accompanying analytical spreadsheet models. In preparing today’s NOPR, DOE revised its methodology for calculating efficiency distributions from test data. Instead of weighting results for each individual tested unit based on the shipments of the associated application, DOE gave equal weight to the results for each unit. For battery chargers and EPSs, DOE compared each test result to the proposed compliance curves for each candidate standard level (CSL). DOE then divided the number of units at a given CSL by the total number of tested units to estimate the percentage of units in the market. For select applications, DOE adjusted these distributions to reflect additional data or other market research about these applications. For EPSs, DOE also calculated the distribution of tested units within the ranges of nameplate output power corresponding to the representative units of analysis. Finally, DOE continued to calculate the distribution of tested units within each battery charger product class. DOE assigned an efficiency distribution profile to each EPS and battery charger application based on applicationspecific data where possible. For applications that DOE did not test, DOE relied on product class (for battery chargers) or representative unit (for EPSs) distributions for use in the energy use analysis and LCC analysis. DOE calculated a shipment-weighted average efficiency distribution for each product class for use in the national impact analysis. For more detail, see sections IV.E, IV.F, and IV.G below, which discuss the energy use, life-cycle cost, and national impact analyses, respectively. E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 3. Product Classes When necessary, DOE divides covered products into classes by the type of energy used, the capacity of the product, and any other performance-related feature that justifies different standard levels, such as features affecting consumer utility. (42 U.S.C. 6295(q)) DOE then conducts its analysis and considers establishing or amending standards to provide separate standard levels for each product class. At the preliminary analysis public meeting, DOE presented its rationale for creating 15 product classes for EPSs and 10 product classes for battery chargers. The product classes established for EPSs and battery chargers were based on various electrical characteristics shared by particular groups of products. As these electrical characteristics change, so does the utility and efficiency of the devices. sroberts on DSK6SPTVN1PROD with PROPOSALS a. External Power Supply Product Classes In the preliminary analysis, DOE raised the possibility of creating product classes based on nameplate output power and nameplate output voltage. This approach was based on the framework set by EISA 2007 and ENERGY STAR 2.0, which, collectively, grouped EPSs in this manner. DOE also divided EPS product classes based on whether a device met the Class A definition, its application type (motorized or medical), its output power, its output current type, its output voltages, and the battery type (detachable) of the associated application. For Class A EPSs, the preliminary analysis divided these products into product classes A1, A2, A3, and A4 based on ENERGY STAR 2.0 criteria, which classify EPSs based on the type of power conversion (i.e., AC to DC or AC to AC) used and nameplate output voltage (i.e., low-voltage or basicvoltage). Each of these four product classes (A1–A4) from the preliminary analysis was created using these same criteria. The Class A EPS product classes were defined using the identical power conversion type and nameplate output voltage parameters as the ENERGY STAR program for EPSs. Consistent with this initial approach, DOE is proposing to adopt the ENERGY STAR definition for low-voltage EPSs. DOE received no comments on these class structures when it first raised them during the preliminary analysis phase. As a result, DOE is proposing to adopt these class structures as part of today’s proposal. Particularly, if a device has a nameplate output voltage of less than 6 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 volts and its nameplate output current is greater than or equal to 550 milliamps, DOE is proposing to classify that device as a low-voltage EPS. Additionally, a product that does not meet the criteria for being a low-voltage EPS would be classified as a basicvoltage EPS. DOE is also proposing definitions for AC to DC and AC to AC EPSs. If an EPS converts household electrical current to a lower voltage DC, DOE is proposing to classify that product as an AC to DC EPS. Similarly, DOE is proposing to classify a device that converts household electrical current to a lower voltage AC output as an AC to AC EPS. DOE’s preliminary analysis also explained how DOE was planning to organize non-Class A EPSs, which include medical, MADB, multiplevoltage, and high-power (nameplate output power >250 Watts) EPSs, into product classes. In the preliminary analysis, DOE created product classes M1, M2, M3, and M4 for medical EPSs and B1, B2, B3, and B4 for MADB EPSs. As with Class A EPSs, DOE considered four product classes for these two groups of devices based on combinations of power conversion type and voltage level. Additionally, for MADB products, DOE determined whether a wall adapter for a MADB application lacked charge control, as defined in appendix 3C of the preliminary TSD, and therefore was a MADB EPS. For multiple-voltage EPSs, DOE considered the creation of two product classes—X1 and X2—and for high-power EPSs, it considered only one, H1. In response to the preliminary analysis, DOE received comments on the product class definitions presented for MADB and multiple-voltage EPSs. The issues raised are discussed below. Indirect Versus Direct Operation External Power Supplies As noted in section IV.A.1, interested parties raised concerns with DOE’s proposed approach in the preliminary analysis regarding MADB EPSs. Based on these comments, DOE revised its approach and is no longer using the charge control method it had considered using during the preliminary analysis. Instead, DOE is proposing a simpler approach, which would require a manufacturer to determine whether an EPS can only ‘‘indirectly operate’’ an application. DOE is proposing to define an indirect operation EPS as an EPS that cannot power a consumer product (other than a battery charger) without the assistance of a battery. In other words, if an enduse product only functions when drawing power from a battery, the EPS PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 18507 associated with that product is classified as an indirect operation EPS. Because the EPS must first deliver power and charge the battery before the end-use product can function as intended, DOE considers this device an indirect operation EPS and has defined a separate product class, N, for all such devices. Conversely, if the battery’s charge status does not impact the enduse product’s ability to operate as intended and the end-use product can function using only power from the EPS, DOE is proposing to treat that wall adapter as a direct operation EPS. DOE’s initial approach for determining whether a given EPS has direct operation capability involved removing the battery from the application and attempting to operate the application using only power from the EPS. While this approach gave the most definitive EPS classifications, this procedure had the potential of creating complications during testing since it can frequently necessitate the removal of integral batteries prior to testing. The removal of such batteries can often require access to internal circuitry via sealed moldings capable of shattering and damaging the application. DOE then developed a new method of testing to help minimize both the risk of damage to the application and the accompanying complexity associated with the removal of the internal batteries while ensuring testing accuracy. This approach would require product testers to determine whether an EPS can operate an end-use product once the associated battery has been fully discharged. Based on product testing results, DOE believes that direct operation EPSs will be able to power the application regardless of the state of the battery while indirect-operation EPSs will need to charge the battery before the application can be used as intended. Comparing the time required for an application to operate once power is applied during fully discharged and fully charged battery conditions would provide a reliable indication of whether a given EPS is an indirect or direct operation device. Recording the time for the application to reach its intended functionality is necessary because certain applications, such as smartphones, contain firmware that can delay the EPS from operating the enduse product as expected. If the application takes significantly longer to operate once the battery has been fully discharged, DOE would view this EPS as one that indirectly operates the enduse consumer product and classify it as part of product class N. Using this methodology, DOE was also able to evaluate a given product’s EPS as it was E:\FR\FM\27MRP2.SGM 27MRP2 18508 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules intended to be used while limiting the burden of the test. The full procedure is detailed in Appendix 3C of the TSD and in the rule language section of today’s notice. Product class N that DOE is proposing in today’s notice contains both Class A and non-Class A EPSs. DOE believes that these two groups of devices are technically equivalent, i.e., there is no difference in performance-related features between the two groups that would justify different standard levels for the two groups. (42 U.S.C. 6295(q)) Because of this technical equivalency, DOE grouped these EPSs into one product class for analysis. DOE seeks comment on whether there are any performance-related features characteristic of either Class A or nonClass A devices (but not both) in product class N that would help justify analyzing the two groups separately. If a product is capable of directly operating its end-use consumer product, other characteristics must be examined to determine the appropriate product class. In its preliminary analysis, DOE separated product classes based on combinations of their power conversion type and voltage level. DOE is proposing to use these class definitions based on those combinations but with one change. As shown in Table IV–1, DOE used four product classes for each combination of power conversion type and voltage level in the preliminary analysis for Class A EPSs, MADB EPSs, and medical EPSs. DOE also considered applying the results of the Class A engineering analysis directly to medical and MADB EPSs, meaning there would be no difference in the cost-efficiency curves or the product class divisions for Class A, medical, or MADB EPSs. DOE believed this was a valid approach because the costs associated with improving the efficiency of a medical or MADB EPS were identical to those associated with the same improvements in a comparable Class A EPS as all three types are technically equivalent. Due to these similarities, DOE believed that Class A, medical, and MADB EPSs should be evaluated identically. Interested parties did not comment on this simplified approach after it was presented during the preliminary analysis public meeting. Today’s NOPR proposes eliminating the disaggregation of Class A, medical, and MADB EPSs in its product class definitions. This consolidation would reduce the number of product classes covering these products from 12 in the preliminary analysis to five (B, C, D, E, and N) in the NOPR. Under this consolidated approach, product class B includes direct operation EPSs that are AC/DC and basic-voltage (i.e. do not qualify as low-voltage); product class C includes direct operation EPSs that are AC/DC and low-voltage (i.e. nameplate output voltage less than 6 volts and nameplate output current greater than or equal to 550 milliamps.); product class D includes direct operation EPSs that are AC/AC and basic-voltage; product class E includes direct operation EPSs that are AC/AC and low-voltage; and product class N includes all indirect operation EPSs. TABLE IV—1 PRELIMINARY ANALYSIS PRODUCT CLASSES Voltage level Basic (not low-voltage) Power Conversion Type ................ AC input, DC output ..................... AC input, AC output ..................... Multiple-Voltage External Power Supplies In the preliminary analysis, DOE considered combining product classes X1 (<100 Watts) and X2 (≥100 Watts) into one product class for all multiplevoltage EPSs. DOE is proposing to define multiple-voltage EPS as devices that convert household electric current into multiple simultaneous output currents. The California IOUs were in favor of creating a single product class for multiple-voltage EPSs because ‘‘the types of products that may occupy this category in the future are unknown.’’ (California IOUs, No. 43 at p. 9). DOE’s initial approach was based on the view Low (<6V, ≥550mA outputs) A1, B1, M1 (now B) ...................... A3, B3, M3 (now D) ...................... that these product classes corresponded to the two main products already in the market in 2008: multi-function devices in X1 and video game consoles in X2. As of 2010, multi-function devices no longer use multiple-voltage EPSs, leaving only one main product category and the need for only one product class. Therefore, DOE has consolidated product classes X1 and X2 into product class X for all multiple-voltage EPSs, which are EPSs that can directly operate a consumer product and simultaneously produce multiple output voltages. High-Power External Power Supplies DOE examined only one product class for high-power EPSs during the A2, B2, M2 (now C). A4, B4, M4 (now E). preliminary analysis because only one relevant consumer application existed at the time the analysis was prepared. DOE received no comments on this proposal from interested parties and, therefore, maintained one product class for highpower EPSs in the NOPR. This product class includes EPSs that can directly operate a consumer product and have a nameplate output power greater than 250 watts. To maintain consistency in the naming convention for the NOPR, product class H1 is now product class H. All product classes developed for the NOPR are shown in Table IV–2. sroberts on DSK6SPTVN1PROD with PROPOSALS TABLE IV—2 EXTERNAL POWER SUPPLY PRODUCT CLASSES USED IN THE NOPR Product class description Preliminary analysis external power supply product classes NOPR external power supply product classes AC/DC Basic-Voltage .......................................................... AC/DC Low-Voltage ............................................................ AC/AC Basic-Voltage .......................................................... AC/AC Low-Voltage ............................................................ Multiple Voltage .................................................................. High-Power ......................................................................... A1, M1, B1 (some) ............................................................. A2, M2, B2 (some) ............................................................. A3, M3, B3 (some) ............................................................. A4, M4, B4 (some) ............................................................. X1, X2 ................................................................................ H1 ....................................................................................... B C D E X H VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 18509 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules TABLE IV—2 EXTERNAL POWER SUPPLY PRODUCT CLASSES USED IN THE NOPR—Continued Product class description Preliminary analysis external power supply product classes NOPR external power supply product classes Indirect Operation ............................................................... B1, B2, B3, B4 (most) ........................................................ N sroberts on DSK6SPTVN1PROD with PROPOSALS b. Battery Charger Product Classes In the preliminary analysis, DOE used five electrical characteristics to disaggregate product classes—battery voltage, battery energy, input and output characteristics (e.g. inductive charging capabilities),23 input voltage type (line AC or low-voltage DC), and AC output. DOE explained its reasoning for using this approach in the preliminary analysis. This reasoning is also detailed in chapter 3 of the TSD. First, DOE explained that battery voltage greatly affects consumer utility because the electronics of a portable consumer product are designed to require a particular battery voltage. If a change occurs in battery voltage, it is possible that the end-use application will be rendered inoperable. Furthermore, battery chargers that charge lower-voltage (voltage equals the product of current (I) and resistance (R)) batteries tend to be less efficient because they use higher currents, which increase I2R losses for the same given output power. (I2R, the product of current and voltage, equates to power and refers to losses directly related to current flow.) These devices could be disproportionately affected by an equally stringent standard level across all voltages. Consequently, DOE opted to use battery voltage as a characteristic for setting product classes. See preliminary analysis TSD Chapter 3. Second, while battery voltage specifies which consumer product applications can be used with a particular battery (and its corresponding battery charger), battery energy describes the total amount of work that the battery can perform, regardless of the application, and is also a measure of utility. Furthermore, because a battery charger must provide enough output power to replenish the energy discharged during use, the capacity and physical size of the battery charger depend on the amount of battery energy.24 By using battery energy as a proxy for output power, only a single criterion, rather than two, is required for classifying battery chargers. This approach has the benefit of simplifying any energy conservation standards that DOE may set while sufficiently accounting for any differences in battery charger capacity or utility in the standards analysis. Additional details on this approach can be found in TSD chapter 3. Third, input and output characteristics are important because input voltage can have an impact on efficiency and dictate where a battery charger may be used, this impact may affect end user utility. With respect to inductive chargers, the utility offered by this characteristic is providing reliable and safe electrical power to a device during operation. In wet environments, such as a bathroom where an electric toothbrush is used, these chargers ensure that the user is isolated from mains current by transferring power to the battery through magnetic induction rather than using a galvanic (i.e. current carrying) connection. DOE also identified numerous battery chargers that do not include a wall adapter, connecting instead to a personal computer’s USB port or a car’s cigarette lighter receptacle. Because input voltage can impact battery charger performance and determine where the battery charger can be used, which affects the utility of the product, DOE defined product classes using this criterion in the preliminary TSD. In response to the preliminary analysis and during manufacturer interviews, DOE received numerous comments regarding these product classes, discussed below, and the results of which are summarized in Table IV–3. 23 Inductive charging is a utility-related characteristic designed to promote cleanliness and guarantee uninterrupted operation of the battery charger in a wet environment. In wet environments, such as a bathroom where an electric toothbrush is used, these chargers ensure that the user is isolated from mains current by transferring power to the battery through magnetic induction rather than using a galvanic (i.e. current carrying) connection. 24 The minimum output power is a product of battery energy and charge rate. However, while charge rates rarely fall outside the range of 1 °C to 10 °C, the battery energy of consumer battery chargers can span over 5 orders of magnitude from 1 watt-hour to over 10,000 watt-hours. Therefore, the output power is more dependent on battery energy than charge rates. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules During the preliminary analysis public meeting, Philips questioned whether DOE could consider product classes based on usage, topology (i.e., the general circuit layout), or price. (Philips, Pub. Mtg. Tr., No. 37 at pp. 126–130) Philips and AHAM stated that they believed DOE could disaggregate infrequently used products into a separate product class and urged DOE to do so. (Philips, No. 43 at p. 3; AHAM, Pub. Mtg. Tr., No. 37 at pp 154–156) AHAM added that, in its view, DOE has always established new product classes based on characteristics, designs, or functions that affect energy use. (AHAM, No. 44 at p. 6) CEA expressed similar concerns as Philips and AHAM, suggesting that DOE did not adequately deal with infrequently charged battery chargers. (CEA, No. 48 at p. 2) Earthjustice disagreed with AHAM’s suggestion and stated that usage is not a feature of a battery charger, but rather a characteristic of the end user of the application that the battery charger accompanies. (Earthjustice, Pub. Mtg. Tr., No., No. 37 at p. 131) Fulton Innovation inquired whether topology is considered as part of the utility of a product and, hence, a factor for setting product classes. (Fulton Innovation, Pub. Mtg. Tr., No., 37 at pp. 134–135) Finally, Stanley Black and Decker asked whether pricing could be considered a utility-related feature to use in defining VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 product classes. (SBD, Pub. Mtg. Tr., No., 37 at pp. 133–134) DOE does not consider usage, topology, and pricing as utility-related features for determining separate product classes. These factors were considered separately, however, in setting potential energy efficiency levels for these products. Usage defines how a battery charger is used, which is inherently tied to the end-use product with which the battery charger is packaged. While changes in usage will affect the energy use of a battery charger, they do not affect the actual performance of the battery charger, which is the relevant factor DOE must consider when establishing a separate class for these products. See 42 U.S.C. 6295(q). Product usage is fundamental to the analyses that DOE performs for battery chargers, particularly for the LCC and NIA. For each application, DOE estimates the time spent in each mode of operation in order to estimate unit energy consumption. Further details on usage and DOE’s assumptions are presented in the energy usage section, IV.E, of today’s notice. Although DOE does not explicitly define product classes for battery chargers based on topology, it considered topologies when it presented its initial product classes. Primarily, DOE uses battery energy as a defining characteristic for battery charger product classes. Because of the PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 extremely wide range of different battery energies, DOE needed to establish meaningful ranges of battery energies for each product class. As outlined in the preliminary analysis TSD (Chapter 3), when battery energy changes, the topologies, or general circuit designs that are most appropriate also change. Therefore, as part of today’s NOPR, DOE examined the potential impacts on topologies when it defined the ranges of battery energies that were considered. Finally, price was also not included in the definitions of DOE’s battery charger product class because it is not a utility-related feature for the purposes of EPCA. DOE understands commenters concerns that some products are marketed at various price points and that energy efficiency standards have the potential to raise those price points or eliminate some all together. However, price does not directly affect device performance. DOE acknowledges that price is an important consideration for consumers and although price is not considered when setting product classes, DOE does account for such consumer impacts in the LCC and PBP analyses conducted in support of this rulemaking. Medical and Single-Cell Battery Chargers Interested parties also advocated separating out particular products into E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.012</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18510 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules their own classes. Philips suggested that DOE consider creating a separate product class for medical battery chargers, as is done for EPSs. (Philips, No. 43 at p. 2) They mentioned that medical battery chargers cannot use off the shelf consumer grade battery chargers and must undergo a special regulatory process that adds testing requirements and costs. (Philips, No. 43 at p. 3) At the public meeting, Wahl Clipper suggested that DOE should have an additional product class for applications that use single-cell batteries. (Wahl Clipper, Pub. Mtg. Tr., No. 37 at p. 158) Neither commenter provided any data supporting their views. While DOE appreciates the suggestions from Philips and Wahl about segregating out additional product classes from DOE’s current definitions, DOE is not inclined to adopt them at this time based on the current information before it. As with EPSs, DOE believes that even though medical battery chargers must adhere to more stringent requirements than other battery chargers, the cost-efficiency relationship will not be appreciably different to merit separate standards and product classes. In the preliminary analysis, DOE found that there was virtually no difference in the cost effectiveness of improving medical EPS efficiency versus improving Class A EPS efficiency. Moreover, DOE is unaware of any capacity or performance-related feature present in medical battery chargers that would permit the creation of a special class for these devices for purposes of setting separate energy conservation standards. As a result, despite the additional safety testing that medical EPSs may have to go through for certification, DOE has tentatively consolidated the two groups and no longer distinguishes between them in its product class definitions for today’s proposal. Based on the information that DOE receives during the course of the comment period, it may reconsider this approach for the final rule. As for the single-cell batteries that Wahl Clipper referenced, DOE believes that its proposed scaling methodology sufficiently addresses Wahl Clipper’s concerns and allows chargers that use single-cell batteries to remain in product class 2 (low-energy, low-voltage). As discussed in section IV.C.2.j, when battery energy approaches zero, DOE levels off unit energy consumption (UEC) requirements to prevent the adoption of overly stringent requirements that could eliminate such products. (UEC is a relevant factor because it is the metric which DOE is proposing to regulate for these devices.) VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 Motorized Application Detachable Battery (MADB) Battery Chargers PTI also submitted comments in which it recommended that DOE revise its 10 battery charger product classes presented in the preliminary analysis. PTI stated that because the statute provides language for DOE to separate MADB’s when referring to EPS’s, DOE should extend this distinction to battery chargers and separate MADB battery chargers from consumer electronics battery chargers. PTI claimed that even though MADB and consumer electronics battery chargers share a common range of battery voltages and energies, the two are vastly different in other ways and urged DOE to create different classes for MADB and non-MADB products across the same battery voltages and energies. PTI added that part of the problem with grouping the two product types together is that consumer electronics promote features such as smaller size and weight and longer run-time—all of which are added benefits related to improving a product’s energy efficiency. (PTI, No. 47 at p. 13) In other words, in their view, consumer electronics have already begun to move towards more efficient battery chargers and manufacturers have been able to pass along the additional costs to consumers because the use of more efficient chargers has led to the addition of desirable features, such as reduced notebook computer weight. (PTI, No. 47 at pp. 13) PTI also disagreed with DOE’s initial plan to group power tools with consumer electronics because shipments of consumer electronics, such as laptops, greatly outnumber MADB product shipments. Because a shipment-weighted average is employed by DOE in its analysis, the calculated effects would be dominated by the effects of the products that have the greatest number of shipments. (PTI, No. 47 at p. 6) Since the shipment quantities of consumer electronic products far outnumber those for MADB products, PTI asserted that the calculations derived by DOE would be dominated by the inclusion of consumer electronics products and skew the overall effects projected to occur with a given standard for these products. (PTI, No. 47 at pp. 6 and 13) In addition, in PTI’s view, the incremental cost estimates to achieve higher efficiencies which have been included in the life cycle cost analysis, are a much smaller percentage of the higher-priced products than they would be for many do-it-yourself power tools. (PTI, No. 47 at p. 13) As a result, PTI asserted that do-it-yourself power tool users are likely to be more sensitive to PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 18511 price changes even though the incremental change may be similar to higher priced products, such as consumer electronics. PTI added that manufacturers, and ultimately consumers, would be better served by a class that included only appliances or, alternatively, have appliances more fairly represented in the averages. In its view, making this change would generate CSLs that more appropriately address the realizable efficiency improvements and strike a better balance between the realities of power tool manufacturers and the energy savings gained by the consumer. (PTI, No. 47 at p. 13) Therefore, PTI recommended that DOE should calculate CSL and LCC information based on sub-classifications of product classes 3 (AC in/DC out, <100 Wh, 4– 10 V battery chargers) and 4 (AC in/DC out, <100Wh, >10V battery chargers) for MADB and non-MADB devices. (PTI, No. 47 at p. 7) Conversely, the California IOUs supported DOE’s decision to group both power tools (i.e. MADB battery chargers) and laptops (i.e. consumer electronics battery chargers) in the same product classes for the purposes of this analysis (California IOUs, No. 45 at p. 6) They also expressed support for DOE’s proposal in the preliminary analysis that usage profiles should not be used when creating product classes. (California IOUs, No. 45 at p. 8) In separate comments, Pacific Gas and Electric and others urged DOE to reduce the number of product classes from 10 to 4, and reorganize product classes 2 through 7 (AC in/DC out battery chargers) into one new product class. (PG&E, et al., No. 49 at pp. 2–3) After considering these comments, DOE re-examined the UEC data from its engineering analysis for product classes 3 and 4. DOE found that when MADB applications were removed from product classes 3 and 4, the UECs generated for the removed group of MADB applications were not significantly different (<10 percent) than those DOE had presented for the product class as a whole. Relative to the reductions in UEC when incrementing CSLs, DOE considered these differences much less significant than it initially suspected. Furthermore, for the NOPR analysis, DOE altered some of its assumptions for the LCC analysis. In the preliminary analysis, DOE assumed the same efficiency distribution for all applications within a product class. For example, in product class 4, laptops were assumed to have the same percentage of their shipments at CSL 0, 1, and 2 as power tools and all other applications in that product class. As E:\FR\FM\27MRP2.SGM 27MRP2 18512 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS mentioned by manufacturers and determined by DOE’s testing program for battery chargers, some products, mainly consumer electronics, have already begun increasing the efficiency of their products because doing so is desirable to the end user. As a result, DOE has altered its assumption that all applications within a product class have the same distribution of efficiency. Instead, DOE now makes more tailored assumptions about efficiency distributions for different applications based on information provided by manufacturers, publicly available data, and DOE’s own test results. This new assumption will alter the economics of DOE’s standards analysis and more accurately illustrate the effects on consumers for the varying consumer types in each product class. Additionally, the individual LCC results for each application are available in appendix 8B of the TSD. Similarly, just as DOE is not persuaded to disaggregate certain product classes, DOE is also not persuaded to aggregate any additional product classes, as suggested by PG&E. DOE initially considered using separate product classes in the preliminary analysis because the different battery voltage and energy ratings that define these classes imply a certain utility and deviation from those ratings will likely lead to different cost-efficiency relationships and efficiency levels. These differences will also lead to different effects on consumers, which will likely support different energy conservation standard levels. Uninterruptible Power Supply (UPS) Battery Chargers Uninterruptible power supplies are used only for emergency situations when power is lost and users need time to safely shut down their electronic devices. Consequently, these devices generally do not fully charge a completely depleted battery. Additionally, these devices typically use integral batteries and generally remain on continuously. Because of its role in providing power in emergency situations, the battery chargers within these devices primarily remain in maintenance mode, which constitutes the most relevant portion of its energy consumption. During manufacturer interviews with UPS producers, DOE discussed additional functionality as it pertains to these devices. Manufacturers suggested that DOE classify UPSs into three different categories: Basic UPSs, UPSs that have automatic voltage regulation (AVR), and UPSs that are extended-run capable (i.e., the ability to attach a second battery to increase battery VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 capacity within the UPS). After further investigation, DOE decided that two of these categories were appropriate and warranted separate standards, but the third category (extended-run UPSs), as it was simply representative of a change in battery capacity, could be accounted for through its scaling methodology. AVR UPSs use circuitry that monitors input voltage from the wall and ensures that all products plugged into the UPS see a steady flow of voltage despite any fluctuations at the wall. This circuitry provides added utility to the consumer by preventing any spikes or dips in voltage, but it comes at the expense of additional power consumption by the UPS. This additional power consumption of the UPS is always on when the device is plugged in and it is indistinguishable from the power consumption due to the battery charger within the UPS. To account for these characteristics, DOE is proposing to divide preliminary analysis product class 10 into two product classes, one for basic UPSs and one for UPSs that contain AVR circuitry. Even though DOE is proposing two product classes for these categories of UPSs, DOE believes that the underlying engineering analysis and other downstream analyses for both product classes is the same. DOE believes that this is an appropriate assumption because the addition of AVR is irrelevant to UPS battery charger power consumption, yet it cannot be disaggregated from UPS battery charger power consumption due to the integrated nature of the circuitry components within a UPS. In other words, there is no technical reason why the battery charger within a basic UPS should be different from the battery charger within a UPS with AVR functionality. However, when the latter is tested via DOE’s battery charger test procedure, it will demonstrate a higher maintenance mode power consumption and will not be able to meet as stringent an energy efficiency standard as a basic UPS. Consequently, for all of DOE’s analyses in today’s NOPR, battery chargers for UPSs are examined as an aggregated product class, product class 10, rather than separately, however the proposed standard for each product class is different. DOE seeks comment on its analytical approach and whether separate classes are appropriate in this context. 4. Technology Assessment In the technology assessment, DOE identifies technology options that appear to be feasible to improve product efficiency. This assessment provides the technical background and structure on PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 which DOE bases its screening and engineering analyses. The following discussion provides an overview of the technology assessment for EPSs and battery chargers. Chapter 3 of the TSD provides additional detail and descriptions of the basic construction and operation of EPSs and battery chargers, followed by a discussion of technology options to improve their efficiency and power consumption in various modes. a. EPS Efficiency Metrics On December 8, 2006, DOE codified a test procedure final rule for single output-voltage EPSs in Appendix Z to Subpart B of 10 CFR Part 430 (‘‘Uniform Test Method for Measuring the Energy Consumption of External Power Supplies.’’) See 71 FR 71340. On June 1, 2011, DOE added a test procedure to cover multiple output-voltage EPSs in Appendix Z to Subpart B of 10 CFR Part 430 (‘‘Uniform Test Method for Measuring the Energy Consumption of External Power Supplies.’’) 76 FR 31750. DOE’s test procedure, based on the CEC EPS test procedure, yields two measurements: Active mode efficiency and no-load mode (standby mode) power consumption. Active-mode efficiency is the ratio of output power to input power. For single-voltage EPSs, the DOE test procedure averages the efficiency at four loading conditions—25, 50, 75, and 100 percent of maximum rated output current—to assess the performance of an EPS when powering diverse loads. For multiple-voltage EPSs, the test procedure provides those four metrics individually, which DOE is considering averaging when setting the efficiency level measurements for these types of devices. The test procedure also specifies how to measure the power consumption of the EPS when disconnected from the consumer product, which is termed ‘‘no-load’’ power consumption because the EPS outputs zero percent of the maximum rated output current to the application. To develop the analysis and to help establish a framework for setting EPS standards, DOE considered both combining average active-mode efficiency and no-load power into a single metric, such as unit energy consumption (i.e. UEC), and maintaining separate metrics for each. For the preliminary analysis, DOE chose to evaluate EPSs using the two metrics separately. Today’s NOPR proposes continuing to use this method when setting standards for these products. Using a single metric that combines active-mode efficiency and no-load power consumption to determine the E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules standard may inadvertently permit the ‘‘backsliding’’ of the standards established by EISA 2007. Specifically, because a combined metric would regulate the overall energy consumption of the EPS as the aggregation of activemode efficiency and no-load power, that approach could permit the performance of one metric to drop below the EISA 2007 level if it is sufficiently offset by an improvement in the other metric. Such a result would, in DOE’s view, constitute a backsliding of the standards and would violate EPCA’s prohibition from setting such a level. DOE’s proposed approach seeks to avoid this result. The DOE test procedure for multiplevoltage EPSs yields five values: no-load power consumption as well as efficiency at 25, 50, 75, and 100 percent of maximum load. See 76 FR 31750 (June 1, 2011)(noting DOE’s recently added procedures for multiple voltage EPSs codified at section 4.2 of appendix Z of subpart B to part 430 of the CFR). In the preliminary analysis, DOE examined the possibility of averaging the four efficiency values to create an average efficiency metric for multiplevoltage EPSs, similar to the approach followed for single-voltage EPSs. Alternatively, DOE introduced the idea of averaging the efficiency measurements at 50 percent and 75 percent of maximum load because the only known application that currently uses a multiple voltage EPS, a video game console, operates most often between those loading conditions. DOE sought comment from interested parties on these two approaches. The California IOUs commented that the test metric should be an ‘‘average of 25%, 50%, 75%, and 100% of rated output power, similar to the approach taken for single voltage EPSs.’’ The California IOUs viewed this approach as best rather than basing the multiplevoltage test procedure on the loading profile of a single application which could decrease the applicability of any standard since ‘‘the types of products that may occupy this category in the future are unknown’’. (California IOUs, No. 43 at p. 9) Though it is aware of only one consumer product using multiplevoltage EPSs, DOE believes that evaluating multiple-voltage EPSs using an average-efficiency metric (based on the efficiencies at 25%, 50%, 75%, and 100% of each output’s normalized maximum nameplate output power) would allow a future standard to be applicable to a diverse range of products as it would not be based solely on the loading profile of a single EPS application. Therefore, DOE evaluated VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 multiple-voltage EPSs using no-load mode power consumption and an average active-mode efficiency metric based on the measured efficiencies at 25%, 50%, 75%, and 100% of rated output power in developing the proposed energy conservation standards for these products. DOE requests feedback on this proposed approach to determining the average efficiency for multiple-voltage EPSs. b. EPS Technology Options DOE considered seven technology options, fully detailed in Chapter 3 of the TSD, which may improve the efficiency of EPSs: (1) Improved Transformers, (2) Switched-Mode Power Supplies, (3) Low-Power Integrated Circuits, (4) Schottky Diodes and Synchronous Rectification, (5) Low-Loss Transistors, (6) Resonant Switching, and (7) Resonant (‘‘Lossless’’) Snubbers. AHAM and PTI commented during the preliminary analysis that ‘‘[DOE] has not justified the value of decreasing the no-load levels at each [initially considered] CSL’’ (AHAM, No. 42 at p. 7; PTI, No. 45 at p. 5). NEEP suggested that DOE should consider whether technology options are applicable across product classes (NEEP, No. 49 at 2). During its analysis, DOE found that some technology options affect both efficiency and no-load performance and that the individual contributions from these options cannot be separated from each other in a cost analysis. Given this trend, DOE generated a ‘‘matched pairs’’ approach for creating the EPS CSLs where select test units were used in characterizing the relationship of average active-mode efficiency and noload power dissipation. In the matched pairs approach, EPS energy consumption improves either through higher active mode efficiency, lower noload mode power consumption, or both. If DOE allowed one metric to decrease in stringency between CSLs, then the cost-efficiency results might have shown cost reductions at higher CSLs and skew the true costs associated with increasing the efficiency of EPSs. To avoid this result, DOE is using an approach that increases the stringency of both metrics for each CSL considered in today’s NOPR. Regarding NEEP’s suggestion, DOE notes that in developing the engineering analysis, DOE considered all technology options when developing CSLs for all four EPS representative units. DOE considered the same efficiency improvements during its analysis for non-Class A EPSs as it did for Class A EPSs. Where representative units were not explicitly analyzed (i.e. product classes C, D, and E), DOE extended its PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 18513 analysis from a directly analyzed class. As a result, all design options that could apply to these products were implicitly considered because the proposed efficiency levels of the analyzed product class will be scaled to other product classes, an approach supported by interested parties. The equations were structured based on the relationship of the other Class A product classes to the representative product class such that the technology options not implemented by the other classes were accounted for in the proposed efficiency equations. For example, AC–AC EPSs (product classes A2 and A4 in the preliminary analysis) tend to have higher no load power dissipation because they do not use switched-mode methods (see Chapter 3 of the TSD for a full technical description). Therefore, DOE used higher no load power metrics when generating CSLs for these product classes than the CSLs from the representative product class A1. DOE will continue to examine all technology options and apply them wherever possible across all product classes as part of the NOPR analysis. c. High-Power EPSs In the non-Class A determination analysis TSD, DOE examined the specific design options of high-power EPSs as they relate to ham radios, the sole consumer application for these EPSs. DOE found that high-power EPSs are unique because both linear and switched-mode versions are available as cost-effective options, but the linear EPSs are more expensive and inherently limited in their achievable efficiency despite sharing some of the same possible efficiency improvements as EPSs in other product classes. Interested parties have expressed concern that setting an efficiency standard higher than a linear EPS can achieve would reduce the utility of these devices because ham radios are sensitive to the electromagnetic interference (EMI) generated by switched-mode EPSs. However, DOE believes there is no reduction in utility because EPSs used in telecommunication applications are required to meet the EMI regulations of the Federal Communications Commission (47 CFR 15, subpart B) regardless of the underlying technology. DOE used this assumption when constructing its engineering analysis for the NOPR but seeks comment on possible issues with EMI and/or radio frequency interference associated with switch-mode power supplies (SMPS) used with amateur radios, including design options for reducing or eliminating interference. E:\FR\FM\27MRP2.SGM 27MRP2 18514 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS d. Power Factor Power factor is a relative measure of transmission losses between the power plant and a consumer product. DOE examined the issue of power factor in section 3.6 of the framework document for the BCEPS rulemaking and noted that certain ENERGY STAR specifications limit power factor. DOE also noted in that same section the role of power factor in higher-power EPSs— namely, that at higher powers, problems associated with power factor (e.g. power dissipation in the wiring) become more pronounced. PTI commented that DOE should preempt other jurisdictions from regulating power factor by addressing power factor as a metric, but not to specify a limit in the energy-efficiency standard. (PTI, No. 45 at p. 12) PTI stated that regulating power factor will add cost to the product because of the need for additional power factor correction circuitry. It also explained that losses due to power factor are a consequence of the power cables used by the local utility, which are beyond the control of the manufacturer. (PTI, No. 45 at pp. 10–11) DOE notes that regulating power factor includes substantial challenges, such as quantifying transmission losses that depend on the length of the transmission wires, which differ for each residential consumer. Further, DOE has not yet conclusively analyzed the benefits and burdens from regulating power factor. While DOE plans to continue analyzing power factor and the merits of its inclusion as part of a future rulemaking, it is DOE’s view that the above factors weigh in favor of not setting a power factor-based standard at this time. e. Battery Charger Modes of Operation and Performance Parameters For the preliminary analysis, DOE found that there are five modes of operation in which a battery charger can operate at any given time. These modes of operation are: Active (or charge) mode, maintenance mode, no-battery (or standby) mode, off mode, and unplugged mode. These five modes are briefly described below: 25 Active (or charge) mode: During active mode, a battery charger is charging a depleted battery, equalizing its cells, or performing functions necessary for bringing the battery to the fully charged state. 25 Active mode, maintenance mode, standby mode, and off mode are all explicitly defined by DOE in Appendix Y to Subpart B of Part 430— Uniform Test Method for Measuring the Energy Consumption of Battery Chargers. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 Maintenance mode: In maintenance mode, the battery is plugged into the charger, has reached full charge, and the charger is performing functions intended to keep the battery fully charged while protecting it from overcharge. No-Battery (or standby) mode: In nobattery mode, the battery is not connected to the charger but the battery charger itself is still plugged into mains. Off mode: In off mode, the charger remains connected to mains power but the battery is removed and all manual on-off switches are turned off. Unplugged mode: In unplugged mode, the battery charger is disconnected from mains and not consuming any electrical power. For each battery charger mode of operation, DOE’s battery charger test procedure has a corresponding test that is performed that outputs a metric for energy consumption in that mode. The tests to obtain these metrics are described in greater detail in DOE’s battery charger test procedure. (76 FR 31750) The following items are pertinent performance parameters from those tests. 24-Hour Energy: This quantity is defined as the power consumption integrated with respect to time of a full metered charge test that starts with a fully depleted battery. In other words, this is the energy consumed to fully charge and maintain at full charge a depleted battery over a period that lasts 24 hours or the length of time needed to charge the tested battery plus 5 hours, whichever is longer. Maintenance Mode Power: This is a measurement of the average power consumed while a battery charger is known to be in maintenance mode. No-Battery (or standby) Mode Power: This is a measurement of the average power consumed while a battery charger is in no-battery or standby mode (only if applicable). Off-Mode Power: This is a measurement of the average power consumed while an on-off switchequipped battery charger is in off mode (i.e. with the on-off switch set to the ‘‘off’’ position). Unplugged Mode Power: This quantity is always 0. Additional discussion on how these parameters are derived and subsequently combined with assumptions about usage in each mode of operation to obtain a value for the UEC is discussed below in section IV.C.2.b. f. Battery Charger Technology Options Since most consumer battery chargers contain an AC to DC power conversion PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 stage, similar to that found in an EPS, all of the technology options discussed in section IV.A.4.b also apply to battery chargers. The technology options used to decrease EPS no-load power will impact battery charger energy consumption in no-battery and maintenance modes (and off mode, if applicable), while those options used to increase EPS conversion efficiency will impact energy consumption in active and maintenance modes. Technology options that DOE considered for battery chargers in the preliminary analysis and again for the NOPR include: Improved transformer cores, termination, elimination/ limitation of maintenance mode current, elimination of no-battery mode current, switched-mode power supplies, lowpower integrated circuits, Schottky diodes and synchronous rectification, phase control to limit input power. An in-depth discussion of these technology options can be found in TSD chapter 3. B. Screening Analysis DOE uses the following four screening criteria to determine which design options are suitable for further consideration in a standards rulemaking: 1. Technological feasibility. DOE considers technologies incorporated in commercial products or in working prototypes to be technologically feasible. 2. Practicability to manufacture, install, and service. If mass production and reliable installation and servicing of a technology in commercial products could be achieved on the scale necessary to serve the relevant market at the time the standard comes into effect, then DOE considers that technology practicable to manufacture, install, and service. 3. Adverse impacts on product utility or product availability. If DOE determines a technology would have significant adverse impact on the utility of the product to significant subgroups of consumers, or would result in the unavailability of any covered product type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as products generally available in the United States at the time, it will not consider this technology further. 4. Adverse impacts on health or safety. If DOE determines that a technology will have significant adverse impacts on health or safety, it will not consider this technology further. See 10 CFR part 430, subpart C, appendix A, (4)(a)(4) and (5)(b). E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules For EPSs, DOE did not screen out any technology options after considering the four criteria. For battery chargers, DOE screened out: 1. Non-inductive chargers for use in wet environments because of adverse impacts on safety; 2. Capacitive reactance because of adverse impacts on safety; and 3. Lowering charging current or increasing battery voltage because of adverse impacts on product utility to consumers. DOE received no comments in response to its preliminary screening analysis. Therefore, DOE is using the same screening analysis for the NOPR. For additional details, please see chapter 4 of the TSD. C. Engineering Analysis In the engineering analysis (detailed in chapter 5 of the TSD), DOE presents a relationship between the manufacturer selling price (MSP) and increases in battery charger and EPS efficiency. The efficiency values range from that of an inefficient battery charger or EPS sold today (i.e., the baseline) to the maximum technologically feasible efficiency level. For each efficiency level examined, DOE determines the MSP; this relationship is referred to as a cost-efficiency curve. DOE structured its engineering analysis around two methodologies: (1) Test and teardowns, which involves testing products for efficiency and determining cost from a detailed bill of materials derived from tear-downs and (2) the efficiency-level approach, where the cost of achieving increases in energy efficiency at discrete levels of efficiency are estimated using information gathered in manufacturer interviews that was supplemented and verified through technology reviews and subject matter experts (SMEs). When analyzing the cost of each CSL—whether based on existing or theoretical designs—DOE differentiates the cost of the battery charger or EPS from the cost of the associated end-use product. 1. Engineering Analysis for External Power Supplies a. Representative Product Classes and Representative Units DOE is applying the same methodology in the NOPR as it used in the preliminary analysis to identify representative product classes and representative units. In the preliminary analysis, DOE selected product class A1 (AC to DC conversion, basic- voltage EPSs) for further analysis as the representative product class because it constituted the majority of EPS shipments and national energy consumption related to EPSs. Within product class A1, DOE focused on four representative units with output power levels at 2.5 watts, 18 watts, 60 watts, and 120 watts because most consumer applications use EPSs with these, or similar, nameplate output power ratings. In the NOPR, DOE is choosing to focus on representative product class B (AC to DC conversion, basic-voltage EPSs), which contains certain product classes from the preliminary analysis— most Class A EPSs from product class A1, most medical EPSs from product class M1, and some MADB EPSs from product class B1 (which are EPSs that can directly power an application). The NOPR analysis also focuses on the same four representative units as the preliminary analysis with output powers at 2.5 watts, 18 watts, 60 watts, and 120 watts in product class B and scales those results to product classes C, D, and E as suggested by interested parties. Interested parties supported DOE’s approach in creating and analyzing representative product classes and representative units in the preliminary analysis. The California IOUs agreed with using product class A1 as the representative product class and scaling to other product classes because of the inherent similarities of the A1 devices to those in the other product classes (California IOUs, No. 43 at p. 8). Although no specific data were provided, the California IOUs also commented in support of the four representative units within the product class noting that their own research 26 into the power supply market corroborates DOE’s selections (California IOUs, No. 43 at p. 8). DOE did not receive comments disputing its selections for the four representative units. DOE is proposing to continue using the same representative product class and representative unit methodology, and will scale results for the other EPS product classes. As noted previously, DOE has incorporated EPSs from product class A1 into product class B. Within product class B (preliminary analysis product class A1) DOE will focus on the four representative units with output powers at 2.5 watts, 18 watts, 60 watts, and 120 watts because products with these ratings constitute a significant portion of shipments and energy consumption. Interested parties also supported this approach. b. EPS Candidate Standard Levels (CSLs) DOE is applying the same methodology to establish CSLs in the NOPR as it used in the preliminary analysis. DOE created CSLs as pairs of EPS efficiency metrics for each representative unit with increasingly stringent standards having highernumbered CSLs. The CSLs were generally based on (1) voluntary (e.g. ENERGY STAR) specifications or mandatory (i.e. those established by EISA 2007) standards that either require or encourage manufacturers to develop products at particular efficiency levels; (2) the most efficient products available in the market; and (3) the maximum technologically feasible (‘‘max tech’’) level. These CSLs are summarized for each representative unit in Table IV–4. In section IV.C.1.e, DOE discusses how it developed equations to apply the CSLs from the representative units to all EPSs. TABLE IV–4—SUMMARY OF EPS CSLS FOR PRODUCT CLASSES B, C, D, AND E sroberts on DSK6SPTVN1PROD with PROPOSALS CSL 0 1 2 3 4 Reference .............................. .............................. .............................. .............................. .............................. Basis EISA 2007 ............................................. ENERGY STAR 2.0 ............................... Intermediate ........................................... Best in Market ....................................... Max Tech ............................................... EISA 2007 equations for efficiency and no-load power. ENERGY STAR 2.0 equations for efficiency and no-load power. Interpolation between test data points. Most efficient test data points. Maximum technologically feasible efficiency. 26 https://www.energy.ca.gov/appliances/archive/ 2004rulemaking/documents/case_studies/ CASE_Power_Supplies.pdf. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 18515 E:\FR\FM\27MRP2.SGM 27MRP2 18516 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules DOE evaluated EPSs using the two EPS efficiency metrics, no-load power consumption and active-mode average efficiency, which it grouped into ‘‘matched pairs.’’ Under the matched pairs approach, each CSL would increase in stringency in at least one of the metrics and no metric would ever be lowered in moving to a higher CSL. DOE’s goal in using this approach was to ensure that when it associated costs with the CSLs, that the costs would reflect the complete costs of increased efficiency. If DOE followed an approach that permitted a decrease in stringency for a given metric, the result might be a projected reduction in EPS cost, which would mask the full cost of increasing EPS efficiency. DOE received considerable support from interested parties on its matched pairs approach for EPS CSLs. However, interested parties, including the California IOUs, also cautioned DOE to avoid setting levels for no-load power that were too stringent when compared to active-mode efficiency improvements. (California IOUs, No. 43 at p. 8). The California IOUs added that ‘‘PG&E research suggests that improvements in active mode yield much higher energy savings than small, incremental improvements in no-load mode.’’ Id. PG&E added that DOE should verify that the no-load levels for the EPS CSLs are not too stringent, which could lead to higher costs since the majority of the projected savings for EPSs would likely come from improving active-mode efficiency (PG&E, Pub. Mtg. Tr., No. 57 at pp. 198–199). DOE received two additional comments regarding its CSLs. The California IOUs supported DOE’s CSL selections, particularly those that were developed based on test data. (California IOUs, No. 43 at p. 8). Additionally, AHAM stated that DOE should ‘‘consider whether the CSLs also apply to units that are less than 2.5W,’’ in particular 2.4W and 1.2W EPSs because they believe that ‘‘the CSL for this class does not apply to these smaller wattage products’’ (AHAM, No. 42 at p. 13). DOE considered interested party comments when revising the CSLs for the NOPR. DOE’s approach maintains the same efficiency levels for all CSLs but alters the max-tech efficiency level based on new data gleaned from manufacturer interviews, which indicated that manufacturers could achieve higher max-tech levels than were previously considered during the preliminary analysis. No load requirements were carefully considered consistent with commenter suggestions to not aggressively increase these levels. Further, DOE has tentatively decided to maintain its best-in-market CSL based on test data and also considered whether the CSLs for the 2.5W EPS should apply to lower-power EPSs. DOE continues to believe that the CSLs apply to these lower power devices because the scaling equations developed by DOE incorporate the test results and data of EPSs with nameplate output power ratings less than 2.5W. For both metrics and at each CSL, DOE has developed standards equations that are functions of nameplate output power. To accommodate the design trend of decreasing efficiency with decreasing output power, the 2.5W CSLs are used as lower power reference points for the standard equations. All of the direct operation CSLs were created using a combination of existing standards and were corroborated with test data. In cases where DOE tested EPSs with nameplate output powers less than 2.5 watts, it scaled the results to the representative unit (2.5 W) and adjusted the efficiency accordingly. Hence, the 2.5W CSLs are supported by data from EPSs with output powers equal to 2.5 watts and scaled EPSs with output power ranges below 2.5 watts. DOE used this methodology in generating the CSLs for all of the other direct operation representative units where the CSLs were not only based on units tested at the nominal output power rating but also on scaled results of EPSs with nameplate output powers slightly above and slightly below the representative unit value. For additional detail regarding DOE’s scaling methodology see chapter 5 of the TSD. DOE maintained the same CSLs for multiple-voltage EPSs in product class X as it proposed in the preliminary analysis because it received no comments and has no new information that would otherwise merit a change in the CSLs for this product class. The CSLs are shown in Table IV–5. TABLE IV–5—SUMMARY OF EPS CSLS FOR PRODUCT CLASS X CSL sroberts on DSK6SPTVN1PROD with PROPOSALS 0 1 2 3 Reference .............................. .............................. .............................. .............................. Market Bottom ....................................... Mid Market ............................................. Best-in-Market ....................................... Max Tech ............................................... DOE structured the CSLs for highpower EPSs based on products available in the market and by scaling CSLs for 120-watt EPSs. The two least efficient CSLs are based on units DOE tested for the non-Class A EPS determination analysis. CSL 0 corresponds to test results from a linear EPS for amateur radio equipment while CSL 1 corresponds to test results from a switched-mode EPS for the same application. During interviews for the determination analysis, high-power EPS manufacturers indicated that CSL 2 was VerDate Mar<15>2010 Basis 22:02 Mar 26, 2012 Jkt 226001 Test data of the least efficient unit in the market. Test data of the typical unit in the market. Manufacturer’s data. Maximum technologically feasible efficiency. what they believed to be the max-tech efficiency for high-power EPSs. As outlined in section III.B.2.a, DOE believes that the efficiencies of the 120W EPSs indicate a potential for 345W EPSs to achieve higher efficiencies than CSL 2 since achievable efficiency tends to remain the same for EPSs with a nameplate output power above 49 watts. DOE characterized these higher efficiencies by modeling a 360W EPS composed of three 120W EPSs connected in parallel. This theoretical EPS would have the same average PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 efficiency as a 120W EPS, scaled for nameplate output voltage, and three times the no-load power consumption. DOE developed CSL 3 and CSL 4 for the 345W representative EPSs based on the efficiency of the theoretical 360W EPS. DOE received no comments concerning the CSLs for high-power EPSs during the preliminary analysis (CSL 0, CSL 1 and CSL 2). DOE seeks comment on its proposed methodology for establishing higher-efficiency CSLs (CSL 3 and CSL 4). The CSLs for product class H are listed in Table IV–6. E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18517 TABLE IV–6—SUMMARY OF EPS CSLS FOR PRODUCT CLASS H CSL 0 1 2 3 4 Reference .............................. .............................. .............................. .............................. .............................. Line Frequency ...................................... Switched-Mode Low Level .................... Switched-Mode High Level .................... Scaled Best-in-Market ........................... Scaled Max Tech ................................... sroberts on DSK6SPTVN1PROD with PROPOSALS c. EPS Engineering Analysis Methodology In the preliminary analysis, DOE presented two sets of cost-efficiency curves: One based on manufacturer data that showed an increasing trend between cost and efficiency and a second set based on test and teardown data that, while inconclusive, generally showed a decreasing relationship between cost and efficiency. DOE sought interested party comment on this discrepancy. Commenters had mixed opinions on which results DOE should use as the basis for its analysis. AHAM commented that ‘‘based on what was presented that the Department should use the manufacturer’s data’’ rather than the test and teardown data that DOE developed stating that ‘‘there is no incentive for manufacturers to not give out all necessary information to the Department’’. (AHAM, No. 42 at p. 13) However, IOUs encouraged DOE to continue to pursue teardowns because the test and teardown results in the preliminary analysis, in their view, may be as accurate as manufacturer data since ‘‘costs are rapidly declining for highly efficient power supplies.’’ (California IOUs, No. 43 at p. 9). NEEP stated that DOE should ‘‘corroborate the cost-efficiency curve data provided to them by manufacturers.’’ In other words, DOE should re-evaluate the manufacturer’s results and consider consulting independent sources to establish a more direct relationship between efficiency and cost. (NEEP, No. 49 at p. 4). DOE considered these opinions and sought additional information. In preparing the NOPR analysis, DOE conducted an additional round of manufacturer interviews to address the differences between the two costefficiency curves in the preliminary analysis. Based on the interviews, DOE believes that the discrepancy between the preliminary analysis curves was due to an ongoing shift in the market that was not reflected in the data. Specifically, the manufacturers stated during these interviews that the EPS market has a trend of increasing efficiency and decreasing cost with each VerDate Mar<15>2010 Basis 22:02 Mar 26, 2012 Jkt 226001 Test data of a low-efficiency unit in the market. Test data of a high-efficiency unit in the market. Manufacturers’ theoretical maximum efficiency. Scaled from 120W EPS CSL 3. Scaled from 120W EPS CSL 4. design cycle and the DOE-tested units may have been from different design cycles.27 By contrast, the manufacturers’ data on which DOE had initially relied reflected the cost-efficiency relationship during a single design cycle. In general, manufacturers agreed that, in their current design cycle, EPSs are designed to be more efficient than the ENERGY STAR level. Thus, DOE’s revised costefficiency curves reflect this improved understanding across all the representative units using updated data obtained from interviews with EPS manufacturers and component suppliers. In the preliminary analysis, DOE evaluated switched-mode power supplies (i.e. power supplies that use controlled switching of a power source to regulate the flow of current to a load), but not linear power supplies. Linear power supplies are power supplies that use a transformer and a linear regulator to provide power to a load. These devices are typically less cost effective as a method to improve energy efficiency and inherently limited in their achievable efficiencies—these limitations stem from the conversion stage delivering current at a higher voltage than needed by the consumer product and dropping the excess voltage across the regulator to achieve the lower regulated output voltage. The power lost in the regulator is the product of the voltage drop and the load current and is dissipated as heat. Switched-mode power supplies do not have the same limitations with respect to the level of efficiency they can achieve because the design relies on transferring power through the controlled modulation of energy stored in the magnetic and electric fields of passive components. As a result, there are fewer resistive losses in the conversion stage and the voltage is regulated using controlled switching instead of intentionally dissipating excess voltage in the form of heat, Cobra Electronics noted this omission. (Cobra, No. 51 at p. 3) DOE has since re-evaluated the analysis and found that linear power supplies are a 27 Original design dates are difficult to determine because the date of release is not often publicized with EPS product data. PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 cost-effective option for 2.5 W EPSs at the lower stringency CSLs, but not in meeting other CSLs or in satisfying CSLs for other representative units. As a result, the NOPR cost-efficiency curves for the 2.5W representative unit include linear supplies as part of the analysis. Today’s proposed rule is based on a slightly revised version of the initial methodology DOE considered when aggregating manufacturer results for the 2.5W and 18W representative units. In the preliminary analysis, DOE used a 3D-aggregation method 28 based on cost, efficiency, and no-load power to generate cost-efficiency curves for all representative units. The same 3Daggregation methodology was applied to the NOPR analysis with the exception of the 2.5W and 18W representative units, for which DOE used a 2D aggregation approach.29 DOE used a 2D aggregation method because that method more accurately captures the cost-efficiency relationship for these EPSs. Generally, DOE believes that 3D aggregation typically yields the best curve fit for the dataset, so long as there are sufficient data. However, for the 2.5W and 18W EPSs, DOE had less data for which it could generate curve fits. DOE initially ran a 3D regression for the 2.5W and 18W representative units, but found that variations in the data for no-load power caused the correlation of the resulting curve to be low. Upon further inspection, DOE believes that the 2D curve fit more accurately reflects the less-robust underlying dataset for these two EPSs because the costs represent incremental improvements to meet specific CSLs and, thus, the large variations in the no-load power data provided by manufacturers do not degrade the correlation of the curve fit. Therefore, DOE switched to a 2D aggregation that described efficiency and cost, which generated a curve with higher correlation and more appropriate 28 DOE’s 3D-aggregation method is an approach to developing an equation that describes how MSP for an EPS changes with respect to both average efficiency and no-load power. That is, MSP is a function of both metrics simultaneously. 29 DOE’s 2D-aggregation method is an approach to developing an equation that describes how MSP for an EPS changes with respect to average efficiency only. E:\FR\FM\27MRP2.SGM 27MRP2 18518 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules d. EPS Engineering Results sroberts on DSK6SPTVN1PROD with PROPOSALS DOE characterized the cost-efficiency relationship of the four representative units in product class B as shown in Table IV–7, Table IV–8, Table IV–9, and Table IV–10. During interviews, manufacturers indicated that their switched-mode EPSs currently meet BILLING CODE 6450–01–C Unlike product class B, DOE analyzed a single 203W representative unit for multiple-voltage EPSs. These devices VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 level as well as at ENERGY STAR 2.0. Specifically, as commenters suggested, DOE examined linear EPSs and found that they might be a cost-effective solution at CSL 0 and CSL 1 for 2.5W EPSs. Thus, $0.15 indicates the incremental cost for a 2.5W EPS to achieve higher efficiency. For all four representative units, the more stringent CSLs, CSL 2, CSL 3, and CSL 4, correspond to switched-mode EPSs designed during the same design cycle, which would cause their costs to increase with increased efficiency. CSL1, the ENERGY STAR 2.0 specification. This factor is reflected in the analysis by setting the incremental MSP for the 18W, 60W, and 120W EPSs at $0 at CSL 1, which means that there is no incremental cost above the baseline to achieve CSL 1. Costs for the 2.5W EPS, however, are estimated at $0.15 for CSL 1. This result occurs because of DOE’s assumption (based on available information) that the lowest cost solution for improving the efficiency of the 2.5W EPS is through the use of linear EPSs, which are manufactured both at the EISA 2007 BILLING CODE 6450–01–P are exclusively used with home videogame consoles, which use one output to power the device and another for standby controls. In Chapter 5 of the preliminary analysis TSD, DOE indicated that, for the NOPR, it was considering using the cost-efficiency relationship for 203W multiple-voltage PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.013</GPH> results for these representative units. For the remaining EPSs, DOE continued to apply the 3D-aggregation method because it generated a satisfactory curve fit. For additional details, please see chapter 5 of the TSD. Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18519 costs for CSL 2 and CSL 3 came from manufacturer and component supplier interviews. DOE did not receive comments on this aspect of its approach in the preliminary analysis TSD. Hence, DOE used the results from the determination analysis to characterize the costs of the less-efficient CSLs for 345W high-power EPSs in today’s NOPR (CSL 0 and CSL 1). However, as noted previously in section IV.C.1.b, DOE also believes that a 345W EPS could achieve higher efficiencies based on its theoretical model of a 360W EPS that exhibits the properties of three 120W EPSs connected in parallel. These higher output devices are typically used with amateur radio equipment, which often transmit at power levels between 100 and 200 watts while simultaneously providing power to other components. DOE developed its costs for the higherefficiency CSLs (CSL 2, CSL 3, and CSL 4) based on 120W EPS analysis. The complete cost-efficiency relationship for the 345W EPS is shown in Table IV–12. e. EPS Equation Scaling ENERGY STAR 2.0, respectively, rather than developing new equations. Both equations are defined over ranges of output power, although the divisions between ranges are slightly different. EISA 2007 created divisions by establishing separate efficiency equations at the 1 watt and 51 watt levels—ENERGY STAR 2.0 creates a similar dividing line at 1 watt and 49 watts. See 42 U.S.C. 6295(u)(3)(A) (denoting nameplate output divisions at under 1 watt, 1 watt to not more than 51 watts, and over 51 watts) and ‘‘ENERGY STAR Program Requirements for Single Voltage External Ac-Dc and Ac-Ac Power Supplies’’ (denoting nameplate output divisions at less than or equal to 1 watt, 1 watt to not more than 49 watts, and over 49 watts). DOE developed equations for all other CSLs and for consistency and simplicity used the ENERGY STAR 2.0 divisions at 1 watt and 49 watts for all CSLs. These divisions were created in conjunction with the EPS product classes discussed in section IV.A.3.a as part of a complete analysis by the EPA. Given that it is considering adopting those product classes for direct operation EPSs, DOE believes that utilizing the ENERGY STAR output power divisions for its proposed standards is the most appropriate course of action. Consequently, the proposed standards are structured around these divisions rather than those created by the EISA 2007 standard or the CEC standards for EPSs. During the preliminary analysis phase, DOE presented an approach to derive the average efficiency and noload efficiency requirements for each CSL over the full range of output power for Class B EPSs. Mathematical equations define each CSL as a pair of relationships—(1) average active-mode efficiency to nameplate output power and (2) no-load mode power consumption to nameplate output power. These equations allow DOE to describe a CSL for any nameplate output power and are the basis of its proposed standards. A complete description of the equations can be found in chapter 5 of the TSD. For the baseline CSL and CSL1, DOE relied on equations from EISA 2007 and VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.015</GPH> DOE is continuing to rely on its determination analysis results to help characterize the cost-efficiency relationship for 203W multiple voltage EPSs, shown in Table IV–11. EP27MR12.014</GPH> for CSL 2 and CSL 3 came from manufacturer and component supplier interviews. DOE received no comments on this approach, which was detailed in the preliminary analysis TSD. Hence, Similar to the analysis of multiplevoltage EPSs, DOE analyzed one 345W representative unit for high-power EPSs. In Chapter 5 of the preliminary analysis TSD, DOE indicated that it was considering applying the cost-efficiency relationship for 345W high-power single-voltage EPSs that it developed as part of the non-Class A EPS determination analysis to high-power EPSs. In the determination analysis, DOE derived costs for CSL 0 and CSL 1 from test and teardown data, whereas sroberts on DSK6SPTVN1PROD with PROPOSALS EPSs that it developed as part of the non-Class A EPS determination analysis. In the determination analysis, DOE derived costs for CSL 0 and CSL 1 from test and teardown data but costs sroberts on DSK6SPTVN1PROD with PROPOSALS 18520 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules DOE derived CSL 2, CSL 3, and CSL 4 by fitting equations to the efficiency values of their respective data points for each representative unit. DOE used an equation of the form Y = a*ln(Pout) + b * Pout + c, for each of the nameplate output power ranges, where Y indicates the efficiency requirement; Pout indicates the nameplate output power; and a, b, and c indicate the specific parameters defined in the respective CSLs. DOE ensured that the equations met three conditions: (1) The distance to each point was minimized. (2) The equation did not exceed the tested efficiencies. (3) DOE further restricted the parameter choice in order to ensure that the CSL curves adhered to a matched pairs approach fully detailed in chapter 5 of the TSD. Among the CSLs for product class B, DOE only revised the efficiencies of the max-tech data points at CSL 4. Thus, the remaining CSL equations, other than max-tech, remain unchanged from the equations DOE developed for the preliminary analysis. For the NOPR, DOE derived a revised max-tech scaling equation using the new max-tech data points it developed after obtaining additional data during manufacturer interviews following the preliminary analysis. As in the preliminary analysis, DOE scaled the CSL equations from product class B to product classes with lowvoltage and AC–AC EPSs, which comprise product classes C, D, and E. The scaling for these equations was based on ENERGY STAR 2.0, which separates AC–DC conversion and AC– AC conversion into ‘‘basic-voltage’’ and ‘‘low-voltage’’ categories. ENERGY STAR 2.0 sets less stringent efficiency levels for low-voltage EPSs because they cannot typically achieve the same efficiencies as basic-voltage EPSs due to inherent design limitations. Similarly, ENERGY STAR 2.0 sets less stringent no-load standards for AC–AC EPSs because they do not use the overhead circuitry found in AC–DC EPSs to limit no-load power dissipation. The power consumed by the additional AC–AC EPS circuitry would actually increase their no-load power metric. DOE used this approach to develop CSLs other than the baseline CSL 0 for product classes C, D, and E. Because the baseline is the EISA 2007 standard that applies to all Class A EPSs, which comprise most of product classes B, C, D, and E, CSL 0 is the same for all product classes. As described in the preliminary analysis and continued in today’s proposal, DOE created less stringent CSLs for product classes C, D, and E. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 For CSL 1, the equations come directly from the ENERGY STAR 2.0 low-voltage equation. The low-voltage curves for CSL 2, CSL 3, and CSL 4 were created by using their respective CSL 2, CSL 3, and CSL 4 basic-voltage efficiency curves, and altering all equation parameters by the difference in the coefficients between the CSL 1 basicvoltage and low-voltage equations. This approach had the effect of shifting the CSL 2, CSL 3, and CSL 4 low-voltage curves downward from their corresponding basic-voltage CSL 2, CSL 3, and CSL 4 curves, by a similar amount as the shift between the CSL basic-voltage and low-voltage curves. In the executive summary of the preliminary analysis TSD, DOE asked for comment regarding the various scaling relationships it developed to analyze EPS representative units and generate CSLs for the scaled product classes. The California IOUs commented that they agreed ‘‘with [scaling EPS] CSLs on the basis of nameplate output power’’ but added that the standard equation should be based on power alone, not on voltage or cord length because this approach would allow DOE to create a potential standard more transparently than one based on voltage or cord length. In their view, an approach based on either or both of these factors would unnecessarily complicate the analysis without yielding an appreciable benefit with respect to determining an EPS’s achievable efficiency. (California IOUs, No. 43 at p. 8). DOE is proposing to apply the output power scaling method detailed in chapter 5 of the TSD to set the standards for the scaled product classes. During the preliminary analysis, DOE analyzed the impacts of setting a discrete standard for product class X (multiple-voltage EPSs) as there was only one existing product on the market at that time. Since then, DOE has reevaluated its data and now believes that the ENERGY STAR 2.0 low-voltage standard equation for AC–DC conversion is a preferable approach to setting standards for multiple-voltage EPSs because lower power EPSs tend to be less efficient. Under this approach, DOE would take into account that trend and any low-power multiple-voltage EPSs that appear on the market would not be relegated to a single efficiency level that was established based on the performance of a 203W unit. As detailed in chapter 5 of the TSD, the ENERGY STAR 2.0 low-voltage equation matches the CSL DOE is proposing for the standard at the representative unit’s output power of 203 watts, but also sets less stringent efficiency standards for PO 00000 Frm 00044 Fmt 4701 Sfmt 4702 lower power EPSs. Therefore, the proposed equation accounts for future products requiring multiple-voltage EPSs by setting a continuous standard versus output power while also supporting DOE’s analysis of the 203W representative unit in product class X. DOE applied the same constraints when fitting the equation to the test data as it did for product classes B, C, D, and E. DOE seeks comment on this proposed approach in setting a standard for multiple-voltage EPSs. For product class H (high-power EPSs), DOE proposes to set a discrete standard for all EPSs greater than 250 watts. DOE believes this is appropriate for two main reasons: (1) DOE is aware of only one application for high-power EPSs (i.e., amateur radios) and (2) this approach is consistent with the standard for product class B, which is a discrete level for all EPSs with nameplate output powers greater than 49 watts. In light of these facts, setting a single efficiency level as the standard for all EPSs with output powers greater than 250 watts (i.e., high-power EPSs) appears to be a reasonable approach to ensure a minimal level of energy efficiency while minimizing the overall level of burden on manufacturers. DOE seeks comment on this approach. 2. Engineering Analysis for Battery Chargers When developing the engineering analysis for battery chargers, DOE selected representative units for each product class. For each representative unit, DOE tested a number of different products. After examining the test results, DOE selected CSLs that set discrete levels of improved battery charger performance in terms of energy consumption. Subsequently, for each CSL, DOE used either teardown data or information gained from manufacturer interviews to generate costs corresponding to each CSL for each representative unit. Finally, for each product class, DOE developed scaling relationships using additional test results and generated UEC equations based on battery energy. a. Representative Units For each product class, DOE selected a representative unit upon which it conducted its engineering analysis and developed a cost-efficiency curve. The representative unit is meant to be an idealized battery charger typical of those used with high-volume applications in its product class. Because results from the analysis of these representative units would later be extended to additional battery chargers, DOE selected highvolume and/or high-energy- E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18521 applications in the product class under the assumption that all battery chargers with the same battery voltage and energy provide similar utility to the user, regardless of the actual end-use product with which they work. The table below shows the representative units for each product class that DOE analyzed. Additional details on the battery charger representative units can be found in chapter 5 of the TSD. The possible use of a UEC metric generated numerous comments. NEEP and PG&E stated that they believed UEC to be an inappropriate metric because of the uncertainties around the usage profiles. (NEEP, No. 51 at p. 3; PG&E, et al., No. 49 at p. 1). NEEP suggested that DOE should regulate 24-hour energy and standby mode power individually rather than use UEC. (NEEP, No. 51 at p. 4). For product classes 1 through 9, PG&E proposed that DOE should have separate standards for 24-hour charge and maintenance energy and no-battery mode power, while for product class 10, DOE should regulate only maintenance mode power. (PG&E, et al., No. 49 at p. 2). PG&E also suggested another alternative in which DOE could use UEC, but that alternative involved giving equal weight to each mode of operation. (PG&E, et al., No. 49 at p. 2). While the ENERGY STAR specification for battery chargers (i.e., a nonactive energy ratio) does not consider active (or charge) mode, the California IOUs agreed with DOE’s approach to consider active mode as a component of UEC. (California IOUs, No. 43 at p. 1). Details on UEC are included in the next section of today’s notice (IV.C.2.c). DOE recognizes that a wide range of consumers may use the same product in different ways, which may cause some uncertainty about usage profiles. Notwithstanding that possibility, DOE believes that its assumptions are accurate and appropriate gauges of product use because calculated weighted averages of usage profiles based on a distribution of user types were used to represent each product class. These assumptions also rely on a variety of sources including information from manufacturers and utilities. Details on DOE’s new usage profile assumptions and how they have changed since the preliminary analysis can be found in section IV.E of today’s notice and TSD chapter 7. DOE also appreciates suggestions to regulate only product class 10 (AC in/ AC out) on the basis of maintenance mode power. DOE’s proposal follows that suggestion. DOE assumes that UPSs, which comprise all of product class 10 units, are always in maintenance mode and undergo zero charges per year. By following this sroberts on DSK6SPTVN1PROD with PROPOSALS b. Battery Charger Efficiency Metrics In the preliminary analysis, DOE considered using a single metric (i.e., UEC) to illustrate the improved performance of battery chargers. DOE designed the calculation of UEC to represent an annualized amount of the non-useful energy consumed by a battery charger in all modes of operation. Non-useful energy is the total amount of energy consumed by a battery charger that is not transferred and stored in a battery as a result of charging (i.e., losses). In order to calculate UEC, DOE must have the performance data, which comes directly from its battery charger test procedure (see section IV.A.4.e.). DOE must also make assumptions about the amount of time spent in each mode of operation. The collective assumption about the amount of time spent in each mode of operation is referred to as a usage profile and is addressed in section IV.E and further detail in TSD chapter 7. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00045 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.016</GPH> consumption applications that use batteries that are typically found across battery chargers in the given product class. The analysis of these battery chargers is pertinent to all the 18522 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules approach, the calculated energy per year for these devices is simply an allowance of maintenance mode power over a 365day year. However, by converting maintenance mode power to a UEC, DOE can ensure consistency across all battery charger classes and avoid any potential confusion.30 Finally, DOE believes that by aggregating the performance parameters of battery chargers into one metric and applying a usage profile, it will allow manufacturers more flexibility to improve performance in the modes of operation that will be the most beneficial to their consumers rather than being required to improve the performance in each mode of operation, some of which may not provide any appreciable benefit. For example, a battery charger used with a mobile phone is likely to spend more time per day in no-battery mode than a battery charger used for a house phone, which is likely to spend a significant portion of every day in maintenance mode. Consequently, it would be more beneficial to consumers of mobile phones if manufacturers improved nobattery mode and house phone battery charger manufacturers improved maintenance mode. Therefore, DOE plans to continue to use UEC as the metric for battery chargers. Where: n = Number of charges per day ta&m = Time per day spent in active and maintenance mode tsb = Time per day spent in standby mode toff = Time per day spent in off mode 31 consumed in each mode of operation per day and ultimately, energy consumption per year. These segments are discussed individually below. DOE seeks comment on all of these equations and its proposed approach. E24 = 24 hour energy Ebatt = Measured battery energy Pm = Maintenance mode power Psb = Standby mode power Poff = Off mode power tc = Time to completely charge a fully discharged battery When separated and examined in segments, it becomes evident how this equation gives a value for energy c. Calculation of Unit Energy Consumption As discussed in IV.C.2.b, UEC is based on a calculation designed to give the total annual amount of energy lost by a battery charger from the time spent in each mode of operation. For the preliminary analysis, the various performance parameters were combined with the usage profile parameters and used to calculate UEC with the following equation: Active (or Charge) Mode Energy per Day value of the maintenance mode power multiplied by the quantity of 24 minus charge time. This latter value (24 minus charge time) corresponds to the amount of time spent in maintenance mode, which, when multiplied by maintenance mode power, yields the amount of maintenance mode energy consumed by the tested product. Thus, maintenance mode energy and the value of the energy transferred to the battery during charging are both subtracted from 24-hour energy, leaving a quantity theoretically equivalent to the amount of energy required to fully charge a depleted battery. This number is then multiplied by the assumed number of charges per day (n) resulting in a value for active mode energy per day. Details on DOE’s usage profile assumptions can be found in section IV.E of today’s notice and TSD chapter 7. In the second segment of DOE’s equation, shown above, maintenance mode power, time spent in active and maintenance mode per day, charge time, and the assumed number of charges per day are combined to obtain maintenance mode energy per day. Time spent in active and maintenance mode is subtracted by the product of the charge time multiplied by the number of charges per day. The resulting quantity is an estimate of time spent in maintenance mode per day, which, when multiplied by the measured value of maintenance mode power, yields the energy consumed per day in maintenance mode. Standby (or No-Battery) Mode Energy per Day 30 If DOE were to establish an energy conservation standard for UPSs in terms of maintenance mode power, manufacturers of other products could be confused and believe that their product is also subject to a maintenance mode power standard, when in fact, it is a combination of all of their product’s performance characteristics. 31 Those values shown in italics are parameters assumed in the usage profile and change for each VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 product class. Further discussion of them and their derivation is found in IV.E. The other values should be determined according to section 5 of appendix Y to subpart B of part 430. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.018</GPH> EP27MR12.019</GPH> In the third part of DOE’s UEC equation, shown above, the measured value of standby mode power is multiplied by the estimated time in EP27MR12.020</GPH> Maintenance Mode Energy per Day EP27MR12.017</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS In the first portion of the equation, shown above, DOE combines the assumed number of charges per day, 24-hour energy, maintenance mode power, charge time, and measured battery energy to calculate the active mode energy losses per day. To calculate this value, 24-hour energy (E24) is reduced by the measured battery energy (the useful energy inherently included in a 24-hour energy measurement) and the product of the Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18523 In addition to initially considering a shortened battery charger active mode test procedure, DOE considered capping the measurement of 24-hour energy at the 24-hour mark of the test. However, following this approach could result in inaccuracies because that measurement would exclude the full amount of energy used to charge a battery if the charge time is longer than 24 hours in duration. To account for this possibility, DOE altered this initial approach in the test procedure final rule by requiring the measurement of energy for the entire duration of the charge and maintenance mode test, which includes a minimum of 5 hours in maintenance mode. 76 FR 31750, 31780. The modifications to the UEC calculation do not alter the value obtained when the charge and maintenance mode test is completed within 24 hours. However, if the test exceeds 24 hours, the energy lost during charging is scaled back to a 24-hour, or per day, cycle by multiplying that energy by the ratio of 24 to the duration of the charge and maintenance mode test. In the equation below, tcd, represents the duration of the charge and maintenance mode test and is a value that the test procedure requires technicians to determine. DOE also modified the equation for the NOPR by inserting a provision to subtract 5 hours of maintenance mode energy from the 24-hour energy measurement. This change was made because the charge and maintenance mode test includes a minimum of 5 hours of maintenance mode time. Consequently, in the second portion of the equation below, DOE would reduce the amount of time subtracted from the assumed time in active and maintenance mode time per day. In other words, the second portion of the equation, which is an approximation of maintenance mode energy, is reduced by 5 hours. This alteration is needed in those instances when the charge and maintenance mode test exceeds 24 hours, because the duration of the test minus 5 hours is an approximation of charge time. This information, tcd, can then be used to approximate the portion of time that a device is assumed to spend in active and maintenance mode per day (ta&m) is solely dedicated to maintenance mode.33 The primary equation that manufacturers will use to determine their product’s unit energy consumption and whether or not their device complies with DOE’s standards is below. 32 The charge mode test must include at least a five-hour period where the unit being tested is known to be in maintenance mode. Thus, if a device takes longer than 19 hours to charge, or is expected to take longer than 19 hours to charge, the entire duration of the charge mode test will exceed 24 hours in total time after the five-hour period of maintenance mode time is added. 76 FR 31750, 31766–67, and 31780. 33 For a test exceeding 24 hours, the duration of the test less 5 hours is equal to the time it took the battery being tested to become fully charged (tcd¥5). That value, multiplied by the assumed number of charges per day, gives an estimate of charge (or active) time per day, which can then be subtracted from DOE’s other assumption for ta&m. That difference is an approximation for maintenance mode time per day. Off-Mode Energy per Day sroberts on DSK6SPTVN1PROD with PROPOSALS In the final part of DOE’s UEC equation, shown above, the measured value of off-mode power is multiplied by the estimated time in off-mode per day, which results in a value of energy consumed per day in off-mode. Finally, to obtain UEC, the values found through the above calculations are added together. The resulting sum is equivalent to an estimate of the average amount of energy consumed by a battery charger per day. That value is then multiplied by 365, the number of days in a year, and the end result is a value of energy consumed per year. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.022</GPH> EP27MR12.023</GPH> This revision to the test procedure is important because it underscores the potential issues with trying to determine exactly when a battery charger has entered maintenance mode, which creates difficulty in determining charge time. To address this situation, DOE modified its initial UEC equation. The new equation, which was presented to manufacturers during interviews, is mathematically equivalent to the equation presented in the preliminary analysis. When the terms in the preliminary analysis UEC equation are multiplied, those terms containing a factor of charge time cancel each other out and drop out of the equation. What is left can be factored and rewritten as done below. This means that even though the new equation looks different from the equation presented for the preliminary analysis, the value that is obtained is exactly the same and represents the exact same value of unit energy consumption. EP27MR12.021</GPH> Modifications to Equation for Unit Energy Consumption On April 2, 2010, DOE published its NOPR on active mode test procedures for battery chargers and EPSs. 75 FR 16958. In that notice, DOE proposed shortening the active mode test procedure in scenarios where a technician could determine that a battery charger had entered maintenance mode. 75 FR 16970. However, during its testing of battery chargers, DOE observed complications arising when attempting to determine the charge time for some devices, which, in turn, could affect the accuracy of the UEC calculation. DOE also received comments opposed to the proposed shortened test procedure. DOE ultimately decided that the duration of the charge test must not be shortened and be a minimum of 24 hours. See 76 FR 31750 (final rule establishing amended test procedure for battery chargers and EPSs). The test that DOE adopted is longer if it is known (e.g., because of an indicator light on the battery charger) or it can be determined from manufacturer information that fully charging the associated battery will take longer than 19 hours.32 standby mode per day, which results in a value of energy consumed per day in standby mode. Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Secondary Calculation of UEC For some battery chargers, the equation described above is not appropriate and an alternative calculation is necessary. Specifically, in those cases where the charge test duration (as determined according to section 5.2 of appendix Y to subpart B sroberts on DSK6SPTVN1PROD with PROPOSALS This alternative equation resolves this inconsistency by prorating the energy used for charging the battery. d. Battery Charger Candidate Standard Levels (CSLs) After selecting its representative units for battery chargers, DOE examined the impacts on the cost of improving the efficiency of each of the representative units to evaluate the impact and assess the viability of potential energy efficiency standards. As described in the technology assessment and screening analysis, there are numerous design options available for improving efficiency and each incremental technology improvement increases the battery charger efficiency along a continuum. The engineering analysis develops cost estimates for several CSLs along that continuum. CSLs are often based on (1) efficiencies available in the market; (2) voluntary specifications or mandatory standards that cause manufacturers to develop products at particular efficiency levels; and (3) the maximum technologically feasible level.34 Currently, there are no energy conservation standards for battery chargers. DOE does not believe the ENERGY STAR efficiency level to be widely applicable, primarily because these levels are limited to chargers used for motor-operated applications and contain no provisions to cover active mode energy consumption. Because of this situation, DOE based the CSLs for its battery charger engineering analysis on the efficiencies obtainable through the design options presented previously (see IV.A.4.f). These options are readily seen in various commercially available units. DOE selected commercially available battery chargers at the representative-unit battery voltage and energy levels from the high-volume 34 The ‘‘max-tech’’ level represents the most efficient design that is commercialized or has been demonstrated in a prototype with materials or technologies available today. ‘‘Max-tech’’ is not constrained by economic justification, and typically VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 of part 430) minus 5 hours is multiplied by the number of charges per day (n) is greater than the time assumed in active and maintenance mode (ta&m), an alternative equation must be used. A different equation must be used because if the number of charges per day multiplied by the time it takes to charge (charge test duration minus 5 hours—or the charge time per day) is longer than the assumption for the amount of time spent in charge mode and maintenance mode per day, that difference creates an inconsistency between the measurements for the test product and DOE’s assumptions. This problem can be corrected by using an alternative equation, which is shown below. applications identified in the market survey. DOE then tested these units in accordance with the DOE battery charger test procedure. For each representative unit, DOE then selected CSLs to correspond to the efficiency of battery charger models that were comparable to each other in most respects, but differed significantly in UEC (i.e., efficiency). In general, for each representative unit, DOE chose the baseline (CSL 0) unit to be the one with the highest calculated unit energy consumption, and the best-in-market (CSL 2) to be the one with the lowest. Where possible, the energy consumption of an intermediate model was selected as the basis for CSL 1 to provide additional resolution to the analysis. Unlike the previous three CSLs, CSL 3 was not based on an evaluation of the efficiency of battery charger units in the market, since battery chargers with maximum technologically feasible efficiency levels are not commercially available due to their high cost. Where possible, DOE analyzed manufacturer estimates of max-tech costs and efficiencies. In some cases, manufacturers were unable to offer any insight into efficiencies beyond the best currently available in the market. Therefore, DOE projected the efficiency of a max-tech unit by estimating through extrapolation from its analysis of the analyzed CSL 2 unit the impacts of adding any remaining energy efficiency design options. DOE received a number of comments from interested parties regarding the CSLs developed for the preliminary analysis. The California IOUs suggested that DOE consider CSLs between the best-in-market and max-tech levels. (California IOUs, No. 43 at pp. 3, 5) NEEP made a similar suggestion, stating that DOE should have an additional CSL between the intermediate and max-tech CSLs. (NEEP, No. 51 at p. 4) The California IOUs added that DOE should consider the efficiency levels proposed at a standards-related workshop held in California on October 11, 2010.35 (California IOUs, No. 43 at p. 2) In response to these suggestions on the preliminary analysis, DOE considered the levels proposed at the California workshop. At that workshop, California proposed using separate metrics for 24-hour energy, maintenance mode power, and standby mode power. Subsequently, California modified its approach to battery charger standards and combined the requirements for maintenance mode power and standby mode power into one metric. Using its usage profiles to translate these standards into a value of UEC, DOE compared its CSLs with the levels adopted by California. DOE found that, in most cases, when California’s proposed standard was calculated into a value of UEC (using DOE’s usage profile assumptions), it generally corresponded closely with one of DOE’s CSLs for each product class. Therefore, in most instances, little valuable resolution could be added to DOE’s cost-efficiency curves. Although this was the case for most product classes, it was not the case for all of them. For product class 2, DOE adopted the suggestion from the California IOUs and added a level between CSL 1 and CSL 2 because the magnitude of the gap between UEC values was large enough to permit an additional CSL that could provide more cost effective savings. Please see TSD chapter 5 for product class 2 test results that illustrate this gap. Table IV–14 below shows which CSL aligns most closely with the California proposal for each product class. is the most expensive design option considered in the engineering analysis. 35 PG&E, Analysis of Standards Options for Battery Charger Systems, October 1, 2010 (https:// www.energy.ca.gov/appliances/battery_chargers/ documents/2010-10-11_workshop/2010-1011_Battery_Charger_Title_20_CASE_Report_v2-22.pdf). PO 00000 Frm 00048 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.024</GPH> 18524 18525 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules TABLE IV–14—CSLS EQUIVALENT TO CALIFORNIA PROPOSED STANDARDS Product class CSL equivalent to CEC standard sroberts on DSK6SPTVN1PROD with PROPOSALS 1 (Low-Energy, Inductive) ................................................................................................................................ 2 (Low-Energy, Low-Voltage) .......................................................................................................................... 3 (Low-Energy, Medium-Voltage) .................................................................................................................... 4 (Low-Energy, High-Voltage) ......................................................................................................................... 5 (Medium-Energy, Low-Voltage) .................................................................................................................... 6 (Medium-Energy, High-Voltage) ................................................................................................................... 7 (High-Energy) ............................................................................................................................................... 8 (DC Input <9 V) ............................................................................................................................................ 10 (AC Output) ................................................................................................................................................ In addition, DOE received comments on specific CSLs for specific product classes. For product class 1 (low-energy, inductive) in particular, the California IOUs encouraged DOE to consider a CSL higher than CSL 3 because, in their view, CSL 3 was shown to be cost effective, leaving a possibility of additional cost-effective savings at higher efficiencies. (California IOUs, No. 43 at p. 5) For product class 2 (lowenergy, low-voltage), the California IOUs asserted that DOE’s baseline CSL should be lower because the test results presented in the preliminary analysis TSD showed products with UEC levels higher than the baseline value selected by DOE. (California IOUs, No. 43 at p. 6) PTI expressed concern over the maxtech level for product class 4, stating that it would be achievable only by using a lithium-based (i.e. Lithium-ion or ‘‘Li-ion’’) battery technology, which is currently used in laptop computer applications. (PTI, No. 47 at p. 8) Finally, when developing a max-tech level for product classes 2, 3 (lowenergy, medium voltage), 4 (low-energy, high-voltage), 8 (low-energy, low DC input), and 9 (low-energy, high DC input), the California IOUs suggested that DOE speak to integrated circuit component suppliers. (California IOUs, No. 43 at p. 5) Based on all of these comments, DOE conducted further analysis and review. For product class 1, DOE conducted additional interviews with manufacturers of these products and has revised its engineering analysis accordingly. DOE believes that the new MSPs, which are shown in section IV.C.2.i, more accurately depict the relationship between cost and efficiency for electric toothbrushes, which is the predominant application in that class. For product class 2, DOE understands the concerns about creating an accurate baseline UEC for these devices. However, the baseline level that DOE has developed for today’s NOPR is representative of the worst performing products tested by DOE. All of the units that showed higher values of energy VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 consumption were products that Ecos, an independent consulting firm and test lab that assisted the CEC when developing a battery charger test procedure, tested and provided to DOE. DOE believes that this factor may be partially explained by timing. Since many of the units tested by Ecos that performed poorly were older test units, it is likely that these devices did not incorporate EPSs that meet the EISA 2007 regulations that went into effect in 2008. Therefore, DOE believes that its current CSL 0 for product class 2 is appropriate and provides a reasonable picture of the current battery charger market. In response to PTI’s comment, DOE clarifies that its preliminary analysis did not include an analysis for CSL 3 in product class 4. DOE obtained results only up to CSL 2 for product class 4. DOE notes that one of the units tested and torn down for that CSL was a power tool. For the NOPR, DOE has developed an analysis for CSL 3 in product class 4, which corresponds to that class’s maximum technology level. Finally, in developing the max-tech levels in the NOPR engineering analysis, DOE relied on input from manufacturers of battery chargers and original equipment manufacturers (OEMs) of products that use battery chargers. Manufacturers were able to provide DOE with sufficient information to enable the agency to ascertain what level of technology is feasible and is capable of surpassing the efficiency levels of incumbent technology currently available at the high end of the market today. Based on this information, DOE tentatively concluded that based on these discussions with manufacturers and OEMs there was sufficient information to define maxtech levels without interviewing integrated circuit suppliers. e. Test and Teardowns As mentioned above, the CSLs used in the battery charger engineering analysis were based on the efficiencies of battery chargers available in the market. PO 00000 Frm 00049 Fmt 4701 Sfmt 4702 CSL CSL CSL CSL CSL CSL CSL CSL CSL 0 2 2 2 3 3 1 0 3 Following testing, the units corresponding to each commercially available CSL were disassembled to (1) evaluate the presence of energy efficiency design options and (2) estimate the materials cost. The disassemblies included an examination of the general design of the battery charger and helped confirm the presence of any of the technology options discussed in section IV.A.4.f. After the battery charger units corresponding to the CSLs were evaluated, they were torn down by iSuppli, a DOE contractor and industry expert. An in-depth teardown and cost analysis was performed for each of these units. For some products, like camcorders and notebook computers, the battery charger constitutes a small portion of the circuitry. In evaluating the related costs, iSuppli identified the subset of components in each product enclosure responsible for battery charging. The results of these teardowns were then used as the primary source for the MSPs. Interested parties offered some feedback regarding DOE’s test and teardowns after the preliminary analysis. Stanley Black and Decker suggested that DOE should validate iSuppli’s results by having them teardown products whose true costs are known—i.e. those instances where a manufacturer may have supplied data under a non-disclosure agreement. (B&D, Pub. Mtg. Tr., No. 37 at p. 234) AHAM recommended that DOE look at low cost products in product class 4 (e.g. notebook computers and large power tools). Wahl Clipper recommended that DOE estimate costs at lower volume levels than those used in the preliminary analysis—it offered 20,000 units per year as one alternative—because the effects on cost might be greater when components are purchased in lower volumes. (Wahl Clipper, Pub. Mtg. Tr., No. 37 at p. 206) The California IOUs made a number of recommendations to DOE. First, they suggested that DOE use PG&E’s battery charger test data and that DOE gather E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS 18526 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules more teardown data. (California IOUs, No. 43 at p. 2) Second, they supported DOE’s decision to leave out packaging costs from the teardown results. In particular, for product class 2 (e.g. mobile and cordless phones), they recommended that DOE conduct teardown analyses of units with slightly higher and lower battery energies. Third, the California IOUs urged DOE to test and tear down a wider array of battery chargers from product classes 5 (e.g. marine chargers) and 7 (e.g. golf cars). They suggested this approach because they claimed that their own test data showed a wider range of efficiencies among battery chargers belonging to these classes. (California IOUs, No. 43 at pp. 4, 6) For the NOPR, DOE has adopted most of the recommendations raised by commenters and has expanded its test program. DOE has performed additional tests using a variety of products from a number of product classes, including product classes 2, 4, 5, and 7. Further, DOE has performed additional teardown analyses on products from all ten proposed product classes. In total, over 100 new test results have been incorporated into the NOPR analysis. Packaging costs have continued to be excluded because they do not represent costs associated with improving the efficiency of a product. Regarding Wahl Clipper’s suggestion to modify the volume assumption to 20,000 in order to determine how costs may change for a lower volume manufacturer, DOE believes that the large number of applications in each product class make it too difficult to select an appropriate low volume level. Additionally, DOE believes that the change in volume that results in higher costs for a manufacturer is likely to have little effect on consumers because the incremental costs from CSL to CSL are likely to be the same regardless of volume. Finally, DOE verified the accuracy of the iSuppli results by confirming those results with individual manufacturers during interviews. As will be discussed in the following section, DOE performed additional manufacturer interviews for the NOPR and during these interviews, the initial iSuppli results were vetted with manufacturers. DOE believes that it has sufficiently verified the accuracy of its teardown results and believes that all of the engineering costs gleaned from iSuppli are appropriate. f. Manufacturer Interviews The preliminary analysis had, in part, relied on information obtained through interviews with several battery charger manufacturers. These manufacturers VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 consisted of companies that manufacture battery chargers and OEMs of battery-operated products who package battery chargers with their enduse products. DOE followed this approach to obtain data on the possible efficiencies and resultant costs of consumer battery chargers. DOE received two comments regarding manufacturer interviews. First, PTI recommended that DOE speak with power tool manufacturers individually to obtain detailed information that would otherwise be unavailable through PTI as a trade association. (PTI, No. 47 at p. 12) Second, AHAM requested that the manufacturer interviews also involve discussions about testing costs and nonrecurring capital expenditures. (AHAM, No. 44 at p. 13) In preparing the NOPR, additional interviews were conducted, including those with manufacturers who were previously interviewed and new ones who were not. These interviews served two purposes. First, it gave manufacturers the opportunity to provide feedback on the preliminary analysis engineering analysis results. Aggregated information from these results is provided in TSD chapter 5. Second, these interviews also provided manufacturer inputs and comments in preparing the manufacturer impact analysis, which is discussed in detail in section IV.I. DOE attempted to obtain teardown results for all of its product classes but encountered difficulties in obtaining useful and accurate teardown results for two of its products classes—namely, product class 1 (e.g. electric toothbrushes) and product class 10 (e.g. uninterruptible power supplies). For these two classes, DOE relied heavily on information obtained from manufacturer interviews. DOE found that when it attempted to teardown product class 1 devices, most contained potting (i.e. material used to waterproof internal electronics). Removal of the potting also removed the identifying markings that iSuppli needed to estimate a cost for the components. As a result, manufacturer interview data helped furnish the necessary information to assist DOE in estimating these costs. In the case of UPSs, DOE found that it was difficult to accurately compare product costs because of the varying functionality of these devices. For example, DOE examined multiple UPSs, some of which provided additional utility to end users, such as AVR. As discussed earlier, AVR involves circuitry that monitors input voltage from the wall and ensures that all products plugged into the UPS see a PO 00000 Frm 00050 Fmt 4701 Sfmt 4702 steady flow of voltage despite any fluctuations. This added circuitry was impossible to distinguish from the standard UPS battery charging circuitry, which made it difficult to compare the costs of products that did not provide the same level of utility to the end-user. Furthermore, because the cost versus efficiency data provided by manufacturers showed economically justifiable levels through the max-tech level developed in the preliminary analysis, DOE believed that these data were sufficient to set out the proposed levels without resorting to a more timeconsuming tear-down analysis. However, after a second round of interviews with UPS manufacturers for the NOPR and conducting additional analysis (including testing), DOE found that it needed to make a modification to its approach for dealing with battery chargers within UPSs. When DOE tested UPSs according to the battery charger test procedure, it was unable to obtain maintenance mode power measurements as low (i.e. as good in terms of energy consumption) as those that manufacturers indicated were possible. DOE believes that the discrepancies between its test measurements and the data provided by manufacturers stems from the manner in which the test procedure measures energy consumption. TP measures consumption of unit as a whole—the entire UPS. BC only is using from mfr data. In particular, the DOE test procedure measures the energy consumption of the unit—in this case, the UPS—as a whole. Measuring the energy consumption of the battery charger alone in this instance would involve destructive testing. As a result, the data that DOE derived following its current test procedure for battery chargers includes the energy consumption from other UPS components other than the battery charger itself. For this reason, in this instance, DOE believes that the manufacturer-supplied data is more likely to accurately reflect the actual energy consumption of the battery charger alone. Because manufacturers would be unlikely to over-estimate the potential energy consumption of their products, DOE believes that their estimates of power consumption from the UPS’s battery charger are still appropriate estimates. However, DOE still needs to account for the discrepancies between the manufacturer data and the measurements from its test procedure. For the NOPR, DOE conducted additional testing of UPSs in which it attempted to describe the differences between its test procedure measurement E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules and the values provided by manufacturers. During this round of testing, DOE performed the DOE test procedure, but added another measurement. As mentioned previously, while it is extremely difficult to isolate the power consumption due to battery charging from any other UPS functionality, the input power to the battery itself can be measured. With this measurement, DOE obtained two useful pieces of information. First, it allowed DOE to isolate a portion of battery charging power consumption from all other functions within a UPS and develop a trend line that describes how maintenance mode power will vary as battery energy changes. Second, this measurement, combined with the data from the tested units that corresponded to DOE’s best-in-market test results (in terms of maintenance mode power as measured in the DOE test procedure), allowed DOE to develop supplemental values that it could use to increment the data provided by manufacturer such that it correlated to DOE test results. These values essentially operate as a 18527 means to account for the additional energy consumption used by a device when providing additional functionality. DOE developed two values, shown in Table IV–15 below, one for basic UPSs and one for UPSs that incorporate AVR. See TSD Chapter 5 for additional details. DOE is proposing to use these two values to develop an appropriate standard for basic UPSs and UPSs with AVR, after DOE proposes selecting an appropriate TSL for product 10. TABLE IV–15—SUPPLEMENTAL VALUES FOR PRODUCT CLASSES 10A AND 10B Maintenance mode supplemental value for proposed standard (W) Product class UEC supplemental value for proposed standard (kWh/yr) 0.4 0.8 3.45 7.08 10a (UPSs without AVR) ................................................................................................................................. 10b (UPSs with AVR) ...................................................................................................................................... sroberts on DSK6SPTVN1PROD with PROPOSALS g. Design Options Design options are technology options that remain viable for use in the engineering analysis after applying the screening analysis as discussed above in section IV.B. In response to the preliminary analysis, DOE received comments regarding design options and their application to the overall analysis. The California IOUs indicated that, with respect to the larger battery charger product classes where lead-acid batteries are most common, DOE should apply technologies more common in smaller units, such as switch-mode power supplies, to these devices in the analysis. (California IOUs, No. 43 at p. 5) NEEP made similar suggestions and stated that DOE should examine whether technologies can be applied across multiple product classes. (NEEP, No. 51 at p. 2) However, CEA urged DOE to account for the differences in battery chemistries and determine the appropriateness of given technologies for certain applications. CEA added that DOE must consider how battery technologies could be impacted by new efficiency requirements. (CEA, No. 48 at p. 2) Motorola expressed similar concerns and noted that although certain battery chemistries are less efficient, those chemistries may have other inherently important features like wider temperature range operations and improved cycle-life. Motorola insisted that these things should be considered when DOE conducts its technical and economic analyses. (Motorola, No. 50 at p. 2) Stanley Black and Decker added VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 that DOE should not assume that additional utility is desirable as it will likely cause an increase in cost to the consumer. (SBD, Pub. Mtg. Tr., No. 37 at pp. 147–148) Finally, Lester commented that transformer-based chargers are more reliable, durable and provide batteries with a much longer life expectancy. Lester added that these chargers are often preferable to more efficient switch-mode chargers in industrial applications. (Lester, No. 52 at p. 2) Lester did not include any additional data to corroborate their statements regarding increased durability for battery chargers that are transformer-based and the life expectancy for batteries that use such chargers. DOE clarifies that all technology options that are not eliminated in the screening analysis (section IV.B) become design options that are considered in the engineering analysis. As most CSLs are based on actual teardowns of units manufactured and sold in today’s battery charger market, DOE did not control which design options were used at each CSL. No technology options were preemptively eliminated from use with a particular product class. Similarly, if products are being manufactured and sold, DOE believes that fact indicates the absence of any significant loss in utility, such as an extremely limited operating temperature range or shortened cycle-life. Therefore, DOE believes that all CSLs can be met with technologies that are feasible and that fit the intended application. For the max-tech designs, which are not commercially available, DOE PO 00000 Frm 00051 Fmt 4701 Sfmt 4702 developed these levels in part with a focus on maintaining product utility as projected energy efficiency improved. Although some features, such as decreased charge time, were considered as added utilities, DOE did not assign any monetary value to such features. Additionally, DOE did not assume that such features were undesirable, particularly if the incremental improvement in performance causes a significant savings in energy costs. Finally, DOE appreciates the need to consider durability, reliability, and other performance and utility related features that affect consumer behavior. On these issues, DOE seeks information, including substantive data, to help it assess these factors in consumer products. h. Cost Model Today’s NOPR continues to apply the same approach used in the preliminary analysis to generate the manufacturer selling prices (MSPs) for the engineering analysis. For those product classes other than product classes 1 and 10, DOE’s MSPs rely on the teardown results obtained from iSuppli. The bills of materials provided by iSuppli were multiplied by a markup that depended on product class. For those product classes for which DOE could not estimate MSPs using the iSuppli teardowns—product classes 1 and 10— DOE relied on aggregate manufacturer interview data, which projected that economic savings would accrue through the max-tech level in the preliminary analysis. E:\FR\FM\27MRP2.SGM 27MRP2 18528 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules (in kWh/yr). These data form the basis for the NOPR analyses. This section illustrates the results that DOE obtained for all 10 product classes in its NOPR engineering analysis. No. 43 at p. 2) In its preliminary analysis, DOE proposed MSPs for product class 1 to be: $2.05, $2.22, $2.45, $2.60, for CSLs 0 through 3 respectively. Although DOE appreciates the feedback provided by Philips, it is vastly different from the information gathered on manufacturer interviews. DOE believes this discrepancy is partially due to a misinterpretation of the term MSP. The values that Philips provided, as it has described them, would correspond to what DOE considers a retail price and not an MSP. DOE has revised its MSPs for product class 1 according to the data obtained from manufacturers on interviews for the NOPR. DOE did not receive any specific comments on its product class 2 engineering results in the preliminary analysis, but its revised results are presented in Table IV–17. 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00052 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.025</GPH> VerDate Mar<15>2010 EP27MR12.026</GPH> i. Battery Charger Engineering Results The results of the engineering analysis are reported as cost-efficiency data (or ‘‘curves’’) in the form of MSP (in dollars) versus unit energy consumption In response to the engineering results that DOE provided in the preliminary analysis for product class 1, DOE received one comment from Philips. Philips publicly submitted estimates of ‘‘what the consumer pays,’’ for CSLs 0, 1, 2, and 3 for product class 1. Philips suggested that those values would be $8, $10, $15, and $24, respectively. (Philips, sroberts on DSK6SPTVN1PROD with PROPOSALS Additional details regarding the cost model and the markups assumed for each product class are presented in TSD chapter 5. Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules analysis, but its revised results are presented in Table IV–19. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00053 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.027</GPH> EP27MR12.028</GPH> analysis, but its revised results are presented in Table IV–18. DOE did not receive any specific comments on its product class 4 engineering results in the preliminary sroberts on DSK6SPTVN1PROD with PROPOSALS DOE did not receive any specific comments on its product class 3 engineering results in the preliminary 18529 18530 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules For product class 6, DOE performed additional product testing for the NOPR, but did not obtain a complete data set upon which to base its engineering analysis. This situation was due in large part to DOE’s inability to locate products with sufficiently similar battery energies and the fact that the products tested did not span a significant range of performance. DOE’s test data for this product class are available in chapter 5 of the accompanying TSD. In order to develop an engineering analysis for this product class, DOE relied on, among other things, the results gleaned from product class 5, interviews with manufacturers, and its limited test data from product class 6. The difference between product class 5 and product class 6 is the range of voltages that are covered. Product class 5 covers low-voltage (less than 20 V) and medium energy (100 Wh to 3,000 Wh) products, while product class 6 covers high-voltage (greater than or equal to 20 V) and medium energy (100 Wh to 3,000 Wh) products. The representative unit examined for product class 5 is a 12 V, 800 Wh VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00054 Fmt 4701 Sfmt 4702 battery charger, while the representative unit analyzed for product class 6 is a 24 V, 400 Wh battery charger. Despite the change in voltage, DOE believes that similar technology options and battery charging strategies are available in both classes. Both chargers are used with relatively large sealed-lead acid batteries in products like wheelchairs, electric scooters, and electric lawn mowers. However, since the battery chargers in product class 6 work with higher voltages, current can be reduced for the same output power, which creates the potential for making these devices E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.030</GPH> analysis, but its revised results are presented in Table IV–20. EP27MR12.029</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS DOE did not receive any specific comments on its product class 5 engineering results in the preliminary Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules which is mostly those products that charge via USB connections. When DOE analyzed this product class it tested and tore down 3 devices, one for CSL 0, 1, and 2; and all of which were MP3 players. 36 In electrical circuits, I2R losses manifests themselves as heat and are the result of high levels of current flow through a device. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00055 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.032</GPH> revised results are presented in Table IV–22. Product class 8 (e.g. MP3 players and smartphones) consists of devices that charge with a DC input of less than 9 V, options and only differed in voltage, DOE did not scale costs from product class 5. Rather than scaling the product class 5 costs, DOE used the same MSP’s for product class 6 that were developed from iSuppli tear down data for product class 5. DOE believes these costs are an accurate representation of the MSPs and seeks comment on its methodology in scaling the results of product class 5 to product class 6, including the decision to hold MSPs constant. EP27MR12.031</GPH> values for 24-hour energy. Additionally, DOE discussed with manufacturers about how costs may differ in manufacturing a 12 V (product class 5) charger versus a 24 V (product class 6) charger. Manufacturers indicated that, holding constant all other factors, there would likely be minimal change, if any, in the cost. Therefore, because DOE scaled performance assuming that the designs for corresponding CSLs in each product class used the same design DOE did not receive any specific comments on its product class 7 results in the preliminary analysis, but its sroberts on DSK6SPTVN1PROD with PROPOSALS slightly more efficient because I2R losses 36 will be reduced. For the NOPR, DOE examined its product class 5 results and analyzed how the performance may be impacted if similar technologies are used. The resulting performance parameters are shown in Table IV–21. To account for the projected variation in energy consumption, DOE used information on charge time and maintenance mode power to adjust the corresponding 18531 18532 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules classes to obtain results for product class 9. The results of DOE’s revised analysis, based on test and teardown results, are shown in Table IV–24. As discussed previously, DOE believes that the engineering analysis results it developed in the preliminary analysis using manufacturer-supplied data provide an appropriate estimate of the cost-versus-UEC (or maintenance mode power) relationship for the battery charger embedded within a UPS. Also as discussed previously, DOE believes that this relationship is appropriate for UPSs, regardless of whether they have AVR. Consequently, DOE has used one set of engineering data, presented in Table IV–25 above, in all of the subsequent analyses (e.g. the LCC and NIA). DOE contends that this is an accurate approach because the technologies available in designing a battery charger used within a UPS are the same whether or not that UPS has AVR. The corresponding costs for these technologies would also result in the same MSP for the battery charger as a component of the UPS. Finally, in the preliminary analysis, DOE developed cost-efficiency curves based on both manufacturer interviews VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00056 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.034</GPH> consumption between each CSL for product class 8, DOE is considering an alternative approach in addition to its proposed standard. Both the proposed standard and the alternative approach are outlined in 0 and, as with all other product class data, DOE seeks comment on its MSP projections for product class data. EP27MR12.033</GPH> unit. The integrated circuit used in this device performs additional functions besides battery charging and constitutes a significant portion of the bill of materials generated by iSuppli. DOE was unable to determine what portion of the integrated circuit was dedicated to battery charging and therefore, kept the entire cost of the component in its bill of materials. Because of this factor and the minimal differences in energy For the preliminary analysis, DOE scaled the results of other product sroberts on DSK6SPTVN1PROD with PROPOSALS DOE’s analysis projects a significant drop in MSP from CSL 0 to CSL 1. See Table IV–23. Because of this drop, DOE tentatively believes that at least one of its trial standard levels for this product class meets DOE’s criteria for being economically justified and technologically feasible. However, the baseline unit MSP for this analysis may be inflated due to the cost of the particular integrated circuit used in that Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS and when possible, test and teardown results. As a result of some differences in these curves, NEEP suggested that DOE should reconcile differences in the results obtained from manufacturer data and from teardowns. (NEEP, No. 51 at p. 4) The data obtained from teardowns that was available at the time of manufacturer interviews was included in the interview guide and discussed at those meetings. DOE continued to conduct teardowns after those meetings and has added data that will be available for public comment. Through that process, DOE seeks to continue to refine its analysis and to mitigate any differences between the teardown and manufacturer data. j. Scaling of Battery Charger Candidate Standard Levels To establish its proposed energy conservation standards for products with all battery energies and battery voltages within a product class, DOE developed a UEC scaling approach. After developing the engineering analysis results for the representative units, DOE had to determine a methodology for extending the UEC at each CSL to all other ratings not directly analyzed for a given product class. DOE had initially raised the possibility of using UEC as a function of battery energy. DOE also indicated that it might base this UEC function on the test data that had been obtained up through the preliminary analysis.37 Numerous interested parties submitted comments regarding the potential scaling methodology. AHAM generally supported DOE’s proposed approach in which the UEC was scaled with regards to battery energy but suggested that DOE hold UEC constant below a certain value of battery energy because the fixed losses in these lowenergy, lower power units begin to dominate and more stringent standards risk becoming overly restrictive on the ability of manufacturers to design useful products for consumers. AHAM also suggested that DOE consider UEC as a function of battery voltage. (AHAM, No. 44 at p. 9) PTI made similar suggestions and commented that it may be appropriate for UEC to remain constant for battery energies below the representative unit value. (PTI, No. 47 at p. 9) 37 At the preliminary analysis public meeting, DOE handed out a supplemental slide deck, which outlined preliminary ideas to scaling UEC based on test data and with respect to battery energy. See these slides available at: https://www1.eere. energy.gov/buildings/appliance_standards/ residential/battery_external_preliminaryanalysis _public_mtg.html. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 The California IOUs suggested applying a single scaling relationship for active mode energy for product classes 2 through 7. For battery chargers with very high battery energies, such as those used in golf cars, the California IOUs believed that a flat or constant standard might be appropriate. (California IOUs, No. 43 at pp. 3–4) The California IOUs also argued that a potential scaling approach based on the test results of multi-capacity battery chargers would be inaccurate and argued that it should be dropped. They indicated that a scaling relationship based on such products would be demonstrative of products that are capable of using multiple batteries rather than products representative of the bulk of battery chargers, which are designed for a single specific battery. (California IOUs, No. 43 at p. 6) Finally, these commenters asserted that maintenance mode power and nobattery mode power should be regulated independently of battery energy, as many of the same design options are applicable to small and large energy battery chargers. Because of these similarities, the California IOUs asserted that all battery chargers, regardless of battery size, should be capable of the same level of performance in those modes of operation and DOE should assume this value is constant irrespective of battery energy. (California IOUs, No. 43, at p. 7) DOE considered the comments it received and refined its scaling approach for the NOPR. In particular, DOE evaluated scaling approaches based on the battery voltage and the battery energy and found that the latter is a more appropriate way to model its scaling methodology. When DOE examined its test results, it noted a much weaker correlation between battery voltage and UEC than between battery energy and UEC. See TSD, appendix 5C. DOE also noticed from its test results that the individual performance parameters, such as maintenance mode power, no-battery mode power, and 24-hour energy, could be formulated as functions of battery energy. See TSD, Chapter 5. For this reason, DOE did not follow the recommendation of the California IOUs to leave some performance parameters constant. Additionally, DOE is proposing to scale UEC as a function of battery energy for golf cars. The TSD shows that, as battery energy increases, so too does the UEC because more energy is needed to charge the larger battery. See TSD, chapter 5 (discussing test results related to product classes 5, 6, and 7 that demonstrate the linear relationship PO 00000 Frm 00057 Fmt 4701 Sfmt 4702 18533 between increasing battery energy and UEC). DOE also found that this trend was true for product class 10 devices (UPSs), which incorporate lead-acid batteries. The details on the scaling methodology for these products are also available in TSD chapter 5. In contrast, for product classes 1 and 8 DOE is proposing that all devices within those product classes be required to meet one nominal standard. For these product classes, battery energy appeared to have little impact on the UEC’s that were calculated. Accordingly, to account for these differences, DOE is tentatively proposing two separate approaches for scaling UEC based on these test results—i.e. one that scales with battery energy and another that remains at a single, nominal level. DOE’s scaling approach for the NOPR relies heavily on the test data that it has gathered throughout the rulemaking process. DOE examined each performance parameter individually and, when possible, looked at groups of product class test results. For example, product classes 2, 3, and 4 are similar products that use similar technologies and span the same battery energy ratings. In these cases, DOE examined all of these test results together. DOE also developed regression equations for each of the performance parameters needed to calculate UEC and ultimately, aggregated those equations with assumptions about usage profiles for each product class. That is, DOE examined test results for maintenance mode power, no-battery mode power, and 24-hour energy individually and relative to battery energy. From these data, DOE derived equations for each parameter as it relates to battery energy. Because each equation was a function of the same parameter, battery energy, each one could be combined with assumptions about product usage to develop a single UEC equation that was also a function of battery energy. For product classes other than product classes 1, 8, and 10, DOE developed equations that use different slopes for different CSLs. For higher CSL equations in a given product class, the slope of the UEC line becomes smaller, which means that the line describing UEC versus battery energy becomes flatter. DOE found that when it filtered its test results and examined products with similar technologies (e.g. lithium-ion chemistry batteries) spanning a range of battery energy levels, the slope of the line generated for 24-hour energy correlated to the inverse of 24-hour efficiency, which is the ratio of measured battery energy to 24-hour energy, expressed as a percentage. Thus, as products became more efficient, the E:\FR\FM\27MRP2.SGM 27MRP2 18534 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS slope of the equation used to describe UEC versus battery energy became flatter. Finally, DOE adopted the suggestions offered by AHAM and PTI regarding the treatment of small battery energies. When DOE was developing its CSL equations for UEC, it found during testing that the correlation between points at low battery energies was much worse than for the rest of the range of battery energy, which indicated that the initial equations DOE had initially planned to use did not match the test results. To address this situation, DOE generated a boundary condition for its CSL equations, which essentially flattens the UEC below a certain threshold of battery energy to recognize that below certain values, fixed power components of UEC, such as maintenance mode power, dominate UEC. Making this change helped DOE to create a better-fitting equation to account for these types of conditions to ensure that any standards that are set better reflect the particular characteristics of a given product. For additional details and the exact CSL equations developed for each product class, please see TSD chapter 5. D. Markups To Determine Product Price The markups analysis develops appropriate markups in the distribution chain to convert the MSP estimates derived in the engineering analysis to consumer prices. At each step in the distribution chain, companies mark up the price of the product to cover business costs and profit margin. Given the variety of products that use battery chargers and EPSs, distribution varies depending on the product class and application. As such, DOE assumed that the dominant path to market establishes the retail price and, thus, the composite markup for a given application. The markups applied to end-use products that use battery chargers and EPSs are approximations of the battery charger and EPS markups. In the case of battery chargers and EPSs, the dominant path to market typically involves an end-use product manufacturer (i.e. OEM) and retailer. DOE developed OEM and retailer markups by examining annual financial filings, such as Securities and Exchange Commission (SEC) 10–K reports, from more than 80 publicly traded OEMs, retailers, and distributors engaged in the manufacturing and/or sales of consumer applications that use battery chargers or EPSs. Retail prices for EPSs in product class H (e.g. EPSs for amateur radios) were readily available, as these devices are not typically bundled with a consumer VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 application. Thus, using these retail prices and the component costs determined in its teardown analysis, DOE was able to derive markups for EPSs in product class H. DOE typically calculates two markups for each product in the markups analysis. These are: a markup applied to the baseline component of a product’s cost (referred to as a baseline markup) and a markup applied to the incremental cost increase that results from standards (referred to as an incremental markup). The incremental markup relates the change in the MSP of higher-efficiency models (the incremental cost increase) to the change in the retailer’s selling price. In the preliminary analysis public meeting, PTI commented that DOE neglected to take into account situations in which an EPS is purchased by a battery charger manufacturer to be integrated into a battery charger. In these cases, the completed battery charger (with integrated EPS) is sold to an OEM to be packaged with an end-use application. Philips explained that three markups would be applied to the MSP of these EPSs: One by the battery charger manufacturer, one by the OEM, and one by the retailer. (PTI, Pub. Mtg. Tr., No. 57 at p. 316) DOE agrees that, for situations in which this additional step occurs, the battery charger manufacturer would need to cover its costs and profit margin with a markup. However, given DOE’s assumption that the dominant path to market sets the final product price, it is only for those classes of EPS for which this is the most common path to market that the final product price would be affected. DOE believes that this situation would primarily apply to EPSs that exclusively provide power to a standalone battery charger, such as EPSs for power tools, garden-care equipment, and other applications with detachable batteries. As explained in section IV.A.1 above, DOE did not quantify savings for EPSs that cannot directly power an enduse consumer product (i.e., EPSs that only provide power to a battery charger), and, therefore, DOE did not quantify markups for these ‘‘indirect operation’’ EPSs. The remaining EPSs that power battery chargers can also power an application directly, meaning that the EPS is not exclusively a component of the battery charger. Instead, it is a component of the application itself, e.g., a notebook computer. In those cases, DOE assumes that it is more common that the OEM, rather than the battery charger manufacturer, sources the EPS, making a third markup unnecessary. PO 00000 Frm 00058 Fmt 4701 Sfmt 4702 AHAM commented that engineering costs to integrate a battery charger into an end-use consumer product are typically higher than those for an EPS, and it may be inappropriate to apply an incremental markup to battery chargers at the OEM stage that is lower than the baseline markup. (AHAM, Pub. Mtg. Tr., No. 57 at p. 325) To calculate incremental markups, DOE subtracted ‘‘selling, general, and administrative expenses’’ (SG&A) from net profit to yield operating profit. Dividing this amount by the revenue value yields an incremental markup. By subtracting SG&A from net profit, DOE assumes that indirect costs (such as indirect labor and overhead) remain constant when a product becomes more efficient and, therefore, do not need to be accounted for in the incremental markup. Given that SG&A does not include research and development (R&D) or engineering costs, any direct labor, R&D, engineering, and other direct expenses that OEMs incur when integrating a more efficient battery charger into an application are assumed to be recovered through the incremental markup. Chapter 6 of the TSD provides additional detail on the markups analysis. E. Energy Use Analysis DOE estimated the annual energy use of products in the field as they are used by consumers. The energy use analysis provides the basis for other analyses, particularly assessments of the energy savings and the savings in consumer operating costs that could result from DOE’s adoption of new or amended standards. While the DOE test procedure provides standardized results that can serve as the basis for comparing the performance of different products used under the same conditions, the energy use analysis seeks to capture the range of operating conditions for battery chargers and EPSs in the United States. Battery chargers and EPSs are power conversion devices that transform input voltage to a suitable voltage for the enduse application or battery they are powering. A portion of the energy that flows into a battery charger or EPS flows out to a battery or end-use product and, thus, cannot be considered to be consumed by the battery charger or EPS. However, to provide the necessary output power, other factors contribute to battery charger and EPS energy consumption—e.g. internal losses and overhead circuitry.38 Therefore, the 38 Internal losses are energy losses that occur during the power conversion process. Overhead circuitry refers to circuits and other components of E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules traditional method for calculating energy consumption—by measuring the energy a product draws from mains while performing its intended function(s)—is not appropriate for battery chargers and EPSs. Instead, DOE considered energy consumption to be the energy dissipated by the battery charger or EPS (losses) and not delivered to the end-use product or battery as a more accurate means to determine the energy consumption of these products. Once the energy and power requirements of those end-use products and batteries were determined, DOE considered them fixed, and DOE analyzed only how standards would affect the energy consumption of the battery chargers and EPSs themselves. DOE applied a single usage profile for each application to calculate the unit energy consumption for battery chargers and EPSs. However, usage varies by application and among users. DOE examined the usage profiles of multiple user types for applications where usage varies widely (for example, a light user and a heavy user or an amateur user and professional user). AHAM suggested that DOE revisit, and possibly revise, its usage profile assumptions for the NOPR stage analyses. (AHAM, No. 42 at p. 8) As new information became available and analytical methodologies were altered, DOE revisited its usage profile assumptions to ensure the accuracy of its NOPR analyses. As part of its NOPR analysis, DOE re-examined its initial usage profiles in the following ways: • New applications were added or existing applications were combined; • Existing applications were divided into applications used in a commercial setting and applications used in a residential setting; • New sources (such as published studies or data from stakeholders) were made available or new data were provided to DOE; and/or • Tested charge times indicated that DOE’s usage profiles were in need of revision. DOE also explored high- and lowsavings scenarios in an LCC sensitivity analysis. Values that varied in this sensitivity analysis included battery charger and EPS usage profiles and EPS loading points. Varying these values allowed DOE to account for uncertainty in the average usage profiles and explore the effect that usage variations might have on energy consumption, lifecycle cost, and payback. Additional information on this sensitivity analysis is contained in appendix 8B to the TSD. the EPS, such as monitoring circuits, logic circuits, and LED indicator lights, that consume power but do not directly contribute power to the end-use application. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 DOE does not assume the existence of a rebound effect, in which consumers would increase use in response to an increase in energy efficiency and resulting decrease in operating costs. For BCs and EPSs, DOE expects that, in light of the small amount of savings expected over the course of the year, the rebound effect is likely to be negligible because consumers are unlikely to notice the decrease in operating costs that would result from new standards for these products. At the preliminary analysis public meeting, PG&E, through its consultant Ecos, commented that DOE should adopt the simplified approach to battery charger usage profiles being pursued by California. It claimed that the wide variety of end-use applications and end users makes it infeasible to accurately characterize usage for battery chargers. It recommended instead that DOE assign all applications to one of two categories: those that are charged rarely (such as battery chargers for uninterruptible power supplies and other backup batteries) and those that are charged sometimes (all other battery chargers). (Ecos/PG&E, Pub. Mtg. Tr., No. 57 at p. 30) In a joint letter submitted to DOE, energy efficiency advocates echoed these sentiments and suggested that DOE group products into one of two possible general duty cycles: ‘charged some of the time’ and ‘almost always in maintenance mode.’’’ (PG&E, et al., No. 47 at p. 2) In the preliminary analysis public meeting, PTI commented that taking into account usage profiles to analyze annual energy consumption is the correct approach because it is the only way to express meaningful savings to the public. PTI reiterated its support for DOE’s proposed approach in its written comments, claiming that increased detail allows for a more accurate understanding of variations in use and a basis for estimating actual energy consumption. PTI also stated that it ‘‘believe[s] that the subsequent UEC calculation based upon usage patterns provides a meaningful measure of energy use.’’ (PTI, Pub. Mtg. Tr., No. 57 at p. 378 and No. 45 at pp. 7–8) AHAM supported the continued use of usage profiles in estimating unit energy consumption and emphasized that, because of their critical nature, usage profiles should be more exact, not simplified. (AHAM, Pub. Mtg. Tr., No. 57 at p. 376 and No. 42 at p. 8) In developing its usage profiles, DOE relied on empirical data for more than 40 applications. These data primarily consisted of user surveys, metering studies, and stakeholder input. Collectively, the analyzed applications for which DOE has empirical usage data PO 00000 Frm 00059 Fmt 4701 Sfmt 4702 18535 accounted for more than 80 percent of annual aggregate battery charger energy use, because the available data focused mainly on the more common, highpowered, and high-use applications. Usage profiles for the remaining applications were derived from these known usage profiles. DOE recognizes that the calculation of usage profiles is not an exact science, but is confident that energy use and potential savings can be more accurately estimated if application-specific use is taken into account. Therefore, based on data and arguments presented to DOE to date, DOE is proposing to continue to use the same basic approach to battery charger usage profiles that it used in the preliminary analysis. Philips questioned DOE’s initial assumption during the preliminary analysis phase that seldom-used applications, such as beard and mustache trimmers, are plugged in, on average, one hour per day. Instead, Philips stated that such products are rarely charged and the potential energy savings from regulating battery chargers and EPSs that power these products would be very small. (Philips, Pub. Mtg. Tr., No. 57 at pp. 130–131) AHAM commented that many of the products that DOE assumes to be charged for one hour per week, such as personal care products and other portable appliances, are typically charged less frequently. (AHAM, No. 42 at p. 6) DOE’s usage profiles are intended to represent an average usage scenario across all users, rather than any particular type of user. DOE recognizes that while many users likely have these products plugged in for less than one hour per day, others (specifically those with cradle chargers) tend to leave these products plugged in for more than one hour per day. Some users may rarely, if ever, unplug their chargers. Given these possible variations in usage, DOE revisited its assumed usage profiles for personal care products and other infrequently charged products. DOE opted to leave its usage profiles for beard and mustache trimmers and hair clippers unchanged in the reference case, but also to explore high- and lowuse scenarios in the LCC sensitivity analyses. Upon further analysis, DOE agrees with AHAM and Philips that some small, portable applications are charged, on average, less frequently than indicated in the preliminary analysis (1 hour per week). Thus, DOE reduced the amount of time in active and maintenance modes to 0.5 hours per week for air mattress pumps, mixers, blenders, handheld GPSs, and residential portable printers. DOE also explored the effects of lower use for E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS 18536 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules other applications in the LCC sensitivity analysis. Philips also suggested the following usage profile for battery chargers in product class 1 (inductive chargers for use in wet environments): 1. Active + Maintenance = 17.25 hr/day 2. Unplugged = 6.48 hr/day 3. No Battery = 0.11 hr/day 4. Off = 0 hr day 5. Charges per day = 0.048 (Philips, No. 41 at p. 2) DOE’s usage profile from its preliminary analysis, which was provided by PG&E (Ecos Consulting, No. 30), assumed that all products in product class 1 are cradle-charged and, thus, are never unplugged. While DOE tentatively agrees with Philips that some users unplug their chargers once the product is charged, PG&E’s research suggests that Philips overestimated the number of users who unplug between charges (and by extension, the amount of time the average unit spends unplugged). Thus, for the NOPR, DOE used an average of the usage profiles provided by PG&E and Philips for its reference case usage profile. This resulted in a usage profile that assumed those products spend some time in unplugged mode, but less than the time suggested by Philips. High- and low-use scenarios for the applications in product class 1 were explored in the LCC sensitivity analysis. Stanley Black & Decker commented that outdoor gardening appliances are typically used seasonally, and that the initial unit energy consumption values for these products that DOE had considered during the preliminary analysis phase should be reduced by half. It added, though, that DOE should maintain its lifetime assumptions from the preliminary analysis. (SBD, No. 44 at p. 1) DOE agrees that these products are typically used seasonally and notes that it had already accounted for seasonal use, as suggested by Stanley Black & Decker, when it created the usage profiles in the preliminary analysis. The usage profile that DOE used in the NOPR-stage analysis continues to apply a seasonal use assumption for these products. Cobra Electronics claimed that the typical residential two-way radio is charged less than once per week, since residential consumers tend to use these products a few times per year. (Cobra, No. 51 at p. 2) DOE agrees that residential use of two-way radios is likely to be infrequent, but also recognizes that many of the two-way radios used by residential users are also available to commercial users, who charge these products far more VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 frequently. In preparation of the NOPR analysis, DOE analyzed the energy use of the two-way radio application separately for those products charged in a residential setting and those products charged in a commercial setting. DOE assumed that two-way radios charged in a residential setting are charged infrequently, as was suggested by Cobra, while those charged in a commercial setting are charged more frequently. Lester commented that ‘‘the reduction in energy loss as estimated is overstated for golf cars due to mistaken assumptions about the duty cycle and corresponding energy use.’’ (Lester, No. 53 at p. 2) DOE remains confident in its assumptions for golf car use, which are derived from manufacturer input. As it did for two-way radios, DOE divided the golf car application into two distinct applications: golf cars charged in the residential sector, and golf cars charged in the commercial sector. DOE’s residential usage profile assumes less time in active use and, therefore, fewer charges per day, while DOE’s commercial usage profile assumes heavier use. Given this heavier use, DOE assumed that commercial golf cars spend less time in maintenance mode, as they are typically used more frequently, and for longer durations, than are residential golf cars. In response to comments from manufacturers that battery chargers in product class 2 that meet the baseline efficiency level may be slow chargers and designed for less frequent use or increased time in maintenance mode, the California IOUs commented that these products may not always be used infrequently, but rather can be used by some segments of the population on a daily basis. (California IOUs, No. 43 at p. 6) DOE’s usage profiles are designed to take into account the average use of all users, subject to the constraints of a given battery charger, such as a slow charge rate or quick discharge rate. DOE believes that it has accurately estimated the usage profiles of handheld vacuum cleaners (which are in no battery mode, on average, six minutes per day), cordless phones (which are in no battery mode, on average, more than two hours per day), and the usage profiles for the remaining applications in its analysis. These usage profiles reflect average use, and, therefore, account for infrequent and frequent users of these applications. DOE recognizes that there is considerable variation in how individual consumers use battery chargers and EPSs for specific applications. This leads to some uncertainty and disagreement over what an appropriate usage profile is for PO 00000 Frm 00060 Fmt 4701 Sfmt 4702 specific applications, such as power tools, personal care products, and other applications. In all cases, DOE used the best available data to derive reference case usage profiles for each application. For applications with highly variable use, DOE explored high- and low-use scenarios in an LCC sensitivity analysis. DOE continues to seek data and substantiated recommendations that will allow it to further refine its reference case usage profiles. (See Issue 12 under ‘‘Issues on Which DOE Seeks Comment’’ in section VII.E of this notice.) Chapter 7 of the TSD provides additional detail on the energy use analysis. F. Life-Cycle Cost and Payback Period Analyses This section describes the LCC and payback period analyses and the spreadsheet model DOE used for analyzing the economic impacts of possible standards on individual consumers. Details of the spreadsheet model, and of all the inputs to the LCC and PBP analyses, are contained in chapter 8 and appendix 8A of the TSD. DOE conducted the LCC and PBP analyses using a spreadsheet model developed in Microsoft Excel. When combined with Crystal Ball (a commercially-available software program), the LCC and PBP model generates a Monte Carlo simulation 39 to perform the analysis by incorporating uncertainty and variability considerations. The LCC analysis estimates the impact of a standard on consumers by calculating the net cost of a battery charger or EPS under a base-case scenario (in which no new energy conservation standard is in effect) and under a standards-case scenario (in which the proposed energy conservation standard is applied). The base-case scenario is determined by the efficiency level that a sampled consumer currently purchases, which may be above the baseline efficiency level. The life-cycle cost of a particular battery charger or EPS is composed of the total installed cost (which includes manufacturer selling price, distribution chain markups, sales taxes, and any installation cost), operating expenses (energy and any maintenance costs), product lifetime, and discount rate. As noted in the preliminary analysis, DOE considers installation costs to be zero for battery chargers and EPSs. 39 Monte Carlo simulations model uncertainty by utilizing probability distributions instead of single values for certain inputs and variables. E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 cost of a more-efficient product through energy savings. DOE expresses this period in years. Table IV–26 summarizes the approach and data that DOE used to derive the inputs to the LCC and PBP calculations for the preliminary analysis and the changes made for today’s proposed rule. PO 00000 Frm 00061 Fmt 4701 Sfmt 4725 The following sections discuss these inputs and comments DOE received regarding its presentation of the LCC and PBP analyses in the preliminary analysis, as well as DOE’s responses thereto. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.035</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS The payback period is the change in purchase expense due to a more stringent energy conservation standard, divided by the change in annual operating cost that results from the standard. Stated more simply, the payback period is the time period it takes to recoup the increased purchase 18537 18538 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 1. Manufacturer Selling Price As in the preliminary analysis, DOE used a combination of test and teardown results and manufacturer interview results to develop manufacturer selling prices. DOE conducted tests and teardowns on a large number of additional units and applications for the NOPR, and incorporated these findings into the MSP. Further detail on the MSPs can be found in chapter 5 of the TSD. Examination of historical price data for a number of appliances that have been subject to energy conservation standards indicates that an assumption of constant real prices and costs may overestimate long-term trends in appliance prices. Economic literature and historical data suggest that the real costs of these products may in fact trend downward over time according to ‘‘learning’’ or ‘‘experience’’ curves. On February 22, 2011, DOE published a Notice of Data Availability (NODA, 76 FR 9696) stating that DOE may consider improving regulatory analysis by addressing equipment price trends. In the NODA, DOE proposed that when sufficiently long-term data are available on the cost or price trends for a given VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 product, it would analyze the available data to forecast future trends. To forecast a price trend for the NOPR, DOE considered the experience curve approach, in which an experience rate parameter is derived using two historical data series on price and cumulative production, but in the absence of historical shipments of battery chargers and EPSs and of sufficient historical Producer Price Index (PPI) data for small electrical appliance manufacturing from the Bureau of Labor Statistics’ (BLS),40 DOE could not use this approach. This situation is partially due to the nature of EPS and battery charger design. EPSs and battery chargers are made up of many electrical components whose size, cost, and performance rapidly change, which leads to relatively short design lifetimes. DOE also considered performing an exponential fit on the deflated AEO’s Projected Price Indexes that most narrowly include battery chargers and EPSs. However, DOE believes that these indexes are sufficiently broad that they may not accurately capture the trend for battery chargers and EPSs. Furthermore, battery 40 Series ID PCU33521–33521; https:// www.bls.gov/ppi/. PO 00000 Frm 00062 Fmt 4701 Sfmt 4702 chargers and EPSs are not typical consumer products; they are more like a commodity that OEMs purchase. Given the uncertainty, DOE is not incorporating product price changes into today’s NOPR. For the NIA, DOE also analyzed the sensitivity of results to three alternative battery chargers and EPSs price forecasts. Appendix 10–B of the NOPR TSD describes the derivation of alternative price forecasts. DOE requests comments on the most appropriate trend to use for real battery charger and EPS prices, both in the short run (to 2013) and the long run (2013–2042). 2. Markups DOE applies a series of markups to the MSP to account for the various distribution chain markups applied to the analyzed product. These markups are evaluated for each application individually, depending on its path to market. Additionally, DOE splits its markups into ‘‘baseline’’ and ‘‘incremental’’ markups. The baseline markup is applied to the entire MSP of the baseline product. The incremental markups are then applied to the marginal increase in MSP over the baseline’s MSP. Further detail on the E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.036</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS BILLING CODE 6450–01–C Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules markups can be found in chapter 6 of the TSD. 3. Sales Tax As in the preliminary analysis, DOE obtained State and local sales tax data from the Sales Tax Clearinghouse. The data represented weighted averages that include county and city rates. DOE used the data to compute populationweighted average tax values for each Census division and four large States (New York, California, Texas, and Florida). For the NOPR, DOE retained this methodology and used updated sales tax data from the Sales Tax Clearinghouse.41 The U.S. Census Bureau population estimates used in the preliminary analysis are the most current data available.42 sroberts on DSK6SPTVN1PROD with PROPOSALS 4. Installation Cost As detailed in the preliminary analysis, DOE considered installation costs to be zero for battery chargers and EPSs because installation would typically entail a consumer simply unpacking the battery charger or EPS from the box in which it was sold and connecting the device to mains power and its associated product or battery. Because the cost of this ‘‘installation’’ (which may be considered temporary, as intermittently used devices might be unplugged for storage) is not quantifiable in dollar terms, DOE considered the installation cost to be zero. 5. Maintenance Cost In the preliminary analysis, DOE did not consider repair or maintenance costs for battery chargers or EPSs. In making this decision, DOE recognized that the service life of a battery charger or EPS typically exceeds that of the consumer product with which it is designed to operate. Thus, a consumer would not incur repair or maintenance costs for a battery charger or EPS. Also, if a battery charger or EPS failed, DOE expects that consumers would typically discard the battery charger or EPS and purchase a replacement. DOE received no comments challenging this assumption and has continued relying on this assumption for purposes of calculating the NOPR’s potential costs and benefits. Although DOE did not assume any repair or maintenance costs would apply generally to battery chargers or EPSs, DOE has considered including a 41 Sales Tax Clearinghouse, Aggregate State Tax Rates. https://thestc.com/STRates.stm. 42 The U.S. Census Bureau. Annual Estimates of the Population for the United States, Regions, States, and Puerto Rico: April 1, 2000 to July 1, 2009. https://www.census.gov/popest/states/tables/ NST–EST2009–01.xls. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 maintenance cost for the replacement of lithium ion batteries in certain battery charger applications. Through conversations with manufacturers, DOE learned that such batteries would need replacing within the service life of the battery charger for certain applications based on the battery lifetime and the usage profile assigned to the application. Lithium ion batteries are marginally more expensive than batteries with nickel chemistries (e.g. nickel metal-hydride or ‘‘Ni-MH’’), as explained in chapter 5 of the TSD. DOE accounted for this marginal cost increase in these applications at CSLs that use lithium batteries. This maintenance cost only applied to applications where DOE believed the lifetime of the application would surpass the lifetime of the battery. DOE estimated the battery lifetime based on the total number of charges the battery could handle divided by the number of charges per year projected for the application. DOE relied on data provided by manufacturers to estimate the total number of charges the battery could undergo before expiring. Further detail on maintenance costs can be found in chapter 8 of the TSD. 6. Product Price Forecast As noted in section IV.F., to derive its central estimates DOE assumed no change in battery charger and EPS prices over the 2013–2042 period. In addition, DOE conducted a sensitivity analysis using three alternative price trends based on AEO indexes. These price trends, and the NPV results from the associated sensitivity cases, are described in appendix 10–B of the NOPR TSD. 7. Unit Energy Consumption The NOPR analysis uses the same approach for determining UECs as the one used in the preliminary analysis. The UEC was determined for each application based on estimated loading points and usage profiles (for EPSs), and battery characteristics and usage profiles (for battery chargers). DOE refined the usage profiles, battery characteristics, and usage profiles for the NOPR. Further detail on the UEC calculations can be found in chapter 7 of the TSD. 8. Electricity Prices DOE determined energy prices by deriving regional average prices for 13 geographic areas consisting of the nine U.S. Census divisions, with four large states (New York, Florida, Texas, and California) treated separately. The derivation of prices was based on data in EIA’s Form EIA–861. PO 00000 Frm 00063 Fmt 4701 Sfmt 4702 18539 In its written comments, NEEP stated that the high electricity prices in the Northeast region of the United States would likely make the LCC and PBP results more attractive for customers in this region. (NEEP, No. 49 at p. 2) Typically, higher energy costs increase a consumer’s operating cost savings. As in the preliminary analysis, DOE sampled a regional electricity price for each trial of the Monte Carlo simulation. Additionally, the electricity price for the Northeast region used by DOE’s analysis is greater than the national average. DOE estimates a residential electricity price of $0.166/kWh for the New England region and $0.181/kWh for the state of New York, which exceeds the national average of $0.112/kWh. Further detail on regional electricity price sampling is available in chapter 8 of the TSD. 9. Electricity Price Trends To project electricity prices to the end of the product lifetime in the preliminary analysis, DOE used data from EIA’s Annual Energy Outlook (AEO) 2010 Early Release.43 This data source only contained a reference case scenario, which required DOE to separately project the high- and loweconomic-growth scenarios using the relationship between the scenarios in the AEO 2009 data.44 For the NOPR, DOE used the final release of the AEO 2010,45 which contained reference, high- and low-economic-growth scenarios. 10. Lifetime DOE considers the lifetime of a battery charger or EPS to be from the moment it is purchased for end-use up until the time when it is permanently retired from service. Because the typical battery charger or EPS is purchased for use with a single associated application, DOE assumed that it will remain in service for as long as the application does. Even though many of the technology options to improve battery charger and EPS efficiencies may result in an increased useful life for the battery charger or EPS, the lifetime of the battery charger or EPS is still directly tied to the lifetime of its associated application. With the exception of EPSs for mobile phones and smartphones (see 43 U.S. Department of Energy. Energy Information Administration. Annual Energy Outlook 2010 Early Release. March, 2010. Washington, DC. Available at: https://www.eia.doe.gov/oiaf/aeo/. 44 U.S. Department of Energy. Energy Information Administration. Annual Energy Outlook 2009 with Projections to 2030. March, 2009. Washington, DC. Available at: https://www.eia.doe.gov/oiaf/aeo/. 45 U.S. Department of Energy. Energy Information Administration. Annual Energy Outlook 2010. November, 2010. Washington, DC. https://www.eia. doe.gov/oiaf/aeo/. E:\FR\FM\27MRP2.SGM 27MRP2 18540 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Even though it is currently standard practice to receive a new EPS with a phone upgrade, DOE assumes that in the near future consumers will no longer expect manufacturers to include an EPS with each new phone. DOE requests comment from stakeholders on the reasonableness of this assumption. Tables IV–27 and IV–28 show that assuming a lifetime of 2 years (rather than 4 years) for mobile phone and smartphone EPSs results in lower lifecycle cost savings (or greater net costs) for consumers of those products. However, the net effect on Product Class B as a whole is negligible due to the fact that mobile phones and smartphones together comprise only 7 percent of shipments in Product Class B. LCC results for all other applications in Product Class B are shown in chapter 11 of the TSD. seven sample years as a basis for estimating the effective financing rate for products. DOE estimated interest or return rates associated with each type of equity and debt using SCF data and other sources. The mean real effective rate across the classes of household debt and equity, weighted by the shares of each class, is 5.6 percent. For the commercial sector, DOE derived the discount rate from the cost of capital of publicly-traded firms falling in the categories of products that involve the purchase of battery chargers or EPSs. To obtain an average discount rate value for the commercial sector, DOE used the share of each category in total paid employees provided by the U.S. Census Bureau 47 and Federal,48 State, and local 49 governments. By multiplying the discount rate for each category by its share of paid employees, DOE derived a commercial discount rate of 7.0 percent. For the NOPR analysis, DOE uses the same methodology employed in the preliminary analysis but has changed the calculations to account for the universal-charging-solution-for-mobile-phones/ 17752/>. 47 U.S. Census Bureau. The 2010 Statistical Abstract. Table 607—Employment by Industry. https://www.census.gov/compendia/statab/2010/ tables/10s0607.xls. 48 U.S. Census Bureau. The 2010 Statistical Abstract. Table 484—Federal Civilian Employment and Annual Payroll by Branch. https://www.census. gov/compendia/statab/2010/tables/10s0484.xls. 49 U.S. Census Bureau. Government Employment and Payroll. 2008 State and Local Government. https://www2.census.gov/govs/apes/08stlall.xls. In the preliminary analysis, DOE derived residential discount rates by identifying all possible debt or asset classes that might be used to purchase and operate products, including household assets that might be affected indirectly. DOE estimated the average shares of the various debt and equity classes in the average U.S. household equity and debt portfolios using data from the Survey of Consumer Finances (SCF) from 1989 to 2007. DOE used the mean share of each class across the 46 The GSMA Universal Charging Solution is an agreement between 17 mobile operators and manufacturers to have the majority of all new mobile phones support a universal charging connector by January 1, 2012. The press release for the agreement can be accessed here: <https://www. gsma.com/articles/mobile-industry-unites-to-drive- VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00064 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.037</GPH> the market around micro-USB plug technology, driven largely by the GSMA Universal Charging Solution.46 To verify that this evolution towards micro-USB plug technology is in fact taking place, DOE examined more than 30 top-selling basic mobile phone and smartphone models offered online by Amazon.com, Sprint, Verizon Wireless, T-Mobile, and AT&T. DOE found that all of the newest smartphone models other than the Apple iPhone use micro-USB plug technology. While some basic mobile phones continue to use mini-USB or other connector technologies, DOE found more than 15 basic mobile phone models that have adopted the microUSB technology. If new EPSs are compatible with a wide range of mobile phone and smartphone models, a consumer may continue to use the EPS from their old phone after upgrading to a new phone. 11. Discount Rate sroberts on DSK6SPTVN1PROD with PROPOSALS below), the typical consumer will not continue to use an EPS or battery charger once its application has been discarded. For this reason, DOE used the same lifetime estimate for the baseline and standard level designs of each application for the LCC and PBP analyses. Further detail on product lifetimes and how they relate to applications can be found in chapter 3 of the TSD. The one exception to the rule that EPSs do not exceed the lifetime of their associated end-use products is the lifetime of EPSs for mobile phones and smartphones. While the typical length of a mobile phone contract is 2 years, and thus many phones are replaced and no longer used after 2 years, DOE assumed that the EPSs for these products will remain in use for an average of 4 years. This assumption is based on an expected standardization of Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules geometric means for all time-series data. Additionally, the analysis now includes updates to the risk-free rate to use a 40year average return on 10-year U.S. Treasury notes, as reported by the U.S. Federal Reserve,50 and the equity risk premium—which now uses the geometric average return on the S&P 500 over a 40-year time period. The new discount rates are estimated to be 5.1 percent and 7.1 percent in the residential and commercial sectors, respectively. For further details on discount rates, see chapter 8 and appendix 8D of the TSD. sroberts on DSK6SPTVN1PROD with PROPOSALS 12. Sectors Analyzed In the preliminary analysis, DOE analyzed battery chargers and EPSs in the residential sector for the reference case scenario and presented commercial sector results in appendix 8B. DOE developed several inputs specifically for the commercial sector, such as energy prices, energy price trends, and discount rates. Other applicationspecific inputs—e.g. UEC, markups, and market distribution—were not altered between the residential sector and commercial sector analyses. The NOPR analysis includes an examination of a weighted average of the residential and commercial sectors as the reference case scenario. Additionally, all application inputs are specified as either residential or commercial sector data. Using these inputs, DOE then sampled each application based on its shipment weighting and used the appropriate residential or commercial inputs based on the sector of the sampled application. This approach provides more specificity as to the appropriate input values for each sector, and permits an examination of the LCC results for a given representative unit or product class in total. For further details on sectors analyzed, see chapter 8 of the TSD. 13. Base Case Market Efficiency Distribution For purposes of conducting the LCC analysis, DOE analyzed candidate standard levels relative to a base case (i.e., a case without new federal energy conservation standards). This analysis required an estimate of the distribution of product efficiencies in the base case (i.e., what consumers would have 50 The Federal Reserve Board, Federal Reserve Statistical Release, Selected Interest Rates, Historical Data, Instrument: Treasury Constant Maturities, Maturity: 10-year, Frequency: Annual, Description: Market yield on U.S. Treasury securities at 10-year constant maturity, quoted on investment basis. Available at: https://www. federalfederalreserve.gov/releases/H15/data.htm. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 purchased in 2013 in the absence of new federal standards). Rather than analyzing the impacts of a particular standard level assuming that all consumers will purchase products at the baseline efficiency level, DOE conducted the analysis by taking into account the breadth of product energy efficiencies that consumers are expected to purchase under the base case. The preliminary analysis contained base case market efficiency distributions for each representative unit or product class. The distributions were based on test results, shipment-weighting of applications, and trends in efficiency that DOE identified. Under this approach, the resulting efficiency distribution could be heavily influenced by one or two very common applications associated with a particular product class or representative unit. In preparing the NOPR analysis, DOE derived base case market efficiency distributions that are specific to each application where it had sufficient data to do so. This approach helped to ensure that the market distribution for applications with fewer shipments was not disproportionately skewed by the market distribution of the applications with the majority of shipments. For battery chargers, DOE also adjusted its efficiency distributions for pending efficiency regulations in California (for more information please see IV.G.4). As a result, the updated analysis more accurately accounts for LCC and PBP impacts. 14. Compliance Date The compliance date is the date when a new standard becomes operative, i.e., the date by which battery charger and EPS manufacturers must manufacture products that comply with the standard. DOE’s publication of a final rule in this standards rulemaking is scheduled for completion by 2013. EPCA had prescribed that DOE complete a rulemaking to amend the Class A EPS standards by July 2011 and had given manufacturers a two-year lead time to satisfy those standards—i.e., July 2013. (42 U.S.C. 6295(u)(3)(D)(i)(II)(bb). Given the timing in issuing this rule, DOE may choose to retain this prescribed two-year lead time for EPS manufacturers in spite of the compliance date currently provided in EPCA. There are no similar requirements for the compliance date for battery charger and new (non-Class A) EPS standards, but DOE is also targeting a two-year time period between publication and compliance. DOE calculated the LCCs for all consumers as if each would purchase a new product in the year that manufacturers would be required to PO 00000 Frm 00065 Fmt 4701 Sfmt 4702 18541 meet the new standard (2013). However, DOE bases the cost of the equipment on the most recent available data; all dollar values are expressed in 2010$. DOE invites comment on the compliance date it should provide manufacturers in light of the current set of circumstances. 15. Payback Period Inputs The PBP is the amount of time a consumer needs to recover the assumed additional costs of a more-efficient product through lower operating costs. As in the preliminary analysis, DOE used a ‘‘simple’’ PBP for the NOPR, because the PBP does not take into account other changes in operating expenses over time or the time value of money. As inputs to the PBP analysis, DOE used the total installed cost of the product to the consumer for each efficiency level, as well as the first-year annual operating costs for each efficiency level. The calculation requires the same inputs as the LCC, except for energy price trends and discount rates; only energy prices for the year the standard becomes required for compliance (2013 in this case) are needed. DOE received a single comment addressing its initial PBP analysis. In particular, Philips commented that DOE had underestimated the projected PBP for inductively charged toothbrushes (i.e., battery charger product class 1). (Philips, No. 43 at p. 2) DOE notes that payback periods comprise a metric demonstrating the underlying costeffectiveness of a standard level. An underestimated PBP could result from an underestimated incremental consumer purchase price or an overestimated amount of operating cost savings. Philips suggested an alternate usage profile for battery charger product class 1 that included time spent in unplugged mode. (Philips, No. 41 at p. 2) In its view, the use of such an adjusted profile would provide a more accurate picture of the projected savings. DOE agrees with Philips that battery chargers in product class 1 likely spend some time in unplugged mode and adjusted its usage profile accordingly. The usage profile for these products now includes time in unplugged mode, which resulted in a reduction in operating cost savings. In the NOPR, DOE refined many of its estimates for the inputs contributing to purchase price and operating costs. While DOE is confident in the accuracy of these inputs and the accompanying PBP calculations presented in this NOPR, DOE continues to seek comment to help refine its approach as needed. E:\FR\FM\27MRP2.SGM 27MRP2 18542 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS G. National Impact Analysis The National Impact Analysis (NIA) assesses the national energy savings (NES) and the net present value (NPV) of total consumer costs and savings that would be expected to result from new or amended standards at specific efficiency levels. (‘‘Consumer’’ in this context refers to consumers of the product being regulated.) DOE calculates the NES and NPV based on projections of annual unit shipments, along with the annual energy consumption and total installed cost data from the energy use and LCC analyses. For the NOPR analysis, DOE forecasted the energy savings, operating cost savings, product costs, and NPV of consumer benefits for products sold from 2013 through 2042. DOE evaluates the impacts of new and amended standards by comparing basecase projections with standards-case projections. The base-case projections characterize energy use and consumer costs for each product class in the absence of new or amended energy conservation standards. DOE compares VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 these projections with projections characterizing the market for each product class if DOE adopted new or amended standards at specific energy efficiency levels (i.e., the TSLs or standards cases) for that class. For the base case forecast, DOE considers historical trends in efficiency and various forces that are likely to affect the mix of efficiencies over time. For the standards cases, DOE also considers how a given standard would likely affect the market shares of efficiencies greater than the standard. To make the analysis more accessible and transparent to all interested parties, DOE used an MS Excel spreadsheet model to calculate the energy savings and the national consumer costs and savings from each TSL. MS Excel is the most widely used spreadsheet calculation tool in the United States and there is general familiarity with its basic features. Thus, DOE’s use of MS Excel as the basis for the spreadsheet models provides interested parties with access to the models within a familiar context. The TSD and other documentation that PO 00000 Frm 00066 Fmt 4701 Sfmt 4702 DOE provides during the rulemaking help explain the models and how to use them, and interested parties can review DOE’s analyses by changing various input quantities within the spreadsheet. The NIA spreadsheet model uses average values as inputs (as opposed to probability distributions). For the current analysis, the NIA used projections of energy prices from the AEO2010 Reference case. In addition, DOE analyzed scenarios that used inputs from the AEO2010 High Economic Growth, Low Economic Growth, and Carbon Cap and Trade cases. These cases have higher or lower energy price trends compared to the Reference case. NIA results based on these cases are presented in appendix 10A to the TSD. Table IV–29 summarizes the inputs and key assumptions DOE used in its preliminary NIA and the changes to the analysis for the NOPR. Discussion of these inputs and changes follows the table. See chapter 10 of the TSD for further details. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS 1. Shipments Forecasts of product shipments are needed to forecast the impacts standards will have on the Nation. DOE develops shipment forecasts based on an analysis of key market drivers for each considered product. In DOE’s shipments model, shipments of products were calculated based on current shipments of product applications powered by battery chargers or EPSs. The inventory model takes an accounting approach, tracking remaining shipments and the vintage of units in the existing stock for each year of the analysis period. Stakeholders submitted several comments questioning DOE’s assumption in the preliminary analysis VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 that shipment volumes would not be affected by new or amended standards. AHAM and PTI stated that certain products, such as hair clippers, cordless vacuum cleaners, electric shavers, and DIY power tools, are discretionary purchases for consumers. Because of the discretionary nature of these purchases, AHAM and PTI claimed, standards that cause significant increases in the enduse product’s price may lead some families to forgo purchasing these products and find other means to meet their needs. These parties asked DOE to consider lower shipments in its standards case forecasts. (AHAM, No. 42 at pp. 14–15; PTI, No. 45 at p. 12) In addition, AHAM, CEA, and Cobra PO 00000 Frm 00067 Fmt 4701 Sfmt 4702 18543 Electronics all stated that increases in product price could lead some manufacturers to substitute primary batteries for rechargeable batteries in certain products, e.g., portable navigation devices and portable radios, reducing the number of battery chargers and EPSs for these products. (AHAM, No. 42 at p. 14; CEA, No. 46 at p. 3; Cobra, No. 51 at p. 2) Lastly, Stanley Black & Decker and Lester stated that increases in product price for batteryoperated gardening products and golf cars could drive consumers toward their gasoline-powered equivalents. (SBD, No. 44 at p. 2; Lester, No. 50 at p. 3) In response to these comments, DOE conducted a sensitivity analysis to E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.038</GPH> Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18544 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS examine how increases in end-use product prices resulting from standards might affect shipment volumes. To DOE’s knowledge, elasticity estimates are not readily available in existing literature for battery chargers, EPSs, or the end-use consumer products that DOE is analyzing in this rulemaking. Because some applications using battery chargers and EPSs, such as smartphones and videogame consoles, could be considered more discretionary than home appliances, which have an estimated relative price elasticity of ¥0.34 (See—https://ees.ead.lbl.gov/ bibliography/an_analysis_of_the_price_ elasticity_of_demand_for_household_ appliances), DOE believed a higher elasticity of demand was possible. In its sensitivity analysis, DOE assumed a price elasticity of demand of ¥1, meaning a given percentage increase in the final product price would be accompanied by that same percentage decrease in shipments. Even under this relatively high assumption for price elasticity of demand, the standards being proposed today are unlikely to have a significant effect on the shipment volumes of those battery charger applications mentioned by stakeholders, with forecasted effects ranging from a decrease of 0.03 percent for electric shavers to a decrease of 1.46 percent for DIY power tools with detachable batteries. Results for all battery charger applications are contained in appendix 9A to the TSD. The corresponding impacts on NES and NPV are included in appendix 10A. DOE did not conduct a similar analysis for EPS applications due to the small size of the price increases (relative to the price of EPS applications) expected to result from the EPS standards being proposed today. 2. Shipment Growth Rate In the preliminary analysis, DOE noted that the market for battery chargers and EPSs has grown tremendously in the past 10 years. Additionally, DOE found that many market reports have predicted enormous future growth for the applications that employ battery chargers and EPSs. However, in forecasting the size of these markets over the next 32 years, DOE considered the possibility that much of the market growth associated with these products has already occurred. In many reports predicting growth of applications that employ battery chargers or EPSs, DOE noted that growth was predicted for new applications, but older applications were generally not included. That is, the demand for battery chargers and EPSs had not grown, but rather the products VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 that use such devices had transitioned to a new product mix. (See chapter 9 of the Preliminary TSD.) With this in mind, DOE took a conservative approach in its forecast and estimated that while the specific applications that use battery chargers or EPSs will change, the overall number of individual units that use battery chargers or EPSs will grow slowly, with new applications replacing some current applications, but with little change in per-capita consumption of battery chargers or EPSs over time. To estimate future market size while assuming no change in the per-capita battery charger and EPS purchase rate, DOE used population growth rate as the compound annual market growth rate. DOE presented this approach to stakeholders for comment and received no comments objecting to its use. Population growth rate values were obtained from the U.S. Census Bureau 2009 National Projections, which forecast population through 2050. DOE took the average annual population growth rate, 0.75 percent, and applied this rate to all battery charger and EPS product classes. For the NOPR analysis, DOE continues to apply this scenario. 3. Product Class Lifetime For the preliminary analysis, DOE calculated product class lifetime profiles using the percentage of shipments of applications within a given product class, and the lifetimes of those applications. These values were combined to estimate the percentage of units remaining in use for each year following the initial year in which those units were shipped. For the NOPR analysis, DOE continued to apply this scenario. For more information on the calculation of product class lifetime profiles, see chapter 10 of the TSD. 4. Forecasted Efficiency in the Base Case and Standards Cases A key component of the NIA is the trend in energy efficiency forecasted for the base case (without new or amended standards) and each of the standards cases. Section IV.A.2 above explains how DOE developed efficiency distributions (which yield shipmentweighted average efficiency) for battery charger and EPS product classes for the first year of the forecast period. To project the trend in efficiency over the entire forecast period, DOE considered recent standards, voluntary programs such as ENERGY STAR, and other trends. DOE received two comments regarding the effect of European Union (EU) energy efficiency standards on the PO 00000 Frm 00068 Fmt 4701 Sfmt 4702 efficiency of battery chargers and EPSs in the U.S. market. AHAM commented that the EU is planning to begin a series of battery charger efficiency standards in 2011 that could have an effect on some non-wall-adapter battery chargers. (AHAM, No. 42 at p. 15) Similarly, Cobra Electronics commented that the EU’s most recent energy efficiency standard for EPSs was established at international efficiency marking protocol level V. (Cobra, No. 51 at p. 3) In the preliminary analysis, DOE found two programs that would influence EPS efficiency in the short term. The first is the ENERGY STAR program for EPSs (called ‘‘external power adapters’’), which specified that EPSs be at or above CSL 1 in order to qualify. This voluntary program was very active, with more than 3,300 qualified products as of May 2010.51 The second program influencing EPS efficiency is the European Union Ecodesign requirements on Energy Using Products, which includes legislation on EPSs that requires that EPSs sold in the EU be at or above CSL 1, effective April 2011. Europe currently represents approximately one-third of the global EPS market. DOE did not identify any programs that required efficiency above CSL 1. These factors apply to Class A EPSs. DOE agrees that standards established by the EU will affect the U.S. market, due to the global nature of EPS design, production, and distribution. With these programs in mind, DOE estimated that approximately half of the Class A EPS market at CSL 0 in 2009 would transition to CSL 1 by 2013. In updating its analysis for the NOPR, DOE reviewed these two programs for any changes. DOE found that no new European standards had been announced during the time between the preliminary analysis and the NOPR. However, in regard to the ENERGY STAR program, the U.S. Environmental Protection Agency announced that its program for EPSs would be cancelled effective December 31, 2010.52 In preparing today’s notice, DOE also noted that the European mobile phone industry agreed to adhere to the GSMA Universal Charging Solution, which incorporates a no-load (‘‘standby’’) power consumption 51 EPA, ‘‘ENERGY STAR External Power Supplies AC–DC Product List,’’ May 24, 2010 and EPA, ‘‘ENERGY STAR External Power Supplies AC–AC Product List,’’ May 24, 2010. Both documents last retrieved on May 28, 2010 from https://www. energystar.gov/index.cfm?c=ext_power_ supplies.power_supplies_consumers. 52 EPA, ‘‘ENERGY STAR EPS EUP Sunset Decision Memo,’’ July 19, 2010. Last retrieved on July 8, 2011 from https://www.energystar.gov/ia/ partners/prod_development/revisions/downloads/ eps_eup_sunset_decision_july2010.pdf. E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS requirement that is stricter than both the current Federal standard and ENERGY STAR version 2.0 criteria. In summary, DOE found no new evidence to support the long-term improvement of EPSs beyond the initial improvement of units as estimated during the preliminary analysis. Thus, DOE has maintained its earlier assumption that EPSs will not improve in efficiency after 2013 in the base case. For battery charger efficiency trends, DOE considered three key factors: European standards, the EPA’s ENERGY STAR program, and the recently approved battery charger standards in California. The EU included battery chargers in a preparatory study on eco-design requirements that it published in January 2007. However, it has not yet announced plans to regulate battery chargers. Thus, DOE did not adjust the efficiency distributions that it calculated VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 for battery chargers between the presentday and the compliance date in 2013 to account for European standards. DOE examined the ENERGY STAR voluntary program for battery charging systems and found that as of January 22, 2010, less than 150 battery charging systems had been qualified. As of July 1, 2011, only 241 battery charging systems had been qualified.53 (Contrast this with the more than 3,300 EPSs that were ENERGY STAR-qualified as of May 2010.) Given the small number of qualified products, DOE also did not adjust its battery charger efficiency distributions to account for any potential market effects of the ENERGY STAR program. 53 EPA, ‘‘Qualified Product (QP) List for ENERGY STAR Qualified Battery Charging Systems.’’ Retrieved on July 8, 2011 from https://www. energystar.gov/ia/products/prod_lists/BCS_prod_ list.xls. PO 00000 Frm 00069 Fmt 4701 Sfmt 4702 18545 In the preliminary analysis, DOE found no battery charger standards slated to take effect by 2013. Subsequently, the California Energy Commission (CEC) approved battery charger standards on January 12, 2012 that will take effect on February 1, 2013 for most, if not all, of the battery chargers within the scope of DOE’s rulemaking. Hence, DOE adjusted its base case efficiency distributions for battery chargers to account for these standards by assuming that in the absence of Federal standards all battery chargers sold in California would meet the CEC standards. In the absence of market share data, DOE assumed that California’s share of the U.S. battery charger market is equivalent to its share of U.S. GDP (13 percent). Table IV–30 contrasts the resultant base case efficiency distributions, used in preparing today’s notice, with those used in the preliminary analysis. E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules DOE recognizes that the CEC standards may also raise the efficiency of battery chargers sold outside of California. However, the magnitude of this effect cannot be determined. Nevertheless, to explore the full range of possibilities DOE also evaluated the potential impacts of Federal standards under the assumption that the CEC standards become the de facto standard for the nation, i.e., all battery chargers sold in the United States just before the Federal standard takes effect in 2013 meet the CEC standards. The base case efficiency distributions assumed in this VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 sensitivity case are shown in Table IV– 30. This scenario represents an upper bound on the possible impacts of the CEC standards and a lower bound on the energy savings that could be achieved by Federal standards. In fact, under this scenario, DOE might be limited to setting standards only for product classes 1 and 8, as further improvements to the efficiency of products in the other product classes are not currently projected to be costeffective. Results of this sensitivity analysis can be found in Appendix 8– B and Appendix 10–A. PO 00000 Frm 00070 Fmt 4701 Sfmt 4702 DOE believes it is unlikely that all battery chargers sold in the United States will meet the CEC standards by February 1, 2013. First, manufacturers have been given an extremely short transition period of only one year; second, DOE’s proposed standards are not as stringent as the CEC standards for product classes 2 through 6, which would potentially reduce the cost of production for these products and make it unlikely that they would be manufactured on a nationwide basis to the higher CEC levels; and third, the CEC standards will be preempted by E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.039</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18546 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Federal standards in the future if DOE finalizes standards for these products, giving manufacturers the option of specifically producing products solely for the California market for an interim period. DOE seeks comment on its assumptions concerning the impacts of the CEC standards on its base case efficiency distributions. In addition, DOE seeks comment on its assumptions about EPS efficiency, specifically, that EPSs within product classes B (DC output, basic-voltage), C (DC output, low-voltage), D (AC output, basicvoltage) and E (AC output, low-voltage) will improve in efficiency slightly prior to 2013, but then no longer improve in the absence of standards, and that EPSs within product classes X (multiplevoltage) and H (high-power) will not improve in efficiency in the absence of standards. (See issues 10 and 11 under ‘‘Issues on Which DOE Seeks Comment’’ in section VII.E of this notice.) To estimate efficiency trends in the standards cases, DOE has used ‘‘roll-up’’ and/or ‘‘shift’’ scenarios in its standards rulemakings. Under the ‘‘roll-up’’ scenario, DOE assumes: (1) product efficiencies in the base case that do not meet the standard level under consideration would ‘‘roll-up’’ to meet the new standard level; and (2) product efficiencies above the standard level under consideration would not be affected. Under the ‘‘shift’’ scenario, DOE reorients the distribution above the new minimum energy conservation standard. In the preliminary analysis, DOE used a roll-up scenario to develop its forecasts of efficiency trends in the standards cases. The NOPR analysis also applies this scenario. For further details about the forecasted efficiency distributions, see chapter 9 of the TSD. 5. Product Price Forecast sroberts on DSK6SPTVN1PROD with PROPOSALS As noted in section IV.F., DOE assumed no change in battery charger and EPS pricing over the 2013–2042 period. In addition, DOE conducted sensitivity analysis using three alternative price trends based on AEO indexes. These price trends, and the NPV results from the associated sensitivity cases, are described in appendix 10–B of the NOPR TSD. 6. Unit Energy Consumption and Savings DOE uses the efficiency distributions for the base case along with the annual unit energy consumption values to estimate shipment-weighted average unit energy consumption under the base and standards cases, which are then VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 compared against one another to yield unit energy savings values for each CSL. To better evaluate actual energy savings when calculating unit energy consumption for a product class at a given CSL, DOE considered only those units that would actually be at that CSL and did not consider any units already at higher CSLs. That is, the shipmentweighted average unit energy consumption for a CSL ignored any shipments from higher CSLs. In addition, when calculating unit energy consumption for a product class, DOE used marginal energy consumption, which was taken to be the consumption of a unit above the minimum energy consumption possible for that unit. Marginal unit energy consumption values were calculated by subtracting the unit energy consumption values for the highest considered CSL from the unit energy consumption values at each CSL. For the NOPR, DOE assumes that energy efficiency would not improve after 2013 in the base case. Therefore, the projected UEC values in the NOPR analysis, as well as the unit energy savings values, do not vary over time. In addition, the analysis assumes that manufacturers would respond to a standard by improving the efficiency of underperforming products but not those that already meet or exceed the standard. For further details on the calculation of unit energy savings for the NIA, see chapter 10 of the NOPR TSD. 7. Unit Costs DOE uses the efficiency distributions for the base case along with the unit cost values to estimate shipment-weighted average unit costs under the base and standards cases, which are then compared against one another to give incremental unit cost values for each CSL. In addition, when calculating unit costs for a product class, DOE uses that product class’s marginal costs—the costs of a given unit above the minimum costs for that unit. For further details on the calculation of unit costs for the NIA, see chapter 10 of the NOPR TSD. 8. Repair and Maintenance Cost per Unit In the preliminary analysis, DOE did not consider repair or maintenance costs for battery chargers or EPSs because the vast majority cannot be repaired and do not require any maintenance. DOE maintains this assumption in its NOPR analysis. For the NOPR analysis, DOE considered the incremental maintenance cost for the replacement of PO 00000 Frm 00071 Fmt 4701 Sfmt 4702 18547 lithium ion batteries in certain applications. After examining the possible impact of this cost in the lifecycle cost and payback period analyses, DOE determined that the actual impact at the product class level would most likely be negligible. Thus, DOE opted not to retool its NIA model to account for this cost in calculating NPV. For further discussion of this issue, see section IV.F.5 above. 9. Energy Prices In the preliminary analysis, DOE assumed that all energy consumption and savings would take place in the residential sector, and therefore any energy cost savings would be calculated using residential sector rates. However, DOE is aware that many products that employ battery chargers and EPSs are located within commercial buildings. Given this fact, the energy cost savings from such products should be calculated using commercial sector rates, which are lower in value than residential sector rates, and would lower the overall financial benefits derived from energy savings in the NPV. In order to account for these products in the NOPR analysis, DOE considered the impacts of battery charger and EPS usage in a commercial setting. In order to determine the energy usage split between the residential and commercial sector, DOE first separated products into residential and commercial categories. Then, for each product class, using shipment values for 2013, average lifetimes, and base-case unit energy consumption values, DOE calculated the approximate annual energy use split between the two sectors. DOE applied the resulting ratio to the electricity pricing to obtain a sector-weighted energy price. This ratio was held constant throughout the period of analysis. For further details on the calculation of sector-weighted energy prices for the NIA, see chapter 10 of the NOPR TSD. 10. Site-to-Source Energy Conversion To estimate the national energy savings expected from appliance standards, DOE uses a multiplicative factor to convert site energy savings (at the home or commercial building) into primary or source energy savings (the energy required to convert and deliver the site energy). These conversion factors account for the energy used at power plants to generate electricity and losses in transmission and distribution, as well as for natural gas losses from pipeline leakage and energy used for pumping. For electricity, the conversion factors vary over time due to projected changes in generation sources (i.e., the E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS 18548 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules power plant types projected to provide electricity to the country). The factors that DOE developed are marginal values, which represent the response of the system to an incremental decrease in consumption associated with appliance standards. In the preliminary analysis, DOE used annual site-to-source conversion factors based on reported values in AEO2010, which provides energy forecasts through 2035. For 2036–2062, DOE used conversion factors that remain constant at the 2035 values. For the NOPR, DOE continued to use this approach. Section 1802 of the Energy Policy Act of 2005 (EPACT 2005) directed DOE to contract a study with the National Academy of Science (the Academy) to examine whether the goals of energy conservation standards are best served by measurement of energy consumed, and efficiency improvements, at the actual point-of-use or through the use of the full-fuel-cycle (FFC), beginning at the source of energy production. (Pub. L. No. 109–58). The FFC measure includes point-of-use energy plus the energy consumed in extracting, processing, and transporting primary fuels and the energy losses associated with generation, transmission, and distribution of electricity. The study, ‘‘Review of Site (Point-of-Use) and FullFuel-Cycle Measurement Approaches to DOE/EERE Building Appliance EnergyEfficiency Standards,’’ was completed in May 2009 and provided five recommendations. A free copy of the study can be downloaded at: https:// www.nap.edu/ catalog.php?record_id=12670. The Academy’s primary recommendation was that ‘‘DOE consider moving over time to use of a FFC measure of energy consumption for assessment of national and environmental impact, especially levels of greenhouse gas emissions, and to providing more comprehensive information to the public through labels and other means, such as an enhanced Web site.’’ The Academy further recommended that DOE work with the Federal Trade Commission (FTC) to consider options for making productspecific GHG emissions estimates available to enable consumers to make cross-class product comparisons. More specifically, the Academy recommended that DOE use the FFC measure of energy consumption for the environmental assessment and national impact analyses used in energy conservation standards rulemakings. The FFC measure would provide more complete information about the total energy use and GHG emissions associated with operating an appliance VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 than the primary energy measure currently used by DOE. Utilizing the FFC measure for environmental assessments and national impact analyses would not require alteration of the measures used to determine the energy efficiency of covered products and covered equipment as existing law still requires such measures to be based solely on the energy consumed at the point-of-use. (42 U.S.C. 6291(4), 6311(4)). However, using the FFC measure in lieu of primary energy in environmental assessments and national impact analyses could affect DOE’s consideration of future alternative standard levels. In response to the NAS committee recommendations, on August 20, 2010, DOE issued a Notice of Proposed Policy proposing to incorporate a FFC analysis into the methods it uses to estimate the likely impacts of energy conservation standards on energy use and greenhouse gas (GHG) emissions, rather than the primary (extended site) energy measures it currently uses. Additionally, DOE proposed to work collaboratively with the FTC to make FFC energy and GHG emissions data available to the public to enable consumers to make cross-class comparisons. On October 7, 2010, DOE held an informal public meeting to discuss and receive comments on its planned approach. The Notice, a transcript of the public meeting and all public comments received by DOE are available at: https://www.regulations.gov/ search/Regs/ home.html#docketDetail?R=EERE-2010BT-NOA-0028. DOE is developing a final policy statement on these subjects and intends to begin implementing the policy in future energy conservation standards rulemakings. For further details about the calculation of national energy savings, see chapter 10 of the TSD. 11. Discount Rates The inputs for determining the NPV of the total costs and benefits experienced by consumers of battery chargers and EPSs are: (1) total increased product cost, (2) total annual savings in operating costs, and (3) a discount factor. For each standards case, DOE calculates net savings each year as total savings in operating costs less total increases in product costs, relative to the base case. DOE calculates operating cost savings over the life of each product shipped from 2013 through 2042. DOE multiplies the net savings in future years by a discount factor to determine their present value. For the preliminary analysis and today’s NOPR, DOE estimated the NPV of consumer PO 00000 Frm 00072 Fmt 4701 Sfmt 4702 benefits using both a 3-percent and a 7percent 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.54 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 3percent real value represents the ‘‘societal rate of time preference,’’ which is the rate at which society discounts future consumption flows to their present value. For further details about the calculation of net present value, see chapter 10 of the TSD. 12. Benefits From Effects of Standards on Energy Prices The reduction in electricity consumption associated with new and amended standards for battery chargers and EPSs could affect overall electricity generation, and thus affect the electricity prices charged to consumers in all sectors of the economy. As a simplifying assumption in the preliminary analysis, DOE assumed no change in electricity prices as a result of energy savings from new or amended standards for battery chargers and EPSs. Commenting on the preliminary analysis, NEEP stated that the economic benefits of the reduced need for new power plants should be estimated and requested that DOE quantify electricity demand reductions achieved by these updated standards in financial terms. (NEEP, No. 49 at p. 2) In preparing the NOPR analysis, DOE used NEMS–BT to assess the impacts of the reduced need for new electric power plants and infrastructure projected to result from standards. In NEMS–BT, changes in power generation infrastructure affect utility revenue requirements, which in turn affect electricity prices. From these data, DOE estimated the impact on electricity prices associated with each considered TSL. Although the aggregate benefits for electricity users are potentially large, there may be negative effects on some of the entities involved in electricity supply, particularly power plant providers and fuel suppliers. Because there is uncertainty about the extent to which the benefits for electricity users from reduced electricity prices would be a transfer from entities involved in electricity supply to electricity consumers, DOE tentatively concludes 54 OMB Circular A–4 (Sept. 17, 2003), section E, ‘‘Identifying and Measuring Benefits and Costs. Available at: https://www.whitehouse.gov/omb/ memoranda/m03-21.html. E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS that, at present, it should not give a heavy weight to this factor in its consideration of the economic justification of new or amended standards. DOE is continuing to investigate the extent to which electricity price changes projected to result from standards represent a net gain to society. For further details about the effect of standards on energy prices, see chapter 10 of the TSD. H. Consumer Subgroup Analysis In analyzing the potential impacts of new or amended standards, DOE evaluates the impacts on identifiable subgroups of consumers (e.g., lowincome households or small businesses) that may be disproportionately affected by a national standard. In the preliminary analysis, DOE identified four consumer subgroups of interest— low-income consumers, small businesses, top marginal electricity price tier consumers, and consumers of specific applications within a representative unit or product class. Interested parties supported DOE’s decision to analyze consumers of specific applications in the subgroup analysis. AHAM commented that DOE should consider subgroups of applications to ensure that CSLs are justified for applications with different energy usage characteristics from the product class. (AHAM, No. 42 at p. 12) Stanley Black & Decker also commented that outdoor gardening appliances were only operated a portion of the year, and would have different energy usage characteristics from the product class, necessitating a subgroup analysis. (SBD, No. 44 at pp. 1–2) Wahl Clipper commented that infrequently charged products should not be compared in the same fashion as those that are plugged in most of the time. (Wahl, No. 53 at p. 2) Additionally, manufacturers commented that averaging LCC results of various applications within the representative unit or product class would not lend enough weight to applications with fewer shipments. PTI noted that power tools have little in common with other applications aside from their battery energy and voltage levels. In its view, the averaging of LCC results would diminish the impact of the power tools on the LCC results for the entire product class. (PTI, No. 45 at pp. 6, 13) Similarly, AHAM and PTI commented that certain applications sell at lower price points than other applications within the product class. They argued that averaging the LCC results across these applications would deemphasize the impacts on the VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 individual applications. (AHAM, No. 42 at pp. 13–14; PTI, No. 45 at pp. 6, 13) DOE’s subgroup analysis for consumers of specific applications considered the LCC impacts of each application within a representative unit or product class. This approach allowed DOE to consider the LCC impacts of individual applications when choosing the proposed standard level, regardless of the application’s weighting in the calculation of average impacts. The impacts of the standard on the cost of the battery charger or EPS as a percentage of the application’s total purchase price are not relevant to DOE’s LCC analysis. The LCC considers the incremental cost between different standard levels. DOE used the cost of the EPS or battery charger component in the LCC, not the final price of the application. Therefore, a $2,000 and $20 product are assumed to have the same cost for a battery charger or EPS (e.g., $5) if they are within the same CSL of the same representative unit or product class. The LCC considers the incremental impacts on consumers who purchase the product, but does not account for price elasticity or the economic impacts of consumers switching to non-covered products. Instead, DOE explored these possibilities in a shipments sensitivity analysis, as explained in section IV.G.1 above. The application-specific subgroup analyses represent an estimate of the marginal impacts of standards on consumers of each application within a representative unit or product class. At the preliminary analysis public meeting, AHAM commented that some applications span multiple battery charger product classes, making it difficult for the LCC to focus on specific applications. (AHAM, Pub. Mtg. Tr., No. 57 at p. 153) DOE notes that several applications span more than one product class or representative unit. Because each product class has associated characteristics and costs, it is difficult to aggregate LCC results across product classes. Therefore, DOE calculated application-specific results for each product class and representative unit. For applications that span multiple product classes, DOE calculated the LCC and PBP impacts for that application in each product class. For each subgroup, DOE considered variations on the standard inputs. DOE defined low-income consumers as residential consumers with incomes at or below the poverty line, as defined by the U.S. Census Bureau. DOE found that these consumers face electricity prices that are 0.2 cents per kWh lower, on average, than the prices faced by PO 00000 Frm 00073 Fmt 4701 Sfmt 4702 18549 consumers above the poverty line. For small businesses, DOE analyzed the potential impacts of standards by conducting the analysis with different discount rates, as small businesses do not have the same access to capital as larger businesses. DOE estimated that for businesses purchasing battery chargers or EPSs, small companies have an average discount rate that is 4.5 percent higher than the industry average. For top tier marginal electricity price consumers, DOE researched inclined marginal block rates for the residential and commercial sectors. DOE found that top tier marginal rates for general usage in the residential and commercial sectors were $0.306 and $0.221, respectively. Lastly, for the application-specific subgroup, DOE used the inputs from each application for lifetime, markups, market efficiency distribution, and UEC to calculate LCC and PBP results. Chapter 11 of the TSD contains further information on the LCC analyses for all subgroups. I. Manufacturer Impact Analysis 1. Overview DOE conducted separate manufacturer impact analyses (MIA) for EPSs and battery chargers to estimate the financial impact of new or amended energy conservation standards on these industries. The MIA is both a quantitative and qualitative analysis. The quantitative part of the MIA relies on the Government Regulatory Impact Model (GRIM), an industry cash-flow model customized for EPSs and applications that include battery chargers covered in this rulemaking. The key MIA output is industry net present value, or INPV. DOE used the GRIM to calculate cash flows using standard accounting principles and to compare changes in INPV between a base case and various TSLs (the standards case). The difference in INPV between the base and standards cases represents the financial impact of the new and amended standards on manufacturers. Different sets of assumptions (scenarios) produce different results. DOE calculated the MIA impacts of new and amended energy conservation standards by creating separate GRIMs for EPS original device manufacturers (ODMs) and battery charger manufacturers. In each GRIM, DOE presents the industry impacts by grouping similarly impacted products. For EPSs DOE presented the industry impacts by grouping the four representative product class B units (with output powers at 2.5, 18, 60, and E:\FR\FM\27MRP2.SGM 27MRP2 18550 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 120 Watts) to characterize the results for product classes B, C, D, and E. DOE also presented the results for product classes X and H separately. For battery chargers, DOE presented the industry impacts by the major product class groupings for which TSLs are selected (product class 1; product classes 2, 3, and 4; product classes 5 and 6; product class 7; product class 8; product class 10). When appropriate, DOE also presented the results for differentially impacted industries within and across those groupings. This is necessary because a given industry, depending upon how narrowly it is defined, may fall into several product classes. By segmenting the results into these similar industries, DOE is also able to discuss how subgroups of battery charger manufacturers will be impacted by new energy conservation standards. The complete MIA is presented in chapter 12 of the NOPR TSD. 2. EPS MIA The MIA for EPSs focused on the original device manufacturers—or ODMs. These companies manufacture the EPS itself, as opposed to the application it is designed for or sold with. DOE analyzed the impact of standards on EPS manufacturers at the ODM level for three basic reasons: (1) The ODM typically certifies compliance with the DOE energy conservation standards and completes most design work for the EPS (even if EPS specifications are given by an OEM); (2) unlike battery chargers, the EPS is not fully integrated into end-use applications; and (3) most of the EPS final assembly and manufacturing is done by ODMs, which then ship the EPS as a component to OEMs. In essence, unlike a battery charger, the EPS typically becomes a final product when under the control of the ODMs, regardless of any additional steps in the distribution chain to the consumer. sroberts on DSK6SPTVN1PROD with PROPOSALS a. EPS GRIM Key Inputs Many of the inputs to the GRIM come from the engineering analysis, the NIA, manufacturer interviews, and other research conducted during the MIA. The major GRIM inputs are described in detail in the sections below. i. EPS Manufacturer Production Costs The MIA is concerned with how changes in efficiency impact the manufacturer production costs (MPCs). The MPCs and the corresponding prices for which fully assembled EPSs are sold to OEMs, frequently referred to as ‘‘factory costs’’ in the industry, are major factors in industry value calculations. DOE’s MPCs include the VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 cost of components (including integrated circuits), other direct materials of the finalized EPS, the labor to assemble all parts, factory overhead, and all other costs borne by the ODM to fully assemble the EPS. In the engineering analysis, costefficiency curves are developed for the four representative product class B units and product classes X and H, which were all analyzed directly. The MPCs are calculated in one of two ways. For the product class B representative units, DOE based its MPCs on information gathered during manufacturer interviews. In these interviews, manufacturers described the costs they would incur to achieve increases in energy efficiency. For product classes H and X, the engineering analysis created a complete bill of materials (BOM) derived from the disassembly of the units selected for teardown. To calculate the percentage of the MPC attributable to labor, material, and overhead, DOE used the average percentages from all teardowns completed as part of the engineering analysis. For further detail, see the Engineering Analysis discussion in section IV.C.1 of this NOPR. ii. EPS Shipment Forecast Industry value, the key GRIM output, depends on industry revenue, which, in turn, depends on the quantity and prices of EPSs shipped in each year of the analysis period. Industry revenue calculations require forecasts of: (1) Total annual shipment volume; (2) the distribution of shipments across analyzed representative units (because prices vary by representative unit); and, (3) the distribution of shipments across efficiencies (because prices vary with efficiency). In the NIA, DOE estimated total EPS shipments by application in 2009 and assumed a constant compound annual growth rate for total EPS shipments throughout the analysis period. DOE did not assume a decrease in shipments due to energy conservation standards. The GRIM requires that shipments be disaggregated by analyzed representative unit. In the LCC, DOE allocated total EPS shipments among all analyzed EPS applications. In the MIA, DOE assigned each application’s associated EPS shipments to one of the six representative units in the following manner. First, DOE assigned any EPS application that uses multiple voltages to product class X. Second, any EPS application with an output power greater than 250 Watts was assigned to product class H. Lastly, DOE assigned each unit shipped in product classes B, PO 00000 Frm 00074 Fmt 4701 Sfmt 4702 C, D, and E to one of four groups, corresponding to one of the four representative units (output powers of 2.5, 18, 60, and 120 Watts), whichever has the closest output power. For example, if an application has an output power of 4 Watts, DOE assigned that application to the 2.5W representative unit grouping. As discussed above, revenue calculations also require knowledge of the efficiency distribution in each year of the analysis period. DOE first developed efficiency distributions for 2009 based on products that DOE tested. Next, DOE estimated a 2013 efficiency distribution based on an assessment of recent trends in product efficiency. DOE then linearly extrapolated the efficiency distributions for the intermediate years between 2009 and 2013. DOE assumed a constant efficiency distribution in the base case throughout the analysis period. See section IV.G of this NOPR for more information about DOE’s basecase EPS shipments forecast. iii. EPS Product and Capital Conversion Costs DOE expects new and amended energy conservation standards to cause some manufacturers to incur one-time conversion costs to bring their production facilities and product designs into compliance with the new and amended standards. For the MIA, DOE classified these one-time conversion costs into two major groups: (1) product conversion costs and (2) capital conversion costs. Product conversion costs are one-time investments in research, development, testing, marketing, and other noncapitalized costs focused on making product designs comply with the new and amended energy conservation standards. Capital conversion costs are one-time investments in property, plant, and equipment to adapt or change existing production facilities so that new product designs can be fabricated and assembled. DOE received several comments on the preliminary analysis about the impact of product and capital conversion costs on EPS manufacturers and OEMs. Many commenters expressed concerns about potential conversion costs. AHAM suggested that DOE seek input from manufacturers related to the impact of additional engineering, testing, and capital improvements that are associated with any significant design changes. Specifically, AHAM noted that changes to the outside housing of some battery chargers and EPSs will result in changes to plastic injection molds that cost tens of thousands of dollars each year, as well E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules as changes in the size of external packaging of the product. (AHAM, No. 42 at p. 11) Similarly, Cobra suggested that incremental engineering design costs be assessed because they may become a significant part of the initial cost of the product. (Cobra, No. 51 at p. 2) DOE agrees that testing, certification, and engineering costs could represent a substantial cost for the EPS industry. DOE relied on a number of assumptions from other analyses and data gathered from publicly available sources to estimate product conversion costs. The key values used to estimate product conversion costs were application lifetimes, shipments of each application from 2011 and 2013, and typical industry research and development expenses. Because the product lifecycle tends to be shorter for electronics, DOE assumed that in the base case, a portion of the applications will be redesigned between the announcement of an energy conservation standard and the implementation of that energy conservation standard. Those applications that are scheduled for redesign are excluded from the projected product conversion costs. DOE assumed that an application’s product lifetime—the average number of years a product is used by consumers— is equal to its production cycle, the average number of years between when manufacturers redesign that application. DOE based this simplifying assumption on feedback received from several manufacturers during manufacturer interviews. However, DOE is aware that not all product lifetimes directly correspond to their production cycle, as some products may have shorter or longer production cycles compared to their product lifetimes. DOE believes on average the product lifetime is an appropriate estimate of the production cycle for an application. So for example, for an application with a five-year product lifetime, DOE assumed that application to also have a five-year production cycle. Therefore on average one-fifth of these applications would be redesigned each year by manufacturers. Because there is a two-year time period between the announcement of the standard and its compliance date, twofifths of the applications with a five-year production cycle will be redesigned in that timeframe, irrespective of whether a standard is implemented. As a result, three-fifths of the five-year applications would need to be redesigned as a result of a new or amended energy conservation standard. In addition, only those products that do not meet the established energy conservation standard would be required to be VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 redesigned, as the efficiency of products meeting or exceeding the standard would remain unchanged. AHAM stated that products that undergo changes must be sent to thirdparty testing laboratories for energy efficiency testing and these testing costs must be factored into the overall cost of changing a product’s design. AHAM suggested that DOE ask manufacturers for information on these costs. AHAM also argued the cost of safety certification should be included in the overall cost. (AHAM, No. 42 at pp. 11) Cobra commented that third-party testing would be an undue burden on manufacturers, stating that DOE should not require it unless a significant compliance problem with the current system is proven. (Cobra, No. 51 at p. 4) DOE notes that it does not currently require manufacturers to use third-party testing to demonstrate compliance with EPS or battery charger energy conservation standards as the above comments suggest. However, DOE recognizes other organizations that provide certifications for safety or other product attributes may constitute part of the total product conversion costs (such as UL certification). DOE also understands that many ODMs and/or OEMs will likely pay for third-party testing to ensure compliance with the energy conservation standard because many do not have certified labs. DOE included testing costs as part of the research and development costs used to calculate the product conversion cost for the industry because these costs represent a significant portion of existing expenses that are factored into the methodology. DOE used a similar approach to calculate capital conversion costs, using application lifetimes and the shipments of each application between 2011 and 2013 as the key assumptions. Whereas DOE estimated product conversion costs using a multiple of typical industry R&D expenditures, DOE estimated capital conversion costs using a multiple of typical industry capital expenditures. In response to AHAM’s comment regarding the potential changes to the plastic injection molds used to cast the external casings of EPSs, DOE assumed in its analysis that the changes for the actual EPS designs would require a lower capital investment than for battery chargers because these changes would affect only the external housing of an EPS. By comparison, battery chargers may require changes to the entire housing, which would require a greater capital investment. Cobra also expressed concerns about conversion costs for manufacturers of linear EPSs because, depending on the PO 00000 Frm 00075 Fmt 4701 Sfmt 4702 18551 efficiency level DOE sets, a manufacturer would have to transition from a mechanical assembly process to an automated printed circuit board (PCB) assembly process. (Cobra, No. 51 at p. 3) The capital cost of transitioning from a mechanical assembly process to an automated PCB assembly process would be borne by the EPS ODM in most cases. For most CSLs, there are a variety of technologies available for EPSs and many ODMs do not exclusively offer linear EPSs. OEMs that do not own their own manufacturing facilities will also be impacted by this transition, but the impact will manifest itself primarily through higher factory costs after standards apply. DOE fully analyzed these costs in the engineering costs and the GRIM’s INPV calculations. In particular, the capital conversion cost assumptions that DOE used increase at CSLs that require a technology change because, as Cobra states, these transitions greatly increase the required capital and product conversion costs, especially for manufacturers that must transition to a new assembly process. This factor is taken into account for the 2.5W representative unit. DOE assumed the product and capital conversion costs associated with upgrading CSL 1 and baseline 2.5W representative units would be greater than the product and capital conversion costs of other representative units because the technology employed in upgrading those 2.5W representative units change from linear to switch mode technology. This technology change would be more costly than an ordinary product redesign because companies focusing on incremental changes for applications using linear technology may not have the experience and expertise to implement switch mode technology in their applications without additional product development efforts. See chapter 12 of the TSD for a complete description of DOE’s assumptions for the capital and product conversion costs. iv. Financial Inputs DOE was unable to locate sufficient data on publicly-traded EPS manufacturers because few, if any, major EPS ODMs are publicly traded in the United States. Consequently, few, if any, of these companies file annual 10–K reports with the Securities and Exchange Commission. Because these documents were not available, the preliminary MIA DOE developed began with the basic financial parameters used in the ballast rulemaking (such as R&D percentage of revenue, capital expenditure percentage of revenue, E:\FR\FM\27MRP2.SGM 27MRP2 18552 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules SG&A percentage of revenue, tax rate as a percentage of revenue, etc.) because many of the companies included in that analysis were structured similarly to EPS manufacturers, manufacture products in similar locations, and use similar production processes [76 FR 20090, 20134–20135 April 11, 2011 (notice of proposed rulemaking to set amended efficiency standards for fluorescent lamp ballasts, describing various aspects of the manufacturing industry) and section 4.3 of chapter 13 of the NOPR TSD accompanying that notice]. During manufacturer interviews, DOE asked EPS manufacturers to comment on these initial financial parameters. Several EPS manufacturers interviewed confirmed that these initial financial parameters were an appropriate representation of the EPS industry. Consequently, DOE applied these parameters in analyzing the EPS industry in the MIA. sroberts on DSK6SPTVN1PROD with PROPOSALS v. EPS Standards-Case Shipments The base-case efficiency distribution and growth rate drive total industry revenue in the base case. In the standards case, DOE assumed that manufacturers will respond to new and amended standards by improving only those products that do not meet the standards in 2013, but not exceed, the new and amended standard level. Products that already meet or exceed the proposed level remain unaffected. This is referred to as a ‘‘roll-up’’ scenario. See chapter 9 of the TSD for a complete explanation of the efficiency distribution of EPSs and battery chargers by product class. vi. EPS Markup Scenarios As discussed above, the MPCs of the six representative units are the factory costs of the ODM and include direct labor, material, overhead, and depreciation. The MSP is the price the ODM sells an EPS to an OEM. The MSP is equal to the MPC multiplied by the manufacturer markup. The manufacturer markup covers all the ODM’s non-production costs (i.e., SG&A, R&D, and interest, etc.) and profit. Total EPS revenue is equal to the MSPs at each CSL multiplied by the shipments at that CSL. Modifying these manufacturer markups in the standards case yields different sets of impacts on manufacturers. For the MIA, DOE modeled two standards-case markup scenarios to represent the uncertainty regarding the potential impacts on prices and profitability for manufacturers following the implementation of new and amended energy conservation standards: (1) A flat VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 markup scenario and (2) a preservation of operating profit scenario. These scenarios lead to different markups values, which, when applied to the inputted MPCs, result in varying revenue and cash flow impacts. The flat markup scenario assumed that the cost of goods sold for each product is marked up by a flat percentage to cover SG&A expenses, R&D expenses, and profit. This scenario represents the upper bound of industry profitability in the standards case because manufacturers are able to fully pass through additional costs due to standards to their customers. DOE also modeled a lower-bound profitability scenario. During interviews, ODMs and OEMs indicated that the electronics industry is extremely price sensitive throughout the distribution chain. Because of the highly competitive market, this scenario models the case in which ODMs’ higher production costs for more efficient EPSs cannot be fully passed through to OEMs. In this scenario, the manufacturer markups are lowered such that manufacturers are only able to maintain the base-case total operating profit in absolute dollars in the standards case, despite higher product costs and required investment. DOE implemented this scenario in the GRIM by lowering the manufacturer markups at each TSL to yield approximately the same earnings before interest and taxes in both the base case and standards cases in the year after the compliance date for the new and amended standards. This scenario represents the lower bound of industry profitability following new and amended energy conservation standards because higher production costs and the investments required to comply with the new and amended energy conservation standard do not yield additional operating profit. b. Comments From Interested Parties Related to EPSs DOE also received comments on the potential manufacturer impacts that would result from DOE’s treatment of EPSs as both a stand-alone product and a component of another regulated product (the battery charger). AHAM stated that this treatment could lead to duplicative testing if this rulemaking were to establish different compliance dates for EPSs and battery chargers, or if future standards were to be updated at different points for battery charger and EPSs. (AHAM No. 44 at p. 11) In response, DOE notes that EPS and battery charger standards for this rulemaking will go into effect on the same date. Therefore, DOE does not foresee a situation in which updated PO 00000 Frm 00076 Fmt 4701 Sfmt 4702 regulations would occur at different intervals. To account for the compliance costs for certifying an EPS alone and as a component of a battery charging system, DOE has included compliance costs for both the EPS and the battery charging system in its conversion cost estimates in the EPS GRIM and the battery charger GRIM, respectively. DOE also notes for product class N EPSs, which only function as a battery charger component (as opposed to EPSs that can directly power the application), the Class A EPS standards prescribed in 42 U.S.C. 6295(u)(3) will continue to apply to the Class A EPSs in product class N. Any additional energy-related savings generated by the use of more efficient product class N EPSs will be captured through the battery charger standards that DOE is proposing to set. Consequently, conversion costs for product class N EPSs are not included in the EPS analysis, but the conversion costs for the battery charging portion of the application are included in the battery charger GRIM for these applications. DOE believes that this approach will help to ensure that additional energy savings can be obtained by applying more stringent levels in a manner that reduces the complexity of the overall standards that are set. Depending on the additional information that DOE receives in response to this proposed approach, the agency may alter the approach to account for that additional information. In response to the preliminary analysis, Cobra suggested that DOE account for incremental engineering design costs in the rulemaking analysis, as those costs may comprise a significant portion of the product’s initial cost. DOE notes that the incremental engineering costs are directly accounted for in the MPCs which are a central input to the GRIM. Cobra also questioned what it viewed as a DOE assumption that achieving a new or amended standard can be done with present staffing and within the two years between the notice and the compliance date. Cobra stated that while this may be possible if the standard is set close to today’s standards, it will not continue to be the case if the standard is set closer to the max tech level. Cobra stated that achieving a new or amended standard will take even longer if DOE regulates products under an EPS and battery charger regulation at the same time due to additional design burdens. (Cobra, No. 51 at p. 2) Partly in recognition of this situation, DOE is not proposing new or amended standards for product class N EPSs in E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules today’s notice. This approach allows manufacturers to focus on improving the efficiency of these products as a system. As shown by DOE’s capital and product conversion costs that increase at each higher efficiency level, DOE also agrees that standards that are closer to max-tech would require a more substantial research and development effort by manufacturers and are accounted for in DOE’s analysis. However, DOE does not assume that standards set closer to the max tech level could be met by all manufacturers with their present staffing. In addition to standard research and development expenses that account for ongoing product development, DOE’s methodology accounts for the additional product conversion costs that would be required for products that fall below the required efficiency level or would not have been redesigned in the period between the final rule’s issuance and the compliance date of the standard. The EPS conversion cost estimates also account for any additional engineering or product development resources necessary to meet new or amended energy conservation standards. sroberts on DSK6SPTVN1PROD with PROPOSALS c. High-Power EPS Manufacturer Interviews To better understand the possible impacts on product class H, DOE attempted to gather more information about the possible impacts on highpower EPS ODMs. DOE identified a total of 13 manufacturers of high-power EPSs. DOE attempted to contact all manufacturers of high-power EPSs. DOE managed to locate contact information for eleven of these manufacturers and contacted each to schedule interviews. Six of these eleven were domestic manufacturers and five were foreign manufacturers. Of these eleven manufacturers for whom DOE found contact information, five were nonresponsive. The remaining six declined to discuss the impacts of new standards on high-power EPSs. Four of the six manufacturers that declined to be interviewed were domestic manufacturers and two were foreign manufacturers. 3. Battery Charger MIA In the battery charger MIA, DOE analyzed the impacts of standards on manufacturers of the applications that incorporate the covered battery chargers (the application OEMs). DOE believes this MIA focus, which differs from the approach DOE is using for the EPS MIA, is appropriate for several reasons. First, the application OEM will be the party most directly financially impacted by any energy conservation standards, VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 as evidenced by their participation in the rulemaking process. Battery chargers are almost always integrated into and/or sold with the final application— meaning the severity of necessary conversion costs and the financial impact of higher battery charger costs can only be assessed meaningfully at the application level. Because most battery chargers are sold with, or fully integrated into, the end-use application, OEMs will pay for any costs required to alter the application if the new battery charger design requires it. These costs will vary from application to application, even within a product class. Second, the battery charger value chain varies greatly and is principally dictated by the application for which it is designed and with which it is sold. While EPSs are almost exclusively sold as finalized components, battery charger manufacturing is split between companies that produce battery chargers for OEMs and OEMs that produce battery chargers ‘‘in house.’’ Third, the OEM typically designs the battery charger and would certify compliance with any DOE regulations because it is often impossible to separate the battery charger from the application. Fourth, even if the OEM does not design the battery charger, it typically will still integrate it into the final product. As a result, even if an OEM did not design the battery charger, it must still integrate it into the final application. Therefore, the OEM will be responsible for any changes to the application (such as the plastic housing) which are necessary due to the changes in the battery charger. Lastly, within a given product class, individual applications may be much more severely impacted than others within the same product class—even at the same CSL. These differential impacts would be obscured if DOE did not consider the different characteristics of the application industries. In some industries, particularly those that utilize high-energy battery chargers, the directly impacted party will likely be the battery charger ODM (as opposed to the OEM). Manufacturers of battery chargers for golf cars, for example, produce and sell stand alone battery chargers and would be responsible for compliance with energy conservation standards and all associated conversion costs. DOE conducted a subgroup analysis for product class 7, which it presents in the regulatory flexibility analysis, section VI.B. That analysis addresses the potential impacts of the proposed standards on small businesses. DOE is following this approach because PO 00000 Frm 00077 Fmt 4701 Sfmt 4702 18553 the only manufacturers of these products that DOE identified are small businesses. To calculate impacts on the application OEM, DOE analyzed the industries of the applications that use covered battery chargers. DOE presents results in two different ways. First, DOE presents the industry impacts by the major product class groupings for which TSLs are derived (product class 1; product classes 2, 3, and 4; product classes 5 and 6; product class 7; product class 8; product class 10). Second, DOE used an alternative construction for evaluating the MIA results for battery chargers. DOE has developed this approach because if it grouped results in the same manner as the TSL product class groupings noted above, they would not adequately account for the fact that many applications within the same product class groupings are very dissimilar. The aggregate projected impacts would not necessarily be representative of each particular industry within each product class grouping. To address this potential problem, the analysis (particularly for product classes 2, 3, and 4) groups applications into four industry subcategories. These industry subgroups share similar characteristics and the proposed standards are projected to affect these industry subgroups similarly. To group the applications, DOE assigned each application to one of four distinct industry subgroups: small appliances, consumer electronics, power tools, and high-energy products (‘‘high-energy’’ products are those applications that fit into product classes 5, 6, and 7). This additional approach enhances the interpretability and transparency of the MIA results by providing a meaningful way to compare impacts across applications. DOE has set up a flexible methodology that allows the analysis of individual applications or a set of applications. DOE reports these quantitative MIA results for each individual application, product class, and industry subgroup in chapter 12 of the TSD. a. Battery Charger GRIM Key Inputs Many of the inputs to the GRIM come from the engineering analysis, the NIA, manufacturer interviews, and other research conducted in preparing the MIA. The major GRIM inputs are described in detail in the sections below. i. Battery Charger Manufacturer Production Costs and Application Prices Calculating manufacturer impacts at the OEM level for battery chargers E:\FR\FM\27MRP2.SGM 27MRP2 18554 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS requires two critical inputs: First, the price that the application OEM charges for its finished product (to calculate revenue); and, second, the portion of that price represented by its battery charger (to calculate costs) at each CSL. For the first component, DOE determined representative retail prices for each application by surveying popular online retailer Web sites to sample a number of price points of the most commonly sold products for each application. The price of each application can vary greatly depending on many factors (such as the features of each individual product). For each application, DOE used the average application price found in the product survey. DOE then discounted this representative retail price back to the application MSP using the retail markups derived from annual SEC 10– K reports in the Markups Analysis, as discussed in section IV.F. DOE calculated the second figure— the price of the battery charger itself at each CSL—in the engineering analysis. The engineering analysis calculated a separate cost efficiency curve for each of the 10 battery charger product classes. Based on product testing data, teardown data and manufacturer feedback, DOE created a BOM at the ODM level to which markups were applied to calculate the MSP of the battery charger at each CSL. DOE then allocated the battery charger MSPs of each product class to all the applications within each product class. In this way, DOE arrived at the cost to the application OEM of the battery charger for each application. ii. Battery Charger Financial Parameters Because any two application OEMs may compete in very different markets, a single set of financial parameters cannot adequately characterize each manufacturer’s cost structure. To address this limitation, DOE gathered and disaggregated publicly available financial data for representative manufacturers in each of the four industry categories it analyzes: Small appliance manufacturers, consumer electronics manufacturers, power tool manufacturers, and high-energy product manufacturers. DOE then assigned each application to one of the four industry subgroups. In the GRIM, each individual application uses the cost structure of the industry subgroup to which it belongs. iii. Battery Charger Shipment Forecast As with EPS shipments, DOE estimated total domestic shipments of each analyzed application for 2013 that is sold with a battery charger. DOE then distributed the associated shipments among the 10 product classes and VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 among the four industry subgroups. See chapter 12 of the TSD for a complete list of the applications DOE included in each of the four industry subgroups. DOE also adjusted its efficiency distributions and shipments in the base case, to account for pending efficiency regulations in California (for more information please see IV.A.2.d). In the GRIM, DOE used the battery charger shipment projections from 2009 to 2042 that were generated in the NIA. iv. Battery Charger Product and Capital Conversion Costs Capital and product conversion costs triggered by a new energy conservation standard are critical inputs to the GRIM. DOE received various comments about the impact of product and capital conversion costs on manufacturers of applications that incorporate covered battery chargers. AHAM suggested that DOE seek manufacturer input regarding the impact of additional engineering, testing, and capital improvements that are associated with any significant design changes that would be needed to satisfy new standards for battery chargers. Specifically, AHAM noted that changes to the outside housing of some battery chargers will result in changes to plastic injection molds that cost tens of thousands of dollars each year, as well as changes in the size of the external packaging of the product. (AHAM, No. 42 at p. 11) PTI stated that manufacturers will encounter redesigning, retooling and re-qualifying costs for battery chargers used in power tools. The magnitude of these costs will depend on the final CSL selected. For example, the difference between CSL 1 and CSL 2 for product class 4 could be hundreds of thousands of dollars. (PTI, No. 45 at p. 13) Similarly, Cobra argued that incremental engineering design costs should be included in the analysis because they may become a significant part of the initial cost of the product. (Cobra, No. 51 at p. 2) DOE agrees that testing and engineering costs could represent a substantial cost burden to manufacturers, depending on the efficiency levels eventually selected. DOE has included the testing costs for battery charger applications to comply with the energy conservation standards in its calculation of conversion costs. At the higher CSLs, manufacturers could be compelled to redesign products that would have been redesigned years later in the base case. DOE accounts for the additional testing and engineering time by assuming that energy conservation standards would require manufacturers to alter products before the end of their PO 00000 Frm 00078 Fmt 4701 Sfmt 4702 natural lifecycle, resulting in substantial product conversion costs. The extent of the product conversion costs depends largely on whether a given standard level requires a technology change— moving from NiMH to lithium ion chemistry, for example—or only minor design tweaks. Within a given product class, some applications will face technology changes and the associated major redesigns at much lower CSLs than other applications. Therefore, DOE estimated product conversion costs for each individual application, rather than in aggregate by product class. Because of the large number of applications analyzed, DOE approximates the impacts of standardsdriven conversion costs by assuming manufacturers will incur a given multiple of normal R&D and normal capital expenditures. The exact multiple used depends on each CSL and each product class and is calibrated to manufacturer feedback received during interviews. Intuitively, this approach to product and capital expenditures accelerates the product cycle and compresses resources that would normally have been spread over a number of years into a shorter timeframe. In the standards case, these expenditures are in addition to, and not in lieu of, normal engineering, testing and equipment costs. DOE only assumes conversion costs for the proportion of shipments that fall below the analyzed TSL within any given application. Also, DOE separately calculated the conversion costs associated with the products sold in California that would have to comply with the CEC battery charger standard. These conversion costs are included in the base case and separate from the conversion costs associated with the DOE standard. For example, in product class 4, computer notebooks would not be impacted at CSL 1 because all computer notebooks meet CSL 1 in the base case. In contrast, DIY power tools would face more substantial conversion costs at CSL 1 because 40 percent of all models would not meet this level and would need to be upgraded. Therefore, DOE assumes these applications, despite incorporating battery chargers that are in the same product class, would incur different levels of R&D and capital expenditures. Based on manufacturer interviews and the engineering analysis, DOE anticipates that new standards may result in the alteration of the external housing in the application, which would trigger additional design costs and expenses for new injection molds used to construct these housings. DOE tentatively believes these changes E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules would most likely occur in those applications incorporating battery chargers that require a substantial technology shift to meet the new standards. DOE includes the associated housing costs in its estimates of the capital conversion costs and believes its methodology accounts for these changes. As discussed in section IV.I.2.a.iii of the EPS MIA methodology, AHAM and Cobra communicated concerns regarding testing and certification costs that are associated with changes in products due to new standards. (AHAM, No. 42 at p. 11; Cobra, No. 51 at p. 4) DOE summarizes and responds to these comments, which relate to battery chargers as well as EPSs, in section IV.I.2.a.iii. PTI also noted that manufacturers will encounter ‘‘stranded costs’’ when forced to retire tooling before the end of its service life, resulting in unused inventory. Stranded costs are capital assets that are not yet fully depreciated, but are made obsolete by a new or amended energy conservation standard. (PTI, No. 47 at p. 13) DOE agrees with PTI that energy conservation standards could strand tooling before the end of its useful life. DOE has estimated these costs as part of stranded assets, which are treated as a non-cash expense in the compliance year of the standard. PTI asserted that the resources that manufacturers would ordinarily devote to new product development, which drives much of the power tool industry, would be reduced in order to meet any new regulations. (PTI, No. 47 at p. 13) DOE understands there are opportunity costs related to any investment and that manufacturers may face difficult decisions in selecting nonenergy related product development projects when faced with the prospect of standards-induced resource allocation. DOE notes that the GRIM analysis accounts for both ordinary, ongoing research and development efforts, as well as those prompted by new energy standards. DOE weighs these impacts when deciding the most appropriate TSL for the proposed standard. PTI stated that the power tool industry is somewhat unique because a significant proportion of its members’ product offerings revolve around detachable pack battery systems. Achieving higher CSLs depends on fulfilling certain technical changes that would require redesigning the entire battery charger, including the battery pack. According to PTI, this situation would disrupt the market because manufacturers would be required to abandon these legacy systems and VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 strand a large installed base of consumers with unsupported systems. For example, in product class 4, PTI argued that CSL 2 would require nickelbased systems to switch to Li-ion, which would most likely require a complete redesign of the system that is unlikely to be backward compatible with existing tools. (PTI, No. 47 at p. 12) DOE agrees it would take a substantial research and development effort to redesign nickel-based systems to Li-ion. For power tools, the backward compatibility issues described by PTI arise from designing the entire battery chargers (including the battery pack) for power tool applications. Based on its engineering analysis, DOE tentatively believes that the technical challenges to achieving backward compatibility could be met at CSL 2 in the context of a complete redesign. DOE has accounted for the additional engineering costs in the MIA. v. Battery Charger Standards-Case Shipments The base-case efficiency distribution and growth rate drive total industry revenue in the base case. As with EPS shipments, the standards case assumes that manufacturers will respond to standards by improving those products that do not meet the new standards to meet, but not exceed, the standard level. Products that are already as efficient as, or more efficient than, the standard level would remain unaffected under this approach. This is referred to as a ‘‘roll-up’’ scenario. DOE did not consider elasticity or substitution away from battery chargers in the standards case in the main NIA scenario. However, this was considered as a sensitivity analysis which is included as an appendix in chapter 12 of the NOPR TSD. vi. Battery Charger Markup Scenarios The revenue DOE calculates for the battery charger GRIM is the revenue generated from the sale of the application that incorporates the covered battery charger. It is the revenue earned on the sale of the product to the OEM’s first customer (e.g., the retailer). After calculating the average retail price from the product price survey as discussed above, DOE discounted the price by the appropriate retailer markup (calculated in the market and technology assessment) to calculate the per-unit revenue the OEM generates for each application. To calculate the potential impacts on manufacturer profitability in the standards case, DOE analyzed how the incremental costs of more efficient battery chargers would PO 00000 Frm 00079 Fmt 4701 Sfmt 4702 18555 impact this revenue stream on an application-by-application basis. In comments, manufacturers raised concerns about higher battery charger input costs resulting in reduced profit margins. PTI stated that many manufacturers only sell through retailers and have ‘‘price points’’ that they must hit, particularly in the ‘‘do-ityourself’’ (DIY) market. Although the cost to produce the product may change with more efficient battery chargers, in its view, there would be no change in price for the consumer. Faced with higher product costs, PTI asserted that manufacturers will have to reduce gross margin or ultimately reduce the utility of the product. (PTI, No. 47 at p. 12) Lester also expressed concerns about increased costs to produce golf cars, which will either be passed along to purchasers or result in reduced profit margins for the manufacturers. (Lester, No. 52 at p. 1) DOE acknowledges that new or amended standards have the potential to increase product prices and disrupt manufacturer profitability, particularly as the market transitions to meet a new energy conservation standard. Based on the comments from interested parties and DOE’s manufacturer interviews, there is a great deal of uncertainty regarding how the markets for such a wide variety of applications will adjust, both in the near term and long term. To account for this uncertainty, DOE analyzes three profitability, or markup, scenarios in the GRIM: the ‘‘constant price,’’ ‘‘pass through,’’ and ‘‘flat markup’’ scenarios. The constant price scenario analyzes the situation in which manufacturers of applications are unable to pass on any incremental costs of more efficient battery chargers to their customers. This scenario is reflective of some manufacturers’ description of the negotiating power of large retailers, who account for the vast majority of shipments of some applications. Manufacturers believe these large retailers would be unwilling to accept any price increases. This scenario results in the most significant negative impacts because no incremental costs added to the application—either because of higher battery charger component costs or because of investments in tooling and design—can be recouped. As a result, manufacturer gross margins decline as cost-of-goodssold increase, on a dollar-for-dollar basis. The higher the incremental cost of the battery charger with respect to the total application price, the greater the impacts on the manufacturer. For example, the impact of an incremental $2.00 increase in the cost of the battery E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS 18556 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules charger is much greater on a product that sells for $50 than on a product that retails for $500. For some applications in certain product classes, the max-tech battery charger price is nearly as expensive as the total base case application price itself. Under the constant price scenario, such circumstances can yield highly negative results, which are not meaningful because, in reality, producers would not continue to produce at prices that did not cover variable costs. If prices fell below the level necessary to cover variable costs, a firm would be better off not producing anything at all. Therefore, DOE applies a boundary condition in the constant price scenario, which assumes that as battery charger costs increase, application prices remain constant (and gross margin would continue to decline) only until manufacturers cease to cover their variable costs (where gross margin is zero). At that point, DOE assumes manufacturers can pass on any further incremental costs of the battery charger on a dollar-for-dollar basis to their customers. In the pass through scenario, DOE assumes that manufacturers are able to pass through the incremental costs of more efficient battery chargers to their customers, but without earning any additional operating profit on those higher costs. Therefore, though less severe than the constant price scenario in which manufacturers absorb all incremental costs, this scenario also results in margin compression and adverse financial impacts as battery charger costs increase. Lastly, DOE considers a flat markup scenario to analyze the upper bound (most positive) of profitability impacts following the compliance date of new standards. In this scenario, manufacturers are able to maintain their base case gross margin as a percentage of revenue at higher CSLs despite higher product costs of more efficient battery chargers. In other words, manufacturers are able to pass on, and fully mark up, the higher incremental product costs due to more efficient battery chargers. This scenario is a more likely outcome for high-value, differentiated products, for which energy efficiency indirectly drives customer-valued benefits such as lighter weight and greater transportability. For other applications, particularly low-cost products for which energy efficiency is not an important selling attribute, the scenario is less likely. In summary, DOE believes these three scenarios present the potential range of profitability impacts on OEM application manufacturers. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 b. Battery Charger Comments From Interested Parties The following section discusses interested parties’ comments on the preliminary analyses that impact the battery charger MIA methodology. In general, DOE provides background on an issue that was raised by interested parties, summarizes the interested parties’ comments, and responds to those comments. i. Compliance Date and Implementation Period Many manufacturers commented on the implementation timeline of a new standard. For example, with respect to medical devices, Philips noted that the development life cycle is at least two to four years. Philips also mentioned that the regulatory approval cycle for medical products is longer than for consumer grade products, suggesting that medical devices should either be exempt or be given a longer transition time. (Philips, No. 43 at p. 3) Lester expressed similar concerns, noting that the proposed timelines are not reasonable for large, integrated vehicle manufacturers. It added that properly designing, testing, and ramping up production of a battery charging system commonly exceeds three years. Furthermore, Lester stated that an insufficient timeline could lead manufacturers to utilize components that have not been designed or tested properly. Additionally, a premature compliance date could cause product shortages, defects, increased costs, and unplanned capital expenditures that will either be passed on to purchasers or result in reduced profits. Lester suggested a timeline extension to five years. (Lester, No. 52 at p. 1, 2) Similarly, Cobra stated that two years will not be enough time to comply if DOE sets the standard level near max tech. (Cobra, No. 51 at p. 2) AHAM commented that the effective date should be two years after the final rule for small appliance battery charger products, but noted a longer time period might be necessary for some other product groups. AHAM argued that an earlier effective date would facilitate consistency across all 50 states. However, AHAM also mentioned that DOE must factor in additional time due to new requirements for third-party testing. (AHAM, No. 44 at p. 3, 11) Lastly, AHAM pointed out that the time needed depends significantly upon which standard level DOE chooses, as well as whether products are treated as both EPSs and battery chargers. (AHAM, Pub. Mtg. Tr., No. 37 at p. 373, 374) PO 00000 Frm 00080 Fmt 4701 Sfmt 4702 EISA 2007 prescribed a two-year period between the issuance of the final rule for Class A EPSs and the compliance date of the amended energy conservation standard. See 42 U.S.C. 6295(u)(3)(D). Congress did not grant DOE with the specific authority to change this date for individual product classes falling within Class A as requested by Philips, Lester, and AHAM. However, DOE notes that Congress did not impose a specific compliance date timeline for battery chargers and newly covered non-Class A EPSs. For these products, DOE has tentatively concluded that the two-year window between the announcement of the final rule and compliance with rule is sufficient for manufacturers to meet the TSLs analyzed in today’s rule. As the comments suggest, depending on the resources available to a given manufacturer, their technological starting point, and the proposed CSL, the typical product design cycle will vary significantly. As such, some manufacturers will likely have to dedicate more resources than others to upgrade some or all of their product lines. DOE notes, however, that designs achieving the levels proposed in today’s NOPR are currently on the market for all product classes except battery charger product class 10. For all of these product classes, the TSLs proposed are below the max-tech level and either represent the best-in-market efficiency or a lower level. For battery charger product class 10, however, DOE is proposing the max-tech level based on information derived from manufacturer input. Therefore, DOE has tentatively concluded that the technologies required to reach the efficiencies proposed in today’s rule are achievable within two years. DOE requests comment on what an appropriate compliance date for battery chargers and non-Class A EPSs would be, including whether a two-year lead time would be reasonable. DOE may decide to adjust the compliance date for these products depending on the nature of the information it receives on this issue. With respect to unplanned capital expenditures, DOE agrees that standards may require changes to tooling and equipment, as well as incremental engineering efforts. Ultimately, whether any manufacturer chooses to allocate the resources necessary to upgrade some or all of their product lines, or to source some or all of them, is a business decision. Regardless of these decisions, DOE accounts for the conversion costs for manufacturers to upgrade all their non-compliant products to comply with each TSL. DOE considers the results of E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules this analysis in weighing the projected benefits and burdens associated with the rule. See section 0 for that determination. sroberts on DSK6SPTVN1PROD with PROPOSALS ii. Cumulative Regulatory Burden Several manufacturers expressed concerns about other regulations that affect battery chargers. Three potential regulations are the U.S. Department of Transportation’s regulation of the packaging and transportation of Li-ion cells in both end-products and in cell configurations, see 75 FR 1302 (Jan. 11, 2010), the future series of regulations on battery chargers from the European Union, (Commission Regulation (EC) No 278/2009 of 6 April 2009), and the California battery charger standard set by CEC (Docket # 11–AAER–2). (AHAM, No. 44 at p. 11, 15) For the cumulative regulatory burden, DOE attempts to quantify and/or describe the impacts of other Federal regulations that have a compliance date within three years of the compliance date of this rulemaking. This analysis does not include the Department of Transportation’s proposal to regulate the packaging and transportation of lithium ion cells given that no requirements are yet in place and any analysis attempting to account for what these requirements might be would be speculative. DOE does acknowledge that EU regulations on battery chargers would be an overlapping regulatory burden on manufacturers, if the EU decides to regulate battery chargers in the future, because identical products are sold throughout the world. At this time the EU has specifically excluded battery chargers from their regulations but will consider in the future to expand the scope of the regulation to include battery chargers (see the adopted draft regulation of EC No 278/2009, 17 October 2008, p. 10). DOE does not include the costs to comply with future regulations in the EU because they are outside the scope of the cumulative regulatory burden, which focuses on Federal regulations. However, DOE did quantitatively assess the impacts of the CEC battery charger standard on battery charger manufacturers in section V.B.2.e of this NOPR. iii. Employment Lester expressed concerns about losing domestic manufacturing jobs to low-cost countries as a result of implementing the new standard. The company stated that because switchmode battery charger assembly is more labor intensive than other designs, it expects standards requiring switchmode designs to accelerate the trend towards offshore manufacturing. Lester VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 added that DOE should prioritize the impact to manufacturing in the U.S. among other criteria in determining which standards to adopt. According to Lester, battery chargers for applications that use transformer-based battery chargers, which are typically used in high-energy applications, tend to correlate with requirements for longer life, greater durability, and higher reliability. (Lester, No. 52 at p. 3) While the vast majority of applications using EPSs and battery chargers are manufactured overseas, DOE agrees that new or amended standards could adversely impact domestic employment for companies currently producing covered products in the United States. This is especially a concern for the golf car industry because battery chargers for this application still have a significant U.S. manufacturing presence. Any manufacturers that would be forced to develop a new technology to meet new standards, especially one that is more labor intensive, would face significant economic pressures to move operations overseas or source products directly from overseas third-party suppliers. DOE’s direct employment analysis (see section V.B.2.b) discusses the preliminary estimates for the impacts on changes in employment at the analyzed TSLs. In selecting the TSLs proposed in today’s notice, the Secretary considers a variety of factors to weigh the overall benefits and burdens of the rule, including, as Lester notes, the impact on United States manufacturing. DOE also notes that the impacts on small businesses are treated directly in the Regulatory Flexibility Analysis in section VI.B. iv. Supply Chain Lester expressed concerns over the potential for supply chain disruptions, noting that as production of chargers is moved to lower-cost countries, manufacturers of electric vehicles will face logistical risks that are less likely to occur domestically. (Lester, No. 52 at p. 2) DOE agrees that overseas manufacturing can complicate the supply chain of firms that elect to move production offshore. However, such a strategy is a business decision and not one that is required to meet the TSLs analyzed in today’s rulemaking. DOE also notes that the vast majority of all battery chargers on the market already make use of global supply chains. PO 00000 Frm 00081 Fmt 4701 Sfmt 4702 18557 4. Comments From Interested Parties Related to EPSs and Battery Chargers The following section discusses interested parties’ comments on the preliminary analyses that impact both the EPS and battery charger MIA methodology. This section provides background on specific issues raised by interested parties, summarizes the relevant comments, and discusses DOE’s response. a. Cumulative Burden AHAM expressed concern about the possibility of DOE applying CEC’s Tier 2 EPS standards which, it asserts, are wrongly applied to the wall adapters of battery chargers. (AHAM, No. 44 at p. 15) PTI added that DOE should consider the cumulative regulatory burden that would be imposed if the CEC were to regulate the power factor of battery chargers. This would increase the costs of achieving higher efficiencies. (PTI, No. 47 at p. 11) With respect to the CEC standards, DOE notes that the proposed EPS standards in today’s NOPR would preempt state regulations on EPS efficiencies. As for potential power factor regulation, DOE has included a quantitative analysis of the CEC standard on battery charger manufacturers in section V.B.2.e. Similarly, Philips expressed concerns about FDA regulations on medical products, which can delay the time-tomarket from a few weeks to many months. Philips also noted that the EU Directive on the Restriction of Hazardous Substances (RoHS) proposed a minimum of six years for medical device manufacturers to reach compliance, which reflects a longer product design cycle and regulatory approval process. (Philips, No. 43 at p. 3) DOE acknowledges that the EU RoHS proposed a minimum of six years for medical device manufacturers to comply with the directive. However, EU’s RoHS regulations have the potential to affect the entire medical application, while the DOE energy conservation standards at issue here cover only the battery charger or EPS portion of the device. DOE does not include the costs to comply with future regulations in the EU as part of the cumulative regulatory burden because they are outside its scope, which focuses on U.S. regulations. DOE notes that it has the authority to set a compliance period for non-Class A EPSs and battery chargers that varies from the two-year lag between the issuance of the final rule and the compliance date of the standard prescribed in EISA for Class A E:\FR\FM\27MRP2.SGM 27MRP2 18558 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS EPSs. However, DOE has consulted with the FDA and does not believe that this extension for non-Class A EPSs is necessary. This situation is described in detail in chapter 3 of the TSD. DOE also does not believe there are technical differences between medical EPSs and non-medical EPSs that would affect the ability of manufacturers to improve the efficiency of medical EPSs. However, DOE requests further comment on the appropriateness of the proposed compliance date for non-Class A EPS and battery charger product classes and if there are any specific medical applications that would be adversely affected by a 2013 date that mirrors the statutorily-prescribed compliance date for Class A EPSs. Cobra commented on the significant burden facing small manufacturers from recent regulatory actions including EISA 2007, the Consumer Product Safety Improvement Act of 2008 (CPSIA 2008), California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65), Mercury-Containing and Rechargeable Battery Management Act, recycling regulations, and EU’s RoHS. Cobra contended that these regulations challenge its ability to compete against larger companies while spending resources to prove compliance with all established regulations. Cobra also mentioned that while it does not manufacture products that are covered under CPSIA 2008, it asserted that it needs to demonstrate to customers that its products can still satisfy those requirements for marketing purposes. (Cobra, No. 53 at pp. 1, 2) DOE agrees that maintaining compliance with the various standards may be a challenge for manufacturers, especially smaller manufacturers. Furthermore, DOE understands that because products with EPSs and battery chargers are sold globally, the design of these products are more harmonized than for other appliances. DOE has analyzed the cost to comply with the EISA requirements in this rulemaking. DOE also further describes the recycling requirements and RoHS in chapter 12 of the TSD. DOE has also attempted to quantify these costs where applicable. b. Competition AHAM asked DOE to evaluate the potential for a reduction in competition, in the event standards cause manufacturers of low-cost products to leave the market. (AHAM, Pub. Mtg. Tr., No., No. 37 at p. 144) EPCA directs DOE to consider any lessening of competition likely to result from standards. It directs the Attorney General to determine the impact, if any, of any lessening of competition likely to VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 result from a proposed standard and to transmit such determination to the Secretary, not later than 60 days after the publication of a proposed rule, together with an analysis of the nature and extent of such impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) DOE will transmit a copy of today’s proposed rule to the Attorney General and request that the U.S. Department of Justice (DOJ) provide its determination on this issue. DOE will publish and address the Attorney General’s determination in the final rule, if any, and will pay particular attention to any potential competitive impacts in that determination. At this time, DOE does not believe there is significant potential for a reduction in competition due to the standards proposed in this rule. Particularly for some of the low-cost products, there are relatively few barriers to entry and the TSLs proposed in today’s rule do not require use of patented technology. Technology that can be used exclusively by one manufacturer does not pass the screening analysis. However, given the wide array of applications that incorporate covered EPSs and battery chargers, DOE seeks comment on which specific markets, if any, exhibit the potential for a reduction in competition. 5. Manufacturer Interviews DOE conducted additional interviews with manufacturers following the preliminary analysis in preparation for the NOPR analysis. In these interviews, DOE asked manufacturers to describe their major concerns with this rulemaking. The following section describes the key issues identified by manufacturers during these interviews. a. Product Groupings Several manufacturers expressed concern over the approach DOE outlined in which a variety of different applications would be grouped together within the same product class and would have to meet equivalent standards. EPS and battery charger product classes are defined by characteristics such as type of current conversion, voltage, and output power. However, the proposed EPS and battery charger product classes do not necessarily group applications performing similar end-use functions. Manufacturers stated that grouping applications that consume a larger amount of electricity over their lifetime with applications that consume only a fraction of electricity over their lifetime can put the applications that are used less frequently at an unfair disadvantage. PO 00000 Frm 00082 Fmt 4701 Sfmt 4702 Manufacturers were particularly concerned about the potential for groupings to impact specific battery charger applications after finalizing the standard. For battery chargers, DOE is proposing standards using one UEC equation for each product class. Specific applications can be grouped into a product class whose individual usage profile differs from the usual profile of the product class. This is especially true if the shipments of one application are significantly greater than the shipments of another application with a very different usage profile (i.e., the millions of laptop shipments versus DIY power tools). Both laptops and DIY power tools would be regulated using the same usage profile parameters to satisfy a given energy conservation standard. Therefore, there is less potential for consumers to save energy cost effectively with respect to those applications that are not used frequently compared to applications that are used continuously even though both applications would be required to meet the same standard. DOE recognizes manufacturer concerns over how specific applications are grouped together as a result of the proposed division of product classes. DOE’s LCC analysis and manufacturing impact analysis evaluate the impacts on users and manufacturers, respectively, on a applications-specific basis. Although the UEC is established at the product class level, the granularity of these analyses enables DOE to consider the benefits and burdens on users and manufacturers of specific applications, and take those results into consideration in determining which TSLs to select. b. Competition From Substitutes Manufacturers have stated that several of their applications compete directly with applications using other forms of energy, such as products powered by gasoline, disposable alkaline batteries, or corded products. Products that use battery chargers must remain cost competitive with these alternatively powered products because these products are close substitutes. Manufacturers of lawn care products, such as mowers and trimmers, and mobility units, such as motorized bikes and golf cars, are competing in the same markets as gas-powered versions of these applications. Similarly, manufacturers of smaller electronic devices, such as digital cameras, are competing in the same market as disposable alkaline battery-powered digital cameras. Several applications also have direct competition with similar non-electric applications, such as electric toothbrushes and DIY power E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules tools. Having products powered by a rechargeable battery is a feature that adds value for consumers. A significant increase in the cost of manufacturing the battery charger could lead manufacturers to remove the rechargeable feature of an application or choose an alternative method to power the device, ultimately reducing the consumer utility for these applications. If energy conservation standards lead to a significant price increase, consumers could switch to these alternatives. Based on these concerns, DOE considered the impact of price elasticity on application shipment volumes. These price elasticity sensitivity results are presented in Appendix 12–B of the TSD. c. Test Procedure Concerns While most manufacturers agree that using the UEC is an appropriate test procedure metric for battery chargers, some battery charger manufacturers stated there is a problem of separating the battery charging function of an application from the other functions being performed by the application. In their view, it is not easy to isolate the battery charging portion of the application for testing and/or creating cost-efficiency curves. Manufacturers stated that the test procedure must clearly separate out the charging portion of the energy consumption in order to regulate its efficiency accurately. DOE specifically took this factor into consideration for UPS manufacturers and explains its approach in detail in section IV.C.2.i of this NOPR. sroberts on DSK6SPTVN1PROD with PROPOSALS d. Multiple Regulation of EPSs and Battery Chargers Manufacturers raised concerns that specific applications that are shipped with both an EPS and a battery charger would be subject to regulations for both components—one energy conservation standard for the EPS and a separate energy conservation standard for the battery charger of the same application. Having to meet two separate standards may not allow the manufacturers to maximize the efficiency of both the EPS and the battery charger together and could add to the overall cost of the application. DOE took these comments into consideration but has tentatively determined that establishing standards for each product was the most appropriate action given the statutory requirements to set standards for these products. For further detail and DOE’s rationale for this decision, see section IV.A.1 of this NOPR. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 e. Profitability Impacts Several manufacturers stated that they expect energy conservation standards to negatively impact the profitability of battery chargers. At higher CSLs, standards could increase MPCs and manufacturers believed these higher costs would not necessarily be passed on to consumers. Several applications use specific price points that consumers expect those applications to have. Consequently, manufacturers believe that cost increases would be at least partly absorbed by manufacturers to keep retail prices from rising sharply. The battery charger often represents a significant portion of the overall cost of the application. Any increase in the cost of the battery charger would have a significant impact on the cost of these applications as a whole. If energy conservation standards led to a significant reduction in profitability, some manufacturers could potentially exit the market and reduce the number of competitors. Additionally, many electronic applications are considered luxury items so consumers could also choose to forgo their purchases altogether if the application prices increased substantially. As discussed in section IV.I.2.a and IV.I.3.a of this NOPR, DOE evaluates a range of profitability scenarios in the MIA that take these specific concerns into account. These sections and Chapter 12 of the TSD discuss the results and details of those analyses. f. Potential Changes to Product Utility Manufacturers believe adverse impacts from new and amended standards could also indirectly affect product utility. Several manufacturers indicated that other features that do not affect efficiency could be removed or component quality could be sacrificed to meet new and amended standard levels and maintain current application prices. Manufacturers also stated that the financial burden of developing products to meet new and amended energy conservation standards has an opportunity cost due to limited capital and R&D dollars. Investments incurred to meet new and amended energy conservation standards reflect foregone investments in innovation and the development of new features that consumers value and on which manufacturers earn higher absolute profit. DOE’s engineering analysis only analyzes utility-neutral design changes to meet higher efficiency standards and accounts for the costs incurred to achieve those levels. While there may be cheaper ways to meet a given efficiency PO 00000 Frm 00083 Fmt 4701 Sfmt 4702 18559 level by reducing other features that provide utility, those design paths are not assumed in DOE’s analyses. DOE recognizes the opportunity cost of standards-induced investment and accounts for the conversion expenditures manufacturers may incur at each TSL, as discussed in section IV.I.3.a.iv. Whether a given manufacturer chooses to mitigate these costs (and the associated product costs illustrated in the engineering analysis’ cost-efficiency curves) by reducing product utility is a business decision and not one mandated by the proposed energy conservation standards. J. Employment Impact Analysis DOE considers employment impacts in the domestic economy as one factor in selecting a proposed standard. Employment impacts include direct and indirect impacts. Direct employment impacts are changes in the number of employees of manufacturers of the products subject to standards, their suppliers, and related service firms. The MIA addresses the direct employment impacts that concern manufacturers of battery chargers and EPSs. Indirect employment impacts from standards consist of the jobs created or eliminated in the national economy, other than in the manufacturing sector being regulated, due to: (1) Reduced spending by end users on energy; (2) reduced spending on new energy supplies by the utility industry; (3) increased spending on new products to which the new standards apply; and (4) the effects of those three factors throughout the economy. One method for assessing the possible effects on the demand for labor of such shifts in economic activity is to compare sectoral employment statistics developed by the Labor Department’s Bureau of Labor Statistics (BLS). The BLS regularly publishes its estimates of the number of jobs per million dollars of economic activity in different sectors of the economy, as well as the jobs created elsewhere in the economy by this same economic activity. Data from BLS indicate that expenditures in the utility sector generally create fewer jobs (both directly and indirectly) than do expenditures in other sectors of the economy.55 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 55 See Bureau of Economic Analysis, Regional Multipliers: A User Handbook for the Regional Input-Output Modeling System (RIMS II), U.S. Department of Commerce (1992). E:\FR\FM\27MRP2.SGM 27MRP2 18560 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS 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 energy conservation standards is to shift economic activity from a less laborintensive sector (i.e., the utility sector) to more labor-intensive sectors (e.g., the retail and service sectors). Thus, based on the BLS data alone, the Department believes net national indirect employment may increase due to shifts in economic activity resulting from amended standards for Class A EPSs and new standards for non-Class A EPSs and battery chargers. In developing today’s NOPR, DOE estimated indirect national employment impacts using an input/output (I–O) model of the U.S. economy called Impact of Sector Energy Technologies version 3.1.1 (ImSET).56 ImSET is a special purpose version of the ‘‘U.S. Benchmark National Input-Output’’ model, designed to estimate the national employment and income effects of energy-saving technologies. The ImSET software includes a computer-based I–O model with structural coefficients to characterize economic flows among 187 sectors most relevant to industrial, commercial, and residential building energy use. DOE notes that ImSET is not a general equilibrium forecasting model. Given the relatively small change to expenditures due to efficiency standards and the resulting small changes to employment, however, DOE believes that the size of any forecast error caused by using ImSET will be small. No comments were received on the preliminary TSD for battery chargers and EPSs concerning the employment impacts analysis. For more details on the employment impact analysis, see chapter 13 of the NOPR TSD. K. Utility Impact Analysis The utility impact analysis estimates several important effects on the utility industry that would result from the adoption of new or amended energy conservation standards. For the NOPR analysis, DOE used the NEMS–BT model to generate forecasts of electricity and natural gas consumption, electricity generation by plant type, and electric generating capacity by plant type, that would result from each considered TSL. DOE obtained the energy savings inputs associated with efficiency improvements to the subject products 56 M.J. Scott, O.V. Livingston, J.M. Roop, R.W. Schultz, and P.J. Balducci, ImSET 3.1: Impact of Sector Energy Technologies; Model Description and User’s Guide (2009) (Available at: https:// www.pnl.gov/main/publications/external/ technical_reports/PNNL-18412.pdf). VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 from the NIA. DOE conducts the utility impact analysis as a scenario that departs from the latest AEO Reference case. For this NOPR, the estimated impacts of amended energy conservation standards are the differences between values forecasted by NEMS–BT and the values in the AEO2010 Reference case (which does not contemplate amended standards). As part of the utility impact analysis, DOE used NEMS–BT to assess the impacts on natural gas prices of the reduced demand for natural gas projected to result from the considered standards. DOE also used NEMS–BT to assess the impacts on electricity prices of the reduced need for new electric power plants and infrastructure projected to result from the considered standards. In NEMS–BT, changes in power generation infrastructure affect utility revenue, which in turn affects electricity prices. DOE estimated the change in electricity prices projected to result over time from each considered TSL. The benefits associated with the impacts of proposed standards on energy prices are discussed in section IV.G.5. For more details on the utility impact analysis, see chapter 14 of the NOPR TSD L. Emissions Analysis In the emissions analysis, DOE estimated the reduction in power sector emissions of carbon dioxide (CO2), nitrogen oxides (NOX), and mercury (Hg) from amended energy conservation standards for Class A EPSs and new energy conservation standards for nonClass A EPSs and battery chargers. DOE used the NEMS–BT computer model, which is run similarly to the AEO NEMS, except that battery charger and EPS energy use is reduced by the amount of energy saved (by fuel type) due to each TSL. The inputs of national energy savings come from the NIA spreadsheet model, while the output is the forecasted physical emissions. The net benefit of each TSL in today’s proposed rule is the difference between the forecasted emissions estimated by NEMS–BT at each TSL and the AEO 2010 Reference Case. NEMS–BT tracks CO2 emissions using a detailed module that provides results with broad coverage of all sectors and inclusion of interactive effects. For today’s NOPR, DOE used the version of NEMS–BT based on AEO2010, which incorporated projected effects of all emissions regulations promulgated as of January 31, 2010. For the final rule, DOE intends to revise the emissions analysis using the most current version of NEMS–BT. PO 00000 Frm 00084 Fmt 4701 Sfmt 4702 SO2 emissions from affected electric generating units (EGUs) are subject to nationwide and regional emissions capand-trade programs, and DOE has preliminarily determined that these programs create uncertainty about the impact of energy conservation standards on SO2 emissions. Title IV of the Clean Air Act sets an annual emissions cap on SO2 for affected EGUs in the 48 contiguous States and the District of Columbia (DC). SO2 emissions from 28 eastern states and DC are also limited under the Clean Air Interstate Rule (CAIR; 70 FR 25162 (May 12, 2005)), which created an allowance-based trading program. Although CAIR was remanded to EPA by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit), see North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008), it remains in effect temporarily, consistent with the D.C. Circuit’s earlier opinion in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008). On July 6, 2011 EPA issued a replacement for CAIR, the Cross-State Air Pollution Rule. 76 FR 48208 (August 8, 2011). (See https://www.epa.gov/crossstaterule/ ). On December 30, 2011, however, the D.C. Circuit stayed the new rules while a panel of judges reviews them, and told EPA to continue enforcing CAIR (see EME Homer City Generation v. EPA, No. 11–1302, Order at *2 (D.C. Cir. Dec. 30, 2011)). The AEO 2010 NEMS used for today’s NOPR assumes the implementation of CAIR. The attainment of emissions caps is typically flexible among EGUs and is enforced through the use of emissions allowances and tradable permits. Under existing EPA regulations any excess SO2 emissions allowances resulting from the lower electricity demand caused by the imposition of an efficiency standard could be used to permit offsetting increases in SO2 emissions by any regulated EGU. However, if the amended and new standards resulted in a permanent increase in the quantity of unused emissions allowances, there would be an overall reduction in SO2 emissions from the standards. While there remains some uncertainty about the ultimate effects of efficiency standards on SO2 emissions covered by the existing cap-and-trade system, the NEMS–BT modeling system that DOE uses to forecast emissions reductions currently indicates that no physical reductions in power sector emissions would occur for SO2. As discussed above, the AEO 2010 NEMS used for today’s NOPR assumes the implementation of CAIR, which established a cap on NOX emissions in 28 eastern States and the District of Columbia. With CAIR in effect, the E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS energy conservation standards for battery chargers and EPSs are expected to have little or no physical effect on NOX emissions in those States covered by CAIR, for the same reasons that they may have little effect on SO2 emissions. However, the proposed standards would be expected to reduce NOX emissions in the 22 States not affected by CAIR. For these 22 States, DOE is using the NEMS–BT to estimate NOX emissions reductions from the standards considered in today’s NOPR. On December 21, 2011, EPA announced national emissions standards for hazardous air pollutants (NESHAPs) for mercury and certain other pollutants emitted from coal and oil-fired EGUs. (See https://epa.gov/ mats/pdfs/20111216MATSfinal.pdf). The NESHAPs do not include a trading program and, as such, DOE’s energy conservation standards would likely reduce Hg emissions. For the emissions analysis for this rulemaking, DOE estimated mercury emissions reductions using NEMS–BT based on AEO2010, which does not incorporate the NESHAPs. DOE expects that future versions of the NEMS–BT model will reflect the implementation of the NESHAPs. For more details on the emissions analysis, see chapter 15 of the NOPR TSD. costs and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs.’’ The purpose of the SCC estimates presented here is to allow agencies to incorporate the monetized social benefits of reducing CO2 emissions into cost-benefit analyses of regulatory actions that have small, or ‘‘marginal,’’ impacts on cumulative global emissions. The estimates are presented with an acknowledgement of the many uncertainties involved and with a clear understanding that they should be updated over time to reflect increasing knowledge of the science and economics of climate impacts. As part of the interagency process that developed these SCC estimates, technical experts from numerous agencies met on a regular basis to consider public comments, explore the technical literature in relevant fields, and discuss key model inputs and assumptions. The main objective of this process was to develop a range of SCC values using a defensible set of input assumptions grounded in the existing scientific and economic literatures. In this way, key uncertainties and model differences transparently and consistently inform the range of SCC estimates used in the rulemaking process. M. Monetizing Carbon Dioxide and Other Emissions Impacts As part of the development of this proposed rule, DOE considered the estimated monetary benefits likely to result from the reduced emissions of CO2 and NOX that are expected to result from each of the TSLs considered. In order to make this calculation similar to the calculation of the NPV of consumer benefit, DOE considered the reduced emissions expected to result over the lifetime of products shipped in the forecast period for each TSL. This section summarizes the basis for the monetary values used for each of these emissions and presents values considered in this rulemaking. For today’s NOPR, DOE is relying on a set of values for the social cost of carbon (SCC) that was developed by an interagency process. A summary of the basis for these values is provided below, and a more detailed description of the methodologies used is provided as an appendix to chapter 16 of the TSD. a. Monetizing Carbon Dioxide Emissions 1. Social Cost of Carbon Under section 1(b) of Executive Order 12866, agencies must, to the extent permitted by law, ‘‘assess both the costs and the benefits of the intended regulation and, recognizing that some VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 The SCC is an estimate of the monetized damages associated with an incremental increase in carbon emissions in a given year. It is intended to include (but is not limited to) changes in net agricultural productivity, human health, property damages from increased flood risk, and the value of ecosystem services. Estimates of the SCC are provided in dollars per metric ton of carbon dioxide. When attempting to assess the incremental economic impacts of carbon dioxide emissions, the analyst faces a number of serious challenges. A recent report from the National Research Council 57 points out that any assessment will suffer from uncertainty, speculation, and lack of information about (1) future emissions of greenhouse gases, (2) the effects of past and future emissions on the climate system, (3) the impact of changes in climate on the physical and biological environment, and (4) the translation of these environmental impacts into economic damages. As a result, any effort to 57 National Research Council. Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use. National Academies Press: Washington, DC (2009). PO 00000 Frm 00085 Fmt 4701 Sfmt 4702 18561 quantify and monetize the harms associated with climate change will raise serious questions of science, economics, and ethics and should be viewed as provisional. Despite the serious limits of both quantification and monetization, SCC estimates can be useful in estimating the social benefits of reducing carbon dioxide emissions. Consistent with the directive in Executive Order 12866 quoted above, the purpose of the SCC estimates presented here is to make it possible for Federal agencies to incorporate the social benefits from reducing carbon dioxide emissions into cost-benefit analyses of regulatory actions that have small, or ‘‘marginal,’’ impacts on cumulative global emissions. Most Federal regulatory actions can be expected to have marginal impacts on global emissions. For such policies, the agency can estimate the benefits from reduced (or costs from increased) emissions in any future year by multiplying the change in emissions in that year by the SCC value appropriate for that year. The net present value of the benefits can then be calculated by multiplying each of these future benefits by an appropriate discount factor and summing across all affected years. This approach assumes that the marginal damages from increased emissions are constant for small departures from the baseline emissions path, an approximation that is reasonable for policies that have effects on emissions that are small relative to cumulative global carbon dioxide emissions. For policies that have a large (non-marginal) impact on global cumulative emissions, there is a separate question of whether the SCC is an appropriate tool for calculating the benefits of reduced emissions. This concern is not applicable to this notice, and DOE does not attempt to answer that question here. At the time of the preparation of this notice, the most recent interagency estimates of the potential global benefits resulting from reduced CO2 emissions in 2010, expressed in 2010$, were $4.9, $22.3, $36.5, and $67.6 per metric ton avoided. For emissions reductions that occur in later years, these values grow in real terms over time. Additionally, the interagency group determined that a range of values from 7 percent to 23 percent should be used to adjust the global SCC to calculate domestic effects,58 although preference is given to 58 It is recognized that this calculation for domestic values is approximate, provisional, and highly speculative. There is no a priori reason why domestic benefits should be a constant fraction of net global damages over time. E:\FR\FM\27MRP2.SGM 27MRP2 18562 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules consideration of the global benefits of reducing CO2 emissions. It is important to emphasize that the interagency process is committed to updating these estimates as the science and economic understanding of climate change and its impacts on society improves over time. Specifically, the interagency group has set a preliminary goal of revisiting the SCC values within 2 years or at such time as substantially updated models become available, and to continue to support research in this area. In the meantime, the interagency group will continue to explore the issues raised by this analysis and consider public comments as part of the ongoing interagency process. sroberts on DSK6SPTVN1PROD with PROPOSALS b. Social Cost of Carbon Values Used in Past Regulatory Analyses To date, economic analyses for Federal regulations have used a wide range of values to estimate the benefits associated with reducing carbon dioxide emissions. In the final model year 2011 CAFE rule, the U.S. Department of Transportation (DOT) used both a ‘‘domestic’’ SCC value of $2 per ton of CO2 and a ‘‘global’’ SCC value of $33 per ton of CO2 for 2007 emission reductions (in 2007$), increasing both values at 2.4 percent per year.59 DOT also included a sensitivity analysis at $80 per ton of CO2. See Average Fuel Economy Standards, Passenger Cars and Light Trucks, Model Year 2011, 74 FR 14196 (March 30, 2009) (Final Rule); Final Environmental Impact Statement Corporate Average Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 2011–2015 at 3–90 (Oct. 2008) (Available at: https:// www.nhtsa.gov/fuel-economy). A domestic SCC value is meant to reflect the value of damages in the United States resulting from a unit change in carbon dioxide emissions, while a global SCC value is meant to reflect the value of damages worldwide. A 2008 regulation proposed by DOT assumed a domestic SCC value of $7 per ton of CO2 (in 2006$) for 2011 emission reductions (with a range of $0–$14 for sensitivity analysis), also increasing at 2.4 percent per year. See Average Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 2011– 2015, 73 FR 24352 (May 2, 2008) 59 Throughout this section, references to tons of CO2 refer to metric tons. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 (Proposed Rule); Draft Environmental Impact Statement Corporate Average Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 2011–2015 at 3–58 (June 2008) (Available at: https://www.nhtsa.gov/ fuel-economy). A regulation for packaged terminal air conditioners and packaged terminal heat pumps finalized by DOE in October of 2008 used a domestic SCC range of $0 to $20 per ton CO2 for 2007 emission reductions (in 2007$). 73 FR 58772, 58814 (Oct. 7, 2008) In addition, EPA’s 2008 Advance Notice of Proposed Rulemaking on Regulating Greenhouse Gas Emissions Under the Clean Air Act identified what it described as ‘‘very preliminary’’ SCC estimates subject to revision. 73 FR 44354 (July 30, 2008). EPA’s global mean values were $68 and $40 per ton CO2 for discount rates of approximately 2 percent and 3 percent, respectively (in 2006$ for 2007 emissions). In 2009, an interagency process was initiated to offer a preliminary assessment of how best to quantify the benefits from reducing carbon dioxide emissions. To ensure consistency in how benefits are evaluated across agencies, the Administration sought to develop a transparent and defensible method, specifically designed for the rulemaking process, to quantify avoided climate change damages from reduced CO2 emissions. The interagency group did not undertake any original analysis. Instead, it combined SCC estimates from the existing literature to use as interim values until a more comprehensive analysis could be conducted. The outcome of the preliminary assessment by the interagency group was a set of five interim values: global SCC estimates for 2007 (in 2006$) of $55, $33, $19, $10, and $5 per ton of CO2. These interim values represent the first sustained interagency effort within the U.S. government to develop an SCC for use in regulatory analysis. The results of this preliminary effort were presented in several proposed and final rules and were offered for public comment in connection with proposed rules, including the joint EPA–DOT fuel economy and CO2 tailpipe emission proposed rules. c. Current Approach and Key Assumptions Since the release of the interim values, the interagency group PO 00000 Frm 00086 Fmt 4701 Sfmt 4702 reconvened on a regular basis to generate improved SCC estimates, which were considered for this proposed rule. Specifically, the group considered public comments and further explored the technical literature in relevant fields. The interagency group relied on three integrated assessment models (IAMs) commonly used to estimate the SCC: the FUND, DICE, and PAGE models.60 These models are frequently cited in the peer-reviewed literature and were used in the last assessment of the Intergovernmental Panel on Climate Change. Each model was given equal weight in the SCC values that were developed. Each model takes a slightly different approach to model how changes in emissions result in changes in economic damages. A key objective of the interagency process was to enable a consistent exploration of the three models while respecting the different approaches to quantifying damages taken by the key modelers in the field. An extensive review of the literature was conducted to select three sets of input parameters for these models: climate sensitivity, socio-economic and emissions trajectories, and discount rates. A probability distribution for climate sensitivity was specified as an input into all three models. In addition, the interagency group used a range of scenarios for the socio-economic parameters and a range of values for the discount rate. All other model features were left unchanged, relying on the model developers’ best estimates and judgments. The interagency group selected four SCC values for use in regulatory analyses. Three values are based on the average SCC from three integrated assessment models, at discount rates of 2.5, 3, and 5 percent. The fourth value, which represents the 95th percentile SCC estimate across all three models at a 3-percent discount rate, is included to represent higher-than-expected impacts from temperature change further out in the tails of the SCC distribution. For emissions (or emission reductions) that occur in later years, these values grow in real terms over time, as depicted in Table IV–31. 60 The models are described in appendix 16–A of the TSD. E:\FR\FM\27MRP2.SGM 27MRP2 It is important to recognize that a number of key uncertainties remain, and that current SCC estimates should be treated as provisional and revisable since they will evolve with improved scientific and economic understanding. The interagency group also recognizes that the existing models are imperfect and incomplete. The National Research Council report mentioned above points out that there is tension between the goal of producing quantified estimates of the economic damages from an incremental ton of carbon and the limits of existing efforts to model these effects. There are a number of concerns and problems that should be addressed by the research community, including research programs housed in many of the Federal agencies participating in the interagency process to estimate the SCC. DOE recognizes the uncertainties embedded in the estimates of the SCC used for cost-benefit analyses. As such, DOE and others in the U.S. Government intend to periodically review and reconsider those estimates to reflect increasing knowledge of the science and economics of climate impacts, as well as improvements in modeling. In this context, statements recognizing the limitations of the analysis and calling for further research take on exceptional significance. In summary, in considering the potential global benefits resulting from reduced CO2 emissions, DOE used the most recent values identified by the interagency process, adjusted to 2010$ using the GDP price deflator. For each of the four cases specified, the values used for emissions in 2010 were $4.9, $22.3, $36.5, and $67.6 per metric ton VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 avoided (values expressed in 2010$).61 To monetize the CO2 emissions reductions expected to result from amended standards for Class A EPSs and new standards for non-Class A EPSs and battery chargers in 2013–2042, DOE used the values identified in Table A1 of the ‘‘Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866,’’ which is reprinted in appendix 16–A of the NOPR TSD, appropriately adjusted to 2010$. To calculate a present value of the stream of monetary values, DOE discounted the values in each of the four cases using the specific discount rate that had been used to obtain the SCC values in each case. d. Valuation of Other Emissions Reductions DOE investigated the potential monetary benefit of reduced NOX emissions from the TSLs it considered. As noted above, new or amended energy conservation standards would reduce NOX emissions in those 22 states that are not affected by the CAIR. DOE estimated the monetized value of NOX emissions reductions resulting from each of the TSLs considered for today’s NOPR based on environmental damage estimates found in the relevant scientific literature. Available estimates suggest a very wide range of monetary values, ranging from $370 per ton to $3,800 per ton of NOX from stationary sources, measured in 2001$ (equivalent to a range of $450 to $4,623 per ton in 61 Table A1 presents SCC values through 2050. For DOE’s calculation, it derived values after 2050 using the 3-percent per year escalation rate used by the interagency group. PO 00000 Frm 00087 Fmt 4701 Sfmt 4702 18563 2010$).62 In accordance with OMB guidance, DOE conducted two calculations of the monetary benefits derived using each of the economic values used for NOX, one using a real discount rate of 3 percent and another using a real discount rate of 7 percent.63 DOE is aware of multiple agency efforts to determine the appropriate range of values used in evaluating the potential economic benefits of reduced Hg emissions. DOE has decided to await further guidance regarding consistent valuation and reporting of Hg emissions before it once again monetizes Hg emissions in its rulemakings. N. Discussion of Other Comments NEEP viewed the adoption of strong Federal energy conservation standards for battery chargers and EPSs as smart, minimal-cost mechanisms to help Northeast states achieve their aggressive energy savings goals. (NEEP, No. 49 at p. 3) Lester suggested that DOE consider establishing incentive programs for U.S. manufacturers as an alternative to setting efficiency standards. The company claimed that these incentives would encourage the development of efficient, domestically produced products. (Lester, No. 50 at p. 3) DOE notes that this rulemaking constitutes an ‘‘economically significant regulatory action’’ under Executive Order (E.O.) 12866, Regulatory Planning and Review. 58 FR 51735 (October 4, 1993) Under 10 62 For additional information, refer to U.S. Office of Management and Budget, Office of Information and Regulatory Affairs, 2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities, Washington, DC. 63 OMB, Circular A–4: Regulatory Analysis (Sept. 17, 2003). E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.040</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18564 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules CFR part 430, subpart C, appendix A, section III.12, DOE must evaluate nonregulatory alternatives to proposed standards by performing a regulatory impact analysis (RIA). 61 FR 36981 at p. 36978 (July 15, 1996) In this RIA, DOE compared the effectiveness of multiple possible alternatives to standards, including manufacturer tax credits for efficient battery chargers and EPSs. The results of this analysis are available in chapter 17 of the TSD. During manufacturer interviews, DOE also received questions regarding multivoltage and multi-capacity battery chargers. Particularly with multi-voltage battery chargers, it is possible for the device to fall into more than one product class and manufacturers sought clarification on how to certify these devices. DOE notes that its recently promulgated test procedure describes the manner in which a multi-voltage or multi-capacity device must be tested. 76 FR 31750. For these devices, manufacturers may be required to test their product more than once and the batteries with which the devices are used for each test may put the battery charger into two product classes. If that is the case, the device would need to be certified for each product class for which it has been tested. This approach is consistent with DOE’s approach for switch-selectable EPSs and DOE tentatively believes that this approach will result in the maximum energy savings for its proposed standards. DOE will consider alternative approaches and requests feedback from manufacturers and other interested parties on this proposal and any others, such as certifying at just the highest or lowest capacity or voltage. sroberts on DSK6SPTVN1PROD with PROPOSALS O. Marking Requirements Under 42 U.S.C. 6294(a)(5), Congress granted DOE with the specific authority to establish labeling or marking requirements for a number of consumer products. Among these products are battery chargers and EPSs. DOE notes that the creation of such marking requirements, particularly for a portion of the products covered by today’s proposal, was specifically contemplated by Congress. In particular, EISA 2007 set standards for Class A EPSs and created marking requirements for these products. Section 301 of that public law specified that all Class A EPSs shall be clearly and permanently marked in accordance with the ‘‘International Efficiency Marking Protocol for External VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 Power Supplies’’ (the ‘‘Marking Protocol’’).64 (42 U.S.C. 6295(u)(3)(C)) The Marking Protocol, developed by the EPA in consultation with stakeholders both within and outside the United States, was originally designed in 2005 and updated in 2008 to meet the needs of those voluntary and regulatory programs in place at those times. In particular, the Marking Protocol defines efficiency mark ‘‘IV’’, which corresponds to the current Federal standard for Class A EPSs, and efficiency mark ‘‘V’’, which corresponds to ENERGY STAR version 2.0. (The ENERGY STAR program for EPSs ended on December 31, 2010.) In addition, these marks currently apply only to single-voltage EPSs with nameplate output power less than 250 watts, but not to multiple-voltage or high-power EPSs. In today’s notice, DOE proposes to amend the product marking (or ‘‘labeling’’) requirements for EPSs and is considering adopting a similar requirement for battery chargers. Specifically, DOE proposes to (1) extend to all EPSs the marking requirement created by EISA 2007, which currently applies only to Class A EPSs; (2) reserve an efficiency mark (or marks) in the Marking Protocol for standard levels in the final rule that do not already have a corresponding mark; and (3) require that EPSs in proposed product class N bear a specific marking to distinguish them from other EPSs and facilitate compliance verification. In addition, DOE is considering establishing a distinguishing mark for EPSs for certain security or life safety alarm or surveillance systems and is considering requiring that battery chargers be marked in accordance with a battery charger marking protocol similar to that for EPSs. DOE welcomes comment on all of these issues. DOE notes that it is proposing standards for EPSs in product classes B, C, D, and E that exceed efficiency level ‘‘V’’, the highest level currently defined in the Marking Protocol. In addition, it is proposing standards for multiplevoltage and high-power EPSs. DOE is working with EPA to revise the Marking Protocol to accommodate all of the new and amended standards for EPSs being proposed today. DOE is also proposing to create a separate product class (product class N) for EPSs that cannot power an end-use consumer product directly. They would be subject to less stringent standards than those being proposed today for 64 U.S. EPA, ‘‘International Efficiency Marking Protocol for External Power Supplies,’’ October 2008, available at Docket No. 62. PO 00000 Frm 00088 Fmt 4701 Sfmt 4702 their ‘‘direct operation’’ counterparts. To aid in determining whether EPSs are in compliance with standards, DOE proposes that (1) a Class A EPS in product class N be permanently marked with an ‘‘N’’ as a superscript to the circle that contains the appropriate Roman numeral; (2) a non-Class A EPS in product class N be permanently marked with the abbreviation ‘‘EPS–N’’; (3) an EPS in product class N that is sold separately from the battery charger or end-use consumer product with which it is intended to be used shall also be permanently marked with the manufacturer and model number of that battery charger or end-use consumer product; and (4) an EPS that is in product class N but, nonetheless, meets the relevant standard set for direct operation EPSs (and bears the appropriate Roman numeral) need not be marked with an ‘‘N’’, with ‘‘EPS–N’’, nor with the manufacturer and model number of the associated device. DOE seeks input on what distinguishing mark should appear on EPSs for certain security and life safety equipment. A recently enacted law amended EPCA to exclude these devices from the no-load mode efficiency standards. Public Law 111–360 (Jan. 4, 2011) (to be codified at 42 U.S.C. 6295(u)(3)). The exclusion applies to AC–AC EPSs manufactured before July 1, 2017, that have nameplate output of 20 watts or more, are certified as being designed to be connected to a security or life safety alarm or surveillance system component (as defined in the law), and are permanently marked with a distinguishing mark for such products as established within the Marking Protocol. No such distinguishing mark exists within the Marking Protocol, but DOE intends to work with EPA and other stakeholders to establish such a mark. The mark, which could be the word ‘‘ACTIVE’’ or an ‘‘A’’ in a circle, for example, would likely be required to appear adjacent to the appropriate Roman numeral. DOE welcomes input on what mark would be appropriate, where it should be located, and any other details related to how that mark should be presented on a given device. Lastly, EPS efficiency markings can be useful in certain circumstances to help verify whether a given product complies with the relevant standards. To assist in ensuring that compliant products can be readily identified, DOE is also considering marking requirements for battery chargers. NRDC submitted a comment in November 2010, after the close of the preliminary analysis comment period, requesting that DOE consider such a marking protocol for battery chargers. (NRDC, No. 56) NRDC E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS claimed that establishing an efficiency marking protocol for battery chargers would have several benefits, including creating a simple vocabulary for all stakeholders, facilitating enforcement, lowering the cost of compliance for industry by facilitating international adoption, and encouraging voluntary adoption of higher levels. NRDC proposed using Roman numerals, as is done for EPSs. To avoid confusion, the Roman numerals on battery chargers would appear next to the word ‘‘BC’’, as VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 shown in Table IV–32, in contrast to the Roman numerals on EPSs, which stand alone. NRDC’s comment also includes recommendations on where the mark should be located. Consistent with this suggestion, DOE is considering adopting a marking protocol for battery chargers that would have ‘‘BC III’’ denote the battery charger standard levels adopted in the final rule. This marking would give other standards-setting bodies the option of defining a lower efficiency level (‘‘BC PO 00000 Frm 00089 Fmt 4701 Sfmt 4702 18565 II’’) for use on BCs sold to consumers outside the United States and would reserve ‘‘BC I’’ for products that do not meet the criteria for the other (higher) marks. A similar approach was used when the efficiency marking protocol for EPSs was established. The formulas given for each of the battery charger product classes for BC Level III match the standards being proposed today and could change. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules BILLING CODE 6450–01–C DOE is considering multiple approaches for determining where on the external housing of the battery VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 charger the mark shall be placed. NRDC’s proposal specifies where the mark shall be placed in cases where the battery charger has more than one PO 00000 Frm 00090 Fmt 4701 Sfmt 4702 housing, as described in Table IV–33. (NRDC, No. 56) DOE’s concern with NRDC’s proposal is the difficulty in accurately identifying and locating E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.041</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18566 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules charge control in a battery charger. Alternatively, DOE could give manufacturers the flexibility to choose where to place the mark. DOE expects that manufacturers will most often choose to place the mark on a cradle or 18567 charging base, if one is present, or on the end-use consumer product. TABLE IV–33—PROPOSED LOCATION FOR BATTERY CHARGER MARKING Form factor Location of battery charger marking Three separate housings .......................................................................... Power supply and charge control together, battery separate .................. Charge control and battery together, power supply separate ................. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 misinterpreted by consumers as an endorsement of that product. DOE welcomes comment on these issues, NRDC’s proposal, and any other issues related to efficiency markings for battery chargers. A. Trial Standard Levels For battery chargers and non-Class A external power supplies, DOE will establish certification, compliance, and enforcement provisions in a future rulemaking. This future rulemaking will outline the necessary information that manufacturers must provide in order to certify compliance with any energy conservation standards established by this rulemaking. DOE analyzed the benefits and burdens of multiple TSLs for the products that are the subject of today’s proposed rule. A description of each TSL DOE analyzed is provided below. DOE attempted to limit the number of TSLs considered for the NOPR by excluding efficiency levels that do not exhibit significantly different economic and/or engineering characteristics from the efficiency levels already selected as a TSL. While the NOPR presents only the results for those efficiency levels in TSL combinations, the TSD contains a more fulsome discussion and includes results for all efficiency levels that DOE examined. V. Analytical Results 1. External Power Supply TSLs The following section addresses the results from DOE’s analyses with respect to potential energy efficiency standards for the various product classes examined as part of this rulemaking. Issues discussed include the TSLs examined by DOE, the projected impacts of each of these levels if adopted as energy efficiency standards for battery chargers and EPSs, and the standards levels that DOE is tentatively proposing in today’s NOPR. Additional details regarding the analyses conducted by the agency are contained in the publicly available TSD supporting this proposal. Table V–1 presents the TSLs for EPSs and the corresponding efficiency levels. DOE chose to analyze product class B directly and scale the results from the engineering analysis to product classes C, D, and E. As a result, the TSLs for these three product classes correspond to the TSLs for product class B. DOE created separate TSLs for the multiplevoltage (product class X) and highpower (product class H) EPSs to determine their standards. DOE did not analyze TSLs above the baseline CSL for product class N and instead proposes applying the baseline EISA 2007 standard to all EPSs in this product class, as discussed in section B below. P. Reporting Requirements PO 00000 Frm 00091 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.042</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS DOE is also considering other requirements for the battery charger mark. For example, DOE could require that the mark be placed on a nameplate or in an equally visible location or that the font size used for the mark be similar to that used for other markings on the product such as the UL and CE symbols. DOE is aware that the CEC also is considering establishing marking requirements for battery chargers and is following that process as it develops. If the CEC adopts marking requirements for battery chargers within the scope of today’s notice, those requirements would be preempted by any future battery charger marking requirements adopted by DOE. Manufacturers would then have to transition from meeting the CEC’s requirements to meeting DOE’s requirements. Therefore, DOE would consider adopting the CEC’s requirements to minimize the burden associated with that transition. DOE recognizes that there are several challenges inherent in creating a marking protocol for battery chargers. First, it may prove difficult to specify unambiguously where the mark should be placed given the variety of form factors found in the marketplace. Second, in contrast to EPSs, some battery chargers may not have a nameplate to add a mark to. Third, in those cases where the mark is placed on an end-use consumer product containing a battery charger, it may be Charge control component. Power supply & charge control component. Charge control & battery component. Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS For EPS product class B, DOE examined three TSLs corresponding to each candidate standard level of efficiency developed in the engineering analysis. TSL 1 is an intermediate level of performance above ENERGY STAR, which offers the greatest consumer NPV. TSL 2 is equivalent to the best-in-market CSL and represents an incremental rise in energy savings over TSL 1. TSL 3 is the max-tech level and corresponds to the greatest NES. For product class X, DOE examined three TSLs above the baseline. TSL 1 is an intermediate level of performance above the baseline. TSL 2 is equivalent to the best-in-market CSL and corresponds to the maximum consumer NPV. TSL 3 is the max-tech level and corresponds to the greatest NES. For product class H, DOE examined three TSLs above the baseline. TSL 1 corresponds to an intermediate level of efficiency. TSL 2 is the scaled best-inmarket CSL and corresponds to the maximum consumer NPV. TSL 3 is the scaled max-tech level, which provides the highest NES. For battery charger product class 1 (low-energy, inductive), DOE examined three trial standard levels corresponding to each candidate standard level developed in the engineering analysis. TSL 1 is an intermediate level of performance above the baseline. TSL 2 is equivalent to the best-in-market and corresponds to the maximum consumer NPV. TSL 3 is the max-tech level and corresponds to the greatest NES. For its second set of TSLs, which covers product classes 2 (low-energy, low-voltage), 3 (low-energy, mediumvoltage), and 4 (low-energy, highvoltage), DOE examined four TSLs of different combinations of the various efficiency levels found for each product class in the engineering analysis. In this grouping, TSL 1 is an intermediate efficiency level above the baseline for each product class and corresponds to the maximum consumer NPV. For 2 of the 3 product classes, TSL 2 corresponds to the same efficiency level, but for the third class, product class 2, TSL 2 represents an incremental efficiency level below best-in-market. TSL 3 corresponds to the best-in-market efficiency level for all product classes. Finally, TSL 4 corresponds to the maxtech efficiency level for all product classes and therefore, the maximum NES. DOE’s third set of TSLs corresponds to the grouping of product classes 5 (medium-energy, low-voltage) and 6 (medium-energy, high-voltage). For this grouping, three TSLs corresponding to different combinations of efficiency levels were examined. For both product classes, TSL 1 is an intermediate efficiency level above the baseline. TSL 2 corresponds to the best-in-market efficiency level for both product classes and is the level with the highest consumer NPV. Finally, TSL 3 corresponds to the max-tech efficiency level for both product classes and the maximum NES. For product class 7 (high-energy), DOE examined only two TSLs because VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 2. Battery Charger TSLs for battery chargers. While DOE examined most product classes individually, there were two groups of product classes that use generally similar technology options and cover the exact same range of battery energies. Because of this situation, DOE grouped all three low-energy, non-inductive, product classes (i.e. 2, 3, and 4) together and examined the results. Similarly, DOE grouped the two medium energy product classes, product classes 5 and 6, together when it examined those results. Table V–2 presents the TSLs and corresponding candidate standard levels PO 00000 Frm 00092 Fmt 4701 Sfmt 4702 of the paucity of products available on the market. TSL 1 corresponds to an efficiency level equivalent to the bestin-market and maximizes consumer NPV is maximized. TSL 2 is the maxtech level and corresponds to the level with the maximum NES. For product class 8 (low-voltage DC input), DOE examined three TSLs at incremental levels above the baseline. TSL 1 is the first incremental level between the baseline and best-inmarket. Consumer NPV is maximized at this level. TSL 2 is the best-in-market efficiency level and is projected to yield higher NES levels over TSL 1. Finally, at TSL 3, or the max-tech efficiency level, NES is maximized. For product class 9 (high-voltage DC input), DOE did not examine any TSLs in depth. Rather, when DOE completed its engineering analysis, it conducted its LCC analysis on the efficiency levels that had been developed and found that all efficiency levels above the baseline showed negative LCC savings. This fact, E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.043</GPH> 18568 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules seven factors to be considered in determining the economic justification for a new or amended standard (42 U.S.C. 6295(o)(2)(B)(i)(II)), is discussed in the following section. For consumers in the aggregate, DOE also calculates the net present value from a national perspective of the economic impacts on consumers over the forecast period used in a particular rulemaking. a. Life-Cycle Cost and Payback Period For individual consumers, measures of economic impact include the changes in LCC and the PBP associated with new or amended standards. The LCC, which is also separately specified as one of the As in the preliminary analysis phase, DOE calculated the average LCC savings relative to the base case market efficiency distribution for each representative unit and product class. DOE’s projections indicate that a new standard would affect different battery charger and EPS consumers differently, depending on the market segment to which they belong and their usage characteristics. Section IV.F discusses the inputs used for calculating the LCC and PBP. Inputs used for calculating the LCC include total installed costs, annual energy savings, electricity rates, electricity price trends, product lifetime, and discount rates. The key outputs of the LCC analysis are average LCC savings for each product class for each considered efficiency level, relative to the base case, as well as a probability distribution of LCC reduction or increase. The LCC analysis also estimates, for each product class or representative unit, the fraction of customers for which the LCC will either decrease (net benefit), or increase (net cost), or exhibit no change (no impact) relative to the base case forecast. No impacts occur when the For EPS product class B (basicvoltage, AC–DC, class A EPSs), each representative unit has a unique value for LCC savings and median PBP. The 2.5W representative unit has positive LCC savings at all TSLs considered, while the 60W representative unit has negative LCC savings at all TSLs. Both 65 DOE notes that it uses the median payback period to reduce the effect of outliers on the data. This method, however, does not eliminate the outliers from the data. B. Economic Justification and Energy Savings As discussed in section II.A, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)) The following sections generally discuss how DOE is addressing each of those seven factors in this rulemaking. For further details and the results of DOE’s analyses pertaining to economic justification, see sections IV and V of today’s notice. 1. Economic Impacts on Individual Consumers sroberts on DSK6SPTVN1PROD with PROPOSALS product efficiencies of the base case forecast already equal or exceed the considered efficiency level. Battery chargers and EPSs are used in applications that can have a wide range of operating hours. Battery chargers and EPSs that are used more frequently will tend to have a larger net LCC benefit than those that are used less frequently because of the large operating cost savings. Another key output of the LCC analysis is the median payback period at each CSL. DOE presents the median payback period rather than the mean payback period because it is more robust in the presence of outliers in the data.65 These outliers skew the mean payback period calculation but have little effect on the median payback period calculation. A small change in operating costs, which derive the denominator of the payback period calculation, can sometimes result in a very large payback period, which skews the mean payback period calculation. For example, consider a sample of PBPs of 2, 2, 2, and 20 years, where 20 years is an outlier. The mean PBP would return a value of 6.5 years, whereas the median PBP would return a value of 2 years. Therefore, DOE considers the median payback period, which is not skewed by occasional outliers. Table V– 3 through Table V–5 show the results for the representative units and product classes analyzed for EPSs and battery chargers. Additional detail for these results, including frequency plots of the distributions of life-cycle costs and payback periods, are available in chapter 8 of the TSD. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00093 Fmt 4701 Sfmt 4702 the 18W and 120W representative units have positive LCC savings through TSL 2, but turn negative at TSL 3. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.044</GPH> combined with the minimal energy consumed per year for these devices, led DOE to propose an alternative standard level for these products. DOE’s proposal for this product class is discussed in section V.B.2.f below. For product class 10 (AC input, AC output), DOE examined three TSLs, each corresponding to an efficiency level developed in the engineering analysis. TSL 1 corresponds to an incremental level of performance above the baseline. TSL 2 is equivalent to what manufacturers stated would be equivalent to the best-in-market level. TSL 3, which DOE projects to yield maximized NPV and NES values, is equivalent to the max-tech efficiency level for product class 10. 18569 18570 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules projection is largely attributable to the installed price of the baseline unit, a linear switching device, which is more costly than higher efficiency switchmode power devices, so as consumers move to higher efficiencies, the purchase price actually decreases, resulting in savings. The LCC results for battery chargers depend on the product class being considered. See Table V–5. For product class 1, LCC results are positive through TSL 2. For the low-energy product classes (PC2, 3, and 4), LCC results are generally positive through TSL 2, with the exception of product class 2, and become negative at TSL 3. The mediumenergy product classes (PC5 and 6) are positive through TSL 2 and negative at TSL 3. The high-energy product class (PC7) has positive LCC savings of $38.26 at TSL 1, and then becomes negative at TSL 2. Product class 8 has positive LCC savings only at TSL 1, while product class 10 has positive LCC savings at each TSL (see entries for PC8 and PC10 in Table V–5). Low-Income Consumers VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 b. Consumer Subgroup Analysis Certain consumer subgroups may be disproportionately affected by standards. DOE performed LCC subgroup analyses in this NOPR for lowincome consumers, small businesses, top tier marginal electricity price consumers, and consumers of specific applications. See section IV.F of this NOPR for a review of the inputs to the LCC analysis. The following discussion presents the most significant results from the LCC subgroup analysis. PO 00000 Frm 00094 Fmt 4701 Sfmt 4702 For low-income consumers, the LCC impacts and payback periods are different than for the general population. This subgroup considers only the residential sector, and uses an adjusted electricity price from the reference case scenario. DOE found that low-income consumers below the poverty line typically paid electricity prices that were 0.2 cents per kWh lower than the general population. To account for this difference, DOE adjusted electricity prices by a factor of 0.9814 to derive electricity prices for this subgroup. Table V–6 through Table V–8 show the LCC impacts and payback E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.046</GPH> approximately $0.01 and 95 percent of this market consists of purchased products that are already at TSL 1. Therefore, the effects are largely from the movement of the 5 percent of the market up from the baseline. The 345W High-Power unit (product class H) has positive LCC savings for each TSL. This EP27MR12.045</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS The Non-Class A EPSs have varying LCC results at each TSL. See Table V– 4. The 203W Multiple Voltage unit (product class X) has positive LCC savings through TSL 2. DOE notes that for this product class, the LCC savings remain largely the same for TSL 1 and 2 because the difference in LCC is Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18571 is specific to the residential sector, and sometimes have greater LCC savings than the reference case results. None of the changes in LCC savings move a TSL from positive to negative LCC savings, or vice versa. Small Businesses adjusted discount rate from the reference case scenario. DOE found that small businesses typically have a cost of capital that is 4.48 percent higher than the industry average, which was applied to the discount rate for the small business consumer subgroup. The small business consumer subgroup LCC results are not directly comparable to the reference case LCC results because this subgroup only considers commercial applications. In the reference case scenario, the LCC results are strongly influenced by the For small business customers, the LCC impacts and payback periods are different than for the general population. This subgroup considers only the commercial sector, and uses an VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00095 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.048</GPH> savings, particularly in product classes dominated by residential applications. However, product classes with a large proportion of commercial applications experience less of an effect under the low-income consumer scenario, which EP27MR12.047</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS periods for low-income consumers purchasing EPSs and battery chargers. The LCC savings and PBPs of lowincome consumers is similar to that of the total population of consumers. In general, low-income consumers experience slightly reduced LCC 18572 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Table V–9 and Table V–10 show the LCC impacts and payback periods for small businesses purchasing EPSs and battery chargers. DOE did not identify any commercial applications for NonClass A EPSs, and, consequently, did not evaluate these products as part of the small business consumer subgroup analysis. Top Tier Marginal Electricity Price Consumers adjusted electricity price from the reference case scenario. DOE used an upper tier inclined marginal block rate for the electricity price in the residential and commercial sectors, resulting in a price of $0.310 and $0.225 per kWh, respectively. Table V–11 through Table V–13 show the LCC impacts and payback periods for top tier marginal electricity price consumers purchasing EPSs and battery chargers. Consumers in the top tier marginal electricity price bracket experience greater LCC savings than those in the reference case scenario. This result occurs because these consumers pay more for their electricity than other consumers, and, therefore, experience greater savings when using products For top tier marginal electricity price consumers, the LCC impacts and payback periods are different than for the general population. The analyses for this subgroup consider a weightedaverage of the residential and commercial sectors, and uses an VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00096 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.050</GPH> versa. Similarly, none of the battery charger product classes that were positive in the reference case become negative in the small business subgroup analysis, and vice versa. This observation indicates that small business consumers would experience similar LCC impacts as the general population. EP27MR12.049</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS presence of residential applications, which typically comprise the majority of application shipments. For EPS product class B, the LCC savings for the 2.5W representative unit become negative at TSL 2 and 3 under the small business scenario, but none of the savings for other representative units change from positive to negative, or vice Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18573 cannot be overcome through operating cost savings using top tier marginal electricity prices. Consumers of Specific Applications application’s specific inputs for lifetime, markups, base case market efficiency distribution, and UEC. Many applications in each representative unit or product class experienced LCC impacts and payback periods that were different from the average results across the representative unit or product class. Because of the large number of applications considered in the analysis, DOE performed an LCC and PBP analysis on every application within each representative unit and product class. This subgroup analysis used the VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00097 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.052</GPH> LCC savings, which indicates that these product classes have increasing installed costs (purchase price plus installation costs, the latter of which are assumed to be zero) at higher TSLs that EP27MR12.051</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS that are more energy efficient. This subgroup analysis changed many of the negative LCC savings results to positive LCC savings. Some product classes and representative units still have negative 18574 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS some of which span multiple representative units or product classes, DOE did not present applicationspecific LCC results here. Detailed results on each application are available in chapter 11 of the TSD. For EPS product class B, the application-specific LCC results indicate that most applications will experience similar levels of LCC savings as the representative unit’s average LCC savings. The 2.5W representative unit has positive LCC savings for each TSL, but infrequently charged applications, such as beard and moustache trimmers (among others), experience negative LCC savings. Similarly, the 18W representative unit has projected positive LCC savings through TSL 2, but other applications using EPSs, such as portable DVD players and camcorders, have negative savings. For the 60W representative unit, all applications follow the shipment-weighted average trends, except EPSs used in sleep apnea machines, which have positive LCC savings at each TSL. The same is true for the 120W representative unit, except for EPSs used in portable O2 concentrator applications, which are projected to yield negative LCC results for all TSLs. For battery charger product classes, DOE noted similar trends where less frequently used applications experienced lower LCC savings. For product class 2, LCC savings are negative beyond TSL 1, but frequently used applications within that class— e.g., answering machines, cordless phones, and home security systems— experience positive LCC savings. The top three product class 3 applications (which account for over 50 percent of total shipments) have negative LCC savings and contribute to the negative LCC savings of the product class average. However, some applications have significantly positive LCC savings, such as handheld vacuums, LAN equipment, stick vacuums, and universal battery chargers, which together comprise 15 percent of the total shipments in PC3. Product class 4 (e.g., notebooks and netbooks) have no impacts at TSL 1 or TSL 2 because these products already use battery charger technology above the baseline efficiency level. In the other battery charger product classes, the disparate VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 applications tend to experience similar LCC savings. See chapter 11 of the TSD for further detail. c. Rebuttable Presumption Payback As discussed in section III.D.2, EPCA provides a rebuttable presumption where, in essence, 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. However, DOE routinely conducts a full economic analysis that considers the full range of impacts, including those to the customer, manufacturer, Nation, and environment, as required under 42 U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C. 6316(e)(1). The results of this analysis serve as the basis for DOE to evaluate definitively the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). For EPSs and battery chargers, energy savings calculations in the LCC and PBP analyses used both the relevant test procedures as well as the relevant usage profiles. DOE’s recent changes to the test procedures did not affect any characteristics that impact the payback period calculation. Because DOE calculated payback periods using a methodology consistent with the rebuttable presumption test for EPSs and battery chargers in the LCC and payback period analyses, DOE did not perform a stand-alone rebuttable presumption analysis, as it was already embodied in the LCC and PBP analyses. 2. Economic Impacts on Manufacturers DOE performed an MIA to estimate the impact of new and amended energy conservation standards on manufacturers of EPSs and battery chargers. The section below describes the expected impacts on manufacturers at each potential TSL. a. Cash-Flow Analysis Results The INPV results refer to the difference in industry value between the base case and the standards case, which DOE calculated by summing the discounted industry cash flows from the base year (2011) through the end of the PO 00000 Frm 00098 Fmt 4701 Sfmt 4702 analysis period. The discussion also notes the difference in cash flow between the base case and the standards case in the year before the compliance date of potential new and amended energy conservation standards. This figure provides a proxy for the magnitude of the required conversion costs, relative to the cash flow generated by the industry in the base case. i. EPS Cash Flow Impacts For EPSs, the MIA describes the impacts on EPS ODMs. Each set of results below shows two tables of INPV impacts on the ODM. The first table reflects the lower (less severe) bound of impacts and the second represents the upper (more severe) bound. To evaluate this range of cash-flow impacts on EPS manufacturers, DOE modeled two different scenarios using different markup assumptions. These assumptions correspond to the bounds of a range of market responses that DOE anticipates could occur in the standards case. Each scenario results in a unique set of cash flows and corresponding industry value at each TSL. To assess the lower (less severe) end of the range of potential impacts, DOE modeled the flat markup scenario. The flat markup scenario assumes that in the standards case manufacturers would be able to pass the higher production costs required to manufacture more efficient products on to their customers. To assess the higher (more severe) end of the range of potential impacts, DOE modeled the preservation of operating profit markup scenario in which higher energy conservation standards result in lower manufacturer markups. DOE used the main NIA shipment scenario for both the lower- and higher-bound MIA scenarios that were used to characterize the potential INPV impacts. Product Classes B, C, D, and E Table V–14 and Table V–15 present the projected results for product classes B, C, D, and E under the flat and preservation of operating profit markup scenarios. DOE examined four representative units in product class B and scaled the results to product classes C, D, and E using the most appropriate representative unit for each product class. E:\FR\FM\27MRP2.SGM 27MRP2 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 representative units to switch from linear to switch mode technology. This change would increase the conversion costs for these 2.5W representative units, which account for approximately a quarter of all the product class B, C, D, and E shipments. At TSL 1, the MPC increases 45 percent for the 2.5W representative units (a representative unit for product class B and all shipments of product classes C and E), 5 percent for the 18 Watt representative units (a representative unit for product class B and all shipments of product class D), 14 percent for the 60W representative units, and 3 percent for the 120W representative units over the baseline. The conversion costs are significant enough to cause a moderately negative industry impact even if the incremental change in MPCs is fully passed on to OEMs. Impacts are more significant under the preservation of operating profit scenario because under this scenario manufacturers would be unable to pass on the full increase product cost. At TSL 2, DOE estimates impacts on INPV to range from ¥$35.2 million to ¥$81.4 million, or a change in INPV of ¥15.2 percent to ¥35.1 percent. At this level, industry free cash flow is estimated to decrease by approximately 212.1 percent to ¥$15.2 million, compared to the base-case value of $13.6 million in the year before the compliance date. PO 00000 Frm 00099 Fmt 4701 Sfmt 4702 TSL 2 represents the best-in-market efficiencies for product class B, C, D, and E EPSs. The difference in conversion costs and incremental production costs at TSL 2 make the INPV impacts slightly better than TSL 1 in the flat markup scenario and worse under the preservation of operating profit scenario. The product conversion costs increase by $5.4 million and the capital conversion costs increase by $5.9 million from TSL 1 because the vast majority of current products fall below the efficiency requirements at TSL 2. Also, at TSL 2, the MPC increases 60 percent for the 2.5W representative units (a representative unit for product class B and all shipments of product classes C and E), 18 percent for the 18 Watt representative units (this is a representative unit for product class B and all shipments of product class D), 22 percent for the 60W representative units, and 4 percent for the 120W representative units over the baseline. However, the similar conversion costs and relatively minor additional incremental costs make the industry impacts at TSL 2 similar to those at TSL 1. At TSL 3, DOE estimates impacts on INPV to range from $17.9 million to ¥$123.5 million, or a change in INPV of 7.7 percent to ¥53.2 percent. At this level, industry free cash flow is estimated to decrease by approximately 223.0 percent to ¥$16.7 million, compared to the base-case value of E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.054</GPH> At TSL 1, DOE estimates impacts on INPV to range from ¥$38.9 million to ¥$62.5 million, or a change in INPV of ¥16.8 percent to ¥26.9 percent. At this level, industry free cash flow is estimated to decrease by approximately 179.2 percent to ¥$10.8 million, compared to the base-case value of $13.6 million in the year leading up to when the new and amended energy conservation standards would need to be met. At TSL 1, manufacturers of product class B, C, D, and E EPSs face a moderate loss in INPV. For these product classes, the required efficiencies at TSL 1 correspond to an intermediate level above the ENERGY STAR 2.0 levels but below the best in market efficiencies. The conversion costs are a major contribution of the decrease in INPV because the vast majority of the product class B, C, D, and E EPS shipments fall below CSL 2. Manufacturers will incur product and capital conversion costs of approximately $61.4 million at TSL 1. In 2013, approximately 84 percent of product class B, C, D, and E shipments are projected to fall below the proposed amended energy conservation standards. In addition, 92 percent of the products for the 2.5W representative unit are projected to fall below the proposed efficiency standard, and would likely require more substantial conversion costs because meeting the efficiency standard would require 2.5W 18575 EP27MR12.053</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18576 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules representative unit (this is a representative unit for product class B and all shipments for product classes C and E), 80 percent for the 18 Watt representative units (this is a representative unit for product class B and all shipments for product class D), 46 percent for the 60W representative units, and 53 percent for the 120W representative units over the baseline. If manufacturers are able to fully pass on these costs to OEMs (the flat markup scenario), the increase in cash flow from operations is enough to overcome the conversion costs to meet the max-tech level and INPV increases slightly. However, if the manufacturers are unable to pass on these costs and only maintain the current operating profit (the preservation of operating profit markup scenario), there is a large, negative impact on INPV, because substantial increases in working capital drain operating cash flow. The conversion costs associated with switching the entire market, the large increase in incremental MPCs, and the extreme pressure from OEMs to keep product prices down make it more likely that ODMs will not be able to fully pass on these costs to OEMs and the ODMS would face a substantial loss instead of a slight gain in INPV at TSL 3. At TSL 1, DOE estimates impacts on INPV to range from ¥$0.4 million to ¥$0.7 million, or a change in INPV of ¥1.0 percent to ¥1.7 percent. At this level, industry free cash flow is estimated to decrease by approximately 10.9 percent to $2.3 million, compared to the base-case value of $2.6 million in the year before the compliance date. At TSL 1, manufacturers of product class X face a very slight decline in INPV because most of the market already meets TSL 1. The total conversion costs are approximately $0.7 million. Conversion costs are low because 95 percent of the products already meet the TSL 1 efficiency requirements. At TSL 2, DOE estimates impacts on INPV to range from ¥$12.0 million to ¥$12.8 million, or a change in INPV of ¥27.1 percent to ¥28.9 percent. At this level, industry free cash flow is estimated to decrease by approximately 218.6 percent to ¥$3.1 million, compared to the base-case value of $2.6 million in the year leading up to when the new energy conservation standards would need to be met. At TSL 2, manufacturers face a more noticeable loss in industry value. DOE estimates that manufacturers will incur total product and capital conversion costs of $14.4 million at TSL 2. The conversion costs increase at TSL 2 because the entire market falls below the efficiency requirements at TSL 2. However, the total impacts are also driven by the incremental MPCs at TSL 2. At TSL 2, the MPC increases 16 percent over the baseline. Therefore, the projected changes in INPV under both the flat and preservation of operating profit markup scenarios are similar. At TSL 3, DOE estimates impacts on INPV to range from ¥$4.6 million to VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00100 Fmt 4701 Sfmt 4702 Product Class X E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.056</GPH> Table V–16 and Table V–17 below present the projected results for product class X under the flat and preservation of operating profit markup scenarios. EP27MR12.055</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS $13.6 million in the year before the compliance date. TSL 3 represents the max-tech CSL for product class B, C, D, and E EPSs. At TSL 3, DOE modeled a wide range of industry impacts because the very large increases in per-unit costs lead to a wide range of potential impacts depending on who captures the additional value in the distribution chain. None of the existing products on the market meet the efficiency requirements at TSL 3. However, since most of the products at TSL 2 also fall below the standard level, there is only a slight difference between the conversion costs at TSL 2 and TSL 3. The different INPV impacts occur due to the large changes in incremental MPCs at the max-tech level. At TSL 3, the MPC increases 69 percent for the 2.5W Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18577 entire market falls below the required efficiency at TSL 3 and total industry conversion costs are also $14.4 million. However, the main difference at TSL 3 is the increase in the MPC. At TSL 3, the MPC increases 46 percent over the baseline. If the ODM can pass on the higher price of these products to the OEM at TSL 3, the decline in INPV is not severe. However, if ODMs cannot pass on these higher MPCs to OEMs, the loss in INPV is much more substantial. At TSL 1, DOE estimates impacts on INPV to range ¥$0.04 million to ¥0.05 million, or a change in INPV of ¥32.7 percent to ¥45.5 percent. At this level, industry free cash flow is estimated to decrease by approximately 284.4 percent to ¥$0.01 million, compared to the base-case value of $0.01 million in the year before the compliance date. At TSL 1, product class H manufacturers face a significant relative loss in industry value. The base case industry value of $100,000 is low and since DOE estimates that total conversion costs at TSL 1 would be approximately $50,000, the conversion costs represent a substantial portion of total industry value. The conversion costs are high relative to the base case INPV because the entire market in 2013 is projected to fall below an efficiency standard set at TSL 1. This means that all products in product class H would have to be redesigned to meet the efficiency level at TSL 1, leading to total conversion costs that are large relative to the base case industry value. In addition, the MPC at TSL 1 declines by 21 percent compared to the baseline since the switching technology that would be required to meet this efficiency level is less costly to manufacture than baseline products that use linear technology. This situation results in a lower MSP and lower revenues for manufacturers of baseline products, which exacerbates the impacts on INPV from new energy conservation standards for these products. At TSL 2, DOE estimates impacts on INPV to range from ¥0.04 million to ¥0.05 million, or a change in INPV of ¥33.8 percent to ¥44.0 percent. At this level, industry free cash flow is estimated to decrease by approximately 284.4 percent to ¥$0.01 million, compared to the base-case value of $0.01 million in the year before the compliance date. The impacts on INPV at TSL 2 are similar to TSL 1. The conversion costs are the same since the entire market in 2013 would fall below the required efficiency at both TSL 1 and TSL 2. Also, the MPC is projected to decrease by 19 percent at TSL 2 compared to the baseline, which is similar to the 21 percent decrease at TSL 1. Overall, the similar conversion costs and lower industry revenue for the minimally compliant products make the INPV impacts at TSL 2 similar to TSL 1. At TSL 3, DOE estimates impacts on INPV to range from ¥$0.03 million to ¥0.05 million, or a change in INPV of ¥24.4 percent to ¥47.3 percent. At this level, industry free cash flow is estimated to decrease by approximately 284.4 percent to ¥$0.01 million, compared to the base-case value of $0.01 million in the year leading up to when the new energy conservation standards would need to be met. Impacts on INPV range from moderately to substantially negative at TSL 3. As with TSL 1 and TSL 2, the entire market falls below the required efficiency and the total industry VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00101 Fmt 4701 Sfmt 4702 Product Class H Table V–18 and Table V–19 present the projected results for product class H under the flat and preservation of operating profit markup scenarios. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.057</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS ¥$17.9 million, or a change in INPV of ¥10.3 percent to ¥40.5 percent. At this level, industry free cash flow is estimated to decrease by approximately 218.6 percent to $3.1 million, compared to the base-case value of $2.6 million in the year before the compliance date. TSL 3 could result in substantial impacts on INPV. As with TSL 2, the 18578 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules conversion costs estimated by DOE remain at $50,000. However, the MPC increases at TSL 3 relative to the estimated cost of the baseline unit and changes the possible impacts on INPV at TSL 3. If ODMs can fully pass on the higher production cost of these products to the OEM at TSL 3, the decline in INPV is less severe. However, if the ODM cannot pass on these higher MPC to OEM then the loss in INPV is much more substantial. sroberts on DSK6SPTVN1PROD with PROPOSALS ii. Battery Charger Cash Flow Impacts DOE reports INPV impacts at each TSL for the six product class groupings below. When appropriate, DOE also discusses the results for groups of related applications that would experience impacts significantly different from the overall product class group to which they belong. In general, two major factors drive the INPV results: (1) The relative difference between a given application’s MSP and the incremental cost of improving its battery charger; and (2) the dominant base case battery charger technology that a given application utilizes, which is approximated by the application’s efficiency distribution. With respect to the first point, the higher the MSP of the application relative to the battery charger cost, the lower the impacts of battery charger standards on OEMs of the application. For example, an industry that sells an application for $500 would be less affected by a $2 increase in battery VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 charger costs than one that sells its application for $10. On the second point regarding base case efficiency distribution, some industries, such as producers of laptop computers, already incorporate highly efficient battery chargers. Therefore, a higher standard would be unlikely to impact the laptop industry as it would other applications using baseline technology in the same product class. As discussed in section IV.I, DOE analyzed three markup scenarios— constant price, pass through, and flat markup. These scenarios were described earlier. The constant price scenario analyzes the situation in which application manufacturers are unable to pass on any incremental costs of more efficient battery chargers to their customers. This scenario generally results in the most significant negative impacts 66 because no incremental costs added to the application—whether driven by higher battery charger component costs or depreciation of required capital investments—can be recouped. In the pass through scenario, DOE assumes that manufacturers are able to pass the incremental costs of more efficient battery chargers through to their customers, but not with any 66 Notably, this is not the case with negative sloping cost-efficiency curves. When a higher efficiency level can be achieved at a lower product cost, the constant price scenario yields positive impacts because larger margins are realized by the manufacturer on each unit produced. PO 00000 Frm 00102 Fmt 4701 Sfmt 4702 markup to cover overhead and profit. Therefore, though less severe than the constant price scenario in which manufacturers absorb all incremental costs, this scenario results in negative cash flow impacts due to margin compression and greater working capital requirements. Finally, DOE considers a flat markup scenario to analyze the upper bound (most positive) of profitability impacts.67 In this scenario, manufacturers are able to maintain their base case gross margin, as a percentage of revenue, at higher CSLs, despite the higher product costs associated with more efficient battery chargers. In other words, manufacturers can fully pass on—and mark up—the higher incremental product costs associated with more efficient battery chargers. Product Class 1 The following tables (Table V–20 through Table V–23) summarize information related to the analysis performed to project the potential impacts on product class 1 battery charger manufacturers. BILLING CODE 6450–01–P 67 While the Flat Markup scenario typically results in the most positive impacts of any scenario, a negatively sloping cost-efficiency curve will yield the opposite effect. When a higher efficiency level can be achieved at a lower product cost, the margin on each unit produced is lower, in absolute terms, in the Flat Markup scenario. This effect leads to lower operating profit, cash flow, and INPV. E:\FR\FM\27MRP2.SGM 27MRP2 Product class 1 has only two applications: Rechargeable toothbrushes and water jets. Rechargeable toothbrushes represent 99.9 percent of the product class 1 shipments. DOE found the majority of these models include nickel-cadmium (Ni-Cd) battery chemistries, although products with NiMH and Li-ion chemistries exist in the market. More than three quarters of market shipments are at the baseline CSL. However, the efficiency distribution is not necessarily indicative of the distribution of retail price points. During interviews, manufacturers indicated that energy efficiency was not VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 a primary selling point in this market. As a consequence, manufacturers expect that stringent standards would likely impact the low-end of the market, where price competition is most fierce and retail selling prices are lowest. The incremental costs of meeting TSL 1 and TSL 2, which represent CSL 1 and CSL 2 for product class 1, respectively, are relatively minor compared to the average application MSP of $58.36. While most applications will have to be altered at these TSLs, the relatively small increase in battery charger costs do not greatly impact industry cash flow even if none of these incremental costs PO 00000 Frm 00103 Fmt 4701 Sfmt 4702 18579 can be passed on to retailers. At maxtech, however, the battery charger is 3.3 times more expensive than the baseline charger. The baseline level is set at the CSL at which the majority of the market currently ships. Therefore, in addition to the R&D efforts necessary to prepare all product lines to incorporate the maxtech levels, the inability to pass those much higher battery charger costs down the distribution chain drive the negative impacts at max-tech in the worst-case constant price scenario. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.058</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Product Classes 2, 3, and 4 sroberts on DSK6SPTVN1PROD with PROPOSALS The following tables (Table V–24 through Table V–30) summarize VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 information related to the analysis performed to project the potential PO 00000 Frm 00104 Fmt 4701 Sfmt 4725 impacts on manufacturers of devices falling into product classes 2, 3, and 4. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.059</GPH> 18580 sroberts on DSK6SPTVN1PROD with PROPOSALS BILLING CODE 6450–01–C Taken together, product classes 2, 3, and 4 include the greatest number of applications and account for more than 75 percent of total battery charger shipments in 2013, the anticipated compliance year for new energy conservation standards. These product classes also include a wide variety of applications, characterized by differing shipment volumes, base case efficiency distributions, and MSPs. Because of this variety, this product class grouping, more than any other, requires a greater level of disaggregation to evaluate specific industry impacts. Presented only on a product class basis, industry impacts are effectively shipmentweighted and mask impacts on certain industry applications that vary substantially from the aggregate results. Therefore, in addition to the overall product class group results, DOE also presents results by industry subgroups—consumer electronics, small appliances, power tools, and highenergy applications—in the pass through scenario, which approximates the mid-point of the potential range of impacts. These results highlight impacts at various TSLs. TSL 1 would require battery chargers in product classes 2, 3 and 4 to each meet CSL 1. Impacts on INPV are relatively moderate at TSL 1 because a majority of application shipments in these product classes already meet CSL VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 1. However, those shipments already meeting CSL 1 are heavily weighted toward the consumer electronics sector. In most cases, CSL 1 could be met with incremental circuit design improvements and higher efficiency components. Satisfying this level would not require a full topology redesign or a move to Li-ion chemistry, although manufacturers of some applications indicated in interviews that they may elect such a design path. TSL 2 has the same efficiency requirements for product classes 3 and 4 as TSL 1 (CSL 1). Product class 2 manufacturers would have to meet CSL 2 at TSL 2, which would likely require battery charger design changes (e.g., moving to switched-mode and Li-ion chemistries) that would likely cause application manufacturers to incur significant R&D expenditures relative to what is normally budgeted for battery chargers. However, the financial impact of this investment effect would be minor compared to the base case industry value, which is largely driven by consumer electronics applications. Industry impacts would become more acute at TSL 3 and TSL 4, as best-inmarket or max-tech designs would be required for all battery chargers. The cost of a battery charger in product classes 3 and 4 rises sharply at CSL 2 (best in market) and further at CSL 3 (max-tech). For relatively inexpensive applications, the inability to fully pass PO 00000 Frm 00105 Fmt 4701 Sfmt 4702 18581 on these substantially higher costs (as assumed in the pass through and, to a greater extent, the constant price scenario) leads to significant margin compression, working capital drains, and, ultimately, reductions in INPV at the max-tech TSL. As discussed above, these aggregated results can mask differentially impacted industries and manufacturer subgroups. Nearly 90 percent of shipments in product classes 2, 3 and 4 fall under the broader consumer electronics category, with the remaining share split between small appliances and power tools. Consumer electronics applications have a much higher shipment-weighted average MSP ($175) than the other product categories ($80 for power tools and $60 for small appliances). Consequently, consumer electronics manufacturers are better able to absorb higher battery charger costs than small appliance and power tool manufacturers. Further, consumer electronics typically incorporate higher efficiency battery chargers already, while small appliances and power tool applications tend to cluster around baseline and CSL 1 efficiencies. These factors lead to proportionally greater impacts on small appliance and power tool manufacturers in the event they are not able to pass on and markup higher battery charger costs. Table V–28 through Table V–30 present INPV impacts in the pass E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.060</GPH> Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules through markup scenario for consumer electronic, power tool, and small appliance applications, respectively (for only those applications incorporating battery chargers in product class 2, 3 or 4). The results clearly indicate manufacturers of power tools and small appliances would face disproportionately adverse impacts, as compared to consumer electronics manufacturers and the overall product group’s results (shown above in Table Product Classes 5 and 6 information related to the analysis performed to project the potential sroberts on DSK6SPTVN1PROD with PROPOSALS The following tables (Table V–31 through Table V–34) summarize VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00106 Fmt 4701 Sfmt 4702 V–25 through Table V–27), if they are not able to mark up the incremental product costs. BILLING CODE 6450–01–P impacts on manufacturers of devices falling into product classes 5 and 6. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.061</GPH> 18582 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules exception of battery chargers for toy ride-on vehicles and lawn mowers, the majority of products in these groupings use baseline battery chargers. EP27MR12.063</GPH> remaining share. DOE’s market survey and interviews found that nearly all of the higher energy applications incorporate battery chargers with lead acid battery chemistries. With the VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00107 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.062</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Ride-on toy vehicles represent nearly three quarters of the combined shipment volume in product classes 5 and 6, with marine chargers and electric scooters accounting for the majority of the 18583 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS TSL 1, TSL 2, and TSL 3 represent CSL 1, CSL 2, and CSL 3, respectively, for both product class 5 and product class 6. The battery charger cost associated with each CSL is the same for product classes 5 and 6. The industry impacts at TSL 1 are minor to moderate because a large percentage of the market already meets the CSLs represented in that TSL and because the incremental battery charger product costs are minor relative to the average application MSP of $220. At TSL 2, the battery charger cost declines compared to the baseline because of the technology shift from a line-frequency power supply to a VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 switch-mode power supply, and the resulting impacts are projected to remain fairly moderate. At TSL 3, however, the impacts on INPV are severe because the required max-tech battery chargers would cost nearly seven times the cost of a baseline charger. Under the flat markup scenario, which assumes manufacturers could fully mark up the product to recover this additional cost, such an increase generates substantially greater cash flow and industry value. However, as noted earlier, the greater the increase in product costs, the less likely DOE believes that manufacturers will be able PO 00000 Frm 00108 Fmt 4701 Sfmt 4725 to fully markup the substantially higher production costs (the flat markup scenario). DOE believes manufacturers would be forced to absorb much of this dramatic cost increase at max-tech, yielding the substantially negative industry impacts, as shown by the lower-bound results. Product Class 7 The following tables (Table V–35 through Table V–38) summarize information related to the analysis performed to project the potential impacts on manufacturers of devices falling into product class 7. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.064</GPH> 18584 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Golf cars are the only application in product class 7. Approximately half the market incorporates baseline battery charger technology—the other half employs technology that meets the efficiency requirements at CSL 1. The cost of a battery charger in product class 7, though higher relative to other product classes, remains a small portion of the overall selling price of a golf car. As such, large percentage increases in VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 the cost of the battery charger, as in the case of max-tech, do not yield severe impacts on golf car OEMs, even in the constant price scenario. Note, however, this analysis focuses on the application manufacturer, or the OEM. DOE did identify a U.S. small business manufacturer of the golf car battery charger itself (as opposed to the application). DOE evaluates the impacts on standards on such manufacturers in the Regulatory Flexibility Analysis (see PO 00000 Frm 00109 Fmt 4701 Sfmt 4702 section VI.B for the results of that analysis). Product Class 8 The following tables (Table V–39 through Table V–42) summarize information related to the analysis performed to project the potential impacts on manufacturers of devices falling into product class 8. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.065</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS BILLING CODE 6450–01–C 18585 Product class 8 includes 14 applications, mostly consumer electronics. MP3 players and mobile phones make up the vast majority of product class 8 shipments (58 percent and 31 percent, respectively). Approximately 50 percent of MP3 players meet CSL 1 or higher and 73 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 percent of mobile phones already incorporate best-in-market battery chargers that exceed CSL 2. For most other applications in this product class, roughly two-thirds of the incorporated battery chargers already meet or exceed CSL 1. Furthermore, because the manufacturer selling prices of these PO 00000 Frm 00110 Fmt 4701 Sfmt 4702 dominant applications dwarf the incremental product costs associated with increasing the efficiency—even at max-tech—the overall industry impacts are projected to be minor for all TSLs for product class 8. Product Class 9 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.067</GPH> Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules EP27MR12.066</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18586 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 provides a more detailed reason for this decision. Product Class 10 The following tables (Table V–44 through Table V–47) summarize PO 00000 Frm 00111 Fmt 4701 Sfmt 4702 information related to the analysis performed to project the potential impacts on manufacturers of devices falling into product class 10. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.068</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS DOE did not examine any TSLs for product class 9 and did not conduct any downstream analyses for this product class. For product class 9, DOE is not proposing any energy conservation standards. Section V.B.2.fof this NOPR 18587 18588 sroberts on DSK6SPTVN1PROD with PROPOSALS BILLING CODE 6450–01–C Product class 10 has only one application: Uninterruptible power supplies. The vast majority of models on the market have sealed lead-acid battery chemistries. The efficiency distribution for product class 10 assumes all shipments are at the baseline CSL. Compared to the average application MSP of approximately $289, the incremental costs of meeting the higher CSLs remain relatively low, despite increasing substantially on a percentage VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 basis. Therefore, even in the constant price scenario, INPV impacts are projected to be limited. b. Impacts on Employment As part of the direct employment impact analysis, DOE attempted to quantify the number of domestic workers involved in EPS manufacturing. Based on manufacturer interviews and DOE’s research, DOE believes that all major EPS ODMs are foreign owned and operated. DOE did identify a few PO 00000 Frm 00112 Fmt 4701 Sfmt 4702 smaller niche EPS ODMs based in the U.S. and attempted to contact these companies. All of the companies DOE reached indicated their EPS manufacturing takes place abroad. During manufacturer interviews, large manufacturers also indicated the vast majority, if not all, EPS production takes place overseas. Due to DOE’s inability to identify any EPS ODMs with domestic manufacturing, DOE has tentatively concluded that there are no EPSs currently manufactured domestically. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.069</GPH> Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules However, in recognition of the fragmented nature of this market, DOE seeks comment and input as to whether there are EPS manufacturers that have domestic production. DOE also recognizes there are several OEMs or their domestic distributors that have employees in the U.S. that work on design, technical support, sales, training, certification, and other requirements. However, in interviews manufacturers generally did not expect any negative changes in the domestic employment of the design, technical support, or other departments of EPS OEMs located in the U.S. in response to new or amended energy conservation standards. For battery chargers, DOE similarly attempted to quantify the number of domestic workers involved in battery charger production. Based on manufacturer interviews and DOE’s research, DOE believes that the vast majority of all small appliance and consumer electronic applications are manufactured abroad. When looking specifically at the battery charger component, which is typically designed by the application manufacturer but sourced for production, the same dynamic holds to an even greater extent. That is, in the rare instance when an application’s production occurs domestically, it is very likely that the battery charger component is still produced and sourced overseas. For example, DOE identified several power tool applications with some level of domestic manufacturing. However, based on more detailed information obtained during interviews, DOE believes the battery charger components for these applications are sourced from abroad. Also, DOE was able to find a few manufacturers of medium and high power applications with facilities in the U.S. However, only a limited number of these companies produce battery chargers domestically for these applications. Therefore, based on manufacturer interviews and DOE’s research, DOE believes that golf cars are the only application with U.S.-based battery charger manufacturing. Any change in U.S. production employment due to new battery charger energy conservation standards is likely to come from changes involving these particular products. DOE seeks comment on the presence of any domestic battery charger manufacturing outside of the golf car industry and beyond prototyping for R&D purposes. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 At the proposed efficiency levels, domestic golf car manufacturers will face a difficult decision on whether to attempt to manufacture more efficient battery chargers in-house and try to compete with a greater level of vertical integration than their competitors, move production to lower-wage regions abroad, or source their battery charger manufacturing. DOE believes one of the latter two strategies would be more likely for domestic golf car manufacturers. DOE describes the major implications for golf car employment in the regulatory flexibility section VI.B below because the major domestic manufacturer is also a small business manufacturer. Similar to EPSs, DOE does not anticipate any negative changes in the domestic employment of the design, technical support, or other departments of battery charger application manufacturers located in the U.S. in response to new energy conservation standards. Standards may require some companies to redesign their battery chargers, change marketing literature, and train some technical and sales support staff. However, during interviews, manufacturers generally agreed these changes would not lead to positive or negative changes in employment. c. Impacts on Manufacturing Capacity DOE does not anticipate that the standards proposed in today’s rule would adversely impact manufacturer capacity. For EPSs, EISA has set a statutory compliance date. The EPS industry is characterized by rapid product development lifecycles. Most battery charger applications have similar design cycles. While there is no statutory compliance date for battery chargers, DOE believes the compliance date proposed in today’s rule provides sufficient time for manufacturers to ramp up capacity to meet the proposed standards for battery chargers and EPSs. DOE requests comment on the appropriate compliance date for battery charger (see section I). d. Impacts on Sub-Group of Manufacturers Using average cost assumptions to develop an industry cash-flow estimate is not adequate for assessing differential impacts among manufacturer subgroups. Small manufacturers, niche equipment manufacturers, and manufacturers exhibiting a cost structure substantially different from the industry average could be affected disproportionately. PO 00000 Frm 00113 Fmt 4701 Sfmt 4702 18589 DOE addressed manufacturer subgroups in the battery charger MIA. Because certain applications are disproportionately impacted compared to the overall product class, DOE reports those results individually so they can be considered as part of the overall MIA. DOE did not identify any EPS manufacturer subgroups that would require a separate analysis in the MIA. DOE also identified small businesses as a subgroup that could potentially be disproportionally impacted. DOE discusses the impacts on the small business subgroup in the regulatory flexibility analysis (section VI.B). e. Cumulative Regulatory Burden While any one regulation may not impose a significant burden on manufacturers, the combined effects of several impending regulations may have serious consequences for some manufacturers, groups of manufacturers, or an entire industry. Assessing the impact of a single regulation may overlook this cumulative regulatory burden. In addition to energy conservation standards, other regulations can significantly affect manufacturers’ financial operations. Multiple regulations affecting the same manufacturer can strain profits and can 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 received many comments about the potential cumulative regulatory burden (see section IV.I.4.a) that may result from a standard for battery chargers and EPSs. The regulatory burdens described in those comments, however, generally fall outside of the scope of the cumulative regulatory burden analysis, which generally focuses on the impacts related to Federal regulations with a compliance date within three years of the anticipated compliance date of today’s proposal. DOE notes that the potential for duplicative testing requirements raised by some commenters were addressed above. i. Impact Due to CEC Battery Charger Standard Table V–48 presents the range of impacts on all battery charger product classes due to the CEC battery charger standards. E:\FR\FM\27MRP2.SGM 27MRP2 18590 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules conversion costs and $3.8 million in capital conversion costs in order to have all battery charger applications sold in California meet the CEC standard by 2013. 3. National Impact Analysis EP27MR12.071</GPH> a. Significance of Energy Savings To estimate the energy savings during the analysis period attributable to potential standards for battery chargers and EPSs, DOE compared the energy consumption of these products in the base case to their anticipated energy consumption with standards set at each TSL. Table V–49 and Table V–50 present DOE’s forecasts of the national energy savings at each TSL for battery chargers and EPSs. The savings were calculated using the approach described in section IV.G. Chapter 10 of the NOPR TSD presents tables that also show the magnitude of the energy savings if the savings are discounted at rates of 3 and 7 percent. Discounted energy savings represent a policy perspective in which energy savings realized farther in the future are less significant than energy savings realized in the nearer term. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00114 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.070</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS DOE quantitatively assessed the impact of the CEC battery charger standard on battery charger application manufacturers. This standard affects applications using a battery charger that are sold in California beginning in 2013. DOE estimates the impacts on manufacturers to range from $137 million to ¥$575 million, or a change in INPV of 0.3 percent to ¥1.1 percent. This range depends on manufacturers’ ability to pass on the incremental price increases to consumers in the California markets caused by the CEC standard. DOE also estimated manufacturers will have to invest $12.6 million in product Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules b. Net Present Value of Consumer Costs and Benefits sroberts on DSK6SPTVN1PROD with PROPOSALS DOE estimated the cumulative NPV to the Nation of the total costs and savings for consumers that would result from potential standard levels for battery chargers and EPSs. In accordance with VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 the OMB’s guidelines on regulatory analysis (OMB Circular A–4, section E, September 17, 2003), DOE calculated NPV using both a 3-percent and a 7percent real discount rate. Table V–51 and Table V–52 show the consumer NPV results for each TSL DOE considered for EPSs, using both a PO 00000 Frm 00115 Fmt 4701 Sfmt 4702 18591 3-percent and a 7-percent discount rate. Table V–53 and Table V–54 show the corresponding results for battery chargers. In each case, the impacts cover the lifetime of products purchased in 2013–2042. See chapter 10 of the TSD for more detailed NPV results. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules BILLING CODE 6450–01–C DOE conducted NPV sensitivity analysis using three alternative price trends. The NPV results from the associated sensitivity cases are VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 described in appendix 10–X of the NOPR TSD. c. Indirect Impacts on Employment DOE develops estimates of the indirect employment impacts of PO 00000 Frm 00116 Fmt 4701 Sfmt 4702 potential standards on the economy in general. As discussed above, DOE expects energy conservation standards for battery chargers and EPSs to reduce energy bills for consumers of these products, and the resulting net savings E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.072</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18592 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules to be 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.J, to estimate these effects DOE used an input/output model of the U.S. economy. DOE understands that there are uncertainties involved in projecting employment impacts generated by an input/output model, especially changes in the later years of the analysis. Therefore, DOE generated results for near-term timeframes, such as 2015, where these uncertainties are reduced. The results suggest the proposed standards are likely to have 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 13 of the NOPR TSD presents more detailed results. battery chargers that meet or exceed the proposed standards. (42 U.S.C. 6295(o) (2)(B)(i)(IV)) 4. Impact on Utility or Performance of Products 6. Need of the Nation To Conserve Energy An improvement in the energy efficiency of the products subject to today’s NOPR is likely to improve the security of the Nation’s energy system and reduce the costs of energy production. Reduced electricity demand may also improve the reliability of the electricity system, particularly during sroberts on DSK6SPTVN1PROD with PROPOSALS As presented in section III.B of this notice, DOE has tentatively concluded that none of the TSLs considered in this notice would reduce the utility or performance of the products under consideration in this rulemaking. Furthermore, manufacturers of these products currently offer EPSs and VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 5. Impact of Any Lessening of Competition DOE has also considered any lessening of competition that is likely to result from amended standards. The Attorney General determines the impact, if any, of any lessening of competition likely to result from a proposed standard, and transmits such determination to the Secretary, together with an analysis of the nature and extent of such impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) To assist the Attorney General in making such determination, DOE will provide DOJ with copies of this NOPR and the TSD for review. DOE will consider DOJ’s comments on the proposed rule in preparing the final rule, and DOE will publish and respond to DOJ’s comments in that document. PO 00000 Frm 00117 Fmt 4701 Sfmt 4702 18593 peak-load periods. (42 U.S.C. 6295(o)(2) (B)(i)(VI)) Energy savings from amended standards for Class A EPSs and new standards for non-Class A EPSs and battery chargers could also produce environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases associated with electricity production. Table V–55 and Table V–56 provide DOE’s estimate of cumulative CO2, NOX, and Hg emissions reductions that would be expected to result from each of the TSLs considered in this rulemaking for EPSs and battery chargers, respectively. In the environmental assessment (chapter 15 in the NOPR TSD), DOE reports annual CO2, NOX, and Hg emissions reductions for each considered TSL. As discussed in section IV.L, DOE has not reported SO2 emissions reductions from power plants, because there is uncertainty about the effect of energy conservation standards on the overall level of SO2 emissions in the United States due to SO2 emissions caps. DOE also did not include NOX emissions reduction from power plants in States subject to CAIR because an amended energy conservation standard would not affect the overall level of NOX emissions in those States due to the emissions caps mandated by CAIR. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules BILLING CODE 6450–01–C VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00118 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.073</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18594 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS DOE also estimated monetary benefits likely to result from the reduced emissions of CO2 and NOX that DOE estimated for each of the TSLs considered for battery chargers and EPSs. In order to make this calculation similar to the calculation of the NPV of consumer benefits, DOE considered the reduced emissions expected to result over the lifetime of products shipped in the forecast period for each TSL. As discussed in section IV.M, a Federal interagency group selected four SCC values for use in regulatory analyses, which DOE used in the NOPR analysis. The four SCC values (expressed in 2007$) are $4.7/ton (the VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 average value from a distribution that uses a 5-percent discount rate), $21.4/ ton (the average value from a distribution that uses a 3-percent discount rate), $35.1/ton (the average value from a distribution that uses a 2.5percent discount rate), and $64.9/ton (the 95th-percentile value from a distribution that uses a 3-percent discount rate). These values correspond to the value of CO2 emission reductions in 2010; the values for later years are higher due to increasing damages as the magnitude of climate change increases. For each of the four cases, DOE calculated a present value of the stream of annual values using the same PO 00000 Frm 00119 Fmt 4701 Sfmt 4702 18595 discount rate as was used in the studies upon which the dollar-per-ton values are based. Table V–57 to Table V–60 and Table V–61 to Table V–66 present the global values of CO2 emissions reductions at each TSL considered for energy efficiency for EPSs and battery chargers, respectively. As explained in section IV.M.1, DOE calculated domestic values as a range from 7 percent to 23 percent of the global values, and these results are presented in Table V–67to Table V– 70 and Table V–71 to Table V–76 for EPSs and battery chargers, respectively. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 VerDate Mar<15>2010 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00120 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.074</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18596 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00121 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 18597 EP27MR12.075</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules VerDate Mar<15>2010 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00122 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.076</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18598 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00123 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 18599 EP27MR12.077</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules VerDate Mar<15>2010 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00124 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.078</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18600 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00125 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 18601 EP27MR12.079</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS DOE is well aware that scientific and economic knowledge about the contribution of CO2 and other GHG emissions to changes in the future global climate and the potential resulting damages to the world economy continues to evolve rapidly. Thus, any value placed in this rulemaking on reducing CO2 emissions is subject to change. DOE, together with other Federal agencies, will continue to review various methodologies for estimating the monetary value of reductions in CO2 and other GHG VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 emissions. This ongoing review will consider any comments on this subject that are part of the public record for this and other rulemakings, as well as other methodological assumptions and issues. However, consistent with DOE’s legal obligations, and taking into account the uncertainty involved with this particular issue, DOE has included in this NOPR the most recent values and analyses resulting from the ongoing interagency review process. DOE also estimated a range for the cumulative monetary value of the PO 00000 Frm 00126 Fmt 4701 Sfmt 4702 economic benefits associated with NOX emissions reductions anticipated to result from amended standards for Class A EPSs and new standards for non-Class A EPSs and battery chargers. The dollarper-ton values that DOE used are discussed in section IV.M. Table V–77 presents the cumulative present values for each TSL considered for EPSs, calculated using 7-percent and 3percent discount rates. Table V–78 presents similar results for the TSLs considered for battery chargers. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.080</GPH> 18602 The NPV of the monetized benefits associated with emissions reductions can be viewed as a complement to the NPV of the consumer savings calculated for each TSL considered in this VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 rulemaking. Table V–79 shows an example of the calculation of the combined NPV, including benefits from emissions reductions for the case of TSL 1 for battery chargers product classes 2, PO 00000 Frm 00127 Fmt 4701 Sfmt 4702 18603 3, 4. Table V–80 and Table V–81 present the NPV values that result from adding the estimates of the potential economic benefits resulting from reduced CO2 and NOX emissions in each of four valuation E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.081</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS scenarios to the NPV of consumer savings calculated for each TSL considered for EPSs, at both a 7-percent and a 3-percent discount rate. The CO2 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 values used in the columns of each table correspond to the four scenarios for the valuation of CO2 emission reductions presented in section IV.M. Table V–82 PO 00000 Frm 00128 Fmt 4701 Sfmt 4725 and Table V–83 present similar results for the TSLs considered for battery chargers. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.082</GPH> 18604 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00129 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 18605 EP27MR12.083</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules VerDate Mar<15>2010 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00130 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.084</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18606 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00131 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 18607 EP27MR12.085</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18608 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Although adding the value of consumer savings to the values of emission reductions provides a valuable perspective, two issues should be considered. First, the national operating savings are domestic U.S. consumer monetary savings that occur as a result of market transactions, while the value of CO2 reductions is based on a global value. Second, the assessments of operating cost savings and CO2 savings are performed with different methods that use quite different time frames for analysis. The national operating cost savings is measured for the lifetime of products shipped in the 30-year period after the compliance date. The SCC VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 values, on the other hand, reflect the present value of all future climaterelated impacts resulting from the emission of one ton of carbon dioxide in each year. These impacts go well beyond 2100. 7. Other Factors In determining whether a standard is economically justified, DOE may consider any other factors that it deems relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VI))) The California IOUs asked that DOE consider adopting the standard levels proposed by the State of California. (California IOUs, No. 43 at p. 2) In January 2012, the CEC finalized its battery charger energy conservation PO 00000 Frm 00132 Fmt 4701 Sfmt 4702 standards and published energy conservation standards for battery chargers. Prior to finalizing these standards, CEC published a draft staff report outlining the requirements that were ultimately adopted.68 The standards consist of two metrics; one is a maximum allowance for 24-hour charge and maintenance energy, while the other is a maximum allowance for the combination of maintenance and no battery mode power. DOE analyzed the 68 Singh, Harinder; Rider, Ken. 2011. Staff Report Staff Analysis of Battery Chargers and SelfContained Lighting Controls. 2011 California Energy Commission, Efficiency and Renewable Energy Division, Appliances and Process Energy Office. CEC–400–2011–001–SF. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.086</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS BILLING CODE 6450–01–C Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18609 standards at these levels. Additional results for these CSLs are presented elsewhere in section V.B and in the TSD. 6295(o)(2)(B)(i)) The new or amended standard must also result in the significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) For today’s NOPR, DOE considered the impacts of standards at each TSL, beginning with the maximum technologically feasible level, to determine whether that level was economically justified. Where the maxtech level was not justified, DOE then considered the next most efficient level and undertook the same evaluation until it reached the most efficient level that is both technologically feasible and economically justified and saves a significant amount of energy. DOE separately discusses the benefits and burdens of each TSL for each group of products. To aid the reader in its discussion of the benefits and burdens of each TSL, DOE presents summary tables containing 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 impact whether a given efficiency level is economically justified. These factors include the impacts on identifiable subgroups of consumers, such as low-income households and seniors, who may be disproportionately affected by a national standard. Section V.B.1 presents the estimated impacts of each TSL on these subgroups. DOE also considers impacts on employment stemming from the manufacture of the products subject to standards (see section V.B.2.b), as well as potential indirect impacts in the national economy (see section V.B.3.c). DOE notes that the economics literature provides a wide-ranging discussion of how consumers trade off upfront costs and energy savings in the absence of government intervention. Much of this literature attempts to explain why consumers appear to undervalue energy efficiency improvements. This undervaluation suggests that regulation that promotes energy efficiency can produce significant net private gains (as well as producing social gains by, for example, reducing pollution). There is evidence that consumers undervalue future energy savings as a result of (1) a lack of information; (2) a lack of sufficient salience of the long-term or aggregate benefits; (3) a lack of sufficient savings to warrant delaying or altering; (4) excessive focus on the short term, in the C. Proposed Standards When considering proposed standards, the new or amended energy conservation standard that DOE adopts for any type (or class) of covered product shall 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 considering, to the greatest extent practicable, the seven statutory factors discussed previously. (42 U.S.C. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00133 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.087</GPH> section IV.C.2.d above. Table shows this mapping and the national energy savings and net benefits that could be expected to result from federal DOE incorporated the CEC’s battery charger standards into its analysis by adjusting its base case efficiency distributions, as explained in section IV.G.4 above. It did not choose proposed standard levels with the explicit intention of aligning its standards with the CEC’s. Rather, as in all such rulemakings, the proposed levels were selected to meet a number of criteria specified in EPCA. These decisions for each product class grouping are explained in detail in the following section. sroberts on DSK6SPTVN1PROD with PROPOSALS CEC’s proposal and determined, for each of DOE’s product classes, which CSL aligns most closely with the CEC’s proposed standards, as explained in 18610 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS 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 (that is, renter versus owner; builder vs. purchaser). Other literature indicates that with less than perfect foresight and a high degree of uncertainty about the future, consumers may trade off these types of investments at a higher than expected rate between current consumption and uncertain future energy cost savings. In 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 a purchase of a product in the standards case, this decreases sales for product manufacturers and the cost to manufacturers 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 regulatory option VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 decreases the number of products used by consumers, this decreases the potential energy savings from an energy conservation standard. DOE provides detailed estimates of shipments and changes in the volume of product purchases in chapter 9 of the NOPR 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. While DOE is not prepared at present to provide a fuller quantifiable framework for estimating the benefits and costs of changes in consumer 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 efficiency standards, and potential enhancements to the methodology by which these PO 00000 Frm 00134 Fmt 4701 Sfmt 4702 impacts are defined and estimated in the regulatory process.69 DOE welcomes comments on approaches for improved assessment of the consumer welfare impacts of appliance standards. 1. External Power Supplies a. Product Class B—Direct Operation External Power Supplies Table V–85 presents a summary of the quantitative impacts estimated for each TSL for EPSs in product class B. As outlined in section V.A.1, DOE is extending the TSLs for product class B to product classes C, D, and E since product class B was the only one directly analyzed and interested parties supported this approach because of the technical similarities among these products. The efficiency levels contained in each TSL are described in section V.A.1. BILLING CODE 6450–01–P 69 Alan Sanstad. Notes on the Economics of Household Energy Consumption and Technology Choice. Lawrence Berkeley National Laboratory. 2010. Available online at: https:// www1.eere.energy.gov/buildings/ appliance_standards/pdfs/consumer_ee_theory.pdf. E:\FR\FM\27MRP2.SGM 27MRP2 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00135 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 18611 EP27MR12.088</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18612 sroberts on DSK6SPTVN1PROD with PROPOSALS BILLING CODE 6450–01–C DOE first considered TSL 3, which represents the max-tech efficiency level. TSL 3 would save 1.316 quads of energy, an amount DOE considers significant. Under TSL 3, the NPV of consumer benefits would be ¥$2.357 billion, using a discount rate of 7 percent, and ¥$3.292 billion, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 3 are 62.5 Mt of CO2, 51.6 kt of NOX, and 0.331 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 3 ranges from $0.263 billion to $3.936 billion. At TSL 3, the average LCC impact is a gain (consumer savings) of $0.02 for the 2.5W unit and a cost (LCC savings decrease) of $1.19 for the 18W unit, $1.38 for the 60W unit, and $5.49 for the 120W unit. The median payback period is 4.3 years for the 2.5W unit, 8.1 years for the 18W unit, 6.4 years for the 60W unit, and 9.1 years for the 120W unit. The fraction of consumers experiencing an LCC benefit is 38.7 percent for the 2.5W unit, 25.6 percent for the 18W unit, 7.2 percent for the 60W unit, and 0 percent for the 120W unit. The fraction of consumers experiencing an LCC cost is 61.3 percent for the 2.5W unit, 74.4 percent for the 18W unit, 92.8 percent for the 60W unit, and 100 percent for the 120W unit. At TSL 3, the projected change in INPV for direct operation product classes B, C, D, and E as a group ranges from a decrease of $123.5 million to an increase of $17.9 million. At TSL 3, DOE recognizes the risk of very large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 3 could result in a net loss of 53.2 percent in INPV to manufacturers of EPSs in these product classes. However, as DOE has not VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 identified any domestic manufacturers of direct operation EPSs, it does not project any immediate negative impacts on direct domestic jobs. The Secretary tentatively concludes that at TSL 3 for EPSs in product class B, the negative NPV of consumer benefits, the economic burden on a significant fraction of consumers due to the large increases in product cost, and the capital conversion costs and profit margin impacts that could result in a very large reduction in INPV, outweigh the benefits of energy savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions. Consequently, the Secretary has tentatively concluded that TSL 3 is not economically justified. DOE then considered TSL 2. TSL 2 would save 0.7246 quads of energy, an amount DOE considers significant. Under TSL 2, the NPV of consumer benefits would be $463 million, using a discount rate of 7 percent, and $1.138 billion, using a discount rate of 3 percent. Additionally, TSL 2 yields the maximum NPV of consumer benefits added to the social cost of carbon and monetized NOX emissions reductions 70 with a value of $1.199 billion at a 7percent discount rate and $1.894 billion at a 3-percent discount rate. The cumulative emissions reductions at TSL 2 are 34.3 Mt of CO2, 28.4 kt of NOX, and 0.182 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 2 ranges from $0.145 billion to $2.166 billion. At TSL 2, the average LCC impact is a gain (consumer savings) of $0.04 for the 2.5W unit, $0.69 for the 18W unit, $0.61 for the 120W unit, and a cost (LCC savings decrease) of $0.45 for the 60W 70 Assuming the social cost of carbon equal to $21.4 per metric ton and NOX calculated with a medium value of $2,514 per short ton. These values are applied throughout the TSL discussion that follows. PO 00000 Frm 00136 Fmt 4701 Sfmt 4702 unit. The median payback period is 4.3 years for the 2.5W unit, 3.1 years for the 18W unit, 5.4 years for the 60W unit, and 1.9 years for the 120W unit. The fraction of consumers experiencing an LCC benefit is 38.6 percent for the 2.5W unit, 52.3 percent years for the 18W unit, 13.6 percent for the 60W unit, and 88.4 percent for the 120W unit. The fraction of consumers experiencing an LCC cost is 59.1 percent for the 2.5W unit, 37.5 percent for the 18W unit, 85.2 percent for the 60W unit, and 8.6 percent for the 120W unit. At TSL 2, the projected change in INPV for product classes B, C, D, and E as a group ranges from a decrease of $81.4 million to a decrease of $35.2 million. DOE recognizes the risk of large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 2 could result in a net loss of 35.1 percent in INPV to manufacturers of EPSs in these product classes. The Secretary tentatively concludes that at TSL 2 for EPSs in product class B, the benefits of energy savings, positive NPV of consumer benefits, emission reductions, and the estimated monetary value of the CO2 emissions reductions outweigh the economic burden on a significant fraction of consumers due to the increases in product cost and the capital conversion costs and profit margin impacts that could result in a reduction in INPV to manufacturers. After considering the analysis, comments to the preliminary analysis and TSD, and the benefits and burdens of TSL 2, the Secretary tentatively concludes that this TSL will offer the maximum improvement in efficiency that is technologically feasible and economically justified and will result in the significant conservation of energy. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.089</GPH> Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 technical similarities among all of these devices. The proposed new and amended energy conservation standards for these EPSs, expressed as equations PO 00000 Frm 00137 Fmt 4701 Sfmt 4725 for minimum average active-mode efficiency and maximum no-load input power, are shown in Table V–86. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.090</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Therefore, DOE today proposes to adopt TSL 2 for EPSs in product class B and, by extension, for EPSs in product classes C, D, and E because of the 18613 18614 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Table V–87 presents a summary of the quantitative impacts estimated for each sroberts on DSK6SPTVN1PROD with PROPOSALS BILLING CODE 6450–01–C DOE first considered TSL 3, which represents the max-tech efficiency level. TSL 3 would save 0.147 quads of energy, an amount DOE considers significant. Under TSL 3, the NPV of consumer benefits would be ¥$364 million, using a discount rate of 7 percent, and ¥$533 million, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 3 are 6.92 Mt of CO2, 5.71 kt of NOX, and 0.036 t of Hg. The estimated monetary value of the cumulative CO2 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 TSL for multiple-voltage EPSs. The efficiency levels contained in each TSL are described in section V.A. emissions reductions at TSL 3 ranges from $0.029 billion to $0.440 billion. At TSL 3, the average LCC impact is a cost (LCC savings decrease) of $3.09. The median payback period is 13.2 years. The fraction of consumers experiencing an LCC benefit is 5 percent while the fraction of consumers experiencing an LCC cost is 95 percent. At TSL 3, the projected change in INPV ranges from a decrease of $17.9 million to a decrease of $4.6 million. At TSL 3, DOE recognizes the risk of very large negative impacts if manufacturers’ expectations concerning reduced profit PO 00000 Frm 00138 Fmt 4701 Sfmt 4702 margins are realized. If the high range of impacts is reached, as DOE expects, TSL 3 could result in a net loss of 40.5 percent in INPV to manufacturers of multiple-voltage EPSs. However, as DOE has not identified any domestic manufacturers of multiple-voltage EPSs, it does not project any immediate negative impacts on direct domestic jobs. The Secretary tentatively concludes that at TSL 3 for multiple-voltage EPSs, the negative NPV of consumer benefits, the economic burden on a significant fraction of consumers due to the large E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.091</GPH> b. Product Class X—Multiple-Voltage External Power Supplies Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules median payback period is 4.7 years. The fraction of consumers experiencing an LCC benefit is 49 percent while the fraction of consumers experiencing an LCC cost is 51 percent. The cumulative emissions reductions at TSL 2 are 3.38 Mt of CO2, 2.79 kt of NOX, and 0.018 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 2 ranges from $0.014 billion to $0.215 billion. At TSL 2, the projected change in INPV ranges from a decrease of $12.8 million to a decrease of $12.0 million. At TSL 2, DOE recognizes the risk of large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 2 could result in a net loss of 28.9 percent in INPV to manufacturers of multiple-voltage EPSs. The Secretary tentatively concludes that at TSL 2 for multiple-voltage EPSs, the benefits of energy savings, positive NPV of consumer benefits, emission c. Product Class H—High-Power External Power Supplies TSL for high-power EPSs. The efficiency levels contained in each TSL are described in section V.A. Table V–89 presents a summary of the quantitative impacts estimated for each sroberts on DSK6SPTVN1PROD with PROPOSALS reductions, and the estimated monetary value of the CO2 emissions reductions outweigh the economic burden on a significant fraction of consumers due to the increases in product cost and the capital conversion costs and profit margin impacts that could result in a reduction in INPV for manufacturers. After considering the analysis, comments to the preliminary analysis and TSD, and the benefits and burdens of TSL 2, the Secretary tentatively concludes that this TSL will offer the maximum improvement in efficiency that is technologically feasible and economically justified and will result in the significant conservation of energy. Therefore, DOE today proposes to adopt TSL 2 for multiple-voltage EPSs. The proposed new and amended energy conservation standard for multiplevoltage EPSs, expressed as an equation for minimum average active-mode efficiency and maximum no-load input power, is shown in Table V–88. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00139 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.092</GPH> increases in product cost, and the capital conversion costs and profit margin impacts that could result in a very large reduction in INPV outweigh the benefits of energy savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions. Consequently, the Secretary has tentatively concluded that TSL 3 is not economically justified. DOE then considered TSL 2. TSL 2 would save 0.0718 quads of energy, an amount DOE considers significant. Under TSL 2, the NPV of consumer benefits would be $176 million, using a discount rate of 7 percent, and $330 million, using a discount rate of 3 percent. Additionally, TSL 2 yields the maximum NPV of consumer benefits added to the social cost of carbon and monetized NOX emissions reductions with a value of $248 million at a 7percent discount rate and $405 million at a 3-percent discount rate. At TSL 2, the average LCC impact is a gain (consumer savings) of $2.07. The 18615 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules DOE first considered TSL 3, which represents the max-tech efficiency level. TSL 3 would save 0.0015 quads of energy, an amount DOE considers significant. Under TSL 3, the NPV of consumer benefits would be $3.6 million, using a discount rate of 7 percent, and $7.6 million, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 3 are 0.065 Mt of CO2, 0.053 kt of NOX, and less than 0.0001 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 3 ranges from less than $0.0001 to $0.004 billion. At TSL 3, the average LCC impact is a gain (consumer savings) of $92.96. The median payback period is 2.5 years. The fraction of consumers experiencing an LCC benefit is 83.1 percent while the VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 fraction of consumers experiencing an LCC cost is 16.9 percent. At TSL 3, the projected change in INPV ranges from a decrease of $0.05 million to a decrease of $0.03 million. At TSL 3, DOE recognizes the risk of very large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 3 could result in a net loss of 47.3 percent in INPV to manufacturers of high-power EPSs. However, as DOE has not identified any domestic manufacturers of high power EPSs, it does not project any immediate negative impacts on direct domestic jobs. The Secretary tentatively concludes that at TSL 3 for high-power EPSs, the additional considerations of the PO 00000 Frm 00140 Fmt 4701 Sfmt 4702 potential negative impacts of a standard at this max-tech TSL outweigh the benefits of energy savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions. DOE notes that it scaled results for product class B to estimate the cost and efficiency of this max-tech CSL. Consequently, DOE is unaware of any product that can achieve this CSL in either product class B or H. Thus, although DOE’s analysis indicates that the max-tech efficiency level is achievable, there is a risk that unforeseen obstacles remain to creating an EPS at this TSL. Additionally, setting a standard at TSL 3 would create a discontinuity in the average efficiency standards for EPSs. For product class B devices, the average efficiency standard is constant E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.093</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18616 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18617 efficiency standard between two product classes despite numerous technical similarities. Consequently, the Secretary has tentatively concluded that TSL 3 is not justified. DOE then considered TSL 2. TSL 2 would save 0.0014 quads of energy, an amount DOE considers significant. Under TSL 2, the NPV of consumer benefits would be $5.0 million, using a discount rate of 7 percent, and $9.7 million, using a discount rate of 3 percent. At TSL 2, the average LCC impact is a gain (consumer savings) of $129.08. The median payback period is 0.2 years. The fraction of consumers experiencing an LCC benefit is 100 percent while the fraction of consumers experiencing an LCC cost is 0 percent. The cumulative emissions reductions at TSL 2 are 0.058 Mt of CO2, 0.048 kt of NOX, and less than 0.0001 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 2 ranges from less than $0.0001 to $0.004 billion. Additionally, TSL 2 yields the maximum NPV of consumer benefits added to the social cost of carbon and monetized NOX emissions reductions with a value of $6.3 million at a 7-percent discount rate and $11.1 million at a 3-percent discount rate. At TSL 2, the projected change in INPV ranges from a decrease of $0.04 million to a decrease of $0.04 million. At TSL 2, DOE recognizes the risk of large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 2 could result in a net loss of 44.0 percent in INPV to manufacturers of high-power EPSs. The Secretary tentatively concludes that at TSL 2 for high-power EPSs, the benefits of energy savings, positive NPV of consumer benefits, positive LCC savings for all consumers, emission reductions, and the estimated monetary value of the CO2 emissions reductions outweigh the economic burden of the capital conversion costs and profit margin impacts that could result in a reduction in INPV for manufacturers. The Secretary also tentatively concludes that this TSL will offer the maximum improvement in efficiency that is technologically feasible and economically justified and will result in the significant conservation of energy. Therefore, DOE today proposes to adopt TSL 2 for high-power EPSs. The proposed new and amended energy conservation standards for high-power EPSs, expressed as a discrete standard for minimum average active-mode efficiency and maximum no-load input power, are shown in Table V–90. d. Product Class N—Indirect-Operation External Power Supplies A devices in product class N are technically equivalent. Because of this technical equivalency, DOE believes that EPSs of both types can achieve the same efficiency level for the same cost and, thus, grouped these EPSs into one product class for analysis. DOE is not aware of any capacity- or performancerelated features of the non-Class A devices in product class N that would enable DOE to create a separate class for this group of devices. 42 U.S.C. 6295(q) Of the estimated 75 million EPSs in this product class sold annually, 46 percent are Class A and are already subject to the Federal standards prescribed by EISA 2007. The remaining 54 percent are non-Class A EPSs, which are not currently subject to Federal standards. Table V–91 lists those applications that DOE has identified as product class N EPSs and indicates how many of each are subject to the current Federal standard for Class A EPSs and how many are non-Class A devices. DOE seeks comment on the accuracy of its estimates regarding the proportions of these applications that ship with indirect-operation EPSs versus directoperation EPSs. (See Issue 17 under ‘‘Issues on Which DOE Seeks Comment’’ in Section VII.E of this notice.) Product class N consists of indirectoperation EPSs, which are EPSs that serve only as battery charger components and do not operate an enduse consumer product or power any auxiliary functions of an end-use consumer product on their own. See section IV.A.3 above. The applications that use these EPSs consist of applications using motors and detachable batteries, which correspond to MADB non-Class A EPSs and other applications that use Class A EPSs. DOE believes that the Class A and non-Class VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00141 Fmt 4701 Sfmt 4702 BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.094</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS for nameplate output power ratings greater than 49 watts up to 250 watts. At 250 watts, where product class H begins, the average efficiency standard would increase by 4 percent if DOE set standards for this product class at the max-tech TSL. This discontinuity in efficiency between the two product classes would be the result of the proposed standards for product class B EPSs being equivalent to the best-inmarket CSL equation while the proposed standards for product class H would be equivalent to the max-tech CSL equation for high-power EPSs. DOE believes that setting a standard with a large discontinuity between these product classes is not consistent with EPS design trends. In contrast, by applying the same level of stringency, scaled for the representative unit voltage, to all EPSs with output power greater than 250 watts, the achievable efficiency in EPS designs that have an output power above 49 watts remains nearly constant. This result occurs because the switching and conduction losses associated with the EPS remain proportionally the same with the increase in output power, which creates a relatively flat achievable efficiency above 49 watts. If DOE were to adopt a level that created a discontinuity in the efficiency levels, it would ignore this trend and set a higher Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules BILLING CODE 6450–01–C First, DOE considered setting standards for EPSs in product class N at an efficiency level greater than the level VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 prescribed by EISA for all Class A EPSs. While such a standard would theoretically yield energy savings, DOE tentatively believes that these savings PO 00000 Frm 00142 Fmt 4701 Sfmt 4702 would not be cost justified. In the case of these particular devices, DOE believes that a more effective way to obtain additional energy savings is to E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.095</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18618 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS regulate the battery chargers of which product class N EPSs are a part, since all of the power flowing through an indirect-operation EPS flows to the battery charger. In contrast, a directoperation EPS’s output power flows to both a battery charger and an end-use consumer product, which means that regulating only the battery charger would not adequately address the entire system. Thus, by not setting new standards for product class N EPSs beyond the existing EISA standard level, DOE believes that manufacturers will have greater flexibility in designing more efficient battery chargers without adversely impacting their utility and performance. This approach would help ensure that consumers and the Nation as a whole will realize cost-effective savings either through improvements to the EPS or other components in the battery charger. Thus, DOE tentatively believes that any cost-effective energy savings for these products will be realized through the battery charger standard itself. Next, DOE considered standards equivalent to the current EISA standards for Class A EPSs. This approach would represent no change in standards for Class A devices and a new standard for non-Class A devices in product class N. (Note that all Class A EPSs, including those in product class N, cannot, by VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 virtue of EPCA’s anti-backsliding provision, be subject to a standard less stringent than the current Class A standard prescribed by EISA 2007 (see 42 U.S.C. 6295(o)(1)).) As indicated in section IV.A.1 above, DOE has not identified any non-Class A EPSs in product class N that are not already subject to the California EPS standard. As a result, all of these nonClass A EPSs that fall into product class N must already comply with the California standard. The California standard for non-Class A EPSs is at the same efficiency level as the Federal Class A EPS standard. California also relies on the Federal test procedure to verify compliance with its EPS standards. Since California requires identical standards and test methods for non-Class A EPSs as DOE does for Class A, DOE considers these standards to be equivalent. Additionally, manufacturers have alluded informally to DOE that the California standard is the ‘‘de facto’’ national standard for their non-Class A EPSs because they typically sell the same EPS for a given product line throughout the country. The California IOUs concurred with this view. (California IOUs, No. 43 at p. 9) Thus, DOE believes that the non-Class A EPSs in product class N already meet the Federal standards currently in place for PO 00000 Frm 00143 Fmt 4701 Sfmt 4702 18619 Class A EPSs and seeks comment on the accuracy of this belief. (See Issue 18 under ‘‘Issues on Which DOE Seeks Comment’’ in section VII.E of this notice.) Under the assumption that all nonClass A EPSs in product class N already meet the Federal standards currently in place for Class A EPSs, a new standard at the EISA level for these products would not yield significant energy savings and, therefore, would not be cost-justified. Therefore, DOE is not proposing new standards for indirect operation EPSs today. If DOE receives new information indicating that this assumption is incorrect, i.e., that manufacturers are not producing all indirect operation EPSs at or above the EISA efficiency levels, DOE will reconsider this decision and evaluate potential new standards for this product class. 2. Battery Chargers a. Low-Energy, Inductive Charging Battery Chargers, Product Class 1 Table V–92 presents a summary of the quantitative impacts estimated for each TSL for low-energy, inductive charging battery chargers. The efficiency levels contained in each TSL are described in section V.A. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules DOE first considered TSL 3, which represents the max-tech efficiency level. TSL 3 would save 0.178 quads of energy, an amount DOE considers significant. Under TSL 3, the NPV of consumer benefits would be ¥$527 million, using a discount rate of 7 percent, and ¥$781 million, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 3 are 8.36 Mt of CO2, 6.90 kt of NOX, and 0.044 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 3 ranges from $0.035 billion to $0.531 billion. At TSL 3, the average LCC impact is a cost (LCC savings decrease) of $2.87 for low-energy inductive charging battery chargers. The median payback period is 8.5 years. The fraction of consumers experiencing an LCC benefit VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 is 1.8 percent and the fraction of consumers experiencing an LCC cost is 98.2 percent. At TSL 3, the projected change in INPV ranges from a decrease of $441 million to an increase of $29 million. At TSL 3, DOE recognizes the risk of very large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 3 could result in a net loss of 89.7 percent in INPV to manufacturers of battery chargers. The Secretary tentatively concludes that at TSL 3 for low-energy, inductive charging battery chargers, the benefits of energy savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions would be outweighed by the negative NPV of PO 00000 Frm 00144 Fmt 4701 Sfmt 4702 consumer benefits, the economic burden on a significant fraction of consumers due to the large increases in product cost, and the capital conversion costs and profit margin impacts that could result in a very large reduction in INPV for the manufacturers. Consequently, the Secretary has tentatively concluded that TSL 3 is not economically justified. DOE then considered TSL 2. TSL 2 would save 0.130 quads of energy, an amount DOE considers significant. Under TSL 2, the NPV of consumer benefits would be $318 million, using a discount rate of 7 percent, and $606 million, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 2 are 6.11 Mt of CO2, 5.05 kt of NOX, and 0.032 t of Hg. The estimated monetary value of the cumulative CO2 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.096</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18620 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules emissions reductions at TSL 2 ranges from $0.026 billion to $0.388 billion. Additionally, the NPV of consumer benefits added to the social cost of carbon and monetized NOX emissions reductions is maximized with a value of $741 million at a 3-percent discount rate and $450 million at a 7-percent discount rate at TSL 2. At TSL 2, the average LCC impact is a savings of $1.52 for low-energy inductive charging battery chargers. The median payback period is 1.7 years. The fraction of consumers experiencing an LCC benefit is 88.9 percent and the fraction of consumers experiencing an LCC cost is 0 percent. At TSL 2, the projected change in INPV ranges from a decrease of $101 million to an increase of $1 million. DOE recognizes the risk of large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 2 could result in a net loss of 20.6 percent in INPV to manufacturers of low-energy inductive charging battery chargers. The Secretary tentatively concludes that at TSL 2 for low-energy, inductive charging battery chargers, the benefits of energy savings, positive NPV of consumer benefits, positive mean LCC savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions outweigh the economic burden of the capital 18621 conversion costs and profit margin impacts that could result in a reduction in INPV for manufacturers. After considering the analysis, comments to the September 2010 notice and the preliminary TSD, and the benefits and burdens of TSL 2, the Secretary tentatively concludes that this TSL will offer the maximum improvement in efficiency that is technologically feasible and economically justified and will result in the significant conservation of energy. Therefore, DOE today proposes to adopt TSL 2 for low-energy inductive charging battery chargers. The proposed new energy conservation standard for lowenergy inductive charging battery chargers is shown in Table V–97. TABLE V–93—PROPOSED STANDARD FOR PRODUCT CLASS 1 Maximum unit energy consumption (kWh/yr) Product class 1 (Low-Energy, Inductive) .......................................................................................................................................... b. Low-Energy, Non-Inductive Charging Battery Chargers, Product Classes 2, 3, and 4 sroberts on DSK6SPTVN1PROD with PROPOSALS Table presents a summary of the quantitative impacts estimated for each VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 TSL for low-energy, non-inductive charging battery chargers. The efficiency levels contained in each TSL are described in section V.A. BILLING CODE 6450–01–P PO 00000 Frm 00145 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 3.04 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules BILLING CODE 6450–01–C VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00146 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.097</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18622 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules DOE first considered TSL 4, which represents the max-tech efficiency level. TSL 4 would save 1.9971 quads of energy, an amount DOE considers significant. Under TSL 4, the NPV of consumer benefits would be ¥$23.54 billion, using a discount rate of 7 percent, and ¥$38.44 billion, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 4 are 94.6 Mt of CO2, 78.1 kt of NOX, and 0.502 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 4 ranges from $0.398 billion to $5.949 billion. At TSL 4, the average LCC impact is a cost (LCC savings decrease) of $4.54, $2.15, and $10.14 for low-energy noninductive charging battery charger product classes 2, 3, and 4 respectively. The median payback period is 16.9, 21.5, and 37.6 years for product classes 2, 3, and 4 respectively. The fraction of consumers experiencing an LCC benefit is 3.2, 14.2, and 1.8 percent for each product class and the fraction of consumers experiencing an LCC cost is 96.8, 85.8, and 98.2 percent for each product class. At TSL 4, the projected change in INPV ranges from a decrease of $14.56 billion to an increase of $0.98 billion. At TSL 4, DOE recognizes the risk of very large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 4 could result in a net loss of 33.2 percent in INPV to manufacturers of battery chargers. The Secretary tentatively concludes that at TSL 4 for low-energy, noninductive charging battery chargers, the benefits of energy savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions would be outweighed by the negative NPV of consumer benefits, the economic burden on a significant fraction of consumers due to the large increases in product cost, and the capital conversion costs and profit margin impacts that could result in a very large reduction in INPV for the manufacturers. Consequently, the Secretary has tentatively concluded that TSL 4 is not economically justified. DOE then considered TSL 3, which represents the best-in-market efficiency level. TSL 3 would save 1.797 quads of energy, an amount DOE considers significant. Under TSL 3, the NPV of consumer benefits would be ¥$8.97 billion, using a discount rate of 7 percent, and ¥$14.16 billion, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 3 are 85.1 Mt of CO2, 70.3 kt of NOX, and 0.452 t of Hg. The estimated VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 monetary value of the cumulative CO2 emissions reductions at TSL 3 ranges from $0.358 billion to $5.352 billion. At TSL 3, the average LCC impact is a cost (LCC savings decrease) of $1.81, $2.12, and $2.73 for low-energy noninductive charging battery charger product classes 2, 3, and 4 respectively. The median payback period is 8.5, 21.9, and 13.8 years for product classes 2, 3, and 4 respectively. The fraction of consumers experiencing an LCC benefit is 10.0, 13.3, and 2.2 percent for each product class and the fraction of consumers experiencing an LCC cost is 87.1, 65.8, and 46.4 percent for each product class. At TSL 3, the projected change in INPV ranges from a decrease of $10.86 billion to an increase of $0.53 billion. At TSL 3, DOE recognizes the risk of large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 3 could result in a net loss of 24.8 percent in INPV to manufacturers of battery chargers. The Secretary tentatively concludes that at TSL 3 for low-energy, noninductive charging battery chargers, the benefits of energy savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions would be outweighed by the negative NPV of consumer benefits, the economic burden on a significant fraction of consumers due to the large increases in product cost, and the capital conversion costs and profit margin impacts that could result in a very large reduction in INPV for the manufacturers. Consequently, the Secretary has tentatively concluded that TSL 3 is not economically justified. DOE then considered TSL 2, which represents an intermediate efficiency level. TSL 2 would save 0.759 quads of energy, an amount DOE considers significant. Under TSL 2, the NPV of consumer benefits would be ¥$435 million, using a discount rate of 7 percent, and ¥$367 million, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 2 are 35.9 Mt of CO2, 29.7 kt of NOX, and 0.191 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 2 ranges from $0.151 billion to $2.260 billion. At TSL 2, the average LCC impact is a cost (LCC savings decrease) of $0.12 for product class 2 and a savings (LCC savings increase) of $0.35 and $0.43 product classes 3 and 4 respectively. The median payback period is 5.2, 3.9, and 3.0 years for product classes 2, 3, and 4 respectively. The fraction of consumers experiencing an LCC benefit PO 00000 Frm 00147 Fmt 4701 Sfmt 4702 18623 is 17.0, 8.3, and 5.8 percent for each product class and the fraction of consumers experiencing an LCC cost is 26.8, 8.9, and 3.4 percent for each product class. At TSL 2, the projected change in INPV ranges from a decrease of $6.06 billion to an increase of $0.13 billion. At TSL 2, DOE recognizes the risk of large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 2 could result in a net loss of 13.8 percent in INPV to manufacturers of battery chargers. The Secretary tentatively concludes that at TSL 2 for low-energy, noninductive charging battery chargers, the benefits of energy savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions would be outweighed by the negative NPV of consumer benefits, the economic burden on a significant fraction of consumers due to the increases in product cost, and the capital conversion costs and profit margin impacts that could result in a large reduction in INPV for the manufacturers. Consequently, the Secretary has tentatively concluded that TSL 2 is not economically justified. DOE then considered TSL 1, which represents another intermediate efficiency level. Relative to TSL 2, the efficiency level for product class 2 has decreased, while the efficiency levels for product classes 3 and 4 are the same. TSL 1 would save 0.309 quads of energy, an amount DOE considers significant. Under TSL 1, the NPV of consumer benefits would be $664 million, using a discount rate of 7 percent, and $1.255 billion, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 1 are 14.7 Mt of CO2, 12.1 kt of NOX, and 0.078 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 1 ranges from $0.062 billion to $0.921 billion. Additionally, the NPV of consumer benefits added to the social cost of carbon and monetized NOX emissions reductions is maximized with a value of $1.576 billion at a 3-percent discount rate and $0.977 billion at a 7-percent discount rate at TSL 1. At TSL 1, the average LCC impact is a savings (LCC savings increase) of $0.16, $0.35, and $0.43 for low-energy non-inductive charging battery charger product classes 2, 3, and 4 respectively. The median payback period is 0.5, 3.9, and 3.0 years for product classes 2, 3, and 4 respectively. The fraction of consumers experiencing an LCC benefit is 17.0, 8.3, and 5.8 percent for each product class and the fraction of E:\FR\FM\27MRP2.SGM 27MRP2 18624 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules consumers experiencing an LCC cost is 1.0, 8.9, and 3.4 percent for each product class. At TSL 1, the projected change in INPV ranges from a decrease of $4.90 billion to an increase of $0.02 billion. DOE recognizes the risk of negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, TSL 1 could result in a net loss of 11.2 percent in INPV to manufacturers of low-energy noninductive charging battery chargers. The Secretary tentatively concludes that at TSL 1 for low-energy, noninductive charging battery chargers, the benefits of energy savings, positive NPV of consumer benefits, positive mean LCC savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions outweigh the economic burden of the capital conversion costs and profit margin impacts that could result in a reduction in INPV for manufacturers. After considering the analysis, comments to the September 2010 notice and the preliminary TSD, and the benefits and burdens of TSL 1, the Secretary tentatively concludes that this TSL will offer the maximum improvement in efficiency that is technologically feasible and economically justified and will result in the significant conservation of energy. Therefore, DOE today proposes to adopt TSL 1 for low-energy non-inductive charging battery chargers. The proposed new energy conservation standards for low-energy, non-inductive charging battery chargers, expressed as equations for minimum unit energy consumption, are shown in Table V–99. c. Medium-Energy Battery Chargers, Product Classes 5 and 6 TSL for medium-energy battery chargers. The efficiency levels contained in each TSL are described in section V.A. sroberts on DSK6SPTVN1PROD with PROPOSALS VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00148 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.098</GPH> BILLING CODE 6450–01–P Table V–96 presents a summary of the quantitative impacts estimated for each BILLING CODE 6450–01–C DOE first considered TSL 3, which represents the max-tech efficiency level. TSL 3 would save 0.781 quads of energy, an amount DOE considers significant. Under TSL 3, the NPV of consumer benefits would be ¥$6.96 billion, using a discount rate of 7 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 percent, and ¥$11.12 billion, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 3 are 35.9 Mt of CO2, 29.6 kt of NOX, and 0.187 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 3 ranges from $0.154 billion to $2.318 billion. PO 00000 Frm 00149 Fmt 4701 Sfmt 4702 18625 At TSL 3, the average LCC impact is a cost (LCC savings decrease) of $104.58 and $86.76 for medium-energy battery charger product classes 5 and 6 respectively. The median payback period is 53.4 and 20.8 years for product classes 5 and 6 respectively. The fraction of consumers experiencing an E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.099</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18626 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules energy, an amount DOE considers significant. Under TSL 2, the NPV of consumer benefits would be $2.54 billion, using a discount rate of 7 percent, and $4.65 billion, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 2 are 27.4 Mt of CO2, 22.6 kt of NOX, and 0.143 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 2 ranges from $0.118 billion to $1.770 billion. Additionally, the NPV of consumer benefits added to the social cost of carbon and monetized NOX emissions reductions is maximized with a value of $5.264 billion at a 3-percent discount rate and $3.139 billion at a 7-percent discount rate at TSL 2. At TSL 2, the average LCC impact is a savings (LCC savings increase) of $33.79 and $40.78 for medium-energy battery charger product classes 5 and 6, respectively. The median payback period is 0.0 and 0.0 years for product classes 5 and 6, respectively. The fraction of consumers experiencing an LCC benefit is 79.9 and 64.8 percent for each product class and the fraction of consumers experiencing an LCC cost is 0.0 and 0.0 percent for each product class. At TSL 2, the projected change in INPV ranges from a decrease of $225 million to a decrease of $40 million. DOE recognizes the risk of negative d. High-Energy Battery Chargers, Product Class 7 TSL for high-energy battery chargers. The efficiency levels contained in each TSL are described in section V.A. Table V–98 presents a summary of the quantitative impacts estimated for each sroberts on DSK6SPTVN1PROD with PROPOSALS impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, TSL 2 could result in a net loss of 14.5 percent in INPV to manufacturers of medium-energy battery chargers. The Secretary tentatively concludes that at TSL 2 for medium-energy battery chargers, the benefits of energy savings, positive NPV of consumer benefits, positive mean LCC savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions outweigh the economic burden of the capital conversion costs and profit margin impacts that could result in a reduction in INPV for manufacturers. After considering the analysis, comments to the September 2010 notice and the preliminary TSD, and the benefits and burdens of TSL 2, the Secretary tentatively concludes that this TSL will offer the maximum improvement in efficiency that is technologically feasible and economically justified and will result in the significant conservation of energy. Therefore, DOE today proposes to adopt TSL 2 for medium-energy battery chargers. The proposed new energy conservation standards for mediumenergy battery chargers, expressed as equations for minimum unit energy consumption, are shown in Table V– 101. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00150 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.100</GPH> LCC benefit is 8.4 and 1.6 percent for product classes 5 and 6, respectively, and the fraction of consumers experiencing an LCC cost is 78.6 and 85.4 percent for product classes 5 and 6, respectively. At TSL 3, the projected change in INPV ranges from a decrease of $1.31 billion to an increase of $0.69 billion. At TSL 3, DOE recognizes the risk of very large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 3 could result in a net loss of 84.8 percent in INPV to manufacturers of battery chargers. The Secretary tentatively concludes that at TSL 3 for medium-energy battery chargers, the benefits of energy savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions would be outweighed by the negative NPV of consumer benefits, the economic burden on a significant fraction of consumers due to the large increases in product cost, and the capital conversion costs and profit margin impacts that could result in a very large reduction in INPV for manufacturers. Consequently, the Secretary has tentatively concluded that TSL 3 is not economically justified. DOE then considered TSL 2, which represents the best-in-market efficiency level. TSL 2 would save 0.596 quads of DOE first considered TSL 2, which represents the max-tech efficiency level. TSL 2 would save 0.021 quads of energy, an amount DOE considers significant. Under TSL 2, the NPV of consumer benefits would be ¥$299 million, using a discount rate of 7 percent, and ¥$493 million, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 2 are 0.975 Mt of CO2, 0.808 kt of NOX, and 0.006 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 2 ranges from $0.004 billion to $0.061 billion. At TSL 2, the average LCC impact is a cost (LCC savings decrease) of $127.30 for high-energy battery chargers. The median payback period is 27.2 years. The fraction of consumers experiencing VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 an LCC benefit is 0.0 percent and the fraction of consumers experiencing an LCC cost is 100.0 percent. At TSL 2, the projected change in INPV ranges from a decrease of $136 million to an increase of $23 million. At TSL 2, DOE recognizes the risk of large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 2 could result in a net loss of 13.1 percent in INPV to manufacturers of battery chargers. The Secretary tentatively concludes that at TSL 2 for high-energy battery chargers, the benefits of energy savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions would be outweighed by the negative NPV of consumer benefits, the PO 00000 Frm 00151 Fmt 4701 Sfmt 4702 18627 economic burden on a significant fraction of consumers due to the large increases in product cost, and the capital conversion costs and profit margin impacts that could result in a large reduction in INPV for the manufacturers. Consequently, the Secretary has tentatively concluded that TSL 2 is not economically justified. DOE then considered TSL 1, which is the best-in-market efficiency level. TSL 1 would save 0.007 quads of energy, an amount DOE considers significant. Under TSL 1, the NPV of consumer benefits would be $70 million, using a discount rate of 7 percent, and $119 million, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 1 are 0.312 Mt of CO2, 0.259 kt of NOX, and 0.002 t of Hg. The E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.101</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18628 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules million to an increase of $47 million. DOE recognizes the risk of negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 1 could result in a net loss of 0.4 percent in INPV to manufacturers of high-energy battery chargers. The Secretary tentatively concludes that at TSL 1 for high-energy battery chargers, the benefits of energy savings, positive NPV of consumer benefits, positive mean LCC savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions outweigh the economic burden associated with the potential direct employment losses, capital conversion costs and profit margin impacts that e. Battery Chargers With a DC Input of Less Than 9 V, Product Class 8 each TSL for battery chargers with a DC input less than 9 V. The efficiency levels contained in each TSL are described in section V.A. sroberts on DSK6SPTVN1PROD with PROPOSALS Table V–100 presents a summary of the quantitative impacts estimated for VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00152 Fmt 4701 Sfmt 4702 could result in a reduction in INPV for manufacturers. After considering the analysis, comments to the September 2010 notice and the preliminary TSD, and the benefits and burdens of TSL 1, the Secretary tentatively concludes that this TSL will offer the maximum improvement in efficiency that is technologically feasible and economically justified and will result in the significant conservation of energy. Therefore, DOE today proposes to adopt TSL 1 for high-energy battery chargers. The proposed new energy conservation standard for high-energy battery chargers, expressed as an equation for minimum unit energy consumption, is shown in Table V–103. E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.102</GPH> estimated monetary value of the cumulative CO2 emissions reductions at TSL 1 ranges from $0.001 billion to $0.019 billion. Additionally, the NPV of consumer benefits added to the social cost of carbon and monetized NOX emissions reductions is maximized with a value of $126 million at a 3-percent discount rate and $76 million at a 7percent discount rate at TSL 1. At TSL 1, the average LCC impact is a savings of $38.26 for high-energy battery chargers. The median payback period is 0.0 years. The fraction of consumers experiencing an LCC benefit is 43.5 percent and the fraction of consumers experiencing an LCC cost is 0.0 percent. At TSL 1, the projected change in INPV ranges from a decrease of $4 DOE first considered TSL 3, which represents the max-tech efficiency level. TSL 3 would save 0.045 quads of energy, an amount DOE considers significant. Under TSL 3, the NPV of consumer benefits would be ¥$1.21 billion, using a discount rate of 7 percent, and ¥$2.00 billion, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 3 are 2.16 Mt of CO2, 1.78 kt of NOX, and 0.011 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 3 ranges from $0.009 billion to $0.136 billion. At TSL 3, the average LCC impact is a cost (LCC savings decrease) of $2.31 for battery chargers with a DC input of less than 9 V. The median payback period is 24.9 years. The fraction of consumers experiencing an LCC benefit VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 is 44.6 percent and the fraction of consumers experiencing an LCC cost is 55.4 percent. At TSL 3, the projected change in INPV ranges from a decrease of $61 million to a decrease of $30 million. At TSL 3, DOE recognizes the risk of large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 3 could result in a net loss of 1.1 percent in INPV to manufacturers of battery chargers. The Secretary tentatively concludes that at TSL 3 for battery chargers with a DC input of less than 9 V, the benefits of energy savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions would be outweighed by the negative NPV of PO 00000 Frm 00153 Fmt 4701 Sfmt 4702 18629 consumer benefits and the economic burden on a significant fraction of consumers due to the large increases in product cost, and the capital conversion costs and profit margin impacts that could result in a reduction in INPV for the manufacturers. Consequently, the Secretary has tentatively concluded that TSL 3 is not economically justified. DOE then considered TSL 2, which represents the best-in-market efficiency level. TSL 2 would save 0.041 quads of energy, an amount DOE considers significant. Under TSL 2, the NPV of consumer benefits would be ¥$1.00 billion, using a discount rate of 7 percent, and ¥$1.65 billion, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 2 are 1.95 Mt of CO2, 1.61 kt of NOX, and 0.010 t of Hg. The estimated E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.103</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18630 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules monetary value of the cumulative CO2 emissions reductions at TSL 2 ranges from $0.008 billion to $0.122 billion. At TSL 2, the average LCC impact is a cost (LCC savings decrease) of $1.96 for battery chargers with a DC input of less than 9 V. The median payback period is 0.0 years. The fraction of consumers experiencing an LCC benefit is 50.0 percent and the fraction of consumers experiencing an LCC cost is 40.0 percent. At TSL 2, the projected change in INPV ranges from an increase of $4 million to an increase of $78 million. At TSL 2, DOE believes there are minimal risks of negative impacts on manufacturers and expects that TSL 2 could result in a net gain of 0.1 percent in INPV to manufacturers of battery chargers. The Secretary tentatively concludes that at TSL 2 for battery chargers with a DC input of less than 9 V, the benefits of energy savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions would be outweighed by the negative NPV of consumer benefits and the economic burden on a significant fraction of consumers due to the large increases in product cost. Consequently, the Secretary has tentatively concluded that TSL 2 is not economically justified. DOE then considered TSL 1, which is an intermediate efficiency level. TSL 1 would save 0.010 quads of energy, an amount DOE considers significant. Under TSL 1, the NPV of consumer benefits would be $1.66 billion, using a discount rate of 7 percent, and $2.78 billion, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 1 are 0.46 Mt of CO2, 0.38 kt of NOX, and 0.002 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 1 ranges from $0.002 billion to $0.029 billion. Additionally, the NPV of consumer benefits added to the social cost of carbon and monetized NOX emissions reductions is maximized with a value of $2.790 billion at a 3-percent discount rate and $1.669 billion at a 7 percent discount rate at TSL 1. At TSL 1, the average LCC impact is a savings of $3.04 for battery chargers with a DC input of less than 9 V. The median payback period is 0.0 years. The fraction of consumers experiencing an LCC benefit is 50.0 percent and the fraction of consumers experiencing an LCC cost is 0.0 percent. At TSL 1, the projected change in INPV ranges from a decrease of $75 million to an increase of $1,300 million. DOE recognizes the risk of negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 1 could result in a net loss of 1.3 percent in INPV to manufacturers of battery chargers with a DC input less than 9 V. The Secretary tentatively concludes that at TSL 1 for battery chargers with a DC input of less than 9 V, the benefits of energy savings, positive NPV of consumer benefits, positive mean LCC savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions outweigh the economic burden associated with the capital conversion costs and profit margin impacts that could result in a reduction in INPV for manufacturers. After considering the analysis, comments to the September 2010 notice and the preliminary TSD, and the benefits and burdens of TSL 1, the Secretary tentatively concludes that this TSL will offer the maximum improvement in efficiency that is technologically feasible and economically justified and will result in the significant conservation of energy. Therefore, DOE today proposes to adopt TSL 1 for battery chargers with a DC input less than 9 V. The proposed new energy conservation standard for battery chargers with a DC input less than 9 V is shown in Table V–105. TABLE V–101—PROPOSED STANDARD FOR PRODUCT CLASS 8 Maximum unit energy consumption (kWh/yr) Product class 8 (Low-Voltage DC Input) .......................................................................................................................................... DOE is also considering an alternative approach for product class 8 because of the considerations expressed in section IV.C.2.i above. This approach is same as the proposal that DOE has for product class 9, discussed in the following section. f. Battery Chargers With a DC Input Greater Than 9 V, Product Class 9 sroberts on DSK6SPTVN1PROD with PROPOSALS DOE ran a number of analyses in an attempt to ascertain whether an appropriate efficiency level could be created for product class 9. A battery charger is in product class 9 if it operates using a DC input source greater VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 than 9 V, it is unable to operate from a universal serial bus (USB) connector, and a manufacturer does not package, recommend, or sell a wall adapter for the device. Such products would be invehicle battery chargers that can operate outside of a vehicle. After completing its engineering analysis for these products, DOE ran the LCC analysis. These analyses projected that no efficiency level would be likely to exhibit a positive LCC savings. The LCC results showed a cost (LCC savings decrease) of $0.08 and $0.24 for CSLs 1 and 2 respectively. That fact, combined with the minimal UECs found for products in PO 00000 Frm 00154 Fmt 4701 Sfmt 4702 0.66 this category, leads DOE to tentatively believe that there would be no economically justifiable TSLs that correspond to the efficiency levels found in the engineering analysis for this product class. g. AC Output Battery Chargers, Product Class 10 Table V–102 presents a summary of the quantitative impacts estimated for each TSL for battery chargers with an AC output. The efficiency levels contained in each TSL are described in section V.A. E:\FR\FM\27MRP2.SGM 27MRP2 DOE first considered TSL 3, which is the max-tech efficiency level. TSL 3 would save 0.312 quads of energy, an amount DOE considers significant. Under TSL 3, the NPV of consumer benefits would be $789 million, using a discount rate of 7 percent, and $1.55 billion, using a discount rate of 3 percent. The cumulative emissions reductions at TSL 3 are 13.9 Mt of CO2, 11.5 kt of NOX, and 0.092 t of Hg. The estimated monetary value of the cumulative CO2 emissions reductions at TSL 3 ranges from $0.060 billion to $0.910 billion. Additionally, the NPV of consumer benefits added to the social cost of carbon and monetized NOX emissions reductions is maximized with a value of $1.866 billion at a 3-percent discount VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 rate and $1.097 billion at a 7-percent discount rate at TSL 3. At TSL 3, the average LCC impact is a savings of $8.30 for AC battery output battery chargers. The median payback period is 1.5 years. The fraction of consumers experiencing an LCC benefit is 87.0 percent and the fraction of consumers experiencing an LCC cost is 13.0 percent. At TSL 3, the projected change in INPV ranges from a decrease of $126 million to a decrease of $5 million. DOE recognizes the risk of large negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the high end of the range of impacts is reached, as DOE expects, TSL 3 could result in a net loss of 20.5 percent in INPV to manufacturers of AC output battery chargers. PO 00000 Frm 00155 Fmt 4701 Sfmt 4702 18631 The Secretary tentatively concludes that at TSL 3 for AC output battery chargers, the benefits of energy savings, positive NPV of consumer benefits, positive mean LCC savings, emission reductions, and the estimated monetary value of the CO2 emissions reductions outweigh the economic burden associated with the capital conversion costs and profit margin impacts that could result in a reduction in INPV for manufacturers. After considering the analysis, comments to the September 2010 notice and the preliminary TSD, and the benefits and burdens of TSL 3, the Secretary tentatively concludes that this TSL will offer the maximum improvement in efficiency that is technologically feasible and economically justified and will result in E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.104</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18632 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules standards for AC output battery chargers is shown in Table V–108. reported in 2010$ to permit comparisons with the other costs and benefits in the same dollar units. Although combining the values of operating savings and CO2 reductions provides a useful perspective, two issues should be considered. First, the national operating savings are domestic U.S. consumer monetary savings that occur as a result of market transactions, while the value of CO2 reductions is based on a global value. Second, the assessments of operating cost savings and CO2 savings are performed with different methods that use quite different time frames for analysis. The national operating cost savings is measured for the lifetime of products shipped in 2013–2042. The SCC values, on the other hand, reflect the present value of future climate-related impacts resulting from the emission of one metric ton of carbon dioxide in each year. These impacts go well beyond 2100. Estimates of annualized benefits and costs of the proposed standards for EPSs are shown in Table V–104. Using a 7percent discount rate and the SCC value of $22.3/ton in 2010 (in 2010$), the cost of the energy efficiency standards proposed in today’s NOPR is $251.9 million per year in increased equipment installed costs, while the annualized benefits are $325.2 million per year in reduced equipment operating costs, $52.3 million in CO2 reductions, and $3.2 million in reduced NOX emissions. In this case, the net benefit amounts to $128.7 million per year. Using a 3percent discount rate and the SCC value of $22.3/metric ton in 2010 (in 2010$), the cost of the energy efficiency standards proposed in today’s NOPR is $247.3 million per year in increased equipment installed costs, while the benefits are $348.2 million per year in reduced operating costs, $52.3 million in CO2 reductions, and $3.3 million in reduced NOX emissions. At a 3-percent discount rate, the net benefit amounts to $156.6 million per year. 71 DOE used a two-step calculation process to convert the time-series of costs and benefits into annualized values. First, DOE calculated a present value in 2011, the year used for discounting the NPV of total consumer costs and savings, for the time-series of costs and benefits using discount rates of three and seven percent for all costs and benefits except for the value of CO2 reductions. For the latter, DOE used a range of discount rates. From the present value, DOE then calculated the fixed annual payment over a 30-year period, starting in 2013, which yields the same present value. The fixed annual payment is the annualized value. Although DOE calculated annualized values, this does not imply that the time-series of cost and benefits from which the annualized values were determined would be a steady stream of payments. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00156 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.105</GPH> TSL 3 for AC output battery chargers. The proposed new energy conservation 3. Summary of Benefits and Costs (Annualized) of Proposed Standards for External Power Supplies The benefits and costs of today’s proposed standards for EPSs can also be expressed in terms of annualized values over the 2013–2042 period. The annualized monetary values are the sum of: (1) The annualized national economic value (expressed in 2010$) of the benefits from operating products that meet the proposed standards (consisting primarily of operating cost savings from using less energy, minus increases in equipment purchase costs, which is another way of representing consumer NPV); and (2) the monetary value of the benefits of emission reductions, including CO2 emission reductions.71 The value of the CO2 reductions, otherwise known as the Social Cost of Carbon (SCC), is calculated using a range of values per metric ton of CO2 developed by a recent Federal interagency process. The monetary costs and benefits of cumulative emissions reductions are sroberts on DSK6SPTVN1PROD with PROPOSALS the significant conservation of energy. Therefore, DOE today proposes to adopt VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00157 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 18633 EP27MR12.106</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18634 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 4. Summary of Benefits and Costs (Annualized) of Proposed Standards for Battery Chargers The benefits and costs of today’s proposed standards for battery chargers can also be expressed in terms of annualized values over the 2013–2042 period. The annualized monetary values are the sum of: (1) The annualized national economic value (expressed in 2010$) of the benefits from operating products that meet the proposed standards (consisting primarily of operating cost savings from using less energy, minus increases in equipment purchase costs, which is another way of representing consumer NPV); and (2) the monetary value of the benefits of emission reductions, including CO2 emission reductions.72 The value of the sroberts on DSK6SPTVN1PROD with PROPOSALS 72 DOE used a two-step calculation process to convert the time-series of costs and benefits into annualized values. First, DOE calculated a present value in 2011, the year used for discounting the NPV of total consumer costs and savings, for the time-series of costs and benefits using discount rates of three and seven percent for all costs and benefits except for the value of CO2 reductions. For the latter, DOE used a range of discount rates, as shown in Table I.3. From the present value, DOE then calculated the fixed annual payment over a 30year period, starting in 2013 that yields the same present value. The fixed annual payment is the VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 CO2 reductions, otherwise known as the Social Cost of Carbon (SCC), is calculated using a range of values per metric ton of CO2 developed by a recent Federal interagency process. The monetary costs and benefits of cumulative emissions reductions are reported in 2010$ to permit comparisons with the other costs and benefits in the same dollar units. Although combining the values of operating savings and CO2 reductions provides a useful perspective, two issues should be considered. First, the national operating savings are domestic U.S. consumer monetary savings that occur as a result of market transactions, while the value of CO2 reductions is based on a global value. Second, the assessments of operating cost savings and CO2 savings are performed with different methods that use quite different time frames for analysis. The national operating cost savings is measured for the lifetime of products shipped in 2013–2042. The SCC values, on the other hand, reflect the present annualized value. Although DOE calculated annualized values, this does not imply that the time-series of cost and benefits from which the annualized values were determined would be a steady stream of payments. PO 00000 Frm 00158 Fmt 4701 Sfmt 4702 value of future climate-related impacts resulting from the emission of one metric ton of carbon dioxide in each year. These impacts go well beyond 2100. Estimates of annualized benefits and costs of the proposed standards for battery chargers are shown in Table V– 104. Using a 7-percent discount rate and the SCC value of $22.3/ton in 2010 (in 2010$), the standards proposed in today’s NOPR result in $110.0 million per year in equipment costs savings, and the annualized benefits are $447.2 million per year in reduced equipment operating costs, $71.6 million in CO2 reductions, and $4.3 million in reduced NOX emissions. In this case, the net benefit amounts to $633.0 million per year. Using a 3-percent discount rate and the SCC value of $22.3/metric ton in 2010 (in 2010$), the standards proposed in today’s NOPR result in $107.9 million per year in equipment costs savings, and the benefits are $485.2 million per year in reduced operating costs, $71.6 million in CO2 reductions, and $4.5 million in reduced NOX emissions. At a 3-percent discount rate, the net benefit amounts to $669.3 million per year. BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00159 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 18635 EP27MR12.107</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18636 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules BILLING CODE 6450–01–C A. Review Under Executive Order 12866 and 13563 Section 1(b)(1) of Executive Order 12866, ‘‘Regulatory Planning and Review,’’ 58 FR 51735 (Oct. 4, 1993), requires each agency to identify the problem that it intends to address, including, where applicable, the failures of private markets or public institutions that warrant new agency action, as well as to assess the significance of that problem. The problems that today’s standards address are as follows: (1) There is a lack of consumer information and/or information processing capability about energy efficiency opportunities in the home appliance market. (2) There is asymmetric information (one party to a transaction has more and better information than the other) and/ or high transactions costs (costs of gathering information and effecting exchanges of goods and services) in the home appliance market. (3) There are external benefits resulting from improved energy efficiency of battery chargers and EPSs that are not captured by the users of such equipment. These benefits include externalities related to environmental protection and energy security that are not reflected in energy prices, such as reduced emissions of greenhouse gases. In addition, DOE has determined that today’s regulatory action is an ‘‘economically significant regulatory action’’ under section 3(f)(1) of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive Order requires that DOE prepare a regulatory impact analysis (RIA) on today’s rule and that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) review this rule. In the RIA, DOE identified and analyzed six alternatives to standards, including consumer rebates, consumer tax credits, manufacturer tax credits, voluntary energy efficiency targets, an early replacement program, and a bulk government purchasing program. DOE quantified the NES and NPV for these alternatives and did not find any alternatives to be more beneficial than standards for any BC or EPS product class. DOE presented to OIRA for review the draft rule and other documents prepared for this rulemaking, including the RIA,73 and has included these documents in the rulemaking record. The assessments prepared pursuant to Executive Order 12866 can be found in the technical support document for this rulemaking. They are available for public review in the Resource Room of DOE’s Building Technologies Program, 950 L’Enfant Plaza SW., Suite 600, Washington, DC 20024, (202) 586–2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. DOE has also reviewed this regulation pursuant to Executive Order 13563, issued on January 18, 2011 (76 FR 3281 (Jan. 21, 2011)). EO 13563 is supplemental to, and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in, Executive Order 12866. To the extent permitted by law, agencies are required by Executive Order 13563 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. We emphasize as well that Executive Order 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 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, DOE believes that today’s notice of proposed rulemaking is consistent with these principles, including that, to the extent permitted by law, agencies adopt a regulation only upon a reasoned determination that its benefits justify its costs and select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits. 73 The Regulatory Impact Analysis is also available at: https://www1.eere.energy.gov/buildings/ appliance_standards/residential/ battery_external_preliminaryanalysis_tsd.html#tsd. For manufacturers of EPSs and battery chargers, the SBA has set a size sroberts on DSK6SPTVN1PROD with PROPOSALS VI. Procedural Issues and Regulatory Review VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00160 Fmt 4701 Sfmt 4702 B. Review Under the Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an initial regulatory flexibility analysis (IRFA) for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, ‘‘Proper Consideration of Small Entities in Agency Rulemaking,’’ 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel’s Web site (www.gc.doe.gov). DOE reviewed the potential standard levels considered in today’s NOPR under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. As a result of this review, DOE has prepared an IRFA addressing the impacts on small manufacturers with respect to the battery charger portion of this proposal. DOE will transmit a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration (SBA) for review under 5 U.S.C. 605(b). As presented and discussed below, the IFRA describes potential impacts on small business manufacturers of battery chargers associated with the required capital and product conversion costs at each TSL and discusses alternatives that could minimize these impacts. Because DOE did not find any small business EPS manufacturers, DOE did not prepare an IRFA regarding the impacts on EPS manufacturers from this proposal. A statement of the reasons for the proposed rule, and the objectives of, and legal basis for, the proposed rule, are set forth elsewhere in the preamble and not repeated here. 1. Description and Estimated Number of Small Entities Regulated a. Methodology for Estimating the Number of Small Entities E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules threshold, which defines those entities classified as ‘‘small businesses’’ for the purposes of the statute. DOE used the SBA’s small business size standards to determine whether any small entities would be subject to the requirements of the rule. 65 FR 30836, 30850 (May 15, 2000), as amended at 65 FR 53533, 53545 (Sept. 5, 2000) and codified at 13 CFR part 121. The size standards are listed by North American Industry Classification System (NAICS) code and industry description and are available at https://www.sba.gov/idc/groups/public/ documents/sba_homepage/ serv_sstd_tablepdf.pdf. EPS and battery charger manufacturing is classified under NAICS 335999, ‘‘All Other Miscellaneous Electrical Equipment and Component Manufacturing.’’ The SBA sets a threshold of 500 employees or less for an entity to be considered as a small business for this category. To estimate the number of companies that could be small business manufacturers of products covered by this rulemaking, DOE conducted a market survey using all available public information to identify potential small manufacturers. DOE’s research involved industry trade association membership directories, product databases, individual company Web sites, and the SBA’s Small Business Database to create a list of every company that could potentially manufacture products covered by this rulemaking. DOE also asked stakeholders and industry representatives if they were aware of any other small manufacturers during manufacturer interviews and at previous DOE public meetings. DOE contacted companies on its list, as necessary, to determine whether they met the SBA’s definition of a small business manufacturer of covered EPSs and battery chargers. DOE screened out companies that did not offer products covered by this rulemaking, did not meet the definition of a ‘‘small business,’’ or are foreign-owned and operated. Based on this screening, DOE identified 30 companies that could potentially manufacture EPSs or battery chargers. DOE eliminated most of these companies from consideration as small business manufacturers based on a review of product literature and Web sites. When those steps yielded inconclusive information, DOE contacted the companies directly. As part of these efforts, DOE identified Lester Electrical, Inc. (Lincoln, Nebraska), a manufacturer of golf car battery chargers, as the only small business that appears to produce covered battery chargers domestically. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 DOE did not identify any small business manufacturers of EPSs. DOE also did not identify any domestic manufacturers of EPSs, which indicates that all residential EPSs sold in the United States are imported. Because there are no small business manufacturers of EPSs, DOE certifies that the standards for EPSs set forth in the proposed rule, if promulgated, would not have a significant economic impact on a substantial number of small entities. Accordingly, DOE has not prepared a regulatory flexibility analysis for the EPS portion of this rulemaking. DOE will transmit the certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the Small Business Administration for review under 5 U.S.C. 605(b). DOE requests comment on the above analysis, as well as any information concerning small businesses that could be impacted by this rulemaking and the nature and extent of those potential impacts of the proposed energy conservation standards on small EPS manufacturers. (See Issue 30 under ‘‘Issues on Which DOE Seeks Comment’’ in section VII.E of this NOPR.) The following sections address the IFRA for small business manufacturers of battery chargers. b. Manufacturer Participation Before issuing this NOPR, DOE contacted the potential small business manufacturers of battery chargers it had identified. One small business consented to being interviewed during the MIA interviews. DOE also obtained information about small business impacts while interviewing large manufacturers. c. Battery Charger Industry Structure With respect to battery chargers, industry structure is typically defined by the characteristics of the industry of the application(s) for which the battery chargers are produced. In the case of the small business DOE identified, however, the battery charger itself is the product the small business produces. That is, the company does not also produce the applications with which the battery charger is intended to be used. Specifically, the company manufactures battery chargers predominantly intended for golf cars (product class 7) and wheelchairs (product classes 5 and 6). A high level of concentration exists in both battery charger markets. Two players account for the vast majority of the golf car battery charger market and each has a similar share. Both competitors in the golf car battery charger market are small businesses: PO 00000 Frm 00161 Fmt 4701 Sfmt 4702 18637 One is foreign-owned and operated, while the other is a domestic small business. Despite this concentration, there is considerable competition for three main reasons. First, each manufacturer sells into a market that is almost as equally concentrated: Three golf car manufacturers supply the majority of the golf cars sold domestically. Second, while there are currently only two major suppliers of battery chargers to the domestic market, the constant prospect of potential entry from other foreign countries has ceded substantial buying power to the three golf car OEMs. Third, golf car manufacturers have the ever-present option of not building electric golf cars altogether (and thus the need for the battery charger) by opting to build gaspowered products. DOE examines a price elasticity sensitivity scenario for this in chapter 12 of the TSD to assess this possibility. Currently, roughly three-quarters of the golf car market is electric, with the remainder gaspowered. The majority of industry shipments flow to the ‘‘fleet’’ segment—i.e. battery chargers sold to golf car manufacturers who then lease the cars to golf courses. Most cars are leased for the first few years before being sold to smaller golf courses or other individuals for personal use. A smaller portion of golf cars are sold as new through dealer distribution. Further upstream, approximately half of the battery chargers intended for golf car use is manufactured domestically, while the other half is foreign-sourced. These latter-sourced battery chargers are typically high frequency designs, while line frequency designs, which are usually less efficient, are made domestically. During the design cycle of the golf car, the battery charger supplier and OEM typically work closely together when designing the battery charger. The small business manufacturer is also a relatively smaller player in the markets for wheelchair and industrial lift battery chargers. Most wheelchair battery chargers and the wheelchairs themselves are manufactured overseas. Three wheelchair manufacturers supply the majority of the U.S. market, but do not have domestic manufacturing. d. Comparison Between Large and Small Entities As discussed above, there are two major suppliers in the golf car battery charger market. Both are small businesses, although one is foreignowned and operated. DOE did not identify any large businesses with which to compare the projected impacts on small businesses. E:\FR\FM\27MRP2.SGM 27MRP2 18638 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules would be required, the magnitude of these expenditures would be unlikely to cause significant adverse financial impacts. Product class 7 drives the majority of these costs. See Table VI.1 below for the estimated capital conversion costs for a typical small business. Table VI–1The product conversion costs associated with standards are more significant for the small business manufacturer at issue than the projected capital costs. As discussed in section V.B.2.a.ii of this notice, TSL 1 for product class 7 reflects a technology change from a linear battery charger at the baseline to a switch-mode or highfrequency design. This change would require manufacturers that produce linear battery chargers to invest heavily in the development of a new product design, which would require investments in engineering resources for R&D, testing, and certification, and marketing and training changes. Again, the level of expenditure at each TSL is driven almost entirely by the changes required for product class 7 at each TSL. See the table below for estimated product conversion costs for a typical small business. Table VI–2, and Table VI–3 below, accompanied by a description of these and other impacts. b. Product Conversion Costs The product conversion costs associated with standards are more significant for the small business manufacturer at issue than the projected capital costs. As discussed in section V.B.2.a.ii of this notice, TSL 1 for product class 7 reflects a technology change from a linear battery charger at the baseline to a switch-mode or highfrequency design. This change would require manufacturers that produce linear battery chargers to invest heavily in the development of a new product design, which would require investments in engineering resources for R&D, testing, and certification, and marketing and training changes. Again, the level of expenditure at each TSL is driven almost entirely by the changes required for product class 7 at each TSL. See the table below for estimated product conversion costs for a typical small business. a. Capital Conversion Costs EP27MR12.109</GPH> Compared to the product development (R&D) efforts required to achieve the proposed levels, DOE does not expect the various potential combinations of TSLs to require significant capital expenditures. Although some replacement of fixtures, new assembly equipment and tooling would be required, the magnitude of these expenditures would be unlikely to cause significant adverse financial impacts. Product class 7 drives the majority of these costs. See Table VI.1 below for the estimated capital conversion costs for a typical small business. c. Summary of Compliance Impacts VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00162 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.108</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 2. Description and Estimate of Compliance Requirements The U.S.-owned small business DOE identified manufactures battery chargers for golf cars (product class 7) and wheelchairs (product classes 5 and 6), as well as industrial lifts (which are not covered by this rulemaking). DOE anticipates the proposed rule will require both capital and product conversion costs to achieve compliance. Various combinations of selected TSLs for product classes 5 and 6 (which are combined under a single TSL) and product class 7 will drive different levels of small business impacts. The compliance costs associated with this combination of potential TSLs are present in tables Table VI–1. Compared to the product development (R&D) efforts required to achieve the proposed levels, DOE does not expect the various potential combinations of TSLs to require significant capital expenditures. Although some replacement of fixtures, new assembly equipment and tooling Based on its engineering analysis, manufacturer interviews and public comments, DOE believes TSL 1 for product class 7 would establish an efficiency level that standard linear battery chargers could not costeffectively achieve. Not only would the size and weight of such chargers potentially conflict with end-user preferences, but the additional steel and copper needs would make such chargers cost-prohibitive in the marketplace. Baseline linear designs are already significantly more costly to manufacture than the more-efficient switch-mode designs, as DOE’s cost efficiency curve shows (see Table IV–22). Because, in this case, the small business manufacturer is positioned as a vertically integrated supplier of linear battery chargers, any energy conservation standard that effectively required switch-mode technology would likely cause significant adverse impacts on that manufacturer. All products currently manufactured in-house by this manufacturer would likely require complete redesigns. The potential impacts of a standard on the small business manufacturer are not entirely captured by the conversion costs estimates, however. While standard linear battery chargers typically have much higher associated material costs relative to the switchmode battery chargers, the manufacturing process of switch-mode designs is more labor intensive. Therefore, in high-wage countries like the United States, a manufacturer is at a relative cost-disadvantage in producing switch-mode battery chargers. It is most likely for this reason that DOE was unable to identify any domestic manufacturing of switch-mode battery chargers. At the proposed efficiency levels, the small business manufacturer will face a difficult decision on whether to attempt to manufacture switch-mode battery chargers in-house and likely compete on factors other than price, move production to lower-wage regions, or source their battery charger manufacturing to a foreign company and rebrand these battery chargers. Given the lack of domestic switch-mode VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 battery charger manufacturers, one of the latter two strategies would appear the more likely course. 3. Duplication, Overlap, and Conflict With Other Rules and Regulations DOE is not aware of any rules or regulations that duplicate, overlap, or conflict with the rule being considered today. 4. Significant Alternatives to the Proposed Rule The discussion above analyzes impacts on small businesses that would result from the other TSLs DOE considered. Though TSLs lower than the proposed TSLs are expected to reduce the impacts on small entities, DOE is required by EPCA to establish standards that achieve the maximum improvement in energy efficiency that are technically feasible and economically justified, and result in a significant conservation of energy. Once DOE determines that a particular TSL meets those requirements, DOE adopts that TSL in satisfaction of its obligations under EPCA. In addition to the other TSLs being considered, the NOPR TSD includes a regulatory impact analysis in chapter 17. For battery chargers, this report discusses the following policy alternatives: (1) No standard, (2) consumer rebates, (3) consumer tax credits, (4) manufacturer tax credits, and (5) early replacement. DOE does not intend to consider these alternatives further because they are either not feasible to implement, or not expected to result in energy savings as large as those that would be achieved by the standard levels under consideration. DOE continues to seek input from businesses that would be affected by this rulemaking and will consider comments received in the development of any final rule. C. Review Under the Paperwork Reduction Act Manufacturers of battery chargers and EPSs must certify to DOE that their product complies with any applicable energy conservation standard. In certifying compliance, manufacturers must test their products according to the PO 00000 Frm 00163 Fmt 4701 Sfmt 4702 18639 DOE test procedure for battery chargers and EPSs, including any amendments adopted for that test procedure. DOE has proposed regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including EPSs 75 FR 56796 (Sept. 16, 2010). The collection-of-information requirement for the certification and recordkeeping is subject to review and approval by OMB under the Paperwork Reduction Act (PRA). This requirement has been submitted to OMB for approval and only applies to Class A EPSs. As discussed, new reporting requirements for battery chargers and non-Class A EPSs will be proposed and a collectionof-information requirement for the certification and recordkeeping subject to review and approval by OMB under the PRA will be submitted as part of a future certification, compliance, and enforcement rule promulgated by DOE. Public reporting burden for the certification is estimated to average 20 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Public comment is sought regarding: whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; the accuracy of the burden estimate; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection of information, including through the use of automated collection techniques or other forms of information technology. Send comments on these or any other aspects of the collection of information to Victor Petrolati (see ADDRESSES) and by email to Chad_S_Whiteman@omb.eop.gov. 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 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.110</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 18640 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules that collection of information displays a currently valid OMB Control Number. sroberts on DSK6SPTVN1PROD with PROPOSALS D. Review Under the National Environmental Policy Act of 1969 Pursuant to the National Environmental Policy Act (NEPA) of 1969, DOE has determined that the proposed rule fits within the category of actions included in Categorical Exclusion (CX) B5.1 and otherwise meets the requirements for application of a CX. See 10 CFR part 1021, App. B, B5.1(b); 1021.410(b) and Appendix B, B(1)–(5). The proposed rule fits within the category of actions because it is a rulemaking that establishes energy conservation standards for consumer products or industrial equipment, and for which none of the exceptions identified in CX B5.1(b) apply. Therefore, DOE has made a CX determination for this rulemaking, and DOE does not need to prepare an Environmental Assessment or Environmental Impact Statement for this proposed rule. DOE’s CX determination for this proposed rule is available at https://cxnepa.energy.gov/. E. Review Under Executive Order 13132 Executive Order 13132, ‘‘Federalism,’’ 64 FR 43255 (August 10, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of today’s proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No further action is required by Executive Order 13132. F. Review Under Executive Order 12988 With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 Executive Order 12988, ‘‘Civil Justice Reform,’’ imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. 61 FR 4729 (Feb. 7, 1996). Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this proposed rule meets the relevant standards of Executive Order 12988. 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 proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed ‘‘significant intergovernmental mandate,’’ and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely PO 00000 Frm 00164 Fmt 4701 Sfmt 4702 affect small governments. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820; also available at https://www.gc.doe.gov. Although today’s proposed rule does not contain a Federal intergovernmental mandate, it may impose expenditures of $100 million or more on the private sector. Specifically, the proposed rule will likely result in a final rule that could impose expenditures of $100 million or more. Such expenditures may include (1) investment in research and development and in capital expenditures by battery charger and EPS manufacturers in the years between the final rule and the compliance date for the new standard, and (2) incremental additional expenditures by consumers to purchase higher-efficiency battery chargers and EPSs, starting in 2013. Section 202 of UMRA authorizes an agency to respond to the content requirements of UMRA in any other statement or analysis that accompanies the proposed rule. 2 U.S.C. 1532(c). The content requirements of section 202(b) of UMRA relevant to a private sector mandate substantially overlap the economic analysis requirements that apply under section 325(o) of EPCA and Executive Order 12866. The SUPPLEMENTARY INFORMATION section of this NOPR and the ‘‘Regulatory Impact Analysis’’ section of the TSD for this proposed rule respond to those requirements. Under section 205 of UMRA, the Department is obligated to identify and consider a reasonable number of regulatory alternatives before promulgating a rule for which a written statement under section 202 is required. 2 U.S.C. 1535(a). DOE is required to select from those alternatives the most cost-effective and least burdensome alternative that achieves the objectives of the rule unless DOE publishes an explanation for doing otherwise or the selection of such an alternative is inconsistent with law. As required by 42 U.S.C. 6295(u), today’s proposed rule would establish energy conservation standards for battery chargers and EPSs that are designed to achieve the maximum improvement in energy efficiency that DOE has determined to be both technologically feasible and economically justified. A full discussion of the alternatives considered by DOE is presented in the ‘‘Regulatory Impact Analysis’’ section of the TSD for today’s proposed rule. E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 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 proposed 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 DOE has determined, under Executive Order 12630, ‘‘Governmental Actions and Interference with Constitutionally Protected Property Rights’’ 53 FR 8859 (March 18, 1988), that this proposed regulation would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution. sroberts on DSK6SPTVN1PROD with PROPOSALS 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 agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB’s guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE’s guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed today’s NOPR under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines. K. Review Under Executive Order 13211 Executive Order 13211, ‘‘Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use’’ 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OIRA at OMB, a Statement of Energy Effects for any proposed significant energy action. A ‘‘significant energy action’’ is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that (1) is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. DOE has tentatively concluded that today’s proposed regulatory action, which sets forth proposed energy conservation standards for battery chargers and EPSs, is not a significant energy action because the proposed standards are not likely to have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as such by the Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects on the proposed rule. L. Review Under the Information Quality Bulletin for Peer Review On December 16, 2004, OMB, in consultation with the Office of Science and Technology (OSTP), issued its Final Information Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal Government, including influential scientific information related to agency regulatory actions. The purpose of the bulletin is to enhance the quality and credibility of the Government’s scientific information. Under the Bulletin, the energy conservation standards rulemaking analyses are ‘‘influential scientific information,’’ which the Bulletin defines as ‘‘scientific information the agency reasonably can determine will have or does have a clear and substantial impact on important public policies or private sector decisions.’’ 70 FR 2667. In response to OMB’s Bulletin, DOE conducted formal in-progress peer reviews of the energy conservation standards development process and analyses and has prepared a Peer Review Report pertaining to the energy conservation standards rulemaking analyses. Generation of this report involved a rigorous, formal, and documented evaluation using objective criteria and qualified and independent reviewers to make a judgment as to the technical/scientific/business merit, the actual or anticipated results, and the productivity and management effectiveness of programs and/or projects. The ‘‘Energy Conservation Standards Rulemaking Peer Review Report’’ dated February 2007 has been disseminated and is available at the following Web site: https:// www1.eere.energy.gov/buildings/ appliance_standards/peer_review.html. PO 00000 Frm 00165 Fmt 4701 Sfmt 4702 18641 VII. Public Participation A. Attendance at Public Meeting The time, date and location of the public meeting are listed in the DATES and ADDRESSES sections at the beginning of this document. If you plan to attend the public meeting, please notify Ms. Brenda Edwards at (202) 586–2945 or Brenda.Edwards@ee.doe.gov. As explained in the ADDRESSES section, foreign nationals visiting DOE Headquarters are subject to advance security screening procedures. In addition, you can attend the public meeting via webinar. Webinar registration information, participant instructions, and information about the capabilities available to webinar participants will be published on DOE’s Web site https://www1.eere.energy.gov/ buildings/appliance_standards/ residential/battery_external.html. Participants are responsible for ensuring their systems are compatible with the webinar software. B. Procedure for Submitting Prepared General Statements for Distribution Any person who has plans to present a prepared general statement may request that copies of his or her statement be made available at the public meeting. Such persons may submit requests, along with an advance electronic copy of their statement in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to the appropriate address shown in the ADDRESSES section at the beginning of this notice. The request and advance copy of statements must be received at least one week before the public meeting and may be emailed, hand-delivered, or sent by mail. DOE prefers to receive requests and advance copies via email. Please include a telephone number to enable DOE staff to make a follow-up contact, if needed. C. Conduct of Public Meeting DOE will designate a DOE official to preside at the public meeting and may also use a professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A court reporter will be present to record the proceedings and prepare a transcript. DOE reserves the right to schedule the order of presentations and to establish the procedures governing the conduct of the public meeting. After the public meeting, interested parties may submit further comments on the proceedings as well as on any aspect of the rulemaking until the end of the comment period. E:\FR\FM\27MRP2.SGM 27MRP2 18642 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules The public meeting will be conducted in an informal, conference style. DOE will present summaries of comments received before the public meeting, allow time for prepared general statements by participants, and encourage all interested parties to share their views on issues affecting this rulemaking. Each participant will be allowed to make a general statement (within time limits determined by DOE), before the discussion of specific topics. DOE will permit, as time permits, other participants to comment briefly on any general statements. At the end of all prepared statements on a topic, DOE will permit participants to clarify their statements briefly and comment on statements made by others. Participants should be prepared to answer questions by DOE and by other participants concerning these issues. DOE representatives may also ask questions of participants concerning other matters relevant to this rulemaking. The official conducting the public meeting will accept additional comments or questions from those attending, as time permits. The presiding official will announce any further procedural rules or modification of the above procedures that may be needed for the proper conduct of the public meeting. A transcript of the public meeting will be included in the docket, which can be viewed as described in the Docket section at the beginning of this notice. In addition, any person may buy a copy of the transcript from the transcribing reporter. sroberts on DSK6SPTVN1PROD with PROPOSALS D. Submission of Comments DOE will accept comments, data, and information regarding this proposed rule before or after the public meeting, but no later than the date provided in the DATES section at the beginning of this proposed rule. Interested parties may submit comments using any of the methods described in the ADDRESSES section at the beginning of this notice. Submitting comments via regulations.gov. The regulations.gov web page will require you to provide your name and contact information. Your contact information will be viewable to DOE Building Technologies staff only. Your contact information will not be publicly viewable except for your first and last names, organization name (if any), and submitter representative name (if any). If your comment is not processed properly because of technical difficulties, DOE will use this information to contact you. If DOE cannot read your comment due to technical difficulties and cannot contact VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 you for clarification, DOE may not be able to consider your comment. However, your contact information will be publicly viewable if you include it in the comment or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments. Do not submit to regulations.gov information for which disclosure is restricted by statute, such as trade secrets and commercial or financial information (hereinafter referred to as Confidential Business Information (CBI)). Comments submitted through regulations.gov cannot be claimed as CBI. Comments received through the Web site will waive any CBI claims for the information submitted. For information on submitting CBI, see the Confidential Business Information section. DOE processes submissions made through regulations.gov before posting. Normally, comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that regulations.gov provides after you have successfully uploaded your comment. Submitting comments via email, hand delivery, or mail. Comments and documents submitted via email, hand delivery, or mail also will be posted to regulations.gov. If you do not want your personal contact information to be publicly viewable, do not include it in your comment or any accompanying documents. Instead, provide your contact information on a cover letter. Include your first and last names, email address, telephone number, and optional mailing address. The cover letter will not be publicly viewable as long as it does not include any comments. Include contact information each time you submit comments, data, documents, and other information to DOE. Email submissions are preferred. If you submit via mail or hand delivery, please provide all items on a CD, if feasible. It is not necessary to submit printed copies. No facsimiles (faxes) will be accepted. Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or PO 00000 Frm 00166 Fmt 4701 Sfmt 4702 Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, written in English and are free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author. Campaign form letters. Please submit campaign form letters by the originating organization in batches of between 50 to 500 form letters per PDF or as one form letter with a list of supporters’ names compiled into one or more PDFs. This reduces comment processing and posting time. Confidential Business Information. According to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via email, postal mail, or hand delivery two well-marked copies: one copy of the document marked confidential including all the information believed to be confidential, and one copy of the document marked non-confidential with the information believed to be confidential deleted. Submit these documents via email or on a CD, if feasible. DOE will make its own determination about the confidential status of the information and treat it according to its determination. Factors of interest to DOE when evaluating requests to treat submitted information as confidential include: (1) A description of the items; (2) whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sources; (4) whether the information has previously been made available to others without obligation concerning its confidentiality; (5) an explanation of the competitive injury to the submitting person which would result from public disclosure; (6) when such information might lose its confidential character due to the passage of time; and (7) why disclosure of the information would be contrary to the public interest. It is DOE’s policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure). E. Issues on Which DOE Seeks Comment Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues: E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 1. DOE requests interested party feedback, including any substantive data, regarding today’s proposed standard levels and the potential for lessening of utility or performance related features. 2. DOE requests interested party feedback on whether the standards proposed in today’s rule would necessitate the use of any proprietary designs or patented technologies. 3. DOE seeks comment on its analysis of the costs and benefits of the standards proposed in this rulemaking, including but not limited to DOE’s analytic assumptions as highlighted in the list of issues herein. More specifically, DOE seeks comment on the Agency’s estimate that the proposed standard for battery chargers lead to between $92.8 million and $98.3 million in cost savings (i.e. negative costs) relative to the assumed baseline. Recognizing that the cost models used for this analysis have certain limitations, DOE seeks comment on the assumed market failure the agency has identified as the underlying reason that private markets have not taken advantage of these cost savings in the absence of this proposed rulemaking. DOE also seeks comment on key assumptions that contributed to this estimate, including but not limited to assumptions regarding energy consumption, shipments, and manufacturer costs, treatment of existing regulatory requirements for battery chargers and EPSs, and treatment of Energy Star and other emerging technologies in both the baseline and standards cases. Finally, DOE seeks comment on the assumption that incremental product costs for battery chargers are negative because of a shift in technology from linear power supplies to switch mode power for the larger battery chargers in product classes 5, 6, and 7. 4. DOE seeks comment on its estimates of battery charger and EPS shipments, lifetimes, and efficiency distributions for each application and product class. DOE is especially interested in receiving comment on its assumption that EPSs for mobile phones and smartphones are likely to standardize around a common connection standard and, as a result, remain in use beyond the lifetimes of their associated applications (an average lifetime of 4 years as opposed to an average lifetime of 2 years). 5. DOE seeks comment and related data on which battery charger and EPS applications are used in the commercial sector, what fraction of shipments are to the commercial sector, and how product lifetimes and usage may differ between residential and commercial settings. VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 6. DOE seeks comment on its proposed approach in classifying EPSs that indirectly operate consumer products and whether that approach requires modifications. If changes are required, DOE seeks specific suggestions on how the proposed approach should be altered. 7. DOE welcomes comment on whether there are any performancerelated features characteristic of either Class A or non-Class A devices (but not both) in product class N that would justify different standard levels for the two groups. DOE also seeks comment on the merits of applying a standard to EPSs falling into product class N. DOE also welcomes comment on the proposed compliance dates for nonClass A EPSs. 8. DOE seeks comment, information, and/or data on whether the proposed standards would impact any features in the regulated products or in their associated complimentary applications. If so, DOE seeks comment as to whether these impacts would impact the utility of either the product or the application, and on whether, how, and to what degree consumer welfare might be impacted by the proposed standards. 9. DOE requests any information regarding existing products that may seem to be able to be classified in multiple product classes. 10. DOE seeks comment on possible issues of electromagnetic interference and/or radio frequency interference associated with switch-mode power supplies (SMPS) used with amateur radios, including design options for reducing or eliminating interference. 11. DOE would like to request any feedback on the proposed approach to determining the average efficiency for multiple-voltage EPSs. 12. DOE seeks comment on its methodology for generating CSL3 and CSL4 for high-power EPSs. 13. DOE seeks comment on its proposal to set a standard for multiplevoltage EPSs as a continuous function of output power. 14. DOE seeks comment on its proposed approach in calculating unit energy consumption for battery chargers and the appropriateness of the various equations to calculate this consumption that are presented in today’s proposal. 15. DOE seeks information, including any substantive data, to help it assess factors of durability, reliability, and preference of transformer based battery chargers versus those incorporating switch-mode power supplies. 16. DOE seeks comment on its proposed approach in developing a costefficiency relationship for battery charger product class 6. PO 00000 Frm 00167 Fmt 4701 Sfmt 4702 18643 17. DOE requests comment on the results of its LCC and PBP analyses, particularly with respect to the projected results for multiple voltage EPSs (i.e., product class X). In addition, DOE requests comment regarding the Agency’s approach of calculating LCC by averaging estimated installation costs within subproduct categories. Further, DOE requests comment on the household debt equity discount rate applied specifically to the LCC cost analysis. Finally, DOE requests comment regarding the segregation of the LCC analysis and consumer price impacts, which are separately addressed in a shipment-based analysis. 18. DOE seeks comment on its treatment of the market path, markups, and MSP estimates. 19. DOE seeks comment on its use of a roll-up market response, which projects that only those products which fall below a standard will improve in efficiency, and that the same products will only improve in efficiency so as to meet, but not exceed, the efficiency required by the standard. DOE further seeks comments on the assumptions regarding efficiency distributions in the baseline, such as the extent to which the worst and best energy performers are and are not represented in the baseline. 20. DOE seeks comment on whether, and to what extent, battery charger efficiency would be likely to improve in the absence of standards, including the assumption that battery charger efficiency will not improve between today and the compliance date in 2013. 21. DOE seeks comment on its assumptions about the extent to which, if at all, EPS efficiency will improve for product classes B, C, D, E, X and H in the absence of mandatory standards, both prior to and after 2013. 22. DOE recognizes that significant variation in use exists for battery chargers, EPSs, and the applications they power. In an effort to ensure the accuracy of its assumed usage profiles, DOE seeks substantiated estimates, with supporting data, of usage profiles for battery chargers, EPSs, and the applications they power. 23. DOE seeks comment on its EPS loading points, as well as test results that will allow it to improve the accuracy of those loading points. 24. DOE seeks comment on its estimate that shipments of EPSs and battery chargers are inelastic and on other elasticity assumptions DOE has made. DOE further seeks comment, information, and data regarding DOE’s market assessment of EPSs and battery chargers via complimentary applications with which these products are nearly always bundled. E:\FR\FM\27MRP2.SGM 27MRP2 sroberts on DSK6SPTVN1PROD with PROPOSALS 18644 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 25. DOE seeks comment on its estimate that substitution impacts for EPSs and battery chargers are negligible. 26. DOE seeks comment on the methodology employed for conducting the National Impact Analysis, including the calculations of National Inventory, National Energy Savings, and Net Present Value. 27. DOE seeks comment on its estimates regarding the proportions of certain applications—including mobile phones, MP3 players, GPS equipment, and personal care products—that ship with EPSs designed to directly operate the application versus indirectly operate the application. 28. DOE seeks comment on what level of efficiency EPSs in product class N already meet and whether EPSs sold in California are different in terms of their energy efficiency than EPSs sold in other States. 29. DOE seeks comment on the accuracy of its distribution models for battery chargers and EPSs, as well as its estimates off battery charger and EPS markups. To the extent that these models and estimates can be improved, DOE seeks specific suggestions and supporting data. 30. DOE seeks information concerning small businesses that could be impacted by this rulemaking and the nature and extent of those potential impacts. For example, DOE is interested in information concerning impacts on the golf cart industry that have not been captured in the current rulemaking analysis. Further, DOE seeks further information and data regarding the ‘double jeopardy’ EPS and battery charger impacts on small businesses as raised by commenters. 31. DOE seeks comment on whether the proposed standards would lead to lessening of market competition in the regulated industries. 32. DOE seeks comment on whether there are any products on the market that are not already subject to California or Federal energy efficiency standards that would be covered by the new EPS standards being proposed for product class N today. DOE welcomes specific examples of such products, if they exist. 33. DOE invites comment on solidstate lighting EPSs, specifically on whether there are any differences between SSL EPSs and other EPSs that might warrant treating them as a separate product class, the size of the market for these products, what proportion of SSL luminaires use EPSs, the efficiency of those EPSs, and usage patterns. 34. DOE seeks comment on whether any battery chargers exist that can only be operated on 12V input, whether a VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 device that can be powered only from a 12V power outlet can be assumed to be designed solely for use in recreational vehicles (RVs) and other mobile equipment, and whether there are battery chargers with DC inputs other than 5V and 12V. 35. DOE welcomes comment on any and all issues related to efficiency markings for battery chargers and EPSs. 36. DOE is interested in receiving comments from industry, states, and other interested parties on the best ways to ensure a smooth transition from the battery charger standards established in California to the national standards addressed in this proposed rule. VIII. Approval of the Office of the Secretary The Secretary of Energy has approved publication of today’s proposed rule. List of Subjects in 10 CFR Part 430 Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Reporting and recordkeeping requirements, Small businesses. Issued in Washington, DC, on March 8, 2012. Henry Kelly, Acting Assistant Secretary of Energy, Energy Efficiency and Renewable Energy. For the reasons set forth in the preamble, DOE proposes to amend chapter II, subchapter D, of title 10 of the Code of Federal Regulations, as set forth below: PART 430—ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS 1. The authority for part 430 continues to read as follows: Authority: 42 U.S.C. 6291–6309; 28 U.S.C. 2461 note. 2. Section 430.2 is amended by adding definitions for AC–AC external power supply, AC–DC external power supply, basic-voltage external power supply, direct operation external power supply, indirect operation external power supply, low-voltage external power supply, and multiple-voltage external power supply in alphabetical order to read as follows: § 430.2 Definitions. * * * * * AC–AC external power supply means an external power supply that is used to convert household electric current into a single lower-voltage AC current. AC–DC external power supply means an external power supply that is used to PO 00000 Frm 00168 Fmt 4701 Sfmt 4702 convert household electric current into a single lower-voltage DC current. * * * * * Basic-voltage external power supply means an external power supply that is not a low-voltage power supply. * * * * * Direct operation external power supply means an external power supply that can operate a consumer product that is not a battery charger without the assistance of a battery. * * * * * Indirect operation external power supply means an external power supply that cannot operate a consumer product that is not a battery charger without the assistance of a battery as determined by the following steps: (1) If a product can be connected to an end-use consumer product and that consumer product can be operated using battery power, the method for determining if an EPS can directly power an application is as follows: (i) Charge the battery in the application via the EPS such that the application can operate as intended before taking any additional steps. (ii) Disconnect the EPS from the application. From an off mode state, turn on the application and record the time necessary for it to become operational to the nearest five second increment (5 sec, 10 sec, etc.). (iii) Operate the application using power only from the battery until the application stops functioning due to the battery discharging. (iv) Connect the EPS first to mains and then to the application. Immediately attempt to operate the application. Record the time for the application to become operational to the nearest five second increment (5 sec, 10 sec, etc.). (2) If the time recorded in paragraph (1)(iv) of this definition is less than or equal to the summation of the time recorded in paragraph (1)(ii) of this definition and five seconds, the EPS can operate the application directly and is not in product class N. Otherwise, it is an indirect operation EPS and is subject to the standards of product class N in § 430.32(w). * * * * * Low-voltage external power supply means an external power supply with a nameplate output voltage less than 6 volts and nameplate output current greater than or equal to 550 milliamps. * * * * * Multiple-voltage external power supply means an external power supply that is used to convert household E:\FR\FM\27MRP2.SGM 27MRP2 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules sroberts on DSK6SPTVN1PROD with PROPOSALS electric current into multiple simultaneous output currents. * * * * * 3. Section 430.32 is amended by revising the paragraph (w) heading and adding paragraphs (w)(1)(iv), (w)(2), VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 (w)(3), (w)(4), (w)(5) and (y) to read as follows: § 430.32 Energy and water conservation standards and their effective dates. * * * * * (w) External Power Supplies. PO 00000 Frm 00169 Fmt 4701 Sfmt 4702 18645 (1) * * * (iv) Except as provided in this paragraph (w)(1)(iii) of this section, all direct operation external power supplies manufactured on or after July 1, 2013, shall meet the following standards: BILLING CODE 6450–01–P E:\FR\FM\27MRP2.SGM 27MRP2 VerDate Mar<15>2010 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00170 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.111</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS 18646 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules (i) Shall be permanently marked with the capital letter ‘‘N’’ as a superscript to the circle that contains the Roman numeral, for example, and (ii) If sold separately from the battery charger or end-use consumer product with which it is intended to be used, shall be marked with the manufacturer and model number of that battery charger or end-use consumer product. * * * * * (y) Battery Chargers. (1) Battery chargers manufactured on or after July 1, 2013, shall have a unit energy consumption (UEC) less than or equal to the standard calculated using the equations for the appropriate product class and corresponding measured battery energy as shown below: EP27MR12.113</GPH> EP27MR12.114</GPH> and (ii) If sold separately from the battery charger or end-use consumer product with which it is intended to be used, shall be marked with the manufacturer and model number of that battery charger or end-use consumer product. (5) Any indirect operation external power supply not subject to the standards in paragraph (w)(1)(i) of this section and not labeled with a Roman numeral VI in accordance with the marking protocol referred to in paragraph (w)(3) of this section: (i) Shall be permanently marked with the abbreviation ‘‘EPS–N’’, for example, VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00171 Fmt 4701 Sfmt 4702 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.112</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS (2) The standards described in paragraphs (w)(1)(i) and (iv) of this section shall not constitute an energy conservation standard for the separate end-use product to which the external power supply is connected. (3) Any external power supply subject to the standards in paragraphs (w)(1)(i) and (iv) of this section shall be clearly and permanently marked in accordance with the External Power Supply International Efficiency Marking Protocol, as referenced in the ‘‘Energy Star Program Requirements for Single Voltage External Ac–Dc and Ac–Ac Power Supplies,’’ (incorporated by reference; see § 430.3), published by the Environmental Protection Agency. (4) Any indirect operation external power supply subject to the standards in paragraph (w)(1)(i) of this section and not labeled with a Roman numeral VI in accordance with the marking protocol referred to in paragraph (w)(3) of this section: 18647 18648 Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules BILLING CODE 6450–01–C paragraph (y)(2)(ii) of this section shall be used to calculate UEC; otherwise a device’s UEC shall be calculated using the equation in paragraph (y)(2)(i). EP27MR12.116</GPH> tested and its charge test duration as determined in section 5.2 of Appendix Y to Subpart B of Part 430 minus 5 hours exceeds the threshold charge time listed in the table below, the equation in VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00172 Fmt 4701 Sfmt 4725 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.115</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS (2) Unit energy consumption shall be calculated for a device seeking certification using one of the two equations listed below. If a device is Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012 / Proposed Rules Where: E24 = 24-hour energy as determined in section 5.10 of Appendix Y to Subpart B of Part 430, Ebatt = Measured battery energy as determined in section 5.6 of Appendix Y to Subpart B of Part 430, Pm = Maintenance mode power as determined in section 5.9 of Appendix Y to Subpart B of Part 430, Psb = Standby mode power as determined in section 5.11 of Appendix Y to Subpart B of Part 430, Poff = Off mode power as determined in section 5.12 of Appendix Y to Subpart B of Part 430, (3) Any battery charger subject to the standards in paragraph (y)(1) of this section shall be clearly and permanently marked on the outside of its housing with the encircled upper case letters 18649 tcd = Charge test duration as determined in section 5.2 of Appendix Y to Subpart B of Part 430, ‘‘BC’’ coupled with the Roman numeral ‘‘III’’ or a Roman numeral having a greater value, for example, And ta&m, n, tsb, and toff, are constants used depending upon a device’s product class and found in the following table: [FR Doc. 2012–6042 Filed 3–26–12; 8:45 am] EP27MR12.118</GPH> VerDate Mar<15>2010 22:02 Mar 26, 2012 Jkt 226001 PO 00000 Frm 00173 Fmt 4701 Sfmt 9990 E:\FR\FM\27MRP2.SGM 27MRP2 EP27MR12.117</GPH> sroberts on DSK6SPTVN1PROD with PROPOSALS BILLING CODE 6450–01–P

Agencies

DEPARTMENT OF ENERGY

[Federal Register Volume 77, Number 59 (Tuesday, March 27, 2012)]
[Proposed Rules]
[Pages 18478-18649]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-6042]

[[Page 18477]]

Vol. 77

Tuesday,

No. 59

March 27, 2012

Part III

Department of Energy

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10 CFR Part 430

Energy Conservation Program: Energy Conservation Standards for Battery
Chargers and External Power Supplies; Proposed Rule

Federal Register / Vol. 77 , No. 59 / Tuesday, March 27, 2012 /
Proposed Rules

[[Page 18478]]

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DEPARTMENT OF ENERGY

10 CFR Part 430

[Docket Number EERE-2008-BT-STD-0005]
RIN 1904-AB57

Energy Conservation Program: Energy Conservation Standards for
Battery Chargers and External Power Supplies

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

ACTION: Notice of proposed rulemaking (NOPR) and public meeting.

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SUMMARY: The Energy Policy and Conservation Act (EPCA) prescribes
energy conservation standards for various consumer products and
commercial and industrial equipment, including battery chargers and
external power supplies (EPSs). EPCA also requires the U.S. Department
of Energy (DOE) to determine whether more stringent, amended standards
for these products are technologically feasible, economically
justified, and would save a significant amount of energy. In this
notice, DOE proposes amended energy conservation standards for Class A
EPSs and new energy conservation standards for non-Class A EPSs and
battery chargers. The notice also announces a public meeting to receive
comment on these proposed standards and associated analyses and
results.

DATES: DOE will hold a public meeting on Wednesday, May 2, 2012 from 9
a.m. to 5 p.m., in Washington, DC. The meeting will also be broadcast
as a webinar. See section VII, ``Public Participation,'' for webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants.
DOE will accept comments, data, and information regarding this
notice of proposed rulemaking (NOPR) before and after the public
meeting, but no later than May 29, 2012. See section VI, ``Public
Participation,'' for details.

ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW.,
Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at
(202) 586-2945. Please note that foreign nationals visiting DOE
Headquarters are subject to advance security screening procedures. Any
foreign national wishing to participate in the meeting should advise
DOE as soon as possible by contacting Ms. Edwards to initiate the
necessary procedures. Please also note that those wishing to bring
laptops into the Forrestal Building will be required to obtain a
property pass. Visitors should avoid bringing laptops, or allow an
extra 45 minutes.
Any comments submitted must identify the NOPR for Energy
Conservation Standards for Battery Chargers and External Power
Supplies, and provide docket number EE-2008-BT-STD-0005 and/or
regulatory information number (RIN) number 1904-AB57. Comments may be
submitted using any of the following methods:
1. Federal eRulemaking Portal: https://www.regulations.gov. Follow
the instructions for submitting comments.
2. Email: BC&EPS_ECS@ee.doe.gov. Include the docket number and/or
RIN in the subject line of the message.
3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW.,
Washington, DC, 20585-0121. If possible, please submit all items on a
CD. It is not necessary to include printed copies.
4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Program, 950 L'Enfant Plaza, SW., Suite
600, Washington, DC, 20024. Telephone: (202) 586-2945. If possible,
please submit all items on a CD. It is not necessary to include printed
copies.
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in this
proposed rule may be submitted to Office of Energy Efficiency and
Renewable Energy through the methods listed above and by email to
Chad_S_Whiteman@omb.eop.gov.
For detailed instructions on submitting comments and additional
information on the rulemaking process, see section VII of this document
(Public Participation).
Docket: The docket is available for review at regulations.gov,
including Federal Register notices, framework documents, public meeting
attendee lists and transcripts, comments, and other supporting
documents/materials. All documents in the docket are listed in the
regulations.gov index. However, not all documents listed in the index
may be publicly available, such as information that is exempt from
public disclosure.
A link to the docket web page can be found at: https://www1.eere.energy.gov/buildings/appliance_standards/residential/battery_external.html. This web page will contain a link to the docket
for this notice on the regulations.gov site. The regulations.gov web
page will contain simple instructions on how to access all documents,
including public comments, in the docket. See section VII for
information on how to submit comments through regulations.gov.
For further information on how to submit or review public comments
or participate in the public meeting, contact Ms. Brenda Edwards at
(202) 586-2945 or email: Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT: Mr. Victor Petrolati, U.S. Department
of Energy, Office of Energy Efficiency and Renewable Energy, Building
Technologies Program, EE-2J, 1000 Independence Avenue SW., Washington,
DC, 20585-0121. Telephone: (202) 586-4549. Email:
Victor.Petrolati@ee.doe.gov.
Mr. Michael Kido, U.S. Department of Energy, Office of the General
Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-8145. Email: michael.kido@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Battery Chargers and
External Power Supplies
III. General Discussion
A. Test Procedures
1. External Power Supply Test Procedures
2. Battery Charger Test Procedures
B. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
a. External Power Supply Max-Tech Levels
b. Battery Charger Max-Tech Levels
C. Energy Savings
1. Determination of Savings
2. Significance of Savings
D. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Life-Cycle Costs
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
2. Rebuttable Presumption
IV. Methodology and Discussion
A. Market and Technology Assessment
1. Products Included in This Rulemaking
a. External Power Supplies
b. Battery Chargers
c. Wireless Power
d. Unique Products

[[Page 18479]]

2. Market Assessment
a. Market Survey
b. Non-Class A External Power Supplies
c. Application Shipments
d. Efficiency Distributions
3. Product Classes
a. External Power Supply Product Classes
b. Battery Charger Product Classes
4. Technology Assessment
a. EPS Efficiency Metrics
b. EPS Technology Options
c. High-Power EPSs
d. Power Factor
e. Battery Charger Modes of Operation and Performance Parameters
f. Battery Charger Technology Options
B. Screening Analysis
C. Engineering Analysis
1. Engineering Analysis for External Power Supplies
a. Representative Product Classes and Representative Units
b. EPS Candidate Standard Levels (CSLs)
c. EPS Engineering Analysis Methodology
d. EPS Engineering Results
e. EPS Equation Scaling
2. Engineering Analysis for Battery Chargers
a. Representative Units
b. Battery Charger Efficiency Metrics
c. Calculation of Unit Energy Consumption
d. Battery Charger Candidate Standard Levels (CSLs)
e. Test and Teardowns
f. Manufacturer Interviews
g. Design Options
h. Cost Model
i. Battery Charger Engineering Results
j. Scaling of Battery Charger Candidate Standard Levels
D. Markups to Determine Product Price
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analyses
1. Manufacturer Selling Price
2. Markups
3. Sales Tax
4. Installation Cost
5. Maintenance Cost
6. Product Price Forecast
7. Unit Energy Consumption
8. Electricity Prices
9. Electricity Price Trends
10. Lifetime
11. Discount Rate
12. Sectors Analyzed
13. Base Case Market Efficiency Distribution
14. Compliance Date
15. Payback Period Inputs
G. National Impact Analysis
1. Shipments
2. Shipment Growth Rate
3. Product Class Lifetime
4. Forecasted Efficiency in the Base Case and Standards Cases
5. Product Price Forecast
6. Unit Energy Consumption and Savings
7. Unit Costs
8. Repair and Maintenance Cost per Unit
9. Energy Prices
10. Site-to-Source Energy Conversion
11. Discount Rates
12. Benefits From Effects of Standards on Energy Prices
H. Consumer Subgroup Analysis
I. Manufacturer Impact Analysis
1. Overview
2. EPS MIA
a. EPS GRIM Key Inputs
b. Comments From Interested Parties Related to EPSs
c. High-Power EPS Manufacturer Interviews
3. Battery Charger MIA
a. Battery Charger GRIM Key Inputs
b. Battery Charger Comments From Interested Parties
4. Comments From Interested Parties Related to EPSs and Battery
Chargers
a. Cumulative Burden
b. Competition
5. Manufacturer Interviews
a. Product Groupings
b. Competition From Substitutes
c. Test Procedure Concerns
d. Multiple Regulation of EPSs and Battery Chargers
e. Profitability Impacts
f. Potential Changes to Product Utility
J. Employment Impact Analysis
K. Utility Impact Analysis
L. Emissions Analysis
M. Monetizing Carbon Dioxide and Other Emissions Impacts
1. Social Cost of Carbon
a. Monetizing Carbon Dioxide Emissions
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
c. Current Approach and Key Assumptions
d. Valuation of Other Emissions Reductions
N. Discussion of Other Comments
O. Marking Requirements
P. Reporting Requirements
V. Analytical Results
A. Trial Standard Levels
1. External Power Supply TSLs
2. Battery Charger TSLs
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. Cash-Flow Analysis Results
b. Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Sub-Group 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
C. Proposed Standards
1. External Power Supplies
a. Product Class B--Direct Operation External Power Supplies
b. Product Class X--Multiple-Voltage External Power Supplies
c. Product Class H--High-Power External Power Supplies
d. Product Class N--Indirect-Operation External Power Supplies
2. Battery Chargers
a. Low-Energy, Inductive Charging Battery Chargers, Product
Class 1
b. Low-Energy, Non-Inductive Charging Battery Chargers, Product
Classes 2, 3, and 4
c. Medium-Energy Battery Chargers, Product Classes 5 and 6
d. High-Energy Battery Chargers, Product Class 7
e. Battery Chargers With a DC Input of Less Than 9 V, Product
Class 8
f. Battery Chargers With a DC Input Greater Than 9 V, Product
Class 9
g. AC Output Battery Chargers, Product Class 10
3. Summary of Benefits and Costs (Annualized) of Proposed
Standards for External Power Supplies
4. Summary of Benefits and Costs (Annualized) of Proposed
Standards for Battery Chargers
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866 and 13563
B. Review Under the Regulatory Flexibility Act
1. Description and Estimated Number of Small Entities Regulated
a. Methodology for Estimating the Number of Small Entities
b. Manufacturer Participation
c. Battery Charger Industry Structure
d. Comparison Between Large and Small Entities
2. Description and Estimate of Compliance Requirements
c. Summary of Compliance Impacts
3. Duplication, Overlap, and Conflict With Other Rules and
Regulations
4. Significant Alternatives to the Proposed Rule
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999 458
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001 459
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
VII. Public Participation
A. Attendance at Public Meeting
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

List of Tables

Table I-1. Proposed Energy Conservation Standards for Direct
Operation External Power Supplies
Table I-2. Proposed Energy Conservation Standards for Battery
Chargers
Table I-3. Impacts of Proposed Standards on Consumers of External
Power Supplies

[[Page 18480]]

Table I-4. Impacts of Proposed Standards on Consumers of Battery
Chargers
Table I-5. External Power Supply Product Classes
Table I-6. Annualized Benefits and Costs of Proposed Standards for
External Power Supplies Shipped in 2013-2042
Table I-7. Battery Charger Product Classes
Table I-8. Annualized Benefits and Costs of Proposed Standards for
Battery Chargers Shipped in 2013-2042
Table II-1. Federal Active Mode Energy Efficiency Standards for
Class A External Power Supplies
Table II-2. Stakeholders Providing Comments on the Preliminary
Analysis
Table III-1 Reduction in Energy Consumption at Max-Tech for Battery
Chargers
Table IV-1 Preliminary Analysis Product Classes
Table IV-2 External Power Supply Product Classes Used in the NOPR
Table IV-3 Battery Charger Product Classes
Table IV-4 Summary of EPS CSLs for Product Classes B, C, D, and E
Table IV-5 Summary of EPS CSLs for Product Class X
Table IV-6 Summary of EPS CSLs for Product Class H
Table IV-7 2.5W EPS Engineering Analysis Results
Table IV-8 18W EPS Engineering Analysis Results
Table IV-9 60W EPS Engineering Analysis Results
Table IV-10 120W EPS Engineering Analysis Results
Table IV-11 203W EPS Engineering Analysis Results
Table IV-12 345W EPS Engineering Analysis Results
Table IV-13 The Battery Charger Representative Units for each
Product Class
Table IV-14 CSLs Equivalent to California Proposed Standards
Table IV-15 Supplemental Values for Product Classes 10a and 10b
Table IV-16 Product Class 1 (Inductive Chargers) Engineering
Analysis Results
Table IV-17 Product Class 2 (Low-Energy, Low-Voltage) Engineering
Analysis Results
Table IV-18 Product Class 3 (Low-Energy, Medium-Voltage) Engineering
Analysis Results
Table IV-19 Product Class 4 (Low-Energy, High-Voltage) Engineering
Analysis Results
Table IV-20 Product Class 5 (Medium-Energy, Low-Voltage) Engineering
Analysis Results
Table IV-21 Product Class 6 (Medium-Energy, High-Voltage)
Engineering Analysis Results
Table IV-22 Product Class 7 (High-Energy) Engineering Analysis
Results
Table IV-23 Product Class 8 (Low-Voltage DC Input) Engineering
Analysis Results
Table IV-24 Product Class 9 (High-Voltage DC Input) Engineering
Analysis Results
Table IV-25 Product Class 10 (AC Input, AC Output) Engineering
Analysis Results
Table IV-26 Summary of Inputs and Key Assumptions Used in the
Preliminary Analysis and NOPR LCC Analyses
Table IV-27 EPS Life-Cycle Cost Savings With 4-Year Lifteime
Assumptions
Table IV-28 EPS Life-Cycle Cost Savings With Alternative (2-Year)
Lifetime Assumptions
Table IV-29 Summary of Inputs, Sources and Key Assumptions for the
National Impact Analysis
Table IV-30 Changes to Base Case Efficiency Distributions to Account
for CEC Standards
Table IV-31 Social Cost of CO2, 2010-2050 (in 2007
Dollars per Metric Ton)
Table IV-32 Proposed Efficiency Marking Protocol for Battery
Chargers
Table IV-33 Proposed Location for Battery Charger Marking
Table V-1 Trial Standard Levels for External Power Supplies
Table V-2 Trial Standard Levels for Battery Chargers
Table V-3 LCC Savings and Payback Period for DC Output, Basic-
Voltage External Power Supplies
Table V-4 LCC Savings and Payback Period for Non-Class A External
Power Supplies
Table V-5 LCC Savings and Payback Period for Battery Chargers
Table V-6 DC Output, Basic-Voltage External Power Supplies: Low-
Income Consumer Subgroup
Table V-7 Non-Class A External Power Supplies: Low-Income Consumer
Subgroup
Table V-8 Battery Chargers: Low-Income Consumer Subgroup
Table V-9 DC Output, Basic-Voltage External Power Supplies: Small
Business Consumer Subgroup
Table V-10 Battery Chargers: Small Business Consumer Subgroup
Table V-11 DC Output, Basic-Voltage External Power Supplies: Top
Tier Marginal Electricity Price Consumer Subgroup
Table V-12 Non-Class A External Power Supplies: Top Tier Marginal
Electricity Price Consumer Subgroup
Table V-13 Battery Chargers: Top Tier Marginal Electricity Price
Consumer Subgroup
Table V-14 Manufacturer Impact Analysis for Product Classes B, C, D,
and E--Flat Markup Scenario
Table V-15 Manufacturer Impact Analysis for Product Classes B, C, D,
and E--Preservation of Operating Profit Markup Scenario
Table V-16 Manufacturer Impact Analysis for Product Class X EPS--
Flat Markup Scenario
Table V-17 Manufacturer Impact Analysis for Product Class X EPS--
Preservation of Operating Scenario
Table V-18 Manufacturer Impact Analysis for Product Class H EPS--
Flat Markup Scenario
Table V-19 Manufacturer Impact Analysis for Product Class H EPS--
Preservation of Operating Profit Markup Scenario
Table V-20 Applications in Product Class 1
Table V-21 Cash Flow Results--Product Class 1--Flat Markup Scenario
Table V-22 Cash Flow Results--Product Class 1--Pass Through Markup
Scenario
Table V-23 Cash Flow Results--Product Class 1--Constant Price Markup
Scenario
Table V-24 Applications in Product Classes 2, 3, and 4
Table V-25 Cash Flow Results--Product Classes 2, 3, and 4--Flat
Markup Scenario
Table V-26 Cash Flow Results--Product Classes 2, 3, and 4--Pass
Through Markup Scenario
Table V-27 Cash Flow Results--Product Classes 2, 3, and 4--Constant
Price Markup Scenario
Table V-28 Cash Flow Results--Product Classes 2, 3, and 4--Pass
Through Markup Scenario--Consumer Electronics
Table V-29 Cash Flow Results--Product Classes 2, 3, and 4--Pass
Through Markup Scenario--Power Tools
Table V-30 Cash Flow Results--Product Classes 2, 3, and 4--Pass
Through Markup Scenario--Small Appliances
Table V-31 Applications in Product Classes 5 and 6
Table V-32 Cash Flow Results--Product Classes 5 and 6--Flat Markup
Scenario
Table V-33 Cash Flow Results--Product Classes 5 and 6--Pass Through
Markup Scenario
Table V-34 Cash Flow Results--Product Classes 5 and 6--Constant
Price Markup Scenario
Table V-35 Applications in Product Class 7
Table V-36 Cash Flow Results--Product Class 7--Flat Markup Scenario
Table V-37 Cash Flow Results--Product Class 7--Pass Through Markup
Scenario
Table V-38 Cash Flow Results--Product Class 7--Constant Price Markup
Scenario
Table V-39 Applications in Product Class 8
Table V-40 Cash Flow Results--Product Class 8--Flat Markup Scenario
Table V-41 Cash Flow Results--Product Class 8--Pass Through Markup
Scenario
Table V-42 Cash Flow Results--Product Class 8--Constant Price Markup
Scenario
Table V-43 Applications in Product Class 9
Table V-44 Applications in Product Class 10
Table V-45 Cash Flow Results--Product Class 10--Flat Markup Scenario
Table V-46 Cash Flow Results--Product Class 10--Pass Through Markup
Scenario
Table V-47 Cash Flow Results--Product Class 10--Constant Price
Markup Scenario
Table V-48 Base Case Manufacturer Impact Analysis for All Battery
Charger Product Classes Due to the CEC Standard
Table V-49 External Power Supplies: Cumulative National Energy
Savings in Quads
Table V-50 Battery Chargers: Cumulative National Energy Savings in
Quads
Table V-51 Cumulative Net Present Value of Consumer Benefits for
External Power Supplies, 3-Percent Discount Rate (2010$ millions)
Table V-52 Cumulative Net Present Value of Consumer Benefits for
External Power Supplies, 7-Percent Discount Rate (2010$ millions)

[[Page 18481]]

Table V-53 Cumulative Net Present Value of Consumer Benefits for
Battery Chargers, 3-Percent Discount Rate (2010$ millions)
Table V-54 Cumulative Net Present Value of Consumer Benefits for
Battery Chargers, 7-Percent Discount Rate (2010$ millions)
Table V-55 Cumulative Emissions Reduction for 2013-2042 Under
External Power Supply TSLs
Table V-56 Cumulative Emissions Reduction for 2013-2042 Under
Battery Charger TSLs
Table V-57 External Power Supply Product Class B: Estimates of
Global Present Value of CO2 Emissions Reduction Under
TSLs
Table V-58 External Power Supply Product Classes B, C, D, and E:
Estimates of Global Present Value of CO2 Emissions
Reduction Under TSLs
Table V-59 External Power Supply Product Class X: Estimates of
Global Present Value of CO2 Emissions Reduction Under
TSLs
Table V-60 External Power Supply Product Class H: Estimates of
Global Present Value of CO2 Emissions Reduction Under
TSLs
Table V-61 Battery Charger Product Class 1: Estimates of Global
Present Value of CO2 Emissions Reduction Under TSLs
Table V-62 Battery Chargers Product Classes 2, 3, 4: Estimates of
Global Present Value of CO2 Emissions Reduction Under
TSLs
Table V-63 Battery Chargers Product Classes 5, 6: Estimates of
Global Present Value of CO2 Emissions Reduction Under
TSLs
Table V-64 Battery Chargers Product Class 7: Estimates of Global
Present Value of CO2 Emissions Reduction Under TSLs
Table V-65 Battery Chargers Product Class 8: Estimates of Global
Present Value of CO2 Emissions Reduction Under TSLs
Table V-66 Battery Chargers Product Class 10: Estimates of Global
Present Value of CO2 Emissions Reduction Under TSLs
Table V-67 External Power Supply Product Class B: Estimates of
Domestic Present Value of CO2 Emissions Reduction Under
TSLs
Table V-68 External Power Supply Product Classes B, C, D, E:
Estimates of Domestic Present Value of CO2 Emissions
Reduction Under TSLs
Table V-69 External Power Supply Product Class X: Estimates of
Domestic Present Value of CO2 Emissions Reduction Under
TSLs
Table V-70 External Power Supply Product Class H: Estimates of
Domestic Present Value of CO2 Emissions Reduction Under
TSLs
Table V-71 Battery Charger Product Class 1: Estimates of Domestic
Present Value of CO2 Emissions Reduction Under TSLs
Table V-72 Battery Charger Product Classes 2, 3, 4: Estimates of
Domestic Present Value of CO2 Emissions Reduction Under
TSLs
Table V-73 Battery Charger Product Classes 5, 6: Estimates of
Domestic Present Value of CO2 Emissions Reduction Under
TSLs
Table V-74 Battery Charger Product Class 7: Estimates of Domestic
Present Value of CO2 Emissions Reduction Under TSLs
Table V-75 Battery Charger Product Class 8: Estimates of Domestic
Present Value of CO2 Emissions Reduction Under TSLs
Table V-76 Battery Charger Product Class 10: Estimates of Domestic
Present Value of CO2 Emissions Reduction Under TSLs
Table V-77 Estimates of Present Value of NOX Emissions
Reduction Under External Power Supply TSLs
Table V-78 Estimates of Present Value of NOX Emissions
Reduction Under Battery Charger TSLs
Table V-79 Adding Net Present Value of Consumer Savings to Present
Value of Monetized Benefits from CO2 and NOX
Emissions Reductions Under TSL 1 for Battery Chargers Product
Classes 2, 3, 4
Table V-80 Results of Adding Net Present Value of Consumer Savings
(at 7% Discount Rate) to Net Present Value of Monetized Benefits
from CO2 and NOX Emissions Reductions Under
External Power Supply TSLs
Table V-81 Results of Adding Net Present Value of Consumer Savings
(at 3% Discount Rate) to Net Present Value of Monetized Benefits
from CO2 and NOX Emissions Reductions External
Power Supply TSLs
Table V-82 Results of Adding Net Present Value of Consumer Savings
(at 7% Discount Rate) to Net Present Value of Monetized Benefits
from CO2 and NOX Emissions Reductions Under
Battery Charger TSLs
Table V-83 Results of Adding Net Present Value of Consumer Savings
(at 3% Discount Rate) to Net Present Value of Monetized Benefits
from CO2 and NOX Emissions Reductions Under
Battery Charger TSLs
Table V-84 Selected National Impacts of Aligning Federal Standards
with California Standards
Table V-85 Summary of Results for Product Class B External Power
Supplies
Table V-86 Proposed Standards for EPSs in Product Classes B, C, D,
and E
Table V-87 Proposed Standards for Product Class X External Power
Supplies
Table V-88 Proposed Standards for Multiple-Voltage External Power
Supplies
Table V-89 Proposed Standards for High-Power External Power Supplies
Table V-90 Proposed Standards for High-Power External Power Supplies
Table V-91 Applications of Indirect Operation External Power
Supplies
Table V-92 Summary of Results for Battery Charger Product Class 1
Table V-93 Proposed Standard for Product Class 1
Table V-94 Summary of Results for Battery Charger Product Classes 2,
3, and 4
Table V-95 Proposed Standard for Product Classes 2, 3, and 4
Table V-96 Summary of Results for Battery Charger Product Classes 5
and 6
Table V-97 Proposed Standard for Product Classes 5 and 6
Table V-98 Summary of Results for Battery Charger Product Class 7
Table V-99 Proposed Standard for Product Class 7
Table V-100 Summary of Results for Battery Charger Product Class 8
Table V-101 Proposed Standard for Product Class 8
Table V-102 Summary of Results for Battery Charger Product Class 10
Table V-103 Proposed Standard for Product Class 10
Table V-104 Annualized Benefits and Costs of Proposed Standards for
EPSs
Table V-105 Annualized Benefits and Costs of Proposed Standards for
Battery Chargers
Table VI-1 Estimated Capital Conservation Costs for a Typical Small
Business (2010$ million)
Table VI-2 Estimated Product Conversion Costs for a Typical Small
Business (2010$ million)
Table VI-3 Estimated Total Conversion Costs for a Typical Small
Business (2010$ million)

I. Summary of the Proposed Rule

Title III, Part B \1\ of the Energy Policy and Conservation Act of
1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as
codified), established the Energy Conservation Program for Consumer
Products Other Than Automobiles. Pursuant to EPCA, any new or amended
energy conservation standard that DOE prescribes for certain products,
such as battery chargers and external power supplies (EPSs), shall be
designed to achieve the maximum improvement in energy efficiency that
is technologically feasible and economically justified. (42 U.S.C.
6295(o)(2)(A)). Furthermore, the new or amended standard must result in
a significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)). In
accordance with these and other statutory provisions discussed in this
notice, DOE proposes amended energy conservation standards for Class A
EPSs and new energy conservation standards for non-Class A EPSs and
battery chargers. The proposed standards for direct operation EPSs,
which are the minimum average efficiency in active mode and the maximum
power consumption in no-load mode expressed as a function of the
nameplate output power, are shown in Table I.1. The proposed standards
for battery chargers, which consist of a set of maximum annual energy
consumption levels expressed as a function of battery energy, are shown
in Table I-2. These proposed standards, if adopted, would apply to all
products listed in Table I.1 and Table I-2 and manufactured in, or
imported into, the United States on or after July 1, 2013. In addition
to being technologically

[[Page 18482]]

feasible and economically justified, DOE's proposed standards were also
designed to maximize the net monetized benefits, as explained further
below in this notice.
---------------------------------------------------------------------------

\1\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
---------------------------------------------------------------------------

BILLING CODE 6450-01-P
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[[Page 18483]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.001

[GRAPHIC] [TIFF OMITTED] TP27MR12.002

BILLING CODE 6450-01-C

[[Page 18484]]

A. Benefits and Costs to Consumers

Table I-3 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of EPSs, as measured by the average
life-cycle cost (LCC) savings and the median payback period. The
projected economic impacts of the proposed standards on individual
consumers are generally positive. For example, the estimated average
life-cycle cost (LCC) savings are from -$0.45 to $0.69 for product
class B, depending on the representative unit, $2.07 for product class
X, and $129.08 for product class H.\2\
---------------------------------------------------------------------------

\2\ The LCC is the total consumer expense over the life of a
product, consisting of purchase and installation costs plus
operating costs (expenses for energy use, maintenance and repair).
To compute the operating costs, DOE discounts future operating costs
to the time of purchase and sums them over the lifetime of the
product.
\3\ As explained in V.B.1.a, DOE uses the median payback period
rather than the mean payback period to dampen the effect of outliers
on the data.
[GRAPHIC] [TIFF OMITTED] TP27MR12.003

Table I-4 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of battery chargers, as measured by the
average life-cycle cost (LCC) savings and the median payback period.
The projected economic impacts of the proposed standards on individual
consumers are generally positive. For example, the estimated average
life-cycle cost (LCC) savings are $1.52 for product class 1, $0.16 for
product class 2, $0.35 for product class 3, $0.43 for product class 4,
$33.79 for product class 5, $40.78 for product class 6, $38.26 for
product class 7, $3.04 for product class 8, and $8.30 for product class
10.\4\
---------------------------------------------------------------------------

\4\ The LCC is the total consumer expense over the life of a
product, consisting of purchase and installation costs plus
operating costs (expenses for energy use, maintenance and repair).
To compute the operating costs, DOE discounts future operating costs
to the time of purchase and sums them over the lifetime of the
product.
[GRAPHIC] [TIFF OMITTED] TP27MR12.004

BILLING CODE 6450-01-C

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 (2011 to 2042). Using a real discount rate of 7.1
percent, DOE estimates that

[[Page 18485]]

the INPV for manufacturers of EPSs is $0.276 billion in 2010$. Under
the proposed standards, DOE expects that manufacturers may lose up to
34.1 percent of their INPV, which is approximately $0.094 billion in
2010$. Based on DOE's interviews with the manufacturers of EPSs and
because DOE did not identify any domestic EPS production, DOE does not
expect any domestic plant closings or any significant change in
employment, since the vast majority, if not all EPS production occurs
abroad.
For battery chargers, DOE estimates that the INPV for manufacturers
of applications that include battery chargers is between $53.918 and
$53.205 billion in 2010$ using a real discount rate of 9.1 percent.
Under the proposed standards, DOE expects that manufacturers may lose
up to 10.2 percent of their INPV, which is approximately $5.428 billion
in 2010$. Based on DOE's interviews with the manufacturers of battery
chargers, DOE does not expect any domestic plant closings or
significant change in employment, since DOE only identified one
domestic battery charger manufacturer.

C. National Benefits

External Power Supplies
DOE's analyses indicate that the proposed standards would save a
significant amount of energy over 30 years (2013-2042)--an estimated
0.99 quads of cumulative energy for EPSs.
The product classes at issue are comprised of the following
groupings of EPS products listed below.
[GRAPHIC] [TIFF OMITTED] TP27MR12.005

The cumulative national net present value (NPV) of total consumer
costs and savings of the proposed standards in 2010$ ranges from $0.79
billion (at a 7-percent discount rate) to $1.87 (at a 3-percent
discount rate) for EPSs. This NPV expresses the estimated total value
of future operating-cost savings minus the estimated increased product
costs for products purchased in 2013-2042, discounted to 2011.
In addition, the proposed standards would have significant
environmental benefits. The energy saved is in the form of electricity,
would result in cumulative greenhouse gas emission reductions of 46.5
million metric tons (Mt) \5\ of carbon dioxide (CO2) in
2013-2042. During this period, the proposed standards would result in
emissions reductions of 38 thousand tons of nitrogen oxides
(NOX) and 0.25 tons (t) of mercury (Hg).\6\ DOE estimates
the net

[[Page 18486]]

present monetary value of the CO2 emissions reduction is
between $0.20 and $2.95 billion, expressed in 2010$ and discounted to
2011. DOE also estimates the net present monetary value of the
NOX emissions reduction, expressed in 2010$ and discounted
to 2011, is between $6.11 and $62.79 million at a 7-percent discount
rate, and between $10.97 and $112.73 million at a 3-percent discount
rate.\7\
---------------------------------------------------------------------------

\5\ A metric ton is equivalent to 1.1 short tons. Results for
NOX and Hg are given in short tons.
\6\ DOE calculates emissions reductions relative to the most
recent version of the Annual Energy Outlook (AEO) Reference case
forecast. This forecast accounts for regulatory emissions reductions
from in-place regulations, including the Clean Air Interstate Rule
(CAIR, 70 FR 25162 (May 12, 2005)), but not the Clean Air Mercury
Rule (CAMR, 70 FR 28606 (May 18, 2005)). Subsequent regulations,
including the finalized CAIR replacement rule, the Cross-State Air
Pollution rule issued on July 6, 2011, do not appear in the
forecast. On December 30, 2011, the D.C. Circuit stayed CSAPR while
ordering EPA to continue administering the also remanded 2005 Clean
Air Interstate Rule (CAIR, which has a similar structure, but with
less stringent budgets and less restrictive trading provisions) and
tentatively set a briefing schedule to allow the case to be heard by
April 2012.
\7\ DOE is aware of multiple agency efforts to determine the
appropriate range of values used in evaluating the potential
economic benefits of reduced Hg emissions. DOE has decided to await
further guidance regarding consistent valuation and reporting of Hg
emissions before it once again monetizes Hg in its rulemakings.
---------------------------------------------------------------------------

The benefits and costs of today's proposed standards, for products
sold in 2013-2042, can also be expressed in terms of annualized values.
The annualized monetary values are the sum of (1) the annualized
national economic value of the benefits from consumer operation of
products that meet the proposed standards (consisting primarily of
operating cost savings from using less energy, minus increases in
equipment purchase and installation costs, which is another way of
representing consumer NPV), and (2) the annualized monetary value of
the benefits of emission reductions, including CO2 emission
reductions.\8\ The value of the CO2 reductions, otherwise
known as the Social Cost of Carbon (SCC), is calculated using a range
of values per metric ton of CO2 developed by a recent
interagency process. The derivation of the SCC values is discussed in
section IV.M.
---------------------------------------------------------------------------

\8\ The process that DOE used to convert the time-series of
costs and benefits into annualized values is explained in section
V.C.3 of this notice.
---------------------------------------------------------------------------

Although combining the values of operating savings and
CO2 reductions provides a useful perspective, two issues
should be considered. First, the national operating savings are
domestic U.S. consumer monetary savings that occur as a result of
market transactions while the value of CO2 reductions is
based on a global value. Second, the assessments of operating cost
savings and CO2 savings are performed with different methods
that use quite different time frames for analysis. The national
operating cost savings is measured for the lifetime of EPSs shipped in
2013-2042. The SCC values, on the other hand, reflect the present value
of all future climate-related impacts resulting from the emission of
one ton of carbon dioxide in each year. These impacts continue well
beyond 2100.
Table I-6 shows the annualized values for today's proposed
standards for EPSs. (All monetary values below are expressed in 2010$.)
The results under the primary estimate are as follows. Using a 7-
percent discount rate for benefits and costs other than CO2
reduction, for which DOE used a 3-percent discount rate along with the
SCC series corresponding to a value of $22.3/ton in 2010, the cost of
the standards proposed in today's rule is $251.9 million per year in
increased equipment costs, while the annualized benefits are $325.2
million per year in reduced equipment operating costs, $52.3 million in
CO2 reductions, and $3.2 million in reduced NOX
emissions. In this case, the net benefit amounts to $128.7 million per
year. Using a 3-percent discount rate for all benefits and costs and
the SCC series corresponding to a value of $22.3/ton in 2010, the cost
of the standards proposed in today's rule is $247.3 million per year in
increased equipment costs, while the benefits are $348.2 million per
year in reduced operating costs, $52.3 million in CO2
reductions, and $3.3 million in reduced NOX emissions. In
this case, the net benefit amounts to $156.6 million per year.
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[[Page 18487]]

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[[Page 18488]]

DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in the
significant conservation of energy. DOE further notes that products
achieving these standard levels are already commercially available for
all product classes covered by today's proposal for EPSs, other than
product class H (high-power EPSs). Based on the analyses described
above, DOE has tentatively concluded that the benefits of the proposed
standards to the Nation (energy savings, positive NPV of consumer
benefits, consumer LCC savings, and emission reductions) would outweigh
the burdens (loss of INPV for manufacturers and LCC increases for some
consumers).
DOE also considered more-stringent and less stringent energy use
levels as trial standard levels, and is still considering them in this
rulemaking. However, DOE has tentatively concluded that the potential
burdens of the more-stringent energy use levels would outweigh the
projected benefits. Based on consideration of the public comments DOE
receives in response to this notice and related information collected
and analyzed during the course of this rulemaking effort, DOE may adopt
energy use levels presented in this notice that are either higher or
lower than the proposed standards, or some combination of level(s) that
incorporate the proposed standards in part.
Battery Chargers
DOE's analyses for battery chargers indicate that the proposed
standards would save a significant amount of energy over 30 years
(2013-2042)--an estimated 1.36 quads of cumulative energy for battery
chargers.
The product classes at issue are comprised of the groupings of
battery chargers listed in Table I-7. Each product class grouping was
established based on the battery charger's input/output type, and
further divided into product classes according to battery energy and
voltage.
[GRAPHIC] [TIFF OMITTED] TP27MR12.007

The cumulative national net present value (NPV) of total consumer
costs and savings of the proposed standards in 2010$ ranges from $6.04
billion (at a 7-percent discount rate) to $10.96 billion (at a 3-
percent discount rate) for battery chargers. This NPV expresses the
estimated total value of future operating-cost savings minus the
estimated increased product costs for products purchased in 2013-2042,
discounted to 2011.
In addition, the proposed standards would have significant
environmental benefits. The savings would result in cumulative
greenhouse gas emission reductions of 62.9 Mt of CO2 in
2013-2042. During this period, the proposed

[[Page 18489]]

standards would result in emissions reductions of 52 thousand tons of
NOX and 0.35 tons of mercury. DOE estimates the net present
monetary value of the CO2 emissions reduction is between
$0.27 and $4.04 billion, expressed in 2010$ and discounted to 2011. DOE
also estimates the net present monetary value of the NOX
emissions reduction, expressed in 2010$ and discounted to 2011, is
between $8.19 and $84.14 million at a 7-percent discount rate, and
between $14.88 and $153.05 million at a 3-percent discount rate.
The benefits and costs of today's proposed standards, for products
sold in 2013-2042, can also be expressed in terms of annualized values.
The annualized monetary values are the sum of (1) the annualized
national economic value of the benefits from consumer operation of
products that meet the proposed standards (consisting primarily of
operating cost savings from using less energy, minus increases in
equipment purchase and installation costs, which is another way of
representing consumer NPV), and (2) the annualized monetary value of
the benefits of emission reductions, including CO2 emission
reductions. The value of the CO2 reductions is calculated
using a range of values per metric ton of CO2 developed by a
recent interagency process. The derivation of the SCC values is
discussed in section IV.M.
Although combining the values of operating savings and
CO2 reductions provides a useful perspective, two issues
should be considered. First, the national operating savings are
domestic U.S. consumer monetary savings that occur as a result of
market transactions while the value of CO2 reductions is
based on a global value. Second, the assessments of operating cost
savings and CO2 savings are performed with different methods
that use quite different time frames for analysis. The national
operating cost savings is measured for the lifetime of battery chargers
shipped in 2013-2042. The SCC values, on the other hand, reflect the
present value of all future climate-related impacts resulting from the
emission of one ton of carbon dioxide in each year. These impacts
continue well beyond 2100.
Table I-8 shows the annualized values for today's proposed
standards for battery chargers. (All monetary values below are
expressed in 2010$.) The results under the primary estimate are as
follows. Using a 7-percent discount rate for benefits and costs other
than CO2 reduction, for which DOE used a 3-percent discount
rate along with the SCC series corresponding to a value of $22.3/ton in
2010, the standards proposed in today's rule result in $110.0 million
per year in equipment costs savings, and the annualized benefits are
$447.2 million per year in reduced equipment operating costs, $71.6
million in CO2 reductions, and $4.3 million in reduced
NOX emissions. In this case, the benefit amounts to $633.0
million per year. Using a 3-percent discount rate for all benefits and
costs and the SCC series corresponding to a value of $22.3/ton in 2010,
the standards proposed in today's rule result in $107.9 million per
year in equipment costs savings, and the benefits are $485.2 million
per year in reduced operating costs, $71.6 million in CO2
reductions, and $4.5 million in reduced NOX emissions. In
this case, the net benefit amounts to $669.3 million per year.
BILLING CODE 6450-01-P

[[Page 18490]]

---------------------------------------------------------------------------

\9\ The incremental product costs for battery chargers are
negative because of a shift in technology from linear power supplies
to switch mode power for the larger battery chargers in product
classes 5, 6, and 7.
[GRAPHIC] [TIFF OMITTED] TP27MR12.008

BILLING CODE 6450-01-C

[[Page 18491]]

DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in the
significant conservation of energy. DOE further notes that products
achieving these standard levels are already commercially available for
all product classes covered by today's proposal for battery chargers,
other than product class 10 (AC output). Based on the analyses
described above, DOE has tentatively concluded that the benefits of the
proposed standards to the Nation (energy savings, positive NPV of
consumer benefits, consumer LCC savings, and emission reductions) would
outweigh the burdens (loss of INPV for manufacturers and LCC increases
for some consumers).
DOE also considered more-stringent and less-stringent energy use
levels as trial standard levels, and is still considering them in this
rulemaking. However, DOE has tentatively concluded that the potential
burdens of the more-stringent energy use levels would outweigh the
projected benefits. Based on consideration of the public comments DOE
receives in response to this notice and related information collected
and analyzed during the course of this rulemaking effort, DOE may adopt
energy use levels presented in this notice that are either higher or
lower than the proposed standards, or some combination of level(s) that
incorporate the proposed standards in part.

II. Introduction

The following section briefly discusses the statutory authority
underlying today's proposal, as well as some of the relevant historical
background related to the establishment of standards for battery
chargers and EPSs.

A. Authority

Title III, Part B of the Energy Policy and Conservation Act of 1975
(EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as codified)
established the Energy Conservation Program for Consumer Products Other
Than Automobiles,\10\ a program covering most major household
appliances (collectively referred to as ``covered products''), which
includes battery chargers and EPSs. (42 U.S.C. 6295(u)) (DOE notes that
under 42 U.S.C. 6295(m), the agency must periodically review its
already established energy conservation standards for a covered
product. Under this requirement, the next review that DOE would need to
conduct must occur no later than six years from the issuance of a final
rule establishing or amending a standard for a covered product.)
---------------------------------------------------------------------------

\10\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
---------------------------------------------------------------------------

Pursuant to EPCA, DOE's energy conservation program for covered
products consists essentially of four parts: (1) Testing; (2) labeling;
(3) the establishment of Federal energy conservation standards; and (4)
certification and enforcement procedures. The Federal Trade Commission
(FTC) is primarily responsible for labeling, and DOE implements the
remainder of the program. 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. 6293) Manufacturers of covered products
must use the prescribed DOE test procedure as the basis for certifying
to DOE that their products comply with the applicable energy
conservation standards adopted under EPCA and when making
representations to the public regarding the energy use or efficiency of
those products. (42 U.S.C. 6293(c)) Similarly, DOE must use these test
procedures to determine whether the products comply with standards
adopted pursuant to EPCA. See 42 U.S.C. 6295(s). As stated below in
Section II.B.2 the DOE test procedures for battery chargers and EPSs
currently appear at title 10, Code of Federal Regulations (CFR), part
430, subpart B, appendices Y and Z, respectively.
DOE must follow specific statutory criteria when prescribing
amended standards for covered products. As indicated above, any amended
standard for a covered product must be designed to achieve the maximum
improvement in energy efficiency that is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, EPCA
precludes DOE from adopting any standard that would not result in the
significant conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover,
DOE may not prescribe a standard: (1) For certain products, including
battery chargers and EPSs, if no test procedure has been established
for the product, or (2) if DOE determines by rule that the proposed
standard is not technologically feasible or economically justified. (42
U.S.C. 6295(o)(3)(A)-(B)) 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 factors:
1. The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
2. The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered products that are likely to result from the imposition of the
standard;
3. The total projected amount of energy, or as applicable, water,
savings likely to result directly from the imposition of the standard;
4. Any lessening of the utility or the performance of the covered
products likely to result from the imposition of the standard;
5. The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
imposition of the standard;
6. The need for national energy and water conservation; and
7. Other factors the Secretary of Energy (Secretary) considers
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing
any amended standard that either increases the maximum allowable energy
use or decreases the minimum required energy efficiency of a covered
product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe
an amended or new standard if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States of any covered product type (or
class) of performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4))
Further, EPCA, 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. See 42 U.S.C. 6295(o)(2)(B)(iii).

[[Page 18492]]

Additionally, 42 U.S.C. 6295(q)(1) specifies requirements when
promulgating a standard for a type or class of covered product that has
two or more subcategories. DOE must specify a different standard level
than that which applies generally to such type or class of products for
any group of covered products that have the same function or intended
use if DOE determines that covered products within such group (A)
consume a different kind of energy from that consumed by other covered
products within such type (or class) or (B) have a capacity or other
performance-related feature which other products within such type (or
class) do not have and such feature justifies a higher or lower
standard . (42 U.S.C. 6294(q)(1)). In determining whether a
performance-related feature justifies a different standard for a group
of products, DOE must consider such factors as the utility of the
feature to the consumer and other factors DOE deems appropriate. Id.
Any rule prescribing such a standard must include an explanation of the
basis on which such higher or lower level was established. (42 U.S.C.
6295(q)(2))
Federal energy conservation requirements generally supersede State
laws or regulations concerning energy conservation testing, labeling,
and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers
of Federal preemption for particular State laws or regulations, in
accordance with the procedures and other provisions set forth under 42
U.S.C. 6297(d).
Finally, pursuant to the amendments contained in section 310(3) of
EISA 2007, any final rule for new or amended energy conservation
standards promulgated after July 1, 2010, are 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 in under EPCA (42 U.S.C. 6295(o)), incorporate standby mode
and off mode energy use into the 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's current test procedures for battery
chargers and EPSs already address standby-mode and off-mode energy use.
The standards for EPSs also address this energy use; currently there
are no standards for battery chargers. In this rulemaking, DOE intends
to incorporate such energy use into any new or amended energy
conservation standards it adopts in the final rule.
DOE has also reviewed this regulation pursuant to Executive Order
13563, issued on January 18, 2011 (76 FR 3281 (Jan. 21, 2011)). EO
13563 is supplemental to and explicitly reaffirms the principles,
structures, and definitions governing regulatory review established in
Executive Order 12866. To the extent permitted by law, agencies are
required by Executive Order 13563 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 Executive Order 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 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, DOE believes that today's NOPR is consistent with these
principles, including the requirement that, to the extent permitted by
law, benefits justify costs and that net benefits are maximized.
Consistent with EO 13563, and the range of impacts analyzed in this
rulemaking, the energy efficiency standards proposed herein by DOE
achieves maximum net benefits.

B. Background

1. Current Standards
Section 301 of EISA 2007 established minimum energy conservation
standards for Class A EPSs, which became effective on July 1, 2008. (42
U.S.C. 6295(u)(3)(A)) These standards provided an active mode
efficiency level and a no-load power consumption rate. The current
standards are set forth in Table II.1 and Table II.2, respectively.

[[Page 18493]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.010

Currently, no Federal energy conservation standards apply to non-
Class A EPSs or battery chargers.
2. History of Standards Rulemaking for Battery Chargers and External
Power Supplies
Section 135 of the Energy Policy Act of 2005 (EPACT 2005), Public
Law 109-58 (Aug. 8, 2005), amended sections 321 and 325 of EPCA by
defining the terms ``battery charger'' and ``external power supply.''
That provision also directed DOE to prescribe definitions and test
procedures related to the energy consumption of battery chargers and
external power supplies and to issue a final rule that determines
whether energy conservation standards shall be issued for battery
chargers and external power supplies or classes of battery chargers and
external power supplies. (42 U.S.C. 6295(u)(1)(A) and (E))
On December 8, 2006, DOE complied with the first of these
requirements by publishing a final rule that prescribed test procedures
for a variety of products. 71 FR 71340, 71365-71375. That rule, which
was codified in multiple sections of the Code of Federal Regulations
(CFR), included definitions and test procedures for battery chargers
and EPSs. As stated above, the test procedures for these products are
found in 10 CFR Part 430, Subpart B, Appendix Y (``Uniform Test Method
for Measuring the Energy Consumption of Battery Chargers'') and 10 CFR
Part 430, Subpart B, Appendix Z (``Uniform Test Method for Measuring
the Energy Consumption of External Power Supplies'').
On December 19, 2007, Congress enacted EISA 2007, which, among
other things, amended sections 321, 323, and 325 of EPCA. As part of
these amendments, EISA 2007 altered the EPS definition. Under the
definition previously set by EPACT 2005, the statute defined an EPS as
an external power supply circuit ``used to convert household electric
current into DC current or lower-voltage AC current to operate a
consumer product.'' (42 U.S.C. 6291(36)(A)) Section 301 of EISA 2007
amended that definition by creating a subset of EPSs called ``Class A
External Power Supplies.'' This new subset of products consisted of
those EPSs that can convert to only 1 AC or DC output voltage at a time
and have a nameplate output power of no more than 250 watts (W). The
definition excludes any device requiring Federal Food and Drug
Administration (FDA) listing and approval as a medical device in
accordance with section 513 of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 360c) or one that powers the charger of a detachable battery
pack or charges the battery of a product that is fully or primarily
motor operated. (42 U.S.C. 6291(36)(C)) Section 301 of EISA 2007 also
established energy conservation standards for Class A EPSs that became
effective on July 1, 2008, and directed DOE to conduct an energy
conservation standards rulemaking to review those standards.
Additionally, section 309 of EISA 2007 amended section 325(u)(1)(E)
of EPCA (42 U.S.C. 6295(u)(1)(E)) by directing DOE to issue a final
rule that prescribes energy conservation standards for battery chargers
or classes of battery chargers or to determine that no energy
conservation standard is technologically feasible and economically
justified. DOE is bundling this battery charger rulemaking proceeding
with the requirement to review and consider amending the energy
conservation standards for Class A EPSs. The new rulemaking
requirements contained in sections 301 and 309 of EISA 2007 effectively
superseded the prior determination analysis that EPACT 2005 required
DOE to conduct.
Section 309 of EISA 2007 also instructed DOE to issue a final rule
to determine whether DOE should issue energy conservation standards for
external power supplies or classes of external power supplies no later
than two years after EISA 2007's enactment. (42 U.S.C.
6295(u)(1)(E)(i)(I)) Because Congress already set standards for Class A
devices, DOE interpreted this determination requirement as applying
solely to assessing whether energy conservation standards are warranted
for EPSs that fall outside of the Class A definition (i.e. non-Class A
EPSs). Non-Class A EPSs include those devices that have a nameplate
output power greater than 250 watts, are able to convert to more than
one AC or DC output voltage simultaneously, and are specifically
excluded from coverage under the Class A EPS definition in EISA 2007 by
virtue of their application--e.g., EPSs used with medical devices.\11\
DOE determined that standards are warranted for non-Class A EPSs. See
75 FR 27170 (May 14, 2010). Given the similarities between battery
chargers and non-Class A and Class A EPSs, DOE is handling all three
product groups in a single standards rulemaking.
---------------------------------------------------------------------------

\11\ To help ensure that the standards Congress set were not
applied in an overly broad fashion, DOE applied the statutory
exclusion not only to those EPSs that require FDA listing and
approval but also to any EPS that provides power to a medical
device.
---------------------------------------------------------------------------

Finally, section 310 of EISA 2007 established definitions for
active, standby, and off modes, and directed DOE to amend its existing
test procedures for battery chargers and EPSs to measure the energy
consumed in standby mode and off mode. (42

[[Page 18494]]

U.S.C. 6295(gg)(2)(B)(i)) Consequently, DOE published a final rule
incorporating standby- and off-mode measurements into the DOE test
procedure. 74 FR 13318, 13334-13336 (March 27, 2009) Additionally, DOE
amended the test procedure for battery chargers to include an active
mode measurement for battery chargers and made certain amendments to
the test procedure for EPSs. 76 FR 31750 (June 1, 2011).
DOE initiated its current rulemaking effort for these products by
issuing the Energy Conservation Standards Rulemaking Framework Document
for Battery Chargers and External Power Supplies (the framework
document). See https://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/bceps_frameworkdocument.pdf. The framework
document explained the issues, analyses, and process DOE anticipated
using to develop energy efficiency standards for those products. DOE
also published a notice announcing the availability of the framework
document, announcing a public meeting to discuss the proposed
analytical framework, and inviting written comments concerning the
development of standards for battery chargers and EPSs. 74 FR 26816
(June 4, 2009)
DOE held a public meeting on July 16, 2009, to discuss the analyses
and issues identified in the framework document. At the meeting, DOE
described the different analyses it would conduct, the methods proposed
for conducting them, and the relationships among the various analyses.
Manufacturers, trade associations, environmental advocates, regulators,
and other interested parties attended the meeting. The comments
received at the public meeting and during the subsequent comment period
helped DOE identify and resolve issues involved in this rulemaking.
Following the framework document public meeting, DOE published on
November 3, 2009, a Notice of Proposed Determination to examine the
feasibility and related economic costs and benefits of setting energy
conservation standards for non-Class A EPSs. 74 FR 56928. This notice
was followed by a final determination published on May 14, 2010, 75 FR
27170, which concluded that energy conservation standards for non-Class
A EPSs appear to be technologically feasible and economically
justified, and would be likely to result in significant energy savings.
Consequently, DOE decided to include non-Class A EPSs in the present
energy conservation standards rulemaking for battery chargers and EPSs.
DOE then gathered additional information and performed preliminary
analyses for the purpose of developing potential amended energy
conservation standards for Class A EPSs and new energy conservation
standards for battery chargers and non-Class A EPSs. This process
culminated in DOE's announcement in the Federal Register on September
15, 2010, of the preliminary analysis public meeting, at which DOE
discussed and received comments on the following matters: the product
classes DOE analyzed; the analytical framework, models, and tools that
DOE was using to evaluate potential standards; the results of the
preliminary analyses performed by DOE; and potential standard levels
under consideration. 75 FR 56021 (the September 2010 notice). DOE also
invited written comments on these subjects and announced the
availability on its Web site of a preliminary technical support
document (preliminary TSD) it had prepared to inform interested parties
and enable them to provide comments.\12\ Id. Finally, DOE stated its
interest in receiving views concerning other relevant issues that
participants believed would affect energy conservation standards for
battery chargers and EPSs, or that DOE should address in this NOPR. Id.
at 56024.
---------------------------------------------------------------------------

\12\ The preliminary TSD is available at: https://www1.eere.energy.gov/buildings/appliance_standards/residential/battery_external_preliminaryanalysis_tsd.html.
---------------------------------------------------------------------------

The preliminary TSD provides an overview of the activities DOE
undertook in developing standards for battery chargers and EPSs, and
discusses the comments DOE received in response to the framework
document. It also describes the analytical framework that DOE used (and
continues to use) in this rulemaking, including a description of the
methodology, the analytical tools, and the relationships among the
various analyses that are part of the rulemaking. The preliminary TSD
presents and describes in detail each analysis DOE had performed up to
that point, including descriptions of inputs, sources, methodologies,
and results. These analyses were as follows:
A market and technology assessment addressed the scope of
this rulemaking, identified the potential classes for battery chargers
and EPSs, characterized the markets for these products, and reviewed
techniques and approaches for improving their efficiency;
A screening analysis reviewed technology options to
improve the efficiency of battery chargers and EPSs, and weighed these
options against DOE's four prescribed screening criteria: (1)
Technological feasibility, (2) practicability to manufacture, install,
and service, (3) impacts on equipment utility or equipment
availability, (4) adverse impacts on health or safety;
An engineering analysis estimated the increases in
manufacturer selling prices (MSPs) associated with more energy-
efficient battery chargers and EPSs;
An energy use analysis estimated the annual energy use in
the field of battery chargers and EPSs as a function of efficiency
levels;
A markups analysis converted estimated manufacturer
selling price (MSP) increases derived from the engineering analysis to
consumer prices;
A life-cycle cost analysis calculated, at the consumer
level, the discounted savings in operating costs throughout the
estimated average life of the product, compared to any increase in
installed costs likely to result directly from the imposition of a
given standard;
A payback period (PBP) analysis estimated the amount of
time it would take consumers to recover the higher expense of
purchasing more energy efficient products through lower operating
costs;
A shipments analysis estimated shipments of battery
chargers and EPSs over the 30-year analysis period (2013-2042), which
were used in performing the national impact analysis (NIA);
A national impact analysis assessed the national energy
savings (NES), and the national net present value of total consumer
costs and savings, expected to result from specific, potential energy
conservation standards for battery chargers and EPSs; and
A preliminary manufacturer impact analysis took the
initial steps in evaluating the effects new or amended efficiency
standards may have on manufacturers.
In the September 2010 notice, DOE summarized the nature and
function of the following analyses: (1) Engineering, (2) energy use
analysis, (3) markups to determine installed prices, (4) LCC and PBP
analyses, and (5) national impact analysis. Id. at 56023-56024.
DOE held a public meeting on October 13, 2010, to discuss its
preliminary analysis. At this meeting, DOE presented the methodologies
and results of the analyses set forth in the preliminary TSD. Major
topics discussed at the meeting included, among others, the regulation
of EPSs for motorized applications and applications

[[Page 18495]]

with detachable batteries (MADB EPSs), criteria for establishing
separate product classes, and assumptions made by DOE on the usage of
certain products. The comments received since publication of the
September 2010 notice, including those received at the preliminary
analysis public meeting, have contributed to DOE's proposed resolution
of the issues noted by interested parties. This NOPR quotes and
summarizes many of these comments, and responds to the issues they
raised.\13\
---------------------------------------------------------------------------

\13\ A parenthetical reference at the end of a quotation or
paraphrase provides the location of the item in the public record.
---------------------------------------------------------------------------

DOE received written comments on the preliminary analysis from four
industry groups (the Association of Home Appliance Manufacturers (AHAM,
No. 42); the Consumer Electronics Association (CEA, No. 46), the Power
Tool Institute, Inc. (PTI, No. 45); and the Wireless Power Consortium
(WPC, No. 40)), six manufacturers (Cobra Electronics Corp. (Cobra, No.
51); Lester Electrical of Nebraska, Inc. (Lester) (Lester, No. 50);
Motorola, Inc. (Motorola, No. 48); Philips Electronics North America
Corp. (Philips, No. 41); Stanley Black & Decker (SBD, No. 44); and Wahl
Clipper Corporation (Wahl, No. 53)), and several energy efficiency
advocates, including a number of utilities (Pacific Gas and Electric
Company, San Diego Gas and Electric Company, Southern California Gas
Company, and Southern California Edison, collectively organized as the
California Investor Owned Utilities (California IOUs, No. 43);
Northeast Energy Efficiency Partnerships (NEEP, No. 49); and a joint
comment from Pacific Gas and Electric Company, Southern California Gas
Company, San Diego Gas and Electric Company, Southern California
Edison, Appliance Standards Awareness Project, Northeast Energy
Efficiency Partnerships, Northwest Energy Efficiency Alliance, American
Council for an Energy-Efficient Economy, and Natural Resources Defense
Council (PG&E, et al., No. 47)). These commenters, along with those
that provided oral comments at the preliminary analysis public meeting,
are summarized in Table II-2.
[GRAPHIC] [TIFF OMITTED] TP27MR12.011

Following the close of the formal public comment period, DOE also
received a clarification statement regarding an earlier submission to
which ASAP joined with other commenters (ASAP, No. 55) and a proposal
for DOE to adopt an efficiency marking protocol for battery chargers
from the Natural Resources Defense Council (NRDC, No. 56).

III. General Discussion

The following section discusses various technical aspects related
to this proposed rulemaking. In particular, it addresses aspects
involving the test procedures for battery chargers and EPSs, the
technological feasibility of potential standards to assign to these
products, and the potential energy savings and economic justification
for prescribing the proposed amended standards for battery chargers and
EPSs.

A. Test Procedures

To help analyze the proposal for the products covered under today's
rulemaking, DOE applied the recently amended test procedures for EPSs
and battery chargers. The following sections explain how DOE applied
these

[[Page 18496]]

procedures in evaluating the standards that are being proposed.
1. External Power Supply Test Procedures
DOE used its recently modified EPS test procedure as the basis for
evaluating EPS efficiency in the NOPR. This procedure, which was
recently codified in appendix Z to subpart B of 10 CFR part 430
(``Uniform Test Method for Measuring the Energy Consumption of EPSs''),
includes a means to account for the energy consumption from multiple-
voltage EPSs and clarifies the manner in which to test those devices
that communicate with their loads. See 76 FR 31750, 31782-31783 (June
1, 2011). The term ``load communication'' refers to the ability of an
EPS to identify whether a given load is compatible with the product
that is being powered. See id. at 31752-31753.
The amended test procedure produces two key outputs relevant to
today's proposal. In particular, the procedure provides measurements
for active mode efficiency and no-load mode power consumption. For
single output voltage EPSs, active-mode conversion efficiency is the
ratio of output power to input power. DOE averages the efficiency at
four loading conditions--25, 50, 75, and 100 percent of maximum rated
output current. For multiple-voltage EPSs, the test procedure produces
these same four efficiency measurements, but does not average them. For
both single-voltage and multiple-voltage EPSs, DOE measures the power
consumption of the EPS when disconnected from the consumer product,
which is termed no-load power consumption. If the EPS has an on-off
switch, the switch is placed in the ``on'' position when making this
measurement.
2. Battery Charger Test Procedures
The initial battery charger test procedure, 71 FR 71340, 71368
(Dec. 8, 2006), included a means to measure battery charger energy
consumption in ``maintenance'' and ``no-battery'' modes. These are non-
active modes of operation for a battery charger and neither mode is the
primary (i.e. active) mode of operation for a battery charger. A
battery charger is in maintenance mode when the battery it is designed
to charge is fully charged, but is still plugged into the charger--i.e.
the charger is maintaining the charge in the battery. Standby mode,
also known as no-battery mode, occurs when a battery charger is plugged
into the wall (or power source), but the battery has been removed. The
test procedure was amended to include measurements (or metrics) to
account for the energy consumption that takes place in a battery
charger during all modes of operation--active (i.e. the energy consumed
by a battery charger while charging a battery), maintenance (i.e. the
energy consumed to maintain the charge of a battery that has already
been fully charged), standby (the energy consumed when a battery
charger is plugged in, but the battery is removed from the device), and
off (i.e. the energy consumed while a charger is plugged in but is
switched off) modes. 76 FR 31750.
In analyzing the various products in preparation of the preliminary
analysis, DOE relied on a test procedure that was largely based on a
procedure that had been developed by the California Energy Commission
(CEC). That procedure also served as the basis for DOE's 2010 proposal
to amend the procedure to account for active mode energy consumption
during testing. 75 FR 16958 (April 2, 2010).
The proposed procedure DOE employed had two key differences from
the CEC procedure. First, it employed a shortened test procedure for
battery chargers whose output power to the battery stabilizes within 24
hours. Second, the procedure employed a reversed charge/discharge
testing order from that specified in the CEC procedure. DOE proposed
switching the order such that the proposal used a preparatory charge,
followed by a measured discharge, followed by a measured charge. The
final rule dropped this approach in favor of the order prescribed in
the CEC procedure--i.e. preparatory discharge, a measured charge, and a
measured discharge. DOE applied this amended test procedure when
analyzing the potential energy efficiency levels for battery chargers.

B. Technological Feasibility

The following sections address the manner in which DOE assessed the
technological feasibility of potential standard levels. Energy
conservation standards promulgated by DOE must be technologically
feasible. Separate analyses were conducted for EPSs and battery
chargers.
1. General
In each standards rulemaking, DOE conducts a screening analysis
based on information gathered on all current technology options and
prototype designs that have the potential to improve product or
equipment efficiency. To conduct the analysis, DOE develops a list of
design options for consideration in consultation with manufacturers,
design engineers, and other interested parties. DOE then determines
which of these means for improving efficiency are technologically
feasible. DOE considers a design option to be technologically feasible
if it is currently in use by the relevant industry, or if a working
prototype exists. See 10 CFR part 430, subpart C, appendix A, section
4(a)(4)(i), which provides that ``[t]echnologies incorporated in
commercially available products or in working prototypes will be
considered technologically feasible.''
Once DOE has determined that particular design options are
technologically feasible, it evaluates each of these design options
using the following additional screening criteria: (1) Practicability
to manufacture, install, or service; (2) adverse impacts on product
utility or availability; and (3) adverse impacts on health or safety.
(10 CFR part 430, subpart C, appendix A, section 4(a)(4)). Section IV.B
of this notice discusses the results of the screening analysis for
battery chargers and EPSs, particularly the designs DOE considered,
those it screened out, and those that are the basis for the trial
standard levels (TSLs) in this rulemaking.
For further details on the screening analysis for this rulemaking,
see chapter 4 of the TSD.
Additionally, DOE notes that it has received no interested party
comments regarding patented technologies and proprietary designs that
would prohibit all manufacturers from achieving the energy conservation
standards proposed in today's rule. At this time, DOE believes that the
proposed standards for the products covered as part of this rulemaking
will not mandate the use of any such technologies, but requests
additional information regarding proprietary designs and patented
technologies.
2. Maximum Technologically Feasible Levels
When proposing an amended standard for a type or class of covered
product, DOE 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)). DOE determined the
maximum technologically feasible (``max-tech'') efficiency level, as
required by section 325(o) of EPCA, by interviewing manufacturers,
vetting their data with subject matter experts, and presenting the
results for public comment. (42 U.S.C. 6295(o)).
a. External Power Supply Max-Tech Levels
DOE conducted several rounds of interviews with manufacturers of
EPSs, integrated circuits for EPSs, and

[[Page 18497]]

applications using EPSs. All of the manufacturers interviewed
identified ways that EPSs could be modified to achieve efficiencies
higher than those available with current products. These manufacturers
also described the costs of achieving those efficiency improvements,
which DOE examines in detail in chapter 5 of the TSD. DOE independently
verified the accuracy of the information described by
manufacturers.\14\ Verifying this information required examining and
testing products at the best-in-market efficiency level and determining
what design options could still be added to improve their efficiency.
By comparing the improved best-in-market designs (using predicted
performance and cost) to the estimates provided by manufacturers, DOE
was able to assess the reasonableness of the max-tech levels developed.
---------------------------------------------------------------------------

\14\ In confirming this information, DOE obtained technical
assistance from two subject matter experts--Robert Gourlay of RDG
Engineering in Northridge, CA and Jon Wexler, an independent and
solo consultant in Los Angeles, CA. These two experts were selected
after having been found through the Institute of Electrical and
Electronics Engineers (IEEE). Together, they have over 30 years of
combined experience with power supply design. The experts relied on
their years of experience to evaluate the validity of both the
design and the general cost of the max-tech efficiency levels
provided by manufacturers.
---------------------------------------------------------------------------

DOE solicited comment on its review of the max-tech CSLs prepared
for the preliminary analysis--particularly with respect to its initial
view that 2.5W EPSs may be able to achieve a max-tech efficiency of 80%
rather than the lower efficiency suggested by manufacturers (See
Chapter 5 of the TSD for details on how DOE aggregated manufacturer
data). During interviews conducted in preparation for the NOPR,
manufacturers confirmed that an 80% efficiency level is achievable for
2.5W EPSs, but not without a decrease in utility. Manufacturers stated
that reaching that efficiency level would require an increase in the
form factor (i.e. the geometry of the design), which would make these
devices larger. The increased size of the EPS would, in the
manufacturers' views, constitute a decreased utility that would be
undesirable to consumers because of demands for smaller and lighter
products. In light of this possibility, DOE used a max-tech efficiency
value of 74.8%, which represents the average max-tech efficiency level
predicted by manufacturers, to characterize CSL 4. The aggregated
responses from manufacturers are discussed in chapter 5 of the TSD.
DOE created the max-tech (CSL 4) equations for average efficiency
and no-load power using curve-fits (i.e. creating a continuous
mathematical expression to represent the trend of the data as
accurately as possible) of the aggregated manufacturer data (see
chapter 5 of the TSD for details on curve fits). DOE created the
equations for no-load power based on a curve fit of the no-load power
among the four representative units. For both the average efficiency
and no-load power CSL equations, DOE used equations similar to those
for CSL 1, involving linear and logarithmic terms in the nameplate
output power. DOE chose the divisions at 1 watt and 49 watts in the CSL
4 equations to ensure consistency with the nameplate output power
divisions between the equations for CSL 1.
In the determination for non-Class A EPSs, DOE created CSLs based
on test and teardown data as well as manufacturer interview data
consistent with the Class A EPS methodology. See 75 FR 27170, 27174-
27175. DOE also stated in Chapter 5 of the preliminary analysis TSD
that it might further evaluate additional CSLs should that become
necessary pending later analysis, including revising the max-tech CSLs
for all the representative units.
For the NOPR, DOE has chosen to add a new max-tech CSL for high-
power EPSs while the max-tech for multiple-voltage EPSs remains
unchanged from the preliminary analysis. Based on its analysis, DOE
ascertained that 345W EPSs are able to achieve comparable efficiencies
to 120W EPSs because efficiency tends to improve with higher nameplate
output power before leveling off regardless of output power. Because of
the diminishing returns of this trend, there would be no appreciable
difference in the achievable efficiency of a 120W EPS and a 345W EPS.
Therefore, DOE scaled its 120W EPS cost-efficiency curve using its
voltage scaling method, outlined in Chapter 5 of the TSD, to generate
the max-tech CSL for 345W EPSs. The max-tech no-load metric was chosen
by assuming that three 120W EPSs could theoretically be connected to
deliver 345 watts to a load (i.e. three 120W EPSs yield a 360W load).
Consequently, in analyzing the potential cost-efficiency curves for
these products, the no-load metric DOE created for CSL 4 is three times
greater than the no load used for the 120W equivalent CSL.
b. Battery Charger Max-Tech Levels
The preliminary analysis did not include max-tech efficiency levels
for five of the ten product classes that are being addressed today. DOE
omitted levels for these product classes because manufacturers did not
provide information on levels of performance that would be
technologically feasible and more efficient than the current best-in-
market devices. DOE's preliminary analyses typically rely heavily on
manufacturer input in framing potential max-tech levels for discussion
and comment.
In preparing today's NOPR, which includes max-tech levels for the
ten classes initially addressed in DOE's preliminary analysis, DOE
developed a means to create max-tech levels for those classes that were
previously not assigned max-tech levels. For the product classes that
DOE was previously unable to generate max-tech efficiency levels, DOE
used multiple approaches to develop levels for these classes. DOE once
again solicited manufacturers for information and extrapolated
performance parameters from its best-in-market efficiency levels.
Extrapolating from the best-in-market performance efficiency levels
required an examination of the devices. From this examination, DOE
determined which design options could be applied and what affects they
would likely have on the various battery charger performance
parameters. The table below shows the reduction in energy consumption
when increasing efficiency from the baseline to the max-tech efficiency
level.

[[Page 18498]]

Table III-1--Reduction in Energy Consumption at Max-Tech for Battery
Chargers
------------------------------------------------------------------------
Reduction of
Max-Tech unit energy
energy consumption
Product class consumption relative to
(kWh/yr) the baseline
(percentage)
------------------------------------------------------------------------
1 (Low-Energy, Inductive)............... 1.29 85
2 (Low-Energy, Low-Voltage)............. 0.81 91
3 (Low-Energy, Medium-Voltage).......... 0.75 94
4 (Low-Energy, High-Voltage)............ 3.01 92
5 (Medium-Energy, Low-Voltage).......... 15.35 82
6 (Medium-Energy, High-Voltage)......... 16.79 86
7 (High-Energy)......................... 131.44 46
8 (DC to DC, <9V Input)................. 0.19 79
9 (DC to DC, >=9V Input)................ 0.13 83
10a (AC Output, No AVR)................. 4.95 92
10b (AC Output, AVR).................... 8.58 92
------------------------------------------------------------------------

Additional discussion of DOE's max-tech efficiency levels and
comments received in response to the preliminary analysis can be found
in the discussion of candidate standard levels in section IV.C.2.d.
Specific details regarding which design options were considered for the
max-tech efficiency levels (and all other CSLs) can be found in Chapter
5 of the accompanying TSD.

C. Energy Savings

The following discussion addresses the various steps DOE used to
assess the potential energy savings that DOE projects will likely
accrue from the various standard levels that were examined.
1. Determination of Savings
DOE used its NIA spreadsheet model to estimate energy savings from
amended standards for the battery chargers and EPS products that are
the subject of this rulemaking.\15\ For each TSL, DOE forecasted energy
savings beginning in 2013, the year that manufacturers would be
required to comply with amended standards, and ending in the last year
products shipped in 2042 would be retired. DOE quantified the energy
savings attributable to each TSL as the difference in energy
consumption between the standards case and the base case. The base case
represents the forecast of energy consumption in the absence of amended
mandatory efficiency standards and considers market demand for more-
efficient products.
---------------------------------------------------------------------------

\15\ The NIA spreadsheet model is described in section IV.G of
this notice.
---------------------------------------------------------------------------

The NIA spreadsheet model calculates the electricity savings in
``site energy'' expressed in kilowatt-hours (kWh). Site energy is the
energy directly consumed by battery chargers and EPSs at the locations
where they are used. DOE reports national energy savings on an annual
basis in terms of the aggregated source (primary) energy savings, which
is the savings in the energy that is used to generate and transmit the
site energy. (See chapter 10 of the TSD.) To convert site energy to
source energy, DOE derived annual conversion factors from the model
used to prepare the Energy Information Administration's (EIA) Annual
Energy Outlook 2010 (AEO2010).
2. Significance of Savings
As noted above, 42 U.S.C. 6295(o)(3)(B) any standard that DOE sets
must result in ``significant'' energy savings. While the term
``significant'' is not defined in the Act, the U.S. Court of Appeals,
in Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373
(D.C. Cir. 1985), indicated that Congress intended ``significant''
energy savings in this context to be savings that were not ``genuinely
trivial.'' The energy savings for all of the TSLs considered in this
rulemaking are nontrivial, and, therefore, DOE considers them
``significant'' within the meaning of section 325 of EPCA.

D. Economic Justification

This section summarizes the manner in which DOE estimated the
economic impacts for the various potential standards that it evaluated.
Among the aspects considered by DOE were the economic impacts on both
manufacturers and consumers, life cycle costs, the amount of projected
energy savings, product utility and performance, impacts on
competition, and the general need to conserve energy.
1. Specific Criteria
As noted in section II.B, EPCA provides seven factors to be
evaluated in determining whether a potential energy conservation
standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)) The
following sections discuss how DOE has addressed each of those seven
factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of new and amended standards on
manufacturers, DOE first determines the quantitative impacts using an
annual cash-flow approach. This step includes both a short-term
assessment--based on the cost and capital requirements during the
period between the issuance of a regulation and when entities must
comply with the regulation--and a long-term assessment over a 30-year
analysis period. The industry-wide impacts analyzed include INPV (which
values the industry on the basis of expected future cash flows), cash
flows by year, changes in revenue and income, and other measures of
impact, as appropriate. Second, DOE analyzes and reports the impacts on
different types of manufacturers, including 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
different DOE regulations and other regulatory requirements on
manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and the PBP associated with new or amended standards.
The LCC, specified separately in EPCA as one of the seven factors to be
considered in determining the economic justification for a new or
amended standard, 42 U.S.C. 6295(o)(2)(B)(i)(II), is discussed in the
following section. For consumers

[[Page 18499]]

in the aggregate, DOE also calculates the national net present value of
the economic impacts on consumers over the forecast period used in a
particular rulemaking.
b. Life-Cycle Costs
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy and
maintenance expenditures) discounted over the lifetime of the product.
For each battery charger product class and EPS representative unit, DOE
calculated both LCC and LCC savings for various efficiency levels. The
LCC analysis required a variety of inputs, such as product prices,
electricity prices, product lifetimes, base case efficiency
distributions, annual unit energy consumption, and discount rates.
To characterize variability in electricity pricing, DOE established
regional differences in electricity prices. To account for uncertainty
and variability in other inputs, such as discount rates, DOE used a
distribution of values with probabilities assigned to each value. DOE
then sampled the values of these inputs from the probability
distributions for each consumer. The analysis produced a range of LCCs.
A distinct advantage of this approach is that DOE can identify the
percentage of consumers achieving LCC savings due to an increased
energy conservation standard, in addition to the average LCC savings.
DOE presents only average LCC savings in this NOPR; however, additional
details showing the distribution of results can be found in chapter 8
and appendix 8B of the TSD.
In the LCC analysis, DOE determined the input values for a wide
array of end-use applications that are powered by battery chargers or
EPSs. There are typically multiple applications within every
representative unit and product class that DOE analyzed. As such, DOE
considered a wide array of input values for each unit analyzed. The
lifetime, markups, base case market efficiency distribution, and unit
energy consumption all vary based on the application. In the analysis,
DOE sampled an application based on its shipment-weighting within the
representative unit or product class. When an application was sampled,
its unique inputs were selected for calculating the LCC and PBP. For
further detail regarding application sampling, see appendix 8C of the
TSD.
In its written comments, AHAM stated that the MIA and LCC
calculations should be the most important considerations when
determining where to set the standard level. (AHAM, No. 42 at p. 15)
DOE considered many criteria when selecting the proposed standard
level, including impacts on manufacturers, consumers, the Nation, and
environmental impacts. DOE weighed the impacts from each of these
analyses in determining the proposed standard level.
c. Energy Savings
While significant conservation of energy is a separate statutory
requirement for imposing an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) DOE uses
the NIA spreadsheet results in its consideration of total projected
energy savings.
d. Lessening of Utility or Performance of Products
In establishing classes of products, and in evaluating design
options and the impact of potential standard levels, DOE sought to
develop standards for EPSs and battery chargers that would not lessen
the utility or performance of these products. None of the TSLs
presented in today's NOPR would substantially reduce the utility or
performance of the products under consideration in the rulemaking. DOE
received no comments that standards for battery chargers and EPSs would
increase their size and reduce their convenience, increase the length
of time to charge a product, shorten the intervals between chargers, or
any other significant adverse impacts on consumer utility. However,
based on DOE's preliminary examination of the information before it,
including interviews with manufacturers, manufacturers may reduce the
availability of features that increase energy use, such as LED
indicator lights, in an effort to meet any standard levels promulgated
as a result of this rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV))
Manufacturers indicated that these changes would only be made if their
customers would not be averse to the change in utility. DOE requests
interested party feedback, including any substantive data, regarding
today's proposed standard levels and the potential for lessening of
utility or performance related features.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider any lessening of competition that is
likely to result from standards. It also 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 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)(i)(V)
and (B)(ii)) DOE has transmitted a copy of today's proposed rule to the
Attorney General and has requested that the Department of Justice (DOJ)
provide its determination on this issue. DOE will address the Attorney
General's determination, if any, in the final rule.
f. Need for National Energy Conservation
Certain benefits of the proposed standards are likely to be
reflected in improvements to the security and reliability of the
Nation's energy system. Reductions in the demand for electricity may
also result in reduced costs for maintaining the reliability of the
Nation's electricity system. DOE conducts a utility impact analysis to
estimate how standards may affect the Nation's needed power generation
capacity.
Energy savings from the proposed standards are also likely to
result in environmental benefits in the form of reduced emissions of
air pollutants and greenhouse gases associated with energy production.
DOE reports the environmental effects from the proposed standards for
battery chargers and EPSs, and from each TSL it considered, in the
environmental assessment contained in chapter 15 of the TSD. DOE also
reports estimates of the economic value of emissions reductions
resulting from the considered TSLs in chapter 16 of the TSD.
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 of 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 payback period of
potential standards for consumers. These analyses include, but are not
limited to, the 3-year payback period contemplated under the rebuttable
presumption test. However, DOE routinely conducts an economic analysis
that considers the full range of impacts to the consumer, manufacturer,

[[Page 18500]]

Nation, and environment, as required under 42 U.S.C. 6295(o)(2)(B)(i).
The results of this analysis serve as the basis for DOE to definitively
evaluate 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 V.B.1.c of this NOPR and
chapter 8 of the TSD.

IV. Methodology and Discussion

DOE used three spreadsheet tools to estimate the impact of today's
proposed standards. The first spreadsheet calculates LCCs and payback
periods of potential standards. The second provides shipments
forecasts, and then calculates national energy savings and net present
value impacts of potential standards. Finally, DOE assessed
manufacturer impacts, largely through use of the Government Regulatory
Impact Model (GRIM). All three spreadsheet tools will be made available
online at the rulemaking Web site: https://www1.eere.energy.gov/buildings/appliance_standards/residential/battery_external.html.
Additionally, DOE estimated the impacts on utilities and the
environment that would be likely to result from the setting of
standards for battery chargers and EPSs. DOE used a version of EIA's
National Energy Modeling System (NEMS) for the utility and
environmental analyses. The NEMS model simulates the energy sector of
the U.S. economy. EIA uses NEMS to prepare its Annual Energy Outlook, a
widely known energy forecast for the United States. The version of NEMS
used for appliance standards analysis is called NEMS-BT,\16\ and is
based on the AEO version with minor modifications.\17\ NEMS-BT offers a
sophisticated picture of the effect of standards because it accounts
for the interactions between the various energy supply and demand
sectors and the economy as a whole.
---------------------------------------------------------------------------

\16\ BT stands for DOE's Building Technologies Program.
\17\ The EIA allows the use of the name ``NEMS'' to describe
only an AEO version of the model without any modification to code or
data. Because the present analysis entails some minor code
modifications and runs the model under various policy scenarios that
deviate from AEO assumptions, the name ``NEMS-BT'' refers to the
model as used here. For more information on NEMS, refer to The
National Energy Modeling System: An Overview, DOE/EIA-0581 (98)
(Feb.1998), available at: https://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf.
---------------------------------------------------------------------------

A. Market and Technology Assessment

When beginning an energy conservation standards rulemaking, DOE
develops information that provides an overall picture of the market for
the products concerned, including the purpose of the products, the
industry structure, and market characteristics. This activity includes
both quantitative and qualitative assessments, based primarily on
publicly available information. The subjects addressed in the market
and technology assessment for this rulemaking include a determination
of the scope of this rulemaking; product classes and manufacturers;
quantities and types of products sold and offered for sale; retail
market trends; regulatory and non-regulatory programs; and technologies
or design options that could improve the energy efficiency of the
product(s) under examination. See chapter 3 of the TSD for further
detail.
1. Products Included in This Rulemaking
This section addresses the scope of coverage for today's proposal,
stating which products would be subject to new or amended standards.
The numerous comments DOE received on the scope of today's proposal are
also summarized and addressed in this section.
a. External Power Supplies
The term ``external power supply'' refers to an external power
supply circuit that is used to convert household electric current into
DC current or lower-voltage AC current to operate a consumer product.
(42 U.S.C. 6291(36)(A)) EPCA, as amended by EISA 2007, also prescribes
the criteria for a subcategory of EPSs--those classified as Class A
EPSs (or in context, ``Class A''). A Class A EPS is a device that:
1. Is designed to convert line voltage AC input into lower voltage
AC or DC output;
2. is able to convert to only one AC or DC output voltage at a
time;
3. is sold with, or intended to be used with, a separate end-use
product that constitutes the primary load;
4. is contained in a separate physical enclosure from the end-use
product;
5. is connected to the end-use product via a removable or hard-
wired male/female electrical connection, cable, cord, or other wiring;
and
6. has nameplate output power that is less than or equal to 250
watts.
See 42 U.S.C. 6291(36)(C)(i).
The Class A definition excludes any device that either (a) requires
Federal Food and Drug Administration listing and approval as a medical
device in accordance with section 513 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360c) or (b) powers the charger of a detachable
battery pack or charges the battery of a product that is fully or
primarily motor operated. See 42 U.S.C. 6291(36)(C)(ii).
Based on DOE's examination of product information, all EPSs appear
to share four of the six criteria under the Class A definition in that
all are:
Designed to convert line voltage AC input into lower
voltage AC or DC output;
Sold with, or intended to be used with, a separate end-use
product that constitutes the primary load;
Contained in a separate physical enclosure from the end-
use product; and
Connected to the end-use product via a removable or hard-
wired male/female electrical connection, cable, cord, or other wiring.
DOE refers to an EPS that falls outside of Class A as a non-Class A
EPS (or, in context, ``non-Class A''). Examples of such devices include
EPSs that can convert power to more than one output voltage at a time
(multiple voltage), EPSs that have nameplate output power exceeding 250
watts (high-power), EPSs used to power medical devices, and EPSs that
provide power to the battery chargers of motorized applications and
detachable battery packs (MADB). After examining the potential for
energy savings that could result from standards for non-Class A
devices, DOE concluded that standards for these devices would be likely
to result in significant energy savings and be technologically feasible
and economically justified. 75 FR 27170 (May 14, 2010). Thus, DOE is
examining the possibility of setting standards for all types of EPSs
within the scope of today's notice.
In the preliminary analysis, DOE treated only those wall adapters
that lacked charge control as EPSs; those with charge control were not
considered to be EPSs. (Charge control relates to regulating the amount
of current being delivered to a battery.) Under that approach, a given
wall adapter without charge control capability could be considered both
as an EPS and as a part of a battery charger. If that approach were
adopted, such a wall adapter would be subject to whatever EPS standard
that DOE may set and would also, indirectly, help the battery charger
of which it is a part to meet whatever battery charger standard that
DOE may set. In essence, the EPS would need to satisfy a prescribed
level of efficiency, which could create certain design restrictions on
manufacturers seeking to optimize the overall efficiency of the battery
charger.
In the following paragraphs, DOE summarizes and addresses the
comments it received on (1) whether to

[[Page 18501]]

set EPS standards for wall adapters that are part of battery chargers,
(2) whether the absence of charge control circuitry should be the basis
for regulating such wall adapters, and (3) if so, appropriate methods
for determining whether a given wall adapter contains charge control.
DOE received a few comments urging DOE to regulate these types of
EPSs--which are part of a battery charger system--as part of the
overall battery charger and also as an EPS to help ensure that whatever
EPS is used in such a charger system meets a minimum level of
efficiency. Several other parties, however, objected to requiring that
these EPSs also meet separate EPS standards. Comments focused mainly on
MADB EPSs, but some pertained to EPSs generally. In response to these
comments, DOE is proposing a new approach, namely, to evaluate whether
an EPS can directly operate an end-use consumer product and to create a
new product class for those EPSs that cannot directly operate an end-
use consumer product. DOE is considering this approach in light of the
substantial resistance by the industry to the initial approach
presented during the preliminary analysis phase.
Energy efficiency advocates favored requiring certain EPSs that are
part of battery chargers to also meet separate EPS standards--in
particular, for those EPSs that do not perform charge control
functions. PG&E, et al. expressed their strong support for this
approach and cited research showing that improving the efficiency of a
power supply helps improve the efficiency of a battery charger. In
addition, PG&E commented that a single EPS definition (rather than one
for Class A and another for non-Class A) would reduce the complexity of
compliance and enforcement as well as the potential for loopholes.
(PG&E, et al., No. 47 at p. 3-4) NEEP also expressed its support for
this approach and added that DOE's initial research shows that there
are a limited number of cases where EPSs would be regulated under both
standards. (NEEP, No. 49 at pp. 1-2) The California IOUs and PG&E, et
al. expressed their support for using the ENERGY STAR EPS definition to
determine whether a wall adapter is an EPS. (California IOUs, No. 43 at
p. 9; PG&E, et al., No. 47 at p. 4)
AHAM, PTI, and Wahl Clipper agreed with DOE and the efficiency
advocates that MADB wall adapters should be regulated, but not under
multiple efficiency requirements. Instead, they urged DOE to regulate
these items as battery charger components but not as EPSs. (AHAM, No.
42 at pp. 2, 3, 13; PTI, No. 45 at p. 4; Wahl, No. 53 at p. 1) PTI
argued that a MADB wall adapter cannot be an EPS because it is not used
``to operate a consumer product.'' According to PTI, a MADB wall
adapter operates a battery charger, but a battery charger is not a
consumer product because battery chargers are not themselves
``distributed in commerce for personal use or consumption by
individuals.'' Thus, in its view, MADB wall adapters are not EPSs.
(PTI, No. 45 at pp. 3-4; Pub. Mtg. Tr., No. 57 at p. 74) AHAM argued
that subjecting a product to multiple energy efficiency requirements
(1) ``makes no sense,'' (2) could cause manufacturers to be in
``constant redesign mode'' if EPS and battery charger standards change
at different times, and (3) would be an undue burden. (AHAM, No. 42 at
pp. 4-5) AHAM contended further that the EPS active mode test is
inappropriate and inaccurate for MADB wall adapters, as they are never
used in the manner tested under that procedure. Consequently, in AHAM's
view, requiring that these types of wall adapters be tested under the
EPS test procedure would not enable DOE to meet its obligation to test
products in a manner representative of their actual use. (AHAM, No. 42
at p. 6) Wahl Clipper echoed AHAM's concerns that the EPS test
procedure is inappropriate for MADB wall adapters and noted that
unsynchronized battery charger and EPS standards would force
manufacturers to constantly redesign their products. Wahl Clipper added
that manufacturers ``do not know if future standards levels will make
it impossible to meet both regulations at the same time since there is
no correlation between the two regulations.'' (Wahl, No. 53 at p. 1)
Others had similar concerns about setting standards for Class A
devices that are part of battery chargers. CEA, Cobra Electronics, and
Motorola objected to regulating any wall adapter as both an EPS and a
component of a battery charger. These parties drew attention to the
burden that multiple energy efficiency requirements would impose on
manufacturers--small businesses in particular. CEA commented that its
``foremost concern is DOE's contemplation of a `double jeopardy'
regulatory situation whereby a single charging device would be subject
to two different test procedures and two different sets of regulatory
requirements,'' and added that such a situation would be ``unreasonable
and unnecessary--and would be particularly onerous for small
businesses.'' (CEA, No. 46 at pp. 1-2) Cobra Electronics, which markets
and sells two-way radios and mobile navigation devices, commented that
``having to be regulated under two standards for a product which is
infrequently used is an unreasonable burden for small companies when
added to the burden of other recent regulations.'' (Cobra, No. 51 at p.
1) Motorola also agreed with CEA that the energy efficiency of EPSs
should not be regulated in two different product categories (battery
chargers and EPSs) and added that ``given the likely high performance
standards that will be set for battery chargers, it would be nearly
impossible for an external power supply to comprise part of a
[standards-compliant] battery charger if it were not itself highly
efficient.'' (Motorola, No. 48 at pp. 1-2)
AHAM also asserted that DOE risks overestimating energy savings if
it does not determine how to remove the overlap between battery charger
and EPS energy savings. AHAM emphasized the importance of accurately
quantifying the extent to which energy savings from battery charger and
EPS standards might overlap so that DOE can accurately project the
potential energy savings from potential standards. (AHAM, Pub. Mtg.
Tr., No. 57 at p. 112)
After carefully considering all of these comments, DOE has
tentatively decided to adopt a broad scope and to propose an approach
in which EPS standards could apply to all devices that meet the EPS
definition prescribed by EPCA. See 42 U.S.C. 6291(36)(A). Those
standards prescribed by Congress, namely, those for Class A devices,
will remain in effect, and DOE, despite the objections raised by CEA
and others, has no authority to remove these standards, although these
standards could be amended to increase their stringency. With regard to
non-Class A EPSs that are components of battery chargers, DOE has the
option to propose new efficiency standards for these devices, including
those devices that perform charge control functions.
To help it ascertain whether a given wall adapter performs charge
control functions, DOE sought comment during the preliminary analysis
phase on seven methods it presented to determine whether charge control
is present in a wall adapter. See Preliminary TSD, appendix 3-C
(detailing the methods DOE considered for determining whether a wall
adapter contains charge control). In the preliminary analysis, DOE used
a method it called ``Energy Star Inspection,'' which is based on parts
(f) and (g) of the ENERGY STAR program's definition of an EPS.
(``ENERGY STAR Program Requirements for Single Voltage External Ac-Dc
and Ac-Ac Power Supplies, Eligibility Criteria (Version

[[Page 18502]]

2.0)'' \18\) This method considers certain easily observable physical
characteristics of the wall adapter. Under this approach, a wall
adapter that meets either of the following two criteria would be exempt
from having to satisfy separate EPS standards and would instead be
treated simply as a battery charger component: (1) The wall adapter has
batteries or battery packs that physically attach directly (including
those that are removable) to the power supply unit; or (2) the wall
adapter has a battery chemistry or type selector switch AND an
indicator light or state of charge meter.
---------------------------------------------------------------------------

\18\ https://www.energystar.gov/ia/partners/product_specs/program_reqs/eps_prog_req.pdf.
---------------------------------------------------------------------------

As noted above, DOE received comments from the California IOUs and
PG&E that supported using this method. PTI contended that DOE neglected
to include MADB wall adapters in its preliminary assessment of the
seven methods and requested that DOE include these products in any
future analysis of possible charge control criteria. (PTI, No. 45 at p.
4) AHAM viewed the presence of charge control in a wall adapter as
irrelevant. In its view, DOE should ask whether a given wall adapter is
a MADB device, as all MADB wall adapters should be excluded from any
EPS standards. (AHAM, No. 42 at p. 12) DOE received no other comments
on the appropriateness of the Energy Star Inspection method or any of
the six other methods it considered for identifying charge control in
wall adapters.
At this time, DOE does not believe that such an exclusion from the
EPS scope of coverage is warranted. It is DOE's understanding that
most, if not all, of the MADB wall adapters that DOE proposes to add to
the EPS scope of coverage are already subject to, and satisfy, the EPS
standards currently in place in California. The California standard
applies the same efficiency level that already applies to Class A EPSs
nationwide. See California Energy Commission, ``2009 Appliance
Efficiency Regulations,'' August 2009, CEC-400-2009-013, Table U-1 on
p. 134. This efficiency level is referred to as Level IV in the
International Efficiency Marking Protocol for External Power
Supplies.\19\ Comments from manufacturers and the California IOUs also
support this finding. (California IOUs, No. 43 at p. 9) DOE is not
aware of any products powered by battery chargers and EPSs that are not
designed, manufactured, and packaged for distribution throughout the
country.
---------------------------------------------------------------------------

\19\ U.S. EPA, ``International Efficiency Marking Protocol for
External Power Supplies,'' October 2008, available at Docket No. 62.
---------------------------------------------------------------------------

It is DOE's understanding that products that use EPSs are designed,
manufactured and packaged for distribution throughout the United
States. Assuming that this understanding is correct, that fact
indicates it is highly unlikely that manufacturers are producing one
set of products for California and another set for the remaining
states.
Notably, California's EPS standards apply only to devices that meet
the ENERGY STAR definition of an EPS,\20\ but do not meet the Class A
definition established by EISA 2007. (California Energy Commission,
``2009 Appliance Efficiency Regulations,'' August 2009, CEC-400-2009-
013) This situation stems in large part from California's adoption of
the ENERGY STAR definition of an EPS when it first established energy
conservation standards for these devices. Once Congress subsequently
established standards for Class A EPSs, these Class A devices were
removed from the scope of the California standards, leaving behind a
set of devices California now refers to as ``state-regulated EPSs.'' As
a result, these state-regulated EPSs are those devices that meet the
ENERGY STAR definition of an EPS but do not fall under the Class A
definition--specifically medical and MADB EPSs. (Multiple-voltage and
high-power EPSs do not meet the ENERGY STAR definition but satisfy the
Federal definition of an EPS.)
---------------------------------------------------------------------------

\20\ For the purposes of EPA's ENERGY STAR specification, an
external power supply: (a) Is designed to convert line voltage ac
input into lower voltage ac or dc output; (b) is able to convert to
only one output voltage at a time; (c) is sold with, or intended to
be used with, a separate end-use product that constitutes the
primary load; (d) is contained in a separate physical enclosure1
from the end-use product; (e) is connected to the end-use product
via a removable or hard-wired male/female electrical connection,
cable, cord or other wiring; (f) does not have batteries or battery
packs that physically attach directly (including those that are
removable) to the power supply unit; (g) does not have a battery
chemistry or type selector switch AND an indicator light or state of
charge meter (e.g., a product with a type selector switch AND a
state of charge meter is excluded from this specification; a product
with only an indicator light is still covered by this
specification); and (h) has nameplate output power less than or
equal to 250 watts. (See https://www.energystar.gov/ia/partners/product_specs/program_reqs/eps_prog_req.pdf.)
---------------------------------------------------------------------------

Due to differences between the ENERGY STAR and Federal statutory
definitions of an EPS, there could be MADB devices that meet the
Federal statutory definition that are not state-regulated. For example,
a MADB EPS that has a battery type selector switch and an indicator
light, and thus does not meet the ENERGY STAR definition of an EPS,
would not be covered either by the current Federal or California
standards. However, as a practical matter, DOE has not identified any
MADB products that meet the Federal statutory definition of an EPS but
do not also meet the ENERGY STAR definition. Thus, DOE is unaware of
any MADB products that are not already subject to California energy
efficiency standards that are within the EPS scope of coverage being
contemplated today. DOE seeks comment on the accuracy of this belief
and specific examples of such products, if they exist.
As noted above, some parties commented that requiring wall adapters
that are part of battery chargers to be tested according to the EPS
test procedure would impose an undue burden on manufacturers and would
be inappropriate and result in inaccurate projections of estimated
energy savings. In response to these comments, DOE notes that Congress
prescribed the definitions of what constitutes an EPS. It did not
provide for any exceptions that would exclude those EPSs that are
components of another product. Given this situation, DOE must assume
that Congress was aware of the fact that some battery chargers use EPSs
and that it structured these statutory provisions to allow for the
possibility that all EPSs would be required to meet some minimum level
of efficiency that would also improve the efficiency of those products
that used these more efficient devices.
As to how to measure the energy performance of these devices, DOE
believes that these wall adapters can be evaluated using the existing
EPS test procedure. See 10 CFR part 430, subpart B, appendix Z
(detailing the procedure to follow when measuring the energy
consumption of an EPS). In fact, this test procedure already is used to
demonstrate compliance with existing Federal standards, in the case of
Class A EPSs, and California standards, in the case of most MADB
EPSs.\21\ The test procedure is designed to assess the energy
performance of an EPS while in active mode by measuring its active-mode
efficiency at 25, 50, 75, and 100 percent of nameplate output current
and then computing the simple arithmetic average of these four values.
DOE believes that this test procedure yields a meaningful and
representative measure of an EPS's active-mode efficiency because,
along with the no-load mode power measurement, it

[[Page 18503]]

covers the full range of outputs the device may be called on to provide
in the field. This is true of EPSs that are not part of battery
chargers as well as those that are. Thus, the EPS test procedure is
appropriately applied to all EPSs, including those that are part of
battery chargers.
---------------------------------------------------------------------------

\21\ California has adopted the Federal EPS test procedure as
part of its regulatory requirements. (California Code of
Regulations, Title 20, Section 1604).
---------------------------------------------------------------------------

Regarding PTI's argument that MADB wall adapters cannot, by
definition, be EPSs because they operate battery chargers (which, in
its view, are not consumer products), DOE disagrees. First, a battery
charger is a consumer product by virtue of its inclusion by Congress
under Part A of EPCA, 42 U.S.C. 6291(32), which addresses the
regulation of consumer products. A consumer product is any article of a
type that consumes or is designed to consume energy and which, to any
significant extent, is distributed in commerce for personal use or
consumption by individuals. See 42 U.S.C. 6291(1). The fact that a
battery charger is a device that charges batteries for consumer
products does not imply that chargers are not themselves consumer
products, particularly since the definition contemplates the inclusion
of those devices ``in other consumer products, '' which indicates that
Congress viewed battery chargers as a separate, and individual,
consumer product.
Second, EPSs are also consumer products for similar reasons.
Third, a MADB wall adapter satisfies the EPS definition since it
``convert[s] household electric current * * * to operate a consumer
product.'' See 42 U.S.C. 6291(36)(A) (emphasis added). Whether the MADB
wall adapter is considered to operate a battery charger, which is a
consumer product, or is considered to enable the end-use consumer
product to operate (by supplying energy to the battery, which in turn
operates the end-use product), a MADB wall adapter falls squarely
within the EPS definition because it is taking household electric
current to operate a consumer product. Accordingly, in DOE's view, MADB
wall adapters are EPSs.
However, in view of the concerns raised by industry commenters, DOE
believes there may be merit in distinguishing between a direct
operation EPS and an indirect operation EPS. In particular, some EPSs
are able to directly power an end-use consumer product (e.g., a
wireless Internet router), while others cannot. This distinction may be
necessary because DOE believes that less stringent EPS standards may be
appropriate for indirect operation EPSs, which cannot directly operate
an end-use consumer product. As explained later, DOE is proposing a
means to differentiate between these two types of EPSs and to set
different efficiency standards for them. DOE's proposed approach to
regulating these products is described in more detail in sections
IV.A.3 and V.C below.
DOE notes that while Congress amended EPCA to exempt certain EPSs
used in security and life safety alarms and surveillance systems from
the no-load mode power requirements that apply generally to Class A
EPSs manufactured prior to July 1, 2017, see Public Law 111-360 (Jan.
4, 2011), such systems would be subject to the proposed active mode
standards under consideration in this NOPR. See 42 U.S.C.
6295(u)(3)(E)(ii) (exempting security and life safety alarms and
surveillance systems solely from no-load requirements).
DOE further notes that it has recently identified an important
emerging EPS application: solid-state lighting (SSL). SSL technology is
used in both the residential and commercial sectors for desk lamps,
under-cabinet lighting, accent lighting, and many other purposes. Most
of the SSL luminaires (fixtures) DOE has identified have integral power
supplies, but some use power supplies that appear to meet the EPS
definition. Some of these EPSs plug into an outlet, while others are
hard wired into the electrical system. DOE has not yet identified any
relevant technical differences between these EPSs and those for
laptops, cell phones, and other electronic equipment that it has
analyzed in detail as part of today's notice. DOE did not include SSL
technology in its NOPR analysis because so few SSL products with EPSs
were sold in 2009, the base year for shipments. However, because of the
rapid proliferation of these products, DOE may consider revising its
analysis to include SSL products in determining the final standards for
EPSs. DOE invites comment on SSL EPSs, specifically on whether there
are any differences between SSL EPSs and other EPSs that might warrant
treating them as a separate product class.
b. Battery Chargers
A battery charger is a device that charges batteries for consumer
products, including battery chargers embedded in other consumer
products. (42 U.S.C. 6291(32)) All devices that meet this definition
are within the scope of this rulemaking.
Like EPSs, battery chargers are used in conjunction with other end-
use consumer products, such as cell phones and digital cameras.
However, unlike EPSs, the battery charger definition prescribed by
Congress is not limited solely to products powered from AC mains, i.e.,
those products that are plugged into a wall outlet. Further, battery
chargers may be wholly embedded in another consumer product, wholly
separate from another consumer product, or partially inside and
partially outside another consumer product.
The California IOUs commented that they ``agree with DOE's wide-
reaching consumer battery charger scope proposed in the preliminary
[TSD],'' as they believe ``it will ultimately enable DOE to identify
more cost-effective savings opportunities.'' (California IOUs, No. 43
at p. 2) Several other parties requested that DOE exclude golf car
chargers and in-vehicle chargers from potential battery charger
regulations.
Lester argued that ``golf cars do not meet the definition of a
consumer product'' because they are primarily purchased by businesses
rather than individuals, adding that the leading golf car manufacturer
in the United States sells the vast majority of its golf cars to
businesses rather than individuals--specifically 96 percent in 2009 and
97.5 percent in 2010. (Lester, No. 50 at p. 1)
As indicated above, the statutory definition of ``consumer
product'' is a broad one. The extent of that breadth indicates that
Congress had contemplated that this definition would encompass a wide
variety of products. DOE's research indicates that approximately 10.6
percent of all new battery-powered golf cars sold each year in the
United States are sold to individuals.\22\ While DOE has no reason to
question Lester's claim that the leading golf car manufacturer sells
almost all of its golf cars to businesses, there are clearly
manufacturers that sell a significant number of golf cars to
individuals. Further, there is no identifiable difference between
battery chargers for golf cars sold to individuals and those for golf
cars sold to golf courses and other businesses. Thus, DOE continues to
believe that golf cars are a type of consumer product. The distinction
between consumer products and industrial equipment has been previously
addressed by DOE. See https://www1.eere.energy.gov/buildings/appliance_standards/pdfs/cce_faq.pdf.
---------------------------------------------------------------------------

\22\ International Market Solutions, Golf Car-Type Vehicles and
the Emerging Market for Small, Task-Oriented Vehicles in the United
States; Trends 2000-2006, Forecasts to 2012, December 2007. For more
information about this report or to purchase a copy, email
icaworld@optonline.net.
---------------------------------------------------------------------------

Lester also commented that in certain industrial applications the
benefits of less energy-efficient, transformer-based

[[Page 18504]]

battery chargers outweigh those of more energy-efficient, switch mode
battery chargers and that business managers are skilled in making the
proper choice of battery charger based on a consideration of all the
relevant factors. (Lester, No. 50 at pp. 2-3) In this context, Lester
argued that businesses that purchase golf cars should be allowed to
make their own decisions regarding the energy performance of the
battery chargers they purchase, implying that there is no need for
energy conservation standards for this product.
DOE notes that, in general, the energy conservation standards that
it sets must satisfy a series of criteria. See generally 42 U.S.C.
6295(o). Among these criteria is the need to ensure the continued
utility of the regulated product. Consistent with this requirement, DOE
will take this factor into account when setting standards for battery
chargers.
CEA commented that because in-vehicle chargers do not consume
energy from the utility grid, they should not be covered by DOE. (CEA,
No. 46 at p. 3) Motorola made similar statements and concluded that
electronics that do not connect to the utility grid should be excluded
from coverage. Motorola added that since DOE could not demonstrate cost
savings associated with the potential efficiency standards that were
under consideration for these products, these devices should not be
regulated. (Motorola, No. 48 at pp. 2, 3) Cobra also expressed concerns
over this product class and stated that quantifying the effect of
battery chargers that obtain energy from 12V car batteries seems
inaccurate and urged DOE to drop this product class from consideration.
Cobra added that it was too difficult to accurately assess the economic
impact of standards on 12V in-vehicle chargers because of difficulties
inherent in accurately estimating gasoline savings. (Cobra, No. 51 at
p. 3)
DOE is aware that consumer products ``designed solely for use in
recreational vehicles and other mobile equipment'' are, by law,
specifically excluded from coverage as consumer products. (42 U.S.C.
6292) Thus, a battery charger designed solely for use in recreational
vehicles (RVs) and other mobile equipment would not be subject to
battery charger standards. DOE has identified several consumer
products--most prominently portable GPS navigators--that are commonly
sold with 12V power adapters. However, DOE is not aware of any battery-
operated consumer products that operate within a vehicle that cannot
also be charged by alternate means, specifically from a 5V USB power
source or from mains through a wall adapter. (For example, a GPS device
may be plugged into a home computer via a USB port to receive power and
to download data updates to the device's memory.) In other words, these
products are not designed solely for use in recreational vehicles and
other mobile equipment. DOE seeks comment on whether any products exist
that can only be operated on 12V. DOE also seeks comment on whether a
device that can be powered only from a 12V power outlet can be assumed
to be designed solely for use in recreational vehicles (RVs) and other
mobile equipment, or whether other 12V power sources exist that could
power battery chargers. Lastly, DOE seeks comment on whether there are
battery chargers with DC inputs other than 5V and 12V.
DOE also considered whether the above exclusion also applies to
battery chargers that charge mobile equipment such as golf cars,
wheelchairs, and electric scooters. DOE has preliminarily determined
that this exclusion does not apply to those types of battery chargers,
for two reasons. First, the statute, by specifying that a device be
``designed solely for use in'' a recreational vehicle or mobile
equipment, appears to exclude only those devices that obtain power from
recreational vehicles and other mobile equipment, not those that
provide power to recreational vehicles and other mobile equipment. For
example, a refrigerator designed solely for use in an RV obtains its
power from the RV and, thus, is not a covered product, whereas a
battery charger that is designed solely to charge the batteries of an
electric bicycle obtains its power from another power source external
to the bicycle (e.g., AC mains) and, thus, is a covered product.
Second, EPCA excludes from coverage those consumer products ``designed
solely for use in recreational vehicles and other mobile equipment.''
DOE has found that many battery chargers that charge mobile equipment
are not contained entirely within that equipment, but rather operate
only partly within, or entirely outside of, that equipment. (Examples
of such chargers include those for many wheelchairs and lawn mowers.)
In DOE's view, such a device is not operated solely in the mobile
equipment and, thus, is not excluded from coverage. DOE welcomes
comment on whether its understanding of how these devices operate is
accurate.
As to the general concern regarding the calculation of potential
benefits and savings from standards for in-vehicle chargers, DOE notes
that it is no longer considering these savings in order to avoid any
potential conflict with the exclusions set out in EPCA.
c. Wireless Power
The Wireless Power Consortium (WPC), which represents companies
engaged in the emerging technology of wireless transfer of energy to
both power and charge consumer products, commented that it does not
believe that a ``wireless power transducer is either an EPS or a
battery charger'' and recommended that a new category of inductive
power supply be introduced for power supplies having inductive output.
WPC explained that it is possible for the various components needed for
these products, such as the transmitter transducers and receiver
transducers, to be manufactured by different companies and sold
separately. WPC further noted that it has not yet been determined how
to address the independence of transmitter and receiver transducers in
regards to overall system efficiency. As a result, ``requirements for
efficiency should be deferred until the technology is better understood
and methods for accurately measuring the efficiency are developed.''
(WPC, No. 42 at p. 2) Similarly, CEA requested that DOE categorize
wireless power systems independently of battery chargers or EPSs to
avoid regulatory mandates that could harm innovation in the emerging
area of wireless power. CEA cited the technology's ability to charge or
interact with multiple devices for multiple purposes simultaneously and
to provide real-time power to appliances without batteries at a variety
of power levels and transmitting efficiencies. (CEA, No. 46 at pp. 2-3)
Philips, in reference to wireless power, expressed concern that DOE
``might inadvertently take regulatory action that could have the
unintended effect of stifling this new technology.'' (Philips, No. 41
at p. 3).
DOE has observed that a number of new products have entered the
marketplace in recent years that use wireless power technology in order
to charge small consumer electronics products such as digital music
players and mobile phones. Some of these products transfer power using
induction while others use conduction or a galvanic (i.e., current-
carrying) connection. Products are also sold in a variety of different
configurations, as noted in WPC's comment, with some transmitters and
receivers sold separately, while others are sold together as a system.
There are a number of different types of products under the broad
umbrella of ``wireless power,'' including both battery chargers and
EPSs. DOE

[[Page 18505]]

analyzed one type, namely inductive battery chargers for wet
environments (product class 1), and is proposing standards for these
products today. In the preliminary analysis, DOE did not differentiate
any other wireless power battery chargers from their conventional wired
counterparts. DOE continues to believe that wireless power products
that meet the definition of a battery charger, whether inductive or
galvanic, are covered products.
However, DOE also agrees with CEA that the ability to charge
multiple devices simultaneously and wirelessly offers a unique utility
to consumers that could adversely and inadvertently be affected by
standards. Because of this fact, and the immaturity of the technology,
which collectively explain the absence of energy efficiency performance
data on these products, DOE is not proposing standards for these types
of products. Instead, DOE is proposing to create a separate product
class for these products and to defer analysis of these products to a
later standards rulemaking. Therefore, in today's rulemaking, DOE has
reserved a section in the CFR for an 11th battery charger product class
for products that use wireless power, in a dry environment, to charge
consumer products.
With regard to the applicability of EPS standards to wireless power
products, DOE reiterates that, by definition, an EPS ``is used to
convert household electric current into DC current or lower-voltage AC
current to operate a consumer product.'' (42 U.S.C. 6291(36)(A)) Some
wireless power transmitter pads are sold by themselves and, thus, are
consumer products in their own right. Other wireless power transmitter
pads are sold along with a power receiver. Such a product constitutes a
battery charger or a large portion of a battery charger, which also is
a consumer product. Hence, in both cases, a wall adapter that provides
power to the wireless power transmitter pad is an EPS.
d. Unique Products
Through additional market study of battery chargers and external
power supplies since the preliminary analysis, DOE has found certain
``unique'' products that exhibit characteristics spanning several of
the proposed BCEPS product classes, which make them difficult to
classify within the scope of this rulemaking. These products possess
traits inherent to both battery chargers and external power supplies
and/or were designed for multiple simultaneous end-use consumer
applications. In one example, a product DOE examined supplied power to
an answering machine equipped with two charging stations for a wireless
headset and a cordless handset. The power converter itself provided two
separate outputs at the same nameplate output voltage, but with
different current limits on each. One output was dedicated to charging
the wireless headset and one output was used to power the answering
machine and charge the cordless handset. Under the definitions DOE has
used to classify battery chargers and EPSs to this point, this product
could be considered a multiple-voltage EPS, a multi-port battery
charger, or even a distinct single-voltage EPS and a battery charger
depending on how the terms are applied.
DOE has invested considerable effort in properly analyzing the
design tendencies of battery chargers and EPSs and believes that the
vast majority of these products can be classified under the definitions
of this proposed rule. DOE also believes that manufacturers, who are
most familiar with how their products function and their intended use,
should be able to appropriately determine what type of product they are
selling and therefore which standard is appropriate based on DOE's
proposed definitions. DOE requests any interested party information
regarding products that may seem to fall into multiple product classes.
2. Market Assessment
a. Market Survey
To characterize the market for battery chargers and EPSs, DOE
gathered information on the products that use them. DOE refers to these
products as end-use consumer products or battery charger and EPS
``applications.'' This method was chosen for two reasons. First,
battery chargers and EPSs are nearly always integrated into, bundled
with, or otherwise intended to be used with a given application;
therefore, the demand for applications drives the demand for battery
chargers and EPSs. Second, because most battery chargers and EPSs are
not stand-alone products, their usage profiles, energy consumption, and
power requirements are all determined by the associated application.
DOE began the development of the preliminary analysis by analyzing
online and brick-and-mortar retail outlets to determine which
applications use battery chargers and EPSs and which battery charger
and EPS technologies are most prevalent. Because the market for battery
charger and EPS applications continues evolving, DOE updated the market
survey to identify new applications and determine whether any relevant
attributes of existing applications had changed significantly between
the preliminary analysis and NOPR phases of the rulemaking.
In order to more accurately characterize the market for battery
chargers and EPSs, DOE analyzed the following new applications: Media
tablets, mobile Internet hotspots, smartphones, and wireless charging
stations. To simplify the analysis, DOE removed external media drives,
radio-controlled cars (hobby grade), and electronic pest repellents,
all of which had low or unsupported shipments estimates. Battery
chargers and EPSs for such applications and any other applications not
explicitly analyzed in the market assessment would still be subject to
the standards proposed in today's notice as long as they meet the
definition of a covered product outlined in sections A.1.a and A.1.b,
above. DOE also combined Wi-Fi access points with LAN equipment and
merged weed trimmers and hedge trimmers into a single application
(rechargeable garden care products). Finally, DOE identified EPS
applications that now also commonly contain rechargeable batteries and
use battery chargers, including LAN equipment and video game consoles.
Chapter 3 of the TSD discusses all of these market assessment updates
in further detail.
As noted in section IV.A.1.a above, DOE is considering including
EPSs for SSL luminaires when it updates its analysis prior to issuing a
final rule. DOE welcomes comment on the size of the market for these
products, what proportion of SSL luminaires use EPSs, the efficiency of
those EPSs, and usage patterns.
The California IOUs suggested that DOE consider two additional
products for inclusion in battery charger product class 10 (AC output):
emergency uninterruptible power supplies (UPSs) for cordless phones and
emergency backup for security systems. (California IOUs, No. 43 at p.
7) Battery charger product class 10 is reserved for products that
output AC power from the battery. UPSs were the only applications that
met this criterion. Due to the small number of UPSs for cordless phones
shipped annually, DOE did not include this application in its
quantitative analysis for product class 10, despite its inclusion in
this class. DOE recognizes that many home security systems contain
rechargeable emergency backup batteries; however, because those backup
batteries output DC power in order to operate the electronics in the
security system, DOE placed these

[[Page 18506]]

chargers in product class 2. Although DOE recognizes that there are
battery charger and EPS applications that it did not analyze, it
tentatively believes that it has included within its analysis all major
applications and, thus, has accurately characterized battery charger
and EPS energy consumption and savings potential for each product
class.
b. Non-Class A External Power Supplies
In addition, DOE expanded its analysis of applications that use
non-Class A EPSs, including multiple-voltage and high-power EPSs, those
EPSs that are used with medical devices, and EPSs used with (1) motor-
operated battery charger applications and (2) the chargers of
detachable batteries (i.e. collectively, MADB devices). In the
preliminary analysis, DOE relied upon market information it had
collected prior to publishing the notice of proposed determination for
non-Class A EPSs in November 2009. Because updated information was
available following the preliminary analysis, DOE revisited non-Class A
EPSs while conducting its NOPR-phase market survey.
DOE found that multiple-voltage EPSs are used in fewer applications
today than they were at the time of the first survey. Specifically, DOE
removed inkjet imaging equipment from the multiple-voltage EPS product
class, leaving the Xbox 360 (a video game console) as the only
application for these devices.
DOE also reclassified medical EPSs based on the power requirements
stated on retailer Web sites and updated lifetime and shipments
estimates for medical devices. Philips commented that medical devices
are expected to last longer than other consumer products and suggested
using expected lifetimes of six to ten years for these products.
(Philips, No. 41 at pp. 2-3) In the preliminary analysis, DOE estimated
the product lifetimes for all medical devices analyzed to be greater
than six years based on input from medical EPS manufacturers. Philips'
comment, combined with independent market research, helped DOE to
confirm its preliminary estimates for the NOPR. All of DOE's shipment
and lifetime assumptions are documented in the market workbook that
accompanies chapter 3 of the TSD.
c. Application Shipments
DOE relied on published market research to estimate base-year
shipments for all applications. The base-year was changed from 2008 to
2009 for the NOPR, and application shipments were updated wherever
supporting data were available. DOE estimated that in 2009 a total of
345 million EPSs and 437 million battery chargers shipped for final
sale in the United States. Philips commented that DOE understated the
shipments estimate for products in battery charger product class 1--
inductive chargers for use in wet environments. In the preliminary
analysis DOE assumed annual shipments of 5.35 million units, but
Philips recommended using an estimate that is ``closer to 15 million''
units. (Philips, No. 41 at p. 2) Philips later explained how it derived
this estimate from proprietary market data and its knowledge of the
toothbrush market. In the NOPR-stage analysis, DOE used the shipments
estimate recommended by Philips.
One significant update to the market assessment methodology was to
estimate the proportion of battery chargers and EPSs used exclusively
in the commercial sector. Commercial users pay commercial electricity
rates, which are lower than residential electricity rates, and,
therefore, the cost savings they would enjoy from an energy
conservation standard would be lower. DOE identified applications that
were likely to be used in office buildings, restaurants, or commercial
construction sites, for example, in order to more accurately estimate
energy cost savings in the life-cycle cost (LCC) analysis and national
impact analysis. Data on commercial shipments were not readily
available for most applications; therefore, DOE assumed similar
commercial market shares among similar office and telecommunications
applications. In the case of power tools, DOE assumed that commercial
and residential spaces have similar repair and maintenance needs and,
thus, used the ratio of commercial to residential floor space in the
United States as a proxy for each sector's share of total power tool
shipments. DOE seeks comment on which battery charger and EPS
applications are used in the commercial sector, what fraction of
shipments are to the commercial sector, and how product lifetimes and
usage may differ between residential and commercial settings. (See
Issue 2 under ``Issues on Which DOE Seeks Comment'' in section VII.E of
this notice.) See chapter 3 of the TSD for more information on DOE's
commercial sector market share estimates.
d. Efficiency Distributions
In the preliminary analysis, DOE estimated separate base-case
market efficiency distributions for each battery charger product class
and a single efficiency distribution for all Class A EPSs analyzed in
the LCC and national impact analyses. AHAM commented that there are
currently more EPSs in the market with efficiencies at levels higher
than the EISA standard than what DOE estimated in the preliminary
analysis; however, AHAM did not provide any specific data to support
its claim. (AHAM, Pub. Mtg. Tr., No. 57 at p. 121) On the other hand,
Cobra Electronics commented that most manufacturers of lower cost
products use linear EPSs that just meet the current Federal standard
rather than more efficient switch mode power supplies because of the
higher costs involved with using that more efficient technology.
(Cobra, No. 51 at p. 3) DOE incorporated these stakeholder comments
into its updated efficiency distribution estimates but largely relied
upon product testing and other market research to estimate base-case
efficiency distributions. Further detail is contained in TSD chapter 3
and the accompanying analytical spreadsheet models.
In preparing today's NOPR, DOE revised its methodology for
calculating efficiency distributions from test data. Instead of
weighting results for each individual tested unit based on the
shipments of the associated application, DOE gave equal weight to the
results for each unit. For battery chargers and EPSs, DOE compared each
test result to the proposed compliance curves for each candidate
standard level (CSL). DOE then divided the number of units at a given
CSL by the total number of tested units to estimate the percentage of
units in the market. For select applications, DOE adjusted these
distributions to reflect additional data or other market research about
these applications. For EPSs, DOE also calculated the distribution of
tested units within the ranges of nameplate output power corresponding
to the representative units of analysis. Finally, DOE continued to
calculate the distribution of tested units within each battery charger
product class. DOE assigned an efficiency distribution profile to each
EPS and battery charger application based on application-specific data
where possible. For applications that DOE did not test, DOE relied on
product class (for battery chargers) or representative unit (for EPSs)
distributions for use in the energy use analysis and LCC analysis. DOE
calculated a shipment-weighted average efficiency distribution for each
product class for use in the national impact analysis. For more detail,
see sections IV.E, IV.F, and IV.G below, which discuss the energy use,
life-cycle cost, and national impact analyses, respectively.

[[Page 18507]]

3. Product Classes
When necessary, DOE divides covered products into classes by the
type of energy used, the capacity of the product, and any other
performance-related feature that justifies different standard levels,
such as features affecting consumer utility. (42 U.S.C. 6295(q)) DOE
then conducts its analysis and considers establishing or amending
standards to provide separate standard levels for each product class.
At the preliminary analysis public meeting, DOE presented its
rationale for creating 15 product classes for EPSs and 10 product
classes for battery chargers. The product classes established for EPSs
and battery chargers were based on various electrical characteristics
shared by particular groups of products. As these electrical
characteristics change, so does the utility and efficiency of the
devices.
a. External Power Supply Product Classes
In the preliminary analysis, DOE raised the possibility of creating
product classes based on nameplate output power and nameplate output
voltage. This approach was based on the framework set by EISA 2007 and
ENERGY STAR 2.0, which, collectively, grouped EPSs in this manner. DOE
also divided EPS product classes based on whether a device met the
Class A definition, its application type (motorized or medical), its
output power, its output current type, its output voltages, and the
battery type (detachable) of the associated application.
For Class A EPSs, the preliminary analysis divided these products
into product classes A1, A2, A3, and A4 based on ENERGY STAR 2.0
criteria, which classify EPSs based on the type of power conversion
(i.e., AC to DC or AC to AC) used and nameplate output voltage (i.e.,
low-voltage or basic-voltage). Each of these four product classes (A1-
A4) from the preliminary analysis was created using these same
criteria. The Class A EPS product classes were defined using the
identical power conversion type and nameplate output voltage parameters
as the ENERGY STAR program for EPSs.
Consistent with this initial approach, DOE is proposing to adopt
the ENERGY STAR definition for low-voltage EPSs. DOE received no
comments on these class structures when it first raised them during the
preliminary analysis phase. As a result, DOE is proposing to adopt
these class structures as part of today's proposal. Particularly, if a
device has a nameplate output voltage of less than 6 volts and its
nameplate output current is greater than or equal to 550 milliamps, DOE
is proposing to classify that device as a low-voltage EPS.
Additionally, a product that does not meet the criteria for being a
low-voltage EPS would be classified as a basic-voltage EPS. DOE is also
proposing definitions for AC to DC and AC to AC EPSs. If an EPS
converts household electrical current to a lower voltage DC, DOE is
proposing to classify that product as an AC to DC EPS. Similarly, DOE
is proposing to classify a device that converts household electrical
current to a lower voltage AC output as an AC to AC EPS.
DOE's preliminary analysis also explained how DOE was planning to
organize non-Class A EPSs, which include medical, MADB, multiple-
voltage, and high-power (nameplate output power >250 Watts) EPSs, into
product classes. In the preliminary analysis, DOE created product
classes M1, M2, M3, and M4 for medical EPSs and B1, B2, B3, and B4 for
MADB EPSs. As with Class A EPSs, DOE considered four product classes
for these two groups of devices based on combinations of power
conversion type and voltage level. Additionally, for MADB products, DOE
determined whether a wall adapter for a MADB application lacked charge
control, as defined in appendix 3C of the preliminary TSD, and
therefore was a MADB EPS. For multiple-voltage EPSs, DOE considered the
creation of two product classes--X1 and X2--and for high-power EPSs, it
considered only one, H1. In response to the preliminary analysis, DOE
received comments on the product class definitions presented for MADB
and multiple-voltage EPSs. The issues raised are discussed below.
Indirect Versus Direct Operation External Power Supplies
As noted in section IV.A.1, interested parties raised concerns with
DOE's proposed approach in the preliminary analysis regarding MADB
EPSs. Based on these comments, DOE revised its approach and is no
longer using the charge control method it had considered using during
the preliminary analysis. Instead, DOE is proposing a simpler approach,
which would require a manufacturer to determine whether an EPS can only
``indirectly operate'' an application.
DOE is proposing to define an indirect operation EPS as an EPS that
cannot power a consumer product (other than a battery charger) without
the assistance of a battery. In other words, if an end-use product only
functions when drawing power from a battery, the EPS associated with
that product is classified as an indirect operation EPS. Because the
EPS must first deliver power and charge the battery before the end-use
product can function as intended, DOE considers this device an indirect
operation EPS and has defined a separate product class, N, for all such
devices. Conversely, if the battery's charge status does not impact the
end-use product's ability to operate as intended and the end-use
product can function using only power from the EPS, DOE is proposing to
treat that wall adapter as a direct operation EPS.
DOE's initial approach for determining whether a given EPS has
direct operation capability involved removing the battery from the
application and attempting to operate the application using only power
from the EPS. While this approach gave the most definitive EPS
classifications, this procedure had the potential of creating
complications during testing since it can frequently necessitate the
removal of integral batteries prior to testing. The removal of such
batteries can often require access to internal circuitry via sealed
moldings capable of shattering and damaging the application.
DOE then developed a new method of testing to help minimize both
the risk of damage to the application and the accompanying complexity
associated with the removal of the internal batteries while ensuring
testing accuracy. This approach would require product testers to
determine whether an EPS can operate an end-use product once the
associated battery has been fully discharged. Based on product testing
results, DOE believes that direct operation EPSs will be able to power
the application regardless of the state of the battery while indirect-
operation EPSs will need to charge the battery before the application
can be used as intended. Comparing the time required for an application
to operate once power is applied during fully discharged and fully
charged battery conditions would provide a reliable indication of
whether a given EPS is an indirect or direct operation device.
Recording the time for the application to reach its intended
functionality is necessary because certain applications, such as
smartphones, contain firmware that can delay the EPS from operating the
end-use product as expected. If the application takes significantly
longer to operate once the battery has been fully discharged, DOE would
view this EPS as one that indirectly operates the end-use consumer
product and classify it as part of product class N. Using this
methodology, DOE was also able to evaluate a given product's EPS as it
was

[[Page 18508]]

intended to be used while limiting the burden of the test. The full
procedure is detailed in Appendix 3C of the TSD and in the rule
language section of today's notice.
Product class N that DOE is proposing in today's notice contains
both Class A and non-Class A EPSs. DOE believes that these two groups
of devices are technically equivalent, i.e., there is no difference in
performance-related features between the two groups that would justify
different standard levels for the two groups. (42 U.S.C. 6295(q))
Because of this technical equivalency, DOE grouped these EPSs into one
product class for analysis. DOE seeks comment on whether there are any
performance-related features characteristic of either Class A or non-
Class A devices (but not both) in product class N that would help
justify analyzing the two groups separately.
If a product is capable of directly operating its end-use consumer
product, other characteristics must be examined to determine the
appropriate product class. In its preliminary analysis, DOE separated
product classes based on combinations of their power conversion type
and voltage level. DOE is proposing to use these class definitions
based on those combinations but with one change. As shown in Table IV-
1, DOE used four product classes for each combination of power
conversion type and voltage level in the preliminary analysis for Class
A EPSs, MADB EPSs, and medical EPSs. DOE also considered applying the
results of the Class A engineering analysis directly to medical and
MADB EPSs, meaning there would be no difference in the cost-efficiency
curves or the product class divisions for Class A, medical, or MADB
EPSs. DOE believed this was a valid approach because the costs
associated with improving the efficiency of a medical or MADB EPS were
identical to those associated with the same improvements in a
comparable Class A EPS as all three types are technically equivalent.
Due to these similarities, DOE believed that Class A, medical, and MADB
EPSs should be evaluated identically. Interested parties did not
comment on this simplified approach after it was presented during the
preliminary analysis public meeting.
Today's NOPR proposes eliminating the disaggregation of Class A,
medical, and MADB EPSs in its product class definitions. This
consolidation would reduce the number of product classes covering these
products from 12 in the preliminary analysis to five (B, C, D, E, and
N) in the NOPR. Under this consolidated approach, product class B
includes direct operation EPSs that are AC/DC and basic-voltage (i.e.
do not qualify as low-voltage); product class C includes direct
operation EPSs that are AC/DC and low-voltage (i.e. nameplate output
voltage less than 6 volts and nameplate output current greater than or
equal to 550 milliamps.); product class D includes direct operation
EPSs that are AC/AC and basic-voltage; product class E includes direct
operation EPSs that are AC/AC and low-voltage; and product class N
includes all indirect operation EPSs.

Table IV--1 Preliminary Analysis Product Classes
----------------------------------------------------------------------------------------------------------------
Voltage level
-------------------------------------------------
Basic (not low- Low (<6V, >=550mA
voltage) outputs)
----------------------------------------------------------------------------------------------------------------
Power Conversion Type................ AC input, DC output.... A1, B1, M1 (now B)..... A2, B2, M2 (now C).
AC input, AC output.... A3, B3, M3 (now D)..... A4, B4, M4 (now E).
----------------------------------------------------------------------------------------------------------------

Multiple-Voltage External Power Supplies
In the preliminary analysis, DOE considered combining product
classes X1 (<100 Watts) and X2 (>=100 Watts) into one product class for
all multiple-voltage EPSs. DOE is proposing to define multiple-voltage
EPS as devices that convert household electric current into multiple
simultaneous output currents. The California IOUs were in favor of
creating a single product class for multiple-voltage EPSs because ``the
types of products that may occupy this category in the future are
unknown.'' (California IOUs, No. 43 at p. 9). DOE's initial approach
was based on the view that these product classes corresponded to the
two main products already in the market in 2008: multi-function devices
in X1 and video game consoles in X2. As of 2010, multi-function devices
no longer use multiple-voltage EPSs, leaving only one main product
category and the need for only one product class. Therefore, DOE has
consolidated product classes X1 and X2 into product class X for all
multiple-voltage EPSs, which are EPSs that can directly operate a
consumer product and simultaneously produce multiple output voltages.
High-Power External Power Supplies
DOE examined only one product class for high-power EPSs during the
preliminary analysis because only one relevant consumer application
existed at the time the analysis was prepared. DOE received no comments
on this proposal from interested parties and, therefore, maintained one
product class for high-power EPSs in the NOPR. This product class
includes EPSs that can directly operate a consumer product and have a
nameplate output power greater than 250 watts. To maintain consistency
in the naming convention for the NOPR, product class H1 is now product
class H. All product classes developed for the NOPR are shown in Table
IV-2.

Table IV--2 External Power Supply Product Classes Used in the NOPR
------------------------------------------------------------------------
Preliminary
analysis
Product class description external power NOPR external power
supply product supply product classes
classes
------------------------------------------------------------------------
AC/DC Basic-Voltage.......... A1, M1, B1 B
(some).
AC/DC Low-Voltage............ A2, M2, B2 C
(some).
AC/AC Basic-Voltage.......... A3, M3, B3 D
(some).
AC/AC Low-Voltage............ A4, M4, B4 E
(some).
Multiple Voltage............. X1, X2......... X
High-Power................... H1............. H

[[Page 18509]]

Indirect Operation........... B1, B2, B3, B4 N
(most).
------------------------------------------------------------------------

b. Battery Charger Product Classes
In the preliminary analysis, DOE used five electrical
characteristics to disaggregate product classes--battery voltage,
battery energy, input and output characteristics (e.g. inductive
charging capabilities),\23\ input voltage type (line AC or low-voltage
DC), and AC output. DOE explained its reasoning for using this approach
in the preliminary analysis. This reasoning is also detailed in chapter
3 of the TSD.
---------------------------------------------------------------------------

\23\ Inductive charging is a utility-related characteristic
designed to promote cleanliness and guarantee uninterrupted
operation of the battery charger in a wet environment. In wet
environments, such as a bathroom where an electric toothbrush is
used, these chargers ensure that the user is isolated from mains
current by transferring power to the battery through magnetic
induction rather than using a galvanic (i.e. current carrying)
connection.
---------------------------------------------------------------------------

First, DOE explained that battery voltage greatly affects consumer
utility because the electronics of a portable consumer product are
designed to require a particular battery voltage. If a change occurs in
battery voltage, it is possible that the end-use application will be
rendered inoperable. Furthermore, battery chargers that charge lower-
voltage (voltage equals the product of current (I) and resistance (R))
batteries tend to be less efficient because they use higher currents,
which increase I\2\R losses for the same given output power. (I\2\R,
the product of current and voltage, equates to power and refers to
losses directly related to current flow.) These devices could be
disproportionately affected by an equally stringent standard level
across all voltages. Consequently, DOE opted to use battery voltage as
a characteristic for setting product classes. See preliminary analysis
TSD Chapter 3.
Second, while battery voltage specifies which consumer product
applications can be used with a particular battery (and its
corresponding battery charger), battery energy describes the total
amount of work that the battery can perform, regardless of the
application, and is also a measure of utility. Furthermore, because a
battery charger must provide enough output power to replenish the
energy discharged during use, the capacity and physical size of the
battery charger depend on the amount of battery energy.\24\ By using
battery energy as a proxy for output power, only a single criterion,
rather than two, is required for classifying battery chargers. This
approach has the benefit of simplifying any energy conservation
standards that DOE may set while sufficiently accounting for any
differences in battery charger capacity or utility in the standards
analysis. Additional details on this approach can be found in TSD
chapter 3.
---------------------------------------------------------------------------

\24\ The minimum output power is a product of battery energy and
charge rate. However, while charge rates rarely fall outside the
range of 1 [deg]C to 10 [deg]C, the battery energy of consumer
battery chargers can span over 5 orders of magnitude from 1 watt-
hour to over 10,000 watt-hours. Therefore, the output power is more
dependent on battery energy than charge rates.
---------------------------------------------------------------------------

Third, input and output characteristics are important because input
voltage can have an impact on efficiency and dictate where a battery
charger may be used, this impact may affect end user utility. With
respect to inductive chargers, the utility offered by this
characteristic is providing reliable and safe electrical power to a
device during operation. In wet environments, such as a bathroom where
an electric toothbrush is used, these chargers ensure that the user is
isolated from mains current by transferring power to the battery
through magnetic induction rather than using a galvanic (i.e. current
carrying) connection. DOE also identified numerous battery chargers
that do not include a wall adapter, connecting instead to a personal
computer's USB port or a car's cigarette lighter receptacle. Because
input voltage can impact battery charger performance and determine
where the battery charger can be used, which affects the utility of the
product, DOE defined product classes using this criterion in the
preliminary TSD. In response to the preliminary analysis and during
manufacturer interviews, DOE received numerous comments regarding these
product classes, discussed below, and the results of which are
summarized in Table IV-3.

[[Page 18510]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.012

During the preliminary analysis public meeting, Philips questioned
whether DOE could consider product classes based on usage, topology
(i.e., the general circuit layout), or price. (Philips, Pub. Mtg. Tr.,
No. 37 at pp. 126-130) Philips and AHAM stated that they believed DOE
could disaggregate infrequently used products into a separate product
class and urged DOE to do so. (Philips, No. 43 at p. 3; AHAM, Pub. Mtg.
Tr., No. 37 at pp 154-156) AHAM added that, in its view, DOE has always
established new product classes based on characteristics, designs, or
functions that affect energy use. (AHAM, No. 44 at p. 6) CEA expressed
similar concerns as Philips and AHAM, suggesting that DOE did not
adequately deal with infrequently charged battery chargers. (CEA, No.
48 at p. 2) Earthjustice disagreed with AHAM's suggestion and stated
that usage is not a feature of a battery charger, but rather a
characteristic of the end user of the application that the battery
charger accompanies. (Earthjustice, Pub. Mtg. Tr., No., No. 37 at p.
131) Fulton Innovation inquired whether topology is considered as part
of the utility of a product and, hence, a factor for setting product
classes. (Fulton Innovation, Pub. Mtg. Tr., No., 37 at pp. 134-135)
Finally, Stanley Black and Decker asked whether pricing could be
considered a utility-related feature to use in defining product
classes. (SBD, Pub. Mtg. Tr., No., 37 at pp. 133-134)
DOE does not consider usage, topology, and pricing as utility-
related features for determining separate product classes. These
factors were considered separately, however, in setting potential
energy efficiency levels for these products. Usage defines how a
battery charger is used, which is inherently tied to the end-use
product with which the battery charger is packaged. While changes in
usage will affect the energy use of a battery charger, they do not
affect the actual performance of the battery charger, which is the
relevant factor DOE must consider when establishing a separate class
for these products. See 42 U.S.C. 6295(q). Product usage is fundamental
to the analyses that DOE performs for battery chargers, particularly
for the LCC and NIA. For each application, DOE estimates the time spent
in each mode of operation in order to estimate unit energy consumption.
Further details on usage and DOE's assumptions are presented in the
energy usage section, IV.E, of today's notice.
Although DOE does not explicitly define product classes for battery
chargers based on topology, it considered topologies when it presented
its initial product classes. Primarily, DOE uses battery energy as a
defining characteristic for battery charger product classes. Because of
the extremely wide range of different battery energies, DOE needed to
establish meaningful ranges of battery energies for each product class.
As outlined in the preliminary analysis TSD (Chapter 3), when battery
energy changes, the topologies, or general circuit designs that are
most appropriate also change. Therefore, as part of today's NOPR, DOE
examined the potential impacts on topologies when it defined the ranges
of battery energies that were considered.
Finally, price was also not included in the definitions of DOE's
battery charger product class because it is not a utility-related
feature for the purposes of EPCA. DOE understands commenters concerns
that some products are marketed at various price points and that energy
efficiency standards have the potential to raise those price points or
eliminate some all together. However, price does not directly affect
device performance. DOE acknowledges that price is an important
consideration for consumers and although price is not considered when
setting product classes, DOE does account for such consumer impacts in
the LCC and PBP analyses conducted in support of this rulemaking.
Medical and Single-Cell Battery Chargers
Interested parties also advocated separating out particular
products into

[[Page 18511]]

their own classes. Philips suggested that DOE consider creating a
separate product class for medical battery chargers, as is done for
EPSs. (Philips, No. 43 at p. 2) They mentioned that medical battery
chargers cannot use off the shelf consumer grade battery chargers and
must undergo a special regulatory process that adds testing
requirements and costs. (Philips, No. 43 at p. 3) At the public
meeting, Wahl Clipper suggested that DOE should have an additional
product class for applications that use single-cell batteries. (Wahl
Clipper, Pub. Mtg. Tr., No. 37 at p. 158) Neither commenter provided
any data supporting their views.
While DOE appreciates the suggestions from Philips and Wahl about
segregating out additional product classes from DOE's current
definitions, DOE is not inclined to adopt them at this time based on
the current information before it. As with EPSs, DOE believes that even
though medical battery chargers must adhere to more stringent
requirements than other battery chargers, the cost-efficiency
relationship will not be appreciably different to merit separate
standards and product classes. In the preliminary analysis, DOE found
that there was virtually no difference in the cost effectiveness of
improving medical EPS efficiency versus improving Class A EPS
efficiency. Moreover, DOE is unaware of any capacity or performance-
related feature present in medical battery chargers that would permit
the creation of a special class for these devices for purposes of
setting separate energy conservation standards. As a result, despite
the additional safety testing that medical EPSs may have to go through
for certification, DOE has tentatively consolidated the two groups and
no longer distinguishes between them in its product class definitions
for today's proposal. Based on the information that DOE receives during
the course of the comment period, it may reconsider this approach for
the final rule.
As for the single-cell batteries that Wahl Clipper referenced, DOE
believes that its proposed scaling methodology sufficiently addresses
Wahl Clipper's concerns and allows chargers that use single-cell
batteries to remain in product class 2 (low-energy, low-voltage). As
discussed in section IV.C.2.j, when battery energy approaches zero, DOE
levels off unit energy consumption (UEC) requirements to prevent the
adoption of overly stringent requirements that could eliminate such
products. (UEC is a relevant factor because it is the metric which DOE
is proposing to regulate for these devices.)
Motorized Application Detachable Battery (MADB) Battery Chargers
PTI also submitted comments in which it recommended that DOE revise
its 10 battery charger product classes presented in the preliminary
analysis. PTI stated that because the statute provides language for DOE
to separate MADB's when referring to EPS's, DOE should extend this
distinction to battery chargers and separate MADB battery chargers from
consumer electronics battery chargers. PTI claimed that even though
MADB and consumer electronics battery chargers share a common range of
battery voltages and energies, the two are vastly different in other
ways and urged DOE to create different classes for MADB and non-MADB
products across the same battery voltages and energies. PTI added that
part of the problem with grouping the two product types together is
that consumer electronics promote features such as smaller size and
weight and longer run-time--all of which are added benefits related to
improving a product's energy efficiency. (PTI, No. 47 at p. 13) In
other words, in their view, consumer electronics have already begun to
move towards more efficient battery chargers and manufacturers have
been able to pass along the additional costs to consumers because the
use of more efficient chargers has led to the addition of desirable
features, such as reduced notebook computer weight. (PTI, No. 47 at pp.
13)
PTI also disagreed with DOE's initial plan to group power tools
with consumer electronics because shipments of consumer electronics,
such as laptops, greatly outnumber MADB product shipments. Because a
shipment-weighted average is employed by DOE in its analysis, the
calculated effects would be dominated by the effects of the products
that have the greatest number of shipments. (PTI, No. 47 at p. 6) Since
the shipment quantities of consumer electronic products far outnumber
those for MADB products, PTI asserted that the calculations derived by
DOE would be dominated by the inclusion of consumer electronics
products and skew the overall effects projected to occur with a given
standard for these products. (PTI, No. 47 at pp. 6 and 13)
In addition, in PTI's view, the incremental cost estimates to
achieve higher efficiencies which have been included in the life cycle
cost analysis, are a much smaller percentage of the higher-priced
products than they would be for many do-it-yourself power tools. (PTI,
No. 47 at p. 13) As a result, PTI asserted that do-it-yourself power
tool users are likely to be more sensitive to price changes even though
the incremental change may be similar to higher priced products, such
as consumer electronics. PTI added that manufacturers, and ultimately
consumers, would be better served by a class that included only
appliances or, alternatively, have appliances more fairly represented
in the averages. In its view, making this change would generate CSLs
that more appropriately address the realizable efficiency improvements
and strike a better balance between the realities of power tool
manufacturers and the energy savings gained by the consumer. (PTI, No.
47 at p. 13) Therefore, PTI recommended that DOE should calculate CSL
and LCC information based on sub-classifications of product classes 3
(AC in/DC out, <100 Wh, 4-10 V battery chargers) and 4 (AC in/DC out,
<100Wh, >10V battery chargers) for MADB and non-MADB devices. (PTI, No.
47 at p. 7)
Conversely, the California IOUs supported DOE's decision to group
both power tools (i.e. MADB battery chargers) and laptops (i.e.
consumer electronics battery chargers) in the same product classes for
the purposes of this analysis (California IOUs, No. 45 at p. 6) They
also expressed support for DOE's proposal in the preliminary analysis
that usage profiles should not be used when creating product classes.
(California IOUs, No. 45 at p. 8) In separate comments, Pacific Gas and
Electric and others urged DOE to reduce the number of product classes
from 10 to 4, and reorganize product classes 2 through 7 (AC in/DC out
battery chargers) into one new product class. (PG&E, et al., No. 49 at
pp. 2-3)
After considering these comments, DOE re-examined the UEC data from
its engineering analysis for product classes 3 and 4. DOE found that
when MADB applications were removed from product classes 3 and 4, the
UECs generated for the removed group of MADB applications were not
significantly different (<10 percent) than those DOE had presented for
the product class as a whole. Relative to the reductions in UEC when
incrementing CSLs, DOE considered these differences much less
significant than it initially suspected. Furthermore, for the NOPR
analysis, DOE altered some of its assumptions for the LCC analysis. In
the preliminary analysis, DOE assumed the same efficiency distribution
for all applications within a product class. For example, in product
class 4, laptops were assumed to have the same percentage of their
shipments at CSL 0, 1, and 2 as power tools and all other applications
in that product class. As

[[Page 18512]]

mentioned by manufacturers and determined by DOE's testing program for
battery chargers, some products, mainly consumer electronics, have
already begun increasing the efficiency of their products because doing
so is desirable to the end user. As a result, DOE has altered its
assumption that all applications within a product class have the same
distribution of efficiency. Instead, DOE now makes more tailored
assumptions about efficiency distributions for different applications
based on information provided by manufacturers, publicly available
data, and DOE's own test results.
This new assumption will alter the economics of DOE's standards
analysis and more accurately illustrate the effects on consumers for
the varying consumer types in each product class. Additionally, the
individual LCC results for each application are available in appendix
8B of the TSD. Similarly, just as DOE is not persuaded to disaggregate
certain product classes, DOE is also not persuaded to aggregate any
additional product classes, as suggested by PG&E. DOE initially
considered using separate product classes in the preliminary analysis
because the different battery voltage and energy ratings that define
these classes imply a certain utility and deviation from those ratings
will likely lead to different cost-efficiency relationships and
efficiency levels. These differences will also lead to different
effects on consumers, which will likely support different energy
conservation standard levels.
Uninterruptible Power Supply (UPS) Battery Chargers
Uninterruptible power supplies are used only for emergency
situations when power is lost and users need time to safely shut down
their electronic devices. Consequently, these devices generally do not
fully charge a completely depleted battery. Additionally, these devices
typically use integral batteries and generally remain on continuously.
Because of its role in providing power in emergency situations, the
battery chargers within these devices primarily remain in maintenance
mode, which constitutes the most relevant portion of its energy
consumption.
During manufacturer interviews with UPS producers, DOE discussed
additional functionality as it pertains to these devices. Manufacturers
suggested that DOE classify UPSs into three different categories: Basic
UPSs, UPSs that have automatic voltage regulation (AVR), and UPSs that
are extended-run capable (i.e., the ability to attach a second battery
to increase battery capacity within the UPS). After further
investigation, DOE decided that two of these categories were
appropriate and warranted separate standards, but the third category
(extended-run UPSs), as it was simply representative of a change in
battery capacity, could be accounted for through its scaling
methodology.
AVR UPSs use circuitry that monitors input voltage from the wall
and ensures that all products plugged into the UPS see a steady flow of
voltage despite any fluctuations at the wall. This circuitry provides
added utility to the consumer by preventing any spikes or dips in
voltage, but it comes at the expense of additional power consumption by
the UPS. This additional power consumption of the UPS is always on when
the device is plugged in and it is indistinguishable from the power
consumption due to the battery charger within the UPS.
To account for these characteristics, DOE is proposing to divide
preliminary analysis product class 10 into two product classes, one for
basic UPSs and one for UPSs that contain AVR circuitry. Even though DOE
is proposing two product classes for these categories of UPSs, DOE
believes that the underlying engineering analysis and other downstream
analyses for both product classes is the same. DOE believes that this
is an appropriate assumption because the addition of AVR is irrelevant
to UPS battery charger power consumption, yet it cannot be
disaggregated from UPS battery charger power consumption due to the
integrated nature of the circuitry components within a UPS. In other
words, there is no technical reason why the battery charger within a
basic UPS should be different from the battery charger within a UPS
with AVR functionality. However, when the latter is tested via DOE's
battery charger test procedure, it will demonstrate a higher
maintenance mode power consumption and will not be able to meet as
stringent an energy efficiency standard as a basic UPS. Consequently,
for all of DOE's analyses in today's NOPR, battery chargers for UPSs
are examined as an aggregated product class, product class 10, rather
than separately, however the proposed standard for each product class
is different. DOE seeks comment on its analytical approach and whether
separate classes are appropriate in this context.
4. Technology Assessment
In the technology assessment, DOE identifies technology options
that appear to be feasible to improve product efficiency. This
assessment provides the technical background and structure on which DOE
bases its screening and engineering analyses. The following discussion
provides an overview of the technology assessment for EPSs and battery
chargers. Chapter 3 of the TSD provides additional detail and
descriptions of the basic construction and operation of EPSs and
battery chargers, followed by a discussion of technology options to
improve their efficiency and power consumption in various modes.
a. EPS Efficiency Metrics
On December 8, 2006, DOE codified a test procedure final rule for
single output-voltage EPSs in Appendix Z to Subpart B of 10 CFR Part
430 (``Uniform Test Method for Measuring the Energy Consumption of
External Power Supplies.'') See 71 FR 71340. On June 1, 2011, DOE added
a test procedure to cover multiple output-voltage EPSs in Appendix Z to
Subpart B of 10 CFR Part 430 (``Uniform Test Method for Measuring the
Energy Consumption of External Power Supplies.'') 76 FR 31750. DOE's
test procedure, based on the CEC EPS test procedure, yields two
measurements: Active mode efficiency and no-load mode (standby mode)
power consumption.
Active-mode efficiency is the ratio of output power to input power.
For single-voltage EPSs, the DOE test procedure averages the efficiency
at four loading conditions--25, 50, 75, and 100 percent of maximum
rated output current--to assess the performance of an EPS when powering
diverse loads. For multiple-voltage EPSs, the test procedure provides
those four metrics individually, which DOE is considering averaging
when setting the efficiency level measurements for these types of
devices. The test procedure also specifies how to measure the power
consumption of the EPS when disconnected from the consumer product,
which is termed ``no-load'' power consumption because the EPS outputs
zero percent of the maximum rated output current to the application.
To develop the analysis and to help establish a framework for
setting EPS standards, DOE considered both combining average active-
mode efficiency and no-load power into a single metric, such as unit
energy consumption (i.e. UEC), and maintaining separate metrics for
each. For the preliminary analysis, DOE chose to evaluate EPSs using
the two metrics separately. Today's NOPR proposes continuing to use
this method when setting standards for these products. Using a single
metric that combines active-mode efficiency and no-load power
consumption to determine the

[[Page 18513]]

standard may inadvertently permit the ``backsliding'' of the standards
established by EISA 2007. Specifically, because a combined metric would
regulate the overall energy consumption of the EPS as the aggregation
of active-mode efficiency and no-load power, that approach could permit
the performance of one metric to drop below the EISA 2007 level if it
is sufficiently offset by an improvement in the other metric. Such a
result would, in DOE's view, constitute a backsliding of the standards
and would violate EPCA's prohibition from setting such a level. DOE's
proposed approach seeks to avoid this result.
The DOE test procedure for multiple-voltage EPSs yields five
values: no-load power consumption as well as efficiency at 25, 50, 75,
and 100 percent of maximum load. See 76 FR 31750 (June 1, 2011)(noting
DOE's recently added procedures for multiple voltage EPSs codified at
section 4.2 of appendix Z of subpart B to part 430 of the CFR). In the
preliminary analysis, DOE examined the possibility of averaging the
four efficiency values to create an average efficiency metric for
multiple-voltage EPSs, similar to the approach followed for single-
voltage EPSs. Alternatively, DOE introduced the idea of averaging the
efficiency measurements at 50 percent and 75 percent of maximum load
because the only known application that currently uses a multiple
voltage EPS, a video game console, operates most often between those
loading conditions. DOE sought comment from interested parties on these
two approaches.
The California IOUs commented that the test metric should be an
``average of 25%, 50%, 75%, and 100% of rated output power, similar to
the approach taken for single voltage EPSs.'' The California IOUs
viewed this approach as best rather than basing the multiple-voltage
test procedure on the loading profile of a single application which
could decrease the applicability of any standard since ``the types of
products that may occupy this category in the future are unknown''.
(California IOUs, No. 43 at p. 9)
Though it is aware of only one consumer product using multiple-
voltage EPSs, DOE believes that evaluating multiple-voltage EPSs using
an average-efficiency metric (based on the efficiencies at 25%, 50%,
75%, and 100% of each output's normalized maximum nameplate output
power) would allow a future standard to be applicable to a diverse
range of products as it would not be based solely on the loading
profile of a single EPS application. Therefore, DOE evaluated multiple-
voltage EPSs using no-load mode power consumption and an average
active-mode efficiency metric based on the measured efficiencies at
25%, 50%, 75%, and 100% of rated output power in developing the
proposed energy conservation standards for these products. DOE requests
feedback on this proposed approach to determining the average
efficiency for multiple-voltage EPSs.
b. EPS Technology Options
DOE considered seven technology options, fully detailed in Chapter
3 of the TSD, which may improve the efficiency of EPSs: (1) Improved
Transformers, (2) Switched-Mode Power Supplies, (3) Low-Power
Integrated Circuits, (4) Schottky Diodes and Synchronous Rectification,
(5) Low-Loss Transistors, (6) Resonant Switching, and (7) Resonant
(``Lossless'') Snubbers.
AHAM and PTI commented during the preliminary analysis that ``[DOE]
has not justified the value of decreasing the no-load levels at each
[initially considered] CSL'' (AHAM, No. 42 at p. 7; PTI, No. 45 at p.
5). NEEP suggested that DOE should consider whether technology options
are applicable across product classes (NEEP, No. 49 at 2).
During its analysis, DOE found that some technology options affect
both efficiency and no-load performance and that the individual
contributions from these options cannot be separated from each other in
a cost analysis. Given this trend, DOE generated a ``matched pairs''
approach for creating the EPS CSLs where select test units were used in
characterizing the relationship of average active-mode efficiency and
no-load power dissipation. In the matched pairs approach, EPS energy
consumption improves either through higher active mode efficiency,
lower no-load mode power consumption, or both. If DOE allowed one
metric to decrease in stringency between CSLs, then the cost-efficiency
results might have shown cost reductions at higher CSLs and skew the
true costs associated with increasing the efficiency of EPSs. To avoid
this result, DOE is using an approach that increases the stringency of
both metrics for each CSL considered in today's NOPR.
Regarding NEEP's suggestion, DOE notes that in developing the
engineering analysis, DOE considered all technology options when
developing CSLs for all four EPS representative units. DOE considered
the same efficiency improvements during its analysis for non-Class A
EPSs as it did for Class A EPSs. Where representative units were not
explicitly analyzed (i.e. product classes C, D, and E), DOE extended
its analysis from a directly analyzed class. As a result, all design
options that could apply to these products were implicitly considered
because the proposed efficiency levels of the analyzed product class
will be scaled to other product classes, an approach supported by
interested parties. The equations were structured based on the
relationship of the other Class A product classes to the representative
product class such that the technology options not implemented by the
other classes were accounted for in the proposed efficiency equations.
For example, AC-AC EPSs (product classes A2 and A4 in the preliminary
analysis) tend to have higher no load power dissipation because they do
not use switched-mode methods (see Chapter 3 of the TSD for a full
technical description). Therefore, DOE used higher no load power
metrics when generating CSLs for these product classes than the CSLs
from the representative product class A1. DOE will continue to examine
all technology options and apply them wherever possible across all
product classes as part of the NOPR analysis.
c. High-Power EPSs
In the non-Class A determination analysis TSD, DOE examined the
specific design options of high-power EPSs as they relate to ham
radios, the sole consumer application for these EPSs. DOE found that
high-power EPSs are unique because both linear and switched-mode
versions are available as cost-effective options, but the linear EPSs
are more expensive and inherently limited in their achievable
efficiency despite sharing some of the same possible efficiency
improvements as EPSs in other product classes. Interested parties have
expressed concern that setting an efficiency standard higher than a
linear EPS can achieve would reduce the utility of these devices
because ham radios are sensitive to the electromagnetic interference
(EMI) generated by switched-mode EPSs.
However, DOE believes there is no reduction in utility because EPSs
used in telecommunication applications are required to meet the EMI
regulations of the Federal Communications Commission (47 CFR 15,
subpart B) regardless of the underlying technology. DOE used this
assumption when constructing its engineering analysis for the NOPR but
seeks comment on possible issues with EMI and/or radio frequency
interference associated with switch-mode power supplies (SMPS) used
with amateur radios, including design options for reducing or
eliminating interference.

[[Page 18514]]

d. Power Factor
Power factor is a relative measure of transmission losses between
the power plant and a consumer product. DOE examined the issue of power
factor in section 3.6 of the framework document for the BCEPS
rulemaking and noted that certain ENERGY STAR specifications limit
power factor. DOE also noted in that same section the role of power
factor in higher-power EPSs--namely, that at higher powers, problems
associated with power factor (e.g. power dissipation in the wiring)
become more pronounced.
PTI commented that DOE should preempt other jurisdictions from
regulating power factor by addressing power factor as a metric, but not
to specify a limit in the energy-efficiency standard. (PTI, No. 45 at
p. 12) PTI stated that regulating power factor will add cost to the
product because of the need for additional power factor correction
circuitry. It also explained that losses due to power factor are a
consequence of the power cables used by the local utility, which are
beyond the control of the manufacturer. (PTI, No. 45 at pp. 10-11)
DOE notes that regulating power factor includes substantial
challenges, such as quantifying transmission losses that depend on the
length of the transmission wires, which differ for each residential
consumer. Further, DOE has not yet conclusively analyzed the benefits
and burdens from regulating power factor. While DOE plans to continue
analyzing power factor and the merits of its inclusion as part of a
future rulemaking, it is DOE's view that the above factors weigh in
favor of not setting a power factor-based standard at this time.
e. Battery Charger Modes of Operation and Performance Parameters
For the preliminary analysis, DOE found that there are five modes
of operation in which a battery charger can operate at any given time.
These modes of operation are: Active (or charge) mode, maintenance
mode, no-battery (or standby) mode, off mode, and unplugged mode. These
five modes are briefly described below: \25\
---------------------------------------------------------------------------

\25\ Active mode, maintenance mode, standby mode, and off mode
are all explicitly defined by DOE in Appendix Y to Subpart B of Part
430--Uniform Test Method for Measuring the Energy Consumption of
Battery Chargers.
---------------------------------------------------------------------------

Active (or charge) mode: During active mode, a battery charger is
charging a depleted battery, equalizing its cells, or performing
functions necessary for bringing the battery to the fully charged
state.
Maintenance mode: In maintenance mode, the battery is plugged into
the charger, has reached full charge, and the charger is performing
functions intended to keep the battery fully charged while protecting
it from overcharge.
No-Battery (or standby) mode: In no-battery mode, the battery is
not connected to the charger but the battery charger itself is still
plugged into mains.
Off mode: In off mode, the charger remains connected to mains power
but the battery is removed and all manual on-off switches are turned
off.
Unplugged mode: In unplugged mode, the battery charger is
disconnected from mains and not consuming any electrical power.
For each battery charger mode of operation, DOE's battery charger
test procedure has a corresponding test that is performed that outputs
a metric for energy consumption in that mode. The tests to obtain these
metrics are described in greater detail in DOE's battery charger test
procedure. (76 FR 31750) The following items are pertinent performance
parameters from those tests.
24-Hour Energy: This quantity is defined as the power consumption
integrated with respect to time of a full metered charge test that
starts with a fully depleted battery. In other words, this is the
energy consumed to fully charge and maintain at full charge a depleted
battery over a period that lasts 24 hours or the length of time needed
to charge the tested battery plus 5 hours, whichever is longer.
Maintenance Mode Power: This is a measurement of the average power
consumed while a battery charger is known to be in maintenance mode.
No-Battery (or standby) Mode Power: This is a measurement of the
average power consumed while a battery charger is in no-battery or
standby mode (only if applicable).
Off-Mode Power: This is a measurement of the average power consumed
while an on-off switch-equipped battery charger is in off mode (i.e.
with the on-off switch set to the ``off'' position).
Unplugged Mode Power: This quantity is always 0.
Additional discussion on how these parameters are derived and
subsequently combined with assumptions about usage in each mode of
operation to obtain a value for the UEC is discussed below in section
IV.C.2.b.
f. Battery Charger Technology Options
Since most consumer battery chargers contain an AC to DC power
conversion stage, similar to that found in an EPS, all of the
technology options discussed in section IV.A.4.b also apply to battery
chargers. The technology options used to decrease EPS no-load power
will impact battery charger energy consumption in no-battery and
maintenance modes (and off mode, if applicable), while those options
used to increase EPS conversion efficiency will impact energy
consumption in active and maintenance modes.
Technology options that DOE considered for battery chargers in the
preliminary analysis and again for the NOPR include: Improved
transformer cores, termination, elimination/limitation of maintenance
mode current, elimination of no-battery mode current, switched-mode
power supplies, low-power integrated circuits, Schottky diodes and
synchronous rectification, phase control to limit input power. An in-
depth discussion of these technology options can be found in TSD
chapter 3.

B. Screening Analysis

DOE uses the following four screening criteria to determine which
design options are suitable for further consideration in a standards
rulemaking:
1. Technological feasibility. DOE considers technologies
incorporated in commercial products or in working prototypes to be
technologically feasible.
2. Practicability to manufacture, install, and service. If mass
production and reliable installation and servicing of a technology in
commercial products could be achieved on the scale necessary to serve
the relevant market at the time the standard comes into effect, then
DOE considers that technology practicable to manufacture, install, and
service.
3. Adverse impacts on product utility or product availability. If
DOE determines a technology would have significant adverse impact on
the utility of the product to significant subgroups of consumers, or
would result in the unavailability of any covered product type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the United States at the time, it will not
consider this technology further.
4. Adverse impacts on health or safety. If DOE determines that a
technology will have significant adverse impacts on health or safety,
it will not consider this technology further.

See 10 CFR part 430, subpart C, appendix A, (4)(a)(4) and (5)(b).

[[Page 18515]]

For EPSs, DOE did not screen out any technology options after
considering the four criteria. For battery chargers, DOE screened out:
1. Non-inductive chargers for use in wet environments because of
adverse impacts on safety;
2. Capacitive reactance because of adverse impacts on safety; and
3. Lowering charging current or increasing battery voltage because
of adverse impacts on product utility to consumers.
DOE received no comments in response to its preliminary screening
analysis. Therefore, DOE is using the same screening analysis for the
NOPR.
For additional details, please see chapter 4 of the TSD.

C. Engineering Analysis

In the engineering analysis (detailed in chapter 5 of the TSD), DOE
presents a relationship between the manufacturer selling price (MSP)
and increases in battery charger and EPS efficiency. The efficiency
values range from that of an inefficient battery charger or EPS sold
today (i.e., the baseline) to the maximum technologically feasible
efficiency level. For each efficiency level examined, DOE determines
the MSP; this relationship is referred to as a cost-efficiency curve.
DOE structured its engineering analysis around two methodologies:
(1) Test and teardowns, which involves testing products for efficiency
and determining cost from a detailed bill of materials derived from
tear-downs and (2) the efficiency-level approach, where the cost of
achieving increases in energy efficiency at discrete levels of
efficiency are estimated using information gathered in manufacturer
interviews that was supplemented and verified through technology
reviews and subject matter experts (SMEs). When analyzing the cost of
each CSL--whether based on existing or theoretical designs--DOE
differentiates the cost of the battery charger or EPS from the cost of
the associated end-use product.
1. Engineering Analysis for External Power Supplies
a. Representative Product Classes and Representative Units
DOE is applying the same methodology in the NOPR as it used in the
preliminary analysis to identify representative product classes and
representative units. In the preliminary analysis, DOE selected product
class A1 (AC to DC conversion, basic- voltage EPSs) for further
analysis as the representative product class because it constituted the
majority of EPS shipments and national energy consumption related to
EPSs. Within product class A1, DOE focused on four representative units
with output power levels at 2.5 watts, 18 watts, 60 watts, and 120
watts because most consumer applications use EPSs with these, or
similar, nameplate output power ratings. In the NOPR, DOE is choosing
to focus on representative product class B (AC to DC conversion, basic-
voltage EPSs), which contains certain product classes from the
preliminary analysis--most Class A EPSs from product class A1, most
medical EPSs from product class M1, and some MADB EPSs from product
class B1 (which are EPSs that can directly power an application). The
NOPR analysis also focuses on the same four representative units as the
preliminary analysis with output powers at 2.5 watts, 18 watts, 60
watts, and 120 watts in product class B and scales those results to
product classes C, D, and E as suggested by interested parties.
Interested parties supported DOE's approach in creating and
analyzing representative product classes and representative units in
the preliminary analysis. The California IOUs agreed with using product
class A1 as the representative product class and scaling to other
product classes because of the inherent similarities of the A1 devices
to those in the other product classes (California IOUs, No. 43 at p.
8). Although no specific data were provided, the California IOUs also
commented in support of the four representative units within the
product class noting that their own research \26\ into the power supply
market corroborates DOE's selections (California IOUs, No. 43 at p. 8).
DOE did not receive comments disputing its selections for the four
representative units.
---------------------------------------------------------------------------

\26\ https://www.energy.ca.gov/appliances/archive/2004rulemaking/documents/case_studies/CASE_Power_Supplies.pdf.
---------------------------------------------------------------------------

DOE is proposing to continue using the same representative product
class and representative unit methodology, and will scale results for
the other EPS product classes. As noted previously, DOE has
incorporated EPSs from product class A1 into product class B. Within
product class B (preliminary analysis product class A1) DOE will focus
on the four representative units with output powers at 2.5 watts, 18
watts, 60 watts, and 120 watts because products with these ratings
constitute a significant portion of shipments and energy consumption.
Interested parties also supported this approach.
b. EPS Candidate Standard Levels (CSLs)
DOE is applying the same methodology to establish CSLs in the NOPR
as it used in the preliminary analysis. DOE created CSLs as pairs of
EPS efficiency metrics for each representative unit with increasingly
stringent standards having higher-numbered CSLs. The CSLs were
generally based on (1) voluntary (e.g. ENERGY STAR) specifications or
mandatory (i.e. those established by EISA 2007) standards that either
require or encourage manufacturers to develop products at particular
efficiency levels; (2) the most efficient products available in the
market; and (3) the maximum technologically feasible (``max tech'')
level. These CSLs are summarized for each representative unit in Table
IV-4. In section IV.C.1.e, DOE discusses how it developed equations to
apply the CSLs from the representative units to all EPSs.

Table IV-4--Summary of EPS CSLs for Product Classes B, C, D, and E
------------------------------------------------------------------------
CSL Reference Basis
------------------------------------------------------------------------
0.......................... EISA 2007......... EISA 2007 equations for
efficiency and no-load
power.
1.......................... ENERGY STAR 2.0... ENERGY STAR 2.0
equations for
efficiency and no-load
power.
2.......................... Intermediate...... Interpolation between
test data points.
3.......................... Best in Market.... Most efficient test
data points.
4.......................... Max Tech.......... Maximum technologically
feasible efficiency.
------------------------------------------------------------------------

[[Page 18516]]

DOE evaluated EPSs using the two EPS efficiency metrics, no-load
power consumption and active-mode average efficiency, which it grouped
into ``matched pairs.'' Under the matched pairs approach, each CSL
would increase in stringency in at least one of the metrics and no
metric would ever be lowered in moving to a higher CSL. DOE's goal in
using this approach was to ensure that when it associated costs with
the CSLs, that the costs would reflect the complete costs of increased
efficiency. If DOE followed an approach that permitted a decrease in
stringency for a given metric, the result might be a projected
reduction in EPS cost, which would mask the full cost of increasing EPS
efficiency.
DOE received considerable support from interested parties on its
matched pairs approach for EPS CSLs. However, interested parties,
including the California IOUs, also cautioned DOE to avoid setting
levels for no-load power that were too stringent when compared to
active-mode efficiency improvements. (California IOUs, No. 43 at p. 8).
The California IOUs added that ``PG&E research suggests that
improvements in active mode yield much higher energy savings than
small, incremental improvements in no-load mode.'' Id. PG&E added that
DOE should verify that the no-load levels for the EPS CSLs are not too
stringent, which could lead to higher costs since the majority of the
projected savings for EPSs would likely come from improving active-mode
efficiency (PG&E, Pub. Mtg. Tr., No. 57 at pp. 198-199).
DOE received two additional comments regarding its CSLs. The
California IOUs supported DOE's CSL selections, particularly those that
were developed based on test data. (California IOUs, No. 43 at p. 8).
Additionally, AHAM stated that DOE should ``consider whether the CSLs
also apply to units that are less than 2.5W,'' in particular 2.4W and
1.2W EPSs because they believe that ``the CSL for this class does not
apply to these smaller wattage products'' (AHAM, No. 42 at p. 13).
DOE considered interested party comments when revising the CSLs for
the NOPR. DOE's approach maintains the same efficiency levels for all
CSLs but alters the max-tech efficiency level based on new data gleaned
from manufacturer interviews, which indicated that manufacturers could
achieve higher max-tech levels than were previously considered during
the preliminary analysis. No load requirements were carefully
considered consistent with commenter suggestions to not aggressively
increase these levels.
Further, DOE has tentatively decided to maintain its best-in-market
CSL based on test data and also considered whether the CSLs for the
2.5W EPS should apply to lower-power EPSs. DOE continues to believe
that the CSLs apply to these lower power devices because the scaling
equations developed by DOE incorporate the test results and data of
EPSs with nameplate output power ratings less than 2.5W. For both
metrics and at each CSL, DOE has developed standards equations that are
functions of nameplate output power. To accommodate the design trend of
decreasing efficiency with decreasing output power, the 2.5W CSLs are
used as lower power reference points for the standard equations. All of
the direct operation CSLs were created using a combination of existing
standards and were corroborated with test data. In cases where DOE
tested EPSs with nameplate output powers less than 2.5 watts, it scaled
the results to the representative unit (2.5 W) and adjusted the
efficiency accordingly. Hence, the 2.5W CSLs are supported by data from
EPSs with output powers equal to 2.5 watts and scaled EPSs with output
power ranges below 2.5 watts. DOE used this methodology in generating
the CSLs for all of the other direct operation representative units
where the CSLs were not only based on units tested at the nominal
output power rating but also on scaled results of EPSs with nameplate
output powers slightly above and slightly below the representative unit
value. For additional detail regarding DOE's scaling methodology see
chapter 5 of the TSD.
DOE maintained the same CSLs for multiple-voltage EPSs in product
class X as it proposed in the preliminary analysis because it received
no comments and has no new information that would otherwise merit a
change in the CSLs for this product class. The CSLs are shown in Table
IV-5.

Table IV-5--Summary of EPS CSLs for Product Class X
------------------------------------------------------------------------
CSL Reference Basis
------------------------------------------------------------------------
0.......................... Market Bottom..... Test data of the least
efficient unit in the
market.
1.......................... Mid Market........ Test data of the
typical unit in the
market.
2.......................... Best-in-Market.... Manufacturer's data.
3.......................... Max Tech.......... Maximum technologically
feasible efficiency.
------------------------------------------------------------------------

DOE structured the CSLs for high-power EPSs based on products
available in the market and by scaling CSLs for 120-watt EPSs. The two
least efficient CSLs are based on units DOE tested for the non-Class A
EPS determination analysis. CSL 0 corresponds to test results from a
linear EPS for amateur radio equipment while CSL 1 corresponds to test
results from a switched-mode EPS for the same application. During
interviews for the determination analysis, high-power EPS manufacturers
indicated that CSL 2 was what they believed to be the max-tech
efficiency for high-power EPSs. As outlined in section III.B.2.a, DOE
believes that the efficiencies of the 120W EPSs indicate a potential
for 345W EPSs to achieve higher efficiencies than CSL 2 since
achievable efficiency tends to remain the same for EPSs with a
nameplate output power above 49 watts. DOE characterized these higher
efficiencies by modeling a 360W EPS composed of three 120W EPSs
connected in parallel. This theoretical EPS would have the same average
efficiency as a 120W EPS, scaled for nameplate output voltage, and
three times the no-load power consumption. DOE developed CSL 3 and CSL
4 for the 345W representative EPSs based on the efficiency of the
theoretical 360W EPS. DOE received no comments concerning the CSLs for
high-power EPSs during the preliminary analysis (CSL 0, CSL 1 and CSL
2). DOE seeks comment on its proposed methodology for establishing
higher-efficiency CSLs (CSL 3 and CSL 4). The CSLs for product class H
are listed in Table IV-6.

[[Page 18517]]

Table IV-6--Summary of EPS CSLs for Product Class H
------------------------------------------------------------------------
CSL Reference Basis
------------------------------------------------------------------------
0.......................... Line Frequency.... Test data of a low-
efficiency unit in the
market.
1.......................... Switched-Mode Low Test data of a high-
Level. efficiency unit in the
market.
2.......................... Switched-Mode High Manufacturers'
Level. theoretical maximum
efficiency.
3.......................... Scaled Best-in- Scaled from 120W EPS
Market. CSL 3.
4.......................... Scaled Max Tech... Scaled from 120W EPS
CSL 4.
------------------------------------------------------------------------

c. EPS Engineering Analysis Methodology
In the preliminary analysis, DOE presented two sets of cost-
efficiency curves: One based on manufacturer data that showed an
increasing trend between cost and efficiency and a second set based on
test and teardown data that, while inconclusive, generally showed a
decreasing relationship between cost and efficiency. DOE sought
interested party comment on this discrepancy.
Commenters had mixed opinions on which results DOE should use as
the basis for its analysis. AHAM commented that ``based on what was
presented that the Department should use the manufacturer's data''
rather than the test and teardown data that DOE developed stating that
``there is no incentive for manufacturers to not give out all necessary
information to the Department''. (AHAM, No. 42 at p. 13) However, IOUs
encouraged DOE to continue to pursue teardowns because the test and
teardown results in the preliminary analysis, in their view, may be as
accurate as manufacturer data since ``costs are rapidly declining for
highly efficient power supplies.'' (California IOUs, No. 43 at p. 9).
NEEP stated that DOE should ``corroborate the cost-efficiency curve
data provided to them by manufacturers.'' In other words, DOE should
re-evaluate the manufacturer's results and consider consulting
independent sources to establish a more direct relationship between
efficiency and cost. (NEEP, No. 49 at p. 4). DOE considered these
opinions and sought additional information.
In preparing the NOPR analysis, DOE conducted an additional round
of manufacturer interviews to address the differences between the two
cost-efficiency curves in the preliminary analysis. Based on the
interviews, DOE believes that the discrepancy between the preliminary
analysis curves was due to an ongoing shift in the market that was not
reflected in the data. Specifically, the manufacturers stated during
these interviews that the EPS market has a trend of increasing
efficiency and decreasing cost with each design cycle and the DOE-
tested units may have been from different design cycles.\27\ By
contrast, the manufacturers' data on which DOE had initially relied
reflected the cost-efficiency relationship during a single design
cycle. In general, manufacturers agreed that, in their current design
cycle, EPSs are designed to be more efficient than the ENERGY STAR
level. Thus, DOE's revised cost-efficiency curves reflect this improved
understanding across all the representative units using updated data
obtained from interviews with EPS manufacturers and component
suppliers.
---------------------------------------------------------------------------

\27\ Original design dates are difficult to determine because
the date of release is not often publicized with EPS product data.
---------------------------------------------------------------------------

In the preliminary analysis, DOE evaluated switched-mode power
supplies (i.e. power supplies that use controlled switching of a power
source to regulate the flow of current to a load), but not linear power
supplies. Linear power supplies are power supplies that use a
transformer and a linear regulator to provide power to a load. These
devices are typically less cost effective as a method to improve energy
efficiency and inherently limited in their achievable efficiencies--
these limitations stem from the conversion stage delivering current at
a higher voltage than needed by the consumer product and dropping the
excess voltage across the regulator to achieve the lower regulated
output voltage. The power lost in the regulator is the product of the
voltage drop and the load current and is dissipated as heat. Switched-
mode power supplies do not have the same limitations with respect to
the level of efficiency they can achieve because the design relies on
transferring power through the controlled modulation of energy stored
in the magnetic and electric fields of passive components. As a result,
there are fewer resistive losses in the conversion stage and the
voltage is regulated using controlled switching instead of
intentionally dissipating excess voltage in the form of heat, Cobra
Electronics noted this omission. (Cobra, No. 51 at p. 3) DOE has since
re-evaluated the analysis and found that linear power supplies are a
cost-effective option for 2.5 W EPSs at the lower stringency CSLs, but
not in meeting other CSLs or in satisfying CSLs for other
representative units. As a result, the NOPR cost-efficiency curves for
the 2.5W representative unit include linear supplies as part of the
analysis.
Today's proposed rule is based on a slightly revised version of the
initial methodology DOE considered when aggregating manufacturer
results for the 2.5W and 18W representative units. In the preliminary
analysis, DOE used a 3D-aggregation method \28\ based on cost,
efficiency, and no-load power to generate cost-efficiency curves for
all representative units. The same 3D-aggregation methodology was
applied to the NOPR analysis with the exception of the 2.5W and 18W
representative units, for which DOE used a 2D aggregation approach.\29\
DOE used a 2D aggregation method because that method more accurately
captures the cost-efficiency relationship for these EPSs. Generally,
DOE believes that 3D aggregation typically yields the best curve fit
for the dataset, so long as there are sufficient data. However, for the
2.5W and 18W EPSs, DOE had less data for which it could generate curve
fits. DOE initially ran a 3D regression for the 2.5W and 18W
representative units, but found that variations in the data for no-load
power caused the correlation of the resulting curve to be low. Upon
further inspection, DOE believes that the 2D curve fit more accurately
reflects the less-robust underlying dataset for these two EPSs because
the costs represent incremental improvements to meet specific CSLs and,
thus, the large variations in the no-load power data provided by
manufacturers do not degrade the correlation of the curve fit.
Therefore, DOE switched to a 2D aggregation that described efficiency
and cost, which generated a curve with higher correlation and more
appropriate

[[Page 18518]]

results for these representative units. For the remaining EPSs, DOE
continued to apply the 3D-aggregation method because it generated a
satisfactory curve fit. For additional details, please see chapter 5 of
the TSD.
---------------------------------------------------------------------------

\28\ DOE's 3D-aggregation method is an approach to developing an
equation that describes how MSP for an EPS changes with respect to
both average efficiency and no-load power. That is, MSP is a
function of both metrics simultaneously.
\29\ DOE's 2D-aggregation method is an approach to developing an
equation that describes how MSP for an EPS changes with respect to
average efficiency only.
---------------------------------------------------------------------------

d. EPS Engineering Results
DOE characterized the cost-efficiency relationship of the four
representative units in product class B as shown in Table IV-7, Table
IV-8, Table IV-9, and Table IV-10. During interviews, manufacturers
indicated that their switched-mode EPSs currently meet CSL1, the ENERGY
STAR 2.0 specification. This factor is reflected in the analysis by
setting the incremental MSP for the 18W, 60W, and 120W EPSs at $0 at
CSL 1, which means that there is no incremental cost above the baseline
to achieve CSL 1. Costs for the 2.5W EPS, however, are estimated at
$0.15 for CSL 1. This result occurs because of DOE's assumption (based
on available information) that the lowest cost solution for improving
the efficiency of the 2.5W EPS is through the use of linear EPSs, which
are manufactured both at the EISA 2007 level as well as at ENERGY STAR
2.0. Specifically, as commenters suggested, DOE examined linear EPSs
and found that they might be a cost-effective solution at CSL 0 and CSL
1 for 2.5W EPSs. Thus, $0.15 indicates the incremental cost for a 2.5W
EPS to achieve higher efficiency. For all four representative units,
the more stringent CSLs, CSL 2, CSL 3, and CSL 4, correspond to
switched-mode EPSs designed during the same design cycle, which would
cause their costs to increase with increased efficiency.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP27MR12.013

BILLING CODE 6450-01-C
Unlike product class B, DOE analyzed a single 203W representative
unit for multiple-voltage EPSs. These devices are exclusively used with
home video-game consoles, which use one output to power the device and
another for standby controls. In Chapter 5 of the preliminary analysis
TSD, DOE indicated that, for the NOPR, it was considering using the
cost-efficiency relationship for 203W multiple-voltage

[[Page 18519]]

EPSs that it developed as part of the non-Class A EPS determination
analysis. In the determination analysis, DOE derived costs for CSL 0
and CSL 1 from test and teardown data but costs for CSL 2 and CSL 3
came from manufacturer and component supplier interviews. DOE received
no comments on this approach, which was detailed in the preliminary
analysis TSD. Hence, DOE is continuing to rely on its determination
analysis results to help characterize the cost-efficiency relationship
for 203W multiple voltage EPSs, shown in Table IV-11.
[GRAPHIC] [TIFF OMITTED] TP27MR12.014

Similar to the analysis of multiple-voltage EPSs, DOE analyzed one
345W representative unit for high-power EPSs. In Chapter 5 of the
preliminary analysis TSD, DOE indicated that it was considering
applying the cost-efficiency relationship for 345W high-power single-
voltage EPSs that it developed as part of the non-Class A EPS
determination analysis to high-power EPSs. In the determination
analysis, DOE derived costs for CSL 0 and CSL 1 from test and teardown
data, whereas costs for CSL 2 and CSL 3 came from manufacturer and
component supplier interviews. DOE did not receive comments on this
aspect of its approach in the preliminary analysis TSD. Hence, DOE used
the results from the determination analysis to characterize the costs
of the less-efficient CSLs for 345W high-power EPSs in today's NOPR
(CSL 0 and CSL 1).
However, as noted previously in section IV.C.1.b, DOE also believes
that a 345W EPS could achieve higher efficiencies based on its
theoretical model of a 360W EPS that exhibits the properties of three
120W EPSs connected in parallel. These higher output devices are
typically used with amateur radio equipment, which often transmit at
power levels between 100 and 200 watts while simultaneously providing
power to other components. DOE developed its costs for the higher-
efficiency CSLs (CSL 2, CSL 3, and CSL 4) based on 120W EPS analysis.
The complete cost-efficiency relationship for the 345W EPS is shown in
Table IV-12.
[GRAPHIC] [TIFF OMITTED] TP27MR12.015

e. EPS Equation Scaling
During the preliminary analysis phase, DOE presented an approach to
derive the average efficiency and no-load efficiency requirements for
each CSL over the full range of output power for Class B EPSs.
Mathematical equations define each CSL as a pair of relationships--(1)
average active-mode efficiency to nameplate output power and (2) no-
load mode power consumption to nameplate output power. These equations
allow DOE to describe a CSL for any nameplate output power and are the
basis of its proposed standards. A complete description of the
equations can be found in chapter 5 of the TSD.
For the baseline CSL and CSL1, DOE relied on equations from EISA
2007 and ENERGY STAR 2.0, respectively, rather than developing new
equations. Both equations are defined over ranges of output power,
although the divisions between ranges are slightly different. EISA 2007
created divisions by establishing separate efficiency equations at the
1 watt and 51 watt levels--ENERGY STAR 2.0 creates a similar dividing
line at 1 watt and 49 watts. See 42 U.S.C. 6295(u)(3)(A) (denoting
nameplate output divisions at under 1 watt, 1 watt to not more than 51
watts, and over 51 watts) and ``ENERGY STAR Program Requirements for
Single Voltage External Ac-Dc and Ac-Ac Power Supplies'' (denoting
nameplate output divisions at less than or equal to 1 watt, 1 watt to
not more than 49 watts, and over 49 watts). DOE developed equations for
all other CSLs and for consistency and simplicity used the ENERGY STAR
2.0 divisions at 1 watt and 49 watts for all CSLs. These divisions were
created in conjunction with the EPS product classes discussed in
section IV.A.3.a as part of a complete analysis by the EPA. Given that
it is considering adopting those product classes for direct operation
EPSs, DOE believes that utilizing the ENERGY STAR output power
divisions for its proposed standards is the most appropriate course of
action. Consequently, the proposed standards are structured around
these divisions rather than those created by the EISA 2007 standard or
the CEC standards for EPSs.

[[Page 18520]]

DOE derived CSL 2, CSL 3, and CSL 4 by fitting equations to the
efficiency values of their respective data points for each
representative unit. DOE used an equation of the form Y =
a*ln(Pout) + b * Pout + c, for each of the
nameplate output power ranges, where Y indicates the efficiency
requirement; Pout indicates the nameplate output power; and
a, b, and c indicate the specific parameters defined in the respective
CSLs. DOE ensured that the equations met three conditions:
(1) The distance to each point was minimized.
(2) The equation did not exceed the tested efficiencies.
(3) DOE further restricted the parameter choice in order to ensure
that the CSL curves adhered to a matched pairs approach fully detailed
in chapter 5 of the TSD.
Among the CSLs for product class B, DOE only revised the
efficiencies of the max-tech data points at CSL 4. Thus, the remaining
CSL equations, other than max-tech, remain unchanged from the equations
DOE developed for the preliminary analysis. For the NOPR, DOE derived a
revised max-tech scaling equation using the new max-tech data points it
developed after obtaining additional data during manufacturer
interviews following the preliminary analysis.
As in the preliminary analysis, DOE scaled the CSL equations from
product class B to product classes with low-voltage and AC-AC EPSs,
which comprise product classes C, D, and E. The scaling for these
equations was based on ENERGY STAR 2.0, which separates AC-DC
conversion and AC-AC conversion into ``basic-voltage'' and ``low-
voltage'' categories. ENERGY STAR 2.0 sets less stringent efficiency
levels for low-voltage EPSs because they cannot typically achieve the
same efficiencies as basic-voltage EPSs due to inherent design
limitations. Similarly, ENERGY STAR 2.0 sets less stringent no-load
standards for AC-AC EPSs because they do not use the overhead circuitry
found in AC-DC EPSs to limit no-load power dissipation. The power
consumed by the additional AC-AC EPS circuitry would actually increase
their no-load power metric. DOE used this approach to develop CSLs
other than the baseline CSL 0 for product classes C, D, and E. Because
the baseline is the EISA 2007 standard that applies to all Class A
EPSs, which comprise most of product classes B, C, D, and E, CSL 0 is
the same for all product classes.
As described in the preliminary analysis and continued in today's
proposal, DOE created less stringent CSLs for product classes C, D, and
E. For CSL 1, the equations come directly from the ENERGY STAR 2.0 low-
voltage equation. The low-voltage curves for CSL 2, CSL 3, and CSL 4
were created by using their respective CSL 2, CSL 3, and CSL 4 basic-
voltage efficiency curves, and altering all equation parameters by the
difference in the coefficients between the CSL 1 basic-voltage and low-
voltage equations. This approach had the effect of shifting the CSL 2,
CSL 3, and CSL 4 low-voltage curves downward from their corresponding
basic-voltage CSL 2, CSL 3, and CSL 4 curves, by a similar amount as
the shift between the CSL basic-voltage and low-voltage curves.
In the executive summary of the preliminary analysis TSD, DOE asked
for comment regarding the various scaling relationships it developed to
analyze EPS representative units and generate CSLs for the scaled
product classes. The California IOUs commented that they agreed ``with
[scaling EPS] CSLs on the basis of nameplate output power'' but added
that the standard equation should be based on power alone, not on
voltage or cord length because this approach would allow DOE to create
a potential standard more transparently than one based on voltage or
cord length. In their view, an approach based on either or both of
these factors would unnecessarily complicate the analysis without
yielding an appreciable benefit with respect to determining an EPS's
achievable efficiency. (California IOUs, No. 43 at p. 8).
DOE is proposing to apply the output power scaling method detailed
in chapter 5 of the TSD to set the standards for the scaled product
classes.
During the preliminary analysis, DOE analyzed the impacts of
setting a discrete standard for product class X (multiple-voltage EPSs)
as there was only one existing product on the market at that time.
Since then, DOE has re-evaluated its data and now believes that the
ENERGY STAR 2.0 low-voltage standard equation for AC-DC conversion is a
preferable approach to setting standards for multiple-voltage EPSs
because lower power EPSs tend to be less efficient. Under this
approach, DOE would take into account that trend and any low-power
multiple-voltage EPSs that appear on the market would not be relegated
to a single efficiency level that was established based on the
performance of a 203W unit. As detailed in chapter 5 of the TSD, the
ENERGY STAR 2.0 low-voltage equation matches the CSL DOE is proposing
for the standard at the representative unit's output power of 203
watts, but also sets less stringent efficiency standards for lower
power EPSs. Therefore, the proposed equation accounts for future
products requiring multiple-voltage EPSs by setting a continuous
standard versus output power while also supporting DOE's analysis of
the 203W representative unit in product class X. DOE applied the same
constraints when fitting the equation to the test data as it did for
product classes B, C, D, and E. DOE seeks comment on this proposed
approach in setting a standard for multiple-voltage EPSs.
For product class H (high-power EPSs), DOE proposes to set a
discrete standard for all EPSs greater than 250 watts. DOE believes
this is appropriate for two main reasons: (1) DOE is aware of only one
application for high-power EPSs (i.e., amateur radios) and (2) this
approach is consistent with the standard for product class B, which is
a discrete level for all EPSs with nameplate output powers greater than
49 watts. In light of these facts, setting a single efficiency level as
the standard for all EPSs with output powers greater than 250 watts
(i.e., high-power EPSs) appears to be a reasonable approach to ensure a
minimal level of energy efficiency while minimizing the overall level
of burden on manufacturers. DOE seeks comment on this approach.
2. Engineering Analysis for Battery Chargers
When developing the engineering analysis for battery chargers, DOE
selected representative units for each product class. For each
representative unit, DOE tested a number of different products. After
examining the test results, DOE selected CSLs that set discrete levels
of improved battery charger performance in terms of energy consumption.
Subsequently, for each CSL, DOE used either teardown data or
information gained from manufacturer interviews to generate costs
corresponding to each CSL for each representative unit. Finally, for
each product class, DOE developed scaling relationships using
additional test results and generated UEC equations based on battery
energy.
a. Representative Units
For each product class, DOE selected a representative unit upon
which it conducted its engineering analysis and developed a cost-
efficiency curve. The representative unit is meant to be an idealized
battery charger typical of those used with high-volume applications in
its product class. Because results from the analysis of these
representative units would later be extended to additional battery
chargers, DOE selected high-volume and/or high-energy-

[[Page 18521]]

consumption applications that use batteries that are typically found
across battery chargers in the given product class. The analysis of
these battery chargers is pertinent to all the applications in the
product class under the assumption that all battery chargers with the
same battery voltage and energy provide similar utility to the user,
regardless of the actual end-use product with which they work. The
table below shows the representative units for each product class that
DOE analyzed.
[GRAPHIC] [TIFF OMITTED] TP27MR12.016

Additional details on the battery charger representative units can
be found in chapter 5 of the TSD.
b. Battery Charger Efficiency Metrics
In the preliminary analysis, DOE considered using a single metric
(i.e., UEC) to illustrate the improved performance of battery chargers.
DOE designed the calculation of UEC to represent an annualized amount
of the non-useful energy consumed by a battery charger in all modes of
operation. Non-useful energy is the total amount of energy consumed by
a battery charger that is not transferred and stored in a battery as a
result of charging (i.e., losses). In order to calculate UEC, DOE must
have the performance data, which comes directly from its battery
charger test procedure (see section IV.A.4.e.). DOE must also make
assumptions about the amount of time spent in each mode of operation.
The collective assumption about the amount of time spent in each mode
of operation is referred to as a usage profile and is addressed in
section IV.E and further detail in TSD chapter 7.
The possible use of a UEC metric generated numerous comments. NEEP
and PG&E stated that they believed UEC to be an inappropriate metric
because of the uncertainties around the usage profiles. (NEEP, No. 51
at p. 3; PG&E, et al., No. 49 at p. 1). NEEP suggested that DOE should
regulate 24-hour energy and standby mode power individually rather than
use UEC. (NEEP, No. 51 at p. 4). For product classes 1 through 9, PG&E
proposed that DOE should have separate standards for 24-hour charge and
maintenance energy and no-battery mode power, while for product class
10, DOE should regulate only maintenance mode power. (PG&E, et al., No.
49 at p. 2). PG&E also suggested another alternative in which DOE could
use UEC, but that alternative involved giving equal weight to each mode
of operation. (PG&E, et al., No. 49 at p. 2). While the ENERGY STAR
specification for battery chargers (i.e., a nonactive energy ratio)
does not consider active (or charge) mode, the California IOUs agreed
with DOE's approach to consider active mode as a component of UEC.
(California IOUs, No. 43 at p. 1). Details on UEC are included in the
next section of today's notice (IV.C.2.c).
DOE recognizes that a wide range of consumers may use the same
product in different ways, which may cause some uncertainty about usage
profiles. Notwithstanding that possibility, DOE believes that its
assumptions are accurate and appropriate gauges of product use because
calculated weighted averages of usage profiles based on a distribution
of user types were used to represent each product class. These
assumptions also rely on a variety of sources including information
from manufacturers and utilities. Details on DOE's new usage profile
assumptions and how they have changed since the preliminary analysis
can be found in section IV.E of today's notice and TSD chapter 7.
DOE also appreciates suggestions to regulate only product class 10
(AC in/AC out) on the basis of maintenance mode power. DOE's proposal
follows that suggestion. DOE assumes that UPSs, which comprise all of
product class 10 units, are always in maintenance mode and undergo zero
charges per year. By following this

[[Page 18522]]

approach, the calculated energy per year for these devices is simply an
allowance of maintenance mode power over a 365-day year. However, by
converting maintenance mode power to a UEC, DOE can ensure consistency
across all battery charger classes and avoid any potential
confusion.\30\
---------------------------------------------------------------------------

\30\ If DOE were to establish an energy conservation standard
for UPSs in terms of maintenance mode power, manufacturers of other
products could be confused and believe that their product is also
subject to a maintenance mode power standard, when in fact, it is a
combination of all of their product's performance characteristics.
---------------------------------------------------------------------------

Finally, DOE believes that by aggregating the performance
parameters of battery chargers into one metric and applying a usage
profile, it will allow manufacturers more flexibility to improve
performance in the modes of operation that will be the most beneficial
to their consumers rather than being required to improve the
performance in each mode of operation, some of which may not provide
any appreciable benefit. For example, a battery charger used with a
mobile phone is likely to spend more time per day in no-battery mode
than a battery charger used for a house phone, which is likely to spend
a significant portion of every day in maintenance mode. Consequently,
it would be more beneficial to consumers of mobile phones if
manufacturers improved no-battery mode and house phone battery charger
manufacturers improved maintenance mode. Therefore, DOE plans to
continue to use UEC as the metric for battery chargers.
c. Calculation of Unit Energy Consumption
As discussed in IV.C.2.b, UEC is based on a calculation designed to
give the total annual amount of energy lost by a battery charger from
the time spent in each mode of operation. For the preliminary analysis,
the various performance parameters were combined with the usage profile
parameters and used to calculate UEC with the following equation:
[GRAPHIC] [TIFF OMITTED] TP27MR12.017

Where:

E24 = 24 hour energy
Ebatt = Measured battery energy
Pm = Maintenance mode power
Psb = Standby mode power
Poff = Off mode power
tc = Time to completely charge a fully discharged battery
n = Number of charges per day
ta&m = Time per day spent in active and maintenance mode
tsb = Time per day spent in standby mode
toff = Time per day spent in off mode \31\
---------------------------------------------------------------------------

\31\ Those values shown in italics are parameters assumed in the
usage profile and change for each product class. Further discussion
of them and their derivation is found in IV.E. The other values
should be determined according to section 5 of appendix Y to subpart
B of part 430.

When separated and examined in segments, it becomes evident how
this equation gives a value for energy consumed in each mode of
operation per day and ultimately, energy consumption per year. These
segments are discussed individually below. DOE seeks comment on all of
these equations and its proposed approach.
Active (or Charge) Mode Energy per Day
[GRAPHIC] [TIFF OMITTED] TP27MR12.018

In the first portion of the equation, shown above, DOE combines the
assumed number of charges per day, 24-hour energy, maintenance mode
power, charge time, and measured battery energy to calculate the active
mode energy losses per day. To calculate this value, 24-hour energy
(E24) is reduced by the measured battery energy (the useful
energy inherently included in a 24-hour energy measurement) and the
product of the value of the maintenance mode power multiplied by the
quantity of 24 minus charge time. This latter value (24 minus charge
time) corresponds to the amount of time spent in maintenance mode,
which, when multiplied by maintenance mode power, yields the amount of
maintenance mode energy consumed by the tested product. Thus,
maintenance mode energy and the value of the energy transferred to the
battery during charging are both subtracted from 24-hour energy,
leaving a quantity theoretically equivalent to the amount of energy
required to fully charge a depleted battery. This number is then
multiplied by the assumed number of charges per day (n) resulting in a
value for active mode energy per day. Details on DOE's usage profile
assumptions can be found in section IV.E of today's notice and TSD
chapter 7.
Maintenance Mode Energy per Day
[GRAPHIC] [TIFF OMITTED] TP27MR12.019

In the second segment of DOE's equation, shown above, maintenance
mode power, time spent in active and maintenance mode per day, charge
time, and the assumed number of charges per day are combined to obtain
maintenance mode energy per day. Time spent in active and maintenance
mode is subtracted by the product of the charge time multiplied by the
number of charges per day. The resulting quantity is an estimate of
time spent in maintenance mode per day, which, when multiplied by the
measured value of maintenance mode power, yields the energy consumed
per day in maintenance mode.
Standby (or No-Battery) Mode Energy per Day
[GRAPHIC] [TIFF OMITTED] TP27MR12.020

In the third part of DOE's UEC equation, shown above, the measured
value of standby mode power is multiplied by the estimated time in

[[Page 18523]]

standby mode per day, which results in a value of energy consumed per
day in standby mode.
Off-Mode Energy per Day
[GRAPHIC] [TIFF OMITTED] TP27MR12.021

In the final part of DOE's UEC equation, shown above, the measured
value of off-mode power is multiplied by the estimated time in off-mode
per day, which results in a value of energy consumed per day in off-
mode.
Finally, to obtain UEC, the values found through the above
calculations are added together. The resulting sum is equivalent to an
estimate of the average amount of energy consumed by a battery charger
per day. That value is then multiplied by 365, the number of days in a
year, and the end result is a value of energy consumed per year.
Modifications to Equation for Unit Energy Consumption
On April 2, 2010, DOE published its NOPR on active mode test
procedures for battery chargers and EPSs. 75 FR 16958. In that notice,
DOE proposed shortening the active mode test procedure in scenarios
where a technician could determine that a battery charger had entered
maintenance mode. 75 FR 16970. However, during its testing of battery
chargers, DOE observed complications arising when attempting to
determine the charge time for some devices, which, in turn, could
affect the accuracy of the UEC calculation. DOE also received comments
opposed to the proposed shortened test procedure. DOE ultimately
decided that the duration of the charge test must not be shortened and
be a minimum of 24 hours. See 76 FR 31750 (final rule establishing
amended test procedure for battery chargers and EPSs). The test that
DOE adopted is longer if it is known (e.g., because of an indicator
light on the battery charger) or it can be determined from manufacturer
information that fully charging the associated battery will take longer
than 19 hours.\32\
---------------------------------------------------------------------------

\32\ The charge mode test must include at least a five-hour
period where the unit being tested is known to be in maintenance
mode. Thus, if a device takes longer than 19 hours to charge, or is
expected to take longer than 19 hours to charge, the entire duration
of the charge mode test will exceed 24 hours in total time after the
five-hour period of maintenance mode time is added. 76 FR 31750,
31766-67, and 31780.
---------------------------------------------------------------------------

This revision to the test procedure is important because it
underscores the potential issues with trying to determine exactly when
a battery charger has entered maintenance mode, which creates
difficulty in determining charge time. To address this situation, DOE
modified its initial UEC equation. The new equation, which was
presented to manufacturers during interviews, is mathematically
equivalent to the equation presented in the preliminary analysis. When
the terms in the preliminary analysis UEC equation are multiplied,
those terms containing a factor of charge time cancel each other out
and drop out of the equation. What is left can be factored and
rewritten as done below. This means that even though the new equation
looks different from the equation presented for the preliminary
analysis, the value that is obtained is exactly the same and represents
the exact same value of unit energy consumption.
[GRAPHIC] [TIFF OMITTED] TP27MR12.022

In addition to initially considering a shortened battery charger
active mode test procedure, DOE considered capping the measurement of
24-hour energy at the 24-hour mark of the test. However, following this
approach could result in inaccuracies because that measurement would
exclude the full amount of energy used to charge a battery if the
charge time is longer than 24 hours in duration. To account for this
possibility, DOE altered this initial approach in the test procedure
final rule by requiring the measurement of energy for the entire
duration of the charge and maintenance mode test, which includes a
minimum of 5 hours in maintenance mode. 76 FR 31750, 31780.
The modifications to the UEC calculation do not alter the value
obtained when the charge and maintenance mode test is completed within
24 hours. However, if the test exceeds 24 hours, the energy lost during
charging is scaled back to a 24-hour, or per day, cycle by multiplying
that energy by the ratio of 24 to the duration of the charge and
maintenance mode test. In the equation below, tcd,
represents the duration of the charge and maintenance mode test and is
a value that the test procedure requires technicians to determine. DOE
also modified the equation for the NOPR by inserting a provision to
subtract 5 hours of maintenance mode energy from the 24-hour energy
measurement. This change was made because the charge and maintenance
mode test includes a minimum of 5 hours of maintenance mode time.
Consequently, in the second portion of the equation below, DOE would
reduce the amount of time subtracted from the assumed time in active
and maintenance mode time per day.
In other words, the second portion of the equation, which is an
approximation of maintenance mode energy, is reduced by 5 hours. This
alteration is needed in those instances when the charge and maintenance
mode test exceeds 24 hours, because the duration of the test minus 5
hours is an approximation of charge time. This information,
tcd, can then be used to approximate the portion of time
that a device is assumed to spend in active and maintenance mode per
day (ta&m) is solely dedicated to maintenance mode.\33\ The
primary equation that manufacturers will use to determine their
product's unit energy consumption and whether or not their device
complies with DOE's standards is below.
---------------------------------------------------------------------------

\33\ For a test exceeding 24 hours, the duration of the test
less 5 hours is equal to the time it took the battery being tested
to become fully charged (tcd-5). That value, multiplied
by the assumed number of charges per day, gives an estimate of
charge (or active) time per day, which can then be subtracted from
DOE's other assumption for ta&m. That difference is an
approximation for maintenance mode time per day.
[GRAPHIC] [TIFF OMITTED] TP27MR12.023

[[Page 18524]]

Secondary Calculation of UEC
For some battery chargers, the equation described above is not
appropriate and an alternative calculation is necessary. Specifically,
in those cases where the charge test duration (as determined according
to section 5.2 of appendix Y to subpart B of part 430) minus 5 hours is
multiplied by the number of charges per day (n) is greater than the
time assumed in active and maintenance mode (ta&m), an
alternative equation must be used. A different equation must be used
because if the number of charges per day multiplied by the time it
takes to charge (charge test duration minus 5 hours--or the charge time
per day) is longer than the assumption for the amount of time spent in
charge mode and maintenance mode per day, that difference creates an
inconsistency between the measurements for the test product and DOE's
assumptions. This problem can be corrected by using an alternative
equation, which is shown below.
[GRAPHIC] [TIFF OMITTED] TP27MR12.024

This alternative equation resolves this inconsistency by prorating
the energy used for charging the battery.
d. Battery Charger Candidate Standard Levels (CSLs)
After selecting its representative units for battery chargers, DOE
examined the impacts on the cost of improving the efficiency of each of
the representative units to evaluate the impact and assess the
viability of potential energy efficiency standards. As described in the
technology assessment and screening analysis, there are numerous design
options available for improving efficiency and each incremental
technology improvement increases the battery charger efficiency along a
continuum. The engineering analysis develops cost estimates for several
CSLs along that continuum.
CSLs are often based on (1) efficiencies available in the market;
(2) voluntary specifications or mandatory standards that cause
manufacturers to develop products at particular efficiency levels; and
(3) the maximum technologically feasible level.\34\
---------------------------------------------------------------------------

\34\ The ``max-tech'' level represents the most efficient design
that is commercialized or has been demonstrated in a prototype with
materials or technologies available today. ``Max-tech'' is not
constrained by economic justification, and typically is the most
expensive design option considered in the engineering analysis.
---------------------------------------------------------------------------

Currently, there are no energy conservation standards for battery
chargers. DOE does not believe the ENERGY STAR efficiency level to be
widely applicable, primarily because these levels are limited to
chargers used for motor-operated applications and contain no provisions
to cover active mode energy consumption. Because of this situation, DOE
based the CSLs for its battery charger engineering analysis on the
efficiencies obtainable through the design options presented previously
(see IV.A.4.f). These options are readily seen in various commercially
available units. DOE selected commercially available battery chargers
at the representative-unit battery voltage and energy levels from the
high-volume applications identified in the market survey. DOE then
tested these units in accordance with the DOE battery charger test
procedure. For each representative unit, DOE then selected CSLs to
correspond to the efficiency of battery charger models that were
comparable to each other in most respects, but differed significantly
in UEC (i.e., efficiency).
In general, for each representative unit, DOE chose the baseline
(CSL 0) unit to be the one with the highest calculated unit energy
consumption, and the best-in-market (CSL 2) to be the one with the
lowest. Where possible, the energy consumption of an intermediate model
was selected as the basis for CSL 1 to provide additional resolution to
the analysis.
Unlike the previous three CSLs, CSL 3 was not based on an
evaluation of the efficiency of battery charger units in the market,
since battery chargers with maximum technologically feasible efficiency
levels are not commercially available due to their high cost. Where
possible, DOE analyzed manufacturer estimates of max-tech costs and
efficiencies. In some cases, manufacturers were unable to offer any
insight into efficiencies beyond the best currently available in the
market. Therefore, DOE projected the efficiency of a max-tech unit by
estimating through extrapolation from its analysis of the analyzed CSL
2 unit the impacts of adding any remaining energy efficiency design
options.
DOE received a number of comments from interested parties regarding
the CSLs developed for the preliminary analysis. The California IOUs
suggested that DOE consider CSLs between the best-in-market and max-
tech levels. (California IOUs, No. 43 at pp. 3, 5) NEEP made a similar
suggestion, stating that DOE should have an additional CSL between the
intermediate and max-tech CSLs. (NEEP, No. 51 at p. 4) The California
IOUs added that DOE should consider the efficiency levels proposed at a
standards-related workshop held in California on October 11, 2010.\35\
(California IOUs, No. 43 at p. 2)
---------------------------------------------------------------------------

\35\ PG&E, Analysis of Standards Options for Battery Charger
Systems, October 1, 2010 (https://www.energy.ca.gov/appliances/battery_chargers/documents/2010-10-11_workshop/2010-10-11_Battery_Charger_Title_20_CASE_Report_v2-2-2.pdf).
---------------------------------------------------------------------------

In response to these suggestions on the preliminary analysis, DOE
considered the levels proposed at the California workshop. At that
workshop, California proposed using separate metrics for 24-hour
energy, maintenance mode power, and standby mode power. Subsequently,
California modified its approach to battery charger standards and
combined the requirements for maintenance mode power and standby mode
power into one metric. Using its usage profiles to translate these
standards into a value of UEC, DOE compared its CSLs with the levels
adopted by California. DOE found that, in most cases, when California's
proposed standard was calculated into a value of UEC (using DOE's usage
profile assumptions), it generally corresponded closely with one of
DOE's CSLs for each product class. Therefore, in most instances, little
valuable resolution could be added to DOE's cost-efficiency curves.
Although this was the case for most product classes, it was not the
case for all of them. For product class 2, DOE adopted the suggestion
from the California IOUs and added a level between CSL 1 and CSL 2
because the magnitude of the gap between UEC values was large enough to
permit an additional CSL that could provide more cost effective
savings. Please see TSD chapter 5 for product class 2 test results that
illustrate this gap.
Table IV-14 below shows which CSL aligns most closely with the
California proposal for each product class.

[[Page 18525]]

Table IV-14--CSLs Equivalent to California Proposed Standards
------------------------------------------------------------------------
Product class CSL equivalent to CEC standard
------------------------------------------------------------------------
1 (Low-Energy, Inductive).......... CSL 0
2 (Low-Energy, Low-Voltage)........ CSL 2
3 (Low-Energy, Medium-Voltage)..... CSL 2
4 (Low-Energy, High-Voltage)....... CSL 2
5 (Medium-Energy, Low-Voltage)..... CSL 3
6 (Medium-Energy, High-Voltage).... CSL 3
7 (High-Energy).................... CSL 1
8 (DC Input <9 V).................. CSL 0
10 (AC Output)..................... CSL 3
------------------------------------------------------------------------

In addition, DOE received comments on specific CSLs for specific
product classes. For product class 1 (low-energy, inductive) in
particular, the California IOUs encouraged DOE to consider a CSL higher
than CSL 3 because, in their view, CSL 3 was shown to be cost
effective, leaving a possibility of additional cost-effective savings
at higher efficiencies. (California IOUs, No. 43 at p. 5) For product
class 2 (low-energy, low-voltage), the California IOUs asserted that
DOE's baseline CSL should be lower because the test results presented
in the preliminary analysis TSD showed products with UEC levels higher
than the baseline value selected by DOE. (California IOUs, No. 43 at p.
6) PTI expressed concern over the max-tech level for product class 4,
stating that it would be achievable only by using a lithium-based (i.e.
Lithium-ion or ``Li-ion'') battery technology, which is currently used
in laptop computer applications. (PTI, No. 47 at p. 8) Finally, when
developing a max-tech level for product classes 2, 3 (low-energy,
medium voltage), 4 (low-energy, high-voltage), 8 (low-energy, low DC
input), and 9 (low-energy, high DC input), the California IOUs
suggested that DOE speak to integrated circuit component suppliers.
(California IOUs, No. 43 at p. 5)
Based on all of these comments, DOE conducted further analysis and
review. For product class 1, DOE conducted additional interviews with
manufacturers of these products and has revised its engineering
analysis accordingly. DOE believes that the new MSPs, which are shown
in section IV.C.2.i, more accurately depict the relationship between
cost and efficiency for electric toothbrushes, which is the predominant
application in that class.
For product class 2, DOE understands the concerns about creating an
accurate baseline UEC for these devices. However, the baseline level
that DOE has developed for today's NOPR is representative of the worst
performing products tested by DOE. All of the units that showed higher
values of energy consumption were products that Ecos, an independent
consulting firm and test lab that assisted the CEC when developing a
battery charger test procedure, tested and provided to DOE. DOE
believes that this factor may be partially explained by timing. Since
many of the units tested by Ecos that performed poorly were older test
units, it is likely that these devices did not incorporate EPSs that
meet the EISA 2007 regulations that went into effect in 2008.
Therefore, DOE believes that its current CSL 0 for product class 2 is
appropriate and provides a reasonable picture of the current battery
charger market.
In response to PTI's comment, DOE clarifies that its preliminary
analysis did not include an analysis for CSL 3 in product class 4. DOE
obtained results only up to CSL 2 for product class 4. DOE notes that
one of the units tested and torn down for that CSL was a power tool.
For the NOPR, DOE has developed an analysis for CSL 3 in product class
4, which corresponds to that class's maximum technology level.
Finally, in developing the max-tech levels in the NOPR engineering
analysis, DOE relied on input from manufacturers of battery chargers
and original equipment manufacturers (OEMs) of products that use
battery chargers. Manufacturers were able to provide DOE with
sufficient information to enable the agency to ascertain what level of
technology is feasible and is capable of surpassing the efficiency
levels of incumbent technology currently available at the high end of
the market today. Based on this information, DOE tentatively concluded
that based on these discussions with manufacturers and OEMs there was
sufficient information to define max-tech levels without interviewing
integrated circuit suppliers.
e. Test and Teardowns
As mentioned above, the CSLs used in the battery charger
engineering analysis were based on the efficiencies of battery chargers
available in the market. Following testing, the units corresponding to
each commercially available CSL were disassembled to (1) evaluate the
presence of energy efficiency design options and (2) estimate the
materials cost. The disassemblies included an examination of the
general design of the battery charger and helped confirm the presence
of any of the technology options discussed in section IV.A.4.f.
After the battery charger units corresponding to the CSLs were
evaluated, they were torn down by iSuppli, a DOE contractor and
industry expert. An in-depth teardown and cost analysis was performed
for each of these units. For some products, like camcorders and
notebook computers, the battery charger constitutes a small portion of
the circuitry. In evaluating the related costs, iSuppli identified the
subset of components in each product enclosure responsible for battery
charging. The results of these teardowns were then used as the primary
source for the MSPs.
Interested parties offered some feedback regarding DOE's test and
teardowns after the preliminary analysis. Stanley Black and Decker
suggested that DOE should validate iSuppli's results by having them
teardown products whose true costs are known--i.e. those instances
where a manufacturer may have supplied data under a non-disclosure
agreement. (B&D, Pub. Mtg. Tr., No. 37 at p. 234) AHAM recommended that
DOE look at low cost products in product class 4 (e.g. notebook
computers and large power tools). Wahl Clipper recommended that DOE
estimate costs at lower volume levels than those used in the
preliminary analysis--it offered 20,000 units per year as one
alternative--because the effects on cost might be greater when
components are purchased in lower volumes. (Wahl Clipper, Pub. Mtg.
Tr., No. 37 at p. 206) The California IOUs made a number of
recommendations to DOE. First, they suggested that DOE use PG&E's
battery charger test data and that DOE gather

[[Page 18526]]

more teardown data. (California IOUs, No. 43 at p. 2) Second, they
supported DOE's decision to leave out packaging costs from the teardown
results. In particular, for product class 2 (e.g. mobile and cordless
phones), they recommended that DOE conduct teardown analyses of units
with slightly higher and lower battery energies. Third, the California
IOUs urged DOE to test and tear down a wider array of battery chargers
from product classes 5 (e.g. marine chargers) and 7 (e.g. golf cars).
They suggested this approach because they claimed that their own test
data showed a wider range of efficiencies among battery chargers
belonging to these classes. (California IOUs, No. 43 at pp. 4, 6)
For the NOPR, DOE has adopted most of the recommendations raised by
commenters and has expanded its test program. DOE has performed
additional tests using a variety of products from a number of product
classes, including product classes 2, 4, 5, and 7. Further, DOE has
performed additional teardown analyses on products from all ten
proposed product classes. In total, over 100 new test results have been
incorporated into the NOPR analysis. Packaging costs have continued to
be excluded because they do not represent costs associated with
improving the efficiency of a product. Regarding Wahl Clipper's
suggestion to modify the volume assumption to 20,000 in order to
determine how costs may change for a lower volume manufacturer, DOE
believes that the large number of applications in each product class
make it too difficult to select an appropriate low volume level.
Additionally, DOE believes that the change in volume that results in
higher costs for a manufacturer is likely to have little effect on
consumers because the incremental costs from CSL to CSL are likely to
be the same regardless of volume.
Finally, DOE verified the accuracy of the iSuppli results by
confirming those results with individual manufacturers during
interviews. As will be discussed in the following section, DOE
performed additional manufacturer interviews for the NOPR and during
these interviews, the initial iSuppli results were vetted with
manufacturers. DOE believes that it has sufficiently verified the
accuracy of its teardown results and believes that all of the
engineering costs gleaned from iSuppli are appropriate.
f. Manufacturer Interviews
The preliminary analysis had, in part, relied on information
obtained through interviews with several battery charger manufacturers.
These manufacturers consisted of companies that manufacture battery
chargers and OEMs of battery-operated products who package battery
chargers with their end-use products. DOE followed this approach to
obtain data on the possible efficiencies and resultant costs of
consumer battery chargers.
DOE received two comments regarding manufacturer interviews. First,
PTI recommended that DOE speak with power tool manufacturers
individually to obtain detailed information that would otherwise be
unavailable through PTI as a trade association. (PTI, No. 47 at p. 12)
Second, AHAM requested that the manufacturer interviews also involve
discussions about testing costs and non-recurring capital expenditures.
(AHAM, No. 44 at p. 13)
In preparing the NOPR, additional interviews were conducted,
including those with manufacturers who were previously interviewed and
new ones who were not. These interviews served two purposes. First, it
gave manufacturers the opportunity to provide feedback on the
preliminary analysis engineering analysis results. Aggregated
information from these results is provided in TSD chapter 5. Second,
these interviews also provided manufacturer inputs and comments in
preparing the manufacturer impact analysis, which is discussed in
detail in section IV.I.
DOE attempted to obtain teardown results for all of its product
classes but encountered difficulties in obtaining useful and accurate
teardown results for two of its products classes--namely, product class
1 (e.g. electric toothbrushes) and product class 10 (e.g.
uninterruptible power supplies). For these two classes, DOE relied
heavily on information obtained from manufacturer interviews. DOE found
that when it attempted to teardown product class 1 devices, most
contained potting (i.e. material used to waterproof internal
electronics). Removal of the potting also removed the identifying
markings that iSuppli needed to estimate a cost for the components. As
a result, manufacturer interview data helped furnish the necessary
information to assist DOE in estimating these costs.
In the case of UPSs, DOE found that it was difficult to accurately
compare product costs because of the varying functionality of these
devices. For example, DOE examined multiple UPSs, some of which
provided additional utility to end users, such as AVR. As discussed
earlier, AVR involves circuitry that monitors input voltage from the
wall and ensures that all products plugged into the UPS see a steady
flow of voltage despite any fluctuations. This added circuitry was
impossible to distinguish from the standard UPS battery charging
circuitry, which made it difficult to compare the costs of products
that did not provide the same level of utility to the end-user.
Furthermore, because the cost versus efficiency data provided by
manufacturers showed economically justifiable levels through the max-
tech level developed in the preliminary analysis, DOE believed that
these data were sufficient to set out the proposed levels without
resorting to a more time-consuming tear-down analysis. However, after a
second round of interviews with UPS manufacturers for the NOPR and
conducting additional analysis (including testing), DOE found that it
needed to make a modification to its approach for dealing with battery
chargers within UPSs.
When DOE tested UPSs according to the battery charger test
procedure, it was unable to obtain maintenance mode power measurements
as low (i.e. as good in terms of energy consumption) as those that
manufacturers indicated were possible. DOE believes that the
discrepancies between its test measurements and the data provided by
manufacturers stems from the manner in which the test procedure
measures energy consumption. TP measures consumption of unit as a
whole--the entire UPS. BC only is using from mfr data. In particular,
the DOE test procedure measures the energy consumption of the unit--in
this case, the UPS--as a whole. Measuring the energy consumption of the
battery charger alone in this instance would involve destructive
testing. As a result, the data that DOE derived following its current
test procedure for battery chargers includes the energy consumption
from other UPS components other than the battery charger itself. For
this reason, in this instance, DOE believes that the manufacturer-
supplied data is more likely to accurately reflect the actual energy
consumption of the battery charger alone. Because manufacturers would
be unlikely to over-estimate the potential energy consumption of their
products, DOE believes that their estimates of power consumption from
the UPS's battery charger are still appropriate estimates. However, DOE
still needs to account for the discrepancies between the manufacturer
data and the measurements from its test procedure.
For the NOPR, DOE conducted additional testing of UPSs in which it
attempted to describe the differences between its test procedure
measurement

[[Page 18527]]

and the values provided by manufacturers. During this round of testing,
DOE performed the DOE test procedure, but added another measurement. As
mentioned previously, while it is extremely difficult to isolate the
power consumption due to battery charging from any other UPS
functionality, the input power to the battery itself can be measured.
With this measurement, DOE obtained two useful pieces of information.
First, it allowed DOE to isolate a portion of battery charging power
consumption from all other functions within a UPS and develop a trend
line that describes how maintenance mode power will vary as battery
energy changes. Second, this measurement, combined with the data from
the tested units that corresponded to DOE's best-in-market test results
(in terms of maintenance mode power as measured in the DOE test
procedure), allowed DOE to develop supplemental values that it could
use to increment the data provided by manufacturer such that it
correlated to DOE test results. These values essentially operate as a
means to account for the additional energy consumption used by a device
when providing additional functionality. DOE developed two values,
shown in Table IV-15 below, one for basic UPSs and one for UPSs that
incorporate AVR. See TSD Chapter 5 for additional details. DOE is
proposing to use these two values to develop an appropriate standard
for basic UPSs and UPSs with AVR, after DOE proposes selecting an
appropriate TSL for product 10.

Table IV-15--Supplemental Values for Product Classes 10a and 10b
------------------------------------------------------------------------
Maintenance mode UEC supplemental
supplemental value for
Product class value for proposed
proposed standard (kWh/
standard (W) yr)
------------------------------------------------------------------------
10a (UPSs without AVR).............. 0.4 3.45
10b (UPSs with AVR)................. 0.8 7.08
------------------------------------------------------------------------

g. Design Options
Design options are technology options that remain viable for use in
the engineering analysis after applying the screening analysis as
discussed above in section IV.B.
In response to the preliminary analysis, DOE received comments
regarding design options and their application to the overall analysis.
The California IOUs indicated that, with respect to the larger battery
charger product classes where lead-acid batteries are most common, DOE
should apply technologies more common in smaller units, such as switch-
mode power supplies, to these devices in the analysis. (California
IOUs, No. 43 at p. 5) NEEP made similar suggestions and stated that DOE
should examine whether technologies can be applied across multiple
product classes. (NEEP, No. 51 at p. 2) However, CEA urged DOE to
account for the differences in battery chemistries and determine the
appropriateness of given technologies for certain applications. CEA
added that DOE must consider how battery technologies could be impacted
by new efficiency requirements. (CEA, No. 48 at p. 2) Motorola
expressed similar concerns and noted that although certain battery
chemistries are less efficient, those chemistries may have other
inherently important features like wider temperature range operations
and improved cycle-life. Motorola insisted that these things should be
considered when DOE conducts its technical and economic analyses.
(Motorola, No. 50 at p. 2) Stanley Black and Decker added that DOE
should not assume that additional utility is desirable as it will
likely cause an increase in cost to the consumer. (SBD, Pub. Mtg. Tr.,
No. 37 at pp. 147-148) Finally, Lester commented that transformer-based
chargers are more reliable, durable and provide batteries with a much
longer life expectancy. Lester added that these chargers are often
preferable to more efficient switch-mode chargers in industrial
applications. (Lester, No. 52 at p. 2) Lester did not include any
additional data to corroborate their statements regarding increased
durability for battery chargers that are transformer-based and the life
expectancy for batteries that use such chargers.
DOE clarifies that all technology options that are not eliminated
in the screening analysis (section IV.B) become design options that are
considered in the engineering analysis. As most CSLs are based on
actual teardowns of units manufactured and sold in today's battery
charger market, DOE did not control which design options were used at
each CSL. No technology options were preemptively eliminated from use
with a particular product class. Similarly, if products are being
manufactured and sold, DOE believes that fact indicates the absence of
any significant loss in utility, such as an extremely limited operating
temperature range or shortened cycle-life. Therefore, DOE believes that
all CSLs can be met with technologies that are feasible and that fit
the intended application.
For the max-tech designs, which are not commercially available, DOE
developed these levels in part with a focus on maintaining product
utility as projected energy efficiency improved. Although some
features, such as decreased charge time, were considered as added
utilities, DOE did not assign any monetary value to such features.
Additionally, DOE did not assume that such features were undesirable,
particularly if the incremental improvement in performance causes a
significant savings in energy costs. Finally, DOE appreciates the need
to consider durability, reliability, and other performance and utility
related features that affect consumer behavior. On these issues, DOE
seeks information, including substantive data, to help it assess these
factors in consumer products.
h. Cost Model
Today's NOPR continues to apply the same approach used in the
preliminary analysis to generate the manufacturer selling prices (MSPs)
for the engineering analysis. For those product classes other than
product classes 1 and 10, DOE's MSPs rely on the teardown results
obtained from iSuppli. The bills of materials provided by iSuppli were
multiplied by a markup that depended on product class. For those
product classes for which DOE could not estimate MSPs using the iSuppli
teardowns--product classes 1 and 10--DOE relied on aggregate
manufacturer interview data, which projected that economic savings
would accrue through the max-tech level in the preliminary analysis.

[[Page 18528]]

Additional details regarding the cost model and the markups assumed
for each product class are presented in TSD chapter 5.
i. Battery Charger Engineering Results
The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of MSP (in dollars) versus
unit energy consumption (in kWh/yr). These data form the basis for the
NOPR analyses. This section illustrates the results that DOE obtained
for all 10 product classes in its NOPR engineering analysis.
[GRAPHIC] [TIFF OMITTED] TP27MR12.025

In response to the engineering results that DOE provided in the
preliminary analysis for product class 1, DOE received one comment from
Philips. Philips publicly submitted estimates of ``what the consumer
pays,'' for CSLs 0, 1, 2, and 3 for product class 1. Philips suggested
that those values would be $8, $10, $15, and $24, respectively.
(Philips, No. 43 at p. 2) In its preliminary analysis, DOE proposed
MSPs for product class 1 to be: $2.05, $2.22, $2.45, $2.60, for CSLs 0
through 3 respectively. Although DOE appreciates the feedback provided
by Philips, it is vastly different from the information gathered on
manufacturer interviews. DOE believes this discrepancy is partially due
to a misinterpretation of the term MSP. The values that Philips
provided, as it has described them, would correspond to what DOE
considers a retail price and not an MSP. DOE has revised its MSPs for
product class 1 according to the data obtained from manufacturers on
interviews for the NOPR.
[GRAPHIC] [TIFF OMITTED] TP27MR12.026

DOE did not receive any specific comments on its product class 2
engineering results in the preliminary analysis, but its revised
results are presented in Table IV-17.

[[Page 18529]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.027

DOE did not receive any specific comments on its product class 3
engineering results in the preliminary analysis, but its revised
results are presented in Table IV-18.
[GRAPHIC] [TIFF OMITTED] TP27MR12.028

DOE did not receive any specific comments on its product class 4
engineering results in the preliminary analysis, but its revised
results are presented in Table IV-19.

[[Page 18530]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.029

DOE did not receive any specific comments on its product class 5
engineering results in the preliminary analysis, but its revised
results are presented in Table IV-20.
[GRAPHIC] [TIFF OMITTED] TP27MR12.030

For product class 6, DOE performed additional product testing for
the NOPR, but did not obtain a complete data set upon which to base its
engineering analysis. This situation was due in large part to DOE's
inability to locate products with sufficiently similar battery energies
and the fact that the products tested did not span a significant range
of performance. DOE's test data for this product class are available in
chapter 5 of the accompanying TSD. In order to develop an engineering
analysis for this product class, DOE relied on, among other things, the
results gleaned from product class 5, interviews with manufacturers,
and its limited test data from product class 6.
The difference between product class 5 and product class 6 is the
range of voltages that are covered. Product class 5 covers low-voltage
(less than 20 V) and medium energy (100 Wh to 3,000 Wh) products, while
product class 6 covers high-voltage (greater than or equal to 20 V) and
medium energy (100 Wh to 3,000 Wh) products. The representative unit
examined for product class 5 is a 12 V, 800 Wh battery charger, while
the representative unit analyzed for product class 6 is a 24 V, 400 Wh
battery charger. Despite the change in voltage, DOE believes that
similar technology options and battery charging strategies are
available in both classes. Both chargers are used with relatively large
sealed-lead acid batteries in products like wheelchairs, electric
scooters, and electric lawn mowers. However, since the battery chargers
in product class 6 work with higher voltages, current can be reduced
for the same output power, which creates the potential for making these
devices

[[Page 18531]]

slightly more efficient because I\2\R losses \36\ will be reduced.
---------------------------------------------------------------------------

\36\ In electrical circuits, I\2\R losses manifests themselves
as heat and are the result of high levels of current flow through a
device.
---------------------------------------------------------------------------

For the NOPR, DOE examined its product class 5 results and analyzed
how the performance may be impacted if similar technologies are used.
The resulting performance parameters are shown in Table IV-21. To
account for the projected variation in energy consumption, DOE used
information on charge time and maintenance mode power to adjust the
corresponding values for 24-hour energy. Additionally, DOE discussed
with manufacturers about how costs may differ in manufacturing a 12 V
(product class 5) charger versus a 24 V (product class 6) charger.
Manufacturers indicated that, holding constant all other factors, there
would likely be minimal change, if any, in the cost. Therefore, because
DOE scaled performance assuming that the designs for corresponding CSLs
in each product class used the same design options and only differed in
voltage, DOE did not scale costs from product class 5. Rather than
scaling the product class 5 costs, DOE used the same MSP's for product
class 6 that were developed from iSuppli tear down data for product
class 5. DOE believes these costs are an accurate representation of the
MSPs and seeks comment on its methodology in scaling the results of
product class 5 to product class 6, including the decision to hold MSPs
constant.
[GRAPHIC] [TIFF OMITTED] TP27MR12.031

DOE did not receive any specific comments on its product class 7
results in the preliminary analysis, but its revised results are
presented in Table IV-22.
[GRAPHIC] [TIFF OMITTED] TP27MR12.032

Product class 8 (e.g. MP3 players and smartphones) consists of
devices that charge with a DC input of less than 9 V, which is mostly
those products that charge via USB connections. When DOE analyzed this
product class it tested and tore down 3 devices, one for CSL 0, 1, and
2; and all of which were MP3 players.

[[Page 18532]]

DOE's analysis projects a significant drop in MSP from CSL 0 to CSL
1. See Table IV-23. Because of this drop, DOE tentatively believes that
at least one of its trial standard levels for this product class meets
DOE's criteria for being economically justified and technologically
feasible. However, the baseline unit MSP for this analysis may be
inflated due to the cost of the particular integrated circuit used in
that unit. The integrated circuit used in this device performs
additional functions besides battery charging and constitutes a
significant portion of the bill of materials generated by iSuppli. DOE
was unable to determine what portion of the integrated circuit was
dedicated to battery charging and therefore, kept the entire cost of
the component in its bill of materials. Because of this factor and the
minimal differences in energy consumption between each CSL for product
class 8, DOE is considering an alternative approach in addition to its
proposed standard. Both the proposed standard and the alternative
approach are outlined in 0 and, as with all other product class data,
DOE seeks comment on its MSP projections for product class data.
[GRAPHIC] [TIFF OMITTED] TP27MR12.033

For the preliminary analysis, DOE scaled the results of other
product classes to obtain results for product class 9. The results of
DOE's revised analysis, based on test and teardown results, are shown
in Table IV-24.
[GRAPHIC] [TIFF OMITTED] TP27MR12.034

As discussed previously, DOE believes that the engineering analysis
results it developed in the preliminary analysis using manufacturer-
supplied data provide an appropriate estimate of the cost-versus-UEC
(or maintenance mode power) relationship for the battery charger
embedded within a UPS. Also as discussed previously, DOE believes that
this relationship is appropriate for UPSs, regardless of whether they
have AVR. Consequently, DOE has used one set of engineering data,
presented in Table IV-25 above, in all of the subsequent analyses (e.g.
the LCC and NIA). DOE contends that this is an accurate approach
because the technologies available in designing a battery charger used
within a UPS are the same whether or not that UPS has AVR. The
corresponding costs for these technologies would also result in the
same MSP for the battery charger as a component of the UPS.
Finally, in the preliminary analysis, DOE developed cost-efficiency
curves based on both manufacturer interviews

[[Page 18533]]

and when possible, test and teardown results. As a result of some
differences in these curves, NEEP suggested that DOE should reconcile
differences in the results obtained from manufacturer data and from
teardowns. (NEEP, No. 51 at p. 4)
The data obtained from teardowns that was available at the time of
manufacturer interviews was included in the interview guide and
discussed at those meetings. DOE continued to conduct teardowns after
those meetings and has added data that will be available for public
comment. Through that process, DOE seeks to continue to refine its
analysis and to mitigate any differences between the teardown and
manufacturer data.
j. Scaling of Battery Charger Candidate Standard Levels
To establish its proposed energy conservation standards for
products with all battery energies and battery voltages within a
product class, DOE developed a UEC scaling approach. After developing
the engineering analysis results for the representative units, DOE had
to determine a methodology for extending the UEC at each CSL to all
other ratings not directly analyzed for a given product class. DOE had
initially raised the possibility of using UEC as a function of battery
energy. DOE also indicated that it might base this UEC function on the
test data that had been obtained up through the preliminary
analysis.\37\
---------------------------------------------------------------------------

\37\ At the preliminary analysis public meeting, DOE handed out
a supplemental slide deck, which outlined preliminary ideas to
scaling UEC based on test data and with respect to battery energy.
See these slides available at: https://www1.eere.energy.gov/buildings/appliance_standards/residential/battery_external_preliminaryanalysis_public_mtg.html.
---------------------------------------------------------------------------

Numerous interested parties submitted comments regarding the
potential scaling methodology. AHAM generally supported DOE's proposed
approach in which the UEC was scaled with regards to battery energy but
suggested that DOE hold UEC constant below a certain value of battery
energy because the fixed losses in these low-energy, lower power units
begin to dominate and more stringent standards risk becoming overly
restrictive on the ability of manufacturers to design useful products
for consumers. AHAM also suggested that DOE consider UEC as a function
of battery voltage. (AHAM, No. 44 at p. 9) PTI made similar suggestions
and commented that it may be appropriate for UEC to remain constant for
battery energies below the representative unit value. (PTI, No. 47 at
p. 9)
The California IOUs suggested applying a single scaling
relationship for active mode energy for product classes 2 through 7.
For battery chargers with very high battery energies, such as those
used in golf cars, the California IOUs believed that a flat or constant
standard might be appropriate. (California IOUs, No. 43 at pp. 3-4) The
California IOUs also argued that a potential scaling approach based on
the test results of multi-capacity battery chargers would be inaccurate
and argued that it should be dropped. They indicated that a scaling
relationship based on such products would be demonstrative of products
that are capable of using multiple batteries rather than products
representative of the bulk of battery chargers, which are designed for
a single specific battery. (California IOUs, No. 43 at p. 6) Finally,
these commenters asserted that maintenance mode power and no-battery
mode power should be regulated independently of battery energy, as many
of the same design options are applicable to small and large energy
battery chargers. Because of these similarities, the California IOUs
asserted that all battery chargers, regardless of battery size, should
be capable of the same level of performance in those modes of operation
and DOE should assume this value is constant irrespective of battery
energy. (California IOUs, No. 43, at p. 7)
DOE considered the comments it received and refined its scaling
approach for the NOPR. In particular, DOE evaluated scaling approaches
based on the battery voltage and the battery energy and found that the
latter is a more appropriate way to model its scaling methodology. When
DOE examined its test results, it noted a much weaker correlation
between battery voltage and UEC than between battery energy and UEC.
See TSD, appendix 5C. DOE also noticed from its test results that the
individual performance parameters, such as maintenance mode power, no-
battery mode power, and 24-hour energy, could be formulated as
functions of battery energy. See TSD, Chapter 5. For this reason, DOE
did not follow the recommendation of the California IOUs to leave some
performance parameters constant.
Additionally, DOE is proposing to scale UEC as a function of
battery energy for golf cars. The TSD shows that, as battery energy
increases, so too does the UEC because more energy is needed to charge
the larger battery. See TSD, chapter 5 (discussing test results related
to product classes 5, 6, and 7 that demonstrate the linear relationship
between increasing battery energy and UEC). DOE also found that this
trend was true for product class 10 devices (UPSs), which incorporate
lead-acid batteries. The details on the scaling methodology for these
products are also available in TSD chapter 5.
In contrast, for product classes 1 and 8 DOE is proposing that all
devices within those product classes be required to meet one nominal
standard. For these product classes, battery energy appeared to have
little impact on the UEC's that were calculated. Accordingly, to
account for these differences, DOE is tentatively proposing two
separate approaches for scaling UEC based on these test results--i.e.
one that scales with battery energy and another that remains at a
single, nominal level.
DOE's scaling approach for the NOPR relies heavily on the test data
that it has gathered throughout the rulemaking process. DOE examined
each performance parameter individually and, when possible, looked at
groups of product class test results. For example, product classes 2,
3, and 4 are similar products that use similar technologies and span
the same battery energy ratings. In these cases, DOE examined all of
these test results together. DOE also developed regression equations
for each of the performance parameters needed to calculate UEC and
ultimately, aggregated those equations with assumptions about usage
profiles for each product class. That is, DOE examined test results for
maintenance mode power, no-battery mode power, and 24-hour energy
individually and relative to battery energy. From these data, DOE
derived equations for each parameter as it relates to battery energy.
Because each equation was a function of the same parameter, battery
energy, each one could be combined with assumptions about product usage
to develop a single UEC equation that was also a function of battery
energy.
For product classes other than product classes 1, 8, and 10, DOE
developed equations that use different slopes for different CSLs. For
higher CSL equations in a given product class, the slope of the UEC
line becomes smaller, which means that the line describing UEC versus
battery energy becomes flatter. DOE found that when it filtered its
test results and examined products with similar technologies (e.g.
lithium-ion chemistry batteries) spanning a range of battery energy
levels, the slope of the line generated for 24-hour energy correlated
to the inverse of 24-hour efficiency, which is the ratio of measured
battery energy to 24-hour energy, expressed as a percentage. Thus, as
products became more efficient, the

[[Page 18534]]

slope of the equation used to describe UEC versus battery energy became
flatter.
Finally, DOE adopted the suggestions offered by AHAM and PTI
regarding the treatment of small battery energies. When DOE was
developing its CSL equations for UEC, it found during testing that the
correlation between points at low battery energies was much worse than
for the rest of the range of battery energy, which indicated that the
initial equations DOE had initially planned to use did not match the
test results. To address this situation, DOE generated a boundary
condition for its CSL equations, which essentially flattens the UEC
below a certain threshold of battery energy to recognize that below
certain values, fixed power components of UEC, such as maintenance mode
power, dominate UEC. Making this change helped DOE to create a better-
fitting equation to account for these types of conditions to ensure
that any standards that are set better reflect the particular
characteristics of a given product.
For additional details and the exact CSL equations developed for
each product class, please see TSD chapter 5.

D. Markups To Determine Product Price

The markups analysis develops appropriate markups in the
distribution chain to convert the MSP estimates derived in the
engineering analysis to consumer prices. At each step in the
distribution chain, companies mark up the price of the product to cover
business costs and profit margin. Given the variety of products that
use battery chargers and EPSs, distribution varies depending on the
product class and application. As such, DOE assumed that the dominant
path to market establishes the retail price and, thus, the composite
markup for a given application. The markups applied to end-use products
that use battery chargers and EPSs are approximations of the battery
charger and EPS markups.
In the case of battery chargers and EPSs, the dominant path to
market typically involves an end-use product manufacturer (i.e. OEM)
and retailer. DOE developed OEM and retailer markups by examining
annual financial filings, such as Securities and Exchange Commission
(SEC) 10-K reports, from more than 80 publicly traded OEMs, retailers,
and distributors engaged in the manufacturing and/or sales of consumer
applications that use battery chargers or EPSs.
Retail prices for EPSs in product class H (e.g. EPSs for amateur
radios) were readily available, as these devices are not typically
bundled with a consumer application. Thus, using these retail prices
and the component costs determined in its teardown analysis, DOE was
able to derive markups for EPSs in product class H.
DOE typically calculates two markups for each product in the
markups analysis. These are: a markup applied to the baseline component
of a product's cost (referred to as a baseline markup) and a markup
applied to the incremental cost increase that results from standards
(referred to as an incremental markup). The incremental markup relates
the change in the MSP of higher-efficiency models (the incremental cost
increase) to the change in the retailer's selling price.
In the preliminary analysis public meeting, PTI commented that DOE
neglected to take into account situations in which an EPS is purchased
by a battery charger manufacturer to be integrated into a battery
charger. In these cases, the completed battery charger (with integrated
EPS) is sold to an OEM to be packaged with an end-use application.
Philips explained that three markups would be applied to the MSP of
these EPSs: One by the battery charger manufacturer, one by the OEM,
and one by the retailer. (PTI, Pub. Mtg. Tr., No. 57 at p. 316)
DOE agrees that, for situations in which this additional step
occurs, the battery charger manufacturer would need to cover its costs
and profit margin with a markup. However, given DOE's assumption that
the dominant path to market sets the final product price, it is only
for those classes of EPS for which this is the most common path to
market that the final product price would be affected. DOE believes
that this situation would primarily apply to EPSs that exclusively
provide power to a stand-alone battery charger, such as EPSs for power
tools, garden-care equipment, and other applications with detachable
batteries. As explained in section IV.A.1 above, DOE did not quantify
savings for EPSs that cannot directly power an end-use consumer product
(i.e., EPSs that only provide power to a battery charger), and,
therefore, DOE did not quantify markups for these ``indirect
operation'' EPSs. The remaining EPSs that power battery chargers can
also power an application directly, meaning that the EPS is not
exclusively a component of the battery charger. Instead, it is a
component of the application itself, e.g., a notebook computer. In
those cases, DOE assumes that it is more common that the OEM, rather
than the battery charger manufacturer, sources the EPS, making a third
markup unnecessary.
AHAM commented that engineering costs to integrate a battery
charger into an end-use consumer product are typically higher than
those for an EPS, and it may be inappropriate to apply an incremental
markup to battery chargers at the OEM stage that is lower than the
baseline markup. (AHAM, Pub. Mtg. Tr., No. 57 at p. 325)
To calculate incremental markups, DOE subtracted ``selling,
general, and administrative expenses'' (SG&A) from net profit to yield
operating profit. Dividing this amount by the revenue value yields an
incremental markup. By subtracting SG&A from net profit, DOE assumes
that indirect costs (such as indirect labor and overhead) remain
constant when a product becomes more efficient and, therefore, do not
need to be accounted for in the incremental markup. Given that SG&A
does not include research and development (R&D) or engineering costs,
any direct labor, R&D, engineering, and other direct expenses that OEMs
incur when integrating a more efficient battery charger into an
application are assumed to be recovered through the incremental markup.
Chapter 6 of the TSD provides additional detail on the markups
analysis.

E. Energy Use Analysis

DOE estimated the annual energy use of products in the field as
they are used by consumers. The energy use analysis provides the basis
for other analyses, particularly assessments of the energy savings and
the savings in consumer operating costs that could result from DOE's
adoption of new or amended standards. While the DOE test procedure
provides standardized results that can serve as the basis for comparing
the performance of different products used under the same conditions,
the energy use analysis seeks to capture the range of operating
conditions for battery chargers and EPSs in the United States.
Battery chargers and EPSs are power conversion devices that
transform input voltage to a suitable voltage for the end-use
application or battery they are powering. A portion of the energy that
flows into a battery charger or EPS flows out to a battery or end-use
product and, thus, cannot be considered to be consumed by the battery
charger or EPS. However, to provide the necessary output power, other
factors contribute to battery charger and EPS energy consumption--e.g.
internal losses and overhead circuitry.\38\ Therefore, the

[[Page 18535]]

traditional method for calculating energy consumption--by measuring the
energy a product draws from mains while performing its intended
function(s)--is not appropriate for battery chargers and EPSs. Instead,
DOE considered energy consumption to be the energy dissipated by the
battery charger or EPS (losses) and not delivered to the end-use
product or battery as a more accurate means to determine the energy
consumption of these products. Once the energy and power requirements
of those end-use products and batteries were determined, DOE considered
them fixed, and DOE analyzed only how standards would affect the energy
consumption of the battery chargers and EPSs themselves.
---------------------------------------------------------------------------

\38\ Internal losses are energy losses that occur during the
power conversion process. Overhead circuitry refers to circuits and
other components of the EPS, such as monitoring circuits, logic
circuits, and LED indicator lights, that consume power but do not
directly contribute power to the end-use application.
---------------------------------------------------------------------------

DOE applied a single usage profile for each application to
calculate the unit energy consumption for battery chargers and EPSs.
However, usage varies by application and among users. DOE examined the
usage profiles of multiple user types for applications where usage
varies widely (for example, a light user and a heavy user or an amateur
user and professional user). AHAM suggested that DOE revisit, and
possibly revise, its usage profile assumptions for the NOPR stage
analyses. (AHAM, No. 42 at p. 8) As new information became available
and analytical methodologies were altered, DOE revisited its usage
profile assumptions to ensure the accuracy of its NOPR analyses. As
part of its NOPR analysis, DOE re-examined its initial usage profiles
in the following ways:
New applications were added or existing applications were
combined;
Existing applications were divided into applications used
in a commercial setting and applications used in a residential setting;
New sources (such as published studies or data from
stakeholders) were made available or new data were provided to DOE;
and/or
Tested charge times indicated that DOE's usage profiles
were in need of revision.
DOE also explored high- and low-savings scenarios in an LCC
sensitivity analysis. Values that varied in this sensitivity analysis
included battery charger and EPS usage profiles and EPS loading points.
Varying these values allowed DOE to account for uncertainty in the
average usage profiles and explore the effect that usage variations
might have on energy consumption, life-cycle cost, and payback.
Additional information on this sensitivity analysis is contained in
appendix 8B to the TSD.
DOE does not assume the existence of a rebound effect, in which
consumers would increase use in response to an increase in energy
efficiency and resulting decrease in operating costs. For BCs and EPSs,
DOE expects that, in light of the small amount of savings expected over
the course of the year, the rebound effect is likely to be negligible
because consumers are unlikely to notice the decrease in operating
costs that would result from new standards for these products.
At the preliminary analysis public meeting, PG&E, through its
consultant Ecos, commented that DOE should adopt the simplified
approach to battery charger usage profiles being pursued by California.
It claimed that the wide variety of end-use applications and end users
makes it infeasible to accurately characterize usage for battery
chargers. It recommended instead that DOE assign all applications to
one of two categories: those that are charged rarely (such as battery
chargers for uninterruptible power supplies and other backup batteries)
and those that are charged sometimes (all other battery chargers).
(Ecos/PG&E, Pub. Mtg. Tr., No. 57 at p. 30) In a joint letter submitted
to DOE, energy efficiency advocates echoed these sentiments and
suggested that DOE group products into one of two possible general duty
cycles: `charged some of the time' and `almost always in maintenance
mode.''' (PG&E, et al., No. 47 at p. 2) In the preliminary analysis
public meeting, PTI commented that taking into account usage profiles
to analyze annual energy consumption is the correct approach because it
is the only way to express meaningful savings to the public. PTI
reiterated its support for DOE's proposed approach in its written
comments, claiming that increased detail allows for a more accurate
understanding of variations in use and a basis for estimating actual
energy consumption. PTI also stated that it ``believe[s] that the
subsequent UEC calculation based upon usage patterns provides a
meaningful measure of energy use.'' (PTI, Pub. Mtg. Tr., No. 57 at p.
378 and No. 45 at pp. 7-8) AHAM supported the continued use of usage
profiles in estimating unit energy consumption and emphasized that,
because of their critical nature, usage profiles should be more exact,
not simplified. (AHAM, Pub. Mtg. Tr., No. 57 at p. 376 and No. 42 at p.
8)
In developing its usage profiles, DOE relied on empirical data for
more than 40 applications. These data primarily consisted of user
surveys, metering studies, and stakeholder input. Collectively, the
analyzed applications for which DOE has empirical usage data accounted
for more than 80 percent of annual aggregate battery charger energy
use, because the available data focused mainly on the more common,
high-powered, and high-use applications. Usage profiles for the
remaining applications were derived from these known usage profiles.
DOE recognizes that the calculation of usage profiles is not an exact
science, but is confident that energy use and potential savings can be
more accurately estimated if application-specific use is taken into
account. Therefore, based on data and arguments presented to DOE to
date, DOE is proposing to continue to use the same basic approach to
battery charger usage profiles that it used in the preliminary
analysis.
Philips questioned DOE's initial assumption during the preliminary
analysis phase that seldom-used applications, such as beard and
mustache trimmers, are plugged in, on average, one hour per day.
Instead, Philips stated that such products are rarely charged and the
potential energy savings from regulating battery chargers and EPSs that
power these products would be very small. (Philips, Pub. Mtg. Tr., No.
57 at pp. 130-131) AHAM commented that many of the products that DOE
assumes to be charged for one hour per week, such as personal care
products and other portable appliances, are typically charged less
frequently. (AHAM, No. 42 at p. 6)
DOE's usage profiles are intended to represent an average usage
scenario across all users, rather than any particular type of user. DOE
recognizes that while many users likely have these products plugged in
for less than one hour per day, others (specifically those with cradle
chargers) tend to leave these products plugged in for more than one
hour per day. Some users may rarely, if ever, unplug their chargers.
Given these possible variations in usage, DOE revisited its assumed
usage profiles for personal care products and other infrequently
charged products. DOE opted to leave its usage profiles for beard and
mustache trimmers and hair clippers unchanged in the reference case,
but also to explore high- and low-use scenarios in the LCC sensitivity
analyses. Upon further analysis, DOE agrees with AHAM and Philips that
some small, portable applications are charged, on average, less
frequently than indicated in the preliminary analysis (1 hour per
week). Thus, DOE reduced the amount of time in active and maintenance
modes to 0.5 hours per week for air mattress pumps, mixers, blenders,
handheld GPSs, and residential portable printers. DOE also explored the
effects of lower use for

[[Page 18536]]

other applications in the LCC sensitivity analysis.
Philips also suggested the following usage profile for battery
chargers in product class 1 (inductive chargers for use in wet
environments):

1. Active + Maintenance = 17.25 hr/day
2. Unplugged = 6.48 hr/day
3. No Battery = 0.11 hr/day
4. Off = 0 hr day
5. Charges per day = 0.048 (Philips, No. 41 at p. 2)

DOE's usage profile from its preliminary analysis, which was
provided by PG&E (Ecos Consulting, No. 30), assumed that all products
in product class 1 are cradle-charged and, thus, are never unplugged.
While DOE tentatively agrees with Philips that some users unplug their
chargers once the product is charged, PG&E's research suggests that
Philips overestimated the number of users who unplug between charges
(and by extension, the amount of time the average unit spends
unplugged). Thus, for the NOPR, DOE used an average of the usage
profiles provided by PG&E and Philips for its reference case usage
profile. This resulted in a usage profile that assumed those products
spend some time in unplugged mode, but less than the time suggested by
Philips. High- and low-use scenarios for the applications in product
class 1 were explored in the LCC sensitivity analysis.
Stanley Black & Decker commented that outdoor gardening appliances
are typically used seasonally, and that the initial unit energy
consumption values for these products that DOE had considered during
the preliminary analysis phase should be reduced by half. It added,
though, that DOE should maintain its lifetime assumptions from the
preliminary analysis. (SBD, No. 44 at p. 1) DOE agrees that these
products are typically used seasonally and notes that it had already
accounted for seasonal use, as suggested by Stanley Black & Decker,
when it created the usage profiles in the preliminary analysis. The
usage profile that DOE used in the NOPR-stage analysis continues to
apply a seasonal use assumption for these products.
Cobra Electronics claimed that the typical residential two-way
radio is charged less than once per week, since residential consumers
tend to use these products a few times per year. (Cobra, No. 51 at p.
2) DOE agrees that residential use of two-way radios is likely to be
infrequent, but also recognizes that many of the two-way radios used by
residential users are also available to commercial users, who charge
these products far more frequently. In preparation of the NOPR
analysis, DOE analyzed the energy use of the two-way radio application
separately for those products charged in a residential setting and
those products charged in a commercial setting. DOE assumed that two-
way radios charged in a residential setting are charged infrequently,
as was suggested by Cobra, while those charged in a commercial setting
are charged more frequently.
Lester commented that ``the reduction in energy loss as estimated
is overstated for golf cars due to mistaken assumptions about the duty
cycle and corresponding energy use.'' (Lester, No. 53 at p. 2) DOE
remains confident in its assumptions for golf car use, which are
derived from manufacturer input. As it did for two-way radios, DOE
divided the golf car application into two distinct applications: golf
cars charged in the residential sector, and golf cars charged in the
commercial sector. DOE's residential usage profile assumes less time in
active use and, therefore, fewer charges per day, while DOE's
commercial usage profile assumes heavier use. Given this heavier use,
DOE assumed that commercial golf cars spend less time in maintenance
mode, as they are typically used more frequently, and for longer
durations, than are residential golf cars.
In response to comments from manufacturers that battery chargers in
product class 2 that meet the baseline efficiency level may be slow
chargers and designed for less frequent use or increased time in
maintenance mode, the California IOUs commented that these products may
not always be used infrequently, but rather can be used by some
segments of the population on a daily basis. (California IOUs, No. 43
at p. 6)
DOE's usage profiles are designed to take into account the average
use of all users, subject to the constraints of a given battery
charger, such as a slow charge rate or quick discharge rate. DOE
believes that it has accurately estimated the usage profiles of
handheld vacuum cleaners (which are in no battery mode, on average, six
minutes per day), cordless phones (which are in no battery mode, on
average, more than two hours per day), and the usage profiles for the
remaining applications in its analysis. These usage profiles reflect
average use, and, therefore, account for infrequent and frequent users
of these applications.
DOE recognizes that there is considerable variation in how
individual consumers use battery chargers and EPSs for specific
applications. This leads to some uncertainty and disagreement over what
an appropriate usage profile is for specific applications, such as
power tools, personal care products, and other applications. In all
cases, DOE used the best available data to derive reference case usage
profiles for each application. For applications with highly variable
use, DOE explored high- and low-use scenarios in an LCC sensitivity
analysis. DOE continues to seek data and substantiated recommendations
that will allow it to further refine its reference case usage profiles.
(See Issue 12 under ``Issues on Which DOE Seeks Comment'' in section
VII.E of this notice.)
Chapter 7 of the TSD provides additional detail on the energy use
analysis.

F. Life-Cycle Cost and Payback Period Analyses

This section describes the LCC and payback period analyses and the
spreadsheet model DOE used for analyzing the economic impacts of
possible standards on individual consumers. Details of the spreadsheet
model, and of all the inputs to the LCC and PBP analyses, are contained
in chapter 8 and appendix 8A of the TSD. DOE conducted the LCC and PBP
analyses using a spreadsheet model developed in Microsoft Excel. When
combined with Crystal Ball (a commercially-available software program),
the LCC and PBP model generates a Monte Carlo simulation \39\ to
perform the analysis by incorporating uncertainty and variability
considerations.
---------------------------------------------------------------------------

\39\ Monte Carlo simulations model uncertainty by utilizing
probability distributions instead of single values for certain
inputs and variables.
---------------------------------------------------------------------------

The LCC analysis estimates the impact of a standard on consumers by
calculating the net cost of a battery charger or EPS under a base-case
scenario (in which no new energy conservation standard is in effect)
and under a standards-case scenario (in which the proposed energy
conservation standard is applied). The base-case scenario is determined
by the efficiency level that a sampled consumer currently purchases,
which may be above the baseline efficiency level. The life-cycle cost
of a particular battery charger or EPS is composed of the total
installed cost (which includes manufacturer selling price, distribution
chain markups, sales taxes, and any installation cost), operating
expenses (energy and any maintenance costs), product lifetime, and
discount rate. As noted in the preliminary analysis, DOE considers
installation costs to be zero for battery chargers and EPSs.

[[Page 18537]]

The payback period is the change in purchase expense due to a more
stringent energy conservation standard, divided by the change in annual
operating cost that results from the standard. Stated more simply, the
payback period is the time period it takes to recoup the increased
purchase cost of a more-efficient product through energy savings. DOE
expresses this period in years.
Table IV-26 summarizes the approach and data that DOE used to
derive the inputs to the LCC and PBP calculations for the preliminary
analysis and the changes made for today's proposed rule. The following
sections discuss these inputs and comments DOE received regarding its
presentation of the LCC and PBP analyses in the preliminary analysis,
as well as DOE's responses thereto.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP27MR12.035

[[Page 18538]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.036

BILLING CODE 6450-01-C
1. Manufacturer Selling Price
As in the preliminary analysis, DOE used a combination of test and
teardown results and manufacturer interview results to develop
manufacturer selling prices. DOE conducted tests and teardowns on a
large number of additional units and applications for the NOPR, and
incorporated these findings into the MSP. Further detail on the MSPs
can be found in chapter 5 of the TSD.
Examination of historical price data for a number of appliances
that have been subject to energy conservation standards indicates that
an assumption of constant real prices and costs may overestimate long-
term trends in appliance prices. Economic literature and historical
data suggest that the real costs of these products may in fact trend
downward over time according to ``learning'' or ``experience'' curves.
On February 22, 2011, DOE published a Notice of Data Availability
(NODA, 76 FR 9696) stating that DOE may consider improving regulatory
analysis by addressing equipment price trends. In the NODA, DOE
proposed that when sufficiently long-term data are available on the
cost or price trends for a given product, it would analyze the
available data to forecast future trends.
To forecast a price trend for the NOPR, DOE considered the
experience curve approach, in which an experience rate parameter is
derived using two historical data series on price and cumulative
production, but in the absence of historical shipments of battery
chargers and EPSs and of sufficient historical Producer Price Index
(PPI) data for small electrical appliance manufacturing from the Bureau
of Labor Statistics' (BLS),\40\ DOE could not use this approach. This
situation is partially due to the nature of EPS and battery charger
design. EPSs and battery chargers are made up of many electrical
components whose size, cost, and performance rapidly change, which
leads to relatively short design lifetimes. DOE also considered
performing an exponential fit on the deflated AEO's Projected Price
Indexes that most narrowly include battery chargers and EPSs. However,
DOE believes that these indexes are sufficiently broad that they may
not accurately capture the trend for battery chargers and EPSs.
Furthermore, battery chargers and EPSs are not typical consumer
products; they are more like a commodity that OEMs purchase.
---------------------------------------------------------------------------

\40\ Series ID PCU33521-33521; https://www.bls.gov/ppi/.
---------------------------------------------------------------------------

Given the uncertainty, DOE is not incorporating product price
changes into today's NOPR. For the NIA, DOE also analyzed the
sensitivity of results to three alternative battery chargers and EPSs
price forecasts. Appendix 10-B of the NOPR TSD describes the derivation
of alternative price forecasts.
DOE requests comments on the most appropriate trend to use for real
battery charger and EPS prices, both in the short run (to 2013) and the
long run (2013-2042).
2. Markups
DOE applies a series of markups to the MSP to account for the
various distribution chain markups applied to the analyzed product.
These markups are evaluated for each application individually,
depending on its path to market. Additionally, DOE splits its markups
into ``baseline'' and ``incremental'' markups. The baseline markup is
applied to the entire MSP of the baseline product. The incremental
markups are then applied to the marginal increase in MSP over the
baseline's MSP. Further detail on the

[[Page 18539]]

markups can be found in chapter 6 of the TSD.
3. Sales Tax
As in the preliminary analysis, DOE obtained State and local sales
tax data from the Sales Tax Clearinghouse. The data represented
weighted averages that include county and city rates. DOE used the data
to compute population-weighted average tax values for each Census
division and four large States (New York, California, Texas, and
Florida). For the NOPR, DOE retained this methodology and used updated
sales tax data from the Sales Tax Clearinghouse.\41\ The U.S. Census
Bureau population estimates used in the preliminary analysis are the
most current data available.\42\
---------------------------------------------------------------------------

\41\ Sales Tax Clearinghouse, Aggregate State Tax Rates. https://thestc.com/STRates.stm.
\42\ The U.S. Census Bureau. Annual Estimates of the Population
for the United States, Regions, States, and Puerto Rico: April 1,
2000 to July 1, 2009. https://www.census.gov/popest/states/tables/NST-EST2009-01.xls.
---------------------------------------------------------------------------

4. Installation Cost
As detailed in the preliminary analysis, DOE considered
installation costs to be zero for battery chargers and EPSs because
installation would typically entail a consumer simply unpacking the
battery charger or EPS from the box in which it was sold and connecting
the device to mains power and its associated product or battery.
Because the cost of this ``installation'' (which may be considered
temporary, as intermittently used devices might be unplugged for
storage) is not quantifiable in dollar terms, DOE considered the
installation cost to be zero.
5. Maintenance Cost
In the preliminary analysis, DOE did not consider repair or
maintenance costs for battery chargers or EPSs. In making this
decision, DOE recognized that the service life of a battery charger or
EPS typically exceeds that of the consumer product with which it is
designed to operate. Thus, a consumer would not incur repair or
maintenance costs for a battery charger or EPS. Also, if a battery
charger or EPS failed, DOE expects that consumers would typically
discard the battery charger or EPS and purchase a replacement. DOE
received no comments challenging this assumption and has continued
relying on this assumption for purposes of calculating the NOPR's
potential costs and benefits.
Although DOE did not assume any repair or maintenance costs would
apply generally to battery chargers or EPSs, DOE has considered
including a maintenance cost for the replacement of lithium ion
batteries in certain battery charger applications. Through
conversations with manufacturers, DOE learned that such batteries would
need replacing within the service life of the battery charger for
certain applications based on the battery lifetime and the usage
profile assigned to the application. Lithium ion batteries are
marginally more expensive than batteries with nickel chemistries (e.g.
nickel metal-hydride or ``Ni-MH''), as explained in chapter 5 of the
TSD. DOE accounted for this marginal cost increase in these
applications at CSLs that use lithium batteries. This maintenance cost
only applied to applications where DOE believed the lifetime of the
application would surpass the lifetime of the battery. DOE estimated
the battery lifetime based on the total number of charges the battery
could handle divided by the number of charges per year projected for
the application. DOE relied on data provided by manufacturers to
estimate the total number of charges the battery could undergo before
expiring. Further detail on maintenance costs can be found in chapter 8
of the TSD.
6. Product Price Forecast
As noted in section IV.F., to derive its central estimates DOE
assumed no change in battery charger and EPS prices over the 2013-2042
period. In addition, DOE conducted a sensitivity analysis using three
alternative price trends based on AEO indexes. These price trends, and
the NPV results from the associated sensitivity cases, are described in
appendix 10-B of the NOPR TSD.
7. Unit Energy Consumption
The NOPR analysis uses the same approach for determining UECs as
the one used in the preliminary analysis. The UEC was determined for
each application based on estimated loading points and usage profiles
(for EPSs), and battery characteristics and usage profiles (for battery
chargers). DOE refined the usage profiles, battery characteristics, and
usage profiles for the NOPR. Further detail on the UEC calculations can
be found in chapter 7 of the TSD.
8. Electricity Prices
DOE determined energy prices by deriving regional average prices
for 13 geographic areas consisting of the nine U.S. Census divisions,
with four large states (New York, Florida, Texas, and California)
treated separately. The derivation of prices was based on data in EIA's
Form EIA-861.
In its written comments, NEEP stated that the high electricity
prices in the Northeast region of the United States would likely make
the LCC and PBP results more attractive for customers in this region.
(NEEP, No. 49 at p. 2) Typically, higher energy costs increase a
consumer's operating cost savings. As in the preliminary analysis, DOE
sampled a regional electricity price for each trial of the Monte Carlo
simulation. Additionally, the electricity price for the Northeast
region used by DOE's analysis is greater than the national average. DOE
estimates a residential electricity price of $0.166/kWh for the New
England region and $0.181/kWh for the state of New York, which exceeds
the national average of $0.112/kWh. Further detail on regional
electricity price sampling is available in chapter 8 of the TSD.
9. Electricity Price Trends
To project electricity prices to the end of the product lifetime in
the preliminary analysis, DOE used data from EIA's Annual Energy
Outlook (AEO) 2010 Early Release.\43\ This data source only contained a
reference case scenario, which required DOE to separately project the
high- and low-economic-growth scenarios using the relationship between
the scenarios in the AEO 2009 data.\44\ For the NOPR, DOE used the
final release of the AEO 2010,\45\ which contained reference, high- and
low-economic-growth scenarios.
---------------------------------------------------------------------------

\43\ U.S. Department of Energy. Energy Information
Administration. Annual Energy Outlook 2010 Early Release. March,
2010. Washington, DC. Available at: https://www.eia.doe.gov/oiaf/aeo/.
\44\ U.S. Department of Energy. Energy Information
Administration. Annual Energy Outlook 2009 with Projections to 2030.
March, 2009. Washington, DC. Available at: https://www.eia.doe.gov/oiaf/aeo/.
\45\ U.S. Department of Energy. Energy Information
Administration. Annual Energy Outlook 2010. November, 2010.
Washington, DC. https://www.eia.doe.gov/oiaf/aeo/.
---------------------------------------------------------------------------

10. Lifetime
DOE considers the lifetime of a battery charger or EPS to be from
the moment it is purchased for end-use up until the time when it is
permanently retired from service. Because the typical battery charger
or EPS is purchased for use with a single associated application, DOE
assumed that it will remain in service for as long as the application
does. Even though many of the technology options to improve battery
charger and EPS efficiencies may result in an increased useful life for
the battery charger or EPS, the lifetime of the battery charger or EPS
is still directly tied to the lifetime of its associated application.
With the exception of EPSs for mobile phones and smartphones (see

[[Page 18540]]

below), the typical consumer will not continue to use an EPS or battery
charger once its application has been discarded. For this reason, DOE
used the same lifetime estimate for the baseline and standard level
designs of each application for the LCC and PBP analyses. Further
detail on product lifetimes and how they relate to applications can be
found in chapter 3 of the TSD.
The one exception to the rule that EPSs do not exceed the lifetime
of their associated end-use products is the lifetime of EPSs for mobile
phones and smartphones. While the typical length of a mobile phone
contract is 2 years, and thus many phones are replaced and no longer
used after 2 years, DOE assumed that the EPSs for these products will
remain in use for an average of 4 years. This assumption is based on an
expected standardization of the market around micro-USB plug
technology, driven largely by the GSMA Universal Charging Solution.\46\
To verify that this evolution towards micro-USB plug technology is in
fact taking place, DOE examined more than 30 top-selling basic mobile
phone and smartphone models offered online by Amazon.com, Sprint,
Verizon Wireless, T-Mobile, and AT&T. DOE found that all of the newest
smartphone models other than the Apple iPhone use micro-USB plug
technology. While some basic mobile phones continue to use mini-USB or
other connector technologies, DOE found more than 15 basic mobile phone
models that have adopted the micro-USB technology.
---------------------------------------------------------------------------

\46\ The GSMA Universal Charging Solution is an agreement
between 17 mobile operators and manufacturers to have the majority
of all new mobile phones support a universal charging connector by
January 1, 2012. The press release for the agreement can be accessed
here: <https://www.gsma.com/articles/mobile-industry-unites-to-drive-universal-charging-solution-for-mobile-phones/17752/.
---------------------------------------------------------------------------

If new EPSs are compatible with a wide range of mobile phone and
smartphone models, a consumer may continue to use the EPS from their
old phone after upgrading to a new phone. Even though it is currently
standard practice to receive a new EPS with a phone upgrade, DOE
assumes that in the near future consumers will no longer expect
manufacturers to include an EPS with each new phone. DOE requests
comment from stakeholders on the reasonableness of this assumption.
Tables IV-27 and IV-28 show that assuming a lifetime of 2 years (rather
than 4 years) for mobile phone and smartphone EPSs results in lower
life-cycle cost savings (or greater net costs) for consumers of those
products. However, the net effect on Product Class B as a whole is
negligible due to the fact that mobile phones and smartphones together
comprise only 7 percent of shipments in Product Class B. LCC results
for all other applications in Product Class B are shown in chapter 11
of the TSD.
[GRAPHIC] [TIFF OMITTED] TP27MR12.037

11. Discount Rate
In the preliminary analysis, DOE derived residential discount rates
by identifying all possible debt or asset classes that might be used to
purchase and operate products, including household assets that might be
affected indirectly. DOE estimated the average shares of the various
debt and equity classes in the average U.S. household equity and debt
portfolios using data from the Survey of Consumer Finances (SCF) from
1989 to 2007. DOE used the mean share of each class across the seven
sample years as a basis for estimating the effective financing rate for
products. DOE estimated interest or return rates associated with each
type of equity and debt using SCF data and other sources. The mean real
effective rate across the classes of household debt and equity,
weighted by the shares of each class, is 5.6 percent.
For the commercial sector, DOE derived the discount rate from the
cost of capital of publicly-traded firms falling in the categories of
products that involve the purchase of battery chargers or EPSs. To
obtain an average discount rate value for the commercial sector, DOE
used the share of each category in total paid employees provided by the
U.S. Census Bureau \47\ and Federal,\48\ State, and local \49\
governments. By multiplying the discount rate for each category by its
share of paid employees, DOE derived a commercial discount rate of 7.0
percent.
---------------------------------------------------------------------------

\47\ U.S. Census Bureau. The 2010 Statistical Abstract. Table
607--Employment by Industry. https://www.census.gov/compendia/statab/2010/tables/10s0607.xls.
\48\ U.S. Census Bureau. The 2010 Statistical Abstract. Table
484--Federal Civilian Employment and Annual Payroll by Branch.
https://www.census.gov/compendia/statab/2010/tables/10s0484.xls.
\49\ U.S. Census Bureau. Government Employment and Payroll. 2008
State and Local Government. https://www2.census.gov/govs/apes/08stlall.xls.
---------------------------------------------------------------------------

For the NOPR analysis, DOE uses the same methodology employed in
the preliminary analysis but has changed the calculations to account
for the

[[Page 18541]]

geometric means for all time-series data. Additionally, the analysis
now includes updates to the risk-free rate to use a 40-year average
return on 10-year U.S. Treasury notes, as reported by the U.S. Federal
Reserve,\50\ and the equity risk premium--which now uses the geometric
average return on the S&P 500 over a 40-year time period. The new
discount rates are estimated to be 5.1 percent and 7.1 percent in the
residential and commercial sectors, respectively. For further details
on discount rates, see chapter 8 and appendix 8D of the TSD.
---------------------------------------------------------------------------

\50\ The Federal Reserve Board, Federal Reserve Statistical
Release, Selected Interest Rates, Historical Data, Instrument:
Treasury Constant Maturities, Maturity: 10-year, Frequency: Annual,
Description: Market yield on U.S. Treasury securities at 10-year
constant maturity, quoted on investment basis. Available at: https://www.federalfederalreserve.gov/releases/H15/data.htm.
---------------------------------------------------------------------------

12. Sectors Analyzed
In the preliminary analysis, DOE analyzed battery chargers and EPSs
in the residential sector for the reference case scenario and presented
commercial sector results in appendix 8B. DOE developed several inputs
specifically for the commercial sector, such as energy prices, energy
price trends, and discount rates. Other application-specific inputs--
e.g. UEC, markups, and market distribution--were not altered between
the residential sector and commercial sector analyses.
The NOPR analysis includes an examination of a weighted average of
the residential and commercial sectors as the reference case scenario.
Additionally, all application inputs are specified as either
residential or commercial sector data. Using these inputs, DOE then
sampled each application based on its shipment weighting and used the
appropriate residential or commercial inputs based on the sector of the
sampled application. This approach provides more specificity as to the
appropriate input values for each sector, and permits an examination of
the LCC results for a given representative unit or product class in
total. For further details on sectors analyzed, see chapter 8 of the
TSD.
13. Base Case Market Efficiency Distribution
For purposes of conducting the LCC analysis, DOE analyzed candidate
standard levels relative to a base case (i.e., a case without new
federal energy conservation standards). This analysis required an
estimate of the distribution of product efficiencies in the base case
(i.e., what consumers would have purchased in 2013 in the absence of
new federal standards). Rather than analyzing the impacts of a
particular standard level assuming that all consumers will purchase
products at the baseline efficiency level, DOE conducted the analysis
by taking into account the breadth of product energy efficiencies that
consumers are expected to purchase under the base case.
The preliminary analysis contained base case market efficiency
distributions for each representative unit or product class. The
distributions were based on test results, shipment-weighting of
applications, and trends in efficiency that DOE identified. Under this
approach, the resulting efficiency distribution could be heavily
influenced by one or two very common applications associated with a
particular product class or representative unit.
In preparing the NOPR analysis, DOE derived base case market
efficiency distributions that are specific to each application where it
had sufficient data to do so. This approach helped to ensure that the
market distribution for applications with fewer shipments was not
disproportionately skewed by the market distribution of the
applications with the majority of shipments. For battery chargers, DOE
also adjusted its efficiency distributions for pending efficiency
regulations in California (for more information please see IV.G.4). As
a result, the updated analysis more accurately accounts for LCC and PBP
impacts.
14. Compliance Date
The compliance date is the date when a new standard becomes
operative, i.e., the date by which battery charger and EPS
manufacturers must manufacture products that comply with the standard.
DOE's publication of a final rule in this standards rulemaking is
scheduled for completion by 2013. EPCA had prescribed that DOE complete
a rulemaking to amend the Class A EPS standards by July 2011 and had
given manufacturers a two-year lead time to satisfy those standards--
i.e., July 2013. (42 U.S.C. 6295(u)(3)(D)(i)(II)(bb). Given the timing
in issuing this rule, DOE may choose to retain this prescribed two-year
lead time for EPS manufacturers in spite of the compliance date
currently provided in EPCA. There are no similar requirements for the
compliance date for battery charger and new (non-Class A) EPS
standards, but DOE is also targeting a two-year time period between
publication and compliance. DOE calculated the LCCs for all consumers
as if each would purchase a new product in the year that manufacturers
would be required to meet the new standard (2013). However, DOE bases
the cost of the equipment on the most recent available data; all dollar
values are expressed in 2010$. DOE invites comment on the compliance
date it should provide manufacturers in light of the current set of
circumstances.
15. Payback Period Inputs
The PBP is the amount of time a consumer needs to recover the
assumed additional costs of a more-efficient product through lower
operating costs. As in the preliminary analysis, DOE used a ``simple''
PBP for the NOPR, because the PBP does not take into account other
changes in operating expenses over time or the time value of money. As
inputs to the PBP analysis, DOE used the total installed cost of the
product to the consumer for each efficiency level, as well as the
first-year annual operating costs for each efficiency level. The
calculation requires the same inputs as the LCC, except for energy
price trends and discount rates; only energy prices for the year the
standard becomes required for compliance (2013 in this case) are
needed.
DOE received a single comment addressing its initial PBP analysis.
In particular, Philips commented that DOE had underestimated the
projected PBP for inductively charged toothbrushes (i.e., battery
charger product class 1). (Philips, No. 43 at p. 2) DOE notes that
payback periods comprise a metric demonstrating the underlying cost-
effectiveness of a standard level. An underestimated PBP could result
from an underestimated incremental consumer purchase price or an
overestimated amount of operating cost savings. Philips suggested an
alternate usage profile for battery charger product class 1 that
included time spent in unplugged mode. (Philips, No. 41 at p. 2) In its
view, the use of such an adjusted profile would provide a more accurate
picture of the projected savings.
DOE agrees with Philips that battery chargers in product class 1
likely spend some time in unplugged mode and adjusted its usage profile
accordingly. The usage profile for these products now includes time in
unplugged mode, which resulted in a reduction in operating cost
savings. In the NOPR, DOE refined many of its estimates for the inputs
contributing to purchase price and operating costs. While DOE is
confident in the accuracy of these inputs and the accompanying PBP
calculations presented in this NOPR, DOE continues to seek comment to
help refine its approach as needed.

[[Page 18542]]

G. National Impact Analysis

The National Impact Analysis (NIA) assesses the national energy
savings (NES) and the net present value (NPV) of total consumer costs
and savings that would be expected to result from new or amended
standards at specific efficiency levels. (``Consumer'' in this context
refers to consumers of the product being regulated.) DOE calculates the
NES and NPV based on projections of annual unit shipments, along with
the annual energy consumption and total installed cost data from the
energy use and LCC analyses. For the NOPR analysis, DOE forecasted the
energy savings, operating cost savings, product costs, and NPV of
consumer benefits for products sold from 2013 through 2042.
DOE evaluates the impacts of new and amended standards by comparing
base-case projections with standards-case projections. The base-case
projections characterize energy use and consumer costs for each product
class in the absence of new or amended energy conservation standards.
DOE compares these projections with projections characterizing the
market for each product class if DOE adopted new or amended standards
at specific energy efficiency levels (i.e., the TSLs or standards
cases) for that class. For the base case forecast, DOE considers
historical trends in efficiency and various forces that are likely to
affect the mix of efficiencies over time. For the standards cases, DOE
also considers how a given standard would likely affect the market
shares of efficiencies greater than the standard.
To make the analysis more accessible and transparent to all
interested parties, DOE used an MS Excel spreadsheet model to calculate
the energy savings and the national consumer costs and savings from
each TSL. MS Excel is the most widely used spreadsheet calculation tool
in the United States and there is general familiarity with its basic
features. Thus, DOE's use of MS Excel as the basis for the spreadsheet
models provides interested parties with access to the models within a
familiar context. The TSD and other documentation that DOE provides
during the rulemaking help explain the models and how to use them, and
interested parties can review DOE's analyses by changing various input
quantities within the spreadsheet. The NIA spreadsheet model uses
average values as inputs (as opposed to probability distributions).
For the current analysis, the NIA used projections of energy prices
from the AEO2010 Reference case. In addition, DOE analyzed scenarios
that used inputs from the AEO2010 High Economic Growth, Low Economic
Growth, and Carbon Cap and Trade cases. These cases have higher or
lower energy price trends compared to the Reference case. NIA results
based on these cases are presented in appendix 10A to the TSD.
Table IV-29 summarizes the inputs and key assumptions DOE used in
its preliminary NIA and the changes to the analysis for the NOPR.
Discussion of these inputs and changes follows the table. See chapter
10 of the TSD for further details.
BILLING CODE 6450-01-P

[[Page 18543]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.038

1. Shipments
Forecasts of product shipments are needed to forecast the impacts
standards will have on the Nation. DOE develops shipment forecasts
based on an analysis of key market drivers for each considered product.
In DOE's shipments model, shipments of products were calculated based
on current shipments of product applications powered by battery
chargers or EPSs. The inventory model takes an accounting approach,
tracking remaining shipments and the vintage of units in the existing
stock for each year of the analysis period.
Stakeholders submitted several comments questioning DOE's
assumption in the preliminary analysis that shipment volumes would not
be affected by new or amended standards. AHAM and PTI stated that
certain products, such as hair clippers, cordless vacuum cleaners,
electric shavers, and DIY power tools, are discretionary purchases for
consumers. Because of the discretionary nature of these purchases, AHAM
and PTI claimed, standards that cause significant increases in the end-
use product's price may lead some families to forgo purchasing these
products and find other means to meet their needs. These parties asked
DOE to consider lower shipments in its standards case forecasts. (AHAM,
No. 42 at pp. 14-15; PTI, No. 45 at p. 12) In addition, AHAM, CEA, and
Cobra Electronics all stated that increases in product price could lead
some manufacturers to substitute primary batteries for rechargeable
batteries in certain products, e.g., portable navigation devices and
portable radios, reducing the number of battery chargers and EPSs for
these products. (AHAM, No. 42 at p. 14; CEA, No. 46 at p. 3; Cobra, No.
51 at p. 2) Lastly, Stanley Black & Decker and Lester stated that
increases in product price for battery-operated gardening products and
golf cars could drive consumers toward their gasoline-powered
equivalents. (SBD, No. 44 at p. 2; Lester, No. 50 at p. 3)
In response to these comments, DOE conducted a sensitivity analysis
to

[[Page 18544]]

examine how increases in end-use product prices resulting from
standards might affect shipment volumes. To DOE's knowledge, elasticity
estimates are not readily available in existing literature for battery
chargers, EPSs, or the end-use consumer products that DOE is analyzing
in this rulemaking. Because some applications using battery chargers
and EPSs, such as smartphones and videogame consoles, could be
considered more discretionary than home appliances, which have an
estimated relative price elasticity of -0.34 (See--https://ees.ead.lbl.gov/bibliography/an_analysis_of_the_price_elasticity_of_demand_for_household_appliances), DOE believed a higher
elasticity of demand was possible. In its sensitivity analysis, DOE
assumed a price elasticity of demand of -1, meaning a given percentage
increase in the final product price would be accompanied by that same
percentage decrease in shipments.
Even under this relatively high assumption for price elasticity of
demand, the standards being proposed today are unlikely to have a
significant effect on the shipment volumes of those battery charger
applications mentioned by stakeholders, with forecasted effects ranging
from a decrease of 0.03 percent for electric shavers to a decrease of
1.46 percent for DIY power tools with detachable batteries. Results for
all battery charger applications are contained in appendix 9A to the
TSD. The corresponding impacts on NES and NPV are included in appendix
10A. DOE did not conduct a similar analysis for EPS applications due to
the small size of the price increases (relative to the price of EPS
applications) expected to result from the EPS standards being proposed
today.
2. Shipment Growth Rate
In the preliminary analysis, DOE noted that the market for battery
chargers and EPSs has grown tremendously in the past 10 years.
Additionally, DOE found that many market reports have predicted
enormous future growth for the applications that employ battery
chargers and EPSs. However, in forecasting the size of these markets
over the next 32 years, DOE considered the possibility that much of the
market growth associated with these products has already occurred. In
many reports predicting growth of applications that employ battery
chargers or EPSs, DOE noted that growth was predicted for new
applications, but older applications were generally not included. That
is, the demand for battery chargers and EPSs had not grown, but rather
the products that use such devices had transitioned to a new product
mix. (See chapter 9 of the Preliminary TSD.)
With this in mind, DOE took a conservative approach in its forecast
and estimated that while the specific applications that use battery
chargers or EPSs will change, the overall number of individual units
that use battery chargers or EPSs will grow slowly, with new
applications replacing some current applications, but with little
change in per-capita consumption of battery chargers or EPSs over time.
To estimate future market size while assuming no change in the per-
capita battery charger and EPS purchase rate, DOE used population
growth rate as the compound annual market growth rate. DOE presented
this approach to stakeholders for comment and received no comments
objecting to its use. Population growth rate values were obtained from
the U.S. Census Bureau 2009 National Projections, which forecast
population through 2050. DOE took the average annual population growth
rate, 0.75 percent, and applied this rate to all battery charger and
EPS product classes. For the NOPR analysis, DOE continues to apply this
scenario.
3. Product Class Lifetime
For the preliminary analysis, DOE calculated product class lifetime
profiles using the percentage of shipments of applications within a
given product class, and the lifetimes of those applications. These
values were combined to estimate the percentage of units remaining in
use for each year following the initial year in which those units were
shipped. For the NOPR analysis, DOE continued to apply this scenario.
For more information on the calculation of product class lifetime
profiles, see chapter 10 of the TSD.
4. Forecasted Efficiency in the Base Case and Standards Cases
A key component of the NIA is the trend in energy efficiency
forecasted for the base case (without new or amended standards) and
each of the standards cases. Section IV.A.2 above explains how DOE
developed efficiency distributions (which yield shipment-weighted
average efficiency) for battery charger and EPS product classes for the
first year of the forecast period. To project the trend in efficiency
over the entire forecast period, DOE considered recent standards,
voluntary programs such as ENERGY STAR, and other trends.
DOE received two comments regarding the effect of European Union
(EU) energy efficiency standards on the efficiency of battery chargers
and EPSs in the U.S. market. AHAM commented that the EU is planning to
begin a series of battery charger efficiency standards in 2011 that
could have an effect on some non-wall-adapter battery chargers. (AHAM,
No. 42 at p. 15) Similarly, Cobra Electronics commented that the EU's
most recent energy efficiency standard for EPSs was established at
international efficiency marking protocol level V. (Cobra, No. 51 at p.
3)
In the preliminary analysis, DOE found two programs that would
influence EPS efficiency in the short term. The first is the ENERGY
STAR program for EPSs (called ``external power adapters''), which
specified that EPSs be at or above CSL 1 in order to qualify. This
voluntary program was very active, with more than 3,300 qualified
products as of May 2010.\51\ The second program influencing EPS
efficiency is the European Union Ecodesign requirements on Energy Using
Products, which includes legislation on EPSs that requires that EPSs
sold in the EU be at or above CSL 1, effective April 2011. Europe
currently represents approximately one-third of the global EPS market.
DOE did not identify any programs that required efficiency above CSL 1.
These factors apply to Class A EPSs.
---------------------------------------------------------------------------

\51\ EPA, ``ENERGY STAR External Power Supplies AC-DC Product
List,'' May 24, 2010 and EPA, ``ENERGY STAR External Power Supplies
AC-AC Product List,'' May 24, 2010. Both documents last retrieved on
May 28, 2010 from https://www.energystar.gov/index.cfm?c=ext_power_supplies.power_supplies_consumers.
---------------------------------------------------------------------------

DOE agrees that standards established by the EU will affect the
U.S. market, due to the global nature of EPS design, production, and
distribution. With these programs in mind, DOE estimated that
approximately half of the Class A EPS market at CSL 0 in 2009 would
transition to CSL 1 by 2013. In updating its analysis for the NOPR, DOE
reviewed these two programs for any changes. DOE found that no new
European standards had been announced during the time between the
preliminary analysis and the NOPR. However, in regard to the ENERGY
STAR program, the U.S. Environmental Protection Agency announced that
its program for EPSs would be cancelled effective December 31,
2010.\52\ In preparing today's notice, DOE also noted that the European
mobile phone industry agreed to adhere to the GSMA Universal Charging
Solution, which incorporates a no-load (``standby'') power consumption

[[Page 18545]]

requirement that is stricter than both the current Federal standard and
ENERGY STAR version 2.0 criteria.
---------------------------------------------------------------------------

\52\ EPA, ``ENERGY STAR EPS EUP Sunset Decision Memo,'' July 19,
2010. Last retrieved on July 8, 2011 from https://www.energystar.gov/ia/partners/prod_development/revisions/downloads/eps_eup_sunset_decision_july2010.pdf.
---------------------------------------------------------------------------

In summary, DOE found no new evidence to support the long-term
improvement of EPSs beyond the initial improvement of units as
estimated during the preliminary analysis. Thus, DOE has maintained its
earlier assumption that EPSs will not improve in efficiency after 2013
in the base case.
For battery charger efficiency trends, DOE considered three key
factors: European standards, the EPA's ENERGY STAR program, and the
recently approved battery charger standards in California.
The EU included battery chargers in a preparatory study on eco-
design requirements that it published in January 2007. However, it has
not yet announced plans to regulate battery chargers. Thus, DOE did not
adjust the efficiency distributions that it calculated for battery
chargers between the present-day and the compliance date in 2013 to
account for European standards.
DOE examined the ENERGY STAR voluntary program for battery charging
systems and found that as of January 22, 2010, less than 150 battery
charging systems had been qualified. As of July 1, 2011, only 241
battery charging systems had been qualified.\53\ (Contrast this with
the more than 3,300 EPSs that were ENERGY STAR-qualified as of May
2010.) Given the small number of qualified products, DOE also did not
adjust its battery charger efficiency distributions to account for any
potential market effects of the ENERGY STAR program.
---------------------------------------------------------------------------

\53\ EPA, ``Qualified Product (QP) List for ENERGY STAR
Qualified Battery Charging Systems.'' Retrieved on July 8, 2011 from
https://www.energystar.gov/ia/products/prod_lists/BCS_prod_list.xls.
---------------------------------------------------------------------------

In the preliminary analysis, DOE found no battery charger standards
slated to take effect by 2013. Subsequently, the California Energy
Commission (CEC) approved battery charger standards on January 12, 2012
that will take effect on February 1, 2013 for most, if not all, of the
battery chargers within the scope of DOE's rulemaking. Hence, DOE
adjusted its base case efficiency distributions for battery chargers to
account for these standards by assuming that in the absence of Federal
standards all battery chargers sold in California would meet the CEC
standards. In the absence of market share data, DOE assumed that
California's share of the U.S. battery charger market is equivalent to
its share of U.S. GDP (13 percent). Table IV-30 contrasts the resultant
base case efficiency distributions, used in preparing today's notice,
with those used in the preliminary analysis.

[[Page 18546]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.039

DOE recognizes that the CEC standards may also raise the efficiency
of battery chargers sold outside of California. However, the magnitude
of this effect cannot be determined. Nevertheless, to explore the full
range of possibilities DOE also evaluated the potential impacts of
Federal standards under the assumption that the CEC standards become
the de facto standard for the nation, i.e., all battery chargers sold
in the United States just before the Federal standard takes effect in
2013 meet the CEC standards. The base case efficiency distributions
assumed in this sensitivity case are shown in Table IV-30. This
scenario represents an upper bound on the possible impacts of the CEC
standards and a lower bound on the energy savings that could be
achieved by Federal standards. In fact, under this scenario, DOE might
be limited to setting standards only for product classes 1 and 8, as
further improvements to the efficiency of products in the other product
classes are not currently projected to be cost-effective. Results of
this sensitivity analysis can be found in Appendix 8-B and Appendix 10-
A.
DOE believes it is unlikely that all battery chargers sold in the
United States will meet the CEC standards by February 1, 2013. First,
manufacturers have been given an extremely short transition period of
only one year; second, DOE's proposed standards are not as stringent as
the CEC standards for product classes 2 through 6, which would
potentially reduce the cost of production for these products and make
it unlikely that they would be manufactured on a nationwide basis to
the higher CEC levels; and third, the CEC standards will be preempted
by

[[Page 18547]]

Federal standards in the future if DOE finalizes standards for these
products, giving manufacturers the option of specifically producing
products solely for the California market for an interim period.
DOE seeks comment on its assumptions concerning the impacts of the
CEC standards on its base case efficiency distributions. In addition,
DOE seeks comment on its assumptions about EPS efficiency,
specifically, that EPSs within product classes B (DC output, basic-
voltage), C (DC output, low-voltage), D (AC output, basic-voltage) and
E (AC output, low-voltage) will improve in efficiency slightly prior to
2013, but then no longer improve in the absence of standards, and that
EPSs within product classes X (multiple-voltage) and H (high-power)
will not improve in efficiency in the absence of standards. (See issues
10 and 11 under ``Issues on Which DOE Seeks Comment'' in section VII.E
of this notice.)
To estimate efficiency trends in the standards cases, DOE has used
``roll-up'' and/or ``shift'' scenarios in its standards rulemakings.
Under the ``roll-up'' scenario, DOE assumes: (1) product efficiencies
in the base case that do not meet the standard level under
consideration would ``roll-up'' to meet the new standard level; and (2)
product efficiencies above the standard level under consideration would
not be affected. Under the ``shift'' scenario, DOE reorients the
distribution above the new minimum energy conservation standard.
In the preliminary analysis, DOE used a roll-up scenario to develop
its forecasts of efficiency trends in the standards cases. The NOPR
analysis also applies this scenario. For further details about the
forecasted efficiency distributions, see chapter 9 of the TSD.
5. Product Price Forecast
As noted in section IV.F., DOE assumed no change in battery charger
and EPS pricing over the 2013-2042 period. In addition, DOE conducted
sensitivity analysis using three alternative price trends based on AEO
indexes. These price trends, and the NPV results from the associated
sensitivity cases, are described in appendix 10-B of the NOPR TSD.
6. Unit Energy Consumption and Savings
DOE uses the efficiency distributions for the base case along with
the annual unit energy consumption values to estimate shipment-weighted
average unit energy consumption under the base and standards cases,
which are then compared against one another to yield unit energy
savings values for each CSL.
To better evaluate actual energy savings when calculating unit
energy consumption for a product class at a given CSL, DOE considered
only those units that would actually be at that CSL and did not
consider any units already at higher CSLs. That is, the shipment-
weighted average unit energy consumption for a CSL ignored any
shipments from higher CSLs.
In addition, when calculating unit energy consumption for a product
class, DOE used marginal energy consumption, which was taken to be the
consumption of a unit above the minimum energy consumption possible for
that unit. Marginal unit energy consumption values were calculated by
subtracting the unit energy consumption values for the highest
considered CSL from the unit energy consumption values at each CSL.
For the NOPR, DOE assumes that energy efficiency would not improve
after 2013 in the base case. Therefore, the projected UEC values in the
NOPR analysis, as well as the unit energy savings values, do not vary
over time. In addition, the analysis assumes that manufacturers would
respond to a standard by improving the efficiency of underperforming
products but not those that already meet or exceed the standard.
For further details on the calculation of unit energy savings for
the NIA, see chapter 10 of the NOPR TSD.
7. Unit Costs
DOE uses the efficiency distributions for the base case along with
the unit cost values to estimate shipment-weighted average unit costs
under the base and standards cases, which are then compared against one
another to give incremental unit cost values for each CSL. In addition,
when calculating unit costs for a product class, DOE uses that product
class's marginal costs--the costs of a given unit above the minimum
costs for that unit.
For further details on the calculation of unit costs for the NIA,
see chapter 10 of the NOPR TSD.
8. Repair and Maintenance Cost per Unit
In the preliminary analysis, DOE did not consider repair or
maintenance costs for battery chargers or EPSs because the vast
majority cannot be repaired and do not require any maintenance. DOE
maintains this assumption in its NOPR analysis.
For the NOPR analysis, DOE considered the incremental maintenance
cost for the replacement of lithium ion batteries in certain
applications. After examining the possible impact of this cost in the
life-cycle cost and payback period analyses, DOE determined that the
actual impact at the product class level would most likely be
negligible. Thus, DOE opted not to retool its NIA model to account for
this cost in calculating NPV. For further discussion of this issue, see
section IV.F.5 above.
9. Energy Prices
In the preliminary analysis, DOE assumed that all energy
consumption and savings would take place in the residential sector, and
therefore any energy cost savings would be calculated using residential
sector rates.
However, DOE is aware that many products that employ battery
chargers and EPSs are located within commercial buildings. Given this
fact, the energy cost savings from such products should be calculated
using commercial sector rates, which are lower in value than
residential sector rates, and would lower the overall financial
benefits derived from energy savings in the NPV. In order to account
for these products in the NOPR analysis, DOE considered the impacts of
battery charger and EPS usage in a commercial setting.
In order to determine the energy usage split between the
residential and commercial sector, DOE first separated products into
residential and commercial categories. Then, for each product class,
using shipment values for 2013, average lifetimes, and base-case unit
energy consumption values, DOE calculated the approximate annual energy
use split between the two sectors. DOE applied the resulting ratio to
the electricity pricing to obtain a sector-weighted energy price. This
ratio was held constant throughout the period of analysis.
For further details on the calculation of sector-weighted energy
prices for the NIA, see chapter 10 of the NOPR TSD.
10. Site-to-Source Energy Conversion
To estimate the national energy savings expected from appliance
standards, DOE uses a multiplicative factor to convert site energy
savings (at the home or commercial building) into primary or source
energy savings (the energy required to convert and deliver the site
energy). These conversion factors account for the energy used at power
plants to generate electricity and losses in transmission and
distribution, as well as for natural gas losses from pipeline leakage
and energy used for pumping. For electricity, the conversion factors
vary over time due to projected changes in generation sources (i.e.,
the

[[Page 18548]]

power plant types projected to provide electricity to the country). The
factors that DOE developed are marginal values, which represent the
response of the system to an incremental decrease in consumption
associated with appliance standards.
In the preliminary analysis, DOE used annual site-to-source
conversion factors based on reported values in AEO2010, which provides
energy forecasts through 2035. For 2036-2062, DOE used conversion
factors that remain constant at the 2035 values. For the NOPR, DOE
continued to use this approach.
Section 1802 of the Energy Policy Act of 2005 (EPACT 2005) directed
DOE to contract a study with the National Academy of Science (the
Academy) to examine whether the goals of energy conservation standards
are best served by measurement of energy consumed, and efficiency
improvements, at the actual point-of-use or through the use of the
full-fuel-cycle (FFC), beginning at the source of energy production.
(Pub. L. No. 109-58). The FFC measure includes point-of-use energy plus
the energy consumed in extracting, processing, and transporting primary
fuels and the energy losses associated with generation, transmission,
and distribution of electricity. The study, ``Review of Site (Point-of-
Use) and Full-Fuel-Cycle Measurement Approaches to DOE/EERE Building
Appliance Energy-Efficiency Standards,'' was completed in May 2009 and
provided five recommendations. A free copy of the study can be
downloaded at: https://www.nap.edu/catalog.php?record_id=12670.
The Academy's primary recommendation was that ``DOE consider moving
over time to use of a FFC measure of energy consumption for assessment
of national and environmental impact, especially levels of greenhouse
gas emissions, and to providing more comprehensive information to the
public through labels and other means, such as an enhanced Web site.''
The Academy further recommended that DOE work with the Federal Trade
Commission (FTC) to consider options for making product-specific GHG
emissions estimates available to enable consumers to make cross-class
product comparisons.
More specifically, the Academy recommended that DOE use the FFC
measure of energy consumption for the environmental assessment and
national impact analyses used in energy conservation standards
rulemakings. The FFC measure would provide more complete information
about the total energy use and GHG emissions associated with operating
an appliance than the primary energy measure currently used by DOE.
Utilizing the FFC measure for environmental assessments and national
impact analyses would not require alteration of the measures used to
determine the energy efficiency of covered products and covered
equipment as existing law still requires such measures to be based
solely on the energy consumed at the point-of-use. (42 U.S.C. 6291(4),
6311(4)). However, using the FFC measure in lieu of primary energy in
environmental assessments and national impact analyses could affect
DOE's consideration of future alternative standard levels.
In response to the NAS committee recommendations, on August 20,
2010, DOE issued a Notice of Proposed Policy proposing to incorporate a
FFC analysis into the methods it uses to estimate the likely impacts of
energy conservation standards on energy use and greenhouse gas (GHG)
emissions, rather than the primary (extended site) energy measures it
currently uses. Additionally, DOE proposed to work collaboratively with
the FTC to make FFC energy and GHG emissions data available to the
public to enable consumers to make cross-class comparisons. On October
7, 2010, DOE held an informal public meeting to discuss and receive
comments on its planned approach. The Notice, a transcript of the
public meeting and all public comments received by DOE are available
at: https://www.regulations.gov/search/Regs/home.html#docketDetail?R=EERE-2010-BT-NOA-0028. DOE is developing a
final policy statement on these subjects and intends to begin
implementing the policy in future energy conservation standards
rulemakings.
For further details about the calculation of national energy
savings, see chapter 10 of the TSD.
11. Discount Rates
The inputs for determining the NPV of the total costs and benefits
experienced by consumers of battery chargers and EPSs are: (1) total
increased product cost, (2) total annual savings in operating costs,
and (3) a discount factor. For each standards case, DOE calculates net
savings each year as total savings in operating costs less total
increases in product costs, relative to the base case. DOE calculates
operating cost savings over the life of each product shipped from 2013
through 2042.
DOE multiplies the net savings in future years by a discount factor
to determine their present value. For the preliminary analysis and
today's NOPR, 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.\54\ 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 ``societal rate of time
preference,'' which is the rate at which society discounts future
consumption flows to their present value.
---------------------------------------------------------------------------

\54\ OMB Circular A-4 (Sept. 17, 2003), section E, ``Identifying
and Measuring Benefits and Costs. Available at: https://www.whitehouse.gov/omb/memoranda/m03-21.html.
---------------------------------------------------------------------------

For further details about the calculation of net present value, see
chapter 10 of the TSD.
12. Benefits From Effects of Standards on Energy Prices
The reduction in electricity consumption associated with new and
amended standards for battery chargers and EPSs could affect overall
electricity generation, and thus affect the electricity prices charged
to consumers in all sectors of the economy. As a simplifying assumption
in the preliminary analysis, DOE assumed no change in electricity
prices as a result of energy savings from new or amended standards for
battery chargers and EPSs.
Commenting on the preliminary analysis, NEEP stated that the
economic benefits of the reduced need for new power plants should be
estimated and requested that DOE quantify electricity demand reductions
achieved by these updated standards in financial terms. (NEEP, No. 49
at p. 2)
In preparing the NOPR analysis, DOE used NEMS-BT to assess the
impacts of the reduced need for new electric power plants and
infrastructure projected to result from standards. In NEMS-BT, changes
in power generation infrastructure affect utility revenue requirements,
which in turn affect electricity prices. From these data, DOE estimated
the impact on electricity prices associated with each considered TSL.
Although the aggregate benefits for electricity users are potentially
large, there may be negative effects on some of the entities involved
in electricity supply, particularly power plant providers and fuel
suppliers. Because there is uncertainty about the extent to which the
benefits for electricity users from reduced electricity prices would be
a transfer from entities involved in electricity supply to electricity
consumers, DOE tentatively concludes

[[Page 18549]]

that, at present, it should not give a heavy weight to this factor in
its consideration of the economic justification of new or amended
standards. DOE is continuing to investigate the extent to which
electricity price changes projected to result from standards represent
a net gain to society.
For further details about the effect of standards on energy prices,
see chapter 10 of the TSD.

H. Consumer Subgroup Analysis

In analyzing the potential impacts of new or amended standards, DOE
evaluates the impacts on identifiable subgroups of consumers (e.g.,
low-income households or small businesses) that may be
disproportionately affected by a national standard. In the preliminary
analysis, DOE identified four consumer subgroups of interest--low-
income consumers, small businesses, top marginal electricity price tier
consumers, and consumers of specific applications within a
representative unit or product class.
Interested parties supported DOE's decision to analyze consumers of
specific applications in the subgroup analysis. AHAM commented that DOE
should consider subgroups of applications to ensure that CSLs are
justified for applications with different energy usage characteristics
from the product class. (AHAM, No. 42 at p. 12) Stanley Black & Decker
also commented that outdoor gardening appliances were only operated a
portion of the year, and would have different energy usage
characteristics from the product class, necessitating a subgroup
analysis. (SBD, No. 44 at pp. 1-2) Wahl Clipper commented that
infrequently charged products should not be compared in the same
fashion as those that are plugged in most of the time. (Wahl, No. 53 at
p. 2)
Additionally, manufacturers commented that averaging LCC results of
various applications within the representative unit or product class
would not lend enough weight to applications with fewer shipments. PTI
noted that power tools have little in common with other applications
aside from their battery energy and voltage levels. In its view, the
averaging of LCC results would diminish the impact of the power tools
on the LCC results for the entire product class. (PTI, No. 45 at pp. 6,
13) Similarly, AHAM and PTI commented that certain applications sell at
lower price points than other applications within the product class.
They argued that averaging the LCC results across these applications
would deemphasize the impacts on the individual applications. (AHAM,
No. 42 at pp. 13-14; PTI, No. 45 at pp. 6, 13)
DOE's subgroup analysis for consumers of specific applications
considered the LCC impacts of each application within a representative
unit or product class. This approach allowed DOE to consider the LCC
impacts of individual applications when choosing the proposed standard
level, regardless of the application's weighting in the calculation of
average impacts. The impacts of the standard on the cost of the battery
charger or EPS as a percentage of the application's total purchase
price are not relevant to DOE's LCC analysis. The LCC considers the
incremental cost between different standard levels. DOE used the cost
of the EPS or battery charger component in the LCC, not the final price
of the application. Therefore, a $2,000 and $20 product are assumed to
have the same cost for a battery charger or EPS (e.g., $5) if they are
within the same CSL of the same representative unit or product class.
The LCC considers the incremental impacts on consumers who purchase the
product, but does not account for price elasticity or the economic
impacts of consumers switching to non-covered products. Instead, DOE
explored these possibilities in a shipments sensitivity analysis, as
explained in section IV.G.1 above. The application-specific subgroup
analyses represent an estimate of the marginal impacts of standards on
consumers of each application within a representative unit or product
class.
At the preliminary analysis public meeting, AHAM commented that
some applications span multiple battery charger product classes, making
it difficult for the LCC to focus on specific applications. (AHAM, Pub.
Mtg. Tr., No. 57 at p. 153)
DOE notes that several applications span more than one product
class or representative unit. Because each product class has associated
characteristics and costs, it is difficult to aggregate LCC results
across product classes. Therefore, DOE calculated application-specific
results for each product class and representative unit. For
applications that span multiple product classes, DOE calculated the LCC
and PBP impacts for that application in each product class.
For each subgroup, DOE considered variations on the standard
inputs. DOE defined low-income consumers as residential consumers with
incomes at or below the poverty line, as defined by the U.S. Census
Bureau. DOE found that these consumers face electricity prices that are
0.2 cents per kWh lower, on average, than the prices faced by consumers
above the poverty line. For small businesses, DOE analyzed the
potential impacts of standards by conducting the analysis with
different discount rates, as small businesses do not have the same
access to capital as larger businesses. DOE estimated that for
businesses purchasing battery chargers or EPSs, small companies have an
average discount rate that is 4.5 percent higher than the industry
average. For top tier marginal electricity price consumers, DOE
researched inclined marginal block rates for the residential and
commercial sectors. DOE found that top tier marginal rates for general
usage in the residential and commercial sectors were $0.306 and $0.221,
respectively. Lastly, for the application-specific subgroup, DOE used
the inputs from each application for lifetime, markups, market
efficiency distribution, and UEC to calculate LCC and PBP results.
Chapter 11 of the TSD contains further information on the LCC
analyses for all subgroups.

I. Manufacturer Impact Analysis

1. Overview
DOE conducted separate manufacturer impact analyses (MIA) for EPSs
and battery chargers to estimate the financial impact of new or amended
energy conservation standards on these industries. The MIA is both a
quantitative and qualitative analysis. The quantitative part of the MIA
relies on the Government Regulatory Impact Model (GRIM), an industry
cash-flow model customized for EPSs and applications that include
battery chargers covered in this rulemaking. The key MIA output is
industry net present value, or INPV. DOE used the GRIM to calculate
cash flows using standard accounting principles and to compare changes
in INPV between a base case and various TSLs (the standards case). The
difference in INPV between the base and standards cases represents the
financial impact of the new and amended standards on manufacturers.
Different sets of assumptions (scenarios) produce different results.
DOE calculated the MIA impacts of new and amended energy
conservation standards by creating separate GRIMs for EPS original
device manufacturers (ODMs) and battery charger manufacturers. In each
GRIM, DOE presents the industry impacts by grouping similarly impacted
products. For EPSs DOE presented the industry impacts by grouping the
four representative product class B units (with output powers at 2.5,
18, 60, and

[[Page 18550]]

120 Watts) to characterize the results for product classes B, C, D, and
E. DOE also presented the results for product classes X and H
separately. For battery chargers, DOE presented the industry impacts by
the major product class groupings for which TSLs are selected (product
class 1; product classes 2, 3, and 4; product classes 5 and 6; product
class 7; product class 8; product class 10). When appropriate, DOE also
presented the results for differentially impacted industries within and
across those groupings. This is necessary because a given industry,
depending upon how narrowly it is defined, may fall into several
product classes. By segmenting the results into these similar
industries, DOE is also able to discuss how subgroups of battery
charger manufacturers will be impacted by new energy conservation
standards.
The complete MIA is presented in chapter 12 of the NOPR TSD.
2. EPS MIA
The MIA for EPSs focused on the original device manufacturers--or
ODMs. These companies manufacture the EPS itself, as opposed to the
application it is designed for or sold with. DOE analyzed the impact of
standards on EPS manufacturers at the ODM level for three basic
reasons: (1) The ODM typically certifies compliance with the DOE energy
conservation standards and completes most design work for the EPS (even
if EPS specifications are given by an OEM); (2) unlike battery
chargers, the EPS is not fully integrated into end-use applications;
and (3) most of the EPS final assembly and manufacturing is done by
ODMs, which then ship the EPS as a component to OEMs. In essence,
unlike a battery charger, the EPS typically becomes a final product
when under the control of the ODMs, regardless of any additional steps
in the distribution chain to the consumer.
a. EPS GRIM Key Inputs
Many of the inputs to the GRIM come from the engineering analysis,
the NIA, manufacturer interviews, and other research conducted during
the MIA. The major GRIM inputs are described in detail in the sections
below.
i. EPS Manufacturer Production Costs
The MIA is concerned with how changes in efficiency impact the
manufacturer production costs (MPCs). The MPCs and the corresponding
prices for which fully assembled EPSs are sold to OEMs, frequently
referred to as ``factory costs'' in the industry, are major factors in
industry value calculations. DOE's MPCs include the cost of components
(including integrated circuits), other direct materials of the
finalized EPS, the labor to assemble all parts, factory overhead, and
all other costs borne by the ODM to fully assemble the EPS.
In the engineering analysis, cost-efficiency curves are developed
for the four representative product class B units and product classes X
and H, which were all analyzed directly. The MPCs are calculated in one
of two ways. For the product class B representative units, DOE based
its MPCs on information gathered during manufacturer interviews. In
these interviews, manufacturers described the costs they would incur to
achieve increases in energy efficiency. For product classes H and X,
the engineering analysis created a complete bill of materials (BOM)
derived from the disassembly of the units selected for teardown.
To calculate the percentage of the MPC attributable to labor,
material, and overhead, DOE used the average percentages from all
teardowns completed as part of the engineering analysis.
For further detail, see the Engineering Analysis discussion in
section IV.C.1 of this NOPR.
ii. EPS Shipment Forecast
Industry value, the key GRIM output, depends on industry revenue,
which, in turn, depends on the quantity and prices of EPSs shipped in
each year of the analysis period. Industry revenue calculations require
forecasts of: (1) Total annual shipment volume; (2) the distribution of
shipments across analyzed representative units (because prices vary by
representative unit); and, (3) the distribution of shipments across
efficiencies (because prices vary with efficiency).
In the NIA, DOE estimated total EPS shipments by application in
2009 and assumed a constant compound annual growth rate for total EPS
shipments throughout the analysis period. DOE did not assume a decrease
in shipments due to energy conservation standards.
The GRIM requires that shipments be disaggregated by analyzed
representative unit. In the LCC, DOE allocated total EPS shipments
among all analyzed EPS applications. In the MIA, DOE assigned each
application's associated EPS shipments to one of the six representative
units in the following manner. First, DOE assigned any EPS application
that uses multiple voltages to product class X. Second, any EPS
application with an output power greater than 250 Watts was assigned to
product class H. Lastly, DOE assigned each unit shipped in product
classes B, C, D, and E to one of four groups, corresponding to one of
the four representative units (output powers of 2.5, 18, 60, and 120
Watts), whichever has the closest output power. For example, if an
application has an output power of 4 Watts, DOE assigned that
application to the 2.5W representative unit grouping.
As discussed above, revenue calculations also require knowledge of
the efficiency distribution in each year of the analysis period. DOE
first developed efficiency distributions for 2009 based on products
that DOE tested. Next, DOE estimated a 2013 efficiency distribution
based on an assessment of recent trends in product efficiency. DOE then
linearly extrapolated the efficiency distributions for the intermediate
years between 2009 and 2013. DOE assumed a constant efficiency
distribution in the base case throughout the analysis period. See
section IV.G of this NOPR for more information about DOE's base-case
EPS shipments forecast.
iii. EPS Product and Capital Conversion Costs
DOE expects new and amended energy conservation standards to cause
some manufacturers to incur one-time conversion costs to bring their
production facilities and product designs into compliance with the new
and amended standards. For the MIA, DOE classified these one-time
conversion costs into two major groups: (1) product conversion costs
and (2) capital conversion costs. Product conversion costs are one-time
investments in research, development, testing, marketing, and other
non-capitalized costs focused on making product designs comply with the
new and amended energy conservation standards. Capital conversion costs
are one-time investments in property, plant, and equipment to adapt or
change existing production facilities so that new product designs can
be fabricated and assembled.
DOE received several comments on the preliminary analysis about the
impact of product and capital conversion costs on EPS manufacturers and
OEMs. Many commenters expressed concerns about potential conversion
costs. AHAM suggested that DOE seek input from manufacturers related to
the impact of additional engineering, testing, and capital improvements
that are associated with any significant design changes. Specifically,
AHAM noted that changes to the outside housing of some battery chargers
and EPSs will result in changes to plastic injection molds that cost
tens of thousands of dollars each year, as well

[[Page 18551]]

as changes in the size of external packaging of the product. (AHAM, No.
42 at p. 11) Similarly, Cobra suggested that incremental engineering
design costs be assessed because they may become a significant part of
the initial cost of the product. (Cobra, No. 51 at p. 2)
DOE agrees that testing, certification, and engineering costs could
represent a substantial cost for the EPS industry. DOE relied on a
number of assumptions from other analyses and data gathered from
publicly available sources to estimate product conversion costs. The
key values used to estimate product conversion costs were application
lifetimes, shipments of each application from 2011 and 2013, and
typical industry research and development expenses. Because the product
lifecycle tends to be shorter for electronics, DOE assumed that in the
base case, a portion of the applications will be redesigned between the
announcement of an energy conservation standard and the implementation
of that energy conservation standard. Those applications that are
scheduled for redesign are excluded from the projected product
conversion costs.
DOE assumed that an application's product lifetime--the average
number of years a product is used by consumers--is equal to its
production cycle, the average number of years between when
manufacturers redesign that application. DOE based this simplifying
assumption on feedback received from several manufacturers during
manufacturer interviews. However, DOE is aware that not all product
lifetimes directly correspond to their production cycle, as some
products may have shorter or longer production cycles compared to their
product lifetimes. DOE believes on average the product lifetime is an
appropriate estimate of the production cycle for an application. So for
example, for an application with a five-year product lifetime, DOE
assumed that application to also have a five-year production cycle.
Therefore on average one-fifth of these applications would be
redesigned each year by manufacturers. Because there is a two-year time
period between the announcement of the standard and its compliance
date, two-fifths of the applications with a five-year production cycle
will be redesigned in that timeframe, irrespective of whether a
standard is implemented. As a result, three-fifths of the five-year
applications would need to be redesigned as a result of a new or
amended energy conservation standard. In addition, only those products
that do not meet the established energy conservation standard would be
required to be redesigned, as the efficiency of products meeting or
exceeding the standard would remain unchanged.
AHAM stated that products that undergo changes must be sent to
third-party testing laboratories for energy efficiency testing and
these testing costs must be factored into the overall cost of changing
a product's design. AHAM suggested that DOE ask manufacturers for
information on these costs. AHAM also argued the cost of safety
certification should be included in the overall cost. (AHAM, No. 42 at
pp. 11) Cobra commented that third-party testing would be an undue
burden on manufacturers, stating that DOE should not require it unless
a significant compliance problem with the current system is proven.
(Cobra, No. 51 at p. 4)
DOE notes that it does not currently require manufacturers to use
third-party testing to demonstrate compliance with EPS or battery
charger energy conservation standards as the above comments suggest.
However, DOE recognizes other organizations that provide certifications
for safety or other product attributes may constitute part of the total
product conversion costs (such as UL certification). DOE also
understands that many ODMs and/or OEMs will likely pay for third-party
testing to ensure compliance with the energy conservation standard
because many do not have certified labs. DOE included testing costs as
part of the research and development costs used to calculate the
product conversion cost for the industry because these costs represent
a significant portion of existing expenses that are factored into the
methodology.
DOE used a similar approach to calculate capital conversion costs,
using application lifetimes and the shipments of each application
between 2011 and 2013 as the key assumptions. Whereas DOE estimated
product conversion costs using a multiple of typical industry R&D
expenditures, DOE estimated capital conversion costs using a multiple
of typical industry capital expenditures. In response to AHAM's comment
regarding the potential changes to the plastic injection molds used to
cast the external casings of EPSs, DOE assumed in its analysis that the
changes for the actual EPS designs would require a lower capital
investment than for battery chargers because these changes would affect
only the external housing of an EPS. By comparison, battery chargers
may require changes to the entire housing, which would require a
greater capital investment.
Cobra also expressed concerns about conversion costs for
manufacturers of linear EPSs because, depending on the efficiency level
DOE sets, a manufacturer would have to transition from a mechanical
assembly process to an automated printed circuit board (PCB) assembly
process. (Cobra, No. 51 at p. 3)
The capital cost of transitioning from a mechanical assembly
process to an automated PCB assembly process would be borne by the EPS
ODM in most cases. For most CSLs, there are a variety of technologies
available for EPSs and many ODMs do not exclusively offer linear EPSs.
OEMs that do not own their own manufacturing facilities will also be
impacted by this transition, but the impact will manifest itself
primarily through higher factory costs after standards apply. DOE fully
analyzed these costs in the engineering costs and the GRIM's INPV
calculations. In particular, the capital conversion cost assumptions
that DOE used increase at CSLs that require a technology change
because, as Cobra states, these transitions greatly increase the
required capital and product conversion costs, especially for
manufacturers that must transition to a new assembly process. This
factor is taken into account for the 2.5W representative unit. DOE
assumed the product and capital conversion costs associated with
upgrading CSL 1 and baseline 2.5W representative units would be greater
than the product and capital conversion costs of other representative
units because the technology employed in upgrading those 2.5W
representative units change from linear to switch mode technology. This
technology change would be more costly than an ordinary product
redesign because companies focusing on incremental changes for
applications using linear technology may not have the experience and
expertise to implement switch mode technology in their applications
without additional product development efforts.
See chapter 12 of the TSD for a complete description of DOE's
assumptions for the capital and product conversion costs.
iv. Financial Inputs
DOE was unable to locate sufficient data on publicly-traded EPS
manufacturers because few, if any, major EPS ODMs are publicly traded
in the United States. Consequently, few, if any, of these companies
file annual 10-K reports with the Securities and Exchange Commission.
Because these documents were not available, the preliminary MIA DOE
developed began with the basic financial parameters used in the ballast
rulemaking (such as R&D percentage of revenue, capital expenditure
percentage of revenue,

[[Page 18552]]

SG&A percentage of revenue, tax rate as a percentage of revenue, etc.)
because many of the companies included in that analysis were structured
similarly to EPS manufacturers, manufacture products in similar
locations, and use similar production processes [76 FR 20090, 20134-
20135 April 11, 2011 (notice of proposed rulemaking to set amended
efficiency standards for fluorescent lamp ballasts, describing various
aspects of the manufacturing industry) and section 4.3 of chapter 13 of
the NOPR TSD accompanying that notice]. During manufacturer interviews,
DOE asked EPS manufacturers to comment on these initial financial
parameters. Several EPS manufacturers interviewed confirmed that these
initial financial parameters were an appropriate representation of the
EPS industry. Consequently, DOE applied these parameters in analyzing
the EPS industry in the MIA.
v. EPS Standards-Case Shipments
The base-case efficiency distribution and growth rate drive total
industry revenue in the base case. In the standards case, DOE assumed
that manufacturers will respond to new and amended standards by
improving only those products that do not meet the standards in 2013,
but not exceed, the new and amended standard level. Products that
already meet or exceed the proposed level remain unaffected. This is
referred to as a ``roll-up'' scenario. See chapter 9 of the TSD for a
complete explanation of the efficiency distribution of EPSs and battery
chargers by product class.
vi. EPS Markup Scenarios
As discussed above, the MPCs of the six representative units are
the factory costs of the ODM and include direct labor, material,
overhead, and depreciation. The MSP is the price the ODM sells an EPS
to an OEM. The MSP is equal to the MPC multiplied by the manufacturer
markup. The manufacturer markup covers all the ODM's non-production
costs (i.e., SG&A, R&D, and interest, etc.) and profit. Total EPS
revenue is equal to the MSPs at each CSL multiplied by the shipments at
that CSL.
Modifying these manufacturer markups in the standards case yields
different sets of impacts on manufacturers. For the MIA, DOE modeled
two standards-case markup scenarios to represent the uncertainty
regarding the potential impacts on prices and profitability for
manufacturers following the implementation of new and amended energy
conservation standards: (1) A flat markup scenario and (2) a
preservation of operating profit scenario. These scenarios lead to
different markups values, which, when applied to the inputted MPCs,
result in varying revenue and cash flow impacts.
The flat markup scenario assumed that the cost of goods sold for
each product is marked up by a flat percentage to cover SG&A expenses,
R&D expenses, and profit. This scenario represents the upper bound of
industry profitability in the standards case because manufacturers are
able to fully pass through additional costs due to standards to their
customers.
DOE also modeled a lower-bound profitability scenario. During
interviews, ODMs and OEMs indicated that the electronics industry is
extremely price sensitive throughout the distribution chain. Because of
the highly competitive market, this scenario models the case in which
ODMs' higher production costs for more efficient EPSs cannot be fully
passed through to OEMs. In this scenario, the manufacturer markups are
lowered such that manufacturers are only able to maintain the base-case
total operating profit in absolute dollars in the standards case,
despite higher product costs and required investment. DOE implemented
this scenario in the GRIM by lowering the manufacturer markups at each
TSL to yield approximately the same earnings before interest and taxes
in both the base case and standards cases in the year after the
compliance date for the new and amended standards. This scenario
represents the lower bound of industry profitability following new and
amended energy conservation standards because higher production costs
and the investments required to comply with the new and amended energy
conservation standard do not yield additional operating profit.
b. Comments From Interested Parties Related to EPSs
DOE also received comments on the potential manufacturer impacts
that would result from DOE's treatment of EPSs as both a stand-alone
product and a component of another regulated product (the battery
charger). AHAM stated that this treatment could lead to duplicative
testing if this rulemaking were to establish different compliance dates
for EPSs and battery chargers, or if future standards were to be
updated at different points for battery charger and EPSs. (AHAM No. 44
at p. 11)
In response, DOE notes that EPS and battery charger standards for
this rulemaking will go into effect on the same date. Therefore, DOE
does not foresee a situation in which updated regulations would occur
at different intervals.
To account for the compliance costs for certifying an EPS alone and
as a component of a battery charging system, DOE has included
compliance costs for both the EPS and the battery charging system in
its conversion cost estimates in the EPS GRIM and the battery charger
GRIM, respectively. DOE also notes for product class N EPSs, which only
function as a battery charger component (as opposed to EPSs that can
directly power the application), the Class A EPS standards prescribed
in 42 U.S.C. 6295(u)(3) will continue to apply to the Class A EPSs in
product class N. Any additional energy-related savings generated by the
use of more efficient product class N EPSs will be captured through the
battery charger standards that DOE is proposing to set. Consequently,
conversion costs for product class N EPSs are not included in the EPS
analysis, but the conversion costs for the battery charging portion of
the application are included in the battery charger GRIM for these
applications. DOE believes that this approach will help to ensure that
additional energy savings can be obtained by applying more stringent
levels in a manner that reduces the complexity of the overall standards
that are set. Depending on the additional information that DOE receives
in response to this proposed approach, the agency may alter the
approach to account for that additional information.
In response to the preliminary analysis, Cobra suggested that DOE
account for incremental engineering design costs in the rulemaking
analysis, as those costs may comprise a significant portion of the
product's initial cost. DOE notes that the incremental engineering
costs are directly accounted for in the MPCs which are a central input
to the GRIM.
Cobra also questioned what it viewed as a DOE assumption that
achieving a new or amended standard can be done with present staffing
and within the two years between the notice and the compliance date.
Cobra stated that while this may be possible if the standard is set
close to today's standards, it will not continue to be the case if the
standard is set closer to the max tech level. Cobra stated that
achieving a new or amended standard will take even longer if DOE
regulates products under an EPS and battery charger regulation at the
same time due to additional design burdens. (Cobra, No. 51 at p. 2)
Partly in recognition of this situation, DOE is not proposing new
or amended standards for product class N EPSs in

[[Page 18553]]

today's notice. This approach allows manufacturers to focus on
improving the efficiency of these products as a system. As shown by
DOE's capital and product conversion costs that increase at each higher
efficiency level, DOE also agrees that standards that are closer to
max-tech would require a more substantial research and development
effort by manufacturers and are accounted for in DOE's analysis.
However, DOE does not assume that standards set closer to the max tech
level could be met by all manufacturers with their present staffing. In
addition to standard research and development expenses that account for
ongoing product development, DOE's methodology accounts for the
additional product conversion costs that would be required for products
that fall below the required efficiency level or would not have been
redesigned in the period between the final rule's issuance and the
compliance date of the standard. The EPS conversion cost estimates also
account for any additional engineering or product development resources
necessary to meet new or amended energy conservation standards.
c. High-Power EPS Manufacturer Interviews
To better understand the possible impacts on product class H, DOE
attempted to gather more information about the possible impacts on
high-power EPS ODMs. DOE identified a total of 13 manufacturers of
high-power EPSs. DOE attempted to contact all manufacturers of high-
power EPSs. DOE managed to locate contact information for eleven of
these manufacturers and contacted each to schedule interviews. Six of
these eleven were domestic manufacturers and five were foreign
manufacturers. Of these eleven manufacturers for whom DOE found contact
information, five were non-responsive. The remaining six declined to
discuss the impacts of new standards on high-power EPSs. Four of the
six manufacturers that declined to be interviewed were domestic
manufacturers and two were foreign manufacturers.
3. Battery Charger MIA
In the battery charger MIA, DOE analyzed the impacts of standards
on manufacturers of the applications that incorporate the covered
battery chargers (the application OEMs). DOE believes this MIA focus,
which differs from the approach DOE is using for the EPS MIA, is
appropriate for several reasons.
First, the application OEM will be the party most directly
financially impacted by any energy conservation standards, as evidenced
by their participation in the rulemaking process. Battery chargers are
almost always integrated into and/or sold with the final application--
meaning the severity of necessary conversion costs and the financial
impact of higher battery charger costs can only be assessed
meaningfully at the application level. Because most battery chargers
are sold with, or fully integrated into, the end-use application, OEMs
will pay for any costs required to alter the application if the new
battery charger design requires it. These costs will vary from
application to application, even within a product class.
Second, the battery charger value chain varies greatly and is
principally dictated by the application for which it is designed and
with which it is sold. While EPSs are almost exclusively sold as
finalized components, battery charger manufacturing is split between
companies that produce battery chargers for OEMs and OEMs that produce
battery chargers ``in house.''
Third, the OEM typically designs the battery charger and would
certify compliance with any DOE regulations because it is often
impossible to separate the battery charger from the application.
Fourth, even if the OEM does not design the battery charger, it
typically will still integrate it into the final product. As a result,
even if an OEM did not design the battery charger, it must still
integrate it into the final application. Therefore, the OEM will be
responsible for any changes to the application (such as the plastic
housing) which are necessary due to the changes in the battery charger.
Lastly, within a given product class, individual applications may
be much more severely impacted than others within the same product
class--even at the same CSL. These differential impacts would be
obscured if DOE did not consider the different characteristics of the
application industries.
In some industries, particularly those that utilize high-energy
battery chargers, the directly impacted party will likely be the
battery charger ODM (as opposed to the OEM). Manufacturers of battery
chargers for golf cars, for example, produce and sell stand alone
battery chargers and would be responsible for compliance with energy
conservation standards and all associated conversion costs. DOE
conducted a subgroup analysis for product class 7, which it presents in
the regulatory flexibility analysis, section VI.B. That analysis
addresses the potential impacts of the proposed standards on small
businesses. DOE is following this approach because the only
manufacturers of these products that DOE identified are small
businesses.
To calculate impacts on the application OEM, DOE analyzed the
industries of the applications that use covered battery chargers. DOE
presents results in two different ways. First, DOE presents the
industry impacts by the major product class groupings for which TSLs
are derived (product class 1; product classes 2, 3, and 4; product
classes 5 and 6; product class 7; product class 8; product class 10).
Second, DOE used an alternative construction for evaluating the MIA
results for battery chargers. DOE has developed this approach because
if it grouped results in the same manner as the TSL product class
groupings noted above, they would not adequately account for the fact
that many applications within the same product class groupings are very
dissimilar. The aggregate projected impacts would not necessarily be
representative of each particular industry within each product class
grouping. To address this potential problem, the analysis (particularly
for product classes 2, 3, and 4) groups applications into four industry
subcategories. These industry subgroups share similar characteristics
and the proposed standards are projected to affect these industry
subgroups similarly. To group the applications, DOE assigned each
application to one of four distinct industry subgroups: small
appliances, consumer electronics, power tools, and high-energy products
(``high-energy'' products are those applications that fit into product
classes 5, 6, and 7). This additional approach enhances the
interpretability and transparency of the MIA results by providing a
meaningful way to compare impacts across applications.
DOE has set up a flexible methodology that allows the analysis of
individual applications or a set of applications. DOE reports these
quantitative MIA results for each individual application, product
class, and industry subgroup in chapter 12 of the TSD.
a. Battery Charger GRIM Key Inputs
Many of the inputs to the GRIM come from the engineering analysis,
the NIA, manufacturer interviews, and other research conducted in
preparing the MIA. The major GRIM inputs are described in detail in the
sections below.
i. Battery Charger Manufacturer Production Costs and Application Prices
Calculating manufacturer impacts at the OEM level for battery
chargers

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requires two critical inputs: First, the price that the application OEM
charges for its finished product (to calculate revenue); and, second,
the portion of that price represented by its battery charger (to
calculate costs) at each CSL.
For the first component, DOE determined representative retail
prices for each application by surveying popular online retailer Web
sites to sample a number of price points of the most commonly sold
products for each application. The price of each application can vary
greatly depending on many factors (such as the features of each
individual product). For each application, DOE used the average
application price found in the product survey. DOE then discounted this
representative retail price back to the application MSP using the
retail markups derived from annual SEC 10-K reports in the Markups
Analysis, as discussed in section IV.F.
DOE calculated the second figure--the price of the battery charger
itself at each CSL--in the engineering analysis. The engineering
analysis calculated a separate cost efficiency curve for each of the 10
battery charger product classes. Based on product testing data, tear-
down data and manufacturer feedback, DOE created a BOM at the ODM level
to which markups were applied to calculate the MSP of the battery
charger at each CSL. DOE then allocated the battery charger MSPs of
each product class to all the applications within each product class.
In this way, DOE arrived at the cost to the application OEM of the
battery charger for each application.
ii. Battery Charger Financial Parameters
Because any two application OEMs may compete in very different
markets, a single set of financial parameters cannot adequately
characterize each manufacturer's cost structure. To address this
limitation, DOE gathered and disaggregated publicly available financial
data for representative manufacturers in each of the four industry
categories it analyzes: Small appliance manufacturers, consumer
electronics manufacturers, power tool manufacturers, and high-energy
product manufacturers. DOE then assigned each application to one of the
four industry subgroups. In the GRIM, each individual application uses
the cost structure of the industry subgroup to which it belongs.
iii. Battery Charger Shipment Forecast
As with EPS shipments, DOE estimated total domestic shipments of
each analyzed application for 2013 that is sold with a battery charger.
DOE then distributed the associated shipments among the 10 product
classes and among the four industry subgroups. See chapter 12 of the
TSD for a complete list of the applications DOE included in each of the
four industry subgroups. DOE also adjusted its efficiency distributions
and shipments in the base case, to account for pending efficiency
regulations in California (for more information please see IV.A.2.d).
In the GRIM, DOE used the battery charger shipment projections from
2009 to 2042 that were generated in the NIA.
iv. Battery Charger Product and Capital Conversion Costs
Capital and product conversion costs triggered by a new energy
conservation standard are critical inputs to the GRIM. DOE received
various comments about the impact of product and capital conversion
costs on manufacturers of applications that incorporate covered battery
chargers.
AHAM suggested that DOE seek manufacturer input regarding the
impact of additional engineering, testing, and capital improvements
that are associated with any significant design changes that would be
needed to satisfy new standards for battery chargers. Specifically,
AHAM noted that changes to the outside housing of some battery chargers
will result in changes to plastic injection molds that cost tens of
thousands of dollars each year, as well as changes in the size of the
external packaging of the product. (AHAM, No. 42 at p. 11) PTI stated
that manufacturers will encounter redesigning, retooling and re-
qualifying costs for battery chargers used in power tools. The
magnitude of these costs will depend on the final CSL selected. For
example, the difference between CSL 1 and CSL 2 for product class 4
could be hundreds of thousands of dollars. (PTI, No. 45 at p. 13)
Similarly, Cobra argued that incremental engineering design costs
should be included in the analysis because they may become a
significant part of the initial cost of the product. (Cobra, No. 51 at
p. 2)
DOE agrees that testing and engineering costs could represent a
substantial cost burden to manufacturers, depending on the efficiency
levels eventually selected. DOE has included the testing costs for
battery charger applications to comply with the energy conservation
standards in its calculation of conversion costs. At the higher CSLs,
manufacturers could be compelled to redesign products that would have
been redesigned years later in the base case. DOE accounts for the
additional testing and engineering time by assuming that energy
conservation standards would require manufacturers to alter products
before the end of their natural lifecycle, resulting in substantial
product conversion costs. The extent of the product conversion costs
depends largely on whether a given standard level requires a technology
change--moving from NiMH to lithium ion chemistry, for example--or only
minor design tweaks. Within a given product class, some applications
will face technology changes and the associated major redesigns at much
lower CSLs than other applications. Therefore, DOE estimated product
conversion costs for each individual application, rather than in
aggregate by product class.
Because of the large number of applications analyzed, DOE
approximates the impacts of standards-driven conversion costs by
assuming manufacturers will incur a given multiple of normal R&D and
normal capital expenditures. The exact multiple used depends on each
CSL and each product class and is calibrated to manufacturer feedback
received during interviews. Intuitively, this approach to product and
capital expenditures accelerates the product cycle and compresses
resources that would normally have been spread over a number of years
into a shorter timeframe. In the standards case, these expenditures are
in addition to, and not in lieu of, normal engineering, testing and
equipment costs. DOE only assumes conversion costs for the proportion
of shipments that fall below the analyzed TSL within any given
application. Also, DOE separately calculated the conversion costs
associated with the products sold in California that would have to
comply with the CEC battery charger standard. These conversion costs
are included in the base case and separate from the conversion costs
associated with the DOE standard. For example, in product class 4,
computer notebooks would not be impacted at CSL 1 because all computer
notebooks meet CSL 1 in the base case. In contrast, DIY power tools
would face more substantial conversion costs at CSL 1 because 40
percent of all models would not meet this level and would need to be
upgraded. Therefore, DOE assumes these applications, despite
incorporating battery chargers that are in the same product class,
would incur different levels of R&D and capital expenditures.
Based on manufacturer interviews and the engineering analysis, DOE
anticipates that new standards may result in the alteration of the
external housing in the application, which would trigger additional
design costs and expenses for new injection molds used to construct
these housings. DOE tentatively believes these changes

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would most likely occur in those applications incorporating battery
chargers that require a substantial technology shift to meet the new
standards. DOE includes the associated housing costs in its estimates
of the capital conversion costs and believes its methodology accounts
for these changes.
As discussed in section IV.I.2.a.iii of the EPS MIA methodology,
AHAM and Cobra communicated concerns regarding testing and
certification costs that are associated with changes in products due to
new standards. (AHAM, No. 42 at p. 11; Cobra, No. 51 at p. 4) DOE
summarizes and responds to these comments, which relate to battery
chargers as well as EPSs, in section IV.I.2.a.iii.
PTI also noted that manufacturers will encounter ``stranded costs''
when forced to retire tooling before the end of its service life,
resulting in unused inventory. Stranded costs are capital assets that
are not yet fully depreciated, but are made obsolete by a new or
amended energy conservation standard. (PTI, No. 47 at p. 13)
DOE agrees with PTI that energy conservation standards could strand
tooling before the end of its useful life. DOE has estimated these
costs as part of stranded assets, which are treated as a non-cash
expense in the compliance year of the standard.
PTI asserted that the resources that manufacturers would ordinarily
devote to new product development, which drives much of the power tool
industry, would be reduced in order to meet any new regulations. (PTI,
No. 47 at p. 13)
DOE understands there are opportunity costs related to any
investment and that manufacturers may face difficult decisions in
selecting non-energy related product development projects when faced
with the prospect of standards-induced resource allocation. DOE notes
that the GRIM analysis accounts for both ordinary, ongoing research and
development efforts, as well as those prompted by new energy standards.
DOE weighs these impacts when deciding the most appropriate TSL for the
proposed standard.
PTI stated that the power tool industry is somewhat unique because
a significant proportion of its members' product offerings revolve
around detachable pack battery systems. Achieving higher CSLs depends
on fulfilling certain technical changes that would require redesigning
the entire battery charger, including the battery pack. According to
PTI, this situation would disrupt the market because manufacturers
would be required to abandon these legacy systems and strand a large
installed base of consumers with unsupported systems. For example, in
product class 4, PTI argued that CSL 2 would require nickel-based
systems to switch to Li-ion, which would most likely require a complete
redesign of the system that is unlikely to be backward compatible with
existing tools. (PTI, No. 47 at p. 12)
DOE agrees it would take a substantial research and development
effort to redesign nickel-based systems to Li-ion. For power tools, the
backward compatibility issues described by PTI arise from designing the
entire battery chargers (including the battery pack) for power tool
applications. Based on its engineering analysis, DOE tentatively
believes that the technical challenges to achieving backward
compatibility could be met at CSL 2 in the context of a complete
redesign. DOE has accounted for the additional engineering costs in the
MIA.
v. Battery Charger Standards-Case Shipments
The base-case efficiency distribution and growth rate drive total
industry revenue in the base case. As with EPS shipments, the standards
case assumes that manufacturers will respond to standards by improving
those products that do not meet the new standards to meet, but not
exceed, the standard level. Products that are already as efficient as,
or more efficient than, the standard level would remain unaffected
under this approach. This is referred to as a ``roll-up'' scenario. DOE
did not consider elasticity or substitution away from battery chargers
in the standards case in the main NIA scenario. However, this was
considered as a sensitivity analysis which is included as an appendix
in chapter 12 of the NOPR TSD.
vi. Battery Charger Markup Scenarios
The revenue DOE calculates for the battery charger GRIM is the
revenue generated from the sale of the application that incorporates
the covered battery charger. It is the revenue earned on the sale of
the product to the OEM's first customer (e.g., the retailer). After
calculating the average retail price from the product price survey as
discussed above, DOE discounted the price by the appropriate retailer
markup (calculated in the market and technology assessment) to
calculate the per-unit revenue the OEM generates for each application.
To calculate the potential impacts on manufacturer profitability in the
standards case, DOE analyzed how the incremental costs of more
efficient battery chargers would impact this revenue stream on an
application-by-application basis.
In comments, manufacturers raised concerns about higher battery
charger input costs resulting in reduced profit margins. PTI stated
that many manufacturers only sell through retailers and have ``price
points'' that they must hit, particularly in the ``do-it-yourself''
(DIY) market. Although the cost to produce the product may change with
more efficient battery chargers, in its view, there would be no change
in price for the consumer. Faced with higher product costs, PTI
asserted that manufacturers will have to reduce gross margin or
ultimately reduce the utility of the product. (PTI, No. 47 at p. 12)
Lester also expressed concerns about increased costs to produce golf
cars, which will either be passed along to purchasers or result in
reduced profit margins for the manufacturers. (Lester, No. 52 at p. 1)
DOE acknowledges that new or amended standards have the potential
to increase product prices and disrupt manufacturer profitability,
particularly as the market transitions to meet a new energy
conservation standard. Based on the comments from interested parties
and DOE's manufacturer interviews, there is a great deal of uncertainty
regarding how the markets for such a wide variety of applications will
adjust, both in the near term and long term. To account for this
uncertainty, DOE analyzes three profitability, or markup, scenarios in
the GRIM: the ``constant price,'' ``pass through,'' and ``flat markup''
scenarios.
The constant price scenario analyzes the situation in which
manufacturers of applications are unable to pass on any incremental
costs of more efficient battery chargers to their customers. This
scenario is reflective of some manufacturers' description of the
negotiating power of large retailers, who account for the vast majority
of shipments of some applications. Manufacturers believe these large
retailers would be unwilling to accept any price increases. This
scenario results in the most significant negative impacts because no
incremental costs added to the application--either because of higher
battery charger component costs or because of investments in tooling
and design--can be recouped. As a result, manufacturer gross margins
decline as cost-of-goods-sold increase, on a dollar-for-dollar basis.
The higher the incremental cost of the battery charger with respect to
the total application price, the greater the impacts on the
manufacturer. For example, the impact of an incremental $2.00 increase
in the cost of the battery

[[Page 18556]]

charger is much greater on a product that sells for $50 than on a
product that retails for $500.
For some applications in certain product classes, the max-tech
battery charger price is nearly as expensive as the total base case
application price itself. Under the constant price scenario, such
circumstances can yield highly negative results, which are not
meaningful because, in reality, producers would not continue to produce
at prices that did not cover variable costs. If prices fell below the
level necessary to cover variable costs, a firm would be better off not
producing anything at all. Therefore, DOE applies a boundary condition
in the constant price scenario, which assumes that as battery charger
costs increase, application prices remain constant (and gross margin
would continue to decline) only until manufacturers cease to cover
their variable costs (where gross margin is zero). At that point, DOE
assumes manufacturers can pass on any further incremental costs of the
battery charger on a dollar-for-dollar basis to their customers.
In the pass through scenario, DOE assumes that manufacturers are
able to pass through the incremental costs of more efficient battery
chargers to their customers, but without earning any additional
operating profit on those higher costs. Therefore, though less severe
than the constant price scenario in which manufacturers absorb all
incremental costs, this scenario also results in margin compression and
adverse financial impacts as battery charger costs increase.
Lastly, DOE considers a flat markup scenario to analyze the upper
bound (most positive) of profitability impacts following the compliance
date of new standards. In this scenario, manufacturers are able to
maintain their base case gross margin as a percentage of revenue at
higher CSLs despite higher product costs of more efficient battery
chargers. In other words, manufacturers are able to pass on, and fully
mark up, the higher incremental product costs due to more efficient
battery chargers. This scenario is a more likely outcome for high-
value, differentiated products, for which energy efficiency indirectly
drives customer-valued benefits such as lighter weight and greater
transportability. For other applications, particularly low-cost
products for which energy efficiency is not an important selling
attribute, the scenario is less likely.
In summary, DOE believes these three scenarios present the
potential range of profitability impacts on OEM application
manufacturers.
b. Battery Charger Comments From Interested Parties
The following section discusses interested parties' comments on the
preliminary analyses that impact the battery charger MIA methodology.
In general, DOE provides background on an issue that was raised by
interested parties, summarizes the interested parties' comments, and
responds to those comments.
i. Compliance Date and Implementation Period
Many manufacturers commented on the implementation timeline of a
new standard. For example, with respect to medical devices, Philips
noted that the development life cycle is at least two to four years.
Philips also mentioned that the regulatory approval cycle for medical
products is longer than for consumer grade products, suggesting that
medical devices should either be exempt or be given a longer transition
time. (Philips, No. 43 at p. 3)
Lester expressed similar concerns, noting that the proposed
timelines are not reasonable for large, integrated vehicle
manufacturers. It added that properly designing, testing, and ramping
up production of a battery charging system commonly exceeds three
years. Furthermore, Lester stated that an insufficient timeline could
lead manufacturers to utilize components that have not been designed or
tested properly. Additionally, a premature compliance date could cause
product shortages, defects, increased costs, and unplanned capital
expenditures that will either be passed on to purchasers or result in
reduced profits. Lester suggested a timeline extension to five years.
(Lester, No. 52 at p. 1, 2) Similarly, Cobra stated that two years will
not be enough time to comply if DOE sets the standard level near max
tech. (Cobra, No. 51 at p. 2)
AHAM commented that the effective date should be two years after
the final rule for small appliance battery charger products, but noted
a longer time period might be necessary for some other product groups.
AHAM argued that an earlier effective date would facilitate consistency
across all 50 states. However, AHAM also mentioned that DOE must factor
in additional time due to new requirements for third-party testing.
(AHAM, No. 44 at p. 3, 11) Lastly, AHAM pointed out that the time
needed depends significantly upon which standard level DOE chooses, as
well as whether products are treated as both EPSs and battery chargers.
(AHAM, Pub. Mtg. Tr., No. 37 at p. 373, 374)
EISA 2007 prescribed a two-year period between the issuance of the
final rule for Class A EPSs and the compliance date of the amended
energy conservation standard. See 42 U.S.C. 6295(u)(3)(D). Congress did
not grant DOE with the specific authority to change this date for
individual product classes falling within Class A as requested by
Philips, Lester, and AHAM. However, DOE notes that Congress did not
impose a specific compliance date timeline for battery chargers and
newly covered non-Class A EPSs. For these products, DOE has tentatively
concluded that the two-year window between the announcement of the
final rule and compliance with rule is sufficient for manufacturers to
meet the TSLs analyzed in today's rule. As the comments suggest,
depending on the resources available to a given manufacturer, their
technological starting point, and the proposed CSL, the typical product
design cycle will vary significantly. As such, some manufacturers will
likely have to dedicate more resources than others to upgrade some or
all of their product lines. DOE notes, however, that designs achieving
the levels proposed in today's NOPR are currently on the market for all
product classes except battery charger product class 10. For all of
these product classes, the TSLs proposed are below the max-tech level
and either represent the best-in-market efficiency or a lower level.
For battery charger product class 10, however, DOE is proposing the
max-tech level based on information derived from manufacturer input.
Therefore, DOE has tentatively concluded that the technologies required
to reach the efficiencies proposed in today's rule are achievable
within two years.
DOE requests comment on what an appropriate compliance date for
battery chargers and non-Class A EPSs would be, including whether a
two-year lead time would be reasonable. DOE may decide to adjust the
compliance date for these products depending on the nature of the
information it receives on this issue.
With respect to unplanned capital expenditures, DOE agrees that
standards may require changes to tooling and equipment, as well as
incremental engineering efforts. Ultimately, whether any manufacturer
chooses to allocate the resources necessary to upgrade some or all of
their product lines, or to source some or all of them, is a business
decision. Regardless of these decisions, DOE accounts for the
conversion costs for manufacturers to upgrade all their non-compliant
products to comply with each TSL. DOE considers the results of

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this analysis in weighing the projected benefits and burdens associated
with the rule. See section 0 for that determination.
ii. Cumulative Regulatory Burden
Several manufacturers expressed concerns about other regulations
that affect battery chargers. Three potential regulations are the U.S.
Department of Transportation's regulation of the packaging and
transportation of Li-ion cells in both end-products and in cell
configurations, see 75 FR 1302 (Jan. 11, 2010), the future series of
regulations on battery chargers from the European Union, (Commission
Regulation (EC) No 278/2009 of 6 April 2009), and the California
battery charger standard set by CEC (Docket 11-AAER-2).
(AHAM, No. 44 at p. 11, 15)
For the cumulative regulatory burden, DOE attempts to quantify and/
or describe the impacts of other Federal regulations that have a
compliance date within three years of the compliance date of this
rulemaking. This analysis does not include the Department of
Transportation's proposal to regulate the packaging and transportation
of lithium ion cells given that no requirements are yet in place and
any analysis attempting to account for what these requirements might be
would be speculative. DOE does acknowledge that EU regulations on
battery chargers would be an overlapping regulatory burden on
manufacturers, if the EU decides to regulate battery chargers in the
future, because identical products are sold throughout the world. At
this time the EU has specifically excluded battery chargers from their
regulations but will consider in the future to expand the scope of the
regulation to include battery chargers (see the adopted draft
regulation of EC No 278/2009, 17 October 2008, p. 10). DOE does not
include the costs to comply with future regulations in the EU because
they are outside the scope of the cumulative regulatory burden, which
focuses on Federal regulations. However, DOE did quantitatively assess
the impacts of the CEC battery charger standard on battery charger
manufacturers in section V.B.2.e of this NOPR.
iii. Employment
Lester expressed concerns about losing domestic manufacturing jobs
to low-cost countries as a result of implementing the new standard. The
company stated that because switch-mode battery charger assembly is
more labor intensive than other designs, it expects standards requiring
switch-mode designs to accelerate the trend towards offshore
manufacturing. Lester added that DOE should prioritize the impact to
manufacturing in the U.S. among other criteria in determining which
standards to adopt. According to Lester, battery chargers for
applications that use transformer-based battery chargers, which are
typically used in high-energy applications, tend to correlate with
requirements for longer life, greater durability, and higher
reliability. (Lester, No. 52 at p. 3)
While the vast majority of applications using EPSs and battery
chargers are manufactured overseas, DOE agrees that new or amended
standards could adversely impact domestic employment for companies
currently producing covered products in the United States. This is
especially a concern for the golf car industry because battery chargers
for this application still have a significant U.S. manufacturing
presence. Any manufacturers that would be forced to develop a new
technology to meet new standards, especially one that is more labor
intensive, would face significant economic pressures to move operations
overseas or source products directly from overseas third-party
suppliers. DOE's direct employment analysis (see section V.B.2.b)
discusses the preliminary estimates for the impacts on changes in
employment at the analyzed TSLs.
In selecting the TSLs proposed in today's notice, the Secretary
considers a variety of factors to weigh the overall benefits and
burdens of the rule, including, as Lester notes, the impact on United
States manufacturing. DOE also notes that the impacts on small
businesses are treated directly in the Regulatory Flexibility Analysis
in section VI.B.
iv. Supply Chain
Lester expressed concerns over the potential for supply chain
disruptions, noting that as production of chargers is moved to lower-
cost countries, manufacturers of electric vehicles will face logistical
risks that are less likely to occur domestically. (Lester, No. 52 at p.
2)
DOE agrees that overseas manufacturing can complicate the supply
chain of firms that elect to move production offshore. However, such a
strategy is a business decision and not one that is required to meet
the TSLs analyzed in today's rulemaking. DOE also notes that the vast
majority of all battery chargers on the market already make use of
global supply chains.
4. Comments From Interested Parties Related to EPSs and Battery
Chargers
The following section discusses interested parties' comments on the
preliminary analyses that impact both the EPS and battery charger MIA
methodology. This section provides background on specific issues raised
by interested parties, summarizes the relevant comments, and discusses
DOE's response.
a. Cumulative Burden
AHAM expressed concern about the possibility of DOE applying CEC's
Tier 2 EPS standards which, it asserts, are wrongly applied to the wall
adapters of battery chargers. (AHAM, No. 44 at p. 15) PTI added that
DOE should consider the cumulative regulatory burden that would be
imposed if the CEC were to regulate the power factor of battery
chargers. This would increase the costs of achieving higher
efficiencies. (PTI, No. 47 at p. 11)
With respect to the CEC standards, DOE notes that the proposed EPS
standards in today's NOPR would preempt state regulations on EPS
efficiencies. As for potential power factor regulation, DOE has
included a quantitative analysis of the CEC standard on battery charger
manufacturers in section V.B.2.e.
Similarly, Philips expressed concerns about FDA regulations on
medical products, which can delay the time-to-market from a few weeks
to many months. Philips also noted that the EU Directive on the
Restriction of Hazardous Substances (RoHS) proposed a minimum of six
years for medical device manufacturers to reach compliance, which
reflects a longer product design cycle and regulatory approval process.
(Philips, No. 43 at p. 3)
DOE acknowledges that the EU RoHS proposed a minimum of six years
for medical device manufacturers to comply with the directive. However,
EU's RoHS regulations have the potential to affect the entire medical
application, while the DOE energy conservation standards at issue here
cover only the battery charger or EPS portion of the device. DOE does
not include the costs to comply with future regulations in the EU as
part of the cumulative regulatory burden because they are outside its
scope, which focuses on U.S. regulations. DOE notes that it has the
authority to set a compliance period for non-Class A EPSs and battery
chargers that varies from the two-year lag between the issuance of the
final rule and the compliance date of the standard prescribed in EISA
for Class A

[[Page 18558]]

EPSs. However, DOE has consulted with the FDA and does not believe that
this extension for non-Class A EPSs is necessary. This situation is
described in detail in chapter 3 of the TSD. DOE also does not believe
there are technical differences between medical EPSs and non-medical
EPSs that would affect the ability of manufacturers to improve the
efficiency of medical EPSs. However, DOE requests further comment on
the appropriateness of the proposed compliance date for non-Class A EPS
and battery charger product classes and if there are any specific
medical applications that would be adversely affected by a 2013 date
that mirrors the statutorily-prescribed compliance date for Class A
EPSs.
Cobra commented on the significant burden facing small
manufacturers from recent regulatory actions including EISA 2007, the
Consumer Product Safety Improvement Act of 2008 (CPSIA 2008),
California's Safe Drinking Water and Toxic Enforcement Act of 1986
(Proposition 65), Mercury-Containing and Rechargeable Battery
Management Act, recycling regulations, and EU's RoHS. Cobra contended
that these regulations challenge its ability to compete against larger
companies while spending resources to prove compliance with all
established regulations. Cobra also mentioned that while it does not
manufacture products that are covered under CPSIA 2008, it asserted
that it needs to demonstrate to customers that its products can still
satisfy those requirements for marketing purposes. (Cobra, No. 53 at
pp. 1, 2)
DOE agrees that maintaining compliance with the various standards
may be a challenge for manufacturers, especially smaller manufacturers.
Furthermore, DOE understands that because products with EPSs and
battery chargers are sold globally, the design of these products are
more harmonized than for other appliances. DOE has analyzed the cost to
comply with the EISA requirements in this rulemaking. DOE also further
describes the recycling requirements and RoHS in chapter 12 of the TSD.
DOE has also attempted to quantify these costs where applicable.
b. Competition
AHAM asked DOE to evaluate the potential for a reduction in
competition, in the event standards cause manufacturers of low-cost
products to leave the market. (AHAM, Pub. Mtg. Tr., No., No. 37 at p.
144)
EPCA directs DOE to consider any lessening of competition likely to
result from standards. It directs the Attorney General to determine the
impact, if any, of any lessening of competition likely to result from a
proposed standard and to transmit such determination to the Secretary,
not later than 60 days after the publication of a proposed rule,
together with an analysis of the nature and extent of such impact. (42
U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) DOE will transmit a copy of
today's proposed rule to the Attorney General and request that the U.S.
Department of Justice (DOJ) provide its determination on this issue.
DOE will publish and address the Attorney General's determination in
the final rule, if any, and will pay particular attention to any
potential competitive impacts in that determination.
At this time, DOE does not believe there is significant potential
for a reduction in competition due to the standards proposed in this
rule. Particularly for some of the low-cost products, there are
relatively few barriers to entry and the TSLs proposed in today's rule
do not require use of patented technology. Technology that can be used
exclusively by one manufacturer does not pass the screening analysis.
However, given the wide array of applications that incorporate
covered EPSs and battery chargers, DOE seeks comment on which specific
markets, if any, exhibit the potential for a reduction in competition.
5. Manufacturer Interviews
DOE conducted additional interviews with manufacturers following
the preliminary analysis in preparation for the NOPR analysis. In these
interviews, DOE asked manufacturers to describe their major concerns
with this rulemaking. The following section describes the key issues
identified by manufacturers during these interviews.
a. Product Groupings
Several manufacturers expressed concern over the approach DOE
outlined in which a variety of different applications would be grouped
together within the same product class and would have to meet
equivalent standards. EPS and battery charger product classes are
defined by characteristics such as type of current conversion, voltage,
and output power. However, the proposed EPS and battery charger product
classes do not necessarily group applications performing similar end-
use functions. Manufacturers stated that grouping applications that
consume a larger amount of electricity over their lifetime with
applications that consume only a fraction of electricity over their
lifetime can put the applications that are used less frequently at an
unfair disadvantage.
Manufacturers were particularly concerned about the potential for
groupings to impact specific battery charger applications after
finalizing the standard. For battery chargers, DOE is proposing
standards using one UEC equation for each product class. Specific
applications can be grouped into a product class whose individual usage
profile differs from the usual profile of the product class. This is
especially true if the shipments of one application are significantly
greater than the shipments of another application with a very different
usage profile (i.e., the millions of laptop shipments versus DIY power
tools). Both laptops and DIY power tools would be regulated using the
same usage profile parameters to satisfy a given energy conservation
standard. Therefore, there is less potential for consumers to save
energy cost effectively with respect to those applications that are not
used frequently compared to applications that are used continuously
even though both applications would be required to meet the same
standard.
DOE recognizes manufacturer concerns over how specific applications
are grouped together as a result of the proposed division of product
classes. DOE's LCC analysis and manufacturing impact analysis evaluate
the impacts on users and manufacturers, respectively, on a
applications-specific basis. Although the UEC is established at the
product class level, the granularity of these analyses enables DOE to
consider the benefits and burdens on users and manufacturers of
specific applications, and take those results into consideration in
determining which TSLs to select.
b. Competition From Substitutes
Manufacturers have stated that several of their applications
compete directly with applications using other forms of energy, such as
products powered by gasoline, disposable alkaline batteries, or corded
products. Products that use battery chargers must remain cost
competitive with these alternatively powered products because these
products are close substitutes. Manufacturers of lawn care products,
such as mowers and trimmers, and mobility units, such as motorized
bikes and golf cars, are competing in the same markets as gas-powered
versions of these applications. Similarly, manufacturers of smaller
electronic devices, such as digital cameras, are competing in the same
market as disposable alkaline battery-powered digital cameras. Several
applications also have direct competition with similar non-electric
applications, such as electric toothbrushes and DIY power

[[Page 18559]]

tools. Having products powered by a rechargeable battery is a feature
that adds value for consumers. A significant increase in the cost of
manufacturing the battery charger could lead manufacturers to remove
the rechargeable feature of an application or choose an alternative
method to power the device, ultimately reducing the consumer utility
for these applications. If energy conservation standards lead to a
significant price increase, consumers could switch to these
alternatives.
Based on these concerns, DOE considered the impact of price
elasticity on application shipment volumes. These price elasticity
sensitivity results are presented in Appendix 12-B of the TSD.
c. Test Procedure Concerns
While most manufacturers agree that using the UEC is an appropriate
test procedure metric for battery chargers, some battery charger
manufacturers stated there is a problem of separating the battery
charging function of an application from the other functions being
performed by the application. In their view, it is not easy to isolate
the battery charging portion of the application for testing and/or
creating cost-efficiency curves. Manufacturers stated that the test
procedure must clearly separate out the charging portion of the energy
consumption in order to regulate its efficiency accurately. DOE
specifically took this factor into consideration for UPS manufacturers
and explains its approach in detail in section IV.C.2.i of this NOPR.
d. Multiple Regulation of EPSs and Battery Chargers
Manufacturers raised concerns that specific applications that are
shipped with both an EPS and a battery charger would be subject to
regulations for both components--one energy conservation standard for
the EPS and a separate energy conservation standard for the battery
charger of the same application. Having to meet two separate standards
may not allow the manufacturers to maximize the efficiency of both the
EPS and the battery charger together and could add to the overall cost
of the application. DOE took these comments into consideration but has
tentatively determined that establishing standards for each product was
the most appropriate action given the statutory requirements to set
standards for these products. For further detail and DOE's rationale
for this decision, see section IV.A.1 of this NOPR.
e. Profitability Impacts
Several manufacturers stated that they expect energy conservation
standards to negatively impact the profitability of battery chargers.
At higher CSLs, standards could increase MPCs and manufacturers
believed these higher costs would not necessarily be passed on to
consumers. Several applications use specific price points that
consumers expect those applications to have. Consequently,
manufacturers believe that cost increases would be at least partly
absorbed by manufacturers to keep retail prices from rising sharply.
The battery charger often represents a significant portion of the
overall cost of the application. Any increase in the cost of the
battery charger would have a significant impact on the cost of these
applications as a whole. If energy conservation standards led to a
significant reduction in profitability, some manufacturers could
potentially exit the market and reduce the number of competitors.
Additionally, many electronic applications are considered luxury items
so consumers could also choose to forgo their purchases altogether if
the application prices increased substantially.
As discussed in section IV.I.2.a and IV.I.3.a of this NOPR, DOE
evaluates a range of profitability scenarios in the MIA that take these
specific concerns into account. These sections and Chapter 12 of the
TSD discuss the results and details of those analyses.
f. Potential Changes to Product Utility
Manufacturers believe adverse impacts from new and amended
standards could also indirectly affect product utility. Several
manufacturers indicated that other features that do not affect
efficiency could be removed or component quality could be sacrificed to
meet new and amended standard levels and maintain current application
prices. Manufacturers also stated that the financial burden of
developing products to meet new and amended energy conservation
standards has an opportunity cost due to limited capital and R&D
dollars. Investments incurred to meet new and amended energy
conservation standards reflect foregone investments in innovation and
the development of new features that consumers value and on which
manufacturers earn higher absolute profit.
DOE's engineering analysis only analyzes utility-neutral design
changes to meet higher efficiency standards and accounts for the costs
incurred to achieve those levels. While there may be cheaper ways to
meet a given efficiency level by reducing other features that provide
utility, those design paths are not assumed in DOE's analyses. DOE
recognizes the opportunity cost of standards-induced investment and
accounts for the conversion expenditures manufacturers may incur at
each TSL, as discussed in section IV.I.3.a.iv. Whether a given
manufacturer chooses to mitigate these costs (and the associated
product costs illustrated in the engineering analysis' cost-efficiency
curves) by reducing product utility is a business decision and not one
mandated by the proposed energy conservation standards.

J. Employment Impact Analysis

DOE considers employment impacts in the domestic economy as one
factor in selecting a proposed standard. Employment impacts include
direct and indirect impacts. Direct employment impacts are changes in
the number of employees of manufacturers of the products subject to
standards, their suppliers, and related service firms. The MIA
addresses the direct employment impacts that concern manufacturers of
battery chargers and EPSs. Indirect employment impacts from standards
consist of the jobs created or eliminated in the national economy,
other than in the manufacturing sector being regulated, due to: (1)
Reduced spending by end users on energy; (2) reduced spending on new
energy supplies by the utility industry; (3) increased spending on new
products to which the new standards apply; and (4) the effects of those
three factors throughout the economy.
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare sectoral
employment statistics developed by the Labor Department's Bureau of
Labor Statistics (BLS). The BLS regularly publishes its estimates of
the number of jobs per million dollars of economic activity in
different sectors of the economy, as well as the jobs created elsewhere
in the economy by this same economic activity. Data from BLS indicate
that expenditures in the utility sector generally create fewer jobs
(both directly and indirectly) than do expenditures in other sectors of
the economy.\55\ 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

[[Page 18560]]

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 energy conservation
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, based on the BLS data
alone, the Department believes net national indirect employment may
increase due to shifts in economic activity resulting from amended
standards for Class A EPSs and new standards for non-Class A EPSs and
battery chargers.
---------------------------------------------------------------------------

\55\ See Bureau of Economic Analysis, Regional Multipliers: A
User Handbook for the Regional Input-Output Modeling System (RIMS
II), U.S. Department of Commerce (1992).
---------------------------------------------------------------------------

In developing today's NOPR, DOE estimated indirect national
employment impacts using an input/output (I-O) model of the U.S.
economy called Impact of Sector Energy Technologies version 3.1.1
(ImSET).\56\ ImSET is a special purpose version of the ``U.S. Benchmark
National Input-Output'' model, designed to estimate the national
employment and income effects of energy-saving technologies. The ImSET
software includes a computer-based I-O model with structural
coefficients to characterize economic flows among 187 sectors most
relevant to industrial, commercial, and residential building energy
use. DOE notes that ImSET is not a general equilibrium forecasting
model. Given the relatively small change to expenditures due to
efficiency standards and the resulting small changes to employment,
however, DOE believes that the size of any forecast error caused by
using ImSET will be small.
---------------------------------------------------------------------------

\56\ M.J. Scott, O.V. Livingston, J.M. Roop, R.W. Schultz, and
P.J. Balducci, ImSET 3.1: Impact of Sector Energy Technologies;
Model Description and User's Guide (2009) (Available at: https://www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf).
---------------------------------------------------------------------------

No comments were received on the preliminary TSD for battery
chargers and EPSs concerning the employment impacts analysis. For more
details on the employment impact analysis, see chapter 13 of the NOPR
TSD.

K. Utility Impact Analysis

The utility impact analysis estimates several important effects on
the utility industry that would result from the adoption of new or
amended energy conservation standards. For the NOPR analysis, DOE used
the NEMS-BT model to generate forecasts of electricity and natural gas
consumption, electricity generation by plant type, and electric
generating capacity by plant type, that would result from each
considered TSL. DOE obtained the energy savings inputs associated with
efficiency improvements to the subject products from the NIA. DOE
conducts the utility impact analysis as a scenario that departs from
the latest AEO Reference case. For this NOPR, the estimated impacts of
amended energy conservation standards are the differences between
values forecasted by NEMS-BT and the values in the AEO2010 Reference
case (which does not contemplate amended standards).
As part of the utility impact analysis, DOE used NEMS-BT to assess
the impacts on natural gas prices of the reduced demand for natural gas
projected to result from the considered standards. DOE also used NEMS-
BT to assess the impacts on electricity prices of the reduced need for
new electric power plants and infrastructure projected to result from
the considered standards. In NEMS-BT, changes in power generation
infrastructure affect utility revenue, which in turn affects
electricity prices. DOE estimated the change in electricity prices
projected to result over time from each considered TSL. The benefits
associated with the impacts of proposed standards on energy prices are
discussed in section IV.G.5.
For more details on the utility impact analysis, see chapter 14 of
the NOPR TSD

L. Emissions Analysis

In the emissions analysis, DOE estimated the reduction in power
sector emissions of carbon dioxide (CO2), nitrogen oxides
(NOX), and mercury (Hg) from amended energy conservation
standards for Class A EPSs and new energy conservation standards for
non-Class A EPSs and battery chargers. DOE used the NEMS-BT computer
model, which is run similarly to the AEO NEMS, except that battery
charger and EPS energy use is reduced by the amount of energy saved (by
fuel type) due to each TSL. The inputs of national energy savings come
from the NIA spreadsheet model, while the output is the forecasted
physical emissions. The net benefit of each TSL in today's proposed
rule is the difference between the forecasted emissions estimated by
NEMS-BT at each TSL and the AEO 2010 Reference Case. NEMS-BT tracks
CO2 emissions using a detailed module that provides results
with broad coverage of all sectors and inclusion of interactive
effects. For today's NOPR, DOE used the version of NEMS-BT based on
AEO2010, which incorporated projected effects of all emissions
regulations promulgated as of January 31, 2010. For the final rule, DOE
intends to revise the emissions analysis using the most current version
of NEMS-BT.
SO2 emissions from affected electric generating units
(EGUs) are subject to nationwide and regional emissions cap-and-trade
programs, and DOE has preliminarily determined that these programs
create uncertainty about the impact of energy conservation standards on
SO2 emissions. Title IV of the Clean Air Act sets an annual
emissions cap on SO2 for affected EGUs in the 48 contiguous
States and the District of Columbia (DC). SO2 emissions from
28 eastern states and DC are also limited under the Clean Air
Interstate Rule (CAIR; 70 FR 25162 (May 12, 2005)), which created an
allowance-based trading program. Although CAIR was remanded to EPA by
the U.S. Court of Appeals for the District of Columbia Circuit (D.C.
Circuit), see North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008), it
remains in effect temporarily, consistent with the D.C. Circuit's
earlier opinion in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir.
2008). On July 6, 2011 EPA issued a replacement for CAIR, the Cross-
State Air Pollution Rule. 76 FR 48208 (August 8, 2011). (See https://www.epa.gov/crossstaterule/). On December 30, 2011, however, the D.C.
Circuit stayed the new rules while a panel of judges reviews them, and
told EPA to continue enforcing CAIR (see EME Homer City Generation v.
EPA, No. 11-1302, Order at *2 (D.C. Cir. Dec. 30, 2011)). The AEO 2010
NEMS used for today's NOPR assumes the implementation of CAIR.
The attainment of emissions caps is typically flexible among EGUs
and is enforced through the use of emissions allowances and tradable
permits. Under existing EPA regulations any excess SO2
emissions allowances resulting from the lower electricity demand caused
by the imposition of an efficiency standard could be used to permit
offsetting increases in SO2 emissions by any regulated EGU.
However, if the amended and new standards resulted in a permanent
increase in the quantity of unused emissions allowances, there would be
an overall reduction in SO2 emissions from the standards.
While there remains some uncertainty about the ultimate effects of
efficiency standards on SO2 emissions covered by the
existing cap-and-trade system, the NEMS-BT modeling system that DOE
uses to forecast emissions reductions currently indicates that no
physical reductions in power sector emissions would occur for
SO2.
As discussed above, the AEO 2010 NEMS used for today's NOPR assumes
the implementation of CAIR, which established a cap on NOX
emissions in 28 eastern States and the District of Columbia. With CAIR
in effect, the

[[Page 18561]]

energy conservation standards for battery chargers and EPSs are
expected to have little or no physical effect on NOX
emissions in those States covered by CAIR, for the same reasons that
they may have little effect on SO2 emissions. However, the
proposed standards would be expected to reduce NOX emissions
in the 22 States not affected by CAIR. For these 22 States, DOE is
using the NEMS-BT to estimate NOX emissions reductions from
the standards considered in today's NOPR.
On December 21, 2011, EPA announced national emissions standards
for hazardous air pollutants (NESHAPs) for mercury and certain other
pollutants emitted from coal and oil-fired EGUs. (See https://epa.gov/mats/pdfs/20111216MATSfinal.pdf). The NESHAPs do not include a trading
program and, as such, DOE's energy conservation standards would likely
reduce Hg emissions. For the emissions analysis for this rulemaking,
DOE estimated mercury emissions reductions using NEMS-BT based on
AEO2010, which does not incorporate the NESHAPs. DOE expects that
future versions of the NEMS-BT model will reflect the implementation of
the NESHAPs.
For more details on the emissions analysis, see chapter 15 of the
NOPR TSD.

M. Monetizing Carbon Dioxide and Other Emissions Impacts

As part of the development of this proposed rule, DOE considered
the estimated monetary benefits likely to result from the reduced
emissions of CO2 and NOX that are expected to
result from each of the TSLs considered. In order to make this
calculation similar to the calculation of the NPV of consumer benefit,
DOE considered the reduced emissions expected to result over the
lifetime of products shipped in the forecast period for each TSL. This
section summarizes the basis for the monetary values used for each of
these emissions and presents values considered in this rulemaking.
For today's NOPR, DOE is relying on a set of values for the social
cost of carbon (SCC) that was developed by an interagency process. A
summary of the basis for these values is provided below, and a more
detailed description of the methodologies used is provided as an
appendix to chapter 16 of the TSD.
1. Social Cost of Carbon
Under section 1(b) of Executive Order 12866, agencies must, to the
extent permitted by law, ``assess both the costs and the benefits of
the intended regulation and, recognizing that some costs and benefits
are difficult to quantify, propose or adopt a regulation only upon a
reasoned determination that the benefits of the intended regulation
justify its costs.'' The purpose of the SCC estimates presented here is
to allow agencies to incorporate the monetized social benefits of
reducing CO2 emissions into cost-benefit analyses of
regulatory actions that have small, or ``marginal,'' impacts on
cumulative global emissions. The estimates are presented with an
acknowledgement of the many uncertainties involved and with a clear
understanding that they should be updated over time to reflect
increasing knowledge of the science and economics of climate impacts.
As part of the interagency process that developed these SCC
estimates, technical experts from numerous agencies met on a regular
basis to consider public comments, explore the technical literature in
relevant fields, and discuss key model inputs and assumptions. The main
objective of this process was to develop a range of SCC values using a
defensible set of input assumptions grounded in the existing scientific
and economic literatures. In this way, key uncertainties and model
differences transparently and consistently inform the range of SCC
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
The SCC is an estimate of the monetized damages associated with an
incremental increase in carbon emissions in a given year. It is
intended to include (but is not limited to) changes in net agricultural
productivity, human health, property damages from increased flood risk,
and the value of ecosystem services. Estimates of the SCC are provided
in dollars per metric ton of carbon dioxide.
When attempting to assess the incremental economic impacts of
carbon dioxide emissions, the analyst faces a number of serious
challenges. A recent report from the National Research Council \57\
points out that any assessment will suffer from uncertainty,
speculation, and lack of information about (1) future emissions of
greenhouse gases, (2) the effects of past and future emissions on the
climate system, (3) the impact of changes in climate on the physical
and biological environment, and (4) the translation of these
environmental impacts into economic damages. As a result, any effort to
quantify and monetize the harms associated with climate change will
raise serious questions of science, economics, and ethics and should be
viewed as provisional.
---------------------------------------------------------------------------

\57\ National Research Council. Hidden Costs of Energy: Unpriced
Consequences of Energy Production and Use. National Academies Press:
Washington, DC (2009).
---------------------------------------------------------------------------

Despite the serious limits of both quantification and monetization,
SCC estimates can be useful in estimating the social benefits of
reducing carbon dioxide emissions. Consistent with the directive in
Executive Order 12866 quoted above, the purpose of the SCC estimates
presented here is to make it possible for Federal agencies to
incorporate the social benefits from reducing carbon dioxide emissions
into cost-benefit analyses of regulatory actions that have small, or
``marginal,'' impacts on cumulative global emissions. Most Federal
regulatory actions can be expected to have marginal impacts on global
emissions.
For such policies, the agency can estimate the benefits from
reduced (or costs from increased) emissions in any future year by
multiplying the change in emissions in that year by the SCC value
appropriate for that year. The net present value of the benefits can
then be calculated by multiplying each of these future benefits by an
appropriate discount factor and summing across all affected years. This
approach assumes that the marginal damages from increased emissions are
constant for small departures from the baseline emissions path, an
approximation that is reasonable for policies that have effects on
emissions that are small relative to cumulative global carbon dioxide
emissions. For policies that have a large (non-marginal) impact on
global cumulative emissions, there is a separate question of whether
the SCC is an appropriate tool for calculating the benefits of reduced
emissions. This concern is not applicable to this notice, and DOE does
not attempt to answer that question here.
At the time of the preparation of this notice, the most recent
interagency estimates of the potential global benefits resulting from
reduced CO2 emissions in 2010, expressed in 2010$, were
$4.9, $22.3, $36.5, and $67.6 per metric ton avoided. For emissions
reductions that occur in later years, these values grow in real terms
over time. Additionally, the interagency group determined that a range
of values from 7 percent to 23 percent should be used to adjust the
global SCC to calculate domestic effects,\58\ although preference is
given to

[[Page 18562]]

consideration of the global benefits of reducing CO2
emissions.
---------------------------------------------------------------------------

\58\ It is recognized that this calculation for domestic values
is approximate, provisional, and highly speculative. There is no a
priori reason why domestic benefits should be a constant fraction of
net global damages over time.
---------------------------------------------------------------------------

It is important to emphasize that the interagency process is
committed to updating these estimates as the science and economic
understanding of climate change and its impacts on society improves
over time. Specifically, the interagency group has set a preliminary
goal of revisiting the SCC values within 2 years or at such time as
substantially updated models become available, and to continue to
support research in this area. In the meantime, the interagency group
will continue to explore the issues raised by this analysis and
consider public comments as part of the ongoing interagency process.
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
To date, economic analyses for Federal regulations have used a wide
range of values to estimate the benefits associated with reducing
carbon dioxide emissions. In the final model year 2011 CAFE rule, the
U.S. Department of Transportation (DOT) used both a ``domestic'' SCC
value of $2 per ton of CO2 and a ``global'' SCC value of $33
per ton of CO2 for 2007 emission reductions (in 2007$),
increasing both values at 2.4 percent per year.\59\ DOT also included a
sensitivity analysis at $80 per ton of CO2. See Average Fuel
Economy Standards, Passenger Cars and Light Trucks, Model Year 2011, 74
FR 14196 (March 30, 2009) (Final Rule); Final Environmental Impact
Statement Corporate Average Fuel Economy Standards, Passenger Cars and
Light Trucks, Model Years 2011-2015 at 3-90 (Oct. 2008) (Available at:
https://www.nhtsa.gov/fuel-economy). A domestic SCC value is meant to
reflect the value of damages in the United States resulting from a unit
change in carbon dioxide emissions, while a global SCC value is meant
to reflect the value of damages worldwide.
---------------------------------------------------------------------------

\59\ Throughout this section, references to tons of
CO2 refer to metric tons.
---------------------------------------------------------------------------

A 2008 regulation proposed by DOT assumed a domestic SCC value of
$7 per ton of CO2 (in 2006$) for 2011 emission reductions
(with a range of $0-$14 for sensitivity analysis), also increasing at
2.4 percent per year. See Average Fuel Economy Standards, Passenger
Cars and Light Trucks, Model Years 2011-2015, 73 FR 24352 (May 2, 2008)
(Proposed Rule); Draft Environmental Impact Statement Corporate Average
Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years
2011-2015 at 3-58 (June 2008) (Available at: https://www.nhtsa.gov/fuel-economy). A regulation for packaged terminal air conditioners and
packaged terminal heat pumps finalized by DOE in October of 2008 used a
domestic SCC range of $0 to $20 per ton CO2 for 2007
emission reductions (in 2007$). 73 FR 58772, 58814 (Oct. 7, 2008) In
addition, EPA's 2008 Advance Notice of Proposed Rulemaking on
Regulating Greenhouse Gas Emissions Under the Clean Air Act identified
what it described as ``very preliminary'' SCC estimates subject to
revision. 73 FR 44354 (July 30, 2008). EPA's global mean values were
$68 and $40 per ton CO2 for discount rates of approximately
2 percent and 3 percent, respectively (in 2006$ for 2007 emissions).
In 2009, an interagency process was initiated to offer a
preliminary assessment of how best to quantify the benefits from
reducing carbon dioxide emissions. To ensure consistency in how
benefits are evaluated across agencies, the Administration sought to
develop a transparent and defensible method, specifically designed for
the rulemaking process, to quantify avoided climate change damages from
reduced CO2 emissions. The interagency group did not
undertake any original analysis. Instead, it combined SCC estimates
from the existing literature to use as interim values until a more
comprehensive analysis could be conducted. The outcome of the
preliminary assessment by the interagency group was a set of five
interim values: global SCC estimates for 2007 (in 2006$) of $55, $33,
$19, $10, and $5 per ton of CO2.
These interim values represent the first sustained interagency
effort within the U.S. government to develop an SCC for use in
regulatory analysis. The results of this preliminary effort were
presented in several proposed and final rules and were offered for
public comment in connection with proposed rules, including the joint
EPA-DOT fuel economy and CO2 tailpipe emission proposed
rules.
c. Current Approach and Key Assumptions
Since the release of the interim values, the interagency group
reconvened on a regular basis to generate improved SCC estimates, which
were considered for this proposed rule. Specifically, the group
considered public comments and further explored the technical
literature in relevant fields. The interagency group relied on three
integrated assessment models (IAMs) commonly used to estimate the SCC:
the FUND, DICE, and PAGE models.\60\ These models are frequently cited
in the peer-reviewed literature and were used in the last assessment of
the Intergovernmental Panel on Climate Change. Each model was given
equal weight in the SCC values that were developed.
---------------------------------------------------------------------------

\60\ The models are described in appendix 16-A of the TSD.
---------------------------------------------------------------------------

Each model takes a slightly different approach to model how changes
in emissions result in changes in economic damages. A key objective of
the interagency process was to enable a consistent exploration of the
three models while respecting the different approaches to quantifying
damages taken by the key modelers in the field. An extensive review of
the literature was conducted to select three sets of input parameters
for these models: climate sensitivity, socio-economic and emissions
trajectories, and discount rates. A probability distribution for
climate sensitivity was specified as an input into all three models. In
addition, the interagency group used a range of scenarios for the
socio-economic parameters and a range of values for the discount rate.
All other model features were left unchanged, relying on the model
developers' best estimates and judgments.
The interagency group selected four SCC values for use in
regulatory analyses. Three values are based on the average SCC from
three integrated assessment models, at discount rates of 2.5, 3, and 5
percent. The fourth value, which represents the 95th percentile SCC
estimate across all three models at a 3-percent discount rate, is
included to represent higher-than-expected impacts from temperature
change further out in the tails of the SCC distribution. For emissions
(or emission reductions) that occur in later years, these values grow
in real terms over time, as depicted in Table IV-31.

[[Page 18563]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.040

It is important to recognize that a number of key uncertainties
remain, and that current SCC estimates should be treated as provisional
and revisable since they will evolve with improved scientific and
economic understanding. The interagency group also recognizes that the
existing models are imperfect and incomplete. The National Research
Council report mentioned above points out that there is tension between
the goal of producing quantified estimates of the economic damages from
an incremental ton of carbon and the limits of existing efforts to
model these effects. There are a number of concerns and problems that
should be addressed by the research community, including research
programs housed in many of the Federal agencies participating in the
interagency process to estimate the SCC.
DOE recognizes the uncertainties embedded in the estimates of the
SCC used for cost-benefit analyses. As such, DOE and others in the U.S.
Government intend to periodically review and reconsider those estimates
to reflect increasing knowledge of the science and economics of climate
impacts, as well as improvements in modeling. In this context,
statements recognizing the limitations of the analysis and calling for
further research take on exceptional significance.
In summary, in considering the potential global benefits resulting
from reduced CO2 emissions, DOE used the most recent values
identified by the interagency process, adjusted to 2010$ using the GDP
price deflator. For each of the four cases specified, the values used
for emissions in 2010 were $4.9, $22.3, $36.5, and $67.6 per metric ton
avoided (values expressed in 2010$).\61\ To monetize the CO2
emissions reductions expected to result from amended standards for
Class A EPSs and new standards for non-Class A EPSs and battery
chargers in 2013-2042, DOE used the values identified in Table A1 of
the ``Social Cost of Carbon for Regulatory Impact Analysis Under
Executive Order 12866,'' which is reprinted in appendix 16-A of the
NOPR TSD, appropriately adjusted to 2010$. To calculate a present value
of the stream of monetary values, DOE discounted the values in each of
the four cases using the specific discount rate that had been used to
obtain the SCC values in each case.
---------------------------------------------------------------------------

\61\ Table A1 presents SCC values through 2050. For DOE's
calculation, it derived values after 2050 using the 3-percent per
year escalation rate used by the interagency group.
---------------------------------------------------------------------------

d. Valuation of Other Emissions Reductions
DOE investigated the potential monetary benefit of reduced
NOX emissions from the TSLs it considered. As noted above,
new or amended energy conservation standards would reduce
NOX emissions in those 22 states that are not affected by
the CAIR. DOE estimated the monetized value of NOX emissions
reductions resulting from each of the TSLs considered for today's NOPR
based on environmental damage estimates found in the relevant
scientific literature. Available estimates suggest a very wide range of
monetary values, ranging from $370 per ton to $3,800 per ton of
NOX from stationary sources, measured in 2001$ (equivalent
to a range of $450 to $4,623 per ton in 2010$).\62\ In accordance with
OMB guidance, DOE conducted two calculations of the monetary benefits
derived using each of the economic values used for NOX, one
using a real discount rate of 3 percent and another using a real
discount rate of 7 percent.\63\
---------------------------------------------------------------------------

\62\ For additional information, refer to U.S. Office of
Management and Budget, Office of Information and Regulatory Affairs,
2006 Report to Congress on the Costs and Benefits of Federal
Regulations and Unfunded Mandates on State, Local, and Tribal
Entities, Washington, DC.
\63\ OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
---------------------------------------------------------------------------

DOE is aware of multiple agency efforts to determine the
appropriate range of values used in evaluating the potential economic
benefits of reduced Hg emissions. DOE has decided to await further
guidance regarding consistent valuation and reporting of Hg emissions
before it once again monetizes Hg emissions in its rulemakings.

N. Discussion of Other Comments

NEEP viewed the adoption of strong Federal energy conservation
standards for battery chargers and EPSs as smart, minimal-cost
mechanisms to help Northeast states achieve their aggressive energy
savings goals. (NEEP, No. 49 at p. 3)
Lester suggested that DOE consider establishing incentive programs
for U.S. manufacturers as an alternative to setting efficiency
standards. The company claimed that these incentives would encourage
the development of efficient, domestically produced products. (Lester,
No. 50 at p. 3) DOE notes that this rulemaking constitutes an
``economically significant regulatory action'' under Executive Order
(E.O.) 12866, Regulatory Planning and Review. 58 FR 51735 (October 4,
1993) Under 10

[[Page 18564]]

CFR part 430, subpart C, appendix A, section III.12, DOE must evaluate
non-regulatory alternatives to proposed standards by performing a
regulatory impact analysis (RIA). 61 FR 36981 at p. 36978 (July 15,
1996) In this RIA, DOE compared the effectiveness of multiple possible
alternatives to standards, including manufacturer tax credits for
efficient battery chargers and EPSs. The results of this analysis are
available in chapter 17 of the TSD.
During manufacturer interviews, DOE also received questions
regarding multi-voltage and multi-capacity battery chargers.
Particularly with multi-voltage battery chargers, it is possible for
the device to fall into more than one product class and manufacturers
sought clarification on how to certify these devices. DOE notes that
its recently promulgated test procedure describes the manner in which a
multi-voltage or multi-capacity device must be tested. 76 FR 31750. For
these devices, manufacturers may be required to test their product more
than once and the batteries with which the devices are used for each
test may put the battery charger into two product classes. If that is
the case, the device would need to be certified for each product class
for which it has been tested. This approach is consistent with DOE's
approach for switch-selectable EPSs and DOE tentatively believes that
this approach will result in the maximum energy savings for its
proposed standards. DOE will consider alternative approaches and
requests feedback from manufacturers and other interested parties on
this proposal and any others, such as certifying at just the highest or
lowest capacity or voltage.

O. Marking Requirements

Under 42 U.S.C. 6294(a)(5), Congress granted DOE with the specific
authority to establish labeling or marking requirements for a number of
consumer products. Among these products are battery chargers and EPSs.
DOE notes that the creation of such marking requirements, particularly
for a portion of the products covered by today's proposal, was
specifically contemplated by Congress. In particular, EISA 2007 set
standards for Class A EPSs and created marking requirements for these
products. Section 301 of that public law specified that all Class A
EPSs shall be clearly and permanently marked in accordance with the
``International Efficiency Marking Protocol for External Power
Supplies'' (the ``Marking Protocol'').\64\ (42 U.S.C. 6295(u)(3)(C))
---------------------------------------------------------------------------

\64\ U.S. EPA, ``International Efficiency Marking Protocol for
External Power Supplies,'' October 2008, available at Docket No. 62.
---------------------------------------------------------------------------

The Marking Protocol, developed by the EPA in consultation with
stakeholders both within and outside the United States, was originally
designed in 2005 and updated in 2008 to meet the needs of those
voluntary and regulatory programs in place at those times. In
particular, the Marking Protocol defines efficiency mark ``IV'', which
corresponds to the current Federal standard for Class A EPSs, and
efficiency mark ``V'', which corresponds to ENERGY STAR version 2.0.
(The ENERGY STAR program for EPSs ended on December 31, 2010.) In
addition, these marks currently apply only to single-voltage EPSs with
nameplate output power less than 250 watts, but not to multiple-voltage
or high-power EPSs.
In today's notice, DOE proposes to amend the product marking (or
``labeling'') requirements for EPSs and is considering adopting a
similar requirement for battery chargers. Specifically, DOE proposes to
(1) extend to all EPSs the marking requirement created by EISA 2007,
which currently applies only to Class A EPSs; (2) reserve an efficiency
mark (or marks) in the Marking Protocol for standard levels in the
final rule that do not already have a corresponding mark; and (3)
require that EPSs in proposed product class N bear a specific marking
to distinguish them from other EPSs and facilitate compliance
verification. In addition, DOE is considering establishing a
distinguishing mark for EPSs for certain security or life safety alarm
or surveillance systems and is considering requiring that battery
chargers be marked in accordance with a battery charger marking
protocol similar to that for EPSs. DOE welcomes comment on all of these
issues.
DOE notes that it is proposing standards for EPSs in product
classes B, C, D, and E that exceed efficiency level ``V'', the highest
level currently defined in the Marking Protocol. In addition, it is
proposing standards for multiple-voltage and high-power EPSs. DOE is
working with EPA to revise the Marking Protocol to accommodate all of
the new and amended standards for EPSs being proposed today.
DOE is also proposing to create a separate product class (product
class N) for EPSs that cannot power an end-use consumer product
directly. They would be subject to less stringent standards than those
being proposed today for their ``direct operation'' counterparts. To
aid in determining whether EPSs are in compliance with standards, DOE
proposes that (1) a Class A EPS in product class N be permanently
marked with an ``N'' as a superscript to the circle that contains the
appropriate Roman numeral; (2) a non-Class A EPS in product class N be
permanently marked with the abbreviation ``EPS-N''; (3) an EPS in
product class N that is sold separately from the battery charger or
end-use consumer product with which it is intended to be used shall
also be permanently marked with the manufacturer and model number of
that battery charger or end-use consumer product; and (4) an EPS that
is in product class N but, nonetheless, meets the relevant standard set
for direct operation EPSs (and bears the appropriate Roman numeral)
need not be marked with an ``N'', with ``EPS-N'', nor with the
manufacturer and model number of the associated device.
DOE seeks input on what distinguishing mark should appear on EPSs
for certain security and life safety equipment. A recently enacted law
amended EPCA to exclude these devices from the no-load mode efficiency
standards. Public Law 111-360 (Jan. 4, 2011) (to be codified at 42
U.S.C. 6295(u)(3)). The exclusion applies to AC-AC EPSs manufactured
before July 1, 2017, that have nameplate output of 20 watts or more,
are certified as being designed to be connected to a security or life
safety alarm or surveillance system component (as defined in the law),
and are permanently marked with a distinguishing mark for such products
as established within the Marking Protocol. No such distinguishing mark
exists within the Marking Protocol, but DOE intends to work with EPA
and other stakeholders to establish such a mark. The mark, which could
be the word ``ACTIVE'' or an ``A'' in a circle, for example, would
likely be required to appear adjacent to the appropriate Roman numeral.
DOE welcomes input on what mark would be appropriate, where it should
be located, and any other details related to how that mark should be
presented on a given device.
Lastly, EPS efficiency markings can be useful in certain
circumstances to help verify whether a given product complies with the
relevant standards. To assist in ensuring that compliant products can
be readily identified, DOE is also considering marking requirements for
battery chargers. NRDC submitted a comment in November 2010, after the
close of the preliminary analysis comment period, requesting that DOE
consider such a marking protocol for battery chargers. (NRDC, No. 56)
NRDC

[[Page 18565]]

claimed that establishing an efficiency marking protocol for battery
chargers would have several benefits, including creating a simple
vocabulary for all stakeholders, facilitating enforcement, lowering the
cost of compliance for industry by facilitating international adoption,
and encouraging voluntary adoption of higher levels. NRDC proposed
using Roman numerals, as is done for EPSs. To avoid confusion, the
Roman numerals on battery chargers would appear next to the word
``BC'', as shown in Table IV-32, in contrast to the Roman numerals on
EPSs, which stand alone. NRDC's comment also includes recommendations
on where the mark should be located.
Consistent with this suggestion, DOE is considering adopting a
marking protocol for battery chargers that would have ``BC III'' denote
the battery charger standard levels adopted in the final rule. This
marking would give other standards-setting bodies the option of
defining a lower efficiency level (``BC II'') for use on BCs sold to
consumers outside the United States and would reserve ``BC I'' for
products that do not meet the criteria for the other (higher) marks. A
similar approach was used when the efficiency marking protocol for EPSs
was established. The formulas given for each of the battery charger
product classes for BC Level III match the standards being proposed
today and could change.
BILLING CODE 6450-01-P

[[Page 18566]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.041

BILLING CODE 6450-01-C
DOE is considering multiple approaches for determining where on the
external housing of the battery charger the mark shall be placed.
NRDC's proposal specifies where the mark shall be placed in cases where
the battery charger has more than one housing, as described in Table
IV-33. (NRDC, No. 56) DOE's concern with NRDC's proposal is the
difficulty in accurately identifying and locating

[[Page 18567]]

charge control in a battery charger. Alternatively, DOE could give
manufacturers the flexibility to choose where to place the mark. DOE
expects that manufacturers will most often choose to place the mark on
a cradle or charging base, if one is present, or on the end-use
consumer product.

Table IV-33--Proposed Location for Battery Charger Marking
------------------------------------------------------------------------
Location of battery charger
Form factor marking
------------------------------------------------------------------------
Three separate housings................ Charge control component.
Power supply and charge control Power supply & charge control
together, battery separate. component.
Charge control and battery together, Charge control & battery
power supply separate. component.
------------------------------------------------------------------------

DOE is also considering other requirements for the battery charger
mark. For example, DOE could require that the mark be placed on a
nameplate or in an equally visible location or that the font size used
for the mark be similar to that used for other markings on the product
such as the UL and CE symbols. DOE is aware that the CEC also is
considering establishing marking requirements for battery chargers and
is following that process as it develops. If the CEC adopts marking
requirements for battery chargers within the scope of today's notice,
those requirements would be preempted by any future battery charger
marking requirements adopted by DOE. Manufacturers would then have to
transition from meeting the CEC's requirements to meeting DOE's
requirements. Therefore, DOE would consider adopting the CEC's
requirements to minimize the burden associated with that transition.
DOE recognizes that there are several challenges inherent in
creating a marking protocol for battery chargers. First, it may prove
difficult to specify unambiguously where the mark should be placed
given the variety of form factors found in the marketplace. Second, in
contrast to EPSs, some battery chargers may not have a nameplate to add
a mark to. Third, in those cases where the mark is placed on an end-use
consumer product containing a battery charger, it may be misinterpreted
by consumers as an endorsement of that product. DOE welcomes comment on
these issues, NRDC's proposal, and any other issues related to
efficiency markings for battery chargers.

P. Reporting Requirements

For battery chargers and non-Class A external power supplies, DOE
will establish certification, compliance, and enforcement provisions in
a future rulemaking. This future rulemaking will outline the necessary
information that manufacturers must provide in order to certify
compliance with any energy conservation standards established by this
rulemaking.

V. Analytical Results

The following section addresses the results from DOE's analyses
with respect to potential energy efficiency standards for the various
product classes examined as part of this rulemaking. Issues discussed
include the TSLs examined by DOE, the projected impacts of each of
these levels if adopted as energy efficiency standards for battery
chargers and EPSs, and the standards levels that DOE is tentatively
proposing in today's NOPR. Additional details regarding the analyses
conducted by the agency are contained in the publicly available TSD
supporting this proposal.

A. Trial Standard Levels

DOE analyzed the benefits and burdens of multiple TSLs for the
products that are the subject of today's proposed rule. A description
of each TSL DOE analyzed is provided below. DOE attempted to limit the
number of TSLs considered for the NOPR by excluding efficiency levels
that do not exhibit significantly different economic and/or engineering
characteristics from the efficiency levels already selected as a TSL.
While the NOPR presents only the results for those efficiency levels in
TSL combinations, the TSD contains a more fulsome discussion and
includes results for all efficiency levels that DOE examined.
1. External Power Supply TSLs
Table V-1 presents the TSLs for EPSs and the corresponding
efficiency levels. DOE chose to analyze product class B directly and
scale the results from the engineering analysis to product classes C,
D, and E. As a result, the TSLs for these three product classes
correspond to the TSLs for product class B. DOE created separate TSLs
for the multiple-voltage (product class X) and high-power (product
class H) EPSs to determine their standards. DOE did not analyze TSLs
above the baseline CSL for product class N and instead proposes
applying the baseline EISA 2007 standard to all EPSs in this product
class, as discussed in section B below.
[GRAPHIC] [TIFF OMITTED] TP27MR12.042

[[Page 18568]]

For EPS product class B, DOE examined three TSLs corresponding to
each candidate standard level of efficiency developed in the
engineering analysis. TSL 1 is an intermediate level of performance
above ENERGY STAR, which offers the greatest consumer NPV. TSL 2 is
equivalent to the best-in-market CSL and represents an incremental rise
in energy savings over TSL 1. TSL 3 is the max-tech level and
corresponds to the greatest NES.
For product class X, DOE examined three TSLs above the baseline.
TSL 1 is an intermediate level of performance above the baseline. TSL 2
is equivalent to the best-in-market CSL and corresponds to the maximum
consumer NPV. TSL 3 is the max-tech level and corresponds to the
greatest NES.
For product class H, DOE examined three TSLs above the baseline.
TSL 1 corresponds to an intermediate level of efficiency. TSL 2 is the
scaled best-in-market CSL and corresponds to the maximum consumer NPV.
TSL 3 is the scaled max-tech level, which provides the highest NES.
2. Battery Charger TSLs
Table V-2 presents the TSLs and corresponding candidate standard
levels for battery chargers. While DOE examined most product classes
individually, there were two groups of product classes that use
generally similar technology options and cover the exact same range of
battery energies. Because of this situation, DOE grouped all three low-
energy, non-inductive, product classes (i.e. 2, 3, and 4) together and
examined the results. Similarly, DOE grouped the two medium energy
product classes, product classes 5 and 6, together when it examined
those results.
[GRAPHIC] [TIFF OMITTED] TP27MR12.043

For battery charger product class 1 (low-energy, inductive), DOE
examined three trial standard levels corresponding to each candidate
standard level developed in the engineering analysis. TSL 1 is an
intermediate level of performance above the baseline. TSL 2 is
equivalent to the best-in-market and corresponds to the maximum
consumer NPV. TSL 3 is the max-tech level and corresponds to the
greatest NES.
For its second set of TSLs, which covers product classes 2 (low-
energy, low-voltage), 3 (low-energy, medium-voltage), and 4 (low-
energy, high-voltage), DOE examined four TSLs of different combinations
of the various efficiency levels found for each product class in the
engineering analysis. In this grouping, TSL 1 is an intermediate
efficiency level above the baseline for each product class and
corresponds to the maximum consumer NPV. For 2 of the 3 product
classes, TSL 2 corresponds to the same efficiency level, but for the
third class, product class 2, TSL 2 represents an incremental
efficiency level below best-in-market. TSL 3 corresponds to the best-
in-market efficiency level for all product classes. Finally, TSL 4
corresponds to the max-tech efficiency level for all product classes
and therefore, the maximum NES.
DOE's third set of TSLs corresponds to the grouping of product
classes 5 (medium-energy, low-voltage) and 6 (medium-energy, high-
voltage). For this grouping, three TSLs corresponding to different
combinations of efficiency levels were examined. For both product
classes, TSL 1 is an intermediate efficiency level above the baseline.
TSL 2 corresponds to the best-in-market efficiency level for both
product classes and is the level with the highest consumer NPV.
Finally, TSL 3 corresponds to the max-tech efficiency level for both
product classes and the maximum NES.
For product class 7 (high-energy), DOE examined only two TSLs
because of the paucity of products available on the market. TSL 1
corresponds to an efficiency level equivalent to the best-in-market and
maximizes consumer NPV is maximized. TSL 2 is the max-tech level and
corresponds to the level with the maximum NES.
For product class 8 (low-voltage DC input), DOE examined three TSLs
at incremental levels above the baseline. TSL 1 is the first
incremental level between the baseline and best-in-market. Consumer NPV
is maximized at this level. TSL 2 is the best-in-market efficiency
level and is projected to yield higher NES levels over TSL 1. Finally,
at TSL 3, or the max-tech efficiency level, NES is maximized.
For product class 9 (high-voltage DC input), DOE did not examine
any TSLs in depth. Rather, when DOE completed its engineering analysis,
it conducted its LCC analysis on the efficiency levels that had been
developed and found that all efficiency levels above the baseline
showed negative LCC savings. This fact,

[[Page 18569]]

combined with the minimal energy consumed per year for these devices,
led DOE to propose an alternative standard level for these products.
DOE's proposal for this product class is discussed in section V.B.2.f
below.
For product class 10 (AC input, AC output), DOE examined three
TSLs, each corresponding to an efficiency level developed in the
engineering analysis. TSL 1 corresponds to an incremental level of
performance above the baseline. TSL 2 is equivalent to what
manufacturers stated would be equivalent to the best-in-market level.
TSL 3, which DOE projects to yield maximized NPV and NES values, is
equivalent to the max-tech efficiency level for product class 10.

B. Economic Justification and Energy Savings

As discussed in section II.A, EPCA provides seven factors to be
evaluated in determining whether a potential energy conservation
standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)) The
following sections generally discuss how DOE is addressing each of
those seven factors in this rulemaking. For further details and the
results of DOE's analyses pertaining to economic justification, see
sections IV and V of today's notice.
1. Economic Impacts on Individual Consumers
For individual consumers, measures of economic impact include the
changes in LCC and the PBP associated with new or amended standards.
The LCC, which is also separately specified as one of the seven factors
to be considered in determining the economic justification for a new or
amended standard (42 U.S.C. 6295(o)(2)(B)(i)(II)), is discussed in the
following section. For consumers in the aggregate, DOE also calculates
the net present value from a national perspective of the economic
impacts on consumers over the forecast period used in a particular
rulemaking.
a. Life-Cycle Cost and Payback Period
As in the preliminary analysis phase, DOE calculated the average
LCC savings relative to the base case market efficiency distribution
for each representative unit and product class. DOE's projections
indicate that a new standard would affect different battery charger and
EPS consumers differently, depending on the market segment to which
they belong and their usage characteristics. Section IV.F discusses the
inputs used for calculating the LCC and PBP. Inputs used for
calculating the LCC include total installed costs, annual energy
savings, electricity rates, electricity price trends, product lifetime,
and discount rates.
The key outputs of the LCC analysis are average LCC savings for
each product class for each considered efficiency level, relative to
the base case, as well as a probability distribution of LCC reduction
or increase. The LCC analysis also estimates, for each product class or
representative unit, the fraction of customers for which the LCC will
either decrease (net benefit), or increase (net cost), or exhibit no
change (no impact) relative to the base case forecast. No impacts occur
when the product efficiencies of the base case forecast already equal
or exceed the considered efficiency level. Battery chargers and EPSs
are used in applications that can have a wide range of operating hours.
Battery chargers and EPSs that are used more frequently will tend to
have a larger net LCC benefit than those that are used less frequently
because of the large operating cost savings.
Another key output of the LCC analysis is the median payback period
at each CSL. DOE presents the median payback period rather than the
mean payback period because it is more robust in the presence of
outliers in the data.\65\ These outliers skew the mean payback period
calculation but have little effect on the median payback period
calculation. A small change in operating costs, which derive the
denominator of the payback period calculation, can sometimes result in
a very large payback period, which skews the mean payback period
calculation. For example, consider a sample of PBPs of 2, 2, 2, and 20
years, where 20 years is an outlier. The mean PBP would return a value
of 6.5 years, whereas the median PBP would return a value of 2 years.
Therefore, DOE considers the median payback period, which is not skewed
by occasional outliers. Table V-3 through Table V-5 show the results
for the representative units and product classes analyzed for EPSs and
battery chargers. Additional detail for these results, including
frequency plots of the distributions of life-cycle costs and payback
periods, are available in chapter 8 of the TSD.
---------------------------------------------------------------------------

\65\ DOE notes that it uses the median payback period to reduce
the effect of outliers on the data. This method, however, does not
eliminate the outliers from the data.
[GRAPHIC] [TIFF OMITTED] TP27MR12.044

For EPS product class B (basic-voltage, AC-DC, class A EPSs), each
representative unit has a unique value for LCC savings and median PBP.
The 2.5W representative unit has positive LCC savings at all TSLs
considered, while the 60W representative unit has negative LCC savings
at all TSLs. Both the 18W and 120W representative units have positive
LCC savings through TSL 2, but turn negative at TSL 3.

[[Page 18570]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.045

The Non-Class A EPSs have varying LCC results at each TSL. See
Table V-4. The 203W Multiple Voltage unit (product class X) has
positive LCC savings through TSL 2. DOE notes that for this product
class, the LCC savings remain largely the same for TSL 1 and 2 because
the difference in LCC is approximately $0.01 and 95 percent of this
market consists of purchased products that are already at TSL 1.
Therefore, the effects are largely from the movement of the 5 percent
of the market up from the baseline. The 345W High-Power unit (product
class H) has positive LCC savings for each TSL. This projection is
largely attributable to the installed price of the baseline unit, a
linear switching device, which is more costly than higher efficiency
switch-mode power devices, so as consumers move to higher efficiencies,
the purchase price actually decreases, resulting in savings.
[GRAPHIC] [TIFF OMITTED] TP27MR12.046

The LCC results for battery chargers depend on the product class
being considered. See Table V-5. For product class 1, LCC results are
positive through TSL 2. For the low-energy product classes (PC2, 3, and
4), LCC results are generally positive through TSL 2, with the
exception of product class 2, and become negative at TSL 3. The medium-
energy product classes (PC5 and 6) are positive through TSL 2 and
negative at TSL 3. The high-energy product class (PC7) has positive LCC
savings of $38.26 at TSL 1, and then becomes negative at TSL 2. Product
class 8 has positive LCC savings only at TSL 1, while product class 10
has positive LCC savings at each TSL (see entries for PC8 and PC10 in
Table V-5).
b. Consumer Subgroup Analysis
Certain consumer subgroups may be disproportionately affected by
standards. DOE performed LCC subgroup analyses in this NOPR for low-
income consumers, small businesses, top tier marginal electricity price
consumers, and consumers of specific applications. See section IV.F of
this NOPR for a review of the inputs to the LCC analysis. The following
discussion presents the most significant results from the LCC subgroup
analysis.
Low-Income Consumers
For low-income consumers, the LCC impacts and payback periods are
different than for the general population. This subgroup considers only
the residential sector, and uses an adjusted electricity price from the
reference case scenario. DOE found that low-income consumers below the
poverty line typically paid electricity prices that were 0.2 cents per
kWh lower than the general population. To account for this difference,
DOE adjusted electricity prices by a factor of 0.9814 to derive
electricity prices for this subgroup. Table V-6 through Table V-8 show
the LCC impacts and payback

[[Page 18571]]

periods for low-income consumers purchasing EPSs and battery chargers.
The LCC savings and PBPs of low-income consumers is similar to that
of the total population of consumers. In general, low-income consumers
experience slightly reduced LCC savings, particularly in product
classes dominated by residential applications. However, product classes
with a large proportion of commercial applications experience less of
an effect under the low-income consumer scenario, which is specific to
the residential sector, and sometimes have greater LCC savings than the
reference case results. None of the changes in LCC savings move a TSL
from positive to negative LCC savings, or vice versa.
[GRAPHIC] [TIFF OMITTED] TP27MR12.047

[GRAPHIC] [TIFF OMITTED] TP27MR12.048

Small Businesses
For small business customers, the LCC impacts and payback periods
are different than for the general population. This subgroup considers
only the commercial sector, and uses an adjusted discount rate from the
reference case scenario. DOE found that small businesses typically have
a cost of capital that is 4.48 percent higher than the industry
average, which was applied to the discount rate for the small business
consumer subgroup.
The small business consumer subgroup LCC results are not directly
comparable to the reference case LCC results because this subgroup only
considers commercial applications. In the reference case scenario, the
LCC results are strongly influenced by the

[[Page 18572]]

presence of residential applications, which typically comprise the
majority of application shipments. For EPS product class B, the LCC
savings for the 2.5W representative unit become negative at TSL 2 and 3
under the small business scenario, but none of the savings for other
representative units change from positive to negative, or vice versa.
Similarly, none of the battery charger product classes that were
positive in the reference case become negative in the small business
subgroup analysis, and vice versa. This observation indicates that
small business consumers would experience similar LCC impacts as the
general population.
Table V-9 and Table V-10 show the LCC impacts and payback periods
for small businesses purchasing EPSs and battery chargers. DOE did not
identify any commercial applications for Non-Class A EPSs, and,
consequently, did not evaluate these products as part of the small
business consumer subgroup analysis.
[GRAPHIC] [TIFF OMITTED] TP27MR12.049

[GRAPHIC] [TIFF OMITTED] TP27MR12.050

Top Tier Marginal Electricity Price Consumers
For top tier marginal electricity price consumers, the LCC impacts
and payback periods are different than for the general population. The
analyses for this subgroup consider a weighted-average of the
residential and commercial sectors, and uses an adjusted electricity
price from the reference case scenario. DOE used an upper tier inclined
marginal block rate for the electricity price in the residential and
commercial sectors, resulting in a price of $0.310 and $0.225 per kWh,
respectively. Table V-11 through Table V-13 show the LCC impacts and
payback periods for top tier marginal electricity price consumers
purchasing EPSs and battery chargers.
Consumers in the top tier marginal electricity price bracket
experience greater LCC savings than those in the reference case
scenario. This result occurs because these consumers pay more for their
electricity than other consumers, and, therefore, experience greater
savings when using products

[[Page 18573]]

that are more energy efficient. This subgroup analysis changed many of
the negative LCC savings results to positive LCC savings. Some product
classes and representative units still have negative LCC savings, which
indicates that these product classes have increasing installed costs
(purchase price plus installation costs, the latter of which are
assumed to be zero) at higher TSLs that cannot be overcome through
operating cost savings using top tier marginal electricity prices.
[GRAPHIC] [TIFF OMITTED] TP27MR12.051

[GRAPHIC] [TIFF OMITTED] TP27MR12.052

Consumers of Specific Applications
DOE performed an LCC and PBP analysis on every application within
each representative unit and product class. This subgroup analysis used
the application's specific inputs for lifetime, markups, base case
market efficiency distribution, and UEC. Many applications in each
representative unit or product class experienced LCC impacts and
payback periods that were different from the average results across the
representative unit or product class. Because of the large number of
applications considered in the analysis,

[[Page 18574]]

some of which span multiple representative units or product classes,
DOE did not present application-specific LCC results here. Detailed
results on each application are available in chapter 11 of the TSD.
For EPS product class B, the application-specific LCC results
indicate that most applications will experience similar levels of LCC
savings as the representative unit's average LCC savings. The 2.5W
representative unit has positive LCC savings for each TSL, but
infrequently charged applications, such as beard and moustache trimmers
(among others), experience negative LCC savings. Similarly, the 18W
representative unit has projected positive LCC savings through TSL 2,
but other applications using EPSs, such as portable DVD players and
camcorders, have negative savings. For the 60W representative unit, all
applications follow the shipment-weighted average trends, except EPSs
used in sleep apnea machines, which have positive LCC savings at each
TSL. The same is true for the 120W representative unit, except for EPSs
used in portable O2 concentrator applications, which are
projected to yield negative LCC results for all TSLs.
For battery charger product classes, DOE noted similar trends where
less frequently used applications experienced lower LCC savings. For
product class 2, LCC savings are negative beyond TSL 1, but frequently
used applications within that class--e.g., answering machines, cordless
phones, and home security systems--experience positive LCC savings. The
top three product class 3 applications (which account for over 50
percent of total shipments) have negative LCC savings and contribute to
the negative LCC savings of the product class average. However, some
applications have significantly positive LCC savings, such as handheld
vacuums, LAN equipment, stick vacuums, and universal battery chargers,
which together comprise 15 percent of the total shipments in PC3.
Product class 4 (e.g., notebooks and netbooks) have no impacts at TSL 1
or TSL 2 because these products already use battery charger technology
above the baseline efficiency level. In the other battery charger
product classes, the disparate applications tend to experience similar
LCC savings. See chapter 11 of the TSD for further detail.
c. Rebuttable Presumption Payback
As discussed in section III.D.2, EPCA provides a rebuttable
presumption where, in essence, 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. However, DOE
routinely conducts a full economic analysis that considers the full
range of impacts, including those to the customer, manufacturer,
Nation, and environment, as required under 42 U.S.C. 6295(o)(2)(B)(i)
and 42 U.S.C. 6316(e)(1). The results of this analysis serve as the
basis for DOE to evaluate definitively the economic justification for a
potential standard level (thereby supporting or rebutting the results
of any preliminary determination of economic justification).
For EPSs and battery chargers, energy savings calculations in the
LCC and PBP analyses used both the relevant test procedures as well as
the relevant usage profiles. DOE's recent changes to the test
procedures did not affect any characteristics that impact the payback
period calculation. Because DOE calculated payback periods using a
methodology consistent with the rebuttable presumption test for EPSs
and battery chargers in the LCC and payback period analyses, DOE did
not perform a stand-alone rebuttable presumption analysis, as it was
already embodied in the LCC and PBP analyses.
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of new and amended
energy conservation standards on manufacturers of EPSs and battery
chargers. The section below describes the expected impacts on
manufacturers at each potential TSL.
a. Cash-Flow Analysis Results
The INPV results refer to the difference in industry value between
the base case and the standards case, which DOE calculated by summing
the discounted industry cash flows from the base year (2011) through
the end of the analysis period. The discussion also notes the
difference in cash flow between the base case and the standards case in
the year before the compliance date of potential new and amended energy
conservation standards. This figure provides a proxy for the magnitude
of the required conversion costs, relative to the cash flow generated
by the industry in the base case.
i. EPS Cash Flow Impacts
For EPSs, the MIA describes the impacts on EPS ODMs. Each set of
results below shows two tables of INPV impacts on the ODM. The first
table reflects the lower (less severe) bound of impacts and the second
represents the upper (more severe) bound. To evaluate this range of
cash-flow impacts on EPS manufacturers, DOE modeled two different
scenarios using different markup assumptions. These assumptions
correspond to the bounds of a range of market responses that DOE
anticipates could occur in the standards case. Each scenario results in
a unique set of cash flows and corresponding industry value at each
TSL.
To assess the lower (less severe) end of the range of potential
impacts, DOE modeled the flat markup scenario. The flat markup scenario
assumes that in the standards case manufacturers would be able to pass
the higher production costs required to manufacture more efficient
products on to their customers. To assess the higher (more severe) end
of the range of potential impacts, DOE modeled the preservation of
operating profit markup scenario in which higher energy conservation
standards result in lower manufacturer markups. DOE used the main NIA
shipment scenario for both the lower- and higher-bound MIA scenarios
that were used to characterize the potential INPV impacts.
Product Classes B, C, D, and E
Table V-14 and Table V-15 present the projected results for product
classes B, C, D, and E under the flat and preservation of operating
profit markup scenarios. DOE examined four representative units in
product class B and scaled the results to product classes C, D, and E
using the most appropriate representative unit for each product class.

[[Page 18575]]

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[GRAPHIC] [TIFF OMITTED] TP27MR12.054

At TSL 1, DOE estimates impacts on INPV to range from -$38.9
million to -$62.5 million, or a change in INPV of -16.8 percent to -
26.9 percent. At this level, industry free cash flow is estimated to
decrease by approximately 179.2 percent to -$10.8 million, compared to
the base-case value of $13.6 million in the year leading up to when the
new and amended energy conservation standards would need to be met.
At TSL 1, manufacturers of product class B, C, D, and E EPSs face a
moderate loss in INPV. For these product classes, the required
efficiencies at TSL 1 correspond to an intermediate level above the
ENERGY STAR 2.0 levels but below the best in market efficiencies. The
conversion costs are a major contribution of the decrease in INPV
because the vast majority of the product class B, C, D, and E EPS
shipments fall below CSL 2. Manufacturers will incur product and
capital conversion costs of approximately $61.4 million at TSL 1. In
2013, approximately 84 percent of product class B, C, D, and E
shipments are projected to fall below the proposed amended energy
conservation standards. In addition, 92 percent of the products for the
2.5W representative unit are projected to fall below the proposed
efficiency standard, and would likely require more substantial
conversion costs because meeting the efficiency standard would require
2.5W representative units to switch from linear to switch mode
technology. This change would increase the conversion costs for these
2.5W representative units, which account for approximately a quarter of
all the product class B, C, D, and E shipments.
At TSL 1, the MPC increases 45 percent for the 2.5W representative
units (a representative unit for product class B and all shipments of
product classes C and E), 5 percent for the 18 Watt representative
units (a representative unit for product class B and all shipments of
product class D), 14 percent for the 60W representative units, and 3
percent for the 120W representative units over the baseline. The
conversion costs are significant enough to cause a moderately negative
industry impact even if the incremental change in MPCs is fully passed
on to OEMs. Impacts are more significant under the preservation of
operating profit scenario because under this scenario manufacturers
would be unable to pass on the full increase product cost.
At TSL 2, DOE estimates impacts on INPV to range from -$35.2
million to -$81.4 million, or a change in INPV of -15.2 percent to -
35.1 percent. At this level, industry free cash flow is estimated to
decrease by approximately 212.1 percent to -$15.2 million, compared to
the base-case value of $13.6 million in the year before the compliance
date.
TSL 2 represents the best-in-market efficiencies for product class
B, C, D, and E EPSs. The difference in conversion costs and incremental
production costs at TSL 2 make the INPV impacts slightly better than
TSL 1 in the flat markup scenario and worse under the preservation of
operating profit scenario. The product conversion costs increase by
$5.4 million and the capital conversion costs increase by $5.9 million
from TSL 1 because the vast majority of current products fall below the
efficiency requirements at TSL 2. Also, at TSL 2, the MPC increases 60
percent for the 2.5W representative units (a representative unit for
product class B and all shipments of product classes C and E), 18
percent for the 18 Watt representative units (this is a representative
unit for product class B and all shipments of product class D), 22
percent for the 60W representative units, and 4 percent for the 120W
representative units over the baseline. However, the similar conversion
costs and relatively minor additional incremental costs make the
industry impacts at TSL 2 similar to those at TSL 1.
At TSL 3, DOE estimates impacts on INPV to range from $17.9 million
to -$123.5 million, or a change in INPV of 7.7 percent to -53.2
percent. At this level, industry free cash flow is estimated to
decrease by approximately 223.0 percent to -$16.7 million, compared to
the base-case value of

[[Page 18576]]

$13.6 million in the year before the compliance date.
TSL 3 represents the max-tech CSL for product class B, C, D, and E
EPSs. At TSL 3, DOE modeled a wide range of industry impacts because
the very large increases in per-unit costs lead to a wide range of
potential impacts depending on who captures the additional value in the
distribution chain. None of the existing products on the market meet
the efficiency requirements at TSL 3. However, since most of the
products at TSL 2 also fall below the standard level, there is only a
slight difference between the conversion costs at TSL 2 and TSL 3. The
different INPV impacts occur due to the large changes in incremental
MPCs at the max-tech level. At TSL 3, the MPC increases 69 percent for
the 2.5W representative unit (this is a representative unit for product
class B and all shipments for product classes C and E), 80 percent for
the 18 Watt representative units (this is a representative unit for
product class B and all shipments for product class D), 46 percent for
the 60W representative units, and 53 percent for the 120W
representative units over the baseline. If manufacturers are able to
fully pass on these costs to OEMs (the flat markup scenario), the
increase in cash flow from operations is enough to overcome the
conversion costs to meet the max-tech level and INPV increases
slightly. However, if the manufacturers are unable to pass on these
costs and only maintain the current operating profit (the preservation
of operating profit markup scenario), there is a large, negative impact
on INPV, because substantial increases in working capital drain
operating cash flow. The conversion costs associated with switching the
entire market, the large increase in incremental MPCs, and the extreme
pressure from OEMs to keep product prices down make it more likely that
ODMs will not be able to fully pass on these costs to OEMs and the ODMS
would face a substantial loss instead of a slight gain in INPV at TSL
3.
Product Class X
Table V-16 and Table V-17 below present the projected results for
product class X under the flat and preservation of operating profit
markup scenarios.
[GRAPHIC] [TIFF OMITTED] TP27MR12.055

[GRAPHIC] [TIFF OMITTED] TP27MR12.056

At TSL 1, DOE estimates impacts on INPV to range from -$0.4 million
to -$0.7 million, or a change in INPV of -1.0 percent to -1.7 percent.
At this level, industry free cash flow is estimated to decrease by
approximately 10.9 percent to $2.3 million, compared to the base-case
value of $2.6 million in the year before the compliance date.
At TSL 1, manufacturers of product class X face a very slight
decline in INPV because most of the market already meets TSL 1. The
total conversion costs are approximately $0.7 million. Conversion costs
are low because 95 percent of the products already meet the TSL 1
efficiency requirements.
At TSL 2, DOE estimates impacts on INPV to range from -$12.0
million to -$12.8 million, or a change in INPV of -27.1 percent to -
28.9 percent. At this level, industry free cash flow is estimated to
decrease by approximately 218.6 percent to -$3.1 million, compared to
the base-case value of $2.6 million in the year leading up to when the
new energy conservation standards would need to be met.
At TSL 2, manufacturers face a more noticeable loss in industry
value. DOE estimates that manufacturers will incur total product and
capital conversion costs of $14.4 million at TSL 2. The conversion
costs increase at TSL 2 because the entire market falls below the
efficiency requirements at TSL 2. However, the total impacts are also
driven by the incremental MPCs at TSL 2. At TSL 2, the MPC increases 16
percent over the baseline. Therefore, the projected changes in INPV
under both the flat and preservation of operating profit markup
scenarios are similar.
At TSL 3, DOE estimates impacts on INPV to range from -$4.6 million
to

[[Page 18577]]

-$17.9 million, or a change in INPV of -10.3 percent to -40.5 percent.
At this level, industry free cash flow is estimated to decrease by
approximately 218.6 percent to $3.1 million, compared to the base-case
value of $2.6 million in the year before the compliance date.
TSL 3 could result in substantial impacts on INPV. As with TSL 2,
the entire market falls below the required efficiency at TSL 3 and
total industry conversion costs are also $14.4 million. However, the
main difference at TSL 3 is the increase in the MPC. At TSL 3, the MPC
increases 46 percent over the baseline. If the ODM can pass on the
higher price of these products to the OEM at TSL 3, the decline in INPV
is not severe. However, if ODMs cannot pass on these higher MPCs to
OEMs, the loss in INPV is much more substantial.
Product Class H
Table V-18 and Table V-19 present the projected results for product
class H under the flat and preservation of operating profit markup
scenarios.
[GRAPHIC] [TIFF OMITTED] TP27MR12.057

At TSL 1, DOE estimates impacts on INPV to range -$0.04 million to
-0.05 million, or a change in INPV of -32.7 percent to -45.5 percent.
At this level, industry free cash flow is estimated to decrease by
approximately 284.4 percent to -$0.01 million, compared to the base-
case value of $0.01 million in the year before the compliance date.
At TSL 1, product class H manufacturers face a significant relative
loss in industry value. The base case industry value of $100,000 is low
and since DOE estimates that total conversion costs at TSL 1 would be
approximately $50,000, the conversion costs represent a substantial
portion of total industry value. The conversion costs are high relative
to the base case INPV because the entire market in 2013 is projected to
fall below an efficiency standard set at TSL 1. This means that all
products in product class H would have to be redesigned to meet the
efficiency level at TSL 1, leading to total conversion costs that are
large relative to the base case industry value. In addition, the MPC at
TSL 1 declines by 21 percent compared to the baseline since the
switching technology that would be required to meet this efficiency
level is less costly to manufacture than baseline products that use
linear technology. This situation results in a lower MSP and lower
revenues for manufacturers of baseline products, which exacerbates the
impacts on INPV from new energy conservation standards for these
products.
At TSL 2, DOE estimates impacts on INPV to range from -0.04 million
to -0.05 million, or a change in INPV of -33.8 percent to -44.0
percent. At this level, industry free cash flow is estimated to
decrease by approximately 284.4 percent to -$0.01 million, compared to
the base-case value of $0.01 million in the year before the compliance
date.
The impacts on INPV at TSL 2 are similar to TSL 1. The conversion
costs are the same since the entire market in 2013 would fall below the
required efficiency at both TSL 1 and TSL 2. Also, the MPC is projected
to decrease by 19 percent at TSL 2 compared to the baseline, which is
similar to the 21 percent decrease at TSL 1. Overall, the similar
conversion costs and lower industry revenue for the minimally compliant
products make the INPV impacts at TSL 2 similar to TSL 1.
At TSL 3, DOE estimates impacts on INPV to range from -$0.03
million to -0.05 million, or a change in INPV of -24.4 percent to -47.3
percent. At this level, industry free cash flow is estimated to
decrease by approximately 284.4 percent to -$0.01 million, compared to
the base-case value of $0.01 million in the year leading up to when the
new energy conservation standards would need to be met.
Impacts on INPV range from moderately to substantially negative at
TSL 3. As with TSL 1 and TSL 2, the entire market falls below the
required efficiency and the total industry

[[Page 18578]]

conversion costs estimated by DOE remain at $50,000. However, the MPC
increases at TSL 3 relative to the estimated cost of the baseline unit
and changes the possible impacts on INPV at TSL 3. If ODMs can fully
pass on the higher production cost of these products to the OEM at TSL
3, the decline in INPV is less severe. However, if the ODM cannot pass
on these higher MPC to OEM then the loss in INPV is much more
substantial.
ii. Battery Charger Cash Flow Impacts
DOE reports INPV impacts at each TSL for the six product class
groupings below. When appropriate, DOE also discusses the results for
groups of related applications that would experience impacts
significantly different from the overall product class group to which
they belong.
In general, two major factors drive the INPV results: (1) The
relative difference between a given application's MSP and the
incremental cost of improving its battery charger; and (2) the dominant
base case battery charger technology that a given application utilizes,
which is approximated by the application's efficiency distribution.
With respect to the first point, the higher the MSP of the
application relative to the battery charger cost, the lower the impacts
of battery charger standards on OEMs of the application. For example,
an industry that sells an application for $500 would be less affected
by a $2 increase in battery charger costs than one that sells its
application for $10. On the second point regarding base case efficiency
distribution, some industries, such as producers of laptop computers,
already incorporate highly efficient battery chargers. Therefore, a
higher standard would be unlikely to impact the laptop industry as it
would other applications using baseline technology in the same product
class.
As discussed in section IV.I, DOE analyzed three markup scenarios--
constant price, pass through, and flat markup. These scenarios were
described earlier. The constant price scenario analyzes the situation
in which application manufacturers are unable to pass on any
incremental costs of more efficient battery chargers to their
customers. This scenario generally results in the most significant
negative impacts \66\ because no incremental costs added to the
application--whether driven by higher battery charger component costs
or depreciation of required capital investments--can be recouped.
---------------------------------------------------------------------------

\66\ Notably, this is not the case with negative sloping cost-
efficiency curves. When a higher efficiency level can be achieved at
a lower product cost, the constant price scenario yields positive
impacts because larger margins are realized by the manufacturer on
each unit produced.
---------------------------------------------------------------------------

In the pass through scenario, DOE assumes that manufacturers are
able to pass the incremental costs of more efficient battery chargers
through to their customers, but not with any markup to cover overhead
and profit. Therefore, though less severe than the constant price
scenario in which manufacturers absorb all incremental costs, this
scenario results in negative cash flow impacts due to margin
compression and greater working capital requirements.
Finally, DOE considers a flat markup scenario to analyze the upper
bound (most positive) of profitability impacts.\67\ In this scenario,
manufacturers are able to maintain their base case gross margin, as a
percentage of revenue, at higher CSLs, despite the higher product costs
associated with more efficient battery chargers. In other words,
manufacturers can fully pass on--and mark up--the higher incremental
product costs associated with more efficient battery chargers.
---------------------------------------------------------------------------

\67\ While the Flat Markup scenario typically results in the
most positive impacts of any scenario, a negatively sloping cost-
efficiency curve will yield the opposite effect. When a higher
efficiency level can be achieved at a lower product cost, the margin
on each unit produced is lower, in absolute terms, in the Flat
Markup scenario. This effect leads to lower operating profit, cash
flow, and INPV.
---------------------------------------------------------------------------

Product Class 1
The following tables (Table V-20 through Table V-23) summarize
information related to the analysis performed to project the potential
impacts on product class 1 battery charger manufacturers.
BILLING CODE 6450-01-P

[[Page 18579]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.058

Product class 1 has only two applications: Rechargeable
toothbrushes and water jets. Rechargeable toothbrushes represent 99.9
percent of the product class 1 shipments. DOE found the majority of
these models include nickel-cadmium (Ni-Cd) battery chemistries,
although products with NiMH and Li-ion chemistries exist in the market.
More than three quarters of market shipments are at the baseline CSL.
However, the efficiency distribution is not necessarily indicative of
the distribution of retail price points. During interviews,
manufacturers indicated that energy efficiency was not a primary
selling point in this market. As a consequence, manufacturers expect
that stringent standards would likely impact the low-end of the market,
where price competition is most fierce and retail selling prices are
lowest.
The incremental costs of meeting TSL 1 and TSL 2, which represent
CSL 1 and CSL 2 for product class 1, respectively, are relatively minor
compared to the average application MSP of $58.36. While most
applications will have to be altered at these TSLs, the relatively
small increase in battery charger costs do not greatly impact industry
cash flow even if none of these incremental costs can be passed on to
retailers. At max-tech, however, the battery charger is 3.3 times more
expensive than the baseline charger. The baseline level is set at the
CSL at which the majority of the market currently ships. Therefore, in
addition to the R&D efforts necessary to prepare all product lines to
incorporate the max-tech levels, the inability to pass those much
higher battery charger costs down the distribution chain drive the
negative impacts at max-tech in the worst-case constant price scenario.

[[Page 18580]]

Product Classes 2, 3, and 4
The following tables (Table V-24 through Table V-30) summarize
information related to the analysis performed to project the potential
impacts on manufacturers of devices falling into product classes 2, 3,
and 4.
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[[Page 18581]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.060

BILLING CODE 6450-01-C
Taken together, product classes 2, 3, and 4 include the greatest
number of applications and account for more than 75 percent of total
battery charger shipments in 2013, the anticipated compliance year for
new energy conservation standards. These product classes also include a
wide variety of applications, characterized by differing shipment
volumes, base case efficiency distributions, and MSPs. Because of this
variety, this product class grouping, more than any other, requires a
greater level of disaggregation to evaluate specific industry impacts.
Presented only on a product class basis, industry impacts are
effectively shipment-weighted and mask impacts on certain industry
applications that vary substantially from the aggregate results.
Therefore, in addition to the overall product class group results, DOE
also presents results by industry subgroups--consumer electronics,
small appliances, power tools, and high-energy applications--in the
pass through scenario, which approximates the mid-point of the
potential range of impacts. These results highlight impacts at various
TSLs.
TSL 1 would require battery chargers in product classes 2, 3 and 4
to each meet CSL 1. Impacts on INPV are relatively moderate at TSL 1
because a majority of application shipments in these product classes
already meet CSL 1. However, those shipments already meeting CSL 1 are
heavily weighted toward the consumer electronics sector. In most cases,
CSL 1 could be met with incremental circuit design improvements and
higher efficiency components. Satisfying this level would not require a
full topology redesign or a move to Li-ion chemistry, although
manufacturers of some applications indicated in interviews that they
may elect such a design path.
TSL 2 has the same efficiency requirements for product classes 3
and 4 as TSL 1 (CSL 1). Product class 2 manufacturers would have to
meet CSL 2 at TSL 2, which would likely require battery charger design
changes (e.g., moving to switched-mode and Li-ion chemistries) that
would likely cause application manufacturers to incur significant R&D
expenditures relative to what is normally budgeted for battery
chargers. However, the financial impact of this investment effect would
be minor compared to the base case industry value, which is largely
driven by consumer electronics applications.
Industry impacts would become more acute at TSL 3 and TSL 4, as
best-in-market or max-tech designs would be required for all battery
chargers. The cost of a battery charger in product classes 3 and 4
rises sharply at CSL 2 (best in market) and further at CSL 3 (max-
tech). For relatively inexpensive applications, the inability to fully
pass on these substantially higher costs (as assumed in the pass
through and, to a greater extent, the constant price scenario) leads to
significant margin compression, working capital drains, and,
ultimately, reductions in INPV at the max-tech TSL.
As discussed above, these aggregated results can mask
differentially impacted industries and manufacturer subgroups. Nearly
90 percent of shipments in product classes 2, 3 and 4 fall under the
broader consumer electronics category, with the remaining share split
between small appliances and power tools. Consumer electronics
applications have a much higher shipment-weighted average MSP ($175)
than the other product categories ($80 for power tools and $60 for
small appliances). Consequently, consumer electronics manufacturers are
better able to absorb higher battery charger costs than small appliance
and power tool manufacturers. Further, consumer electronics typically
incorporate higher efficiency battery chargers already, while small
appliances and power tool applications tend to cluster around baseline
and CSL 1 efficiencies. These factors lead to proportionally greater
impacts on small appliance and power tool manufacturers in the event
they are not able to pass on and markup higher battery charger costs.
Table V-28 through Table V-30 present INPV impacts in the pass

[[Page 18582]]

through markup scenario for consumer electronic, power tool, and small
appliance applications, respectively (for only those applications
incorporating battery chargers in product class 2, 3 or 4). The results
clearly indicate manufacturers of power tools and small appliances
would face disproportionately adverse impacts, as compared to consumer
electronics manufacturers and the overall product group's results
(shown above in Table V-25 through Table V-27), if they are not able to
mark up the incremental product costs.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP27MR12.061

Product Classes 5 and 6
The following tables (Table V-31 through Table V-34) summarize
information related to the analysis performed to project the potential
impacts on manufacturers of devices falling into product classes 5 and
6.

[[Page 18583]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.062

Ride-on toy vehicles represent nearly three quarters of the
combined shipment volume in product classes 5 and 6, with marine
chargers and electric scooters accounting for the majority of the
remaining share. DOE's market survey and interviews found that nearly
all of the higher energy applications incorporate battery chargers with
lead acid battery chemistries. With the exception of battery chargers
for toy ride-on vehicles and lawn mowers, the majority of products in
these groupings use baseline battery chargers.
[GRAPHIC] [TIFF OMITTED] TP27MR12.063

[[Page 18584]]

TSL 1, TSL 2, and TSL 3 represent CSL 1, CSL 2, and CSL 3,
respectively, for both product class 5 and product class 6. The battery
charger cost associated with each CSL is the same for product classes 5
and 6. The industry impacts at TSL 1 are minor to moderate because a
large percentage of the market already meets the CSLs represented in
that TSL and because the incremental battery charger product costs are
minor relative to the average application MSP of $220. At TSL 2, the
battery charger cost declines compared to the baseline because of the
technology shift from a line-frequency power supply to a switch-mode
power supply, and the resulting impacts are projected to remain fairly
moderate. At TSL 3, however, the impacts on INPV are severe because the
required max-tech battery chargers would cost nearly seven times the
cost of a baseline charger.
Under the flat markup scenario, which assumes manufacturers could
fully mark up the product to recover this additional cost, such an
increase generates substantially greater cash flow and industry value.
However, as noted earlier, the greater the increase in product costs,
the less likely DOE believes that manufacturers will be able to fully
markup the substantially higher production costs (the flat markup
scenario). DOE believes manufacturers would be forced to absorb much of
this dramatic cost increase at max-tech, yielding the substantially
negative industry impacts, as shown by the lower-bound results.
Product Class 7
The following tables (Table V-35 through Table V-38) summarize
information related to the analysis performed to project the potential
impacts on manufacturers of devices falling into product class 7.
[GRAPHIC] [TIFF OMITTED] TP27MR12.064

[[Page 18585]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.065

BILLING CODE 6450-01-C
Golf cars are the only application in product class 7.
Approximately half the market incorporates baseline battery charger
technology--the other half employs technology that meets the efficiency
requirements at CSL 1. The cost of a battery charger in product class
7, though higher relative to other product classes, remains a small
portion of the overall selling price of a golf car. As such, large
percentage increases in the cost of the battery charger, as in the case
of max-tech, do not yield severe impacts on golf car OEMs, even in the
constant price scenario. Note, however, this analysis focuses on the
application manufacturer, or the OEM. DOE did identify a U.S. small
business manufacturer of the golf car battery charger itself (as
opposed to the application). DOE evaluates the impacts on standards on
such manufacturers in the Regulatory Flexibility Analysis (see section
VI.B for the results of that analysis).
Product Class 8
The following tables (Table V-39 through Table V-42) summarize
information related to the analysis performed to project the potential
impacts on manufacturers of devices falling into product class 8.
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Product class 8 includes 14 applications, mostly consumer
electronics. MP3 players and mobile phones make up the vast majority of
product class 8 shipments (58 percent and 31 percent, respectively).
Approximately 50 percent of MP3 players meet CSL 1 or higher and 73
percent of mobile phones already incorporate best-in-market battery
chargers that exceed CSL 2. For most other applications in this product
class, roughly two-thirds of the incorporated battery chargers already
meet or exceed CSL 1. Furthermore, because the manufacturer selling
prices of these dominant applications dwarf the incremental product
costs associated with increasing the efficiency--even at max-tech--the
overall industry impacts are projected to be minor for all TSLs for
product class 8.
Product Class 9

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DOE did not examine any TSLs for product class 9 and did not
conduct any downstream analyses for this product class. For product
class 9, DOE is not proposing any energy conservation standards.
Section V.B.2.fof this NOPR provides a more detailed reason for this
decision.
Product Class 10
The following tables (Table V-44 through Table V-47) summarize
information related to the analysis performed to project the potential
impacts on manufacturers of devices falling into product class 10.

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Product class 10 has only one application: Uninterruptible power
supplies. The vast majority of models on the market have sealed lead-
acid battery chemistries. The efficiency distribution for product class
10 assumes all shipments are at the baseline CSL. Compared to the
average application MSP of approximately $289, the incremental costs of
meeting the higher CSLs remain relatively low, despite increasing
substantially on a percentage basis. Therefore, even in the constant
price scenario, INPV impacts are projected to be limited.
b. Impacts on Employment
As part of the direct employment impact analysis, DOE attempted to
quantify the number of domestic workers involved in EPS manufacturing.
Based on manufacturer interviews and DOE's research, DOE believes that
all major EPS ODMs are foreign owned and operated. DOE did identify a
few smaller niche EPS ODMs based in the U.S. and attempted to contact
these companies. All of the companies DOE reached indicated their EPS
manufacturing takes place abroad. During manufacturer interviews, large
manufacturers also indicated the vast majority, if not all, EPS
production takes place overseas. Due to DOE's inability to identify any
EPS ODMs with domestic manufacturing, DOE has tentatively concluded
that there are no EPSs currently manufactured domestically.

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However, in recognition of the fragmented nature of this market, DOE
seeks comment and input as to whether there are EPS manufacturers that
have domestic production.
DOE also recognizes there are several OEMs or their domestic
distributors that have employees in the U.S. that work on design,
technical support, sales, training, certification, and other
requirements. However, in interviews manufacturers generally did not
expect any negative changes in the domestic employment of the design,
technical support, or other departments of EPS OEMs located in the U.S.
in response to new or amended energy conservation standards.
For battery chargers, DOE similarly attempted to quantify the
number of domestic workers involved in battery charger production.
Based on manufacturer interviews and DOE's research, DOE believes that
the vast majority of all small appliance and consumer electronic
applications are manufactured abroad. When looking specifically at the
battery charger component, which is typically designed by the
application manufacturer but sourced for production, the same dynamic
holds to an even greater extent. That is, in the rare instance when an
application's production occurs domestically, it is very likely that
the battery charger component is still produced and sourced overseas.
For example, DOE identified several power tool applications with some
level of domestic manufacturing. However, based on more detailed
information obtained during interviews, DOE believes the battery
charger components for these applications are sourced from abroad.
Also, DOE was able to find a few manufacturers of medium and high
power applications with facilities in the U.S. However, only a limited
number of these companies produce battery chargers domestically for
these applications. Therefore, based on manufacturer interviews and
DOE's research, DOE believes that golf cars are the only application
with U.S.-based battery charger manufacturing. Any change in U.S.
production employment due to new battery charger energy conservation
standards is likely to come from changes involving these particular
products. DOE seeks comment on the presence of any domestic battery
charger manufacturing outside of the golf car industry and beyond
prototyping for R&D purposes.
At the proposed efficiency levels, domestic golf car manufacturers
will face a difficult decision on whether to attempt to manufacture
more efficient battery chargers in-house and try to compete with a
greater level of vertical integration than their competitors, move
production to lower-wage regions abroad, or source their battery
charger manufacturing. DOE believes one of the latter two strategies
would be more likely for domestic golf car manufacturers. DOE describes
the major implications for golf car employment in the regulatory
flexibility section VI.B below because the major domestic manufacturer
is also a small business manufacturer. Similar to EPSs, DOE does not
anticipate any negative changes in the domestic employment of the
design, technical support, or other departments of battery charger
application manufacturers located in the U.S. in response to new energy
conservation standards. Standards may require some companies to
redesign their battery chargers, change marketing literature, and train
some technical and sales support staff. However, during interviews,
manufacturers generally agreed these changes would not lead to positive
or negative changes in employment.
c. Impacts on Manufacturing Capacity
DOE does not anticipate that the standards proposed in today's rule
would adversely impact manufacturer capacity. For EPSs, EISA has set a
statutory compliance date. The EPS industry is characterized by rapid
product development lifecycles. Most battery charger applications have
similar design cycles. While there is no statutory compliance date for
battery chargers, DOE believes the compliance date proposed in today's
rule provides sufficient time for manufacturers to ramp up capacity to
meet the proposed standards for battery chargers and EPSs. DOE requests
comment on the appropriate compliance date for battery charger (see
section I).
d. Impacts on Sub-Group of Manufacturers
Using average cost assumptions to develop an industry cash-flow
estimate is not adequate for assessing differential impacts among
manufacturer subgroups. Small manufacturers, niche equipment
manufacturers, and manufacturers exhibiting a cost structure
substantially different from the industry average could be affected
disproportionately. DOE addressed manufacturer subgroups in the battery
charger MIA. Because certain applications are disproportionately
impacted compared to the overall product class, DOE reports those
results individually so they can be considered as part of the overall
MIA. DOE did not identify any EPS manufacturer subgroups that would
require a separate analysis in the MIA.
DOE also identified small businesses as a subgroup that could
potentially be disproportionally impacted. DOE discusses the impacts on
the small business subgroup in the regulatory flexibility analysis
(section VI.B).
e. Cumulative Regulatory Burden
While any one regulation may not impose a significant burden on
manufacturers, the combined effects of several impending regulations
may have serious consequences for some manufacturers, groups of
manufacturers, or an entire industry. Assessing the impact of a single
regulation may overlook this cumulative regulatory burden. In addition
to energy conservation standards, other regulations can significantly
affect manufacturers' financial operations. Multiple regulations
affecting the same manufacturer can strain profits and can 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 received many comments about
the potential cumulative regulatory burden (see section IV.I.4.a) that
may result from a standard for battery chargers and EPSs. The
regulatory burdens described in those comments, however, generally fall
outside of the scope of the cumulative regulatory burden analysis,
which generally focuses on the impacts related to Federal regulations
with a compliance date within three years of the anticipated compliance
date of today's proposal. DOE notes that the potential for duplicative
testing requirements raised by some commenters were addressed above.
i. Impact Due to CEC Battery Charger Standard
Table V-48 presents the range of impacts on all battery charger
product classes due to the CEC battery charger standards.

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DOE quantitatively assessed the impact of the CEC battery charger
standard on battery charger application manufacturers. This standard
affects applications using a battery charger that are sold in
California beginning in 2013. DOE estimates the impacts on
manufacturers to range from $137 million to -$575 million, or a change
in INPV of 0.3 percent to -1.1 percent. This range depends on
manufacturers' ability to pass on the incremental price increases to
consumers in the California markets caused by the CEC standard. DOE
also estimated manufacturers will have to invest $12.6 million in
product conversion costs and $3.8 million in capital conversion costs
in order to have all battery charger applications sold in California
meet the CEC standard by 2013.
3. National Impact Analysis
a. Significance of Energy Savings
To estimate the energy savings during the analysis period
attributable to potential standards for battery chargers and EPSs, DOE
compared the energy consumption of these products in the base case to
their anticipated energy consumption with standards set at each TSL.
Table V-49 and Table V-50 present DOE's forecasts of the national
energy savings at each TSL for battery chargers and EPSs. The savings
were calculated using the approach described in section IV.G. Chapter
10 of the NOPR TSD presents tables that also show the magnitude of the
energy savings if the savings are discounted at rates of 3 and 7
percent. Discounted energy savings represent a policy perspective in
which energy savings realized farther in the future are less
significant than energy savings realized in the nearer term.
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b. Net Present Value of Consumer Costs and Benefits
DOE estimated the cumulative NPV to the Nation of the total costs
and savings for consumers that would result from potential standard
levels for battery chargers and EPSs. In accordance with the OMB's
guidelines on regulatory analysis (OMB Circular A-4, section E,
September 17, 2003), DOE calculated NPV using both a 3-percent and a 7-
percent real discount rate.
Table V-51 and Table V-52 show the consumer NPV results for each
TSL DOE considered for EPSs, using both a 3-percent and a 7-percent
discount rate. Table V-53 and Table V-54 show the corresponding results
for battery chargers. In each case, the impacts cover the lifetime of
products purchased in 2013-2042. See chapter 10 of the TSD for more
detailed NPV results.
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DOE conducted NPV sensitivity analysis using three alternative
price trends. The NPV results from the associated sensitivity cases are
described in appendix 10-X of the NOPR TSD.
c. Indirect Impacts on Employment
DOE develops estimates of the indirect employment impacts of
potential standards on the economy in general. As discussed above, DOE
expects energy conservation standards for battery chargers and EPSs to
reduce energy bills for consumers of these products, and the resulting
net savings

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to be 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.J, to estimate these effects DOE used
an input/output model of the U.S. economy. DOE understands that there
are uncertainties involved in projecting employment impacts generated
by an input/output model, especially changes in the later years of the
analysis. Therefore, DOE generated results for near-term timeframes,
such as 2015, where these uncertainties are reduced.
The results suggest the proposed standards are likely to have
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 13 of the NOPR TSD presents more detailed results.
4. Impact on Utility or Performance of Products
As presented in section III.B of this notice, DOE has tentatively
concluded that none of the TSLs considered in this notice would reduce
the utility or performance of the products under consideration in this
rulemaking. Furthermore, manufacturers of these products currently
offer EPSs and battery chargers that meet or exceed the proposed
standards. (42 U.S.C. 6295(o)(2)(B)(i)(IV))
5. Impact of Any Lessening of Competition
DOE has also considered any lessening of competition that is likely
to result from amended standards. The Attorney General determines the
impact, if any, of any lessening of competition likely to result from a
proposed standard, and transmits such determination to the Secretary,
together with an analysis of the nature and extent of such impact. (42
U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii))
To assist the Attorney General in making such determination, DOE
will provide DOJ with copies of this NOPR and the TSD for review. DOE
will consider DOJ's comments on the proposed rule in preparing the
final rule, and DOE will publish and respond to DOJ's comments in that
document.
6. Need of the Nation To Conserve Energy
An improvement in the energy efficiency of the products subject to
today's NOPR is likely to improve the security of the Nation's energy
system and reduce the costs of energy production. Reduced electricity
demand may also improve the reliability of the electricity system,
particularly during peak-load periods. (42 U.S.C. 6295(o)(2)(B)(i)(VI))
Energy savings from amended standards for Class A EPSs and new
standards for non-Class A EPSs and battery chargers could also produce
environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases associated with electricity production.
Table V-55 and Table V-56 provide DOE's estimate of cumulative
CO2, NOX, and Hg emissions reductions that would
be expected to result from each of the TSLs considered in this
rulemaking for EPSs and battery chargers, respectively. In the
environmental assessment (chapter 15 in the NOPR TSD), DOE reports
annual CO2, NOX, and Hg emissions reductions for
each considered TSL.
As discussed in section IV.L, DOE has not reported SO2
emissions reductions from power plants, because there is uncertainty
about the effect of energy conservation standards on the overall level
of SO2 emissions in the United States due to SO2
emissions caps. DOE also did not include NOX emissions
reduction from power plants in States subject to CAIR because an
amended energy conservation standard would not affect the overall level
of NOX emissions in those States due to the emissions caps
mandated by CAIR.
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DOE also estimated monetary benefits likely to result from the
reduced emissions of CO2 and NOX that DOE
estimated for each of the TSLs considered for battery chargers and
EPSs. In order to make this calculation similar to the calculation of
the NPV of consumer benefits, DOE considered the reduced emissions
expected to result over the lifetime of products shipped in the
forecast period for each TSL.
As discussed in section IV.M, a Federal interagency group selected
four SCC values for use in regulatory analyses, which DOE used in the
NOPR analysis. The four SCC values (expressed in 2007$) are $4.7/ton
(the average value from a distribution that uses a 5-percent discount
rate), $21.4/ton (the average value from a distribution that uses a 3-
percent discount rate), $35.1/ton (the average value from a
distribution that uses a 2.5-percent discount rate), and $64.9/ton (the
95th-percentile value from a distribution that uses a 3-percent
discount rate). These values correspond to the value of CO2
emission reductions in 2010; the values for later years are higher due
to increasing damages as the magnitude of climate change increases. For
each of the four cases, DOE calculated a present value of the stream of
annual values using the same discount rate as was used in the studies
upon which the dollar-per-ton values are based.
Table V-57 to Table V-60 and Table V-61 to Table V-66 present the
global values of CO2 emissions reductions at each TSL
considered for energy efficiency for EPSs and battery chargers,
respectively. As explained in section IV.M.1, DOE calculated domestic
values as a range from 7 percent to 23 percent of the global values,
and these results are presented in Table V-67to Table V-70 and Table V-
71 to Table V-76 for EPSs and battery chargers, respectively.
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DOE is well aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
world economy continues to evolve rapidly. Thus, any value placed in
this rulemaking on reducing CO2 emissions is subject to
change. DOE, together with other Federal agencies, will continue to
review various methodologies for estimating the monetary value of
reductions in CO2 and other GHG emissions. This ongoing
review will consider any comments on this subject that are part of the
public record for this and other rulemakings, as well as other
methodological assumptions and issues. However, consistent with DOE's
legal obligations, and taking into account the uncertainty involved
with this particular issue, DOE has included in this NOPR the most
recent values and analyses resulting from the ongoing interagency
review process.
DOE also estimated a range for the cumulative monetary value of the
economic benefits associated with NOX emissions reductions
anticipated to result from amended standards for Class A EPSs and new
standards for non-Class A EPSs and battery chargers. The dollar-per-ton
values that DOE used are discussed in section IV.M. Table V-77 presents
the cumulative present values for each TSL considered for EPSs,
calculated using 7-percent and 3-percent discount rates. Table V-78
presents similar results for the TSLs considered for battery chargers.

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The NPV of the monetized benefits associated with emissions
reductions can be viewed as a complement to the NPV of the consumer
savings calculated for each TSL considered in this rulemaking. Table V-
79 shows an example of the calculation of the combined NPV, including
benefits from emissions reductions for the case of TSL 1 for battery
chargers product classes 2, 3, 4. Table V-80 and Table V-81 present the
NPV values that result from adding the estimates of the potential
economic benefits resulting from reduced CO2 and
NOX emissions in each of four valuation

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scenarios to the NPV of consumer savings calculated for each TSL
considered for EPSs, at both a 7-percent and a 3-percent discount rate.
The CO2 values used in the columns of each table correspond
to the four scenarios for the valuation of CO2 emission
reductions presented in section IV.M. Table V-82 and Table V-83 present
similar results for the TSLs considered for battery chargers.
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Although adding the value of consumer savings to the values of
emission reductions provides a valuable perspective, two issues should
be considered. First, the national operating savings are domestic U.S.
consumer monetary savings that occur as a result of market
transactions, while the value of CO2 reductions is based on
a global value. Second, the assessments of operating cost savings and
CO2 savings are performed with different methods that use
quite different time frames for analysis. The national operating cost
savings is measured for the lifetime of products shipped in the 30-year
period after the compliance date. The SCC values, on the other hand,
reflect the present value of all future climate-related impacts
resulting from the emission of one ton of carbon dioxide in each year.
These impacts go well beyond 2100.
7. Other Factors
In determining whether a standard is economically justified, DOE
may consider any other factors that it deems relevant. (42 U.S.C.
6295(o)(2)(B)(i)(VI))) The California IOUs asked that DOE consider
adopting the standard levels proposed by the State of California.
(California IOUs, No. 43 at p. 2) In January 2012, the CEC finalized
its battery charger energy conservation standards and published energy
conservation standards for battery chargers. Prior to finalizing these
standards, CEC published a draft staff report outlining the
requirements that were ultimately adopted.\68\ The standards consist of
two metrics; one is a maximum allowance for 24-hour charge and
maintenance energy, while the other is a maximum allowance for the
combination of maintenance and no battery mode power. DOE analyzed the

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CEC's proposal and determined, for each of DOE's product classes, which
CSL aligns most closely with the CEC's proposed standards, as explained
in section IV.C.2.d above. Table shows this mapping and the national
energy savings and net benefits that could be expected to result from
federal standards at these levels. Additional results for these CSLs
are presented elsewhere in section V.B and in the TSD.
---------------------------------------------------------------------------

\68\ Singh, Harinder; Rider, Ken. 2011. Staff Report Staff
Analysis of Battery Chargers and Self-Contained Lighting Controls.
2011 California Energy Commission, Efficiency and Renewable Energy
Division, Appliances and Process Energy Office. CEC-400-2011-001-SF.
[GRAPHIC] [TIFF OMITTED] TP27MR12.087

DOE incorporated the CEC's battery charger standards into its
analysis by adjusting its base case efficiency distributions, as
explained in section IV.G.4 above. It did not choose proposed standard
levels with the explicit intention of aligning its standards with the
CEC's. Rather, as in all such rulemakings, the proposed levels were
selected to meet a number of criteria specified in EPCA. These
decisions for each product class grouping are explained in detail in
the following section.

C. Proposed Standards

When considering proposed standards, the new or amended energy
conservation standard that DOE adopts for any type (or class) of
covered product shall 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 considering, to the greatest extent practicable, the seven statutory
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or
amended standard must also result in the significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B))
For today's NOPR, DOE considered the impacts of standards 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
most efficient level that is both technologically feasible and
economically justified and saves a significant amount of energy.
DOE separately discusses the benefits and burdens of each TSL for
each group of products. To aid the reader in its discussion of the
benefits and burdens of each TSL, DOE presents summary tables
containing 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 impact whether a
given efficiency level is economically justified. These factors include
the impacts on identifiable subgroups of consumers, such as low-income
households and seniors, who may be disproportionately affected by a
national standard. Section V.B.1 presents the estimated impacts of each
TSL on these subgroups. DOE also considers impacts on employment
stemming from the manufacture of the products subject to standards (see
section V.B.2.b), as well as potential indirect impacts in the national
economy (see section V.B.3.c).
DOE notes that the economics literature provides a wide-ranging
discussion of how consumers trade off upfront costs and energy savings
in the absence of government intervention. Much of this literature
attempts to explain why consumers appear to undervalue energy
efficiency improvements. This undervaluation suggests that regulation
that promotes energy efficiency can produce significant net private
gains (as well as producing social gains by, for example, reducing
pollution). There is evidence that consumers undervalue future energy
savings as a result of (1) a lack of information; (2) a lack of
sufficient salience of the long-term or aggregate benefits; (3) a lack
of sufficient savings to warrant delaying or altering; (4) excessive
focus on the short term, in the

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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 (that is, renter versus owner; builder
vs. purchaser). Other literature indicates that with less than perfect
foresight and a high degree of uncertainty about the future, consumers
may trade off these types of investments at a higher than expected rate
between current consumption and uncertain future energy cost savings.
In 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 a
purchase of a product in the standards case, this decreases sales for
product manufacturers and the cost to manufacturers 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
regulatory option decreases the number of products used by consumers,
this decreases the potential energy savings from an energy conservation
standard. DOE provides detailed estimates of shipments and changes in
the volume of product purchases in chapter 9 of the NOPR 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.
While DOE is not prepared at present to provide a fuller
quantifiable framework for estimating the benefits and costs of changes
in consumer 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 efficiency
standards, and potential enhancements to the methodology by which these
impacts are defined and estimated in the regulatory process.\69\ DOE
welcomes comments on approaches for improved assessment of the consumer
welfare impacts of appliance standards.
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\69\ Alan Sanstad. Notes on the Economics of Household Energy
Consumption and Technology Choice. Lawrence Berkeley National
Laboratory. 2010. Available online at: https://www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf.
---------------------------------------------------------------------------

1. External Power Supplies
a. Product Class B--Direct Operation External Power Supplies
Table V-85 presents a summary of the quantitative impacts estimated
for each TSL for EPSs in product class B. As outlined in section V.A.1,
DOE is extending the TSLs for product class B to product classes C, D,
and E since product class B was the only one directly analyzed and
interested parties supported this approach because of the technical
similarities among these products. The efficiency levels contained in
each TSL are described in section V.A.1.
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DOE first considered TSL 3, which represents the max-tech
efficiency level. TSL 3 would save 1.316 quads of energy, an amount DOE
considers significant. Under TSL 3, the NPV of consumer benefits would
be -$2.357 billion, using a discount rate of 7 percent, and -$3.292
billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 62.5 Mt of
CO2, 51.6 kt of NOX, and 0.331 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 3 ranges from $0.263 billion to $3.936 billion.
At TSL 3, the average LCC impact is a gain (consumer savings) of
$0.02 for the 2.5W unit and a cost (LCC savings decrease) of $1.19 for
the 18W unit, $1.38 for the 60W unit, and $5.49 for the 120W unit. The
median payback period is 4.3 years for the 2.5W unit, 8.1 years for the
18W unit, 6.4 years for the 60W unit, and 9.1 years for the 120W unit.
The fraction of consumers experiencing an LCC benefit is 38.7 percent
for the 2.5W unit, 25.6 percent for the 18W unit, 7.2 percent for the
60W unit, and 0 percent for the 120W unit. The fraction of consumers
experiencing an LCC cost is 61.3 percent for the 2.5W unit, 74.4
percent for the 18W unit, 92.8 percent for the 60W unit, and 100
percent for the 120W unit.
At TSL 3, the projected change in INPV for direct operation product
classes B, C, D, and E as a group ranges from a decrease of $123.5
million to an increase of $17.9 million. At TSL 3, DOE recognizes the
risk of very large negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached, as DOE expects, TSL 3 could result in a
net loss of 53.2 percent in INPV to manufacturers of EPSs in these
product classes. However, as DOE has not identified any domestic
manufacturers of direct operation EPSs, it does not project any
immediate negative impacts on direct domestic jobs.
The Secretary tentatively concludes that at TSL 3 for EPSs in
product class B, the negative NPV of consumer benefits, the economic
burden on a significant fraction of consumers due to the large
increases in product cost, and the capital conversion costs and profit
margin impacts that could result in a very large reduction in INPV,
outweigh the benefits of energy savings, emission reductions, and the
estimated monetary value of the CO2 emissions reductions.
Consequently, the Secretary has tentatively concluded that TSL 3 is not
economically justified.
DOE then considered TSL 2. TSL 2 would save 0.7246 quads of energy,
an amount DOE considers significant. Under TSL 2, the NPV of consumer
benefits would be $463 million, using a discount rate of 7 percent, and
$1.138 billion, using a discount rate of 3 percent. Additionally, TSL 2
yields the maximum NPV of consumer benefits added to the social cost of
carbon and monetized NOX emissions reductions \70\ with a
value of $1.199 billion at a 7-percent discount rate and $1.894 billion
at a 3-percent discount rate.
---------------------------------------------------------------------------

\70\ Assuming the social cost of carbon equal to $21.4 per
metric ton and NOX calculated with a medium value of
$2,514 per short ton. These values are applied throughout the TSL
discussion that follows.
---------------------------------------------------------------------------

The cumulative emissions reductions at TSL 2 are 34.3 Mt of
CO2, 28.4 kt of NOX, and 0.182 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 2 ranges from $0.145 billion to $2.166 billion.
At TSL 2, the average LCC impact is a gain (consumer savings) of
$0.04 for the 2.5W unit, $0.69 for the 18W unit, $0.61 for the 120W
unit, and a cost (LCC savings decrease) of $0.45 for the 60W unit. The
median payback period is 4.3 years for the 2.5W unit, 3.1 years for the
18W unit, 5.4 years for the 60W unit, and 1.9 years for the 120W unit.
The fraction of consumers experiencing an LCC benefit is 38.6 percent
for the 2.5W unit, 52.3 percent years for the 18W unit, 13.6 percent
for the 60W unit, and 88.4 percent for the 120W unit. The fraction of
consumers experiencing an LCC cost is 59.1 percent for the 2.5W unit,
37.5 percent for the 18W unit, 85.2 percent for the 60W unit, and 8.6
percent for the 120W unit.
At TSL 2, the projected change in INPV for product classes B, C, D,
and E as a group ranges from a decrease of $81.4 million to a decrease
of $35.2 million. DOE recognizes the risk of large negative impacts if
manufacturers' expectations concerning reduced profit margins are
realized. If the high end of the range of impacts is reached, as DOE
expects, TSL 2 could result in a net loss of 35.1 percent in INPV to
manufacturers of EPSs in these product classes.
The Secretary tentatively concludes that at TSL 2 for EPSs in
product class B, the benefits of energy savings, positive NPV of
consumer benefits, emission reductions, and the estimated monetary
value of the CO2 emissions reductions outweigh the economic
burden on a significant fraction of consumers due to the increases in
product cost and the capital conversion costs and profit margin impacts
that could result in a reduction in INPV to manufacturers.
After considering the analysis, comments to the preliminary
analysis and TSD, and the benefits and burdens of TSL 2, the Secretary
tentatively concludes that this TSL will offer the maximum improvement
in efficiency that is technologically feasible and economically
justified and will result in the significant conservation of energy.

[[Page 18613]]

Therefore, DOE today proposes to adopt TSL 2 for EPSs in product class
B and, by extension, for EPSs in product classes C, D, and E because of
the technical similarities among all of these devices. The proposed new
and amended energy conservation standards for these EPSs, expressed as
equations for minimum average active-mode efficiency and maximum no-
load input power, are shown in Table V-86.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP27MR12.090

[[Page 18614]]

b. Product Class X--Multiple-Voltage External Power Supplies
Table V-87 presents a summary of the quantitative impacts estimated
for each TSL for multiple-voltage EPSs. The efficiency levels contained
in each TSL are described in section V.A.
[GRAPHIC] [TIFF OMITTED] TP27MR12.091

BILLING CODE 6450-01-C
DOE first considered TSL 3, which represents the max-tech
efficiency level. TSL 3 would save 0.147 quads of energy, an amount DOE
considers significant. Under TSL 3, the NPV of consumer benefits would
be -$364 million, using a discount rate of 7 percent, and -$533
million, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 6.92 Mt of
CO2, 5.71 kt of NOX, and 0.036 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 3 ranges from $0.029 billion to $0.440 billion.
At TSL 3, the average LCC impact is a cost (LCC savings decrease)
of $3.09. The median payback period is 13.2 years. The fraction of
consumers experiencing an LCC benefit is 5 percent while the fraction
of consumers experiencing an LCC cost is 95 percent.
At TSL 3, the projected change in INPV ranges from a decrease of
$17.9 million to a decrease of $4.6 million. At TSL 3, DOE recognizes
the risk of very large negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high range of
impacts is reached, as DOE expects, TSL 3 could result in a net loss of
40.5 percent in INPV to manufacturers of multiple-voltage EPSs.
However, as DOE has not identified any domestic manufacturers of
multiple-voltage EPSs, it does not project any immediate negative
impacts on direct domestic jobs.
The Secretary tentatively concludes that at TSL 3 for multiple-
voltage EPSs, the negative NPV of consumer benefits, the economic
burden on a significant fraction of consumers due to the large

[[Page 18615]]

increases in product cost, and the capital conversion costs and profit
margin impacts that could result in a very large reduction in INPV
outweigh the benefits of energy savings, emission reductions, and the
estimated monetary value of the CO2 emissions reductions.
Consequently, the Secretary has tentatively concluded that TSL 3 is not
economically justified.
DOE then considered TSL 2. TSL 2 would save 0.0718 quads of energy,
an amount DOE considers significant. Under TSL 2, the NPV of consumer
benefits would be $176 million, using a discount rate of 7 percent, and
$330 million, using a discount rate of 3 percent. Additionally, TSL 2
yields the maximum NPV of consumer benefits added to the social cost of
carbon and monetized NOX emissions reductions with a value
of $248 million at a 7-percent discount rate and $405 million at a 3-
percent discount rate.
At TSL 2, the average LCC impact is a gain (consumer savings) of
$2.07. The median payback period is 4.7 years. The fraction of
consumers experiencing an LCC benefit is 49 percent while the fraction
of consumers experiencing an LCC cost is 51 percent.
The cumulative emissions reductions at TSL 2 are 3.38 Mt of
CO2, 2.79 kt of NOX, and 0.018 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 2 ranges from $0.014 billion to $0.215 billion.
At TSL 2, the projected change in INPV ranges from a decrease of
$12.8 million to a decrease of $12.0 million. At TSL 2, DOE recognizes
the risk of large negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached, as DOE expects, TSL 2 could result in a
net loss of 28.9 percent in INPV to manufacturers of multiple-voltage
EPSs.
The Secretary tentatively concludes that at TSL 2 for multiple-
voltage EPSs, the benefits of energy savings, positive NPV of consumer
benefits, emission reductions, and the estimated monetary value of the
CO2 emissions reductions outweigh the economic burden on a
significant fraction of consumers due to the increases in product cost
and the capital conversion costs and profit margin impacts that could
result in a reduction in INPV for manufacturers.
After considering the analysis, comments to the preliminary
analysis and TSD, and the benefits and burdens of TSL 2, the Secretary
tentatively concludes that this TSL will offer the maximum improvement
in efficiency that is technologically feasible and economically
justified and will result in the significant conservation of energy.
Therefore, DOE today proposes to adopt TSL 2 for multiple-voltage EPSs.
The proposed new and amended energy conservation standard for multiple-
voltage EPSs, expressed as an equation for minimum average active-mode
efficiency and maximum no-load input power, is shown in Table V-88.
[GRAPHIC] [TIFF OMITTED] TP27MR12.092

c. Product Class H--High-Power External Power Supplies
Table V-89 presents a summary of the quantitative impacts estimated
for each TSL for high-power EPSs. The efficiency levels contained in
each TSL are described in section V.A.

[[Page 18616]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.093

DOE first considered TSL 3, which represents the max-tech
efficiency level. TSL 3 would save 0.0015 quads of energy, an amount
DOE considers significant. Under TSL 3, the NPV of consumer benefits
would be $3.6 million, using a discount rate of 7 percent, and $7.6
million, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 0.065 Mt of
CO2, 0.053 kt of NOX, and less than 0.0001 t of
Hg. The estimated monetary value of the cumulative CO2
emissions reductions at TSL 3 ranges from less than $0.0001 to $0.004
billion.
At TSL 3, the average LCC impact is a gain (consumer savings) of
$92.96. The median payback period is 2.5 years. The fraction of
consumers experiencing an LCC benefit is 83.1 percent while the
fraction of consumers experiencing an LCC cost is 16.9 percent.
At TSL 3, the projected change in INPV ranges from a decrease of
$0.05 million to a decrease of $0.03 million. At TSL 3, DOE recognizes
the risk of very large negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached, as DOE expects, TSL 3 could result in a
net loss of 47.3 percent in INPV to manufacturers of high-power EPSs.
However, as DOE has not identified any domestic manufacturers of high
power EPSs, it does not project any immediate negative impacts on
direct domestic jobs.
The Secretary tentatively concludes that at TSL 3 for high-power
EPSs, the additional considerations of the potential negative impacts
of a standard at this max-tech TSL outweigh the benefits of energy
savings, emission reductions, and the estimated monetary value of the
CO2 emissions reductions. DOE notes that it scaled results
for product class B to estimate the cost and efficiency of this max-
tech CSL. Consequently, DOE is unaware of any product that can achieve
this CSL in either product class B or H. Thus, although DOE's analysis
indicates that the max-tech efficiency level is achievable, there is a
risk that unforeseen obstacles remain to creating an EPS at this TSL.
Additionally, setting a standard at TSL 3 would create a
discontinuity in the average efficiency standards for EPSs. For product
class B devices, the average efficiency standard is constant

[[Page 18617]]

for nameplate output power ratings greater than 49 watts up to 250
watts. At 250 watts, where product class H begins, the average
efficiency standard would increase by 4 percent if DOE set standards
for this product class at the max-tech TSL. This discontinuity in
efficiency between the two product classes would be the result of the
proposed standards for product class B EPSs being equivalent to the
best-in-market CSL equation while the proposed standards for product
class H would be equivalent to the max-tech CSL equation for high-power
EPSs. DOE believes that setting a standard with a large discontinuity
between these product classes is not consistent with EPS design trends.
In contrast, by applying the same level of stringency, scaled for
the representative unit voltage, to all EPSs with output power greater
than 250 watts, the achievable efficiency in EPS designs that have an
output power above 49 watts remains nearly constant. This result occurs
because the switching and conduction losses associated with the EPS
remain proportionally the same with the increase in output power, which
creates a relatively flat achievable efficiency above 49 watts. If DOE
were to adopt a level that created a discontinuity in the efficiency
levels, it would ignore this trend and set a higher efficiency standard
between two product classes despite numerous technical similarities.
Consequently, the Secretary has tentatively concluded that TSL 3 is not
justified.
DOE then considered TSL 2. TSL 2 would save 0.0014 quads of energy,
an amount DOE considers significant. Under TSL 2, the NPV of consumer
benefits would be $5.0 million, using a discount rate of 7 percent, and
$9.7 million, using a discount rate of 3 percent.
At TSL 2, the average LCC impact is a gain (consumer savings) of
$129.08. The median payback period is 0.2 years. The fraction of
consumers experiencing an LCC benefit is 100 percent while the fraction
of consumers experiencing an LCC cost is 0 percent.
The cumulative emissions reductions at TSL 2 are 0.058 Mt of
CO2, 0.048 kt of NOX, and less than 0.0001 t of
Hg. The estimated monetary value of the cumulative CO2
emissions reductions at TSL 2 ranges from less than $0.0001 to $0.004
billion. Additionally, TSL 2 yields the maximum NPV of consumer
benefits added to the social cost of carbon and monetized
NOX emissions reductions with a value of $6.3 million at a
7-percent discount rate and $11.1 million at a 3-percent discount rate.
At TSL 2, the projected change in INPV ranges from a decrease of
$0.04 million to a decrease of $0.04 million. At TSL 2, DOE recognizes
the risk of large negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached, as DOE expects, TSL 2 could result in a
net loss of 44.0 percent in INPV to manufacturers of high-power EPSs.
The Secretary tentatively concludes that at TSL 2 for high-power
EPSs, the benefits of energy savings, positive NPV of consumer
benefits, positive LCC savings for all consumers, emission reductions,
and the estimated monetary value of the CO2 emissions
reductions outweigh the economic burden of the capital conversion costs
and profit margin impacts that could result in a reduction in INPV for
manufacturers. The Secretary also tentatively concludes that this TSL
will offer the maximum improvement in efficiency that is
technologically feasible and economically justified and will result in
the significant conservation of energy. Therefore, DOE today proposes
to adopt TSL 2 for high-power EPSs. The proposed new and amended energy
conservation standards for high-power EPSs, expressed as a discrete
standard for minimum average active-mode efficiency and maximum no-load
input power, are shown in Table V-90.
[GRAPHIC] [TIFF OMITTED] TP27MR12.094

d. Product Class N--Indirect-Operation External Power Supplies
Product class N consists of indirect-operation EPSs, which are EPSs
that serve only as battery charger components and do not operate an
end-use consumer product or power any auxiliary functions of an end-use
consumer product on their own. See section IV.A.3 above. The
applications that use these EPSs consist of applications using motors
and detachable batteries, which correspond to MADB non-Class A EPSs and
other applications that use Class A EPSs. DOE believes that the Class A
and non-Class A devices in product class N are technically equivalent.
Because of this technical equivalency, DOE believes that EPSs of both
types can achieve the same efficiency level for the same cost and,
thus, grouped these EPSs into one product class for analysis. DOE is
not aware of any capacity- or performance-related features of the non-
Class A devices in product class N that would enable DOE to create a
separate class for this group of devices. 42 U.S.C. 6295(q)
Of the estimated 75 million EPSs in this product class sold
annually, 46 percent are Class A and are already subject to the Federal
standards prescribed by EISA 2007. The remaining 54 percent are non-
Class A EPSs, which are not currently subject to Federal standards.
Table V-91 lists those applications that DOE has identified as product
class N EPSs and indicates how many of each are subject to the current
Federal standard for Class A EPSs and how many are non-Class A devices.
DOE seeks comment on the accuracy of its estimates regarding the
proportions of these applications that ship with indirect-operation
EPSs versus direct-operation EPSs. (See Issue 17 under ``Issues on
Which DOE Seeks Comment'' in Section VII.E of this notice.)
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[[Page 18618]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.095

BILLING CODE 6450-01-C
First, DOE considered setting standards for EPSs in product class N
at an efficiency level greater than the level prescribed by EISA for
all Class A EPSs. While such a standard would theoretically yield
energy savings, DOE tentatively believes that these savings would not
be cost justified. In the case of these particular devices, DOE
believes that a more effective way to obtain additional energy savings
is to

[[Page 18619]]

regulate the battery chargers of which product class N EPSs are a part,
since all of the power flowing through an indirect-operation EPS flows
to the battery charger. In contrast, a direct-operation EPS's output
power flows to both a battery charger and an end-use consumer product,
which means that regulating only the battery charger would not
adequately address the entire system. Thus, by not setting new
standards for product class N EPSs beyond the existing EISA standard
level, DOE believes that manufacturers will have greater flexibility in
designing more efficient battery chargers without adversely impacting
their utility and performance. This approach would help ensure that
consumers and the Nation as a whole will realize cost-effective savings
either through improvements to the EPS or other components in the
battery charger. Thus, DOE tentatively believes that any cost-effective
energy savings for these products will be realized through the battery
charger standard itself.
Next, DOE considered standards equivalent to the current EISA
standards for Class A EPSs. This approach would represent no change in
standards for Class A devices and a new standard for non-Class A
devices in product class N. (Note that all Class A EPSs, including
those in product class N, cannot, by virtue of EPCA's anti-backsliding
provision, be subject to a standard less stringent than the current
Class A standard prescribed by EISA 2007 (see 42 U.S.C. 6295(o)(1)).)
As indicated in section IV.A.1 above, DOE has not identified any
non-Class A EPSs in product class N that are not already subject to the
California EPS standard. As a result, all of these non-Class A EPSs
that fall into product class N must already comply with the California
standard. The California standard for non-Class A EPSs is at the same
efficiency level as the Federal Class A EPS standard. California also
relies on the Federal test procedure to verify compliance with its EPS
standards. Since California requires identical standards and test
methods for non-Class A EPSs as DOE does for Class A, DOE considers
these standards to be equivalent.
Additionally, manufacturers have alluded informally to DOE that the
California standard is the ``de facto'' national standard for their
non-Class A EPSs because they typically sell the same EPS for a given
product line throughout the country. The California IOUs concurred with
this view. (California IOUs, No. 43 at p. 9) Thus, DOE believes that
the non-Class A EPSs in product class N already meet the Federal
standards currently in place for Class A EPSs and seeks comment on the
accuracy of this belief. (See Issue 18 under ``Issues on Which DOE
Seeks Comment'' in section VII.E of this notice.)
Under the assumption that all non-Class A EPSs in product class N
already meet the Federal standards currently in place for Class A EPSs,
a new standard at the EISA level for these products would not yield
significant energy savings and, therefore, would not be cost-justified.
Therefore, DOE is not proposing new standards for indirect operation
EPSs today. If DOE receives new information indicating that this
assumption is incorrect, i.e., that manufacturers are not producing all
indirect operation EPSs at or above the EISA efficiency levels, DOE
will reconsider this decision and evaluate potential new standards for
this product class.
2. Battery Chargers
a. Low-Energy, Inductive Charging Battery Chargers, Product Class 1
Table V-92 presents a summary of the quantitative impacts estimated
for each TSL for low-energy, inductive charging battery chargers. The
efficiency levels contained in each TSL are described in section V.A.
BILLING CODE 6450-01-P

[[Page 18620]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.096

DOE first considered TSL 3, which represents the max-tech
efficiency level. TSL 3 would save 0.178 quads of energy, an amount DOE
considers significant. Under TSL 3, the NPV of consumer benefits would
be -$527 million, using a discount rate of 7 percent, and -$781
million, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 8.36 Mt of
CO2, 6.90 kt of NOX, and 0.044 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 3 ranges from $0.035 billion to $0.531 billion.
At TSL 3, the average LCC impact is a cost (LCC savings decrease)
of $2.87 for low-energy inductive charging battery chargers. The median
payback period is 8.5 years. The fraction of consumers experiencing an
LCC benefit is 1.8 percent and the fraction of consumers experiencing
an LCC cost is 98.2 percent.
At TSL 3, the projected change in INPV ranges from a decrease of
$441 million to an increase of $29 million. At TSL 3, DOE recognizes
the risk of very large negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached, as DOE expects, TSL 3 could result in a
net loss of 89.7 percent in INPV to manufacturers of battery chargers.
The Secretary tentatively concludes that at TSL 3 for low-energy,
inductive charging battery chargers, the benefits of energy savings,
emission reductions, and the estimated monetary value of the
CO2 emissions reductions would be outweighed by the negative
NPV of consumer benefits, the economic burden on a significant fraction
of consumers due to the large increases in product cost, and the
capital conversion costs and profit margin impacts that could result in
a very large reduction in INPV for the manufacturers. Consequently, the
Secretary has tentatively concluded that TSL 3 is not economically
justified.
DOE then considered TSL 2. TSL 2 would save 0.130 quads of energy,
an amount DOE considers significant. Under TSL 2, the NPV of consumer
benefits would be $318 million, using a discount rate of 7 percent, and
$606 million, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 2 are 6.11 Mt of
CO2, 5.05 kt of NOX, and 0.032 t of Hg. The
estimated monetary value of the cumulative CO2

[[Page 18621]]

emissions reductions at TSL 2 ranges from $0.026 billion to $0.388
billion. Additionally, the NPV of consumer benefits added to the social
cost of carbon and monetized NOX emissions reductions is
maximized with a value of $741 million at a 3-percent discount rate and
$450 million at a 7-percent discount rate at TSL 2.
At TSL 2, the average LCC impact is a savings of $1.52 for low-
energy inductive charging battery chargers. The median payback period
is 1.7 years. The fraction of consumers experiencing an LCC benefit is
88.9 percent and the fraction of consumers experiencing an LCC cost is
0 percent.
At TSL 2, the projected change in INPV ranges from a decrease of
$101 million to an increase of $1 million. DOE recognizes the risk of
large negative impacts if manufacturers' expectations concerning
reduced profit margins are realized. If the high end of the range of
impacts is reached, as DOE expects, TSL 2 could result in a net loss of
20.6 percent in INPV to manufacturers of low-energy inductive charging
battery chargers.
The Secretary tentatively concludes that at TSL 2 for low-energy,
inductive charging battery chargers, the benefits of energy savings,
positive NPV of consumer benefits, positive mean LCC savings, emission
reductions, and the estimated monetary value of the CO2
emissions reductions outweigh the economic burden of the capital
conversion costs and profit margin impacts that could result in a
reduction in INPV for manufacturers.
After considering the analysis, comments to the September 2010
notice and the preliminary TSD, and the benefits and burdens of TSL 2,
the Secretary tentatively concludes that this TSL will offer the
maximum improvement in efficiency that is technologically feasible and
economically justified and will result in the significant conservation
of energy. Therefore, DOE today proposes to adopt TSL 2 for low-energy
inductive charging battery chargers. The proposed new energy
conservation standard for low-energy inductive charging battery
chargers is shown in Table V-97.

Table V-93--Proposed Standard for Product Class 1
------------------------------------------------------------------------
Maximum unit energy
Product class consumption (kWh/yr)
------------------------------------------------------------------------
1 (Low-Energy, Inductive)................. 3.04
------------------------------------------------------------------------

b. Low-Energy, Non-Inductive Charging Battery Chargers, Product Classes
2, 3, and 4
Table presents a summary of the quantitative impacts estimated for
each TSL for low-energy, non-inductive charging battery chargers. The
efficiency levels contained in each TSL are described in section V.A.
BILLING CODE 6450-01-P

[[Page 18622]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.097

BILLING CODE 6450-01-C

[[Page 18623]]

DOE first considered TSL 4, which represents the max-tech
efficiency level. TSL 4 would save 1.9971 quads of energy, an amount
DOE considers significant. Under TSL 4, the NPV of consumer benefits
would be -$23.54 billion, using a discount rate of 7 percent, and -
$38.44 billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 94.6 Mt of
CO2, 78.1 kt of NOX, and 0.502 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 4 ranges from $0.398 billion to $5.949 billion.
At TSL 4, the average LCC impact is a cost (LCC savings decrease)
of $4.54, $2.15, and $10.14 for low-energy non-inductive charging
battery charger product classes 2, 3, and 4 respectively. The median
payback period is 16.9, 21.5, and 37.6 years for product classes 2, 3,
and 4 respectively. The fraction of consumers experiencing an LCC
benefit is 3.2, 14.2, and 1.8 percent for each product class and the
fraction of consumers experiencing an LCC cost is 96.8, 85.8, and 98.2
percent for each product class.
At TSL 4, the projected change in INPV ranges from a decrease of
$14.56 billion to an increase of $0.98 billion. At TSL 4, DOE
recognizes the risk of very large negative impacts if manufacturers'
expectations concerning reduced profit margins are realized. If the
high end of the range of impacts is reached, as DOE expects, TSL 4
could result in a net loss of 33.2 percent in INPV to manufacturers of
battery chargers.
The Secretary tentatively concludes that at TSL 4 for low-energy,
non-inductive charging battery chargers, the benefits of energy
savings, emission reductions, and the estimated monetary value of the
CO2 emissions reductions would be outweighed by the negative
NPV of consumer benefits, the economic burden on a significant fraction
of consumers due to the large increases in product cost, and the
capital conversion costs and profit margin impacts that could result in
a very large reduction in INPV for the manufacturers. Consequently, the
Secretary has tentatively concluded that TSL 4 is not economically
justified.
DOE then considered TSL 3, which represents the best-in-market
efficiency level. TSL 3 would save 1.797 quads of energy, an amount DOE
considers significant. Under TSL 3, the NPV of consumer benefits would
be -$8.97 billion, using a discount rate of 7 percent, and -$14.16
billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 85.1 Mt of
CO2, 70.3 kt of NOX, and 0.452 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 3 ranges from $0.358 billion to $5.352 billion.
At TSL 3, the average LCC impact is a cost (LCC savings decrease)
of $1.81, $2.12, and $2.73 for low-energy non-inductive charging
battery charger product classes 2, 3, and 4 respectively. The median
payback period is 8.5, 21.9, and 13.8 years for product classes 2, 3,
and 4 respectively. The fraction of consumers experiencing an LCC
benefit is 10.0, 13.3, and 2.2 percent for each product class and the
fraction of consumers experiencing an LCC cost is 87.1, 65.8, and 46.4
percent for each product class.
At TSL 3, the projected change in INPV ranges from a decrease of
$10.86 billion to an increase of $0.53 billion. At TSL 3, DOE
recognizes the risk of large negative impacts if manufacturers'
expectations concerning reduced profit margins are realized. If the
high end of the range of impacts is reached, as DOE expects, TSL 3
could result in a net loss of 24.8 percent in INPV to manufacturers of
battery chargers.
The Secretary tentatively concludes that at TSL 3 for low-energy,
non-inductive charging battery chargers, the benefits of energy
savings, emission reductions, and the estimated monetary value of the
CO2 emissions reductions would be outweighed by the negative
NPV of consumer benefits, the economic burden on a significant fraction
of consumers due to the large increases in product cost, and the
capital conversion costs and profit margin impacts that could result in
a very large reduction in INPV for the manufacturers. Consequently, the
Secretary has tentatively concluded that TSL 3 is not economically
justified.
DOE then considered TSL 2, which represents an intermediate
efficiency level. TSL 2 would save 0.759 quads of energy, an amount DOE
considers significant. Under TSL 2, the NPV of consumer benefits would
be -$435 million, using a discount rate of 7 percent, and -$367
million, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 2 are 35.9 Mt of
CO2, 29.7 kt of NOX, and 0.191 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 2 ranges from $0.151 billion to $2.260 billion.
At TSL 2, the average LCC impact is a cost (LCC savings decrease)
of $0.12 for product class 2 and a savings (LCC savings increase) of
$0.35 and $0.43 product classes 3 and 4 respectively. The median
payback period is 5.2, 3.9, and 3.0 years for product classes 2, 3, and
4 respectively. The fraction of consumers experiencing an LCC benefit
is 17.0, 8.3, and 5.8 percent for each product class and the fraction
of consumers experiencing an LCC cost is 26.8, 8.9, and 3.4 percent for
each product class.
At TSL 2, the projected change in INPV ranges from a decrease of
$6.06 billion to an increase of $0.13 billion. At TSL 2, DOE recognizes
the risk of large negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached, as DOE expects, TSL 2 could result in a
net loss of 13.8 percent in INPV to manufacturers of battery chargers.
The Secretary tentatively concludes that at TSL 2 for low-energy,
non-inductive charging battery chargers, the benefits of energy
savings, emission reductions, and the estimated monetary value of the
CO2 emissions reductions would be outweighed by the negative
NPV of consumer benefits, the economic burden on a significant fraction
of consumers due to the increases in product cost, and the capital
conversion costs and profit margin impacts that could result in a large
reduction in INPV for the manufacturers. Consequently, the Secretary
has tentatively concluded that TSL 2 is not economically justified.
DOE then considered TSL 1, which represents another intermediate
efficiency level. Relative to TSL 2, the efficiency level for product
class 2 has decreased, while the efficiency levels for product classes
3 and 4 are the same. TSL 1 would save 0.309 quads of energy, an amount
DOE considers significant. Under TSL 1, the NPV of consumer benefits
would be $664 million, using a discount rate of 7 percent, and $1.255
billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 1 are 14.7 Mt of
CO2, 12.1 kt of NOX, and 0.078 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 1 ranges from $0.062 billion to $0.921 billion.
Additionally, the NPV of consumer benefits added to the social cost of
carbon and monetized NOX emissions reductions is maximized
with a value of $1.576 billion at a 3-percent discount rate and $0.977
billion at a 7-percent discount rate at TSL 1.
At TSL 1, the average LCC impact is a savings (LCC savings
increase) of $0.16, $0.35, and $0.43 for low-energy non-inductive
charging battery charger product classes 2, 3, and 4 respectively. The
median payback period is 0.5, 3.9, and 3.0 years for product classes 2,
3, and 4 respectively. The fraction of consumers experiencing an LCC
benefit is 17.0, 8.3, and 5.8 percent for each product class and the
fraction of

[[Page 18624]]

consumers experiencing an LCC cost is 1.0, 8.9, and 3.4 percent for
each product class.
At TSL 1, the projected change in INPV ranges from a decrease of
$4.90 billion to an increase of $0.02 billion. DOE recognizes the risk
of negative impacts if manufacturers' expectations concerning reduced
profit margins are realized. If the high end of the range of impacts is
reached, TSL 1 could result in a net loss of 11.2 percent in INPV to
manufacturers of low-energy non-inductive charging battery chargers.
The Secretary tentatively concludes that at TSL 1 for low-energy,
non-inductive charging battery chargers, the benefits of energy
savings, positive NPV of consumer benefits, positive mean LCC savings,
emission reductions, and the estimated monetary value of the
CO2 emissions reductions outweigh the economic burden of the
capital conversion costs and profit margin impacts that could result in
a reduction in INPV for manufacturers.
After considering the analysis, comments to the September 2010
notice and the preliminary TSD, and the benefits and burdens of TSL 1,
the Secretary tentatively concludes that this TSL will offer the
maximum improvement in efficiency that is technologically feasible and
economically justified and will result in the significant conservation
of energy. Therefore, DOE today proposes to adopt TSL 1 for low-energy
non-inductive charging battery chargers. The proposed new energy
conservation standards for low-energy, non-inductive charging battery
chargers, expressed as equations for minimum unit energy consumption,
are shown in Table V-99.
[GRAPHIC] [TIFF OMITTED] TP27MR12.098

c. Medium-Energy Battery Chargers, Product Classes 5 and 6
Table V-96 presents a summary of the quantitative impacts estimated
for each TSL for medium-energy battery chargers. The efficiency levels
contained in each TSL are described in section V.A.
BILLING CODE 6450-01-P

[[Page 18625]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.099

BILLING CODE 6450-01-C
DOE first considered TSL 3, which represents the max-tech
efficiency level. TSL 3 would save 0.781 quads of energy, an amount DOE
considers significant. Under TSL 3, the NPV of consumer benefits would
be -$6.96 billion, using a discount rate of 7 percent, and -$11.12
billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 35.9 Mt of
CO2, 29.6 kt of NOX, and 0.187 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 3 ranges from $0.154 billion to $2.318 billion.
At TSL 3, the average LCC impact is a cost (LCC savings decrease)
of $104.58 and $86.76 for medium-energy battery charger product classes
5 and 6 respectively. The median payback period is 53.4 and 20.8 years
for product classes 5 and 6 respectively. The fraction of consumers
experiencing an

[[Page 18626]]

LCC benefit is 8.4 and 1.6 percent for product classes 5 and 6,
respectively, and the fraction of consumers experiencing an LCC cost is
78.6 and 85.4 percent for product classes 5 and 6, respectively.
At TSL 3, the projected change in INPV ranges from a decrease of
$1.31 billion to an increase of $0.69 billion. At TSL 3, DOE recognizes
the risk of very large negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached, as DOE expects, TSL 3 could result in a
net loss of 84.8 percent in INPV to manufacturers of battery chargers.
The Secretary tentatively concludes that at TSL 3 for medium-energy
battery chargers, the benefits of energy savings, emission reductions,
and the estimated monetary value of the CO2 emissions
reductions would be outweighed by the negative NPV of consumer
benefits, the economic burden on a significant fraction of consumers
due to the large increases in product cost, and the capital conversion
costs and profit margin impacts that could result in a very large
reduction in INPV for manufacturers. Consequently, the Secretary has
tentatively concluded that TSL 3 is not economically justified.
DOE then considered TSL 2, which represents the best-in-market
efficiency level. TSL 2 would save 0.596 quads of energy, an amount DOE
considers significant. Under TSL 2, the NPV of consumer benefits would
be $2.54 billion, using a discount rate of 7 percent, and $4.65
billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 2 are 27.4 Mt of
CO2, 22.6 kt of NOX, and 0.143 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 2 ranges from $0.118 billion to $1.770 billion.
Additionally, the NPV of consumer benefits added to the social cost of
carbon and monetized NOX emissions reductions is maximized
with a value of $5.264 billion at a 3-percent discount rate and $3.139
billion at a 7-percent discount rate at TSL 2.
At TSL 2, the average LCC impact is a savings (LCC savings
increase) of $33.79 and $40.78 for medium-energy battery charger
product classes 5 and 6, respectively. The median payback period is 0.0
and 0.0 years for product classes 5 and 6, respectively. The fraction
of consumers experiencing an LCC benefit is 79.9 and 64.8 percent for
each product class and the fraction of consumers experiencing an LCC
cost is 0.0 and 0.0 percent for each product class.
At TSL 2, the projected change in INPV ranges from a decrease of
$225 million to a decrease of $40 million. DOE recognizes the risk of
negative impacts if manufacturers' expectations concerning reduced
profit margins are realized. If the high end of the range of impacts is
reached, TSL 2 could result in a net loss of 14.5 percent in INPV to
manufacturers of medium-energy battery chargers.
The Secretary tentatively concludes that at TSL 2 for medium-energy
battery chargers, the benefits of energy savings, positive NPV of
consumer benefits, positive mean LCC savings, emission reductions, and
the estimated monetary value of the CO2 emissions reductions
outweigh the economic burden of the capital conversion costs and profit
margin impacts that could result in a reduction in INPV for
manufacturers.
After considering the analysis, comments to the September 2010
notice and the preliminary TSD, and the benefits and burdens of TSL 2,
the Secretary tentatively concludes that this TSL will offer the
maximum improvement in efficiency that is technologically feasible and
economically justified and will result in the significant conservation
of energy. Therefore, DOE today proposes to adopt TSL 2 for medium-
energy battery chargers. The proposed new energy conservation standards
for medium-energy battery chargers, expressed as equations for minimum
unit energy consumption, are shown in Table V-101.
[GRAPHIC] [TIFF OMITTED] TP27MR12.100

d. High-Energy Battery Chargers, Product Class 7
Table V-98 presents a summary of the quantitative impacts estimated
for each TSL for high-energy battery chargers. The efficiency levels
contained in each TSL are described in section V.A.

[[Page 18627]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.101

DOE first considered TSL 2, which represents the max-tech
efficiency level. TSL 2 would save 0.021 quads of energy, an amount DOE
considers significant. Under TSL 2, the NPV of consumer benefits would
be -$299 million, using a discount rate of 7 percent, and -$493
million, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 2 are 0.975 Mt of
CO2, 0.808 kt of NOX, and 0.006 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 2 ranges from $0.004 billion to $0.061 billion.
At TSL 2, the average LCC impact is a cost (LCC savings decrease)
of $127.30 for high-energy battery chargers. The median payback period
is 27.2 years. The fraction of consumers experiencing an LCC benefit is
0.0 percent and the fraction of consumers experiencing an LCC cost is
100.0 percent.
At TSL 2, the projected change in INPV ranges from a decrease of
$136 million to an increase of $23 million. At TSL 2, DOE recognizes
the risk of large negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached, as DOE expects, TSL 2 could result in a
net loss of 13.1 percent in INPV to manufacturers of battery chargers.
The Secretary tentatively concludes that at TSL 2 for high-energy
battery chargers, the benefits of energy savings, emission reductions,
and the estimated monetary value of the CO2 emissions
reductions would be outweighed by the negative NPV of consumer
benefits, the economic burden on a significant fraction of consumers
due to the large increases in product cost, and the capital conversion
costs and profit margin impacts that could result in a large reduction
in INPV for the manufacturers. Consequently, the Secretary has
tentatively concluded that TSL 2 is not economically justified.
DOE then considered TSL 1, which is the best-in-market efficiency
level. TSL 1 would save 0.007 quads of energy, an amount DOE considers
significant. Under TSL 1, the NPV of consumer benefits would be $70
million, using a discount rate of 7 percent, and $119 million, using a
discount rate of 3 percent.
The cumulative emissions reductions at TSL 1 are 0.312 Mt of
CO2, 0.259 kt of NOX, and 0.002 t of Hg. The

[[Page 18628]]

estimated monetary value of the cumulative CO2 emissions
reductions at TSL 1 ranges from $0.001 billion to $0.019 billion.
Additionally, the NPV of consumer benefits added to the social cost of
carbon and monetized NOX emissions reductions is maximized
with a value of $126 million at a 3-percent discount rate and $76
million at a 7-percent discount rate at TSL 1.
At TSL 1, the average LCC impact is a savings of $38.26 for high-
energy battery chargers. The median payback period is 0.0 years. The
fraction of consumers experiencing an LCC benefit is 43.5 percent and
the fraction of consumers experiencing an LCC cost is 0.0 percent.
At TSL 1, the projected change in INPV ranges from a decrease of $4
million to an increase of $47 million. DOE recognizes the risk of
negative impacts if manufacturers' expectations concerning reduced
profit margins are realized. If the high end of the range of impacts is
reached, as DOE expects, TSL 1 could result in a net loss of 0.4
percent in INPV to manufacturers of high-energy battery chargers.
The Secretary tentatively concludes that at TSL 1 for high-energy
battery chargers, the benefits of energy savings, positive NPV of
consumer benefits, positive mean LCC savings, emission reductions, and
the estimated monetary value of the CO2 emissions reductions
outweigh the economic burden associated with the potential direct
employment losses, capital conversion costs and profit margin impacts
that could result in a reduction in INPV for manufacturers.
After considering the analysis, comments to the September 2010
notice and the preliminary TSD, and the benefits and burdens of TSL 1,
the Secretary tentatively concludes that this TSL will offer the
maximum improvement in efficiency that is technologically feasible and
economically justified and will result in the significant conservation
of energy. Therefore, DOE today proposes to adopt TSL 1 for high-energy
battery chargers. The proposed new energy conservation standard for
high-energy battery chargers, expressed as an equation for minimum unit
energy consumption, is shown in Table V-103.
[GRAPHIC] [TIFF OMITTED] TP27MR12.102

e. Battery Chargers With a DC Input of Less Than 9 V, Product Class 8
Table V-100 presents a summary of the quantitative impacts
estimated for each TSL for battery chargers with a DC input less than 9
V. The efficiency levels contained in each TSL are described in section
V.A.

[[Page 18629]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.103

DOE first considered TSL 3, which represents the max-tech
efficiency level. TSL 3 would save 0.045 quads of energy, an amount DOE
considers significant. Under TSL 3, the NPV of consumer benefits would
be -$1.21 billion, using a discount rate of 7 percent, and -$2.00
billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 2.16 Mt of
CO2, 1.78 kt of NOX, and 0.011 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 3 ranges from $0.009 billion to $0.136 billion.
At TSL 3, the average LCC impact is a cost (LCC savings decrease)
of $2.31 for battery chargers with a DC input of less than 9 V. The
median payback period is 24.9 years. The fraction of consumers
experiencing an LCC benefit is 44.6 percent and the fraction of
consumers experiencing an LCC cost is 55.4 percent.
At TSL 3, the projected change in INPV ranges from a decrease of
$61 million to a decrease of $30 million. At TSL 3, DOE recognizes the
risk of large negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached, as DOE expects, TSL 3 could result in a
net loss of 1.1 percent in INPV to manufacturers of battery chargers.
The Secretary tentatively concludes that at TSL 3 for battery
chargers with a DC input of less than 9 V, the benefits of energy
savings, emission reductions, and the estimated monetary value of the
CO2 emissions reductions would be outweighed by the negative
NPV of consumer benefits and the economic burden on a significant
fraction of consumers due to the large increases in product cost, and
the capital conversion costs and profit margin impacts that could
result in a reduction in INPV for the manufacturers. Consequently, the
Secretary has tentatively concluded that TSL 3 is not economically
justified.
DOE then considered TSL 2, which represents the best-in-market
efficiency level. TSL 2 would save 0.041 quads of energy, an amount DOE
considers significant. Under TSL 2, the NPV of consumer benefits would
be -$1.00 billion, using a discount rate of 7 percent, and -$1.65
billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 2 are 1.95 Mt of
CO2, 1.61 kt of NOX, and 0.010 t of Hg. The
estimated

[[Page 18630]]

monetary value of the cumulative CO2 emissions reductions at
TSL 2 ranges from $0.008 billion to $0.122 billion.
At TSL 2, the average LCC impact is a cost (LCC savings decrease)
of $1.96 for battery chargers with a DC input of less than 9 V. The
median payback period is 0.0 years. The fraction of consumers
experiencing an LCC benefit is 50.0 percent and the fraction of
consumers experiencing an LCC cost is 40.0 percent.
At TSL 2, the projected change in INPV ranges from an increase of
$4 million to an increase of $78 million. At TSL 2, DOE believes there
are minimal risks of negative impacts on manufacturers and expects that
TSL 2 could result in a net gain of 0.1 percent in INPV to
manufacturers of battery chargers.
The Secretary tentatively concludes that at TSL 2 for battery
chargers with a DC input of less than 9 V, the benefits of energy
savings, emission reductions, and the estimated monetary value of the
CO2 emissions reductions would be outweighed by the negative
NPV of consumer benefits and the economic burden on a significant
fraction of consumers due to the large increases in product cost.
Consequently, the Secretary has tentatively concluded that TSL 2 is not
economically justified.
DOE then considered TSL 1, which is an intermediate efficiency
level. TSL 1 would save 0.010 quads of energy, an amount DOE considers
significant. Under TSL 1, the NPV of consumer benefits would be $1.66
billion, using a discount rate of 7 percent, and $2.78 billion, using a
discount rate of 3 percent.
The cumulative emissions reductions at TSL 1 are 0.46 Mt of
CO2, 0.38 kt of NOX, and 0.002 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 1 ranges from $0.002 billion to $0.029 billion.
Additionally, the NPV of consumer benefits added to the social cost of
carbon and monetized NOX emissions reductions is maximized
with a value of $2.790 billion at a 3-percent discount rate and $1.669
billion at a 7 percent discount rate at TSL 1.
At TSL 1, the average LCC impact is a savings of $3.04 for battery
chargers with a DC input of less than 9 V. The median payback period is
0.0 years. The fraction of consumers experiencing an LCC benefit is
50.0 percent and the fraction of consumers experiencing an LCC cost is
0.0 percent.
At TSL 1, the projected change in INPV ranges from a decrease of
$75 million to an increase of $1,300 million. DOE recognizes the risk
of negative impacts if manufacturers' expectations concerning reduced
profit margins are realized. If the high end of the range of impacts is
reached, as DOE expects, TSL 1 could result in a net loss of 1.3
percent in INPV to manufacturers of battery chargers with a DC input
less than 9 V.
The Secretary tentatively concludes that at TSL 1 for battery
chargers with a DC input of less than 9 V, the benefits of energy
savings, positive NPV of consumer benefits, positive mean LCC savings,
emission reductions, and the estimated monetary value of the
CO2 emissions reductions outweigh the economic burden
associated with the capital conversion costs and profit margin impacts
that could result in a reduction in INPV for manufacturers.
After considering the analysis, comments to the September 2010
notice and the preliminary TSD, and the benefits and burdens of TSL 1,
the Secretary tentatively concludes that this TSL will offer the
maximum improvement in efficiency that is technologically feasible and
economically justified and will result in the significant conservation
of energy. Therefore, DOE today proposes to adopt TSL 1 for battery
chargers with a DC input less than 9 V. The proposed new energy
conservation standard for battery chargers with a DC input less than 9
V is shown in Table V-105.

Table V-101--Proposed Standard for Product Class 8
------------------------------------------------------------------------
Maximum unit energy
Product class consumption (kWh/yr)
------------------------------------------------------------------------
8 (Low-Voltage DC Input).................. 0.66
------------------------------------------------------------------------

DOE is also considering an alternative approach for product class 8
because of the considerations expressed in section IV.C.2.i above. This
approach is same as the proposal that DOE has for product class 9,
discussed in the following section.
f. Battery Chargers With a DC Input Greater Than 9 V, Product Class 9
DOE ran a number of analyses in an attempt to ascertain whether an
appropriate efficiency level could be created for product class 9. A
battery charger is in product class 9 if it operates using a DC input
source greater than 9 V, it is unable to operate from a universal
serial bus (USB) connector, and a manufacturer does not package,
recommend, or sell a wall adapter for the device. Such products would
be in-vehicle battery chargers that can operate outside of a vehicle.
After completing its engineering analysis for these products, DOE ran
the LCC analysis. These analyses projected that no efficiency level
would be likely to exhibit a positive LCC savings. The LCC results
showed a cost (LCC savings decrease) of $0.08 and $0.24 for CSLs 1 and
2 respectively. That fact, combined with the minimal UECs found for
products in this category, leads DOE to tentatively believe that there
would be no economically justifiable TSLs that correspond to the
efficiency levels found in the engineering analysis for this product
class.
g. AC Output Battery Chargers, Product Class 10
Table V-102 presents a summary of the quantitative impacts
estimated for each TSL for battery chargers with an AC output. The
efficiency levels contained in each TSL are described in section V.A.

[[Page 18631]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.104

DOE first considered TSL 3, which is the max-tech efficiency level.
TSL 3 would save 0.312 quads of energy, an amount DOE considers
significant. Under TSL 3, the NPV of consumer benefits would be $789
million, using a discount rate of 7 percent, and $1.55 billion, using a
discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 13.9 Mt of
CO2, 11.5 kt of NOX, and 0.092 t of Hg. The
estimated monetary value of the cumulative CO2 emissions
reductions at TSL 3 ranges from $0.060 billion to $0.910 billion.
Additionally, the NPV of consumer benefits added to the social cost of
carbon and monetized NOX emissions reductions is maximized
with a value of $1.866 billion at a 3-percent discount rate and $1.097
billion at a 7-percent discount rate at TSL 3.
At TSL 3, the average LCC impact is a savings of $8.30 for AC
battery output battery chargers. The median payback period is 1.5
years. The fraction of consumers experiencing an LCC benefit is 87.0
percent and the fraction of consumers experiencing an LCC cost is 13.0
percent.
At TSL 3, the projected change in INPV ranges from a decrease of
$126 million to a decrease of $5 million. DOE recognizes the risk of
large negative impacts if manufacturers' expectations concerning
reduced profit margins are realized. If the high end of the range of
impacts is reached, as DOE expects, TSL 3 could result in a net loss of
20.5 percent in INPV to manufacturers of AC output battery chargers.
The Secretary tentatively concludes that at TSL 3 for AC output
battery chargers, the benefits of energy savings, positive NPV of
consumer benefits, positive mean LCC savings, emission reductions, and
the estimated monetary value of the CO2 emissions reductions
outweigh the economic burden associated with the capital conversion
costs and profit margin impacts that could result in a reduction in
INPV for manufacturers.
After considering the analysis, comments to the September 2010
notice and the preliminary TSD, and the benefits and burdens of TSL 3,
the Secretary tentatively concludes that this TSL will offer the
maximum improvement in efficiency that is technologically feasible and
economically justified and will result in

[[Page 18632]]

the significant conservation of energy. Therefore, DOE today proposes
to adopt TSL 3 for AC output battery chargers. The proposed new energy
conservation standards for AC output battery chargers is shown in Table
V-108.
[GRAPHIC] [TIFF OMITTED] TP27MR12.105

3. Summary of Benefits and Costs (Annualized) of Proposed Standards for
External Power Supplies
The benefits and costs of today's proposed standards for EPSs can
also be expressed in terms of annualized values over the 2013-2042
period. The annualized monetary values are the sum of: (1) The
annualized national economic value (expressed in 2010$) of the benefits
from operating products that meet the proposed standards (consisting
primarily of operating cost savings from using less energy, minus
increases in equipment purchase costs, which is another way of
representing consumer NPV); and (2) the monetary value of the benefits
of emission reductions, including CO2 emission
reductions.\71\ The value of the CO2 reductions, otherwise
known as the Social Cost of Carbon (SCC), is calculated using a range
of values per metric ton of CO2 developed by a recent
Federal interagency process. The monetary costs and benefits of
cumulative emissions reductions are reported in 2010$ to permit
comparisons with the other costs and benefits in the same dollar units.
---------------------------------------------------------------------------

\71\ DOE used a two-step calculation process to convert the
time-series of costs and benefits into annualized values. First, DOE
calculated a present value in 2011, the year used for discounting
the NPV of total consumer costs and savings, for the time-series of
costs and benefits using discount rates of three and seven percent
for all costs and benefits except for the value of CO2
reductions. For the latter, DOE used a range of discount rates. From
the present value, DOE then calculated the fixed annual payment over
a 30-year period, starting in 2013, which yields the same present
value. The fixed annual payment is the annualized value. Although
DOE calculated annualized values, this does not imply that the time-
series of cost and benefits from which the annualized values were
determined would be a steady stream of payments.
---------------------------------------------------------------------------

Although combining the values of operating savings and
CO2 reductions provides a useful perspective, two issues
should be considered. First, the national operating savings are
domestic U.S. consumer monetary savings that occur as a result of
market transactions, while the value of CO2 reductions is
based on a global value. Second, the assessments of operating cost
savings and CO2 savings are performed with different methods
that use quite different time frames for analysis. The national
operating cost savings is measured for the lifetime of products shipped
in 2013-2042. The SCC values, on the other hand, reflect the present
value of future climate-related impacts resulting from the emission of
one metric ton of carbon dioxide in each year. These impacts go well
beyond 2100.
Estimates of annualized benefits and costs of the proposed
standards for EPSs are shown in Table V-104. Using a 7-percent discount
rate and the SCC value of $22.3/ton in 2010 (in 2010$), the cost of the
energy efficiency standards proposed in today's NOPR is $251.9 million
per year in increased equipment installed costs, while the annualized
benefits are $325.2 million per year in reduced equipment operating
costs, $52.3 million in CO2 reductions, and $3.2 million in
reduced NOX emissions. In this case, the net benefit amounts
to $128.7 million per year. Using a 3-percent discount rate and the SCC
value of $22.3/metric ton in 2010 (in 2010$), the cost of the energy
efficiency standards proposed in today's NOPR is $247.3 million per
year in increased equipment installed costs, while the benefits are
$348.2 million per year in reduced operating costs, $52.3 million in
CO2 reductions, and $3.3 million in reduced NOX
emissions. At a 3-percent discount rate, the net benefit amounts to
$156.6 million per year.

[[Page 18633]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.106

[[Page 18634]]

4. Summary of Benefits and Costs (Annualized) of Proposed Standards for
Battery Chargers
The benefits and costs of today's proposed standards for battery
chargers can also be expressed in terms of annualized values over the
2013-2042 period. The annualized monetary values are the sum of: (1)
The annualized national economic value (expressed in 2010$) of the
benefits from operating products that meet the proposed standards
(consisting primarily of operating cost savings from using less energy,
minus increases in equipment purchase costs, which is another way of
representing consumer NPV); and (2) the monetary value of the benefits
of emission reductions, including CO2 emission
reductions.\72\ The value of the CO2 reductions, otherwise
known as the Social Cost of Carbon (SCC), is calculated using a range
of values per metric ton of CO2 developed by a recent
Federal interagency process. The monetary costs and benefits of
cumulative emissions reductions are reported in 2010$ to permit
comparisons with the other costs and benefits in the same dollar units.
---------------------------------------------------------------------------

\72\ DOE used a two-step calculation process to convert the
time-series of costs and benefits into annualized values. First, DOE
calculated a present value in 2011, the year used for discounting
the NPV of total consumer costs and savings, for the time-series of
costs and benefits using discount rates of three and seven percent
for all costs and benefits except for the value of CO2
reductions. For the latter, DOE used a range of discount rates, as
shown in Table I.3. From the present value, DOE then calculated the
fixed annual payment over a 30-year period, starting in 2013 that
yields the same present value. The fixed annual payment is the
annualized value. Although DOE calculated annualized values, this
does not imply that the time-series of cost and benefits from which
the annualized values were determined would be a steady stream of
payments.
---------------------------------------------------------------------------

Although combining the values of operating savings and
CO2 reductions provides a useful perspective, two issues
should be considered. First, the national operating savings are
domestic U.S. consumer monetary savings that occur as a result of
market transactions, while the value of CO2 reductions is
based on a global value. Second, the assessments of operating cost
savings and CO2 savings are performed with different methods
that use quite different time frames for analysis. The national
operating cost savings is measured for the lifetime of products shipped
in 2013-2042. The SCC values, on the other hand, reflect the present
value of future climate-related impacts resulting from the emission of
one metric ton of carbon dioxide in each year. These impacts go well
beyond 2100.
Estimates of annualized benefits and costs of the proposed
standards for battery chargers are shown in Table V-104. Using a 7-
percent discount rate and the SCC value of $22.3/ton in 2010 (in
2010$), the standards proposed in today's NOPR result in $110.0 million
per year in equipment costs savings, and the annualized benefits are
$447.2 million per year in reduced equipment operating costs, $71.6
million in CO2 reductions, and $4.3 million in reduced
NOX emissions. In this case, the net benefit amounts to
$633.0 million per year. Using a 3-percent discount rate and the SCC
value of $22.3/metric ton in 2010 (in 2010$), the standards proposed in
today's NOPR result in $107.9 million per year in equipment costs
savings, and the benefits are $485.2 million per year in reduced
operating costs, $71.6 million in CO2 reductions, and $4.5
million in reduced NOX emissions. At a 3-percent discount
rate, the net benefit amounts to $669.3 million per year.
BILLING CODE 6450-01-P

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BILLING CODE 6450-01-C

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866 and 13563

Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify
the problem that it intends to address, including, where applicable,
the failures of private markets or public institutions that warrant new
agency action, as well as to assess the significance of that problem.
The problems that today's standards address are as follows:
(1) There is a lack of consumer information and/or information
processing capability about energy efficiency opportunities in the home
appliance market.
(2) There is asymmetric information (one party to a transaction has
more and better information than the other) and/or high transactions
costs (costs of gathering information and effecting exchanges of goods
and services) in the home appliance market.
(3) There are external benefits resulting from improved energy
efficiency of battery chargers and EPSs that are not captured by the
users of such equipment. These benefits include externalities related
to environmental protection and energy security that are not reflected
in energy prices, such as reduced emissions of greenhouse gases.
In addition, DOE has determined that today's regulatory action is
an ``economically significant regulatory action'' under section 3(f)(1)
of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive
Order requires that DOE prepare a regulatory impact analysis (RIA) on
today's rule and that the Office of Information and Regulatory Affairs
(OIRA) in the Office of Management and Budget (OMB) review this rule.
In the RIA, DOE identified and analyzed six alternatives to standards,
including consumer rebates, consumer tax credits, manufacturer tax
credits, voluntary energy efficiency targets, an early replacement
program, and a bulk government purchasing program. DOE quantified the
NES and NPV for these alternatives and did not find any alternatives to
be more beneficial than standards for any BC or EPS product class.
DOE presented to OIRA for review the draft rule and other documents
prepared for this rulemaking, including the RIA,\73\ and has included
these documents in the rulemaking record. The assessments prepared
pursuant to Executive Order 12866 can be found in the technical support
document for this rulemaking. They are available for public review in
the Resource Room of DOE's Building Technologies Program, 950 L'Enfant
Plaza SW., Suite 600, Washington, DC 20024, (202) 586-2945, between 9
a.m. and 4 p.m., Monday through Friday, except Federal holidays.
---------------------------------------------------------------------------

\73\ The Regulatory Impact Analysis is also available at: https://www1.eere.energy.gov/buildings/appliance_standards/residential/battery_external_preliminaryanalysis_tsd.html#tsd.
---------------------------------------------------------------------------

DOE has also reviewed this regulation pursuant to Executive Order
13563, issued on January 18, 2011 (76 FR 3281 (Jan. 21, 2011)). EO
13563 is supplemental to, and explicitly reaffirms the principles,
structures, and definitions governing regulatory review established in,
Executive Order 12866. To the extent permitted by law, agencies are
required by Executive Order 13563 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.
We emphasize as well that Executive Order 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 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, DOE believes that today's notice of proposed rulemaking is
consistent with these principles, including that, to the extent
permitted by law, agencies adopt a regulation only upon a reasoned
determination that its benefits justify its costs and select, in
choosing among alternative regulatory approaches, those approaches that
maximize net benefits.

B. Review Under the Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (IRFA) for
any rule that by law must be proposed for public comment, unless the
agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
As required by Executive Order 13272, ``Proper Consideration of Small
Entities in Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE
published procedures and policies on February 19, 2003, to ensure that
the potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's Web site (www.gc.doe.gov). DOE reviewed the potential
standard levels considered in today's NOPR under the provisions of the
Regulatory Flexibility Act and the procedures and policies published on
February 19, 2003.
As a result of this review, DOE has prepared an IRFA addressing the
impacts on small manufacturers with respect to the battery charger
portion of this proposal. DOE will transmit a copy of the IRFA to the
Chief Counsel for Advocacy of the Small Business Administration (SBA)
for review under 5 U.S.C. 605(b). As presented and discussed below, the
IFRA describes potential impacts on small business manufacturers of
battery chargers associated with the required capital and product
conversion costs at each TSL and discusses alternatives that could
minimize these impacts. Because DOE did not find any small business EPS
manufacturers, DOE did not prepare an IRFA regarding the impacts on EPS
manufacturers from this proposal.
A statement of the reasons for the proposed rule, and the
objectives of, and legal basis for, the proposed rule, are set forth
elsewhere in the preamble and not repeated here.
1. Description and Estimated Number of Small Entities Regulated
a. Methodology for Estimating the Number of Small Entities
For manufacturers of EPSs and battery chargers, the SBA has set a
size

[[Page 18637]]

threshold, which defines those entities classified as ``small
businesses'' for the purposes of the statute. DOE used the SBA's small
business size standards to determine whether any small entities would
be subject to the requirements of the rule. 65 FR 30836, 30850 (May 15,
2000), as amended at 65 FR 53533, 53545 (Sept. 5, 2000) and codified at
13 CFR part 121. The size standards are listed by North American
Industry Classification System (NAICS) code and industry description
and are available at https://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf. EPS and battery charger
manufacturing is classified under NAICS 335999, ``All Other
Miscellaneous Electrical Equipment and Component Manufacturing.'' The
SBA sets a threshold of 500 employees or less for an entity to be
considered as a small business for this category.
To estimate the number of companies that could be small business
manufacturers of products covered by this rulemaking, DOE conducted a
market survey using all available public information to identify
potential small manufacturers. DOE's research involved industry trade
association membership directories, product databases, individual
company Web sites, and the SBA's Small Business Database to create a
list of every company that could potentially manufacture products
covered by this rulemaking. DOE also asked stakeholders and industry
representatives if they were aware of any other small manufacturers
during manufacturer interviews and at previous DOE public meetings. DOE
contacted companies on its list, as necessary, to determine whether
they met the SBA's definition of a small business manufacturer of
covered EPSs and battery chargers. DOE screened out companies that did
not offer products covered by this rulemaking, did not meet the
definition of a ``small business,'' or are foreign-owned and operated.
Based on this screening, DOE identified 30 companies that could
potentially manufacture EPSs or battery chargers. DOE eliminated most
of these companies from consideration as small business manufacturers
based on a review of product literature and Web sites. When those steps
yielded inconclusive information, DOE contacted the companies directly.
As part of these efforts, DOE identified Lester Electrical, Inc.
(Lincoln, Nebraska), a manufacturer of golf car battery chargers, as
the only small business that appears to produce covered battery
chargers domestically.
DOE did not identify any small business manufacturers of EPSs. DOE
also did not identify any domestic manufacturers of EPSs, which
indicates that all residential EPSs sold in the United States are
imported. Because there are no small business manufacturers of EPSs,
DOE certifies that the standards for EPSs set forth in the proposed
rule, if promulgated, would not have a significant economic impact on a
substantial number of small entities. Accordingly, DOE has not prepared
a regulatory flexibility analysis for the EPS portion of this
rulemaking. DOE will transmit the certification and supporting
statement of factual basis to the Chief Counsel for Advocacy of the
Small Business Administration for review under 5 U.S.C. 605(b).
DOE requests comment on the above analysis, as well as any
information concerning small businesses that could be impacted by this
rulemaking and the nature and extent of those potential impacts of the
proposed energy conservation standards on small EPS manufacturers. (See
Issue 30 under ``Issues on Which DOE Seeks Comment'' in section VII.E
of this NOPR.)
The following sections address the IFRA for small business
manufacturers of battery chargers.
b. Manufacturer Participation
Before issuing this NOPR, DOE contacted the potential small
business manufacturers of battery chargers it had identified. One small
business consented to being interviewed during the MIA interviews. DOE
also obtained information about small business impacts while
interviewing large manufacturers.
c. Battery Charger Industry Structure
With respect to battery chargers, industry structure is typically
defined by the characteristics of the industry of the application(s)
for which the battery chargers are produced. In the case of the small
business DOE identified, however, the battery charger itself is the
product the small business produces. That is, the company does not also
produce the applications with which the battery charger is intended to
be used. Specifically, the company manufactures battery chargers
predominantly intended for golf cars (product class 7) and wheelchairs
(product classes 5 and 6).
A high level of concentration exists in both battery charger
markets. Two players account for the vast majority of the golf car
battery charger market and each has a similar share. Both competitors
in the golf car battery charger market are small businesses: One is
foreign-owned and operated, while the other is a domestic small
business. Despite this concentration, there is considerable competition
for three main reasons. First, each manufacturer sells into a market
that is almost as equally concentrated: Three golf car manufacturers
supply the majority of the golf cars sold domestically. Second, while
there are currently only two major suppliers of battery chargers to the
domestic market, the constant prospect of potential entry from other
foreign countries has ceded substantial buying power to the three golf
car OEMs. Third, golf car manufacturers have the ever-present option of
not building electric golf cars altogether (and thus the need for the
battery charger) by opting to build gas-powered products. DOE examines
a price elasticity sensitivity scenario for this in chapter 12 of the
TSD to assess this possibility. Currently, roughly three-quarters of
the golf car market is electric, with the remainder gas-powered.
The majority of industry shipments flow to the ``fleet'' segment--
i.e. battery chargers sold to golf car manufacturers who then lease the
cars to golf courses. Most cars are leased for the first few years
before being sold to smaller golf courses or other individuals for
personal use. A smaller portion of golf cars are sold as new through
dealer distribution.
Further upstream, approximately half of the battery chargers
intended for golf car use is manufactured domestically, while the other
half is foreign-sourced. These latter-sourced battery chargers are
typically high frequency designs, while line frequency designs, which
are usually less efficient, are made domestically. During the design
cycle of the golf car, the battery charger supplier and OEM typically
work closely together when designing the battery charger.
The small business manufacturer is also a relatively smaller player
in the markets for wheelchair and industrial lift battery chargers.
Most wheelchair battery chargers and the wheelchairs themselves are
manufactured overseas. Three wheelchair manufacturers supply the
majority of the U.S. market, but do not have domestic manufacturing.
d. Comparison Between Large and Small Entities
As discussed above, there are two major suppliers in the golf car
battery charger market. Both are small businesses, although one is
foreign-owned and operated. DOE did not identify any large businesses
with which to compare the projected impacts on small businesses.

[[Page 18638]]

2. Description and Estimate of Compliance Requirements
The U.S.-owned small business DOE identified manufactures battery
chargers for golf cars (product class 7) and wheelchairs (product
classes 5 and 6), as well as industrial lifts (which are not covered by
this rulemaking). DOE anticipates the proposed rule will require both
capital and product conversion costs to achieve compliance. Various
combinations of selected TSLs for product classes 5 and 6 (which are
combined under a single TSL) and product class 7 will drive different
levels of small business impacts. The compliance costs associated with
this combination of potential TSLs are present in tables Table VI-1.
Compared to the product development (R&D) efforts required to achieve
the proposed levels, DOE does not expect the various potential
combinations of TSLs to require significant capital expenditures.
Although some replacement of fixtures, new assembly equipment and
tooling would be required, the magnitude of these expenditures would be
unlikely to cause significant adverse financial impacts. Product class
7 drives the majority of these costs. See Table VI.1 below for the
estimated capital conversion costs for a typical small business.
Table VI-1The product conversion costs associated with standards
are more significant for the small business manufacturer at issue than
the projected capital costs. As discussed in section V.B.2.a.ii of this
notice, TSL 1 for product class 7 reflects a technology change from a
linear battery charger at the baseline to a switch-mode or high-
frequency design. This change would require manufacturers that produce
linear battery chargers to invest heavily in the development of a new
product design, which would require investments in engineering
resources for R&D, testing, and certification, and marketing and
training changes. Again, the level of expenditure at each TSL is driven
almost entirely by the changes required for product class 7 at each
TSL. See the table below for estimated product conversion costs for a
typical small business.
Table VI-2, and Table VI-3 below, accompanied by a description of
these and other impacts.
a. Capital Conversion Costs
Compared to the product development (R&D) efforts required to
achieve the proposed levels, DOE does not expect the various potential
combinations of TSLs to require significant capital expenditures.
Although some replacement of fixtures, new assembly equipment and
tooling would be required, the magnitude of these expenditures would be
unlikely to cause significant adverse financial impacts. Product class
7 drives the majority of these costs. See Table VI.1 below for the
estimated capital conversion costs for a typical small business.
[GRAPHIC] [TIFF OMITTED] TP27MR12.108

b. Product Conversion Costs
The product conversion costs associated with standards are more
significant for the small business manufacturer at issue than the
projected capital costs. As discussed in section V.B.2.a.ii of this
notice, TSL 1 for product class 7 reflects a technology change from a
linear battery charger at the baseline to a switch-mode or high-
frequency design. This change would require manufacturers that produce
linear battery chargers to invest heavily in the development of a new
product design, which would require investments in engineering
resources for R&D, testing, and certification, and marketing and
training changes. Again, the level of expenditure at each TSL is driven
almost entirely by the changes required for product class 7 at each
TSL. See the table below for estimated product conversion costs for a
typical small business.
[GRAPHIC] [TIFF OMITTED] TP27MR12.109

c. Summary of Compliance Impacts

[[Page 18639]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.110

Based on its engineering analysis, manufacturer interviews and
public comments, DOE believes TSL 1 for product class 7 would establish
an efficiency level that standard linear battery chargers could not
cost-effectively achieve. Not only would the size and weight of such
chargers potentially conflict with end-user preferences, but the
additional steel and copper needs would make such chargers cost-
prohibitive in the marketplace. Baseline linear designs are already
significantly more costly to manufacture than the more-efficient
switch-mode designs, as DOE's cost efficiency curve shows (see Table
IV-22). Because, in this case, the small business manufacturer is
positioned as a vertically integrated supplier of linear battery
chargers, any energy conservation standard that effectively required
switch-mode technology would likely cause significant adverse impacts
on that manufacturer. All products currently manufactured in-house by
this manufacturer would likely require complete redesigns.
The potential impacts of a standard on the small business
manufacturer are not entirely captured by the conversion costs
estimates, however. While standard linear battery chargers typically
have much higher associated material costs relative to the switch-mode
battery chargers, the manufacturing process of switch-mode designs is
more labor intensive. Therefore, in high-wage countries like the United
States, a manufacturer is at a relative cost-disadvantage in producing
switch-mode battery chargers. It is most likely for this reason that
DOE was unable to identify any domestic manufacturing of switch-mode
battery chargers.
At the proposed efficiency levels, the small business manufacturer
will face a difficult decision on whether to attempt to manufacture
switch-mode battery chargers in-house and likely compete on factors
other than price, move production to lower-wage regions, or source
their battery charger manufacturing to a foreign company and rebrand
these battery chargers. Given the lack of domestic switch-mode battery
charger manufacturers, one of the latter two strategies would appear
the more likely course.
3. Duplication, Overlap, and Conflict With Other Rules and Regulations
DOE is not aware of any rules or regulations that duplicate,
overlap, or conflict with the rule being considered today.
4. Significant Alternatives to the Proposed Rule
The discussion above analyzes impacts on small businesses that
would result from the other TSLs DOE considered. Though TSLs lower than
the proposed TSLs are expected to reduce the impacts on small entities,
DOE is required by EPCA to establish standards that achieve the maximum
improvement in energy efficiency that are technically feasible and
economically justified, and result in a significant conservation of
energy. Once DOE determines that a particular TSL meets those
requirements, DOE adopts that TSL in satisfaction of its obligations
under EPCA.
In addition to the other TSLs being considered, the NOPR TSD
includes a regulatory impact analysis in chapter 17. For battery
chargers, this report discusses the following policy alternatives: (1)
No standard, (2) consumer rebates, (3) consumer tax credits, (4)
manufacturer tax credits, and (5) early replacement. DOE does not
intend to consider these alternatives further because they are either
not feasible to implement, or not expected to result in energy savings
as large as those that would be achieved by the standard levels under
consideration.
DOE continues to seek input from businesses that would be affected
by this rulemaking and will consider comments received in the
development of any final rule.

C. Review Under the Paperwork Reduction Act

Manufacturers of battery chargers and EPSs must certify to DOE that
their product complies with any applicable energy conservation
standard. In certifying compliance, manufacturers must test their
products according to the DOE test procedure for battery chargers and
EPSs, including any amendments adopted for that test procedure. DOE has
proposed regulations for the certification and recordkeeping
requirements for all covered consumer products and commercial
equipment, including EPSs 75 FR 56796 (Sept. 16, 2010). The collection-
of-information requirement for the certification and recordkeeping is
subject to review and approval by OMB under the Paperwork Reduction Act
(PRA). This requirement has been submitted to OMB for approval and only
applies to Class A EPSs. As discussed, new reporting requirements for
battery chargers and non-Class A EPSs will be proposed and a
collection-of-information requirement for the certification and
recordkeeping subject to review and approval by OMB under the PRA will
be submitted as part of a future certification, compliance, and
enforcement rule promulgated by DOE. Public reporting burden for the
certification is estimated to average 20 hours per response, including
the time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the collection of information.
Public comment is sought regarding: whether this proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information shall
have practical utility; the accuracy of the burden estimate; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways to minimize the burden of the collection of
information, including through the use of automated collection
techniques or other forms of information technology. Send comments on
these or any other aspects of the collection of information to Victor
Petrolati (see ADDRESSES) and by email to Chad_S_Whiteman@omb.eop.gov.
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

[[Page 18640]]

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 (NEPA) of 1969,
DOE has determined that the proposed rule fits within the category of
actions included in Categorical Exclusion (CX) B5.1 and otherwise meets
the requirements for application of a CX. See 10 CFR part 1021, App. B,
B5.1(b); 1021.410(b) and Appendix B, B(1)-(5). The proposed rule fits
within the category of actions because it is a rulemaking that
establishes energy conservation standards for consumer products or
industrial equipment, and for which none of the exceptions identified
in CX B5.1(b) apply. Therefore, DOE has made a CX determination for
this rulemaking, and DOE does not need to prepare an Environmental
Assessment or Environmental Impact Statement for this proposed rule.
DOE's CX determination for this proposed rule is available at https://cxnepa.energy.gov/.

E. Review Under Executive Order 13132

Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 10,
1999) imposes certain requirements on agencies formulating and
implementing policies or regulations that preempt State law or that
have Federalism implications. The Executive Order requires agencies to
examine the constitutional and statutory authority supporting any
action that would limit the policymaking discretion of the States and
to carefully assess the necessity for such actions. The Executive Order
also requires agencies to have an accountable process to ensure
meaningful and timely input by State and local officials in the
development of regulatory policies that have Federalism implications.
On March 14, 2000, DOE published a statement of policy describing the
intergovernmental consultation process it will follow in the
development of such regulations. 65 FR 13735. EPCA governs and
prescribes Federal preemption of State regulations as to energy
conservation for the products that are the subject of today's proposed
rule. States can petition DOE for exemption from such preemption to the
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No
further action is required by Executive Order 13132.

F. Review Under Executive Order 12988

With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' imposes on Federal agencies the general duty
to adhere to the following requirements: (1) Eliminate drafting errors
and ambiguity; (2) write regulations to minimize litigation; and (3)
provide a clear legal standard for affected conduct rather than a
general standard and promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Section 3(b) of Executive Order 12988 specifically
requires that Executive agencies make every reasonable effort to ensure
that the regulation: (1) clearly specifies the preemptive effect, if
any; (2) clearly specifies any effect on existing Federal law or
regulation; (3) provides a clear legal standard for affected conduct
while promoting simplification and burden reduction; (4) specifies the
retroactive effect, if any; (5) adequately defines key terms; and (6)
addresses other important issues affecting clarity and general
draftsmanship under any guidelines issued by the Attorney General.
Section 3(c) of Executive Order 12988 requires Executive agencies to
review regulations in light of applicable standards in section 3(a) and
section 3(b) to determine whether they are met or it is unreasonable to
meet one or more of them. DOE has completed the required review and
determined that, to the extent permitted by law, this proposed rule
meets the relevant standards of Executive Order 12988.

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 proposed regulatory action likely to result in a rule that may
cause the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector of $100 million or more in any one
year (adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a proposed ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect small governments. On March 18, 1997,
DOE published a statement of policy on its process for
intergovernmental consultation under UMRA. 62 FR 12820; also available
at https://www.gc.doe.gov.
Although today's proposed rule does not contain a Federal
intergovernmental mandate, it may impose expenditures of $100 million
or more on the private sector. Specifically, the proposed rule will
likely result in a final rule that could impose expenditures of $100
million or more. Such expenditures may include (1) investment in
research and development and in capital expenditures by battery charger
and EPS manufacturers in the years between the final rule and the
compliance date for the new standard, and (2) incremental additional
expenditures by consumers to purchase higher-efficiency battery
chargers and EPSs, starting in 2013.
Section 202 of UMRA authorizes an agency to respond to the content
requirements of UMRA in any other statement or analysis that
accompanies the proposed rule. 2 U.S.C. 1532(c). The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap the economic analysis requirements that
apply under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of this NOPR and the ``Regulatory
Impact Analysis'' section of the TSD for this proposed rule respond to
those requirements.
Under section 205 of UMRA, the Department is obligated to identify
and consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. 2 U.S.C. 1535(a). DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives of the rule unless DOE publishes an
explanation for doing otherwise or the selection of such an alternative
is inconsistent with law. As required by 42 U.S.C. 6295(u), today's
proposed rule would establish energy conservation standards for battery
chargers and EPSs that are designed to achieve the maximum improvement
in energy efficiency that DOE has determined to be both technologically
feasible and economically justified. A full discussion of the
alternatives considered by DOE is presented in the ``Regulatory Impact
Analysis'' section of the TSD for today's proposed rule.

[[Page 18641]]

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 proposed 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

DOE has determined, under Executive Order 12630, ``Governmental
Actions and Interference with Constitutionally Protected Property
Rights'' 53 FR 8859 (March 18, 1988), that this proposed regulation
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 agencies to review most
disseminations of information to the public under guidelines
established by each agency pursuant to general guidelines issued by
OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and
DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has
reviewed today's NOPR under the OMB and DOE guidelines and has
concluded that it is consistent with applicable policies in those
guidelines.

K. Review Under Executive Order 13211

Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA
at OMB, a Statement of Energy Effects for any proposed significant
energy action. A ``significant energy action'' is defined as any action
by an agency that promulgates or is expected to lead to promulgation of
a final rule, and that (1) is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
DOE has tentatively concluded that today's proposed regulatory
action, which sets forth proposed energy conservation standards for
battery chargers and EPSs, is not a significant energy action because
the proposed standards are not likely to have a significant adverse
effect on the supply, distribution, or use of energy, nor has it been
designated as such by the Administrator at OIRA. Accordingly, DOE has
not prepared a Statement of Energy Effects on the proposed rule.

L. Review Under the Information Quality Bulletin for Peer Review

On December 16, 2004, OMB, in consultation with the Office of
Science and Technology (OSTP), issued its Final Information Quality
Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 2005).
The Bulletin establishes that certain scientific information shall be
peer reviewed by qualified specialists before it is disseminated by the
Federal Government, including influential scientific information
related to agency regulatory actions. The purpose of the bulletin is to
enhance the quality and credibility of the Government's scientific
information. Under the Bulletin, the energy conservation standards
rulemaking analyses are ``influential scientific information,'' which
the Bulletin defines as ``scientific information the agency reasonably
can determine will have or does have a clear and substantial impact on
important public policies or private sector decisions.'' 70 FR 2667.
In response to OMB's Bulletin, DOE conducted formal in-progress
peer reviews of the energy conservation standards development process
and analyses and has prepared a Peer Review Report pertaining to the
energy conservation standards rulemaking analyses. Generation of this
report involved a rigorous, formal, and documented evaluation using
objective criteria and qualified and independent reviewers to make a
judgment as to the technical/scientific/business merit, the actual or
anticipated results, and the productivity and management effectiveness
of programs and/or projects. The ``Energy Conservation Standards
Rulemaking Peer Review Report'' dated February 2007 has been
disseminated and is available at the following Web site: https://www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.

VII. Public Participation

A. Attendance at Public Meeting

The time, date and location of the public meeting are listed in the
DATES and ADDRESSES sections at the beginning of this document. If you
plan to attend the public meeting, please notify Ms. Brenda Edwards at
(202) 586-2945 or Brenda.Edwards@ee.doe.gov. As explained in the
ADDRESSES section, foreign nationals visiting DOE Headquarters are
subject to advance security screening procedures.
In addition, you can attend the public meeting via webinar. Webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants will be
published on DOE's Web site https://www1.eere.energy.gov/buildings/appliance_standards/residential/battery_external.html. Participants
are responsible for ensuring their systems are compatible with the
webinar software.

B. Procedure for Submitting Prepared General Statements for
Distribution

Any person who has plans to present a prepared general statement
may request that copies of his or her statement be made available at
the public meeting. Such persons may submit requests, along with an
advance electronic copy of their statement in PDF (preferred),
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to
the appropriate address shown in the ADDRESSES section at the beginning
of this notice. The request and advance copy of statements must be
received at least one week before the public meeting and may be
emailed, hand-delivered, or sent by mail. DOE prefers to receive
requests and advance copies via email. Please include a telephone
number to enable DOE staff to make a follow-up contact, if needed.

C. Conduct of Public Meeting

DOE will designate a DOE official to preside at the public meeting
and may also use a professional facilitator to aid discussion. The
meeting will not be a judicial or evidentiary-type public hearing, but
DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C.
6306). A court reporter will be present to record the proceedings and
prepare a transcript. DOE reserves the right to schedule the order of
presentations and to establish the procedures governing the conduct of
the public meeting. After the public meeting, interested parties may
submit further comments on the proceedings as well as on any aspect of
the rulemaking until the end of the comment period.

[[Page 18642]]

The public meeting will be conducted in an informal, conference
style. DOE will present summaries of comments received before the
public meeting, allow time for prepared general statements by
participants, and encourage all interested parties to share their views
on issues affecting this rulemaking. Each participant will be allowed
to make a general statement (within time limits determined by DOE),
before the discussion of specific topics. DOE will permit, as time
permits, other participants to comment briefly on any general
statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly and comment on
statements made by others. Participants should be prepared to answer
questions by DOE and by other participants concerning these issues. DOE
representatives may also ask questions of participants concerning other
matters relevant to this rulemaking. The official conducting the public
meeting will accept additional comments or questions from those
attending, as time permits. The presiding official will announce any
further procedural rules or modification of the above procedures that
may be needed for the proper conduct of the public meeting.
A transcript of the public meeting will be included in the docket,
which can be viewed as described in the Docket section at the beginning
of this notice. In addition, any person may buy a copy of the
transcript from the transcribing reporter.

D. Submission of Comments

DOE will accept comments, data, and information regarding this
proposed rule before or after the public meeting, but no later than the
date provided in the DATES section at the beginning of this proposed
rule. Interested parties may submit comments using any of the methods
described in the ADDRESSES section at the beginning of this notice.
Submitting comments via regulations.gov. The regulations.gov web
page will require you to provide your name and contact information.
Your contact information will be viewable to DOE Building Technologies
staff only. Your contact information will not be publicly viewable
except for your first and last names, organization name (if any), and
submitter representative name (if any). If your comment is not
processed properly because of technical difficulties, DOE will use this
information to contact you. If DOE cannot read your comment due to
technical difficulties and cannot contact you for clarification, DOE
may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment or in any documents attached to your comment.
Any information that you do not want to be publicly viewable should not
be included in your comment, nor in any document attached to your
comment. Persons viewing comments will see only first and last names,
organization names, correspondence containing comments, and any
documents submitted with the comments.
Do not submit to regulations.gov information for which disclosure
is restricted by statute, such as trade secrets and commercial or
financial information (hereinafter referred to as Confidential Business
Information (CBI)). Comments submitted through regulations.gov cannot
be claimed as CBI. Comments received through the Web site will waive
any CBI claims for the information submitted. For information on
submitting CBI, see the Confidential Business Information section.
DOE processes submissions made through regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery, or mail. Comments and
documents submitted via email, hand delivery, or mail also will be
posted to regulations.gov. If you do not want your personal contact
information to be publicly viewable, do not include it in your comment
or any accompanying documents. Instead, provide your contact
information on a cover letter. Include your first and last names, email
address, telephone number, and optional mailing address. The cover
letter will not be publicly viewable as long as it does not include any
comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. Email submissions are
preferred. If you submit via mail or hand delivery, please provide all
items on a CD, if feasible. It is not necessary to submit printed
copies. No facsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, written in English and are free of any defects or
viruses. Documents should not contain special characters or any form of
encryption and, if possible, they should carry the electronic signature
of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. According to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email, postal mail, or hand delivery two well-marked copies: one copy
of the document marked confidential including all the information
believed to be confidential, and one copy of the document marked non-
confidential with the information believed to be confidential deleted.
Submit these documents via email or on a CD, if feasible. DOE will make
its own determination about the confidential status of the information
and treat it according to its determination.
Factors of interest to DOE when evaluating requests to treat
submitted information as confidential include: (1) A description of the
items; (2) whether and why such items are customarily treated as
confidential within the industry; (3) whether the information is
generally known by or available from other sources; (4) whether the
information has previously been made available to others without
obligation concerning its confidentiality; (5) an explanation of the
competitive injury to the submitting person which would result from
public disclosure; (6) when such information might lose its
confidential character due to the passage of time; and (7) why
disclosure of the information would be contrary to the public interest.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

Although DOE welcomes comments on any aspect of this proposal, DOE
is particularly interested in receiving comments and views of
interested parties concerning the following issues:

[[Page 18643]]

1. DOE requests interested party feedback, including any
substantive data, regarding today's proposed standard levels and the
potential for lessening of utility or performance related features.
2. DOE requests interested party feedback on whether the standards
proposed in today's rule would necessitate the use of any proprietary
designs or patented technologies.
3. DOE seeks comment on its analysis of the costs and benefits of
the standards proposed in this rulemaking, including but not limited to
DOE's analytic assumptions as highlighted in the list of issues herein.
More specifically, DOE seeks comment on the Agency's estimate that the
proposed standard for battery chargers lead to between $92.8 million
and $98.3 million in cost savings (i.e. negative costs) relative to the
assumed baseline. Recognizing that the cost models used for this
analysis have certain limitations, DOE seeks comment on the assumed
market failure the agency has identified as the underlying reason that
private markets have not taken advantage of these cost savings in the
absence of this proposed rulemaking. DOE also seeks comment on key
assumptions that contributed to this estimate, including but not
limited to assumptions regarding energy consumption, shipments, and
manufacturer costs, treatment of existing regulatory requirements for
battery chargers and EPSs, and treatment of Energy Star and other
emerging technologies in both the baseline and standards cases.
Finally, DOE seeks comment on the assumption that incremental product
costs for battery chargers are negative because of a shift in
technology from linear power supplies to switch mode power for the
larger battery chargers in product classes 5, 6, and 7.
4. DOE seeks comment on its estimates of battery charger and EPS
shipments, lifetimes, and efficiency distributions for each application
and product class. DOE is especially interested in receiving comment on
its assumption that EPSs for mobile phones and smartphones are likely
to standardize around a common connection standard and, as a result,
remain in use beyond the lifetimes of their associated applications (an
average lifetime of 4 years as opposed to an average lifetime of 2
years).
5. DOE seeks comment and related data on which battery charger and
EPS applications are used in the commercial sector, what fraction of
shipments are to the commercial sector, and how product lifetimes and
usage may differ between residential and commercial settings.
6. DOE seeks comment on its proposed approach in classifying EPSs
that indirectly operate consumer products and whether that approach
requires modifications. If changes are required, DOE seeks specific
suggestions on how the proposed approach should be altered.
7. DOE welcomes comment on whether there are any performance-
related features characteristic of either Class A or non-Class A
devices (but not both) in product class N that would justify different
standard levels for the two groups. DOE also seeks comment on the
merits of applying a standard to EPSs falling into product class N. DOE
also welcomes comment on the proposed compliance dates for non-Class A
EPSs.
8. DOE seeks comment, information, and/or data on whether the
proposed standards would impact any features in the regulated products
or in their associated complimentary applications. If so, DOE seeks
comment as to whether these impacts would impact the utility of either
the product or the application, and on whether, how, and to what degree
consumer welfare might be impacted by the proposed standards.
9. DOE requests any information regarding existing products that
may seem to be able to be classified in multiple product classes.
10. DOE seeks comment on possible issues of electromagnetic
interference and/or radio frequency interference associated with
switch-mode power supplies (SMPS) used with amateur radios, including
design options for reducing or eliminating interference.
11. DOE would like to request any feedback on the proposed approach
to determining the average efficiency for multiple-voltage EPSs.
12. DOE seeks comment on its methodology for generating CSL3 and
CSL4 for high-power EPSs.
13. DOE seeks comment on its proposal to set a standard for
multiple-voltage EPSs as a continuous function of output power.
14. DOE seeks comment on its proposed approach in calculating unit
energy consumption for battery chargers and the appropriateness of the
various equations to calculate this consumption that are presented in
today's proposal.
15. DOE seeks information, including any substantive data, to help
it assess factors of durability, reliability, and preference of
transformer based battery chargers versus those incorporating switch-
mode power supplies.
16. DOE seeks comment on its proposed approach in developing a
cost-efficiency relationship for battery charger product class 6.
17. DOE requests comment on the results of its LCC and PBP
analyses, particularly with respect to the projected results for
multiple voltage EPSs (i.e., product class X). In addition, DOE
requests comment regarding the Agency's approach of calculating LCC by
averaging estimated installation costs within subproduct categories.
Further, DOE requests comment on the household debt equity discount
rate applied specifically to the LCC cost analysis. Finally, DOE
requests comment regarding the segregation of the LCC analysis and
consumer price impacts, which are separately addressed in a shipment-
based analysis.
18. DOE seeks comment on its treatment of the market path, markups,
and MSP estimates.
19. DOE seeks comment on its use of a roll-up market response,
which projects that only those products which fall below a standard
will improve in efficiency, and that the same products will only
improve in efficiency so as to meet, but not exceed, the efficiency
required by the standard. DOE further seeks comments on the assumptions
regarding efficiency distributions in the baseline, such as the extent
to which the worst and best energy performers are and are not
represented in the baseline.
20. DOE seeks comment on whether, and to what extent, battery
charger efficiency would be likely to improve in the absence of
standards, including the assumption that battery charger efficiency
will not improve between today and the compliance date in 2013.
21. DOE seeks comment on its assumptions about the extent to which,
if at all, EPS efficiency will improve for product classes B, C, D, E,
X and H in the absence of mandatory standards, both prior to and after
2013.
22. DOE recognizes that significant variation in use exists for
battery chargers, EPSs, and the applications they power. In an effort
to ensure the accuracy of its assumed usage profiles, DOE seeks
substantiated estimates, with supporting data, of usage profiles for
battery chargers, EPSs, and the applications they power.
23. DOE seeks comment on its EPS loading points, as well as test
results that will allow it to improve the accuracy of those loading
points.
24. DOE seeks comment on its estimate that shipments of EPSs and
battery chargers are inelastic and on other elasticity assumptions DOE
has made. DOE further seeks comment, information, and data regarding
DOE's market assessment of EPSs and battery chargers via complimentary
applications with which these products are nearly always bundled.

[[Page 18644]]

25. DOE seeks comment on its estimate that substitution impacts for
EPSs and battery chargers are negligible.
26. DOE seeks comment on the methodology employed for conducting
the National Impact Analysis, including the calculations of National
Inventory, National Energy Savings, and Net Present Value.
27. DOE seeks comment on its estimates regarding the proportions of
certain applications--including mobile phones, MP3 players, GPS
equipment, and personal care products--that ship with EPSs designed to
directly operate the application versus indirectly operate the
application.
28. DOE seeks comment on what level of efficiency EPSs in product
class N already meet and whether EPSs sold in California are different
in terms of their energy efficiency than EPSs sold in other States.
29. DOE seeks comment on the accuracy of its distribution models
for battery chargers and EPSs, as well as its estimates off battery
charger and EPS markups. To the extent that these models and estimates
can be improved, DOE seeks specific suggestions and supporting data.
30. DOE seeks information concerning small businesses that could be
impacted by this rulemaking and the nature and extent of those
potential impacts. For example, DOE is interested in information
concerning impacts on the golf cart industry that have not been
captured in the current rulemaking analysis. Further, DOE seeks further
information and data regarding the `double jeopardy' EPS and battery
charger impacts on small businesses as raised by commenters.
31. DOE seeks comment on whether the proposed standards would lead
to lessening of market competition in the regulated industries.
32. DOE seeks comment on whether there are any products on the
market that are not already subject to California or Federal energy
efficiency standards that would be covered by the new EPS standards
being proposed for product class N today. DOE welcomes specific
examples of such products, if they exist.
33. DOE invites comment on solid-state lighting EPSs, specifically
on whether there are any differences between SSL EPSs and other EPSs
that might warrant treating them as a separate product class, the size
of the market for these products, what proportion of SSL luminaires use
EPSs, the efficiency of those EPSs, and usage patterns.
34. DOE seeks comment on whether any battery chargers exist that
can only be operated on 12V input, whether a device that can be powered
only from a 12V power outlet can be assumed to be designed solely for
use in recreational vehicles (RVs) and other mobile equipment, and
whether there are battery chargers with DC inputs other than 5V and
12V.
35. DOE welcomes comment on any and all issues related to
efficiency markings for battery chargers and EPSs.
36. DOE is interested in receiving comments from industry, states,
and other interested parties on the best ways to ensure a smooth
transition from the battery charger standards established in California
to the national standards addressed in this proposed rule.

VIII. Approval of the Office of the Secretary

The Secretary of Energy has approved publication of today's
proposed rule.

List of Subjects in 10 CFR Part 430

Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Reporting and
recordkeeping requirements, Small businesses.

Issued in Washington, DC, on March 8, 2012.
Henry Kelly,
Acting Assistant Secretary of Energy, Energy Efficiency and Renewable
Energy.

For the reasons set forth in the preamble, DOE proposes to amend
chapter II, subchapter D, of title 10 of the Code of Federal
Regulations, as set forth below:

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

1. The authority for part 430 continues to read as follows:

Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.

2. Section 430.2 is amended by adding definitions for AC-AC
external power supply, AC-DC external power supply, basic-voltage
external power supply, direct operation external power supply, indirect
operation external power supply, low-voltage external power supply, and
multiple-voltage external power supply in alphabetical order to read as
follows:

Sec. 430.2 Definitions.

* * * * *
AC-AC external power supply means an external power supply that is
used to convert household electric current into a single lower-voltage
AC current.
AC-DC external power supply means an external power supply that is
used to convert household electric current into a single lower-voltage
DC current.
* * * * *
Basic-voltage external power supply means an external power supply
that is not a low-voltage power supply.
* * * * *
Direct operation external power supply means an external power
supply that can operate a consumer product that is not a battery
charger without the assistance of a battery.
* * * * *
Indirect operation external power supply means an external power
supply that cannot operate a consumer product that is not a battery
charger without the assistance of a battery as determined by the
following steps:
(1) If a product can be connected to an end-use consumer product
and that consumer product can be operated using battery power, the
method for determining if an EPS can directly power an application is
as follows:
(i) Charge the battery in the application via the EPS such that the
application can operate as intended before taking any additional steps.
(ii) Disconnect the EPS from the application. From an off mode
state, turn on the application and record the time necessary for it to
become operational to the nearest five second increment (5 sec, 10 sec,
etc.).
(iii) Operate the application using power only from the battery
until the application stops functioning due to the battery discharging.
(iv) Connect the EPS first to mains and then to the application.
Immediately attempt to operate the application. Record the time for the
application to become operational to the nearest five second increment
(5 sec, 10 sec, etc.).
(2) If the time recorded in paragraph (1)(iv) of this definition is
less than or equal to the summation of the time recorded in paragraph
(1)(ii) of this definition and five seconds, the EPS can operate the
application directly and is not in product class N. Otherwise, it is an
indirect operation EPS and is subject to the standards of product class
N in Sec. 430.32(w).
* * * * *
Low-voltage external power supply means an external power supply
with a nameplate output voltage less than 6 volts and nameplate output
current greater than or equal to 550 milliamps.
* * * * *
Multiple-voltage external power supply means an external power
supply that is used to convert household

[[Page 18645]]

electric current into multiple simultaneous output currents.
* * * * *
3. Section 430.32 is amended by revising the paragraph (w) heading
and adding paragraphs (w)(1)(iv), (w)(2), (w)(3), (w)(4), (w)(5) and
(y) to read as follows:

Sec. 430.32 Energy and water conservation standards and their
effective dates.

* * * * *
(w) External Power Supplies.
(1) * * *
(iv) Except as provided in this paragraph (w)(1)(iii) of this
section, all direct operation external power supplies manufactured on
or after July 1, 2013, shall meet the following standards:
BILLING CODE 6450-01-P

[[Page 18646]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.111

[[Page 18647]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.112

(2) The standards described in paragraphs (w)(1)(i) and (iv) of
this section shall not constitute an energy conservation standard for
the separate end-use product to which the external power supply is
connected.
(3) Any external power supply subject to the standards in
paragraphs (w)(1)(i) and (iv) of this section shall be clearly and
permanently marked in accordance with the External Power Supply
International Efficiency Marking Protocol, as referenced in the
``Energy Star Program Requirements for Single Voltage External Ac-Dc
and Ac-Ac Power Supplies,'' (incorporated by reference; see Sec.
430.3), published by the Environmental Protection Agency.
(4) Any indirect operation external power supply subject to the
standards in paragraph (w)(1)(i) of this section and not labeled with a
Roman numeral VI in accordance with the marking protocol referred to in
paragraph (w)(3) of this section:
(i) Shall be permanently marked with the capital letter ``N'' as a
superscript to the circle that contains the Roman numeral, for example,
[GRAPHIC] [TIFF OMITTED] TP27MR12.113

and

(ii) If sold separately from the battery charger or end-use
consumer product with which it is intended to be used, shall be marked
with the manufacturer and model number of that battery charger or end-
use consumer product.
(5) Any indirect operation external power supply not subject to the
standards in paragraph (w)(1)(i) of this section and not labeled with a
Roman numeral VI in accordance with the marking protocol referred to in
paragraph (w)(3) of this section:
(i) Shall be permanently marked with the abbreviation ``EPS-N'',
for example,
[GRAPHIC] [TIFF OMITTED] TP27MR12.114

and

(ii) If sold separately from the battery charger or end-use
consumer product with which it is intended to be used, shall be marked
with the manufacturer and model number of that battery charger or end-
use consumer product.
* * * * *
(y) Battery Chargers. (1) Battery chargers manufactured on or after
July 1, 2013, shall have a unit energy consumption (UEC) less than or
equal to the standard calculated using the equations for the
appropriate product class and corresponding measured battery energy as
shown below:

[[Page 18648]]

[GRAPHIC] [TIFF OMITTED] TP27MR12.115

BILLING CODE 6450-01-C
(2) Unit energy consumption shall be calculated for a device
seeking certification using one of the two equations listed below. If a
device is tested and its charge test duration as determined in section
5.2 of Appendix Y to Subpart B of Part 430 minus 5 hours exceeds the
threshold charge time listed in the table below, the equation in
paragraph (y)(2)(ii) of this section shall be used to calculate UEC;
otherwise a device's UEC shall be calculated using the equation in
paragraph (y)(2)(i).
[GRAPHIC] [TIFF OMITTED] TP27MR12.116

[[Page 18649]]

Where:

E24 = 24-hour energy as determined in section 5.10 of
Appendix Y to Subpart B of Part 430,
Ebatt = Measured battery energy as determined in section
5.6 of Appendix Y to Subpart B of Part 430,
Pm = Maintenance mode power as determined in section 5.9
of Appendix Y to Subpart B of Part 430,
Psb = Standby mode power as determined in section 5.11 of
Appendix Y to Subpart B of Part 430,
Poff = Off mode power as determined in section 5.12 of
Appendix Y to Subpart B of Part 430,
tcd = Charge test duration as determined in section 5.2
of Appendix Y to Subpart B of Part 430,

And
ta&m, n, tsb, and toff, are
constants used depending upon a device's product class and found in
the following table:
[GRAPHIC] [TIFF OMITTED] TP27MR12.117

(3) Any battery charger subject to the standards in paragraph
(y)(1) of this section shall be clearly and permanently marked on the
outside of its housing with the encircled upper case letters ``BC''
coupled with the Roman numeral ``III'' or a Roman numeral having a
greater value, for example,
[GRAPHIC] [TIFF OMITTED] TP27MR12.118

[FR Doc. 2012-6042 Filed 3-26-12; 8:45 am]
BILLING CODE 6450-01-P

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