Energy Conservation Program: Energy Conservation Standards for Electric Motors, 36066-36152 [2023-10019]
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36066
Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
DEPARTMENT OF ENERGY
10 CFR Part 431
[EERE–2020–BT–STD–0007]
RIN 1904–AE63
Energy Conservation Program: Energy
Conservation Standards for Electric
Motors
Office of Energy Efficiency and
Renewable Energy, Department of
Energy.
ACTION: Direct final rule.
AGENCY:
The Energy Policy and
Conservation Act, as amended
(‘‘EPCA’’), prescribes energy
conservation standards for various
consumer products and certain
commercial and industrial equipment,
including electric motors. EPCA also
requires the U.S. Department of Energy
(‘‘DOE’’) to periodically determine
whether more-stringent, standards
would be technologically feasible and
economically justified, and would result
in significant energy savings. In this
direct final rule, DOE is adopting new
and amended energy conservation
standards for electric motors. It has
determined that the new and amended
energy conservation standards for these
products would result in significant
conservation of energy, and are
technologically feasible and
economically justified.
DATES: The effective date of this rule is
September 29, 2023, unless adverse
comment is received by September 19,
2023. If adverse comments are received
that DOE determines may provide a
reasonable basis for withdrawal of the
direct final rule, a timely withdrawal of
this rule will be published in the
Federal Register. If no such adverse
comments are received, compliance
with the new and amended standards
established for electric motors in this
direct final rule is required on and after
June 1, 2027.
ADDRESSES: The docket for this
rulemaking, which includes Federal
Register notices, public meeting
attendee lists and transcripts,
comments, and other supporting
documents/materials, is available for
review at www.regulations.gov. All
documents in the docket are listed in
the www.regulations.gov index.
However, not all documents listed in
the index may be publicly available,
such as information that is exempt from
public disclosure.
The docket web page can be found
www.regulations.gov/docket/EERE2020-BT-STD-0007. The docket web
page contains instructions on how to
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SUMMARY:
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access all documents, including public
comments, in the docket.
For further information on how to
submit a comment or review other
public comments and the docket,
contact the Appliance and Equipment
Standards Program staff at (202) 287–
1445 or by email:
ApplianceStandardsQuestions@
ee.doe.gov.
FOR FURTHER INFORMATION CONTACT:
Mr. Jeremy Dommu, U.S. Department
of Energy, Office of Energy Efficiency
and Renewable Energy, Building
Technologies Office, EE–5B, 1000
Independence Avenue SW, Washington,
DC 20585–0121. Email:
ApplianceStandardsQuestions@
ee.doe.gov.
Mr. Matthew Ring, U.S. Department of
Energy, Office of the General Counsel,
GC–33, 1000 Independence Avenue SW,
Washington, DC 20585–0121.
Telephone: (202) 586–2555; Email:
matthew.ring@hq.doe.gov.
For further information on how to
submit a comment, review other public
comments and the docket, or participate
in the public meeting, contact the
Appliance and Equipment Standards
Program staff at (202) 287–1445 or by
email: ApplianceStandardsQuestions@
ee.doe.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Direct Final Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for
Electric Motors
3. Electric Motors Working Group
Recommended Standard Levels
III. General Discussion
A. General Comments
B. Scope of Coverage and Equipment
Classes
C. Test Procedure
D. Technological Feasibility
1. General
2. Maximum Technologically Feasible
Levels
E. Energy Savings
1. Determination of Savings
2. Significance of Savings
F. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and
Consumers
b. Savings in Operating Costs Compared to
Increase in Price (LCC and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of
Products
e. Impact of Any Lessening of Competition
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f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related
Comments
A. Market and Technology Assessment
1. Scope of Coverage
a. Motor Used as a Component of a
Covered Product or Equipment
b. Air-Over Electric Motors
c. AC Induction Electric Motors Greater
Than 500 Horsepower
d. AC Induction Inverter-Only and
Synchronous Electric Motors
e. Submersible Electric Motors
2. Test Procedure and Metric
3. Equipment Classes
4. Technology Options
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Representative Units Analyzed
b. Baseline Efficiency
c. Higher Efficiency Levels
2. Cost Analysis
3. Cost-Efficiency Results
4. Scaling Methodology
D. Markups Analysis
E. Energy Use Analysis
1. Consumer Sample
2. Motor Input Power
3. Annual Operating Hours
4. Impact of Electric Motor Speed
F. Life-Cycle Cost and Payback Period
Analysis
1. Equipment Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Equipment Lifetime
7. Discount Rates
8. Energy Efficiency Distribution in the NoNew-Standards Case
9. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Equipment Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model
and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Product and Capital Conversion Costs
d. Markup Scenarios
3. Manufacturer Interviews
K. Emissions Analysis
1. Air Quality Regulations Incorporated in
DOE’s Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas
Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous
Oxide
2. Monetization of Other Emissions
Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
A. Trial Standard Levels
B. Economic Justification and Energy
Savings
1. Economic Impacts on Individual
Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. Direct Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value of Consumer Costs
and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of
Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs
Considered for Electric Motors Standards
2. Annualized Benefits and Costs of the
Standards
D. Reporting, Certification, and Sampling
Plan
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866
and 13563
B. Review Under the Regulatory Flexibility
Act
C. Review Under the Paperwork Reduction
Act
D. Review Under the National
Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates
Reform Act of 1995
H. Review Under the Treasury and General
Government Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General
Government Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
M. Congressional Notification
VII. Approval of the Office of the Secretary
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I. Synopsis of the Direct Final Rule
The Energy Policy and Conservation
Act, Public Law 94–163, as amended
(‘‘EPCA’’),1 authorizes DOE to regulate
the energy efficiency of a number of
consumer products and certain
industrial equipment. (42 U.S.C. 6291–
6317) Title III, Part C 2 of EPCA
1 All references to EPCA in this document refer
to the statute as amended through the Energy Act
of 2020, Public Law 116–260 (Dec. 27, 2020), which
reflect the last statutory amendments that impact
Parts A and A–1 of EPCA.
2 For editorial reasons, upon codification in the
U.S. Code, Part C was re-designated Part A–1.
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established the Energy Conservation
Program for Certain Industrial
Equipment. (42 U.S.C. 6311–6317).
Such equipment includes electric
motors, the subject of this rulemaking.
Pursuant to EPCA, any new or
amended energy conservation standard
must be designed to achieve the
maximum improvement in energy
efficiency that DOE determines is
technologically feasible and
economically justified. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(A))
Furthermore, the new or amended
standard must result in a significant
conservation of energy. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(3)(B)) EPCA
also provides that not later than 6 years
after issuance of any final rule
establishing or amending a standard,
DOE must publish either a notice of
determination that standards for the
product do not need to be amended, or
a notice of proposed rulemaking
including new proposed energy
conservation standards (proceeding to a
final rule, as appropriate). (42 U.S.C.
6316(a); 42 U.S.C. 6295(m))
In light of the above and under the
authority provided by 42 U.S.C.
6295(p)(4), DOE is issuing this direct
final rule amending the energy
conservation standards for electric
motors. The amended standard levels in
this document were submitted in a joint
recommendation (the ‘‘November 2022
Joint Recommendation’’) 3 by the
American Council for an EnergyEfficient Economy (‘‘ACEEE’’),
Appliance Standards Awareness Project
(‘‘ASAP’’), National Electrical
Manufacturers Association (‘‘NEMA’’),
Natural Resources Defense Council
(‘‘NRDC’’), Northwest Energy Efficiency
Alliance (‘‘NEEA’’), Pacific Gas &
Electric Company (‘‘PG&E’’), San Diego
Gas & Electric (‘‘SDG&E’’), and Southern
California Edison (‘‘SCE’’) hereinafter
referred to as ‘‘the Electric Motors
Working Group.’’ In a letter comment
submitted December 12, 2022, the New
York State Energy Research and
Development Authority (‘‘NYSERDA’’)
expressed its support of the November
2022 Joint Recommendation and urged
DOE to implement it in a timely
manner. The November 2022 Joint
Recommendation was preceded by the
following DOE actions in this
3 Joint comment response to the published
Notification of a webinar and availability of
preliminary technical support document;
www.regulations.gov/comment/EERE-2020-BT-STD0007-0035.
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36067
rulemaking and stakeholder comments
thereon: May 2020 Early Assessment
Review RFI (85 FR 30878 (May 21,
2020)); March 2022 Preliminary
Analysis (87 FR 11650 (March 2, 2022))
and the Preliminary Analysis TSD
(‘‘March 2022 Prelim TSD’’). See
sections II.B.2 and II.B.3 for a detailed
history of the current rulemaking and a
discussion of the November 2022 Joint
Recommendation.
After carefully considering the
November 2022 Joint Recommendation,
DOE determined that the
recommendations contained therein are
compliant with 42 U.S.C. 6295(o), as
required by 42 U.S.C. 6295(p)(4)(A)(i)
for the issuance of a direct final rule. As
required by 42 U.S.C. 6295(p)(4)(A)(i),
DOE is simultaneously publishing a
NOPR proposing that the identical
standard levels contained in this direct
final rule be adopted. Consistent with
the statute, DOE is providing a 110-day
public comment period on the direct
final rule. (42 U.S.C. 6295(p)(4)(B)) If
DOE determines that any comments
received provide a reasonable basis for
withdrawal of the direct final rule under
42 U.S.C. 6295(o), DOE will continue
the rulemaking under the
simultaneously published NOPR. (42
U.S.C. 6295(p)(4)(C)) See section II.A for
more details on DOE’s statutory
authority.
This direct final rule documents
DOE’s analyses to objectively and
independently evaluate the energy
savings potential, technological
feasibility, and economic justification of
the standard levels recommended in the
November 2022 Joint Recommendation,
as per the requirements of 42 U.S.C.
6295(o).
Ultimately, DOE found that the
standard levels recommended in the
November 2022 Joint Recommendation
would result in significant energy
savings and are technologically feasible
and economically justified. Table I–1
through Table I–3 document the
amended standards for electric motors.
The amended standards correspond to
the recommended trial standard level
(‘‘TSL’’) 2 (as described in section V.A
of this document) and are expressed in
terms of nominal full-load efficiency.
The amended standards are the same as
those recommended by the Electric
Motors Working Group. These standards
apply to all products listed in through
Table I–1 through Table I–3 and
manufactured in, or imported into, the
United States starting on June 1, 2027.
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
TABLE I–1—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N, NE, NEY
OR NY MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS AND AIR-OVER ELECTRIC MOTORS) AT 60 HZ
Nominal full-load efficiency (%)
Motor horsepower/
standard kilowatt
equivalent
2 Pole
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
300/224 ............................................................
350/261 ............................................................
400/298 ............................................................
450/336 ............................................................
500/373 ............................................................
550/410 ............................................................
600/447 ............................................................
650/485 ............................................................
700/522 ............................................................
750/559 ............................................................
4 Pole
Open
77.0
84.0
85.5
86.5
88.5
89.5
90.2
91.0
91.0
91.7
91.7
92.4
93.0
93.6
93.6
95.0
95.4
95.4
95.8
96.2
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
Enclosed
77.0
84.0
85.5
85.5
86.5
88.5
89.5
90.2
91.0
91.7
91.7
92.4
93.0
93.6
93.6
94.5
94.5
94.5
95.4
95.4
95.4
95.4
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
6 Pole
Open
85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
96.2
96.2
96.2
96.5
96.5
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
96.2
96.2
96.2
96.2
96.2
95.8
95.8
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
8 Pole
Enclosed
Open
Enclosed
Open
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.8
95.8
96.2
96.2
96.2
95.8
95.8
................
................
................
................
................
................
................
................
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.8
95.8
95.8
95.8
96.2
95.8
95.8
................
................
................
................
................
................
................
................
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
94.5
95.0
95.0
95.4
95.4
................
................
................
................
................
................
................
................
................
................
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
95.0
95.0
95.0
95.0
95.4
................
................
................
................
................
................
................
................
................
................
TABLE I–2—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N, NE, NEY
OR NY STANDARD FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS) AT 60 HZ
Nominal full-load efficiency (%)
Motor horsepower/
standard kilowatt
equivalent
2 Pole
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Enclosed
1/.75 .........................................................................
1.5/1.1 ......................................................................
2/1.5 .........................................................................
3/2.2 .........................................................................
5/3.7 .........................................................................
7.5/5.5 ......................................................................
10/7.5 .......................................................................
15/11 ........................................................................
20/15 ........................................................................
25/18.5 .....................................................................
30/22 ........................................................................
40/30 ........................................................................
50/37 ........................................................................
60/45 ........................................................................
75/55 ........................................................................
100/75 ......................................................................
125/90 ......................................................................
150/110 ....................................................................
200/150 ....................................................................
250/186 ....................................................................
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77.0
84.0
85.5
86.5
88.5
89.5
90.2
91.0
91.0
91.7
91.7
92.4
93.0
93.6
93.6
95.0
95.4
95.4
95.8
96.2
Frm 00004
4 Pole
Open
Enclosed
77.0
84.0
85.5
85.5
86.5
88.5
89.5
90.2
91.0
91.7
91.7
92.4
93.0
93.6
93.6
94.5
94.5
94.5
95.4
95.4
Fmt 4701
Sfmt 4700
85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
96.2
96.2
96.2
96.5
96.5
6 Pole
Open
Enclosed
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
96.2
96.2
96.2
96.2
96.2
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82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.8
95.8
96.2
96.2
96.2
01JNR3
8 Pole
Open
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.8
95.8
95.8
95.8
96.2
Enclosed
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
94.5
95.0
95.0
95.4
95.4
Open
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
95.0
95.0
95.0
95.0
95.4
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
TABLE I–3—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N, NE, NEY
OR NY SPECIALIZED FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS) AT 60 HZ
Nominal full-load efficiency (%)
Motor horsepower/
standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .........................................................................
1.5/1.1 ......................................................................
2/1.5 .........................................................................
3/2.2 .........................................................................
5/3.7 .........................................................................
7.5/5.5 ......................................................................
10/7.5 .......................................................................
15/11 ........................................................................
20/15 ........................................................................
A. Benefits and Costs to Consumers
Table I–4 summarizes DOE’s
evaluation of the economic impacts of
the adopted standards on consumers of
74.0
82.5
84.0
85.5
87.5
88.5
89.5
90.2
90.2
4 Pole
Open
Enclosed
..............
82.5
84.0
84.0
85.5
87.5
88.5
89.5
90.2
6 Pole
Open
82.5
84.0
84.0
87.5
87.5
89.5
89.5
91.0
91.0
82.5
84.0
84.0
86.5
87.5
88.5
89.5
91.0
91.0
electric motors, as measured by the
average life-cycle cost (‘‘LCC’’) savings
and the simple payback period
(‘‘PBP’’).4 The average LCC savings are
positive for all representative units, and
8 Pole
Enclosed
Open
Enclosed
Open
80.0
85.5
86.5
87.5
87.5
89.5
89.5
................
................
80.0
84.0
85.5
86.5
87.5
88.5
90.2
..............
..............
74.0
77.0
82.5
84.0
85.5
85.5
................
................
................
74.0
75.5
85.5
86.5
87.5
88.5
..............
..............
..............
the PBP is less than the average lifetime
of electric motors, which is estimated to
be 13.6 years (see section V.B.1 of this
document).
TABLE I–4—IMPACTS OF ADOPTED ENERGY CONSERVATION STANDARDS ON CONSUMERS OF ELECTRIC MOTORS
Equipment class group
Representative
unit
Average LCC
savings
(2021$)
Simple payback
period
(years)
MEM, 1–500 hp, NEMA Design A and B .......................................................................
RU1 ....................
RU2 ....................
RU3 ....................
RU4 ....................
RU5 ....................
RU6 ....................
RU7 ....................
RU8 ....................
RU9 * ..................
RU10 ..................
RU11 ..................
N/A
N/A
N/A
567.1
N/A
2,550.1
57.6
472.4
............................
930.7
49.9
N/A
N/A
N/A
4.1
N/A
3.7
4.0
1.6
............................
4.9
4.1
MEM, 501–750 hp, NEMA Design A and B above 500 hp ............................................
AO–MEM (Standard Frame Size) ...................................................................................
AO-Polyphase (Specialized Frame Size) .......................................................................
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* No impact because there are no shipments below the efficiency level corresponding to TSL1 and TSL2 for RU9.
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DOE’s analysis of the impacts of the
adopted standards on consumers is
described in section IV.F of this
document.
range from ¥6.6 percent to ¥6.0
percent, which is approximately ¥$333
million to ¥$303 million. In order to
bring products into compliance with
new and amended standards, it is
estimated that industry will incur total
conversion costs of $468 million.
DOE’s analysis of the impacts of the
adopted standards on manufacturers is
described in sections IV.J and V.B.2 of
this document.
B. Impact on Manufacturers
The industry net present value
(‘‘INPV’’) is the sum of the discounted
cash flows to the industry from the base
year through the end of the analysis
period (2023–2056). Using a real
discount rate of 9.1 percent, DOE
estimates that the INPV for
manufacturers of electric motors in the
case without new and amended
standards is $5,023 million in 2021
dollars. Under the adopted standards,
DOE estimates the change in INPV to
DOE’s analyses indicate that the
adopted energy conservation standards
for electric motors would save a
significant amount of energy. Relative to
the case without new and amended
4 The average LCC savings refer to consumers that
are affected by a standard and are measured relative
to the efficiency distribution in the no-newstandards case, which depicts the market in the
compliance year in the absence of new or amended
standards (see section IV.F.8 of this document). The
simple PBP, which is designed to compare specific
efficiency levels, is measured relative to the
baseline product (see section IV.F.9 of this
document).
5 All monetary values in this document are
expressed in 2021 dollars.
6 The quantity refers to full-fuel-cycle (‘‘FFC’’)
energy savings. FFC energy savings includes the
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C. National Benefits and Costs 5
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standards, the lifetime energy savings
for electric motors purchased in the 30year period that begins in the
anticipated year of compliance with the
new and amended standards (2027–
2056) amount to 3.0 quadrillion British
thermal units (‘‘Btu’’), or quads.6 This
represents a savings of 0.2 percent
relative to the energy use of these
products in the case without amended
standards (referred to as the ‘‘no-newstandards case’’).
The cumulative net present value
(‘‘NPV’’) of total consumer benefits of
the standards for electric motors ranges
from $2.23 billion (at a 7-percent
discount rate) to $7.47 billion (at a 3percent discount rate). This NPV
energy consumed in extracting, processing, and
transporting primary fuels (i.e., coal, natural gas,
petroleum fuels), and, thus, presents a more
complete picture of the impacts of energy efficiency
standards. For more information on the FFC metric,
see section IV.H.2 of this document.
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expresses the estimated total value of
future operating-cost savings minus the
estimated increased equipment and
installation costs for electric motors
purchased in 2027–2056.
In addition, the adopted standards for
electric motors are projected to yield
significant environmental benefits. DOE
estimates that the adopted standards
will result in cumulative emission
reductions (over the same period as for
energy savings) of 91.69 million metric
tons (‘‘Mt’’) 7 of carbon dioxide (‘‘CO2’’),
35.12 thousand tons of sulfur dioxide
(‘‘SO2’’), 148.74 thousand tons of
nitrogen oxides (‘‘NOX’’), 690.10
thousand tons of methane (‘‘CH4’’), 0.82
thousand tons of nitrous oxide (‘‘N2O’’),
and 0.23 tons of mercury (‘‘Hg’’).8 The
estimated cumulative reduction in CO2
emissions through 2030 amounts to 0.90
million Mt, which is equivalent to the
emissions resulting from the annual
electricity use of more than 0.15 million
homes.
DOE estimates climate benefits from a
reduction in greenhouse gases (GHG)
using four different estimates of the
social cost of CO2 (‘‘SC–CO2’’), the
social cost of methane (‘‘SC–CH4’’), and
the social cost of nitrous oxide (‘‘SC–
N2O’’). Together these represent the
social cost of GHG (SC–GHG). DOE used
SC–GHG values based on the interim
values developed by an Interagency
Working Group on the Social Cost of
Greenhouse Gases (IWG),9 as discussed
in section IV.K of this document. For
presentational purposes, the climate
benefits associated with the average SC–
GHG at a 3-percent discount rate are
$3.14 billion. DOE does not have a
single central SC–GHG point estimate
and it emphasizes the importance and
value of considering the benefits
calculated using all four SC–GHG
estimates.
DOE also estimated health benefits
from SO2 and NOX emissions
reductions.10 DOE estimated the present
value of the health benefits would be
$1.76 billion using a 7-percent discount
rate, and $5.72 billion using a 3-percent
discount rate.11 DOE is currently only
monetizing (for SO2 and NOX) PM2.5
precursor health benefits and (for NOX)
ozone precursor health benefits, but will
continue to assess the ability to
monetize other effects such as health
benefits from reductions in direct PM2.5
emissions.
Table I–5 summarizes the economic
benefits and costs expected to result
from the new and amended standards
for electric motors. There are other
important unquantified effects,
including certain unquantified climate
benefits, unquantified public health
benefits from the reduction of toxic air
pollutants and other emissions,
unquantified energy security benefits,
and distributional effects, among others.
TABLE I–5—SUMMARY OF ECONOMIC BENEFITS AND COSTS OF ADOPTED ENERGY CONSERVATION STANDARDS FOR
ELECTRIC MOTORS
[TSL 2]
Billion $2021
3% discount rate
Consumer Operating Cost Savings .................................................................................................................................................
Climate Benefits * .............................................................................................................................................................................
Health Benefits ** .............................................................................................................................................................................
8.8
3.1
5.7
Total Benefits † .........................................................................................................................................................................
Consumer Incremental Equipment Costs ‡ .....................................................................................................................................
17.7
1.4
Net Benefits ..............................................................................................................................................................................
16.3
7% discount rate
Consumer Operating Cost Savings .................................................................................................................................................
Climate Benefits * (3% discount rate) ..............................................................................................................................................
Health Benefits ** .............................................................................................................................................................................
3.0
3.1
1.8
Total Benefits † .........................................................................................................................................................................
Consumer Incremental Equipment Costs ‡ .....................................................................................................................................
7.8
0.7
Net Benefits ..............................................................................................................................................................................
7.1
ddrumheller on DSK120RN23PROD with RULES3
Note: This table presents the costs and benefits associated with product name shipped in 2027–2056. These results include benefits to consumers which accrue after 2027 from the products shipped in 2027–2056.
* Climate benefits are calculated using four different estimates of the SC–GHG (see section IV.L of this document). For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3 percent discount rate are shown, but the Department does
not have a single central SC–GHG point estimate, and it emphasizes the importance of considering the benefits calculated using all four SC–
GHG estimates.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as
health benefits from reductions in direct PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this document for more details.
7 A metric ton is equivalent to 1.1 short tons.
Results for emissions other than CO2 are presented
in short tons.
8 DOE calculated emissions reductions relative to
the no-new-standards case, which reflects key
assumptions in the Annual Energy Outlook 2022
(‘‘AEO2022’’). AEO2022 represents current federal
and state legislation and final implementation of
regulations as of the time of its preparation. See
section IV.K of this document for further discussion
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of AEO2022 assumptions that effect air pollutant
emissions.
9 See Interagency Working Group on Social Cost
of Greenhouse Gases, Technical Support Document:
Social Cost of Carbon, Methane, and Nitrous Oxide.
Interim Estimates Under Executive Order 13990,
Washington, DC, February 2021 (‘‘February 2021
SC–GHG TSD’’). www.whitehouse.gov/wp-content/
uploads/2021/02/TechnicalSupportDocument_
SocialCostofCarbonMethaneNitrousOxide.pdf.
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10 DOE estimated the monetized value of SO and
2
NOX emissions reductions associated with
electricity savings using benefit per ton estimates
from the scientific literature. See section IV.L.2 of
this document for further discussion.
11 DOE estimates the economic value of these
emissions reductions resulting from the considered
TSLs for the purpose of complying with the
requirements of Executive Order 12866.
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36071
† Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits for both the 3-percent
and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate, but the Department does not have a single central
SC–GHG point estimate. DOE emphasizes the importance and value of considering the benefits calculated using all four SC–GHG estimates.
See Table V–41 for net benefits using all four SC–GHG estimates. To monetize the benefits of reducing GHG emissions this analysis uses the
interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under
Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
‡ Costs include incremental equipment costs as well as installation costs.
The benefits and costs of the
standards can also be expressed in terms
of annualized values. The monetary
values for the total annualized net
benefits are (1) the reduced consumer
operating costs, minus (2) the increase
in product purchase prices and
installation costs, plus (3) the value of
the benefits of GHG and NOX and SO2
emission reductions, all annualized.12
The national operating savings are
domestic private U.S. consumer
monetary savings that occur as a result
of purchasing the covered products and
are measured for the lifetime of electric
motors shipped in 2027–2056. The
benefits associated with reduced
emissions achieved as a result of the
standards are also calculated based on
the lifetime of electric motors shipped
in 2027–2056.
Estimates of annualized benefits and
costs of the adopted standards are
shown in Table I–6. The results under
the primary estimate are as follows.
Using a 7-percent discount rate for
consumer benefits and costs and health
benefits from reduced NOX and SO2
emissions, and the 3-percent discount
rate case for climate benefits from
reduced GHG emissions, the estimated
cost of the standards adopted in this
rule is $62.1 million per year in
increased equipment costs, while the
estimated annual benefits are $254.8
million in reduced equipment operating
costs, $164.8 million in climate benefits,
and $151.4 million in health benefits. In
this case, the net benefit would amount
to $508.9 million per year.
Using a 3-percent discount rate for all
benefits and costs, the estimated cost of
the standards is $71.0 million per year
in increased equipment costs, while the
estimated annual benefits are $463.6
million in reduced operating costs,
$164.8 million in climate benefits, and
$300.7 million in health benefits. In this
case, the net benefit would amount to
$858.2 million per year.
TABLE I–6—ANNUALIZED BENEFITS AND COSTS OF ADOPTED STANDARDS FOR ELECTRIC MOTORS
[TSL 2]
Million 2021$/year
Primary
estimate
Low-netbenefits
estimate
High-netbenefits
estimate
3% discount rate
Consumer Operating Cost Savings .............................................................................................
Climate Benefits * .........................................................................................................................
Health Benefits ** .........................................................................................................................
463.6
164.8
300.7
405.1
148.0
269.5
542.9
186.5
341.0
Total Benefits † .....................................................................................................................
Consumer Incremental Equipment Costs ‡ .................................................................................
929.1
71.0
822.5
73.7
1070.4
73.0
Net Benefits ..........................................................................................................................
858.2
748.8
997.4
Consumer Operating Cost Savings .............................................................................................
Climate Benefits * (3% discount rate) ..........................................................................................
Health Benefits ** ..................................................................................................................
254.8
164.8
151.4
225.3
148.0
137.1
293.6
186.5
169.5
Total Benefits † .....................................................................................................................
Consumer Incremental Equipment Costs ‡ .................................................................................
571.0
62.1
510.4
63.8
649.6
63.9
Net Benefits ..........................................................................................................................
508.9
446.6
585.6
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7% discount rate
Note: This table presents the costs and benefits associated with electric motors shipped in 2027–2056. These results include benefits to consumers which accrue after 2056 from the products shipped in 2027–2056.
* Climate benefits are calculated using four different estimates of the global SC–GHG (see section IV.L of this document). For presentational
purposes of this table, the climate benefits associated with the average SC–GHG at a 3 percent discount rate are shown, but the Department
does not have a single central SC–GHG point estimate, and it emphasizes the importance and value of considering the benefits calculated using
all four SC–GHG estimates.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as
health benefits from reductions in direct PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this document for more details.
12 To convert the time-series of costs and benefits
into annualized values, DOE calculated a present
value in 2023, the year used for discounting the
NPV of total consumer costs and savings. For the
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benefits, DOE calculated a present value associated
with each year’s shipments in the year in which the
shipments occur (e.g., 2030), and then discounted
the present value from each year to 2023. Using the
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present value, DOE then calculated the fixed annual
payment over a 30-year period, starting in the
compliance year, that yields the same present value.
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† Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits for both the 3-percent
and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate, but the Department does not have a single central
SC–GHG point estimate. DOE emphasizes the importance and value of considering the benefits calculated using all four SC–GHG estimates.
See Table V–41 for net benefits using all four SC–GHG estimates. To monetize the benefits of reducing GHG emissions this analysis uses the
interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under
Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
‡ Costs include incremental equipment costs as well as installation costs.
DOE’s analysis of the national impacts
of the adopted standards is described in
sections IV.H, V.B.3 and V.C of this
document.
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D. Conclusion
DOE has determined that the
November 2022 Joint Recommendation
containing recommendations with
respect to energy conservation standards
for electric motors was submitted jointly
by interested persons that are fairly
representative of relevant points of
view, in accordance with 42 U.S.C.
6295(p)(4)(A). After considering the
analysis and weighing the benefits and
burdens, DOE has determined that the
recommended standards are in
accordance with 42 U.S.C. 6295(o),
which contains the criteria for
prescribing new or amended standards.
Specifically, the Secretary has
determined that the adoption of the
recommended standards would result in
the significant conservation of energy
and is technologically feasible and
economically justified. In determining
whether the recommended standards
are economically justified, the Secretary
has determined that the benefits of the
recommended standards exceed the
burdens. Namely, the Secretary has
concluded that the recommended
standards, when considering the
benefits of energy savings, positive NPV
of consumer benefits, emission
reductions, the estimated monetary
value of the emissions reductions, and
positive average LCC savings, would
yield benefits outweighing the negative
impacts on some consumers and on
manufacturers, including the conversion
costs that could result in a reduction in
INPV for manufacturers.
Using a 7-percent discount rate for
consumer benefits and costs and NOX
and SO2 reduction benefits, and a 3percent discount rate case for GHG
social costs, the estimated cost of the
standards for electric motors is $62.1
million per year in increased equipment
and installation costs, while the
estimated annual benefits are $254.8
million in reduced equipment operating
costs, $164.8 million in climate benefits
and $151.4 million in health benefits.
The net benefit amounts to $508.9
million per year.
The significance of energy savings
offered by a new or amended energy
conservation standard cannot be
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determined without knowledge of the
specific circumstances surrounding a
given rulemaking.13 For example, some
covered products and equipment have
most of their energy consumption occur
during periods of peak energy demand.
The impacts of these products on the
energy infrastructure can be more
pronounced than products with
relatively constant demand.
Accordingly, DOE evaluates the
significance of energy savings on a caseby-case basis.
As previously mentioned, the
standards are projected to result in
estimated national energy savings of 3.0
quads (FFC), the equivalent of the
primary annual energy use of 31 million
homes. The NPV of consumer benefit for
these projected energy savings is $2.2
billion using a discount rate of 7
percent, and $7.5 billion using a
discount rate of 3 percent. The
cumulative emission reductions
associated with these energy savings are
91.69 Mt of CO2, 35.12 thousand tons of
SO2, 148.74 thousand tons of NOX,
690.10 thousand tons of CH4, 0.82
thousand tons of N2O, and 0.23 tons of
Hg. The estimated monetary value of the
climate benefits from reduced GHG
emissions (associated with the average
SC–GHG at a 3-percent discount rate) is
$3.14 billion. The estimated monetary
value of the health benefits from
reduced SO2 and NOX emissions is
$1.76 billion using a 7-percent discount
rate, and $5.72 billion using a 3-percent
discount rate. Based on these findings,
DOE has determined the energy savings
from the standard levels adopted in this
DFR are ‘‘significant’’ within the
meaning of 42 U.S.C. 6295(o)(3)(B). A
more detailed discussion of the basis for
these tentative conclusions is contained
in the remainder of this document and
the accompanying TSD.
Under the authority provided by 42
U.S.C. 6295(p)(4), DOE is issuing this
direct final rule (‘‘DFR’’) amending the
energy conservation standards for
electric motors. Consistent with this
authority, DOE is also publishing
elsewhere in this Federal Register a
notice of proposed rulemaking
proposing standards that are identical to
13 Procedures, Interpretations, and Policies for
Consideration in New or Revised Energy
Conservation Standards and Test Procedures for
Consumer Products and Commercial/Industrial
Equipment, 86 FR 70892, 70901 (Dec. 13, 2021).
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those contained in this direct final rule.
See 42 U.S.C. 6295(p)(4)(A)(i).
II. Introduction
The following section briefly
discusses the statutory authority
underlying this direct final rule, as well
as some of the relevant historical
background related to the establishment
of standards for electric motors.
A. Authority
EPCA authorizes DOE to regulate the
energy efficiency of a number of
consumer products and certain
industrial equipment. Title III, Part C 14
of EPCA added by Public Law 95–619,
Title IV, section 441(a) (42 U.S.C. 6311–
6317, as codified), established the
Energy Conservation Program for
Certain Industrial Equipment, which
sets forth a variety of provisions
designed to improve the energy
efficiency of certain types of industrial
equipment, including electric motors,
the subject of this direct final rule. (42
U.S.C. 6311(1)(A)). The Energy Policy
Act of 1992 (‘‘EPACT 1992’’) (Pub. L.
102–486 (Oct. 24, 1992)) further
amended EPCA by establishing energy
conservation standards and test
procedures for certain commercial and
industrial electric motors that are
manufactured alone or as a component
of another piece of equipment. In
December 2007, Congress enacted the
Energy Independence and Security Act
of 2007 (‘‘EISA 2007’’) (Pub. L. 110–140
(Dec. 19, 2007). Section 313(b)(1) of
EISA 2007 updated the energy
conservation standards for those electric
motors already covered by EPCA and
established energy conservation
standards for a larger scope of motors
not previously covered by standards. (42
U.S.C. 6313(b)(2)) EISA 2007 also
revised certain statutory definitions
related to electric motors. See EISA
2007, sec. 313 (amending statutory
definitions related to electric motors at
42 U.S.C. 6311(13)).
The energy conservation program
under EPCA consists essentially of four
parts: (1) testing, (2) labeling, (3) the
establishment of Federal energy
conservation standards, and (4)
certification and enforcement
procedures. Relevant provisions of
EPCA include definitions (42 U.S.C.
14 For editorial reasons, upon codification in the
U.S. Code, Part C was redesignated Part A–1.
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6311), test procedures (42 U.S.C. 6314),
labeling provisions (42 U.S.C. 6315),
energy conservation standards (42
U.S.C. 6313), and the authority to
require information and reports from
manufacturers (42 U.S.C. 6316; 42
U.S.C. 6296).
Federal energy efficiency
requirements for covered equipment
established under EPCA generally
supersede State laws and regulations
concerning energy conservation testing,
labeling, and standards. (42 U.S.C.
6316(a) and (b); 42 U.S.C. 6297) DOE
may, however, grant waivers of Federal
preemption in limited instances for
particular State laws or regulations, in
accordance with the procedures and
other provisions set forth under EPCA.
(See 42 U.S.C. 6316(a) (applying the
preemption waiver provisions of 42
U.S.C. 6297))
Subject to certain criteria and
conditions, DOE is required to develop
test procedures to measure the energy
efficiency, energy use, or estimated
annual operating cost of each covered
product. (42 U.S.C. 6314(a), 42 U.S.C.
6295(o)(3)(A) and 42 U.S.C. 6295(r))
Manufacturers of covered equipment
must use the Federal test procedures as
the basis for: (1) certifying to DOE that
their equipment complies with the
applicable energy conservation
standards adopted pursuant to EPCA (42
U.S.C. 6316(a); 42 U.S.C. 6295(s)), and
(2) making representations about the
efficiency of that equipment (42 U.S.C.
6314(d)). Similarly, DOE must use these
test procedures to determine whether
the equipment complies with relevant
standards promulgated under EPCA. (42
U.S.C. 6316(a); 42 U.S.C. 6295(s)) The
DOE test procedures for electric motors
appear at title 10 of the Code of Federal
Regulations (‘‘CFR’’) part 431, subpart B,
appendix B.
EPCA further provides that, not later
than 6 years after the issuance of any
final rule establishing or amending a
standard, DOE must publish either a
notice of determination that standards
for the product do not need to be
amended, or a notice of proposed
rulemaking including new proposed
energy conservation standards
(proceeding to a final rule, as
appropriate). (42 U.S.C. 6316(a); 42
U.S.C. 6295(m)(1)) DOE must follow
specific statutory criteria for prescribing
new or amended standards for covered
equipment, including electric motors.
Any new or amended standard for a
covered product must be designed to
achieve the maximum improvement in
energy efficiency that the Secretary of
Energy determines is technologically
feasible and economically justified. (42
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)
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and 42 U.S.C. 6295(o)(3)(B))
Furthermore, DOE may not adopt any
standard that would not result in the
significant conservation of energy. (42
U.S.C. 6316(a); 42 U.S.C. 6295(o)(3))
Moreover, DOE may not prescribe a
standard: (1) for certain products,
including electric motors, if no test
procedure has been established for the
product, or (2) if DOE determines by
rule that the standard is not
technologically feasible or economically
justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(3)(A)–(B)) In deciding whether a
proposed standard is economically
justified, DOE must determine whether
the benefits of the standard exceed its
burdens. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)) DOE must make this
determination after receiving comments
on the proposed standard, and by
considering, to the greatest extent
practicable, the following seven
statutory factors:
(1) The economic impact of the
standard on manufacturers and
consumers of the products subject to the
standard;
(2) The savings in operating costs
throughout the estimated average life of
the covered products in the type (or
class) compared to any increase in the
price, initial charges, or maintenance
expenses for the covered products that
are likely to result from the standard;
(3) The total projected amount of
energy (or as applicable, water) savings
likely to result directly from the
standard;
(4) Any lessening of the utility or the
performance of the covered products
likely to result from the standard;
(5) The impact of any lessening of
competition, as determined in writing
by the Attorney General, that is likely to
result from the standard;
(6) The need for national energy and
water conservation; and
(7) Other factors the Secretary of
Energy (‘‘Secretary’’) considers relevant.
(42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(I)–(VII))
Further, EPCA, as codified,
establishes a rebuttable presumption
that a standard is economically justified
if the Secretary finds that the additional
cost to the consumer of purchasing a
product complying with an energy
conservation standard level will be less
than three times the value of the energy
savings during the first year that the
consumer will receive as a result of the
standard, as calculated under the
applicable test procedure. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(B)(iii))
EPCA, as codified, also contains what
is known as an ‘‘anti-backsliding’’
provision, which prevents the Secretary
from prescribing any amended standard
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36073
that either increases the maximum
allowable energy use or decreases the
minimum required energy efficiency of
a covered product. (42 U.S.C. 6316(a);
42 U.S.C. 6295(o)(1)) Also, the Secretary
may not prescribe an amended or new
standard if interested persons have
established by a preponderance of the
evidence that the standard is likely to
result in the unavailability in the United
States in any covered product type (or
class) of performance characteristics
(including reliability), features, sizes,
capacities, and volumes that are
substantially the same as those generally
available in the United States. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(4))
Additionally, EPCA specifies
requirements when promulgating an
energy conservation standard for a
covered product that has two or more
subcategories. DOE must specify a
different standard level for a type or
class of products that has the same
function or intended use, if DOE
determines that products within such
group: (A) consume a different kind of
energy from that consumed by other
covered products within such type (or
class); or (B) have a capacity or other
performance-related feature which other
products within such type (or class) do
not have and such feature justifies a
higher or lower standard. (42 U.S.C.
6316(a); 42 U.S.C. 6295(q)(1)) In
determining whether a performancerelated feature justifies a different
standard for a group of products, DOE
must consider such factors as the utility
to the consumer of such a feature and
other factors DOE deems appropriate.
Id. Any rule prescribing such a standard
must include an explanation of the basis
on which such higher or lower level was
established. (42 U.S.C. 6316(a); 42
U.S.C. 6295(q)(2))
Finally, EISA 2007 amended EPCA, in
relevant part, to grant DOE authority to
issue a final rule (i.e., a ‘‘direct final
rule’’ or ‘‘DFR’’) establishing an energy
conservation standard on receipt of a
statement submitted jointly by
interested persons that are fairly
representative of relevant points of view
(including representatives of
manufacturers of covered products,
States, and efficiency advocates), as
determined by the Secretary, that
contains recommendations with respect
to an energy or water conservation
standard that are in accordance with the
provisions of 42 U.S.C. 6295(o). (42
U.S.C. 6295(p)(4)) Pursuant to 42 U.S.C.
6295(p)(4), the Secretary must also
determine whether a jointly-submitted
recommendation for an energy or water
conservation standard satisfies 42 U.S.C.
6295(o) or 42 U.S.C. 6313(a)(6)(B), as
applicable.
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
The direct final rule must be
published simultaneously with a NOPR
that proposes an energy or water
conservation standard that is identical
to the standard established in the direct
final rule, and DOE must provide a
public comment period of at least 110
days on this proposal. (42 U.S.C.
6295(p)(4)(A)–(B)) Based on the
comments received during this period,
the direct final rule will either become
effective, or DOE will withdraw it not
later than 120 days after its issuance if
(1) one or more adverse comments is
received, and (2) DOE determines that
those comments, when viewed in light
of the rulemaking record related to the
direct final rule, provide a reasonable
basis for withdrawal of the direct final
rule under 42 U.S.C. 6295(o), 42 U.S.C.
6313(a)(6)(B), or any other applicable
law. (42 U.S.C. 6295(p)(4)(C)) Receipt of
an alternative joint recommendation
may also trigger a DOE withdrawal of
the direct final rule in the same manner.
Id. After withdrawing a direct final rule,
DOE must proceed with the notice of
proposed rulemaking published
simultaneously with the direct final rule
and publish in the Federal Register the
reasons why the direct final rule was
withdrawn. Id.
Typical of other rulemakings, it is the
substance, rather than the quantity, of
comments that will ultimately
determine whether a direct final rule
will be withdrawn. To this end, the
substance of any adverse comment(s)
received will be weighed against the
anticipated benefits of the jointlysubmitted recommendations and the
likelihood that further consideration of
the comment(s) would change the
results of the rulemaking. DOE notes
that, to the extent an adverse comment
had been previously raised and
addressed in the rulemaking
proceeding, such a submission will not
typically provide a basis for withdrawal
of a direct final rule.
B. Background
1. Current Standards
In a final rule published on May 29,
2014, DOE prescribed the current energy
conservation standards for electric
motors manufactured on and after June
1, 2016. 79 FR 30934 (‘‘May 2014 Final
Rule’’). These standards are set forth in
DOE’s regulations at 10 CFR 431.25 and
are repeated in Table II–1, Table II–2,
and Table II–3.
TABLE II–1—ENERGY CONSERVATION STANDARDS FOR NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N MOTORS
(EXCLUDING FIRE PUMP ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .........................................................................
1.5/1.1 ......................................................................
2/1.5 .........................................................................
3/2.2 .........................................................................
5/3.7 .........................................................................
7.5/5.5 ......................................................................
10/7.5 .......................................................................
15/11 ........................................................................
20/15 ........................................................................
25/18.5 .....................................................................
30/22 ........................................................................
40/30 ........................................................................
50/37 ........................................................................
60/45 ........................................................................
75/55 ........................................................................
100/75 ......................................................................
125/90 ......................................................................
150/110 ....................................................................
200/150 ....................................................................
250/186 ....................................................................
300/224 ....................................................................
350/261 ....................................................................
400/298 ....................................................................
450/336 ....................................................................
500/373 ....................................................................
77.0
84.0
85.5
86.5
88.5
89.5
90.2
91.0
91.0
91.7
91.7
92.4
93.0
93.6
93.6
94.1
95.0
95.0
95.4
95.8
95.8
95.8
95.8
95.8
95.8
4 Pole
Open
Enclosed
77.0
84.0
85.5
85.5
86.5
88.5
89.5
90.2
91.0
91.7
91.7
92.4
93.0
93.6
93.6
93.6
94.1
94.1
95.0
95.0
95.4
95.4
95.8
96.2
96.2
6 Pole
Open
85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
95.4
95.4
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
95.4
95.4
95.8
95.8
95.8
95.8
95.8
95.8
96.2
96.2
8 Pole
Enclosed
Open
Enclosed
Open
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.0
95.0
95.8
95.8
95.8
95.8
95.8
................
................
................
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.0
95.0
95.4
95.4
95.8
95.8
95.8
..............
..............
..............
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
93.6
94.1
94.1
94.5
95.0
................
................
................
................
................
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
94.1
94.1
94.1
94.1
95.0
..............
..............
..............
..............
..............
TABLE II–2—ENERGY CONSERVATION STANDARDS FOR NEMA DESIGN C AND IEC DESIGN H MOTORS AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
4 Pole
ddrumheller on DSK120RN23PROD with RULES3
Enclosed
1/.75 .........................................................................................................
1.5/1.1 ......................................................................................................
2/1.5 .........................................................................................................
3/2.2 .........................................................................................................
5/3.7 .........................................................................................................
7.5/5.5 ......................................................................................................
10/7.5 .......................................................................................................
15/11 ........................................................................................................
20/15 ........................................................................................................
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85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
Sfmt 4700
6 Pole
Open
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
Enclosed
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
E:\FR\FM\01JNR3.SGM
01JNR3
8 Pole
Open
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
Enclosed
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
Open
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
TABLE II–2—ENERGY CONSERVATION STANDARDS FOR NEMA DESIGN C AND IEC DESIGN H MOTORS AT 60 Hz—
Continued
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
4 Pole
Enclosed
25/18.5 .....................................................................................................
30/22 ........................................................................................................
40/30 ........................................................................................................
50/37 ........................................................................................................
60/45 ........................................................................................................
75/55 ........................................................................................................
100/75 ......................................................................................................
125/90 ......................................................................................................
150/110 ....................................................................................................
200/150 ....................................................................................................
6 Pole
Open
93.6
93.6
94.1
94.5
95.0
95.4
95.4
95.4
95.8
96.2
93.6
94.1
94.1
94.5
95.0
95.0
95.4
95.4
95.8
95.8
Enclosed
8 Pole
Open
93.0
93.0
94.1
94.1
94.5
94.5
95.0
95.0
95.8
95.8
93.0
93.6
94.1
94.1
94.5
94.5
95.0
95.0
95.4
95.4
Enclosed
Open
90.2
91.7
91.7
92.4
92.4
93.6
93.6
94.1
94.1
94.5
91.0
91.7
91.7
92.4
93.0
94.1
94.1
94.1
94.1
94.1
TABLE II–3—ENERGY CONSERVATION STANDARDS FOR FIRE PUMP ELECTRIC MOTORS AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
ddrumheller on DSK120RN23PROD with RULES3
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
300/224 ............................................................
350/261 ............................................................
400/298 ............................................................
450/336 ............................................................
500/373 ............................................................
2. History of Standards Rulemaking for
Electric Motors
In the May 2020 Early Assessment
Review RFI, DOE stated that it was
initiating an early assessment review to
determine whether any new or amended
standards would satisfy the relevant
requirements of EPCA for a new or
amended energy conservation standard
for electric motors and sought
information related to that effort.
Specifically, DOE sought data and
information that could enable the
agency to determine whether DOE
should propose a ‘‘no new standard’’
determination because a more stringent
standard: (1) would not result in a
VerDate Sep<11>2014
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Jkt 259001
75.5
82.5
84.0
85.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
92.4
93.0
93.0
93.6
94.5
94.5
95.0
95.4
95.4
95.4
95.4
95.4
95.4
4 Pole
Open
................
82.5
84.0
84.0
85.5
87.5
88.5
89.5
90.2
91.0
91.0
91.7
92.4
93.0
93.0
93.0
93.6
93.6
94.5
94.5
95.0
95.0
95.4
95.8
95.8
Enclosed
82.5
84.0
84.0
87.5
87.5
89.5
89.5
91.0
91.0
92.4
92.4
93.0
93.0
93.6
94.1
94.5
94.5
95.0
95.0
95.0
95.4
95.4
95.4
95.4
95.8
6 Pole
Open
82.5
84.0
84.0
86.5
87.5
88.5
89.5
91.0
91.0
91.7
92.4
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
95.4
95.4
95.4
95.4
95.8
95.8
significant savings of energy; (2) is not
technologically feasible; (3) is not
economically justified; or (4) any
combination of the foregoing. 85 FR
30878, 30879.
On March 2, 2022, DOE published the
preliminary analysis for electric motors.
87 FR 11650 (‘‘March 2022 Preliminary
Analysis’’). In conjunction with the
March 2022 Preliminary Analysis, DOE
published a technical support document
(‘‘March 2022 Prelim TSD’’) which
presented the results of the in-depth
technical analyses in the following
areas: (1) Engineering; (2) markups to
determine equipment price; (3) energy
use; (4) life cycle cost (‘‘LCC’’) and
PO 00000
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8 Pole
Enclosed
Open
Enclosed
Open
80.0
85.5
86.5
87.5
87.5
89.5
89.5
90.2
90.2
91.7
91.7
93.0
93.0
93.6
93.6
94.1
94.1
95.0
95.0
95.0
95.0
95.0
................
................
................
80.0
84.0
85.5
86.5
87.5
88.5
90.2
90.2
91.0
91.7
92.4
93.0
93.0
93.6
93.6
94.1
94.1
94.5
94.5
95.4
95.4
95.4
................
................
................
74.0
77.0
82.5
84.0
85.5
85.5
88.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
93.6
93.6
94.1
94.5
................
................
................
................
................
74.0
75.5
85.5
86.5
87.5
88.5
89.5
89.5
90.2
90.2
91.0
91.0
91.7
92.4
93.6
93.6
93.6
93.6
93.6
94.5
................
................
................
................
................
payback period (‘‘PBP’’); and (5)
national impacts. The results presented
included the current scope of electric
motors regulated at 10 CFR 431.25, in
addition to an expanded scope of
motors, including electric motors above
500 horsepower, air-over electric
motors, and small, non-small-electricmotor, electric motors (‘‘SNEM’’). See
Chapter 2 of the March 2022 Prelim
TSD. DOE requested comment on a
number of topics regarding the analysis
presented.
DOE received comments in response
to the March 2022 Preliminary Analysis
from the interested parties listed in
Table II–4.
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TABLE II–4—MARCH 2022 PRELIMINARY ANALYSIS WRITTEN COMMENTS
Commenter(s)
Reference in this final rule
ABB Motors and Mechanical Inc ...........................................
American Council for an Energy-Efficient Economy, Appliance Standards Awareness Project, National Electrical
Manufacturers Association, Natural Resources Defense
Council, Northwest Energy Efficiency Alliance, Pacific
Gas & Electric Company, San Diego Gas & Electric,
Southern California Edison.
Appliance Standards Awareness Project, American Council
for an Energy-Efficient Economy, Natural Resources Defense Council, New York State Energy Research and Development Authority.
Association of Home Appliance Manufacturers; Air-Conditioning, Heating, and Refrigeration Institute.
Air-Conditioning, Heating, and Refrigeration Institute ...........
Pacific Gas and Electric Company (PG&E), San Diego Gas
and Electric (SDG&E), and Southern California Edison
(SCE).
Daikin Comfort Technologies Manufacturing Company, L.P
Electrical Apparatus Service Association, Inc .......................
Hydraulics Institute .................................................................
Lennox International ..............................................................
Metglas, Inc ............................................................................
Northwest Energy Efficiency Alliance ....................................
National Electrical Manufacturers Association (NEMA), Association of Home Appliance Manufacturers (AHAM), the
Air-Conditioning, Heating, and Refrigeration Institute
(AHRI), the Medical Imaging Technology Alliance (MITA),
the Outdoor Power Equipment Institute (OPEI), Home
Ventilating Institute (HVI) and the Power Tool Institute
(PTI).
National Electrical Manufacturers Association ......................
ABB .......................................
Electric Motors Working
Group.
28
35, 36
Joint Advocates .....................
27
Efficiency Organizations.
AHAM and AHRI ...................
25
Industry OEM Trade Association.
AHRI ......................................
CA IOUs ................................
26
30
Industry OEM Trade Association.
Utilities.
Daikin .....................................
EASA .....................................
HI ...........................................
Lennox ...................................
Metglas ..................................
NEEA .....................................
Joint Industry Stakeholders ...
32
21
31
29
24
33
23
Manufacturer.
International Trade Association.
Industry Pump Trade Association.
Manufacturer.
Materials supplier.
Non-profit organization.
Industry Trade Associations.
NEMA ....................................
22
Industry Trade Association.
ddrumheller on DSK120RN23PROD with RULES3
By letter dated on November 15, 2022,
DOE received a joint recommendation
for energy conservation standards for
electric motors (‘‘November 2022 Joint
Recommendation’’). The November
2022 Joint Recommendation represented
the motors industry, energy efficiency
organizations and utilities (collectively,
‘‘the Electric Motors Working
Group’’).15 The November 2022 Joint
Recommendation addressed energy
conservation standards for medium
electric motors that are 1–750 hp and
polyphase, and air-over medium electric
motors. On December 9, 2022, DOE
received a supplemental letter to the
November 2022 Joint Recommendation
from the Electric Motors Working
Group. The supplemental letter
provided additional guidance on the
recommended levels for open medium
electric motors rated 100 hp to 250 hp,
and a recommended compliance date
15 The members of the Electric Motors Working
Group included ACEEE, ASAP, NEMA, NRDC,
NEEA, PG&E, SDG&E, and SCE.
16 The parenthetical reference provides a
reference for information located in the docket of
DOE’s rulemaking to develop energy conservation
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Docket No.
for standards presented in the
November 2022 Joint Recommendation.
A parenthetical reference at the end of
a comment quotation or paraphrase
provides the location of the item in the
public record.16
3. Electric Motors Working Group
Recommended Standard Levels
This section summarizes the standard
levels recommended in the November
2022 Joint Recommendation and
supplement by the Electric Motors
Working Group and the subsequent
procedural steps taken by DOE. Further
discussion on scope is provided in
section III.B of this document.
Recommendation #1: For NEMA
Design A/B medium electric motors
(‘‘MEM’’) rated up to 500 hp at 60Hz,
standard levels as follows:
a. Less than 100 hp—remain at
Premium LevelIE3 level 17
standards for electric motors. (Docket NO EERE–
2020–BT–STD–0007, which is maintained at
www.regulations.gov). The references are arranged
as follows: (commenter name, comment docket ID
number, page of that document).
PO 00000
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Commenter type
Manufacturer.
Working Group.
b. 100–250 hp—increase to Super
Premium/IE4 level,18 aligning with
European Union (‘‘EU’’) Ecodesign
Directive 2019/1781 which requires IE4
levels for 75–200 kW motors.
c. Over 250 and up to 500 hp—remain
at Premium Level/IE3 level
Separately, because the efficiencies
for the IE4 level in IEC 60034–30–
1:2014 do not distinguish between
enclosed and open motors, the
supplemental letter to the November
2022 Joint Recommendation
recommended efficiencies for open
motors based on the efficiencies for
enclosed motors in the IEC standard.
The supplemental letter stated that for
some horsepower ratings, open motors
have different minimum efficiencies
which account for the different frame
size at a given horsepower rating.
17 IE3 efficiency level refers to the 60 Hz
efficiency values in Table 8 of IEC 60034–30–
1:2014.
18 IE4 efficiency level refers to the 60 Hz
efficiency values in Table 10 of IEC 60034–30–
1:2014.
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Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
Premium efficiency level refers to the
efficiency values in NEMA MG 1–2016
Tables 12–12. The current standards for
NEMA Design A/B in Table 5 of 10 CFR
431.25 are at Premium efficiency.
Accordingly, in this direct final rule,
pursuant to the November 22 Joint
95.0
95.4
95.4
95.8
96.2
4 Pole
Open
94.5
94.5
94.5
95.4
95.4
Enclosed
6 Pole
Open
96.2
96.2
96.2
96.5
96.5
96.2
96.2
96.2
96.2
96.2
Recommendation, the energy
conservation standards for NEMA
Design A/B medium electric motors
(‘‘MEM’’) less than 100 hp and between
250 to 500 hp, remain at the current
levels in 10 CFR 430.25. However, the
energy conservation standards for such
Enclosed
95.8
95.8
96.2
96.2
96.2
8 Pole
Open
95.8
95.8
95.8
95.8
96.2
Enclosed
94.5
95.0
95.0
95.4
95.4
Open
95.0
95.0
95.0
95.0
95.4
MEMs between 100 and 250 hp increase
to the Super Premium/IE4 Level, which
approximately represents a 20 percent
reduction of losses over Premium/IE3.
Table II–4 presents a comparison of the
current and updated standards for
MEMs between 100 and 250 hp.
TABLE II–4—CROSSWALK OF CURRENT AND NEW EFFICIENCY STANDARDS FOR MEMS 100–250 HP
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
4 Pole
Open
Enclosed
6 Pole
Open
Enclosed
8 Pole
Open
Enclosed
Open
Current Standards in Table 5 of 10 CFR 431.25
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
94.1
95.0
95.0
95.4
95.8
93.6
94.1
94.1
95.0
95.0
95.4
95.4
95.8
96.2
96.2
95.4
95.4
95.8
95.8
95.8
95.0
95.0
95.8
95.8
95.8
95.0
95.0
95.4
95.4
95.8
93.6
94.1
94.1
94.5
95.0
94.1
94.1
94.1
94.1
95.0
94.5
95.0
95.0
95.4
95.4
95.0
95.0
95.0
95.0
95.4
Updated Standards in this DFR, pursuant to the November 2022 Joint Recommendation
ddrumheller on DSK120RN23PROD with RULES3
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
95.0
95.4
95.4
95.8
96.2
94.5
94.5
94.5
95.4
95.4
96.2
96.2
96.2
96.5
96.5
96.2
96.2
96.2
96.2
96.2
Recommendation #2: For medium
electric motors rated over 500 hp and up
to 750 hp at 60 Hz, standard levels that
correspond to IE3 levels for open and
enclosed electric motors.
The current energy conservation
standards for MEMs do not contain
standards for MEMs with greater than
500 hp. However, in the May 2014 Final
Rule, DOE noted that it may consider
future regulation of motor types not
regulated in the May 2014 Final Rule,
including motors greater than 500 hp.
See 79 FR 30946. As discussed more in
section III.B of this document, DOE
recently expanded the electric motor
test procedure to include motors
between 500 hp and 750 hp. Pursuant
to the November 2022 Joint
Recommendation, this direct final rule
establishes standards for motors
between 500 and 750 hp at levels
consistent with IE3 levels for open and
enclosed electric motors.
Recommendation #3: For air-over 19
medium electric motors (‘‘AO–MEMs’’),
establish two equipment classes and
corresponding energy conservation
standards for AO MEMs: AO–MEMs in
standard NEMA frame sizes and air-over
motors in specialized NEMA frame
sizes, with standard levels as follows:
a. Standard Frame Size AO–MEMs:
For AO MEMs sold in standard NEMA
19 Air-over electric motor means an electric motor
that does not reach thermal equilibrium (i.e.,
thermal stability), during a rated load temperature
test according to section 2 of appendix B, without
the application of forced cooling by a free flow of
air from an external device not mechanically
connected to the motor within the motor enclosure.
10 CFR 430.12.
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95.8
95.8
96.2
96.2
96.2
95.8
95.8
95.8
95.8
96.2
frame sizes aligned with NEMA MG 1–
2016, Table 13.2 (open motors) and
Table 13.3 (enclosed motors), standard
levels consistent with Recommendation
#1 (i.e., standard levels for NEMA MG
1 12–12 levels for motors rated less than
100 hp, IE4 levels for motors rated 100
to 250 hp, and MG 1 12–12 levels for
motors rated over 250 hp).
b. Specialized Frame Size air-over
electric motors: For air-over electric
motors sold in smaller, specialized
NEMA frame sizes, standard levels
consistent with current fire pump
efficiency levels (in Table 7 of 10 CFR
431.25), but with constraint on frame
size as follows:
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2 Pole
(maximum NEMA
frame diameter)
HP/kW
1/.75 .................................................
1.5/1.1 ..............................................
2/1.5 .................................................
3/2.2 .................................................
5/3.7 .................................................
7.5/5.5 ..............................................
10/7.5 ...............................................
15/11 ................................................
20/15 ................................................
ddrumheller on DSK120RN23PROD with RULES3
8 Pole
(maximum NEMA
frame diameter)
Open
Enclosed
Open
Enclosed
Open
Enclosed
Open
74 (48)
82.5 (48)
84 (48)
85.5 (140)
87.5 (140)
88.5 (180)
89.5 (180)
90.2 (210)
90.2 (210)
..................
82.5 (48)
84 (48)
84 (48)
85.5 (140)
87.5 (140)
88.5 (180)
89.5 (180)
90.2 (210)
82.5 (48)
84 (48)
84 (48)
87.5 (140)
87.5 (140)
89.5 (180)
89.5 (180)
91 (210)
91 (210)
82.5 (48)
84 (48)
84 (48)
86.5 (140)
87.5 (140)
88.5 (180)
89.5 (180)
91 (210)
91 (210)
80 (48)
85.5 (140)
86.5 (140)
87.5 (180)
87.5 (180)
89.5 (210)
89.5 (210)
..................
..................
80 (48)
84 (140)
85.5 (140)
86.5 (180)
87.5 (180)
88.5 (210)
90.2 (210)
..................
..................
74 (140)
77 (140)
82.5 (180)
84 (180)
85.5 (210)
85.5 (210)
..................
..................
..................
74 (140)
75.5 (140)
85.5 (180)
86.5 (180)
87.5 (210)
88.5 (210)
..................
..................
..................
20 In the May 2014 Final Rule, DOE chose not to
establish standards for inverter-only electric motors
because of the then absence of a reliable and
repeatable method to test them for efficiency, but
DOE noted that if a test procedure became available,
DOE may consider setting standards for inverteronly electric motors at that time. 79 FR 30945. DOE
recently expanded the electric motor test procedure
to include inverter-only and synchronous electric
motors. See 87 FR 63600–63605. Similarly, DOE
expanded the scope of the test procedure to include
synchronous electric motors. 87 FR 63601–63605.
However, pursuant to the November 2022 Joint
Recommendation, DOE is not separately regulating
20:37 May 31, 2023
6 Pole
(maximum NEMA
frame diameter)
Enclosed
The current energy conservation
standard for electric motors in 10 CFR
430.25 exempt air-over electric motors
from the standards. 10 CFR 430.25(l). In
the May 2014 Final Rule, DOE
explained that this exemption was due
to a lack of information at that time to
support the establishment of a test
method for air-over electric motors. See
79 FR 30946; 78 FR 38474. However, as
discussed more in section III.B, DOE
recently expanded the electric motor
test procedure to include AO–MEMs.
Accordingly, pursuant to the November
2022 Joint Recommendation, this direct
final rule establishes 2 equipment
classes for AO–MEMs (AO–MEMs in
standard NEMA frame sizes, and those
in specialized NEMA frame sizes) and
corresponding standards based on the
November 2022 Joint Recommendation.
However, based on DOE’s review of the
market, DOE only observed AO–MEMs
up to 250 hp. As such, in this direct
final rule, DOE is only establishing
standards for AO–MEMs up to 250 hp.
Recommendation #4: For
synchronous and inverter-only electric
motors, a recommendation to forego
establishing standards until an updated
test procedure is adopted that better
captures the energy-saving benefits of
these motors.
The current energy conservation
standard for electric motors in 10 CFR
430.25 exempts inverter-only electric
motors from the standards. 10 CFR
431.25(l). Similarly, the current energy
conservation standards apply to AC
induction motors, which do not include
synchronous motors.20 Accordingly,
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(maximum NEMA
frame diameter)
Jkt 259001
following this recommendation, this
direct final rule continues to exempt
these types of motors from the energy
conservation standards.
Recommendation #5: For the
recommended energy conservation
standard levels, a compliance date of
four (4) years from the date of
publication of the final rule.
In the May 2014 Final Rule, DOE
provided a 2-year compliance lead time
based on the requirements of 42 U.S.C.
6313(b)(4)(B). See 79 FR 30944. DOE
notes that EPCA generally requires a 3year compliance lead time from the
effective date of an amended standard
under EPCA’s 6-year lookback
provisions. (42 U.S.C. 6316(a); 42 U.S.C.
6295(m)) However, EPCA’s direct final
rule provision (42 U.S.C. 6295(p)(4))
conveys upon DOE a substantive grant
of rulemaking authority, thereby
allowing stakeholders to negotiate over
more aspects of the energy or water
conservation standard, so long as the
requirements of 42 U.S.C. 6295(o) are
met. See 86 FR 70892, 70915. In the
past, DOE has looked to joint
recommendations to fill in necessary
details that EPCA does not place upon
the direct final rule process, including
compliance periods. DOE’s direct final
rules have frequently utilized
alternative compliance dates, while
continuing to ensure that the standards
in these rules represent the maximum
improvement in energy efficiency that is
technologically feasible and
economically justified.
After carefully considering the
November 2022 Joint Recommendation
and supplement for amending the
energy conservation standards for
electric motors submitted by the Electric
Motors Working Group, DOE has
determined that these recommendations
inverter-only and synchronous electric motors in
this direct final rule. Rather, DOE is only
considering the substitution effects of switching to
these electric motors if higher standards for MEMs
are established. More discussion on inverter-only
and synchronous electric motors may be found in
sections IV.A and F of this document.
PO 00000
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are in accordance with the statutory
requirements of 42 U.S.C. 6295(p)(4) for
the issuance of a direct final rule.
More specifically, these
recommendations comprise a statement
submitted by interested persons who are
fairly representative of relevant points
of view on this matter. In appendix A
to subpart C of 10 CFR part 430
(‘‘Appendix A’’), DOE explained that to
be ‘‘fairly representative of relevant
points of view,’’ the group submitting a
joint statement must, where appropriate,
include larger concerns and small
business in the regulated industry/
manufacturer community, energy
advocates, energy utilities, consumers,
and States. However, it will be
necessary to evaluate the meaning of
‘‘fairly representative’’ on a case-by-case
basis, subject to the circumstances of a
particular rulemaking, to determine
whether fewer or additional parties
must be part of a joint statement in
order to be ‘‘fairly representative of
relevant points of view.’’ Section 10 of
appendix A. In reaching this
determination, DOE took into
consideration the fact that the Joint
Recommendation was signed and
submitted by a broad cross-section of
interests, including a manufacturers’
trade association, environmental and
energy-efficiency advocacy
organizations, and electric utility
companies. NYSERDA, a state
organization, also submitted a letter
supporting the Joint Recommendation.
DOE notes that these organizations
include the relevant points of view
specifically identified by Congress:
manufacturers of covered products,
States, and efficiency advocates. (42
U.S.C. 6295(p)(4)(A))
DOE also evaluated whether the
recommendation satisfies 42 U.S.C.
6295(o), as applicable. In making this
determination, DOE conducted an
analysis to evaluate whether the
potential energy conservation standards
under consideration achieve the
maximum improvement in energy
efficiency that is technologically
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feasible and economically justified and
result in significant energy
conservation. The evaluation is the
same comprehensive approach that DOE
typically conducts whenever it
considers potential energy conservation
standards for a given type of product or
equipment.
Upon review, the Secretary
determined that the November 2022
Joint Recommendation comports with
the standard-setting criteria set forth
under 42 U.S.C. 6295(p)(4)(A).
Accordingly, the Electric Motors
Working Group recommended
efficiency levels were included as the
‘‘recommended TSL’’ for electric motors
(see section V.A for description of all of
the considered TSLs). The details
regarding how the Electric Motors
Working Group-recommended TSLs
comply with the standard-setting
criteria are discussed and demonstrated
in the relevant sections throughout this
document.
In sum, as the relevant criteria under
42 U.S.C. 6295(p)(4) have been satisfied,
the Secretary has determined that it is
appropriate to adopt the Electric Motors
Working Group-recommended amended
energy conservation standards for
Electric Motors through this direct final
rule. Also, in accordance with the
provisions described in section II.A of
this document, DOE is simultaneously
publishing a NOPR proposing that the
identical standard levels contained in
this direct final rule be adopted.
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III. General Discussion
A. General Comments
This section summarizes general
comments received from interested
parties regarding rulemaking timing and
process for the March 2022 Preliminary
Analysis.
Lennox commented that longstanding DOE practice recognizes the
benefit of establishing an appropriate
test procedure before undertaking an
energy conservation standards
rulemaking. Lennox commented that the
March 2022 Preliminary Analysis was
issued in February 2022 while
comments on the test procedure NOPR
were due. As such, Lennox suggested
that DOE cutting corners on the
regulatory process undermines the
accuracy and reliability of data
contained in the March 2022
Preliminary Analysis TSD. (Lennox, No.
29 at p. 4–5) The Joint Industry
Stakeholders commented that the
process DOE is using for the electric
motor test procedure and standards
undermines the value of early
stakeholder engagement. Specifically,
they claimed that DOE is: (1) shortening
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Jkt 259001
comment periods; (2) overlapping
comment periods; and (3) condensing
the rulemaking process. The Joint
Industry Stakeholders noted that DOE
published the March 2022 Preliminary
Analysis two months after issuing a
proposed test procedure. Furthermore,
the Joint Industry Stakeholders
commented that there were numerous
comments challenging DOE’s proposed
test procedure, which resulted in
significant changes. They commented
that manufacturers and others lack
enough time with the proposed test
procedure to fully understand or
comment upon its impact on potential
energy conservation standards,
especially for SNEMs where they stated
that DOE has done no testing. The Joint
Industry Stakeholders commented that
they recognize and support DOE’s
interest in moving rulemakings forward,
especially rules such as the electric
motor standards and test procedures,
which have missed statutory deadlines.
However, they stated that DOE should
have released the proposed test
procedure earlier so that DOE could
receive feedback on the test procedure
before proceeding with its resourceintensive preliminary analysis. (Joint
Industry Stakeholders, No. 23 at p. 9–
10)
Appendix A establishes procedures,
interpretations, and policies to guide
DOE in the consideration and
promulgation of new or revised
appliance energy conservation
standards and test procedures under
EPCA. DOE has maintained the process
and timeline for the electric motors test
procedure and energy conservation
standards based on appendix A.
Appendix A requires that DOE
provide for early input from
stakeholders so that the initiation and
direction of rulemaking is informed by
comments from interested parties.
Appendix A, section 1(a). As discussed
in section II.B.2 of this document, DOE
provided opportunity for comment for
these energy conservation standards
through the May 2020 Early Assessment
Review RFI, which had a 30-day
comment period, and the March 2022
Preliminary Analysis, which had a 60day comment period. Further, DOE
provided multiple opportunities for
stakeholder comments and inputs
through the test procedure rulemaking
process; DOE published a request for
information (85 FR 34111; June 3, 2020
‘‘June 2020 RFI’’), which had a 45-day
comment period, and DOE published a
test procedure NOPR (86 FR 71710;
December 17, 2021 ‘‘December 2021
NOPR’’), which originally had a 60-day
comment period, which was extended
to a 75-day comment period. 87 FR
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36079
6436. Even though some of these
comment periods overlapped to some
extent, DOE has nonetheless provided
ample opportunity for stakeholder
review and comments and has
considered such comments and
recommendations in this notice.
Appendix A also generally requires
that test procedure rulemakings
establishing methodologies used to
evaluate proposed energy conservation
standards will be finalized prior to
publication of a NOPR proposing new or
amended energy conservation
standards. Appendix A, section 8(d)(1).
Pursuant to 42 U.S.C. 6295(p)(4),
published elsewhere in the Federal
Register is a NOPR accompanying this
direct final rule, which proposes
standards identical to those in this
direct final rule. On October 19, 2022,
DOE published the electric motor test
procedure final rule. (‘‘October 2022
Final Rule’’). Thus, in accordance with
appendix A section 8(d)(1), the October
2022 Final Rule prior was published
180 days prior to publication of this
energy conservations standards direct
final rule and the accompanying NOPR.
B. Scope of Coverage and Equipment
Classes
When evaluating and establishing
energy conservation standards, DOE
divides covered equipment into
equipment classes by the type of energy
used or by capacity or other
performance-related features that justify
differing standards. In making a
determination whether a performancerelated feature justifies a different
standard, DOE must consider such
factors as the utility of the feature to the
consumer and other factors DOE
determines are appropriate. (42 U.S.C.
6316(a); 42 U.S.C. 6295(q))
This document covers certain
equipment meeting the definition of
electric motors as defined in 10 CFR
431.12. Specifically, the definition for
‘‘electric motor’’ is ‘‘a machine that
converts electrical power into rotational
mechanical power.’’ Id. Electric motors
are used in a wide range of applications
in commercial building and in the
industrial sector (e.g., chemicals,
primary metals, food, paper, plastic/
rubber, petroleum refining, and
wastewater), including: fans,
compressors, pumps, material handling
equipment, and material processing
equipment.
Currently, DOE regulates medium
electric motors (‘‘MEMs’’) falling into
the NEMA Design A, NEMA Design B,
NEMA Design C, and fire pump motor
categories and those electric motors that
meet the criteria specified at 10 CFR
431.25(g). 10 CFR 431.25(h)–(j). Section
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431.25(g) specifies that the relevant
standards apply only to electric motors,
including partial electric motors, that
satisfy the following criteria:
(1) Are single-speed, induction motors;
(2) Are rated for continuous duty (MG 1)
operation or for duty type S1 (IEC)
(3) Contain a squirrel-cage (MG 1) or cage
(IEC) rotor;
(4) Operate on polyphase alternating
current 60-hertz sinusoidal line power;
(5) Are rated 600 volts or less;
(6) Have a 2-, 4-, 6-, or 8-pole
configuration;
(7) Are built in a three-digit or four-digit
NEMA frame size (or IEC metric equivalent),
including those designs between two
consecutive NEMA frame sizes (or IEC metric
equivalent), or an enclosed 56 NEMA frame
size (or IEC metric equivalent);
(8) Produce at least one horsepower (0.746
kW) but not greater than 500 horsepower
(373 kW), and
(9) Meet all of the performance
requirements of one of the following motor
types: A NEMA Design A, B, or C motor or
an IEC Design N, NE, NEY, NY or H, HE,
HEY, HYmotor.21
10 CFR 431.25(g).
The definitions for NEMA Design A
motors, NEMA Design B motors, NEMA
Design C motors, fire pump electric
motors, IEC Design N motor and IEC
Design H motor, as well as ‘‘E’’ and ‘‘Y’’
designated IEC Design motors, are
codified in 10 CFR 431.12. DOE has also
currently exempted certain categories of
motors from standards. The exemptions
are as follows:
(1) Air-over electric motors;
(2) Component sets of an electric motor;
(3) Liquid-cooled electric motors;
(4) Submersible electric motors; and
(5) Inverter-only electric motors.
10 CFR 431.25(l)
On October 19, 2022, DOE published
the electric motors test procedure final
rule. 87 FR 63588 (‘‘October 2022 Final
Rule’’). As part of the October 2022
Final Rule, DOE expanded the test
procedure scope to additional categories
of electric motors that currently do not
have energy conservation standards. 87
FR 63588, 63593–63606. The expanded
test procedure scope included the
following:
• Electric motors having a rated
horsepower above 500 and up to 750 hp
that meets the criteria listed at
§ 431.25(g), with the exception of
criteria § 431.25(g)(8) to air-over electric
motors (‘‘AO–MEMs’’), and inverteronly electric motors;
• Small, non-Small-Electric Motor,
Electric Motors (‘‘SNEM’’), which:
(a) Is not a small electric motor, as
defined at § 431.442 and is not a
dedicated pool pump motors as defined
at § 431.483;
(b) Is rated for continuous duty (MG
1) operation or for duty type S1 (IEC);
(c) Operates on polyphase or singlephase alternating current 60-hertz (Hz)
sinusoidal line power; or is used with
an inverter that operates on polyphase
or single-phase alternating current 60hertz (Hz) sinusoidal line power;
(d) Is rated for 600 volts or less;
(e) Is a single-speed induction motor
capable of operating without an inverter
or is an inverter-only electric motor;
(f) Produces a rated motor horsepower
greater than or equal to 0.25 horsepower
(0.18 kW); and
(g) Is built in the following frame
sizes: any two-, or three-digit NEMA
frame size (or IEC equivalent) if the
motor operates on single-phase power;
any two-, or three-digit NEMA frame
size (or IEC equivalent) if the motor
operates on polyphase power, and has a
rated motor horsepower less than 1
horsepower (0.75 kW); or a two-digit
NEMA frame size (or IEC metric
equivalent), if the motor operates on
polyphase power, has a rated motor
horsepower equal to or greater than 1
horsepower (0.75 kW), and is not an
enclosed 56 NEMA frame size (or IEC
metric equivalent).
• SNEMs that are air-over electric
motors (‘‘AO–SNEMs’’) and inverteronly electric motors;
• Synchronous electric motors,
which:
(a) Is not a dedicated pool pump
motor as defined at § 431.483 or is not
an air-over electric motor;
(b) Is a synchronous electric motor;
(c) Operates on polyphase or singlephase alternating current 60-hertz (Hz)
sinusoidal line power; or is used with
an inverter that operates on polyphase
or single-phase alternating current 60hertz (Hz) sinusoidal line power;
(d) Is rated 600 volts or less; and
(e) Produces at least 0.25 hp (0.18 kW)
but not greater than 750 hp (559 kW).
• Synchronous electric motors that
are inverter-only electric motors.
In the October 2022 Final Rule, DOE
noted that, for these motors newly
included within the scope of the test
procedure for which there was no
established energy conservation
standard, manufacturers would not be
required to use the test procedure to
certify these motors to DOE until such
time as a standard is established. 87 FR
63591.22 Further, the October 2022
Final Rule continued to exclude the
following categories of electric motors:
• inverter-only electric motors that
are air-over electric motors;
• component sets of an electric motor;
• liquid-cooled electric motors; and
• submersible electric motors.
In the March 2022 Preliminary
Analysis, DOE analyzed the additional
motors now included within the scope
of the test procedure after the October
2022 Final Rule.23 See sections 2.2.1
and 2.2.3.2 of the March 2022 Prelim
TSD. This included MEMs from 1–500
hp, AO–MEMs, SNEMs, and AO–
SNEMs. However, consistent with the
November 2022 Joint Recommendation,
this direct final rule establishes new and
amended standards for only a portion of
the scope analyzed in the March 2022
Preliminary Analysis and included
within the scope of the test procedure
after the October 2022 Final Rule.
Specifically, in this direct final rule,
DOE is only amending standards for
certain MEMs and establishing new
standards for AO–MEMs and certain airover polyphase motors. DOE may
address in a future rulemaking energy
conservation standards for electric
motor equipment classes not addressed
in this direct final rule. Table III–1
summarizes the equipment class groups
(‘‘ECG’’) DOE established pursuant to
the November 2022 Joint
Recommendation and analyzed in this
direct final rule. Further discussion on
equipment classes is provided in section
IV.A.3 of this document.
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TABLE III–1—EQUIPMENT CLASS GROUPS CONSIDERED
ECG
ECG motor design type
Motor
topology
1 ........................................
MEM 1–500 hp, NEMA Design A & B .........................
Polyphase
21 DOE added the ‘‘E’’ and ‘‘Y’’ designations for
IEC Design motors into § 431.25(g) in the October
2022 Final Rule. 87 FR 63596, 636597, 6306.
22 However, manufacturers making voluntary
representations respecting the energy consumption
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or cost of energy consumed by such motors are
required to use the DOE test procedure for making
such representations beginning 180 days following
publication of the October 2022 Final Rule. Id.
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Horsepower
rating
1–500
Pole
configuration
2, 4, 6, 8
Enclosure
Open.
Enclosed.
23 At the time, most of these motors had been
proposed for inclusion in the scope of the test
procedure in the December 2021 Test Procedure
NOPR. 86 FR 71710.
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TABLE III–1—EQUIPMENT CLASS GROUPS CONSIDERED—Continued
ECG
ECG motor design type
Motor
topology
2 ........................................
MEM 501–750 hp, NEMA Design A & B .....................
Polyphase
501–750
2, 4
3 ........................................
AO–MEM (Standard Frame Size) ................................
Polyphase
1–250
2, 4, 6, 8
4 ........................................
AO–Polyphase (Specialized Frame Size) ....................
Polyphase
1–20
2, 4, 6, 8
As described in section II.B.3 of this
document, this direct final rule
establishes new equipment classes for
AO–MEMs, AO–polyphase motors, and
MEMs between 500 and 750 hp, and
amends the standards for the 100–250
hp MEMs equipment classes.
C. Test Procedure
EPCA sets forth generally applicable
criteria and procedures for DOE’s
adoption and amendment of test
procedures. (42 U.S.C. 6314(a))
Manufacturers of covered products must
use these test procedures to certify to
DOE that their product complies with
energy conservation standards and to
quantify the efficiency of their product.
On October 19, 2022, DOE published
the electric motor test procedure final
rule. 87 FR 63588 (‘‘October 2022 Final
Rule’’). As described previously, the
October 2022 Final Rule expanded the
types of motors included within the
scope of the test procedure, including
the new classes of electric motors for
which DOE is establishing energy
conservation standards in this final rule.
DOE’s test procedures for electric
motors are currently prescribed at
appendix B to subpart B of 10 CFR part
431 (‘‘appendix B’’).
DOE’s energy conservation standards
for electric motors are currently
prescribed at 10 CFR 431.25. DOE’s
current energy conservation standards
for electric motors are expressed in
terms of nominal full-load efficiency.
ddrumheller on DSK120RN23PROD with RULES3
D. Technological Feasibility
1. General
In each energy conservation standards
rulemaking, DOE conducts a screening
analysis based on information gathered
on all current technology options and
prototype designs that could improve
the efficiency of the products or
equipment that are the subject of the
rulemaking. As the first step in such an
analysis, DOE develops a list of
technology options for consideration in
consultation with manufacturers, design
engineers, and other interested parties.
DOE then determines which of those
means for improving efficiency are
technologically feasible. DOE considers
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technologies incorporated in
commercially-available products or in
working prototypes to be
technologically feasible. 10 CFR 431.4;
10 CFR part 430, subpart C, appendix A,
sections 6(c)(3)(i) and 7(b)(1)
(‘‘Appendix A’’).
After DOE has determined that
particular technology options are
technologically feasible, it further
evaluates each technology option in
light of the following additional
screening criteria: (1) practicability to
manufacture, install, and service; (2)
adverse impacts on product utility or
availability; (3) adverse impacts on
health or safety, and (4) unique-pathway
proprietary technologies. Section
7(b)(2)–(5) of appendix A. Section IV.B
of this document discusses the results of
the screening analysis for electric
motors, particularly the designs DOE
considered, those it screened out, and
those that are the basis for the standards
considered in this rulemaking. For
further details on the screening analysis
for this rulemaking, see chapter 4 of the
direct final rule technical support
document (‘‘TSD’’).
2. Maximum Technologically Feasible
Levels
When DOE adopts an amended
standard for a type or class of covered
product, it must determine the
maximum improvement in energy
efficiency or maximum reduction in
energy use that is technologically
feasible for such product. (42 U.S.C.
6316(a); 42 U.S.C. 6295(p)(1))
Accordingly, in the engineering
analysis, DOE determined the maximum
technologically feasible (‘‘max-tech’’)
improvements in energy efficiency for
electric motors, using the design
parameters for the most efficient
products available on the market or in
working prototypes. The max-tech
levels that DOE determined for this
rulemaking are described in section III.C
of this direct final rule and in chapter
5 of the direct final rule TSD.
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Horsepower
rating
Pole
configuration
Enclosure
Open.
Enclosed.
Open.
Enclosed.
Open.
Enclosed.
E. Energy Savings
1. Determination of Savings
For each trial standard level (‘‘TSL’’),
DOE projected energy savings from
application of the TSL to electric motors
purchased in the 30-year period that
begins in the first year of compliance
with the amended standards (2027–
2056).24 The savings are measured over
the entire lifetime of electric motors
purchased in the 30-year analysis
period. DOE quantified the energy
savings attributable to each TSL as the
difference in energy consumption
between each standards case and the nonew-standards case. The no-newstandards case represents a projection of
energy consumption that reflects how
the market for an equipment would
likely evolve in the absence of new and
amended energy conservation
standards.
DOE used its national impact analysis
(‘‘NIA’’) spreadsheet model to estimate
national energy savings (‘‘NES’’) from
potential amended or new standards for
electric motors. The NIA spreadsheet
model (described in section IV.H of this
document) calculates energy savings in
terms of site energy, which is the energy
directly consumed by products at the
locations where they are used. For
electricity, DOE reports national energy
savings in terms of primary energy
savings, which is the savings in the
energy that is used to generate and
transmit the site electricity. DOE also
calculates NES in terms of FFC energy
savings. The FFC metric includes the
energy consumed in extracting,
processing, and transporting primary
fuels (i.e., coal, natural gas, petroleum
fuels), and thus presents a more
complete picture of the impacts of
energy conservation standards.25 DOE’s
24 Each TSL is composed of specific efficiency
levels for each product class. The TSLs considered
for this direct final rule are described in section V.A
of this document. DOE also presents a sensitivity
analysis that considers impacts for products
shipped in a 9-year period.
25 The FFC metric is discussed in DOE’s
statement of policy and notice of policy
amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
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approach is based on the calculation of
an FFC multiplier for each of the energy
types used by covered products or
equipment. For more information on
FFC energy savings, see section IV.H.2
of this document.
2. Significance of Savings
To adopt any new or amended
standards for a covered product, DOE
must determine that such action would
result in significant energy savings. (42
U.S.C. 6295(o)(3)(B))
The significance of energy savings
offered by a new or amended energy
conservation standard cannot be
determined without knowledge of the
specific circumstances surrounding a
given rulemaking. For example, some
covered products and equipment have
most of their energy consumption occur
during periods of peak energy demand.
The impacts of these products on the
energy infrastructure can be more
pronounced than products with
relatively constant demand.
Accordingly, DOE evaluates the
significance of energy savings on a caseby-case basis, taking into account the
significance of cumulative FFC national
energy savings, the cumulative FFC
emissions reductions, health benefits,
and the need to confront the global
climate crisis, among other factors.
As stated, the standard levels adopted
in this direct final rule are projected to
result in national energy savings of 3.0
quads, the equivalent of the electricity
use of 31 million homes in one year.
Based on the amount of FFC savings, the
corresponding reduction in emissions,
and need to confront the global climate
crisis, DOE has determined the energy
savings from the standard levels
adopted in this direct final rule are
‘‘significant’’ within the meaning of 42
U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B).
F. Economic Justification
1. Specific Criteria
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As noted previously, EPCA provides
seven factors to be evaluated in
determining whether a potential energy
conservation standard is economically
justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(I)–(VII)) The following
sections discuss how DOE has
addressed each of those seven factors in
this rulemaking.
a. Economic Impact on Manufacturers
and Consumers
In determining the impacts of a
potential amended standard on
manufacturers, DOE conducts an MIA,
as discussed in section IV.J of this
document. DOE first uses an annual
cash-flow approach to determine the
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quantitative impacts. This step includes
both a short-term assessment—based on
the cost and capital requirements during
the period between when a regulation is
issued and when entities must comply
with the regulation—and a long-term
assessment over a 30-year period. The
industry-wide impacts analyzed include
(1) INPV, which values the industry on
the basis of expected future cash flows;
(2) cash flows by year; (3) changes in
revenue and income; and (4) other
measures of impact, as appropriate.
Second, DOE analyzes and reports the
impacts on different types of
manufacturers, including impacts on
small manufacturers. Third, DOE
considers the impact of standards on
domestic manufacturer employment and
manufacturing capacity, as well as the
potential for standards to result in plant
closures and loss of capital investment.
Finally, DOE takes into account
cumulative impacts of various DOE
regulations and other regulatory
requirements on manufacturers.
For individual consumers, measures
of economic impact include the changes
in LCC and PBP associated with new or
amended standards. These measures are
discussed further in the following
section. For consumers in the aggregate,
DOE also calculates the national net
present value of the consumer costs and
benefits expected to result from
particular standards. DOE also evaluates
the impacts of potential standards on
identifiable subgroups of consumers
that may be affected disproportionately
by a standard.
values, with probabilities attached to
each value.
The PBP is the estimated amount of
time (in years) it takes consumers to
recover the increased purchase cost
(including installation) of a moreefficient product through lower
operating costs. DOE calculates the PBP
by dividing the change in purchase cost
due to a more-stringent standard by the
change in annual operating cost for the
year that standards are assumed to take
effect.
For its LCC and PBP analysis, DOE
assumes that consumers will purchase
the covered products in the first year of
compliance with new or amended
standards. The LCC savings for the
considered efficiency levels are
calculated relative to the case that
reflects projected market trends in the
absence of new or amended standards.
DOE’s LCC and PBP analysis is
discussed in further detail in section
IV.F of this document.
b. Savings in Operating Costs Compared
to Increase in Price (LCC and PBP)
EPCA requires DOE to consider the
savings in operating costs throughout
the estimated average life of the covered
product in the type (or class) compared
to any increase in the price of, or in the
initial charges for, or maintenance
expenses of, the covered product that
are likely to result from a standard. (42
U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this
comparison in its LCC and PBP analysis.
The LCC is the sum of the purchase
price of an equipment(including its
installation) and the operating costs
(including energy, maintenance, and
repair expenditures) discounted over
the lifetime of the product. The LCC
analysis requires a variety of inputs,
such as product prices, product energy
consumption, energy prices,
maintenance and repair costs, product
lifetime, and discount rates appropriate
for consumers. To account for
uncertainty and variability in specific
inputs, such as product lifetime and
discount rate, DOE uses a distribution of
d. Lessening of Utility or Performance of
Products
In establishing product classes and in
evaluating design options and the
impact of potential standard levels, DOE
evaluates potential standards that would
not lessen the utility or performance of
the considered products. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(IV))
Based on data available to DOE, the
standards adopted in this document
would not reduce the utility or
performance of the products under
consideration in this rulemaking.
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c. Energy Savings
Although significant conservation of
energy is a separate statutory
requirement for adopting an energy
conservation standard, EPCA requires
DOE, in determining the economic
justification of a standard, to consider
the total projected energy savings that
are expected to result directly from the
standard. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(III)) As discussed in
section IV.H of this document, DOE uses
the NIA spreadsheet model to project
national energy savings.
e. Impact of Any Lessening of
Competition
EPCA directs DOE to consider the
impact of any lessening of competition,
as determined in writing by the
Attorney General, that is likely to result
from a standard. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)(V)) It also directs
the Attorney General to determine the
impact, if any, of any lessening of
competition likely to result from a
standard and to transmit such
determination to the Secretary within 60
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days of the publication of a rule,
together with an analysis of the nature
and extent of the impact. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(B)(ii)) To
assist the Department of Justice (‘‘DOJ’’)
in making such a determination, DOE
transmitted copies of its proposed rule
and the NOPR TSD to the Attorney
General for review, with a request that
the DOJ provide its determination on
this issue. In its assessment letter
responding to DOE, DOJ concluded that
the energy conservation standards for
electric motors are unlikely to have a
significant adverse impact on
competition. DOE is publishing the
Attorney General’s assessment at the
end of this direct final rule.
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f. Need for National Energy
Conservation
DOE also considers the need for
national energy and water conservation
in determining whether a new or
amended standard is economically
justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(VI)) The energy savings
from the adopted standards are likely to
provide improvements to the security
and reliability of the Nation’s energy
system. Reductions in the demand for
electricity also may result in reduced
costs for maintaining the reliability of
the Nation’s electricity system. DOE
conducts a utility impact analysis to
estimate how standards may affect the
Nation’s needed power generation
capacity, as discussed in section IV.M of
this document.
DOE maintains that environmental
and public health benefits associated
with the more efficient use of energy are
important to take into account when
considering the need for national energy
conservation. The adopted standards are
likely to result in environmental
benefits in the form of reduced
emissions of air pollutants and
greenhouse gases (‘‘GHGs’’) associated
with energy production and use. DOE
conducts an emissions analysis to
estimate how potential standards may
affect these emissions, as discussed in
section IV.K the estimated emissions
impacts are reported in section V.B.6 of
this document. DOE also estimates the
economic value of emissions reductions
resulting from the considered TSLs, as
discussed in section IV.L of this
document.
g. Other Factors
In determining whether an energy
conservation standard is economically
justified, DOE may consider any other
factors that the Secretary deems to be
relevant. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(VII)) To the extent DOE
identifies any relevant information
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regarding economic justification that
does not fit into the other categories
described previously, DOE could
consider such information under ‘‘other
factors.’’
2. Rebuttable Presumption
EPCA creates a rebuttable
presumption that an energy
conservation standard is economically
justified if the additional cost to the
equipment that meets the standard is
less than three times the value of the
first year’s energy savings resulting from
the standard, as calculated under the
applicable DOE test procedure. (42
U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(iii)) DOE’s LCC and PBP
analyses generate values used to
calculate the effects that energy
conservation standards would have on
the payback period for consumers.
These analyses include, but are not
limited to, the 3-year payback period
contemplated under the rebuttablepresumption test. In addition, DOE
routinely conducts an economic
analysis that considers the full range of
impacts to consumers, manufacturers,
the Nation, and the environment, as
required under 42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i). The results of
this analysis serve as the basis for DOE’s
evaluation of the economic justification
for a potential standard level (thereby
supporting or rebutting the results of
any preliminary determination of
economic justification). The rebuttable
presumption payback calculation is
discussed in section IV.F of this direct
final rule.
IV. Methodology and Discussion of
Related Comments
This section addresses the analyses
DOE has performed for this rulemaking
with regards to electric motors. Separate
subsections address each component of
DOE’s analyses. In this direct final rule,
DOE is only addressing comments and
analysis specific to the scope of motors
provided in the November 2022 Joint
Recommendation. As such, any analysis
and comments related to SNEMs and
AO–SNEMs will be addressed in a
separate NOPR.
DOE used several analytical tools to
estimate the impact of the standards
considered in this document. The first
tool is a spreadsheet that calculates the
LCC savings and PBP of potential
amended or new energy conservation
standards. The national impacts
analysis uses a second spreadsheet set
that provides shipments projections and
calculates national energy savings and
net present value of total consumer
costs and savings expected to result
from potential energy conservation
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36083
standards. DOE uses the third
spreadsheet tool, the Government
Regulatory Impact Model (GRIM), to
assess manufacturer impacts of potential
standards. These three spreadsheet tools
are available on the DOE website for this
rulemaking: www.regulations.gov/
docket/EERE-2020-BT-STD-0007.
Additionally, DOE used output from the
latest version of the Energy Information
Administration’s (‘‘EIA’s’’) Annual
Energy Outlook (‘‘AEO’’) for the
emissions and utility impact analyses.
A. Market and Technology Assessment
DOE develops information in the
market and technology assessment that
provides an overall picture of the
market for the products concerned,
including the purpose of the products,
the industry structure, manufacturers,
market characteristics, and technologies
used in the products. This activity
includes both quantitative and
qualitative assessments, based primarily
on publicly-available information. The
subjects addressed in the market and
technology assessment for this
rulemaking include (1) a determination
of the scope of the rulemaking and
product classes, (2) manufacturers and
industry structure, (3) existing
efficiency programs, (4) shipments
information, (5) market and industry
trends; and (6) technologies or design
options that could improve the energy
efficiency of electric motors. The key
findings of DOE’s market assessment are
summarized in the following sections.
See chapter 3 of the direct final rule
TSD for further discussion of the market
and technology assessment.
1. Scope of Coverage
This document covers equipment
meeting the definition of electric motors
as defined in 10 CFR 431.12.
Specifically, the definition for ‘‘electric
motor’’ is ‘‘a machine that converts
electrical power into rotational
mechanical power.’’ Id.
In the March 2022 Preliminary
Analysis, DOE presented analysis for
the current scope of electric motors
regulated at 10 CFR 431.25, as well as
expanded scope proposed in the
December 2021 test procedure NOPR,
which included air-over electric motors
and SNEMs. See Chapter 2 of the March
2022 Prelim TSD. Since, DOE has
published the October 2022 Final Rule,
which expanded the scope of the test
procedures to include such motors, as
discussed in detail in section III.B of
this direct final rule.
In response to the scope presented in
the March 2022 Preliminary Analysis,
DOE received a number of comments,
which are discussed in the subsections
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below. In this direct final rule, DOE is
only addressing comments and analysis
specific to the scope of motors provided
in the November 2022 Joint
Recommendation, which includes
MEMs and polyphase air-over electric
motors.
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a. Motor Used as a Component of a
Covered Product or Equipment
Generally, Lennox noted that DOE
should apply a finished-product
approach to energy efficiency
regulations. Specifically, Lennox
commented that system performance
standards of HVAC–R products include
the energy used by the electric motors,
and that increasing the stringency of
component-level regulation does not
have any efficiency benefit when the
ultimate efficiency is measured at the
systems level and manufacturers adjust
other equipment parameters based on
the overall system level of performance,
offsetting increased motor costs by
reducing other component costs and
efficiencies to mitigate adverse financial
impacts on consumers.26 Lennox stated
that mandating additional testing and
certification of motors used in alreadyregulated HVAC–R products would not
save energy and create needless testing,
paperwork, and record-keeping
requirements that raise consumer costs.
(Lennox, No. 29 at p. 2–3) Lennox
elaborated that the HVAC–R standards
in place will drive more efficient design
of relevant components, including
motors, without unnecessary further
regulation of components, and that the
March 2022 Preliminary Analysis has
not adequately accounted for these
cumulative manufacturer burdens.27
(Lennox, No. 29 at p. 6)
AHAM and AHRI strongly opposed
DOE’s plan to expand the existing scope
of coverage of electric motors to include
motors destined for particular
applications in finished goods, and
26 Lennox made these comments in the context of
air-over and inverter-only motors included within
HVACR products, requesting that DOE maintain the
exemptions to the energy conservation standards for
these motors contained in 10 CFR 431.25(l).
(Lennox, No. 29 at p. 2) DOE addresses Lennox’s
comments regarding the exemption for these
specific motors in sections IV.1.b and d of this
document.
27 Lennox also commented that DOE should
continue exempting SEMs used as a component in
covered equipment (specifically, HVACR
equipment) from the energy conservation standards
for electric motors, and that including SNEMs in
the energy conversation standards for electric
motors would circumvent Congressional intent to
exempt from regulation small electric motors that
are components of EPCA covered products and
covered equipment. (Lennox, No. 29 at p. 3). As
noted previously, DOE is not including SNEMs
within the scope of this direct final rule. SNEMs
may be addressed in a future rulemaking, and DOE
will consider such comments in that rulemaking.
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instead recommended that DOE should
apply a finished-product approach to
energy efficiency regulations. (AHAM,
AHRI, No. 25 at p. 7–9) NEMA
commented that further elevations to
component efficiencies or changes to
scope for electric motors energy
conservation standards will lead to
diminishing returns, and are therefore
less practical, because previous electric
motors rulemakings adequately
addressed concerns for ‘‘application and
performance of existing equipment’’ to
the maximum extent practical. NEMA
stated that DOE should allow
application-dependent solutions like
power drive systems to take over from
minimum energy conservation
standards as the most-appropriate and
best-fit market transformation vehicles,
but they must be selected and installed
with due regard for their applicationspecific nature, which calls for ‘‘other
than regulatory action’’ on the part of
DOE. (NEMA, No. 22 at p. 26)
Daikin commented that they do not
support the regulation of electric motors
that are components of a covered
equipment such as HVAC equipment.
Daikin added that regulating embedded
components creates both apparent and
likely unforeseen issues. For HVAC
manufacturers, Daikin commented that
regulating components reduces design
flexibility and may not result in optimal
design for overall system performance.
Daikin stated that standards for HVAC
equipment are regularly evaluated by
DOE to ensure regulations are aligned
with the most cost-effective product for
consumers, and HVAC manufacturers
generally respond by producing a class
of equipment at these federal minimum
efficiency levels. As such, Daikin stated
that regulating an embedded component
will not improve the overall product’s
energy efficiency. (Daikin, No. 32 at p.
1)
On the other hand, the Joint
Advocates commented in support of
regulating electric motors that are
components of covered equipment. The
Joint Advocates stated that there is
value in regulating the motors
separately. The Joint Advocates agreed
with DOE that different motor efficiency
levels may be cost-effective for different
covered products, and the presence of
electric motors in covered equipment
does not preclude the possibility of costeffective energy standards for electric
motors individually. Furthermore, the
Joint Advocates commented that absent
standards for motors that are used in
covered equipment, consumers may get
stuck with inefficient replacement
motors. Finally, the Joint Advocates
commented that motors used in covered
equipment are often purchased by the
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original equipment manufacturer
(‘‘OEM’’) from a motor manufacturer,
and thus, exempting motors used in
covered equipment would likely create
enforcement challenges since it would
be difficult to determine a given motor’s
end use application. (Joint Advocates,
No. 27 at p. 5)
DOE understands that the majority of
the concerns summarized in this section
and provided separately by commenters
stems from DOE potentially regulating
SNEMs and AO–SNEMs. This direct
final rule does not address SNEMs or
AO–SNEMs as part of the scope. DOE
may consider in a future rulemaking
energy conservation standards for
electric motor equipment classes not
addressed in this direct final rule,
including SNEMs and AO–SNEMs. If so,
DOE will address these comments and
concerns as part of any future
rulemaking. As such, in this final rule,
DOE is generally addressing comments
regarding electric motors scope and
what DOE has the authority to regulate.
As discussed in the October 2022
Final Rule, EPCA, as amended through
EISA 2007, provides DOE with the
authority to regulate the expanded
scope of motors addressed in this rule.
87 FR 63588, 63596. Before the
enactment of EISA 2007, EPCA defined
the term ‘‘electric motor’’ as any motor
that is a general purpose T-frame,
single-speed, foot-mounting, polyphase
squirrel-cage induction motor of the
NEMA, Design A and B, continuous
rated, operating on 230/460 volts and
constant 60 Hertz line power as defined
in NEMA Standards Publication MG1–
1987. (See 42 U.S.C. 6311(13)(A) (2006))
Section 313(a)(2) of EISA 2007 removed
that definition and the prior limits that
narrowly defined what types of motors
would be considered as electric motors.
In its place, EISA 2007 inserted a new
‘‘Electric motors’’ heading, and created
two new subtypes of electric motors:
General purpose electric motor (subtype
I) and general purpose electric motor
(subtype II). (42 U.S.C. 6311(13)(A)–(B)
(2011)) In addition, section 313(b)(2) of
EISA 2007 established energy
conservation standards for four types of
electric motors: general purpose electric
motors (subtype I) (i.e., subtype I
motors) with a power rating of 1 to 200
horsepower; fire pump motors; general
purpose electric motor (subtype II) (i.e.,
subtype II motors) with a power rating
of 1 to 200 horsepower; and NEMA
Design B, general purpose electric
motors with a power rating of more than
200 horsepower, but less than or equal
to 500 horsepower. (42 U.S.C.
6313(b)(2)) The term ‘‘electric motor’’
was left undefined. However, in a May
4, 2012 final rule amending the electric
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motors test procedure (the May 2012
Final Rule), DOE adopted the broader
definition of ‘‘electric motor’’ currently
found in 10 CFR 431.12 because DOE
noted that the absence of a definition
may cause confusion about which
electric motors are required to comply
with mandatory test procedures and
energy conservation standards, and to
provide DOE with the flexibility to set
energy conservation standards for other
types of electric motors without having
to continuously update the definition of
‘‘electric motors’’ each time DOE sets
energy conservation standards for a new
subset of electric motors. 77 FR 26608,
26613.
The provisions of EPCA make clear
that DOE may regulate electric motors
‘‘alone or as a component of another
piece of equipment.’’ See 42 U.S.C.
6313(b)(1) & (2) (providing that
standards for electric motors be applied
to electric motors manufactured ‘‘alone
or as a component of another piece of
equipment’’) In contrast, Congress
exempted small electric motors
(SEMs) 28 that are a component of a
covered product or a covered equipment
from the standards that DOE was
required to establish under 42 U.S.C.
6317(b). Congress did not, however,
similarly restrict electric motors. Unlike
SEMs, the statute does not limit DOE’s
authority to regulate an electric motor
with respect to whether ‘‘electric
motors’’ are stand-alone equipment
items or components of a covered
product or covered equipment. Rather,
Congress specifically provided that DOE
could regulate electric motors that are
components of other covered equipment
in the standards established by DOE.
Additionally, EPCA requires that any
new or amended standard for a covered
product must be designed to achieve the
maximum improvement in energy
efficiency that the Secretary of Energy
determines is technologically feasible
and economically justified. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(A) and 42
U.S.C. 6295(o)(3)(B)) In this direct final
rule, DOE performs the necessary
analyses to determine whether amended
or new standards would meet the
aforementioned criteria. Further, DOE
has determined that the amended
standards provide cost-effective
standards that would result in the
28 Congress defined what equipment comprises a
small electric motor (‘‘SEM’’)—specifically, ‘‘a
NEMA general purpose alternating current singlespeed induction motor, built in a two-digit frame
number series in accordance with NEMA Standards
Publication MG1–1987.’’ (42 U.S.C. 6311(13)(G))
(DOE clarified, at industry’s urging, that the
definition also includes motors that are IEC metric
equivalents to the specified NEMA motors
prescribed by the statute. See 74 FR 32059, 32061–
32062; 10 CFR 431.442.
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significant conservation of energy.
Further discussion on double-counting
as it relates to energy savings is
provided in section IV.F of this
document. Further discussion on the
analytical results and DOE’s
justification is provided in section V.C
of this document.
b. Air-Over Electric Motors
NEEA supported the inclusion of airover electric motors in the scope of the
standards, noting that including them
will allow comparison of performance
and informed purchase decisions.
(NEEA, No. 33 at p. 2) The CA IOUs
supported the inclusion of Totally
Enclosed Air Over (‘‘TEAO’’) motors in
the analysis. In addition, the CA IOUs
commented that they support
establishing standards for air-over
motors that otherwise meet the
description of regulated motors (i.e.,
‘‘AO–MEM’’) consistent with the levels
for totally enclosed fan cooled (‘‘TEFC’’)
electric motors. (CA IOUs, No. 30 at p.
1–2)
Lennox commented that DOE must
continue the current electric motor
exemptions specified in 10 CFR
431.25(l) for air-over, particularly when
those motors are used in alreadyregulated HVACR products. (Lennox,
No. 29 at p. 3) AHRI commented that
air-over motors are explicitly exempted
from regulation in 10 CFR 431.25(l), and
that DOE has not overcome the
challenges to include these exempted
products, procedurally or technically.
(AHRI, No. 26 at p. 1, 2)
DOE is covering air-over electric
motors under its ‘‘electric motors’’
authority. (42 U.S.C. 6311(1)(A)) As
previously discussed, the statute does
not limit DOE’s authority to regulate an
electric motor with respect to whether
they are stand-alone equipment items or
as components of a covered product or
covered equipment. See 42 U.S.C.
6313(b)(1) (providing that standards for
electric motors be applied to electric
motors manufactured ‘‘alone or as a
component of another piece of
equipment’’).
DOE’s previous determination in the
December 2013 Final Rule to exclude
air-over electric motors from scope was
due to insufficient information available
to DOE at the time to support
establishment of a test method. See 78
FR 75962, 75974–75975. Since that
time, NEMA published a test standard
for air-over motors in Section IV,
‘‘Performance Standards Applying to
All Machines,’’ Part 34 ‘‘Air-Over Motor
Efficiency Test Method’’ of NEMA MG
1–2016 (‘‘NEMA Air-over Motor
Efficiency Test Method’’). The air-over
method was originally published as part
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36085
of the 2017 NEMA MG–1 Supplements
and is also included in the latest version
of NEMA MG 1–2016. In the October
2022 Final Rule, DOE used the
aforementioned argument to include airover electric motors into the test
procedure scope and establish test
procedures. See 87 FR 63588, 63597. In
this direct final rule, DOE has analyzed
the scope of electric motors based on the
finalized test procedures from the
October 2022 Final Rule, and amended
energy conservation standards based on
the November 2022 Joint
Recommendation.
c. AC Induction Electric Motors Greater
Than 500 Horsepower
NEEA commented in support of
expanding the scope to include AC
induction electric motors greater than
500 horsepower to identify their energy
use, potential for energy savings, price,
and prevalence in the market today.
NEEA added that these motors consume
a significant amount of energy, and that
motor efficiency generally improves as a
function of motor size, so it may be
possible to establish higher efficiency
standards for greater than 500 HP
motors. (NEEA, No. 33 at p. 3)
NEMA stated that energy conservation
standards for >500 HP motors would
likely not be justified because of how
tiny their market share is. It also stated
that there are unique performance
requirements applied to these motors
that require custom designs that limit
efficiency. NEMA stated that, at
minimum, if a motor has one of the
following special requirements, it
should not be subject to standards; those
special requirements are: <550 percent
locked-rotor current, minimum locked
rotor steady state supply voltage of <80
percent, ability to accelerate a moment
of inertia greater than the moment of
inertia defined by NEMA, ability to
operate outside the range of ¥20 °C to
+60 °C, ability to operate above 4,000 m
above sea level, a load-torque envelope
with a minimum torque of 25 percent of
rated torque with a square shaped
T¥n∧2 up to a max load, ability to start
consecutively from cold three times or
from hot two times, being a multi-speed
motor, submersible, smoke extraction
motor, explosion-proof motor, or a
motor used in nuclear plants. (NEMA,
No. 22 at p. 9–10)
Since the comments to the March
2022 Preliminary Analysis, the Electric
Motors Working Group, which included
NEEA and NEMA, recommended
standards for medium electric motors
rated over 500 hp and up to 750 hp at
60 Hz (Recommendation #2). The scope
of medium electric motors includes
those electric motors that currently meet
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10 CFR 431.25(g), but expanded to
include motor horsepower >500 hp but
less than 750 hp. Accordingly, in this
direct final rule, DOE is including the
aforementioned scope of electric motors
for consideration of new standards,
based on the November 2022 Joint
Recommendation. Specifically, in the
November 2022 Joint Recommendation,
the Electric Motors Working Group
agreed on establishing efficiency levels
corresponding to 60 Hz NEMA Premium
levels for motors rated over 500 hp and
up to 750 hp. The Electric Motors
Working Group noted that extending the
horsepower range of electric motors
subject to energy conservation standards
would be beneficial in aligning with EU
Ecodesign Directive 2019/1781,29 which
covers motors up to 1000 kW (1341 hp)
at NEMA Premium levels, and for which
manufacturers are making investments
to comply.
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d. AC Induction Inverter-Only and
Synchronous Electric Motors
NEEA commented in support of
expanding the scope of standards to
synchronous and inverter-only motors
to identify their energy use, potential for
energy savings, price, and prevalence in
the market today. NEEA recommended
to include these motors in the same
equipment classes are induction motors.
In addition, NEEA recommended not to
establish stricter efficiency requirements
for these motors based on full-load
efficiency because these motors allow
energy savings at part load conditions.
(NEEA, No. 33 at p. 3) NEMA stated that
synchronous motors should have their
own equipment class until analysis
concludes they are not needed. NEMA
suggested DOE make an ‘‘other than
regulatory action’’ to save energy at the
application and reference NEMA
Standard 10011–22 with regards to the
power index. (NEMA, No. 22 at p. 8)
CA IOUs supported including
inverter-only and synchronous electric
motors, but in the same equipment class
as currently regulated induction motors.
The CA IOUs recommended convening
an Appliance Standards and
Rulemaking Federal Advisory
Committee (‘‘ASRAC’’) Working Group
to finalize a test procedure and part-load
metric for these motors before finalizing
a test procedure and energy
conservation standards rulemaking. (CA
IOUs, No. 30 at p. 2) The Joint
Advocates also commented supporting
analyzing synchronous motors jointly
with currently covered motors and
29 In terms of standardized horsepowers, this
would correspond to 100–250 hp when applying
the guidance from 10 CFR 431.25(k) (and new
section 10 CFR 431.25(q)).
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recommended that DOE also analyze
synchronous motors jointly with
relevant SNEM and AO motors. The
Joint Advocates commented that
synchronous motors represent the most
efficient motors on the market and
highlighted the potential energy savings
opportunities facilitated by market
shifts to synchronous motors. In
addition, the Joint Advocates
commented that the potential life-cycle
cost savings associated with
synchronous motor substitutions should
be directly accounted for when
evaluating potential amended standards
for electric motors. (Joint Advocates, No.
27 at p. 2) Similarly, the CA IOUs also
provided the following supporting data
to show that synchronous and inverteronly electric motor are designed,
marketed, capable, and are being used to
replace induction motors: (1)
manufacturer reference tables that
promote the direct replacement of
currently regulated induction motors
with synchronous and inverter-only
motors (2) data showing synchronous
motor performance exceeding a best-inclass copper cage induction motor
paired with a commercially available
VFD (which the CA IOUs stated
corroborates the PTSD savings estimates
for synchronous electric motors), and (3)
a summary of case studies docketed in
response to the December 2021 test
procedure NOPR. The CA IOUs
commented that this supporting data
demonstrates the use of synchronous
and inverter-only motors in applications
where National Electrical Manufacturers
Association (NEMA) Design B motors
are typically used. (CA IOUs, No. 30 at
p. 2–3)
AHAM and AHRI commented that if
DOE includes inverter-only and
synchronous motors in the scope of the
ECS, it should first publish a
preliminary analysis or NODA for these
motors before proceeding to a NOPR.
(AHAM, AHRI, No. 25 at p. 2) Lennox
commented that DOE imposing
increased costs on inverter-only motors
by additional regulation may inhibit
HVACR manufacturer use of these
motors in innovative applications.
Further, Lennox commented that DOE
ceasing its exemptions for inverter-only
motors, and thereby unduly-burdening
manufacturers and forcing higher
HVACR product costs on consumers
with component-level regulation, is
particularly inappropriate during an
ongoing pandemic where inflation has
been at a 40-year high. (Lennox, No. 29
at p. 2–3) NEMA stated that by
regulating synchronous motors, DOE is
regulating both the required adjustable
speed drive and the motor itself. It
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Sfmt 4700
stated that this is unnecessary and
poorly conceived, and that synchronous
motors do not generally conform to the
torque-speed curves required by NEMA
and IEC Designs. (NEMA, No. 22 at p.
7) In addition, NEMA stated that
inverter-only induction motors have
characteristics warranting their own
equipment class. It stated these motors
are used exclusively for constant torque
or constant HP applications and that
certain applications have performance
requirements like acceleration,
deceleration, and overload capability for
optimal control of a process. NEMA also
stated that the performance
requirements go beyond a single steadystate load condition that the test
procedure uses, and that targeting a
specific operating point’s efficiency
could restrict the other torque and
thermal requirements of these motors. It
also states that since the metric includes
the losses of the inverter, these motors
will have a lower maximum potential
efficiency than typical induction
motors. NEMA pointed to IEC 60034–
30–2 as an example for efficiency values
that pertain specifically to variablespeed motors. (NEMA, No. 22 at p. 8–
9)
In this direct final rule, DOE is not
separately regulating or establishing
standards for inverter-only and
synchronous electric motors. As a
sensitivity analysis, DOE notes that it
analyzed the impacts of potentially
switching to these electric motors as a
result of higher standards that will be
finalized for MEMs 100–250 hp, NEMA
Design A & B in this DFR; further
discussion is provided in section IV.F of
this document.
e. Submersible Electric Motors
NEEA and HI recommended
excluding submersible motors from the
scope of the standards due to the lack
of repeatable and representative test
procedures. (NEEA, No. 33 at p. 4; HI,
No. 31 at p. 1) CA IOUs commented that
they do not support including
submersible electric motors, and that
DOE should collaborate with industry
stakeholders in developing a test
procedure for this motor category. (CA
IOUs, No. 30 at p. 2) Finally, NEMA
stated that submersible electric motors
should be removed from the
rulemaking. (NEMA, No. 22 at p. 9) In
the October 2022 Final Rule, DOE did
not finalize a test method for
submersible electric motors. See 87 FR
63588, 63605. Moreover, the November
2022 Joint Recommendation did not
recommend energy conservation
standards for submersible electric
motors. Accordingly, submersible
electric motors continue to be excluded
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from the test procedure and are not
included in this standards direct final
rule.
2. Test Procedure and Metric
DOE received comments regarding the
test procedure and efficiency metric for
electric motors subject to these energy
conservation standards.
NEMA requested an SNOPR for the
test procedure and requested that the
energy conservation standards
rulemaking not move forward until the
test procedure is finished. (NEMA, No.
22 at p. 2). DOE published the electric
motor test procedure final rule on
October 19, 2022. 87 FR 63588.
NEEA commented that, until DOE
revises their test procedure and
efficiency metric to account for partload operating conditions, they do not
recommend that DOE establish stricter
efficiency requirements for synchronous
electric motors and inverter-only
electric motors. (NEEA, No. 33 at p. 4,5)
CA IOUs commented similarly, strongly
encouraging DOE to adopt the use of a
metric that is representative of part-load
performance for inverter-only and
synchronous electric motors. CA IOUs
provided data in support of the use of
a part-load metric for inverter-only and
synchronous electric motor applications
to better reflect how these motors
operate in the field. (CA IOUs, No. 30
at p. 2) The Joint Advocates explained
that inverter-only AC motors may not
have a higher full-load efficiency than a
comparable single-speed motor, but they
may save energy by reducing motor
speed and resulting input power at
partial loads. Therefore, they
commented that because the efficiency
is evaluated only at full load, inverteronly motors would be at a disadvantage
as the input losses associated with the
inverter would be included in the
efficiency calculation, but the potential
energy savings resulting from its speed
control capabilities would not be
captured. (Joint Advocates, No. 27 at p.
3) NEMA commented that DOE should
transition away from a single point
efficiency metric and instead should
develop a Power Index that incorporates
the savings associated with power drive
systems. NEMA commented that by
applying a fixed speed efficiency testing
at full load metric, the DOE misses the
true opportunity for energy savings.
NEMA explained that while at certain
load points the motor losses might be a
fraction (0.5 percent) lower, the
application of a PDS would save 25–50
percent of power in the integral
horsepower market and that these
savings dwarf the 0.8 percent reduction
associated with EL2. (NEMA, No. 22 at
p. 5)
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The currently prescribed test
procedure in appendix B requires
testing electric motors at full-load only.
In the October 2022 Final Rule, DOE
argued that variable-load applications
primarily operate in a range where
efficiency is relatively flat as a function
of load, and therefore measuring the
performance of these motors at full-load
is representative of an average use cycle.
See 87 FR 63588, 63620. Moreover, in
this direct final rule, DOE is not
proposing to separately regulate
inverter-only and synchronous electric
motors, but rather DOE is considering
substitution effects to these motors for
higher efficiency standards for MEMs.
Lennox commented that there would
be insufficient testing facilities to
accommodate significantly expanded
motor product classes, such as DOE
expanding motor regulations into
SNEMs, air-over, synchronous or
inverter-only motors, specifically in
view of the proposal to require thirdparty laboratory testing. (Lennox, No. 29
at p. 5–6) The Joint Industry
Stakeholders commented that DOE
proposed that electric motors certified
to the new test procedure could only be
certified by 3rd party test labs, instead
of certified labs in accordance with
longstanding recognized practice. They
stated that special and definite-purpose
motors potentially classified as SNEM
could not possibly be tested, redesigned,
retested, certified, and made available
for OEM use by the few third-party
small electric motor certification bodies
recognized by DOE today. (Joint
Industry Stakeholders, No. 23 at p. 9) As
discussed in section IV.A.1, in this
direct final rule, DOE is only amending
standards for certain MEMs and
establishing standards for AO–MEMs
and certain air-over polyphase motors.
Further, DOE understands the Joint
Industry Stakeholders comments to be
directed at the proposals from the test
procedure rulemaking. Since this
proposal, DOE published the October
2022 Final Rule, where DOE decided to
not adopt its proposal to require the use
of an independent testing program, and
to instead continue permitting the use of
accredited labs as currently allowed
through National Institute of Standards
and Technology (‘‘NIST’’) and National
Voluntary Laboratory Accreditation
Program (‘‘NVLAP’’) accreditation. See
87 FR 62588, 63628–63629.
3. Equipment Classes
When evaluating and establishing
energy conservation standards, DOE
divides covered equipment into
equipment classes by the type of energy
used or by capacity or other
performance-related features that justify
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36087
differing standards. In making a
determination whether a performancerelated feature justifies a different
standard, DOE must consider such
factors as the utility of the feature to the
consumer and other factors DOE
determines are appropriate. (42 U.S.C.
6316(a); 42 U.S.C. 6295(q))
Due to the number of electric motor
characteristics (e.g., horsepower rating,
pole configuration, and enclosure), in
the March 2022 Preliminary Analysis,
DOE used two constructs to help
develop appropriate energy
conservation standards for electric
motors: ‘‘equipment class’’ and
‘‘equipment class groups.’’ An
equipment class represents a unique
combination of motor characteristics for
which DOE is establishing a specific
energy conservation standard. This
includes permutations of electric motor
design types (i.e., NEMA Design A & B
(and IEC equivalents)), standard
horsepower ratings (i.e., standard
ratings from 1 to 500 horsepower), pole
configurations (i.e., 2–, 4–, 6–, or 8–
pole), and enclosure types (i.e., open or
enclosed). An equipment class group
(‘‘ECG’’) is a collection of electric
motors that share a common design
trait. Equipment class groups include
motors over a range of horsepower
ratings, enclosure types, and pole
configurations. Essentially, each
equipment class group is a collection of
a large number of equipment classes
with the same design trait. As such, in
the March 2022 Preliminary Analysis,
DOE presented equipment class groups
based on electric motor design, motor
topology, horsepower rating, pole
configuration and enclosure type. See
Chapters 2.3.1 and 3.2.2 of the March
2022 Preliminary Analysis TSD.
Further, although DOE acknowledged
that synchronous electric motors,
inverter-only electric motors and
induction electric motors >500 hp and
≤750 hp would be within scope, DOE
did not create separate equipment
classes for these electric motors and did
not evaluate separate energy
conservation standards. (See Chapter
2.3.1.3 of the March 2022 Preliminary
Analysis TSD) However, DOE did
evaluate synchronous and inverter-only
electric motors jointly with the
induction motors because the motors
did not have a performance-related
feature that would justify a separate
class. Id.
In response to the equipment classes,
DOE received a number of comments,
which are presented below. Comments
regarding SNEM and AO–SNEM
equipment classes will be addressed in
a separate NOPR.
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Regarding air-over motors, NEMA
agreed that an air-over rating warrants a
separate equipment class because these
motors are often built in a smaller frame
size to take advantage of the outside
airflow. NEMA stated that these motors
built in a smaller frame size are limited
in their efficiency capability because
less active material can fit in them.
(NEMA, No. 22 at p. 7)
Since the comments to the March
2022 Preliminary Analysis TSD, the
November 2022 Joint Recommendation
specifically recommended that DOE
establish two separate equipment
classes for AO–MEMs, i.e., standard
frame AO–MEMs and specialized frame
AO–MEMs, because of their different
applications. The November 2022 Joint
Recommendation identified standard
frame AO–MEMs as AO–MEMs sold in
standard NEMA frame sizes aligned
with NEMA MG1, Table 13.2 and Table
13.3. In addition, the November 2022
Joint Recommendation identified
specialized, smaller frame AO–MEMs as
a group of motors for which the rated
output exceeds the horsepower-frame
size limits in the aforementioned NEMA
MG1 tables. The Electric Motors
Working Group noted that these motors
are used in specialty applications where
the design is optimized to meet space
constraints and take advantage of
higher-than-normal airflows, such as in
agriculture applications. They also
stated that because of the higher
airflows, the motor operates at greater
power densities than standard-frame
motors, which therefore results in the
motor being loaded to a slightly less
efficient operating point. Accordingly,
they recommended these motors be
separated into their own equipment
class. See November 2022 Joint
Recommendation at 4–5.
Consistent with the November 2022
Joint Recommendation, in this direct
final rule, DOE is separating the air-over
equipment class into two equipment
classes. As such, DOE is including
‘‘AO–MEM (Standard frame size),’’ and
renaming ‘‘Specialized Frame Size AO–
MEMs’’ (from the November 2022 Joint
Recommendation) to ‘‘AO–Polyphase
(Specialized frame size)’’. DOE notes
that the frame size constraints from
Recommendation 3.b. include frame
sizes beyond those specifically in the
AO–MEM scope; as discussed in section
III.A, 10 CFR 431.25(g)(7) specifically
states that a MEM built in a two-digit
frame size would only be an enclosed 56
NEMA frame size (or IEC metric
equivalent), whereas Recommendation
3.b. specifies maximum NEMA frame
diameters at 48 NEMA frame size.
Accordingly, to provide a more
representative naming convention for
these motors, DOE is using ‘‘AO–
Polyphase (Specialized frame size)’’ in
this direct final rule. DOE notes that
only the naming convention is changed
compared to the November 2022 Joint
Recommendation; the scope of motors
being represented continues to stay the
same.
In addition, to clarify what is meant
by ‘‘standard frame size’’ and
‘‘specialized frame size,’’ DOE is adding
definitions in the CFR consistent with
the recommendations from the
November 2022 Joint Recommendation.
Specifically, in this direct final rule,
DOE is adding a definition for ‘‘standard
frame size’’ as ‘‘aligned with the
specifications in NEMA MG 1–2016
section 13.2 for open motors, and
NEMA MG 1–2016 section 13.3 for
enclosed motors.’’ Further, DOE is
adding a definition for ‘‘specialized
frame size’’ as ‘‘means an electric motor
frame size for which the rated output
power of the motor exceeds the motor
frame size limits specified for standard
frame size. Specialized frame sizes have
maximum diameters corresponding to
the following NEMA Frame Sizes:’’
Maximum NEMA frame diameter
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
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1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
Regarding motors already covered at
10 CFR 431.25(g), NEMA stated that
locked-rotor torque is not a typical
design criterion used by end-users and
that this value is already captured in the
NEMA Design A, B, C etc. classification.
NEMA also stated that locked-rotor
torque is not a reliable means for
determining energy efficiency. (NEMA,
No. 22 at p. 6) DOE agrees with the
statement and is therefore not
incorporating locked-rotor torque as an
equipment class identifier for MEMs
currently covered at 10 CFR 431.25(g).
Regarding synchronous and inverteronly electric motors, NEEA
recommended that DOE not create
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Jkt 259001
48
48
48
140
140
180
180
210
210
4 Pole
Open
................
48
48
48
140
140
180
180
210
Enclosed
48
48
48
140
140
180
180
210
210
6 Pole
Open
48
48
48
140
140
180
180
210
210
separate equipment classes because
these motors are used in the same
applications as their induction motor
counterparts. (NEEA, No. 33 at p. 3) The
Joint Advocates stated that while they
agree that inverter-only induction
electric motors do not have a unique
performance-related feature or utility
that justifies a separate class from noninverter and inverter-capable motors,
they were concerned that inverter-only
motors may be at an unfair disadvantage
relative to single-speed induction
motors when efficiencies are evaluated
only at full load. (Joint Advocates, No.
28 at p. 3) As discussed in section
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8 Pole
Enclosed
Open
Enclosed
Open
48
140
140
180
180
210
210
................
................
48
140
140
180
180
210
210
................
................
140
140
180
180
210
210
................
................
................
140
140
180
180
210
210
................
................
................
IV.A.1.d of this document, DOE is not
separately regulating inverter-only and
synchronous electric motors in this
direct final rule. Rather, DOE is only
considering the substitution effects of
switching to these electric motors if
higher standards for MEMs are
established. Otherwise, comments
regarding the test procedure and metric
are addressed in section IV.A.2 of this
document.
Therefore, Table IV–1 presents the
ECGs considered in this direct final
rule. The equipment class groups
represent a total of 425 equipment
classes.
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36089
TABLE IV–1—EQUIPMENT CLASS GROUPS CONSIDERED
Horsepower
rating
Pole
configuration
ECG
ECG motor design type
Motor topology
1 ..................................
MEM 1–500 hp, NEMA Design A & B ...........
Polyphase ...........
1–500
2, 4, 6, 8
2 ..................................
MEM 501–750 hp, NEMA Design A & B .......
Polyphase ...........
501–750
2, 4
3 ..................................
AO–MEM (Standard Frame Size) ..................
Polyphase ...........
1–250
2, 4, 6, 8
4 ..................................
AO–Polyphase (Specialized Frame Size) ......
Polyphase ...........
1–20
2, 4, 6, 8
4. Technology Options
assessment, DOE identified several
technology options that were initially
determined to improve the efficiency of
electric motors, as measured by the DOE
In the March 2022 Preliminary
Analysis market and technology
Enclosure
Open.
Enclosed.
Open.
Enclosed.
Open.
Enclosed.
Open.
Enclosed.
test procedure. Table IV–2 presents the
technology options considered in the
March 2022 Preliminary Analysis.
TABLE IV–2—MARCH 2022 PRELIMINARY ANALYSIS TECHNOLOGY OPTIONS TO INCREASE MOTOR EFFICIENCY
Type of loss to reduce
Technology option
Stator I2R Losses ...............................................
Rotor I2R Losses ................................................
Core Losses ........................................................
Friction and Windage Losses .............................
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Stray-Load Losses ..............................................
In response to the technology options,
DOE received several comments.
Regarding electrical steel, NEMA
stated that newer grade steels are
available but not in the high volumes
required to replace today’s production,
and that many new grades are imported
and subject to tariffs and delays.
(NEMA, No. 22 at p. 10) NEMA argued
that using lower-loss steel would not
necessarily result in a more efficient
electric motor. (NEMA, No. 22 at p. 10–
13) Specifically, NEMA stated that
processing of the steel during motor
manufacturing could alter electrical
steel performance. As an example,
NEMA noted that thinner steels would
deform more when punched than
thicker grades. (NEMA, No. 22 at p. 11)
Additionally, NEMA stated that
different steel grades could have
different heat transfer rates, which may
affect motor operating temperature and,
thus, efficiency. (NEMA, No. 22 at p. 11)
NEMA provided certain test data
illustrating its claims regarding the
potential for steel loss and motor
efficiency to diverge. (NEMA, No. 22 at
p. 12) Relatedly, NEMA provided finite
element model data illustrating
magnetic flux density over the cross
section of a 4-pole induction motor and
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Increase cross-sectional area of copper in stator slots
Decrease the length of coil extensions
Increase cross-sectional area of end rings.
Increase cross-sectional area of rotor conductor bars.
Use a die-cast copper rotor cage.
Use electrical steel laminations with lower losses. (watts/lb)
Use thinner steel laminations.
Increase stack length (i.e., add electrical steel laminations).
Optimize bearing and lubrication selection.
Improve cooling system design.
Reduce skew on rotor cage.
Improve rotor bar insulation.
noting the nonuniformity of the flux
density values obtained, which NEMA
observed could exceed the 1.5Treference value commonly used by steel
producers to rate their products.
(NEMA, No. 22 at p. 13–14)
Losses generated in the electrical steel
in the core of an induction motor can be
significant and are classified as either
hysteresis or eddy current losses.
Hysteresis losses are caused by magnetic
domains resisting reorientation to the
alternating magnetic field. Eddy
currents are physical currents that are
induced in the steel laminations by the
magnetic flux produced by the current
in the windings. Both hysteresis and
eddy current losses generate heat in the
electrical steel.
In evaluating techniques used to
reduce steel losses, DOE considered two
types of material: conventional nonoriented electrical steel and ‘‘nonconventional’’ steels, which may
contain high proportions of boron or
cobalt or lack metal grain structure
altogether. Conventional steels are more
commonly used in electric motors
manufactured today. The three types of
steel that DOE classifies as
‘‘conventional,’’ include cold-rolled
magnetic laminations, fully processed
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non-oriented electrical steel, and semiprocessed non-oriented electrical steel.
DOE does not model non-conventional
electrical steels in its analysis of electric
motors, including cobalt-based and
amorphous steels. For additional details
on DOE’s software modeling and
analysis of electrical steel performance,
see chapter 3 of the direct final rule
TSD.
DOE acknowledges the potential for
increased non-oriented steel demand
arising from a larger trend toward
electrification of vehicles and
equipment. However, DOE’s research of
publicly announced non-oriented
electrical steel manufacturing capacity
expansions 30 either currently underway
30 E.g., (1) US-based Cleveland-Cliffs doubles
NOES capacity by 2023, adding 70 kilotons of
annual capacity in response to customer demand.
(2) US-based Big River Steel (a subsidiary of
United States Steel Corporation) announced plans
to increase annual NOES production capacity by
200 kilotons by September 2023.
(3) JFE Steel reports plans to double NOES
production capacity by the first half of the 2024
fiscal year, which begins in April 2024.
(4) Baoshan Iron & Steel (‘‘Baosteel’’, a subsidiary
of China Baowu Steel Group) is reported to be
expanding NOES production capacity by 500
kilotons by March 2023.
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or planned for the near future suggests
that steelmakers, both US-based and
international, are anticipating increased
demand and demonstrating willingness
to increase supply accordingly.
Regarding tariffs on imported steels,
DOE presented the costs for various
steel grades to manufacturers during
interviews and updated the costs based
on input received. The input DOE
received about steel prices incorporated
changes in costs due to importing
delays, tariffs, and global supply.
Because the steel tariff applies to
articles imported into the United States,
it does not directly affect prices paid for
steel in other nations, including those
which manufacture motors sold in the
US market.
Regarding the uncertain ability of
lower-loss electrical steel to increase
motor efficiency, electric motor
manufacturers stated during
confidential interviews that lower-loss
steel would generally increase motor
efficiency, even when considering the
potential increase in steel loss that can
arise during manufacturing.
Accordingly, DOE considers lower-loss
electrical steel to be an available option
for improving motor efficiency in
general, even if not in all possible motor
designs. Electric motor manufacturers
during confidential interviews did not
report having constructed or tested
electric motor designs using what
appear to be the lowest-loss electrical
steel grades available in the market. In
cases, manufacturers reported
unfamiliarity with the grades. As a
result, DOE is not able to assess whether
testing performed by manufacturers,
including the example presented by
NEMA (NEMA, No. 22 at p. 12),
establishes a limitation on the degree of
electric motor efficiency improvement
possible through use of increasingly
lower-loss electric steel.
Regarding the flux density map from
finite element modeling provided by
NEMA, it is reasonable to expect
variation in flux density levels
throughout both the motor laminations
and over time, as NEMA observes.
DOE’s analysis does not assume a
constant flux density would exist
throughout an electric motor. Those
variations would cause instantaneous,
localized steel loss levels to vary
accordingly, and depart from the
manufacturer-rated values at a given,
single reference value (1.5T, commonly
for non-oriented electric steels). All
grades of non-oriented electrical steel
(5) POSCO announced groundbreaking for a
NOES production facility which will approximately
quadruple high-efficiency NOES capacity to 400
kilotons by 2025.
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that DOE has identified share the
property of increasing loss with
increasing flux density. Thus, the flux
density variation cited by NEMA would
ostensibly exist for electrical steels
generally; it would not be unique to
lower-loss steel grades. Additionally,
when evaluating use of a higher steel
grade, manufacturers would likely
optimize the design for the grade in
question for any design likely to be built
in significant volume. For DOE’s
modeling, DOE considered a
conservative approach to represent
performance of these lower-loss
electrical steels, which is discussed
further in section IV.C.1.c of this
document.
Some production requirements
associated with using lower-loss steel
grades are understood and able to be
accounted for with a cost. For example,
increasing the silicon content of an alloy
may increase resistivity (and thus,
potentially reduce loss) but increase the
hardness of the grade as a side effect.
The comparatively harder steel may
wear punching dies more rapidly,
which would be likely to worsen the
quality of the punched steel laminations
more quickly if tooling were not
replaced correspondingly more often or
substituted with a harder tooling
material. More frequent tooling
replacement and harder tooling would
be likely to add cost to the electric
motor manufacturing process, which
DOE accounts for in the manufacturer
impact analysis.
Separately, NEMA also commented
on another technology option that DOE
considered. Specifically, NEMA stated
that the benefits of reducing the length
of the coil extensions are not clear. It
noted that to reduce the I2R loss, the
mean length of each turn in the end coil
region would have to be reduced during
the coil winding stage but doing so
would increase the difficulty of winding
insertion due to increased crowding
with adjacent coils. However, NEMA
stated that if such a reduction in mean
length was feasible, it is likely to have
already been exploited to their full
extent because it would reduce the
amount of copper in the winding, and
would also be a cost-saving measure.
(NEMA, No. 22 at p. 3) DOE agrees that
decreasing the length of the coil
extensions in the stator slots of an
electric motor reduces the resistive I2R
losses, and reduces the material cost of
the electric motor because less copper is
being used. DOE also agrees that there
may be limited efficiency gains, if any,
for most electric motors using this
technology option. DOE understands
that electric motors have been produced
for many decades and that many
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manufacturers have improved their
production techniques to the point
where certain design parameters may
already be fully optimized. However,
DOE cannot conclude that this design
parameter is fully optimized for all
electric motors, and therefore maintains
that this is a design parameter that
affects efficiency and should be
considered when designing an electric
motor because it is a technology option
that continues to be technologically
feasible. DOE has previously made
similar conclusions in the May 2014
Final Rule. See 79 FR 30934, 30960.
The CA IOUs strongly suggested that
DOE update the maximum technology
feasible for electric motors to include, at
a minimum, the commercially available
technology with the highest efficiency.
The CA IOUs provided data for
commercially available electric motors,
as well as built and tested prototypes,
that exceed the max-tech performance
assumption in the March 2022
Preliminary Analysis. (CA IOUs, No. 30
at p. 3) For the analysis, DOE uses the
maximum efficiency technology option
to represent the design option which
yields the highest energy efficiency that
is technologically feasible within the
scope of MEMs and air-over electric
motors, which are all induction motors.
In their comment, the CA IOU’s present
high efficiency motors that are all
outside the scope of this direct final
rule, such as permanent magnet
synchronous motors, and electronically
commutated motors. As such, DOE is
not amending the maximum technology
design option in this direct final rule.
Therefore, DOE maintains the same
technology options from the March 2022
Preliminary Analysis in this direct final
rule.
B. Screening Analysis
DOE uses the following five screening
criteria to determine which technology
options are suitable for further
consideration in an energy conservation
standards rulemaking:
(8) Technological feasibility.
Technologies that are not incorporated
in commercial products or in
commercially viable, existing prototypes
will not be considered further.
(9) Practicability to manufacture,
install, and service. If it is determined
that mass production of a technology in
commercial products and reliable
installation and servicing of the
technology could not be achieved on the
scale necessary to serve the relevant
market at the time of the projected
compliance date of the standard, then
that technology will not be considered
further.
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(10) Impacts on product utility. If a
technology is determined to have a
significant adverse impact on the utility
of the product to subgroups of
consumers, or result in the
unavailability of any covered product
type with performance characteristics
(including reliability), features, sizes,
capacities, and volumes that are
substantially the same as products
generally available in the United States
at the time, it will not be considered
further.
(11) Safety of technologies. If it is
determined that a technology would
have significant adverse impacts on
health or safety, it will not be
considered further.
(12) Unique-pathway proprietary
technologies. If a technology has
proprietary protection and represents a
unique pathway to achieving a given
efficiency level, it will not be
considered further, due to the potential
for monopolistic concerns.
10 CFR 431.4; 10 CFR part 430,
subpart C, appendix A, sections 6(c)(3)
and 7(b).
In summary, if DOE determines that a
technology, or a combination of
technologies, fails to meet one or more
of the listed five criteria, it will be
excluded from further consideration in
the engineering analysis. The reasons
for eliminating any technology are
discussed in the following sections.
As part of the May 2022 Preliminary
Analysis, DOE requested feedback, in
part, on its screening analysis based on
the five criteria described in this
section. 87 FR 11650. The subsequent
sections include comments from
interested parties pertinent to the
screening criteria, DOE’s evaluation of
each technology option against the
screening analysis criteria, and whether
DOE determined that a technology
option should be excluded (‘‘screened
out’’) based on the screening criteria.
1. Screened-Out Technologies
In the March 2022 Prelim TSD, DOE
screened out amorphous metal
laminations and plastic bonded iron
powder (‘‘PBIP’’) from the analysis. DOE
requested further data on the feasibility
of amorphous steel being used in
electric motors at scale. See chapter 3 of
the March 2022 Prelim TSD. In
response, DOE received comments
regarding the technologies excluded
from this engineering analysis.
Metglas commented that they strongly
disagree with the decision to exclude
electric motors that use amorphous
steel. Metglas stated that Hitachi
Industrial Equipment Systems Co., Ltd.
(Hitachi Sanki Systems) has
commercially produced higher
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efficiency air compressors (IE5 class)
with an amorphous metal-based motor
since 2017. Metglas noted that Hitachi
Ltd. is using novel motor topologies to
optimize the use of amorphous foil in
the fabrication process. Metglas claimed
that other motor producers are actively
designing amorphous metal-based
motors, and while amorphous metalbased motors are certainly not
predominant today, they do represent
where the maximum technological
feasibility efficiency levels can be set for
electric motors. Metglas claimed the
losses when using an amorphous metal
stator have been shown to drop by more
than 75 percent compared to a
conventional non-oriented electrical
steel, and that this allows for higher
operational frequencies which reduces
the overall motor size for the same
output power. Furthermore, Metglas
claimed higher efficiencies in other
electrical appliances can be achieved
with more efficient amorphous-based
motors. (Metglas, No. 24 at p. 1) Metglas
requested that DOE consider the
maximum technical feasibility
efficiency be based on the performance
of amorphous metal containing motors,
but understands that the DOE cannot set
efficiency levels based on niche
materials that have not been widely
demonstrated on a commercial scale.
(Metglas, No. 24 at p. 2) On the other
hand, NEMA commented that
amorphous steel is not a direct
replacement for the current electrical
steel that is in motors, and stated that
this option is unproven since NEMA is
not aware of any successful prototype
motors using this steel. (NEMA, No. 22
at p. 14)
DOE reviewed the information
submitted by Metglas and notes that the
motors provided appear to all require an
inverter to drive and are thus not in the
scope of this direct final rule. DOE
understands the potential benefits of
using amorphous steel, particularly the
reduction in core losses during
operation, but was unable to identify
any electric motors within the scope of
this rule using amorphous steel.
Additionally, as stated in the March
2022 Preliminary TSD, amorphous steel
is a very brittle material which makes it
difficult to punch into motor
laminations. Amorphous steel may also
be less structurally stiff, requiring
additional mechanical support to
implement. Finally, amorphous steel
may entail greater acoustic noise levels,
which may be unsuitable for some
applications or require design
compromises to mitigate. As such, with
it not being definitive that amorphous
steel is able to meet all the screening
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criteria, DOE is continuing to screen out
amorphous metal in this direct final rule
on the basis of technological feasibility.
Accordingly, consistent with the
March 2022 Preliminary Analysis, DOE
is continuing to screen out amorphous
metal laminations and PBIP in this
direct final rule.
2. Remaining Technologies
In the March 2022 Prelim TSD, DOE
did not screen out the following
technology options: Increasing crosssectional area of copper in stator slots;
decreasing the length of coil extensions;
increasing cross-sectional area of end
rings; increasing cross-sectional area of
rotor conductor bars; using a die-cast
copper rotor cage; using electrical steel
laminations with lower losses (watts/lb);
using thinner steel laminations;
increasing stack length; optimizing
bearing and lubrication selection;
improving cooling system design;
reducing skew on rotor cage; and
improving rotor bar insulation. See
chapter 3 of the March 2022 Prelim
TSD.
Regarding copper die-cast rotors,
NEMA commented in opposition of
DOE’s decision to not screen out copper
die-cast rotors. NEMA stated that only
one manufacturer offers NEMA Design
A, B, or C motors with copper rotor
cages, and that the largest horsepower
offered of these motors was 20 HP.
NEMA also stated that they are not
practicable to manufacture because of
added equipment requirements, higher
energy costs to melt the copper, die
lifespan that is 10 percent that of dies
used for aluminum, and a casting piston
life of only 500 rotors. NEMA also stated
that the increased locked-rotor current
due to the copper rotor would push
certain motors out of NEMA Design B
requirements and reduce consumer
utility. NEMA finally stated that the
higher melting point of copper (1084
deg C) vs. aluminum (660 deg C) poses
health and safety issues for plant
workers, and that DOE failed to rebut
this claim with evidence in 2012.
(NEMA, No. 22 at p. 4–5)
Aluminum is the most common
material used today to create die-cast
rotor bars for electric motors. Some
manufacturers that focus on producing
high-efficiency designs have started to
offer electric motors with die-cast rotor
bars made of copper. Copper offers
better performance than aluminum
because it has better electrical
conductivity (i.e., a lower electrical
resistance). However, because copper
also has a higher melting point than
aluminum, the casting process becomes
more difficult and is likely to increase
both production time and cost.
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DOE recognizes that assessing the
technological feasibility of copper diecast rotors in high-horsepower motors
(above 30 HP) is made more complex by
the fact that manufacturers do not offer
them commercially. That could be for a
variety of reasons, among them: (1) large
copper die-cast rotors are physically
impossible to construct; (2) they are
possible to construct, but impossible to
construct to required specifications, or
(3) they are possible to construct to
required specifications, but would
require large capital investment to do so
and would be so costly that few (if any)
consumers would choose them. As
stated in the March 2022 Preliminary
TSD, electric motors incorporating
copper die-cast rotor cages are already
commercially available by large
manufacturers for motors up to 30
horsepower.31 As such, DOE does not
have enough evidence to screen out
copper die-cast rotors on the basis of
practicability to manufacture, install,
and service, or adverse impacts to
equipment utility or availability.
Additionally, DOE is hesitant to screen
out copper die-cast rotors on the basis
of technological feasibility because there
is nothing to suggest the advantages
associated with copper rotors would not
occur beyond a certain size. Therefore,
DOE’s research into commercially
available electric motors with copper
die-cast rotors does not conclude that
copper die-cast rotors are either: (1)
physically impossible to construct, or
(2) possible to construct, but impossible
to construct to required specifications.
DOE considers a higher factory
overhead markup (which includes all
the indirect costs associated with
production, indirect materials and
energy use, taxes, and insurance) for
copper die-cast rotors in the engineering
analysis. See Chapter 5 of the direct
final rule TSD. In addition, DOE
understands that large capital
investments may be needed for copper
die-cast rotors, which is addressed as
additional conversion costs in the
manufacturer impact analysis (see
section IV.J.4).
Regarding the higher melting point of
copper versus aluminum (1085 degrees
Celsius versus 660 degrees Celsius),
although the increased temperature
could theoretically affect the health or
safety of plant workers, DOE does not
believe that this potential impact is
sufficiently adverse to screen out copper
as a die cast material for rotor
conductors. The process for die casting
copper rotors involves risks similar to
those of die casting aluminum. DOE
believes that manufacturers who diecast metal at 660 Celsius or 1085 Celsius
(the respective temperatures required
for aluminum and copper) would need
to maintain strict safety protocols in
both cases. DOE understands that many
plants already work with molten
aluminum die casting processes and
believes that similar processes could be
adopted for copper. Since DOE has not
received any supporting data about the
increased risks associated with copper
die-casting versus aluminum diecasting, DOE is not screening out copper
die-cast rotors from this direct final rule.
Otherwise, through a review of each
technology, DOE concludes that all of
the other identified technologies listed
in section IV.A.4 met all five screening
criteria to be examined further as design
options in DOE’s direct final rule
analysis. The design options screened-in
are consistent with the design options
from the March 2022 Preliminary
Analysis. DOE determined that these
technology options are technologically
feasible because they are being used or
have previously been used in
commercially-available products or
working prototypes. DOE also finds that
all of the remaining technology options
meet the other screening criteria (i.e.,
practicable to manufacture, install, and
service and do not result in adverse
impacts on consumer utility, product
availability, health, or safety). For
additional details, see chapter 4 of the
direct final rule TSD.
C. Engineering Analysis
The purpose of the engineering
analysis is to establish the relationship
between the efficiency and cost of
electric motors. There are two elements
to consider in the engineering analysis;
the selection of efficiency levels to
analyze (i.e., the ‘‘efficiency analysis’’)
and the determination of product cost at
each efficiency level (i.e., the ‘‘cost
analysis’’). In determining the
performance of higher-efficiency
equipment, DOE considers technologies
and design option combinations not
eliminated by the screening analysis.
For each equipment class, DOE
estimates the baseline cost, as well as
the incremental cost for the equipment
at efficiency levels above the baseline.
The output of the engineering analysis
is a set of cost-efficiency ‘‘curves’’ that
are used in downstream analyses (i.e.,
the LCC and PBP analyses and the NIA).
1. Efficiency Analysis
DOE typically uses one of two
approaches to develop energy efficiency
levels for the engineering analysis: (1)
relying on observed efficiency levels in
the market (i.e., the efficiency-level
approach), or (2) determining the
incremental efficiency improvements
associated with incorporating specific
design options to a baseline model (i.e.,
the design-option approach). Using the
efficiency-level approach, the efficiency
levels established for the analysis are
determined based on the market
distribution of existing products (in
other words, based on the range of
efficiencies and efficiency level
‘‘clusters’’ that already exist on the
market). Using the design option
approach, the efficiency levels
established for the analysis are
determined through detailed
engineering calculations and/or
computer simulations of the efficiency
improvements from implementing
specific design options that have been
identified in the technology assessment.
DOE may also rely on a combination of
these two approaches. For example, the
efficiency-level approach (based on
actual products on the market) may be
extended using the design option
approach to interpolate to define ‘‘gap
fill’’ levels (to bridge large gaps between
other identified efficiency levels) and/or
to extrapolate to the max-tech level
(particularly in cases where the maxtech level exceeds the maximum
efficiency level currently available on
the market).
In this rulemaking, DOE applied a
combination of the efficiency-level
approach and the design-option
approach to establish efficiency levels to
analyze. The design-option approach
was used to characterize efficiency
levels that are not available on the
market but appear to be market
solutions for those higher efficiency
levels if sufficient demand existed. For
the efficiency levels available on the
market, sufficient performance data was
publicly available to characterize these
levels.
a. Representative Units Analyzed
Due to the large number of equipment
classes, DOE did not directly analyze all
equipment classes of electric motors
considered in this direct final rule.
Instead, DOE selected representative
units based on two factors: (1) the
quantity of motor models available
within an equipment class and (2) the
31 DOE is aware of two large manufacturers—
Siemens and SEW-Eurodrive—that offer die-cast
copper rotor motors up to 30-horsepower.
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ability to scale to other equipment
classes.
Table IV–3 presents the representative
units DOE analyzed in the March 2022
Preliminary Analysis. DOE only
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analyzed NEMA Design B representative
units.
TABLE IV–3—MARCH 2022 PRELIMINARY ANALYSIS REPRESENTATIVE UNITS ANALYZED
Representative
unit horsepower
(4 poles, enclosed)
ECG/Design type
MEM, NEMA Design B ...........................................................................................................
5
30
75
*150
*250
5
30
75
AO–MEM, NEMA Design B ....................................................................................................
Represented
horsepower range
(all poles, all enclosures)
1 ≤ hp ≤5.
5 < hp ≤ 50.
51 < hp ≤ 100.
101 < hp ≤ 200.
201 < hp ≤ 500.
1 < hp ≤ 20.
21 < hp ≤ 50.
51 < hp ≤ 500.
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* While these representative units were not directly analyzed in the engineering analysis, they were added to represent consumers of larger
sized electric motors for the LCC and NIA analyses.
DOE received a comment regarding
motor testing at higher efficiency levels.
NEMA stated that DOE should test a
greater number of representative units
across all design types to better inform
scaling assumptions, and that for higher
efficiency levels, testing is more
important than scaling. In addition,
NEMA commented that DOE places too
much reliance on untested models,
scaling and interpolation. NEMA
commented that the only appropriate
way to evaluate non-represented
equipment classes is to study them
through testing (including prototype
construction for testing, as appropriate).
(NEMA, No. 22 at p. 15, 24)
DOE recognizes that scaling motor
efficiencies is a complicated proposition
that has the potential to result in
efficiency standards that are not evenly
stringent across all equipment classes.
However, given the extremely high
volume of horsepower rating, pole
configuration, and enclosure
combinations, DOE cannot feasibly
analyze all of these variants directly,
hence, the need for scaling.
For the analysis, DOE obtained
electric motor performance data from a
catalog reflecting electric motors
currently available in the U.S. market
and views this database as
representative of the full range of motors
that can be purchased. Specifically,
DOE created a database which contains
information regarding the characteristics
of the motor (motor performance values
like horsepower output, pole
configuration, NEMA Design letter, etc.),
and the full-load efficiency (‘‘2022
Motor Database’’). DOE collected
performance data from online catalogs
for four major motor manufacturers in
2022: ABB (which includes the
manufacturer formerly known as Baldor
Electric Company), Nidec Motor
Corporation (which includes the US
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Motors brand), Regal-Beloit Corporation
(which includes the Marathon and
Leeson brands), and WEG Electric
Motors Corporation.32 Based on market
information from the Low-Voltage
Motors World Market Report,33 DOE
estimates that the four major motor
manufacturers noted above comprise the
majority of the U.S. motors market and
are consistent with the motor brands
considered in this direct final rule. In
addition, DOE tested multiple motors
and obtained test reports detailing the
efficiency of these motors at their rated
load, along with many other
measurements and technical
specifications, to inform the scaling
relationships and efficiency analysis
described in this direct final rule.
Using the 2022 Motor Database, and
along with testing and modeling, DOE
affirms that the scaling methodologies
employed are accurate for the purposes
of determining energy conservation
standards, and therefore maintains the
current scaling methodology. Further,
the relationships used to scale between
efficiency and a combination of
horsepower, pole count, and enclosure
are consistent with previously used and
validated methods of scaling, which are
based on Table 12–12 of NEMA MG 1–
2016. For more detailed discussion on
32 ABB (Baldor-Reliance): Online Manufacturer
Catalog, accessed March 22, 2022. Available at
https://www.baldor.com/catalog#category=2; Nidec:
Online Manufacturer Catalog, accessed April 8,
2022. Available at ecatalog.motorboss.com/Catalog/
Motors/ALL; Regal (Marathon and Leeson): Online
Manufacturer Catalog, accessed May 25, 2022.
Available at https://www.regalbeloit.com/Products/
Faceted-Search?category=Motors&brand=
Leeson,Marathon%20Motors; WEG: Online
Manufacturer Catalog, accessed March 22, 2022.
Available at https://catalog.wegelectric.com/.
33 Based on the OMDIA, Low-Voltage Motors
Intelligence Service, Annual 2020 Analysis(OMDIA
Report November 2020) Table 3: Market Share
Estimates for Low-voltage Motors: Americas;
Suppliers ‘share of the Market:2019.
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scaling, see section IV.C.4.
Consequently, DOE has concluded that
scaling is necessary and suitable for
establishing appropriate efficiency
levels for new or amended energy
conservation standards for electric
motors.
For this direct final rule, DOE
updated several representative units
based on the November 2022 Joint
Recommendation. Overall, DOE
updated the representative units to be
based on both NEMA Design A and B
instead of only NEMA Design B. The
November 2022 Joint Recommendation
specifically noted that to achieve IE4
levels, manufacturers would likely shift
from NEMA Design B to NEMA Design
A motors.
DOE notes that the one main
difference between NEMA Design A and
Design B is that Design A does not have
a locked-rotor current limit. Lockedrotor current is the steady-state current
applied to a motor, at its rated voltage,
when the rotor is stationary. It is a
critical design characteristic of
induction motors because higher
locked-rotor currents can negatively
impact (or even damage) the starting
circuit if the starting circuit is not
equipped to handle the locked-rotor
current. One of the ways to improve
motor efficiency is to use lower coreloss electrical steel, but a common
tradeoff of these low core-loss steels is
a lower permeability 34 that requires the
motor to have a higher locked-rotor
current to meet the torque requirements
of NEMA Design A and B. DOE
analyzed a sample of over 3,000 NEMA
Design A and B motors currently
available on the market and found that
34 The magnetic permeability of a material
determines the magnitude of magnetic flux density
in the material after a magnetic field is applied to
it, and the magnetic flux density is proportional to
the amount of torque generated in an electric motor.
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over 50 percent of them are already at
or above 90 percent of the NEMA Design
B locked-rotor current limit. DOE notes
that higher energy conservation
standards could incentivize
manufacturers to offer NEMA Design A
motors in place of their Design B
motors.
While it appears to be possible to
design NEMA Design B motors that are
at higher efficiency levels than current
standards, these NEMA Design B motors
would require some combination of
longer stack lengths, wider core
laminations, and/or higher slot fills, all
of which could require additional
equipment and retooling by the
manufacturer. Because NEMA Design A
and B motors are in the same equipment
class, in the case of higher standards,
manufacturers could opt to shift their
offerings to NEMA Design A motors that
do not require nearly the same
magnitude of investment by the
manufacturer. This shift to NEMA
Design A offerings could result in
additional installation costs, discussed
in section IV.F.2. DOE’s review of
current motor catalogs suggests multiple
manufacturers representing their IE4
motors as NEMA Design A.35 As such,
in this direct final rule, the
representative unit designs include both
NEMA Design A and Design B.
In addition, DOE updated the
horsepowers analyzed, and the range of
horsepowers each representative unit
represents. First, DOE updated the MEM
Design A/B 250 hp representative unit
to 350 hp to better represent the
horsepower range between 250 hp to
500 hp, which the Electric Motors
Working Group recommended to remain
at Premium Level/IE3 level (see
Recommendation #1 in section II.B.3).
Second, DOE added a MEM Design A/
B representative unit at 600 hp to
represent and analyze electric motors
rated over 500 hp and up to 750 hp (see
Recommendation #2 in section II.B.3).
Third, DOE split the air-over equipment
class into AO–MEM (Standard Frame
Size) and AO–Polyphase (Specialized
Frame Size), as discussed in section
IV.A.3, and added the following
representative units: (1) a representative
unit to represent the horsepower range
between 100 hp to 250 hp for AO–MEM
(Standard Frame Size), which the
Electric Motors Working Group
recommended at Super Premium/IE4
level; and (2) a representative unit to
represent the horsepower range between
1 hp to 20 hp for AO–Polyphase
(Specialized Frame Size), which the
Electric Motors Working Group
recommended at fire pump level (see
Recommendation #3 in section II.B.3).
DOE notes that the 250 hp limit for AO–
MEM (Standard Frame Size)
corresponds to the horsepower output
range observed in the 2022 Motor
Database.
Otherwise, similar to the March 2022
Preliminary Analysis, DOE chose the
horsepower ratings that constitute a
high volume of motor models and
approximate the middle of the range of
covered horsepower ratings so that DOE
could develop a reasonable scaling
methodology. DOE did not vary the pole
configuration of the representative
classes it analyzed because analyzing
the same pole configuration provided
the strongest relationship upon which to
base its scaling. Keeping as many design
characteristics constant as possible
enabled DOE to more accurately identify
how design changes affect efficiency
across horsepower ratings. For each
motor topology, DOE directly analyzed
the most common pole-configuration,
which was 4-pole.
Table IV–4 presents the representative
units analyzed, and the covered
horsepower ranges for each of the
representative units.
TABLE IV–4—REPRESENTATIVE UNITS ANALYZED
Representative
unit
(RU)
ECG
MEM 1–500 hp, NEMA Design A & B ...................................................
MEM 501–750 hp, NEMA Design A & B ...............................................
AO–MEM (Standard Frame Size) ..........................................................
AO–Polyphase (Specialized Frame Size) ..............................................
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b. Baseline Efficiency
For each equipment class, DOE
generally selects a baseline model as a
reference point for each class, and
measures changes resulting from
potential energy conservation standards
against the baseline. The baseline model
in each equipment class represents the
characteristics of an equipment typical
of that class (e.g., capacity, physical
size). Generally, a baseline model is one
that just meets current energy
35 ABB Product Brochure: NEMA Super-E
Premium efficient motors. (Last accessed December
2, 2022.) https://library.e.abb.com/public/
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Representative
unit horsepower
(4 poles, enclosed)
1
2
5
30
3
4
5
6
7
8
9
10
11
75
150
350
600
5
30
75
150
5
Represented
horsepower range
(all poles, all enclosures)
1 ≤ hp ≤ 5.
5 < hp ≤ 20.
20 < hp ≤ 50.
50 < hp < 100.
100 ≤ hp ≤ 250.
250 < hp ≤ 500.
500 < hp ≤ 750.
1 ≤ hp ≤ 20.
20 < hp ≤ 50.
50 < hp < 100.
100 ≤ hp ≤ 250.
1 ≤ hp ≤ 20.
conservation standards, or, if no
standards are in place, the baseline is
typically the most common or least
efficient unit on the market.
In the March 2022 Preliminary
Analysis, for current scope motors in 10
CFR 431.25, DOE used the current
energy conservation standards in Table
5 of 10 CFR 431.25 as the baseline. For
AO–MEMs, DOE used a baseline
representing the lowest efficiencies
available in the market based on catalog
listings. See Chapter 5 of the March
2022 Prelim TSD. In response to the
March 2022 Preliminary Analysis, DOE
received comments on how the baseline
efficiencies were established.
The Joint Advocates encouraged DOE
to both clarify and refine the baseline
efficiency levels for air-over electric
motors. (Joint Advocates, No. 27 at pp.
2–3) Specifically, they commented that
while the March 2022 Preliminary
Analysis stated that the baseline
e35d57ce4df3160285257d6d00720f51/
9AKK106369_SuperE_1014_WEB.pdf.
WEG Super Premium Efficiency Catalog: https://
www.weg.net/catalog/weg/US/en/c/MT_1PHASE_
LV_TEFC_W22_STANDARD/list?h=3a6a6e81.
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efficiency levels of the currently
covered motors were the same as the airover versions (See: EERE–2020–BT–
STD–0007–0010, p. 5–7), Table 5.3.6 of
the March 2022 Prelim TSD showed the
baseline efficiency levels for the
currently covered motors as EL1 for the
air-over variants. Further, the Joint
Advocates commented that the
assumption that baseline air-over
motors are less efficient than the
baseline in the current standard for
covered motors is supported by the 2015
Appliance Standards and Rulemaking
Federal Advisory Committee
(‘‘ASRAC’’) term sheet for fans and
blowers,36 which included default airover motor efficiencies less than those
shown in the March 2022 Preliminary
Analysis. The Joint Advocates
commented that they suspected that the
lack of coverage for air-over motors
means that there are available models
that may be considerably less efficient
than equivalent non-air-over motors. In
addition, the Joint Advocates
commented that the appropriate
baseline efficiency levels for AO motors
will depend heavily on the final AO
motor test procedure. (Joint Advocates,
No. 27 at pp. 2–3)
DOE notes that the Joint Advocates’
statement that the baseline efficiency
levels of currently covered motors are
the same as the air-over versions in the
March 2022 Prelim TSD is incorrect.
The March 2022 Prelim TSD stated that,
since AO motors are designed largely
the same as non-AO motors, DOE used
the same higher efficiency levels for AO
MEM motors, and did not state that
baseline efficiency levels of currently
covered motors are the same as the airover versions. This is shown in Table
5.3.6 and Table ES3.3.3 of the March
2022 Preliminary TSD, which also
present the baseline efficiency for airover motors as lower than the baseline
for currently regulated motors.
Otherwise, DOE acknowledges that
because air-over electric motors are not
currently regulated, air-over electric
motors will likely be less efficient than
currently regulated non-air-over electric
motors available on the market. In order
to understand the efficiency of air-over
electric motors currently available, DOE
reviewed the 2022 Motor Database. With
that, DOE confirmed that air-over
electric motors were less efficient than
36 See EERE–2013–BT–STD–0006–0179, p. 18,
www.regulations.gov/document/EERE-2013-BTSTD-0006-0179.
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currently regulated non-air-over electric
motors and also noted that AO–MEMs
were only available up to 250 hp.
However, DOE did not identify
baselines as low as what was considered
in the 2015 ASRAC term sheet for fans
and blowers; because DOE had current
market data through the 2022 Motor
Database, DOE decided to consider more
up-to-date baseline efficiencies. As
such, DOE maintained the engineering
analysis for AO–MEMs from the March
2022 Preliminary Analysis.
The Joint Advocates commented that
DOE’s specification of a single target test
temperature of 75 °C for all AO motors
may not be representative. For example,
the Joint Advocates commented that it
is plausible that one or more of the AO
motors that DOE tested may run at
higher temperatures in the field, which
would result in lower real-world
efficiency. As such, they noted that
artificially cooling a hotter running
motor beyond realistic operating
temperatures could result in AO motor
efficiency ratings that are not
representative both in comparison to
other AO motors and the equivalent
non-AO motors. Therefore, the Joint
Advocates recommend that DOE
analyze appropriate baseline efficiency
levels for AO motors. (Joint Advocates,
No. 27 at p. 3) In the October 2022 Final
Rule, DOE addressed the single-target
temperature concerns by specifying that
the requirement to use a single target
temperature of 75 °C only applies to airover motors that do not have a specified
temperature rise. As such, if the
temperature rise is specified on the
motor, such temperature rise will be
used to determine the target
temperature. 87 FR 63588, 63614.
Accordingly, in this direct final rule,
DOE included the following baseline
efficiencies, which are summarized
below in Table IV–5:
For ECG 1, DOE used the current
energy conservations standards in Table
5 of 10 CFR 431.25 to establish the
baseline efficiency for each
representative unit analyzed. The
standards for this ECG align with Table
12–12 of NEMA MG 1–2016 ‘‘Full-Load
Efficiencies for 60 Hz Premium
Efficiency . . .’’ and is commonly
referred to by industry as ‘‘NEMA
Premium’’ or IE3 levels.
For ECGs 2 and 3, DOE used available
catalog data to understand the
efficiencies of motors offered. DOE
observed that the lowest efficiencies at
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36095
multiple horsepowers aligned with the
efficiencies found in Table 12–11 of
NEMA MG 1–2016 ‘‘Full-Load
Efficiencies of 60 Hz Energy-Efficient
Motors’’. These levels of efficiency are
commonly referred to as ‘‘fire pump
electric motor levels’’ since they largely
correspond to the energy conservations
standards for fire pump motors set out
in Table 7 of 10 CFR 431.25. As such,
DOE set the baseline for ECGs 2 and 3
in line with fire pump electric motor
levels.
For ECG 4, during the electric motor
working group negotiations it was
discussed that catalog data would not
accurately represent the efficiencies of
these ‘‘specialized’’ frame size motors
since they are designed be placed in
larger equipment based on manufacturer
specifications, and not typically sold
through publicly available catalogs.
DOE understands that given a fixed
horsepower output, reducing frame size
will restrict the potential for efficiency
improvements in a motor and may make
improvements in efficiency more
expensive compared to a larger motor.
Because the electric motors in ECG 4 are
smaller versions of those in ECG 3, DOE
assumed that the baseline efficiency for
ECG 4 would be an offset version of the
baseline of ECG 3. DOE decided to
quantify the offset in terms of ‘NEMA
bands’ because these bands are
commonly used by industry when
describing motor efficiency. One NEMA
band represents a 10 percent reduction
in motor losses from the previous
efficiency value; Table 12–10 of NEMA
MG 1–2016 specifies the list of
selectable efficiency values. DOE
received feedback from manufacturers
that they typically design motors in
increments of 20 percent loss
differences or more because of motor
efficiency test variability and marketing
clarity. This 20 percent loss is
consistent with the IE level
designations, in that each IE level that
is included in IEC 60034–30–1:2014,
starting from IE1 (lowest efficiency) to
IE4 (highest efficiency), is
approximately in increments of 20
percent loss difference. As such, DOE
assumed the baseline for ECG 4 would
be 2 NEMA bands (or 20 percent loss
difference) lower than the baseline of
ECG 3 due to reduced size of ECG 4
motors. This baseline corresponds with
the IE1 level, the lowest level defined by
IEC 60034–30–1:2014.
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TABLE IV–5—BASELINE EFFICIENCIES ANALYZED
ECG
ECG motor design type
1 .............................
MEM 1–500 hp, NEMA Design A & B .................................................
2 .............................
3 .............................
MEM 501–750 hp, NEMA Design A & B .............................................
AO–MEM (Standard Frame Size) ........................................................
4 .............................
AO–Polyphase (Specialized Frame Size) ...........................................
c. Higher Efficiency Levels
As part of DOE’s analysis, the
maximum available efficiency level is
the highest efficiency unit currently
available on the market. DOE also
defines a ‘‘max-tech’’ efficiency level to
represent the maximum possible
efficiency for a given product.
In the March 2022 Preliminary
Analysis, DOE established the higher
efficiency levels by shifting the baseline
efficiencies up a certain number of
NEMA bands. For ECG 1, EL 1
represented a 1 NEMA band increase
over baseline efficiency, EL 2 a 2 NEMA
band increase, and so on until max-tech.
For ECG 3 of this direct final rule
(referred to as ‘‘AO–MEMs’’ in the
March 2022 Preliminary Analysis), EL 1
was NEMA Premium because this ECG
had a lower baseline at fire pump levels.
EL 2 was 1 NEMA band above premium,
EL 3 was 2 NEMA bands above NEMA
Premium, and the max-tech was the
same as ECG 1. See Chapter 5 of the
March 2022 Prelim TSD.
In response to the March 2022
Preliminary Analysis, DOE received
comments regarding the analysis used to
determine efficiencies at higher levels.
NEMA stated that any performance
modeling done by DOE should rely on
multiple tested models rather than a
single unverified motor performance
model (NEMA, No. 22 at p. 2–3). NEMA
also stated that building and testing
models with high enough volumes to
ensure repeatability is the only way to
prove the performance of a new steel.
(NEMA, No. 22 at p. 11,13)
While DOE acknowledges that testing
individual models is the most ideal way
to gather performance data for electric
motors, given the extremely high
volume of horsepower rating, pole
configuration, and enclosure
combinations, DOE cannot feasibly
analyze all of these variations directly,
hence, the need for scaling and
modeling. Accordingly, DOE retained an
electric motors subject matter expert
(‘‘SME’’) with significant experience in
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RU
terms of both design and related
software, who prepared a set of electric
motor designs with increasing
efficiency.
DOE concurs that modeling is not an
exact equivalent to testing in all regards,
and that relative to physical motor
units, modeled results may over- or
-underestimate performance. That
prototyping and testing of production
runs are important motor tools does not
imply, however, that properly modeled
motors would carry no predictive power
and could not be of value in estimating
electric motor performance. Through
confidential interviews of electric motor
manufacturers, DOE learned that
performance modeling, along with
prototyping, is a central element in
modern electric motor development.
Therefore, DOE does not find
justification to abandon modeling as an
analytical practice. DOE pairs and
informs modeled results using physical
testing and teardown of motors
purchased on the market, and from
performance data collected in the 2022
Motor Database, as detailed in chapter 5
of the direct final rule TSD. The motors
that were torn down represented a range
of horsepowers, and had efficiencies
rated at 2 to 3 NEMA bands above their
respective standards. As new designs
were created, DOE’s SME ensured that
the critical performance characteristics
that define a NEMA design letter (e.g.,
locked-rotor torque, breakdown torque,
pull-up torque, and locked-rotor
currents) were maintained.
As an example on how the modeling
was informed by teardowns, DOE’s SME
used lamination diameters measured
during the teardowns as limits for the
software models. After establishing
baseline models, DOE used the motor
design software to incorporate design
options (generated in the market and
technology assessment and screening
analysis) to increase motor efficiency all
the way up to the max-tech design. This
procedure has been utilized to inform
scaling relationships in previous
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Description
1
2
3
4
5
6
7
8
9
10
11
NEMA Premium/IE3.
Fire Pump.
Fire Pump.
2 NEMA bands below Fire Pump.
rulemakings, and as such, DOE is
continuing to use motor performance
modeling as the basis of its efficiency
analysis in this direct final rule.
In recognition of the potential for
electrical steel quality to vary and of
modeled results to diverge from test
results of production electric motor
designs, DOE opted to use a
conservative approach when modeling
the performance of electrical steels by
using the guaranteed maximum core
loss values for various steel grades in
place of ‘‘average’’ or ‘‘typical’’ core loss
per pound values. Purchasers of
electrical steel cannot rely on a given
sample of electrical steel exceeding (i.e.,
carrying lower loss) the guaranteed loss.
However, on a larger scale the steel
performance would be expected to
converge to the average if steel
manufacturers are accurately
representing their products.
Separately, NEMA stated that the
inrush current of multiple models
exceeds the NEMA Design B and C
locked-rotor current limits for the
following representative units: 5HP,
Design B; 5HP, Design C; and 50 HP,
Design C. (NEMA, No. 22 at p. 3) NEMA
also stated that in order to comply with
the test procedure, motors may become
NEMA Design A motors with higher
inrush current, and that this higher
current could create safety issues on
other components and would require
upgrades and modifications to electrical
components of the motor. It stated that
not being able to satisfy NEMA Design
B requirements would present a loss of
consumer utility. (NEMA, No. 22 at p.
2)
DOE disagrees with NEMA’s claim
that the test procedure rule would
require a change in motor design to
comply with standards. DOE
understands NEMA’s comment to relate
to the changes to the represented value
formula (currently in 10 CFR 429.64)
proposed in the test procedure NOPR
(86 FR 71710, December 17, 2021). DOE
addressed concerns regarding the
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updates to the test procedure in the
October 2022 Final Rule; specifically,
DOE noted that while DOE proposed
changes in the formulas used to
determine the represented value of a
basic model, DOE did not propose to
change how the compliance of a given
basic model is determined. As such,
DOE concluded that the compliance or
noncompliance of a basic model would
remain unchanged by the publication of
this final rule, and therefore, disagreed
with NEMA that basic model redesigns
would be required to ensure
compliance. 87 FR 63588, 63631–63633
As for the representative unit designs
not complying with NEMA Design B
locked-rotor current requirements, DOE
agrees and notes that the voltages
specified for those units in the March
2022 Preliminary TSD were incorrect
and will be corrected in the TSD of this
direct final rule. With that voltage
correction, the locked-rotor current
units for the mentioned representative
units fell within NEMA Design B limits.
However, as discussed in section
IV.C.1.a, DOE is considering NEMA
Design A at higher efficiency levels.
As such, for this direct final rule, DOE
considered several design options for
higher efficiencies: improved electrical
steel for the stator and rotor, using diecast copper rotors, increasing stack
length, and any other applicable design
options remaining after the screening
analysis when improving electric motor
efficiency from the baseline level up to
a max-tech level. As each of these
design options are added, the
manufacturer’s cost generally increases
and the electric motor’s efficiency
improves. DOE worked with an SME to
develop the highest efficiency levels
technologically feasible for each
representative unit analyzed, and used a
combination of electric motor software
design programs and SME input to
develop these levels. The SME also
checked his designs against tear-down
data and calibrated his software using
the relevant test results. DOE notes that
for all efficiency levels of directly
modeled representative units, the frame
size was constrained to that of the
baseline unit. DOE also notes that the
full-load speed of the simulated motors
did not stay the same throughout all
efficiency levels. Depending on the
materials used to meet a given efficiency
level, the full-load speed of the motor
may increase compared to a lower
efficiency model, but for the
representative units analyzed this was
not always the case. See chapter 5 of the
TSD for more details on the full-load
speeds of modeled units.
For the max-tech efficiencies in the
engineering analysis, DOE considered
35H210 silicon steel, which has the
lowest theoretical maximum core loss of
all steels considered in this engineering
analysis, and the thinnest practical
thickness for use in motor laminations.
In addition, the max-tech efficiency
designs all use die-cast copper rotors,
because copper offers better
performance than aluminum since it has
better electrical conductivity (i.e., a
lower electrical resistance), leading to a
higher-efficiency design. The max-tech
designs also have the highest possible
slot fill, maximizing the number of
motor laminations that can fit inside the
motor. Further details are provided in
Chapter 5 of the direct final rule TSD.
For intermediate efficiency levels that
were higher than an ECG’s baseline but
not the max-tech efficiency considered,
DOE used different approaches to
establish these levels depending on the
ECG, as discussed in the next few
paragraphs.
For ECG 1, EL 1 was set at IE4 levels
(also referred to as NEMA SuperPremium) after receiving feedback
during the electric motor working group
negotiations that this should be the first
EL considered above current standards
(in 10 CFR 431.25, IE3 or ‘‘NEMA
36097
Premium’’), consistent with the
progression of the IE levels to represent
efficiency, when available. IE4 levels
correspond to the efficiency values in
Table 10 of IEC 60034–30–
1:2014,’’Nominal efficiency limits
(percentage) for 60 Hz IE4’’. DOE notes
that the efficiencies at IE4 levels are
varying magnitudes above current
standard levels, but are typically either
1 or 2 NEMA bands higher depending
on pole configuration and horsepower
output. Next, DOE defined EL 2 as 2
NEMA bands above current standards
and EL 3 as 3 NEMA bands above
current standards. For RU1, RU2 and
RU5, EL 1 efficiency is the same as EL
2 efficiency because the IE4 efficiencies
are the same as the efficiencies at 2
NEMA bands above current standard
levels.
When possible, DOE opted to set the
intermediate efficiency levels at
industry-recognized levels of efficiency
like NEMA Premium or IE4. For ECGs
2 and 3, EL 1 was set at current
standards since the baseline for these
ECGs was lower than current standards.
EL 2 was then set at IE4 levels, and EL
3 set at 2 NEMA bands above current
standard levels. For RU6, RU7 and RU8,
EL 2 efficiency is the same as EL 3
efficiency because the IE4 efficiencies
are the same as the efficiencies at 2
NEMA bands above current standards.
For ECG 4, DOE again opted to set the
intermediate efficiency levels at
industry-recognized levels. Therefore,
EL 1 was set at fire pump electric motor
levels, EL 2 at current standards or
NEMA Premium, and EL 3 at IE4 levels.
For RU11, the max-tech efficiency is the
same as EL 3 efficiency at IE4.
Table IV–6 presents a summary of the
description of the higher efficiency
levels analyzed in this direct final rule.
For additional details on the efficiency
levels, see chapter 5 of the direct final
rule TSD.
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TABLE IV–6—HIGHER EFFICIENCIES ANALYZED
ECG
RUs
EL0/Baseline
EL1
EL2
EL3
1 .................
1 through 5 ...................
Premium/IE3 .................
Super Premium/IE4 ......
2 .................
6 ....................................
Fire pump .....................
Premium/IE3 .................
2 NEMA bands above
Premium.
Super Premium/IE4 ......
3 .................
7 through 10 .................
Fire pump .....................
Premium/IE3 .................
Super Premium/IE4 ......
4 .................
11 ..................................
2 NEMA Bands below
Fire pump.
Fire pump .....................
Premium/IE3 .................
3 NEMA bands above
Premium.
2 NEMA bands above
Premium.
2 NEMA bands above
Premium.
Super Premium/IE4 ......
2. Cost Analysis
The cost analysis portion of the
engineering analysis is conducted using
one or a combination of cost
approaches. The selection of cost
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approach depends on a suite of factors,
including the availability and reliability
of public information, characteristics of
the regulated product, the availability
and timeliness of purchasing the
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Max-tech
Max-tech
Max-tech
Max-tech
equipment on the market. The cost
approaches are summarized as follows:
• Physical teardowns: Under this
approach, DOE physically dismantles a
commercially available product,
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component-by-component, to develop a
detailed bill of materials for the product.
• Catalog teardowns: In lieu of
physically deconstructing a product,
DOE identifies each component using
parts diagrams (available from
manufacturer websites or appliance
repair websites, for example) to develop
the bill of materials for the product.
• Price surveys: If neither a physical
nor catalog teardown is feasible (for
example, for tightly integrated products
such as fluorescent lamps, which are
infeasible to disassemble and for which
parts diagrams are unavailable) or costprohibitive and otherwise impractical
(e.g. large commercial boilers), DOE
conducts price surveys using publicly
available pricing data published on
major online retailer websites and/or by
soliciting prices from distributors and
other commercial channels.
In the March 2022 Preliminary
Analysis, DOE conducted the analysis
using a combination of physical
teardowns and software modeling. DOE
contracted a professional motor
laboratory to disassemble various
electric motors and record what types of
materials were present and how much
of each material was present, recorded
in a final bill of materials (‘‘BOM’’). To
supplement the physical teardowns,
software modeling by an SME was also
used to generate BOMs for select
efficiency levels of directly analyzed
representative units. The resulting bill
of materials provides the basis for the
manufacturer production cost (‘‘MPC’’)
estimates. See Chapter 5 of the March
2022 Prelim TSD.
In response to the March 2022
Preliminary Analysis, DOE received a
number of comments. First, DOE
received a comment regarding labor
rates and markups used in the
engineering analysis. ABB commented
that the tabulated cost of labor used in
Table 2.5.17 of the March 2022 Prelim
TSD does not accurately reflect the
current labor market. ABB added that
the U.S. labor markets have tightened
significantly over the past 12 months,
and as a result labor rates have
increased significantly. Therefore, ABB
commented that they believe the labor
rates shown in the table are outdated
and need to be revised with current
rates. Regarding the magnitude of the
factory markup in Table 2.5.17 in the
March 2022 Prelim TSD, ABB also
commented that they believe that 30
percent is a more accurate estimate than
the 15 percent mentioned, and that
using the 15 percent markup would
result in an underestimation of the cost
impacts of factory overhead. (ABB, No.
28 at p. 1)
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Regarding labor rates and markups,
DOE used the same hourly labor rate for
all electric motors analyzed. DOE
determined the unburdened labor rate
by using the 2007 Economic Census of
Industry, and since the March 2022
Preliminary Analysis, updated the labor
rate to dollar year 2021 using producer
price index (‘‘PPI’’) data.37 DOE
understands this method of calculation
accounts for changes in the labor market
because the PPI data contains
information from the current market. In
addition, several markups were applied
to this hourly rate to obtain a fully
burdened rate, which is representative
of the labor costs associated with
manufacturing electric motors. The
markups applied to the base labor cost
per hour include indirect production,
overhead, fringe, and assembly labor uptime costs. Finally, DOE also
incorporated input from manufacturers
during interviews on domestic and
foreign labor rates to inform the labor
cost values used in the engineering
analysis in this direct final rule. As
such, DOE concludes that the updates to
the labor rates since the March 2022
Preliminary Analysis accurately
represent current labor market.
Regarding the overhead markup, DOE
notes that in the March 2022
Preliminary Analysis, an overhead
markup of 30 percent was applied to the
unburdened labor rate in line with
ABB’s recommendation. The 15 percent
factory overheard markup referenced in
ABB’s comment is a separate markup
applied to the material cost of a motor,
not related to the labor markup of
concern. In addition, the factory
overhead markup was increased to 20
percent when copper die-casting was
used in the rotor. DOE presented the
range of factory overhead markups in
manufacturer interviews, and either
received little feedback, or generally
supportive comments from
manufacturers. Accordingly, DOE
concludes that the factory overhead
markups used in the March 2022
Preliminary Analysis sufficiently
characterizes the markups used for the
cost analysis.
DOE also received a comment
regarding material prices. NEMA
commented referring DOE to a
Department of Commerce study from
October 2020 for perspective on
conductor prices. NEMA also stated that
DOE should update its information to
2022 data and pricing. (NEMA, No. 22
at p. 16) DOE reviewed the Department
of Commerce study referenced by
37 NAICS code 335312 ‘‘Motor and generator
manufacturing’’ production workers hours and
wages.
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NEMA and did not find any specific
material pricing information regarding
copper or aluminum, the two
conductors that this engineering
analysis focuses on. In the direct final
rule, DOE determined conductor prices
based on producer price indices 38 and
manufacturer input obtained through
interviews.
Regarding the dollar year used for the
analysis, DOE usually uses the most
recent completed year before the
publication of any rulemaking
document when presenting pricing
information and data to reduce the
impact of month-to-month material
pricing volatility. However, due to
recent pricing volatility as a result of
global supply chain issues, DOE is
presenting pricing information as a 5year average price so that the price
results can be extrapolated more
accurately for use in future years. As
such, DOE presents all costs and pricing
information as a 5-year average of the
years 2017 to 2021 in this direct final
rule.
Finally, DOE also received a comment
regarding how costs would need to be
updated because of the stack length
increase. NEMA commented that the
stack lengths of motors in Table 2.5.13
of the March 2022 Preliminary Analysis
TSD appear to be longer than what
would fit in a typical motor housing and
stated that DOE needs to consider the
cost of redesigning the motor to
accommodate the larger stack and all
costs of changing the production line.
NEMA stated that certain stack lengths
may be so long that they are not able to
be machine wound, and instead would
use the more labor-intensive process of
hand winding. NEMA commented that
the increased labor requirements would
push manufacturers to move production
to facilities with lower cost of labor
outside of the US and would reduce US
jobs. Finally, NEMA stated that the
conversion costs of using thinner steels
did not capture the conversion costs of
using longer stack lengths. NEMA also
stated that end-use motor application
redesign should be accounted for as
well. (NEMA, No. 22 at p. 17)
DOE notes that NEMA did not
identify specific units that would have
to be hand-wound because of their stack
lengths. A given winding machine may
have a limit of how long of a stack it can
wind, but DOE understands that if the
38 Producer Price Index by Commodity: Metals
and Metal Products: Copper Wire and Cable
(WPU10260314): https://fred.stlouisfed.org/series/
WPU10260314; Producer Price Index by
Commodity: Metals and Metal Products: Extruded
Aluminum Rod, Bar, and Other Extruded Shapes
(WPU10250162): https://fred.stlouisfed.org/series/
WPU10250162.
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stack length increased beyond this limit,
a manufacturer could use the next sized
winding machine that they may already
use for larger horsepower motors.
However, in this direct final rule, DOE
is not adopting a standard level that
would require motors to be handwound, and as such does not find that
there will be a push to offshore US
manufacturing of electric motors for the
standards being finalized. However,
separately DOE also performs a
manufacturer impact analysis to
quantify the costs incurred by the
manufacturer to redesign regulated
equipment at each efficiency level; see
discussion in section IV.J.
Accordingly, in this direct final rule,
DOE continues to use the approach from
the March 2022 Preliminary Analysis by
determining costs using a combination
of physical teardowns and software
modeling. In addition, as part of this
direct final rule, DOE supplemented
other critical inputs to the MPC
estimate, including material prices
assumed, scrap costs, overhead costs,
and conversion costs incurred by the
manufacturer, using information
provided by manufacturers under a
nondisclosure agreement through both
manufacturer interviews and the
Electric Motors Working Group.
Through these nondisclosure
agreements, DOE solicited and received
feedback on inputs like: motor starter
costs associated with NEMA Design A
motors, recent electrical steel prices by
grade, and the MPCs of both Design A
and Design B motors at different
efficiency levels and rated motor output.
See chapter 5 of the direct final rule
TSD for more detail on the scrap,
overhead, and conversion costs as well
as material prices used.
Finally, to account for manufacturers’
non-production costs and profit margin,
DOE applies a non-production cost
multiplier (the manufacturer markup) to
the MPC. The resulting manufacturer
selling price (‘‘MSP’’) is the price at
which the manufacturer distributes a
unit into commerce. DOE developed an
average manufacturer markup by
examining the annual Securities and
Exchange Commission (SEC) 10–K
reports filed by publicly-traded
manufacturers primarily engaged in
electric motor manufacturing and whose
combined product range includes
electric motors. For motors with a rated
output power of 5 or less horsepower,
36099
DOE used a non-production markup of
37 percent. For motors rated above 5
horsepower, DOE used a nonproduction markup of 45 percent.
3. Cost-Efficiency Results
The results of the engineering analysis
are reported as cost-efficiency data (or
‘‘curves’’) in the form of MSP (in
dollars) versus full-load efficiency (in
%), which form the basis for subsequent
analysis. DOE developed eleven curves
representing the four equipment class
groups. The methodology for developing
the curves started with determining the
full-load efficiency and MPCs for
baseline motors. Above the baseline,
DOE implemented various combinations
of design options to achieve each
efficiency level. Design options were
implemented until all available
technologies were employed (i.e., at a
max-tech level). To account for
manufacturers’ non-production costs
and profit margin, DOE applies a
manufacturer markup to the MPC,
resulting in the MSP. See Table IV–7 for
the final results. See TSD Chapter 5 for
additional detail on the engineering
analysis.
TABLE IV–7—COST-EFFICIENCY RESULTS
Full-load efficiency (%)
RU
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1 ..................
2 ..................
3 ..................
4 ..................
5 ..................
6 ..................
7 ..................
8 ..................
9 ..................
10 ................
11 ................
HP
Pole
5
30
75
150
350
600
5
30
75
150
5
4
4
4
4
4
4
4
4
4
4
4
Enclosed
Enclosed
Enclosed
Enclosed
Enclosed
Enclosed
Enclosed
Enclosed
Enclosed
Enclosed
Enclosed
EL0
EL1
EL2
EL3
EL4
89.50
93.60
95.40
95.80
96.20
95.80
87.50
92.40
94.10
95.00
85.50
91.00
94.50
95.80
96.20
96.80
96.20
89.50
93.60
95.40
95.80
87.50
91.00
94.50
96.20
96.50
96.80
96.80
91.00
94.50
95.80
96.20
89.50
91.70
95.00
96.50
96.80
97.10
96.80
91.00
94.50
96.20
96.50
91.00
92.40
95.40
96.80
97.10
97.40
97.40
92.40
95.40
96.80
97.10
91.00
....
....
....
....
....
....
....
....
....
....
....
In this direct final rule, DOE also
added a scenario to account for the fact
that some consumers may choose to
purchase a synchronous electric motor
(out of scope of this direct final rule)
rather than a more efficient NEMA
Design A or B electric motor or select to
purchase a VFD in combination with a
compliant electric motor. As such, DOE
costed out the price of a synchronous
electric motor and a VFD to analyze for
this substitution; further discussion on
this analysis is provided in Chapter 5 of
the direct final rule TSD.
4. Scaling Methodology
Due to the large number of equipment
classes, DOE was not able to perform a
detailed engineering analysis on each
one. Instead, DOE focused its analysis
on the representative units and scaled
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Enclosure
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EL0
$340.95
1,331.45
3,724.25
6,181.17
12,874.60
19,711.60
304.59
1,281.82
3,097.87
5,352.67
304.59
the results to equipment classes not
directly analyzed in the engineering
analysis. In the March 2022 Preliminary
Analysis, DOE used the current
standards at 10 CFR 431.25 as a basis to
scale the efficiency of the representative
units to all other equipment classes. In
order to scale for efficiency levels above
baseline, the efficiencies for the
representative units were shifted up or
down by however many NEMA bands,
because these bands are commonly used
by industry when describing motor
efficiency, that efficiency level was
above current standards.
In response to the preliminary
analysis, NEMA disagreed that a given
enclosed motor could meet the same or
higher efficiency standards as an open
motor. NEMA stated that Part 13 of
NEMA MG1 specifies, for many ratings,
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EL1
$424.52
1,792.24
4,577.13
6,378.33
15,313.54
20,532.73
332.96
1,326.36
3,703.79
6,199.20
332.96
EL2
$424.52
1,792.24
4,943.96
8,205.53
15,313.54
24,422.41
414.57
1,785.38
4,551.99
6,396.94
414.57
EL3
$459.91
1,928.42
5,219.07
8,662.15
18,042.15
24,422.41
414.57
1,785.38
4,910.11
8,229.47
554.40
EL4
$614.47
1,999.62
5,541.73
9,197.66
19,157.57
30,552.96
554.40
1,975.97
5,510.57
8,687.42
554.40
their standard frame size to be smaller
than an enclosed motor of the same
frame size. NEMA provided an example
of a 7.5 hp, 575V, 2 pole standard
NEMA Design A/B motor and state that
an open enclosure motor is standard as
a 184T frame whereas an enclosed
would be a 213T frame. NEMA stated
that the ratings for which the standard
frame size is the same for an open or
enclosed enclosure, the efficiency
capability of the open motor is expected
to be equal or greater than an enclosed
motor because of the reduced windage
losses and potentially lower operating
temperature. NEMA noted that the
specific utility lost by switching from an
open motor to an enclosed one would be
having to move to a physically larger
motor and mounting dimensions for
certain ratings. NEMA stated that the
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D. Markups Analysis
of the product to cover business costs
and profit margin.
In the March 2022 Preliminary
Analysis, DOE identified distribution
channels for MEM 1–500 hp, NEMA
Design A and B and AO–MEM
(Standard Frame Size) and their
respective market shares (i.e.,
percentage of sales going through each
channel). For these electric motors, the
main parties in the distribution chain
are OEMs, equipment or motor
wholesalers, retailers, and contractors.
In response to the March 2022
Preliminary Analysis, DOE did not
receive any comment on the distribution
channels identified. Therefore, DOE
retained these distribution channels for
MEM 1–500 hp, NEMA Design A and B
and AO–MEM (Standard Frame Size) in
the direct final rule. For electric motors
above 500 hp and up to 750 hp (‘‘MEM
501–750 hp, NEMA Design A & B’’),
DOE applied the same distribution
channels. For and AO–polyphase
(specialized frame size) electric motors
which are typically sold through OEMs,
DOE assumed that these motors are only
sold through distribution channels that
include OEMs.
DOE developed baseline and
incremental markups for each actor in
the distribution chain. Baseline
markups are applied to the price of
products with baseline efficiency, while
incremental markups are applied to the
difference in price between baseline and
higher-efficiency models (the
incremental cost increase). The
incremental markup is typically less
than the baseline markup and is
designed to maintain similar per-unit
operating profit before and after new or
amended standards.39
In the March 2022 Preliminary
Analysis, DOE relied on economic data
from the U.S. Census Bureau and on
2020 RS Means Electrical Cost Data to
estimate average baseline and
incremental markups. Specifically, DOE
estimated the OEM markups for electric
motors based on financial data of
different sets of OEMs that use
respective electric motors from the latest
2019 Annual Survey of Manufactures.40
The relevant sets of OEMs identified
were listed in Table 6.4.2 of the March
The markups analysis develops
appropriate markups (e.g., retailer
markups, distributor markups,
contractor markups) in the distribution
chain and sales taxes to convert the
MSP estimates derived in the
engineering analysis to consumer prices,
which are then used in the LCC and PBP
analysis and in the manufacturer impact
analysis. At each step in the distribution
channel, companies mark up the price
39 Because the projected price of standardscompliant products is typically higher than the
price of baseline products, using the same markup
for the incremental cost and the baseline cost would
result in higher per-unit operating profit. While
such an outcome is possible, DOE maintains that in
markets that are reasonably competitive it is
unlikely that standards would lead to a sustainable
increase in profitability in the long run.
40 U.S. Census Bureau. 2019 Annual Survey of
Manufactures (ASM): Statistics for Industry Groups
and Industries. (Last accessed March 23, 2021.)
www.census.gov/programs-surveys/asm.html.
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efficiency ratings of NEMA 12–12 is
higher for open motors at some ratings,
higher for enclosed at others, and in
some cases equal in order to retain this
utility of having a smaller motor for a
given application. (NEMA, No. 22 at p.
6)
DOE acknowledges that the
efficiencies would be different for open
and enclosed motors for the scope of
electric motors being considered in this
direct final rule. As such, DOE
considered separate efficiencies for
open and enclosed motors; although
DOE only analyzed enclosed motor
representative units as part of the
analysis, for the full range of efficiencies
being considered for the downstream
analysis, DOE considered different
efficiencies for open and enclosed. DOE
based the relationship between enclosed
and open motor efficiencies on Table 5
of 10 CFR 431.25. Specifically, DOE
quantified the offset between enclosed
and open motor efficiencies for each
pole and horsepower combination in
terms of NEMA bands. DOE used the
same offset to determine the open motor
efficiencies from the enclosed motor
efficiencies for the full range of pole and
horsepower combinations being
considered for each ECG and efficiency
level analyzed.
In this direct final rule, to scale across
horsepower, pole configuration, and
enclosure, DOE again relied on
industry-recognized levels of efficiency
when possible, or shifted forms of these
levels. For example: when an efficiency
level for a representative unit was
NEMA Premium, Table 12–12 of NEMA
MG 1–2016 was used to determine the
efficiency of all the non-representative
unit equipment classes. This method of
scaling was also done for IE4 levels of
efficiency, electric motor fire pump
levels, and shifted versions of NEMA
Premium (see Table IV–10 for
description of efficiency levels
analyzed). DOE relied on industryrecognized levels because they
sufficiently capture the effects of
enclosure, pole configuration, frame
size, and horsepower on motor
efficiency.
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2022 Prelim TSD, using six-digit code
level North American Industry
Classification System (NAICS). Further,
DOE collected information regarding
sales taxes from the Sales Tax
Clearinghouse.41 See chapter 6 of the
March 2022 Prelim TSD.
In response to the March 2022
Preliminary Analysis, NEMA
commented that Table 6.4.2 of the
March 2022 Prelim TSD should be
replaced by Table IV.3 of the Import
Data Declaration Proposed Rule.42
(NEMA, No. 22 at p. 18)
Table IV.3 of the Import Data
Declaration Proposed Rule provides a
list of five-digit code level NAICS.43
DOE reviewed the corresponding sixdigit code level NAICS and identified
the following additional NAICS code as
relevant in the context of OEMs
incorporating electric motors in their
equipment: 333999 ‘‘All other
miscellaneous general Purpose
machinery manufacturing’’. Other
NAICS codes were either already
included in the March 2022 Preliminary
Analysis or were did not correspond to
OEMs incorporating electric motors
subject to this DFR in their equipment.
For the direct final rule, DOE revised
the OEM baseline and incremental
markups calculation to account for this
additional NAICS code. In addition,
DOE relied on updated data from the
economic data from the U.S. Census
Bureau and on 2022 RS Means Electrical
Cost Data, and the Sales Tax
Clearinghouse.
Chapter 6 of the direct final rule TSD
provides details on DOE’s development
of markups for electric motors.
E. Energy Use Analysis
The purpose of the energy use
analysis is to determine the annual
energy consumption of electric motors
at different efficiencies for a
representative sample of commercial,
industrial, and agricultural consumers,
and to assess the energy savings
potential of increased electric motor
efficiency. The energy use analysis
estimates the range of energy use of
electric motors in the field (i.e., as they
are actually used by consumers). For
each consumer in the sample, the
energy use is calculated by multiplying
the annual average motor input power
by the annual operating hours. The
41 Sales Tax Clearinghouse Inc. State Sales Tax
Rates Along with Combined Average City and
County Rates. July 2021. (Last accessed July 1,
2021.) thestc.com/STrates.stm.
42 NEMA also provided the following link:
www.regulations.gov/document/EERE-2015-BT-CE0019-0001
43 Each five-digit code level NAICS includes
several six-digit code level NAICS.
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energy use analysis provides the basis
for other analyses DOE performed,
particularly assessments of the energy
savings and the savings in consumer
operating costs that could result from
adoption of amended or new standards.
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1. Consumer Sample
In the March 2022 Preliminary
Analysis, DOE created a consumer
sample to represent consumers of
electric motors in the commercial,
industrial, and agricultural sectors. DOE
used the sample to determine electric
motor annual energy consumption as
well as for conducting the LCC and PBP
analyses. Each consumer in the sample
was assigned a sector, an application,
and a region. The sector and application
determine the usage profile of the
electric motor and the economic
characteristics of the motor owner vary
by sector and region. DOE primarily
relied on data from the 2018
Commercial Building Energy
Consumption Survey (‘‘CBECS’’), the
2018 Manufacturing Energy
Consumption Survey (‘‘MECS’’), the
2013 Farm and Ranch Irrigation Survey,
and a DOE–AMO report ‘‘U.S. Industrial
and Commercial Motor System Market
Assessment Report Volume 1:
Characteristics of the Installed Base’’
(‘‘MSMA’’ or ‘‘DOE–AMO report’’).44
See chapter 7 of the March 2022 Prelim
TSD.
In response to DOE’s requests for
feedback regarding the consumer
sample, NEMA referred to the MSMA
report (NEMA, No. 22 at p. 19) As
previously described, DOE relied on
information from the MSMA report to
inform its consumer sample. DOE did
not receive any additional comments
related to the consumer sample
developed in the preliminary analysis
and retained the same approach for this
direct final rule. In addition, for electric
motors above 500 hp and up to 750 hp,
and AO–polyphase specialized frame
size electric motors, DOE applied the
same consumer sample.
2. Motor Input Power
In the March 2022 Preliminary
Analysis, DOE calculated the motor
input power as the sum of (1) the
electric motor’s rated horsepower
multiplied by its operating load (i.e., the
motor output power), and (2) the losses
at the operating load (i.e., part-load
losses). DOE estimated distributions of
motor average annual operating load by
application and sector based on
information from the MSMA report.
44 Prakash Rao et al., ‘‘U.S. Industrial and
Commercial Motor System Market Assessment
Report Volume 1: Characteristics of the Installed
Base,’’ January 12, 2021, doi.org/10.2172/1760267.
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DOE determined the part-load losses
using outputs from the engineering
analysis (full-load efficiency at each
efficiency level) and published part-load
efficiency information from 2016 and
2020 catalog data from several
manufacturers to model motor part-load
losses as a function of the motor’s
operating load. See chapter 7 of the
March 2022 Prelim TSD.
In response to DOE’s requests for
feedback regarding distributions of
average annual operating load by
application and sector, NEMA referred
to the MSMA report (NEMA, No. 22 at
p. 19) As previously described, DOE
relied on information from the MSMA
report to characterize average annual
operating loads. DOE did not receive
any additional comments related to the
distributions of operating loads
developed in the March 2022
Preliminary Analysis and retained the
same approach for this DFR.
DOE did not receive any comments on
its approach to determine part-load
losses and retained the same
methodology for this DFR. However,
DOE updated its analysis to account for
more recent part-load efficiency
information from the 2022 Motor
Database. In addition, for electric motors
larger than 500 hp and up to 750 hp,
and AO–polyphase specialized frame
size electric motors, DOE applied the
same approach for establishing motor
part-load losses and motor input power.
3. Annual Operating Hours
In the March 2022 Preliminary
Analysis, DOE used information from
the MSMA report to establish
distributions of motor annual hours of
operation by application for the
commercial and industrial sectors. The
MSMA report provided average, mean,
median, minimum, maximum, and
quartile boundaries for annual operating
hours across industrial and commercial
sectors by application and showed no
significant difference in average annual
hours of operation between horsepower
ranges. DOE used this information to
develop application-specific statistical
distributions of annual operating hours
in the commercial and industrial
sectors. See chapter 7 of the March 2022
Prelim TSD.
For electric motors used in the
agricultural sector (which were not
included in the MSMA report), DOE
derived statistical distributions of
annual operating hours of irrigation
pumps by region using data from the
2013 Census of Agriculture Farm and
Ranch Irrigation Survey.
In response to DOE’s requests for
feedback regarding distributions of
average annual operating hours by
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36101
application and sector, NEMA referred
to the DOE MSMA report. (NEMA, No.
22 at p. 20) As previously described,
DOE relied on information from the
MSMA report to inform its distributions
of annual operating hours in the
commercial and industrial sectors. For
the agricultural sector, which was not
included in the MSMA report, DOE
relied on additional data sources as
previously described. DOE did not
receive any additional comments related
to the distributions of operating hours
developed in the March 2022
Preliminary Analysis and retained the
same approach for this final rule. In
addition for electric motors larger than
500 hp, DOE also relied on data from
the MSMA report to develop operating
hours.
4. Impact of Electric Motor Speed
Any increase in operating speeds as
the efficiency of the motor is increased
could affect the energy saving benefits
of more efficient motors in certain
variable torque applications (i.e., fans,
pumps, and compressors) due to the
cubic relation between speed and power
requirements (i.e., ‘‘affinity law’’). In the
March 2022 Preliminary Analysis, DOE
accounted for any changes in the
motor’s rated speed with an increase in
efficiency levels, based on the speed
information by EL provided in the
engineering analysis. Based on
information from a European motor
study,45 DOE assumed that 20 percent of
consumers with fan, pump, and air
compressor applications would be
negatively impacted by higher operating
speeds. See chapter 7 of the March 2022
Prelim TSD.
The Joint Advocates requested
clarifications regarding how DOE
accounted for the impact of the
increased motor speed on the energy
use, as well as how motor slip 46 was
45 ‘‘EuP–LOT–30–Task–7–Jun–2014.Pdf,’’
accessed April 26, 2021, www.eup-network.de/
fileadmin/user_upload/EuP-LOT-30-Task-7-Jun2014.pdf. The European motor study estimated, as
a ‘‘worst case scenario,’’ that up to 40 percent of
consumers purchasing motors for replacement
applications may not see any decrease or increase
in energy use due to this impact and did not
incorporate any change in energy use with
increased speed. In addition, the European motor
study also predicts that any energy use impact will
be reduced over time because new motor driven
equipment would be designed to take account of
this change in speed. Therefore, the study did not
incorporate this effect in the analysis (i.e., 0 percent
of negatively impacted consumers). In the absence
of additional data to estimate the percentage of
consumers that may be negatively impacted in the
compliance year, DOE relied on the mid-point value
of 20 percent.
46 The motor slip is the difference between the
motor’s synchronous speed and actual speed which
is lower than the synchronous speed). At higher
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incorporated into the energy use
analysis. (Joint Advocates, No. 27 at p.
4–5)
DOE described the method and
assumptions used to calculate the
impact of higher speeds (i.e., lower slip)
by EL on the energy use in section
7.2.2.1 of the March 2022 Prelim TSD.
In the direct final rule TSD, DOE
provided additional details on the
methodology and equations used as part
of Appendix 7A.
NEMA commented that nearly 100
percent of fans, pumps and compressors
using electric motors would be
negatively impacted by an increase in
speed. In addition, NEMA commented
that it would take up to two years for
OEMs to redesign and recertify an
equipment with a motor that has higher
speed and provided an example
calculation to illustrate the impacts of
higher speed operation. (NEMA, No. 22
at pp. 20–21, 49) The Joint Industry
Stakeholders commented that DOE
should consider the full impact of
higher speed motors by taking into
account new products as well as
replacement. The Joint Industry
Stakeholders commented that if lower
speed motors are no longer available,
appliances may be forced to incorporate
higher speed motors which may cause
short-cycling in HVAC and refrigeration
applications and result in negative
impacts in other appliances. (Joint
Industry Stakeholders, No. 23 at pp. 8–
9)
In this direct final rule, DOE included
the effect of increased speeds in the
energy use calculation for all equipment
classes. DOE reviewed information
related to pump, fans, and compressor
applications and notes that: (1) seven to
20 percent of motors used in these
applications are paired with VFDs
which allow the user to adjust the speed
of the motor; 47 (2) approximately half of
fans operate with belts which also allow
the user to adjust the speed of the
driven fan; 48 (3) some applications
would benefit from increase in speeds
as the work would be completed at a
higher load in less operating hours (e.g.
pump filling water tank faster at
increased speed); (4) not all fans, pumps
and compressors are variable torque
loads to which the affinity laws applies.
Therefore, less than 100 percent of
motors in these applications would
ELs, the speed of a given motor may increase and
the motor slip may decrease.
47 See Figure 64 and Figure 71 of the MSMA
report.
48 See 2016 Fan Notice of Data Availability, 81 FR
75742 (November 1, 2016). LCC spreadsheet, ‘‘LCC
sample’’ worksheet, ‘‘Belt vs. direct driven fan
distribution’’ available at www.regulations.gov/
document/EERE-2013-BT-STD-0006-0190.
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experience an increase in energy use as
a result of an increase in speed. In
addition, as described in the European
motor study, the increase in speed
would primarily impact replacement
motors installed in applications that
previously operated with a lower speed
motor. For these reasons, DOE
determined that assuming that 100
percent of fans, pumps and compressors
using electric motors would be
negatively impacted by an increase in
speed would not be representative. DOE
continues to rely on a 20 percent
assumption used in the March 2022
Preliminary Analysis. In addition, DOE
incorporated a sensitivity analysis
allowing the user to consider this effect
following scenarios described in
Appendix 7–A of the TSD.
Chapter 7 of the direct final rule TSD
provides details on DOE’s energy use
analysis for electric motors.
F. Life-Cycle Cost and Payback Period
Analysis
DOE conducted LCC and PBP
analyses to evaluate the economic
impacts on individual consumers of
potential energy conservation standards
for electric motors. The effect of new or
amended energy conservation standards
on individual consumers usually
involves a reduction in operating cost
and an increase in purchase cost. DOE
used the following two metrics to
measure consumer impacts:
• The LCC is the total consumer
expense of an appliance or product over
the life of that product, consisting of
total installed cost (manufacturer selling
price, distribution chain markups, sales
tax, and installation costs) plus
operating costs (expenses for energy use,
maintenance, and repair). To compute
the operating costs, DOE discounts
future operating costs to the time of
purchase and sums them over the
lifetime of the product.
• The PBP is the estimated amount of
time (in years) it takes consumers to
recover the increased purchase cost
(including installation) of a moreefficient product through lower
operating costs. DOE calculates the PBP
by dividing the change in purchase cost
at higher efficiency levels by the change
in annual operating cost for the year that
amended or new standards are assumed
to take effect.
For any given efficiency level, DOE
measures the change in LCC relative to
the LCC in the no-new-standards case,
which reflects the estimated efficiency
distribution of electric motors in the
absence of new or amended energy
conservation standards. In contrast, the
PBP for a given efficiency level is
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measured relative to the baseline
product.
For each considered efficiency level
in each product class, DOE calculated
the LCC and PBP for a nationally
representative set of consumers. As
stated previously, DOE developed
consumer samples from various data
sources (see section IV.E.1 of this
document). For each sample consumer,
DOE determined the energy
consumption for the electric motor and
the appropriate energy price. By
developing a representative sample of
consumers, the analysis captured the
variability in energy consumption and
energy prices associated with the use of
electric motors.
Inputs to the calculation of total
installed cost include the cost of the
product—which includes MPCs,
manufacturer markups, retailer and
distributor markups, and sales taxes—
and installation costs. Inputs to the
calculation of operating expenses
include annual energy consumption,
energy prices and price projections,
repair and maintenance costs, product
lifetimes, and discount rates. DOE
created distributions of values for
product lifetime, discount rates, and
sales taxes, with probabilities attached
to each value, to account for their
uncertainty and variability.
The computer model DOE uses to
calculate the LCC and PBP relies on a
Monte Carlo simulation to incorporate
uncertainty and variability into the
analysis. The Monte Carlo simulations
randomly sample input values from the
probability distributions and electric
motor user samples. The model
calculated the LCC and PBP for
products at each efficiency level for
10,000 consumer per simulation run.
The analytical results include a
distribution of 10,000 data points
showing the range of LCC savings for a
given efficiency level relative to the nonew-standards case efficiency
distribution. In performing an iteration
of the Monte Carlo simulation for a
given consumer, product efficiency is
chosen based on its probability. If the
chosen product efficiency is greater than
or equal to the efficiency of the standard
level under consideration, the LCC and
PBP calculation reveals that a consumer
is not impacted by the standard level.
By accounting for consumers who
already purchase more-efficient
products, DOE avoids overstating the
potential benefits from increasing
product efficiency.
DOE calculated the LCC and PBP for
all consumers of electric motors as if
each were to purchase a new product in
the first year of required compliance
with new or amended standards. DOE
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expects the direct final rule to publish
in the first half of 2023. Therefore, DOE
used 2027 as the year of compliance
with any new or amended standards for
electric motors based on the
recommended 4 year compliance period
after the direct final rule publication.
Table IV–8 summarizes the approach
and data DOE used to derive inputs to
the LCC and PBP calculations. The
subsections that follow provide further
36103
discussion. Details of the LCC model,
and of all the inputs to the LCC and PBP
analyses, are contained in chapter 8 of
the direct final rule TSD and its
appendices.
TABLE IV–8—SUMMARY OF INPUTS AND METHODS FOR THE LCC AND PBP ANALYSIS *
Inputs
Source/method
Equipment Cost ..................................................
Derived by multiplying MPCs by manufacturer and retailer markups and sales tax, as appropriate. Used a constant price trend to project equipment costs based on historical data.
Installation costs vary by EL. Used input from NEMA and engineering analysis to determine installation costs.
Motor input power multiplied by annual operating hours per year. Variability: Primarily based
on the MSMA report, 2018 CBECS, 2018 MECS, and 2013 Farm and Ranch Irrigation Survey.
Electricity: Based on EEI Typical Bills and Average Rates Reports data for 2021. Variability:
Regional energy prices determined for four census regions.
Based on AEO 2022 price projections.
Repair costs based on Vaughen 2021, varies by EL Assumed no change in maintenance
costs with efficiency level.
Average: 11.8–33.6 years depending on the equipment class group and horsepower considered. Shipments-weighted average lifetime is 13.6.
Calculated as the weighted average cost of capital for entities purchasing electric motors. Primary data source was Damodaran Online.
2027.
Installation Costs ................................................
Annual Energy Use .............................................
Energy Prices .....................................................
Energy Price Trends ...........................................
Repair and Maintenance Costs ..........................
Equipment Lifetime .............................................
Discount Rates ...................................................
Compliance Date ................................................
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* References for the data sources mentioned in this table are provided in the sections following the table or in chapter 8 of the direct final rule
TSD.
In response to the preliminary
analysis, the Joint Stakeholders
commented that double-regulation has
no corresponding consumer benefits in
the form of reduced power consumption
given the appliance regulations being
unchanged and the fact that a more
efficient motor does not necessarily
translate to a more efficient product
when incorporated into a finished good.
The Joint Stakeholders commented that
to potentially increase the cost of an
OEM product, without a corresponding
energy savings would mean a net loss
for consumers and negative national
impacts. The Joint Industry
Stakeholders noted that the DOE used
operating hours for the following
categories of equipment: air
compressors, refrigeration compressors,
fans and blowers, pumps material
handling, material processing, other,
and agricultural pumps. Of these, the
Joint Stakeholders noted that electric
motors used in air compressors,
refrigeration compressors, fans and
blowers, pumps and agricultural pumps
are already regulated to some extent and
that DOE made no apparent effort to
account for this and deduct a significant
portion of those estimated hours (Joint
Industry Stakeholders, No. 23 at p. 5)
Lennox commented that DOE must
accurately assess, and avoid doublecounting, energy savings when assessing
potential efficiency improvements from
motors used in already-regulated HVAC
equipment. Lennox commented that it is
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unclear in the LCC and payback periods
analysis if DOE accounted for double
regulation and eliminated energy
savings already achieved from systemlevel HVACR regulation. (Lennox, No.
29 at p. 4) HI commented that there is
a potential for duplicate accounting of
energy savings when regulating motors
in general. In addition, there is a
potential for other motor product
efficiencies to be counted twice such as
the use of inverter-only products in
pumps when the DOE calculates savings
in their evaluations (one for inverter
only motors, and another for pumps
using those motors). (HI, No. 31 at p. 1)
NEMA commented that many of the
proposed additions to scope are
accompanied by erroneous claims of
potential energy savings, owing to the
fact that the added motors are
components to other regulated
appliances and devices. They
commented that their review of the
document shows instances where the
DOE is anticipating energy savings on
products that will be used in other
covered products, suggesting the
potentially significant overstatement of
potential energy savings benefits.
(NEMA, No. 22 at p. 5)
As highlighted in a previous DOE
report, motor energy savings potential
and opportunities for higher efficiency
electric motors in commercial and
residential equipment would result in
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overall energy savings.49 In addition,
some manufacturers advertise electric
motors as resulting in energy savings in
HVAC equipment.50 Therefore, DOE
disagrees with the Joint Industry
Stakeholders that an increase in motor
efficiency would not necessarily result
in a more efficient equipment when
incorporated into a given equipment. In
addition, DOE’s analysis ensures the
LCC and NIA analysis do not result in
double-counting of energy savings by
accounting for consumers who already
purchase more-efficient products and
calculating LCC and energy savings
relative to a no-new standards case
efficiency distribution. See Section
IV.F.8 for more details. DOE applies the
same approach in other equipment
rulemakings, and evaluates energy
savings relative to a no-new standards
case efficiency distribution that
accounts for consumers who already
purchase more-efficient equipment
incorporating more efficient motors. As
such, any future analysis in support of
energy conservation standards for
equipment incorporating motors would
also account for equipment that already
incorporate more-efficient electric
49 U.S. DOE Building technology Office, Energy
Savings Potential and Opportunities for HighEfficiency Electric Motors in residential and
Commercial Equipment, December 2013. Available
at: www.energy.gov/eere/buildings/downloads/
motor-energy-savings-potential-report
50 See for example Nidec and ABB:
acim.nidec.com/motors/usmotors/industryapplications/hvac; bit.ly/3wEIQyu
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motors and would not result in any
double counting of energy savings
resulting from motor efficiency
improvements.
In the direct final rule TSD, DOE
added a scenario to account for the fact
that some consumers may choose to
purchase a synchronous electric motor
(out of scope of this direct final rule)
rather than a more efficient NEMA
Design A or B electric motor or select to
purchase a VFD in combination with a
compliant electric motor. DOE
developed a consumer choice model to
estimate the percentage of consumers
that would purchase a synchronous
electric motor based on the payback
period of such investment. See
Appendix 8–D for more details on this
analysis. DOE notes that there is
uncertainty as to which rate such
substitution would occur and did not
incorporate this scenario as part of the
reference analysis.
1. Equipment Cost
To calculate consumer product costs,
DOE multiplied the MSPs developed in
the engineering analysis by the
distribution channel markups described
previously (along with sales taxes). DOE
used different markups for baseline
products and higher-efficiency
products, because DOE applies an
incremental markup to the increase in
MSP associated with higher-efficiency
products.
Economic literature and historical
data suggest that the real costs of many
products may trend downward over
time according to ‘‘learning’’ or
‘‘experience’’ curves. Experience curve
analysis implicitly includes factors such
as efficiencies in labor, capital
investment, automation, materials
prices, distribution, and economies of
scale at an industry-wide level. To
derive a price trend for electric motors,
DOE obtained historical PPI data for
integral horsepower motors and
generators manufacturing spanning the
time period 1969–2021 from the Bureau
of Labor Statistics’ (‘‘BLS’’).51 The PPI
data reflect nominal prices, adjusted for
electric motor quality changes. An
inflation-adjusted (deflated) price index
for integral horsepower motors and
generators manufacturing was
calculated by dividing the PPI series by
the implicit price deflator for Gross
Domestic Product. The deflated price
index for integral horsepower motors
was found to align with the copper,
steel and aluminum deflated price
indices. DOE believes that the extent to
51 Serie PCU3353123353121 for integral
horsepower motors and generators manufacturing;
www.bls.gov/ppi/.
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how these trends will continue in the
future is very uncertain. Therefore, DOE
relied on a constant price assumption as
the default price factor index to project
future electric motor prices.
DOE did not receive any comments on
price trends in response to the
preliminary analysis and followed the
same methodology in the direct final
rule.
2. Installation Cost
Installation cost includes labor,
overhead, and any miscellaneous
materials and parts needed to install the
product. In the March 2022 Preliminary
Analysis, DOE considered that all
motors would remain NEMA Design B
as efficiency increased, and DOE found
no evidence that installation costs
would be impacted with increased
efficiency levels. Therefore, in the
March 2022 Preliminary Analysis, DOE
did not incorporate changes in
installation costs for motors that are
more efficient than baseline equipment.
DOE assumed there was no variation in
installation costs between a baseline
efficiency motor and a higher efficiency
motor except in terms of shipping costs.
These shipping costs were based on
weight data from the engineering
analysis for the representative units. See
chapter 8 of the March 2022 Prelim
TSD.
In response to the preliminary
analysis, EASA stated that there is no
simple or reliable method to estimate
the installation time and costs for
synchronous motors under 100 hp
because they are typically embedded
into a machine like a fan or compressor.
EASA further commented that
submersible motors do not have a
simple or reliable method to estimate
their installation costs because of the
physically connected piping that would
require more time to install than a
typical motor. EASA commented that
inverter-only motors probably do not
require additional time and cost to
install compared to non-inverter motor
unless they require additional wiring for
feedback devices and sensors or
mitigation of harmonics. (EASA, No. 21
at pp. 3–4)
DOE is not including synchronous
electric motors, submersible electric
motors, and inverter-only motors in the
scope of this direct final rule.
EASA commented that motors above
500 hp have additional rigging costs
during installation because of their size
and sometimes difficult to access
locations. EASA stated that there is not
a simple or reliable method to estimate
the installation time and costs for this
size of motor. (EASA, No. 21 at p. 3)
NEMA commented that DOE should
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include costs for rigging (hoisting) for
larger motors due to their extreme
weight. As rated horsepower increases,
so too does the expense and time to
move them safely. (NEMA, No. 22 at p.
22)
DOE agrees that at a given efficiency
level, the installation costs will vary as
a function of the motor’s weight.
However, DOE did not find evidence
that rigging costs (for a given motor size)
would be impacted with increased
efficiency levels as the variations in
weights by EL are not significant enough
to change the equipment and labor
required to hoist the motor as compared
to the baseline.
EASA commented that if a motor is
replaced with a physically larger frame,
the replacement would have higher
installation costs because of the added
complexity of modifying the mounting
setup to accommodate the larger motor,
and in some case would be impossible.
(EASA, No. 21 at p. 2–3)
As noted in section IV.C of this
document, DOE fixed the frame size
which remains the same across
efficiency levels. Therefore, DOE did
not account for any changes in
installation costs due to changes in
frame sizes in this direct final rule.
In addition, as noted in IV.C.1.a, in
this direct final rule, DOE revised the
engineering approach, and assumed that
higher efficiency motors above the
baseline would meet the characteristics
of a NEMA A motors and have higher
inrush currents. Therefore, based on
input from NEMA, DOE estimated the
additional installation costs associated
with the higher inrush current at
efficiency levels above baseline, and
incorporated these costs in the analysis.
3. Annual Energy Consumption
For each sampled consumer, DOE
determined the energy consumption for
an electric motor at different efficiency
levels using the approach described
previously in section IV.E of this
document.
4. Energy Prices
Because marginal electricity price
more accurately captures the
incremental savings associated with a
change in energy use from higher
efficiency, it provides a better
representation of incremental change in
consumer costs than average electricity
prices. Therefore, DOE applied average
electricity prices for the energy use of
the product purchased in the no-newstandards case, and marginal electricity
prices for the incremental change in
energy use associated with the other
efficiency levels considered.
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DOE derived electricity prices in 2021
using data from EEI Typical Bills and
Average Rates reports. Based upon
comprehensive, industry-wide surveys,
this semi-annual report presents typical
monthly electric bills and average
kilowatt-hour costs to the customer as
charged by investor-owned utilities. For
all sectors, DOE calculated electricity
prices using the methodology described
in Coughlin and Beraki (2019).52
DOE’s methodology allows electricity
prices to vary by sector, region and
season. In the analysis, variability in
electricity prices is chosen to be
consistent with the way the consumer
economic and energy use characteristics
are defined in the LCC analysis. For
electric motors, DOE relied on
variability by region and sector. See
chapter 8 of the final rule TSD for
details.
To estimate energy prices in future
years, DOE multiplied the 2021 energy
prices by the projection of annual
average price changes for each sector
from the Reference case in AEO2022,
which has an end year of 2050.53 To
estimate price trends after 2050, DOE
used the 2050 electricity prices, held
constant.
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5. Maintenance and Repair Costs
Repair costs are associated with
repairing or replacing product
components that have failed in an
appliance; maintenance costs are
associated with maintaining the
operation of the product
In the March 2022 Preliminary
Analysis, for the maintenance costs,
DOE did not find data indicating a
variation in maintenance costs between
baseline efficiency and higher efficiency
motors. The cost of replacing bearings,
which is the most common maintenance
practice, is constant across efficiency
levels. Therefore, DOE did not include
maintenance costs in the LCC analysis.
See chapter 8 of the March 2022 Prelim
TSD.
DOE did not receive any comments
related to maintenance costs and
retained the same approach in this
direct final rule.
DOE defines motor repair as including
rewinding and reconditioning. In the
March 2022 Preliminary Analysis, DOE
estimated repair costs as a function of
efficiency based on data from 2021
52 Coughlin, K. and B. Beraki. 2019. Nonresidential Electricity Prices: A Review of Data
Sources and Estimation Methods. Lawrence
Berkeley National Lab. Berkeley, CA. Report No.
LBNL–2001203. https://ees.lbl.gov/publications/
non-residential-electricity-prices.
53 U.S. Energy Information Administration.
Annual Energy Outlook 2022. 2022. Washington,
DC (Last accessed June 1, 2022.) https://
www.eia.gov/outlooks/aeo/index.php.
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Vaughen’s National Average Prices.
Based on these data, DOE estimated the
repair costs for baseline electric motors,
and used a 15 percent repair cost
increase per NEMA efficiency band
increase. In addition, DOE considered
that electric motors at or below 20
horsepower were not repaired. DOE also
assumed that electric motors with a
horsepower greater than 20 and less
than or equal to 100 horsepower are
repaired once over their lifetime, while
electric motors with a horsepower
greater than 100 and less than or equal
to 500 are repaired twice over their
lifetime. DOE also assumed that all
electric motors above 20 horsepower
would be repaired at least one,
regardless of the sampled lifetime. As a
sensitivity analysis, DOE also
considered an alternative scenario
where motors are repaired only upon
meeting certain lifetime criteria. See
chapter 8 of the March 2022 Prelim
TSD.
In response to the March 2022
Preliminary Analysis, EASA and NEMA
stated that DOE may have overlooked
non-rewinding repairs like bearing
changes and stated that these repairs
occur 5–7 times more often than
rewinds regardless of motor output
power. (EASA, No. 21 at p. 3; NEMA,
No. 22 at p. 21) As noted previously,
DOE defines motor repair as including
rewinding and reconditioning. Other
non-rewinding related practices such as
bearing replacement were considered as
part of the maintenance costs.
EASA commented that a higher
efficiency motor may require more
material (e.g. copper magnet wire) and
more labor to rewind windings with the
higher slot fill that is typical of high
efficiency designs. EASA also state that
section 2.8.5 of the preliminary analysis
TSD attributes a 15 percent increase in
repair cost due to higher efficiency
which contradicts Table 2.8.1 of the
preliminary analysis TSD that states
‘‘assumed no change with efficiency
level’’ for repair costs. (EASA, No. 21 at
pp. 3–4) NEMA commented that as
efficiency increases, the rate of hand
winding increases. Repairing handwound motors may take longer as they
are usually would by hand to
accomplish very tight stacking.
Rewinding such motors will take longer
and cost more than random wound
designs (NEMA, No. 22 at p. 22) NEMA
also commented that the discussion on
section 2.8.5 of the preliminary analysis
TSD contradicted the summary table
2.8.1. of the preliminary analysis TSD
(NEMA, No. 22 at p. 22)
As noted by NEMA and EASA, more
efficient motors are more expensive to
repair. In the March 2022 Preliminary
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Analysis, DOE estimated the repair costs
for baseline electric motors, and used a
15 percent repair cost increase per
NEMA efficiency band increase to
characterize the increase in repair costs
with increased electric motor efficiency.
In this direct final rule, DOE continues
to apply an increase in repair costs at
higher efficiency, and because the
increase is directly related to the
increase in material costs, DOE assumed
the repair costs would increase similarly
to the MSP instead of applying a 15
percent increase per NEMA efficiency
band increase. DOE notes a
typographical error in Table 2.8.1 of the
preliminary analysis TSD. In that Table,
DOE omitted to describe the repair cost
assumption, and the statement only
applies to the maintenance costs.
EASA and NEMA commented that
they believe 20 horsepower is not a
valid breakpoint for a repair/replace
decision on electric motors. In practice,
EASA and NEMA commented that the
horsepower breakpoint may be as high
as 100 horsepower on motors readily
available from stock. Also, special OEM
motors and IEC motors that may be
unavailable from inventory may be
rewound more often than other motors
and in lower power ratings due to need
to keep equipment in service. (EASA,
No. 21 at p. 2; NEMA, No. 22 at p. 21)
EASA provided data from 2017–2021
regarding 11,000 technical inquiries
they received about rewinding motors.
The data showed that 32 percent, 29
percent, 31 percent and 8 percent of
inquiries related to motors with
horsepower below 20, between 20 and
100 hp, between 100–500 hp, and
greater than 500 hp, respectively.
(EASA, No. 21 at p. 2) EASA
commented that getting substantive data
on repair likelihood would require
polling a large sample of end-users and
providing them with the definition of
repair given in 8.3.3. of the preliminary
analysis TSD.54 (EASA, No. 21 at p. 4)
Since the publication of the March
2022 Preliminary Analysis, DOE
reviewed additional information related
to repair practices. DOE found that
although a breakpoint of 20 hp reflects
the breakpoint below which the repair
cost for is equivalent to or exceeds the
cost of a new motor, the decision to
repair or replace the motor is not only
based on a cost effectiveness criteria.55
Specifically, in most facilities the cost of
lost production or customer
54 DOE defined a motor repair as repair as
including rewinding and reconditioning
55 ‘‘US Department of Energy, Advanced
Manufacturing Office, Premium Efficiency Motor
Selection and Application Guide,’’ February 2014,
www.energy.gov/sites/prod/files/2014/04/f15/amo_
motors_handbook_web.pdf.
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inconvenience from downtime
outweighs any cost differences between
repairing or replacing a failed motor. As
noted by EASA, the need to keep the
equipment in service also affects the
repair or replace decision. In addition,
when replacing a motor, another major
concern is stock availability. Most
motors under 100 hp will typically be
available on the shelf at the facility
while larger and specialty motors will
not.56 Based on this additional
information, DOE updated the repair
breakpoint from 20 hp to 100 hp. As
such DOE considered that electric
motors below 100 hp would not be
repaired while motors above 100 hp
would be repaired at least once. In
addition, DOE revised the analysis to
consider that specialty electric motors,
which are less likely to be in stock
would be repaired regardless of their
size.
The Joint Advocates observed that for
several representative units of currentlycovered motors, the lifetime operating
costs increased at higher EL and
commented that DOE should review the
repair assumptions and costs to ensure
that operating costs at higher ELs are not
over-estimated. Specifically, the Joint
Advocates commented that DOE should
use the alternative scenario, wherein a
motor is only assumed to be repaired if
that motor’s projected lifetime is greater
than half of the average motor lifetime.
The Joint Advocates commented that
this alternative approach is similar to
that used in the analysis for motor
replacements in the direct final rule for
dedicated-purpose pool pumps 57 and
would result in LCCs that are more
reflective of real-world repair/
replacement decisions. (Joint Advocates,
No. 27 at p. 3–4)
In this direct final rule, DOE revised
the repair assumptions to align with the
alternative scenario presented in the
March 2022 Preliminary Analysis. As
noted by the Joint Advocates, this
scenario, which assumes that motors
with longer lifetimes would be repaired
more often is more representative of
industry practice.
6. Equipment Lifetime
In the March 2022 Preliminary
Analysis, for electric motors regulated at
10 CFR 431.25, DOE estimated the
average mechanical lifetime of electric
motors (i.e., the total number of hours
an electric motor operates throughout its
lifetime) and used different values
depending on the electric motor’s
56 Bonneville Power Administration, ‘‘Quality
Electric Motor Repair, a Guidebook for Electric
Utilities’’ digital.library.unt.edu/ark:/67531/
metadc665937/m2/1/high_res_d/237370.pdf.
57 See 82 FR 5650 (January 18, 2017).
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horsepower. For NEMA Design A and B
electric motors, and AO MEMs, DOE
established sector-specific average
motor lifetime estimates to account for
differences in maintenance practices
and field usage conditions. In addition,
DOE applied a maximum lifetime of 30
years as used in the May 2014 Final
Rule. DOE then developed Weibull
distributions of mechanical lifetimes.
The lifetime in years for a sampled
electric motor is calculated by dividing
the sampled mechanical lifetime by the
sampled annual operating hours of the
electric motor. This model produces a
negative correlation between annual
hours of operation and electric motor
lifetime. Electric motors operated many
hours per year are likely to be retired
sooner than electric motors that are used
for only a few hours per year. In
addition, DOE considered that electric
motors of less than or equal to 75
horsepower are most likely to be
embedded in a piece of equipment (i.e.,
an application). For such applications,
DOE developed Weibull distributions of
application lifetimes expressed in years
and compared the sampled motor
mechanical lifetime (in years) with the
sampled application lifetime. DOE
assumed that the electric motor would
be retired at the earlier of the two
lifetimes. See chapter 8 of the March
2022 Prelim TSD.
In response to the March 2022
Preliminary Analysis, NEMA
commented that the lifetimes assigned
to the representative units appear to be
sufficiently accurate. (NEMA, No. 22 at
p. 22). The CA IOUs recommended
higher maximum lifetimes for NEMA
Designs A and B electric motors beyond
30 years and provided data to justify a
higher maximum lifetime. Specifically,
the CA IOUs referenced the MSMA
report which shows that 5.4 percent of
motors with legible nameplate were
older than 30 years, including 3.4
percent of motors rated 101 to 500 hp
which had lifetimes of at least 50 years.
The CA IOUs also cited the Swiss EASY
program which showed motors of 40
years still in operation. Finally the CA
IOUs cited the ‘‘Energy-Efficient Motor
Systems: A Handbook on Technology,
Program, and Policy Opportunities’’
which references average lifetimes of 30
years for motors larger than 50 hp. (CA
IOUs, No. 30 at p. 3)
DOE reviewed the data provided by
the CA IOUs. As noted by the CA IOUs,
the maximum lifetime of 30 years
assumed in the March 2022 Preliminary
Analysis is not representative as some
motors are reported to have a lifetime
exceeding 50 years. In this direct final
rule, DOE revised the maximum lifetime
of NEMA Designs A and B electric
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motors and AO MEMs from 30 years to
60 years based on information from the
MSMA report which showed motors
still in operation after 50 years.
7. Discount Rates
In the calculation of LCC, DOE
applies discount rates appropriate to
consumers to estimate the present value
of future operating cost savings. DOE
estimated a distribution of discount
rates for electric motors based on the
opportunity cost of consumer funds.
DOE applies weighted average
discount rates calculated from consumer
debt and asset data, rather than marginal
or implicit discount rates.58 The LCC
analysis estimates net present value
over the lifetime of the product, so the
appropriate discount rate will reflect the
general opportunity cost of household
funds, taking this time scale into
account. Given the long time horizon
modeled in the LCC analysis, the
application of a marginal interest rate
associated with an initial source of
funds is inaccurate. Regardless of the
method of purchase, consumers are
expected to continue to rebalance their
debt and asset holdings over the LCC
analysis period, based on the
restrictions consumers face in their debt
payment requirements and the relative
size of the interest rates available on
debts and assets. DOE estimates the
aggregate impact of this rebalancing
using the historical distribution of debts
and assets.
To establish commercial and
industrial discount rates, DOE estimated
the weighted-average cost of capital
using data from Damodaran Online.59
The weighted-average cost of capital is
commonly used to estimate the present
value of cash flows to be derived from
a typical company project or
investment. Most companies use both
debt and equity capital to fund
investments, so their cost of capital is
the weighted average of the cost to the
firm of equity and debt financing. DOE
estimated the cost of equity using the
58 The implicit discount rate is inferred from a
consumer purchase decision between two otherwise
identical goods with different first cost and
operating cost. It is the interest rate that equates the
increment of first cost to the difference in net
present value of lifetime operating cost,
incorporating the influence of several factors:
transaction costs; risk premiums and response to
uncertainty; time preferences; interest rates at
which a consumer is able to borrow or lend. The
implicit discount rate is not appropriate for the LCC
analysis because it reflects a range of factors that
influence consumer purchase decisions, rather than
the opportunity cost of the funds that are used in
purchases.
59 Damodaran, A. Data Page: Historical Returns
on Stocks, Bonds and Bills-United States. 2021.
(Last accessed April 26, 2022.) pages.stern.nyu.edu/
∼adamodar/.
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capital asset pricing model, which
assumes that the cost of equity for a
particular company is proportional to
the systematic risk faced by that
company. The average commercial,
industrial, and agricultural discount
rates in 2022 are 6.8 percent, 7.2
percent, and 7.1 percent respectively.
In response to the March 2022
Preliminary Analysis, DOE did not
receive any comments on discount rates.
See chapter 8 of the direct final rule
TSD for further details on the
development of consumer discount
rates.
8. Energy Efficiency Distribution in the
No-New-Standards Case
To accurately estimate the share of
consumers that would be affected by a
potential energy conservation standard
at a particular efficiency level, DOE’s
LCC analysis considered the projected
distribution (market shares) of
equipment efficiencies under the nonew-standards case (i.e., the case
without amended or new energy
conservation standards).
In the March 2022 Preliminary
Analysis, to estimate the energy
efficiency distribution of electric motors
for 2027, DOE relied on model counts
by efficiency from the 2016 and 2020
Manufacturer Catalog Data and assumed
no changes in electric motor efficiency
over time. In some cases where DOE did
not have enough models with efficiency
information within a single horsepower
range, DOE aggregated horsepower
ranges. In addition for certain AO–
SNEM electric motors, DOE did not find
enough models with efficiency
information to develop a distribution
and used the efficiency distributions of
the corresponding non-AO equipment
class instead. In the March 2022
Preliminary Analysis, DOE used a
Monte Carlo simulation to draw from
the efficiency distributions and
randomly assign an efficiency to the
electric motor purchased by each
sample household in the no-newstandards case. The resulting percent
shares within the sample match the
market shares in the efficiency
distributions. See chapter 8 of the
March 2022 Prelim TSD.
NEMA disagreed with the DOE
estimates for AO MEMs efficiency
distributions and commented that these
distributions were modeled/estimated,
rather than gathered properly and
accurately through testing and other
means. NEMA commented that DOE
should not develop estimates and
interpolations and instead finalize test
procedures. NEMA added that energy
efficiency information does not exist
because Federal test procedures for
some of these motors have not been
established. (NEMA, No. 22 at p. 23)
DOE notes that NEMA did not
provide any data to support alternative
efficiency distributions. In the absence
of such data, DOE relied on model
counts by efficiency from manufacturer
Catalog Data and updated the data to
reflect 2022 catalog offerings (using the
2022 Motor Database). For AO
Polyphase specialized frame electric
motors, DOE did not find any catalog
data to characterize their efficiency
distributions and assumed all motors
were at the baseline, because the OEM
market is cost-driven. As such these
motors are typically built on a first-cost
basis and are not optimized for
efficiency.60 In addition, the electric
motors test procedure, which relies on
industry test methods published in
2016,61 was finalized on October 19,
2022. 87 FR 63588 For air-over motors,
DOE believes manufacturers currently
use the industry test methods (which
were adopted in the October 2022 Final
Rule) to evaluate the efficiency of
electric motors as reported in their
catalogs, which is in line with the DOE
test procedure as finalized.
As previously noted, in the March
2022 Preliminary Analysis, DOE
assumed no changes in electric motor
efficiency over time. DOE did not
receive any comment on this
assumption and retain the same
approach in this direct final rule: to
estimate the energy efficiency
distribution of electric motors for 2027,
DOE assumed no changes in electric
motor efficiency over time. The
estimated market shares for the no-newstandards case for electric motors are
shown in Table IV–9 by equipment class
group and horsepower range.
TABLE IV–9—NO-NEW STANDARDS CASE EFFICIENCY DISTRIBUTIONS IN THE COMPLIANCE YEAR
Equipment class group
Horsepower range
MEM 1–500 hp, NEMA Design A and B .....................................................
1 ≤ hp ≤ 5 ..............
5 < hp ≤ 20 ............
20 < hp ≤ 50 ..........
50 < hp <100 .........
100 ≤ hp ≤ 250 ......
250 < hp ≤ 500 ......
500 < hp ≤ 750 ......
1 ≤ hp ≤ 20 ............
20 < hp ≤ 50 ..........
50 < hp < 100 ........
100 ≤ hp ≤ 250 ......
1 ≤ hp ≤ 20 ............
MEM 501–750 hp, NEMA Design A & B ....................................................
AO–MEM (Standard Frame Size) ...............................................................
AO–Polyphase (Specialized Frame Size) ...................................................
EL0
(%)
79.8
93.9
93.9
89.6
85.9
91.9
10.5
33.3
10.3
0.0
16.7
100
EL1
(%)
18.8
5.4
5.4
1.2
7.0
8.1
73.7
64.3
89.7
100.0
75.0
0
EL2
(%)
0.0
0.0
0.0
6.7
6.5
0.0
15.8
2.3
0.0
0.0
8.3
0
EL3
(%)
0.9
0.5
0.5
2.5
0.6
0.0
0.0
0.0
0.0
0.0
0.0
0
EL4
(%)
0.6
0.1
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0
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* May not sum to 100% due to rounding.
The existence of market failures in the
commercial and industrial sectors is
well supported by the economics
literature and by a number of case
studies as discussed in the remainder of
this section. DOE did not receive any
comments specific to the random
assignment of no-new-standards case
efficiencies (sampled from the
developed efficiency distribution) in the
LCC model and continued to rely on the
same approach to reflect market failures
in the motor market, as noted in the
following examples. First, a recognized
problem in commercial settings is the
60 See, Almeida, Anibal T., et al. 2008. EuP Lot
11 Motors, Ecodesign Assessment of Energy Using
Products. s.l.: ISR-University of Coimbra for the
European Commission Directorate General for
Mobility and Transport, 2008. (p.117). Available at:
circabc.europa.eu/sd/d/62415be2-3d5a-4b3f-b29ad1760f4dc11a/Lot11Motors1-8final28-04-08.pdf.
61 NEMA Standards Publication MG 1–2016,
‘‘Motors and Generators: Air-Over Motor Efficiency
Test Method Section IV Part 34’’, www.nema.org/
docs/default-source/standards-document-library/
part-34-addition-to-mg1-2016-watermarkd91d7834cf4f-4a87-b86f-bef96b7dad54.pdf?sfvrsn=cbf1386d_
3.
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principal-agent problem, where the
building owner (or building developer)
selects the equipment and the tenant (or
subsequent building owner) pays for
energy costs.62 63 In the case of electric
motors, for many companies, the energy
bills are paid for the company as a
whole and not allocated to individual
departments. This practice provides
maintenance and engineering staff little
incentives to pursue energy saving
investments because the savings in
energy bills provide little benefits to the
decision-making maintenance and
engineering staff. (Nadel et al.) 64
Second, the nature of the organizational
structure and design can influence
priorities for capital budgeting, resulting
in choices that do not necessarily
maximize profitability.65 In the case of
electric motors, within manufacturing as
a whole, motor system energy costs
constitute less than 1 percent of total
operating costs and energy efficiency
has a low level of priority among capital
investment and operating objectives.
(Xenergy,66 Nadel et al.) Third, there are
asymmetric information and other
potential market failures in financial
markets in general, which can affect
decisions by firms with regard to their
choice among alternative investment
options, with energy efficiency being
one such option.67 In the case of electric
62 Vernon, D., and Meier, A. (2012).
‘‘Identification and quantification of principal–
agent problems affecting energy efficiency
investments and use decisions in the trucking
industry,’’ Energy Policy, 49, 266–273.
63 Blum, H. and Sathaye, J. (2010). ‘‘Quantitative
Analysis of the Principal-Agent Problem in
Commercial Buildings in the U.S.: Focus on Central
Space Heating and Cooling,’’ Lawrence Berkeley
National Laboratory, LBNL–3557E. (Available at:
escholarship.org/uc/item/6p1525mg) (Last accessed
January 20, 2022).
64 Nadel, S., R.N. Elliott, M. Shepard, S.
Greenberg, G. Katz & A.T. de Almedia. 2002.
Energy-Efficient Motor Systems: A Handbook on
Technology, Program and Policy Opportunities.
Washington, DC: American Council for an EnergyEfficient Economy. Second Edition.
65 DeCanio, S.J. (1994). ‘‘Agency and control
problems in US corporations: the case of energyefficient investment projects,’’ Journal of the
Economics of Business, 1(1), 105–124.
Stole, L.A., and Zwiebel, J. (1996).
‘‘Organizational design and technology choice
under intrafirm bargaining,’’ The American
Economic Review, 195–222.
66 Xenergy, Inc. (1998). United States Industrial
Electric Motor Systems Market Opportunity
Assessment. (Available at: www.energy.gov/sites/
default/files/2014/04/f15/mtrmkt.pdf) (Last
accessed January 20, 2022).
67 Fazzari, S.M., Hubbard, R.G., Petersen, B.C.,
Blinder, A.S., and Poterba, J.M. (1988). ‘‘Financing
constraints and corporate investment,’’ Brookings
Papers on Economic Activity, 1988(1), 141–206.
Cummins, J.G., Hassett, K.A., Hubbard, R.G., Hall,
R.E., and Caballero, R.J. (1994). ‘‘A reconsideration
of investment behavior using tax reforms as natural
experiments,’’ Brookings Papers on Economic
Activity, 1994(2), 1–74.
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motors, Xenergy identified the lack of
information concerning the nature of
motor system efficiency measures—their
benefits, costs, and implementation
procedures—as a principal barrier to
their adoption. In addition, Almeida 68
reports that the attitude of electric motor
end-user is characterized by bounded
rationality where they adopt ‘rule of
thumb’ routines because of the
complexity of market structure which
makes it difficult for motors end-users
to get all the information they need to
make an optimum decision concerning
allocation of resources. The rule of
thumb is to buy the same type and
brand as the failed motor from the
nearest retailer. Almeida adds that the
same problem of bounded rationality
exists when end-users purchase electric
motors incorporated in larger
equipment. In general, end-users are
only concerned about the overall
performance of a machine, and energy
efficiency is rarely a key factor in this
performance. Motor selection is
therefore often left to the OEM, which
are not responsible for energy costs and
prioritize price and reliability.
See chapter 8 of the direct final rule
TSD for further information on the
derivation of the efficiency
distributions.
9. Payback Period Analysis
The payback period is the amount of
time it takes the consumer to recover the
additional installed cost of moreefficient products, compared to baseline
products, through energy cost savings.
Payback periods are expressed in years.
Payback periods that exceed the life of
the product mean that the increased
total installed cost is not recovered in
reduced operating expenses.
The inputs to the PBP calculation for
each efficiency level are the change in
total installed cost of the product and
the change in the first-year annual
operating expenditures relative to the
baseline. The PBP calculation uses the
same inputs as the LCC analysis, except
that discount rates are not needed.
As noted previously, EPCA
establishes a rebuttable presumption
that a standard is economically justified
if the Secretary finds that the additional
cost to the consumer of purchasing a
DeCanio, S.J., and Watkins, W.E. (1998).
‘‘Investment in energy efficiency: do the
characteristics of firms matter?’’ Review of
Economics and Statistics, 80(1), 95–107.
Hubbard R.G. and Kashyap A. (1992). ‘‘Internal
Net Worth and the Investment Process: An
Application to U.S. Agriculture,’’ Journal of
Political Economy, 100, 506–534.
68 de Almeida, E.L.F. (1998). ‘‘Energy efficiency
and the limits of market forces: The example of the
electric motor market in France’’, Energy Policy,
26(8), 643–653.
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product complying with an energy
conservation standard level will be less
than three times the value of the first
year’s energy savings resulting from the
standard, as calculated under the
applicable test procedure. (42 U.S.C.
6295(o)(2)(B)(iii)) For each considered
efficiency level, DOE determined the
value of the first year’s energy savings
by calculating the energy savings in
accordance with the applicable DOE test
procedure, and multiplying those
savings by the average energy price
projection for the year in which
compliance with the new or amended
standards would be required.
G. Shipments Analysis
DOE uses projections of annual
product shipments to calculate the
national impacts of potential amended
or new energy conservation standards
on energy use, NPV, and future
manufacturer cash flows.69 The
shipments model takes an accounting
approach, tracking market shares of
each product class and the vintage of
units in the stock. Stock accounting uses
product shipments as inputs to estimate
the age distribution of in-service
product stocks for all years. The age
distribution of in-service product stocks
is a key input to calculations of both the
NES and NPV, because operating costs
for any year depend on the age
distribution of the stock.
In the March 2022 Preliminary
Analysis, DOE estimated shipments in
the base year (2020). DOE estimated the
shipments of NEMA Design A and B
electric motors regulated under 10 CFR
431.25 to be approximately 4.5 million
units in 2020 based on data from the
2019 Low-Voltage Motors, World
Market Report, and on the share of lowvoltage motors that are subject to the
electric motors energy conservation
standards. DOE estimated the total
shipments AO–MEMs in 2020 to be
240,000 units. For electric motors
regulated under 10 CFR 431.25, DOE
developed a distribution of shipments
by equipment class group, horsepower,
enclosure, and poles based on data from
manufacturer interviews. For AO–
MEMs, DOE relied on model counts
from the 2020 and 2016/2020
Manufacturer Catalog Data. DOE also
provided shipments estimates for
additional categories of electric motors
not analyzed in the preliminary analysis
such as electric motors with horsepower
greater than 500 hp. See chapter 9 of the
March 2022 Prelim TSD.
69 DOE uses data on manufacturer shipments as
a proxy for national sales, as aggregate data on sales
are lacking. In general one would expect a close
correspondence between shipments and sales.
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NEMA commented that shipments for
motors above 500 hp were overestimated (NEMA, No. 22 at p. 24)
During the electric motor working group
negotiations, NEMA provided an
estimate of 250—400 units sold per
year. NEMA also provided an estimate
of 180,000 units for AO MEMs, and
20,000 units for AO polyphase
specialized frame size electric motors.
In this direct final rule, DOE is
including electric motors with
horsepower greater than 500 hp and
relied on NEMA’s input to estimate
shipments to 375 units in the base year.
For AO MEMs and AO polyphase
specialized frame size electric motors,
DOE revised the total shipments to align
with NEMA’s estimate and revised the
distribution of shipments by
horsepower range based on model
counts from the 2022 Motor Database.
DOE did not receive any additional
comments related to the base year
shipments estimates and retained the
values estimated in the March 2022
Preliminary Analysis for NEMA Design
A and B motors between 1—500 hp.
In the March 2022 Preliminary
Analysis, for NEMA A and B electric
motors which are primarily used in the
industry and commercial sectors, DOE
projected shipments in the no-new
standards case under the assumption
that long-term growth of electric motor
shipments will be driven by long-term
growth of fixed investments. DOE relied
on the AEO 2021 forecast of fixed
investments through 2050 to inform its
shipments projection. For the years
beyond 2050, DOE assumed that fixed
investment growth will follow the same
growth trend as GDP, which DOE
projected for years after 2050 based on
the GDP forecast provided by AEO 2021.
For AO–MEM electric motors, which are
typically lower horsepower motors,
DOE projected shipments using the
following sector-specific market drivers
from AEO 2021: commercial building
floor space, housing numbers, and value
of manufacturing activity for the
commercial, residential, and industrial
sector, respectively. In addition, DOE
kept the distribution of shipments by
equipment class group/horsepower
range constant across the analysis
period. Finally, in each standard case,
DOE accounted for the possibility that
some consumers may choose to
purchase a synchronous electric motor
(out of scope of this preliminary
analysis) rather than a more efficient
NEMA Design A or B electric motor.
DOE developed a consumer choice
model to estimate the percentage of
consumers that would purchase a
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synchronous electric motor based on the
payback period of such investment.
In response to the March 2022
Preliminary Analysis, NEMA
commented that they do not anticipate
horsepower shifts from technology
changes. NEMA also noted that, as an
example, increased emission
requirements for stationary diesel pump
drivers will increase demand for larger
200 hp and above electric motors.
(NEMA, No. 22 at p. 24) NEMA did not
provide any additional comments
regarding shipments projections. DOE
did not receive any additional
comments related to shipments and
retained the same methodology as in the
preliminary analysis and updated the
analysis to reflect AEO 2022. DOE
applied the same shipments trends to
electric motors above 500 hp.
With respect to synchronous motors,
NEMA commented that in section 2.9.5
of the March 2022 Prelim TSD, DOE
notes that synchronous motors are less
efficient than their Design A or B
counterparts, which NEMA does not
agree with. Furthermore, NEMA stated
that a focus on single point efficiency at
full load misses the benefit synchronous
motors provide (variable load and
reduced speed operation). (NEMA, No.
22 at p. 24)
DOE clarifies that Table 2.9.5 of the
March 2022 Preliminary Analysis TSD
did not provide information related to
the efficiency of synchronous motors.
Instead, Table 2.9.5 of the March 2022
Prelim TSD presented the percentage of
consumer that would select a
synchronous motor over a compliant
induction motor in each considered
standard level case. In addition, as
noted by NEMA, synchronous motors
offer additional energy savings benefits
through variable load and reduced
speed operation and DOE accounted for
these savings in the preliminary
analysis by applying a reduction of
energy of 30 percent based on
information from a previous DOE
study.70 (See section 9.4 of the March
2022 Prelim TSD).
The Electric Motors Working Group
stated that to achieve IE4 efficiency
levels, manufacturers would likely shift
from NEMA Design B to NEMA Design
A motors. This shift may result in the
increased adoption of variable
frequency drives (VFDs), which would
significantly increase energy savings.
Furthermore, while DOE’s March 2022
Preliminary Analysis looked only at
substitutions to synchronous motors up
to 100 hp, the increased adoption of
70 U.S Department of Energy. United States
Industrial Electric Motor Systems Market
Opportunities Assessment. 2002.
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VFDs (paired with an IE4 motor) would
also be relevant at higher horsepower
levels. The Electric Motors Working
Group therefore encouraged DOE to
include this VFD substitution in its
analysis and added that with these
substitutions, DOE’s updated analysis
will show the recommended efficiency
levels to be cost effective. The Electric
Motors Working Group did not provide
estimates regarding the rate at which
this substitution would occur.
In the direct final rule TSD, DOE
added a scenario to account for the fact
that some consumers may choose to
purchase a synchronous electric motor
(out of scope of this direct final rule)
rather than a more efficient NEMA
Design A or B electric motor or select to
purchase a VFD in combination with a
compliant electric motor. Similar to the
approach used in the March 2022
Preliminary Analysis, DOE developed a
consumer choice model to estimate the
percentage of consumers that would
purchase a synchronous electric motor
based on the payback period of such
investment. DOE notes that there is
uncertainty as to which rate such
substitution would occur and did not
incorporate this scenario as part of the
reference analysis. To support the
payback calculation, DOE accounted for
the total installed costs and annual
operating costs of a synchronous motor
and of a VFD in combination with a
compliant electric motor. In addition,
DOE updated its previous estimate of
energy use reduction resulting from
variable load and reduced speed
operation based on a more recent study.
See appendix 8–D of the DFR TSD for
more details on this analysis.
NEMA added that comparing a
synchronous motor and drive
combination to an induction motor is
not an apples-to-apples comparison and
should be avoided. NEMA stated that
the application of motor-drive systems
are application dependent. NEMA
stated that programs which encourage
and facilitate power drive system
installations in the field and during
planning are the appropriate vehicles
for market transformation, not point-ofsale regulations such as those in
question of the PTSD. NEMA stated that
DOE should defer to and encourage
those programs as appropriate ‘‘other
than regulatory’’ actions for market
transformation. (NEMA, No. 22 at p. 24)
DOE notes that NEMA is a member of
the Electric Motors Working Group and
jointly commented that DOE should
consider that some consumers may
select to purchase a synchronous motor
and drive combination or a VFD
combined with a compliant motor. As
noted, DOE analyzed this scenario as a
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sensitivity analysis and the reference
scenario did not include this potential
market shift to synchronous motors and
VFD usage.
NEMA commented that legacy
induction motors are being replaced by
PDS (or power drive systems) consisting
of a motor and controls/drives as a
means to dramatically reduce power
and integrate motor driven systems into
sophisticated control schemes that
continuously monitor processes
managing flow, pressure, etc., to reduce
operating costs and emissions. (NEMA,
No. 22 at p. 23) As noted by NEMA,
advanced technology electric motors
that are combined with a drive are now
available on the market and could be
used in the same applications as the
electric motors analyzed in this direct
final rule. However, DOE estimates
these PDS currently represent a small
fraction of the market.71 Further, NEMA
did not provide data to quantitatively
estimate the rate at which such PDS
would replace legacy induction motors.
As such DOE did not include such
impact in the reference scenario.
Instead, DOE accounted for the potential
switch from induction motors to PDS as
a sensitivity scenario. See Appendix 8–
C and 10–D for more details. In
addition, as another sensitivity analysis,
DOE also projected shipments in a low
growth scenario which assumed lower
shipments compared to the reference
scenario. See Chapter 9 of the direct
final rule for more details.
H. National Impact Analysis
The NIA assesses the national energy
savings (‘‘NES’’) and the NPV from a
national perspective of total consumer
costs and savings that would be
expected to result from new or amended
standards at specific efficiency levels.72
(‘‘Consumer’’ in this context refers to
consumers of the product being
regulated.) DOE calculates the NES and
NPV for the potential standard levels
considered based on projections of
annual product shipments, along with
the annual energy consumption and
total installed cost data from the energy
use and LCC analyses. For the present
analysis, DOE projected the energy
savings, operating cost savings, product
costs, and NPV of consumer benefits
over the lifetime of electric motors sold
from 2027 through 2056.
DOE evaluates the impacts of new or
amended standards by comparing a case
without such standards with standardscase projections. The no-new-standards
case characterizes energy use and
consumer costs for each product class in
the absence of new or amended energy
conservation standards. For this
projection, DOE considers historical
trends in efficiency and various forces
that are likely to affect the mix of
efficiencies over time. DOE compares
the no-new-standards case with
projections characterizing the market for
each product class if DOE adopted new
or amended standards at specific energy
efficiency levels (i.e., the TSLs or
standards cases) for that class. For the
standards cases, DOE considers how a
given standard would likely affect the
market shares of products with
efficiencies greater than the standard.
In its analysis, DOE analyzes the
energy and economic impacts of a
potential standard on all equipment
classes aggregated by horsepower range
and equipment class group. For NEMA
Design A and B electric motors
regulated under 10 CFR 431.25, inputs
for non-representative equipment
classes (i.e., those not analyzed in the
engineering, energy-use, and LCC
analyses) are scaled using inputs for the
analyzed representative equipment
classes.73 For AO–MEMs and electric
motors above 500 hp, DOE used the
results of the representative units
without any scaling due to the smaller
size of horsepower ranges associated for
each representative unit, and lower
shipments of motors at larger
horsepower ratings.
DOE uses a spreadsheet model to
calculate the energy savings and the
national consumer costs and savings
from each TSL. Interested parties can
review DOE’s analyses by changing
various input quantities within the
spreadsheet. The NIA spreadsheet
model uses typical values (as opposed
to probability distributions) as inputs.
Table IV–10 summarizes the inputs
and methods DOE used for the NIA
analysis for the direct final rule.
Discussion of these inputs and methods
follows the table. See chapter 10 of the
direct final rule TSD for further details.
TABLE IV–10—SUMMARY OF INPUTS AND METHODS FOR THE NATIONAL IMPACT ANALYSIS
Inputs
Method
Shipments ...........................................................
Compliance Date of Standard ............................
Efficiency Trends ................................................
Annual Energy Consumption per Unit ................
Total Installed Cost per Unit ...............................
Annual shipments from shipments model.
2027.
No-new-standards case: constant trend Standard cases: constant trend.
Annual weighted-average values are a function of energy use at each TSL.
Annual weighted-average values are a function of cost at each TSL. Incorporates projection of
future product prices based on historical data (constant trend).
Maintenance costs: Do not change with efficiency level. Repair costs: Changes with efficiency
level.
Estimated average and marginal electricity prices from the LCC analysis based on EEI data.
AEO2022 projections (to 2050) and extrapolation thereafter.
A time-series conversion factor based on AEO2022.
3 percent and 7 percent.
2023.
Repair and Maintenance Cost per Unit ..............
Electricity Price ...................................................
Electricity Price Trends .......................................
Energy Site-to-Primary and FFC Conversion .....
Discount Rate .....................................................
Present Year .......................................................
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1. Equipment Efficiency Trends
A key component of the NIA is the
trend in energy efficiency projected for
the no-new-standards case and each of
the standards cases. Section IV.F.8 of
71 DOE estimates the market share of advanced
technology motors to be less than 1 percent based
on information from OMDIA, Low-Voltage Motors
Intelligence Service, Annual 2020 Analysis (OMDIA
Report November 2020).
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this document describes how DOE
developed an energy efficiency
distribution for the no-new-standards
case (which yields a shipment-weighted
average efficiency) for each of the
considered equipment classes for the
first year of anticipated compliance with
an amended or new standard. To project
the trend in efficiency absent amended
standards for electric motors over the
72 The NIA accounts for impacts in the 50 states
and U.S. territories.
73 For example, results from representative unit 1
(NEMA Design A and B electric motors, 5horsepower, 4-pole, enclosed) were scaled based by
HP and weight to represent all NEMA Design A and
B electric motor equipment classes between 1 and
5 horsepower. DOE then used shipments weightedaverage results to represent the 1–5 HP range.
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entire shipments projection period,
similar to what was done in the March
2022 preliminary Analysis, DOE applied
a constant trend. The approach is
further described in chapter 10 of the
direct final rule TSD.
For the standards cases, similar to
what was done in the March 2022
preliminary Analysis, DOE used a ‘‘rollup’’ scenario to establish the shipmentweighted efficiency for the year that
standards are assumed to become
effective (2027). In this scenario, the
market shares of products in the nonew-standards case that do not meet the
standard under consideration would
‘‘roll up’’ to meet the new standard
level, and the market share of products
above the standard would remain
unchanged.
To develop standards case efficiency
trends after 2027, DOE assumed no
change over the forecast period.
DOE did not receive any comments on
the projected efficiency trends.
2. National Energy Savings
The national energy savings analysis
involves a comparison of national
energy consumption of the considered
products between each potential
standards case (‘‘TSL’’) and the case
with no new or amended energy
conservation standards. DOE calculated
the national energy consumption by
multiplying the number of units (stock)
of each product (by vintage or age) by
the unit energy consumption (also by
vintage). DOE calculated annual NES
based on the difference in national
energy consumption for the no-new
standards case and for each higher
efficiency standard case. DOE estimated
energy consumption and savings based
on site energy and converted the
electricity consumption and savings to
primary energy (i.e., the energy
consumed by power plants to generate
site electricity) using annual conversion
factors derived from AEO2022.
Cumulative energy savings are the sum
of the NES for each year over the
timeframe of the analysis.
Use of higher-efficiency products is
sometimes associated with a direct
rebound effect, which refers to an
increase in utilization of the product
due to the increase in efficiency. For
example, when a consumer realizes that
a more-efficient electric motor used for
cooling will lower the electricity bill,
that person may opt for increased
comfort in the building by using the
equipment more, thereby negating a
portion of the energy savings. In
commercial buildings, however, the
person owning the equipment (i.e., the
building owner) is usually not the
person operating the equipment (i.e., the
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renter). Because the operator usually
does not own the equipment, that
person will not have the operating cost
information necessary to influence their
operation of the equipment. Therefore,
DOE believes that a rebound effect is
unlikely to occur in commercial
buildings. In the industrial and
agricultural sectors, DOE believes that
electric motors are likely to be operated
whenever needed for the required
process or service, so a rebound effect
is also unlikely to occur in the
industrial and agricultural sectors.
In addition, electric motors are
components of larger equipment or
systems and DOE has determined that a
change in motor efficiency alone would
not increase the utilization of that
equipment or system. DOE did not find
any data on the rebound effect specific
to electric motors and did not receive
any comments supporting the inclusion
of a rebound effect for electric motors.
DOE did not apply a rebound effect for
electric motors.
In 2011, in response to the
recommendations of a committee on
‘‘Point-of-Use and Full-Fuel-Cycle
Measurement Approaches to Energy
Efficiency Standards’’ appointed by the
National Academy of Sciences, DOE
announced its intention to use FFC
measures of energy use and greenhouse
gas and other emissions in the national
impact analyses and emissions analyses
included in future energy conservation
standards rulemakings. 76 FR 51281
(Aug. 18, 2011). After evaluating the
approaches discussed in the August 18,
2011 notice, DOE published a statement
of amended policy in which DOE
explained its determination that EIA’s
National Energy Modeling System
(‘‘NEMS’’) is the most appropriate tool
for its FFC analysis and its intention to
use NEMS for that purpose. 77 FR 49701
(Aug. 17, 2012). NEMS is a public
domain, multi-sector, partial
equilibrium model of the U.S. energy
sector 74 that EIA uses to prepare its
Annual Energy Outlook. The FFC factors
incorporate losses in production and
delivery in the case of natural gas
(including fugitive emissions) and
additional energy used to produce and
deliver the various fuels used by power
plants. The approach used for deriving
FFC measures of energy use and
emissions is described in appendix 10B
of the direct final rule TSD.
74 For more information on NEMS, refer to The
National Energy Modeling System: An Overview
2018, DOE/EIA–0581(2018), April 2019. Available
at www.eia.gov/outlooks/aeo/nems/documentation/
(last accessed July 26, 2022).
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3. Net Present Value Analysis
The inputs for determining the NPV
of the total costs and benefits
experienced by consumers are (1) total
annual installed cost, (2) total annual
operating costs (energy costs and repair
and maintenance costs), and (3) a
discount factor to calculate the present
value of costs and savings. DOE
calculates net savings each year as the
difference between the no-newstandards case and each standards case
in terms of total savings in operating
costs versus total increases in installed
costs. DOE calculates operating cost
savings over the lifetime of each product
shipped during the projection period.
As discussed in section IV.F.1 of this
document, DOE developed equipment
price trends based on historical PPI
data. DOE applied the same trends (i.e.,
constant price trend) to project prices
for each equipment class at each
considered efficiency level.
To evaluate the effect of uncertainty
regarding the price trend estimates, DOE
investigated the impact of different
product price projections on the
consumer NPV for the considered TSLs
for electric motors. In addition to the
default price trend, DOE considered two
product price sensitivity cases: (1) a
high price decline case and (2) a low
price decline case based on historical
PPI data. The derivation of these price
trends and the results of these
sensitivity cases are described in
appendix 10–C of the direct final rule
TSD.
The operating cost savings are
electricity cost savings and any changes
in repair costs, which are calculated
using the estimated energy savings in
each year and the projected electricity
price as well as using the lifetime repair
costs estimates from the LCC. To
estimate electricity prices in future
years, in each sector (commercial,
industrial and agriculture), DOE
multiplied the sector-specific average
electricity prices by the projection of
annual national-average electricity price
changes in the Reference case from
AEO2022, which has an end year of
2050. To estimate price trends after
2050, DOE used the 2050 electricity
prices, held constant. DOE then used a
weighted-average trend across all
sectors in the NIA. As part of the NIA,
DOE also analyzed scenarios that used
inputs from variants of the AEO2022
Reference case that have lower and
higher economic growth. Those cases
have lower and higher energy price
trends compared to the Reference case.
NIA results based on these cases are
presented in appendix 10C of the direct
final rule TSD.
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In calculating the NPV, DOE
multiplies the net savings in future
years by a discount factor to determine
their present value. For this direct final
rule, DOE estimated the NPV of
consumer benefits using both a 3percent and a 7-percent real discount
rate. DOE uses these discount rates in
accordance with guidance provided by
the Office of Management and Budget
(‘‘OMB’’) to Federal agencies on the
development of regulatory analysis.75
The discount rates for the determination
of NPV are in contrast to the discount
rates used in the LCC analysis, which
are designed to reflect a consumer’s
perspective. The 7-percent real value is
an estimate of the average before-tax rate
of return to private capital in the U.S.
economy. The 3-percent real value
represents the ‘‘social rate of time
preference,’’ which is the rate at which
society discounts future consumption
flows to their present value.
I. Consumer Subgroup Analysis
In analyzing the potential impact of
new or amended energy conservation
standards on consumers, DOE evaluates
the impact on identifiable subgroups of
consumers that may be
disproportionately affected by a new or
amended national standard. The
purpose of a subgroup analysis is to
determine the extent of any such
disproportional impacts. DOE evaluates
impacts on particular subgroups of
consumers by analyzing the LCC
impacts and PBP for those particular
consumers from alternative standard
levels. For this direct final rule, DOE
analyzed the impacts of the considered
standard levels on one subgroup: small
businesses.
DOE used the LCC and PBP
spreadsheet model to estimate the
impacts of the considered efficiency
levels on this subgroup. Chapter 11 in
the direct final rule TSD describes the
consumer subgroup analysis.
J. Manufacturer Impact Analysis
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1. Overview
DOE performed an MIA to estimate
the financial impacts of new and
amended energy conservation standards
on manufacturers of electric motors and
to estimate the potential impacts of such
standards on employment and
manufacturing capacity. The MIA has
both quantitative and qualitative aspects
and includes analyses of projected
75 United States Office of Management and
Budget. Circular A–4: Regulatory Analysis.
September 17, 2003. Section E. Available at
georgewbush-whitehouse.archives.gov/omb/
memoranda/m03-21.html (last accessed July 26,
2022).
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industry cash flows, the INPV,
investments in research and
development (‘‘R&D’’) and
manufacturing capital, and domestic
manufacturing employment.
Additionally, the MIA seeks to
determine how new and amended
energy conservation standards might
affect manufacturing employment,
capacity, and competition, as well as
how standards contribute to overall
regulatory burden. Finally, the MIA
serves to identify any disproportionate
impacts on manufacturer subgroups,
including small business manufacturers.
The quantitative part of the MIA
primarily relies on the Government
Regulatory Impact Model (‘‘GRIM’’), an
industry cash flow model with inputs
specific to this rulemaking. The key
GRIM inputs include data on the
industry cost structure, unit production
costs, product shipments, manufacturer
markups, and investments in R&D and
manufacturing capital required to
produce compliant products. The key
GRIM outputs are the INPV, which is
the sum of industry annual cash flows
over the analysis period, discounted
using the industry-weighted average
cost of capital, and the impact to
domestic manufacturing employment.
The model uses standard accounting
principles to estimate the impacts of
more-stringent energy conservation
standards on a given industry by
comparing changes in INPV and
domestic manufacturing employment
between a no-new-standards case and
the various standards cases (‘‘TSLs’’). To
capture the uncertainty relating to
manufacturer pricing strategies
following new and amended standards,
the GRIM estimates a range of possible
impacts under different manufacturer
markup scenarios.
The qualitative part of the MIA
addresses manufacturer characteristics
and market trends. Specifically, the MIA
considers such factors as a potential
standard’s impact on manufacturing
capacity, competition within the
industry, the cumulative impact of other
DOE and non-DOE regulations, and
impacts on manufacturer subgroups.
The complete MIA is outlined in
chapter 12 of the direct final rule TSD.
DOE conducted the MIA for this
rulemaking in three phases. In Phase 1
of the MIA, DOE prepared a profile of
the electric motors manufacturing
industry based on the market and
technology assessment, preliminary
manufacturer interviews, and publiclyavailable information. This included a
top-down analysis of electric motors
manufacturers that DOE used to derive
preliminary financial inputs for the
GRIM (e.g., revenues; materials, labor,
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overhead, and depreciation expenses;
selling, general, and administrative
expenses (‘‘SG&A’’); and R&D expenses).
DOE also used public sources of
information to further calibrate its
initial characterization of the electric
motors manufacturing industry,
including company filings of form 10–
K from the SEC,76 corporate annual
reports, the U.S. Census Bureau’s
‘‘Economic Census,’’ 77 and reports from
D&B Hoover.78
In Phase 2 of the MIA, DOE prepared
a framework industry cash-flow analysis
to quantify the potential impacts of new
and amended energy conservation
standards. The GRIM uses several
factors to determine a series of annual
cash flows starting with the
announcement of the standard and
extending over a 30-year period
following the compliance date of the
standard. These factors include annual
expected revenues, costs of sales, SG&A
and R&D expenses, taxes, and capital
expenditures. In general, energy
conservation standards can affect
manufacturer cash flow in three distinct
ways: (1) creating a need for increased
investment, (2) raising production costs
per unit, and (3) altering revenue due to
higher per-unit prices and changes in
sales volumes.
In addition, during Phase 2, DOE
developed interview guides to distribute
to manufacturers of electric motors in
order to develop other key GRIM inputs,
including product and capital
conversion costs, and to gather
additional information on the
anticipated effects of energy
conservation standards on revenues,
direct employment, capital assets,
industry competitiveness, and subgroup
impacts.
In Phase 3 of the MIA, DOE
conducted structured, detailed
interviews with representative
manufacturers. During these interviews,
DOE discussed engineering,
manufacturing, procurement, and
financial topics to validate assumptions
used in the GRIM and to identify key
issues or concerns. See section IV.J.3 of
this document for a description of the
key issues raised by manufacturers
during the interviews. As part of Phase
3, DOE also evaluated subgroups of
manufacturers that may be
disproportionately impacted by new
and amended standards or that may not
be accurately represented by the average
cost assumptions used to develop the
industry cash flow analysis. Such
76 www.sec.gov/edgar.
77 www.census.gov/programs-surveys/asm/data/
tables.html.
78 app.avention.com.
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manufacturer subgroups may include
small business manufacturers, lowvolume manufacturers (‘‘LVMs’’), niche
players, and/or manufacturers
exhibiting a cost structure that largely
differs from the industry average. DOE
identified one subgroup for a separate
impact analysis: small business
manufacturers. The small business
subgroup is discussed in section VI.B,
‘‘Review under the Regulatory
Flexibility Act’’ and in chapter 12 of the
direct final rule TSD.
2. Government Regulatory Impact Model
and Key Inputs
DOE uses the GRIM to quantify the
changes in cash flow due to new and
amended standards that result in a
higher or lower industry value. The
GRIM uses a standard, annual
discounted cash-flow analysis that
incorporates manufacturer costs,
markups, shipments, and industry
financial information as inputs. The
GRIM models changes in costs,
distribution of shipments, investments,
and manufacturer margins that could
result from new and amended energy
conservation standards. The GRIM
spreadsheet uses the inputs to arrive at
a series of annual cash flows, beginning
in 2023 (the base year of the analysis)
and continuing to 2056. DOE calculated
INPVs by summing the stream of annual
discounted cash flows during this
period. For manufacturers of electric
motors, DOE used a real discount rate of
9.1 percent, which was used in the May
2014 Final Rule and then asked for
feedback on this value during
manufacturer interviews.
The GRIM calculates cash flows using
standard accounting principles and
compares changes in INPV between the
no-new-standards case and each
standards case. The difference in INPV
between the no-new-standards case and
a standards case represents the financial
impact of the new and amended energy
conservation standards on
manufacturers. As discussed previously,
DOE developed critical GRIM inputs
using a number of sources, including
publicly available data, results of the
engineering analysis, and information
gathered from industry stakeholders
during the course of manufacturer
interviews and subsequent Working
Group meetings. The GRIM results are
presented in section V.B.2. Additional
details about the GRIM, the discount
rate, and other financial parameters can
be found in chapter 12 of the direct final
rule TSD.
a. Manufacturer Production Costs
Manufacturing more efficient
equipment is typically more expensive
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than manufacturing baseline equipment
due to the use of more complex
components, which are typically more
costly than baseline components. The
changes in the MPCs of the covered
equipment can affect the revenues, gross
margins, and cash flow of the industry.
DOE conducted the engineering
analysis using a combination of physical
teardowns and software modeling. DOE
contracted a professional motor
laboratory to disassemble various
electric motors and record what types of
materials were present and how much
of each material was present, recorded
in a final bill of materials (‘‘BOM’’). To
supplement the physical teardowns,
software modeling by a subject matter
expert (‘‘SME’’) was also used to
generate BOMs for select efficiency
levels of directly analyzed
representative units.
For a complete description of the
MPCs, see chapter 5 of the direct final
rule TSD.
b. Shipments Projections
The GRIM estimates manufacturer
revenues based on total unit shipment
projections and the distribution of those
shipments by efficiency level. Changes
in sales volumes and efficiency mix
over time can significantly affect
manufacturer finances. For this analysis,
the GRIM uses the NIA’s annual
shipment projections derived from the
shipments analysis from 2023 (the base
year) to 2056 (the end year of the
analysis period). See chapter 9 of the
direct final rule TSD for additional
details.
c. Product and Capital Conversion Costs
New and amended energy
conservation standards could cause
manufacturers to incur conversion costs
to bring their production facilities and
equipment designs into compliance.
DOE evaluated the level of conversionrelated expenditures that would be
needed to comply with each considered
efficiency level in each equipment class.
For the MIA, DOE classified these
conversion costs into two major groups:
(1) product conversion costs; and (2)
capital conversion costs. Product
conversion costs are investments in
research, development, testing,
marketing, and other non-capitalized
costs necessary to make equipment
designs comply with new amended
energy conservation standards. Capital
conversion costs are investments in
property, plant, and equipment
necessary to adapt or change existing
production facilities such that new
compliant equipment designs can be
fabricated and assembled.
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DOE calculated the product and
capital conversion costs using bottomup approach based on feedback from
manufacturers during manufacturer
interviews. During manufacturer
interviews, DOE asked manufacturers
questions regarding the estimated
product and capital conversion costs
needed to produce electric motors
within an equipment class at each
specific EL. DOE used the feedback
provided from manufacturers to
estimate the approximate amount of
engineering time, testing costs and
capital equipment that would be
purchased to redesign a single frame
size to each EL. Some of the types of
capital conversion costs manufacturers
identified were the purchase of
lamination die sets, winding machines,
frame casts, and assembly equipment as
well as other retooling costs. The two
main types of product conversion costs
manufacturers shared with DOE during
interviews were number of engineer
hours necessary to re-engineer frames to
meet higher efficiency standards and the
testing costs to comply with higher
efficiency standards.
DOE then took average values (i.e.,
costs or number of hours) based on the
range of responses given by
manufacturers for each product and
capital conversion costs necessary for a
manufacturer to increase the efficiency
of one frame size to a specific EL. DOE
multiplied the conversion costs
associated with manufacturing a single
frame size at each EL by the number of
frames each interviewed manufacturer
produces. DOE finally scaled this
number based on the market share of the
manufacturers DOE interviewed, to
arrive at industry wide bottom-up
product and capital conversion cost
estimates for each representative unit at
each EL.
In response to the May 2020 Early
Assessment Review RFI, NEMA stated
that if DOE decides to pursue revision
of energy conservation standards for
electric motors, DOE should revisit its
analyses and assumptions for the
product and capital conversion costs
used in the May 2014 Final Rule.
(NEMA, No. 4 at p. 3) Additionally, in
response to the March 2022 Preliminary
Analysis EASA agreed with NEMA’s
comment that DOE should revise the
analyses for product and capital
conversion costs (EASA, No. 21 at p. 5)
After the publication of the March 2022
Preliminary Analysis, DOE interviewed
manufacturers to gather information
regarding the product and capital
conversion costs used in this NOPR
analysis. DOE relied on the information
gathered during these manufacturer
interviews to create the product and
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capital conversion cost estimated used
in this direct final rule analysis.
In general, DOE assumes all
conversion-related investments occur
between the year of publication of the
direct final rule and the year by which
manufacturers must comply with the
new and amended standard. The
conversion cost figures used in the
GRIM can be found in section V.B.2 of
this document. For additional
information on the estimated capital
and product conversion costs, see
chapter 12 of the direct final rule TSD.
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d. Markup Scenarios
MSPs include direct manufacturing
production costs (i.e., labor, materials,
and overhead estimated in DOE’s MPCs)
and all non-production costs (i.e.,
SG&A, R&D, and interest), along with
profit. To calculate the MSPs in the
GRIM, DOE applied non-production
cost markup multipliers to the MPCs
estimated in the engineering analysis for
each equipment class and efficiency
level. Modifying these markup
multipliers the standards case yields
different sets of impacts on
manufacturers. For the MIA, DOE
modeled two standards-case markup
scenarios to represent uncertainty
regarding the potential impacts on
prices and profitability for
manufacturers following the
implementation of new and amended
energy conservation standards: (1) a
preservation of gross margin scenario;
and (2) a preservation of operating profit
markup scenario. These scenarios lead
to different markup multipliers that,
when applied to the MPCs, result in
varying revenue and cash flow impacts.
Under the preservation of gross
margin scenario, DOE applied a single
uniform ‘‘gross margin percentage’’
across all efficiency levels, which
assumes that manufacturers would be
able to maintain the same amount of
profit as a percentage of revenues at all
efficiency levels within an equipment
class. In this manufacturer markup
scenario, electric motor manufacturers
fully pass on any additional MPC
increase due to standards to their
consumers. DOE used a manufacturer
markup of 1.37 for all electric motors
covered by this rulemaking with less
than or equal to 5 hp, and a
manufacturer markup or 1.45 for all
electric motors covered by this
rulemaking greater than 5 hp. DOE used
these same manufacturer markups for
all TSLs in the preservation of gross
margin scenario. This manufacturer
markup scenario represents the upperbound of manufacturer INPV and is the
manufacturer markup scenario used to
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calculate the economic impacts on
consumers.
Under the preservation of operating
profit scenario, DOE modeled a
situation in which manufacturers are
not able to increase per-unit operating
profit in proportion to increases in
MPCs. Under this scenario, as MPCs
increase, manufacturers reduce the
manufacturer margins to maintain a cost
competitive offering in the market.
However, in this scenario manufacturers
maintain their total operating profit in
absolute dollars in the standards case,
despite higher product costs and
investment. Therefore, gross margin (as
a percentage) shrinks in the standards
cases. This manufacturer markup
scenario represents the lower-bound to
industry profitability under new and
amended energy conservation
standards.
A comparison of industry financial
impacts under the two markup
scenarios is presented in section V.B.2.a
of this document.
3. Manufacturer Interviews
DOE conducted additional interviews
with manufacturers following the
publication of the March 2022 Prelim
TSD in preparation for this NOPR
analysis. In interviews, DOE asked
manufacturers to describe their major
concerns regarding this rulemaking. The
following section highlights
manufacturer concerns that helped
inform the projected potential impacts
of anew and amended standard on the
industry. Manufacturer interviews are
conducted under non-disclosure
agreements (‘‘NDAs’’), so DOE does not
document these discussions in the same
way that it does public comments in the
comment summaries and DOE’s
responses throughout the rest of this
document.
During these interviews, most
manufacturers stated that even
manufacturing a single electric motor to
an efficiency level above IE 4 (or IE 4
equivalent efficiency levels) would
require a significant level of
investments. Further, most
manufacturers also stated that it would
be impossible to manufacturer a
complete line of electric motors
spanning all horsepower covered by this
rulemaking regardless of the costs
associated with this task. Increasing the
efficiency of any electric motor to an
efficiency level above IE 4 would
require each manufacturer to make a
significant capital investment to retool
their entire production line. It would
also require manufacturers to
completely redesign almost every
electric motor configuration offered,
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which could take more than a decade of
engineering time.
DOE examines a range of efficiency
levels for covered equipment when
determining whether to amend or
establish energy conservation standards,
including the level that represents the
most energy-efficient combination of
design options. In this analysis for
NEMA Design A and B electric motors
between 1 and 500 hp, EL 1 is
associated with an IE 4 equivalent
efficiency level and EL 2, EL 3, and EL
4 (max-tech) represent efficiency levels
above IE 4. DOE understands the level
of burden placed on electric motor
manufacturers if energy conservation
standards require any electric motors to
meet energy conservation standards set
above IE 4 equivalent levels. These
investments (in the form of conversion
costs) are accounted for in the MIA and
displayed in section V.B.2.a.
K. Emissions Analysis
The emissions analysis consists of
two components. The first component
estimates the effect of potential energy
conservation standards on power sector
and site (where applicable) combustion
emissions of CO2, NOX, SO2, and Hg.
The second component estimates the
impacts of potential standards on
emissions of two additional greenhouse
gases, CH4 and N2O, as well as the
reductions in emissions of other gases
due to ‘‘upstream’’ activities in the fuel
production chain. These upstream
activities comprise extraction,
processing, and transporting fuels to the
site of combustion.
The analysis of electric power sector
emissions of CO2, NOX, SO2, and Hg
uses emissions factors intended to
represent the marginal impacts of the
change in electricity consumption
associated with amended or new
standards. The methodology is based on
results published for the AEO, including
a set of side cases that implement a
variety of efficiency-related policies.
The methodology is described in
appendix 13A in the direct final rule
TSD. The analysis presented in this
notice uses projections from AEO2022.
Power sector emissions of CH4 and N2O
from fuel combustion are estimated
using Emission Factors for Greenhouse
Gas Inventories published by the
Environmental Protection Agency
(EPA).79
FFC upstream emissions, which
include emissions from fuel combustion
during extraction, processing, and
transportation of fuels, and ‘‘fugitive’’
79 Available at www.epa.gov/sites/production/
files/2021-04/documents/emission-factors_
apr2021.pdf (last accessed July 12, 2021).
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26, 2016). Compliance with CSAPR is
flexible among EGUs and is enforced
through the use of tradable emissions
allowances. Under existing EPA
regulations, for states subject to SO2
emissions limits under CSAPR, any
excess SO2 emissions allowances
resulting from the lower electricity
demand caused by the adoption of an
efficiency standard could be used to
permit offsetting increases in SO2
emissions by another regulated EGU.
However, beginning in 2016, SO2
emissions began to fall as a result of the
Mercury and Air Toxics Standards
1. Air Quality Regulations Incorporated
(‘‘MATS’’) for power plants. 77 FR 9304
in DOE’s Analysis
(Feb. 16, 2012). The final rule
DOE’s no-new-standards case for the
establishes power plant emission
electric power sector reflects the AEO,
standards for mercury, acid gases, and
which incorporates the projected
non-mercury metallic toxic pollutants.
impacts of existing air quality
In order to continue operating, coal
regulations on emissions. AEO2022
plants must have either flue gas
generally represents current legislation
desulfurization or dry sorbent injection
and environmental regulations,
systems installed. Both technologies,
including recent government actions,
which are used to reduce acid gas
that were in place at the time of
emissions, also reduce SO2 emissions.
preparation of AEO2022, including the
emissions control programs discussed in Because of the emissions reductions
under the MATS, it is unlikely that
the following paragraphs.80
excess SO2 emissions allowances
SO2 emissions from affected electric
resulting
from the lower electricity
generating units (‘‘EGUs’’) are subject to
nationwide and regional emissions cap- demand would be needed or used to
permit offsetting increases in SO2
and-trade programs. Title IV of the
emissions by another regulated EGU.
Clean Air Act sets an annual emissions
Therefore, energy conservation
cap on SO2 for affected EGUs in the 48
standards that decrease electricity
contiguous States and the District of
generation will generally reduce SO2
Columbia (‘‘DC’’). (42 U.S.C. 7651 et
emissions. DOE estimated SO2
seq.) SO2 emissions from numerous
emissions
reduction using emissions
States in the eastern half of the United
factors based on AEO2022.
States are also limited under the CrossCSAPR also established limits on NOX
State Air Pollution Rule (‘‘CSAPR’’). 76
emissions for numerous States in the
FR 48208 (Aug. 8, 2011). CSAPR
eastern half of the United States. Energy
requires these States to reduce certain
conservation standards would have
emissions, including annual SO2
little effect on NOX emissions in those
emissions, and went into effect as of
January 1, 2015.81 AEO2022 incorporates States covered by CSAPR emissions
limits if excess NOX emissions
implementation of CSAPR, including
allowances resulting from the lower
the update to the CSAPR ozone season
electricity demand could be used to
program emission budgets and target
permit offsetting increases in NOX
dates issued in 2016. 81 FR 74504 (Oct.
emissions from other EGUs. In such
80 For further information, see the Assumptions to
case, NOX emissions would remain near
AEO2022 report that sets forth the major
the limit even if electricity generation
assumptions used to generate the projections in the
goes down. Depending on the
Annual Energy Outlook. Available at www.eia.gov/
configuration of the power sector in the
outlooks/aeo/assumptions/ (last accessed June 22,
different regions and the need for
2022).
81 CSAPR requires states to address annual
allowances, however, NOX emissions
emissions of SO2 and NOX, precursors to the
might not remain at the limit in the case
formation of fine particulate matter (PM2.5)
of lower electricity demand. That would
pollution, in order to address the interstate
mean that standards might reduce NOX
transport of pollution with respect to the 1997 and
2006 PM2.5 National Ambient Air Quality Standards emissions in covered States. Despite this
(‘‘NAAQS’’). CSAPR also requires certain states to
possibility, DOE has chosen to be
address the ozone season (May–September)
conservative in its analysis and has
emissions of NOX, a precursor to the formation of
maintained the assumption that
ozone pollution, in order to address the interstate
transport of ozone pollution with respect to the
standards will not reduce NOX
1997 ozone NAAQS. 76 FR 48208 (Aug. 8, 2011).
emissions in States covered by CSAPR.
EPA subsequently issued a supplemental rule that
Standards would be expected to reduce
included an additional five states in the CSAPR
NOX emissions in the States not covered
ozone season program; 76 FR 80760 (Dec. 27, 2011)
(Supplemental Rule).
by CSAPR. DOE used AEO2022 data to
ddrumheller on DSK120RN23PROD with RULES3
emissions (direct leakage to the
atmosphere) of CH4 and CO2, are
estimated based on the methodology
described in chapter 15 of the direct
final rule TSD.
The emissions intensity factors are
expressed in terms of physical units per
MWh or MMBtu of site energy savings.
For power sector emissions, specific
emissions intensity factors are
calculated by sector and end use. Total
emissions reductions are estimated
using the energy savings calculated in
the national impact analysis.
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derive NOX emissions factors for the
group of States not covered by CSAPR.
The MATS limit mercury emissions
from power plants, but they do not
include emissions caps and, as such,
DOE’s energy conservation standards
would be expected to slightly reduce Hg
emissions. DOE estimated mercury
emissions reduction using emissions
factors based on AEO2022, which
incorporates the MATS.
NEMA commented that DOE does not
adequately examine or account for the
significant impacts from ever-increasing
investment in and use of renewable
energy sources and associated decrease
in emissions. (NEMA, No. 22 at p. 25)
DOE acknowledges that increasing
use of renewable electricity sources
could reduce CO2 emissions and likely
other emissions from the power sector
faster than could have been expected
when AEO2022 was prepared.
Nevertheless, DOE has used AEO2022
for the purposes of quantifying
emissions as DOE believes it continues
to be the most appropriate projection at
this time for such purposes.
L. Monetizing Emissions Impacts
As part of the development of this
direct final rule, for the purpose of
complying with the requirements of
Executive Order 12866, DOE considered
the estimated monetary benefits from
the reduced emissions of CO2, CH4,
N2O, NOX, and SO2 that are expected to
result from each of the TSLs considered.
In order to make this calculation
analogous to the calculation of the NPV
of consumer benefit, DOE considered
the reduced emissions expected to
result over the lifetime of products
shipped in the projection period for
each TSL. This section summarizes the
basis for the values used for monetizing
the emissions benefits and presents the
values considered in this direct final
rule.
To monetize the benefits of reducing
GHG emissions this analysis uses the
interim estimates presented in the
Technical Support Document: Social
Cost of Carbon, Methane, and Nitrous
Oxide Interim Estimates Under
Executive Order 13990 published in
February 2021 by the Interagency
Working Group on the Social Cost of
Greenhouse Gases (IWG). DOE requests
comment on how to address the climate
benefits and other non-monetized
effects of the proposal.
1. Monetization of Greenhouse Gas
Emissions
DOE estimates the monetized benefits
of the reductions in emissions of CO2,
CH4, and N2O by using a measure of the
SC of each pollutant (e.g., SC–CO2).
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These estimates represent the monetary
value of the net harm to society
associated with a marginal increase in
emissions of these pollutants in a given
year, or the benefit of avoiding that
increase. These estimates are intended
to include (but are not limited to)
climate-change-related changes in net
agricultural productivity, human health,
property damages from increased flood
risk, disruption of energy systems, risk
of conflict, environmental migration,
and the value of ecosystem services.
DOE exercises its own judgment in
presenting monetized climate benefits
as recommended by applicable
Executive orders, and DOE would reach
the same conclusion presented in this
direct final rule in the absence of the
social cost of greenhouse gases. That is,
the social costs of greenhouse gases,
whether measured using the February
2021 interim estimates presented by the
Interagency Working Group on the
Social Cost of Greenhouse Gases or by
another means, did not affect the rule
ultimately adopted by DOE.
DOE estimated the global social
benefits of CO2, CH4, and N2O
reductions (i.e., SC–GHGs) using the
estimates presented in the Technical
Support Document: Social Cost of
Carbon, Methane, and Nitrous Oxide
Interim Estimates under Executive
Order 13990, published in February
2021 by the IWG. The SC–GHGs is the
monetary value of the net harm to
society associated with a marginal
increase in emissions in a given year, or
the benefit of avoiding that increase. In
principle, SC–GHGs includes the value
of all climate change impacts, including
(but not limited to) changes in net
agricultural productivity, human health
effects, property damage from increased
flood risk and natural disasters,
disruption of energy systems, risk of
conflict, environmental migration, and
the value of ecosystem services. The
SC–GHGs therefore, reflects the societal
value of reducing emissions of the gas
in question by one metric ton. The SC–
GHGs is the theoretically appropriate
value to use in conducting benefit-cost
analyses of policies that affect CO2, N2O
and CH4 emissions. As a member of the
IWG involved in the development of the
February 2021 SC–GHG TSD, DOE
agrees that the interim SC–GHG
estimates represent the most appropriate
estimate of the SC–GHG until revised
estimates have been developed
reflecting the latest, peer-reviewed
science.
The SC–GHGs estimates presented
here were developed over many years,
using transparent process, peerreviewed methodologies, the best
science available at the time of that
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process, and with input from the public.
Specifically, in 2009, the IWG, that
included the DOE and other executive
branch agencies and offices was
established to ensure that agencies were
using the best available science and to
promote consistency in the social cost of
carbon (SC–CO2) values used across
agencies. The IWG published SC–CO2
estimates in 2010 that were developed
from an ensemble of three widely cited
integrated assessment models (IAMs)
that estimate global climate damages
using highly aggregated representations
of climate processes and the global
economy combined into a single
modeling framework. The three IAMs
were run using a common set of input
assumptions in each model for future
population, economic, and CO2
emissions growth, as well as
equilibrium climate sensitivity—a
measure of the globally averaged
temperature response to increased
atmospheric CO2 concentrations. These
estimates were updated in 2013 based
on new versions of each IAM. In August
2016 the IWG published estimates of the
social cost of methane (SC–CH4) and
nitrous oxide (SC–N2O) using
methodologies that are consistent with
the methodology underlying the SC–
CO2 estimates. The modeling approach
that extends the IWG SC–CO2
methodology to non-CO2 GHGs has
undergone multiple stages of peer
review. The SC–CH4 and SC–N2O
estimates were developed by Marten et
al.82 and underwent a standard doubleblind peer review process prior to
journal publication. In 2015, as part of
the response to public comments
received to a 2013 solicitation for
comments on the SC–CO2 estimates, the
IWG announced a National Academies
of Sciences, Engineering, and Medicine
review of the SC–CO2 estimates to offer
advice on how to approach future
updates to ensure that the estimates
continue to reflect the best available
science and methodologies. In January
2017, the National Academies released
their final report, Valuing Climate
Damages: Updating Estimation of the
Social Cost of Carbon Dioxide, and
recommended specific criteria for future
updates to the SC–CO2 estimates, a
modeling framework to satisfy the
specified criteria, and both near-term
updates and longer-term research needs
pertaining to various components of the
estimation process (National
Academies, 2017).83 Shortly thereafter,
in March 2017, President Trump issued
Executive Order 13783, which
disbanded the IWG, withdrew the
previous TSDs, and directed agencies to
ensure SC–CO2 estimates used in
regulatory analyses are consistent with
the guidance contained in OMB’s
Circular A–4, ‘‘including with respect to
the consideration of domestic versus
international impacts and the
consideration of appropriate discount
rates’’ (Executive Order (‘‘E.O.’’) 13783,
section 5(c)). Benefit-cost analyses
following E.O. 13783 used SC–GHG
estimates that attempted to focus on the
U.S.-specific share of climate change
damages as estimated by the models and
were calculated using two discount
rates recommended by Circular A–4, 3
percent and 7 percent. All other
methodological decisions and model
versions used in SC–GHG calculations
remained the same as those used by the
IWG in 2010 and 2013, respectively.
On January 20, 2021, President Biden
issued Executive Order 13990, which reestablished the IWG and directed it to
ensure that the U.S. Government’s
estimates of the social cost of carbon
and other greenhouse gases reflect the
best available science and the
recommendations of the National
Academies (2017). The IWG was tasked
with first reviewing the SC–GHG
estimates currently used in Federal
analyses and publishing interim
estimates within 30 days of the E.O. that
reflect the full impact of GHG
emissions, including by taking global
damages into account. The interim SC–
GHG estimates published in February
2021 are used here to estimate the
climate benefits for this direct final rule.
The E.O. instructs the IWG to undertake
a fuller update of the SC–GHG estimates
by January 2022 that takes into
consideration the advice of the National
Academies (2017) and other recent
scientific literature. The February 2021
SC–GHG TSD provides a complete
discussion of the IWG’s initial review
conducted under E.O.13990. In
particular, the IWG found that the SC–
GHG estimates used under E.O. 13783
fail to reflect the full impact of GHG
emissions in multiple ways.
First, the IWG found that the SC–GHG
estimates used under E.O. 13783 fail to
fully capture many climate impacts that
affect the welfare of U.S. citizens and
residents, and those impacts are better
reflected by global measures of the SC–
GHG. Examples of omitted effects from
82 Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C.
Newbold, and A. Wolverton. Incremental CH4 and
N2O mitigation benefits consistent with the U.S.
Government’s SC–CO2 estimates. Climate Policy.
2015. 15(2): pp. 272–298.
83 National Academies of Sciences, Engineering,
and Medicine. Valuing Climate Damages: Updating
Estimation of the Social Cost of Carbon Dioxide.
2017. The National Academies Press: Washington,
DC.
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the E.O. 13783 estimates include direct
effects on U.S. citizens, assets, and
investments located abroad, supply
chains, U.S. military assets and interests
abroad, and tourism, and spillover
pathways such as economic and
political destabilization and global
migration that can lead to adverse
impacts on U.S. national security,
public health, and humanitarian
concerns. In addition, assessing the
benefits of U.S. GHG mitigation
activities requires consideration of how
those actions may affect mitigation
activities by other countries, as those
international mitigation actions will
provide a benefit to U.S. citizens and
residents by mitigating climate impacts
that affect U.S. citizens and residents. A
wide range of scientific and economic
experts have emphasized the issue of
reciprocity as support for considering
global damages of GHG emissions. If the
United States does not consider impacts
on other countries, it is difficult to
convince other countries to consider the
impacts of their emissions on the United
States. The only way to achieve an
efficient allocation of resources for
emissions reduction on a global basis—
and so benefit the U.S. and its citizens—
is for all countries to base their policies
on global estimates of damages. As a
member of the IWG involved in the
development of the February 2021 SC–
GHG TSD, DOE agrees with this
assessment and, therefore, in this direct
final rule DOE centers attention on a
global measure of SC–GHG. This
approach is the same as that taken in
DOE regulatory analyses from 2012
through 2016. A robust estimate of
climate damages that accrue only to U.S.
citizens and residents does not currently
exist in the literature. As explained in
the February 2021 TSD, existing
estimates are both incomplete and an
underestimate of total damages that
accrue to the citizens and residents of
the U.S. because they do not fully
capture the regional interactions and
spillovers discussed above, nor do they
include all of the important physical,
ecological, and economic impacts of
climate change recognized in the
climate change literature. As noted in
the February 2021 SC–GHG TSD, the
IWG will continue to review
developments in the literature,
including more robust methodologies
for estimating a U.S.-specific SC–GHG
value, and explore ways to better inform
the public of the full range of carbon
impacts. As a member of the IWG, DOE
will continue to follow developments in
the literature pertaining to this issue
Second, the IWG found that the use of
the social rate of return on capital (7
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percent under current OMB Circular A–
4 guidance) to discount the future
benefits of reducing GHG emissions
inappropriately underestimates the
impacts of climate change for the
purposes of estimating the SC–GHG.
Consistent with the findings of the
National Academies (2017) and the
economic literature, the IWG continued
to conclude that the consumption rate of
interest is the theoretically appropriate
discount rate in an intergenerational
context,84 and recommended that
discount rate uncertainty and relevant
aspects of intergenerational ethical
considerations be accounted for in
selecting future discount rates.
Furthermore, the damage estimates
developed for use in the SC–GHG are
estimated in consumption-equivalent
terms, and so an application of OMB
Circular A–4’s guidance for regulatory
analysis would then use the
consumption discount rate to calculate
the SC–GHG. DOE agrees with this
assessment and will continue to follow
developments in the literature
pertaining to this issue. DOE also notes
that while OMB Circular A–4, as
published in 2003, recommends using
3% and 7% discount rates as ‘‘default’’
values, Circular A–4 also reminds
agencies that ‘‘different regulations may
call for different emphases in the
analysis, depending on the nature and
complexity of the regulatory issues and
the sensitivity of the benefit and cost
estimates to the key assumptions.’’ On
discounting, Circular A–4 recognizes
that ‘‘special ethical considerations arise
when comparing benefits and costs
across generations,’’ and Circular A–4
acknowledges that analyses may
84 Interagency Working Group on Social Cost of
Carbon. Social Cost of Carbon for Regulatory Impact
Analysis under Executive Order 12866. 2010.
United States Government. (Last accessed April 15,
2022.) www.epa.gov/sites/default/files/2016-12/
documents/scc_tsd_2010.pdf; Interagency Working
Group on Social Cost of Carbon. Technical Update
of the Social Cost of Carbon for Regulatory Impact
Analysis Under Executive Order 12866. 2013. (Last
accessed April 15, 2022.) www.federalregister.gov/
documents/2013/11/26/2013-28242/technicalsupport-document-technical-update-of-the-socialcost-of-carbon-for-regulatory-impact; Interagency
Working Group on Social Cost of Greenhouse Gases,
United States Government. Technical Support
Document: Technical Update on the Social Cost of
Carbon for Regulatory Impact Analysis-Under
Executive Order 12866. August 2016. (Last accessed
January 18, 2022.) www.epa.gov/sites/default/files/
2016-12/documents/sc_co2_tsd_august_2016.pdf;
Interagency Working Group on Social Cost of
Greenhouse Gases, United States Government.
Addendum to Technical Support Document on
Social Cost of Carbon for Regulatory Impact
Analysis under Executive Order 12866: Application
of the Methodology to Estimate the Social Cost of
Methane and the Social Cost of Nitrous Oxide.
August 2016. (Last accessed January 18, 2022.)
www.epa.gov/sites/default/files/2016-12/
documents/addendum_to_sc-ghg_tsd_august_
2016.pdf.
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appropriately ‘‘discount future costs and
consumption benefits . . . at a lower
rate than for intragenerational analysis.’’
In the 2015 Response to Comments on
the Social Cost of Carbon for Regulatory
Impact Analysis, OMB, DOE, and the
other IWG members recognized that
‘‘Circular A–4 is a living document’’ and
‘‘the use of 7 percent is not considered
appropriate for intergenerational
discounting. There is wide support for
this view in the academic literature, and
it is recognized in Circular A–4 itself.’’
Thus, DOE concludes that a 7%
discount rate is not appropriate to apply
to value the social cost of greenhouse
gases in the analysis presented in this
analysis.
To calculate the present and
annualized values of climate benefits,
DOE uses the same discount rate as the
rate used to discount the value of
damages from future GHG emissions, for
internal consistency. That approach to
discounting follows the same approach
that the February 2021 TSD
recommends ‘‘to ensure internal
consistency—i.e., future damages from
climate change using the SC–GHG at 2.5
percent should be discounted to the
base year of the analysis using the same
2.5 percent rate.’’ DOE has also
consulted the National Academies’ 2017
recommendations on how SC–GHG
estimates can ‘‘be combined in RIAs
with other cost and benefits estimates
that may use different discount rates.’’
The National Academies reviewed
several options, including ‘‘presenting
all discount rate combinations of other
costs and benefits with [SC–GHG]
estimates.’’
As a member of the IWG involved in
the development of the February 2021
SC–GHG TSD, DOE agrees with the
above assessment and will continue to
follow developments in the literature
pertaining to this issue. While the IWG
works to assess how best to incorporate
the latest, peer reviewed science to
develop an updated set of SC–GHG
estimates, it set the interim estimates to
be the most recent estimates developed
by the IWG prior to the group being
disbanded in 2017. The estimates rely
on the same models and harmonized
inputs and are calculated using a range
of discount rates. As explained in the
February 2021 SC–GHG TSD, the IWG
has recommended that agencies revert
to the same set of four values drawn
from the SC–GHG distributions based
on three discount rates as were used in
regulatory analyses between 2010 and
2016 and were subject to public
comment. For each discount rate, the
IWG combined the distributions across
models and socioeconomic emissions
scenarios (applying equal weight to
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each) and then selected a set of four
values recommended for use in benefitcost analyses: an average value resulting
from the model runs for each of three
discount rates (2.5 percent, 3 percent,
and 5 percent), plus a fourth value,
selected as the 95th percentile of
estimates based on a 3 percent discount
rate. The fourth value was included to
provide information on potentially
higher-than-expected economic impacts
from climate change. As explained in
the February 2021 SC–GHG TSD, and
DOE agrees, this update reflects the
immediate need to have an operational
SC–GHG for use in regulatory benefitcost analyses and other applications that
was developed using a transparent
process, peer-reviewed methodologies,
and the science available at the time of
that process. Those estimates were
subject to public comment in the
context of dozens of proposed
rulemakings as well as in a dedicated
public comment period in 2013.
There are a number of limitations and
uncertainties associated with the SC–
GHG estimates. First, the current
scientific and economic understanding
of discounting approaches suggests
discount rates appropriate for
intergenerational analysis in the context
of climate change are likely to be less
than 3 percent, near 2 percent or
lower.85 Second, the IAMs used to
produce these interim estimates do not
include all of the important physical,
ecological, and economic impacts of
climate change recognized in the
climate change literature and the
science underlying their ‘‘damage
functions’’—i.e., the core parts of the
IAMs that map global mean temperature
changes and other physical impacts of
climate change into economic (both
market and nonmarket) damages—lags
behind the most recent research. For
example, limitations include the
incomplete treatment of catastrophic
and non-catastrophic impacts in the
integrated assessment models, their
incomplete treatment of adaptation and
technological change, the incomplete
way in which inter-regional and
intersectoral linkages are modeled,
uncertainty in the extrapolation of
damages to high temperatures, and
inadequate representation of the
relationship between the discount rate
and uncertainty in economic growth
over long time horizons. Likewise, the
socioeconomic and emissions scenarios
used as inputs to the models do not
reflect new information from the last
decade of scenario generation or the full
range of projections. The modeling
limitations do not all work in the same
direction in terms of their influence on
the SC–CO2 estimates. However, as
discussed in the February 2021 TSD, the
IWG has recommended that, taken
together, the limitations suggest that the
interim SC–GHG estimates used in this
final rule likely underestimate the
damages from GHG emissions. DOE
concurs with this assessment.
DOE’s derivations of the SC–GHG
(i.e., SC–CO2, SC–N2O, and SC–CH4)
values used for this direct final rule are
discussed in the following sections, and
the results of DOE’s analyses estimating
the benefits of the reductions in
emissions of these pollutants are
presented in section V.B.6 of this
document.
NEMA disagrees with DOE’s approach
for estimating monetary benefits
associated with emissions reductions.
NEMA commented that this topic is too
convoluted and subjective to be
included in a rulemaking analysis for
electric motor standards.(NEMA, No. 22
at p. 25)
As previously stated, as part of the
development of this direct final rule, for
the purpose of complying with the
requirements of Executive Order 12866,
DOE considered the estimated monetary
benefits from the reduced emissions of
CO2, CH4, N2O, NOX, and SO2 that are
expected to result from each of the TSLs
considered.
a. Social Cost of Carbon
The SC–CO2 values used for this
direct final rule were generated using
the values presented in the 2021 update
from the IWG’s February 2021 TSD.
Table IV–11 shows the updated sets of
SC–CO2 estimates from the latest
interagency update in 5-year increments
from 2020 to 2050. The full set of
annual values used is presented in
Appendix 14–A of the direct final rule
TSD. For purposes of capturing the
uncertainties involved in regulatory
impact analysis, DOE has determined it
is appropriate include all four sets of
SC–CO2 values, as recommended by the
IWG.86
TABLE IV–11—ANNUAL SC–CO2 VALUES FROM 2021 INTERAGENCY UPDATE, 2020–2050
[2020$ per metric ton CO2]
Discount rate
Year
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2020
2025
2030
2035
2040
2045
2050
5%
Average
.............................................................................................................
.............................................................................................................
.............................................................................................................
.............................................................................................................
.............................................................................................................
.............................................................................................................
.............................................................................................................
3%
Average
14
17
19
22
25
28
32
2.5%
Average
51
56
62
67
73
79
85
76
83
89
96
103
110
116
3%
95th percentile
152
169
187
206
225
242
260
For 2051 to 2070, DOE used SC–CO2
estimates published by EPA, adjusted to
2020$.87 These estimates are based on
methods, assumptions, and parameters
identical to the 2020–2050 estimates
published by the IWG. DOE expects
additional climate benefits to accrue for
any longer-life electric motors after
2070, but a lack of available SC–CO2
estimates for emissions years beyond
2070 prevents DOE from monetizing
these potential benefits in this analysis.
85 Interagency Working Group on Social Cost of
Greenhouse Gases (IWG). 2021. Technical Support
Document: Social Cost of Carbon, Methane, and
Nitrous Oxide Interim Estimates under Executive
Order 13990. February. United States Government.
Available at: www.whitehouse.gov/briefing-room/
blog/2021/02/26/a-return-to-science-evidence-
based-estimates-of-the-benefits-of-reducing-climatepollution/.
86 For example, the February 2021 TSD discusses
how the understanding of discounting approaches
suggests that discount rates appropriate for
intergenerational analysis in the context of climate
change may be lower than 3 percent.
87 See EPA, Revised 2023 and Later Model Year
Light-Duty Vehicle GHG Emissions Standards:
Regulatory Impact Analysis, Washington, DC,
December 2021. Available at: www.epa.gov/system/
files/documents/2021-12/420r21028.pdf (last
accessed January 13, 2022).
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DOE multiplied the CO2 emissions
reduction estimated for each year by the
SC–CO2 value for that year in each of
the four cases. DOE adjusted the values
to 2021$ using the implicit price
deflator for gross domestic product
(‘‘GDP’’) from the Bureau of Economic
Analysis. To calculate a present value of
the stream of monetary values, DOE
discounted the values in each of the
four cases using the specific discount
rate that had been used to obtain the
SC–CO2 values in each case.
b. Social Cost of Methane and Nitrous
Oxide
The SC–CH4 and SC–N2O values used
for this direct final rule were based on
the values developed for in the February
2021 TSD. Table IV–12 shows the
updated sets of SC–CH4 and SC–N2O
estimates from the latest interagency
update in 5-year increments from 2020
to 2050. The full set of annual values
used is presented in Appendix 14–A of
the direct final rule TSD. To capture the
uncertainties involved in regulatory
impact analysis, DOE has determined it
is appropriate to include all four sets of
SC–CH4 and SC–N2O values, as
recommended by the IWG.
TABLE IV–12—ANNUAL SC–CH4 AND SC–N2O VALUES FROM 2021 INTERAGENCY UPDATE, 2020–2050
[2020$ per metric ton]
Year
2020
2025
2030
2035
2040
2045
2050
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Discount rate and statistic
Discount rate and statistic
3%
Average
2.5%
Average
670
800
940
1,100
1,300
1,500
1,700
1,500
1,700
2,000
2,200
2,500
2,800
3,100
2,000
2,200
2,500
2,800
3,100
3,500
3,800
DOE multiplied the CH4 and N2O
emissions reduction estimated for each
year by the SC–CH4 and SC–N2O
estimates for that year in each of the
cases. To calculate a present value of the
stream of monetary values, DOE
discounted the values in each of the
cases using the specific discount rate
that had been used to obtain the SC–CH4
and SC–N2O estimates in each case.
2. Monetization of Other Emissions
Impacts
For the direct final rule, DOE
estimated the monetized value of NOX
and SO2 emissions reductions from
electricity generation using benefit per
ton estimates for that sector from the
EPA’s Benefits Mapping and Analysis
Program.88 DOE used EPA’s values for
PM2.5-related benefits associated with
NOX and SO2 and for ozone-related
benefits associated with NOX for 2025
and 2030, and 2040, calculated with
discount rates of 3 percent and 7
percent. DOE used linear interpolation
to define values for the years not given
in the 2025 to 2040 range; for years
beyond 2040 the values are held
constant. DOE derived values specific to
the sector for electric motors using a
method described in appendix 14B of
the direct final rule TSD.
DOE multiplied the site emissions
reduction (in tons) in each year by the
88 Estimating the Benefit per Ton of Reducing
PM2.5 Precursors from 21 Sectors. www.epa.gov/
benmap/estimating-benefit-ton-reducing-pm25precursors-21-sectors.
20:37 May 31, 2023
SC–N2O
5%
Average
.....................................................
.....................................................
.....................................................
.....................................................
.....................................................
.....................................................
.....................................................
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3%
95th percentile
5%
Average
3%
Average
2.5%
Average
5,800
6,800
7,800
9,000
10,000
12,000
13,000
18,000
21,000
23,000
25,000
28,000
30,000
33,000
27,000
30,000
33,000
36,000
39,000
42,000
45,000
3,900
4,500
5,200
6,000
6,700
7,500
8,200
associated $/ton values, and then
discounted each series using discount
rates of 3 percent and 7 percent as
appropriate.
M. Utility Impact Analysis
The utility impact analysis estimates
the changes in installed electrical
capacity and generation projected to
result for each considered TSL. The
analysis is based on published output
from the NEMS associated with
AEO2022. NEMS produces the AEO
Reference case, as well as a number of
side cases that estimate the economywide impacts of changes to energy
supply and demand. For the current
analysis, impacts are quantified by
comparing the levels of electricity sector
generation, installed capacity, fuel
consumption and emissions in the
AEO2022 Reference case and various
side cases. Details of the methodology
are provided in the appendices to
chapters [13] and [15] of the direct final
rule TSD.
The output of this analysis is a set of
time-dependent coefficients that capture
the change in electricity generation,
primary fuel consumption, installed
capacity and power sector emissions
due to a unit reduction in demand for
a given end use. These coefficients are
multiplied by the stream of electricity
savings calculated in the NIA to provide
estimates of selected utility impacts of
potential new or amended energy
conservation standards.
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3%
95th percentile
48,000
54,000
60,000
67,000
74,000
81,000
88,000
N. Employment Impact Analysis
DOE considers employment impacts
in the domestic economy as one factor
in selecting a standard. Employment
impacts from new or amended energy
conservation standards include both
direct and indirect impacts. Direct
employment impacts are any changes in
the number of employees of
manufacturers of the products subject to
standards, their suppliers, and related
service firms. The MIA addresses those
impacts. Indirect employment impacts
are changes in national employment
that occur due to the shift in
expenditures and capital investment
caused by the purchase and operation of
more-efficient appliances. Indirect
employment impacts from standards
consist of the net jobs created or
eliminated in the national economy,
other than in the manufacturing sector
being regulated, caused by (1) reduced
spending by consumers on energy, (2)
reduced spending on new energy supply
by the utility industry, (3) increased
consumer spending on the products to
which the new standards apply and
other goods and services, and (4) the
effects of those three factors throughout
the economy.
One method for assessing the possible
effects on the demand for labor of such
shifts in economic activity is to compare
sector employment statistics developed
by the Labor Department’s Bureau of
Labor Statistics (‘‘BLS’’). BLS regularly
publishes its estimates of the number of
jobs per million dollars of economic
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activity in different sectors of the
economy, as well as the jobs created
elsewhere in the economy by this same
economic activity. Data from BLS
indicate that expenditures in the utility
sector generally create fewer jobs (both
directly and indirectly) than
expenditures in other sectors of the
economy.89 There are many reasons for
these differences, including wage
differences and the fact that the utility
sector is more capital-intensive and less
labor-intensive than other sectors.
Energy conservation standards have the
effect of reducing consumer utility bills.
Because reduced consumer
expenditures for energy likely lead to
increased expenditures in other sectors
of the economy, the general effect of
efficiency standards is to shift economic
activity from a less labor-intensive
sector (i.e., the utility sector) to more
labor-intensive sectors (e.g., the retail
and service sectors). Thus, the BLS data
suggest that net national employment
may increase due to shifts in economic
activity resulting from energy
conservation standards.
DOE estimated indirect national
employment impacts for the standard
levels considered in this direct final rule
using an input/output model of the U.S.
economy called Impact of Sector Energy
Technologies version 4 (‘‘ImSET’’).90
ImSET is a special-purpose version of
the ‘‘U.S. Benchmark National InputOutput’’ (‘‘I–O’’) model, which was
designed to estimate the national
employment and income effects of
energy-saving technologies. The ImSET
software includes a computer- based I–
O model having structural coefficients
that characterize economic flows among
187 sectors most relevant to industrial,
commercial, and residential building
energy use.
NEMA commented that the proposed
approach for assessing national
employment impacts appears to be
sufficient. (NEMA, No. 22 at p. 25)
DOE notes that ImSET is not a general
equilibrium forecasting model, and that
the uncertainties involved in projecting
employment impacts, especially
changes in the later years of the
analysis. Because ImSET does not
incorporate price changes, the
employment effects predicted by ImSET
may over-estimate actual job impacts
over the long run for this rule.
Therefore, DOE used ImSET only to
generate results for near-term
timeframes (2027–2031), where these
uncertainties are reduced. For more
details on the employment impact
analysis, see chapter 16 of the direct
final rule TSD.
89 See U.S. Department of Commerce–Bureau of
Economic Analysis. Regional Multipliers: A User
Handbook for the Regional Input-Output Modeling
System (RIMS II). 1997. U.S. Government Printing
Office: Washington, DC. Available at www.bea.gov/
scb/pdf/regional/perinc/meth/rims2.pdf (last
accessed September 30, 2022).
90 Livingston, O.V., S.R. Bender, M.J. Scott, and
R.W. Schultz. ImSET 4.0: Impact of Sector Energy
Technologies Model Description and User Guide.
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V. Analytical Results and Conclusions
The following section addresses the
results from DOE’s analyses with
respect to the considered energy
conservation standards for electric
motors. It addresses the TSLs examined
by DOE, the projected impacts of each
of these levels if adopted as energy
conservation standards for electric
motors, and the standards levels that
DOE is proposing to adopt in this direct
final rule. Additional details regarding
DOE’s analyses are contained in the
direct final rule TSD supporting this
document.
A. Trial Standard Levels
In general, DOE typically evaluates
potential amended standards for
products and equipment by grouping
individual efficiency levels for each
class into TSLs. Use of TSLs allows DOE
to identify and consider manufacturer
cost interactions between equipment
classes, to the extent that there are such
interactions, and market cross elasticity
from consumer purchasing decisions
that may change when different
standard levels are set.
In the analysis conducted for this
direct final rule, DOE analyzed the
benefits and burdens of four TSLs for
electric motors. DOE developed TSLs
that combine efficiency levels for each
analyzed equipment class group by
horsepower range. DOE presents the
results for the TSLs in this document,
while the results for all efficiency levels
that DOE analyzed are in the direct final
rule TSD.
Table V.1 presents the TSLs and the
corresponding efficiency levels that
DOE has identified for potential
amended energy conservation standards
for electric motors. Table V.2 presents
the corresponding description of the
levels.
TSL 4 represents the maximum
technologically feasible (‘‘max-tech’’)
energy efficiency for all equipment class
groups and is constructed with the same
efficiency level for all equipment class
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groups (i.e., EL 4). (See Table IV–6 in
section IV.C.1.c for a breakdown of ELs
1–4 for each ECG).
TSL 3 represents a level
corresponding to the IE4 level for each
equipment class group (i.e., the industry
standard efficiency classification above
NEMA Premium/I3), except for AO–
polyphase specialized frame size
electric motors, where it corresponds to
a lower level of efficiency (i.e., NEMA
Premium/I3 level) due to the physical
limitation of these electric motors.
TSL 2 represents the levels
recommended by the November 2022
Joint Recommendation. For currently
regulated electric motors (i.e., MEM, 1–
500 hp, NEMA Design A and B motors),
this TSL represents no changes in the
current standard (i.e., NEMA Premium/
IE3 level, EL0), except for currently
regulated motors in the 100 to 250 hp
range where TSL 2 is set at an EL
corresponding to the IE4 level (i.e., the
industry standard efficiency
classification above NEMA Premium/
IE3, EL1).91 At TSL 2, MEM 501–750 hp,
NEMA Design A and B electric motors
are set at the NEMA Premium level
(EL1). For AO–MEM standard frame
size, TSL 2 is similarly constructed
using the efficiency levels
corresponding to the NEMA Premium/
IE3 level (EL1), except in the 100 to 250
hp range of AO–MEM standard frame
size motors, where it is equivalent to the
IE4 level (EL2). For AO–polyphase
specialized frame electric motors, TSL 2
represents the fire pump electric motor
level (EL1), which is the industry
standard efficiency classification
approximately two bands below NEMA
Premium/IE3.
TSL1 represents a level below the
recommended level. TSL1 represents a
level where the currently non-regulated
electric motors would be subject to the
same standards as currently regulated
motors (i.e., NEMA Premium level),
except for AO–polyphase specialized
frame size electric motors, where it
corresponds to a lower level of
efficiency (i.e., fire pump electric motor
level) due to the physical limitation of
these electric motors. For currently
regulated electric motors (i.e., MEM, 1–
500 hp, NEMA Design A and B motors),
this TSL would represent no changes in
the current standard.
2015. Pacific Northwest National Laboratory:
Richland, WA. PNNL–24563.
91 As noted, this TSL would harmonize with the
current European energy conservation standards
(compliance date July, 2023). See eurlex.europa.eu/eli/reg/2019/1781/oj.
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TABLE V.1—TRIAL STANDARD LEVELS FOR ELECTRIC MOTORS
Trial standard level
Equipment class group
Horsepower range
1
2
3
4
Efficiency level
MEM, 1–500 hp, NEMA Design A and B ....................................................
MEM, 501–750 hp, NEMA Design A and B ................................................
AO–MEM (Standard Frame Size) ...............................................................
AO–Polyphase (Specialized Frame Size) ...................................................
1 ≤ hp ≤ 5 ..............
5 < hp ≤ 20 ............
20 < hp ≤ 50 ..........
50 < hp <100 .........
100 ≤ hp ≤ 250 ......
250 < hp ≤ 500 ......
500 < hp ≤ 750 ......
1 ≤ hp ≤ 20 ............
20 < hp ≤ 50 ..........
50 < hp < 100 ........
100 ≤ hp ≤ 250 ......
1 ≤ hp ≤ 20 ............
0
0
0
0
0
0
1
1
1
1
1
1
0
0
0
0
1
0
1
1
1
1
2
1
1
1
1
1
1
1
2
2
2
2
2
2
4
4
4
4
4
4
4
4
4
4
4
4
TABLE V.2—DESCRIPTION OF TRIAL STANDARD LEVELS FOR ELECTRIC MOTORS
Trial standard level
ECG
Horsepower range
1
2
3
4
Max-tech
Efficiency level description
MEM, 1–500 hp, NEMA
Design A and B.
NEMA premium *
Recommended
IE4 *
1 ≤ hp ≤ 5 ...........
Premium/IE3 ..................
Premium/IE3 ..................
Super Premium/IE4 .......
Max-tech.
5 < hp ≤ 20 .........
20 < hp ≤ 50 .......
50 < hp <100 ......
100 ≤ hp ≤ 250 ...
250 < hp ≤ 500 ...
500 < hp ≤ 750 ...
Premium/IE3
Premium/IE3
Premium/IE3
Premium/IE3
Premium/IE3
Premium/IE3
..................
..................
..................
..................
..................
..................
Premium/IE3 ..................
Premium/IE3 ..................
Premium/IE3 ..................
Super Premium/IE4 .......
Premium/IE3 ..................
Premium/IE3 ..................
Super
Super
Super
Super
Super
Super
.......
.......
.......
.......
.......
.......
Max-tech.
Max-tech.
Max-tech.
Max-tech.
Max-tech.
Max-tech.
Premium/IE3 ..................
Premium/IE3 ..................
Super Premium/IE4 .......
Max-tech.
Premium/IE3 ..................
Premium/IE3 ..................
Premium/IE3 ..................
Fire pump ......................
Premium/IE3 ..................
Premium/IE3 ..................
Super Premium/IE4 .......
Fire pump ......................
Super Premium/IE4 .......
Super Premium/IE4 .......
Super Premium/IE4 .......
Premium/IE3 ..................
Max-tech.
Max-tech.
Max-tech.
Max-tech.
MEM, 501–750 hp,
NEMA Design A and B.
AO–MEM (Standard
1 ≤ hp ≤ 20 .........
Frame Size).
20 < hp ≤ 50 .......
50 < hp < 100 .....
100 ≤ hp ≤ 250 ...
AO–Polyphase (Special- 1 ≤ hp ≤ 20 .........
ized Frame Size).
Premium/IE4
Premium/IE4
Premium/IE4
Premium/IE4
Premium/IE4
Premium/IE4
ddrumheller on DSK120RN23PROD with RULES3
* Except for AO–Polyphase (Specialized Frame Size) electric motors where the efficiency level corresponds to a lower efficiency.
DOE constructed the TSLs for this
direct final rule to include ELs
representative of ELs with similar
characteristics (i.e., using similar
technologies and/or efficiencies, and
having roughly comparable equipment
availability). The use of representative
ELs provided for greater distinction
between the TSLs. While representative
ELs were included in the TSLs, DOE
considered all efficiency levels as part
of its analysis.92 In constructing the
TSLs, DOE did not consider EL3
because the average LCC savings at EL3
were negative for all representative
units, with a majority of consumers
experiencing net cost as shown in
92 Efficiency levels that were analyzed for this
final rule are discussed in section IV.C of this
document. Results by efficiency level are presented
in TSD chapter 8.
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section V.B.1.a of this document.
Similarly, DOE did not consider a TSL
with EL2 for the MEM, 1–500 hp,
NEMA Design A and B electric motors
because the average LCC savings at EL
2 were negative for each of the
representative units analyzed, with a
majority of consumers experiencing net
cost as shown in section V.B.1.a of this
document.
B. Economic Justification and Energy
Savings
1. Economic Impacts on Individual
Consumers
DOE analyzed the economic impacts
on electric motors consumers by looking
at the effects that new and amended
standards at each TSL would have on
the LCC and PBP. DOE also examined
the impacts of potential standards on
PO 00000
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selected consumer subgroups. These
analyses are discussed in the following
sections.
a. Life-Cycle Cost and Payback Period
In general, higher-efficiency products
affect consumers in two ways: (1)
purchase price increases and (2) annual
operating costs decrease. Inputs used for
calculating the LCC and PBP include
total installed costs (i.e., product price
plus installation costs), and operating
costs (i.e., annual energy use, energy
prices, energy price trends, repair costs,
and maintenance costs). The LCC
calculation also uses product lifetime
and a discount rate. Chapter [8] of the
direct final rule TSD provides detailed
information on the LCC and PBP
analyses.
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As described in Table IV–4 of this
document, the analysis focuses on 11
representative units identified in the
engineering analysis. Table V–3 through
Table V–24 show the LCC and PBP
results for the TSLs considered for each
representative unit. In the first of each
pair of tables, the simple payback is
measured relative to the baseline
average LCC of the baseline product and
the average LCC at each TSL. The
savings refer only to consumers who are
affected by a standard at a given TSL.
Those who already purchase a product
with efficiency at or above a given TSL
are not affected. Consumers for whom
the LCC increases at a given TSL
experience a net cost.
product. In the second table, impacts are
measured relative to the efficiency
distribution in the no-new-standards
case in the compliance year (see section
IV.F.8 of this document). Because some
consumers purchase products with
higher efficiency in the no-newstandards case, the average savings are
less than the difference between the
TABLE V–3—AVERAGE LCC AND PBP RESULTS FOR MEM, NEMA DESIGN A AND B; 5 hp, 4 POLES, ENCLOSED
[RU1]
Average costs
(2021$)
TSL
Efficiency level
First year’s
operating
cost
Installed
cost
1–2 ..............
3 ..................
4 ..................
Baseline ......................................................
EL1 .............................................................
EL2 * ...........................................................
EL3 .............................................................
EL4 .............................................................
1,185.5
1,356.8
1,356.8
1,408.0
1,620.1
Lifetime
operating
cost
789.9
779.7
779.7
773.7
768.5
Simple
payback
(years)
LCC
5,754.2
5,684.8
5,684.8
5,643.8
5,616.7
6,939.6
7,041.6
7,041.6
7,051.8
7,236.8
Average
lifetime
(years)
................
16.7
16.7
13.7
20.3
12.6
12.6
12.6
12.6
12.6
* EL1 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline product.
TABLE V–4—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR MEM, NEMA DESIGN A AND B;
5 hp, 4 POLES, ENCLOSED
[RU1]
Life-cycle cost savings
TSL
Efficiency level
1–2 ............................................................
3 ................................................................
Baseline ....................................................
EL1 ...........................................................
EL2 * .........................................................
EL3 ...........................................................
EL4 ...........................................................
4 ................................................................
Average LCC savings **
(2021$)
Percent of consumers that
experience net cost
N/A
¥101.8
¥101.8
¥92.3
¥276.4
N/A
64.1
64.1
76.4
95.9
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* EL1 = EL2.
** The savings represent the average LCC for affected consumers.
TABLE V–5—AVERAGE LCC AND PBP RESULTS FOR MEM, NEMA DESIGN A AND B; 30 hp, 4 POLES, ENCLOSED
[RU2]
Average costs
(2021$)
TSL
Efficiency level
Installed
cost
1–2 ..............
3 ..................
ddrumheller on DSK120RN23PROD with RULES3
4 ..................
Baseline ......................................................
EL1 .............................................................
EL2 * ...........................................................
EL3 .............................................................
EL4 .............................................................
First year’s
operating
cost
3,274.2
3,964.7
3,964.7
4,175.1
4,277.2
4,568.5
4,523.7
4,523.7
4,502.3
4,484.2
Lifetime
operating
cost
37,700.8
37,347.1
37,347.1
37,174.6
37,026.9
LCC
40,975.0
41,311.9
41,311.9
41,349.7
41,304.1
Simple
payback
(years)
................
15.4
15.4
13.6
11.9
Average
lifetime
(years)
14.1
14.1
14.1
14.1
14.1
* EL1 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline product.
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36123
TABLE V–6—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR MEM, NEMA DESIGN A AND B;
30 hp, 4 POLES, ENCLOSED
[RU2]
Life-cycle cost savings
TSL
Efficiency level
1–2 ............................................................
3 ................................................................
Baseline ....................................................
EL1 ...........................................................
EL2 * .........................................................
EL3 ...........................................................
EL4 ...........................................................
4 ................................................................
Average LCC savings **
(2021$)
Percent of consumers that
experience net cost
N/A
¥336.9
¥336.9
¥356.9
¥309.4
N/A
82.2
82.2
81.1
75.0
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* EL1 = EL2.
** The savings represent the average LCC for affected consumers.
TABLE V–7—AVERAGE LCC AND PBP RESULTS FOR MEM, NEMA DESIGN A AND B; 75 hp, 4 POLES, ENCLOSED
[RU3]
Average costs
(2021$)
TSL
Efficiency level
First year’s
operating
cost
Installed
cost
1–2 ..............
3 ..................
4 ..................
Baseline ......................................................
EL1 .............................................................
EL2 .............................................................
EL3 .............................................................
EL4 .............................................................
8,046.4
9,288.2
9,811.9
10,177.1
10,636.4
Lifetime
operating
cost
10,021.1
9,979.9
9,956.1
9,925.6
9,895.3
Simple
payback
(years)
LCC
83,400.1
83,074.6
82,879.4
82,631.4
82,386.0
91,446.5
92,362.8
92,691.3
92,808.5
93,022.4
................
30.2
27.2
22.3
20.6
Average
lifetime
(years)
14.2
14.2
14.2
14.2
14.2
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline product.
TABLE V–8—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR MEM, NEMA DESIGN A AND B;
75 hp, 4 POLES, ENCLOSED
[RU3]
Life-cycle cost savings
TSL
Efficiency level
1–2 ............................................................
3 ................................................................
Baseline ....................................................
EL1 ...........................................................
EL2 ...........................................................
EL3 ...........................................................
EL4 ...........................................................
4 ................................................................
Average LCC savings *
(2021$)
Percent of consumers that
experience net cost
N/A
¥916.7
¥1,229.6
¥1,258.0
¥1,439.6
N/A
88.4
86.0
89.0
90.5
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* The savings represent the average LCC for affected consumers.
TABLE V–9—AVERAGE LCC AND PBP RESULTS FOR MEM, NEMA DESIGN A AND B; 150 hp, 4 POLES, ENCLOSED
[RU4]
Average costs (2021$)
ddrumheller on DSK120RN23PROD with RULES3
TSL
1 ..................
2–3 ..............
4 ..................
Efficiency level
Installed
cost
Baseline ......................................................
EL1 .............................................................
EL2 .............................................................
EL3 .............................................................
EL4 .............................................................
13,066.4
13,414.0
15,941.3
16,547.4
17,308.4
First year’s
operating
cost
20,576.9
20,492.3
20,467.3
20,404.6
20,342.2
Lifetime
operating
cost
243,710.9
242,797.2
243,214.8
242,661.3
242,143.9
LCC
256,777.2
256,211.3
259,156.1
259,208.7
259,452.3
Simple
payback
(years)
................
4.1
26.2
20.2
18.1
Average
lifetime
(years)
33.4
33.4
33.4
33.4
33.4
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline product.
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TABLE V–10—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR MEM, NEMA DESIGN A AND
B; 150 hp, 4 POLES, ENCLOSED
[RU4]
Life-cycle cost savings
TSL
Efficiency level
1 ................................................................
2–3 ............................................................
Baseline ....................................................
EL1 ...........................................................
EL2 ...........................................................
EL3 ...........................................................
EL4 ...........................................................
4 ................................................................
Average LCC savings *
(2021$)
Percent of consumers that
experience net cost
N/A
567.1
¥2,424.3
¥2,314.5
¥2,541.1
N/A
20.2
90.1
90.3
89.1
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* The savings represent the average LCC for affected consumers.
TABLE V–11—AVERAGE LCC AND PBP RESULTS FOR MEM, NEMA DESIGN A AND B; 350 hp, 4 POLES, ENCLOSED
[RU5]
Average costs
(2021$)
TSL
Efficiency level
First year’s
operating
cost
Installed
cost
1–2 ..............
3 ..................
4 ..................
Baseline ......................................................
EL1 .............................................................
EL2 * ...........................................................
EL3 .............................................................
EL4 .............................................................
26,409.6
29,815.6
29,815.6
33,572.3
35,153.9
47,899.8
47,610.1
47,610.1
47,548.0
47,405.2
Lifetime
operating
cost
Simple
payback
(years)
LCC
563,544.0
561,091.1
561,091.1
561,385.2
560,142.3
589,953.6
590,906.6
590,906.6
594,957.5
595,296.2
................
11.8
11.8
20.4
17.7
Average
lifetime
(years)
33.4
33.4
33.4
33.4
33.4
* EL1 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline product.
TABLE V–12—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR MEM, NEMA DESIGN A AND
B; 350 hp, 4 POLES, ENCLOSED
[RU5]
Life-cycle cost savings
TSL
Efficiency level
1–2 ............................................................
3 ................................................................
Baseline ....................................................
EL1 ...........................................................
EL2 * .........................................................
EL3 ...........................................................
EL4 ...........................................................
4 ................................................................
Average LCC savings **
(2021$)
Percent of consumers that
experience net cost
N/A
¥945.5
¥945.5
¥4,918.5
¥5,257.2
N/A
66.9
66.9
92.4
89.0
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* EL1 = EL2.
** The savings represent the average LCC for affected consumers.
TABLE V–13—AVERAGE LCC AND PBP RESULTS FOR MEM, NEMA DESIGN A AND B; 600 hp, 4 POLES, ENCLOSED
[RU6]
Average costs
(2021$)
TSL
Efficiency level
ddrumheller on DSK120RN23PROD with RULES3
Installed
cost
1–2 ..............
3 ..................
4 ..................
Baseline ......................................................
EL1 .............................................................
EL2 .............................................................
EL3 * ...........................................................
EL4 .............................................................
40,229.5
41,466.0
46,889.6
46,889.6
55,293.3
First year’s
operating
cost
83,393.4
83,054.7
82,698.8
82,698.8
82,201.3
Lifetime
operating
cost
980,309.1
976,644.0
973,798.2
973,798.2
970,160.6
LCC
Simple
payback
(years)
1,020,538.6
1,018,109.9
1,020,687.7
1,020,687.7
1,025,454.0
................
3.7
9.6
9.6
12.6
Average
lifetime
(years)
33.5
33.5
33.5
33.5
33.5
* EL2 = EL3.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline product.
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36125
TABLE V–14—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR MEM, NEMA DESIGN A AND
B; 600 hp, 4 POLES, ENCLOSED
[RU6]
Life-cycle cost savings
TSL
1–2 ............................................................
3 ................................................................
4 ................................................................
Efficiency level
Average LCC savings **
(2021$)
Percent of consumers that
experience net cost
Baseline ....................................................
EL1 ...........................................................
EL2 ...........................................................
EL3 * .........................................................
EL4 ...........................................................
........................................
2,550.1
¥2,287.8
¥2,287.8
¥6,710.3
................................................
2.1
58.3
58.3
83.2
* EL2 = EL3.
** The savings represent the average LCC for affected consumers.
TABLE V–15—AVERAGE LCC AND PBP RESULTS FOR AO MEM (STANDARD FRAME SIZE); 5 hp, 4 POLES, ENCLOSED
[RU7]
Average costs
(2021$)
TSL
Efficiency level
First year’s
operating
cost
Installed
cost
1–2 ..............
3 ..................
4 ..................
Baseline ......................................................
EL1 .............................................................
EL2 .............................................................
EL3 .............................................................
EL4 .............................................................
1,126.0
1,214.2
1,331.6
1,331.6
1,525.2
Lifetime
operating
cost
992.2
970.4
960.7
960.7
947.7
Simple
payback
(years)
LCC
6,734.4
6,589.4
6,531.3
6,531.3
6,455.8
7,860.4
7,803.6
7,862.8
7,862.8
7,981.0
................
4.0
6.5
6.5
9.0
Average
lifetime
(years)
11.8
11.8
11.8
11.8
11.8
* EL3 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline product.
TABLE V–16—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR AO MEM (STANDARD FRAME
SIZE); 5 hp, 4 POLES, ENCLOSED
[RU7]
Life-cycle cost savings
TSL
1–2 ............................................................
3 ................................................................
4 ................................................................
Efficiency level
Average LCC savings **
(2021$)
Percent of consumers that
experience net cost
Baseline ....................................................
EL1 ...........................................................
EL2 ...........................................................
EL3 * .........................................................
EL4 ...........................................................
........................................
57.6
¥39.2
¥39.2
¥156.5
................................................
10.3
62.9
62.9
80.7
* EL2 = EL3.
** The savings represent the average LCC for affected consumers.
TABLE V–17—AVERAGE LCC AND PBP RESULTS FOR AO MEM (STANDARD FRAME SIZE); 30 hp, 4 POLES, ENCLOSED
[RU8]
Average costs
(2021$)
TSL
Efficiency level
ddrumheller on DSK120RN23PROD with RULES3
Installed
cost
1–2 ..............
3 ..................
4 ..................
Baseline ......................................................
EL1 .............................................................
EL2 .............................................................
EL3 * ...........................................................
EL4 .............................................................
First year’s
operating
cost
3,186.7
3,302.6
3,925.6
3,925.6
4,214.4
5,553.3
5,482.2
5,428.3
5,428.3
5,384.7
Lifetime
operating
cost
44,668.1
44,098.8
43,681.1
43,681.1
43,337.1
LCC
47,854.8
47,401.4
47,606.7
47,606.7
47,551.4
Simple
payback
(years)
................
1.6
5.9
5.9
6.1
Average
lifetime
(years)
13.7
13.7
13.7
13.7
13.7
* EL3 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline product.
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TABLE V–18—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR AO MEM (STANDARD FRAME
SIZE); 30 hp, 4 POLES, ENCLOSED
[RU8]
Life-cycle cost savings
TSL
1–2 ............................................................
3 ................................................................
4 ................................................................
Efficiency level
Average LCC savings **
(2021$)
Percent of consumers that
experience net cost
Baseline ....................................................
EL1 ...........................................................
EL2 ...........................................................
EL3 * .........................................................
EL4 ...........................................................
........................................
472.4
¥160.8
¥160.8
¥105.5
................................................
0.9
73.9
73.9
64.5
* EL2 = EL3.
** The savings represent the average LCC for affected consumers.
TABLE V–19—AVERAGE LCC AND PBP RESULTS FOR AO MEM (STANDARD FRAME SIZE); 75 hp, 4 POLES, ENCLOSED
[RU9]
Average costs
(2021$)
TSL
Efficiency level
First year’s
operating
cost
Installed
cost
1–2 ..............
3 ..................
4 ..................
Baseline ......................................................
EL1 .............................................................
EL2 .............................................................
EL3 .............................................................
EL4 .............................................................
6,905.6
7,850.5
8,995.7
9,505.8
10,331.4
13,470.2
13,291.7
13,237.8
13,227.0
13,147.4
Lifetime
operating
cost
Simple
payback
(years)
LCC
104,380.5
103,149.1
102,934.5
102,934.8
102,463.3
111,286.0
110,999.7
111,930.2
112,440.6
112,794.6
................
5.3
9.0
10.7
10.6
Average
lifetime
(years)
13.3
13.3
13.3
13.3
13.3
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline product.
TABLE V–20—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR AO MEM (STANDARD FRAME
SIZE); 75 hp, 4 POLES, ENCLOSED
[RU9]
Life-cycle cost savings
TSL
1–2 ............................................................
3 ................................................................
4 ................................................................
Efficiency level
Average LCC savings **
(2021$)
Percent of consumers that
experience net cost
Baseline ....................................................
EL1 * .........................................................
EL2 ...........................................................
EL3 ...........................................................
EL4 ...........................................................
........................................
........................................
¥930.5
¥1,441.0
¥1,795.0
................................................
................................................
99.9
98.4
96.4
* No savings at EL1 as there are no shipments at the baseline for RU9. See Table IV–9 of this document.
** The savings represent the average LCC for affected consumers.
TABLE V–21—AVERAGE LCC AND PBP RESULTS FOR AO MEM (STANDARD FRAME SIZE); 150 hp, 4 POLES, ENCLOSED
[RU10]
Average costs
(2021$)
TSL
Efficiency level
ddrumheller on DSK120RN23PROD with RULES3
Installed
cost
1 ..................
2–3 ..............
4 ..................
Baseline ......................................................
EL1 .............................................................
EL2 .............................................................
EL3 * ...........................................................
EL4 .............................................................
11,557.8
12,862.9
13,119.9
15,651.8
16,290.6
First year’s
operating
cost
26,565.2
26,349.5
26,243.0
26,253.2
26,095.5
Lifetime
operating
cost
296,595.2
294,637.7
293,559.4
294,598.5
293,085.9
LCC
308,153.0
307,500.7
306,679.3
310,250.3
309,376.5
Simple
payback
(years)
................
6.1
4.9
13.1
10.1
Average
lifetime
(years)
31.4
31.4
31.4
31.4
31.4
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline product.
* At EL3, for RU10, the increase in motor speed compared to the baseline is greater than the increase in motor speed at EL2 compared to the
baseline (see section IV.C.1.c of this document). The additional energy use due to the increase in motor speed at EL3 results in lower energy
savings and higher operating costs at EL3 compared to EL2. See section IV.E.4 of this document for a detailed explanation of the impact of
speed.
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TABLE V–22—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR AO MEM (STANDARD FRAME
SIZE); 150 hp, 4 POLES, ENCLOSED
[RU10]
Life-cycle cost savings
TSL
1 ................................................................
2–3 ............................................................
4 ................................................................
Efficiency level
Average LCC savings *
(2021$)
Percent of consumers that
experience net cost
Baseline ....................................................
EL1 ...........................................................
EL2 ...........................................................
EL3 ...........................................................
EL4 ...........................................................
........................................
608.8
930.7
¥2,720.3
¥1,846.6
................................................
6.3
11.7
93.7
79.0
* The savings represent the average LCC for affected consumers.
TABLE V–23—AVERAGE LCC AND PBP RESULTS FOR POLYPHASE (SPECIALIZED FRAME SIZE); 5 hp, 4 POLES,
ENCLOSED
[RU11]
Average costs
(2021$)
TSL
Efficiency level
First year’s
operating
cost
Installed
cost
1–2 ..............
3 ..................
4 ..................
Baseline ......................................................
EL1 .............................................................
EL2 .............................................................
EL3 .............................................................
EL4 * ...........................................................
1,134.3
1,225.1
1,342.9
1,539.1
1,539.1
Lifetime
operating
cost
993.4
971.1
956.1
942.1
942.1
Simple
payback
(years)
LCC
6,899.6
6,758.9
6,688.5
6,648.0
6,648.0
8,033.9
7,984.0
8,031.3
8,187.0
8,187.0
................
4.1
5.6
7.9
7.9
Average
Lifetime
(years)
11.9
11.9
11.9
11.9
11.9
* EL3 = EL4.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline product.
TABLE V–24—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR AO–POLYPHASE (SPECIALIZED
FRAME SIZE); 5 hp, 4 POLES, ENCLOSED
[RU11]
Life-cycle cost savings
TSL
1–2 ............................................................
3 ................................................................
4 ................................................................
Efficiency level
Average LCC savings *
(2021$)
Percent of consumers that
experience net cost
Baseline ....................................................
EL1 ...........................................................
EL2 ...........................................................
EL3 ...........................................................
EL4 * .........................................................
........................................
49.9
2.5
¥153.2
¥153.2
................................................
32.1
53.4
74.5
74.5
* EL3 = EL4.
** The savings represent the average LCC for affected consumers.
b. Consumer Subgroup Analysis
ddrumheller on DSK120RN23PROD with RULES3
In the consumer subgroup analysis,
DOE estimated the impact of the
considered TSLs on small businesses.
Table V–25 compares the average LCC
savings and PBP at each efficiency level
for the consumer subgroups with similar
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metrics for the entire consumer sample
for electric motors. For the subgroup
analysis, the only input change to the
LCC calculation is the discount rate
applied. Therefore, the simple paybacks
remain identical for small businesses
compared to the whole sample. In all
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cases, the average LCC savings and PBP
for small businesses at the considered
efficiency levels are reduced compared
to the average for all consumers.
Chapter 11 of the direct final rule TSD
presents the complete LCC and PBP
results for the subgroups.
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TABLE V–25—COMPARISON OF LCC SAVINGS AND PBP FOR SMALL BUSINESS CONSUMER SUBGROUPS AND ALL
CONSUMERS
Average LCC savings *
(2021$)
TSL
Simple payback
(years)
EL
Small
businesses
All
businesses
Small
businesses
All
businesses
MEM, NEMA Design A and B; 5 hp, 4 poles, enclosed (RU1)
1–2 .......................................................................................
3 ...........................................................................................
0
1
2
3
4
4 ...........................................................................................
N/A
¥108.5
¥108.5
¥101.7
¥288.0
N/A
¥101.8
¥101.8
¥92.3
¥276.4
N/A
16.7
16.7
13.3
20.7
N/A
16.7
16.7
13.3
20.7
N/A
15.4
15.4
13.6
11.8
N/A
15.4
15.4
13.6
11.8
N/A
30.3
27.1
22.0
20.3
N/A
30.3
27.1
22.0
20.3
N/A
4.1
27.6
20.5
18.2
N/A
4.1
27.6
20.5
18.2
N/A
11.7
11.7
20.9
17.9
N/A
11.7
11.7
20.9
17.9
........................
3.6
14.1
14.1
15.8
........................
3.6
14.1
14.1
15.8
........................
4.0
8.6
8.6
11.4
........................
4.0
8.6
8.6
11.4
........................
1.6
10.4
10.4
8.8
........................
1.6
10.4
10.4
8.8
........................
........................
........................
........................
MEM, NEMA Design A and B; 30 hp, 4 poles, enclosed (RU2)
1–2 .......................................................................................
3 ...........................................................................................
0
1
2
3
4
4 ...........................................................................................
N/A
¥376.7
¥376.7
¥414.2
¥383.3
N/A
¥336.9
¥336.9
¥356.9
¥309.4
MEM, NEMA Design A and B; 75 hp, 4 poles, enclosed (RU3)
1–2 .......................................................................................
3 ...........................................................................................
0
1
2
3
4
4 ...........................................................................................
N/A
¥954.2
¥1,290.1
¥1,342.9
¥1,550.9
N/A
¥916.7
¥1229.6
¥1258.0
¥1439.6
MEM, NEMA Design A and B; 150 hp, 4 poles, enclosed (RU4)
1 ...........................................................................................
2–3 .......................................................................................
0
1
2
3
4
4 ...........................................................................................
N/A
398.4
¥2,471.1
¥2,454.5
¥2,768.0
N/A
567.1
¥2424.3
¥2314.5
¥2541.1
MEM, NEMA Design A and B; 350 hp, 4 poles, enclosed (RU5)
1–2 .......................................................................................
3 ...........................................................................................
0
1
2
3
4
4 ...........................................................................................
N/A
¥1,362.7
¥1,362.7
¥5,206.4
¥5,758.3
N/A
¥945.5
¥945.5
¥4918.5
¥5257.2
MEM, NEMA Design A and B; 600 hp, 4 poles, enclosed (RU6)
0
1
2
3
4
1–2 .......................................................................................
3 ...........................................................................................
4 ...........................................................................................
........................
1,865.7
¥2,854.2
¥2,854.2
¥7,771.5
........................
2550.1
¥2287.8
¥2287.8
¥6710.3
AO–MEM (Standard Frame Size); 5 hp, 4 poles, enclosed (RU7)
0
1
2
3
4
1–2 .......................................................................................
3 ...........................................................................................
4 ...........................................................................................
........................
44.1
¥49.0
¥49.0
¥172.7
........................
57.6
¥39.2
¥39.2
¥156.5
ddrumheller on DSK120RN23PROD with RULES3
AO–MEM (Standard Frame Size); 30 hp, 4 poles, enclosed (RU8)
0
1
2
3
4
1–2 .......................................................................................
3 ...........................................................................................
4 ...........................................................................................
........................
407.9
¥213.1
¥213.1
¥196.1
........................
472.4
¥160.8
¥160.8
¥105.5
AO–MEM (Standard Frame Size); 75 hp, 4 poles, enclosed (RU9)
0
*1
1–2 .......................................................................................
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........................
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TABLE V–25—COMPARISON OF LCC SAVINGS AND PBP FOR SMALL BUSINESS CONSUMER SUBGROUPS AND ALL
CONSUMERS—Continued
Average LCC savings *
(2021$)
TSL
Simple payback
(years)
EL
Small
businesses
3 ...........................................................................................
¥947.0
¥1,454.5
¥1,854.7
2
3
4
4 ...........................................................................................
All
businesses
Small
businesses
¥930.5
¥1,441.0
¥1795.0
All
businesses
21.2
25.6
17.2
21.2
25.6
17.2
........................
6.1
3.4
24.5
13
........................
6.1
3.4
24.5
13
........................
4.1
5.6
7.9
7.9
........................
4.1
5.6
7.9
7.9
AO–MEM (Standard Frame Size); 150 hp, 4 poles, enclosed (RU10)
0
1
2
3
4
1 ...........................................................................................
2–3 .......................................................................................
4 ...........................................................................................
........................
292.7
691.0
¥2,732.4
¥2,111.7
........................
608.8
930.7
¥2720.3
¥1846.6
AO–Polyphase (Specialized Frame Size); 5 hp, 4 poles, enclosed (RU11)
0
1
2
3
4
1–2 .......................................................................................
3 ...........................................................................................
4 ...........................................................................................
........................
37.0
¥16.1
¥173.9
¥173.9
........................
49.9
2.5
¥153.2
¥153.2
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* No savings at EL1 as there are no shipments at the baseline for RU9. See Table IV–9 of this document.
c. Rebuttable Presumption Payback
As discussed in section III.F.2, EPCA
establishes a rebuttable presumption
that an energy conservation standard is
economically justified if the increased
purchase cost for a product that meets
the standard is less than three times the
value of the first-year energy savings
resulting from the standard. In
calculating a rebuttable presumption
payback period for each of the
considered TSLs, DOE used discrete
values, and, as required by EPCA, based
the energy use calculation on the DOE
test procedure for electric motors. In
contrast, the PBPs presented in section
V.B.1.a were calculated using
distributions that reflect the range of
energy use in the field.
Table V–26 presents the rebuttablepresumption payback periods for the
considered TSLs for electric motors.
While DOE examined the rebuttablepresumption criterion, it considered
whether the standard levels considered
for the direct final rule are economically
justified through a more detailed
analysis of the economic impacts of
those levels, pursuant to 42 U.S.C.
6295(o)(2)(B)(i), that considers the full
range of impacts to the consumer,
manufacturer, Nation, and environment.
The results of that analysis serve as the
basis for DOE to definitively evaluate
the economic justification for a potential
standard level, thereby supporting or
rebutting the results of any preliminary
determination of economic justification.
TABLE V–26—REBUTTABLE-PRESUMPTION PAYBACK PERIODS
Rebuttable payback period
(years)
Representative unit
ddrumheller on DSK120RN23PROD with RULES3
MEM, NEMA Design A and B; 5 hp, 4 poles, enclosed (RU1) .......................................
MEM, NEMA Design A and B; 30 hp, 4 poles, enclosed (RU2) .....................................
MEM, NEMA Design A and B; 75 hp, 4 poles, enclosed (RU3) .....................................
MEM, NEMA Design A and B; 150 hp, 4 poles, enclosed (RU4) ...................................
MEM, NEMA Design A and B; 350 hp, 4 poles, enclosed (RU5) ...................................
MEM, NEMA Design A and B; 600 hp, 4 poles, enclosed (RU6) ...................................
AO–MEM (Standard Frame Size); 5 hp, 4 poles, enclosed (RU7) .................................
AO–MEM (Standard Frame Size); 30 hp, 4 poles, enclosed (RU8) ...............................
AO–MEM (Standard Frame Size); 75 hp, 4 poles, enclosed (RU9) * .............................
AO–MEM (Standard Frame Size); 150 hp, 4 poles, enclosed (RU10) ...........................
AO–Polyphase (Specialized Frame Size); 5 hp, 4 poles, enclosed (RU11) ...................
TSL 1
TSL 2
N/A
N/A
N/A
N/A
N/A
2.7
3.1
1.2
....................
4.4
3.1
N/A
N/A
N/A
3.0
N/A
2.7
3.1
1.2
....................
3.5
3.1
TSL 3
12.6
11.4
21.6
3.0
8.5
6.9
5.0
4.5
6.6
3.5
4.2
TSL 4
15.1
8.8
14.9
12.9
12.9
9.2
6.9
4.6
7.8
7.3
5.9
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* No payback at TSL1 and TSL2 (EL1) as there are no shipments at the baseline for RU9. See Table IV–9 of this document.
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate
the impact of new and amended energy
conservation standards on
manufacturers of electric motors. The
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following section describes the expected
impacts on manufacturers at each
considered TSL. Chapter 12 of the direct
final rule TSD explains the analysis in
further detail.
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a. Industry Cash Flow Analysis Results
In this section, DOE provides GRIM
results from the analysis, which
examines changes in the industry that
would result from a standard. The
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following tables summarize the
estimated financial impacts (represented
by changes in INPV) of potential new
and amended energy conservation
standards on manufacturers of electric
motors, as well as the conversion costs
that DOE estimates manufacturers of
electric motors would incur at each
TSL.
To evaluate the range of cash flow
impacts on the electric motor industry,
DOE modeled two manufacturer markup
scenarios that correspond to the range of
possible market responses to new and
amended standards. Each manufacturer
markup scenario results in a unique set
of cash flows and corresponding INPVs
at each TSL.
In the following discussion, the INPV
results refer to the difference in industry
value between the no-new-standards
case and the standards cases that result
from the sum of discounted cash flows
from the reference year (2023) through
the end of the analysis period (2056).
The results also discuss the difference
in cash flows between the no-new
standards case and the standards cases
in the year before the estimated
compliance date for new and amended
energy conservation standards. This
figure represents the size of the required
conversion costs relative to the cash
flow generated by the electric motor
industry in the absence of new and
amended energy conservation
standards.
To assess the upper (less severe) end
of the range of potential impacts on
electric motors manufacturers, DOE
modeled a preservation of gross margin
scenario. This scenario assumes that in
the standards cases, electric motor
manufacturers will be able to pass along
all the higher MPCs required for more
efficient equipment to their customers.
Specifically, the industry will be able to
maintain its average no-new-standards
case gross margin (as a percentage of
revenue) despite the higher production
costs in the standards cases. In general,
the larger the MPC increases, the less
likely manufacturers are to achieve the
cash flow from operations calculated in
this scenario because it is less likely that
manufacturers will be able to fully
markup these larger production cost
increases.
To assess the lower (more severe) end
of the range of potential impacts on the
electric motor manufacturers, DOE
modeled a preservation of operating
profit scenario. This scenario represents
the lower end of the range of impacts on
manufacturers because no additional
operating profit is earned on the higher
MPCs, eroding profit margins as a
percentage of total revenue.
TABLE V–27—MANUFACTURER IMPACT ANALYSIS FOR ELECTRIC MOTORS—PRESERVATION OF GROSS MARGIN SCENARIO
No-newstandards
case
Units
INPV ......................................................
Change in INPV ....................................
Product Conversion Costs ....................
Capital Conversion Costs .....................
Total Conversion Costs ........................
2021$ millions ......................................
2021$ millions ......................................
% ..........................................................
2021$ millions ......................................
2021$ millions ......................................
2021$ millions ......................................
5,023
....................
....................
....................
....................
....................
Trial standard level
1
2
3
4,899
(124)
(2.5)
159
31
190
4,720
(303)
(6.0)
296
173
468
4,681
(342)
(6.8)
870
748
1,618
4
(3,840)
(8,863)
(176.4)
6,285
7,231
13,516
TABLE V–28—MANUFACTURER IMPACT ANALYSIS FOR ELECTRIC MOTORS—PRESERVATION OF OPERATING PROFIT
SCENARIO
No-newstandards
case
Units
INPV ......................................................
Change in INPV ....................................
ddrumheller on DSK120RN23PROD with RULES3
Product Conversion Costs ....................
Capital Conversion Costs .....................
Total Conversion Costs ........................
2021$ millions ......................................
2021$ millions ......................................
% ..........................................................
2021$ millions ......................................
2021$ millions ......................................
2021$ millions ......................................
TSL 1 sets the efficiency level at
baseline for all MEM, 1–500 hp, NEMA
Design A and B; and at EL 1 for all
MEM, 501–750 hp, NEMA Design A and
B, for all AO–MEM 1–250 hp (standard
frame size), and for all AO–Polyphase
1–20 hp (specialized frame size). At TSL
1, DOE estimates impacts on INPV will
range from ¥$127 million to ¥$124
million, which represents a change in
INPV of approximately ¥2.5 percent
(for both values, when rounded to the
nearest tenth of a percent). At TSL 1,
industry free cash flow (operating cash
flow minus capital expenditures) is
estimated to decrease to $272 million, or
a drop of 21 percent, compared to the
no-new-standards case value of $343
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5,023
....................
....................
....................
....................
....................
million in 2026, the year leading up to
the compliance date of new and
amended energy conservation
standards.
In the absence of new or amended
energy conservation standards, DOE
estimates that all MEM, 1–500 hp,
NEMA Design A and B; 90 percent of
MEM, 501–750 hp, NEMA Design A and
B; 73 percent of the AO–MEM 1–250 hp
(standard frame size); and none of the
AO–Polyphase 1–20 hp (specialized
frame size) shipments will meet or
exceed the ELs required at TSL 1 in
2027, the compliance year of new and
amended standards.
DOE does not expect manufacturers to
incur any product or capital conversion
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Trial standard level
1
2
4,896
(127)
(2.5)
159
31
190
4,690
(333)
(6.6)
296
173
468
3
3,659
(1,364)
(27.2)
870
748
1,618
4
(6,066)
(11,090)
(220.8)
6,285
7,231
13,516
costs for MEM, 1–500 hp, NEMA Design
A and B at TSL 1, since standards are
set at baseline at TSL 1 for these electric
motors. For the rest of the electric
motors covered by this rulemaking, DOE
estimates that manufacturers will incur
approximately $159 million in product
conversion costs and approximately $31
million in capital conversion costs.
Product conversion costs primarily
include engineering time to redesign
non-compliance electric motor models
and to re-test these newly redesigned
models to meet the standards set at TSL
1. Capital conversion costs include the
purchase of lamination die sets,
winding machines, frame casts, and
assembly equipment as well as other
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retooling costs for MEM, 501–750 hp,
NEMA Design A and B and for all AO–
MEM 1–250 hp (standard frame size)
and all AO–Polyphase 1–20 hp
(specialized frame size) electric motors
covered by this rulemaking.
At TSL 1, under the preservation of
gross margin scenario, the shipment
weighted average MPC increases slightly
by approximately 0.1 percent relative to
the no-new-standards case MPC. This
slight price increase is outweighed by
the $190 million in total conversion
costs estimated at TSL 1, resulting in
slightly negative INPV impacts at TSL 1
under the preservation of gross margin
scenario.
Under the preservation of operating
profit scenario, manufacturers earn the
same nominal operating profit as would
be earned in the no-new-standards case,
but manufacturers do not earn
additional profit from their investments.
The slight increase in the shipment
weighted average MPC results in a
slightly lower average manufacturer
margin. This slightly lower average
manufacturer margin and the $190
million in total conversion costs result
in slightly negative INPV impacts at TSL
1 under the preservation of operating
profit scenario.
TSL 2 sets the efficiency level at
baseline for all MEM, 1–99 hp and 251–
500 hp, NEMA Design A and B; at EL
1 for all MEM, 100–250 hp and 501–750
hp, NEMA Design A and B, for all AO–
MEM 1–99 hp (standard frame size), and
for all AO–Polyphase 1–20 hp
(specialized frame size); and at EL 2 for
all AO–MEM 100–250 hp (standard
frame size). At TSL 2, DOE estimates
impacts on INPV will range from ¥$333
million to ¥$303 million, which
represents a change in INPV of
approximately ¥6.6 percent to ¥6.0
percent, respectively. At TSL 2, industry
free cash flow (operating cash flow
minus capital expenditures) is estimated
to decrease to $160 million, or a drop
of 53 percent, compared to the no-newstandards case value of $343 million in
2026, the year leading up to the
compliance date of new and amended
energy conservation standards.
In the absence of new or amended
energy conservation standards, DOE
estimates that all MEM, 1–99 hp and
251–500 hp, NEMA Design A and B; 14
percent of all MEM, 100–250 hp, NEMA
Design A and B; 90 percent of all MEM,
501–750, NEMA Design A and B; 72
percent of all AO–MEM 1–99 hp
(standard frame size); 8 percent of all
AO–MEM 100–250 hp (standard frame
size); and none of the AO–Polyphase 1–
20 hp (specialized frame size)
shipments will meet or exceed the ELs
required at TSL 2 in 2027, the
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compliance year of new and amended
standards.
DOE does not expect manufacturers to
incur any product or capital conversion
costs for MEM, 1–99 hp and 250–500
hp, NEMA Design A and B at TSL 2,
since standards are set at baseline at
TSL 2 for these electric motors. For the
rest of the electric motors covered by
this rulemaking, DOE estimates that
manufacturers will incur approximately
$296 million in product conversion
costs and approximately $173 million in
capital conversion costs. Product
conversion costs primarily include
engineering time to redesign noncompliance electric motor models and
to re-test these newly redesigned models
to meet the standards set at TSL 2.
Capital conversion costs include the
purchase of lamination die sets,
winding machines, frame casts, and
assembly equipment as well as other
retooling costs for MEM, 100–250 hp
and 501–750 hp, NEMA Design A and
B and for all AO–MEM 1–250 hp
(standard frame size) and all AO–
Polyphase 1–20 hp (specialized frame
size) electric motors covered by this
rulemaking.
At TSL 2, under the preservation of
gross margin scenario, the shipment
weighted average MPC increases slightly
by approximately 0.7 percent relative to
the no-new-standards case MPC. This
slight price increase is outweighed by
the $468 million in total conversion
costs estimated at TSL 2, resulting in
moderately negative INPV impacts at
TSL 2 under the preservation of gross
margin scenario.
Under the preservation of operating
profit scenario, manufacturers earn the
same nominal operating profit as would
be earned in the no-new-standards case,
but manufacturers do not earn
additional profit from their investments.
The slight increase in the shipment
weighted average MPC results in a
slightly lower average manufacturer
margin. This slightly lower average
manufacturer margin and the $468
million in total conversion costs result
in moderately negative INPV impacts at
TSL 2 under the preservation of
operating profit scenario.
TSL 3 sets the efficiency level at EL
1 for all MEM, 1–500 hp, NEMA Design
A and B; and at EL 2 for all MEM, 501–
750 hp, NEMA Design A and B, for all
AO–MEM 1–250 hp (standard frame
size), and for all AO–Polyphase 1–20 hp
(specialized frame size). At TSL 3, DOE
estimates impacts on INPV will range
from ¥$1,364 million to ¥$342
million, which represents a change in
INPV of approximately ¥27.2 percent to
¥6.8 percent, respectively. At TSL 3,
industry free cash flow (operating cash
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36131
flow minus capital expenditures) is
estimated to decrease to ¥$303 million,
or a drop of 189 percent, compared to
the no-new-standards case value of $343
million in 2026, the year leading up to
the compliance date of new and
amended energy conservation
standards.
In the absence of new or amended
energy conservation standards, DOE
estimates that 14 percent of all MEM, 1–
500 hp, NEMA Design A and B; 16
percent of all MEM, 501–750 hp, NEMA
Design A and B; 2 percent of all AO–
MEM 1–250 hp (standard frame size);
and none of the AO–Polyphase 1–20 hp
(specialized frame size) shipments will
meet or exceed the ELs required at TSL
3 in 2027, the compliance year of new
and amended standards.
The majority of electric motors
covered by this rulemaking will need to
be redesigned at TSL 3. DOE estimates
that manufacturers will have to make
significant investments in their
manufacturing production equipment
and the engineering resources dedicated
to redesigning electric motor models.
DOE estimates that manufacturers will
incur approximately $870 million in
product conversion costs and
approximately $748 million in capital
conversion costs.
At TSL 3, under the preservation of
gross margin scenario, the shipment
weighted average MPC increases
significantly by approximately 22.0
percent relative to the no-new-standards
case MPC. This price increase is
outweighed by the $1,618 million in
total conversion costs estimated at TSL
3, resulting in moderately negative INPV
impacts at TSL 3 under the preservation
of gross margin scenario.
Under the preservation of operating
profit scenario, manufacturers earn the
same nominal operating profit as would
be earned in the no-new-standards case,
but manufacturers do not earn
additional profit from their investments.
The increase in the shipment weighted
average MPC results in a significantly
lower average manufacturer margin,
compared to the no-new-standards case
manufacturer margin. This lower
average manufacturer margin and the
$1,618 million in total conversion costs
result in significantly negative INPV
impacts at TSL 3 under the preservation
of operating profit scenario.
TSL 4 sets the efficiency level at EL
4 (max-tech) for all electric motors
covered by this rulemaking. At TSL 4,
DOE estimates impacts on INPV will
range from ¥$11,090 million to
¥$8,863 million, which represents a
change in INPV of approximately
¥220.8 percent to ¥176.4 percent,
respectively. At TSL 4, industry free
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cash flow (operating cash flow minus
capital expenditures) is estimated to
decrease to ¥$5,634 million, or a drop
of 1,745 percent, compared to the nonew-standards case value of $343
million in 2026, the year leading up to
the compliance date of new and
amended energy conservation
standards.
In the absence of new or amended
energy conservation standards, DOE
estimates that less than 1 percent of all
MEM, 1–50 hp, NEMA Design A and B;
none of the MEM, 51–750 hp, NEMA
Design A and B; none of the AO–MEM
1–250 hp (standard frame size); and
none of the AO–Polyphase 1–20 hp
(specialized frame size) shipments will
meet the ELs required at TSL 4 in 2027,
the compliance year of new and
amended standards.
Almost all electric motors covered by
this rulemaking will need to be
redesigned at TSL 4. DOE estimates that
manufacturers will have to make
significant investments in their
manufacturing production equipment
and the engineering resources dedicated
to redesigning electric motor models.
DOE estimates that manufacturers will
incur approximately $6,285 million in
product conversion costs and
approximately $7,231 million in capital
conversion costs. The significant
increase in product and capital
conversion costs is because DOE
assumes that electric motor
manufacturers will need to use die-cast
copper rotors for most, if not all, electric
motors manufactured to meet this TSL.
This technology requires a significant
level of investment because the majority
of the existing electric motor production
machinery would need to be replaced or
significantly modified.
At TSL 4, under the preservation of
gross margin scenario, the shipment
weighted average MPC increases
significantly by approximately 49.5
percent relative to the no-new-standards
case MPC. This price increase is
significantly outweighed by the $13,516
million in total conversion costs
estimated at TSL 4, resulting in
significantly negative INPV impacts at
TSL 4 under the preservation of gross
margin scenario.
Under the preservation of operating
profit scenario, manufacturers earn the
same nominal operating profit as would
be earned in the no-new-standards case,
but manufacturers do not earn
additional profit from their investments.
The increase in the shipment weighted
average MPC results in a lower average
manufacturer margin, compared to the
no-new-standards case manufacturer
margin. This lower average
manufacturer margin and the $13,516
million in total conversion costs result
in significantly negative INPV impacts
at TSL 4 under the preservation of
operating profit scenario.
b. Direct Impacts on Employment
To quantitatively assess the potential
impacts of new and amended energy
conservation standards on direct
employment in the electric motors
industry, DOE used the GRIM to
estimate the domestic labor
expenditures and number of direct
employees in the no-new-standards case
and in each of the standards cases
during the analysis period.
DOE used statistical data from the
U.S. Census Bureau’s 2021 Annual
Survey of Manufacturers (‘‘ASM’’), the
results of the engineering analysis, and
interviews with manufacturers to
determine the inputs necessary to
calculate industry-wide labor
expenditures and domestic employment
levels. Labor expenditures involved
with the manufacturing of electric
motors are a function of the labor
intensity of the product, the sales
volume, and an assumption that wages
remain fixed in real terms over time.
In the GRIM, DOE used the labor
content of each piece of equipment and
the MPCs to estimate the annual labor
expenditures of the industry. DOE used
Census data and interviews with
manufacturers to estimate the portion of
the total labor expenditures attributable
to domestic labor.
The production worker estimates in
this employment section cover only
workers up to the line-supervisor level
who are directly involved in fabricating
and assembling an electric motor within
a motor facility. Workers performing
services that are closely associated with
production operations, such as material
handling with a forklift, are also
included as production labor. DOE’s
estimates account for only production
workers who manufacture the specific
equipment covered by this rulemaking.
For example, a worker on an electric
motor line manufacturing a fractional
horsepower motor (i.e., a motor with
less than one horsepower) would not be
included with this estimate of the
number of electric motor workers, since
fractional motors are not covered by this
rulemaking.
The employment impacts shown in
Table V–29 represent the potential
production employment impact
resulting from new and amended energy
conservation standards. The upper
bound of the results estimates the
maximum change in the number of
production workers that could occur
after compliance with new and
amended energy conservation standards
when assuming that manufacturers
continue to produce the same scope of
covered equipment in the same
production facilities. It also assumes
that domestic production does not shift
to lower-labor-cost countries. Because
there is a real risk of manufacturers
evaluating sourcing decisions in
response to new and amended energy
conservation standards, the lower
bound of the employment results
includes the estimated total number of
U.S. production workers in the industry
who could lose their jobs if some
existing electric motor production was
moved outside of the U.S. While the
results present a range of employment
impacts following 2027, this section
also include qualitative discussions of
the likelihood of negative employment
impacts at the various TSLs. Finally, the
employment impacts shown are
independent of the indirect employment
impacts from the broader U.S. economy,
which are documented in chapter 16 of
the direct final rule TSD.
Based on 2021 ASM data and
interviews with manufacturers, DOE
estimates approximately 15 percent of
electric motors covered by this
rulemaking sold in the U.S. are
manufactured domestically. Using this
assumption, DOE estimates that in the
absence of new and amended energy
conservation standards, there would be
approximately 1,242 domestic
production workers involved in
manufacturing all electric motors
covered by this rulemaking in 2027.
Table V–29 shows the range of potential
impacts of new and amended energy
conservation standards on U.S.
production workers involved in the
production of electric motors covered by
this rulemaking.
TABLE V–29—POTENTIAL CHANGES IN THE NUMBER OF DOMESTIC ELECTRIC MOTOR WORKERS
No-newstandards
case
Domestic Production Workers in 2027 ............................................
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1
2
1,243
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01JNR3
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1,857
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TABLE V–29—POTENTIAL CHANGES IN THE NUMBER OF DOMESTIC ELECTRIC MOTOR WORKERS—Continued
No-newstandards
case
Domestic Non-Production Workers in 2027 ....................................
Total Domestic Employment in 2027 ...............................................
Potential Changes in Total Domestic Employment in 2027 * ..........
712
1,954
....................
Trial standard level
1
2
712
1,955
(2)–1
3
712
1,962
(13)–8
712
2,227
(432)–273
4
712
2,569
(1,201)–615
* DOE presents a range of potential impacts. Numbers in parentheses indicate negative values.
ddrumheller on DSK120RN23PROD with RULES3
At the upper end of the range, all
examined TSLs show an increase in the
number of domestic production workers
for electric motors. The upper end of the
range represents a scenario where
manufacturers increase production
hiring due to the increase in the labor
associated with adding the required
components and additional labor (e.g.,
hand winding, etc.) to make electric
motors more efficient. However, as
previously stated, this assumes that in
addition to hiring more production
employees, all existing domestic
production would remain in the United
States and not shift to lower labor-cost
countries.
At the lower end of the range, all
examined TSLs show a decrease in
domestic production employment. In
response to the March 2022 Preliminary
TSD NEMA stated that increasing
component prices can drive production
offshore when tariffs only apply to raw
materials and not finished goods.
(NEMA, No. 22 at p. 16). The lower end
of the domestic employment range
assumes that some electric motor
domestic production employment may
shift to lower labor-cost countries in
response to energy conservation
standards. DOE estimated this lower
bound potential change in domestic
employment based on the percent
change in the MPC at each TSL.
c. Impacts on Manufacturing Capacity
During manufacturer interviews and
during meetings supporting the
November 2022 Joint Recommendation,
most manufacturers stated that any
standards requiring efficiency levels
higher than IE4 (also referred to as
NEMA Super-Premium) 93 would
severely disrupt manufacturing capacity
(in this analysis these efficiency levels
correspond to two or more NEMA bands
of efficiency above NEMA Premium).
Many electric motor manufacturers do
not offer any electric motor models that
would meet these higher efficiency
93 The TSL that require efficiency levels above
IE4/NEMA Super-Premium is TSL 4.
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levels. Based on the shipments analysis
used in the NIA, DOE estimates that less
than 1.5 percent of all electric motor
shipments will meet any efficiency level
above IE4, in the no-new-standards case
in 2027, the compliance year of new and
amended standards.
Additionally, most manufacturers
stated they would not be able to provide
a full portfolio of electric motors for any
standards that would be met using
copper rotors. Most manufacturers
stated that they do not currently have
the machinery, technology, or
engineering resources to produce copper
rotors in-house. Some manufacturers
claim that the few manufacturers that do
have the capability of producing copper
rotors are not able to produce these
motors in volumes sufficient to fulfill
the entire electric motor market and
would not be able to ramp up those
production volumes over the four-year
compliance period. For manufacturers
to either completely redesign their
motor production lines or significantly
expand their very limited copper rotor
production line would require a massive
retooling and engineering effort, which
could take more than a decade to
complete. Most manufacturers stated
they would have to outsource copper
rotor production because they would
not be able to modify their facilities and
production processes to produce copper
rotors in-house within a four-year time
period. Most manufacturers agreed that
outsourcing rotor die casting would
constrain capacity by creating a
bottleneck in rotor production, as there
are very few companies that produce
copper rotors.
Manufacturers also pointed out that
there is substantial uncertainty
surrounding the global availability and
price of copper, which has the potential
to constrain capacity. Several
manufacturers expressed concern that
the combination of all of these factors
would make it impossible to support
existing customers while redesigning
product lines and retooling.
DOE estimates there is a strong
likelihood of manufacturer capacity
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constraints in the near term for any
standards that would likely require the
use of copper rotors and for any
standards set at efficiency levels higher
than IE4.
d. Impacts on Subgroups of
Manufacturers
Using average cost assumptions to
develop an industry cash-flow estimate
may not be adequate for assessing
differential impacts among
manufacturer subgroups. Small
manufacturers, niche equipment
manufacturers, and manufacturers
exhibiting cost structures substantially
different from the industry average
could be affected disproportionately.
DOE analyzed the impacts to small
businesses in section VI.B and did not
identify any other adversely impacted
electric motor-related manufacturer
subgroups for this rulemaking based on
the results of the industry
characterization.
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer
burden involves looking at the
cumulative impact of multiple DOE
standards and the product-specific
regulatory actions of other Federal
agencies that affect the manufacturers of
a covered product or equipment. While
any one regulation may not impose a
significant burden on manufacturers,
the combined effects of several existing
or impending regulations may have
serious consequences for some
manufacturers, groups of manufacturers,
or an entire industry. Assessing the
impact of a single regulation may
overlook this cumulative regulatory
burden. In addition to energy
conservation standards, other
regulations can significantly affect
manufacturers’ financial operations.
Multiple regulations affecting the same
manufacturer can strain profits and lead
companies to abandon product lines or
markets with lower expected future
returns than competing products. For
these reasons, DOE conducts an analysis
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of cumulative regulatory burden as part
of its rulemakings pertaining to
appliance efficiency. DOE requests
information regarding the impact of
cumulative regulatory burden on
manufacturers of electric motors
associated with multiple DOE standards
or product-specific regulatory actions of
other Federal agencies.
DOE evaluates product-specific
regulations that will take effect
approximately 3 years before or after the
2027 compliance date of any new and
amended energy conservation standards
for electric motors. This information is
presented in Table V–30.
TABLE V–30—COMPLIANCE DATES AND EXPECTED CONVERSION EXPENSES OF FEDERAL ENERGY CONSERVATION
STANDARDS AFFECTING ELECTRIC MOTOR MANUFACTURERS
Number of
manufacturers *
Federal energy conservation standard
Dedicated-Purpose Pool Pump Motors 87 FR
37122 (Jun. 21, 2022) †.
Distribution Transformer 88 FR 1722 (Jan. 11,
2023) †.
Number of
manufacturers
affected from
this rule **
Industry
conversion
costs
(millions)
Approx.
standards
year
Industry
conversion
costs/product
revenue ***
(%)
5
5
2026
$46.2 (2020$)
2.8
27
6
2027
$343 (2021$)
2.7
* This column presents the total number of manufacturers identified in the energy conservation standard rule contributing to cumulative regulatory burden.
** This column presents the number of manufacturers producing electric motors that are also listed as manufacturers in the listed energy conservation standard contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of product revenue during the conversion period. Industry conversion costs
are the upfront investments manufacturers must make to sell compliant products/equipment. The revenue used for this calculation is the revenue
from just the covered product/equipment associated with each row. The conversion period is the time frame over which conversion costs are
made and lasts from the publication year of the final rule to the compliance year of the energy conservation standard. The conversion period
typically ranges from 3 to 5 years, depending on the rulemaking.
† Indicates a proposed rulemaking. Final values may change upon the publication of a final rule.
3. National Impact Analysis
a. Significance of Energy Savings
This section presents DOE’s estimates
of the national energy savings and the
NPV of consumer benefits that would
result from each of the TSLs considered
as potential amended standards.
To estimate the energy savings
attributable to potential amended
standards for electric motors, DOE
compared their energy consumption
under the no-new-standards case to
their anticipated energy consumption
under each TSL. The savings are
measured over the entire lifetime of
products purchased in the 30-year
period that begins in the year of
anticipated compliance with amended
standards (2027–2056). Table V–31
presents DOE’s projections of the
national energy savings for each TSL
considered for electric motors. The
savings were calculated using the
approach described in section IV.H of
this document.
TABLE V–31—CUMULATIVE NATIONAL ENERGY SAVINGS FOR ELECTRIC MOTORS; 30 YEARS OF SHIPMENTS
[2027–2056]
Trial standard level
Equipment class group
Horsepower range
1
2
3
4
(quads)
Primary Energy:
MEM, 1–500 hp, NEMA Design A and B ........................................................................
AO–Polyphase (Specialized Frame Size) .......................................................................
1 ≤ hp ≤ 5 ......................
5 < hp ≤ 20 ....................
20 < hp ≤ 50 ..................
50 < hp < 100 ................
100 ≤ hp ≤ 250 ..............
250 < hp ≤ 500 ..............
500 < hp ≤ 750 ..............
1 ≤ hp ≤ 20 ....................
20 < hp ≤ 50 ..................
50 < hp < 100* ..............
100 ≤hp ≤ 250 ...............
1 ≤ hp ≤ 20 ....................
N/A
N/A
N/A
N/A
N/A
N/A
0.003
0.045
0.012
....................
0.056
0.021
N/A
N/A
N/A
N/A
2.609
N/A
0.003
0.045
0.012
..............
0.207
0.021
0.799
2.303
2.049
0.327
2.609
1.411
0.029
0.104
0.100
0.018
0.207
0.036
1.877
4.461
3.968
1.049
7.926
2.497
0.073
0.184
0.171
0.047
0.436
0.049
Total ..........................................................................................................................
........................................
0.137
2.898
9.991
22.739
1 ≤ hp ≤ 5 ......................
5 < hp ≤ 20 ....................
20 < hp ≤ 50 ..................
50 < hp < 100 ................
100 ≤ hp ≤ 250 ..............
250 < hp ≤ 500 ..............
500 < hp ≤ 750 ..............
N/A
N/A
N/A
N/A
N/A
N/A
0.003
N/A
N/A
N/A
N/A
2.710
N/A
0.003
0.830
2.393
2.128
0.339
2.710
1.466
0.031
1.950
4.635
4.123
1.090
8.234
2.594
0.076
ddrumheller on DSK120RN23PROD with RULES3
MEM, 501–750 hp, NEMA Design A and B above 500 hp .............................................
AO–MEM (Standard Frame Size) ....................................................................................
FFC:
MEM, 1–500 hp, NEMA Design A and B ........................................................................
MEM, 501–750 hp, NEMA Design A and B above 500 hp .............................................
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TABLE V–31—CUMULATIVE NATIONAL ENERGY SAVINGS FOR ELECTRIC MOTORS; 30 YEARS OF SHIPMENTS—Continued
[2027–2056]
Trial standard level
Equipment class group
Horsepower range
1
2
3
4
(quads)
AO–Polyphase (Specialized Frame Size) .......................................................................
1 ≤ hp ≤ 20 ....................
20 < hp ≤ 50 ..................
50 ≤ hp ≤ 100 * ..............
100 ≤ hp ≤ 250 ** ...........
1 hp 20 ..........................
0.047
0.012
....................
0.058
0.022
0.047
0.012
..............
0.215
0.022
0.108
0.104
0.018
0.215
0.037
0.192
0.177
0.049
0.453
0.051
Total ..........................................................................................................................
........................................
0.143
3.011
10.379
23.623
AO–MEM (Standard Frame Size) ....................................................................................
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and TSL2 in that equipment class group and
horsepower range.
OMB Circular A–4 94 requires
agencies to present analytical results,
including separate schedules of the
monetized benefits and costs that show
the type and timing of benefits and
costs. Circular A–4 also directs agencies
to consider the variability of key
elements underlying the estimates of
benefits and costs. For this rulemaking,
DOE undertook a sensitivity analysis
using 9 years, rather than 30 years, of
product shipments. The choice of a 9year period is a proxy for the timeline
in EPCA for the review of certain energy
conservation standards and potential
revision of and compliance with such
revised standards.95 The review
timeframe established in EPCA is
generally not synchronized with the
product lifetime, product manufacturing
cycles, or other factors specific to
electric motors. Thus, such results are
presented for informational purposes
only and are not indicative of any
change in DOE’s analytical
methodology. The NES sensitivity
analysis results based on a 9-year
analytical period are presented in Table
V–32. The impacts are counted over the
lifetime of electric motors purchased in
2027–2035.
TABLE V–32—CUMULATIVE NATIONAL ENERGY SAVINGS FOR ELECTRIC MOTORS; 9 YEARS OF SHIPMENTS
[2027–2035]
Trial standard level
Equipment class group
Horsepower range
1
2
3
4
(quads)
Primary Energy:
MEM, 1–500 hp, NEMA Design A and B ........................................................................
AO–Polyphase (Specialized Frame Size) .......................................................................
1 ≤ hp ≤ 5 ......................
5 < hp ≤ 20 ....................
20 < hp ≤ 50 ..................
50 < hp < 100 ................
100 ≤ hp ≤ 250 ..............
250 < hp ≤ 500 ..............
500 < hp ≤ 750 ..............
1 ≤ hp ≤ 20 ....................
20 < hp ≤ 50 ..................
50 < hp < 100 * ..............
100 ≤ hp ≤ 250 ..............
1 ≤ hp ≤ 20 ....................
N/A
N/A
N/A
N/A
N/A
N/A
0.001
0.012
0.003
....................
0.015
0.006
N/A
N/A
N/A
N/A
0.592
N/A
0.001
0.012
0.003
..............
0.057
0.006
0.182
0.524
0.466
0.074
0.592
0.320
0.007
0.029
0.027
0.005
0.057
0.010
0.427
1.016
0.903
0.239
1.799
0.567
0.017
0.051
0.047
0.013
0.119
0.014
Total ..........................................................................................................................
........................................
0.038
0.671
2.294
5.211
1 ≤ hp ≤ 5 ......................
5 < hp ≤ 20 ....................
20 < hp ≤ 50 ..................
50 < hp < 100 ................
100 ≤ hp ≤ 250 ..............
250 < hp ≤ 500 ..............
500 < hp ≤ 750 ..............
1 ≤ hp ≤ 20 ....................
20 < hp ≤ 50 ..................
50 < hp < 100 * ..............
100 ≤ hp ≤ 250 ** ...........
N/A
N/A
N/A
N/A
N/A
N/A
0.001
0.013
0.003
....................
0.016
N/A
N/A
N/A
N/A
0.615
N/A
0.001
0.013
0.003
..............
0.059
0.189
0.545
0.485
0.077
0.615
0.333
0.007
0.030
0.028
0.005
0.059
0.444
1.056
0.939
0.248
1.869
0.589
0.017
0.053
0.049
0.013
0.124
MEM, 501–750 hp, NEMA Design A and B above 500 hp .............................................
AO–MEM (Standard Frame Size) ....................................................................................
FFC:
MEM, 1—500 hp, NEMA Design A and B ......................................................................
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MEM, 501–750 hp, NEMA Design A and B above 500 hp .............................................
AO–MEM (Standard Frame Size) ....................................................................................
94 U.S. Office of Management and Budget.
Circular A–4: Regulatory Analysis. September 17,
2003. obamawhitehouse.archives.gov/omb/
circulars_a004_a-4 (last accessed September 30,
2022).
95 EPCA requires DOE to review its standards at
least once every 6 years, and requires, for certain
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products, a 3-year period after any new standard is
promulgated before compliance is required, except
that in no case may any new standards be required
within 6- years of the compliance date of the
previous standards. While adding a 6-year review
to the 3-year compliance period adds up to 9 years,
DOE notes that it may undertake reviews at any
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time within the 6-year period and that the 3-year
compliance date may yield to the 6-year backstop.
A 9-year analysis period may not be appropriate
given the variability that occurs in the timing of
standards reviews and the fact that for some
products, the compliance period is 5 years rather
than 3 years.
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TABLE V–32—CUMULATIVE NATIONAL ENERGY SAVINGS FOR ELECTRIC MOTORS; 9 YEARS OF SHIPMENTS—Continued
[2027–2035]
Trial standard level
Equipment class group
Horsepower range
1
2
3
4
(quads)
AO–Polyphase (Specialized Frame Size) .......................................................................
1 ≤ hp ≤ 20 ....................
0.006
0.006
0.010
0.014
Total ..........................................................................................................................
........................................
0.039
0.698
2.384
5.416
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and TSL2 (EL1) in that equipment class group
and horsepower range.
b. Net Present Value of Consumer Costs
and Benefits
DOE estimated the cumulative NPV of
the total costs and savings for
consumers that would result from the
TSLs considered for electric motors. In
accordance with OMB’s guidelines on
regulatory analysis,96 DOE calculated
NPV using both a 7-percent and a 3-
percent real discount rate. Table V–33
shows the consumer NPV results with
impacts counted over the lifetime of
products purchased in 2027–2056.
TABLE V–33—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR ELECTRIC MOTORS; 30 YEARS OF
SHIPMENTS
[2027–2056]
Discount rate
Horsepower
range
Equipment class group
Trial standard level
1
2
3
4
(billion 2021$)
3 percent ........................
1 ≤ hp ≤ 5
5 < hp ≤ 20
20 < hp ≤ 50
50 < hp < 100
100 ≤ hp ≤ 250
250 < hp ≤ 500
500 < hp ≤ 750
N/A
N/A
N/A
N/A
N/A
N/A
0.01
N/A
N/A
N/A
N/A
6.73
N/A
0.01
¥2.18
¥7.17
¥3.24
¥1.36
6.73
1.77
0.02
¥8.54
¥6.21
¥0.93
¥1.50
5.13
0.66
0.03
AO–Polyphase (Specialized Frame Size) .............
1 ≤ hp ≤ 20
20 < hp ≤ 50
50 < hp < 100 *
100 ≤ hp ≤ 250
1 ≤ hp ≤ 20
0.12
0.04
................
0.11
0.05
0.12
0.04
................
0.52
0.05
0.05
0.04
¥0.09
0.52
0.05
¥0.14
0.17
¥0.16
0.18
0.01
Total ...............................................................
..........................
0.33
7.47
¥4.85
¥11.30
MEM, 1–500 hp, NEMA Design A and B .............
1 ≤ hp ≤ 5
5 < hp ≤ 20
20 < hp ≤ 50
50 < hp < 100
100 ≤ hp ≤ 250
250 < hp ≤ 500
500 < hp ≤ 750
N/A
N/A
N/A
N/A
N/A
N/A
0.00
N/A
N/A
N/A
N/A
2.00
N/A
0.00
¥1.49
¥4.77
¥2.62
¥0.86
2.00
0.09
¥0.01
¥5.30
¥5.18
¥2.25
¥1.26
¥2.04
¥1.15
¥0.03
AO–Polyphase (Specialized Frame Size) .............
1 ≤ hp ≤ 20
20 < hp ≤ 50
50 < hp < 100 *
100 ≤ hp ≤ 250
1 ≤ hp ≤ 20
0.04
0.02
................
0.02
0.02
0.04
0.02
................
0.16
0.02
¥0.02
¥0.02
¥0.06
0.16
0.01
¥0.16
0.01
¥0.11
¥0.18
¥0.02
Total ...............................................................
..........................
0.11
2.23
¥7.60
¥17.67
MEM, 1–500 hp, NEMA Design A and B .............
MEM, 501–750 hp, NEMA Design A and B above
500 hp.
AO–MEM (Standard Frame Size) .........................
7 percent ........................
ddrumheller on DSK120RN23PROD with RULES3
MEM, 501–750 hp, NEMA Design A and B above
500 hp.
AO–MEM (Standard Frame Size) .........................
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and TSL2 in that equipment
class group and horsepower range.
The NPV results based on the
aforementioned 9-year analytical period
are presented in Table V–34. The
impacts are counted over the lifetime of
products purchased in 2027–2035. As
mentioned previously, such results are
presented for informational purposes
only and are not indicative of any
96 U.S. Office of Management and Budget.
Circular A–4: Regulatory Analysis. September 17,
2003. obamawhitehouse.archives.gov/omb/
circulars_a004_a-4 (last accessed September 30,
2022).
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change in DOE’s analytical methodology
or decision criteria.
TABLE V–34—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR ELECTRIC MOTORS; 9 YEARS OF
SHIPMENTS
[2027–2035]
Discount rate
Horsepower
range
Equipment class group
Trial standard level
1
2
3
4
(billion 2021$)
3 percent ........................
1 ≤ hp ≤ 5
5 < hp ≤ 20
20 < hp ≤ 50
50 < hp < 100
100 ≤ hp ≤ 250
250 < hp ≤ 500
500 < hp ≤ 750
N/A
N/A
N/A
N/A
N/A
N/A
0.00
N/A
N/A
N/A
N/A
2.16
N/A
0.00
¥0.66
¥2.17
¥0.95
¥0.41
2.16
0.58
0.01
¥2.62
¥1.79
¥0.16
¥0.43
1.74
0.25
0.01
AO–Polyphase (Specialized Frame Size) .............
1 ≤ hp ≤ 20
20 < hp ≤ 50
50 < hp < 100 *
100 ≤ hp ≤ 250
1 ≤ hp ≤ 20
0.04
0.02
................
0.04
0.02
0.04
0.02
................
0.20
0.02
0.02
0.02
¥0.03
0.20
0.02
¥0.04
0.07
¥0.06
0.08
0.01
Total ...............................................................
..........................
0.12
2.44
¥1.22
¥2.95
MEM, 1–500 hp, NEMA Design A and B .............
1 ≤ hp ≤ 5
5 < hp ≤ 20
20 < hp ≤ 50
50 < hp < 100
100 ≤ hp ≤ 250
250 < hp ≤ 500
500 < hp ≤ 750
N/A
N/A
N/A
N/A
N/A
N/A
0.00
N/A
N/A
N/A
N/A
0.90
N/A
0.00
¥0.64
¥2.06
¥1.12
¥0.37
0.90
0.05
0.00
¥2.30
¥2.20
¥0.93
¥0.54
¥0.84
¥0.49
¥0.01
AO–Polyphase (Specialized Frame Size) .............
1 ≤ hp ≤ 20
20 < hp ≤ 50
50 < hp < 100
100 ≤ hp ≤ 250
1 ≤ hp ≤ 20
0.02
0.01
................
0.01
0.01
0.02
0.01
................
0.08
0.01
¥0.01
¥0.01
¥0.03
0.08
0.01
¥0.08
0.01
¥0.05
¥0.08
¥0.01
Total ...............................................................
..........................
0.06
1.02
¥3.21
¥7.51
MEM, 1–500 hp, NEMA Design A and B .............
MEM, 501–750 hp, NEMA Design A and B above
500 hp.
AO–MEM (Standard Frame Size) .........................
7 percent ........................
MEM, 501—750 hp, NEMA Design A and B
above 500 hp.
AO–MEM (Standard Frame Size) .........................
ddrumheller on DSK120RN23PROD with RULES3
The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and TSL2 in that equipment
class group and horsepower range.
The previous results reflect the use of
a default trend to estimate the change in
price for electric motors over the
analysis period (see section IV.F.1 of
this document). In addition to the
default trend (constant prices), DOE also
conducted a sensitivity analysis that
considered one scenario with a rate of
price decline and one scenario with a
rate of price increase. The results of
these alternative cases are presented in
appendix 10C of the direct final rule
TSD. In the price-decline case, the NPV
of consumer benefits is higher than in
the default case. In the price-increase
case, the NPV of consumer benefits is
lower than in the default case.
c. Indirect Impacts on Employment
It is estimated that that amended
energy conservation standards for
electric motors would reduce energy
expenditures for consumers of those
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products, with the resulting net savings
being redirected to other forms of
economic activity. These expected shifts
in spending and economic activity
could affect the demand for labor. As
described in section IV.N of this
document, DOE used an input/output
model of the U.S. economy to estimate
indirect employment impacts of the
TSLs that DOE considered. There are
uncertainties involved in projecting
employment impacts, especially
changes in the later years of the
analysis. Therefore, DOE generated
results for near-term timeframes (2027–
2031), where these uncertainties are
reduced.
The results suggest that the standards
would be likely to have a negligible
impact on the net demand for labor in
the economy. The net change in jobs is
so small that it would be imperceptible
in national labor statistics and might be
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offset by other, unanticipated effects on
employment. Chapter 16 of the direct
final rule TSD presents detailed results
regarding anticipated indirect
employment impacts.
4. Impact on Utility or Performance of
Products
As discussed in section IV.C.1.b of
this document, DOE concludes that the
standards in this direct final rule would
not lessen the utility or performance of
the electric motors under consideration
in this rulemaking. Manufacturers of
these products currently offer units that
meet or exceed the standards.
5. Impact of Any Lessening of
Competition
DOE considered any lessening of
competition that would be likely to
result from new or amended standards.
As discussed in section III.F.1.e of this
document, the Attorney General
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determines the impact, if any, of any
lessening of competition likely to result
from a standard, and transmits such
determination in writing to the
Secretary, together with an analysis of
the nature and extent of such impact. To
assist the Attorney General in making
this determination, DOE has provided
DOJ with copies of this direct final rule
and the accompanying TSD for review.
DOE will consider DOJ’s comments on
the rule in determining whether to
proceed to a final rule. DOE will publish
and respond to DOJ’s comments in that
document. DOE invites comment from
the public regarding the competitive
impacts that are likely to result from
this rule. In addition, stakeholders may
also provide comments separately to
DOJ regarding these potential impacts.
See the ADDRESSES section for
information to send comments to DOJ.
6. Need of the Nation To Conserve
Energy
Enhanced energy efficiency, where
economically justified, improves the
Nation’s energy security, strengthens the
economy, and reduces the
environmental impacts (costs) of energy
production. Reduced electricity demand
due to energy conservation standards is
also likely to reduce the cost of
maintaining the reliability of the
electricity system, particularly during
peak-load periods. Chapter 15 in the
direct final rule TSD presents the
estimated impacts on electricity
generating capacity, relative to the nonew-standards case, for the TSLs that
DOE considered in this rulemaking.
Energy conservation resulting from
potential energy conservation standards
for electric motors is expected to yield
environmental benefits in the form of
reduced emissions of certain air
pollutants and greenhouse gases. Table
V–35 provides DOE’s estimate of
cumulative emissions reductions
expected to result from the TSLs
considered in this rulemaking. The
emissions were calculated using the
multipliers discussed in section IV.K of
this document. DOE reports annual
emissions reductions for each TSL in
chapter 13 of the direct final rule TSD.
TABLE V–35—CUMULATIVE EMISSIONS REDUCTION FOR ELECTRIC MOTORS SHIPPED IN 2027–2056
Trial standard level
1
2
3
4
Power Sector Emissions
CO2 (million metric tons) .................................................................................
CH4 (thousand tons) ........................................................................................
N2O (thousand tons) ........................................................................................
NOX (thousand tons) .......................................................................................
SO2 (thousand tons) ........................................................................................
Hg (tons) ..........................................................................................................
4.08
0.28
0.04
1.93
1.68
0.01
84.48
5.73
0.79
39.32
34.64
0.23
294.36
20.15
2.78
138.52
121.08
0.80
669.19
45.77
6.31
314.54
275.16
1.81
0.34
32.47
0.00
5.20
0.02
0.00
7.20
684.37
0.04
109.42
0.47
0.00
24.88
2,359.60
0.12
377.47
1.67
0.00
56.62
5,370.22
0.28
859.03
3.79
0.01
4.42
32.75
0.04
7.13
1.71
0.01
91.69
690.10
0.82
148.74
35.12
0.23
319.24
2,379.75
2.90
516.00
122.75
0.80
725.80
5,415.99
6.59
1,173.58
278.95
1.82
Upstream Emissions
CO2 (million metric tons) .................................................................................
CH4 (thousand tons) ........................................................................................
N2O (thousand tons) ........................................................................................
NOX (thousand tons) .......................................................................................
SO2 (thousand tons) ........................................................................................
Hg (tons) ..........................................................................................................
Total FFC Emissions
CO2 (million metric tons) .................................................................................
CH4 (thousand tons) ........................................................................................
N2O (thousand tons) ........................................................................................
NOX (thousand tons) .......................................................................................
SO2 (thousand tons) ........................................................................................
Hg (tons) ..........................................................................................................
As part of the analysis for this
rulemaking, DOE estimated monetary
benefits likely to result from the
reduced emissions of CO2 that DOE
estimated for each of the considered
TSLs for electric motors. Section IV.L of
this document discusses the SC–CO2
values that DOE used. Table V–36
presents the value of CO2 emissions
reduction at each TSL for each of the
SC–CO2 cases. The time-series of annual
values is presented for the TSL in
chapter 14 of the direct final rule TSD.
TABLE V–36—PRESENT VALUE OF CO2 EMISSIONS REDUCTION FOR ELECTRIC MOTORS SHIPPED IN 2027–2056
ddrumheller on DSK120RN23PROD with RULES3
SC–CO2 case
Discount rate and statistics
TSL
5%
Average
3%
Average
2.5%
Average
3%
95th percentile
(Billion 2021$)
1 ...................................................................................................................
2 ...................................................................................................................
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36139
TABLE V–36—PRESENT VALUE OF CO2 EMISSIONS REDUCTION FOR ELECTRIC MOTORS SHIPPED IN 2027–2056—
Continued
SC–CO2 case
Discount rate and statistics
TSL
5%
Average
3%
Average
2.5%
Average
3%
95th percentile
(Billion 2021$)
3 ...................................................................................................................
4 ...................................................................................................................
As discussed in section IV.L.2 of this
document, DOE estimated the climate
benefits likely to result from the
reduced emissions of methane and N2O
that DOE estimated for each of the
2,455.13
5,459.53
considered TSLs for electric motors.
Table V–37 presents the value of the
CH4 emissions reduction at each TSL,
and Table V–38 presents the value of
the N2O emissions reduction at each
10,830.27
24,136.32
17,081.13
38,092.58
32,809.19
73,105.31
TSL. The time-series of annual values is
presented for the TSL in chapter 14 of
the direct final rule TSD.
TABLE V–37—PRESENT VALUE OF METHANE EMISSIONS REDUCTION FOR ELECTRIC MOTORS SHIPPED IN 2027–2056
SC–CH4 case
Discount rate and statistics
TSL
5%
Average
3%
Average
2.5%
Average
3%
95th percentile
(Billion 2021$)
1
2
3
4
...................................................................................................................
...................................................................................................................
...................................................................................................................
...................................................................................................................
12.16
194.82
845.85
1,884.39
37.03
623.71
2,621.71
5,857.68
51.92
884.30
3,690.13
8,250.30
97.98
1,651.65
6,932.36
15,490.67
TABLE V–38—PRESENT VALUE OF NITROUS OXIDE EMISSIONS REDUCTION FOR ELECTRIC MOTORS SHIPPED IN 2027–
2056
SC–N2O case
Discount rate and statistics
TSL
5%
Average
3%
Average
2.5%
Average
3%
95th percentile
(Billion 2021$)
ddrumheller on DSK120RN23PROD with RULES3
1
2
3
4
...................................................................................................................
...................................................................................................................
...................................................................................................................
...................................................................................................................
DOE is aware that scientific and
economic knowledge about the
contribution of CO2 and other GHG
emissions to changes in the future
global climate and the potential
resulting damages to the global and U.S.
economy continues to evolve rapidly.
DOE, together with other Federal
agencies, will continue to review
methodologies for estimating the
monetary value of reductions in CO2
and other GHG emissions. This ongoing
review will consider the comments on
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19.20
this subject that are part of the public
record for this and other rulemakings, as
well as other methodological
assumptions and issues. DOE notes that
the standards would be economically
justified even without inclusion of
monetized benefits of reduced GHG
emissions.
DOE also estimated the monetary
value of the health benefits associated
with NOX and SO2 emissions reductions
anticipated to result from the
considered TSLs for electric motors. The
dollar-per-ton values that DOE used are
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0.51
8.23
35.54
79.21
0.79
12.94
55.47
123.71
1.36
21.99
94.75
211.22
discussed in section IV.L of this
document. Table V–39 presents the
present value for NOX emissions
reduction for each TSL calculated using
7-percent and 3-percent discount rates,
and Table V–40 presents similar results
for SO2 emissions reductions. The
results in these tables reflect application
of EPA’s low dollar-per-ton values,
which DOE used to be conservative. The
time-series of annual values is presented
for the TSL in chapter 14 of the direct
final rule TSD.
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TABLE V–39—PRESENT VALUE OF NOX EMISSIONS REDUCTION FOR ELECTRIC MOTORS SHIPPED IN 2027–2056
TSL
3% Discount rate
7% Discount rate
(million 2021$)
1
2
3
4
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
251.49
4,333.63
17,501.29
39,226.69
93.31
1,321.91
6,149.06
13,614.34
TABLE V–40—PRESENT VALUE OF SO2 EMISSIONS REDUCTION FOR ELECTRIC MOTORS SHIPPED IN 2027–2056
TSL
3% Discount rate
7% Discount rate
(million 2021$)
1
2
3
4
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
Not all the public health and
environmental benefits from the
reduction of greenhouse gases, NOx, and
SO2 are captured in the values above,
and additional unquantified benefits
from the reductions of those pollutants
as well as from the reduction of direct
PM and other co-pollutants may be
significant. DOE has not included the
monetary benefits of the reduction of Hg
for this direct final rule because Hg
emissions reductions are expected to be
small.
7. Other Factors
The Secretary of Energy, in
determining whether a standard is
economically justified, may consider
any other factors that the Secretary
deems to be relevant. (42 U.S.C.
6295(o)(2)(B)(i)(VII))
8. Summary of Economic Impacts
Table V–41 presents the NPV values
that result from adding the estimates of
the potential economic benefits
resulting from reduced GHG and NOX
and SO2 emissions to the NPV of
82.00
1,388.59
5,658.54
12,671.52
31.35
434.33
2,042.58
4,517.89
consumer benefits calculated for each
TSL considered in this rulemaking. The
consumer benefits are domestic U.S.
monetary savings that occur as a result
of purchasing the covered electric
motors, and are measured for the
lifetime of products shipped in 2027–
2056. The benefits associated with
reduced GHG emissions resulting from
the adopted standards are global
benefits, and are also calculated based
on the lifetime of electric motors
shipped in 2027–2056.
TABLE V–41—CONSUMER NPV COMBINED WITH PRESENT VALUE OF BENEFITS FROM CLIMATE AND HEALTH BENEFITS
Category
TSL 1
TSL 2
TSL 3
TSL 4
3% Discount Rate for Consumer NPV and Health Benefits (billion 2021$)
5% Average SC–GHG case ............................................................................
3% Average SC–GHG case ............................................................................
2.5% Average SC–GHG case .........................................................................
3% 95th percentile SC–GHG case ..................................................................
0.71
0.85
0.96
1.23
13.95
16.33
18.07
22.44
21.62
31.80
39.14
58.15
47.96
70.67
87.07
129.41
3.90
14.08
21.42
40.43
7.83
30.54
46.93
89.27
7% Discount Rate for Consumer NPV and Health Benefits (billion 2021$)
5% Average SC–GHG case ............................................................................
3% Average SC–GHG case ............................................................................
2.5% Average SC–GHG case .........................................................................
3% 95th percentile SC–GHG case ..................................................................
ddrumheller on DSK120RN23PROD with RULES3
C. Conclusion
When considering new or amended
energy conservation standards, the
standards that DOE adopts for any type
(or class) of covered equipment must be
designed to achieve the maximum
improvement in energy efficiency that
the Secretary determines is
technologically feasible and
economically justified. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(A)) In
determining whether a standard is
economically justified, the Secretary
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0.80
must determine whether the benefits of
the standard exceed its burdens by, to
the greatest extent practicable,
considering the seven statutory factors
discussed in section III.F.1 of this
document. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)) The new or amended
standard must also result in significant
conservation of energy. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(3)(B))
For this direct final rule, DOE
considered the impacts of new and
amended standards for electric motors
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7.13
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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 highest efficiency level
that is both technologically feasible and
economically justified and saves a
significant amount of energy.
To aid the reader as DOE discusses
the benefits and/or burdens of each TSL,
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tables in this section present a summary
of the results of DOE’s quantitative
analysis for each TSL. In addition to the
quantitative results presented in the
tables, DOE also considers other
burdens and benefits that affect
economic justification. These include
the impacts on identifiable subgroups of
consumers who may be
disproportionately affected by a national
standard and impacts on employment.
1. Benefits and Burdens of TSLs
Considered for Electric Motors
Standards
Tables V–42 and V–43 summarize the
quantitative impacts estimated for each
TSL for electric motors. The national
impacts are measured over the lifetime
of electric motors purchased in the 30year period that begins in the
anticipated year of compliance with
amended standards (2027–2056). The
energy savings, emissions reductions,
and value of emissions reductions refer
to full-fuel-cycle results. DOE is
presenting monetized benefits of GHG
emissions reductions in accordance
with the applicable Executive Orders
and DOE would reach the same
conclusion presented in this notice in
the absence of the social cost of
greenhouse gases, including the Interim
Estimates presented by the Interagency
Working Group. The efficiency levels
contained in each TSL are described in
section V.A of this document.
TABLE V–42—SUMMARY OF ANALYTICAL RESULTS FOR ELECTRIC MOTORS TSLS: NATIONAL IMPACTS
Category
TSL 1
TSL 2
TSL 3
TSL 4
Cumulative FFC National Energy Savings
Quads ..............................................................................................................
0.1
3.0
10.4
23.6
91.69
690.10
0.82
148.74
35.12
0.23
319.24
2,379.75
2.90
516.00
122.75
0.80
725.80
5,415.99
6.59
1,173.58
278.95
1.82
34.86
13.49
23.16
71.50
39.70
¥4.85
31.80
73.26
30.07
51.90
155.23
84.56
¥11.30
70.67
13.44
13.49
8.19
35.11
21.03
¥7.60
14.08
27.14
30.07
18.13
75.34
44.80
¥17.67
30.54
Cumulative FFC Emissions Reduction
CO2 (million metric tons) .................................................................................
CH4 (thousand tons) ........................................................................................
N2O (thousand tons) ........................................................................................
NOX (thousand tons) .......................................................................................
SO2 (thousand tons) ........................................................................................
Hg (tons) ..........................................................................................................
4.42
32.75
0.04
7.13
1.71
0.01
Present Value of Benefits and Costs (3% discount rate, billion 2021$)
Consumer Operating Cost Savings .................................................................
Climate Benefits * .............................................................................................
Health Benefits ** .............................................................................................
Total Benefits † ................................................................................................
Consumer Incremental Product Costs ‡ ..........................................................
Consumer Net Benefits ...................................................................................
Total Net Benefits ............................................................................................
0.51
0.19
0.33
1.04
0.18
0.33
0.85
8.82
3.14
5.72
17.68
1.35
7.47
16.33
Present Value of Benefits and Costs (7% discount rate, billion 2021$)
Consumer Operating Cost Savings .................................................................
Climate Benefits * .............................................................................................
Health Benefits ** .............................................................................................
Total Benefits † ................................................................................................
Consumer Incremental Product Costs ‡ ..........................................................
Consumer Net Benefits ...................................................................................
Total Net Benefits ............................................................................................
0.21
0.19
0.12
0.53
0.10
0.11
0.43
2.95
3.14
1.76
7.85
0.72
2.23
7.13
ddrumheller on DSK120RN23PROD with RULES3
Note: This table presents the costs and benefits associated with electric motors shipped in 2027–2056. These results include benefits to consumers which accrue after 2056 from the products shipped in 2027–2056.
* Climate benefits are calculated using four different estimates of the SC–CO2, SC–CH4 and SC–N2O. Together, these represent the global
SC–GHG. For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3 percent discount rate are
shown, but the Department does not have a single central SC–GHG point estimate. To monetize the benefits of reducing GHG emissions this
analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse
Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as
health benefits from reductions in direct PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this document for more details.
† Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits for both the 3-percent
and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate, but the Department does not have a single central
SC–GHG point estimate. DOE emphasizes the importance and value of considering the benefits calculated using all four SC–GHG estimates.
‡ Costs include incremental equipment costs as well as installation costs.
TABLE V–43—SUMMARY OF ANALYTICAL RESULTS FOR ELECTRIC MOTORS TSLS: MANUFACTURER AND CONSUMER
IMPACTS
Category
TSL 1
TSL 2
TSL 3
TSL 4
Manufacturer Impacts
Industry NPV (million 2021$) (No-new-standards case INPV = 5,023) ......
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TABLE V–43—SUMMARY OF ANALYTICAL RESULTS FOR ELECTRIC MOTORS TSLS: MANUFACTURER AND CONSUMER
IMPACTS—Continued
Category
TSL 1
Industry NPV (% change) ............................................................................
TSL 2
(2.5)
TSL 3
TSL 4
(6.6)–(6.0)
(27.2)–(6.8)
(220.8)–(176.4)
N/A
N/A
N/A
567.1
N/A
2,550.1
57.6
472.4
........................
930.7
49.9
337.4
¥101.8
¥336.9
¥916.7
567.1
¥945.5
¥2,287.8
¥39.2
¥160.8
¥930.5
930.7
2.5
¥196.2
¥276.4
¥309.4
¥1,439.6
¥2,541.1
¥5,257.2
¥6,710.3
¥156.5
¥105.5
¥1,795.0
¥1,846.6
¥153.2
¥404.2
N/A
N/A
N/A
4.1
N/A
3.7
4.0
1.6
........................
4.9
4.1
3.9
16.7
15.4
30.2
4.1
11.8
9.6
6.5
5.9
9.0
4.9
5.6
15.6
20.3
11.9
20.6
18.1
17.7
12.6
9.0
6.1
10.6
10.1
7.9
16.3
64.1%
82.2%
88.4%
20.2%
66.9%
58.3%
62.9%
73.9%
99.9%
11.7%
53.4%
70.6%
95.9%
75.0%
90.5%
89.1%
89.0%
83.2%
80.7%
64.5%
96.4%
79.0%
74.5%
86.3%
Consumer Average LCC Savings (2021$)
RU1 ..............................................................................................................
RU2 ..............................................................................................................
RU3 ..............................................................................................................
RU4 ..............................................................................................................
RU5 ..............................................................................................................
RU6 ..............................................................................................................
RU7 ..............................................................................................................
RU8 ..............................................................................................................
RU9 * ............................................................................................................
RU10 ............................................................................................................
RU11 ............................................................................................................
Shipment-Weighted Average ** ...................................................................
N/A
N/A
N/A
N/A
N/A
2,550.1
57.6
472.4
........................
608.8
49.9
159.8
Consumer Simple PBP (years)
RU1 ..............................................................................................................
RU2 ..............................................................................................................
RU3 ..............................................................................................................
RU4 ..............................................................................................................
RU5 ..............................................................................................................
RU6 ..............................................................................................................
RU7 ..............................................................................................................
RU8 ..............................................................................................................
RU9 * ............................................................................................................
RU10 ............................................................................................................
RU11 ............................................................................................................
Shipment-Weighted Average ** ...................................................................
N/A
N/A
N/A
N/A
N/A
3.7
4.0
1.6
........................
6.1
4.1
3.8
Percent of Consumers that Experience a Net Cost
RU1 ..............................................................................................................
RU2 ..............................................................................................................
RU3 ..............................................................................................................
RU4 ..............................................................................................................
RU5 ..............................................................................................................
RU6 ..............................................................................................................
RU7 ..............................................................................................................
RU8 ..............................................................................................................
RU9 * ............................................................................................................
RU10 ............................................................................................................
RU11 ............................................................................................................
Shipment-Weighted Average ** ...................................................................
N/A
N/A
N/A
N/A
N/A
2.1%
10.3%
0.9%
........................
6.3%
32.1%
10.9%
N/A
N/A
N/A
20.2%
N/A
2.1%
10.3%
0.9%
........................
11.7%
32.1%
14.9%
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The entry ‘‘N/A’’ means not applicable because there is no change in the standard at certain TSLs.
* No impact because there are no shipments below the efficiency level corresponding to TSL1 and TSL2 for RU9.
** Weighted by shares of each equipment class in total projected shipments in 2027 for impacted consumers.
DOE first considered TSL 4, which
represents the max-tech efficiency
levels. At this level, DOE expects that
all equipment classes would require
35H210 silicon steel and die-cast copper
rotors. DOE estimates that
approximately 0.34 percent of annual
shipments across all electric motor
equipment classes currently meet the
max-tech efficiencies required. TSL 4
would save an estimated 23.6 quads of
energy, an amount DOE considers
significant. Under TSL 4, the NPV of
consumer benefit would be ¥$17.67
billion using a discount rate of 7
percent, and ¥$11.30 billion using a
discount rate of 3 percent.
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The cumulative emissions reductions
at TSL 4 are 725.80 Mt of CO2, 278.95
thousand tons of SO2, 1,173.58
thousand tons of NOX, 1.82 tons of Hg,
5,415.99 thousand tons of CH4, and 6.59
thousand tons of N2O. The estimated
monetary value of the climate benefits
from reduced GHG emissions
(associated with the average SC–GHG at
a 3-percent discount rate) at TSL 4 is
$30.07 billion. The estimated monetary
value of the health benefits from
reduced SO2 and NOX emissions at TSL
4 is $18.13 billion using a 7-percent
discount rate and $51.90 billion using a
3-percent discount rate.
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Using a 7-percent discount rate for
consumer benefits and costs, health
benefits from reduced SO2 and NOX
emissions, and the 3-percent discount
rate case for climate benefits from
reduced GHG emissions, the estimated
total NPV at TSL 4 is $30.54 billion.
Using a 3-percent discount rate for all
benefits and costs, the estimated total
NPV at TSL 4 is $70.67 billion.
At TSL 4, for the largest equipment
class group and horsepower ranges,
which are represented by RU1 and RU2,
which together represent approximately
90 percent of annual shipments, there is
a life cycle cost savings of ¥$276.4 and
¥$309.4 and a payback period of 20.3
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
years and 11.9 years, respectively. For
these equipment classes, the fraction of
customers experiencing a net LCC cost
is 95.9 percent and 75.0 percent due to
increases in total installed cost of $434.7
and $1,003.0, respectively. Overall, for
the remaining equipment class groups
and horsepower ranges, a majority of
electric motor consumers (84.5 percent)
would experience a net cost and the
average LCC savings would be negative
for all remaining equipment class
groups and horsepower ranges.
At TSL 4, the projected change in
INPV ranges from a decrease of $11,090
million to a decrease of $8,863 million,
which corresponds to decreases of 220.8
percent and 176.4 percent, respectively.
DOE estimates that industry must invest
$13,516 million to comply with
standards set at TSL 4. The significant
increase in product and capital
conversion costs is because DOE
assumes that electric motor
manufacturers will need to use die-cast
copper rotors for most, if not all, electric
motors manufactured to meet this TSL.
This technology requires a significant
level of investment because almost all
existing electric motor production
machinery would need to be replaced or
significantly modified. Based on the
shipments analysis used in the NIA,
DOE estimates that approximately 0.3
percent of all electric motor shipments
will meet the efficiency levels required
at TSL 4, in the no-new-standards case
in 2027, the compliance year of new and
amended standards.
Under 42 U.S.C. 6295(o)(2)(B)(i), DOE
determines whether a standard is
economically justified after considering
seven factors. Based on these factors, the
Secretary concludes that at TSL 4 for
electric motors, the benefits of energy
savings, emission reductions, and the
estimated monetary value of the
emissions reductions are outweighed by
the negative NPV of consumer benefits,
economic burden on many consumers,
and the impacts on manufacturers,
including the extremely large
conversion costs, profit margin impacts
that will result in a negative INPV, and
the lack of manufacturers currently
offering products meeting the efficiency
levels required at this TSL. A majority
of electric motor consumers (86.3
percent) would experience a net cost
and the average LCC savings for each
representative unit DOE examined is
negative. In both manufacturer markup
scenarios, INPV is negative at TSL 4,
which implies that manufacturers
would never recover the conversion
costs they must make to produce
electric motors at TSL 4. Consequently,
the Secretary concludes that TSL 4 is
not economically justified.
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DOE then considered TSL 3, which
represents a level corresponding to the
IE4 level, except for AO–polyphase
specialized frame size electric motors,
where it corresponds to a lower level of
efficiency (i.e., NEMA Premium level).
TSL 3 would save an estimated 10.4
quads of energy, an amount DOE
considers significant. Under TSL 3, the
NPV of consumer benefit would be
¥$7.60 billion using a discount rate of
7 percent, and ¥$4.85 billion using a
discount rate of 3 percent.
The cumulative emissions reductions
at TSL 3 are 319.24 Mt of CO2, 122.75
thousand tons of SO2, 516.00 thousand
tons of NOX, 0.80 tons of Hg, 2,379.75
thousand tons of CH4, and 2.90
thousand tons of N2O. The estimated
monetary value of the climate benefits
from reduced GHG emissions
(associated with the average SC–GHG at
a 3-percent discount rate) at TSL 3 is
$13.49 billion. The estimated monetary
value of the health benefits from
reduced SO2 and NOX emissions at TSL
3 is 8.19 billion using a 7-percent
discount rate and $23.16 billion using a
3-percent discount rate.
Using a 7-percent discount rate for
consumer benefits and costs, health
benefits from reduced SO2 and NOX
emissions, and the 3-percent discount
rate case for climate benefits from
reduced GHG emissions, the estimated
total NPV at TSL 3 is $14.08 billion.
Using a 3-percent discount rate for all
benefits and costs, the estimated total
NPV at TSL 3 is $31.80 billion.
At TSL 3, for the largest equipment
class group and horsepower ranges,
which are represented by RU1 and RU2,
there is a life cycle cost savings of
¥$101.8 and ¥$336.9 and a payback
period of 16.7 and 15.4, respectively.
For these equipment classes, the
fraction of customers experiencing a net
LCC cost is 64.1 percent and 82.2
percent due to increases in total
installed cost of $171.3 and $690.5,
respectively. Overall, for the remaining
equipment class groups and horsepower
ranges, a majority of electric motor
consumers (55.5 percent) would
experience a net cost and the
shipments-weighted average LCC
savings would be negative for all
remaining equipment class groups and
horsepower ranges.
At TSL 3, the projected change in
INPV ranges from a decrease of $1,364
million to a decrease of $342 million,
which correspond to decreases of 27.2
percent and 6.8 percent, respectively.
DOE estimates that industry must invest
$1,618 million to comply with
standards set at TSL 3. Based on the
shipments analysis used in the NIA,
DOE estimates that approximately 13.3
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percent of all electric motor shipments
will meet or exceed the efficiency levels
required at TSL 3, in the no-newstandards case in 2027, the compliance
year of new and amended standards.
Under 42 U.S.C. 6295(o)(2)(B)(i), DOE
determines whether a standard is
economically justified after considering
seven factors. Based on these factors, the
Secretary concludes that at TSL 3 for
electric motors, the benefits of energy
savings, emission reductions, and the
estimated monetary value of the
emissions reductions are outweighed by
the negative NPV of consumer benefits,
economic burden on many consumers,
and the impacts on manufacturers,
including the large conversion costs,
profit margin impacts that could result
in a large reduction in INPV, and the
lack of manufacturers currently offering
products meeting the efficiency levels
required at this TSL. A majority of
electric motor consumers (70.6 percent)
would experience a net cost and the
average LCC savings would be negative.
The potential reduction in INPV could
be as high as 27.2 percent.
Consequently, the Secretary concludes
that TSL 3 is not economically justified.
DOE then considered TSL 2, the
standard levels recommended in the
November 2022 Joint Recommendation
by the Electric Motors Working Group.
TSL 2 would also align with the EU
Ecodesign Directive 2019/1781, which
requires IE4 levels for 75–200 kW
motors.97 TSL 2 would save an
estimated 3.0 quads of energy, an
amount DOE considers significant.
Under TSL 2, the NPV of consumer
benefit would be $2.23 billion using a
discount rate of 7 percent, and $7.47
billion using a discount rate of 3
percent.
The cumulative emissions reductions
at TSL 2 are 91.69 Mt of CO2, 35.12
thousand tons of SO2, 148.74 thousand
tons of NOX, 0.23 tons of Hg, 690.10
thousand tons of CH4, and 0.82
thousand tons of N2O. The estimated
monetary value of the climate benefits
from reduced GHG emissions
(associated with the average SC–GHG at
a 3-percent discount rate) at TSL 2 is
$3.14 billion. The estimated monetary
value of the health benefits from
reduced SO2 and NOX emissions at TSL
2 is $1.76 billion using a 7-percent
discount rate and $5.72 billion using a
3-percent discount rate.
Using a 7-percent discount rate for
consumer benefits and costs, health
benefits from reduced SO2 and NOX
97 In terms of standardized horsepowers, this
would correspond to 100–250 hp when applying
the provisions from 10 CFR 431.25(k) (and new
section 10 CFR 431.25(q)).
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emissions, and the 3-percent discount
rate case for climate benefits from
reduced GHG emissions, the estimated
total NPV at TSL 2 is $7.13 billion.
Using a 3-percent discount rate for all
benefits and costs, the estimated total
NPV at TSL 2 is $16.33 billion.
At TSL 2, for the largest equipment
class group and horsepower ranges,
which are represented by RU1 and RU2,
there would be no changes in the
standards. Overall, for the remaining
equipment class groups and horsepower
ranges, 14.9 percent of electric motor
consumers would experience a net cost
and the shipments-weighted average
LCC savings would be positive for all
remaining equipment class groups and
horsepower ranges.
At TSL 2, the projected change in
INPV ranges from a decrease of $333
million to a decrease of $303 million,
which correspond to decreases of 6.6
percent and 6.0 percent, respectively.
DOE estimates that industry must invest
$468 million to comply with standards
set at TSL 2. Based on the shipments
analysis used in the NIA, DOE estimates
that approximately 96.2 percent of all
electric motor shipments will meet or
exceed the efficiency levels required at
TSL 2, in the no-new-standards case in
2027, the compliance year of new and
amended standards.
Under 42 U.S.C. 6295(o)(2)(B)(i), DOE
determines whether a standard is
economically justified after considering
seven factors. Based on these factors, the
Secretary concludes that a standard set
at TSL 2 for electric motors would be
economically justified. At this TSL, the
average LCC savings is positive. Only an
estimated 14.9 percent of electric motor
consumers experience a net cost. The
FFC national energy savings are
significant and the NPV of consumer
benefits is positive using both a 3percent and 7-percent discount rate.
Notably, the benefits to consumers
vastly outweigh the cost to
manufacturers. Notably, at TSL 2, the
NPV of consumer benefits, even
measured at the more conservative
discount rate of 7 percent, is over 6
times higher than the maximum
estimated manufacturers’ loss in INPV.
The standard levels at TSL 2 are
economically justified even without
weighing the estimated monetary value
of emissions reductions. When those
emissions reductions are included—
representing $3.14 billion in climate
benefits (associated with the average
SC–GHG at a 3-percent discount rate),
and $5.72 billion (using a 3-percent
discount rate) or $1.76 billion (using a
7-percent discount rate) in health
benefits—the rationale becomes stronger
still.
As stated, DOE conducts the walkdown analysis to determine the TSL that
represents the maximum improvement
in energy efficiency that is
technologically feasible and
economically justified as required under
EPCA. The walk-down is not a
comparative analysis, as a comparative
analysis would result in the
maximization of net benefits instead of
energy savings that are technologically
feasible and economically justified,
which would be contrary to the statute.
86 FR 70892, 70908. Although DOE has
not conducted a comparative analysis to
select the energy conservation
standards, DOE notes that as compared
to TSL 3 and TSL 4, TSL 2 has higher
average LCC savings for consumers,
significantly smaller percentages of
electric motor consumers experiencing a
net cost, a lower maximum decrease in
INPV, and lower manufacturer
conversion costs.
Although DOE considered amended
standard levels for electric motors by
grouping the efficiency levels for each
equipment class groups and horsepower
ranges into TSLs, DOE evaluates all
analyzed efficiency levels in its
analysis. For all equipment class groups
and horsepower ranges, TSL 2
represents the maximum energy savings
that does not result in the majority of
consumers experiencing a net LCC cost.
The ELs at the adopted TSL result in
average positive LCC savings for all
equipment class groups and horsepower
ranges, significantly reduce the number
of consumers experiencing a net cost,
and reduce the decrease in INPV and
conversion costs to the point where
DOE has concluded they are
economically justified, as discussed for
TSL 2 in the preceding paragraphs.
Therefore, based on the previous
considerations, DOE adopts the energy
conservation standards for electric
motors at TSL 2. The new and amended
energy conservation standards for
electric motors, which are expressed as
full-load nominal efficiency values are
shown in Table V–44, Table V–45 and
Table V–46.
TABLE V–44—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N, NE, NEY
OR NY MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS AND AIR-OVER ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
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1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
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84.0
85.5
86.5
88.5
89.5
90.2
91.0
91.0
91.7
91.7
92.4
93.0
93.6
93.6
95.0
95.4
95.4
95.8
96.2
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77.0
84.0
85.5
85.5
86.5
88.5
89.5
90.2
91.0
91.7
91.7
92.4
93.0
93.6
93.6
94.5
94.5
94.5
95.4
95.4
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85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
96.2
96.2
96.2
96.5
96.5
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85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
96.2
96.2
96.2
96.2
96.2
Enclosed
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.8
95.8
96.2
96.2
96.2
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82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.8
95.8
95.8
95.8
96.2
Enclosed
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
94.5
95.0
95.0
95.4
95.4
Open
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
95.0
95.0
95.0
95.0
95.4
36145
Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
TABLE V–44—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N, NE, NEY
OR NY MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS AND AIR-OVER ELECTRIC MOTORS) AT 60 Hz—Continued
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
300/224
350/261
400/298
450/336
500/373
550/410
600/447
650/485
700/522
750/559
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
4 Pole
Open
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.4
95.4
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
Enclosed
6 Pole
Open
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
95.8
95.8
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
8 Pole
Enclosed
Open
Enclosed
Open
95.8
95.8
................
................
................
................
................
................
................
................
95.8
95.8
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
TABLE V–45—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N, NE, NEY
OR NY STANDARD FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
4 Pole
Open
77.0
84.0
85.5
86.5
88.5
89.5
90.2
91.0
91.0
91.7
91.7
92.4
93.0
93.6
93.6
95.0
95.4
95.4
95.8
96.2
77.0
84.0
85.5
85.5
86.5
88.5
89.5
90.2
91.0
91.7
91.7
92.4
93.0
93.6
93.6
94.5
94.5
94.5
95.4
95.4
Enclosed
6 Pole
Open
85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
96.2
96.2
96.2
96.5
96.5
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
96.2
96.2
96.2
96.2
96.2
Enclosed
8 Pole
Open
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.8
95.8
96.2
96.2
96.2
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.8
95.8
95.8
95.8
96.2
Enclosed
Open
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
94.5
95.0
95.0
95.4
95.4
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
95.0
95.0
95.0
95.0
95.4
TABLE V–46—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N, NE, NEY
OR NY SPECIALIZED FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
ddrumheller on DSK120RN23PROD with RULES3
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
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Jkt 259001
PO 00000
74.0
82.5
84.0
85.5
87.5
88.5
89.5
90.2
90.2
4 Pole
Open
................
82.5
84.0
84.0
85.5
87.5
88.5
89.5
90.2
Frm 00081
Fmt 4701
Enclosed
82.5
84.0
84.0
87.5
87.5
89.5
89.5
91.0
91.0
Sfmt 4700
6 Pole
Open
82.5
84.0
84.0
86.5
87.5
88.5
89.5
91.0
91.0
8 Pole
Enclosed
Open
Enclosed
Open
80.0
85.5
86.5
87.5
87.5
89.5
89.5
................
................
80.0
84.0
85.5
86.5
87.5
88.5
90.2
................
................
74.0
77.0
82.5
84.0
85.5
85.5
................
................
................
74.0
75.5
85.5
86.5
87.5
88.5
................
................
................
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
2. Annualized Benefits and Costs of the
Standards
The benefits and costs of the adopted
standards can also be expressed in terms
of annualized values. The annualized
net benefit is (1) the annualized national
economic value (expressed in 2021$) of
the benefits from operating equipment
that meet the adopted standards
(consisting primarily of operating cost
savings from using less energy, minus
increases in equipment purchase costs,
and (2) the annualized monetary value
of the climate and health benefits from
emission reductions.
Table V–47 shows the annualized
values for electric motors under TSL 2,
expressed in 2021$. The results under
the primary estimate are as follows.
Using a 7-percent discount rate for
consumer benefits and costs and NOX
and SO2 reduction benefits, and a 3percent discount rate case for GHG
social costs, the estimated cost of the
standards for electric motors is $62.1
million per year in increased equipment
costs, while the estimated annual
benefits are $254.8 million in reduced
equipment operating costs, $164.8
million in climate benefits, and $151.4
million in health benefits. In this case,
the net benefit amounts to $508.9
million per year.
Using a 3-percent discount rate for all
benefits and costs, the estimated cost of
the standards for electric motors is $71.0
million per year in increased equipment
costs, while the estimated annual
benefits are $463.6 million in reduced
operating costs, $164.8 million in
climate benefits, and $300.7 million in
health benefits. In this case, the net
benefit amounts to $858.2 million per
year.
TABLE V–47—ANNUALIZED BENEFITS AND COSTS OF AMENDED ENERGY CONSERVATION STANDARDS FOR ELECTRIC
MOTORS
[TSL 2]
Million 2021$/year
Primary
estimate
Low-netbenefits
estimate
High-netbenefits
estimate
3% discount rate
Consumer Operating Cost Savings .............................................................................................
Climate Benefits * .........................................................................................................................
Health Benefits ** .........................................................................................................................
Total Benefits † ............................................................................................................................
Consumer Incremental Equipment Costs ‡ .................................................................................
Net Benefits .................................................................................................................................
463.6
164.8
300.7
929.1
71.0
858.2
405.1
148.0
269.5
822.5
73.7
748.8
542.9
186.5
341.0
1070.4
73.0
997.4
254.8
164.8
151.4
571.0
62.1
508.9
225.3
148.0
137.1
510.4
63.8
446.6
293.6
186.5
169.5
649.6
63.9
585.6
7% discount rate
Consumer Operating Cost Savings .............................................................................................
Climate Benefits * (3% discount rate) ..........................................................................................
Health Benefits ** .........................................................................................................................
Total Benefits † ............................................................................................................................
Consumer Incremental Product Costs ........................................................................................
Net Benefits .................................................................................................................................
Note: This table presents the costs and benefits associated with electric motors shipped in 2027–2056. These results include benefits to consumers which accrue after 2056 from the products shipped in 2027–2056. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO2022 Reference case, Low Economic Growth case, and High Economic Growth case, respectively.
In addition, incremental equipment costs reflect a constant rate in the Primary Estimate, an increasing rate in the Low Net Benefits Estimate, and
a declining rate in the High Net Benefits Estimate. The methods used to derive projected price trends are explained in section IV.H.3 of this document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC–GHG (see section IV.L of this notice). For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3 percent discount rate are shown, but the Department does
not have a single central SC–GHG point estimate, and it emphasizes the importance and value of considering the benefits calculated using all
four SC–GHG estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as
health benefits from reductions in direct PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this document for more details.
† Total benefits for both the 3-percent and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate, but the
Department does not have a single central SC–GHG point estimate.
‡ Costs include incremental equipment costs as well as installation costs.
ddrumheller on DSK120RN23PROD with RULES3
D. Reporting, Certification, and
Sampling Plan
Manufacturers, including importers,
must use product-specific certification
templates to certify compliance to DOE.
For electric motors, the certification
template reflects the general
certification requirements specified at
10 CFR 429.64 and the product-specific
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requirements specified at 10 CFR
429.64. DOE is not amending the
product-specific certification
requirements for this equipment in this
direct final rule.
PO 00000
VI. Procedural Issues and Regulatory
Review
A. Review Under Executive Orders
12866, 13563, and 14094
Executive Order (‘‘E.O.’’) 12866,
‘‘Regulatory Planning and Review,’’ 58
FR 51735 (Oct. 4, 1993), as
supplemented and reaffirmed by E.O.
13563, ‘‘Improving Regulation and
Frm 00082
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ddrumheller on DSK120RN23PROD with RULES3
Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
Regulatory Review,’’ 76 FR 3821 (Jan.
21, 2011) and amended by E.O. 14094,
‘‘Modernizing Regulatory Review,’’ 88
FR 21879 (April 11, 2023), requires
agencies, to the extent permitted by law,
to (1) propose or adopt a regulation only
upon a reasoned determination that its
benefits justify its costs (recognizing
that some benefits and costs are difficult
to quantify); (2) tailor regulations to
impose the least burden on society,
consistent with obtaining regulatory
objectives, taking into account, among
other things, and to the extent
practicable, the costs of cumulative
regulations; (3) select, in choosing
among alternative regulatory
approaches, those approaches that
maximize net benefits (including
potential economic, environmental,
public health and safety, and other
advantages; distributive impacts; and
equity); (4) to the extent feasible, specify
performance objectives, rather than
specifying the behavior or manner of
compliance that regulated entities must
adopt; and (5) identify and assess
available alternatives to direct
regulation, including providing
economic incentives to encourage the
desired behavior, such as user fees or
marketable permits, or providing
information upon which choices can be
made by the public. DOE emphasizes as
well that E.O. 13563 requires agencies to
use the best available techniques to
quantify anticipated present and future
benefits and costs as accurately as
possible. In its guidance, the Office of
Information and Regulatory Affairs
(‘‘OIRA’’) in the Office of Management
and Budget (‘‘OMB’’) has emphasized
that such techniques may include
identifying changing future compliance
costs that might result from
technological innovation or anticipated
behavioral changes. For the reasons
stated in the preamble, this final
regulatory action is consistent with
these principles.
Section 6(a) of E.O. 12866 also
requires agencies to submit ‘‘significant
regulatory actions’’ to OIRA for review.
OIRA has determined that this final
regulatory action constitutes a
significant regulatory action within the
scope of section 3(f)(1) of E.O. 12866.
Accordingly, pursuant to section
6(a)(3)(C) of E.O. 12866, DOE has
provided to OIRA an assessment,
including the underlying analysis, of
benefits and costs anticipated from the
final regulatory action, together with, to
the extent feasible, a quantification of
those costs; and an assessment,
including the underlying analysis, of
costs and benefits of potentially
effective and reasonably feasible
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alternatives to the planned regulation,
and an explanation why the planned
regulatory action is preferable to the
identified potential alternatives. These
assessments are summarized in this
preamble and further detail can be
found in the technical support
document for this rulemaking.
B. Review Under the Regulatory
Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) requires preparation
of an initial regulatory flexibility
analysis (‘‘IRFA’’) and a final regulatory
flexibility analysis (‘‘FRFA’’) for any
rule that by law must be proposed for
public comment, unless the agency
certifies that the rule, if promulgated,
will not have a significant economic
impact on a substantial number of small
entities. As required by E.O. 13272,
‘‘Proper Consideration of Small Entities
in Agency Rulemaking,’’ 67 FR 53461
(Aug. 16, 2002), DOE published
procedures and policies on February 19,
2003, to ensure that the potential
impacts of its rules on small entities are
properly considered during the
rulemaking process. 68 FR 7990. DOE
has made its procedures and policies
available on the Office of the General
Counsel’s website (www.energy.gov/gc/
office-general-counsel).
DOE is not obligated to prepare a
regulatory flexibility analysis for this
rulemaking because there is not a
requirement to publish a general notice
of proposed rulemaking under the
Administrative Procedure Act. See 5
U.S.C. 601(2), 603(a). As discussed
previously, DOE has determined that
the November 2022 Joint
Recommendation meets the necessary
requirements under EPCA to issue this
direct final rule for energy conservation
standards for electric motors under the
procedures in 42 U.S.C. 6295(p)(4). DOE
notes that the NOPR for energy
conservation standards for electric
motors published elsewhere in this
Federal Register contains an IRFA.
C. Review Under the Paperwork
Reduction Act
Under the procedures established by
the Paperwork Reduction Act of 1995
(‘‘PRA’’), a person is not required to
respond to a collection of information
by a Federal agency unless that
collection of information displays a
currently valid OMB Control Number.
OMB Control Number 1910–1400,
Compliance Statement Energy/Water
Conservation Standards for Appliances,
is currently valid and assigned to the
certification reporting requirements
applicable to covered equipment,
including electric motors.
PO 00000
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36147
DOE’s certification and compliance
activities ensure accurate and
comprehensive information about the
energy and water use characteristics of
covered products and covered
equipment sold in the United States.
Manufacturers of all covered products
and covered equipment must submit a
certification report before a basic model
is distributed in commerce, annually
thereafter, and if the basic model is
redesigned in such a manner to increase
the consumption or decrease the
efficiency of the basic model such that
the certified rating is no longer
supported by the test data. Additionally,
manufacturers must report when
production of a basic model has ceased
and is no longer offered for sale as part
of the next annual certification report
following such cessation. DOE requires
the manufacturer of any covered
product or covered equipment to
establish, maintain, and retain the
records of certification reports, of the
underlying test data for all certification
testing, and of any other testing
conducted to satisfy the requirements of
part 429, part 430, and/or part 431.
Certification reports provide DOE and
consumers with comprehensive, up-to
date efficiency information and support
effective enforcement.
New certification data would be
required for electric motors were this
direct final rule to be finalized as
proposed; however, DOE is not
proposing new or amended certification
or reporting requirements for electric
motors in this direct final rule. Instead,
DOE may consider proposals to
establish certification requirements and
reporting for electric motors under a
separate rulemaking regarding appliance
and equipment certification. DOE will
address changes to OMB Control
Number 1910–1400 at that time, as
necessary.
Notwithstanding any other provision
of the law, no person is required to
respond to, nor shall any person be
subject to a penalty for failure to comply
with, a collection of information subject
to the requirements of the PRA, unless
that collection of information displays a
currently valid OMB Control Number.
D. Review Under the National
Environmental Policy Act of 1969
Pursuant to the National
Environmental Policy Act of 1969
(‘‘NEPA’’), DOE has analyzed this rule
in accordance with NEPA and DOE’s
NEPA implementing regulations (10
CFR part 1021). DOE has determined
that this rule qualifies for categorical
exclusion under 10 CFR part 1021,
subpart D, appendix B5.1 because it is
a rulemaking that establishes energy
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
conservation standards for consumer
products or industrial equipment, none
of the exceptions identified in B5.1(b)
apply, no extraordinary circumstances
exist that require further environmental
analysis, and it meets the requirements
for application of a categorical
exclusion. See 10 CFR 1021.410.
Therefore, DOE has determined that
promulgation of this rule is not a major
Federal action significantly affecting the
quality of the human environment
within the meaning of NEPA, and does
not require an environmental
assessment or an environmental impact
statement.
ddrumheller on DSK120RN23PROD with RULES3
E. Review Under Executive Order 13132
E.O. 13132, ‘‘Federalism,’’ 64 FR
43255 (Aug. 10, 1999), imposes certain
requirements on Federal agencies
formulating and implementing policies
or regulations that preempt State law or
that have federalism implications. The
Executive order requires agencies to
examine the constitutional and statutory
authority supporting any action that
would limit the policymaking discretion
of the States and to carefully assess the
necessity for such actions. The
Executive order also requires agencies to
have an accountable process to ensure
meaningful and timely input by State
and local officials in the development of
regulatory policies that have federalism
implications. On March 14, 2000, DOE
published a statement of policy
describing the intergovernmental
consultation process it will follow in the
development of such regulations. 65 FR
13735. DOE has examined this rule and
has determined that it would not have
a substantial direct effect on the States,
on the relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government. EPCA governs and
prescribes Federal preemption of State
regulations as to energy conservation for
the equipment that are the subject of
this final rule. States can petition DOE
for exemption from such preemption to
the extent, and based on criteria, set
forth in EPCA. (42 U.S.C. 6316(a) and
(b); 42 U.S.C. 6297) Therefore, no
further action is required by Executive
Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing
regulations and the promulgation of
new regulations, section 3(a) of E.O.
12988, ‘‘Civil Justice Reform,’’ imposes
on Federal agencies the general duty to
adhere to the following requirements:
(1) eliminate drafting errors and
ambiguity, (2) write regulations to
minimize litigation, (3) provide a clear
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legal standard for affected conduct
rather than a general standard, and (4)
promote simplification and burden
reduction. 61 FR 4729 (Feb. 7, 1996).
Regarding the review required by
section 3(a), section 3(b) of E.O. 12988
specifically requires that Executive
agencies make every reasonable effort to
ensure that the regulation (1) clearly
specifies the preemptive effect, if any,
(2) clearly specifies any effect on
existing Federal law or regulation, (3)
provides a clear legal standard for
affected conduct while promoting
simplification and burden reduction, (4)
specifies the retroactive effect, if any, (5)
adequately defines key terms, and (6)
addresses other important issues
affecting clarity and general
draftsmanship under any guidelines
issued by the Attorney General. Section
3(c) of E.O. 12988 requires Executive
agencies to review regulations in light of
applicable standards in section 3(a) and
section 3(b) to determine whether they
are met or it is unreasonable to meet one
or more of them. DOE has completed the
required review and determined that, to
the extent permitted by law, this direct
final rule meets the relevant standards
of E.O. 12988.
G. Review Under the Unfunded
Mandates Reform Act of 1995
Title II of the Unfunded Mandates
Reform Act of 1995 (‘‘UMRA’’) requires
each Federal agency to assess the effects
of Federal regulatory actions on State,
local, and Tribal governments and the
private sector. Public Law 104–4, sec.
201 (codified at 2 U.S.C. 1531). For a
regulatory action likely to result in a
rule that may cause the expenditure by
State, local, and Tribal governments, in
the aggregate, or by the private sector of
$100 million or more in any one year
(adjusted annually for inflation), section
202 of UMRA requires a Federal agency
to publish a written statement that
estimates the resulting costs, benefits,
and other effects on the national
economy. (2 U.S.C. 1532(a), (b)) The
UMRA also requires a Federal agency to
develop an effective process to permit
timely input by elected officers of State,
local, and Tribal governments on a
‘‘significant intergovernmental
mandate,’’ and requires an agency plan
for giving notice and opportunity for
timely input to potentially affected
small governments before establishing
any requirements that might
significantly or uniquely affect them. On
March 18, 1997, DOE published a
statement of policy on its process for
intergovernmental consultation under
UMRA. 62 FR 12820. DOE’s policy
statement is also available at
PO 00000
Frm 00084
Fmt 4701
Sfmt 4700
www.energy.gov/sites/prod/files/gcprod/
documents/umra_97.pdf.
DOE has concluded that this direct
final rule may require expenditures of
$100 million or more in any one year by
the private sector. Such expenditures
may include (1) investment in research
and development and in capital
expenditures by electric motor
manufacturers in the years between the
direct final rule and the compliance
date for the new standards and (2)
incremental additional expenditures by
consumers to purchase higher-efficiency
electric motors, starting at the
compliance date for the applicable
standard.
Section 202 of UMRA authorizes a
Federal agency to respond to the content
requirements of UMRA in any other
statement or analysis that accompanies
the direct final rule. (2 U.S.C. 1532(c))
The content requirements of section
202(b) of UMRA relevant to a private
sector mandate substantially overlap
with the economic analysis
requirements that apply under section
325(o) of EPCA and Executive Order
12866. The SUPPLEMENTARY INFORMATION
section of this document and the TSD
for this direct final rule respond to those
requirements.
Under section 205 of UMRA, the
Department is obligated to identify and
consider a reasonable number of
regulatory alternatives before
promulgating a rule for which a written
statement under section 202 is required.
(2 U.S.C. 1535(a)) DOE is required to
select from those alternatives the most
cost-effective and least burdensome
alternative that achieves the objectives
of the rule unless DOE publishes an
explanation for doing otherwise, or the
selection of such an alternative is
inconsistent with law. As required by 42
U.S.C. 6295(m) and 42 U.S.C. 6316(a),
this rule establishes new and amended
energy conservation standards for
electric motors that are designed to
achieve the maximum improvement in
energy efficiency that DOE has
determined to be both technologically
feasible and economically justified, as
required by 42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(A) and 42 U.S.C.
6295(o)(3)(B). A full discussion of the
alternatives considered by DOE is
presented in chapter 17 of the TSD for
this rule.
H. Review Under the Treasury and
General Government Appropriations
Act, 1999
Section 654 of the Treasury and
General Government Appropriations
Act, 1999 (Pub. L. 105–277) requires
Federal agencies to issue a Family
Policymaking Assessment for any rule
E:\FR\FM\01JNR3.SGM
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
that may affect family well-being. This
rule will not have any impact on the
autonomy or integrity of the family as
an institution. Accordingly, DOE has
concluded that it is not necessary to
prepare a Family Policymaking
Assessment.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630,
‘‘Governmental Actions and Interference
with Constitutionally Protected Property
Rights,’’ 53 FR 8859 (Mar. 15, 1988),
DOE has determined that this rule
would not result in any takings that
might require compensation under the
Fifth Amendment to the U.S.
Constitution.
ddrumheller on DSK120RN23PROD with RULES3
J. Review Under the Treasury and
General Government Appropriations
Act, 2001
Section 515 of the Treasury and
General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides
for Federal agencies to review most
disseminations of information to the
public under information quality
guidelines established by each agency
pursuant to general guidelines issued by
OMB. OMB’s guidelines were published
at 67 FR 8452 (Feb. 22, 2002), and
DOE’s guidelines were published at 67
FR 62446 (Oct. 7, 2002). Pursuant to
OMB Memorandum M–19–15,
Improving Implementation of the
Information Quality Act (April 24,
2019), DOE published updated
guidelines which are available at
www.energy.gov/sites/prod/files/2019/
12/f70/DOE%20Final%20
Updated%20IQA%20Guidelines%20
Dec%202019.pdf. DOE has reviewed
this direct final rule under the OMB and
DOE guidelines and has concluded that
it is consistent with applicable policies
in those guidelines.
K. Review Under Executive Order 13211
E.O. 13211, ‘‘Actions Concerning
Regulations That Significantly Affect
Energy Supply, Distribution, or Use,’’ 66
FR 28355 (May 22, 2001), requires
Federal agencies to prepare and submit
to OIRA at OMB, a Statement of Energy
Effects for any significant energy action.
A ‘‘significant energy action’’ is defined
as any action by an agency that
promulgates or is expected to lead to
promulgation of a final rule, and that (1)
is a significant regulatory action under
Executive Order 12866, or any successor
order; and (2) is likely to have a
significant adverse effect on the supply,
distribution, or use of energy, or (3) is
designated by the Administrator of
OIRA as a significant energy action. For
any significant energy action, the agency
must give a detailed statement of any
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adverse effects on energy supply,
distribution, or use should the proposal
be implemented, and of reasonable
alternatives to the action and their
expected benefits on energy supply,
distribution, and use.
DOE concludes that this regulatory
action, which sets forth new and
amended energy conservation standards
for electric motors, is not a significant
energy action because standards are not
likely to have a significant adverse effect
on the supply, distribution, or use of
energy, nor has it been designated as
such by the Administrator at OIRA.
Accordingly, DOE has not prepared a
Statement of Energy Effects on this
direct final rule.
L. Information Quality
On December 16, 2004, OMB, in
consultation with the Office of Science
and Technology Policy (‘‘OSTP’’),
issued its Final Information Quality
Bulletin for Peer Review (‘‘the
Bulletin’’). 70 FR 2664 (Jan. 14, 2005).
The Bulletin establishes that certain
scientific information shall be peer
reviewed by qualified specialists before
it is disseminated by the Federal
Government, including influential
scientific information related to agency
regulatory actions. The purpose of the
bulletin is to enhance the quality and
credibility of the Government’s
scientific information. Under the
Bulletin, the energy conservation
standards rulemaking analyses are
‘‘influential scientific information,’’
which the Bulletin defines as ‘‘scientific
information the agency reasonably can
determine will have, or does have, a
clear and substantial impact on
important public policies or private
sector decisions.’’ 70 FR 2664, 2667.
In response to OMB’s Bulletin, DOE
conducted formal peer reviews of the
energy conservation standards
development process and the analyses
that are typically used and has prepared
a report describing that peer review.98
Generation of this report involved a
rigorous, formal, and documented
evaluation using objective criteria and
qualified and independent reviewers to
make a judgment as to the technical/
scientific/business merit, the actual or
anticipated results, and the productivity
and management effectiveness of
programs and/or projects. Because
available data, models, and
technological understanding have
changed since 2007, DOE has engaged
98 The 2007 ‘‘Energy Conservation Standards
Rulemaking Peer Review Report’’ is available at the
following website: energy.gov/eere/buildings/
downloads/energy-conservation-standardsrulemaking-peer-review-report-0 (last accessed
December 12, 2022).
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with the National Academy of Sciences
to review DOE’s analytical
methodologies to ascertain whether
modifications are needed to improve the
Department’s analyses. DOE is in the
process of evaluating the resulting
report.99
NEMA MG 1–2016 was previously
approved for incorporation by reference
in the section where it appears in this
proposed rule and no change is made.
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will
report to Congress on the promulgation
of this rule prior to its effective date.
The report will state that it has been
determined that the rule is a ‘‘major
rule’’ as defined by 5 U.S.C. 804(2).
VII. Approval of the Office of the
Secretary
The Secretary of Energy has approved
publication of this direct final rule.
List of Subjects in 10 CFR Part 431
Administrative practice and
procedure, Confidential business
information, Energy conservation test
procedures, Incorporation by reference,
Reporting and recordkeeping
requirements.
Signing Authority
This document of the Department of
Energy was signed on May 1, 2023,
Francisco Alejandro Moreno, Acting
Assistant Secretary for Energy Efficiency
and Renewable Energy. That document
with the original signature and date is
maintained by DOE. For administrative
purposes only, and in compliance with
requirements of the Office of the Federal
Register, the undersigned DOE Federal
Register Liaison Officer has been
authorized to sign and submit the
document in electronic format for
publication, as an official document of
the Department of Energy. This
administrative process in no way alters
the legal effect of this document upon
publication in the Federal Register.
Signed in Washington, DC, on May 5, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S.
Department of Energy.
For the reasons stated in the
preamble, DOE amends part 431 of
chapter II of title 10 of the Code of
Federal Regulations, as set forth below:
99 The report is available at
www.nationalacademies.org/our-work/review-ofmethods-for-setting-building-and-equipmentperformance-standards.
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
Authority: 42 U.S.C. 6291–6317; 28 U.S.C.
2461 note.
PART 431—ENERGY EFFICIENCY
PROGRAM FOR CERTAIN
COMMERCIAL AND INDUSTRIAL
EQUIPMENT
2. Amend § 431.12 by adding, in
alphabetical order, definitions for
‘‘Specialized frame size’’ and ‘‘Standard
frame size,’’ to read as follows:
■
1. The authority citation for part 431
continues to read as follows:
■
§ 431.12
*
*
Definitions.
*
*
*
Specialized frame size means an
electric motor frame size for which the
rated output power of the motor exceeds
the motor frame size limits specified for
standard frame size. Specialized frame
sizes have maximum diameters
corresponding to the following NEMA
Frame Sizes:
Maximum NEMA frame diameters
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
Standard frame size means a motor
frame size that aligns with the
specifications in NEMA MG 1–2016,
section 13.2 for open motors, and
NEMA MG 1–2016, section 13.3 for
enclosed motors (incorporated by
reference, see § 431.15).
*
*
*
*
*
■ 3. Amend § 431.25 by:
■ a. Revising paragraph (h) introductory
text; and
■ b. Adding paragraphs (m) through (r).
The revision and additions read as
follows:
§ 431.25 Energy conservation standards
and effective dates.
*
*
*
*
*
(h) Each NEMA Design A motor,
NEMA Design B motor, and IEC Design
N (including NE, NEY, or NY variants)
motor that is an electric motor meeting
the criteria in paragraph (g) of this
section and with a power rating from 1
horsepower through 500 horsepower,
but excluding fire pump electric motors,
48
48
48
140
140
180
180
210
210
4 Pole
Open
................
48
48
48
140
140
180
180
210
Enclosed
6 Pole
Open
48
48
48
140
140
180
180
210
210
48
48
48
140
140
180
180
210
210
manufactured (alone or as a component
of another piece of equipment) on or
after June 1, 2016, but before June 1,
2027, shall have a nominal full-load
efficiency of not less than the following:
*
*
*
*
*
(m) The standards in tables 8 through
10 of this section apply only to electric
motors, including partial electric
motors, that satisfy the following
criteria:
(1) Are single-speed, induction
motors;
(2) Are rated for continuous duty
(MG 1) operation or for duty type S1
(IEC);
(3) Contain a squirrel-cage (MG 1) or
cage (IEC) rotor;
(4) Operate on polyphase alternating
current 60-hertz sinusoidal line power;
(5) Are rated 600 volts or less;
(6) Have a 2-, 4-, 6-, or 8-pole
configuration,
(7) Are built in a three-digit or fourdigit NEMA frame size (or IEC metric
equivalent), including those designs
8 Pole
Enclosed
Open
Enclosed
Open
48
140
140
180
180
210
210
................
................
48
140
140
180
180
210
210
................
................
140
140
180
180
210
210
................
................
................
140
140
180
180
210
210
................
................
................
between two consecutive NEMA frame
sizes (or IEC metric equivalent), or an
enclosed 56 NEMA frame size (or IEC
metric equivalent),
(8) Produce at least one horsepower
(0.746 kW) but not greater than 750
horsepower (559 kW), and
(9) Meet all of the performance
requirements of one of the following
motor types: A NEMA Design A, B, or
C motor or an IEC Design N, NE, NEY,
NY or H, HE, HEY, HY motor.
(n) Starting on June 1, 2027, each
NEMA Design A motor, NEMA Design
B motor, and IEC Design N (including
NE, NEY, or NY variants) motor that is
an electric motor meeting the criteria in
paragraph (m) of this section and with
a power rating from 1 horsepower
through 750 horsepower, but excluding
fire pump electric motors and air-over
electric motors, manufactured (alone or
as a component of another piece of
equipment) shall have a nominal fullload efficiency of not less than the
following:
TABLE 8 TO PARAGRAPH (n)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N, NE, NEY OR NY MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS AND AIR-OVER ELECTRIC MOTORS)
AT 60 Hz
Nominal full-load efficiency (%)
ddrumheller on DSK120RN23PROD with RULES3
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
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89.5
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89.5
91.7
91.7
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85.5
86.5
86.5
89.5
89.5
91.0
91.7
Enclosed
82.5
87.5
88.5
89.5
89.5
91.0
91.0
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8 Pole
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86.5
87.5
88.5
89.5
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91.7
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78.5
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Open
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
TABLE 8 TO PARAGRAPH (n)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N, NE, NEY OR NY MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS AND AIR-OVER ELECTRIC MOTORS)
AT 60 Hz—Continued
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
300/224 ............................................................
350/261 ............................................................
400/298 ............................................................
450/336 ............................................................
500/373 ............................................................
550/410 ............................................................
600/447 ............................................................
650/485 ............................................................
700/522 ............................................................
750/559 ............................................................
(o) Starting on June 1, 2027, each
NEMA Design A motor, NEMA Design
B motor, and IEC Design N (including
NE, NEY, or NY variants) motor that is
an air-over electric motor meeting the
91.0
91.0
91.7
91.7
92.4
93.0
93.6
93.6
95.0
95.4
95.4
95.8
96.2
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
4 Pole
Open
90.2
91.0
91.7
91.7
92.4
93.0
93.6
93.6
94.5
94.5
94.5
95.4
95.4
95.4
95.4
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
Enclosed
6 Pole
Open
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
96.2
96.2
96.2
96.5
96.5
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
96.2
96.2
96.2
96.2
96.2
95.8
95.8
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
criteria in paragraph (m) of this section
and with a power rating from 1
horsepower through 250 horsepower,
built in a standard frame size, but
excluding fire pump electric motors,
8 Pole
Enclosed
Open
Enclosed
Open
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.8
95.8
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96.2
96.2
95.8
95.8
................
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................
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.8
95.8
95.8
95.8
96.2
95.8
95.8
................
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................
89.5
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91.7
92.4
92.4
93.6
94.5
95.0
95.0
95.4
95.4
................
................
................
................
................
................
................
................
................
................
90.2
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91.7
91.7
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95.0
95.0
95.4
................
................
................
................
................
................
................
................
................
................
manufactured (alone or as a component
of another piece of equipment) shall
have a nominal full-load efficiency of
not less than the following:
TABLE 9 TO PARAGRAPH (o)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N, NE, NEY OR NY STANDARD FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP ELECTRIC
MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
ddrumheller on DSK120RN23PROD with RULES3
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
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91.7
91.7
92.4
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93.6
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95.4
95.4
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96.2
Frm 00087
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Open
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95.4
Fmt 4701
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85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
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Sfmt 4700
6 Pole
Open
85.5
86.5
86.5
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89.5
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93.6
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Enclosed
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
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94.1
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8 Pole
Open
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Enclosed
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
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95.4
Open
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87.5
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Federal Register / Vol. 88, No. 105 / Thursday, June 1, 2023 / Rules and Regulations
(p) Starting on June 1, 2027, each
NEMA Design A motor, NEMA Design
B motor, and IEC Design N (including
NE, NEY, or NY variants) motor that is
an air-over electric motor meeting the
criteria in paragraph (m) of this section
and with a power rating from 1
horsepower through 20 horsepower,
built in a specialized frame size, but
excluding fire pump electric motors,
manufactured (alone or as a component
of another piece of equipment) shall
have a nominal full-load efficiency of
not less than the following:
TABLE 10 TO PARAGRAPH (p)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC DESIGN N, NE, NEY OR NY SPECIALIZED FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP ELECTRIC
MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
ddrumheller on DSK120RN23PROD with RULES3
(q) For purposes of determining the
required minimum nominal full-load
efficiency of an electric motor that has
a horsepower or kilowatt rating between
two horsepower or two kilowatt ratings
listed in any table of energy
conservation standards in paragraphs
(n) through (p) through of this section,
each such motor shall be deemed to
have a listed horsepower or kilowatt
rating, determined as follows:
(1) A horsepower at or above the
midpoint between the two consecutive
horsepowers shall be rounded up to the
higher of the two horsepowers;
VerDate Sep<11>2014
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91.0
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(2) A horsepower below the midpoint
between the two consecutive
horsepowers shall be rounded down to
the lower of the two horsepowers; or
(3) A kilowatt rating shall be directly
converted from kilowatts to horsepower
using the formula 1 kilowatt = (1⁄0.746)
horsepower. The conversion should be
calculated to three significant decimal
places, and the resulting horsepower
shall be rounded in accordance with
paragraphs (q)(1) or (2) of this section,
whichever applies.
(r) The standards in tables 8 through
10 of this section do not apply to the
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85.5
85.5
................
................
................
74.0
75.5
85.5
86.5
87.5
88.5
................
................
................
following electric motors exempted by
the Secretary, or any additional electric
motors that the Secretary may exempt:
(1) Component sets of an electric
motor;
(2) Liquid-cooled electric motors;
(3) Submersible electric motors; and
(4) Inverter-only electric motors.
[FR Doc. 2023–10019 Filed 5–31–23; 8:45 am]
BILLING CODE 6450–01–P
E:\FR\FM\01JNR3.SGM
01JNR3
]]>Agencies
[Federal Register Volume 88, Number 105 (Thursday, June 1, 2023)]
[Rules and Regulations]
[Pages 36066-36152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-10019]
[[Page 36065]]
Vol. 88
Thursday,
No. 105
June 1, 2023
Part III
Department of Energy
-----------------------------------------------------------------------
10 CFR Part 431
Energy Conservation Program: Energy Conservation Standards for Electric
Motor; Final Rule
Federal Register / Vol. 88 , No. 105 / Thursday, June 1, 2023 / Rules
and Regulations
[[Page 36066]]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
10 CFR Part 431
[EERE-2020-BT-STD-0007]
RIN 1904-AE63
Energy Conservation Program: Energy Conservation Standards for
Electric Motors
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Direct final rule.
-----------------------------------------------------------------------
SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including electric
motors. EPCA also requires the U.S. Department of Energy (``DOE'') to
periodically determine whether more-stringent, standards would be
technologically feasible and economically justified, and would result
in significant energy savings. In this direct final rule, DOE is
adopting new and amended energy conservation standards for electric
motors. It has determined that the new and amended energy conservation
standards for these products would result in significant conservation
of energy, and are technologically feasible and economically justified.
DATES: The effective date of this rule is September 29, 2023, unless
adverse comment is received by September 19, 2023. If adverse comments
are received that DOE determines may provide a reasonable basis for
withdrawal of the direct final rule, a timely withdrawal of this rule
will be published in the Federal Register. If no such adverse comments
are received, compliance with the new and amended standards established
for electric motors in this direct final rule is required on and after
June 1, 2027.
ADDRESSES: The docket for this rulemaking, which includes Federal
Register notices, public meeting attendee lists and transcripts,
comments, and other supporting documents/materials, is available for
review at www.regulations.gov. All documents in the docket are listed
in the www.regulations.gov index. However, not all documents listed in
the index may be publicly available, such as information that is exempt
from public disclosure.
The docket web page can be found www.regulations.gov/docket/EERE-2020-BT-STD-0007. The docket web page contains instructions on how to
access all documents, including public comments, in the docket.
For further information on how to submit a comment or review other
public comments and the docket, contact the Appliance and Equipment
Standards Program staff at (202) 287-1445 or by email:
[email protected].
FOR FURTHER INFORMATION CONTACT:
Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Email:
[email protected].
Mr. Matthew Ring, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121.
Telephone: (202) 586-2555; Email: [email protected].
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact the Appliance and Equipment Standards Program staff at (202)
287-1445 or by email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Direct Final Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Electric Motors
3. Electric Motors Working Group Recommended Standard Levels
III. General Discussion
A. General Comments
B. Scope of Coverage and Equipment Classes
C. Test Procedure
D. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
E. Energy Savings
1. Determination of Savings
2. Significance of Savings
F. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Savings in Operating Costs Compared to Increase in Price (LCC
and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Scope of Coverage
a. Motor Used as a Component of a Covered Product or Equipment
b. Air-Over Electric Motors
c. AC Induction Electric Motors Greater Than 500 Horsepower
d. AC Induction Inverter-Only and Synchronous Electric Motors
e. Submersible Electric Motors
2. Test Procedure and Metric
3. Equipment Classes
4. Technology Options
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Representative Units Analyzed
b. Baseline Efficiency
c. Higher Efficiency Levels
2. Cost Analysis
3. Cost-Efficiency Results
4. Scaling Methodology
D. Markups Analysis
E. Energy Use Analysis
1. Consumer Sample
2. Motor Input Power
3. Annual Operating Hours
4. Impact of Electric Motor Speed
F. Life-Cycle Cost and Payback Period Analysis
1. Equipment Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Equipment Lifetime
7. Discount Rates
8. Energy Efficiency Distribution in the No-New-Standards Case
9. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Equipment Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Product and Capital Conversion Costs
d. Markup Scenarios
3. Manufacturer Interviews
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous Oxide
2. Monetization of Other Emissions Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
[[Page 36067]]
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. Direct Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Electric Motors
Standards
2. Annualized Benefits and Costs of the Standards
D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
M. Congressional Notification
VII. Approval of the Office of the Secretary
I. Synopsis of the Direct Final Rule
The Energy Policy and Conservation Act, Public Law 94-163, as
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency
of a number of consumer products and certain industrial equipment. (42
U.S.C. 6291-6317) Title III, Part C \2\ of EPCA established the Energy
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317). Such equipment includes electric motors, the subject of this
rulemaking.
---------------------------------------------------------------------------
\1\ All references to EPCA in this document refer to the statute
as amended through the Energy Act of 2020, Public Law 116-260 (Dec.
27, 2020), which reflect the last statutory amendments that impact
Parts A and A-1 of EPCA.
\2\ For editorial reasons, upon codification in the U.S. Code,
Part C was re-designated Part A-1.
---------------------------------------------------------------------------
Pursuant to EPCA, any new or amended energy conservation standard
must be designed to achieve the maximum improvement in energy
efficiency that DOE determines is technologically feasible and
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A))
Furthermore, the new or amended standard must result in a significant
conservation of energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B))
EPCA also provides that not later than 6 years after issuance of any
final rule establishing or amending a standard, DOE must publish either
a notice of determination that standards for the product do not need to
be amended, or a notice of proposed rulemaking including new proposed
energy conservation standards (proceeding to a final rule, as
appropriate). (42 U.S.C. 6316(a); 42 U.S.C. 6295(m))
In light of the above and under the authority provided by 42 U.S.C.
6295(p)(4), DOE is issuing this direct final rule amending the energy
conservation standards for electric motors. The amended standard levels
in this document were submitted in a joint recommendation (the
``November 2022 Joint Recommendation'') \3\ by the American Council for
an Energy-Efficient Economy (``ACEEE''), Appliance Standards Awareness
Project (``ASAP''), National Electrical Manufacturers Association
(``NEMA''), Natural Resources Defense Council (``NRDC''), Northwest
Energy Efficiency Alliance (``NEEA''), Pacific Gas & Electric Company
(``PG&E''), San Diego Gas & Electric (``SDG&E''), and Southern
California Edison (``SCE'') hereinafter referred to as ``the Electric
Motors Working Group.'' In a letter comment submitted December 12,
2022, the New York State Energy Research and Development Authority
(``NYSERDA'') expressed its support of the November 2022 Joint
Recommendation and urged DOE to implement it in a timely manner. The
November 2022 Joint Recommendation was preceded by the following DOE
actions in this rulemaking and stakeholder comments thereon: May 2020
Early Assessment Review RFI (85 FR 30878 (May 21, 2020)); March 2022
Preliminary Analysis (87 FR 11650 (March 2, 2022)) and the Preliminary
Analysis TSD (``March 2022 Prelim TSD''). See sections II.B.2 and
II.B.3 for a detailed history of the current rulemaking and a
discussion of the November 2022 Joint Recommendation.
---------------------------------------------------------------------------
\3\ Joint comment response to the published Notification of a
webinar and availability of preliminary technical support document;
www.regulations.gov/comment/EERE-2020-BT-STD-0007-0035.
---------------------------------------------------------------------------
After carefully considering the November 2022 Joint Recommendation,
DOE determined that the recommendations contained therein are compliant
with 42 U.S.C. 6295(o), as required by 42 U.S.C. 6295(p)(4)(A)(i) for
the issuance of a direct final rule. As required by 42 U.S.C.
6295(p)(4)(A)(i), DOE is simultaneously publishing a NOPR proposing
that the identical standard levels contained in this direct final rule
be adopted. Consistent with the statute, DOE is providing a 110-day
public comment period on the direct final rule. (42 U.S.C.
6295(p)(4)(B)) If DOE determines that any comments received provide a
reasonable basis for withdrawal of the direct final rule under 42
U.S.C. 6295(o), DOE will continue the rulemaking under the
simultaneously published NOPR. (42 U.S.C. 6295(p)(4)(C)) See section
II.A for more details on DOE's statutory authority.
This direct final rule documents DOE's analyses to objectively and
independently evaluate the energy savings potential, technological
feasibility, and economic justification of the standard levels
recommended in the November 2022 Joint Recommendation, as per the
requirements of 42 U.S.C. 6295(o).
Ultimately, DOE found that the standard levels recommended in the
November 2022 Joint Recommendation would result in significant energy
savings and are technologically feasible and economically justified.
Table I-1 through Table I-3 document the amended standards for electric
motors. The amended standards correspond to the recommended trial
standard level (``TSL'') 2 (as described in section V.A of this
document) and are expressed in terms of nominal full-load efficiency.
The amended standards are the same as those recommended by the Electric
Motors Working Group. These standards apply to all products listed in
through Table I-1 through Table I-3 and manufactured in, or imported
into, the United States starting on June 1, 2027.
[[Page 36068]]
Table I-1--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding Fire Pump Electric Motors
and Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/ standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
300/224......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
350/261......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
400/298......................................................... 95.8 95.8 96.2 95.8 ......... ......... ......... .........
450/336......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
500/373......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
550/410......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
600/447......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
650/485......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
700/522......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
750/559......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table I-2--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY
Standard Frame Size Air-Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
----------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
-----------------------------------------------------------------------------------
Motor horsepower/ standard 2 Pole 4 Pole 6 Pole 8 Pole
kilowatt equivalent -----------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
----------------------------------------------------------------------------------------------------------------
1/.75....................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1..................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5....................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2....................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7....................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5..................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5...................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11....................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15....................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5..................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22....................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30....................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37....................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45....................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55....................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75...................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90...................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110..................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150..................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186..................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
----------------------------------------------------------------------------------------------------------------
[[Page 36069]]
Table I-3--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY
Specialized Frame Size Air-Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
----------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
-----------------------------------------------------------------------------------
Motor horsepower/ standard 2 Pole 4 Pole 6 Pole 8 Pole
kilowatt equivalent -----------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
----------------------------------------------------------------------------------------------------------------
1/.75....................... 74.0 ........ 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1..................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5....................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2....................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7....................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5..................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5...................... 89.5 88.5 89.5 89.5 89.5 90.2 ......... ........
15/11....................... 90.2 89.5 91.0 91.0 ......... ........ ......... ........
20/15....................... 90.2 90.2 91.0 91.0 ......... ........ ......... ........
----------------------------------------------------------------------------------------------------------------
A. Benefits and Costs to Consumers
Table I-4 summarizes DOE's evaluation of the economic impacts of
the adopted standards on consumers of electric motors, as measured by
the average life-cycle cost (``LCC'') savings and the simple payback
period (``PBP'').\4\ The average LCC savings are positive for all
representative units, and the PBP is less than the average lifetime of
electric motors, which is estimated to be 13.6 years (see section V.B.1
of this document).
---------------------------------------------------------------------------
\4\ The average LCC savings refer to consumers that are affected
by a standard and are measured relative to the efficiency
distribution in the no-new-standards case, which depicts the market
in the compliance year in the absence of new or amended standards
(see section IV.F.8 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.F.9 of this document).
Table I-4--Impacts of Adopted Energy Conservation Standards on Consumers of Electric Motors
----------------------------------------------------------------------------------------------------------------
Average LCC Simple payback
Equipment class group Representative unit savings (2021$) period (years)
----------------------------------------------------------------------------------------------------------------
MEM, 1-500 hp, NEMA Design A and B....... RU1.............................. N/A N/A
RU2.............................. N/A N/A
RU3.............................. N/A N/A
RU4.............................. 567.1 4.1
RU5.............................. N/A N/A
MEM, 501-750 hp, NEMA Design A and B RU6.............................. 2,550.1 3.7
above 500 hp.
AO-MEM (Standard Frame Size)............. RU7.............................. 57.6 4.0
RU8.............................. 472.4 1.6
RU9 *............................ ................ ................
RU10............................. 930.7 4.9
AO-Polyphase (Specialized Frame Size).... RU11............................. 49.9 4.1
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact because there are no shipments below the efficiency level corresponding to TSL1 and TSL2 for RU9.
DOE's analysis of the impacts of the adopted standards on consumers
is described in section IV.F of this document.
B. Impact on Manufacturers
The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the base year through the
end of the analysis period (2023-2056). Using a real discount rate of
9.1 percent, DOE estimates that the INPV for manufacturers of electric
motors in the case without new and amended standards is $5,023 million
in 2021 dollars. Under the adopted standards, DOE estimates the change
in INPV to range from -6.6 percent to -6.0 percent, which is
approximately -$333 million to -$303 million. In order to bring
products into compliance with new and amended standards, it is
estimated that industry will incur total conversion costs of $468
million.
DOE's analysis of the impacts of the adopted standards on
manufacturers is described in sections IV.J and V.B.2 of this document.
C. National Benefits and Costs 5
---------------------------------------------------------------------------
\5\ All monetary values in this document are expressed in 2021
dollars.
---------------------------------------------------------------------------
DOE's analyses indicate that the adopted energy conservation
standards for electric motors would save a significant amount of
energy. Relative to the case without new and amended standards, the
lifetime energy savings for electric motors purchased in the 30-year
period that begins in the anticipated year of compliance with the new
and amended standards (2027-2056) amount to 3.0 quadrillion British
thermal units (``Btu''), or quads.\6\ This represents a savings of 0.2
percent relative to the energy use of these products in the case
without amended standards (referred to as the ``no-new-standards
case'').
---------------------------------------------------------------------------
\6\ The quantity refers to full-fuel-cycle (``FFC'') energy
savings. FFC energy savings includes the energy consumed in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and, thus, presents a more complete
picture of the impacts of energy efficiency standards. For more
information on the FFC metric, see section IV.H.2 of this document.
---------------------------------------------------------------------------
The cumulative net present value (``NPV'') of total consumer
benefits of the standards for electric motors ranges from $2.23 billion
(at a 7-percent discount rate) to $7.47 billion (at a 3-percent
discount rate). This NPV
[[Page 36070]]
expresses the estimated total value of future operating-cost savings
minus the estimated increased equipment and installation costs for
electric motors purchased in 2027-2056.
In addition, the adopted standards for electric motors are
projected to yield significant environmental benefits. DOE estimates
that the adopted standards will result in cumulative emission
reductions (over the same period as for energy savings) of 91.69
million metric tons (``Mt'') \7\ of carbon dioxide
(``CO2''), 35.12 thousand tons of sulfur dioxide
(``SO2''), 148.74 thousand tons of nitrogen oxides
(``NOX''), 690.10 thousand tons of methane
(``CH4''), 0.82 thousand tons of nitrous oxide
(``N2O''), and 0.23 tons of mercury (``Hg'').\8\ The
estimated cumulative reduction in CO2 emissions through 2030
amounts to 0.90 million Mt, which is equivalent to the emissions
resulting from the annual electricity use of more than 0.15 million
homes.
---------------------------------------------------------------------------
\7\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\8\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2022 (``AEO2022''). AEO2022 represents current federal and
state legislation and final implementation of regulations as of the
time of its preparation. See section IV.K of this document for
further discussion of AEO2022 assumptions that effect air pollutant
emissions.
---------------------------------------------------------------------------
DOE estimates climate benefits from a reduction in greenhouse gases
(GHG) using four different estimates of the social cost of
CO2 (``SC-CO2''), the social cost of methane
(``SC-CH4''), and the social cost of nitrous oxide (``SC-
N2O''). Together these represent the social cost of GHG (SC-
GHG). DOE used SC-GHG values based on the interim values developed by
an Interagency Working Group on the Social Cost of Greenhouse Gases
(IWG),\9\ as discussed in section IV.K of this document. For
presentational purposes, the climate benefits associated with the
average SC-GHG at a 3-percent discount rate are $3.14 billion. DOE does
not have a single central SC-GHG point estimate and it emphasizes the
importance and value of considering the benefits calculated using all
four SC-GHG estimates.
---------------------------------------------------------------------------
\9\ See Interagency Working Group on Social Cost of Greenhouse
Gases, Technical Support Document: Social Cost of Carbon, Methane,
and Nitrous Oxide. Interim Estimates Under Executive Order 13990,
Washington, DC, February 2021 (``February 2021 SC-GHG TSD'').
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------
DOE also estimated health benefits from SO2 and
NOX emissions reductions.\10\ DOE estimated the present
value of the health benefits would be $1.76 billion using a 7-percent
discount rate, and $5.72 billion using a 3-percent discount rate.\11\
DOE is currently only monetizing (for SO2 and
NOX) PM2.5 precursor health benefits and (for
NOX) ozone precursor health benefits, but will continue to
assess the ability to monetize other effects such as health benefits
from reductions in direct PM2.5 emissions.
---------------------------------------------------------------------------
\10\ DOE estimated the monetized value of SO2 and
NOX emissions reductions associated with electricity
savings using benefit per ton estimates from the scientific
literature. See section IV.L.2 of this document for further
discussion.
\11\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------
Table I-5 summarizes the economic benefits and costs expected to
result from the new and amended standards for electric motors. There
are other important unquantified effects, including certain
unquantified climate benefits, unquantified public health benefits from
the reduction of toxic air pollutants and other emissions, unquantified
energy security benefits, and distributional effects, among others.
Table I-5--Summary of Economic Benefits and Costs of Adopted Energy
Conservation Standards for Electric Motors
[TSL 2]
------------------------------------------------------------------------
Billion $2021
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 8.8
Climate Benefits *.................................... 3.1
Health Benefits **.................................... 5.7
-----------------
Total Benefits [dagger]........................... 17.7
Consumer Incremental Equipment Costs [Dagger]......... 1.4
-----------------
Net Benefits...................................... 16.3
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 3.0
Climate Benefits * (3% discount rate)................. 3.1
Health Benefits **.................................... 1.8
-----------------
Total Benefits [dagger]........................... 7.8
Consumer Incremental Equipment Costs [Dagger]......... 0.7
-----------------
Net Benefits...................................... 7.1
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with product
name shipped in 2027-2056. These results include benefits to consumers
which accrue after 2027 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the
SC-GHG (see section IV.L of this document). For presentational
purposes of this table, the climate benefits associated with the
average SC-GHG at a 3 percent discount rate are shown, but the
Department does not have a single central SC-GHG point estimate, and
it emphasizes the importance of considering the benefits calculated
using all four SC-GHG estimates.
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
precursor health benefits and (for NOX) ozone precursor health
benefits, but will continue to assess the ability to monetize other
effects such as health benefits from reductions in direct PM2.5
emissions. The health benefits are presented at real discount rates of
3 and 7 percent. See section IV.L of this document for more details.
[[Page 36071]]
[dagger] Total and net benefits include consumer, climate, and health
benefits. For presentation purposes, total and net benefits for both
the 3-percent and 7-percent cases are presented using the average SC-
GHG with 3-percent discount rate, but the Department does not have a
single central SC-GHG point estimate. DOE emphasizes the importance
and value of considering the benefits calculated using all four SC-GHG
estimates. See Table V-41 for net benefits using all four SC-GHG
estimates. To monetize the benefits of reducing GHG emissions this
analysis uses the interim estimates presented in the Technical Support
Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates Under Executive Order 13990 published in February 2021 by
the Interagency Working Group on the Social Cost of Greenhouse Gases
(IWG).
[Dagger] Costs include incremental equipment costs as well as
installation costs.
The benefits and costs of the standards can also be expressed in
terms of annualized values. The monetary values for the total
annualized net benefits are (1) the reduced consumer operating costs,
minus (2) the increase in product purchase prices and installation
costs, plus (3) the value of the benefits of GHG and NOX and
SO2 emission reductions, all annualized.\12\ The national
operating savings are domestic private U.S. consumer monetary savings
that occur as a result of purchasing the covered products and are
measured for the lifetime of electric motors shipped in 2027-2056. The
benefits associated with reduced emissions achieved as a result of the
standards are also calculated based on the lifetime of electric motors
shipped in 2027-2056.
---------------------------------------------------------------------------
\12\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2023, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2030), and then discounted the present value from each year
to 2023. Using the present value, DOE then calculated the fixed
annual payment over a 30-year period, starting in the compliance
year, that yields the same present value.
---------------------------------------------------------------------------
Estimates of annualized benefits and costs of the adopted standards
are shown in Table I-6. The results under the primary estimate are as
follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced NOX and SO2
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated cost of the standards adopted
in this rule is $62.1 million per year in increased equipment costs,
while the estimated annual benefits are $254.8 million in reduced
equipment operating costs, $164.8 million in climate benefits, and
$151.4 million in health benefits. In this case, the net benefit would
amount to $508.9 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the standards is $71.0 million per year in increased
equipment costs, while the estimated annual benefits are $463.6 million
in reduced operating costs, $164.8 million in climate benefits, and
$300.7 million in health benefits. In this case, the net benefit would
amount to $858.2 million per year.
Table I-6--Annualized Benefits and Costs of Adopted Standards for Electric Motors
[TSL 2]
----------------------------------------------------------------------------------------------------------------
Million 2021$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 463.6 405.1 542.9
Climate Benefits *.............................................. 164.8 148.0 186.5
Health Benefits **.............................................. 300.7 269.5 341.0
-----------------------------------------------
Total Benefits [dagger]..................................... 929.1 822.5 1070.4
Consumer Incremental Equipment Costs [Dagger]................... 71.0 73.7 73.0
-----------------------------------------------
Net Benefits................................................ 858.2 748.8 997.4
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 254.8 225.3 293.6
Climate Benefits * (3% discount rate)........................... 164.8 148.0 186.5
Health Benefits **.......................................... 151.4 137.1 169.5
-----------------------------------------------
Total Benefits [dagger]..................................... 571.0 510.4 649.6
Consumer Incremental Equipment Costs [Dagger]................... 62.1 63.8 63.9
-----------------------------------------------
Net Benefits................................................ 508.9 446.6 585.6
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with electric motors shipped in 2027-2056. These
results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
at a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point
estimate, and it emphasizes the importance and value of considering the benefits calculated using all four SC-
GHG estimates.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[[Page 36072]]
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Table V-
41 for net benefits using all four SC-GHG estimates. To monetize the benefits of reducing GHG emissions this
analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon,
Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the
Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
[Dagger] Costs include incremental equipment costs as well as installation costs.
DOE's analysis of the national impacts of the adopted standards is
described in sections IV.H, V.B.3 and V.C of this document.
D. Conclusion
DOE has determined that the November 2022 Joint Recommendation
containing recommendations with respect to energy conservation
standards for electric motors was submitted jointly by interested
persons that are fairly representative of relevant points of view, in
accordance with 42 U.S.C. 6295(p)(4)(A). After considering the analysis
and weighing the benefits and burdens, DOE has determined that the
recommended standards are in accordance with 42 U.S.C. 6295(o), which
contains the criteria for prescribing new or amended standards.
Specifically, the Secretary has determined that the adoption of the
recommended standards would result in the significant conservation of
energy and is technologically feasible and economically justified. In
determining whether the recommended standards are economically
justified, the Secretary has determined that the benefits of the
recommended standards exceed the burdens. Namely, the Secretary has
concluded that the recommended standards, when considering the benefits
of energy savings, positive NPV of consumer benefits, emission
reductions, the estimated monetary value of the emissions reductions,
and positive average LCC savings, would yield benefits outweighing the
negative impacts on some consumers and on manufacturers, including the
conversion costs that could result in a reduction in INPV for
manufacturers.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
standards for electric motors is $62.1 million per year in increased
equipment and installation costs, while the estimated annual benefits
are $254.8 million in reduced equipment operating costs, $164.8 million
in climate benefits and $151.4 million in health benefits. The net
benefit amounts to $508.9 million per year.
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\13\ For
example, some covered products and equipment have most of their energy
consumption occur during periods of peak energy demand. The impacts of
these products on the energy infrastructure can be more pronounced than
products with relatively constant demand. Accordingly, DOE evaluates
the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------
\13\ Procedures, Interpretations, and Policies for Consideration
in New or Revised Energy Conservation Standards and Test Procedures
for Consumer Products and Commercial/Industrial Equipment, 86 FR
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------
As previously mentioned, the standards are projected to result in
estimated national energy savings of 3.0 quads (FFC), the equivalent of
the primary annual energy use of 31 million homes. The NPV of consumer
benefit for these projected energy savings is $2.2 billion using a
discount rate of 7 percent, and $7.5 billion using a discount rate of 3
percent. The cumulative emission reductions associated with these
energy savings are 91.69 Mt of CO2, 35.12 thousand tons of
SO2, 148.74 thousand tons of NOX, 690.10 thousand
tons of CH4, 0.82 thousand tons of N2O, and 0.23
tons of Hg. The estimated monetary value of the climate benefits from
reduced GHG emissions (associated with the average SC-GHG at a 3-
percent discount rate) is $3.14 billion. The estimated monetary value
of the health benefits from reduced SO2 and NOX
emissions is $1.76 billion using a 7-percent discount rate, and $5.72
billion using a 3-percent discount rate. Based on these findings, DOE
has determined the energy savings from the standard levels adopted in
this DFR are ``significant'' within the meaning of 42 U.S.C.
6295(o)(3)(B). A more detailed discussion of the basis for these
tentative conclusions is contained in the remainder of this document
and the accompanying TSD.
Under the authority provided by 42 U.S.C. 6295(p)(4), DOE is
issuing this direct final rule (``DFR'') amending the energy
conservation standards for electric motors. Consistent with this
authority, DOE is also publishing elsewhere in this Federal Register a
notice of proposed rulemaking proposing standards that are identical to
those contained in this direct final rule. See 42 U.S.C.
6295(p)(4)(A)(i).
II. Introduction
The following section briefly discusses the statutory authority
underlying this direct final rule, as well as some of the relevant
historical background related to the establishment of standards for
electric motors.
A. Authority
EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, Part
C \14\ of EPCA added by Public Law 95-619, Title IV, section 441(a) (42
U.S.C. 6311-6317, as codified), established the Energy Conservation
Program for Certain Industrial Equipment, which sets forth a variety of
provisions designed to improve the energy efficiency of certain types
of industrial equipment, including electric motors, the subject of this
direct final rule. (42 U.S.C. 6311(1)(A)). The Energy Policy Act of
1992 (``EPACT 1992'') (Pub. L. 102-486 (Oct. 24, 1992)) further amended
EPCA by establishing energy conservation standards and test procedures
for certain commercial and industrial electric motors that are
manufactured alone or as a component of another piece of equipment. In
December 2007, Congress enacted the Energy Independence and Security
Act of 2007 (``EISA 2007'') (Pub. L. 110-140 (Dec. 19, 2007). Section
313(b)(1) of EISA 2007 updated the energy conservation standards for
those electric motors already covered by EPCA and established energy
conservation standards for a larger scope of motors not previously
covered by standards. (42 U.S.C. 6313(b)(2)) EISA 2007 also revised
certain statutory definitions related to electric motors. See EISA
2007, sec. 313 (amending statutory definitions related to electric
motors at 42 U.S.C. 6311(13)).
---------------------------------------------------------------------------
\14\ For editorial reasons, upon codification in the U.S. Code,
Part C was redesignated Part A-1.
---------------------------------------------------------------------------
The energy conservation program under EPCA consists essentially of
four parts: (1) testing, (2) labeling, (3) the establishment of Federal
energy conservation standards, and (4) certification and enforcement
procedures. Relevant provisions of EPCA include definitions (42 U.S.C.
[[Page 36073]]
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C.
6315), energy conservation standards (42 U.S.C. 6313), and the
authority to require information and reports from manufacturers (42
U.S.C. 6316; 42 U.S.C. 6296).
Federal energy efficiency requirements for covered equipment
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6316(a) and (b); 42 U.S.C. 6297) DOE may, however, grant waivers
of Federal preemption in limited instances for particular State laws or
regulations, in accordance with the procedures and other provisions set
forth under EPCA. (See 42 U.S.C. 6316(a) (applying the preemption
waiver provisions of 42 U.S.C. 6297))
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered product. (42 U.S.C.
6314(a), 42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers
of covered equipment must use the Federal test procedures as the basis
for: (1) certifying to DOE that their equipment complies with the
applicable energy conservation standards adopted pursuant to EPCA (42
U.S.C. 6316(a); 42 U.S.C. 6295(s)), and (2) making representations
about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly,
DOE must use these test procedures to determine whether the equipment
complies with relevant standards promulgated under EPCA. (42 U.S.C.
6316(a); 42 U.S.C. 6295(s)) The DOE test procedures for electric motors
appear at title 10 of the Code of Federal Regulations (``CFR'') part
431, subpart B, appendix B.
EPCA further provides that, not later than 6 years after the
issuance of any final rule establishing or amending a standard, DOE
must publish either a notice of determination that standards for the
product do not need to be amended, or a notice of proposed rulemaking
including new proposed energy conservation standards (proceeding to a
final rule, as appropriate). (42 U.S.C. 6316(a); 42 U.S.C. 6295(m)(1))
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered equipment, including electric motors. Any
new or amended standard for a covered product must be designed to
achieve the maximum improvement in energy efficiency that the Secretary
of Energy determines is technologically feasible and economically
justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C.
6295(o)(3)(B)) Furthermore, DOE may not adopt any standard that would
not result in the significant conservation of energy. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(3))
Moreover, DOE may not prescribe a standard: (1) for certain
products, including electric motors, if no test procedure has been
established for the product, or (2) if DOE determines by rule that the
standard is not technologically feasible or economically justified. (42
U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a
proposed standard is economically justified, DOE must determine whether
the benefits of the standard exceed its burdens. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after
receiving comments on the proposed standard, and by considering, to the
greatest extent practicable, the following seven statutory factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered products that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water)
savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (``Secretary'') considers
relevant. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA, as codified, establishes a rebuttable presumption
that a standard is economically justified if the Secretary finds that
the additional cost to the consumer of purchasing a product complying
with an energy conservation standard level will be less than three
times the value of the energy savings during the first year that the
consumer will receive as a result of the standard, as calculated under
the applicable test procedure. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(iii))
EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing
any amended standard that either increases the maximum allowable energy
use or decreases the minimum required energy efficiency of a covered
product. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(1)) Also, the Secretary
may not prescribe an amended or new standard if interested persons have
established by a preponderance of the evidence that the standard is
likely to result in the unavailability in the United States in any
covered product type (or class) of performance characteristics
(including reliability), features, sizes, capacities, and volumes that
are substantially the same as those generally available in the United
States. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an
energy conservation standard for a covered product that has two or more
subcategories. DOE must specify a different standard level for a type
or class of products that has the same function or intended use, if DOE
determines that products within such group: (A) consume a different
kind of energy from that consumed by other covered products within such
type (or class); or (B) have a capacity or other performance-related
feature which other products within such type (or class) do not have
and such feature justifies a higher or lower standard. (42 U.S.C.
6316(a); 42 U.S.C. 6295(q)(1)) In determining whether a performance-
related feature justifies a different standard for a group of products,
DOE must consider such factors as the utility to the consumer of such a
feature and other factors DOE deems appropriate. Id. Any rule
prescribing such a standard must include an explanation of the basis on
which such higher or lower level was established. (42 U.S.C. 6316(a);
42 U.S.C. 6295(q)(2))
Finally, EISA 2007 amended EPCA, in relevant part, to grant DOE
authority to issue a final rule (i.e., a ``direct final rule'' or
``DFR'') establishing an energy conservation standard on receipt of a
statement submitted jointly by interested persons that are fairly
representative of relevant points of view (including representatives of
manufacturers of covered products, States, and efficiency advocates),
as determined by the Secretary, that contains recommendations with
respect to an energy or water conservation standard that are in
accordance with the provisions of 42 U.S.C. 6295(o). (42 U.S.C.
6295(p)(4)) Pursuant to 42 U.S.C. 6295(p)(4), the Secretary must also
determine whether a jointly-submitted recommendation for an energy or
water conservation standard satisfies 42 U.S.C. 6295(o) or 42 U.S.C.
6313(a)(6)(B), as applicable.
[[Page 36074]]
The direct final rule must be published simultaneously with a NOPR
that proposes an energy or water conservation standard that is
identical to the standard established in the direct final rule, and DOE
must provide a public comment period of at least 110 days on this
proposal. (42 U.S.C. 6295(p)(4)(A)-(B)) Based on the comments received
during this period, the direct final rule will either become effective,
or DOE will withdraw it not later than 120 days after its issuance if
(1) one or more adverse comments is received, and (2) DOE determines
that those comments, when viewed in light of the rulemaking record
related to the direct final rule, provide a reasonable basis for
withdrawal of the direct final rule under 42 U.S.C. 6295(o), 42 U.S.C.
6313(a)(6)(B), or any other applicable law. (42 U.S.C. 6295(p)(4)(C))
Receipt of an alternative joint recommendation may also trigger a DOE
withdrawal of the direct final rule in the same manner. Id. After
withdrawing a direct final rule, DOE must proceed with the notice of
proposed rulemaking published simultaneously with the direct final rule
and publish in the Federal Register the reasons why the direct final
rule was withdrawn. Id.
Typical of other rulemakings, it is the substance, rather than the
quantity, of comments that will ultimately determine whether a direct
final rule will be withdrawn. To this end, the substance of any adverse
comment(s) received will be weighed against the anticipated benefits of
the jointly-submitted recommendations and the likelihood that further
consideration of the comment(s) would change the results of the
rulemaking. DOE notes that, to the extent an adverse comment had been
previously raised and addressed in the rulemaking proceeding, such a
submission will not typically provide a basis for withdrawal of a
direct final rule.
B. Background
1. Current Standards
In a final rule published on May 29, 2014, DOE prescribed the
current energy conservation standards for electric motors manufactured
on and after June 1, 2016. 79 FR 30934 (``May 2014 Final Rule''). These
standards are set forth in DOE's regulations at 10 CFR 431.25 and are
repeated in Table II-1, Table II-2, and Table II-3.
Table II-1--Energy Conservation Standards for NEMA Design A, NEMA Design B and IEC Design N Motors (Excluding
Fire Pump Electric Motors) at 60 Hz
----------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
-----------------------------------------------------------------------------------
Motor horsepower/standard 2 Pole 4 Pole 6 Pole 8 Pole
kilowatt equivalent -----------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
----------------------------------------------------------------------------------------------------------------
1/.75....................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1..................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5....................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2....................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7....................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5..................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5...................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11....................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15....................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5..................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22....................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30....................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37....................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45....................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55....................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75...................... 94.1 93.6 95.4 95.4 95.0 95.0 93.6 94.1
125/90...................... 95.0 94.1 95.4 95.4 95.0 95.0 94.1 94.1
150/110..................... 95.0 94.1 95.8 95.8 95.8 95.4 94.1 94.1
200/150..................... 95.4 95.0 96.2 95.8 95.8 95.4 94.5 94.1
250/186..................... 95.8 95.0 96.2 95.8 95.8 95.8 95.0 95.0
300/224..................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... ........
350/261..................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... ........
400/298..................... 95.8 95.8 96.2 95.8 ......... ........ ......... ........
450/336..................... 95.8 96.2 96.2 96.2 ......... ........ ......... ........
500/373..................... 95.8 96.2 96.2 96.2 ......... ........ ......... ........
----------------------------------------------------------------------------------------------------------------
Table II-2--Energy Conservation Standards for NEMA Design C and IEC Design H Motors at 60 Hz
----------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
-----------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 4 Pole 6 Pole 8 Pole
-----------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open
----------------------------------------------------------------------------------------------------------------
1/.75......................................... 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1....................................... 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5......................................... 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2......................................... 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7......................................... 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5....................................... 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5........................................ 91.7 91.7 91.0 91.7 89.5 90.2
15/11......................................... 92.4 93.0 91.7 91.7 89.5 90.2
20/15......................................... 93.0 93.0 91.7 92.4 90.2 91.0
[[Page 36075]]
25/18.5....................................... 93.6 93.6 93.0 93.0 90.2 91.0
30/22......................................... 93.6 94.1 93.0 93.6 91.7 91.7
40/30......................................... 94.1 94.1 94.1 94.1 91.7 91.7
50/37......................................... 94.5 94.5 94.1 94.1 92.4 92.4
60/45......................................... 95.0 95.0 94.5 94.5 92.4 93.0
75/55......................................... 95.4 95.0 94.5 94.5 93.6 94.1
100/75........................................ 95.4 95.4 95.0 95.0 93.6 94.1
125/90........................................ 95.4 95.4 95.0 95.0 94.1 94.1
150/110....................................... 95.8 95.8 95.8 95.4 94.1 94.1
200/150....................................... 96.2 95.8 95.8 95.4 94.5 94.1
----------------------------------------------------------------------------------------------------------------
Table II-3--Energy Conservation Standards for Fire Pump Electric Motors At 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 75.5 ......... 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1......................................................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5........................................................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2........................................................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7........................................................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5......................................................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5.......................................................... 89.5 88.5 89.5 89.5 89.5 90.2 88.5 89.5
15/11........................................................... 90.2 89.5 91.0 91.0 90.2 90.2 88.5 89.5
20/15........................................................... 90.2 90.2 91.0 91.0 90.2 91.0 89.5 90.2
25/18.5......................................................... 91.0 91.0 92.4 91.7 91.7 91.7 89.5 90.2
30/22........................................................... 91.0 91.0 92.4 92.4 91.7 92.4 91.0 91.0
40/30........................................................... 91.7 91.7 93.0 93.0 93.0 93.0 91.0 91.0
50/37........................................................... 92.4 92.4 93.0 93.0 93.0 93.0 91.7 91.7
60/45........................................................... 93.0 93.0 93.6 93.6 93.6 93.6 91.7 92.4
75/55........................................................... 93.0 93.0 94.1 94.1 93.6 93.6 93.0 93.6
100/75.......................................................... 93.6 93.0 94.5 94.1 94.1 94.1 93.0 93.6
125/90.......................................................... 94.5 93.6 94.5 94.5 94.1 94.1 93.6 93.6
150/110......................................................... 94.5 93.6 95.0 95.0 95.0 94.5 93.6 93.6
200/150......................................................... 95.0 94.5 95.0 95.0 95.0 94.5 94.1 93.6
250/186......................................................... 95.4 94.5 95.0 95.4 95.0 95.4 94.5 94.5
300/224......................................................... 95.4 95.0 95.4 95.4 95.0 95.4 ......... .........
350/261......................................................... 95.4 95.0 95.4 95.4 95.0 95.4 ......... .........
400/298......................................................... 95.4 95.4 95.4 95.4 ......... ......... ......... .........
450/336......................................................... 95.4 95.8 95.4 95.8 ......... ......... ......... .........
500/373......................................................... 95.4 95.8 95.8 95.8 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. History of Standards Rulemaking for Electric Motors
In the May 2020 Early Assessment Review RFI, DOE stated that it was
initiating an early assessment review to determine whether any new or
amended standards would satisfy the relevant requirements of EPCA for a
new or amended energy conservation standard for electric motors and
sought information related to that effort. Specifically, DOE sought
data and information that could enable the agency to determine whether
DOE should propose a ``no new standard'' determination because a more
stringent standard: (1) would not result in a significant savings of
energy; (2) is not technologically feasible; (3) is not economically
justified; or (4) any combination of the foregoing. 85 FR 30878, 30879.
On March 2, 2022, DOE published the preliminary analysis for
electric motors. 87 FR 11650 (``March 2022 Preliminary Analysis''). In
conjunction with the March 2022 Preliminary Analysis, DOE published a
technical support document (``March 2022 Prelim TSD'') which presented
the results of the in-depth technical analyses in the following areas:
(1) Engineering; (2) markups to determine equipment price; (3) energy
use; (4) life cycle cost (``LCC'') and payback period (``PBP''); and
(5) national impacts. The results presented included the current scope
of electric motors regulated at 10 CFR 431.25, in addition to an
expanded scope of motors, including electric motors above 500
horsepower, air-over electric motors, and small, non-small-electric-
motor, electric motors (``SNEM''). See Chapter 2 of the March 2022
Prelim TSD. DOE requested comment on a number of topics regarding the
analysis presented.
DOE received comments in response to the March 2022 Preliminary
Analysis from the interested parties listed in Table II-4.
[[Page 36076]]
Table II-4--March 2022 Preliminary Analysis Written Comments
----------------------------------------------------------------------------------------------------------------
Reference in this final
Commenter(s) rule Docket No. Commenter type
----------------------------------------------------------------------------------------------------------------
ABB Motors and Mechanical Inc............ ABB........................ 28 Manufacturer.
American Council for an Energy-Efficient Electric Motors Working 35, 36 Working Group.
Economy, Appliance Standards Awareness Group.
Project, National Electrical
Manufacturers Association, Natural
Resources Defense Council, Northwest
Energy Efficiency Alliance, Pacific Gas
& Electric Company, San Diego Gas &
Electric, Southern California Edison.
Appliance Standards Awareness Project, Joint Advocates............ 27 Efficiency Organizations.
American Council for an Energy-Efficient
Economy, Natural Resources Defense
Council, New York State Energy Research
and Development Authority.
Association of Home Appliance AHAM and AHRI.............. 25 Industry OEM Trade
Manufacturers; Air-Conditioning, Association.
Heating, and Refrigeration Institute.
Air-Conditioning, Heating, and AHRI....................... 26 Industry OEM Trade
Refrigeration Institute. Association.
Pacific Gas and Electric Company (PG&E), CA IOUs.................... 30 Utilities.
San Diego Gas and Electric (SDG&E), and
Southern California Edison (SCE).
Daikin Comfort Technologies Manufacturing Daikin..................... 32 Manufacturer.
Company, L.P.
Electrical Apparatus Service Association, EASA....................... 21 International Trade
Inc. Association.
Hydraulics Institute..................... HI......................... 31 Industry Pump Trade
Association.
Lennox International..................... Lennox..................... 29 Manufacturer.
Metglas, Inc............................. Metglas.................... 24 Materials supplier.
Northwest Energy Efficiency Alliance..... NEEA....................... 33 Non-profit organization.
National Electrical Manufacturers Joint Industry Stakeholders 23 Industry Trade
Association (NEMA), Association of Home Associations.
Appliance Manufacturers (AHAM), the Air-
Conditioning, Heating, and Refrigeration
Institute (AHRI), the Medical Imaging
Technology Alliance (MITA), the Outdoor
Power Equipment Institute (OPEI), Home
Ventilating Institute (HVI) and the
Power Tool Institute (PTI).
National Electrical Manufacturers NEMA....................... 22 Industry Trade Association.
Association.
----------------------------------------------------------------------------------------------------------------
By letter dated on November 15, 2022, DOE received a joint
recommendation for energy conservation standards for electric motors
(``November 2022 Joint Recommendation''). The November 2022 Joint
Recommendation represented the motors industry, energy efficiency
organizations and utilities (collectively, ``the Electric Motors
Working Group'').\15\ The November 2022 Joint Recommendation addressed
energy conservation standards for medium electric motors that are 1-750
hp and polyphase, and air-over medium electric motors. On December 9,
2022, DOE received a supplemental letter to the November 2022 Joint
Recommendation from the Electric Motors Working Group. The supplemental
letter provided additional guidance on the recommended levels for open
medium electric motors rated 100 hp to 250 hp, and a recommended
compliance date for standards presented in the November 2022 Joint
Recommendation.
---------------------------------------------------------------------------
\15\ The members of the Electric Motors Working Group included
ACEEE, ASAP, NEMA, NRDC, NEEA, PG&E, SDG&E, and SCE.
---------------------------------------------------------------------------
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\16\
---------------------------------------------------------------------------
\16\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for electric motors. (Docket NO EERE-
2020-BT-STD-0007, which is maintained at www.regulations.gov). The
references are arranged as follows: (commenter name, comment docket
ID number, page of that document).
---------------------------------------------------------------------------
3. Electric Motors Working Group Recommended Standard Levels
This section summarizes the standard levels recommended in the
November 2022 Joint Recommendation and supplement by the Electric
Motors Working Group and the subsequent procedural steps taken by DOE.
Further discussion on scope is provided in section III.B of this
document.
Recommendation #1: For NEMA Design A/B medium electric motors
(``MEM'') rated up to 500 hp at 60Hz, standard levels as follows:
a. Less than 100 hp--remain at Premium LevelIE3 level \17\
---------------------------------------------------------------------------
\17\ IE3 efficiency level refers to the 60 Hz efficiency values
in Table 8 of IEC 60034-30-1:2014.
---------------------------------------------------------------------------
b. 100-250 hp--increase to Super Premium/IE4 level,\18\ aligning
with European Union (``EU'') Ecodesign Directive 2019/1781 which
requires IE4 levels for 75-200 kW motors.
---------------------------------------------------------------------------
\18\ IE4 efficiency level refers to the 60 Hz efficiency values
in Table 10 of IEC 60034-30-1:2014.
---------------------------------------------------------------------------
c. Over 250 and up to 500 hp--remain at Premium Level/IE3 level
Separately, because the efficiencies for the IE4 level in IEC
60034-30-1:2014 do not distinguish between enclosed and open motors,
the supplemental letter to the November 2022 Joint Recommendation
recommended efficiencies for open motors based on the efficiencies for
enclosed motors in the IEC standard. The supplemental letter stated
that for some horsepower ratings, open motors have different minimum
efficiencies which account for the different frame size at a given
horsepower rating.
[[Page 36077]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Premium efficiency level refers to the efficiency values in NEMA MG
1-2016 Tables 12-12. The current standards for NEMA Design A/B in Table
5 of 10 CFR 431.25 are at Premium efficiency. Accordingly, in this
direct final rule, pursuant to the November 22 Joint Recommendation,
the energy conservation standards for NEMA Design A/B medium electric
motors (``MEM'') less than 100 hp and between 250 to 500 hp, remain at
the current levels in 10 CFR 430.25. However, the energy conservation
standards for such MEMs between 100 and 250 hp increase to the Super
Premium/IE4 Level, which approximately represents a 20 percent
reduction of losses over Premium/IE3. Table II-4 presents a comparison
of the current and updated standards for MEMs between 100 and 250 hp.
Table II-4--Crosswalk of Current and New Efficiency Standards for MEMs 100-250 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current Standards in Table 5 of 10 CFR 431.25
--------------------------------------------------------------------------------------------------------------------------------------------------------
100/75.......................................................... 94.1 93.6 95.4 95.4 95.0 95.0 93.6 94.1
125/90.......................................................... 95.0 94.1 95.4 95.4 95.0 95.0 94.1 94.1
150/110......................................................... 95.0 94.1 95.8 95.8 95.8 95.4 94.1 94.1
200/150......................................................... 95.4 95.0 96.2 95.8 95.8 95.4 94.5 94.1
250/186......................................................... 95.8 95.0 96.2 95.8 95.8 95.8 95.0 95.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Updated Standards in this DFR, pursuant to the November 2022 Joint Recommendation
--------------------------------------------------------------------------------------------------------------------------------------------------------
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recommendation #2: For medium electric motors rated over 500 hp and
up to 750 hp at 60 Hz, standard levels that correspond to IE3 levels
for open and enclosed electric motors.
The current energy conservation standards for MEMs do not contain
standards for MEMs with greater than 500 hp. However, in the May 2014
Final Rule, DOE noted that it may consider future regulation of motor
types not regulated in the May 2014 Final Rule, including motors
greater than 500 hp. See 79 FR 30946. As discussed more in section
III.B of this document, DOE recently expanded the electric motor test
procedure to include motors between 500 hp and 750 hp. Pursuant to the
November 2022 Joint Recommendation, this direct final rule establishes
standards for motors between 500 and 750 hp at levels consistent with
IE3 levels for open and enclosed electric motors.
Recommendation #3: For air-over \19\ medium electric motors (``AO-
MEMs''), establish two equipment classes and corresponding energy
conservation standards for AO MEMs: AO-MEMs in standard NEMA frame
sizes and air-over motors in specialized NEMA frame sizes, with
standard levels as follows:
---------------------------------------------------------------------------
\19\ Air-over electric motor means an electric motor that does
not reach thermal equilibrium (i.e., thermal stability), during a
rated load temperature test according to section 2 of appendix B,
without the application of forced cooling by a free flow of air from
an external device not mechanically connected to the motor within
the motor enclosure. 10 CFR 430.12.
---------------------------------------------------------------------------
a. Standard Frame Size AO-MEMs: For AO MEMs sold in standard NEMA
frame sizes aligned with NEMA MG 1-2016, Table 13.2 (open motors) and
Table 13.3 (enclosed motors), standard levels consistent with
Recommendation #1 (i.e., standard levels for NEMA MG 1 12-12 levels for
motors rated less than 100 hp, IE4 levels for motors rated 100 to 250
hp, and MG 1 12-12 levels for motors rated over 250 hp).
b. Specialized Frame Size air-over electric motors: For air-over
electric motors sold in smaller, specialized NEMA frame sizes, standard
levels consistent with current fire pump efficiency levels (in Table 7
of 10 CFR 431.25), but with constraint on frame size as follows:
[[Page 36078]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2 Pole (maximum NEMA 4 Pole (maximum NEMA 6 Pole (maximum NEMA 8 Pole (maximum NEMA
frame diameter) frame diameter) frame diameter) frame diameter)
HP/kW -----------------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75................................................... 74 (48) .......... 82.5 (48) 82.5 (48) 80 (48) 80 (48) 74 (140) 74 (140)
1.5/1.1................................................. 82.5 (48) 82.5 (48) 84 (48) 84 (48) 85.5 (140) 84 (140) 77 (140) 75.5 (140)
2/1.5................................................... 84 (48) 84 (48) 84 (48) 84 (48) 86.5 (140) 85.5 (140) 82.5 (180) 85.5 (180)
3/2.2................................................... 85.5 (140) 84 (48) 87.5 (140) 86.5 (140) 87.5 (180) 86.5 (180) 84 (180) 86.5 (180)
5/3.7................................................... 87.5 (140) 85.5 (140) 87.5 (140) 87.5 (140) 87.5 (180) 87.5 (180) 85.5 (210) 87.5 (210)
7.5/5.5................................................. 88.5 (180) 87.5 (140) 89.5 (180) 88.5 (180) 89.5 (210) 88.5 (210) 85.5 (210) 88.5 (210)
10/7.5.................................................. 89.5 (180) 88.5 (180) 89.5 (180) 89.5 (180) 89.5 (210) 90.2 (210) .......... ..........
15/11................................................... 90.2 (210) 89.5 (180) 91 (210) 91 (210) .......... .......... .......... ..........
20/15................................................... 90.2 (210) 90.2 (210) 91 (210) 91 (210) .......... .......... .......... ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
The current energy conservation standard for electric motors in 10
CFR 430.25 exempt air-over electric motors from the standards. 10 CFR
430.25(l). In the May 2014 Final Rule, DOE explained that this
exemption was due to a lack of information at that time to support the
establishment of a test method for air-over electric motors. See 79 FR
30946; 78 FR 38474. However, as discussed more in section III.B, DOE
recently expanded the electric motor test procedure to include AO-MEMs.
Accordingly, pursuant to the November 2022 Joint Recommendation, this
direct final rule establishes 2 equipment classes for AO-MEMs (AO-MEMs
in standard NEMA frame sizes, and those in specialized NEMA frame
sizes) and corresponding standards based on the November 2022 Joint
Recommendation. However, based on DOE's review of the market, DOE only
observed AO-MEMs up to 250 hp. As such, in this direct final rule, DOE
is only establishing standards for AO-MEMs up to 250 hp.
Recommendation #4: For synchronous and inverter-only electric
motors, a recommendation to forego establishing standards until an
updated test procedure is adopted that better captures the energy-
saving benefits of these motors.
The current energy conservation standard for electric motors in 10
CFR 430.25 exempts inverter-only electric motors from the standards. 10
CFR 431.25(l). Similarly, the current energy conservation standards
apply to AC induction motors, which do not include synchronous
motors.\20\ Accordingly, following this recommendation, this direct
final rule continues to exempt these types of motors from the energy
conservation standards.
---------------------------------------------------------------------------
\20\ In the May 2014 Final Rule, DOE chose not to establish
standards for inverter-only electric motors because of the then
absence of a reliable and repeatable method to test them for
efficiency, but DOE noted that if a test procedure became available,
DOE may consider setting standards for inverter-only electric motors
at that time. 79 FR 30945. DOE recently expanded the electric motor
test procedure to include inverter-only and synchronous electric
motors. See 87 FR 63600-63605. Similarly, DOE expanded the scope of
the test procedure to include synchronous electric motors. 87 FR
63601-63605. However, pursuant to the November 2022 Joint
Recommendation, DOE is not separately regulating inverter-only and
synchronous electric motors in this direct final rule. Rather, DOE
is only considering the substitution effects of switching to these
electric motors if higher standards for MEMs are established. More
discussion on inverter-only and synchronous electric motors may be
found in sections IV.A and F of this document.
---------------------------------------------------------------------------
Recommendation #5: For the recommended energy conservation standard
levels, a compliance date of four (4) years from the date of
publication of the final rule.
In the May 2014 Final Rule, DOE provided a 2-year compliance lead
time based on the requirements of 42 U.S.C. 6313(b)(4)(B). See 79 FR
30944. DOE notes that EPCA generally requires a 3-year compliance lead
time from the effective date of an amended standard under EPCA's 6-year
lookback provisions. (42 U.S.C. 6316(a); 42 U.S.C. 6295(m)) However,
EPCA's direct final rule provision (42 U.S.C. 6295(p)(4)) conveys upon
DOE a substantive grant of rulemaking authority, thereby allowing
stakeholders to negotiate over more aspects of the energy or water
conservation standard, so long as the requirements of 42 U.S.C. 6295(o)
are met. See 86 FR 70892, 70915. In the past, DOE has looked to joint
recommendations to fill in necessary details that EPCA does not place
upon the direct final rule process, including compliance periods. DOE's
direct final rules have frequently utilized alternative compliance
dates, while continuing to ensure that the standards in these rules
represent the maximum improvement in energy efficiency that is
technologically feasible and economically justified.
After carefully considering the November 2022 Joint Recommendation
and supplement for amending the energy conservation standards for
electric motors submitted by the Electric Motors Working Group, DOE has
determined that these recommendations are in accordance with the
statutory requirements of 42 U.S.C. 6295(p)(4) for the issuance of a
direct final rule.
More specifically, these recommendations comprise a statement
submitted by interested persons who are fairly representative of
relevant points of view on this matter. In appendix A to subpart C of
10 CFR part 430 (``Appendix A''), DOE explained that to be ``fairly
representative of relevant points of view,'' the group submitting a
joint statement must, where appropriate, include larger concerns and
small business in the regulated industry/manufacturer community, energy
advocates, energy utilities, consumers, and States. However, it will be
necessary to evaluate the meaning of ``fairly representative'' on a
case-by-case basis, subject to the circumstances of a particular
rulemaking, to determine whether fewer or additional parties must be
part of a joint statement in order to be ``fairly representative of
relevant points of view.'' Section 10 of appendix A. In reaching this
determination, DOE took into consideration the fact that the Joint
Recommendation was signed and submitted by a broad cross-section of
interests, including a manufacturers' trade association, environmental
and energy-efficiency advocacy organizations, and electric utility
companies. NYSERDA, a state organization, also submitted a letter
supporting the Joint Recommendation. DOE notes that these organizations
include the relevant points of view specifically identified by
Congress: manufacturers of covered products, States, and efficiency
advocates. (42 U.S.C. 6295(p)(4)(A))
DOE also evaluated whether the recommendation satisfies 42 U.S.C.
6295(o), as applicable. In making this determination, DOE conducted an
analysis to evaluate whether the potential energy conservation
standards under consideration achieve the maximum improvement in energy
efficiency that is technologically
[[Page 36079]]
feasible and economically justified and result in significant energy
conservation. The evaluation is the same comprehensive approach that
DOE typically conducts whenever it considers potential energy
conservation standards for a given type of product or equipment.
Upon review, the Secretary determined that the November 2022 Joint
Recommendation comports with the standard-setting criteria set forth
under 42 U.S.C. 6295(p)(4)(A). Accordingly, the Electric Motors Working
Group recommended efficiency levels were included as the ``recommended
TSL'' for electric motors (see section V.A for description of all of
the considered TSLs). The details regarding how the Electric Motors
Working Group-recommended TSLs comply with the standard-setting
criteria are discussed and demonstrated in the relevant sections
throughout this document.
In sum, as the relevant criteria under 42 U.S.C. 6295(p)(4) have
been satisfied, the Secretary has determined that it is appropriate to
adopt the Electric Motors Working Group-recommended amended energy
conservation standards for Electric Motors through this direct final
rule. Also, in accordance with the provisions described in section II.A
of this document, DOE is simultaneously publishing a NOPR proposing
that the identical standard levels contained in this direct final rule
be adopted.
III. General Discussion
A. General Comments
This section summarizes general comments received from interested
parties regarding rulemaking timing and process for the March 2022
Preliminary Analysis.
Lennox commented that long-standing DOE practice recognizes the
benefit of establishing an appropriate test procedure before
undertaking an energy conservation standards rulemaking. Lennox
commented that the March 2022 Preliminary Analysis was issued in
February 2022 while comments on the test procedure NOPR were due. As
such, Lennox suggested that DOE cutting corners on the regulatory
process undermines the accuracy and reliability of data contained in
the March 2022 Preliminary Analysis TSD. (Lennox, No. 29 at p. 4-5) The
Joint Industry Stakeholders commented that the process DOE is using for
the electric motor test procedure and standards undermines the value of
early stakeholder engagement. Specifically, they claimed that DOE is:
(1) shortening comment periods; (2) overlapping comment periods; and
(3) condensing the rulemaking process. The Joint Industry Stakeholders
noted that DOE published the March 2022 Preliminary Analysis two months
after issuing a proposed test procedure. Furthermore, the Joint
Industry Stakeholders commented that there were numerous comments
challenging DOE's proposed test procedure, which resulted in
significant changes. They commented that manufacturers and others lack
enough time with the proposed test procedure to fully understand or
comment upon its impact on potential energy conservation standards,
especially for SNEMs where they stated that DOE has done no testing.
The Joint Industry Stakeholders commented that they recognize and
support DOE's interest in moving rulemakings forward, especially rules
such as the electric motor standards and test procedures, which have
missed statutory deadlines. However, they stated that DOE should have
released the proposed test procedure earlier so that DOE could receive
feedback on the test procedure before proceeding with its resource-
intensive preliminary analysis. (Joint Industry Stakeholders, No. 23 at
p. 9-10)
Appendix A establishes procedures, interpretations, and policies to
guide DOE in the consideration and promulgation of new or revised
appliance energy conservation standards and test procedures under EPCA.
DOE has maintained the process and timeline for the electric motors
test procedure and energy conservation standards based on appendix A.
Appendix A requires that DOE provide for early input from
stakeholders so that the initiation and direction of rulemaking is
informed by comments from interested parties. Appendix A, section 1(a).
As discussed in section II.B.2 of this document, DOE provided
opportunity for comment for these energy conservation standards through
the May 2020 Early Assessment Review RFI, which had a 30-day comment
period, and the March 2022 Preliminary Analysis, which had a 60-day
comment period. Further, DOE provided multiple opportunities for
stakeholder comments and inputs through the test procedure rulemaking
process; DOE published a request for information (85 FR 34111; June 3,
2020 ``June 2020 RFI''), which had a 45-day comment period, and DOE
published a test procedure NOPR (86 FR 71710; December 17, 2021
``December 2021 NOPR''), which originally had a 60-day comment period,
which was extended to a 75-day comment period. 87 FR 6436. Even though
some of these comment periods overlapped to some extent, DOE has
nonetheless provided ample opportunity for stakeholder review and
comments and has considered such comments and recommendations in this
notice.
Appendix A also generally requires that test procedure rulemakings
establishing methodologies used to evaluate proposed energy
conservation standards will be finalized prior to publication of a NOPR
proposing new or amended energy conservation standards. Appendix A,
section 8(d)(1). Pursuant to 42 U.S.C. 6295(p)(4), published elsewhere
in the Federal Register is a NOPR accompanying this direct final rule,
which proposes standards identical to those in this direct final rule.
On October 19, 2022, DOE published the electric motor test procedure
final rule. (``October 2022 Final Rule''). Thus, in accordance with
appendix A section 8(d)(1), the October 2022 Final Rule prior was
published 180 days prior to publication of this energy conservations
standards direct final rule and the accompanying NOPR.
B. Scope of Coverage and Equipment Classes
When evaluating and establishing energy conservation standards, DOE
divides covered equipment into equipment classes by the type of energy
used or by capacity or other performance-related features that justify
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such
factors as the utility of the feature to the consumer and other factors
DOE determines are appropriate. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q))
This document covers certain equipment meeting the definition of
electric motors as defined in 10 CFR 431.12. Specifically, the
definition for ``electric motor'' is ``a machine that converts
electrical power into rotational mechanical power.'' Id. Electric
motors are used in a wide range of applications in commercial building
and in the industrial sector (e.g., chemicals, primary metals, food,
paper, plastic/rubber, petroleum refining, and wastewater), including:
fans, compressors, pumps, material handling equipment, and material
processing equipment.
Currently, DOE regulates medium electric motors (``MEMs'') falling
into the NEMA Design A, NEMA Design B, NEMA Design C, and fire pump
motor categories and those electric motors that meet the criteria
specified at 10 CFR 431.25(g). 10 CFR 431.25(h)-(j). Section
[[Page 36080]]
431.25(g) specifies that the relevant standards apply only to electric
motors, including partial electric motors, that satisfy the following
criteria:
(1) Are single-speed, induction motors;
(2) Are rated for continuous duty (MG 1) operation or for duty
type S1 (IEC)
(3) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
(4) Operate on polyphase alternating current 60-hertz sinusoidal
line power;
(5) Are rated 600 volts or less;
(6) Have a 2-, 4-, 6-, or 8-pole configuration;
(7) Are built in a three-digit or four-digit NEMA frame size (or
IEC metric equivalent), including those designs between two
consecutive NEMA frame sizes (or IEC metric equivalent), or an
enclosed 56 NEMA frame size (or IEC metric equivalent);
(8) Produce at least one horsepower (0.746 kW) but not greater
than 500 horsepower (373 kW), and
(9) Meet all of the performance requirements of one of the
following motor types: A NEMA Design A, B, or C motor or an IEC
Design N, NE, NEY, NY or H, HE, HEY, HYmotor.\21\
---------------------------------------------------------------------------
\21\ DOE added the ``E'' and ``Y'' designations for IEC Design
motors into Sec. 431.25(g) in the October 2022 Final Rule. 87 FR
63596, 636597, 6306.
10 CFR 431.25(g).
The definitions for NEMA Design A motors, NEMA Design B motors,
NEMA Design C motors, fire pump electric motors, IEC Design N motor and
IEC Design H motor, as well as ``E'' and ``Y'' designated IEC Design
motors, are codified in 10 CFR 431.12. DOE has also currently exempted
certain categories of motors from standards. The exemptions are as
follows:
(1) Air-over electric motors;
(2) Component sets of an electric motor;
(3) Liquid-cooled electric motors;
(4) Submersible electric motors; and
(5) Inverter-only electric motors.
10 CFR 431.25(l)
On October 19, 2022, DOE published the electric motors test
procedure final rule. 87 FR 63588 (``October 2022 Final Rule''). As
part of the October 2022 Final Rule, DOE expanded the test procedure
scope to additional categories of electric motors that currently do not
have energy conservation standards. 87 FR 63588, 63593-63606. The
expanded test procedure scope included the following:
Electric motors having a rated horsepower above 500 and up
to 750 hp that meets the criteria listed at Sec. 431.25(g), with the
exception of criteria Sec. 431.25(g)(8) to air-over electric motors
(``AO-MEMs''), and inverter-only electric motors;
Small, non-Small-Electric Motor, Electric Motors
(``SNEM''), which:
(a) Is not a small electric motor, as defined at Sec. 431.442 and
is not a dedicated pool pump motors as defined at Sec. 431.483;
(b) Is rated for continuous duty (MG 1) operation or for duty type
S1 (IEC);
(c) Operates on polyphase or single-phase alternating current 60-
hertz (Hz) sinusoidal line power; or is used with an inverter that
operates on polyphase or single-phase alternating current 60-hertz (Hz)
sinusoidal line power;
(d) Is rated for 600 volts or less;
(e) Is a single-speed induction motor capable of operating without
an inverter or is an inverter-only electric motor;
(f) Produces a rated motor horsepower greater than or equal to 0.25
horsepower (0.18 kW); and
(g) Is built in the following frame sizes: any two-, or three-digit
NEMA frame size (or IEC equivalent) if the motor operates on single-
phase power; any two-, or three-digit NEMA frame size (or IEC
equivalent) if the motor operates on polyphase power, and has a rated
motor horsepower less than 1 horsepower (0.75 kW); or a two-digit NEMA
frame size (or IEC metric equivalent), if the motor operates on
polyphase power, has a rated motor horsepower equal to or greater than
1 horsepower (0.75 kW), and is not an enclosed 56 NEMA frame size (or
IEC metric equivalent).
SNEMs that are air-over electric motors (``AO-SNEMs'') and
inverter-only electric motors;
Synchronous electric motors, which:
(a) Is not a dedicated pool pump motor as defined at Sec. 431.483
or is not an air-over electric motor;
(b) Is a synchronous electric motor;
(c) Operates on polyphase or single-phase alternating current 60-
hertz (Hz) sinusoidal line power; or is used with an inverter that
operates on polyphase or single-phase alternating current 60-hertz (Hz)
sinusoidal line power;
(d) Is rated 600 volts or less; and
(e) Produces at least 0.25 hp (0.18 kW) but not greater than 750 hp
(559 kW).
Synchronous electric motors that are inverter-only
electric motors.
In the October 2022 Final Rule, DOE noted that, for these motors
newly included within the scope of the test procedure for which there
was no established energy conservation standard, manufacturers would
not be required to use the test procedure to certify these motors to
DOE until such time as a standard is established. 87 FR 63591.\22\
Further, the October 2022 Final Rule continued to exclude the following
categories of electric motors:
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\22\ However, manufacturers making voluntary representations
respecting the energy consumption or cost of energy consumed by such
motors are required to use the DOE test procedure for making such
representations beginning 180 days following publication of the
October 2022 Final Rule. Id.
inverter-only electric motors that are air-over electric
motors;
component sets of an electric motor;
liquid-cooled electric motors; and
submersible electric motors.
In the March 2022 Preliminary Analysis, DOE analyzed the additional
motors now included within the scope of the test procedure after the
October 2022 Final Rule.\23\ See sections 2.2.1 and 2.2.3.2 of the
March 2022 Prelim TSD. This included MEMs from 1-500 hp, AO-MEMs,
SNEMs, and AO-SNEMs. However, consistent with the November 2022 Joint
Recommendation, this direct final rule establishes new and amended
standards for only a portion of the scope analyzed in the March 2022
Preliminary Analysis and included within the scope of the test
procedure after the October 2022 Final Rule. Specifically, in this
direct final rule, DOE is only amending standards for certain MEMs and
establishing new standards for AO-MEMs and certain air-over polyphase
motors. DOE may address in a future rulemaking energy conservation
standards for electric motor equipment classes not addressed in this
direct final rule. Table III-1 summarizes the equipment class groups
(``ECG'') DOE established pursuant to the November 2022 Joint
Recommendation and analyzed in this direct final rule. Further
discussion on equipment classes is provided in section IV.A.3 of this
document.
---------------------------------------------------------------------------
\23\ At the time, most of these motors had been proposed for
inclusion in the scope of the test procedure in the December 2021
Test Procedure NOPR. 86 FR 71710.
Table III-1--Equipment Class Groups Considered
----------------------------------------------------------------------------------------------------------------
ECG motor design Horsepower Pole
ECG type Motor topology rating configuration Enclosure
----------------------------------------------------------------------------------------------------------------
1............................. MEM 1-500 hp, Polyphase..... 1-500 2, 4, 6, 8 Open.
NEMA Design A & Enclosed.
B.
[[Page 36081]]
2............................. MEM 501-750 hp, Polyphase..... 501-750 2, 4 Open.
NEMA Design A & Enclosed.
B.
3............................. AO-MEM (Standard Polyphase..... 1-250 2, 4, 6, 8 Open.
Frame Size). Enclosed.
4............................. AO-Polyphase Polyphase..... 1-20 2, 4, 6, 8 Open.
(Specialized Enclosed.
Frame Size).
----------------------------------------------------------------------------------------------------------------
As described in section II.B.3 of this document, this direct final
rule establishes new equipment classes for AO-MEMs, AO-polyphase
motors, and MEMs between 500 and 750 hp, and amends the standards for
the 100-250 hp MEMs equipment classes.
C. Test Procedure
EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a))
Manufacturers of covered products must use these test procedures to
certify to DOE that their product complies with energy conservation
standards and to quantify the efficiency of their product. On October
19, 2022, DOE published the electric motor test procedure final rule.
87 FR 63588 (``October 2022 Final Rule''). As described previously, the
October 2022 Final Rule expanded the types of motors included within
the scope of the test procedure, including the new classes of electric
motors for which DOE is establishing energy conservation standards in
this final rule. DOE's test procedures for electric motors are
currently prescribed at appendix B to subpart B of 10 CFR part 431
(``appendix B'').
DOE's energy conservation standards for electric motors are
currently prescribed at 10 CFR 431.25. DOE's current energy
conservation standards for electric motors are expressed in terms of
nominal full-load efficiency.
D. Technological Feasibility
1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
rulemaking. As the first step in such an analysis, DOE develops a list
of technology options for consideration in consultation with
manufacturers, design engineers, and other interested parties. DOE then
determines which of those means for improving efficiency are
technologically feasible. DOE considers technologies incorporated in
commercially-available products or in working prototypes to be
technologically feasible. 10 CFR 431.4; 10 CFR part 430, subpart C,
appendix A, sections 6(c)(3)(i) and 7(b)(1) (``Appendix A'').
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
practicability to manufacture, install, and service; (2) adverse
impacts on product utility or availability; (3) adverse impacts on
health or safety, and (4) unique-pathway proprietary technologies.
Section 7(b)(2)-(5) of appendix A. Section IV.B of this document
discusses the results of the screening analysis for electric motors,
particularly the designs DOE considered, those it screened out, and
those that are the basis for the standards considered in this
rulemaking. For further details on the screening analysis for this
rulemaking, see chapter 4 of the direct final rule technical support
document (``TSD'').
2. Maximum Technologically Feasible Levels
When DOE adopts an amended standard for a type or class of covered
product, it must determine the maximum improvement in energy efficiency
or maximum reduction in energy use that is technologically feasible for
such product. (42 U.S.C. 6316(a); 42 U.S.C. 6295(p)(1)) Accordingly, in
the engineering analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for electric
motors, using the design parameters for the most efficient products
available on the market or in working prototypes. The max-tech levels
that DOE determined for this rulemaking are described in section III.C
of this direct final rule and in chapter 5 of the direct final rule
TSD.
E. Energy Savings
1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to electric motors purchased in the
30-year period that begins in the first year of compliance with the
amended standards (2027-2056).\24\ The savings are measured over the
entire lifetime of electric motors purchased in the 30-year analysis
period. DOE quantified the energy savings attributable to each TSL as
the difference in energy consumption between each standards case and
the no-new-standards case. The no-new-standards case represents a
projection of energy consumption that reflects how the market for an
equipment would likely evolve in the absence of new and amended energy
conservation standards.
---------------------------------------------------------------------------
\24\ Each TSL is composed of specific efficiency levels for each
product class. The TSLs considered for this direct final rule are
described in section V.A of this document. DOE also presents a
sensitivity analysis that considers impacts for products shipped in
a 9-year period.
---------------------------------------------------------------------------
DOE used its national impact analysis (``NIA'') spreadsheet model
to estimate national energy savings (``NES'') from potential amended or
new standards for electric motors. The NIA spreadsheet model (described
in section IV.H of this document) calculates energy savings in terms of
site energy, which is the energy directly consumed by products at the
locations where they are used. For electricity, DOE reports national
energy savings in terms of primary energy savings, which is the savings
in the energy that is used to generate and transmit the site
electricity. DOE also calculates NES in terms of FFC energy savings.
The FFC metric includes the energy consumed in extracting, processing,
and transporting primary fuels (i.e., coal, natural gas, petroleum
fuels), and thus presents a more complete picture of the impacts of
energy conservation standards.\25\ DOE's
[[Page 36082]]
approach is based on the calculation of an FFC multiplier for each of
the energy types used by covered products or equipment. For more
information on FFC energy savings, see section IV.H.2 of this document.
---------------------------------------------------------------------------
\25\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------
2. Significance of Savings
To adopt any new or amended standards for a covered product, DOE
must determine that such action would result in significant energy
savings. (42 U.S.C. 6295(o)(3)(B))
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking. For example,
some covered products and equipment have most of their energy
consumption occur during periods of peak energy demand. The impacts of
these products on the energy infrastructure can be more pronounced than
products with relatively constant demand.
Accordingly, DOE evaluates the significance of energy savings on a
case-by-case basis, taking into account the significance of cumulative
FFC national energy savings, the cumulative FFC emissions reductions,
health benefits, and the need to confront the global climate crisis,
among other factors.
As stated, the standard levels adopted in this direct final rule
are projected to result in national energy savings of 3.0 quads, the
equivalent of the electricity use of 31 million homes in one year.
Based on the amount of FFC savings, the corresponding reduction in
emissions, and need to confront the global climate crisis, DOE has
determined the energy savings from the standard levels adopted in this
direct final rule are ``significant'' within the meaning of 42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(3)(B).
F. Economic Justification
1. Specific Criteria
As noted previously, EPCA provides seven factors to be evaluated in
determining whether a potential energy conservation standard is
economically justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has
addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential amended standard on
manufacturers, DOE conducts an MIA, as discussed in section IV.J of
this document. DOE first uses an annual cash-flow approach to determine
the quantitative impacts. This step includes both a short-term
assessment--based on the cost and capital requirements during the
period between when a regulation is issued and when entities must
comply with the regulation--and a long-term assessment over a 30-year
period. The industry-wide impacts analyzed include (1) INPV, which
values the industry on the basis of expected future cash flows; (2)
cash flows by year; (3) changes in revenue and income; and (4) other
measures of impact, as appropriate. Second, DOE analyzes and reports
the impacts on different types of manufacturers, including impacts on
small manufacturers. Third, DOE considers the impact of standards on
domestic manufacturer employment and manufacturing capacity, as well as
the potential for standards to result in plant closures and loss of
capital investment. Finally, DOE takes into account cumulative impacts
of various DOE regulations and other regulatory requirements on
manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national net present value of
the consumer costs and benefits expected to result from particular
standards. DOE also evaluates the impacts of potential standards on
identifiable subgroups of consumers that may be affected
disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC
and PBP analysis.
The LCC is the sum of the purchase price of an equipment(including
its installation) and the operating costs (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more-stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first year of compliance with new
or amended standards. The LCC savings for the considered efficiency
levels are calculated relative to the case that reflects projected
market trends in the absence of new or amended standards. DOE's LCC and
PBP analysis is discussed in further detail in section IV.F of this
document.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(III)) As discussed in section IV.H of this document,
DOE uses the NIA spreadsheet model to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards
adopted in this document would not reduce the utility or performance of
the products under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a standard. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine
the impact, if any, of any lessening of competition likely to result
from a standard and to transmit such determination to the Secretary
within 60
[[Page 36083]]
days of the publication of a rule, together with an analysis of the
nature and extent of the impact. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(ii)) To assist the Department of Justice (``DOJ'') in
making such a determination, DOE transmitted copies of its proposed
rule and the NOPR TSD to the Attorney General for review, with a
request that the DOJ provide its determination on this issue. In its
assessment letter responding to DOE, DOJ concluded that the energy
conservation standards for electric motors are unlikely to have a
significant adverse impact on competition. DOE is publishing the
Attorney General's assessment at the end of this direct final rule.
f. Need for National Energy Conservation
DOE also considers the need for national energy and water
conservation in determining whether a new or amended standard is
economically justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(VI)) The energy savings from the adopted standards are
likely to provide improvements to the security and reliability of the
Nation's energy system. Reductions in the demand for electricity also
may result in reduced costs for maintaining the reliability of the
Nation's electricity system. DOE conducts a utility impact analysis to
estimate how standards may affect the Nation's needed power generation
capacity, as discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when considering the need for national energy
conservation. The adopted standards are likely to result in
environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases (``GHGs'') associated with energy
production and use. DOE conducts an emissions analysis to estimate how
potential standards may affect these emissions, as discussed in section
IV.K the estimated emissions impacts are reported in section V.B.6 of
this document. DOE also estimates the economic value of emissions
reductions resulting from the considered TSLs, as discussed in section
IV.L of this document.
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant
information regarding economic justification that does not fit into the
other categories described previously, DOE could consider such
information under ``other factors.''
2. Rebuttable Presumption
EPCA creates a rebuttable presumption that an energy conservation
standard is economically justified if the additional cost to the
equipment that meets the standard is less than three times the value of
the first year's energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. (42 U.S.C. 6316(a);
42 U.S.C. 6295(o)(2)(B)(iii)) DOE's LCC and PBP analyses generate
values used to calculate the effects that energy conservation standards
would have on the payback period for consumers. These analyses include,
but are not limited to, the 3-year payback period contemplated under
the rebuttable-presumption test. In addition, DOE routinely conducts an
economic analysis that considers the full range of impacts to
consumers, manufacturers, the Nation, and the environment, as required
under 42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i). The results of
this analysis serve as the basis for DOE's evaluation of the economic
justification for a potential standard level (thereby supporting or
rebutting the results of any preliminary determination of economic
justification). The rebuttable presumption payback calculation is
discussed in section IV.F of this direct final rule.
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this
rulemaking with regards to electric motors. Separate subsections
address each component of DOE's analyses. In this direct final rule,
DOE is only addressing comments and analysis specific to the scope of
motors provided in the November 2022 Joint Recommendation. As such, any
analysis and comments related to SNEMs and AO-SNEMs will be addressed
in a separate NOPR.
DOE used several analytical tools to estimate the impact of the
standards considered in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential amended or new
energy conservation standards. The national impacts analysis uses a
second spreadsheet set that provides shipments projections and
calculates national energy savings and net present value of total
consumer costs and savings expected to result from potential energy
conservation standards. DOE uses the third spreadsheet tool, the
Government Regulatory Impact Model (GRIM), to assess manufacturer
impacts of potential standards. These three spreadsheet tools are
available on the DOE website for this rulemaking: www.regulations.gov/docket/EERE-2020-BT-STD-0007. Additionally, DOE used output from the
latest version of the Energy Information Administration's (``EIA's'')
Annual Energy Outlook (``AEO'') for the emissions and utility impact
analyses.
A. Market and Technology Assessment
DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly-available
information. The subjects addressed in the market and technology
assessment for this rulemaking include (1) a determination of the scope
of the rulemaking and product classes, (2) manufacturers and industry
structure, (3) existing efficiency programs, (4) shipments information,
(5) market and industry trends; and (6) technologies or design options
that could improve the energy efficiency of electric motors. The key
findings of DOE's market assessment are summarized in the following
sections. See chapter 3 of the direct final rule TSD for further
discussion of the market and technology assessment.
1. Scope of Coverage
This document covers equipment meeting the definition of electric
motors as defined in 10 CFR 431.12. Specifically, the definition for
``electric motor'' is ``a machine that converts electrical power into
rotational mechanical power.'' Id.
In the March 2022 Preliminary Analysis, DOE presented analysis for
the current scope of electric motors regulated at 10 CFR 431.25, as
well as expanded scope proposed in the December 2021 test procedure
NOPR, which included air-over electric motors and SNEMs. See Chapter 2
of the March 2022 Prelim TSD. Since, DOE has published the October 2022
Final Rule, which expanded the scope of the test procedures to include
such motors, as discussed in detail in section III.B of this direct
final rule.
In response to the scope presented in the March 2022 Preliminary
Analysis, DOE received a number of comments, which are discussed in the
subsections
[[Page 36084]]
below. In this direct final rule, DOE is only addressing comments and
analysis specific to the scope of motors provided in the November 2022
Joint Recommendation, which includes MEMs and polyphase air-over
electric motors.
a. Motor Used as a Component of a Covered Product or Equipment
Generally, Lennox noted that DOE should apply a finished-product
approach to energy efficiency regulations. Specifically, Lennox
commented that system performance standards of HVAC-R products include
the energy used by the electric motors, and that increasing the
stringency of component-level regulation does not have any efficiency
benefit when the ultimate efficiency is measured at the systems level
and manufacturers adjust other equipment parameters based on the
overall system level of performance, offsetting increased motor costs
by reducing other component costs and efficiencies to mitigate adverse
financial impacts on consumers.\26\ Lennox stated that mandating
additional testing and certification of motors used in already-
regulated HVAC-R products would not save energy and create needless
testing, paperwork, and record-keeping requirements that raise consumer
costs. (Lennox, No. 29 at p. 2-3) Lennox elaborated that the HVAC-R
standards in place will drive more efficient design of relevant
components, including motors, without unnecessary further regulation of
components, and that the March 2022 Preliminary Analysis has not
adequately accounted for these cumulative manufacturer burdens.\27\
(Lennox, No. 29 at p. 6)
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\26\ Lennox made these comments in the context of air-over and
inverter-only motors included within HVACR products, requesting that
DOE maintain the exemptions to the energy conservation standards for
these motors contained in 10 CFR 431.25(l). (Lennox, No. 29 at p. 2)
DOE addresses Lennox's comments regarding the exemption for these
specific motors in sections IV.1.b and d of this document.
\27\ Lennox also commented that DOE should continue exempting
SEMs used as a component in covered equipment (specifically, HVACR
equipment) from the energy conservation standards for electric
motors, and that including SNEMs in the energy conversation
standards for electric motors would circumvent Congressional intent
to exempt from regulation small electric motors that are components
of EPCA covered products and covered equipment. (Lennox, No. 29 at
p. 3). As noted previously, DOE is not including SNEMs within the
scope of this direct final rule. SNEMs may be addressed in a future
rulemaking, and DOE will consider such comments in that rulemaking.
---------------------------------------------------------------------------
AHAM and AHRI strongly opposed DOE's plan to expand the existing
scope of coverage of electric motors to include motors destined for
particular applications in finished goods, and instead recommended that
DOE should apply a finished-product approach to energy efficiency
regulations. (AHAM, AHRI, No. 25 at p. 7-9) NEMA commented that further
elevations to component efficiencies or changes to scope for electric
motors energy conservation standards will lead to diminishing returns,
and are therefore less practical, because previous electric motors
rulemakings adequately addressed concerns for ``application and
performance of existing equipment'' to the maximum extent practical.
NEMA stated that DOE should allow application-dependent solutions like
power drive systems to take over from minimum energy conservation
standards as the most-appropriate and best-fit market transformation
vehicles, but they must be selected and installed with due regard for
their application-specific nature, which calls for ``other than
regulatory action'' on the part of DOE. (NEMA, No. 22 at p. 26)
Daikin commented that they do not support the regulation of
electric motors that are components of a covered equipment such as HVAC
equipment. Daikin added that regulating embedded components creates
both apparent and likely unforeseen issues. For HVAC manufacturers,
Daikin commented that regulating components reduces design flexibility
and may not result in optimal design for overall system performance.
Daikin stated that standards for HVAC equipment are regularly evaluated
by DOE to ensure regulations are aligned with the most cost-effective
product for consumers, and HVAC manufacturers generally respond by
producing a class of equipment at these federal minimum efficiency
levels. As such, Daikin stated that regulating an embedded component
will not improve the overall product's energy efficiency. (Daikin, No.
32 at p. 1)
On the other hand, the Joint Advocates commented in support of
regulating electric motors that are components of covered equipment.
The Joint Advocates stated that there is value in regulating the motors
separately. The Joint Advocates agreed with DOE that different motor
efficiency levels may be cost-effective for different covered products,
and the presence of electric motors in covered equipment does not
preclude the possibility of cost-effective energy standards for
electric motors individually. Furthermore, the Joint Advocates
commented that absent standards for motors that are used in covered
equipment, consumers may get stuck with inefficient replacement motors.
Finally, the Joint Advocates commented that motors used in covered
equipment are often purchased by the original equipment manufacturer
(``OEM'') from a motor manufacturer, and thus, exempting motors used in
covered equipment would likely create enforcement challenges since it
would be difficult to determine a given motor's end use application.
(Joint Advocates, No. 27 at p. 5)
DOE understands that the majority of the concerns summarized in
this section and provided separately by commenters stems from DOE
potentially regulating SNEMs and AO-SNEMs. This direct final rule does
not address SNEMs or AO-SNEMs as part of the scope. DOE may consider in
a future rulemaking energy conservation standards for electric motor
equipment classes not addressed in this direct final rule, including
SNEMs and AO-SNEMs. If so, DOE will address these comments and concerns
as part of any future rulemaking. As such, in this final rule, DOE is
generally addressing comments regarding electric motors scope and what
DOE has the authority to regulate.
As discussed in the October 2022 Final Rule, EPCA, as amended
through EISA 2007, provides DOE with the authority to regulate the
expanded scope of motors addressed in this rule. 87 FR 63588, 63596.
Before the enactment of EISA 2007, EPCA defined the term ``electric
motor'' as any motor that is a general purpose T-frame, single-speed,
foot-mounting, polyphase squirrel-cage induction motor of the NEMA,
Design A and B, continuous rated, operating on 230/460 volts and
constant 60 Hertz line power as defined in NEMA Standards Publication
MG1-1987. (See 42 U.S.C. 6311(13)(A) (2006)) Section 313(a)(2) of EISA
2007 removed that definition and the prior limits that narrowly defined
what types of motors would be considered as electric motors. In its
place, EISA 2007 inserted a new ``Electric motors'' heading, and
created two new subtypes of electric motors: General purpose electric
motor (subtype I) and general purpose electric motor (subtype II). (42
U.S.C. 6311(13)(A)-(B) (2011)) In addition, section 313(b)(2) of EISA
2007 established energy conservation standards for four types of
electric motors: general purpose electric motors (subtype I) (i.e.,
subtype I motors) with a power rating of 1 to 200 horsepower; fire pump
motors; general purpose electric motor (subtype II) (i.e., subtype II
motors) with a power rating of 1 to 200 horsepower; and NEMA Design B,
general purpose electric motors with a power rating of more than 200
horsepower, but less than or equal to 500 horsepower. (42 U.S.C.
6313(b)(2)) The term ``electric motor'' was left undefined. However, in
a May 4, 2012 final rule amending the electric
[[Page 36085]]
motors test procedure (the May 2012 Final Rule), DOE adopted the
broader definition of ``electric motor'' currently found in 10 CFR
431.12 because DOE noted that the absence of a definition may cause
confusion about which electric motors are required to comply with
mandatory test procedures and energy conservation standards, and to
provide DOE with the flexibility to set energy conservation standards
for other types of electric motors without having to continuously
update the definition of ``electric motors'' each time DOE sets energy
conservation standards for a new subset of electric motors. 77 FR
26608, 26613.
The provisions of EPCA make clear that DOE may regulate electric
motors ``alone or as a component of another piece of equipment.'' See
42 U.S.C. 6313(b)(1) & (2) (providing that standards for electric
motors be applied to electric motors manufactured ``alone or as a
component of another piece of equipment'') In contrast, Congress
exempted small electric motors (SEMs) \28\ that are a component of a
covered product or a covered equipment from the standards that DOE was
required to establish under 42 U.S.C. 6317(b). Congress did not,
however, similarly restrict electric motors. Unlike SEMs, the statute
does not limit DOE's authority to regulate an electric motor with
respect to whether ``electric motors'' are stand-alone equipment items
or components of a covered product or covered equipment. Rather,
Congress specifically provided that DOE could regulate electric motors
that are components of other covered equipment in the standards
established by DOE.
---------------------------------------------------------------------------
\28\ Congress defined what equipment comprises a small electric
motor (``SEM'')--specifically, ``a NEMA general purpose alternating
current single-speed induction motor, built in a two-digit frame
number series in accordance with NEMA Standards Publication MG1-
1987.'' (42 U.S.C. 6311(13)(G)) (DOE clarified, at industry's
urging, that the definition also includes motors that are IEC metric
equivalents to the specified NEMA motors prescribed by the statute.
See 74 FR 32059, 32061-32062; 10 CFR 431.442.
---------------------------------------------------------------------------
Additionally, EPCA requires that any new or amended standard for a
covered product must be designed to achieve the maximum improvement in
energy efficiency that the Secretary of Energy determines is
technologically feasible and economically justified. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B)) In this
direct final rule, DOE performs the necessary analyses to determine
whether amended or new standards would meet the aforementioned
criteria. Further, DOE has determined that the amended standards
provide cost-effective standards that would result in the significant
conservation of energy. Further discussion on double-counting as it
relates to energy savings is provided in section IV.F of this document.
Further discussion on the analytical results and DOE's justification is
provided in section V.C of this document.
b. Air-Over Electric Motors
NEEA supported the inclusion of air-over electric motors in the
scope of the standards, noting that including them will allow
comparison of performance and informed purchase decisions. (NEEA, No.
33 at p. 2) The CA IOUs supported the inclusion of Totally Enclosed Air
Over (``TEAO'') motors in the analysis. In addition, the CA IOUs
commented that they support establishing standards for air-over motors
that otherwise meet the description of regulated motors (i.e., ``AO-
MEM'') consistent with the levels for totally enclosed fan cooled
(``TEFC'') electric motors. (CA IOUs, No. 30 at p. 1-2)
Lennox commented that DOE must continue the current electric motor
exemptions specified in 10 CFR 431.25(l) for air-over, particularly
when those motors are used in already-regulated HVACR products.
(Lennox, No. 29 at p. 3) AHRI commented that air-over motors are
explicitly exempted from regulation in 10 CFR 431.25(l), and that DOE
has not overcome the challenges to include these exempted products,
procedurally or technically. (AHRI, No. 26 at p. 1, 2)
DOE is covering air-over electric motors under its ``electric
motors'' authority. (42 U.S.C. 6311(1)(A)) As previously discussed, the
statute does not limit DOE's authority to regulate an electric motor
with respect to whether they are stand-alone equipment items or as
components of a covered product or covered equipment. See 42 U.S.C.
6313(b)(1) (providing that standards for electric motors be applied to
electric motors manufactured ``alone or as a component of another piece
of equipment'').
DOE's previous determination in the December 2013 Final Rule to
exclude air-over electric motors from scope was due to insufficient
information available to DOE at the time to support establishment of a
test method. See 78 FR 75962, 75974-75975. Since that time, NEMA
published a test standard for air-over motors in Section IV,
``Performance Standards Applying to All Machines,'' Part 34 ``Air-Over
Motor Efficiency Test Method'' of NEMA MG 1-2016 (``NEMA Air-over Motor
Efficiency Test Method''). The air-over method was originally published
as part of the 2017 NEMA MG-1 Supplements and is also included in the
latest version of NEMA MG 1-2016. In the October 2022 Final Rule, DOE
used the aforementioned argument to include air-over electric motors
into the test procedure scope and establish test procedures. See 87 FR
63588, 63597. In this direct final rule, DOE has analyzed the scope of
electric motors based on the finalized test procedures from the October
2022 Final Rule, and amended energy conservation standards based on the
November 2022 Joint Recommendation.
c. AC Induction Electric Motors Greater Than 500 Horsepower
NEEA commented in support of expanding the scope to include AC
induction electric motors greater than 500 horsepower to identify their
energy use, potential for energy savings, price, and prevalence in the
market today. NEEA added that these motors consume a significant amount
of energy, and that motor efficiency generally improves as a function
of motor size, so it may be possible to establish higher efficiency
standards for greater than 500 HP motors. (NEEA, No. 33 at p. 3)
NEMA stated that energy conservation standards for >500 HP motors
would likely not be justified because of how tiny their market share
is. It also stated that there are unique performance requirements
applied to these motors that require custom designs that limit
efficiency. NEMA stated that, at minimum, if a motor has one of the
following special requirements, it should not be subject to standards;
those special requirements are: <550 percent locked-rotor current,
minimum locked rotor steady state supply voltage of <80 percent,
ability to accelerate a moment of inertia greater than the moment of
inertia defined by NEMA, ability to operate outside the range of -20
[deg]C to +60 [deg]C, ability to operate above 4,000 m above sea level,
a load-torque envelope with a minimum torque of 25 percent of rated
torque with a square shaped T-n[supcaret]2 up to a max load, ability to
start consecutively from cold three times or from hot two times, being
a multi-speed motor, submersible, smoke extraction motor, explosion-
proof motor, or a motor used in nuclear plants. (NEMA, No. 22 at p. 9-
10)
Since the comments to the March 2022 Preliminary Analysis, the
Electric Motors Working Group, which included NEEA and NEMA,
recommended standards for medium electric motors rated over 500 hp and
up to 750 hp at 60 Hz (Recommendation #2). The scope of medium electric
motors includes those electric motors that currently meet
[[Page 36086]]
10 CFR 431.25(g), but expanded to include motor horsepower >500 hp but
less than 750 hp. Accordingly, in this direct final rule, DOE is
including the aforementioned scope of electric motors for consideration
of new standards, based on the November 2022 Joint Recommendation.
Specifically, in the November 2022 Joint Recommendation, the Electric
Motors Working Group agreed on establishing efficiency levels
corresponding to 60 Hz NEMA Premium levels for motors rated over 500 hp
and up to 750 hp. The Electric Motors Working Group noted that
extending the horsepower range of electric motors subject to energy
conservation standards would be beneficial in aligning with EU
Ecodesign Directive 2019/1781,\29\ which covers motors up to 1000 kW
(1341 hp) at NEMA Premium levels, and for which manufacturers are
making investments to comply.
---------------------------------------------------------------------------
\29\ In terms of standardized horsepowers, this would correspond
to 100-250 hp when applying the guidance from 10 CFR 431.25(k) (and
new section 10 CFR 431.25(q)).
---------------------------------------------------------------------------
d. AC Induction Inverter-Only and Synchronous Electric Motors
NEEA commented in support of expanding the scope of standards to
synchronous and inverter-only motors to identify their energy use,
potential for energy savings, price, and prevalence in the market
today. NEEA recommended to include these motors in the same equipment
classes are induction motors. In addition, NEEA recommended not to
establish stricter efficiency requirements for these motors based on
full-load efficiency because these motors allow energy savings at part
load conditions. (NEEA, No. 33 at p. 3) NEMA stated that synchronous
motors should have their own equipment class until analysis concludes
they are not needed. NEMA suggested DOE make an ``other than regulatory
action'' to save energy at the application and reference NEMA Standard
10011-22 with regards to the power index. (NEMA, No. 22 at p. 8)
CA IOUs supported including inverter-only and synchronous electric
motors, but in the same equipment class as currently regulated
induction motors. The CA IOUs recommended convening an Appliance
Standards and Rulemaking Federal Advisory Committee (``ASRAC'') Working
Group to finalize a test procedure and part-load metric for these
motors before finalizing a test procedure and energy conservation
standards rulemaking. (CA IOUs, No. 30 at p. 2) The Joint Advocates
also commented supporting analyzing synchronous motors jointly with
currently covered motors and recommended that DOE also analyze
synchronous motors jointly with relevant SNEM and AO motors. The Joint
Advocates commented that synchronous motors represent the most
efficient motors on the market and highlighted the potential energy
savings opportunities facilitated by market shifts to synchronous
motors. In addition, the Joint Advocates commented that the potential
life-cycle cost savings associated with synchronous motor substitutions
should be directly accounted for when evaluating potential amended
standards for electric motors. (Joint Advocates, No. 27 at p. 2)
Similarly, the CA IOUs also provided the following supporting data to
show that synchronous and inverter-only electric motor are designed,
marketed, capable, and are being used to replace induction motors: (1)
manufacturer reference tables that promote the direct replacement of
currently regulated induction motors with synchronous and inverter-only
motors (2) data showing synchronous motor performance exceeding a best-
in-class copper cage induction motor paired with a commercially
available VFD (which the CA IOUs stated corroborates the PTSD savings
estimates for synchronous electric motors), and (3) a summary of case
studies docketed in response to the December 2021 test procedure NOPR.
The CA IOUs commented that this supporting data demonstrates the use of
synchronous and inverter-only motors in applications where National
Electrical Manufacturers Association (NEMA) Design B motors are
typically used. (CA IOUs, No. 30 at p. 2-3)
AHAM and AHRI commented that if DOE includes inverter-only and
synchronous motors in the scope of the ECS, it should first publish a
preliminary analysis or NODA for these motors before proceeding to a
NOPR. (AHAM, AHRI, No. 25 at p. 2) Lennox commented that DOE imposing
increased costs on inverter-only motors by additional regulation may
inhibit HVACR manufacturer use of these motors in innovative
applications. Further, Lennox commented that DOE ceasing its exemptions
for inverter-only motors, and thereby unduly-burdening manufacturers
and forcing higher HVACR product costs on consumers with component-
level regulation, is particularly inappropriate during an ongoing
pandemic where inflation has been at a 40-year high. (Lennox, No. 29 at
p. 2-3) NEMA stated that by regulating synchronous motors, DOE is
regulating both the required adjustable speed drive and the motor
itself. It stated that this is unnecessary and poorly conceived, and
that synchronous motors do not generally conform to the torque-speed
curves required by NEMA and IEC Designs. (NEMA, No. 22 at p. 7) In
addition, NEMA stated that inverter-only induction motors have
characteristics warranting their own equipment class. It stated these
motors are used exclusively for constant torque or constant HP
applications and that certain applications have performance
requirements like acceleration, deceleration, and overload capability
for optimal control of a process. NEMA also stated that the performance
requirements go beyond a single steady-state load condition that the
test procedure uses, and that targeting a specific operating point's
efficiency could restrict the other torque and thermal requirements of
these motors. It also states that since the metric includes the losses
of the inverter, these motors will have a lower maximum potential
efficiency than typical induction motors. NEMA pointed to IEC 60034-30-
2 as an example for efficiency values that pertain specifically to
variable-speed motors. (NEMA, No. 22 at p. 8-9)
In this direct final rule, DOE is not separately regulating or
establishing standards for inverter-only and synchronous electric
motors. As a sensitivity analysis, DOE notes that it analyzed the
impacts of potentially switching to these electric motors as a result
of higher standards that will be finalized for MEMs 100-250 hp, NEMA
Design A & B in this DFR; further discussion is provided in section
IV.F of this document.
e. Submersible Electric Motors
NEEA and HI recommended excluding submersible motors from the scope
of the standards due to the lack of repeatable and representative test
procedures. (NEEA, No. 33 at p. 4; HI, No. 31 at p. 1) CA IOUs
commented that they do not support including submersible electric
motors, and that DOE should collaborate with industry stakeholders in
developing a test procedure for this motor category. (CA IOUs, No. 30
at p. 2) Finally, NEMA stated that submersible electric motors should
be removed from the rulemaking. (NEMA, No. 22 at p. 9) In the October
2022 Final Rule, DOE did not finalize a test method for submersible
electric motors. See 87 FR 63588, 63605. Moreover, the November 2022
Joint Recommendation did not recommend energy conservation standards
for submersible electric motors. Accordingly, submersible electric
motors continue to be excluded
[[Page 36087]]
from the test procedure and are not included in this standards direct
final rule.
2. Test Procedure and Metric
DOE received comments regarding the test procedure and efficiency
metric for electric motors subject to these energy conservation
standards.
NEMA requested an SNOPR for the test procedure and requested that
the energy conservation standards rulemaking not move forward until the
test procedure is finished. (NEMA, No. 22 at p. 2). DOE published the
electric motor test procedure final rule on October 19, 2022. 87 FR
63588.
NEEA commented that, until DOE revises their test procedure and
efficiency metric to account for part-load operating conditions, they
do not recommend that DOE establish stricter efficiency requirements
for synchronous electric motors and inverter-only electric motors.
(NEEA, No. 33 at p. 4,5) CA IOUs commented similarly, strongly
encouraging DOE to adopt the use of a metric that is representative of
part-load performance for inverter-only and synchronous electric
motors. CA IOUs provided data in support of the use of a part-load
metric for inverter-only and synchronous electric motor applications to
better reflect how these motors operate in the field. (CA IOUs, No. 30
at p. 2) The Joint Advocates explained that inverter-only AC motors may
not have a higher full-load efficiency than a comparable single-speed
motor, but they may save energy by reducing motor speed and resulting
input power at partial loads. Therefore, they commented that because
the efficiency is evaluated only at full load, inverter-only motors
would be at a disadvantage as the input losses associated with the
inverter would be included in the efficiency calculation, but the
potential energy savings resulting from its speed control capabilities
would not be captured. (Joint Advocates, No. 27 at p. 3) NEMA commented
that DOE should transition away from a single point efficiency metric
and instead should develop a Power Index that incorporates the savings
associated with power drive systems. NEMA commented that by applying a
fixed speed efficiency testing at full load metric, the DOE misses the
true opportunity for energy savings. NEMA explained that while at
certain load points the motor losses might be a fraction (0.5 percent)
lower, the application of a PDS would save 25-50 percent of power in
the integral horsepower market and that these savings dwarf the 0.8
percent reduction associated with EL2. (NEMA, No. 22 at p. 5)
The currently prescribed test procedure in appendix B requires
testing electric motors at full-load only. In the October 2022 Final
Rule, DOE argued that variable-load applications primarily operate in a
range where efficiency is relatively flat as a function of load, and
therefore measuring the performance of these motors at full-load is
representative of an average use cycle. See 87 FR 63588, 63620.
Moreover, in this direct final rule, DOE is not proposing to separately
regulate inverter-only and synchronous electric motors, but rather DOE
is considering substitution effects to these motors for higher
efficiency standards for MEMs.
Lennox commented that there would be insufficient testing
facilities to accommodate significantly expanded motor product classes,
such as DOE expanding motor regulations into SNEMs, air-over,
synchronous or inverter-only motors, specifically in view of the
proposal to require third-party laboratory testing. (Lennox, No. 29 at
p. 5-6) The Joint Industry Stakeholders commented that DOE proposed
that electric motors certified to the new test procedure could only be
certified by 3rd party test labs, instead of certified labs in
accordance with longstanding recognized practice. They stated that
special and definite-purpose motors potentially classified as SNEM
could not possibly be tested, redesigned, retested, certified, and made
available for OEM use by the few third-party small electric motor
certification bodies recognized by DOE today. (Joint Industry
Stakeholders, No. 23 at p. 9) As discussed in section IV.A.1, in this
direct final rule, DOE is only amending standards for certain MEMs and
establishing standards for AO-MEMs and certain air-over polyphase
motors. Further, DOE understands the Joint Industry Stakeholders
comments to be directed at the proposals from the test procedure
rulemaking. Since this proposal, DOE published the October 2022 Final
Rule, where DOE decided to not adopt its proposal to require the use of
an independent testing program, and to instead continue permitting the
use of accredited labs as currently allowed through National Institute
of Standards and Technology (``NIST'') and National Voluntary
Laboratory Accreditation Program (``NVLAP'') accreditation. See 87 FR
62588, 63628-63629.
3. Equipment Classes
When evaluating and establishing energy conservation standards, DOE
divides covered equipment into equipment classes by the type of energy
used or by capacity or other performance-related features that justify
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such
factors as the utility of the feature to the consumer and other factors
DOE determines are appropriate. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q))
Due to the number of electric motor characteristics (e.g.,
horsepower rating, pole configuration, and enclosure), in the March
2022 Preliminary Analysis, DOE used two constructs to help develop
appropriate energy conservation standards for electric motors:
``equipment class'' and ``equipment class groups.'' An equipment class
represents a unique combination of motor characteristics for which DOE
is establishing a specific energy conservation standard. This includes
permutations of electric motor design types (i.e., NEMA Design A & B
(and IEC equivalents)), standard horsepower ratings (i.e., standard
ratings from 1 to 500 horsepower), pole configurations (i.e., 2-, 4-,
6-, or 8-pole), and enclosure types (i.e., open or enclosed). An
equipment class group (``ECG'') is a collection of electric motors that
share a common design trait. Equipment class groups include motors over
a range of horsepower ratings, enclosure types, and pole
configurations. Essentially, each equipment class group is a collection
of a large number of equipment classes with the same design trait. As
such, in the March 2022 Preliminary Analysis, DOE presented equipment
class groups based on electric motor design, motor topology, horsepower
rating, pole configuration and enclosure type. See Chapters 2.3.1 and
3.2.2 of the March 2022 Preliminary Analysis TSD.
Further, although DOE acknowledged that synchronous electric
motors, inverter-only electric motors and induction electric motors
>500 hp and <=750 hp would be within scope, DOE did not create separate
equipment classes for these electric motors and did not evaluate
separate energy conservation standards. (See Chapter 2.3.1.3 of the
March 2022 Preliminary Analysis TSD) However, DOE did evaluate
synchronous and inverter-only electric motors jointly with the
induction motors because the motors did not have a performance-related
feature that would justify a separate class. Id.
In response to the equipment classes, DOE received a number of
comments, which are presented below. Comments regarding SNEM and AO-
SNEM equipment classes will be addressed in a separate NOPR.
[[Page 36088]]
Regarding air-over motors, NEMA agreed that an air-over rating
warrants a separate equipment class because these motors are often
built in a smaller frame size to take advantage of the outside airflow.
NEMA stated that these motors built in a smaller frame size are limited
in their efficiency capability because less active material can fit in
them. (NEMA, No. 22 at p. 7)
Since the comments to the March 2022 Preliminary Analysis TSD, the
November 2022 Joint Recommendation specifically recommended that DOE
establish two separate equipment classes for AO-MEMs, i.e., standard
frame AO-MEMs and specialized frame AO-MEMs, because of their different
applications. The November 2022 Joint Recommendation identified
standard frame AO-MEMs as AO-MEMs sold in standard NEMA frame sizes
aligned with NEMA MG1, Table 13.2 and Table 13.3. In addition, the
November 2022 Joint Recommendation identified specialized, smaller
frame AO-MEMs as a group of motors for which the rated output exceeds
the horsepower-frame size limits in the aforementioned NEMA MG1 tables.
The Electric Motors Working Group noted that these motors are used in
specialty applications where the design is optimized to meet space
constraints and take advantage of higher-than-normal airflows, such as
in agriculture applications. They also stated that because of the
higher airflows, the motor operates at greater power densities than
standard-frame motors, which therefore results in the motor being
loaded to a slightly less efficient operating point. Accordingly, they
recommended these motors be separated into their own equipment class.
See November 2022 Joint Recommendation at 4-5.
Consistent with the November 2022 Joint Recommendation, in this
direct final rule, DOE is separating the air-over equipment class into
two equipment classes. As such, DOE is including ``AO-MEM (Standard
frame size),'' and renaming ``Specialized Frame Size AO-MEMs'' (from
the November 2022 Joint Recommendation) to ``AO-Polyphase (Specialized
frame size)''. DOE notes that the frame size constraints from
Recommendation 3.b. include frame sizes beyond those specifically in
the AO-MEM scope; as discussed in section III.A, 10 CFR 431.25(g)(7)
specifically states that a MEM built in a two-digit frame size would
only be an enclosed 56 NEMA frame size (or IEC metric equivalent),
whereas Recommendation 3.b. specifies maximum NEMA frame diameters at
48 NEMA frame size. Accordingly, to provide a more representative
naming convention for these motors, DOE is using ``AO-Polyphase
(Specialized frame size)'' in this direct final rule. DOE notes that
only the naming convention is changed compared to the November 2022
Joint Recommendation; the scope of motors being represented continues
to stay the same.
In addition, to clarify what is meant by ``standard frame size''
and ``specialized frame size,'' DOE is adding definitions in the CFR
consistent with the recommendations from the November 2022 Joint
Recommendation. Specifically, in this direct final rule, DOE is adding
a definition for ``standard frame size'' as ``aligned with the
specifications in NEMA MG 1-2016 section 13.2 for open motors, and NEMA
MG 1-2016 section 13.3 for enclosed motors.'' Further, DOE is adding a
definition for ``specialized frame size'' as ``means an electric motor
frame size for which the rated output power of the motor exceeds the
motor frame size limits specified for standard frame size. Specialized
frame sizes have maximum diameters corresponding to the following NEMA
Frame Sizes:''
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum NEMA frame diameter
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 48 ......... 48 48 48 48 140 140
1.5/1.1......................................................... 48 48 48 48 140 140 140 140
2/1.5........................................................... 48 48 48 48 140 140 180 180
3/2.2........................................................... 140 48 140 140 180 180 180 180
5/3.7........................................................... 140 140 140 140 180 180 210 210
7.5/5.5......................................................... 180 140 180 180 210 210 210 210
10/7.5.......................................................... 180 180 180 180 210 210 ......... .........
15/11........................................................... 210 180 210 210 ......... ......... ......... .........
20/15........................................................... 210 210 210 210 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Regarding motors already covered at 10 CFR 431.25(g), NEMA stated
that locked-rotor torque is not a typical design criterion used by end-
users and that this value is already captured in the NEMA Design A, B,
C etc. classification. NEMA also stated that locked-rotor torque is not
a reliable means for determining energy efficiency. (NEMA, No. 22 at p.
6) DOE agrees with the statement and is therefore not incorporating
locked-rotor torque as an equipment class identifier for MEMs currently
covered at 10 CFR 431.25(g).
Regarding synchronous and inverter-only electric motors, NEEA
recommended that DOE not create separate equipment classes because
these motors are used in the same applications as their induction motor
counterparts. (NEEA, No. 33 at p. 3) The Joint Advocates stated that
while they agree that inverter-only induction electric motors do not
have a unique performance-related feature or utility that justifies a
separate class from non-inverter and inverter-capable motors, they were
concerned that inverter-only motors may be at an unfair disadvantage
relative to single-speed induction motors when efficiencies are
evaluated only at full load. (Joint Advocates, No. 28 at p. 3) As
discussed in section IV.A.1.d of this document, DOE is not separately
regulating inverter-only and synchronous electric motors in this direct
final rule. Rather, DOE is only considering the substitution effects of
switching to these electric motors if higher standards for MEMs are
established. Otherwise, comments regarding the test procedure and
metric are addressed in section IV.A.2 of this document.
Therefore, Table IV-1 presents the ECGs considered in this direct
final rule. The equipment class groups represent a total of 425
equipment classes.
[[Page 36089]]
Table IV-1--Equipment Class Groups Considered
--------------------------------------------------------------------------------------------------------------------------------------------------------
Horsepower Pole
ECG ECG motor design type Motor topology rating configuration Enclosure
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... MEM 1-500 hp, NEMA Polyphase.................... 1-500 2, 4, 6, 8 Open.
Design A & B. Enclosed.
2................................... MEM 501-750 hp, NEMA Polyphase.................... 501-750 2, 4 Open.
Design A & B. Enclosed.
3................................... AO-MEM (Standard Frame Polyphase.................... 1-250 2, 4, 6, 8 Open.
Size). Enclosed.
4................................... AO-Polyphase Polyphase.................... 1-20 2, 4, 6, 8 Open.
(Specialized Frame Enclosed.
Size).
--------------------------------------------------------------------------------------------------------------------------------------------------------
4. Technology Options
In the March 2022 Preliminary Analysis market and technology
assessment, DOE identified several technology options that were
initially determined to improve the efficiency of electric motors, as
measured by the DOE test procedure. Table IV-2 presents the technology
options considered in the March 2022 Preliminary Analysis.
Table IV-2--March 2022 Preliminary Analysis Technology Options To
Increase Motor Efficiency
------------------------------------------------------------------------
Type of loss to reduce Technology option
------------------------------------------------------------------------
Stator I2R Losses............ Increase cross-sectional area of copper
in stator slots
Decrease the length of coil extensions
Rotor I2R Losses............. Increase cross-sectional area of end
rings.
Increase cross-sectional area of rotor
conductor bars.
Use a die-cast copper rotor cage.
Core Losses.................. Use electrical steel laminations with
lower losses. (watts/lb)
Use thinner steel laminations.
Increase stack length (i.e., add
electrical steel laminations).
Friction and Windage Losses.. Optimize bearing and lubrication
selection.
Improve cooling system design.
Stray-Load Losses............ Reduce skew on rotor cage.
Improve rotor bar insulation.
------------------------------------------------------------------------
In response to the technology options, DOE received several
comments.
Regarding electrical steel, NEMA stated that newer grade steels are
available but not in the high volumes required to replace today's
production, and that many new grades are imported and subject to
tariffs and delays. (NEMA, No. 22 at p. 10) NEMA argued that using
lower-loss steel would not necessarily result in a more efficient
electric motor. (NEMA, No. 22 at p. 10-13) Specifically, NEMA stated
that processing of the steel during motor manufacturing could alter
electrical steel performance. As an example, NEMA noted that thinner
steels would deform more when punched than thicker grades. (NEMA, No.
22 at p. 11) Additionally, NEMA stated that different steel grades
could have different heat transfer rates, which may affect motor
operating temperature and, thus, efficiency. (NEMA, No. 22 at p. 11)
NEMA provided certain test data illustrating its claims regarding the
potential for steel loss and motor efficiency to diverge. (NEMA, No. 22
at p. 12) Relatedly, NEMA provided finite element model data
illustrating magnetic flux density over the cross section of a 4-pole
induction motor and noting the nonuniformity of the flux density values
obtained, which NEMA observed could exceed the 1.5T-reference value
commonly used by steel producers to rate their products. (NEMA, No. 22
at p. 13-14)
Losses generated in the electrical steel in the core of an
induction motor can be significant and are classified as either
hysteresis or eddy current losses. Hysteresis losses are caused by
magnetic domains resisting reorientation to the alternating magnetic
field. Eddy currents are physical currents that are induced in the
steel laminations by the magnetic flux produced by the current in the
windings. Both hysteresis and eddy current losses generate heat in the
electrical steel.
In evaluating techniques used to reduce steel losses, DOE
considered two types of material: conventional non-oriented electrical
steel and ``non-conventional'' steels, which may contain high
proportions of boron or cobalt or lack metal grain structure
altogether. Conventional steels are more commonly used in electric
motors manufactured today. The three types of steel that DOE classifies
as ``conventional,'' include cold-rolled magnetic laminations, fully
processed non-oriented electrical steel, and semi-processed non-
oriented electrical steel. DOE does not model non-conventional
electrical steels in its analysis of electric motors, including cobalt-
based and amorphous steels. For additional details on DOE's software
modeling and analysis of electrical steel performance, see chapter 3 of
the direct final rule TSD.
DOE acknowledges the potential for increased non-oriented steel
demand arising from a larger trend toward electrification of vehicles
and equipment. However, DOE's research of publicly announced non-
oriented electrical steel manufacturing capacity expansions \30\ either
currently underway
[[Page 36090]]
or planned for the near future suggests that steelmakers, both US-based
and international, are anticipating increased demand and demonstrating
willingness to increase supply accordingly.
---------------------------------------------------------------------------
\30\ E.g., (1) US-based Cleveland-Cliffs doubles NOES capacity
by 2023, adding 70 kilotons of annual capacity in response to
customer demand.
(2) US-based Big River Steel (a subsidiary of United States
Steel Corporation) announced plans to increase annual NOES
production capacity by 200 kilotons by September 2023.
(3) JFE Steel reports plans to double NOES production capacity
by the first half of the 2024 fiscal year, which begins in April
2024.
(4) Baoshan Iron & Steel (``Baosteel'', a subsidiary of China
Baowu Steel Group) is reported to be expanding NOES production
capacity by 500 kilotons by March 2023.
(5) POSCO announced groundbreaking for a NOES production
facility which will approximately quadruple high-efficiency NOES
capacity to 400 kilotons by 2025.
---------------------------------------------------------------------------
Regarding tariffs on imported steels, DOE presented the costs for
various steel grades to manufacturers during interviews and updated the
costs based on input received. The input DOE received about steel
prices incorporated changes in costs due to importing delays, tariffs,
and global supply. Because the steel tariff applies to articles
imported into the United States, it does not directly affect prices
paid for steel in other nations, including those which manufacture
motors sold in the US market.
Regarding the uncertain ability of lower-loss electrical steel to
increase motor efficiency, electric motor manufacturers stated during
confidential interviews that lower-loss steel would generally increase
motor efficiency, even when considering the potential increase in steel
loss that can arise during manufacturing. Accordingly, DOE considers
lower-loss electrical steel to be an available option for improving
motor efficiency in general, even if not in all possible motor designs.
Electric motor manufacturers during confidential interviews did not
report having constructed or tested electric motor designs using what
appear to be the lowest-loss electrical steel grades available in the
market. In cases, manufacturers reported unfamiliarity with the grades.
As a result, DOE is not able to assess whether testing performed by
manufacturers, including the example presented by NEMA (NEMA, No. 22 at
p. 12), establishes a limitation on the degree of electric motor
efficiency improvement possible through use of increasingly lower-loss
electric steel.
Regarding the flux density map from finite element modeling
provided by NEMA, it is reasonable to expect variation in flux density
levels throughout both the motor laminations and over time, as NEMA
observes. DOE's analysis does not assume a constant flux density would
exist throughout an electric motor. Those variations would cause
instantaneous, localized steel loss levels to vary accordingly, and
depart from the manufacturer-rated values at a given, single reference
value (1.5T, commonly for non-oriented electric steels). All grades of
non-oriented electrical steel that DOE has identified share the
property of increasing loss with increasing flux density. Thus, the
flux density variation cited by NEMA would ostensibly exist for
electrical steels generally; it would not be unique to lower-loss steel
grades. Additionally, when evaluating use of a higher steel grade,
manufacturers would likely optimize the design for the grade in
question for any design likely to be built in significant volume. For
DOE's modeling, DOE considered a conservative approach to represent
performance of these lower-loss electrical steels, which is discussed
further in section IV.C.1.c of this document.
Some production requirements associated with using lower-loss steel
grades are understood and able to be accounted for with a cost. For
example, increasing the silicon content of an alloy may increase
resistivity (and thus, potentially reduce loss) but increase the
hardness of the grade as a side effect. The comparatively harder steel
may wear punching dies more rapidly, which would be likely to worsen
the quality of the punched steel laminations more quickly if tooling
were not replaced correspondingly more often or substituted with a
harder tooling material. More frequent tooling replacement and harder
tooling would be likely to add cost to the electric motor manufacturing
process, which DOE accounts for in the manufacturer impact analysis.
Separately, NEMA also commented on another technology option that
DOE considered. Specifically, NEMA stated that the benefits of reducing
the length of the coil extensions are not clear. It noted that to
reduce the I\2\R loss, the mean length of each turn in the end coil
region would have to be reduced during the coil winding stage but doing
so would increase the difficulty of winding insertion due to increased
crowding with adjacent coils. However, NEMA stated that if such a
reduction in mean length was feasible, it is likely to have already
been exploited to their full extent because it would reduce the amount
of copper in the winding, and would also be a cost-saving measure.
(NEMA, No. 22 at p. 3) DOE agrees that decreasing the length of the
coil extensions in the stator slots of an electric motor reduces the
resistive I\2\R losses, and reduces the material cost of the electric
motor because less copper is being used. DOE also agrees that there may
be limited efficiency gains, if any, for most electric motors using
this technology option. DOE understands that electric motors have been
produced for many decades and that many manufacturers have improved
their production techniques to the point where certain design
parameters may already be fully optimized. However, DOE cannot conclude
that this design parameter is fully optimized for all electric motors,
and therefore maintains that this is a design parameter that affects
efficiency and should be considered when designing an electric motor
because it is a technology option that continues to be technologically
feasible. DOE has previously made similar conclusions in the May 2014
Final Rule. See 79 FR 30934, 30960.
The CA IOUs strongly suggested that DOE update the maximum
technology feasible for electric motors to include, at a minimum, the
commercially available technology with the highest efficiency. The CA
IOUs provided data for commercially available electric motors, as well
as built and tested prototypes, that exceed the max-tech performance
assumption in the March 2022 Preliminary Analysis. (CA IOUs, No. 30 at
p. 3) For the analysis, DOE uses the maximum efficiency technology
option to represent the design option which yields the highest energy
efficiency that is technologically feasible within the scope of MEMs
and air-over electric motors, which are all induction motors. In their
comment, the CA IOU's present high efficiency motors that are all
outside the scope of this direct final rule, such as permanent magnet
synchronous motors, and electronically commutated motors. As such, DOE
is not amending the maximum technology design option in this direct
final rule.
Therefore, DOE maintains the same technology options from the March
2022 Preliminary Analysis in this direct final rule.
B. Screening Analysis
DOE uses the following five screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
(8) Technological feasibility. Technologies that are not
incorporated in commercial products or in commercially viable, existing
prototypes will not be considered further.
(9) Practicability to manufacture, install, and service. If it is
determined that mass production of a technology in commercial products
and reliable installation and servicing of the technology could not be
achieved on the scale necessary to serve the relevant market at the
time of the projected compliance date of the standard, then that
technology will not be considered further.
[[Page 36091]]
(10) Impacts on product utility. If a technology is determined to
have a significant adverse impact on the utility of the product to
subgroups of consumers, or result in the unavailability of any covered
product type with performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as products generally available in the United States at the time,
it will not be considered further.
(11) Safety of technologies. If it is determined that a technology
would have significant adverse impacts on health or safety, it will not
be considered further.
(12) Unique-pathway proprietary technologies. If a technology has
proprietary protection and represents a unique pathway to achieving a
given efficiency level, it will not be considered further, due to the
potential for monopolistic concerns.
10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, sections
6(c)(3) and 7(b).
In summary, if DOE determines that a technology, or a combination
of technologies, fails to meet one or more of the listed five criteria,
it will be excluded from further consideration in the engineering
analysis. The reasons for eliminating any technology are discussed in
the following sections.
As part of the May 2022 Preliminary Analysis, DOE requested
feedback, in part, on its screening analysis based on the five criteria
described in this section. 87 FR 11650. The subsequent sections include
comments from interested parties pertinent to the screening criteria,
DOE's evaluation of each technology option against the screening
analysis criteria, and whether DOE determined that a technology option
should be excluded (``screened out'') based on the screening criteria.
1. Screened-Out Technologies
In the March 2022 Prelim TSD, DOE screened out amorphous metal
laminations and plastic bonded iron powder (``PBIP'') from the
analysis. DOE requested further data on the feasibility of amorphous
steel being used in electric motors at scale. See chapter 3 of the
March 2022 Prelim TSD. In response, DOE received comments regarding the
technologies excluded from this engineering analysis.
Metglas commented that they strongly disagree with the decision to
exclude electric motors that use amorphous steel. Metglas stated that
Hitachi Industrial Equipment Systems Co., Ltd. (Hitachi Sanki Systems)
has commercially produced higher efficiency air compressors (IE5 class)
with an amorphous metal-based motor since 2017. Metglas noted that
Hitachi Ltd. is using novel motor topologies to optimize the use of
amorphous foil in the fabrication process. Metglas claimed that other
motor producers are actively designing amorphous metal-based motors,
and while amorphous metal-based motors are certainly not predominant
today, they do represent where the maximum technological feasibility
efficiency levels can be set for electric motors. Metglas claimed the
losses when using an amorphous metal stator have been shown to drop by
more than 75 percent compared to a conventional non-oriented electrical
steel, and that this allows for higher operational frequencies which
reduces the overall motor size for the same output power. Furthermore,
Metglas claimed higher efficiencies in other electrical appliances can
be achieved with more efficient amorphous-based motors. (Metglas, No.
24 at p. 1) Metglas requested that DOE consider the maximum technical
feasibility efficiency be based on the performance of amorphous metal
containing motors, but understands that the DOE cannot set efficiency
levels based on niche materials that have not been widely demonstrated
on a commercial scale. (Metglas, No. 24 at p. 2) On the other hand,
NEMA commented that amorphous steel is not a direct replacement for the
current electrical steel that is in motors, and stated that this option
is unproven since NEMA is not aware of any successful prototype motors
using this steel. (NEMA, No. 22 at p. 14)
DOE reviewed the information submitted by Metglas and notes that
the motors provided appear to all require an inverter to drive and are
thus not in the scope of this direct final rule. DOE understands the
potential benefits of using amorphous steel, particularly the reduction
in core losses during operation, but was unable to identify any
electric motors within the scope of this rule using amorphous steel.
Additionally, as stated in the March 2022 Preliminary TSD, amorphous
steel is a very brittle material which makes it difficult to punch into
motor laminations. Amorphous steel may also be less structurally stiff,
requiring additional mechanical support to implement. Finally,
amorphous steel may entail greater acoustic noise levels, which may be
unsuitable for some applications or require design compromises to
mitigate. As such, with it not being definitive that amorphous steel is
able to meet all the screening criteria, DOE is continuing to screen
out amorphous metal in this direct final rule on the basis of
technological feasibility.
Accordingly, consistent with the March 2022 Preliminary Analysis,
DOE is continuing to screen out amorphous metal laminations and PBIP in
this direct final rule.
2. Remaining Technologies
In the March 2022 Prelim TSD, DOE did not screen out the following
technology options: Increasing cross-sectional area of copper in stator
slots; decreasing the length of coil extensions; increasing cross-
sectional area of end rings; increasing cross-sectional area of rotor
conductor bars; using a die-cast copper rotor cage; using electrical
steel laminations with lower losses (watts/lb); using thinner steel
laminations; increasing stack length; optimizing bearing and
lubrication selection; improving cooling system design; reducing skew
on rotor cage; and improving rotor bar insulation. See chapter 3 of the
March 2022 Prelim TSD.
Regarding copper die-cast rotors, NEMA commented in opposition of
DOE's decision to not screen out copper die-cast rotors. NEMA stated
that only one manufacturer offers NEMA Design A, B, or C motors with
copper rotor cages, and that the largest horsepower offered of these
motors was 20 HP. NEMA also stated that they are not practicable to
manufacture because of added equipment requirements, higher energy
costs to melt the copper, die lifespan that is 10 percent that of dies
used for aluminum, and a casting piston life of only 500 rotors. NEMA
also stated that the increased locked-rotor current due to the copper
rotor would push certain motors out of NEMA Design B requirements and
reduce consumer utility. NEMA finally stated that the higher melting
point of copper (1084 deg C) vs. aluminum (660 deg C) poses health and
safety issues for plant workers, and that DOE failed to rebut this
claim with evidence in 2012. (NEMA, No. 22 at p. 4-5)
Aluminum is the most common material used today to create die-cast
rotor bars for electric motors. Some manufacturers that focus on
producing high-efficiency designs have started to offer electric motors
with die-cast rotor bars made of copper. Copper offers better
performance than aluminum because it has better electrical conductivity
(i.e., a lower electrical resistance). However, because copper also has
a higher melting point than aluminum, the casting process becomes more
difficult and is likely to increase both production time and cost.
[[Page 36092]]
DOE recognizes that assessing the technological feasibility of
copper die-cast rotors in high-horsepower motors (above 30 HP) is made
more complex by the fact that manufacturers do not offer them
commercially. That could be for a variety of reasons, among them: (1)
large copper die-cast rotors are physically impossible to construct;
(2) they are possible to construct, but impossible to construct to
required specifications, or (3) they are possible to construct to
required specifications, but would require large capital investment to
do so and would be so costly that few (if any) consumers would choose
them. As stated in the March 2022 Preliminary TSD, electric motors
incorporating copper die-cast rotor cages are already commercially
available by large manufacturers for motors up to 30 horsepower.\31\ As
such, DOE does not have enough evidence to screen out copper die-cast
rotors on the basis of practicability to manufacture, install, and
service, or adverse impacts to equipment utility or availability.
Additionally, DOE is hesitant to screen out copper die-cast rotors on
the basis of technological feasibility because there is nothing to
suggest the advantages associated with copper rotors would not occur
beyond a certain size. Therefore, DOE's research into commercially
available electric motors with copper die-cast rotors does not conclude
that copper die-cast rotors are either: (1) physically impossible to
construct, or (2) possible to construct, but impossible to construct to
required specifications.
---------------------------------------------------------------------------
\31\ DOE is aware of two large manufacturers--Siemens and SEW-
Eurodrive--that offer die-cast copper rotor motors up to 30-
horsepower.
---------------------------------------------------------------------------
DOE considers a higher factory overhead markup (which includes all
the indirect costs associated with production, indirect materials and
energy use, taxes, and insurance) for copper die-cast rotors in the
engineering analysis. See Chapter 5 of the direct final rule TSD. In
addition, DOE understands that large capital investments may be needed
for copper die-cast rotors, which is addressed as additional conversion
costs in the manufacturer impact analysis (see section IV.J.4).
Regarding the higher melting point of copper versus aluminum (1085
degrees Celsius versus 660 degrees Celsius), although the increased
temperature could theoretically affect the health or safety of plant
workers, DOE does not believe that this potential impact is
sufficiently adverse to screen out copper as a die cast material for
rotor conductors. The process for die casting copper rotors involves
risks similar to those of die casting aluminum. DOE believes that
manufacturers who die-cast metal at 660 Celsius or 1085 Celsius (the
respective temperatures required for aluminum and copper) would need to
maintain strict safety protocols in both cases. DOE understands that
many plants already work with molten aluminum die casting processes and
believes that similar processes could be adopted for copper. Since DOE
has not received any supporting data about the increased risks
associated with copper die-casting versus aluminum die-casting, DOE is
not screening out copper die-cast rotors from this direct final rule.
Otherwise, through a review of each technology, DOE concludes that
all of the other identified technologies listed in section IV.A.4 met
all five screening criteria to be examined further as design options in
DOE's direct final rule analysis. The design options screened-in are
consistent with the design options from the March 2022 Preliminary
Analysis. DOE determined that these technology options are
technologically feasible because they are being used or have previously
been used in commercially-available products or working prototypes. DOE
also finds that all of the remaining technology options meet the other
screening criteria (i.e., practicable to manufacture, install, and
service and do not result in adverse impacts on consumer utility,
product availability, health, or safety). For additional details, see
chapter 4 of the direct final rule TSD.
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of electric motors. There
are two elements to consider in the engineering analysis; the selection
of efficiency levels to analyze (i.e., the ``efficiency analysis'') and
the determination of product cost at each efficiency level (i.e., the
``cost analysis''). In determining the performance of higher-efficiency
equipment, DOE considers technologies and design option combinations
not eliminated by the screening analysis. For each equipment class, DOE
estimates the baseline cost, as well as the incremental cost for the
equipment at efficiency levels above the baseline. The output of the
engineering analysis is a set of cost-efficiency ``curves'' that are
used in downstream analyses (i.e., the LCC and PBP analyses and the
NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing products (in other words, based on
the range of efficiencies and efficiency level ``clusters'' that
already exist on the market). Using the design option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended
using the design option approach to interpolate to define ``gap fill''
levels (to bridge large gaps between other identified efficiency
levels) and/or to extrapolate to the max-tech level (particularly in
cases where the max-tech level exceeds the maximum efficiency level
currently available on the market).
In this rulemaking, DOE applied a combination of the efficiency-
level approach and the design-option approach to establish efficiency
levels to analyze. The design-option approach was used to characterize
efficiency levels that are not available on the market but appear to be
market solutions for those higher efficiency levels if sufficient
demand existed. For the efficiency levels available on the market,
sufficient performance data was publicly available to characterize
these levels.
a. Representative Units Analyzed
Due to the large number of equipment classes, DOE did not directly
analyze all equipment classes of electric motors considered in this
direct final rule. Instead, DOE selected representative units based on
two factors: (1) the quantity of motor models available within an
equipment class and (2) the
[[Page 36093]]
ability to scale to other equipment classes.
Table IV-3 presents the representative units DOE analyzed in the
March 2022 Preliminary Analysis. DOE only analyzed NEMA Design B
representative units.
Table IV-3--March 2022 Preliminary Analysis Representative Units Analyzed
----------------------------------------------------------------------------------------------------------------
Representative unit
ECG/Design type horsepower (4 poles, Represented horsepower range (all poles, all
enclosed) enclosures)
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design B........................ 5 1 <= hp <=5.
30 5 < hp <= 50.
75 51 < hp <= 100.
*150 101 < hp <= 200.
*250 201 < hp <= 500.
AO-MEM, NEMA Design B..................... 5 1 < hp <= 20.
30 21 < hp <= 50.
75 51 < hp <= 500.
----------------------------------------------------------------------------------------------------------------
* While these representative units were not directly analyzed in the engineering analysis, they were added to
represent consumers of larger sized electric motors for the LCC and NIA analyses.
DOE received a comment regarding motor testing at higher efficiency
levels. NEMA stated that DOE should test a greater number of
representative units across all design types to better inform scaling
assumptions, and that for higher efficiency levels, testing is more
important than scaling. In addition, NEMA commented that DOE places too
much reliance on untested models, scaling and interpolation. NEMA
commented that the only appropriate way to evaluate non-represented
equipment classes is to study them through testing (including prototype
construction for testing, as appropriate). (NEMA, No. 22 at p. 15, 24)
DOE recognizes that scaling motor efficiencies is a complicated
proposition that has the potential to result in efficiency standards
that are not evenly stringent across all equipment classes. However,
given the extremely high volume of horsepower rating, pole
configuration, and enclosure combinations, DOE cannot feasibly analyze
all of these variants directly, hence, the need for scaling.
For the analysis, DOE obtained electric motor performance data from
a catalog reflecting electric motors currently available in the U.S.
market and views this database as representative of the full range of
motors that can be purchased. Specifically, DOE created a database
which contains information regarding the characteristics of the motor
(motor performance values like horsepower output, pole configuration,
NEMA Design letter, etc.), and the full-load efficiency (``2022 Motor
Database''). DOE collected performance data from online catalogs for
four major motor manufacturers in 2022: ABB (which includes the
manufacturer formerly known as Baldor Electric Company), Nidec Motor
Corporation (which includes the US Motors brand), Regal-Beloit
Corporation (which includes the Marathon and Leeson brands), and WEG
Electric Motors Corporation.\32\ Based on market information from the
Low-Voltage Motors World Market Report,\33\ DOE estimates that the four
major motor manufacturers noted above comprise the majority of the U.S.
motors market and are consistent with the motor brands considered in
this direct final rule. In addition, DOE tested multiple motors and
obtained test reports detailing the efficiency of these motors at their
rated load, along with many other measurements and technical
specifications, to inform the scaling relationships and efficiency
analysis described in this direct final rule.
---------------------------------------------------------------------------
\32\ ABB (Baldor-Reliance): Online Manufacturer Catalog,
accessed March 22, 2022. Available at https://www.baldor.com/catalog#category=2; Nidec: Online Manufacturer Catalog, accessed
April 8, 2022. Available at ecatalog.motorboss.com/Catalog/Motors/ALL; Regal (Marathon and Leeson): Online Manufacturer Catalog,
accessed May 25, 2022. Available at https://www.regalbeloit.com/Products/Faceted-Search?category=Motors&brand=Leeson,Marathon%20Motors; WEG: Online
Manufacturer Catalog, accessed March 22, 2022. Available at https://catalog.wegelectric.com/.
\33\ Based on the OMDIA, Low-Voltage Motors Intelligence
Service, Annual 2020 Analysis(OMDIA Report November 2020) Table 3:
Market Share Estimates for Low-voltage Motors: Americas; Suppliers
`share of the Market:2019.
---------------------------------------------------------------------------
Using the 2022 Motor Database, and along with testing and modeling,
DOE affirms that the scaling methodologies employed are accurate for
the purposes of determining energy conservation standards, and
therefore maintains the current scaling methodology. Further, the
relationships used to scale between efficiency and a combination of
horsepower, pole count, and enclosure are consistent with previously
used and validated methods of scaling, which are based on Table 12-12
of NEMA MG 1-2016. For more detailed discussion on scaling, see section
IV.C.4. Consequently, DOE has concluded that scaling is necessary and
suitable for establishing appropriate efficiency levels for new or
amended energy conservation standards for electric motors.
For this direct final rule, DOE updated several representative
units based on the November 2022 Joint Recommendation. Overall, DOE
updated the representative units to be based on both NEMA Design A and
B instead of only NEMA Design B. The November 2022 Joint Recommendation
specifically noted that to achieve IE4 levels, manufacturers would
likely shift from NEMA Design B to NEMA Design A motors.
DOE notes that the one main difference between NEMA Design A and
Design B is that Design A does not have a locked-rotor current limit.
Locked-rotor current is the steady-state current applied to a motor, at
its rated voltage, when the rotor is stationary. It is a critical
design characteristic of induction motors because higher locked-rotor
currents can negatively impact (or even damage) the starting circuit if
the starting circuit is not equipped to handle the locked-rotor
current. One of the ways to improve motor efficiency is to use lower
core-loss electrical steel, but a common tradeoff of these low core-
loss steels is a lower permeability \34\ that requires the motor to
have a higher locked-rotor current to meet the torque requirements of
NEMA Design A and B. DOE analyzed a sample of over 3,000 NEMA Design A
and B motors currently available on the market and found that
[[Page 36094]]
over 50 percent of them are already at or above 90 percent of the NEMA
Design B locked-rotor current limit. DOE notes that higher energy
conservation standards could incentivize manufacturers to offer NEMA
Design A motors in place of their Design B motors.
---------------------------------------------------------------------------
\34\ The magnetic permeability of a material determines the
magnitude of magnetic flux density in the material after a magnetic
field is applied to it, and the magnetic flux density is
proportional to the amount of torque generated in an electric motor.
---------------------------------------------------------------------------
While it appears to be possible to design NEMA Design B motors that
are at higher efficiency levels than current standards, these NEMA
Design B motors would require some combination of longer stack lengths,
wider core laminations, and/or higher slot fills, all of which could
require additional equipment and retooling by the manufacturer. Because
NEMA Design A and B motors are in the same equipment class, in the case
of higher standards, manufacturers could opt to shift their offerings
to NEMA Design A motors that do not require nearly the same magnitude
of investment by the manufacturer. This shift to NEMA Design A
offerings could result in additional installation costs, discussed in
section IV.F.2. DOE's review of current motor catalogs suggests
multiple manufacturers representing their IE4 motors as NEMA Design
A.\35\ As such, in this direct final rule, the representative unit
designs include both NEMA Design A and Design B.
---------------------------------------------------------------------------
\35\ ABB Product Brochure: NEMA Super-E Premium efficient
motors. (Last accessed December 2, 2022.) https://library.e.abb.com/public/e35d57ce4df3160285257d6d00720f51/9AKK106369_SuperE_1014_WEB.pdf.
WEG Super Premium Efficiency Catalog: https://www.weg.net/catalog/weg/US/en/c/MT_1PHASE_LV_TEFC_W22_STANDARD/list?h=3a6a6e81.
---------------------------------------------------------------------------
In addition, DOE updated the horsepowers analyzed, and the range of
horsepowers each representative unit represents. First, DOE updated the
MEM Design A/B 250 hp representative unit to 350 hp to better represent
the horsepower range between 250 hp to 500 hp, which the Electric
Motors Working Group recommended to remain at Premium Level/IE3 level
(see Recommendation #1 in section II.B.3). Second, DOE added a MEM
Design A/B representative unit at 600 hp to represent and analyze
electric motors rated over 500 hp and up to 750 hp (see Recommendation
#2 in section II.B.3). Third, DOE split the air-over equipment class
into AO-MEM (Standard Frame Size) and AO-Polyphase (Specialized Frame
Size), as discussed in section IV.A.3, and added the following
representative units: (1) a representative unit to represent the
horsepower range between 100 hp to 250 hp for AO-MEM (Standard Frame
Size), which the Electric Motors Working Group recommended at Super
Premium/IE4 level; and (2) a representative unit to represent the
horsepower range between 1 hp to 20 hp for AO-Polyphase (Specialized
Frame Size), which the Electric Motors Working Group recommended at
fire pump level (see Recommendation #3 in section II.B.3). DOE notes
that the 250 hp limit for AO-MEM (Standard Frame Size) corresponds to
the horsepower output range observed in the 2022 Motor Database.
Otherwise, similar to the March 2022 Preliminary Analysis, DOE
chose the horsepower ratings that constitute a high volume of motor
models and approximate the middle of the range of covered horsepower
ratings so that DOE could develop a reasonable scaling methodology. DOE
did not vary the pole configuration of the representative classes it
analyzed because analyzing the same pole configuration provided the
strongest relationship upon which to base its scaling. Keeping as many
design characteristics constant as possible enabled DOE to more
accurately identify how design changes affect efficiency across
horsepower ratings. For each motor topology, DOE directly analyzed the
most common pole-configuration, which was 4-pole.
Table IV-4 presents the representative units analyzed, and the
covered horsepower ranges for each of the representative units.
Table IV-4--Representative Units Analyzed
----------------------------------------------------------------------------------------------------------------
Representative unit
ECG Representative horsepower (4 poles, Represented horsepower range (all
unit (RU) enclosed) poles, all enclosures)
----------------------------------------------------------------------------------------------------------------
MEM 1-500 hp, NEMA Design A & B.. 1 5 1 <= hp <= 5.
2 30 5 < hp <= 20.
20 < hp <= 50.
3 75 50 < hp < 100.
4 150 100 <= hp <= 250.
5 350 250 < hp <= 500.
MEM 501-750 hp, NEMA Design A & B 6 600 500 < hp <= 750.
AO-MEM (Standard Frame Size)..... 7 5 1 <= hp <= 20.
8 30 20 < hp <= 50.
9 75 50 < hp < 100.
10 150 100 <= hp <= 250.
AO-Polyphase (Specialized Frame 11 5 1 <= hp <= 20.
Size).
----------------------------------------------------------------------------------------------------------------
b. Baseline Efficiency
For each equipment class, DOE generally selects a baseline model as
a reference point for each class, and measures changes resulting from
potential energy conservation standards against the baseline. The
baseline model in each equipment class represents the characteristics
of an equipment typical of that class (e.g., capacity, physical size).
Generally, a baseline model is one that just meets current energy
conservation standards, or, if no standards are in place, the baseline
is typically the most common or least efficient unit on the market.
In the March 2022 Preliminary Analysis, for current scope motors in
10 CFR 431.25, DOE used the current energy conservation standards in
Table 5 of 10 CFR 431.25 as the baseline. For AO-MEMs, DOE used a
baseline representing the lowest efficiencies available in the market
based on catalog listings. See Chapter 5 of the March 2022 Prelim TSD.
In response to the March 2022 Preliminary Analysis, DOE received
comments on how the baseline efficiencies were established.
The Joint Advocates encouraged DOE to both clarify and refine the
baseline efficiency levels for air-over electric motors. (Joint
Advocates, No. 27 at pp. 2-3) Specifically, they commented that while
the March 2022 Preliminary Analysis stated that the baseline
[[Page 36095]]
efficiency levels of the currently covered motors were the same as the
air-over versions (See: EERE-2020-BT-STD-0007-0010, p. 5-7), Table
5.3.6 of the March 2022 Prelim TSD showed the baseline efficiency
levels for the currently covered motors as EL1 for the air-over
variants. Further, the Joint Advocates commented that the assumption
that baseline air-over motors are less efficient than the baseline in
the current standard for covered motors is supported by the 2015
Appliance Standards and Rulemaking Federal Advisory Committee
(``ASRAC'') term sheet for fans and blowers,\36\ which included default
air-over motor efficiencies less than those shown in the March 2022
Preliminary Analysis. The Joint Advocates commented that they suspected
that the lack of coverage for air-over motors means that there are
available models that may be considerably less efficient than
equivalent non-air-over motors. In addition, the Joint Advocates
commented that the appropriate baseline efficiency levels for AO motors
will depend heavily on the final AO motor test procedure. (Joint
Advocates, No. 27 at pp. 2-3)
---------------------------------------------------------------------------
\36\ See EERE-2013-BT-STD-0006-0179, p. 18, www.regulations.gov/document/EERE-2013-BT-STD-0006-0179.
---------------------------------------------------------------------------
DOE notes that the Joint Advocates' statement that the baseline
efficiency levels of currently covered motors are the same as the air-
over versions in the March 2022 Prelim TSD is incorrect. The March 2022
Prelim TSD stated that, since AO motors are designed largely the same
as non-AO motors, DOE used the same higher efficiency levels for AO MEM
motors, and did not state that baseline efficiency levels of currently
covered motors are the same as the air-over versions. This is shown in
Table 5.3.6 and Table ES3.3.3 of the March 2022 Preliminary TSD, which
also present the baseline efficiency for air-over motors as lower than
the baseline for currently regulated motors.
Otherwise, DOE acknowledges that because air-over electric motors
are not currently regulated, air-over electric motors will likely be
less efficient than currently regulated non-air-over electric motors
available on the market. In order to understand the efficiency of air-
over electric motors currently available, DOE reviewed the 2022 Motor
Database. With that, DOE confirmed that air-over electric motors were
less efficient than currently regulated non-air-over electric motors
and also noted that AO-MEMs were only available up to 250 hp. However,
DOE did not identify baselines as low as what was considered in the
2015 ASRAC term sheet for fans and blowers; because DOE had current
market data through the 2022 Motor Database, DOE decided to consider
more up-to-date baseline efficiencies. As such, DOE maintained the
engineering analysis for AO-MEMs from the March 2022 Preliminary
Analysis.
The Joint Advocates commented that DOE's specification of a single
target test temperature of 75 [deg]C for all AO motors may not be
representative. For example, the Joint Advocates commented that it is
plausible that one or more of the AO motors that DOE tested may run at
higher temperatures in the field, which would result in lower real-
world efficiency. As such, they noted that artificially cooling a
hotter running motor beyond realistic operating temperatures could
result in AO motor efficiency ratings that are not representative both
in comparison to other AO motors and the equivalent non-AO motors.
Therefore, the Joint Advocates recommend that DOE analyze appropriate
baseline efficiency levels for AO motors. (Joint Advocates, No. 27 at
p. 3) In the October 2022 Final Rule, DOE addressed the single-target
temperature concerns by specifying that the requirement to use a single
target temperature of 75 [deg]C only applies to air-over motors that do
not have a specified temperature rise. As such, if the temperature rise
is specified on the motor, such temperature rise will be used to
determine the target temperature. 87 FR 63588, 63614.
Accordingly, in this direct final rule, DOE included the following
baseline efficiencies, which are summarized below in Table IV-5:
For ECG 1, DOE used the current energy conservations standards in
Table 5 of 10 CFR 431.25 to establish the baseline efficiency for each
representative unit analyzed. The standards for this ECG align with
Table 12-12 of NEMA MG 1-2016 ``Full-Load Efficiencies for 60 Hz
Premium Efficiency . . .'' and is commonly referred to by industry as
``NEMA Premium'' or IE3 levels.
For ECGs 2 and 3, DOE used available catalog data to understand the
efficiencies of motors offered. DOE observed that the lowest
efficiencies at multiple horsepowers aligned with the efficiencies
found in Table 12-11 of NEMA MG 1-2016 ``Full-Load Efficiencies of 60
Hz Energy-Efficient Motors''. These levels of efficiency are commonly
referred to as ``fire pump electric motor levels'' since they largely
correspond to the energy conservations standards for fire pump motors
set out in Table 7 of 10 CFR 431.25. As such, DOE set the baseline for
ECGs 2 and 3 in line with fire pump electric motor levels.
For ECG 4, during the electric motor working group negotiations it
was discussed that catalog data would not accurately represent the
efficiencies of these ``specialized'' frame size motors since they are
designed be placed in larger equipment based on manufacturer
specifications, and not typically sold through publicly available
catalogs. DOE understands that given a fixed horsepower output,
reducing frame size will restrict the potential for efficiency
improvements in a motor and may make improvements in efficiency more
expensive compared to a larger motor. Because the electric motors in
ECG 4 are smaller versions of those in ECG 3, DOE assumed that the
baseline efficiency for ECG 4 would be an offset version of the
baseline of ECG 3. DOE decided to quantify the offset in terms of `NEMA
bands' because these bands are commonly used by industry when
describing motor efficiency. One NEMA band represents a 10 percent
reduction in motor losses from the previous efficiency value; Table 12-
10 of NEMA MG 1-2016 specifies the list of selectable efficiency
values. DOE received feedback from manufacturers that they typically
design motors in increments of 20 percent loss differences or more
because of motor efficiency test variability and marketing clarity.
This 20 percent loss is consistent with the IE level designations, in
that each IE level that is included in IEC 60034-30-1:2014, starting
from IE1 (lowest efficiency) to IE4 (highest efficiency), is
approximately in increments of 20 percent loss difference. As such, DOE
assumed the baseline for ECG 4 would be 2 NEMA bands (or 20 percent
loss difference) lower than the baseline of ECG 3 due to reduced size
of ECG 4 motors. This baseline corresponds with the IE1 level, the
lowest level defined by IEC 60034-30-1:2014.
[[Page 36096]]
Table IV-5--Baseline Efficiencies Analyzed
----------------------------------------------------------------------------------------------------------------
ECG ECG motor design type RU Description
----------------------------------------------------------------------------------------------------------------
1.................................. MEM 1-500 hp, NEMA Design A & B 1 NEMA Premium/IE3.
2
3
4
5
2.................................. MEM 501-750 hp, NEMA Design A & 6 Fire Pump.
B.
3.................................. AO-MEM (Standard Frame Size)... 7 Fire Pump.
8
9
10
4.................................. AO-Polyphase (Specialized Frame 11 2 NEMA bands below Fire
Size). Pump.
----------------------------------------------------------------------------------------------------------------
c. Higher Efficiency Levels
As part of DOE's analysis, the maximum available efficiency level
is the highest efficiency unit currently available on the market. DOE
also defines a ``max-tech'' efficiency level to represent the maximum
possible efficiency for a given product.
In the March 2022 Preliminary Analysis, DOE established the higher
efficiency levels by shifting the baseline efficiencies up a certain
number of NEMA bands. For ECG 1, EL 1 represented a 1 NEMA band
increase over baseline efficiency, EL 2 a 2 NEMA band increase, and so
on until max-tech. For ECG 3 of this direct final rule (referred to as
``AO-MEMs'' in the March 2022 Preliminary Analysis), EL 1 was NEMA
Premium because this ECG had a lower baseline at fire pump levels. EL 2
was 1 NEMA band above premium, EL 3 was 2 NEMA bands above NEMA
Premium, and the max-tech was the same as ECG 1. See Chapter 5 of the
March 2022 Prelim TSD.
In response to the March 2022 Preliminary Analysis, DOE received
comments regarding the analysis used to determine efficiencies at
higher levels.
NEMA stated that any performance modeling done by DOE should rely
on multiple tested models rather than a single unverified motor
performance model (NEMA, No. 22 at p. 2-3). NEMA also stated that
building and testing models with high enough volumes to ensure
repeatability is the only way to prove the performance of a new steel.
(NEMA, No. 22 at p. 11,13)
While DOE acknowledges that testing individual models is the most
ideal way to gather performance data for electric motors, given the
extremely high volume of horsepower rating, pole configuration, and
enclosure combinations, DOE cannot feasibly analyze all of these
variations directly, hence, the need for scaling and modeling.
Accordingly, DOE retained an electric motors subject matter expert
(``SME'') with significant experience in terms of both design and
related software, who prepared a set of electric motor designs with
increasing efficiency.
DOE concurs that modeling is not an exact equivalent to testing in
all regards, and that relative to physical motor units, modeled results
may over- or -underestimate performance. That prototyping and testing
of production runs are important motor tools does not imply, however,
that properly modeled motors would carry no predictive power and could
not be of value in estimating electric motor performance. Through
confidential interviews of electric motor manufacturers, DOE learned
that performance modeling, along with prototyping, is a central element
in modern electric motor development. Therefore, DOE does not find
justification to abandon modeling as an analytical practice. DOE pairs
and informs modeled results using physical testing and teardown of
motors purchased on the market, and from performance data collected in
the 2022 Motor Database, as detailed in chapter 5 of the direct final
rule TSD. The motors that were torn down represented a range of
horsepowers, and had efficiencies rated at 2 to 3 NEMA bands above
their respective standards. As new designs were created, DOE's SME
ensured that the critical performance characteristics that define a
NEMA design letter (e.g., locked-rotor torque, breakdown torque, pull-
up torque, and locked-rotor currents) were maintained.
As an example on how the modeling was informed by teardowns, DOE's
SME used lamination diameters measured during the teardowns as limits
for the software models. After establishing baseline models, DOE used
the motor design software to incorporate design options (generated in
the market and technology assessment and screening analysis) to
increase motor efficiency all the way up to the max-tech design. This
procedure has been utilized to inform scaling relationships in previous
rulemakings, and as such, DOE is continuing to use motor performance
modeling as the basis of its efficiency analysis in this direct final
rule.
In recognition of the potential for electrical steel quality to
vary and of modeled results to diverge from test results of production
electric motor designs, DOE opted to use a conservative approach when
modeling the performance of electrical steels by using the guaranteed
maximum core loss values for various steel grades in place of
``average'' or ``typical'' core loss per pound values. Purchasers of
electrical steel cannot rely on a given sample of electrical steel
exceeding (i.e., carrying lower loss) the guaranteed loss. However, on
a larger scale the steel performance would be expected to converge to
the average if steel manufacturers are accurately representing their
products.
Separately, NEMA stated that the inrush current of multiple models
exceeds the NEMA Design B and C locked-rotor current limits for the
following representative units: 5HP, Design B; 5HP, Design C; and 50
HP, Design C. (NEMA, No. 22 at p. 3) NEMA also stated that in order to
comply with the test procedure, motors may become NEMA Design A motors
with higher inrush current, and that this higher current could create
safety issues on other components and would require upgrades and
modifications to electrical components of the motor. It stated that not
being able to satisfy NEMA Design B requirements would present a loss
of consumer utility. (NEMA, No. 22 at p. 2)
DOE disagrees with NEMA's claim that the test procedure rule would
require a change in motor design to comply with standards. DOE
understands NEMA's comment to relate to the changes to the represented
value formula (currently in 10 CFR 429.64) proposed in the test
procedure NOPR (86 FR 71710, December 17, 2021). DOE addressed concerns
regarding the
[[Page 36097]]
updates to the test procedure in the October 2022 Final Rule;
specifically, DOE noted that while DOE proposed changes in the formulas
used to determine the represented value of a basic model, DOE did not
propose to change how the compliance of a given basic model is
determined. As such, DOE concluded that the compliance or noncompliance
of a basic model would remain unchanged by the publication of this
final rule, and therefore, disagreed with NEMA that basic model
redesigns would be required to ensure compliance. 87 FR 63588, 63631-
63633
As for the representative unit designs not complying with NEMA
Design B locked-rotor current requirements, DOE agrees and notes that
the voltages specified for those units in the March 2022 Preliminary
TSD were incorrect and will be corrected in the TSD of this direct
final rule. With that voltage correction, the locked-rotor current
units for the mentioned representative units fell within NEMA Design B
limits. However, as discussed in section IV.C.1.a, DOE is considering
NEMA Design A at higher efficiency levels.
As such, for this direct final rule, DOE considered several design
options for higher efficiencies: improved electrical steel for the
stator and rotor, using die-cast copper rotors, increasing stack
length, and any other applicable design options remaining after the
screening analysis when improving electric motor efficiency from the
baseline level up to a max-tech level. As each of these design options
are added, the manufacturer's cost generally increases and the electric
motor's efficiency improves. DOE worked with an SME to develop the
highest efficiency levels technologically feasible for each
representative unit analyzed, and used a combination of electric motor
software design programs and SME input to develop these levels. The SME
also checked his designs against tear-down data and calibrated his
software using the relevant test results. DOE notes that for all
efficiency levels of directly modeled representative units, the frame
size was constrained to that of the baseline unit. DOE also notes that
the full-load speed of the simulated motors did not stay the same
throughout all efficiency levels. Depending on the materials used to
meet a given efficiency level, the full-load speed of the motor may
increase compared to a lower efficiency model, but for the
representative units analyzed this was not always the case. See chapter
5 of the TSD for more details on the full-load speeds of modeled units.
For the max-tech efficiencies in the engineering analysis, DOE
considered 35H210 silicon steel, which has the lowest theoretical
maximum core loss of all steels considered in this engineering
analysis, and the thinnest practical thickness for use in motor
laminations. In addition, the max-tech efficiency designs all use die-
cast copper rotors, because copper offers better performance than
aluminum since it has better electrical conductivity (i.e., a lower
electrical resistance), leading to a higher-efficiency design. The max-
tech designs also have the highest possible slot fill, maximizing the
number of motor laminations that can fit inside the motor. Further
details are provided in Chapter 5 of the direct final rule TSD.
For intermediate efficiency levels that were higher than an ECG's
baseline but not the max-tech efficiency considered, DOE used different
approaches to establish these levels depending on the ECG, as discussed
in the next few paragraphs.
For ECG 1, EL 1 was set at IE4 levels (also referred to as NEMA
Super-Premium) after receiving feedback during the electric motor
working group negotiations that this should be the first EL considered
above current standards (in 10 CFR 431.25, IE3 or ``NEMA Premium''),
consistent with the progression of the IE levels to represent
efficiency, when available. IE4 levels correspond to the efficiency
values in Table 10 of IEC 60034-30-1:2014,''Nominal efficiency limits
(percentage) for 60 Hz IE4''. DOE notes that the efficiencies at IE4
levels are varying magnitudes above current standard levels, but are
typically either 1 or 2 NEMA bands higher depending on pole
configuration and horsepower output. Next, DOE defined EL 2 as 2 NEMA
bands above current standards and EL 3 as 3 NEMA bands above current
standards. For RU1, RU2 and RU5, EL 1 efficiency is the same as EL 2
efficiency because the IE4 efficiencies are the same as the
efficiencies at 2 NEMA bands above current standard levels.
When possible, DOE opted to set the intermediate efficiency levels
at industry-recognized levels of efficiency like NEMA Premium or IE4.
For ECGs 2 and 3, EL 1 was set at current standards since the baseline
for these ECGs was lower than current standards. EL 2 was then set at
IE4 levels, and EL 3 set at 2 NEMA bands above current standard levels.
For RU6, RU7 and RU8, EL 2 efficiency is the same as EL 3 efficiency
because the IE4 efficiencies are the same as the efficiencies at 2 NEMA
bands above current standards.
For ECG 4, DOE again opted to set the intermediate efficiency
levels at industry-recognized levels. Therefore, EL 1 was set at fire
pump electric motor levels, EL 2 at current standards or NEMA Premium,
and EL 3 at IE4 levels. For RU11, the max-tech efficiency is the same
as EL 3 efficiency at IE4.
Table IV-6 presents a summary of the description of the higher
efficiency levels analyzed in this direct final rule. For additional
details on the efficiency levels, see chapter 5 of the direct final
rule TSD.
Table IV-6--Higher Efficiencies Analyzed
--------------------------------------------------------------------------------------------------------------------------------------------------------
ECG RUs EL0/Baseline EL1 EL2 EL3 EL4
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.............................. 1 through 5....... Premium/IE3....... Super Premium/IE4. 2 NEMA bands above 3 NEMA bands Max-tech
Premium. above Premium.
2.............................. 6................. Fire pump......... Premium/IE3....... Super Premium/IE4. 2 NEMA bands Max-tech
above Premium.
3.............................. 7 through 10...... Fire pump......... Premium/IE3....... Super Premium/IE4. 2 NEMA bands Max-tech
above Premium.
4.............................. 11................ 2 NEMA Bands below Fire pump......... Premium/IE3....... Super Premium/IE4 Max-tech
Fire pump.
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, the availability and timeliness of purchasing the equipment on
the market. The cost approaches are summarized as follows:
Physical teardowns: Under this approach, DOE physically
dismantles a commercially available product,
[[Page 36098]]
component-by-component, to develop a detailed bill of materials for the
product.
Catalog teardowns: In lieu of physically deconstructing a
product, DOE identifies each component using parts diagrams (available
from manufacturer websites or appliance repair websites, for example)
to develop the bill of materials for the product.
Price surveys: If neither a physical nor catalog teardown
is feasible (for example, for tightly integrated products such as
fluorescent lamps, which are infeasible to disassemble and for which
parts diagrams are unavailable) or cost-prohibitive and otherwise
impractical (e.g. large commercial boilers), DOE conducts price surveys
using publicly available pricing data published on major online
retailer websites and/or by soliciting prices from distributors and
other commercial channels.
In the March 2022 Preliminary Analysis, DOE conducted the analysis
using a combination of physical teardowns and software modeling. DOE
contracted a professional motor laboratory to disassemble various
electric motors and record what types of materials were present and how
much of each material was present, recorded in a final bill of
materials (``BOM''). To supplement the physical teardowns, software
modeling by an SME was also used to generate BOMs for select efficiency
levels of directly analyzed representative units. The resulting bill of
materials provides the basis for the manufacturer production cost
(``MPC'') estimates. See Chapter 5 of the March 2022 Prelim TSD.
In response to the March 2022 Preliminary Analysis, DOE received a
number of comments. First, DOE received a comment regarding labor rates
and markups used in the engineering analysis. ABB commented that the
tabulated cost of labor used in Table 2.5.17 of the March 2022 Prelim
TSD does not accurately reflect the current labor market. ABB added
that the U.S. labor markets have tightened significantly over the past
12 months, and as a result labor rates have increased significantly.
Therefore, ABB commented that they believe the labor rates shown in the
table are outdated and need to be revised with current rates. Regarding
the magnitude of the factory markup in Table 2.5.17 in the March 2022
Prelim TSD, ABB also commented that they believe that 30 percent is a
more accurate estimate than the 15 percent mentioned, and that using
the 15 percent markup would result in an underestimation of the cost
impacts of factory overhead. (ABB, No. 28 at p. 1)
Regarding labor rates and markups, DOE used the same hourly labor
rate for all electric motors analyzed. DOE determined the unburdened
labor rate by using the 2007 Economic Census of Industry, and since the
March 2022 Preliminary Analysis, updated the labor rate to dollar year
2021 using producer price index (``PPI'') data.\37\ DOE understands
this method of calculation accounts for changes in the labor market
because the PPI data contains information from the current market. In
addition, several markups were applied to this hourly rate to obtain a
fully burdened rate, which is representative of the labor costs
associated with manufacturing electric motors. The markups applied to
the base labor cost per hour include indirect production, overhead,
fringe, and assembly labor up-time costs. Finally, DOE also
incorporated input from manufacturers during interviews on domestic and
foreign labor rates to inform the labor cost values used in the
engineering analysis in this direct final rule. As such, DOE concludes
that the updates to the labor rates since the March 2022 Preliminary
Analysis accurately represent current labor market.
---------------------------------------------------------------------------
\37\ NAICS code 335312 ``Motor and generator manufacturing''
production workers hours and wages.
---------------------------------------------------------------------------
Regarding the overhead markup, DOE notes that in the March 2022
Preliminary Analysis, an overhead markup of 30 percent was applied to
the unburdened labor rate in line with ABB's recommendation. The 15
percent factory overheard markup referenced in ABB's comment is a
separate markup applied to the material cost of a motor, not related to
the labor markup of concern. In addition, the factory overhead markup
was increased to 20 percent when copper die-casting was used in the
rotor. DOE presented the range of factory overhead markups in
manufacturer interviews, and either received little feedback, or
generally supportive comments from manufacturers. Accordingly, DOE
concludes that the factory overhead markups used in the March 2022
Preliminary Analysis sufficiently characterizes the markups used for
the cost analysis.
DOE also received a comment regarding material prices. NEMA
commented referring DOE to a Department of Commerce study from October
2020 for perspective on conductor prices. NEMA also stated that DOE
should update its information to 2022 data and pricing. (NEMA, No. 22
at p. 16) DOE reviewed the Department of Commerce study referenced by
NEMA and did not find any specific material pricing information
regarding copper or aluminum, the two conductors that this engineering
analysis focuses on. In the direct final rule, DOE determined conductor
prices based on producer price indices \38\ and manufacturer input
obtained through interviews.
---------------------------------------------------------------------------
\38\ Producer Price Index by Commodity: Metals and Metal
Products: Copper Wire and Cable (WPU10260314): https://fred.stlouisfed.org/series/WPU10260314; Producer Price Index by
Commodity: Metals and Metal Products: Extruded Aluminum Rod, Bar,
and Other Extruded Shapes (WPU10250162): https://fred.stlouisfed.org/series/WPU10250162.
---------------------------------------------------------------------------
Regarding the dollar year used for the analysis, DOE usually uses
the most recent completed year before the publication of any rulemaking
document when presenting pricing information and data to reduce the
impact of month-to-month material pricing volatility. However, due to
recent pricing volatility as a result of global supply chain issues,
DOE is presenting pricing information as a 5-year average price so that
the price results can be extrapolated more accurately for use in future
years. As such, DOE presents all costs and pricing information as a 5-
year average of the years 2017 to 2021 in this direct final rule.
Finally, DOE also received a comment regarding how costs would need
to be updated because of the stack length increase. NEMA commented that
the stack lengths of motors in Table 2.5.13 of the March 2022
Preliminary Analysis TSD appear to be longer than what would fit in a
typical motor housing and stated that DOE needs to consider the cost of
redesigning the motor to accommodate the larger stack and all costs of
changing the production line. NEMA stated that certain stack lengths
may be so long that they are not able to be machine wound, and instead
would use the more labor-intensive process of hand winding. NEMA
commented that the increased labor requirements would push
manufacturers to move production to facilities with lower cost of labor
outside of the US and would reduce US jobs. Finally, NEMA stated that
the conversion costs of using thinner steels did not capture the
conversion costs of using longer stack lengths. NEMA also stated that
end-use motor application redesign should be accounted for as well.
(NEMA, No. 22 at p. 17)
DOE notes that NEMA did not identify specific units that would have
to be hand-wound because of their stack lengths. A given winding
machine may have a limit of how long of a stack it can wind, but DOE
understands that if the
[[Page 36099]]
stack length increased beyond this limit, a manufacturer could use the
next sized winding machine that they may already use for larger
horsepower motors. However, in this direct final rule, DOE is not
adopting a standard level that would require motors to be hand-wound,
and as such does not find that there will be a push to offshore US
manufacturing of electric motors for the standards being finalized.
However, separately DOE also performs a manufacturer impact analysis to
quantify the costs incurred by the manufacturer to redesign regulated
equipment at each efficiency level; see discussion in section IV.J.
Accordingly, in this direct final rule, DOE continues to use the
approach from the March 2022 Preliminary Analysis by determining costs
using a combination of physical teardowns and software modeling. In
addition, as part of this direct final rule, DOE supplemented other
critical inputs to the MPC estimate, including material prices assumed,
scrap costs, overhead costs, and conversion costs incurred by the
manufacturer, using information provided by manufacturers under a
nondisclosure agreement through both manufacturer interviews and the
Electric Motors Working Group. Through these nondisclosure agreements,
DOE solicited and received feedback on inputs like: motor starter costs
associated with NEMA Design A motors, recent electrical steel prices by
grade, and the MPCs of both Design A and Design B motors at different
efficiency levels and rated motor output. See chapter 5 of the direct
final rule TSD for more detail on the scrap, overhead, and conversion
costs as well as material prices used.
Finally, to account for manufacturers' non-production costs and
profit margin, DOE applies a non-production cost multiplier (the
manufacturer markup) to the MPC. The resulting manufacturer selling
price (``MSP'') is the price at which the manufacturer distributes a
unit into commerce. DOE developed an average manufacturer markup by
examining the annual Securities and Exchange Commission (SEC) 10-K
reports filed by publicly-traded manufacturers primarily engaged in
electric motor manufacturing and whose combined product range includes
electric motors. For motors with a rated output power of 5 or less
horsepower, DOE used a non-production markup of 37 percent. For motors
rated above 5 horsepower, DOE used a non-production markup of 45
percent.
3. Cost-Efficiency Results
The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of MSP (in dollars) versus
full-load efficiency (in %), which form the basis for subsequent
analysis. DOE developed eleven curves representing the four equipment
class groups. The methodology for developing the curves started with
determining the full-load efficiency and MPCs for baseline motors.
Above the baseline, DOE implemented various combinations of design
options to achieve each efficiency level. Design options were
implemented until all available technologies were employed (i.e., at a
max-tech level). To account for manufacturers' non-production costs and
profit margin, DOE applies a manufacturer markup to the MPC, resulting
in the MSP. See Table IV-7 for the final results. See TSD Chapter 5 for
additional detail on the engineering analysis.
Table IV-7--Cost-Efficiency Results
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Full-load efficiency (%) MSP (2021$)
RU HP Pole Enclosure --------------------------------------------------------------------------------------------------------
EL0 EL1 EL2 EL3 EL4 EL0 EL1 EL2 EL3 EL4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1........................................ 5 4 Enclosed.................. 89.50 91.00 91.00 91.70 92.40 $340.95 $424.52 $424.52 $459.91 $614.47
2........................................ 30 4 Enclosed.................. 93.60 94.50 94.50 95.00 95.40 1,331.45 1,792.24 1,792.24 1,928.42 1,999.62
3........................................ 75 4 Enclosed.................. 95.40 95.80 96.20 96.50 96.80 3,724.25 4,577.13 4,943.96 5,219.07 5,541.73
4........................................ 150 4 Enclosed.................. 95.80 96.20 96.50 96.80 97.10 6,181.17 6,378.33 8,205.53 8,662.15 9,197.66
5........................................ 350 4 Enclosed.................. 96.20 96.80 96.80 97.10 97.40 12,874.60 15,313.54 15,313.54 18,042.15 19,157.57
6........................................ 600 4 Enclosed.................. 95.80 96.20 96.80 96.80 97.40 19,711.60 20,532.73 24,422.41 24,422.41 30,552.96
7........................................ 5 4 Enclosed.................. 87.50 89.50 91.00 91.00 92.40 304.59 332.96 414.57 414.57 554.40
8........................................ 30 4 Enclosed.................. 92.40 93.60 94.50 94.50 95.40 1,281.82 1,326.36 1,785.38 1,785.38 1,975.97
9........................................ 75 4 Enclosed.................. 94.10 95.40 95.80 96.20 96.80 3,097.87 3,703.79 4,551.99 4,910.11 5,510.57
10....................................... 150 4 Enclosed.................. 95.00 95.80 96.20 96.50 97.10 5,352.67 6,199.20 6,396.94 8,229.47 8,687.42
11....................................... 5 4 Enclosed.................. 85.50 87.50 89.50 91.00 91.00 304.59 332.96 414.57 554.40 554.40
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
In this direct final rule, DOE also added a scenario to account for
the fact that some consumers may choose to purchase a synchronous
electric motor (out of scope of this direct final rule) rather than a
more efficient NEMA Design A or B electric motor or select to purchase
a VFD in combination with a compliant electric motor. As such, DOE
costed out the price of a synchronous electric motor and a VFD to
analyze for this substitution; further discussion on this analysis is
provided in Chapter 5 of the direct final rule TSD.
4. Scaling Methodology
Due to the large number of equipment classes, DOE was not able to
perform a detailed engineering analysis on each one. Instead, DOE
focused its analysis on the representative units and scaled the results
to equipment classes not directly analyzed in the engineering analysis.
In the March 2022 Preliminary Analysis, DOE used the current standards
at 10 CFR 431.25 as a basis to scale the efficiency of the
representative units to all other equipment classes. In order to scale
for efficiency levels above baseline, the efficiencies for the
representative units were shifted up or down by however many NEMA
bands, because these bands are commonly used by industry when
describing motor efficiency, that efficiency level was above current
standards.
In response to the preliminary analysis, NEMA disagreed that a
given enclosed motor could meet the same or higher efficiency standards
as an open motor. NEMA stated that Part 13 of NEMA MG1 specifies, for
many ratings, their standard frame size to be smaller than an enclosed
motor of the same frame size. NEMA provided an example of a 7.5 hp,
575V, 2 pole standard NEMA Design A/B motor and state that an open
enclosure motor is standard as a 184T frame whereas an enclosed would
be a 213T frame. NEMA stated that the ratings for which the standard
frame size is the same for an open or enclosed enclosure, the
efficiency capability of the open motor is expected to be equal or
greater than an enclosed motor because of the reduced windage losses
and potentially lower operating temperature. NEMA noted that the
specific utility lost by switching from an open motor to an enclosed
one would be having to move to a physically larger motor and mounting
dimensions for certain ratings. NEMA stated that the
[[Page 36100]]
efficiency ratings of NEMA 12-12 is higher for open motors at some
ratings, higher for enclosed at others, and in some cases equal in
order to retain this utility of having a smaller motor for a given
application. (NEMA, No. 22 at p. 6)
DOE acknowledges that the efficiencies would be different for open
and enclosed motors for the scope of electric motors being considered
in this direct final rule. As such, DOE considered separate
efficiencies for open and enclosed motors; although DOE only analyzed
enclosed motor representative units as part of the analysis, for the
full range of efficiencies being considered for the downstream
analysis, DOE considered different efficiencies for open and enclosed.
DOE based the relationship between enclosed and open motor efficiencies
on Table 5 of 10 CFR 431.25. Specifically, DOE quantified the offset
between enclosed and open motor efficiencies for each pole and
horsepower combination in terms of NEMA bands. DOE used the same offset
to determine the open motor efficiencies from the enclosed motor
efficiencies for the full range of pole and horsepower combinations
being considered for each ECG and efficiency level analyzed.
In this direct final rule, to scale across horsepower, pole
configuration, and enclosure, DOE again relied on industry-recognized
levels of efficiency when possible, or shifted forms of these levels.
For example: when an efficiency level for a representative unit was
NEMA Premium, Table 12-12 of NEMA MG 1-2016 was used to determine the
efficiency of all the non-representative unit equipment classes. This
method of scaling was also done for IE4 levels of efficiency, electric
motor fire pump levels, and shifted versions of NEMA Premium (see Table
IV-10 for description of efficiency levels analyzed). DOE relied on
industry-recognized levels because they sufficiently capture the
effects of enclosure, pole configuration, frame size, and horsepower on
motor efficiency.
D. Markups Analysis
The markups analysis develops appropriate markups (e.g., retailer
markups, distributor markups, contractor markups) in the distribution
chain and sales taxes to convert the MSP estimates derived in the
engineering analysis to consumer prices, which are then used in the LCC
and PBP analysis and in the manufacturer impact analysis. At each step
in the distribution channel, companies mark up the price of the product
to cover business costs and profit margin.
In the March 2022 Preliminary Analysis, DOE identified distribution
channels for MEM 1-500 hp, NEMA Design A and B and AO-MEM (Standard
Frame Size) and their respective market shares (i.e., percentage of
sales going through each channel). For these electric motors, the main
parties in the distribution chain are OEMs, equipment or motor
wholesalers, retailers, and contractors. In response to the March 2022
Preliminary Analysis, DOE did not receive any comment on the
distribution channels identified. Therefore, DOE retained these
distribution channels for MEM 1-500 hp, NEMA Design A and B and AO-MEM
(Standard Frame Size) in the direct final rule. For electric motors
above 500 hp and up to 750 hp (``MEM 501-750 hp, NEMA Design A & B''),
DOE applied the same distribution channels. For and AO-polyphase
(specialized frame size) electric motors which are typically sold
through OEMs, DOE assumed that these motors are only sold through
distribution channels that include OEMs.
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
products with baseline efficiency, while incremental markups are
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental
markup is typically less than the baseline markup and is designed to
maintain similar per-unit operating profit before and after new or
amended standards.\39\
---------------------------------------------------------------------------
\39\ Because the projected price of standards-compliant products
is typically higher than the price of baseline products, using the
same markup for the incremental cost and the baseline cost would
result in higher per-unit operating profit. While such an outcome is
possible, DOE maintains that in markets that are reasonably
competitive it is unlikely that standards would lead to a
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------
In the March 2022 Preliminary Analysis, DOE relied on economic data
from the U.S. Census Bureau and on 2020 RS Means Electrical Cost Data
to estimate average baseline and incremental markups. Specifically, DOE
estimated the OEM markups for electric motors based on financial data
of different sets of OEMs that use respective electric motors from the
latest 2019 Annual Survey of Manufactures.\40\ The relevant sets of
OEMs identified were listed in Table 6.4.2 of the March 2022 Prelim
TSD, using six-digit code level North American Industry Classification
System (NAICS). Further, DOE collected information regarding sales
taxes from the Sales Tax Clearinghouse.\41\ See chapter 6 of the March
2022 Prelim TSD.
---------------------------------------------------------------------------
\40\ U.S. Census Bureau. 2019 Annual Survey of Manufactures
(ASM): Statistics for Industry Groups and Industries. (Last accessed
March 23, 2021.) www.census.gov/programs-surveys/asm.html.
\41\ Sales Tax Clearinghouse Inc. State Sales Tax Rates Along
with Combined Average City and County Rates. July 2021. (Last
accessed July 1, 2021.) thestc.com/STrates.stm.
---------------------------------------------------------------------------
In response to the March 2022 Preliminary Analysis, NEMA commented
that Table 6.4.2 of the March 2022 Prelim TSD should be replaced by
Table IV.3 of the Import Data Declaration Proposed Rule.\42\ (NEMA, No.
22 at p. 18)
---------------------------------------------------------------------------
\42\ NEMA also provided the following link: www.regulations.gov/document/EERE-2015-BT-CE-0019-0001
---------------------------------------------------------------------------
Table IV.3 of the Import Data Declaration Proposed Rule provides a
list of five-digit code level NAICS.\43\ DOE reviewed the corresponding
six-digit code level NAICS and identified the following additional
NAICS code as relevant in the context of OEMs incorporating electric
motors in their equipment: 333999 ``All other miscellaneous general
Purpose machinery manufacturing''. Other NAICS codes were either
already included in the March 2022 Preliminary Analysis or were did not
correspond to OEMs incorporating electric motors subject to this DFR in
their equipment.
---------------------------------------------------------------------------
\43\ Each five-digit code level NAICS includes several six-digit
code level NAICS.
---------------------------------------------------------------------------
For the direct final rule, DOE revised the OEM baseline and
incremental markups calculation to account for this additional NAICS
code. In addition, DOE relied on updated data from the economic data
from the U.S. Census Bureau and on 2022 RS Means Electrical Cost Data,
and the Sales Tax Clearinghouse.
Chapter 6 of the direct final rule TSD provides details on DOE's
development of markups for electric motors.
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of electric motors at different efficiencies for a
representative sample of commercial, industrial, and agricultural
consumers, and to assess the energy savings potential of increased
electric motor efficiency. The energy use analysis estimates the range
of energy use of electric motors in the field (i.e., as they are
actually used by consumers). For each consumer in the sample, the
energy use is calculated by multiplying the annual average motor input
power by the annual operating hours. The
[[Page 36101]]
energy use analysis provides the basis for other analyses DOE
performed, particularly assessments of the energy savings and the
savings in consumer operating costs that could result from adoption of
amended or new standards.
1. Consumer Sample
In the March 2022 Preliminary Analysis, DOE created a consumer
sample to represent consumers of electric motors in the commercial,
industrial, and agricultural sectors. DOE used the sample to determine
electric motor annual energy consumption as well as for conducting the
LCC and PBP analyses. Each consumer in the sample was assigned a
sector, an application, and a region. The sector and application
determine the usage profile of the electric motor and the economic
characteristics of the motor owner vary by sector and region. DOE
primarily relied on data from the 2018 Commercial Building Energy
Consumption Survey (``CBECS''), the 2018 Manufacturing Energy
Consumption Survey (``MECS''), the 2013 Farm and Ranch Irrigation
Survey, and a DOE-AMO report ``U.S. Industrial and Commercial Motor
System Market Assessment Report Volume 1: Characteristics of the
Installed Base'' (``MSMA'' or ``DOE-AMO report'').\44\ See chapter 7 of
the March 2022 Prelim TSD.
---------------------------------------------------------------------------
\44\ Prakash Rao et al., ``U.S. Industrial and Commercial Motor
System Market Assessment Report Volume 1: Characteristics of the
Installed Base,'' January 12, 2021, doi.org/10.2172/1760267.
---------------------------------------------------------------------------
In response to DOE's requests for feedback regarding the consumer
sample, NEMA referred to the MSMA report (NEMA, No. 22 at p. 19) As
previously described, DOE relied on information from the MSMA report to
inform its consumer sample. DOE did not receive any additional comments
related to the consumer sample developed in the preliminary analysis
and retained the same approach for this direct final rule. In addition,
for electric motors above 500 hp and up to 750 hp, and AO-polyphase
specialized frame size electric motors, DOE applied the same consumer
sample.
2. Motor Input Power
In the March 2022 Preliminary Analysis, DOE calculated the motor
input power as the sum of (1) the electric motor's rated horsepower
multiplied by its operating load (i.e., the motor output power), and
(2) the losses at the operating load (i.e., part-load losses). DOE
estimated distributions of motor average annual operating load by
application and sector based on information from the MSMA report. DOE
determined the part-load losses using outputs from the engineering
analysis (full-load efficiency at each efficiency level) and published
part-load efficiency information from 2016 and 2020 catalog data from
several manufacturers to model motor part-load losses as a function of
the motor's operating load. See chapter 7 of the March 2022 Prelim TSD.
In response to DOE's requests for feedback regarding distributions
of average annual operating load by application and sector, NEMA
referred to the MSMA report (NEMA, No. 22 at p. 19) As previously
described, DOE relied on information from the MSMA report to
characterize average annual operating loads. DOE did not receive any
additional comments related to the distributions of operating loads
developed in the March 2022 Preliminary Analysis and retained the same
approach for this DFR.
DOE did not receive any comments on its approach to determine part-
load losses and retained the same methodology for this DFR. However,
DOE updated its analysis to account for more recent part-load
efficiency information from the 2022 Motor Database. In addition, for
electric motors larger than 500 hp and up to 750 hp, and AO-polyphase
specialized frame size electric motors, DOE applied the same approach
for establishing motor part-load losses and motor input power.
3. Annual Operating Hours
In the March 2022 Preliminary Analysis, DOE used information from
the MSMA report to establish distributions of motor annual hours of
operation by application for the commercial and industrial sectors. The
MSMA report provided average, mean, median, minimum, maximum, and
quartile boundaries for annual operating hours across industrial and
commercial sectors by application and showed no significant difference
in average annual hours of operation between horsepower ranges. DOE
used this information to develop application-specific statistical
distributions of annual operating hours in the commercial and
industrial sectors. See chapter 7 of the March 2022 Prelim TSD.
For electric motors used in the agricultural sector (which were not
included in the MSMA report), DOE derived statistical distributions of
annual operating hours of irrigation pumps by region using data from
the 2013 Census of Agriculture Farm and Ranch Irrigation Survey.
In response to DOE's requests for feedback regarding distributions
of average annual operating hours by application and sector, NEMA
referred to the DOE MSMA report. (NEMA, No. 22 at p. 20) As previously
described, DOE relied on information from the MSMA report to inform its
distributions of annual operating hours in the commercial and
industrial sectors. For the agricultural sector, which was not included
in the MSMA report, DOE relied on additional data sources as previously
described. DOE did not receive any additional comments related to the
distributions of operating hours developed in the March 2022
Preliminary Analysis and retained the same approach for this final
rule. In addition for electric motors larger than 500 hp, DOE also
relied on data from the MSMA report to develop operating hours.
4. Impact of Electric Motor Speed
Any increase in operating speeds as the efficiency of the motor is
increased could affect the energy saving benefits of more efficient
motors in certain variable torque applications (i.e., fans, pumps, and
compressors) due to the cubic relation between speed and power
requirements (i.e., ``affinity law''). In the March 2022 Preliminary
Analysis, DOE accounted for any changes in the motor's rated speed with
an increase in efficiency levels, based on the speed information by EL
provided in the engineering analysis. Based on information from a
European motor study,\45\ DOE assumed that 20 percent of consumers with
fan, pump, and air compressor applications would be negatively impacted
by higher operating speeds. See chapter 7 of the March 2022 Prelim TSD.
---------------------------------------------------------------------------
\45\ ``EuP-LOT-30-Task-7-Jun-2014.Pdf,'' accessed April 26,
2021, www.eup-network.de/fileadmin/user_upload/EuP-LOT-30-Task-7-
Jun-2014.pdf. The European motor study estimated, as a ``worst case
scenario,'' that up to 40 percent of consumers purchasing motors for
replacement applications may not see any decrease or increase in
energy use due to this impact and did not incorporate any change in
energy use with increased speed. In addition, the European motor
study also predicts that any energy use impact will be reduced over
time because new motor driven equipment would be designed to take
account of this change in speed. Therefore, the study did not
incorporate this effect in the analysis (i.e., 0 percent of
negatively impacted consumers). In the absence of additional data to
estimate the percentage of consumers that may be negatively impacted
in the compliance year, DOE relied on the mid-point value of 20
percent.
---------------------------------------------------------------------------
The Joint Advocates requested clarifications regarding how DOE
accounted for the impact of the increased motor speed on the energy
use, as well as how motor slip \46\ was
[[Page 36102]]
incorporated into the energy use analysis. (Joint Advocates, No. 27 at
p. 4-5)
---------------------------------------------------------------------------
\46\ The motor slip is the difference between the motor's
synchronous speed and actual speed which is lower than the
synchronous speed). At higher ELs, the speed of a given motor may
increase and the motor slip may decrease.
---------------------------------------------------------------------------
DOE described the method and assumptions used to calculate the
impact of higher speeds (i.e., lower slip) by EL on the energy use in
section 7.2.2.1 of the March 2022 Prelim TSD. In the direct final rule
TSD, DOE provided additional details on the methodology and equations
used as part of Appendix 7A.
NEMA commented that nearly 100 percent of fans, pumps and
compressors using electric motors would be negatively impacted by an
increase in speed. In addition, NEMA commented that it would take up to
two years for OEMs to redesign and recertify an equipment with a motor
that has higher speed and provided an example calculation to illustrate
the impacts of higher speed operation. (NEMA, No. 22 at pp. 20-21, 49)
The Joint Industry Stakeholders commented that DOE should consider the
full impact of higher speed motors by taking into account new products
as well as replacement. The Joint Industry Stakeholders commented that
if lower speed motors are no longer available, appliances may be forced
to incorporate higher speed motors which may cause short-cycling in
HVAC and refrigeration applications and result in negative impacts in
other appliances. (Joint Industry Stakeholders, No. 23 at pp. 8-9)
In this direct final rule, DOE included the effect of increased
speeds in the energy use calculation for all equipment classes. DOE
reviewed information related to pump, fans, and compressor applications
and notes that: (1) seven to 20 percent of motors used in these
applications are paired with VFDs which allow the user to adjust the
speed of the motor; \47\ (2) approximately half of fans operate with
belts which also allow the user to adjust the speed of the driven fan;
\48\ (3) some applications would benefit from increase in speeds as the
work would be completed at a higher load in less operating hours (e.g.
pump filling water tank faster at increased speed); (4) not all fans,
pumps and compressors are variable torque loads to which the affinity
laws applies. Therefore, less than 100 percent of motors in these
applications would experience an increase in energy use as a result of
an increase in speed. In addition, as described in the European motor
study, the increase in speed would primarily impact replacement motors
installed in applications that previously operated with a lower speed
motor. For these reasons, DOE determined that assuming that 100 percent
of fans, pumps and compressors using electric motors would be
negatively impacted by an increase in speed would not be
representative. DOE continues to rely on a 20 percent assumption used
in the March 2022 Preliminary Analysis. In addition, DOE incorporated a
sensitivity analysis allowing the user to consider this effect
following scenarios described in Appendix 7-A of the TSD.
---------------------------------------------------------------------------
\47\ See Figure 64 and Figure 71 of the MSMA report.
\48\ See 2016 Fan Notice of Data Availability, 81 FR 75742
(November 1, 2016). LCC spreadsheet, ``LCC sample'' worksheet,
``Belt vs. direct driven fan distribution'' available at
www.regulations.gov/document/EERE-2013-BT-STD-0006-0190.
---------------------------------------------------------------------------
Chapter 7 of the direct final rule TSD provides details on DOE's
energy use analysis for electric motors.
F. Life-Cycle Cost and Payback Period Analysis
DOE conducted LCC and PBP analyses to evaluate the economic impacts
on individual consumers of potential energy conservation standards for
electric motors. The effect of new or amended energy conservation
standards on individual consumers usually involves a reduction in
operating cost and an increase in purchase cost. DOE used the following
two metrics to measure consumer impacts:
The LCC is the total consumer expense of an appliance or
product over the life of that product, consisting of total installed
cost (manufacturer selling price, distribution chain markups, sales
tax, and installation costs) plus operating costs (expenses for energy
use, maintenance, and repair). To compute the operating costs, DOE
discounts future operating costs to the time of purchase and sums them
over the lifetime of the product.
The PBP is the estimated amount of time (in years) it
takes consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
at higher efficiency levels by the change in annual operating cost for
the year that amended or new standards are assumed to take effect.
For any given efficiency level, DOE measures the change in LCC
relative to the LCC in the no-new-standards case, which reflects the
estimated efficiency distribution of electric motors in the absence of
new or amended energy conservation standards. In contrast, the PBP for
a given efficiency level is measured relative to the baseline product.
For each considered efficiency level in each product class, DOE
calculated the LCC and PBP for a nationally representative set of
consumers. As stated previously, DOE developed consumer samples from
various data sources (see section IV.E.1 of this document). For each
sample consumer, DOE determined the energy consumption for the electric
motor and the appropriate energy price. By developing a representative
sample of consumers, the analysis captured the variability in energy
consumption and energy prices associated with the use of electric
motors.
Inputs to the calculation of total installed cost include the cost
of the product--which includes MPCs, manufacturer markups, retailer and
distributor markups, and sales taxes--and installation costs. Inputs to
the calculation of operating expenses include annual energy
consumption, energy prices and price projections, repair and
maintenance costs, product lifetimes, and discount rates. DOE created
distributions of values for product lifetime, discount rates, and sales
taxes, with probabilities attached to each value, to account for their
uncertainty and variability.
The computer model DOE uses to calculate the LCC and PBP relies on
a Monte Carlo simulation to incorporate uncertainty and variability
into the analysis. The Monte Carlo simulations randomly sample input
values from the probability distributions and electric motor user
samples. The model calculated the LCC and PBP for products at each
efficiency level for 10,000 consumer per simulation run. The analytical
results include a distribution of 10,000 data points showing the range
of LCC savings for a given efficiency level relative to the no-new-
standards case efficiency distribution. In performing an iteration of
the Monte Carlo simulation for a given consumer, product efficiency is
chosen based on its probability. If the chosen product efficiency is
greater than or equal to the efficiency of the standard level under
consideration, the LCC and PBP calculation reveals that a consumer is
not impacted by the standard level. By accounting for consumers who
already purchase more-efficient products, DOE avoids overstating the
potential benefits from increasing product efficiency.
DOE calculated the LCC and PBP for all consumers of electric motors
as if each were to purchase a new product in the first year of required
compliance with new or amended standards. DOE
[[Page 36103]]
expects the direct final rule to publish in the first half of 2023.
Therefore, DOE used 2027 as the year of compliance with any new or
amended standards for electric motors based on the recommended 4 year
compliance period after the direct final rule publication.
Table IV-8 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The subsections that follow
provide further discussion. Details of the LCC model, and of all the
inputs to the LCC and PBP analyses, are contained in chapter 8 of the
direct final rule TSD and its appendices.
Table IV-8--Summary of Inputs and Methods for the LCC and PBP Analysis *
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Equipment Cost............... Derived by multiplying MPCs by
manufacturer and retailer markups and
sales tax, as appropriate. Used a
constant price trend to project
equipment costs based on historical
data.
Installation Costs........... Installation costs vary by EL. Used input
from NEMA and engineering analysis to
determine installation costs.
Annual Energy Use............ Motor input power multiplied by annual
operating hours per year. Variability:
Primarily based on the MSMA report, 2018
CBECS, 2018 MECS, and 2013 Farm and
Ranch Irrigation Survey.
Energy Prices................ Electricity: Based on EEI Typical Bills
and Average Rates Reports data for 2021.
Variability: Regional energy prices
determined for four census regions.
Energy Price Trends.......... Based on AEO 2022 price projections.
Repair and Maintenance Costs. Repair costs based on Vaughen 2021,
varies by EL Assumed no change in
maintenance costs with efficiency level.
Equipment Lifetime........... Average: 11.8-33.6 years depending on the
equipment class group and horsepower
considered. Shipments-weighted average
lifetime is 13.6.
Discount Rates............... Calculated as the weighted average cost
of capital for entities purchasing
electric motors. Primary data source was
Damodaran Online.
Compliance Date.............. 2027.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
in the sections following the table or in chapter 8 of the direct
final rule TSD.
In response to the preliminary analysis, the Joint Stakeholders
commented that double-regulation has no corresponding consumer benefits
in the form of reduced power consumption given the appliance
regulations being unchanged and the fact that a more efficient motor
does not necessarily translate to a more efficient product when
incorporated into a finished good. The Joint Stakeholders commented
that to potentially increase the cost of an OEM product, without a
corresponding energy savings would mean a net loss for consumers and
negative national impacts. The Joint Industry Stakeholders noted that
the DOE used operating hours for the following categories of equipment:
air compressors, refrigeration compressors, fans and blowers, pumps
material handling, material processing, other, and agricultural pumps.
Of these, the Joint Stakeholders noted that electric motors used in air
compressors, refrigeration compressors, fans and blowers, pumps and
agricultural pumps are already regulated to some extent and that DOE
made no apparent effort to account for this and deduct a significant
portion of those estimated hours (Joint Industry Stakeholders, No. 23
at p. 5) Lennox commented that DOE must accurately assess, and avoid
double-counting, energy savings when assessing potential efficiency
improvements from motors used in already-regulated HVAC equipment.
Lennox commented that it is unclear in the LCC and payback periods
analysis if DOE accounted for double regulation and eliminated energy
savings already achieved from system-level HVACR regulation. (Lennox,
No. 29 at p. 4) HI commented that there is a potential for duplicate
accounting of energy savings when regulating motors in general. In
addition, there is a potential for other motor product efficiencies to
be counted twice such as the use of inverter-only products in pumps
when the DOE calculates savings in their evaluations (one for inverter
only motors, and another for pumps using those motors). (HI, No. 31 at
p. 1) NEMA commented that many of the proposed additions to scope are
accompanied by erroneous claims of potential energy savings, owing to
the fact that the added motors are components to other regulated
appliances and devices. They commented that their review of the
document shows instances where the DOE is anticipating energy savings
on products that will be used in other covered products, suggesting the
potentially significant overstatement of potential energy savings
benefits. (NEMA, No. 22 at p. 5)
As highlighted in a previous DOE report, motor energy savings
potential and opportunities for higher efficiency electric motors in
commercial and residential equipment would result in overall energy
savings.\49\ In addition, some manufacturers advertise electric motors
as resulting in energy savings in HVAC equipment.\50\ Therefore, DOE
disagrees with the Joint Industry Stakeholders that an increase in
motor efficiency would not necessarily result in a more efficient
equipment when incorporated into a given equipment. In addition, DOE's
analysis ensures the LCC and NIA analysis do not result in double-
counting of energy savings by accounting for consumers who already
purchase more-efficient products and calculating LCC and energy savings
relative to a no-new standards case efficiency distribution. See
Section IV.F.8 for more details. DOE applies the same approach in other
equipment rulemakings, and evaluates energy savings relative to a no-
new standards case efficiency distribution that accounts for consumers
who already purchase more-efficient equipment incorporating more
efficient motors. As such, any future analysis in support of energy
conservation standards for equipment incorporating motors would also
account for equipment that already incorporate more-efficient electric
[[Page 36104]]
motors and would not result in any double counting of energy savings
resulting from motor efficiency improvements.
---------------------------------------------------------------------------
\49\ U.S. DOE Building technology Office, Energy Savings
Potential and Opportunities for High-Efficiency Electric Motors in
residential and Commercial Equipment, December 2013. Available at:
www.energy.gov/eere/buildings/downloads/motor-energy-savings-potential-report
\50\ See for example Nidec and ABB: acim.nidec.com/motors/usmotors/industry-applications/hvac; bit.ly/3wEIQyu
---------------------------------------------------------------------------
In the direct final rule TSD, DOE added a scenario to account for
the fact that some consumers may choose to purchase a synchronous
electric motor (out of scope of this direct final rule) rather than a
more efficient NEMA Design A or B electric motor or select to purchase
a VFD in combination with a compliant electric motor. DOE developed a
consumer choice model to estimate the percentage of consumers that
would purchase a synchronous electric motor based on the payback period
of such investment. See Appendix 8-D for more details on this analysis.
DOE notes that there is uncertainty as to which rate such substitution
would occur and did not incorporate this scenario as part of the
reference analysis.
1. Equipment Cost
To calculate consumer product costs, DOE multiplied the MSPs
developed in the engineering analysis by the distribution channel
markups described previously (along with sales taxes). DOE used
different markups for baseline products and higher-efficiency products,
because DOE applies an incremental markup to the increase in MSP
associated with higher-efficiency products.
Economic literature and historical data suggest that the real costs
of many products may trend downward over time according to ``learning''
or ``experience'' curves. Experience curve analysis implicitly includes
factors such as efficiencies in labor, capital investment, automation,
materials prices, distribution, and economies of scale at an industry-
wide level. To derive a price trend for electric motors, DOE obtained
historical PPI data for integral horsepower motors and generators
manufacturing spanning the time period 1969-2021 from the Bureau of
Labor Statistics' (``BLS'').\51\ The PPI data reflect nominal prices,
adjusted for electric motor quality changes. An inflation-adjusted
(deflated) price index for integral horsepower motors and generators
manufacturing was calculated by dividing the PPI series by the implicit
price deflator for Gross Domestic Product. The deflated price index for
integral horsepower motors was found to align with the copper, steel
and aluminum deflated price indices. DOE believes that the extent to
how these trends will continue in the future is very uncertain.
Therefore, DOE relied on a constant price assumption as the default
price factor index to project future electric motor prices.
---------------------------------------------------------------------------
\51\ Serie PCU3353123353121 for integral horsepower motors and
generators manufacturing; www.bls.gov/ppi/.
---------------------------------------------------------------------------
DOE did not receive any comments on price trends in response to the
preliminary analysis and followed the same methodology in the direct
final rule.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. In the March 2022
Preliminary Analysis, DOE considered that all motors would remain NEMA
Design B as efficiency increased, and DOE found no evidence that
installation costs would be impacted with increased efficiency levels.
Therefore, in the March 2022 Preliminary Analysis, DOE did not
incorporate changes in installation costs for motors that are more
efficient than baseline equipment. DOE assumed there was no variation
in installation costs between a baseline efficiency motor and a higher
efficiency motor except in terms of shipping costs. These shipping
costs were based on weight data from the engineering analysis for the
representative units. See chapter 8 of the March 2022 Prelim TSD.
In response to the preliminary analysis, EASA stated that there is
no simple or reliable method to estimate the installation time and
costs for synchronous motors under 100 hp because they are typically
embedded into a machine like a fan or compressor. EASA further
commented that submersible motors do not have a simple or reliable
method to estimate their installation costs because of the physically
connected piping that would require more time to install than a typical
motor. EASA commented that inverter-only motors probably do not require
additional time and cost to install compared to non-inverter motor
unless they require additional wiring for feedback devices and sensors
or mitigation of harmonics. (EASA, No. 21 at pp. 3-4)
DOE is not including synchronous electric motors, submersible
electric motors, and inverter-only motors in the scope of this direct
final rule.
EASA commented that motors above 500 hp have additional rigging
costs during installation because of their size and sometimes difficult
to access locations. EASA stated that there is not a simple or reliable
method to estimate the installation time and costs for this size of
motor. (EASA, No. 21 at p. 3) NEMA commented that DOE should include
costs for rigging (hoisting) for larger motors due to their extreme
weight. As rated horsepower increases, so too does the expense and time
to move them safely. (NEMA, No. 22 at p. 22)
DOE agrees that at a given efficiency level, the installation costs
will vary as a function of the motor's weight. However, DOE did not
find evidence that rigging costs (for a given motor size) would be
impacted with increased efficiency levels as the variations in weights
by EL are not significant enough to change the equipment and labor
required to hoist the motor as compared to the baseline.
EASA commented that if a motor is replaced with a physically larger
frame, the replacement would have higher installation costs because of
the added complexity of modifying the mounting setup to accommodate the
larger motor, and in some case would be impossible. (EASA, No. 21 at p.
2-3)
As noted in section IV.C of this document, DOE fixed the frame size
which remains the same across efficiency levels. Therefore, DOE did not
account for any changes in installation costs due to changes in frame
sizes in this direct final rule.
In addition, as noted in IV.C.1.a, in this direct final rule, DOE
revised the engineering approach, and assumed that higher efficiency
motors above the baseline would meet the characteristics of a NEMA A
motors and have higher inrush currents. Therefore, based on input from
NEMA, DOE estimated the additional installation costs associated with
the higher inrush current at efficiency levels above baseline, and
incorporated these costs in the analysis.
3. Annual Energy Consumption
For each sampled consumer, DOE determined the energy consumption
for an electric motor at different efficiency levels using the approach
described previously in section IV.E of this document.
4. Energy Prices
Because marginal electricity price more accurately captures the
incremental savings associated with a change in energy use from higher
efficiency, it provides a better representation of incremental change
in consumer costs than average electricity prices. Therefore, DOE
applied average electricity prices for the energy use of the product
purchased in the no-new-standards case, and marginal electricity prices
for the incremental change in energy use associated with the other
efficiency levels considered.
[[Page 36105]]
DOE derived electricity prices in 2021 using data from EEI Typical
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric
bills and average kilowatt-hour costs to the customer as charged by
investor-owned utilities. For all sectors, DOE calculated electricity
prices using the methodology described in Coughlin and Beraki
(2019).\52\
---------------------------------------------------------------------------
\52\ Coughlin, K. and B. Beraki. 2019. Non-residential
Electricity Prices: A Review of Data Sources and Estimation Methods.
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. https://ees.lbl.gov/publications/non-residential-electricity-prices.
---------------------------------------------------------------------------
DOE's methodology allows electricity prices to vary by sector,
region and season. In the analysis, variability in electricity prices
is chosen to be consistent with the way the consumer economic and
energy use characteristics are defined in the LCC analysis. For
electric motors, DOE relied on variability by region and sector. See
chapter 8 of the final rule TSD for details.
To estimate energy prices in future years, DOE multiplied the 2021
energy prices by the projection of annual average price changes for
each sector from the Reference case in AEO2022, which has an end year
of 2050.\53\ To estimate price trends after 2050, DOE used the 2050
electricity prices, held constant.
---------------------------------------------------------------------------
\53\ U.S. Energy Information Administration. Annual Energy
Outlook 2022. 2022. Washington, DC (Last accessed June 1, 2022.)
https://www.eia.gov/outlooks/aeo/index.php.
---------------------------------------------------------------------------
5. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing product
components that have failed in an appliance; maintenance costs are
associated with maintaining the operation of the product
In the March 2022 Preliminary Analysis, for the maintenance costs,
DOE did not find data indicating a variation in maintenance costs
between baseline efficiency and higher efficiency motors. The cost of
replacing bearings, which is the most common maintenance practice, is
constant across efficiency levels. Therefore, DOE did not include
maintenance costs in the LCC analysis. See chapter 8 of the March 2022
Prelim TSD.
DOE did not receive any comments related to maintenance costs and
retained the same approach in this direct final rule.
DOE defines motor repair as including rewinding and reconditioning.
In the March 2022 Preliminary Analysis, DOE estimated repair costs as a
function of efficiency based on data from 2021 Vaughen's National
Average Prices. Based on these data, DOE estimated the repair costs for
baseline electric motors, and used a 15 percent repair cost increase
per NEMA efficiency band increase. In addition, DOE considered that
electric motors at or below 20 horsepower were not repaired. DOE also
assumed that electric motors with a horsepower greater than 20 and less
than or equal to 100 horsepower are repaired once over their lifetime,
while electric motors with a horsepower greater than 100 and less than
or equal to 500 are repaired twice over their lifetime. DOE also
assumed that all electric motors above 20 horsepower would be repaired
at least one, regardless of the sampled lifetime. As a sensitivity
analysis, DOE also considered an alternative scenario where motors are
repaired only upon meeting certain lifetime criteria. See chapter 8 of
the March 2022 Prelim TSD.
In response to the March 2022 Preliminary Analysis, EASA and NEMA
stated that DOE may have overlooked non-rewinding repairs like bearing
changes and stated that these repairs occur 5-7 times more often than
rewinds regardless of motor output power. (EASA, No. 21 at p. 3; NEMA,
No. 22 at p. 21) As noted previously, DOE defines motor repair as
including rewinding and reconditioning. Other non-rewinding related
practices such as bearing replacement were considered as part of the
maintenance costs.
EASA commented that a higher efficiency motor may require more
material (e.g. copper magnet wire) and more labor to rewind windings
with the higher slot fill that is typical of high efficiency designs.
EASA also state that section 2.8.5 of the preliminary analysis TSD
attributes a 15 percent increase in repair cost due to higher
efficiency which contradicts Table 2.8.1 of the preliminary analysis
TSD that states ``assumed no change with efficiency level'' for repair
costs. (EASA, No. 21 at pp. 3-4) NEMA commented that as efficiency
increases, the rate of hand winding increases. Repairing hand-wound
motors may take longer as they are usually would by hand to accomplish
very tight stacking. Rewinding such motors will take longer and cost
more than random wound designs (NEMA, No. 22 at p. 22) NEMA also
commented that the discussion on section 2.8.5 of the preliminary
analysis TSD contradicted the summary table 2.8.1. of the preliminary
analysis TSD (NEMA, No. 22 at p. 22)
As noted by NEMA and EASA, more efficient motors are more expensive
to repair. In the March 2022 Preliminary Analysis, DOE estimated the
repair costs for baseline electric motors, and used a 15 percent repair
cost increase per NEMA efficiency band increase to characterize the
increase in repair costs with increased electric motor efficiency. In
this direct final rule, DOE continues to apply an increase in repair
costs at higher efficiency, and because the increase is directly
related to the increase in material costs, DOE assumed the repair costs
would increase similarly to the MSP instead of applying a 15 percent
increase per NEMA efficiency band increase. DOE notes a typographical
error in Table 2.8.1 of the preliminary analysis TSD. In that Table,
DOE omitted to describe the repair cost assumption, and the statement
only applies to the maintenance costs.
EASA and NEMA commented that they believe 20 horsepower is not a
valid breakpoint for a repair/replace decision on electric motors. In
practice, EASA and NEMA commented that the horsepower breakpoint may be
as high as 100 horsepower on motors readily available from stock. Also,
special OEM motors and IEC motors that may be unavailable from
inventory may be rewound more often than other motors and in lower
power ratings due to need to keep equipment in service. (EASA, No. 21
at p. 2; NEMA, No. 22 at p. 21) EASA provided data from 2017-2021
regarding 11,000 technical inquiries they received about rewinding
motors. The data showed that 32 percent, 29 percent, 31 percent and 8
percent of inquiries related to motors with horsepower below 20,
between 20 and 100 hp, between 100-500 hp, and greater than 500 hp,
respectively. (EASA, No. 21 at p. 2) EASA commented that getting
substantive data on repair likelihood would require polling a large
sample of end-users and providing them with the definition of repair
given in 8.3.3. of the preliminary analysis TSD.\54\ (EASA, No. 21 at
p. 4)
---------------------------------------------------------------------------
\54\ DOE defined a motor repair as repair as including rewinding
and reconditioning
---------------------------------------------------------------------------
Since the publication of the March 2022 Preliminary Analysis, DOE
reviewed additional information related to repair practices. DOE found
that although a breakpoint of 20 hp reflects the breakpoint below which
the repair cost for is equivalent to or exceeds the cost of a new
motor, the decision to repair or replace the motor is not only based on
a cost effectiveness criteria.\55\ Specifically, in most facilities the
cost of lost production or customer
[[Page 36106]]
inconvenience from downtime outweighs any cost differences between
repairing or replacing a failed motor. As noted by EASA, the need to
keep the equipment in service also affects the repair or replace
decision. In addition, when replacing a motor, another major concern is
stock availability. Most motors under 100 hp will typically be
available on the shelf at the facility while larger and specialty
motors will not.\56\ Based on this additional information, DOE updated
the repair breakpoint from 20 hp to 100 hp. As such DOE considered that
electric motors below 100 hp would not be repaired while motors above
100 hp would be repaired at least once. In addition, DOE revised the
analysis to consider that specialty electric motors, which are less
likely to be in stock would be repaired regardless of their size.
---------------------------------------------------------------------------
\55\ ``US Department of Energy, Advanced Manufacturing Office,
Premium Efficiency Motor Selection and Application Guide,'' February
2014, www.energy.gov/sites/prod/files/2014/04/f15/amo_motors_handbook_web.pdf.
\56\ Bonneville Power Administration, ``Quality Electric Motor
Repair, a Guidebook for Electric Utilities''
digital.library.unt.edu/ark:/67531/metadc665937/m2/1/high_res_d/237370.pdf.
---------------------------------------------------------------------------
The Joint Advocates observed that for several representative units
of currently-covered motors, the lifetime operating costs increased at
higher EL and commented that DOE should review the repair assumptions
and costs to ensure that operating costs at higher ELs are not over-
estimated. Specifically, the Joint Advocates commented that DOE should
use the alternative scenario, wherein a motor is only assumed to be
repaired if that motor's projected lifetime is greater than half of the
average motor lifetime. The Joint Advocates commented that this
alternative approach is similar to that used in the analysis for motor
replacements in the direct final rule for dedicated-purpose pool pumps
\57\ and would result in LCCs that are more reflective of real-world
repair/replacement decisions. (Joint Advocates, No. 27 at p. 3-4)
---------------------------------------------------------------------------
\57\ See 82 FR 5650 (January 18, 2017).
---------------------------------------------------------------------------
In this direct final rule, DOE revised the repair assumptions to
align with the alternative scenario presented in the March 2022
Preliminary Analysis. As noted by the Joint Advocates, this scenario,
which assumes that motors with longer lifetimes would be repaired more
often is more representative of industry practice.
6. Equipment Lifetime
In the March 2022 Preliminary Analysis, for electric motors
regulated at 10 CFR 431.25, DOE estimated the average mechanical
lifetime of electric motors (i.e., the total number of hours an
electric motor operates throughout its lifetime) and used different
values depending on the electric motor's horsepower. For NEMA Design A
and B electric motors, and AO MEMs, DOE established sector-specific
average motor lifetime estimates to account for differences in
maintenance practices and field usage conditions. In addition, DOE
applied a maximum lifetime of 30 years as used in the May 2014 Final
Rule. DOE then developed Weibull distributions of mechanical lifetimes.
The lifetime in years for a sampled electric motor is calculated by
dividing the sampled mechanical lifetime by the sampled annual
operating hours of the electric motor. This model produces a negative
correlation between annual hours of operation and electric motor
lifetime. Electric motors operated many hours per year are likely to be
retired sooner than electric motors that are used for only a few hours
per year. In addition, DOE considered that electric motors of less than
or equal to 75 horsepower are most likely to be embedded in a piece of
equipment (i.e., an application). For such applications, DOE developed
Weibull distributions of application lifetimes expressed in years and
compared the sampled motor mechanical lifetime (in years) with the
sampled application lifetime. DOE assumed that the electric motor would
be retired at the earlier of the two lifetimes. See chapter 8 of the
March 2022 Prelim TSD.
In response to the March 2022 Preliminary Analysis, NEMA commented
that the lifetimes assigned to the representative units appear to be
sufficiently accurate. (NEMA, No. 22 at p. 22). The CA IOUs recommended
higher maximum lifetimes for NEMA Designs A and B electric motors
beyond 30 years and provided data to justify a higher maximum lifetime.
Specifically, the CA IOUs referenced the MSMA report which shows that
5.4 percent of motors with legible nameplate were older than 30 years,
including 3.4 percent of motors rated 101 to 500 hp which had lifetimes
of at least 50 years. The CA IOUs also cited the Swiss EASY program
which showed motors of 40 years still in operation. Finally the CA IOUs
cited the ``Energy-Efficient Motor Systems: A Handbook on Technology,
Program, and Policy Opportunities'' which references average lifetimes
of 30 years for motors larger than 50 hp. (CA IOUs, No. 30 at p. 3)
DOE reviewed the data provided by the CA IOUs. As noted by the CA
IOUs, the maximum lifetime of 30 years assumed in the March 2022
Preliminary Analysis is not representative as some motors are reported
to have a lifetime exceeding 50 years. In this direct final rule, DOE
revised the maximum lifetime of NEMA Designs A and B electric motors
and AO MEMs from 30 years to 60 years based on information from the
MSMA report which showed motors still in operation after 50 years.
7. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to consumers to estimate the present value of future operating cost
savings. DOE estimated a distribution of discount rates for electric
motors based on the opportunity cost of consumer funds.
DOE applies weighted average discount rates calculated from
consumer debt and asset data, rather than marginal or implicit discount
rates.\58\ The LCC analysis estimates net present value over the
lifetime of the product, so the appropriate discount rate will reflect
the general opportunity cost of household funds, taking this time scale
into account. Given the long time horizon modeled in the LCC analysis,
the application of a marginal interest rate associated with an initial
source of funds is inaccurate. Regardless of the method of purchase,
consumers are expected to continue to rebalance their debt and asset
holdings over the LCC analysis period, based on the restrictions
consumers face in their debt payment requirements and the relative size
of the interest rates available on debts and assets. DOE estimates the
aggregate impact of this rebalancing using the historical distribution
of debts and assets.
---------------------------------------------------------------------------
\58\ The implicit discount rate is inferred from a consumer
purchase decision between two otherwise identical goods with
different first cost and operating cost. It is the interest rate
that equates the increment of first cost to the difference in net
present value of lifetime operating cost, incorporating the
influence of several factors: transaction costs; risk premiums and
response to uncertainty; time preferences; interest rates at which a
consumer is able to borrow or lend. The implicit discount rate is
not appropriate for the LCC analysis because it reflects a range of
factors that influence consumer purchase decisions, rather than the
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------
To establish commercial and industrial discount rates, DOE
estimated the weighted-average cost of capital using data from
Damodaran Online.\59\ The weighted-average cost of capital is commonly
used to estimate the present value of cash flows to be derived from a
typical company project or investment. Most companies use both debt and
equity capital to fund investments, so their cost of capital is the
weighted average of the cost to the firm of equity and debt financing.
DOE estimated the cost of equity using the
[[Page 36107]]
capital asset pricing model, which assumes that the cost of equity for
a particular company is proportional to the systematic risk faced by
that company. The average commercial, industrial, and agricultural
discount rates in 2022 are 6.8 percent, 7.2 percent, and 7.1 percent
respectively.
---------------------------------------------------------------------------
\59\ Damodaran, A. Data Page: Historical Returns on Stocks,
Bonds and Bills-United States. 2021. (Last accessed April 26, 2022.)
pages.stern.nyu.edu/~adamodar/.
---------------------------------------------------------------------------
In response to the March 2022 Preliminary Analysis, DOE did not
receive any comments on discount rates.
See chapter 8 of the direct final rule TSD for further details on
the development of consumer discount rates.
8. Energy Efficiency Distribution in the No-New-Standards Case
To accurately estimate the share of consumers that would be
affected by a potential energy conservation standard at a particular
efficiency level, DOE's LCC analysis considered the projected
distribution (market shares) of equipment efficiencies under the no-
new-standards case (i.e., the case without amended or new energy
conservation standards).
In the March 2022 Preliminary Analysis, to estimate the energy
efficiency distribution of electric motors for 2027, DOE relied on
model counts by efficiency from the 2016 and 2020 Manufacturer Catalog
Data and assumed no changes in electric motor efficiency over time. In
some cases where DOE did not have enough models with efficiency
information within a single horsepower range, DOE aggregated horsepower
ranges. In addition for certain AO-SNEM electric motors, DOE did not
find enough models with efficiency information to develop a
distribution and used the efficiency distributions of the corresponding
non-AO equipment class instead. In the March 2022 Preliminary Analysis,
DOE used a Monte Carlo simulation to draw from the efficiency
distributions and randomly assign an efficiency to the electric motor
purchased by each sample household in the no-new-standards case. The
resulting percent shares within the sample match the market shares in
the efficiency distributions. See chapter 8 of the March 2022 Prelim
TSD.
NEMA disagreed with the DOE estimates for AO MEMs efficiency
distributions and commented that these distributions were modeled/
estimated, rather than gathered properly and accurately through testing
and other means. NEMA commented that DOE should not develop estimates
and interpolations and instead finalize test procedures. NEMA added
that energy efficiency information does not exist because Federal test
procedures for some of these motors have not been established. (NEMA,
No. 22 at p. 23)
DOE notes that NEMA did not provide any data to support alternative
efficiency distributions. In the absence of such data, DOE relied on
model counts by efficiency from manufacturer Catalog Data and updated
the data to reflect 2022 catalog offerings (using the 2022 Motor
Database). For AO Polyphase specialized frame electric motors, DOE did
not find any catalog data to characterize their efficiency
distributions and assumed all motors were at the baseline, because the
OEM market is cost-driven. As such these motors are typically built on
a first-cost basis and are not optimized for efficiency.\60\ In
addition, the electric motors test procedure, which relies on industry
test methods published in 2016,\61\ was finalized on October 19, 2022.
87 FR 63588 For air-over motors, DOE believes manufacturers currently
use the industry test methods (which were adopted in the October 2022
Final Rule) to evaluate the efficiency of electric motors as reported
in their catalogs, which is in line with the DOE test procedure as
finalized.
---------------------------------------------------------------------------
\60\ See, Almeida, Anibal T., et al. 2008. EuP Lot 11 Motors,
Ecodesign Assessment of Energy Using Products. s.l.: ISR-University
of Coimbra for the European Commission Directorate General for
Mobility and Transport, 2008. (p.117). Available at:
circabc.europa.eu/sd/d/62415be2-3d5a-4b3f-b29a-d1760f4dc11a/
Lot11Motors1-8final28-04-08.pdf.
\61\ NEMA Standards Publication MG 1-2016, ``Motors and
Generators: Air-Over Motor Efficiency Test Method Section IV Part
34'', www.nema.org/docs/default-source/standards-document-library/part-34-addition-to-mg1-2016-watermarkd91d7834-cf4f-4a87-b86f-bef96b7dad54.pdf?sfvrsn=cbf1386d_3.
---------------------------------------------------------------------------
As previously noted, in the March 2022 Preliminary Analysis, DOE
assumed no changes in electric motor efficiency over time. DOE did not
receive any comment on this assumption and retain the same approach in
this direct final rule: to estimate the energy efficiency distribution
of electric motors for 2027, DOE assumed no changes in electric motor
efficiency over time. The estimated market shares for the no-new-
standards case for electric motors are shown in Table IV-9 by equipment
class group and horsepower range.
Table IV-9--No-New Standards Case Efficiency Distributions in the Compliance Year
----------------------------------------------------------------------------------------------------------------
Equipment class group Horsepower range EL0 (%) EL1 (%) EL2 (%) EL3 (%) EL4 (%)
----------------------------------------------------------------------------------------------------------------
MEM 1-500 hp, NEMA Design A and B.. 1 <= hp <= 5.................. 79.8 18.8 0.0 0.9 0.6
5 < hp <= 20.................. 93.9 5.4 0.0 0.5 0.1
20 < hp <= 50................. 93.9 5.4 0.0 0.5 0.1
50 < hp <100.................. 89.6 1.2 6.7 2.5 0.0
100 <= hp <= 250.............. 85.9 7.0 6.5 0.6 0.0
250 < hp <= 500............... 91.9 8.1 0.0 0.0 0.0
MEM 501-750 hp, NEMA Design A & B.. 500 < hp <= 750............... 10.5 73.7 15.8 0.0 0.0
AO-MEM (Standard Frame Size)....... 1 <= hp <= 20................. 33.3 64.3 2.3 0.0 0.0
20 < hp <= 50................. 10.3 89.7 0.0 0.0 0.0
50 < hp < 100................. 0.0 100.0 0.0 0.0 0.0
100 <= hp <= 250.............. 16.7 75.0 8.3 0.0 0.0
AO-Polyphase (Specialized Frame 1 <= hp <= 20................. 100 0 0 0 0
Size).
----------------------------------------------------------------------------------------------------------------
* May not sum to 100% due to rounding.
The existence of market failures in the commercial and industrial
sectors is well supported by the economics literature and by a number
of case studies as discussed in the remainder of this section. DOE did
not receive any comments specific to the random assignment of no-new-
standards case efficiencies (sampled from the developed efficiency
distribution) in the LCC model and continued to rely on the same
approach to reflect market failures in the motor market, as noted in
the following examples. First, a recognized problem in commercial
settings is the
[[Page 36108]]
principal-agent problem, where the building owner (or building
developer) selects the equipment and the tenant (or subsequent building
owner) pays for energy costs.62 63 In the case of electric
motors, for many companies, the energy bills are paid for the company
as a whole and not allocated to individual departments. This practice
provides maintenance and engineering staff little incentives to pursue
energy saving investments because the savings in energy bills provide
little benefits to the decision-making maintenance and engineering
staff. (Nadel et al.) \64\ Second, the nature of the organizational
structure and design can influence priorities for capital budgeting,
resulting in choices that do not necessarily maximize
profitability.\65\ In the case of electric motors, within manufacturing
as a whole, motor system energy costs constitute less than 1 percent of
total operating costs and energy efficiency has a low level of priority
among capital investment and operating objectives. (Xenergy,\66\ Nadel
et al.) Third, there are asymmetric information and other potential
market failures in financial markets in general, which can affect
decisions by firms with regard to their choice among alternative
investment options, with energy efficiency being one such option.\67\
In the case of electric motors, Xenergy identified the lack of
information concerning the nature of motor system efficiency measures--
their benefits, costs, and implementation procedures--as a principal
barrier to their adoption. In addition, Almeida \68\ reports that the
attitude of electric motor end-user is characterized by bounded
rationality where they adopt `rule of thumb' routines because of the
complexity of market structure which makes it difficult for motors end-
users to get all the information they need to make an optimum decision
concerning allocation of resources. The rule of thumb is to buy the
same type and brand as the failed motor from the nearest retailer.
Almeida adds that the same problem of bounded rationality exists when
end-users purchase electric motors incorporated in larger equipment. In
general, end-users are only concerned about the overall performance of
a machine, and energy efficiency is rarely a key factor in this
performance. Motor selection is therefore often left to the OEM, which
are not responsible for energy costs and prioritize price and
reliability.
---------------------------------------------------------------------------
\62\ Vernon, D., and Meier, A. (2012). ``Identification and
quantification of principal-agent problems affecting energy
efficiency investments and use decisions in the trucking industry,''
Energy Policy, 49, 266-273.
\63\ Blum, H. and Sathaye, J. (2010). ``Quantitative Analysis of
the Principal-Agent Problem in Commercial Buildings in the U.S.:
Focus on Central Space Heating and Cooling,'' Lawrence Berkeley
National Laboratory, LBNL-3557E. (Available at: escholarship.org/uc/item/6p1525mg) (Last accessed January 20, 2022).
\64\ Nadel, S., R.N. Elliott, M. Shepard, S. Greenberg, G. Katz
& A.T. de Almedia. 2002. Energy-Efficient Motor Systems: A Handbook
on Technology, Program and Policy Opportunities. Washington, DC:
American Council for an Energy-Efficient Economy. Second Edition.
\65\ DeCanio, S.J. (1994). ``Agency and control problems in US
corporations: the case of energy-efficient investment projects,''
Journal of the Economics of Business, 1(1), 105-124.
Stole, L.A., and Zwiebel, J. (1996). ``Organizational design and
technology choice under intrafirm bargaining,'' The American
Economic Review, 195-222.
\66\ Xenergy, Inc. (1998). United States Industrial Electric
Motor Systems Market Opportunity Assessment. (Available at:
www.energy.gov/sites/default/files/2014/04/f15/mtrmkt.pdf) (Last
accessed January 20, 2022).
\67\ Fazzari, S.M., Hubbard, R.G., Petersen, B.C., Blinder,
A.S., and Poterba, J.M. (1988). ``Financing constraints and
corporate investment,'' Brookings Papers on Economic Activity,
1988(1), 141-206.
Cummins, J.G., Hassett, K.A., Hubbard, R.G., Hall, R.E., and
Caballero, R.J. (1994). ``A reconsideration of investment behavior
using tax reforms as natural experiments,'' Brookings Papers on
Economic Activity, 1994(2), 1-74.
DeCanio, S.J., and Watkins, W.E. (1998). ``Investment in energy
efficiency: do the characteristics of firms matter?'' Review of
Economics and Statistics, 80(1), 95-107.
Hubbard R.G. and Kashyap A. (1992). ``Internal Net Worth and the
Investment Process: An Application to U.S. Agriculture,'' Journal of
Political Economy, 100, 506-534.
\68\ de Almeida, E.L.F. (1998). ``Energy efficiency and the
limits of market forces: The example of the electric motor market in
France'', Energy Policy, 26(8), 643-653.
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See chapter 8 of the direct final rule TSD for further information
on the derivation of the efficiency distributions.
9. Payback Period Analysis
The payback period is the amount of time it takes the consumer to
recover the additional installed cost of more-efficient products,
compared to baseline products, through energy cost savings. Payback
periods are expressed in years. Payback periods that exceed the life of
the product mean that the increased total installed cost is not
recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the product and the change in the
first-year annual operating expenditures relative to the baseline. The
PBP calculation uses the same inputs as the LCC analysis, except that
discount rates are not needed.
As noted previously, EPCA establishes a rebuttable presumption that
a standard is economically justified if the Secretary finds that the
additional cost to the consumer of purchasing a product complying with
an energy conservation standard level will be less than three times the
value of the first year's energy savings resulting from the standard,
as calculated under the applicable test procedure. (42 U.S.C.
6295(o)(2)(B)(iii)) For each considered efficiency level, DOE
determined the value of the first year's energy savings by calculating
the energy savings in accordance with the applicable DOE test
procedure, and multiplying those savings by the average energy price
projection for the year in which compliance with the new or amended
standards would be required.
G. Shipments Analysis
DOE uses projections of annual product shipments to calculate the
national impacts of potential amended or new energy conservation
standards on energy use, NPV, and future manufacturer cash flows.\69\
The shipments model takes an accounting approach, tracking market
shares of each product class and the vintage of units in the stock.
Stock accounting uses product shipments as inputs to estimate the age
distribution of in-service product stocks for all years. The age
distribution of in-service product stocks is a key input to
calculations of both the NES and NPV, because operating costs for any
year depend on the age distribution of the stock.
---------------------------------------------------------------------------
\69\ DOE uses data on manufacturer shipments as a proxy for
national sales, as aggregate data on sales are lacking. In general
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------
In the March 2022 Preliminary Analysis, DOE estimated shipments in
the base year (2020). DOE estimated the shipments of NEMA Design A and
B electric motors regulated under 10 CFR 431.25 to be approximately 4.5
million units in 2020 based on data from the 2019 Low-Voltage Motors,
World Market Report, and on the share of low-voltage motors that are
subject to the electric motors energy conservation standards. DOE
estimated the total shipments AO-MEMs in 2020 to be 240,000 units. For
electric motors regulated under 10 CFR 431.25, DOE developed a
distribution of shipments by equipment class group, horsepower,
enclosure, and poles based on data from manufacturer interviews. For
AO-MEMs, DOE relied on model counts from the 2020 and 2016/2020
Manufacturer Catalog Data. DOE also provided shipments estimates for
additional categories of electric motors not analyzed in the
preliminary analysis such as electric motors with horsepower greater
than 500 hp. See chapter 9 of the March 2022 Prelim TSD.
[[Page 36109]]
NEMA commented that shipments for motors above 500 hp were over-
estimated (NEMA, No. 22 at p. 24) During the electric motor working
group negotiations, NEMA provided an estimate of 250--400 units sold
per year. NEMA also provided an estimate of 180,000 units for AO MEMs,
and 20,000 units for AO polyphase specialized frame size electric
motors. In this direct final rule, DOE is including electric motors
with horsepower greater than 500 hp and relied on NEMA's input to
estimate shipments to 375 units in the base year. For AO MEMs and AO
polyphase specialized frame size electric motors, DOE revised the total
shipments to align with NEMA's estimate and revised the distribution of
shipments by horsepower range based on model counts from the 2022 Motor
Database. DOE did not receive any additional comments related to the
base year shipments estimates and retained the values estimated in the
March 2022 Preliminary Analysis for NEMA Design A and B motors between
1--500 hp.
In the March 2022 Preliminary Analysis, for NEMA A and B electric
motors which are primarily used in the industry and commercial sectors,
DOE projected shipments in the no-new standards case under the
assumption that long-term growth of electric motor shipments will be
driven by long-term growth of fixed investments. DOE relied on the AEO
2021 forecast of fixed investments through 2050 to inform its shipments
projection. For the years beyond 2050, DOE assumed that fixed
investment growth will follow the same growth trend as GDP, which DOE
projected for years after 2050 based on the GDP forecast provided by
AEO 2021. For AO-MEM electric motors, which are typically lower
horsepower motors, DOE projected shipments using the following sector-
specific market drivers from AEO 2021: commercial building floor space,
housing numbers, and value of manufacturing activity for the
commercial, residential, and industrial sector, respectively. In
addition, DOE kept the distribution of shipments by equipment class
group/horsepower range constant across the analysis period. Finally, in
each standard case, DOE accounted for the possibility that some
consumers may choose to purchase a synchronous electric motor (out of
scope of this preliminary analysis) rather than a more efficient NEMA
Design A or B electric motor. DOE developed a consumer choice model to
estimate the percentage of consumers that would purchase a synchronous
electric motor based on the payback period of such investment.
In response to the March 2022 Preliminary Analysis, NEMA commented
that they do not anticipate horsepower shifts from technology changes.
NEMA also noted that, as an example, increased emission requirements
for stationary diesel pump drivers will increase demand for larger 200
hp and above electric motors. (NEMA, No. 22 at p. 24) NEMA did not
provide any additional comments regarding shipments projections. DOE
did not receive any additional comments related to shipments and
retained the same methodology as in the preliminary analysis and
updated the analysis to reflect AEO 2022. DOE applied the same
shipments trends to electric motors above 500 hp.
With respect to synchronous motors, NEMA commented that in section
2.9.5 of the March 2022 Prelim TSD, DOE notes that synchronous motors
are less efficient than their Design A or B counterparts, which NEMA
does not agree with. Furthermore, NEMA stated that a focus on single
point efficiency at full load misses the benefit synchronous motors
provide (variable load and reduced speed operation). (NEMA, No. 22 at
p. 24)
DOE clarifies that Table 2.9.5 of the March 2022 Preliminary
Analysis TSD did not provide information related to the efficiency of
synchronous motors. Instead, Table 2.9.5 of the March 2022 Prelim TSD
presented the percentage of consumer that would select a synchronous
motor over a compliant induction motor in each considered standard
level case. In addition, as noted by NEMA, synchronous motors offer
additional energy savings benefits through variable load and reduced
speed operation and DOE accounted for these savings in the preliminary
analysis by applying a reduction of energy of 30 percent based on
information from a previous DOE study.\70\ (See section 9.4 of the
March 2022 Prelim TSD).
---------------------------------------------------------------------------
\70\ U.S Department of Energy. United States Industrial Electric
Motor Systems Market Opportunities Assessment. 2002.
---------------------------------------------------------------------------
The Electric Motors Working Group stated that to achieve IE4
efficiency levels, manufacturers would likely shift from NEMA Design B
to NEMA Design A motors. This shift may result in the increased
adoption of variable frequency drives (VFDs), which would significantly
increase energy savings. Furthermore, while DOE's March 2022
Preliminary Analysis looked only at substitutions to synchronous motors
up to 100 hp, the increased adoption of VFDs (paired with an IE4 motor)
would also be relevant at higher horsepower levels. The Electric Motors
Working Group therefore encouraged DOE to include this VFD substitution
in its analysis and added that with these substitutions, DOE's updated
analysis will show the recommended efficiency levels to be cost
effective. The Electric Motors Working Group did not provide estimates
regarding the rate at which this substitution would occur.
In the direct final rule TSD, DOE added a scenario to account for
the fact that some consumers may choose to purchase a synchronous
electric motor (out of scope of this direct final rule) rather than a
more efficient NEMA Design A or B electric motor or select to purchase
a VFD in combination with a compliant electric motor. Similar to the
approach used in the March 2022 Preliminary Analysis, DOE developed a
consumer choice model to estimate the percentage of consumers that
would purchase a synchronous electric motor based on the payback period
of such investment. DOE notes that there is uncertainty as to which
rate such substitution would occur and did not incorporate this
scenario as part of the reference analysis. To support the payback
calculation, DOE accounted for the total installed costs and annual
operating costs of a synchronous motor and of a VFD in combination with
a compliant electric motor. In addition, DOE updated its previous
estimate of energy use reduction resulting from variable load and
reduced speed operation based on a more recent study. See appendix 8-D
of the DFR TSD for more details on this analysis.
NEMA added that comparing a synchronous motor and drive combination
to an induction motor is not an apples-to-apples comparison and should
be avoided. NEMA stated that the application of motor-drive systems are
application dependent. NEMA stated that programs which encourage and
facilitate power drive system installations in the field and during
planning are the appropriate vehicles for market transformation, not
point-of-sale regulations such as those in question of the PTSD. NEMA
stated that DOE should defer to and encourage those programs as
appropriate ``other than regulatory'' actions for market
transformation. (NEMA, No. 22 at p. 24)
DOE notes that NEMA is a member of the Electric Motors Working
Group and jointly commented that DOE should consider that some
consumers may select to purchase a synchronous motor and drive
combination or a VFD combined with a compliant motor. As noted, DOE
analyzed this scenario as a
[[Page 36110]]
sensitivity analysis and the reference scenario did not include this
potential market shift to synchronous motors and VFD usage.
NEMA commented that legacy induction motors are being replaced by
PDS (or power drive systems) consisting of a motor and controls/drives
as a means to dramatically reduce power and integrate motor driven
systems into sophisticated control schemes that continuously monitor
processes managing flow, pressure, etc., to reduce operating costs and
emissions. (NEMA, No. 22 at p. 23) As noted by NEMA, advanced
technology electric motors that are combined with a drive are now
available on the market and could be used in the same applications as
the electric motors analyzed in this direct final rule. However, DOE
estimates these PDS currently represent a small fraction of the
market.\71\ Further, NEMA did not provide data to quantitatively
estimate the rate at which such PDS would replace legacy induction
motors. As such DOE did not include such impact in the reference
scenario. Instead, DOE accounted for the potential switch from
induction motors to PDS as a sensitivity scenario. See Appendix 8-C and
10-D for more details. In addition, as another sensitivity analysis,
DOE also projected shipments in a low growth scenario which assumed
lower shipments compared to the reference scenario. See Chapter 9 of
the direct final rule for more details.
---------------------------------------------------------------------------
\71\ DOE estimates the market share of advanced technology
motors to be less than 1 percent based on information from OMDIA,
Low-Voltage Motors Intelligence Service, Annual 2020 Analysis (OMDIA
Report November 2020).
---------------------------------------------------------------------------
H. National Impact Analysis
The NIA assesses the national energy savings (``NES'') and the NPV
from a national perspective of total consumer costs and savings that
would be expected to result from new or amended standards at specific
efficiency levels.\72\ (``Consumer'' in this context refers to
consumers of the product being regulated.) DOE calculates the NES and
NPV for the potential standard levels considered based on projections
of annual product shipments, along with the annual energy consumption
and total installed cost data from the energy use and LCC analyses. For
the present analysis, DOE projected the energy savings, operating cost
savings, product costs, and NPV of consumer benefits over the lifetime
of electric motors sold from 2027 through 2056.
---------------------------------------------------------------------------
\72\ The NIA accounts for impacts in the 50 states and U.S.
territories.
---------------------------------------------------------------------------
DOE evaluates the impacts of new or amended standards by comparing
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each
product class in the absence of new or amended energy conservation
standards. For this projection, DOE considers historical trends in
efficiency and various forces that are likely to affect the mix of
efficiencies over time. DOE compares the no-new-standards case with
projections characterizing the market for each product class if DOE
adopted new or amended standards at specific energy efficiency levels
(i.e., the TSLs or standards cases) for that class. For the standards
cases, DOE considers how a given standard would likely affect the
market shares of products with efficiencies greater than the standard.
In its analysis, DOE analyzes the energy and economic impacts of a
potential standard on all equipment classes aggregated by horsepower
range and equipment class group. For NEMA Design A and B electric
motors regulated under 10 CFR 431.25, inputs for non-representative
equipment classes (i.e., those not analyzed in the engineering, energy-
use, and LCC analyses) are scaled using inputs for the analyzed
representative equipment classes.\73\ For AO-MEMs and electric motors
above 500 hp, DOE used the results of the representative units without
any scaling due to the smaller size of horsepower ranges associated for
each representative unit, and lower shipments of motors at larger
horsepower ratings.
---------------------------------------------------------------------------
\73\ For example, results from representative unit 1 (NEMA
Design A and B electric motors, 5-horsepower, 4-pole, enclosed) were
scaled based by HP and weight to represent all NEMA Design A and B
electric motor equipment classes between 1 and 5 horsepower. DOE
then used shipments weighted-average results to represent the 1-5 HP
range.
---------------------------------------------------------------------------
DOE uses a spreadsheet model to calculate the energy savings and
the national consumer costs and savings from each TSL. Interested
parties can review DOE's analyses by changing various input quantities
within the spreadsheet. The NIA spreadsheet model uses typical values
(as opposed to probability distributions) as inputs.
Table IV-10 summarizes the inputs and methods DOE used for the NIA
analysis for the direct final rule. Discussion of these inputs and
methods follows the table. See chapter 10 of the direct final rule TSD
for further details.
Table IV-10--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments.................... Annual shipments from shipments model.
Compliance Date of Standard.. 2027.
Efficiency Trends............ No-new-standards case: constant trend
Standard cases: constant trend.
Annual Energy Consumption per Annual weighted-average values are a
Unit. function of energy use at each TSL.
Total Installed Cost per Unit Annual weighted-average values are a
function of cost at each TSL.
Incorporates projection of future
product prices based on historical data
(constant trend).
Repair and Maintenance Cost Maintenance costs: Do not change with
per Unit. efficiency level. Repair costs: Changes
with efficiency level.
Electricity Price............ Estimated average and marginal
electricity prices from the LCC analysis
based on EEI data.
Electricity Price Trends..... AEO2022 projections (to 2050) and
extrapolation thereafter.
Energy Site-to-Primary and A time-series conversion factor based on
FFC Conversion. AEO2022.
Discount Rate................ 3 percent and 7 percent.
Present Year................. 2023.
------------------------------------------------------------------------
1. Equipment Efficiency Trends
A key component of the NIA is the trend in energy efficiency
projected for the no-new-standards case and each of the standards
cases. Section IV.F.8 of this document describes how DOE developed an
energy efficiency distribution for the no-new-standards case (which
yields a shipment-weighted average efficiency) for each of the
considered equipment classes for the first year of anticipated
compliance with an amended or new standard. To project the trend in
efficiency absent amended standards for electric motors over the
[[Page 36111]]
entire shipments projection period, similar to what was done in the
March 2022 preliminary Analysis, DOE applied a constant trend. The
approach is further described in chapter 10 of the direct final rule
TSD.
For the standards cases, similar to what was done in the March 2022
preliminary Analysis, DOE used a ``roll-up'' scenario to establish the
shipment-weighted efficiency for the year that standards are assumed to
become effective (2027). In this scenario, the market shares of
products in the no-new-standards case that do not meet the standard
under consideration would ``roll up'' to meet the new standard level,
and the market share of products above the standard would remain
unchanged.
To develop standards case efficiency trends after 2027, DOE assumed
no change over the forecast period.
DOE did not receive any comments on the projected efficiency
trends.
2. National Energy Savings
The national energy savings analysis involves a comparison of
national energy consumption of the considered products between each
potential standards case (``TSL'') and the case with no new or amended
energy conservation standards. DOE calculated the national energy
consumption by multiplying the number of units (stock) of each product
(by vintage or age) by the unit energy consumption (also by vintage).
DOE calculated annual NES based on the difference in national energy
consumption for the no-new standards case and for each higher
efficiency standard case. DOE estimated energy consumption and savings
based on site energy and converted the electricity consumption and
savings to primary energy (i.e., the energy consumed by power plants to
generate site electricity) using annual conversion factors derived from
AEO2022. Cumulative energy savings are the sum of the NES for each year
over the timeframe of the analysis.
Use of higher-efficiency products is sometimes associated with a
direct rebound effect, which refers to an increase in utilization of
the product due to the increase in efficiency. For example, when a
consumer realizes that a more-efficient electric motor used for cooling
will lower the electricity bill, that person may opt for increased
comfort in the building by using the equipment more, thereby negating a
portion of the energy savings. In commercial buildings, however, the
person owning the equipment (i.e., the building owner) is usually not
the person operating the equipment (i.e., the renter). Because the
operator usually does not own the equipment, that person will not have
the operating cost information necessary to influence their operation
of the equipment. Therefore, DOE believes that a rebound effect is
unlikely to occur in commercial buildings. In the industrial and
agricultural sectors, DOE believes that electric motors are likely to
be operated whenever needed for the required process or service, so a
rebound effect is also unlikely to occur in the industrial and
agricultural sectors.
In addition, electric motors are components of larger equipment or
systems and DOE has determined that a change in motor efficiency alone
would not increase the utilization of that equipment or system. DOE did
not find any data on the rebound effect specific to electric motors and
did not receive any comments supporting the inclusion of a rebound
effect for electric motors. DOE did not apply a rebound effect for
electric motors.
In 2011, in response to the recommendations of a committee on
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy
Efficiency Standards'' appointed by the National Academy of Sciences,
DOE announced its intention to use FFC measures of energy use and
greenhouse gas and other emissions in the national impact analyses and
emissions analyses included in future energy conservation standards
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the
approaches discussed in the August 18, 2011 notice, DOE published a
statement of amended policy in which DOE explained its determination
that EIA's National Energy Modeling System (``NEMS'') is the most
appropriate tool for its FFC analysis and its intention to use NEMS for
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain,
multi-sector, partial equilibrium model of the U.S. energy sector \74\
that EIA uses to prepare its Annual Energy Outlook. The FFC factors
incorporate losses in production and delivery in the case of natural
gas (including fugitive emissions) and additional energy used to
produce and deliver the various fuels used by power plants. The
approach used for deriving FFC measures of energy use and emissions is
described in appendix 10B of the direct final rule TSD.
---------------------------------------------------------------------------
\74\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2018, DOE/EIA-0581(2018), April 2019.
Available at www.eia.gov/outlooks/aeo/nems/documentation/ (last
accessed July 26, 2022).
---------------------------------------------------------------------------
3. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers are (1) total annual installed cost, (2) total
annual operating costs (energy costs and repair and maintenance costs),
and (3) a discount factor to calculate the present value of costs and
savings. DOE calculates net savings each year as the difference between
the no-new-standards case and each standards case in terms of total
savings in operating costs versus total increases in installed costs.
DOE calculates operating cost savings over the lifetime of each product
shipped during the projection period.
As discussed in section IV.F.1 of this document, DOE developed
equipment price trends based on historical PPI data. DOE applied the
same trends (i.e., constant price trend) to project prices for each
equipment class at each considered efficiency level.
To evaluate the effect of uncertainty regarding the price trend
estimates, DOE investigated the impact of different product price
projections on the consumer NPV for the considered TSLs for electric
motors. In addition to the default price trend, DOE considered two
product price sensitivity cases: (1) a high price decline case and (2)
a low price decline case based on historical PPI data. The derivation
of these price trends and the results of these sensitivity cases are
described in appendix 10-C of the direct final rule TSD.
The operating cost savings are electricity cost savings and any
changes in repair costs, which are calculated using the estimated
energy savings in each year and the projected electricity price as well
as using the lifetime repair costs estimates from the LCC. To estimate
electricity prices in future years, in each sector (commercial,
industrial and agriculture), DOE multiplied the sector-specific average
electricity prices by the projection of annual national-average
electricity price changes in the Reference case from AEO2022, which has
an end year of 2050. To estimate price trends after 2050, DOE used the
2050 electricity prices, held constant. DOE then used a weighted-
average trend across all sectors in the NIA. As part of the NIA, DOE
also analyzed scenarios that used inputs from variants of the AEO2022
Reference case that have lower and higher economic growth. Those cases
have lower and higher energy price trends compared to the Reference
case. NIA results based on these cases are presented in appendix 10C of
the direct final rule TSD.
[[Page 36112]]
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
direct final rule, DOE estimated the NPV of consumer benefits using
both a 3-percent and a 7-percent real discount rate. DOE uses these
discount rates in accordance with guidance provided by the Office of
Management and Budget (``OMB'') to Federal agencies on the development
of regulatory analysis.\75\ The discount rates for the determination of
NPV are in contrast to the discount rates used in the LCC analysis,
which are designed to reflect a consumer's perspective. The 7-percent
real value is an estimate of the average before-tax rate of return to
private capital in the U.S. economy. The 3-percent real value
represents the ``social rate of time preference,'' which is the rate at
which society discounts future consumption flows to their present
value.
---------------------------------------------------------------------------
\75\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at
georgewbush-whitehouse.archives.gov/omb/memoranda/m03-21.html (last
accessed July 26, 2022).
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I. Consumer Subgroup Analysis
In analyzing the potential impact of new or amended energy
conservation standards on consumers, DOE evaluates the impact on
identifiable subgroups of consumers that may be disproportionately
affected by a new or amended national standard. The purpose of a
subgroup analysis is to determine the extent of any such
disproportional impacts. DOE evaluates impacts on particular subgroups
of consumers by analyzing the LCC impacts and PBP for those particular
consumers from alternative standard levels. For this direct final rule,
DOE analyzed the impacts of the considered standard levels on one
subgroup: small businesses.
DOE used the LCC and PBP spreadsheet model to estimate the impacts
of the considered efficiency levels on this subgroup. Chapter 11 in the
direct final rule TSD describes the consumer subgroup analysis.
J. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the financial impacts of new and
amended energy conservation standards on manufacturers of electric
motors and to estimate the potential impacts of such standards on
employment and manufacturing capacity. The MIA has both quantitative
and qualitative aspects and includes analyses of projected industry
cash flows, the INPV, investments in research and development (``R&D'')
and manufacturing capital, and domestic manufacturing employment.
Additionally, the MIA seeks to determine how new and amended energy
conservation standards might affect manufacturing employment, capacity,
and competition, as well as how standards contribute to overall
regulatory burden. Finally, the MIA serves to identify any
disproportionate impacts on manufacturer subgroups, including small
business manufacturers.
The quantitative part of the MIA primarily relies on the Government
Regulatory Impact Model (``GRIM''), an industry cash flow model with
inputs specific to this rulemaking. The key GRIM inputs include data on
the industry cost structure, unit production costs, product shipments,
manufacturer markups, and investments in R&D and manufacturing capital
required to produce compliant products. The key GRIM outputs are the
INPV, which is the sum of industry annual cash flows over the analysis
period, discounted using the industry-weighted average cost of capital,
and the impact to domestic manufacturing employment. The model uses
standard accounting principles to estimate the impacts of more-
stringent energy conservation standards on a given industry by
comparing changes in INPV and domestic manufacturing employment between
a no-new-standards case and the various standards cases (``TSLs''). To
capture the uncertainty relating to manufacturer pricing strategies
following new and amended standards, the GRIM estimates a range of
possible impacts under different manufacturer markup scenarios.
The qualitative part of the MIA addresses manufacturer
characteristics and market trends. Specifically, the MIA considers such
factors as a potential standard's impact on manufacturing capacity,
competition within the industry, the cumulative impact of other DOE and
non-DOE regulations, and impacts on manufacturer subgroups. The
complete MIA is outlined in chapter 12 of the direct final rule TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase
1 of the MIA, DOE prepared a profile of the electric motors
manufacturing industry based on the market and technology assessment,
preliminary manufacturer interviews, and publicly-available
information. This included a top-down analysis of electric motors
manufacturers that DOE used to derive preliminary financial inputs for
the GRIM (e.g., revenues; materials, labor, overhead, and depreciation
expenses; selling, general, and administrative expenses (``SG&A''); and
R&D expenses). DOE also used public sources of information to further
calibrate its initial characterization of the electric motors
manufacturing industry, including company filings of form 10-K from the
SEC,\76\ corporate annual reports, the U.S. Census Bureau's ``Economic
Census,'' \77\ and reports from D&B Hoover.\78\
---------------------------------------------------------------------------
\76\ www.sec.gov/edgar.
\77\ www.census.gov/programs-surveys/asm/data/tables.html.
\78\ app.avention.com.
---------------------------------------------------------------------------
In Phase 2 of the MIA, DOE prepared a framework industry cash-flow
analysis to quantify the potential impacts of new and amended energy
conservation standards. The GRIM uses several factors to determine a
series of annual cash flows starting with the announcement of the
standard and extending over a 30-year period following the compliance
date of the standard. These factors include annual expected revenues,
costs of sales, SG&A and R&D expenses, taxes, and capital expenditures.
In general, energy conservation standards can affect manufacturer cash
flow in three distinct ways: (1) creating a need for increased
investment, (2) raising production costs per unit, and (3) altering
revenue due to higher per-unit prices and changes in sales volumes.
In addition, during Phase 2, DOE developed interview guides to
distribute to manufacturers of electric motors in order to develop
other key GRIM inputs, including product and capital conversion costs,
and to gather additional information on the anticipated effects of
energy conservation standards on revenues, direct employment, capital
assets, industry competitiveness, and subgroup impacts.
In Phase 3 of the MIA, DOE conducted structured, detailed
interviews with representative manufacturers. During these interviews,
DOE discussed engineering, manufacturing, procurement, and financial
topics to validate assumptions used in the GRIM and to identify key
issues or concerns. See section IV.J.3 of this document for a
description of the key issues raised by manufacturers during the
interviews. As part of Phase 3, DOE also evaluated subgroups of
manufacturers that may be disproportionately impacted by new and
amended standards or that may not be accurately represented by the
average cost assumptions used to develop the industry cash flow
analysis. Such
[[Page 36113]]
manufacturer subgroups may include small business manufacturers, low-
volume manufacturers (``LVMs''), niche players, and/or manufacturers
exhibiting a cost structure that largely differs from the industry
average. DOE identified one subgroup for a separate impact analysis:
small business manufacturers. The small business subgroup is discussed
in section VI.B, ``Review under the Regulatory Flexibility Act'' and in
chapter 12 of the direct final rule TSD.
2. Government Regulatory Impact Model and Key Inputs
DOE uses the GRIM to quantify the changes in cash flow due to new
and amended standards that result in a higher or lower industry value.
The GRIM uses a standard, annual discounted cash-flow analysis that
incorporates manufacturer costs, markups, shipments, and industry
financial information as inputs. The GRIM models changes in costs,
distribution of shipments, investments, and manufacturer margins that
could result from new and amended energy conservation standards. The
GRIM spreadsheet uses the inputs to arrive at a series of annual cash
flows, beginning in 2023 (the base year of the analysis) and continuing
to 2056. DOE calculated INPVs by summing the stream of annual
discounted cash flows during this period. For manufacturers of electric
motors, DOE used a real discount rate of 9.1 percent, which was used in
the May 2014 Final Rule and then asked for feedback on this value
during manufacturer interviews.
The GRIM calculates cash flows using standard accounting principles
and compares changes in INPV between the no-new-standards case and each
standards case. The difference in INPV between the no-new-standards
case and a standards case represents the financial impact of the new
and amended energy conservation standards on manufacturers. As
discussed previously, DOE developed critical GRIM inputs using a number
of sources, including publicly available data, results of the
engineering analysis, and information gathered from industry
stakeholders during the course of manufacturer interviews and
subsequent Working Group meetings. The GRIM results are presented in
section V.B.2. Additional details about the GRIM, the discount rate,
and other financial parameters can be found in chapter 12 of the direct
final rule TSD.
a. Manufacturer Production Costs
Manufacturing more efficient equipment is typically more expensive
than manufacturing baseline equipment due to the use of more complex
components, which are typically more costly than baseline components.
The changes in the MPCs of the covered equipment can affect the
revenues, gross margins, and cash flow of the industry.
DOE conducted the engineering analysis using a combination of
physical teardowns and software modeling. DOE contracted a professional
motor laboratory to disassemble various electric motors and record what
types of materials were present and how much of each material was
present, recorded in a final bill of materials (``BOM''). To supplement
the physical teardowns, software modeling by a subject matter expert
(``SME'') was also used to generate BOMs for select efficiency levels
of directly analyzed representative units.
For a complete description of the MPCs, see chapter 5 of the direct
final rule TSD.
b. Shipments Projections
The GRIM estimates manufacturer revenues based on total unit
shipment projections and the distribution of those shipments by
efficiency level. Changes in sales volumes and efficiency mix over time
can significantly affect manufacturer finances. For this analysis, the
GRIM uses the NIA's annual shipment projections derived from the
shipments analysis from 2023 (the base year) to 2056 (the end year of
the analysis period). See chapter 9 of the direct final rule TSD for
additional details.
c. Product and Capital Conversion Costs
New and amended energy conservation standards could cause
manufacturers to incur conversion costs to bring their production
facilities and equipment designs into compliance. DOE evaluated the
level of conversion-related expenditures that would be needed to comply
with each considered efficiency level in each equipment class. For the
MIA, DOE classified these conversion costs into two major groups: (1)
product conversion costs; and (2) capital conversion costs. Product
conversion costs are investments in research, development, testing,
marketing, and other non-capitalized costs necessary to make equipment
designs comply with new amended energy conservation standards. Capital
conversion costs are investments in property, plant, and equipment
necessary to adapt or change existing production facilities such that
new compliant equipment designs can be fabricated and assembled.
DOE calculated the product and capital conversion costs using
bottom-up approach based on feedback from manufacturers during
manufacturer interviews. During manufacturer interviews, DOE asked
manufacturers questions regarding the estimated product and capital
conversion costs needed to produce electric motors within an equipment
class at each specific EL. DOE used the feedback provided from
manufacturers to estimate the approximate amount of engineering time,
testing costs and capital equipment that would be purchased to redesign
a single frame size to each EL. Some of the types of capital conversion
costs manufacturers identified were the purchase of lamination die
sets, winding machines, frame casts, and assembly equipment as well as
other retooling costs. The two main types of product conversion costs
manufacturers shared with DOE during interviews were number of engineer
hours necessary to re-engineer frames to meet higher efficiency
standards and the testing costs to comply with higher efficiency
standards.
DOE then took average values (i.e., costs or number of hours) based
on the range of responses given by manufacturers for each product and
capital conversion costs necessary for a manufacturer to increase the
efficiency of one frame size to a specific EL. DOE multiplied the
conversion costs associated with manufacturing a single frame size at
each EL by the number of frames each interviewed manufacturer produces.
DOE finally scaled this number based on the market share of the
manufacturers DOE interviewed, to arrive at industry wide bottom-up
product and capital conversion cost estimates for each representative
unit at each EL.
In response to the May 2020 Early Assessment Review RFI, NEMA
stated that if DOE decides to pursue revision of energy conservation
standards for electric motors, DOE should revisit its analyses and
assumptions for the product and capital conversion costs used in the
May 2014 Final Rule. (NEMA, No. 4 at p. 3) Additionally, in response to
the March 2022 Preliminary Analysis EASA agreed with NEMA's comment
that DOE should revise the analyses for product and capital conversion
costs (EASA, No. 21 at p. 5) After the publication of the March 2022
Preliminary Analysis, DOE interviewed manufacturers to gather
information regarding the product and capital conversion costs used in
this NOPR analysis. DOE relied on the information gathered during these
manufacturer interviews to create the product and
[[Page 36114]]
capital conversion cost estimated used in this direct final rule
analysis.
In general, DOE assumes all conversion-related investments occur
between the year of publication of the direct final rule and the year
by which manufacturers must comply with the new and amended standard.
The conversion cost figures used in the GRIM can be found in section
V.B.2 of this document. For additional information on the estimated
capital and product conversion costs, see chapter 12 of the direct
final rule TSD.
d. Markup Scenarios
MSPs include direct manufacturing production costs (i.e., labor,
materials, and overhead estimated in DOE's MPCs) and all non-production
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate
the MSPs in the GRIM, DOE applied non-production cost markup
multipliers to the MPCs estimated in the engineering analysis for each
equipment class and efficiency level. Modifying these markup
multipliers the standards case yields different sets of impacts on
manufacturers. For the MIA, DOE modeled two standards-case markup
scenarios to represent uncertainty regarding the potential impacts on
prices and profitability for manufacturers following the implementation
of new and amended energy conservation standards: (1) a preservation of
gross margin scenario; and (2) a preservation of operating profit
markup scenario. These scenarios lead to different markup multipliers
that, when applied to the MPCs, result in varying revenue and cash flow
impacts.
Under the preservation of gross margin scenario, DOE applied a
single uniform ``gross margin percentage'' across all efficiency
levels, which assumes that manufacturers would be able to maintain the
same amount of profit as a percentage of revenues at all efficiency
levels within an equipment class. In this manufacturer markup scenario,
electric motor manufacturers fully pass on any additional MPC increase
due to standards to their consumers. DOE used a manufacturer markup of
1.37 for all electric motors covered by this rulemaking with less than
or equal to 5 hp, and a manufacturer markup or 1.45 for all electric
motors covered by this rulemaking greater than 5 hp. DOE used these
same manufacturer markups for all TSLs in the preservation of gross
margin scenario. This manufacturer markup scenario represents the
upper-bound of manufacturer INPV and is the manufacturer markup
scenario used to calculate the economic impacts on consumers.
Under the preservation of operating profit scenario, DOE modeled a
situation in which manufacturers are not able to increase per-unit
operating profit in proportion to increases in MPCs. Under this
scenario, as MPCs increase, manufacturers reduce the manufacturer
margins to maintain a cost competitive offering in the market. However,
in this scenario manufacturers maintain their total operating profit in
absolute dollars in the standards case, despite higher product costs
and investment. Therefore, gross margin (as a percentage) shrinks in
the standards cases. This manufacturer markup scenario represents the
lower-bound to industry profitability under new and amended energy
conservation standards.
A comparison of industry financial impacts under the two markup
scenarios is presented in section V.B.2.a of this document.
3. Manufacturer Interviews
DOE conducted additional interviews with manufacturers following
the publication of the March 2022 Prelim TSD in preparation for this
NOPR analysis. In interviews, DOE asked manufacturers to describe their
major concerns regarding this rulemaking. The following section
highlights manufacturer concerns that helped inform the projected
potential impacts of anew and amended standard on the industry.
Manufacturer interviews are conducted under non-disclosure agreements
(``NDAs''), so DOE does not document these discussions in the same way
that it does public comments in the comment summaries and DOE's
responses throughout the rest of this document.
During these interviews, most manufacturers stated that even
manufacturing a single electric motor to an efficiency level above IE 4
(or IE 4 equivalent efficiency levels) would require a significant
level of investments. Further, most manufacturers also stated that it
would be impossible to manufacturer a complete line of electric motors
spanning all horsepower covered by this rulemaking regardless of the
costs associated with this task. Increasing the efficiency of any
electric motor to an efficiency level above IE 4 would require each
manufacturer to make a significant capital investment to retool their
entire production line. It would also require manufacturers to
completely redesign almost every electric motor configuration offered,
which could take more than a decade of engineering time.
DOE examines a range of efficiency levels for covered equipment
when determining whether to amend or establish energy conservation
standards, including the level that represents the most energy-
efficient combination of design options. In this analysis for NEMA
Design A and B electric motors between 1 and 500 hp, EL 1 is associated
with an IE 4 equivalent efficiency level and EL 2, EL 3, and EL 4 (max-
tech) represent efficiency levels above IE 4. DOE understands the level
of burden placed on electric motor manufacturers if energy conservation
standards require any electric motors to meet energy conservation
standards set above IE 4 equivalent levels. These investments (in the
form of conversion costs) are accounted for in the MIA and displayed in
section V.B.2.a.
K. Emissions Analysis
The emissions analysis consists of two components. The first
component estimates the effect of potential energy conservation
standards on power sector and site (where applicable) combustion
emissions of CO2, NOX, SO2, and Hg.
The second component estimates the impacts of potential standards on
emissions of two additional greenhouse gases, CH4 and
N2O, as well as the reductions in emissions of other gases
due to ``upstream'' activities in the fuel production chain. These
upstream activities comprise extraction, processing, and transporting
fuels to the site of combustion.
The analysis of electric power sector emissions of CO2,
NOX, SO2, and Hg uses emissions factors intended
to represent the marginal impacts of the change in electricity
consumption associated with amended or new standards. The methodology
is based on results published for the AEO, including a set of side
cases that implement a variety of efficiency-related policies. The
methodology is described in appendix 13A in the direct final rule TSD.
The analysis presented in this notice uses projections from AEO2022.
Power sector emissions of CH4 and N2O from fuel
combustion are estimated using Emission Factors for Greenhouse Gas
Inventories published by the Environmental Protection Agency (EPA).\79\
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\79\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12,
2021).
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FFC upstream emissions, which include emissions from fuel
combustion during extraction, processing, and transportation of fuels,
and ``fugitive''
[[Page 36115]]
emissions (direct leakage to the atmosphere) of CH4 and
CO2, are estimated based on the methodology described in
chapter 15 of the direct final rule TSD.
The emissions intensity factors are expressed in terms of physical
units per MWh or MMBtu of site energy savings. For power sector
emissions, specific emissions intensity factors are calculated by
sector and end use. Total emissions reductions are estimated using the
energy savings calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
DOE's no-new-standards case for the electric power sector reflects
the AEO, which incorporates the projected impacts of existing air
quality regulations on emissions. AEO2022 generally represents current
legislation and environmental regulations, including recent government
actions, that were in place at the time of preparation of AEO2022,
including the emissions control programs discussed in the following
paragraphs.\80\
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\80\ For further information, see the Assumptions to AEO2022
report that sets forth the major assumptions used to generate the
projections in the Annual Energy Outlook. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed June 22, 2022).
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SO2 emissions from affected electric generating units
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions
cap on SO2 for affected EGUs in the 48 contiguous States and
the District of Columbia (``DC''). (42 U.S.C. 7651 et seq.)
SO2 emissions from numerous States in the eastern half of
the United States are also limited under the Cross-State Air Pollution
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these
States to reduce certain emissions, including annual SO2
emissions, and went into effect as of January 1, 2015.\81\ AEO2022
incorporates implementation of CSAPR, including the update to the CSAPR
ozone season program emission budgets and target dates issued in 2016.
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among
EGUs and is enforced through the use of tradable emissions allowances.
Under existing EPA regulations, for states subject to SO2
emissions limits under CSAPR, any excess SO2 emissions
allowances resulting from the lower electricity demand caused by the
adoption of an efficiency standard could be used to permit offsetting
increases in SO2 emissions by another regulated EGU.
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\81\ CSAPR requires states to address annual emissions of
SO2 and NOX, precursors to the formation of
fine particulate matter (PM2.5) pollution, in order to
address the interstate transport of pollution with respect to the
1997 and 2006 PM2.5 National Ambient Air Quality
Standards (``NAAQS''). CSAPR also requires certain states to address
the ozone season (May-September) emissions of NOX, a
precursor to the formation of ozone pollution, in order to address
the interstate transport of ozone pollution with respect to the 1997
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a
supplemental rule that included an additional five states in the
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011)
(Supplemental Rule).
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However, beginning in 2016, SO2 emissions began to fall
as a result of the Mercury and Air Toxics Standards (``MATS'') for
power plants. 77 FR 9304 (Feb. 16, 2012). The final rule establishes
power plant emission standards for mercury, acid gases, and non-mercury
metallic toxic pollutants. In order to continue operating, coal plants
must have either flue gas desulfurization or dry sorbent injection
systems installed. Both technologies, which are used to reduce acid gas
emissions, also reduce SO2 emissions. Because of the
emissions reductions under the MATS, it is unlikely that excess
SO2 emissions allowances resulting from the lower
electricity demand would be needed or used to permit offsetting
increases in SO2 emissions by another regulated EGU.
Therefore, energy conservation standards that decrease electricity
generation will generally reduce SO2 emissions. DOE
estimated SO2 emissions reduction using emissions factors
based on AEO2022.
CSAPR also established limits on NOX emissions for
numerous States in the eastern half of the United States. Energy
conservation standards would have little effect on NOX
emissions in those States covered by CSAPR emissions limits if excess
NOX emissions allowances resulting from the lower
electricity demand could be used to permit offsetting increases in
NOX emissions from other EGUs. In such case, NOX
emissions would remain near the limit even if electricity generation
goes down. Depending on the configuration of the power sector in the
different regions and the need for allowances, however, NOX
emissions might not remain at the limit in the case of lower
electricity demand. That would mean that standards might reduce
NOX emissions in covered States. Despite this possibility,
DOE has chosen to be conservative in its analysis and has maintained
the assumption that standards will not reduce NOX emissions
in States covered by CSAPR. Standards would be expected to reduce
NOX emissions in the States not covered by CSAPR. DOE used
AEO2022 data to derive NOX emissions factors for the group
of States not covered by CSAPR.
The MATS limit mercury emissions from power plants, but they do not
include emissions caps and, as such, DOE's energy conservation
standards would be expected to slightly reduce Hg emissions. DOE
estimated mercury emissions reduction using emissions factors based on
AEO2022, which incorporates the MATS.
NEMA commented that DOE does not adequately examine or account for
the significant impacts from ever-increasing investment in and use of
renewable energy sources and associated decrease in emissions. (NEMA,
No. 22 at p. 25)
DOE acknowledges that increasing use of renewable electricity
sources could reduce CO2 emissions and likely other
emissions from the power sector faster than could have been expected
when AEO2022 was prepared. Nevertheless, DOE has used AEO2022 for the
purposes of quantifying emissions as DOE believes it continues to be
the most appropriate projection at this time for such purposes.
L. Monetizing Emissions Impacts
As part of the development of this direct final rule, for the
purpose of complying with the requirements of Executive Order 12866,
DOE considered the estimated monetary benefits from the reduced
emissions of CO2, CH4, N2O,
NOX, and SO2 that are expected to result from
each of the TSLs considered. In order to make this calculation
analogous to the calculation of the NPV of consumer benefit, DOE
considered the reduced emissions expected to result over the lifetime
of products shipped in the projection period for each TSL. This section
summarizes the basis for the values used for monetizing the emissions
benefits and presents the values considered in this direct final rule.
To monetize the benefits of reducing GHG emissions this analysis
uses the interim estimates presented in the Technical Support Document:
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates
Under Executive Order 13990 published in February 2021 by the
Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
DOE requests comment on how to address the climate benefits and other
non-monetized effects of the proposal.
1. Monetization of Greenhouse Gas Emissions
DOE estimates the monetized benefits of the reductions in emissions
of CO2, CH4, and N2O by using a
measure of the SC of each pollutant (e.g., SC-CO2).
[[Page 36116]]
These estimates represent the monetary value of the net harm to society
associated with a marginal increase in emissions of these pollutants in
a given year, or the benefit of avoiding that increase. These estimates
are intended to include (but are not limited to) climate-change-related
changes in net agricultural productivity, human health, property
damages from increased flood risk, disruption of energy systems, risk
of conflict, environmental migration, and the value of ecosystem
services.
DOE exercises its own judgment in presenting monetized climate
benefits as recommended by applicable Executive orders, and DOE would
reach the same conclusion presented in this direct final rule in the
absence of the social cost of greenhouse gases. That is, the social
costs of greenhouse gases, whether measured using the February 2021
interim estimates presented by the Interagency Working Group on the
Social Cost of Greenhouse Gases or by another means, did not affect the
rule ultimately adopted by DOE.
DOE estimated the global social benefits of CO2,
CH4, and N2O reductions (i.e., SC-GHGs) using the
estimates presented in the Technical Support Document: Social Cost of
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive
Order 13990, published in February 2021 by the IWG. The SC-GHGs is the
monetary value of the net harm to society associated with a marginal
increase in emissions in a given year, or the benefit of avoiding that
increase. In principle, SC-GHGs includes the value of all climate
change impacts, including (but not limited to) changes in net
agricultural productivity, human health effects, property damage from
increased flood risk and natural disasters, disruption of energy
systems, risk of conflict, environmental migration, and the value of
ecosystem services. The SC-GHGs therefore, reflects the societal value
of reducing emissions of the gas in question by one metric ton. The SC-
GHGs is the theoretically appropriate value to use in conducting
benefit-cost analyses of policies that affect CO2,
N2O and CH4 emissions. As a member of the IWG
involved in the development of the February 2021 SC-GHG TSD, DOE agrees
that the interim SC-GHG estimates represent the most appropriate
estimate of the SC-GHG until revised estimates have been developed
reflecting the latest, peer-reviewed science.
The SC-GHGs estimates presented here were developed over many
years, using transparent process, peer-reviewed methodologies, the best
science available at the time of that process, and with input from the
public. Specifically, in 2009, the IWG, that included the DOE and other
executive branch agencies and offices was established to ensure that
agencies were using the best available science and to promote
consistency in the social cost of carbon (SC-CO2) values
used across agencies. The IWG published SC-CO2 estimates in
2010 that were developed from an ensemble of three widely cited
integrated assessment models (IAMs) that estimate global climate
damages using highly aggregated representations of climate processes
and the global economy combined into a single modeling framework. The
three IAMs were run using a common set of input assumptions in each
model for future population, economic, and CO2 emissions
growth, as well as equilibrium climate sensitivity--a measure of the
globally averaged temperature response to increased atmospheric
CO2 concentrations. These estimates were updated in 2013
based on new versions of each IAM. In August 2016 the IWG published
estimates of the social cost of methane (SC-CH4) and nitrous
oxide (SC-N2O) using methodologies that are consistent with
the methodology underlying the SC-CO2 estimates. The
modeling approach that extends the IWG SC-CO2 methodology to
non-CO2 GHGs has undergone multiple stages of peer review.
The SC-CH4 and SC-N2O estimates were developed by
Marten et al.\82\ and underwent a standard double-blind peer review
process prior to journal publication. In 2015, as part of the response
to public comments received to a 2013 solicitation for comments on the
SC-CO2 estimates, the IWG announced a National Academies of
Sciences, Engineering, and Medicine review of the SC-CO2
estimates to offer advice on how to approach future updates to ensure
that the estimates continue to reflect the best available science and
methodologies. In January 2017, the National Academies released their
final report, Valuing Climate Damages: Updating Estimation of the
Social Cost of Carbon Dioxide, and recommended specific criteria for
future updates to the SC-CO2 estimates, a modeling framework
to satisfy the specified criteria, and both near-term updates and
longer-term research needs pertaining to various components of the
estimation process (National Academies, 2017).\83\ Shortly thereafter,
in March 2017, President Trump issued Executive Order 13783, which
disbanded the IWG, withdrew the previous TSDs, and directed agencies to
ensure SC-CO2 estimates used in regulatory analyses are
consistent with the guidance contained in OMB's Circular A-4,
``including with respect to the consideration of domestic versus
international impacts and the consideration of appropriate discount
rates'' (Executive Order (``E.O.'') 13783, section 5(c)). Benefit-cost
analyses following E.O. 13783 used SC-GHG estimates that attempted to
focus on the U.S.-specific share of climate change damages as estimated
by the models and were calculated using two discount rates recommended
by Circular A-4, 3 percent and 7 percent. All other methodological
decisions and model versions used in SC-GHG calculations remained the
same as those used by the IWG in 2010 and 2013, respectively.
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\82\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold,
and A. Wolverton. Incremental CH4 and N2O
mitigation benefits consistent with the U.S. Government's SC-
CO2 estimates. Climate Policy. 2015. 15(2): pp. 272-298.
\83\ National Academies of Sciences, Engineering, and Medicine.
Valuing Climate Damages: Updating Estimation of the Social Cost of
Carbon Dioxide. 2017. The National Academies Press: Washington, DC.
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On January 20, 2021, President Biden issued Executive Order 13990,
which re-established the IWG and directed it to ensure that the U.S.
Government's estimates of the social cost of carbon and other
greenhouse gases reflect the best available science and the
recommendations of the National Academies (2017). The IWG was tasked
with first reviewing the SC-GHG estimates currently used in Federal
analyses and publishing interim estimates within 30 days of the E.O.
that reflect the full impact of GHG emissions, including by taking
global damages into account. The interim SC-GHG estimates published in
February 2021 are used here to estimate the climate benefits for this
direct final rule. The E.O. instructs the IWG to undertake a fuller
update of the SC-GHG estimates by January 2022 that takes into
consideration the advice of the National Academies (2017) and other
recent scientific literature. The February 2021 SC-GHG TSD provides a
complete discussion of the IWG's initial review conducted under
E.O.13990. In particular, the IWG found that the SC-GHG estimates used
under E.O. 13783 fail to reflect the full impact of GHG emissions in
multiple ways.
First, the IWG found that the SC-GHG estimates used under E.O.
13783 fail to fully capture many climate impacts that affect the
welfare of U.S. citizens and residents, and those impacts are better
reflected by global measures of the SC-GHG. Examples of omitted effects
from
[[Page 36117]]
the E.O. 13783 estimates include direct effects on U.S. citizens,
assets, and investments located abroad, supply chains, U.S. military
assets and interests abroad, and tourism, and spillover pathways such
as economic and political destabilization and global migration that can
lead to adverse impacts on U.S. national security, public health, and
humanitarian concerns. In addition, assessing the benefits of U.S. GHG
mitigation activities requires consideration of how those actions may
affect mitigation activities by other countries, as those international
mitigation actions will provide a benefit to U.S. citizens and
residents by mitigating climate impacts that affect U.S. citizens and
residents. A wide range of scientific and economic experts have
emphasized the issue of reciprocity as support for considering global
damages of GHG emissions. If the United States does not consider
impacts on other countries, it is difficult to convince other countries
to consider the impacts of their emissions on the United States. The
only way to achieve an efficient allocation of resources for emissions
reduction on a global basis--and so benefit the U.S. and its citizens--
is for all countries to base their policies on global estimates of
damages. As a member of the IWG involved in the development of the
February 2021 SC-GHG TSD, DOE agrees with this assessment and,
therefore, in this direct final rule DOE centers attention on a global
measure of SC-GHG. This approach is the same as that taken in DOE
regulatory analyses from 2012 through 2016. A robust estimate of
climate damages that accrue only to U.S. citizens and residents does
not currently exist in the literature. As explained in the February
2021 TSD, existing estimates are both incomplete and an underestimate
of total damages that accrue to the citizens and residents of the U.S.
because they do not fully capture the regional interactions and
spillovers discussed above, nor do they include all of the important
physical, ecological, and economic impacts of climate change recognized
in the climate change literature. As noted in the February 2021 SC-GHG
TSD, the IWG will continue to review developments in the literature,
including more robust methodologies for estimating a U.S.-specific SC-
GHG value, and explore ways to better inform the public of the full
range of carbon impacts. As a member of the IWG, DOE will continue to
follow developments in the literature pertaining to this issue
Second, the IWG found that the use of the social rate of return on
capital (7 percent under current OMB Circular A-4 guidance) to discount
the future benefits of reducing GHG emissions inappropriately
underestimates the impacts of climate change for the purposes of
estimating the SC-GHG. Consistent with the findings of the National
Academies (2017) and the economic literature, the IWG continued to
conclude that the consumption rate of interest is the theoretically
appropriate discount rate in an intergenerational context,\84\ and
recommended that discount rate uncertainty and relevant aspects of
intergenerational ethical considerations be accounted for in selecting
future discount rates.
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\84\ Interagency Working Group on Social Cost of Carbon. Social
Cost of Carbon for Regulatory Impact Analysis under Executive Order
12866. 2010. United States Government. (Last accessed April 15,
2022.) www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf; Interagency Working Group on Social Cost of
Carbon. Technical Update of the Social Cost of Carbon for Regulatory
Impact Analysis Under Executive Order 12866. 2013. (Last accessed
April 15, 2022.) www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact; Interagency Working Group on
Social Cost of Greenhouse Gases, United States Government. Technical
Support Document: Technical Update on the Social Cost of Carbon for
Regulatory Impact Analysis-Under Executive Order 12866. August 2016.
(Last accessed January 18, 2022.) www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf; Interagency Working
Group on Social Cost of Greenhouse Gases, United States Government.
Addendum to Technical Support Document on Social Cost of Carbon for
Regulatory Impact Analysis under Executive Order 12866: Application
of the Methodology to Estimate the Social Cost of Methane and the
Social Cost of Nitrous Oxide. August 2016. (Last accessed January
18, 2022.) www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf.
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Furthermore, the damage estimates developed for use in the SC-GHG
are estimated in consumption-equivalent terms, and so an application of
OMB Circular A-4's guidance for regulatory analysis would then use the
consumption discount rate to calculate the SC-GHG. DOE agrees with this
assessment and will continue to follow developments in the literature
pertaining to this issue. DOE also notes that while OMB Circular A-4,
as published in 2003, recommends using 3% and 7% discount rates as
``default'' values, Circular A-4 also reminds agencies that ``different
regulations may call for different emphases in the analysis, depending
on the nature and complexity of the regulatory issues and the
sensitivity of the benefit and cost estimates to the key assumptions.''
On discounting, Circular A-4 recognizes that ``special ethical
considerations arise when comparing benefits and costs across
generations,'' and Circular A-4 acknowledges that analyses may
appropriately ``discount future costs and consumption benefits . . . at
a lower rate than for intragenerational analysis.'' In the 2015
Response to Comments on the Social Cost of Carbon for Regulatory Impact
Analysis, OMB, DOE, and the other IWG members recognized that
``Circular A-4 is a living document'' and ``the use of 7 percent is not
considered appropriate for intergenerational discounting. There is wide
support for this view in the academic literature, and it is recognized
in Circular A-4 itself.'' Thus, DOE concludes that a 7% discount rate
is not appropriate to apply to value the social cost of greenhouse
gases in the analysis presented in this analysis.
To calculate the present and annualized values of climate benefits,
DOE uses the same discount rate as the rate used to discount the value
of damages from future GHG emissions, for internal consistency. That
approach to discounting follows the same approach that the February
2021 TSD recommends ``to ensure internal consistency--i.e., future
damages from climate change using the SC-GHG at 2.5 percent should be
discounted to the base year of the analysis using the same 2.5 percent
rate.'' DOE has also consulted the National Academies' 2017
recommendations on how SC-GHG estimates can ``be combined in RIAs with
other cost and benefits estimates that may use different discount
rates.'' The National Academies reviewed several options, including
``presenting all discount rate combinations of other costs and benefits
with [SC-GHG] estimates.''
As a member of the IWG involved in the development of the February
2021 SC-GHG TSD, DOE agrees with the above assessment and will continue
to follow developments in the literature pertaining to this issue.
While the IWG works to assess how best to incorporate the latest, peer
reviewed science to develop an updated set of SC-GHG estimates, it set
the interim estimates to be the most recent estimates developed by the
IWG prior to the group being disbanded in 2017. The estimates rely on
the same models and harmonized inputs and are calculated using a range
of discount rates. As explained in the February 2021 SC-GHG TSD, the
IWG has recommended that agencies revert to the same set of four values
drawn from the SC-GHG distributions based on three discount rates as
were used in regulatory analyses between 2010 and 2016 and were subject
to public comment. For each discount rate, the IWG combined the
distributions across models and socioeconomic emissions scenarios
(applying equal weight to
[[Page 36118]]
each) and then selected a set of four values recommended for use in
benefit-cost analyses: an average value resulting from the model runs
for each of three discount rates (2.5 percent, 3 percent, and 5
percent), plus a fourth value, selected as the 95th percentile of
estimates based on a 3 percent discount rate. The fourth value was
included to provide information on potentially higher-than-expected
economic impacts from climate change. As explained in the February 2021
SC-GHG TSD, and DOE agrees, this update reflects the immediate need to
have an operational SC-GHG for use in regulatory benefit-cost analyses
and other applications that was developed using a transparent process,
peer-reviewed methodologies, and the science available at the time of
that process. Those estimates were subject to public comment in the
context of dozens of proposed rulemakings as well as in a dedicated
public comment period in 2013.
There are a number of limitations and uncertainties associated with
the SC-GHG estimates. First, the current scientific and economic
understanding of discounting approaches suggests discount rates
appropriate for intergenerational analysis in the context of climate
change are likely to be less than 3 percent, near 2 percent or
lower.\85\ Second, the IAMs used to produce these interim estimates do
not include all of the important physical, ecological, and economic
impacts of climate change recognized in the climate change literature
and the science underlying their ``damage functions''--i.e., the core
parts of the IAMs that map global mean temperature changes and other
physical impacts of climate change into economic (both market and
nonmarket) damages--lags behind the most recent research. For example,
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the integrated assessment models, their
incomplete treatment of adaptation and technological change, the
incomplete way in which inter-regional and intersectoral linkages are
modeled, uncertainty in the extrapolation of damages to high
temperatures, and inadequate representation of the relationship between
the discount rate and uncertainty in economic growth over long time
horizons. Likewise, the socioeconomic and emissions scenarios used as
inputs to the models do not reflect new information from the last
decade of scenario generation or the full range of projections. The
modeling limitations do not all work in the same direction in terms of
their influence on the SC-CO2 estimates. However, as
discussed in the February 2021 TSD, the IWG has recommended that, taken
together, the limitations suggest that the interim SC-GHG estimates
used in this final rule likely underestimate the damages from GHG
emissions. DOE concurs with this assessment.
---------------------------------------------------------------------------
\85\ Interagency Working Group on Social Cost of Greenhouse
Gases (IWG). 2021. Technical Support Document: Social Cost of
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive
Order 13990. February. United States Government. Available at:
www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/.
---------------------------------------------------------------------------
DOE's derivations of the SC-GHG (i.e., SC-CO2, SC-
N2O, and SC-CH4) values used for this direct
final rule are discussed in the following sections, and the results of
DOE's analyses estimating the benefits of the reductions in emissions
of these pollutants are presented in section V.B.6 of this document.
NEMA disagrees with DOE's approach for estimating monetary benefits
associated with emissions reductions. NEMA commented that this topic is
too convoluted and subjective to be included in a rulemaking analysis
for electric motor standards.(NEMA, No. 22 at p. 25)
As previously stated, as part of the development of this direct
final rule, for the purpose of complying with the requirements of
Executive Order 12866, DOE considered the estimated monetary benefits
from the reduced emissions of CO2, CH4,
N2O, NOX, and SO2 that are expected to
result from each of the TSLs considered.
a. Social Cost of Carbon
The SC-CO2 values used for this direct final rule were
generated using the values presented in the 2021 update from the IWG's
February 2021 TSD. Table IV-11 shows the updated sets of SC-
CO2 estimates from the latest interagency update in 5-year
increments from 2020 to 2050. The full set of annual values used is
presented in Appendix 14-A of the direct final rule TSD. For purposes
of capturing the uncertainties involved in regulatory impact analysis,
DOE has determined it is appropriate include all four sets of SC-
CO2 values, as recommended by the IWG.\86\
---------------------------------------------------------------------------
\86\ For example, the February 2021 TSD discusses how the
understanding of discounting approaches suggests that discount rates
appropriate for intergenerational analysis in the context of climate
change may be lower than 3 percent.
Table IV-11--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
[2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
Discount rate
-----------------------------------------------------------------
Year 3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
2020.......................................... 14 51 76 152
2025.......................................... 17 56 83 169
2030.......................................... 19 62 89 187
2035.......................................... 22 67 96 206
2040.......................................... 25 73 103 225
2045.......................................... 28 79 110 242
2050.......................................... 32 85 116 260
----------------------------------------------------------------------------------------------------------------
For 2051 to 2070, DOE used SC-CO2 estimates published by
EPA, adjusted to 2020$.\87\ These estimates are based on methods,
assumptions, and parameters identical to the 2020-2050 estimates
published by the IWG. DOE expects additional climate benefits to accrue
for any longer-life electric motors after 2070, but a lack of available
SC-CO2 estimates for emissions years beyond 2070 prevents
DOE from monetizing these potential benefits in this analysis.
---------------------------------------------------------------------------
\87\ See EPA, Revised 2023 and Later Model Year Light-Duty
Vehicle GHG Emissions Standards: Regulatory Impact Analysis,
Washington, DC, December 2021. Available at: www.epa.gov/system/files/documents/2021-12/420r21028.pdf (last accessed January 13,
2022).
---------------------------------------------------------------------------
[[Page 36119]]
DOE multiplied the CO2 emissions reduction estimated for
each year by the SC-CO2 value for that year in each of the
four cases. DOE adjusted the values to 2021$ using the implicit price
deflator for gross domestic product (``GDP'') from the Bureau of
Economic Analysis. To calculate a present value of the stream of
monetary values, DOE discounted the values in each of the four cases
using the specific discount rate that had been used to obtain the SC-
CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
The SC-CH4 and SC-N2O values used for this
direct final rule were based on the values developed for in the
February 2021 TSD. Table IV-12 shows the updated sets of SC-
CH4 and SC-N2O estimates from the latest
interagency update in 5-year increments from 2020 to 2050. The full set
of annual values used is presented in Appendix 14-A of the direct final
rule TSD. To capture the uncertainties involved in regulatory impact
analysis, DOE has determined it is appropriate to include all four sets
of SC-CH4 and SC-N2O values, as recommended by
the IWG.
Table IV-12--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
[2020$ per metric ton]
--------------------------------------------------------------------------------------------------------------------------------------------------------
SC-CH4 SC-N2O
-----------------------------------------------------------------------------------------------
Discount rate and statistic Discount rate and statistic
Year -----------------------------------------------------------------------------------------------
5% 3% 2.5% 3% 95th 5% 3% 2.5% 3% 95th
Average Average Average percentile Average Average Average percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020.................................................... 670 1,500 2,000 3,900 5,800 18,000 27,000 48,000
2025.................................................... 800 1,700 2,200 4,500 6,800 21,000 30,000 54,000
2030.................................................... 940 2,000 2,500 5,200 7,800 23,000 33,000 60,000
2035.................................................... 1,100 2,200 2,800 6,000 9,000 25,000 36,000 67,000
2040.................................................... 1,300 2,500 3,100 6,700 10,000 28,000 39,000 74,000
2045.................................................... 1,500 2,800 3,500 7,500 12,000 30,000 42,000 81,000
2050.................................................... 1,700 3,100 3,800 8,200 13,000 33,000 45,000 88,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE multiplied the CH4 and N2O emissions
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. To
calculate a present value of the stream of monetary values, DOE
discounted the values in each of the cases using the specific discount
rate that had been used to obtain the SC-CH4 and SC-
N2O estimates in each case.
2. Monetization of Other Emissions Impacts
For the direct final rule, DOE estimated the monetized value of
NOX and SO2 emissions reductions from electricity
generation using benefit per ton estimates for that sector from the
EPA's Benefits Mapping and Analysis Program.\88\ DOE used EPA's values
for PM2.5-related benefits associated with NOX
and SO2 and for ozone-related benefits associated with
NOX for 2025 and 2030, and 2040, calculated with discount
rates of 3 percent and 7 percent. DOE used linear interpolation to
define values for the years not given in the 2025 to 2040 range; for
years beyond 2040 the values are held constant. DOE derived values
specific to the sector for electric motors using a method described in
appendix 14B of the direct final rule TSD.
---------------------------------------------------------------------------
\88\ Estimating the Benefit per Ton of Reducing PM2.5
Precursors from 21 Sectors. www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
---------------------------------------------------------------------------
DOE multiplied the site emissions reduction (in tons) in each year
by the associated $/ton values, and then discounted each series using
discount rates of 3 percent and 7 percent as appropriate.
M. Utility Impact Analysis
The utility impact analysis estimates the changes in installed
electrical capacity and generation projected to result for each
considered TSL. The analysis is based on published output from the NEMS
associated with AEO2022. NEMS produces the AEO Reference case, as well
as a number of side cases that estimate the economy-wide impacts of
changes to energy supply and demand. For the current analysis, impacts
are quantified by comparing the levels of electricity sector
generation, installed capacity, fuel consumption and emissions in the
AEO2022 Reference case and various side cases. Details of the
methodology are provided in the appendices to chapters [13] and [15] of
the direct final rule TSD.
The output of this analysis is a set of time-dependent coefficients
that capture the change in electricity generation, primary fuel
consumption, installed capacity and power sector emissions due to a
unit reduction in demand for a given end use. These coefficients are
multiplied by the stream of electricity savings calculated in the NIA
to provide estimates of selected utility impacts of potential new or
amended energy conservation standards.
N. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a standard. Employment impacts from new or amended
energy conservation standards include both direct and indirect impacts.
Direct employment impacts are any changes in the number of employees of
manufacturers of the products subject to standards, their suppliers,
and related service firms. The MIA addresses those impacts. Indirect
employment impacts are changes in national employment that occur due to
the shift in expenditures and capital investment caused by the purchase
and operation of more-efficient appliances. Indirect employment impacts
from standards consist of the net jobs created or eliminated in the
national economy, other than in the manufacturing sector being
regulated, caused by (1) reduced spending by consumers on energy, (2)
reduced spending on new energy supply by the utility industry, (3)
increased consumer spending on the products to which the new standards
apply and other goods and services, and (4) the effects of those three
factors throughout the economy.
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare sector
employment statistics developed by the Labor Department's Bureau of
Labor Statistics (``BLS''). BLS regularly publishes its estimates of
the number of jobs per million dollars of economic
[[Page 36120]]
activity in different sectors of the economy, as well as the jobs
created elsewhere in the economy by this same economic activity. Data
from BLS indicate that expenditures in the utility sector generally
create fewer jobs (both directly and indirectly) than expenditures in
other sectors of the economy.\89\ There are many reasons for these
differences, including wage differences and the fact that the utility
sector is more capital-intensive and less labor-intensive than other
sectors. Energy conservation standards have the effect of reducing
consumer utility bills. Because reduced consumer expenditures for
energy likely lead to increased expenditures in other sectors of the
economy, the general effect of efficiency standards is to shift
economic activity from a less labor-intensive sector (i.e., the utility
sector) to more labor-intensive sectors (e.g., the retail and service
sectors). Thus, the BLS data suggest that net national employment may
increase due to shifts in economic activity resulting from energy
conservation standards.
---------------------------------------------------------------------------
\89\ See U.S. Department of Commerce-Bureau of Economic
Analysis. Regional Multipliers: A User Handbook for the Regional
Input-Output Modeling System (RIMS II). 1997. U.S. Government
Printing Office: Washington, DC. Available at www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed September 30, 2022).
---------------------------------------------------------------------------
DOE estimated indirect national employment impacts for the standard
levels considered in this direct final rule using an input/output model
of the U.S. economy called Impact of Sector Energy Technologies version
4 (``ImSET'').\90\ ImSET is a special-purpose version of the ``U.S.
Benchmark National Input-Output'' (``I-O'') model, which was designed
to estimate the national employment and income effects of energy-saving
technologies. The ImSET software includes a computer- based I-O model
having structural coefficients that characterize economic flows among
187 sectors most relevant to industrial, commercial, and residential
building energy use.
---------------------------------------------------------------------------
\90\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W.
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model
Description and User Guide. 2015. Pacific Northwest National
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------
NEMA commented that the proposed approach for assessing national
employment impacts appears to be sufficient. (NEMA, No. 22 at p. 25)
DOE notes that ImSET is not a general equilibrium forecasting
model, and that the uncertainties involved in projecting employment
impacts, especially changes in the later years of the analysis. Because
ImSET does not incorporate price changes, the employment effects
predicted by ImSET may over-estimate actual job impacts over the long
run for this rule. Therefore, DOE used ImSET only to generate results
for near-term timeframes (2027-2031), where these uncertainties are
reduced. For more details on the employment impact analysis, see
chapter 16 of the direct final rule TSD.
V. Analytical Results and Conclusions
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for
electric motors. It addresses the TSLs examined by DOE, the projected
impacts of each of these levels if adopted as energy conservation
standards for electric motors, and the standards levels that DOE is
proposing to adopt in this direct final rule. Additional details
regarding DOE's analyses are contained in the direct final rule TSD
supporting this document.
A. Trial Standard Levels
In general, DOE typically evaluates potential amended standards for
products and equipment by grouping individual efficiency levels for
each class into TSLs. Use of TSLs allows DOE to identify and consider
manufacturer cost interactions between equipment classes, to the extent
that there are such interactions, and market cross elasticity from
consumer purchasing decisions that may change when different standard
levels are set.
In the analysis conducted for this direct final rule, DOE analyzed
the benefits and burdens of four TSLs for electric motors. DOE
developed TSLs that combine efficiency levels for each analyzed
equipment class group by horsepower range. DOE presents the results for
the TSLs in this document, while the results for all efficiency levels
that DOE analyzed are in the direct final rule TSD.
Table V.1 presents the TSLs and the corresponding efficiency levels
that DOE has identified for potential amended energy conservation
standards for electric motors. Table V.2 presents the corresponding
description of the levels.
TSL 4 represents the maximum technologically feasible (``max-
tech'') energy efficiency for all equipment class groups and is
constructed with the same efficiency level for all equipment class
groups (i.e., EL 4). (See Table IV-6 in section IV.C.1.c for a
breakdown of ELs 1-4 for each ECG).
TSL 3 represents a level corresponding to the IE4 level for each
equipment class group (i.e., the industry standard efficiency
classification above NEMA Premium/I3), except for AO-polyphase
specialized frame size electric motors, where it corresponds to a lower
level of efficiency (i.e., NEMA Premium/I3 level) due to the physical
limitation of these electric motors.
TSL 2 represents the levels recommended by the November 2022 Joint
Recommendation. For currently regulated electric motors (i.e., MEM, 1-
500 hp, NEMA Design A and B motors), this TSL represents no changes in
the current standard (i.e., NEMA Premium/IE3 level, EL0), except for
currently regulated motors in the 100 to 250 hp range where TSL 2 is
set at an EL corresponding to the IE4 level (i.e., the industry
standard efficiency classification above NEMA Premium/IE3, EL1).\91\ At
TSL 2, MEM 501-750 hp, NEMA Design A and B electric motors are set at
the NEMA Premium level (EL1). For AO-MEM standard frame size, TSL 2 is
similarly constructed using the efficiency levels corresponding to the
NEMA Premium/IE3 level (EL1), except in the 100 to 250 hp range of AO-
MEM standard frame size motors, where it is equivalent to the IE4 level
(EL2). For AO-polyphase specialized frame electric motors, TSL 2
represents the fire pump electric motor level (EL1), which is the
industry standard efficiency classification approximately two bands
below NEMA Premium/IE3.
---------------------------------------------------------------------------
\91\ As noted, this TSL would harmonize with the current
European energy conservation standards (compliance date July, 2023).
See eur-lex.europa.eu/eli/reg/2019/1781/oj.
---------------------------------------------------------------------------
TSL1 represents a level below the recommended level. TSL1
represents a level where the currently non-regulated electric motors
would be subject to the same standards as currently regulated motors
(i.e., NEMA Premium level), except for AO-polyphase specialized frame
size electric motors, where it corresponds to a lower level of
efficiency (i.e., fire pump electric motor level) due to the physical
limitation of these electric motors. For currently regulated electric
motors (i.e., MEM, 1-500 hp, NEMA Design A and B motors), this TSL
would represent no changes in the current standard.
[[Page 36121]]
Table V.1--Trial Standard Levels for Electric Motors
----------------------------------------------------------------------------------------------------------------
Trial standard level
Equipment class group Horsepower range -------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
............................... Efficiency level
----------------------------------------------------------------------------
MEM, 1-500 hp, NEMA Design A and B. 1 <= hp <= 5................... 0 0 1 4
5 < hp <= 20................... 0 0 1 4
20 < hp <= 50.................. 0 0 1 4
50 < hp <100................... 0 0 1 4
100 <= hp <= 250............... 0 1 1 4
250 < hp <= 500................ 0 0 1 4
MEM, 501-750 hp, NEMA Design A and 500 < hp <= 750................ 1 1 2 4
B.
AO-MEM (Standard Frame Size)....... 1 <= hp <= 20.................. 1 1 2 4
20 < hp <= 50.................. 1 1 2 4
50 < hp < 100.................. 1 1 2 4
100 <= hp <= 250............... 1 2 2 4
AO-Polyphase (Specialized Frame 1 <= hp <= 20.................. 1 1 2 4
Size).
----------------------------------------------------------------------------------------------------------------
Table V.2--Description of Trial Standard Levels for Electric Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
ECG Horsepower range -----------------------------------------------------------------------------------------
1 2 3 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Efficiency level description
----------------------------------------------------------------------------------------------------------------------
NEMA premium *...... Recommended......... IE4 *............... Max-tech
--------------------------------------------------------------------------------------------------------------------------------------------------------
MEM, 1-500 hp, NEMA Design A and 1 <= hp <= 5............... Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
B.
5 < hp <= 20............... Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
20 < hp <= 50.............. Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
50 < hp <100............... Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
100 <= hp <= 250........... Premium/IE3......... Super Premium/IE4... Super Premium/IE4... Max-tech.
250 < hp <= 500............ Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
MEM, 501-750 hp, NEMA Design A 500 < hp <= 750............ Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
and B.
AO-MEM (Standard Frame Size)..... 1 <= hp <= 20.............. Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
20 < hp <= 50.............. Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
50 < hp < 100.............. Premium/IE3......... Premium/IE3......... Super Premium/IE4... Max-tech.
100 <= hp <= 250........... Premium/IE3......... Super Premium/IE4... Super Premium/IE4... Max-tech.
AO-Polyphase (Specialized Frame 1 <= hp <= 20.............. Fire pump........... Fire pump........... Premium/IE3......... Max-tech.
Size).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Except for AO-Polyphase (Specialized Frame Size) electric motors where the efficiency level corresponds to a lower efficiency.
DOE constructed the TSLs for this direct final rule to include ELs
representative of ELs with similar characteristics (i.e., using similar
technologies and/or efficiencies, and having roughly comparable
equipment availability). The use of representative ELs provided for
greater distinction between the TSLs. While representative ELs were
included in the TSLs, DOE considered all efficiency levels as part of
its analysis.\92\ In constructing the TSLs, DOE did not consider EL3
because the average LCC savings at EL3 were negative for all
representative units, with a majority of consumers experiencing net
cost as shown in section V.B.1.a of this document. Similarly, DOE did
not consider a TSL with EL2 for the MEM, 1-500 hp, NEMA Design A and B
electric motors because the average LCC savings at EL 2 were negative
for each of the representative units analyzed, with a majority of
consumers experiencing net cost as shown in section V.B.1.a of this
document.
---------------------------------------------------------------------------
\92\ Efficiency levels that were analyzed for this final rule
are discussed in section IV.C of this document. Results by
efficiency level are presented in TSD chapter 8.
---------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on electric motors consumers by
looking at the effects that new and amended standards at each TSL would
have on the LCC and PBP. DOE also examined the impacts of potential
standards on selected consumer subgroups. These analyses are discussed
in the following sections.
a. Life-Cycle Cost and Payback Period
In general, higher-efficiency products affect consumers in two
ways: (1) purchase price increases and (2) annual operating costs
decrease. Inputs used for calculating the LCC and PBP include total
installed costs (i.e., product price plus installation costs), and
operating costs (i.e., annual energy use, energy prices, energy price
trends, repair costs, and maintenance costs). The LCC calculation also
uses product lifetime and a discount rate. Chapter [8] of the direct
final rule TSD provides detailed information on the LCC and PBP
analyses.
[[Page 36122]]
As described in Table IV-4 of this document, the analysis focuses
on 11 representative units identified in the engineering analysis.
Table V-3 through Table V-24 show the LCC and PBP results for the TSLs
considered for each representative unit. In the first of each pair of
tables, the simple payback is measured relative to the baseline
product. In the second table, impacts are measured relative to the
efficiency distribution in the no-new-standards case in the compliance
year (see section IV.F.8 of this document). Because some consumers
purchase products with higher efficiency in the no-new-standards case,
the average savings are less than the difference between the average
LCC of the baseline product and the average LCC at each TSL. The
savings refer only to consumers who are affected by a standard at a
given TSL. Those who already purchase a product with efficiency at or
above a given TSL are not affected. Consumers for whom the LCC
increases at a given TSL experience a net cost.
Table V-3--Average LCC and PBP Results for MEM, NEMA Design A and B; 5 hp, 4 Poles, Enclosed
[RU1]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
1-2.............. Baseline........ 1,185.5 789.9 5,754.2 6,939.6 ......... 12.6
3................ EL1............. 1,356.8 779.7 5,684.8 7,041.6 16.7 12.6
EL2 *........... 1,356.8 779.7 5,684.8 7,041.6 16.7 12.6
EL3............. 1,408.0 773.7 5,643.8 7,051.8 13.7 12.6
4................ EL4............. 1,620.1 768.5 5,616.7 7,236.8 20.3 12.6
----------------------------------------------------------------------------------------------------------------
* EL1 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-4--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 5 hp, 4
Poles, Enclosed
[RU1]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
1-2................................ Baseline............. N/A N/A
3.................................. EL1.................. -101.8 64.1
EL2 *................ -101.8 64.1
EL3.................. -92.3 76.4
4.................................. EL4.................. -276.4 95.9
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* EL1 = EL2.
** The savings represent the average LCC for affected consumers.
Table V-5--Average LCC and PBP Results for MEM, NEMA Design A and B; 30 hp, 4 Poles, Enclosed
[RU2]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
1-2.............. Baseline........ 3,274.2 4,568.5 37,700.8 40,975.0 ......... 14.1
3................ EL1............. 3,964.7 4,523.7 37,347.1 41,311.9 15.4 14.1
EL2 *........... 3,964.7 4,523.7 37,347.1 41,311.9 15.4 14.1
EL3............. 4,175.1 4,502.3 37,174.6 41,349.7 13.6 14.1
4................ EL4............. 4,277.2 4,484.2 37,026.9 41,304.1 11.9 14.1
----------------------------------------------------------------------------------------------------------------
* EL1 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
[[Page 36123]]
Table V-6--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 30 hp, 4
Poles, Enclosed
[RU2]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
1-2................................ Baseline............. N/A N/A
3.................................. EL1.................. -336.9 82.2
EL2 *................ -336.9 82.2
EL3.................. -356.9 81.1
4.................................. EL4.................. -309.4 75.0
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* EL1 = EL2.
** The savings represent the average LCC for affected consumers.
Table V-7--Average LCC and PBP Results for MEM, NEMA Design A and B; 75 hp, 4 Poles, Enclosed
[RU3]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
1-2.............. Baseline........ 8,046.4 10,021.1 83,400.1 91,446.5 ......... 14.2
3................ EL1............. 9,288.2 9,979.9 83,074.6 92,362.8 30.2 14.2
EL2............. 9,811.9 9,956.1 82,879.4 92,691.3 27.2 14.2
EL3............. 10,177.1 9,925.6 82,631.4 92,808.5 22.3 14.2
4................ EL4............. 10,636.4 9,895.3 82,386.0 93,022.4 20.6 14.2
----------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-8--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 75 hp, 4
Poles, Enclosed
[RU3]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings * Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
1-2................................ Baseline............. N/A N/A
3.................................. EL1.................. -916.7 88.4
EL2.................. -1,229.6 86.0
EL3.................. -1,258.0 89.0
4.................................. EL4.................. -1,439.6 90.5
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* The savings represent the average LCC for affected consumers.
Table V-9--Average LCC and PBP Results for MEM, NEMA Design A and B; 150 hp, 4 Poles, Enclosed
[RU4]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
1................ Baseline........ 13,066.4 20,576.9 243,710.9 256,777.2 ......... 33.4
2-3.............. EL1............. 13,414.0 20,492.3 242,797.2 256,211.3 4.1 33.4
EL2............. 15,941.3 20,467.3 243,214.8 259,156.1 26.2 33.4
EL3............. 16,547.4 20,404.6 242,661.3 259,208.7 20.2 33.4
4................ EL4............. 17,308.4 20,342.2 242,143.9 259,452.3 18.1 33.4
----------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
[[Page 36124]]
Table V-10--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 150 hp, 4
Poles, Enclosed
[RU4]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings * Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
1.................................. Baseline............. N/A N/A
2-3................................ EL1.................. 567.1 20.2
EL2.................. -2,424.3 90.1
EL3.................. -2,314.5 90.3
4.................................. EL4.................. -2,541.1 89.1
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* The savings represent the average LCC for affected consumers.
Table V-11--Average LCC and PBP Results for MEM, NEMA Design A and B; 350 hp, 4 Poles, Enclosed
[RU5]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
1-2.............. Baseline........ 26,409.6 47,899.8 563,544.0 589,953.6 ......... 33.4
3................ EL1............. 29,815.6 47,610.1 561,091.1 590,906.6 11.8 33.4
EL2 *........... 29,815.6 47,610.1 561,091.1 590,906.6 11.8 33.4
EL3............. 33,572.3 47,548.0 561,385.2 594,957.5 20.4 33.4
4................ EL4............. 35,153.9 47,405.2 560,142.3 595,296.2 17.7 33.4
----------------------------------------------------------------------------------------------------------------
* EL1 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-12--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 350 hp, 4
Poles, Enclosed
[RU5]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
1-2................................ Baseline............. N/A N/A
3.................................. EL1.................. -945.5 66.9
EL2 *................ -945.5 66.9
EL3.................. -4,918.5 92.4
4.................................. EL4.................. -5,257.2 89.0
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* EL1 = EL2.
** The savings represent the average LCC for affected consumers.
Table V-13--Average LCC and PBP Results for MEM, NEMA Design A and B; 600 hp, 4 Poles, Enclosed
[RU6]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 40,229.5 83,393.4 980,309.1 1,020,538.6 ......... 33.5
1-2.............. EL1............. 41,466.0 83,054.7 976,644.0 1,018,109.9 3.7 33.5
3................ EL2............. 46,889.6 82,698.8 973,798.2 1,020,687.7 9.6 33.5
EL3 *........... 46,889.6 82,698.8 973,798.2 1,020,687.7 9.6 33.5
4................ EL4............. 55,293.3 82,201.3 970,160.6 1,025,454.0 12.6 33.5
----------------------------------------------------------------------------------------------------------------
* EL2 = EL3.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
[[Page 36125]]
Table V-14--Average LCC Savings Relative to the No-New-Standards Case for MEM, NEMA Design A and B; 600 hp, 4
Poles, Enclosed
[RU6]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1-2................................ EL1.................. 2,550.1 2.1
3.................................. EL2.................. -2,287.8 58.3
EL3 *................ -2,287.8 58.3
4.................................. EL4.................. -6,710.3 83.2
----------------------------------------------------------------------------------------------------------------
* EL2 = EL3.
** The savings represent the average LCC for affected consumers.
Table V-15--Average LCC and PBP Results for AO MEM (Standard Frame Size); 5 hp, 4 Poles, Enclosed
[RU7]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 1,126.0 992.2 6,734.4 7,860.4 ......... 11.8
1-2.............. EL1............. 1,214.2 970.4 6,589.4 7,803.6 4.0 11.8
3................ EL2............. 1,331.6 960.7 6,531.3 7,862.8 6.5 11.8
EL3............. 1,331.6 960.7 6,531.3 7,862.8 6.5 11.8
4................ EL4............. 1,525.2 947.7 6,455.8 7,981.0 9.0 11.8
----------------------------------------------------------------------------------------------------------------
* EL3 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-16--Average LCC Savings Relative to the No-New-Standards Case for AO MEM (Standard Frame Size); 5 hp, 4
Poles, Enclosed
[RU7]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1-2................................ EL1.................. 57.6 10.3
3.................................. EL2.................. -39.2 62.9
EL3 *................ -39.2 62.9
4.................................. EL4.................. -156.5 80.7
----------------------------------------------------------------------------------------------------------------
* EL2 = EL3.
** The savings represent the average LCC for affected consumers.
Table V-17--Average LCC and PBP Results for AO MEM (Standard Frame Size); 30 hp, 4 Poles, Enclosed
[RU8]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 3,186.7 5,553.3 44,668.1 47,854.8 ......... 13.7
1-2.............. EL1............. 3,302.6 5,482.2 44,098.8 47,401.4 1.6 13.7
3................ EL2............. 3,925.6 5,428.3 43,681.1 47,606.7 5.9 13.7
EL3 *........... 3,925.6 5,428.3 43,681.1 47,606.7 5.9 13.7
4................ EL4............. 4,214.4 5,384.7 43,337.1 47,551.4 6.1 13.7
----------------------------------------------------------------------------------------------------------------
* EL3 = EL2.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
[[Page 36126]]
Table V-18--Average LCC Savings Relative to the No-New-Standards Case for AO MEM (Standard Frame Size); 30 hp, 4
Poles, Enclosed
[RU8]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1-2................................ EL1.................. 472.4 0.9
3.................................. EL2.................. -160.8 73.9
EL3 *................ -160.8 73.9
4.................................. EL4.................. -105.5 64.5
----------------------------------------------------------------------------------------------------------------
* EL2 = EL3.
** The savings represent the average LCC for affected consumers.
Table V-19--Average LCC and PBP Results for AO MEM (Standard Frame Size); 75 hp, 4 Poles, Enclosed
[RU9]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 6,905.6 13,470.2 104,380.5 111,286.0 ......... 13.3
1-2.............. EL1............. 7,850.5 13,291.7 103,149.1 110,999.7 5.3 13.3
3................ EL2............. 8,995.7 13,237.8 102,934.5 111,930.2 9.0 13.3
EL3............. 9,505.8 13,227.0 102,934.8 112,440.6 10.7 13.3
4................ EL4............. 10,331.4 13,147.4 102,463.3 112,794.6 10.6 13.3
----------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-20--Average LCC Savings Relative to the No-New-Standards Case for AO MEM (Standard Frame Size); 75 hp, 4
Poles, Enclosed
[RU9]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings ** Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1-2................................ EL1 *................ ....................... ...........................
3.................................. EL2.................. -930.5 99.9
EL3.................. -1,441.0 98.4
4.................................. EL4.................. -1,795.0 96.4
----------------------------------------------------------------------------------------------------------------
* No savings at EL1 as there are no shipments at the baseline for RU9. See Table IV-9 of this document.
** The savings represent the average LCC for affected consumers.
Table V-21--Average LCC and PBP Results for AO MEM (Standard Frame Size); 150 hp, 4 Poles, Enclosed
[RU10]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 11,557.8 26,565.2 296,595.2 308,153.0 ......... 31.4
1................ EL1............. 12,862.9 26,349.5 294,637.7 307,500.7 6.1 31.4
2-3.............. EL2............. 13,119.9 26,243.0 293,559.4 306,679.3 4.9 31.4
EL3 *........... 15,651.8 26,253.2 294,598.5 310,250.3 13.1 31.4
4................ EL4............. 16,290.6 26,095.5 293,085.9 309,376.5 10.1 31.4
----------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
* At EL3, for RU10, the increase in motor speed compared to the baseline is greater than the increase in motor
speed at EL2 compared to the baseline (see section IV.C.1.c of this document). The additional energy use due
to the increase in motor speed at EL3 results in lower energy savings and higher operating costs at EL3
compared to EL2. See section IV.E.4 of this document for a detailed explanation of the impact of speed.
[[Page 36127]]
Table V-22--Average LCC Savings Relative to the No-New-Standards Case for AO MEM (Standard Frame Size); 150 hp,
4 Poles, Enclosed
[RU10]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings * Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1.................................. EL1.................. 608.8 6.3
2-3................................ EL2.................. 930.7 11.7
EL3.................. -2,720.3 93.7
4.................................. EL4.................. -1,846.6 79.0
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V-23--Average LCC and PBP Results for Polyphase (Specialized Frame Size); 5 hp, 4 Poles, Enclosed
[RU11]
----------------------------------------------------------------------------------------------------------------
Average costs (2021$)
------------------------------------------------------- Simple Average
TSL Efficiency level Lifetime payback Lifetime
Installed First year's operating LCC (years) (years)
cost operating cost cost
----------------------------------------------------------------------------------------------------------------
Baseline........ 1,134.3 993.4 6,899.6 8,033.9 ......... 11.9
1-2.............. EL1............. 1,225.1 971.1 6,758.9 7,984.0 4.1 11.9
3................ EL2............. 1,342.9 956.1 6,688.5 8,031.3 5.6 11.9
EL3............. 1,539.1 942.1 6,648.0 8,187.0 7.9 11.9
4................ EL4 *........... 1,539.1 942.1 6,648.0 8,187.0 7.9 11.9
----------------------------------------------------------------------------------------------------------------
* EL3 = EL4.
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency
level. The PBP is measured relative to the baseline product.
Table V-24--Average LCC Savings Relative to the No-New-Standards Case for AO-Polyphase (Specialized Frame Size);
5 hp, 4 Poles, Enclosed
[RU11]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------------------------
TSL Efficiency level Average LCC savings * Percent of consumers that
(2021$) experience net cost
----------------------------------------------------------------------------------------------------------------
Baseline............. ....................... ...........................
1-2................................ EL1.................. 49.9 32.1
3.................................. EL2.................. 2.5 53.4
EL3.................. -153.2 74.5
4.................................. EL4 *................ -153.2 74.5
----------------------------------------------------------------------------------------------------------------
* EL3 = EL4.
** The savings represent the average LCC for affected consumers.
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on small businesses. Table V-25 compares the average
LCC savings and PBP at each efficiency level for the consumer subgroups
with similar metrics for the entire consumer sample for electric
motors. For the subgroup analysis, the only input change to the LCC
calculation is the discount rate applied. Therefore, the simple
paybacks remain identical for small businesses compared to the whole
sample. In all cases, the average LCC savings and PBP for small
businesses at the considered efficiency levels are reduced compared to
the average for all consumers. Chapter 11 of the direct final rule TSD
presents the complete LCC and PBP results for the subgroups.
[[Page 36128]]
Table V-25--Comparison of LCC Savings and PBP for Small Business Consumer Subgroups and All Consumers
----------------------------------------------------------------------------------------------------------------
Average LCC savings * (2021$) Simple payback (years)
---------------------------------------------------------------
TSL EL Small Small
businesses All businesses businesses All businesses
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 5 hp, 4 poles, enclosed (RU1)
----------------------------------------------------------------------------------------------------------------
1-2............................. 0 N/A N/A N/A N/A
3............................... 1 -108.5 -101.8 16.7 16.7
2 -108.5 -101.8 16.7 16.7
3 -101.7 -92.3 13.3 13.3
4............................... 4 -288.0 -276.4 20.7 20.7
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 30 hp, 4 poles, enclosed (RU2)
----------------------------------------------------------------------------------------------------------------
1-2............................. 0 N/A N/A N/A N/A
3............................... 1 -376.7 -336.9 15.4 15.4
2 -376.7 -336.9 15.4 15.4
3 -414.2 -356.9 13.6 13.6
4............................... 4 -383.3 -309.4 11.8 11.8
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 75 hp, 4 poles, enclosed (RU3)
----------------------------------------------------------------------------------------------------------------
1-2............................. 0 N/A N/A N/A N/A
3............................... 1 -954.2 -916.7 30.3 30.3
2 -1,290.1 -1229.6 27.1 27.1
3 -1,342.9 -1258.0 22.0 22.0
4............................... 4 -1,550.9 -1439.6 20.3 20.3
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 150 hp, 4 poles, enclosed (RU4)
----------------------------------------------------------------------------------------------------------------
1............................... 0 N/A N/A N/A N/A
2-3............................. 1 398.4 567.1 4.1 4.1
2 -2,471.1 -2424.3 27.6 27.6
3 -2,454.5 -2314.5 20.5 20.5
4............................... 4 -2,768.0 -2541.1 18.2 18.2
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 350 hp, 4 poles, enclosed (RU5)
----------------------------------------------------------------------------------------------------------------
1-2............................. 0 N/A N/A N/A N/A
3............................... 1 -1,362.7 -945.5 11.7 11.7
2 -1,362.7 -945.5 11.7 11.7
3 -5,206.4 -4918.5 20.9 20.9
4............................... 4 -5,758.3 -5257.2 17.9 17.9
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 600 hp, 4 poles, enclosed (RU6)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1-2............................. 1 1,865.7 2550.1 3.6 3.6
3............................... 2 -2,854.2 -2287.8 14.1 14.1
3 -2,854.2 -2287.8 14.1 14.1
4............................... 4 -7,771.5 -6710.3 15.8 15.8
----------------------------------------------------------------------------------------------------------------
AO-MEM (Standard Frame Size); 5 hp, 4 poles, enclosed (RU7)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1-2............................. 1 44.1 57.6 4.0 4.0
3............................... 2 -49.0 -39.2 8.6 8.6
3 -49.0 -39.2 8.6 8.6
4............................... 4 -172.7 -156.5 11.4 11.4
----------------------------------------------------------------------------------------------------------------
AO-MEM (Standard Frame Size); 30 hp, 4 poles, enclosed (RU8)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1-2............................. 1 407.9 472.4 1.6 1.6
3............................... 2 -213.1 -160.8 10.4 10.4
3 -213.1 -160.8 10.4 10.4
4............................... 4 -196.1 -105.5 8.8 8.8
----------------------------------------------------------------------------------------------------------------
AO-MEM (Standard Frame Size); 75 hp, 4 poles, enclosed (RU9)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1-2............................. *1 .............. .............. .............. ..............
[[Page 36129]]
3............................... 2 -947.0 -930.5 21.2 21.2
3 -1,454.5 -1,441.0 25.6 25.6
4............................... 4 -1,854.7 -1795.0 17.2 17.2
----------------------------------------------------------------------------------------------------------------
AO-MEM (Standard Frame Size); 150 hp, 4 poles, enclosed (RU10)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1............................... 1 292.7 608.8 6.1 6.1
2-3............................. 2 691.0 930.7 3.4 3.4
3 -2,732.4 -2720.3 24.5 24.5
4............................... 4 -2,111.7 -1846.6 13 13
----------------------------------------------------------------------------------------------------------------
AO-Polyphase (Specialized Frame Size); 5 hp, 4 poles, enclosed (RU11)
----------------------------------------------------------------------------------------------------------------
0 .............. .............. .............. ..............
1-2............................. 1 37.0 49.9 4.1 4.1
3............................... 2 -16.1 2.5 5.6 5.6
3 -173.9 -153.2 7.9 7.9
4............................... 4 -173.9 -153.2 7.9 7.9
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No savings at EL1 as there are no shipments at the baseline for RU9. See Table IV-9 of this document.
c. Rebuttable Presumption Payback
As discussed in section III.F.2, EPCA establishes a rebuttable
presumption that an energy conservation standard is economically
justified if the increased purchase cost for a product that meets the
standard is less than three times the value of the first-year energy
savings resulting from the standard. In calculating a rebuttable
presumption payback period for each of the considered TSLs, DOE used
discrete values, and, as required by EPCA, based the energy use
calculation on the DOE test procedure for electric motors. In contrast,
the PBPs presented in section V.B.1.a were calculated using
distributions that reflect the range of energy use in the field.
Table V-26 presents the rebuttable-presumption payback periods for
the considered TSLs for electric motors. While DOE examined the
rebuttable-presumption criterion, it considered whether the standard
levels considered for the direct final rule are economically justified
through a more detailed analysis of the economic impacts of those
levels, pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that considers the full
range of impacts to the consumer, manufacturer, Nation, and
environment. The results of that analysis serve as the basis for DOE to
definitively evaluate the economic justification for a potential
standard level, thereby supporting or rebutting the results of any
preliminary determination of economic justification.
Table V-26--Rebuttable-Presumption Payback Periods
----------------------------------------------------------------------------------------------------------------
Rebuttable payback period (years)
Representative unit ---------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
MEM, NEMA Design A and B; 5 hp, 4 poles, enclosed (RU1)..... N/A N/A 12.6 15.1
MEM, NEMA Design A and B; 30 hp, 4 poles, enclosed (RU2).... N/A N/A 11.4 8.8
MEM, NEMA Design A and B; 75 hp, 4 poles, enclosed (RU3).... N/A N/A 21.6 14.9
MEM, NEMA Design A and B; 150 hp, 4 poles, enclosed (RU4)... N/A 3.0 3.0 12.9
MEM, NEMA Design A and B; 350 hp, 4 poles, enclosed (RU5)... N/A N/A 8.5 12.9
MEM, NEMA Design A and B; 600 hp, 4 poles, enclosed (RU6)... 2.7 2.7 6.9 9.2
AO-MEM (Standard Frame Size); 5 hp, 4 poles, enclosed (RU7). 3.1 3.1 5.0 6.9
AO-MEM (Standard Frame Size); 30 hp, 4 poles, enclosed (RU8) 1.2 1.2 4.5 4.6
AO-MEM (Standard Frame Size); 75 hp, 4 poles, enclosed (RU9) ........... ........... 6.6 7.8
*..........................................................
AO-MEM (Standard Frame Size); 150 hp, 4 poles, enclosed 4.4 3.5 3.5 7.3
(RU10).....................................................
AO-Polyphase (Specialized Frame Size); 5 hp, 4 poles, 3.1 3.1 4.2 5.9
enclosed (RU11)............................................
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No payback at TSL1 and TSL2 (EL1) as there are no shipments at the baseline for RU9. See Table IV-9 of this
document.
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of new and amended
energy conservation standards on manufacturers of electric motors. The
following section describes the expected impacts on manufacturers at
each considered TSL. Chapter 12 of the direct final rule TSD explains
the analysis in further detail.
a. Industry Cash Flow Analysis Results
In this section, DOE provides GRIM results from the analysis, which
examines changes in the industry that would result from a standard. The
[[Page 36130]]
following tables summarize the estimated financial impacts (represented
by changes in INPV) of potential new and amended energy conservation
standards on manufacturers of electric motors, as well as the
conversion costs that DOE estimates manufacturers of electric motors
would incur at each TSL.
To evaluate the range of cash flow impacts on the electric motor
industry, DOE modeled two manufacturer markup scenarios that correspond
to the range of possible market responses to new and amended standards.
Each manufacturer markup scenario results in a unique set of cash flows
and corresponding INPVs at each TSL.
In the following discussion, the INPV results refer to the
difference in industry value between the no-new-standards case and the
standards cases that result from the sum of discounted cash flows from
the reference year (2023) through the end of the analysis period
(2056). The results also discuss the difference in cash flows between
the no-new standards case and the standards cases in the year before
the estimated compliance date for new and amended energy conservation
standards. This figure represents the size of the required conversion
costs relative to the cash flow generated by the electric motor
industry in the absence of new and amended energy conservation
standards.
To assess the upper (less severe) end of the range of potential
impacts on electric motors manufacturers, DOE modeled a preservation of
gross margin scenario. This scenario assumes that in the standards
cases, electric motor manufacturers will be able to pass along all the
higher MPCs required for more efficient equipment to their customers.
Specifically, the industry will be able to maintain its average no-new-
standards case gross margin (as a percentage of revenue) despite the
higher production costs in the standards cases. In general, the larger
the MPC increases, the less likely manufacturers are to achieve the
cash flow from operations calculated in this scenario because it is
less likely that manufacturers will be able to fully markup these
larger production cost increases.
To assess the lower (more severe) end of the range of potential
impacts on the electric motor manufacturers, DOE modeled a preservation
of operating profit scenario. This scenario represents the lower end of
the range of impacts on manufacturers because no additional operating
profit is earned on the higher MPCs, eroding profit margins as a
percentage of total revenue.
Table V-27--Manufacturer Impact Analysis for Electric Motors--Preservation of Gross Margin Scenario
----------------------------------------------------------------------------------------------------------------
No-new- Trial standard level
Units standards -------------------------------------------
case 1 2 3 4
----------------------------------------------------------------------------------------------------------------
INPV............................. 2021$ millions...... 5,023 4,899 4,720 4,681 (3,840)
Change in INPV................... 2021$ millions...... ........... (124) (303) (342) (8,863)
%................... ........... (2.5) (6.0) (6.8) (176.4)
Product Conversion Costs......... 2021$ millions...... ........... 159 296 870 6,285
Capital Conversion Costs......... 2021$ millions...... ........... 31 173 748 7,231
Total Conversion Costs........... 2021$ millions...... ........... 190 468 1,618 13,516
----------------------------------------------------------------------------------------------------------------
Table V-28--Manufacturer Impact Analysis for Electric Motors--Preservation of Operating Profit Scenario
----------------------------------------------------------------------------------------------------------------
No-new- Trial standard level
Units standards -------------------------------------------
case 1 2 3 4
----------------------------------------------------------------------------------------------------------------
INPV............................. 2021$ millions...... 5,023 4,896 4,690 3,659 (6,066)
Change in INPV................... 2021$ millions...... ........... (127) (333) (1,364) (11,090)
%................... ........... (2.5) (6.6) (27.2) (220.8)
Product Conversion Costs......... 2021$ millions...... ........... 159 296 870 6,285
Capital Conversion Costs......... 2021$ millions...... ........... 31 173 748 7,231
Total Conversion Costs........... 2021$ millions...... ........... 190 468 1,618 13,516
----------------------------------------------------------------------------------------------------------------
TSL 1 sets the efficiency level at baseline for all MEM, 1-500 hp,
NEMA Design A and B; and at EL 1 for all MEM, 501-750 hp, NEMA Design A
and B, for all AO-MEM 1-250 hp (standard frame size), and for all AO-
Polyphase 1-20 hp (specialized frame size). At TSL 1, DOE estimates
impacts on INPV will range from -$127 million to -$124 million, which
represents a change in INPV of approximately -2.5 percent (for both
values, when rounded to the nearest tenth of a percent). At TSL 1,
industry free cash flow (operating cash flow minus capital
expenditures) is estimated to decrease to $272 million, or a drop of 21
percent, compared to the no-new-standards case value of $343 million in
2026, the year leading up to the compliance date of new and amended
energy conservation standards.
In the absence of new or amended energy conservation standards, DOE
estimates that all MEM, 1-500 hp, NEMA Design A and B; 90 percent of
MEM, 501-750 hp, NEMA Design A and B; 73 percent of the AO-MEM 1-250 hp
(standard frame size); and none of the AO-Polyphase 1-20 hp
(specialized frame size) shipments will meet or exceed the ELs required
at TSL 1 in 2027, the compliance year of new and amended standards.
DOE does not expect manufacturers to incur any product or capital
conversion costs for MEM, 1-500 hp, NEMA Design A and B at TSL 1, since
standards are set at baseline at TSL 1 for these electric motors. For
the rest of the electric motors covered by this rulemaking, DOE
estimates that manufacturers will incur approximately $159 million in
product conversion costs and approximately $31 million in capital
conversion costs. Product conversion costs primarily include
engineering time to redesign non-compliance electric motor models and
to re-test these newly redesigned models to meet the standards set at
TSL 1. Capital conversion costs include the purchase of lamination die
sets, winding machines, frame casts, and assembly equipment as well as
other
[[Page 36131]]
retooling costs for MEM, 501-750 hp, NEMA Design A and B and for all
AO-MEM 1-250 hp (standard frame size) and all AO-Polyphase 1-20 hp
(specialized frame size) electric motors covered by this rulemaking.
At TSL 1, under the preservation of gross margin scenario, the
shipment weighted average MPC increases slightly by approximately 0.1
percent relative to the no-new-standards case MPC. This slight price
increase is outweighed by the $190 million in total conversion costs
estimated at TSL 1, resulting in slightly negative INPV impacts at TSL
1 under the preservation of gross margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The slight increase in the shipment weighted
average MPC results in a slightly lower average manufacturer margin.
This slightly lower average manufacturer margin and the $190 million in
total conversion costs result in slightly negative INPV impacts at TSL
1 under the preservation of operating profit scenario.
TSL 2 sets the efficiency level at baseline for all MEM, 1-99 hp
and 251-500 hp, NEMA Design A and B; at EL 1 for all MEM, 100-250 hp
and 501-750 hp, NEMA Design A and B, for all AO-MEM 1-99 hp (standard
frame size), and for all AO-Polyphase 1-20 hp (specialized frame size);
and at EL 2 for all AO-MEM 100-250 hp (standard frame size). At TSL 2,
DOE estimates impacts on INPV will range from -$333 million to -$303
million, which represents a change in INPV of approximately -6.6
percent to -6.0 percent, respectively. At TSL 2, industry free cash
flow (operating cash flow minus capital expenditures) is estimated to
decrease to $160 million, or a drop of 53 percent, compared to the no-
new-standards case value of $343 million in 2026, the year leading up
to the compliance date of new and amended energy conservation
standards.
In the absence of new or amended energy conservation standards, DOE
estimates that all MEM, 1-99 hp and 251-500 hp, NEMA Design A and B; 14
percent of all MEM, 100-250 hp, NEMA Design A and B; 90 percent of all
MEM, 501-750, NEMA Design A and B; 72 percent of all AO-MEM 1-99 hp
(standard frame size); 8 percent of all AO-MEM 100-250 hp (standard
frame size); and none of the AO-Polyphase 1-20 hp (specialized frame
size) shipments will meet or exceed the ELs required at TSL 2 in 2027,
the compliance year of new and amended standards.
DOE does not expect manufacturers to incur any product or capital
conversion costs for MEM, 1-99 hp and 250-500 hp, NEMA Design A and B
at TSL 2, since standards are set at baseline at TSL 2 for these
electric motors. For the rest of the electric motors covered by this
rulemaking, DOE estimates that manufacturers will incur approximately
$296 million in product conversion costs and approximately $173 million
in capital conversion costs. Product conversion costs primarily include
engineering time to redesign non-compliance electric motor models and
to re-test these newly redesigned models to meet the standards set at
TSL 2. Capital conversion costs include the purchase of lamination die
sets, winding machines, frame casts, and assembly equipment as well as
other retooling costs for MEM, 100-250 hp and 501-750 hp, NEMA Design A
and B and for all AO-MEM 1-250 hp (standard frame size) and all AO-
Polyphase 1-20 hp (specialized frame size) electric motors covered by
this rulemaking.
At TSL 2, under the preservation of gross margin scenario, the
shipment weighted average MPC increases slightly by approximately 0.7
percent relative to the no-new-standards case MPC. This slight price
increase is outweighed by the $468 million in total conversion costs
estimated at TSL 2, resulting in moderately negative INPV impacts at
TSL 2 under the preservation of gross margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The slight increase in the shipment weighted
average MPC results in a slightly lower average manufacturer margin.
This slightly lower average manufacturer margin and the $468 million in
total conversion costs result in moderately negative INPV impacts at
TSL 2 under the preservation of operating profit scenario.
TSL 3 sets the efficiency level at EL 1 for all MEM, 1-500 hp, NEMA
Design A and B; and at EL 2 for all MEM, 501-750 hp, NEMA Design A and
B, for all AO-MEM 1-250 hp (standard frame size), and for all AO-
Polyphase 1-20 hp (specialized frame size). At TSL 3, DOE estimates
impacts on INPV will range from -$1,364 million to -$342 million, which
represents a change in INPV of approximately -27.2 percent to -6.8
percent, respectively. At TSL 3, industry free cash flow (operating
cash flow minus capital expenditures) is estimated to decrease to -$303
million, or a drop of 189 percent, compared to the no-new-standards
case value of $343 million in 2026, the year leading up to the
compliance date of new and amended energy conservation standards.
In the absence of new or amended energy conservation standards, DOE
estimates that 14 percent of all MEM, 1-500 hp, NEMA Design A and B; 16
percent of all MEM, 501-750 hp, NEMA Design A and B; 2 percent of all
AO-MEM 1-250 hp (standard frame size); and none of the AO-Polyphase 1-
20 hp (specialized frame size) shipments will meet or exceed the ELs
required at TSL 3 in 2027, the compliance year of new and amended
standards.
The majority of electric motors covered by this rulemaking will
need to be redesigned at TSL 3. DOE estimates that manufacturers will
have to make significant investments in their manufacturing production
equipment and the engineering resources dedicated to redesigning
electric motor models. DOE estimates that manufacturers will incur
approximately $870 million in product conversion costs and
approximately $748 million in capital conversion costs.
At TSL 3, under the preservation of gross margin scenario, the
shipment weighted average MPC increases significantly by approximately
22.0 percent relative to the no-new-standards case MPC. This price
increase is outweighed by the $1,618 million in total conversion costs
estimated at TSL 3, resulting in moderately negative INPV impacts at
TSL 3 under the preservation of gross margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The increase in the shipment weighted average
MPC results in a significantly lower average manufacturer margin,
compared to the no-new-standards case manufacturer margin. This lower
average manufacturer margin and the $1,618 million in total conversion
costs result in significantly negative INPV impacts at TSL 3 under the
preservation of operating profit scenario.
TSL 4 sets the efficiency level at EL 4 (max-tech) for all electric
motors covered by this rulemaking. At TSL 4, DOE estimates impacts on
INPV will range from -$11,090 million to -$8,863 million, which
represents a change in INPV of approximately -220.8 percent to -176.4
percent, respectively. At TSL 4, industry free
[[Page 36132]]
cash flow (operating cash flow minus capital expenditures) is estimated
to decrease to -$5,634 million, or a drop of 1,745 percent, compared to
the no-new-standards case value of $343 million in 2026, the year
leading up to the compliance date of new and amended energy
conservation standards.
In the absence of new or amended energy conservation standards, DOE
estimates that less than 1 percent of all MEM, 1-50 hp, NEMA Design A
and B; none of the MEM, 51-750 hp, NEMA Design A and B; none of the AO-
MEM 1-250 hp (standard frame size); and none of the AO-Polyphase 1-20
hp (specialized frame size) shipments will meet the ELs required at TSL
4 in 2027, the compliance year of new and amended standards.
Almost all electric motors covered by this rulemaking will need to
be redesigned at TSL 4. DOE estimates that manufacturers will have to
make significant investments in their manufacturing production
equipment and the engineering resources dedicated to redesigning
electric motor models. DOE estimates that manufacturers will incur
approximately $6,285 million in product conversion costs and
approximately $7,231 million in capital conversion costs. The
significant increase in product and capital conversion costs is because
DOE assumes that electric motor manufacturers will need to use die-cast
copper rotors for most, if not all, electric motors manufactured to
meet this TSL. This technology requires a significant level of
investment because the majority of the existing electric motor
production machinery would need to be replaced or significantly
modified.
At TSL 4, under the preservation of gross margin scenario, the
shipment weighted average MPC increases significantly by approximately
49.5 percent relative to the no-new-standards case MPC. This price
increase is significantly outweighed by the $13,516 million in total
conversion costs estimated at TSL 4, resulting in significantly
negative INPV impacts at TSL 4 under the preservation of gross margin
scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The increase in the shipment weighted average
MPC results in a lower average manufacturer margin, compared to the no-
new-standards case manufacturer margin. This lower average manufacturer
margin and the $13,516 million in total conversion costs result in
significantly negative INPV impacts at TSL 4 under the preservation of
operating profit scenario.
b. Direct Impacts on Employment
To quantitatively assess the potential impacts of new and amended
energy conservation standards on direct employment in the electric
motors industry, DOE used the GRIM to estimate the domestic labor
expenditures and number of direct employees in the no-new-standards
case and in each of the standards cases during the analysis period.
DOE used statistical data from the U.S. Census Bureau's 2021 Annual
Survey of Manufacturers (``ASM''), the results of the engineering
analysis, and interviews with manufacturers to determine the inputs
necessary to calculate industry-wide labor expenditures and domestic
employment levels. Labor expenditures involved with the manufacturing
of electric motors are a function of the labor intensity of the
product, the sales volume, and an assumption that wages remain fixed in
real terms over time.
In the GRIM, DOE used the labor content of each piece of equipment
and the MPCs to estimate the annual labor expenditures of the industry.
DOE used Census data and interviews with manufacturers to estimate the
portion of the total labor expenditures attributable to domestic labor.
The production worker estimates in this employment section cover
only workers up to the line-supervisor level who are directly involved
in fabricating and assembling an electric motor within a motor
facility. Workers performing services that are closely associated with
production operations, such as material handling with a forklift, are
also included as production labor. DOE's estimates account for only
production workers who manufacture the specific equipment covered by
this rulemaking. For example, a worker on an electric motor line
manufacturing a fractional horsepower motor (i.e., a motor with less
than one horsepower) would not be included with this estimate of the
number of electric motor workers, since fractional motors are not
covered by this rulemaking.
The employment impacts shown in Table V-29 represent the potential
production employment impact resulting from new and amended energy
conservation standards. The upper bound of the results estimates the
maximum change in the number of production workers that could occur
after compliance with new and amended energy conservation standards
when assuming that manufacturers continue to produce the same scope of
covered equipment in the same production facilities. It also assumes
that domestic production does not shift to lower-labor-cost countries.
Because there is a real risk of manufacturers evaluating sourcing
decisions in response to new and amended energy conservation standards,
the lower bound of the employment results includes the estimated total
number of U.S. production workers in the industry who could lose their
jobs if some existing electric motor production was moved outside of
the U.S. While the results present a range of employment impacts
following 2027, this section also include qualitative discussions of
the likelihood of negative employment impacts at the various TSLs.
Finally, the employment impacts shown are independent of the indirect
employment impacts from the broader U.S. economy, which are documented
in chapter 16 of the direct final rule TSD.
Based on 2021 ASM data and interviews with manufacturers, DOE
estimates approximately 15 percent of electric motors covered by this
rulemaking sold in the U.S. are manufactured domestically. Using this
assumption, DOE estimates that in the absence of new and amended energy
conservation standards, there would be approximately 1,242 domestic
production workers involved in manufacturing all electric motors
covered by this rulemaking in 2027. Table V-29 shows the range of
potential impacts of new and amended energy conservation standards on
U.S. production workers involved in the production of electric motors
covered by this rulemaking.
Table V-29--Potential Changes in the Number of Domestic Electric Motor Workers
----------------------------------------------------------------------------------------------------------------
No-new- Trial standard level
standards ---------------------------------------------------------
case 1 2 3 4
----------------------------------------------------------------------------------------------------------------
Domestic Production Workers in 2027...... 1,242 1,243 1,250 1,515 1,857
[[Page 36133]]
Domestic Non-Production Workers in 2027.. 712 712 712 712 712
Total Domestic Employment in 2027........ 1,954 1,955 1,962 2,227 2,569
Potential Changes in Total Domestic ........... (2)-1 (13)-8 (432)-273 (1,201)-615
Employment in 2027 *....................
----------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential impacts. Numbers in parentheses indicate negative values.
At the upper end of the range, all examined TSLs show an increase
in the number of domestic production workers for electric motors. The
upper end of the range represents a scenario where manufacturers
increase production hiring due to the increase in the labor associated
with adding the required components and additional labor (e.g., hand
winding, etc.) to make electric motors more efficient. However, as
previously stated, this assumes that in addition to hiring more
production employees, all existing domestic production would remain in
the United States and not shift to lower labor-cost countries.
At the lower end of the range, all examined TSLs show a decrease in
domestic production employment. In response to the March 2022
Preliminary TSD NEMA stated that increasing component prices can drive
production offshore when tariffs only apply to raw materials and not
finished goods. (NEMA, No. 22 at p. 16). The lower end of the domestic
employment range assumes that some electric motor domestic production
employment may shift to lower labor-cost countries in response to
energy conservation standards. DOE estimated this lower bound potential
change in domestic employment based on the percent change in the MPC at
each TSL.
c. Impacts on Manufacturing Capacity
During manufacturer interviews and during meetings supporting the
November 2022 Joint Recommendation, most manufacturers stated that any
standards requiring efficiency levels higher than IE4 (also referred to
as NEMA Super-Premium) \93\ would severely disrupt manufacturing
capacity (in this analysis these efficiency levels correspond to two or
more NEMA bands of efficiency above NEMA Premium). Many electric motor
manufacturers do not offer any electric motor models that would meet
these higher efficiency levels. Based on the shipments analysis used in
the NIA, DOE estimates that less than 1.5 percent of all electric motor
shipments will meet any efficiency level above IE4, in the no-new-
standards case in 2027, the compliance year of new and amended
standards.
---------------------------------------------------------------------------
\93\ The TSL that require efficiency levels above IE4/NEMA
Super-Premium is TSL 4.
---------------------------------------------------------------------------
Additionally, most manufacturers stated they would not be able to
provide a full portfolio of electric motors for any standards that
would be met using copper rotors. Most manufacturers stated that they
do not currently have the machinery, technology, or engineering
resources to produce copper rotors in-house. Some manufacturers claim
that the few manufacturers that do have the capability of producing
copper rotors are not able to produce these motors in volumes
sufficient to fulfill the entire electric motor market and would not be
able to ramp up those production volumes over the four-year compliance
period. For manufacturers to either completely redesign their motor
production lines or significantly expand their very limited copper
rotor production line would require a massive retooling and engineering
effort, which could take more than a decade to complete. Most
manufacturers stated they would have to outsource copper rotor
production because they would not be able to modify their facilities
and production processes to produce copper rotors in-house within a
four-year time period. Most manufacturers agreed that outsourcing rotor
die casting would constrain capacity by creating a bottleneck in rotor
production, as there are very few companies that produce copper rotors.
Manufacturers also pointed out that there is substantial
uncertainty surrounding the global availability and price of copper,
which has the potential to constrain capacity. Several manufacturers
expressed concern that the combination of all of these factors would
make it impossible to support existing customers while redesigning
product lines and retooling.
DOE estimates there is a strong likelihood of manufacturer capacity
constraints in the near term for any standards that would likely
require the use of copper rotors and for any standards set at
efficiency levels higher than IE4.
d. Impacts on Subgroups of Manufacturers
Using average cost assumptions to develop an industry cash-flow
estimate may not be adequate for assessing differential impacts among
manufacturer subgroups. Small manufacturers, niche equipment
manufacturers, and manufacturers exhibiting cost structures
substantially different from the industry average could be affected
disproportionately. DOE analyzed the impacts to small businesses in
section VI.B and did not identify any other adversely impacted electric
motor-related manufacturer subgroups for this rulemaking based on the
results of the industry characterization.
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer burden involves looking at the
cumulative impact of multiple DOE standards and the product-specific
regulatory actions of other Federal agencies that affect the
manufacturers of a covered product or equipment. While any one
regulation may not impose a significant burden on manufacturers, the
combined effects of several existing or impending regulations may have
serious consequences for some manufacturers, groups of manufacturers,
or an entire industry. Assessing the impact of a single regulation may
overlook this cumulative regulatory burden. In addition to energy
conservation standards, other regulations can significantly affect
manufacturers' financial operations. Multiple regulations affecting the
same manufacturer can strain profits and lead companies to abandon
product lines or markets with lower expected future returns than
competing products. For these reasons, DOE conducts an analysis
[[Page 36134]]
of cumulative regulatory burden as part of its rulemakings pertaining
to appliance efficiency. DOE requests information regarding the impact
of cumulative regulatory burden on manufacturers of electric motors
associated with multiple DOE standards or product-specific regulatory
actions of other Federal agencies.
DOE evaluates product-specific regulations that will take effect
approximately 3 years before or after the 2027 compliance date of any
new and amended energy conservation standards for electric motors. This
information is presented in Table V-30.
Table V-30--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting Electric Motor Manufacturers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Industry
Number of manufacturers Approx. conversion costs/
Federal energy conservation standard manufacturers * affected from standards year Industry conversion costs (millions) product revenue
this rule ** *** (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dedicated-Purpose Pool Pump Motors 87 FR 5 5 2026 $46.2 (2020$) 2.8
37122 (Jun. 21, 2022) [dagger].
Distribution Transformer 88 FR 1722 (Jan. 27 6 2027 $343 (2021$) 2.7
11, 2023) [dagger].
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This column presents the total number of manufacturers identified in the energy conservation standard rule contributing to cumulative regulatory
burden.
** This column presents the number of manufacturers producing electric motors that are also listed as manufacturers in the listed energy conservation
standard contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of product revenue during the conversion period. Industry conversion costs are the
upfront investments manufacturers must make to sell compliant products/equipment. The revenue used for this calculation is the revenue from just the
covered product/equipment associated with each row. The conversion period is the time frame over which conversion costs are made and lasts from the
publication year of the final rule to the compliance year of the energy conservation standard. The conversion period typically ranges from 3 to 5
years, depending on the rulemaking.
[dagger] Indicates a proposed rulemaking. Final values may change upon the publication of a final rule.
3. National Impact Analysis
This section presents DOE's estimates of the national energy
savings and the NPV of consumer benefits that would result from each of
the TSLs considered as potential amended standards.
a. Significance of Energy Savings
To estimate the energy savings attributable to potential amended
standards for electric motors, DOE compared their energy consumption
under the no-new-standards case to their anticipated energy consumption
under each TSL. The savings are measured over the entire lifetime of
products purchased in the 30-year period that begins in the year of
anticipated compliance with amended standards (2027-2056). Table V-31
presents DOE's projections of the national energy savings for each TSL
considered for electric motors. The savings were calculated using the
approach described in section IV.H of this document.
Table V-31--Cumulative National Energy Savings for Electric Motors; 30 Years of Shipments
[2027-2056]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Equipment class group Horsepower range ------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
(quads)
----------------------------------------------------------------------------------------------------------------
Primary Energy:
MEM, 1-500 hp, NEMA Design A 1 <= hp <= 5.................... N/A N/A 0.799 1.877
and B.
5 < hp <= 20.................... N/A N/A 2.303 4.461
20 < hp <= 50................... N/A N/A 2.049 3.968
50 < hp < 100................... N/A N/A 0.327 1.049
100 <= hp <= 250................ N/A 2.609 2.609 7.926
250 < hp <= 500................. N/A N/A 1.411 2.497
MEM, 501-750 hp, NEMA Design A 500 < hp <= 750................. 0.003 0.003 0.029 0.073
and B above 500 hp.
AO-MEM (Standard Frame Size)... 1 <= hp <= 20................... 0.045 0.045 0.104 0.184
20 < hp <= 50................... 0.012 0.012 0.100 0.171
50 < hp < 100*.................. ........... ........ 0.018 0.047
100 <=hp <= 250................. 0.056 0.207 0.207 0.436
AO-Polyphase (Specialized Frame 1 <= hp <= 20................... 0.021 0.021 0.036 0.049
Size).
------------------------------------------
Total...................... ................................ 0.137 2.898 9.991 22.739
----------------------------------------------------------------------------------------------------------------
FFC:
MEM, 1-500 hp, NEMA Design A 1 <= hp <= 5.................... N/A N/A 0.830 1.950
and B. 5 < hp <= 20.................... N/A N/A 2.393 4.635
20 < hp <= 50................... N/A N/A 2.128 4.123
50 < hp < 100................... N/A N/A 0.339 1.090
100 <= hp <= 250................ N/A 2.710 2.710 8.234
250 < hp <= 500................. N/A N/A 1.466 2.594
MEM, 501-750 hp, NEMA Design A 500 < hp <= 750................. 0.003 0.003 0.031 0.076
and B above 500 hp.
[[Page 36135]]
AO-MEM (Standard Frame Size)... 1 <= hp <= 20................... 0.047 0.047 0.108 0.192
20 < hp <= 50................... 0.012 0.012 0.104 0.177
50 <= hp <= 100 *............... ........... ........ 0.018 0.049
100 <= hp <= 250 **............. 0.058 0.215 0.215 0.453
AO-Polyphase (Specialized Frame 1 hp 20......................... 0.022 0.022 0.037 0.051
Size).
------------------------------------------
Total...................... ................................ 0.143 3.011 10.379 23.623
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and
TSL2 in that equipment class group and horsepower range.
OMB Circular A-4 \94\ requires agencies to present analytical
results, including separate schedules of the monetized benefits and
costs that show the type and timing of benefits and costs. Circular A-4
also directs agencies to consider the variability of key elements
underlying the estimates of benefits and costs. For this rulemaking,
DOE undertook a sensitivity analysis using 9 years, rather than 30
years, of product shipments. The choice of a 9-year period is a proxy
for the timeline in EPCA for the review of certain energy conservation
standards and potential revision of and compliance with such revised
standards.\95\ The review timeframe established in EPCA is generally
not synchronized with the product lifetime, product manufacturing
cycles, or other factors specific to electric motors. Thus, such
results are presented for informational purposes only and are not
indicative of any change in DOE's analytical methodology. The NES
sensitivity analysis results based on a 9-year analytical period are
presented in Table V-32. The impacts are counted over the lifetime of
electric motors purchased in 2027-2035.
---------------------------------------------------------------------------
\94\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003.
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed
September 30, 2022).
\95\ EPCA requires DOE to review its standards at least once
every 6 years, and requires, for certain products, a 3-year period
after any new standard is promulgated before compliance is required,
except that in no case may any new standards be required within 6-
years of the compliance date of the previous standards. While adding
a 6-year review to the 3-year compliance period adds up to 9 years,
DOE notes that it may undertake reviews at any time within the 6-
year period and that the 3-year compliance date may yield to the 6-
year backstop. A 9-year analysis period may not be appropriate given
the variability that occurs in the timing of standards reviews and
the fact that for some products, the compliance period is 5 years
rather than 3 years.
Table V-32--Cumulative National Energy Savings for Electric Motors; 9 Years of Shipments
[2027-2035]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Equipment class group Horsepower range ------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
(quads)
----------------------------------------------------------------------------------------------------------------
Primary Energy:
MEM, 1-500 hp, NEMA Design A 1 <= hp <= 5.................... N/A N/A 0.182 0.427
and B. 5 < hp <= 20.................... N/A N/A 0.524 1.016
20 < hp <= 50................... N/A N/A 0.466 0.903
50 < hp < 100................... N/A N/A 0.074 0.239
100 <= hp <= 250................ N/A 0.592 0.592 1.799
250 < hp <= 500................. N/A N/A 0.320 0.567
MEM, 501-750 hp, NEMA Design A 500 < hp <= 750................. 0.001 0.001 0.007 0.017
and B above 500 hp.
AO-MEM (Standard Frame Size)... 1 <= hp <= 20................... 0.012 0.012 0.029 0.051
20 < hp <= 50................... 0.003 0.003 0.027 0.047
50 < hp < 100 *................. ........... ........ 0.005 0.013
100 <= hp <= 250................ 0.015 0.057 0.057 0.119
AO-Polyphase (Specialized Frame 1 <= hp <= 20................... 0.006 0.006 0.010 0.014
Size).
------------------------------------------
Total...................... ................................ 0.038 0.671 2.294 5.211
----------------------------------------------------------------------------------------------------------------
FFC:
MEM, 1--500 hp, NEMA Design A 1 <= hp <= 5.................... N/A N/A 0.189 0.444
and B. 5 < hp <= 20.................... N/A N/A 0.545 1.056
20 < hp <= 50................... N/A N/A 0.485 0.939
50 < hp < 100................... N/A N/A 0.077 0.248
100 <= hp <= 250................ N/A 0.615 0.615 1.869
250 < hp <= 500................. N/A N/A 0.333 0.589
MEM, 501-750 hp, NEMA Design A 500 < hp <= 750................. 0.001 0.001 0.007 0.017
and B above 500 hp.
AO-MEM (Standard Frame Size)... 1 <= hp <= 20................... 0.013 0.013 0.030 0.053
20 < hp <= 50................... 0.003 0.003 0.028 0.049
50 < hp < 100 *................. ........... ........ 0.005 0.013
100 <= hp <= 250 **............. 0.016 0.059 0.059 0.124
[[Page 36136]]
AO-Polyphase (Specialized Frame 1 <= hp <= 20................... 0.006 0.006 0.010 0.014
Size).
------------------------------------------
Total...................... ................................ 0.039 0.698 2.384 5.416
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and
TSL2 (EL1) in that equipment class group and horsepower range.
b. Net Present Value of Consumer Costs and Benefits
DOE estimated the cumulative NPV of the total costs and savings for
consumers that would result from the TSLs considered for electric
motors. In accordance with OMB's guidelines on regulatory analysis,\96\
DOE calculated NPV using both a 7-percent and a 3-percent real discount
rate. Table V-33 shows the consumer NPV results with impacts counted
over the lifetime of products purchased in 2027-2056.
---------------------------------------------------------------------------
\96\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003.
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed
September 30, 2022).
Table V-33--Cumulative Net Present Value of Consumer Benefits for Electric Motors; 30 Years of Shipments
[2027-2056]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate Equipment class Horsepower -------------------------------------------
group range 1 2 3 4
----------------------------------------------------------------------------------------------------------------
(billion 2021$)
----------------------------------------------------------------------------------------------------------------
3 percent...................... MEM, 1-500 hp, 1 <= hp <= 5 N/A N/A -2.18 -8.54
NEMA Design A and
B.
5 < hp <= 20 N/A N/A -7.17 -6.21
20 < hp <= 50 N/A N/A -3.24 -0.93
50 < hp < 100 N/A N/A -1.36 -1.50
100 <= hp <= N/A 6.73 6.73 5.13
250
250 < hp <= 500 N/A N/A 1.77 0.66
MEM, 501-750 hp, 500 < hp <= 750 0.01 0.01 0.02 0.03
NEMA Design A and
B above 500 hp.
AO-MEM (Standard 1 <= hp <= 20 0.12 0.12 0.05 -0.14
Frame Size). 20 < hp <= 50 0.04 0.04 0.04 0.17
50 < hp < 100 * ......... ......... -0.09 -0.16
100 <= hp <= 0.11 0.52 0.52 0.18
250
AO-Polyphase 1 <= hp <= 20 0.05 0.05 0.05 0.01
(Specialized
Frame Size).
-------------------------------------------
Total.......... ............... 0.33 7.47 -4.85 -11.30
----------------------------------------------------------------------------------------------------------------
7 percent...................... MEM, 1-500 hp, 1 <= hp <= 5 N/A N/A -1.49 -5.30
NEMA Design A and
B.
5 < hp <= 20 N/A N/A -4.77 -5.18
20 < hp <= 50 N/A N/A -2.62 -2.25
50 < hp < 100 N/A N/A -0.86 -1.26
100 <= hp <= N/A 2.00 2.00 -2.04
250
250 < hp <= 500 N/A N/A 0.09 -1.15
MEM, 501-750 hp, 500 < hp <= 750 0.00 0.00 -0.01 -0.03
NEMA Design A and
B above 500 hp.
AO-MEM (Standard 1 <= hp <= 20 0.04 0.04 -0.02 -0.16
Frame Size). 20 < hp <= 50 0.02 0.02 -0.02 0.01
50 < hp < 100 * ......... ......... -0.06 -0.11
100 <= hp <= 0.02 0.16 0.16 -0.18
250
AO-Polyphase 1 <= hp <= 20 0.02 0.02 0.01 -0.02
(Specialized
Frame Size).
-------------------------------------------
Total.......... ............... 0.11 2.23 -7.60 -17.67
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and
TSL2 in that equipment class group and horsepower range.
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V-34. The impacts are counted over the
lifetime of products purchased in 2027-2035. As mentioned previously,
such results are presented for informational purposes only and are not
indicative of any
[[Page 36137]]
change in DOE's analytical methodology or decision criteria.
Table V-34--Cumulative Net Present Value of Consumer Benefits for Electric Motors; 9 Years of Shipments
[2027-2035]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate Equipment class Horsepower -------------------------------------------
group range 1 2 3 4
----------------------------------------------------------------------------------------------------------------
(billion 2021$)
----------------------------------------------------------------------------------------------------------------
3 percent...................... MEM, 1-500 hp, 1 <= hp <= 5 N/A N/A -0.66 -2.62
NEMA Design A and 5 < hp <= 20 N/A N/A -2.17 -1.79
B.
20 < hp <= 50 N/A N/A -0.95 -0.16
50 < hp < 100 N/A N/A -0.41 -0.43
100 <= hp <= N/A 2.16 2.16 1.74
250
250 < hp <= 500 N/A N/A 0.58 0.25
MEM, 501-750 hp, 500 < hp <= 750 0.00 0.00 0.01 0.01
NEMA Design A and
B above 500 hp.
AO-MEM (Standard 1 <= hp <= 20 0.04 0.04 0.02 -0.04
Frame Size). 20 < hp <= 50 0.02 0.02 0.02 0.07
50 < hp < 100 * ......... ......... -0.03 -0.06
100 <= hp <= 0.04 0.20 0.20 0.08
250
AO-Polyphase 1 <= hp <= 20 0.02 0.02 0.02 0.01
(Specialized
Frame Size).
-------------------------------------------
Total.......... ............... 0.12 2.44 -1.22 -2.95
----------------------------------------------------------------------------------------------------------------
7 percent...................... MEM, 1-500 hp, 1 <= hp <= 5 N/A N/A -0.64 -2.30
NEMA Design A and 5 < hp <= 20 N/A N/A -2.06 -2.20
B.
20 < hp <= 50 N/A N/A -1.12 -0.93
50 < hp < 100 N/A N/A -0.37 -0.54
100 <= hp <= N/A 0.90 0.90 -0.84
250
250 < hp <= 500 N/A N/A 0.05 -0.49
MEM, 501--750 hp, 500 < hp <= 750 0.00 0.00 0.00 -0.01
NEMA Design A and
B above 500 hp.
AO-MEM (Standard 1 <= hp <= 20 0.02 0.02 -0.01 -0.08
Frame Size). 20 < hp <= 50 0.01 0.01 -0.01 0.01
50 < hp < 100 ......... ......... -0.03 -0.05
100 <= hp <= 0.01 0.08 0.08 -0.08
250
AO-Polyphase 1 <= hp <= 20 0.01 0.01 0.01 -0.01
(Specialized
Frame Size).
-------------------------------------------
Total.......... ............... 0.06 1.02 -3.21 -7.51
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact at TSL1 and TSL2 because there are no shipments below the efficiency level corresponding to TSL1 and
TSL2 in that equipment class group and horsepower range.
The previous results reflect the use of a default trend to estimate
the change in price for electric motors over the analysis period (see
section IV.F.1 of this document). In addition to the default trend
(constant prices), DOE also conducted a sensitivity analysis that
considered one scenario with a rate of price decline and one scenario
with a rate of price increase. The results of these alternative cases
are presented in appendix 10C of the direct final rule TSD. In the
price-decline case, the NPV of consumer benefits is higher than in the
default case. In the price-increase case, the NPV of consumer benefits
is lower than in the default case.
c. Indirect Impacts on Employment
It is estimated that that amended energy conservation standards for
electric motors would reduce energy expenditures for consumers of those
products, with the resulting net savings being redirected to other
forms of economic activity. These expected shifts in spending and
economic activity could affect the demand for labor. As described in
section IV.N of this document, DOE used an input/output model of the
U.S. economy to estimate indirect employment impacts of the TSLs that
DOE considered. There are uncertainties involved in projecting
employment impacts, especially changes in the later years of the
analysis. Therefore, DOE generated results for near-term timeframes
(2027-2031), where these uncertainties are reduced.
The results suggest that the standards would be likely to have a
negligible impact on the net demand for labor in the economy. The net
change in jobs is so small that it would be imperceptible in national
labor statistics and might be offset by other, unanticipated effects on
employment. Chapter 16 of the direct final rule TSD presents detailed
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
As discussed in section IV.C.1.b of this document, DOE concludes
that the standards in this direct final rule would not lessen the
utility or performance of the electric motors under consideration in
this rulemaking. Manufacturers of these products currently offer units
that meet or exceed the standards.
5. Impact of Any Lessening of Competition
DOE considered any lessening of competition that would be likely to
result from new or amended standards. As discussed in section III.F.1.e
of this document, the Attorney General
[[Page 36138]]
determines the impact, if any, of any lessening of competition likely
to result from a standard, and transmits such determination in writing
to the Secretary, together with an analysis of the nature and extent of
such impact. To assist the Attorney General in making this
determination, DOE has provided DOJ with copies of this direct final
rule and the accompanying TSD for review. DOE will consider DOJ's
comments on the rule in determining whether to proceed to a final rule.
DOE will publish and respond to DOJ's comments in that document. DOE
invites comment from the public regarding the competitive impacts that
are likely to result from this rule. In addition, stakeholders may also
provide comments separately to DOJ regarding these potential impacts.
See the ADDRESSES section for information to send comments to DOJ.
6. Need of the Nation To Conserve Energy
Enhanced energy efficiency, where economically justified, improves
the Nation's energy security, strengthens the economy, and reduces the
environmental impacts (costs) of energy production. Reduced electricity
demand due to energy conservation standards is also likely to reduce
the cost of maintaining the reliability of the electricity system,
particularly during peak-load periods. Chapter 15 in the direct final
rule TSD presents the estimated impacts on electricity generating
capacity, relative to the no-new-standards case, for the TSLs that DOE
considered in this rulemaking.
Energy conservation resulting from potential energy conservation
standards for electric motors is expected to yield environmental
benefits in the form of reduced emissions of certain air pollutants and
greenhouse gases. Table V-35 provides DOE's estimate of cumulative
emissions reductions expected to result from the TSLs considered in
this rulemaking. The emissions were calculated using the multipliers
discussed in section IV.K of this document. DOE reports annual
emissions reductions for each TSL in chapter 13 of the direct final
rule TSD.
Table V-35--Cumulative Emissions Reduction for Electric Motors Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
Trial standard level
---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 4.08 84.48 294.36 669.19
CH4 (thousand tons)............................. 0.28 5.73 20.15 45.77
N2O (thousand tons)............................. 0.04 0.79 2.78 6.31
NOX (thousand tons)............................. 1.93 39.32 138.52 314.54
SO2 (thousand tons)............................. 1.68 34.64 121.08 275.16
Hg (tons)....................................... 0.01 0.23 0.80 1.81
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 0.34 7.20 24.88 56.62
CH4 (thousand tons)............................. 32.47 684.37 2,359.60 5,370.22
N2O (thousand tons)............................. 0.00 0.04 0.12 0.28
NOX (thousand tons)............................. 5.20 109.42 377.47 859.03
SO2 (thousand tons)............................. 0.02 0.47 1.67 3.79
Hg (tons)....................................... 0.00 0.00 0.00 0.01
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 4.42 91.69 319.24 725.80
CH4 (thousand tons)............................. 32.75 690.10 2,379.75 5,415.99
N2O (thousand tons)............................. 0.04 0.82 2.90 6.59
NOX (thousand tons)............................. 7.13 148.74 516.00 1,173.58
SO2 (thousand tons)............................. 1.71 35.12 122.75 278.95
Hg (tons)....................................... 0.01 0.23 0.80 1.82
----------------------------------------------------------------------------------------------------------------
As part of the analysis for this rulemaking, DOE estimated monetary
benefits likely to result from the reduced emissions of CO2
that DOE estimated for each of the considered TSLs for electric motors.
Section IV.L of this document discusses the SC-CO2 values
that DOE used. Table V-36 presents the value of CO2
emissions reduction at each TSL for each of the SC-CO2
cases. The time-series of annual values is presented for the TSL in
chapter 14 of the direct final rule TSD.
Table V-36--Present Value of CO2 Emissions Reduction for Electric Motors Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-CO2 case
-----------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(Billion 2021$)
----------------------------------------------------------------------------------------------------------------
1............................................. 35.69 155.25 243.87 470.82
2............................................. 553.79 2,504.21 3,979.48 7,570.82
[[Page 36139]]
3............................................. 2,455.13 10,830.27 17,081.13 32,809.19
4............................................. 5,459.53 24,136.32 38,092.58 73,105.31
----------------------------------------------------------------------------------------------------------------
As discussed in section IV.L.2 of this document, DOE estimated the
climate benefits likely to result from the reduced emissions of methane
and N2O that DOE estimated for each of the considered TSLs
for electric motors. Table V-37 presents the value of the
CH4 emissions reduction at each TSL, and Table V-38 presents
the value of the N2O emissions reduction at each TSL. The
time-series of annual values is presented for the TSL in chapter 14 of
the direct final rule TSD.
Table V-37--Present Value of Methane Emissions Reduction for Electric Motors Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-CH4 case
-----------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(Billion 2021$)
----------------------------------------------------------------------------------------------------------------
1............................................. 12.16 37.03 51.92 97.98
2............................................. 194.82 623.71 884.30 1,651.65
3............................................. 845.85 2,621.71 3,690.13 6,932.36
4............................................. 1,884.39 5,857.68 8,250.30 15,490.67
----------------------------------------------------------------------------------------------------------------
Table V-38--Present Value of Nitrous Oxide Emissions Reduction for Electric Motors Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-N2O case
-----------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(Billion 2021$)
----------------------------------------------------------------------------------------------------------------
1............................................. 0.13 0.51 0.79 1.36
2............................................. 1.95 8.23 12.94 21.99
3............................................. 8.63 35.54 55.47 94.75
4............................................. 19.20 79.21 123.71 211.22
----------------------------------------------------------------------------------------------------------------
DOE is aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
global and U.S. economy continues to evolve rapidly. DOE, together with
other Federal agencies, will continue to review methodologies for
estimating the monetary value of reductions in CO2 and other
GHG emissions. This ongoing review will consider the comments on this
subject that are part of the public record for this and other
rulemakings, as well as other methodological assumptions and issues.
DOE notes that the standards would be economically justified even
without inclusion of monetized benefits of reduced GHG emissions.
DOE also estimated the monetary value of the health benefits
associated with NOX and SO2 emissions reductions
anticipated to result from the considered TSLs for electric motors. The
dollar-per-ton values that DOE used are discussed in section IV.L of
this document. Table V-39 presents the present value for NOX
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and Table V-40 presents similar results for
SO2 emissions reductions. The results in these tables
reflect application of EPA's low dollar-per-ton values, which DOE used
to be conservative. The time-series of annual values is presented for
the TSL in chapter 14 of the direct final rule TSD.
[[Page 36140]]
Table V-39--Present Value of NOX Emissions Reduction for Electric Motors
Shipped in 2027-2056
------------------------------------------------------------------------
TSL 3% Discount rate 7% Discount rate
------------------------------------------------------------------------
(million 2021$)
------------------------------------------------------------------------
1........................... 251.49 93.31
2........................... 4,333.63 1,321.91
3........................... 17,501.29 6,149.06
4........................... 39,226.69 13,614.34
------------------------------------------------------------------------
Table V-40--Present Value of SO2 Emissions Reduction for Electric Motors
Shipped in 2027-2056
------------------------------------------------------------------------
TSL 3% Discount rate 7% Discount rate
------------------------------------------------------------------------
(million 2021$)
------------------------------------------------------------------------
1........................... 82.00 31.35
2........................... 1,388.59 434.33
3........................... 5,658.54 2,042.58
4........................... 12,671.52 4,517.89
------------------------------------------------------------------------
Not all the public health and environmental benefits from the
reduction of greenhouse gases, NOx, and SO2 are
captured in the values above, and additional unquantified benefits from
the reductions of those pollutants as well as from the reduction of
direct PM and other co-pollutants may be significant. DOE has not
included the monetary benefits of the reduction of Hg for this direct
final rule because Hg emissions reductions are expected to be small.
7. Other Factors
The Secretary of Energy, in determining whether a standard is
economically justified, may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII))
8. Summary of Economic Impacts
Table V-41 presents the NPV values that result from adding the
estimates of the potential economic benefits resulting from reduced GHG
and NOX and SO2 emissions to the NPV of consumer
benefits calculated for each TSL considered in this rulemaking. The
consumer benefits are domestic U.S. monetary savings that occur as a
result of purchasing the covered electric motors, and are measured for
the lifetime of products shipped in 2027-2056. The benefits associated
with reduced GHG emissions resulting from the adopted standards are
global benefits, and are also calculated based on the lifetime of
electric motors shipped in 2027-2056.
Table V-41--Consumer NPV Combined With Present Value of Benefits From Climate and Health Benefits
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
3% Discount Rate for Consumer NPV and Health Benefits (billion 2021$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.......................... 0.71 13.95 21.62 47.96
3% Average SC-GHG case.......................... 0.85 16.33 31.80 70.67
2.5% Average SC-GHG case........................ 0.96 18.07 39.14 87.07
3% 95th percentile SC-GHG case.................. 1.23 22.44 58.15 129.41
----------------------------------------------------------------------------------------------------------------
7% Discount Rate for Consumer NPV and Health Benefits (billion 2021$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.......................... 0.28 4.74 3.90 7.83
3% Average SC-GHG case.......................... 0.43 7.13 14.08 30.54
2.5% Average SC-GHG case........................ 0.53 8.87 21.42 46.93
3% 95th percentile SC-GHG case.................. 0.80 13.24 40.43 89.27
----------------------------------------------------------------------------------------------------------------
C. Conclusion
When considering new or amended energy conservation standards, the
standards that DOE adopts for any type (or class) of covered equipment
must be designed to achieve the maximum improvement in energy
efficiency that the Secretary determines is technologically feasible
and economically justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(A)) In determining whether a standard is economically
justified, the Secretary must determine whether the benefits of the
standard exceed its burdens by, to the greatest extent practicable,
considering the seven statutory factors discussed in section III.F.1 of
this document. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)) The new
or amended standard must also result in significant conservation of
energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B))
For this direct final rule, DOE considered the impacts of new and
amended standards for electric motors at each TSL, beginning with the
maximum technologically feasible level, to determine whether that level
was economically justified. Where the max-tech level was not justified,
DOE then considered the next most efficient level and undertook the
same evaluation until it reached the highest efficiency level that is
both technologically feasible and economically justified and saves a
significant amount of energy.
To aid the reader as DOE discusses the benefits and/or burdens of
each TSL,
[[Page 36141]]
tables in this section present a summary of the results of DOE's
quantitative analysis for each TSL. In addition to the quantitative
results presented in the tables, DOE also considers other burdens and
benefits that affect economic justification. These include the impacts
on identifiable subgroups of consumers who may be disproportionately
affected by a national standard and impacts on employment.
1. Benefits and Burdens of TSLs Considered for Electric Motors
Standards
Tables V-42 and V-43 summarize the quantitative impacts estimated
for each TSL for electric motors. The national impacts are measured
over the lifetime of electric motors purchased in the 30-year period
that begins in the anticipated year of compliance with amended
standards (2027-2056). The energy savings, emissions reductions, and
value of emissions reductions refer to full-fuel-cycle results. DOE is
presenting monetized benefits of GHG emissions reductions in accordance
with the applicable Executive Orders and DOE would reach the same
conclusion presented in this notice in the absence of the social cost
of greenhouse gases, including the Interim Estimates presented by the
Interagency Working Group. The efficiency levels contained in each TSL
are described in section V.A of this document.
Table V-42--Summary of Analytical Results for Electric Motors TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings
----------------------------------------------------------------------------------------------------------------
Quads........................................... 0.1 3.0 10.4 23.6
----------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 4.42 91.69 319.24 725.80
CH4 (thousand tons)............................. 32.75 690.10 2,379.75 5,415.99
N2O (thousand tons)............................. 0.04 0.82 2.90 6.59
NOX (thousand tons)............................. 7.13 148.74 516.00 1,173.58
SO2 (thousand tons)............................. 1.71 35.12 122.75 278.95
Hg (tons)....................................... 0.01 0.23 0.80 1.82
----------------------------------------------------------------------------------------------------------------
Present Value of Benefits and Costs (3% discount rate, billion 2021$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................. 0.51 8.82 34.86 73.26
Climate Benefits *.............................. 0.19 3.14 13.49 30.07
Health Benefits **.............................. 0.33 5.72 23.16 51.90
Total Benefits [dagger]......................... 1.04 17.68 71.50 155.23
Consumer Incremental Product Costs [Dagger]..... 0.18 1.35 39.70 84.56
Consumer Net Benefits........................... 0.33 7.47 -4.85 -11.30
Total Net Benefits.............................. 0.85 16.33 31.80 70.67
----------------------------------------------------------------------------------------------------------------
Present Value of Benefits and Costs (7% discount rate, billion 2021$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................. 0.21 2.95 13.44 27.14
Climate Benefits *.............................. 0.19 3.14 13.49 30.07
Health Benefits **.............................. 0.12 1.76 8.19 18.13
Total Benefits [dagger]......................... 0.53 7.85 35.11 75.34
Consumer Incremental Product Costs [Dagger]..... 0.10 0.72 21.03 44.80
Consumer Net Benefits........................... 0.11 2.23 -7.60 -17.67
Total Net Benefits.............................. 0.43 7.13 14.08 30.54
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with electric motors shipped in 2027-2056. These
results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the SC-CO2, SC-CH4 and SC-N2O. Together,
these represent the global SC-GHG. For presentational purposes of this table, the climate benefits associated
with the average SC-GHG at a 3 percent discount rate are shown, but the Department does not have a single
central SC-GHG point estimate. To monetize the benefits of reducing GHG emissions this analysis uses the
interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous
Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working
Group on the Social Cost of Greenhouse Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
the importance and value of considering the benefits calculated using all four SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.
Table V-43--Summary of Analytical Results for Electric Motors TSLs: Manufacturer and Consumer Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
----------------------------------------------------------------------------------------------------------------
Industry NPV (million 2021$) (No-new-standards 4,896-4,899 4,690-4,720 3,659-4,681 (6,066)-(3,840)
case INPV = 5,023)...........................
[[Page 36142]]
Industry NPV (% change)....................... (2.5) (6.6)-(6.0) (27.2)-(6.8) (220.8)-(176.4)
----------------------------------------------------------------------------------------------------------------
Consumer Average LCC Savings (2021$)
----------------------------------------------------------------------------------------------------------------
RU1........................................... N/A N/A -101.8 -276.4
RU2........................................... N/A N/A -336.9 -309.4
RU3........................................... N/A N/A -916.7 -1,439.6
RU4........................................... N/A 567.1 567.1 -2,541.1
RU5........................................... N/A N/A -945.5 -5,257.2
RU6........................................... 2,550.1 2,550.1 -2,287.8 -6,710.3
RU7........................................... 57.6 57.6 -39.2 -156.5
RU8........................................... 472.4 472.4 -160.8 -105.5
RU9 *......................................... .............. .............. -930.5 -1,795.0
RU10.......................................... 608.8 930.7 930.7 -1,846.6
RU11.......................................... 49.9 49.9 2.5 -153.2
Shipment-Weighted Average **.................. 159.8 337.4 -196.2 -404.2
----------------------------------------------------------------------------------------------------------------
Consumer Simple PBP (years)
----------------------------------------------------------------------------------------------------------------
RU1........................................... N/A N/A 16.7 20.3
RU2........................................... N/A N/A 15.4 11.9
RU3........................................... N/A N/A 30.2 20.6
RU4........................................... N/A 4.1 4.1 18.1
RU5........................................... N/A N/A 11.8 17.7
RU6........................................... 3.7 3.7 9.6 12.6
RU7........................................... 4.0 4.0 6.5 9.0
RU8........................................... 1.6 1.6 5.9 6.1
RU9 *......................................... .............. .............. 9.0 10.6
RU10.......................................... 6.1 4.9 4.9 10.1
RU11.......................................... 4.1 4.1 5.6 7.9
Shipment-Weighted Average **.................. 3.8 3.9 15.6 16.3
----------------------------------------------------------------------------------------------------------------
Percent of Consumers that Experience a Net Cost
----------------------------------------------------------------------------------------------------------------
RU1........................................... N/A N/A 64.1% 95.9%
RU2........................................... N/A N/A 82.2% 75.0%
RU3........................................... N/A N/A 88.4% 90.5%
RU4........................................... N/A 20.2% 20.2% 89.1%
RU5........................................... N/A N/A 66.9% 89.0%
RU6........................................... 2.1% 2.1% 58.3% 83.2%
RU7........................................... 10.3% 10.3% 62.9% 80.7%
RU8........................................... 0.9% 0.9% 73.9% 64.5%
RU9 *......................................... .............. .............. 99.9% 96.4%
RU10.......................................... 6.3% 11.7% 11.7% 79.0%
RU11.......................................... 32.1% 32.1% 53.4% 74.5%
Shipment-Weighted Average **.................. 10.9% 14.9% 70.6% 86.3%
----------------------------------------------------------------------------------------------------------------
The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* No impact because there are no shipments below the efficiency level corresponding to TSL1 and TSL2 for RU9.
** Weighted by shares of each equipment class in total projected shipments in 2027 for impacted consumers.
DOE first considered TSL 4, which represents the max-tech
efficiency levels. At this level, DOE expects that all equipment
classes would require 35H210 silicon steel and die-cast copper rotors.
DOE estimates that approximately 0.34 percent of annual shipments
across all electric motor equipment classes currently meet the max-tech
efficiencies required. TSL 4 would save an estimated 23.6 quads of
energy, an amount DOE considers significant. Under TSL 4, the NPV of
consumer benefit would be -$17.67 billion using a discount rate of 7
percent, and -$11.30 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 725.80 Mt of
CO2, 278.95 thousand tons of SO2, 1,173.58
thousand tons of NOX, 1.82 tons of Hg, 5,415.99 thousand
tons of CH4, and 6.59 thousand tons of N2O. The
estimated monetary value of the climate benefits from reduced GHG
emissions (associated with the average SC-GHG at a 3-percent discount
rate) at TSL 4 is $30.07 billion. The estimated monetary value of the
health benefits from reduced SO2 and NOX
emissions at TSL 4 is $18.13 billion using a 7-percent discount rate
and $51.90 billion using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 4 is $30.54
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 4 is $70.67 billion.
At TSL 4, for the largest equipment class group and horsepower
ranges, which are represented by RU1 and RU2, which together represent
approximately 90 percent of annual shipments, there is a life cycle
cost savings of -$276.4 and -$309.4 and a payback period of 20.3
[[Page 36143]]
years and 11.9 years, respectively. For these equipment classes, the
fraction of customers experiencing a net LCC cost is 95.9 percent and
75.0 percent due to increases in total installed cost of $434.7 and
$1,003.0, respectively. Overall, for the remaining equipment class
groups and horsepower ranges, a majority of electric motor consumers
(84.5 percent) would experience a net cost and the average LCC savings
would be negative for all remaining equipment class groups and
horsepower ranges.
At TSL 4, the projected change in INPV ranges from a decrease of
$11,090 million to a decrease of $8,863 million, which corresponds to
decreases of 220.8 percent and 176.4 percent, respectively. DOE
estimates that industry must invest $13,516 million to comply with
standards set at TSL 4. The significant increase in product and capital
conversion costs is because DOE assumes that electric motor
manufacturers will need to use die-cast copper rotors for most, if not
all, electric motors manufactured to meet this TSL. This technology
requires a significant level of investment because almost all existing
electric motor production machinery would need to be replaced or
significantly modified. Based on the shipments analysis used in the
NIA, DOE estimates that approximately 0.3 percent of all electric motor
shipments will meet the efficiency levels required at TSL 4, in the no-
new-standards case in 2027, the compliance year of new and amended
standards.
Under 42 U.S.C. 6295(o)(2)(B)(i), DOE determines whether a standard
is economically justified after considering seven factors. Based on
these factors, the Secretary concludes that at TSL 4 for electric
motors, the benefits of energy savings, emission reductions, and the
estimated monetary value of the emissions reductions are outweighed by
the negative NPV of consumer benefits, economic burden on many
consumers, and the impacts on manufacturers, including the extremely
large conversion costs, profit margin impacts that will result in a
negative INPV, and the lack of manufacturers currently offering
products meeting the efficiency levels required at this TSL. A majority
of electric motor consumers (86.3 percent) would experience a net cost
and the average LCC savings for each representative unit DOE examined
is negative. In both manufacturer markup scenarios, INPV is negative at
TSL 4, which implies that manufacturers would never recover the
conversion costs they must make to produce electric motors at TSL 4.
Consequently, the Secretary concludes that TSL 4 is not economically
justified.
DOE then considered TSL 3, which represents a level corresponding
to the IE4 level, except for AO-polyphase specialized frame size
electric motors, where it corresponds to a lower level of efficiency
(i.e., NEMA Premium level). TSL 3 would save an estimated 10.4 quads of
energy, an amount DOE considers significant. Under TSL 3, the NPV of
consumer benefit would be -$7.60 billion using a discount rate of 7
percent, and -$4.85 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 319.24 Mt of
CO2, 122.75 thousand tons of SO2, 516.00 thousand
tons of NOX, 0.80 tons of Hg, 2,379.75 thousand tons of
CH4, and 2.90 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 3 is $13.49 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 3 is 8.19 billion using a 7-percent discount rate and $23.16
billion using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 3 is $14.08
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 3 is $31.80 billion.
At TSL 3, for the largest equipment class group and horsepower
ranges, which are represented by RU1 and RU2, there is a life cycle
cost savings of -$101.8 and -$336.9 and a payback period of 16.7 and
15.4, respectively. For these equipment classes, the fraction of
customers experiencing a net LCC cost is 64.1 percent and 82.2 percent
due to increases in total installed cost of $171.3 and $690.5,
respectively. Overall, for the remaining equipment class groups and
horsepower ranges, a majority of electric motor consumers (55.5
percent) would experience a net cost and the shipments-weighted average
LCC savings would be negative for all remaining equipment class groups
and horsepower ranges.
At TSL 3, the projected change in INPV ranges from a decrease of
$1,364 million to a decrease of $342 million, which correspond to
decreases of 27.2 percent and 6.8 percent, respectively. DOE estimates
that industry must invest $1,618 million to comply with standards set
at TSL 3. Based on the shipments analysis used in the NIA, DOE
estimates that approximately 13.3 percent of all electric motor
shipments will meet or exceed the efficiency levels required at TSL 3,
in the no-new-standards case in 2027, the compliance year of new and
amended standards.
Under 42 U.S.C. 6295(o)(2)(B)(i), DOE determines whether a standard
is economically justified after considering seven factors. Based on
these factors, the Secretary concludes that at TSL 3 for electric
motors, the benefits of energy savings, emission reductions, and the
estimated monetary value of the emissions reductions are outweighed by
the negative NPV of consumer benefits, economic burden on many
consumers, and the impacts on manufacturers, including the large
conversion costs, profit margin impacts that could result in a large
reduction in INPV, and the lack of manufacturers currently offering
products meeting the efficiency levels required at this TSL. A majority
of electric motor consumers (70.6 percent) would experience a net cost
and the average LCC savings would be negative. The potential reduction
in INPV could be as high as 27.2 percent. Consequently, the Secretary
concludes that TSL 3 is not economically justified.
DOE then considered TSL 2, the standard levels recommended in the
November 2022 Joint Recommendation by the Electric Motors Working
Group. TSL 2 would also align with the EU Ecodesign Directive 2019/
1781, which requires IE4 levels for 75-200 kW motors.\97\ TSL 2 would
save an estimated 3.0 quads of energy, an amount DOE considers
significant. Under TSL 2, the NPV of consumer benefit would be $2.23
billion using a discount rate of 7 percent, and $7.47 billion using a
discount rate of 3 percent.
---------------------------------------------------------------------------
\97\ In terms of standardized horsepowers, this would correspond
to 100-250 hp when applying the provisions from 10 CFR 431.25(k)
(and new section 10 CFR 431.25(q)).
---------------------------------------------------------------------------
The cumulative emissions reductions at TSL 2 are 91.69 Mt of
CO2, 35.12 thousand tons of SO2, 148.74 thousand
tons of NOX, 0.23 tons of Hg, 690.10 thousand tons of
CH4, and 0.82 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 2 is $3.14 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 2 is $1.76 billion using a 7-percent discount rate and $5.72
billion using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
[[Page 36144]]
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 2 is $7.13
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 2 is $16.33 billion.
At TSL 2, for the largest equipment class group and horsepower
ranges, which are represented by RU1 and RU2, there would be no changes
in the standards. Overall, for the remaining equipment class groups and
horsepower ranges, 14.9 percent of electric motor consumers would
experience a net cost and the shipments-weighted average LCC savings
would be positive for all remaining equipment class groups and
horsepower ranges.
At TSL 2, the projected change in INPV ranges from a decrease of
$333 million to a decrease of $303 million, which correspond to
decreases of 6.6 percent and 6.0 percent, respectively. DOE estimates
that industry must invest $468 million to comply with standards set at
TSL 2. Based on the shipments analysis used in the NIA, DOE estimates
that approximately 96.2 percent of all electric motor shipments will
meet or exceed the efficiency levels required at TSL 2, in the no-new-
standards case in 2027, the compliance year of new and amended
standards.
Under 42 U.S.C. 6295(o)(2)(B)(i), DOE determines whether a standard
is economically justified after considering seven factors. Based on
these factors, the Secretary concludes that a standard set at TSL 2 for
electric motors would be economically justified. At this TSL, the
average LCC savings is positive. Only an estimated 14.9 percent of
electric motor consumers experience a net cost. The FFC national energy
savings are significant and the NPV of consumer benefits is positive
using both a 3-percent and 7-percent discount rate. Notably, the
benefits to consumers vastly outweigh the cost to manufacturers.
Notably, at TSL 2, the NPV of consumer benefits, even measured at the
more conservative discount rate of 7 percent, is over 6 times higher
than the maximum estimated manufacturers' loss in INPV. The standard
levels at TSL 2 are economically justified even without weighing the
estimated monetary value of emissions reductions. When those emissions
reductions are included--representing $3.14 billion in climate benefits
(associated with the average SC-GHG at a 3-percent discount rate), and
$5.72 billion (using a 3-percent discount rate) or $1.76 billion (using
a 7-percent discount rate) in health benefits--the rationale becomes
stronger still.
As stated, DOE conducts the walk-down analysis to determine the TSL
that represents the maximum improvement in energy efficiency that is
technologically feasible and economically justified as required under
EPCA. The walk-down is not a comparative analysis, as a comparative
analysis would result in the maximization of net benefits instead of
energy savings that are technologically feasible and economically
justified, which would be contrary to the statute. 86 FR 70892, 70908.
Although DOE has not conducted a comparative analysis to select the
energy conservation standards, DOE notes that as compared to TSL 3 and
TSL 4, TSL 2 has higher average LCC savings for consumers,
significantly smaller percentages of electric motor consumers
experiencing a net cost, a lower maximum decrease in INPV, and lower
manufacturer conversion costs.
Although DOE considered amended standard levels for electric motors
by grouping the efficiency levels for each equipment class groups and
horsepower ranges into TSLs, DOE evaluates all analyzed efficiency
levels in its analysis. For all equipment class groups and horsepower
ranges, TSL 2 represents the maximum energy savings that does not
result in the majority of consumers experiencing a net LCC cost. The
ELs at the adopted TSL result in average positive LCC savings for all
equipment class groups and horsepower ranges, significantly reduce the
number of consumers experiencing a net cost, and reduce the decrease in
INPV and conversion costs to the point where DOE has concluded they are
economically justified, as discussed for TSL 2 in the preceding
paragraphs.
Therefore, based on the previous considerations, DOE adopts the
energy conservation standards for electric motors at TSL 2. The new and
amended energy conservation standards for electric motors, which are
expressed as full-load nominal efficiency values are shown in Table V-
44, Table V-45 and Table V-46.
Table V-44--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding Fire Pump Electric Motors
and Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
[[Page 36145]]
300/224......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
350/261......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
400/298......................................................... 95.8 95.8 96.2 95.8 ......... ......... ......... .........
450/336......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
500/373......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
550/410......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
600/447......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
650/485......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
700/522......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
750/559......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-45--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Standard Frame Size Air-Over Electric Motors
(Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-46--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Specialized Frame Size Air-Over Electric
Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 74.0 ......... 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1......................................................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5........................................................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2........................................................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7........................................................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5......................................................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5.......................................................... 89.5 88.5 89.5 89.5 89.5 90.2 ......... .........
15/11........................................................... 90.2 89.5 91.0 91.0 ......... ......... ......... .........
20/15........................................................... 90.2 90.2 91.0 91.0 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 36146]]
2. Annualized Benefits and Costs of the Standards
The benefits and costs of the adopted standards can also be
expressed in terms of annualized values. The annualized net benefit is
(1) the annualized national economic value (expressed in 2021$) of the
benefits from operating equipment that meet the adopted standards
(consisting primarily of operating cost savings from using less energy,
minus increases in equipment purchase costs, and (2) the annualized
monetary value of the climate and health benefits from emission
reductions.
Table V-47 shows the annualized values for electric motors under
TSL 2, expressed in 2021$. The results under the primary estimate are
as follows.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
standards for electric motors is $62.1 million per year in increased
equipment costs, while the estimated annual benefits are $254.8 million
in reduced equipment operating costs, $164.8 million in climate
benefits, and $151.4 million in health benefits. In this case, the net
benefit amounts to $508.9 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the standards for electric motors is $71.0 million
per year in increased equipment costs, while the estimated annual
benefits are $463.6 million in reduced operating costs, $164.8 million
in climate benefits, and $300.7 million in health benefits. In this
case, the net benefit amounts to $858.2 million per year.
Table V-47--Annualized Benefits and Costs of Amended Energy Conservation Standards for Electric Motors
[TSL 2]
----------------------------------------------------------------------------------------------------------------
Million 2021$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 463.6 405.1 542.9
Climate Benefits *.............................................. 164.8 148.0 186.5
Health Benefits **.............................................. 300.7 269.5 341.0
Total Benefits [dagger]......................................... 929.1 822.5 1070.4
Consumer Incremental Equipment Costs [Dagger]................... 71.0 73.7 73.0
Net Benefits.................................................... 858.2 748.8 997.4
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 254.8 225.3 293.6
Climate Benefits * (3% discount rate)........................... 164.8 148.0 186.5
Health Benefits **.............................................. 151.4 137.1 169.5
Total Benefits [dagger]......................................... 571.0 510.4 649.6
Consumer Incremental Product Costs.............................. 62.1 63.8 63.9
Net Benefits.................................................... 508.9 446.6 585.6
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with electric motors shipped in 2027-2056. These
results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056. The
Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the
AEO2022 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition,
incremental equipment costs reflect a constant rate in the Primary Estimate, an increasing rate in the Low Net
Benefits Estimate, and a declining rate in the High Net Benefits Estimate. The methods used to derive
projected price trends are explained in section IV.H.3 of this document. Note that the Benefits and Costs may
not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
notice). For presentational purposes of this table, the climate benefits associated with the average SC-GHG at
a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point estimate,
and it emphasizes the importance and value of considering the benefits calculated using all four SC-GHG
estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates
presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the
Social Cost of Greenhouse Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate.
[Dagger] Costs include incremental equipment costs as well as installation costs.
D. Reporting, Certification, and Sampling Plan
Manufacturers, including importers, must use product-specific
certification templates to certify compliance to DOE. For electric
motors, the certification template reflects the general certification
requirements specified at 10 CFR 429.64 and the product-specific
requirements specified at 10 CFR 429.64. DOE is not amending the
product-specific certification requirements for this equipment in this
direct final rule.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
Executive Order (``E.O.'') 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (Oct. 4, 1993), as supplemented and reaffirmed by
E.O. 13563, ``Improving Regulation and
[[Page 36147]]
Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011) and amended by E.O.
14094, ``Modernizing Regulatory Review,'' 88 FR 21879 (April 11, 2023),
requires agencies, to the extent permitted by law, to (1) propose or
adopt a regulation only upon a reasoned determination that its benefits
justify its costs (recognizing that some benefits and costs are
difficult to quantify); (2) tailor regulations to impose the least
burden on society, consistent with obtaining regulatory objectives,
taking into account, among other things, and to the extent practicable,
the costs of cumulative regulations; (3) select, in choosing among
alternative regulatory approaches, those approaches that maximize net
benefits (including potential economic, environmental, public health
and safety, and other advantages; distributive impacts; and equity);
(4) to the extent feasible, specify performance objectives, rather than
specifying the behavior or manner of compliance that regulated entities
must adopt; and (5) identify and assess available alternatives to
direct regulation, including providing economic incentives to encourage
the desired behavior, such as user fees or marketable permits, or
providing information upon which choices can be made by the public. DOE
emphasizes as well that E.O. 13563 requires agencies to use the best
available techniques to quantify anticipated present and future
benefits and costs as accurately as possible. In its guidance, the
Office of Information and Regulatory Affairs (``OIRA'') in the Office
of Management and Budget (``OMB'') has emphasized that such techniques
may include identifying changing future compliance costs that might
result from technological innovation or anticipated behavioral changes.
For the reasons stated in the preamble, this final regulatory action is
consistent with these principles.
Section 6(a) of E.O. 12866 also requires agencies to submit
``significant regulatory actions'' to OIRA for review. OIRA has
determined that this final regulatory action constitutes a significant
regulatory action within the scope of section 3(f)(1) of E.O. 12866.
Accordingly, pursuant to section 6(a)(3)(C) of E.O. 12866, DOE has
provided to OIRA an assessment, including the underlying analysis, of
benefits and costs anticipated from the final regulatory action,
together with, to the extent feasible, a quantification of those costs;
and an assessment, including the underlying analysis, of costs and
benefits of potentially effective and reasonably feasible alternatives
to the planned regulation, and an explanation why the planned
regulatory action is preferable to the identified potential
alternatives. These assessments are summarized in this preamble and
further detail can be found in the technical support document for this
rulemaking.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (``IRFA'')
and a final regulatory flexibility analysis (``FRFA'') for any rule
that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by E.O. 13272, ``Proper Consideration of Small Entities in Agency
Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published procedures and
policies on February 19, 2003, to ensure that the potential impacts of
its rules on small entities are properly considered during the
rulemaking process. 68 FR 7990. DOE has made its procedures and
policies available on the Office of the General Counsel's website
(www.energy.gov/gc/office-general-counsel).
DOE is not obligated to prepare a regulatory flexibility analysis
for this rulemaking because there is not a requirement to publish a
general notice of proposed rulemaking under the Administrative
Procedure Act. See 5 U.S.C. 601(2), 603(a). As discussed previously,
DOE has determined that the November 2022 Joint Recommendation meets
the necessary requirements under EPCA to issue this direct final rule
for energy conservation standards for electric motors under the
procedures in 42 U.S.C. 6295(p)(4). DOE notes that the NOPR for energy
conservation standards for electric motors published elsewhere in this
Federal Register contains an IRFA.
C. Review Under the Paperwork Reduction Act
Under the procedures established by the Paperwork Reduction Act of
1995 (``PRA''), a person is not required to respond to a collection of
information by a Federal agency unless that collection of information
displays a currently valid OMB Control Number.
OMB Control Number 1910-1400, Compliance Statement Energy/Water
Conservation Standards for Appliances, is currently valid and assigned
to the certification reporting requirements applicable to covered
equipment, including electric motors.
DOE's certification and compliance activities ensure accurate and
comprehensive information about the energy and water use
characteristics of covered products and covered equipment sold in the
United States. Manufacturers of all covered products and covered
equipment must submit a certification report before a basic model is
distributed in commerce, annually thereafter, and if the basic model is
redesigned in such a manner to increase the consumption or decrease the
efficiency of the basic model such that the certified rating is no
longer supported by the test data. Additionally, manufacturers must
report when production of a basic model has ceased and is no longer
offered for sale as part of the next annual certification report
following such cessation. DOE requires the manufacturer of any covered
product or covered equipment to establish, maintain, and retain the
records of certification reports, of the underlying test data for all
certification testing, and of any other testing conducted to satisfy
the requirements of part 429, part 430, and/or part 431. Certification
reports provide DOE and consumers with comprehensive, up-to date
efficiency information and support effective enforcement.
New certification data would be required for electric motors were
this direct final rule to be finalized as proposed; however, DOE is not
proposing new or amended certification or reporting requirements for
electric motors in this direct final rule. Instead, DOE may consider
proposals to establish certification requirements and reporting for
electric motors under a separate rulemaking regarding appliance and
equipment certification. DOE will address changes to OMB Control Number
1910-1400 at that time, as necessary.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
D. Review Under the National Environmental Policy Act of 1969
Pursuant to the National Environmental Policy Act of 1969
(``NEPA''), DOE has analyzed this rule in accordance with NEPA and
DOE's NEPA implementing regulations (10 CFR part 1021). DOE has
determined that this rule qualifies for categorical exclusion under 10
CFR part 1021, subpart D, appendix B5.1 because it is a rulemaking that
establishes energy
[[Page 36148]]
conservation standards for consumer products or industrial equipment,
none of the exceptions identified in B5.1(b) apply, no extraordinary
circumstances exist that require further environmental analysis, and it
meets the requirements for application of a categorical exclusion. See
10 CFR 1021.410. Therefore, DOE has determined that promulgation of
this rule is not a major Federal action significantly affecting the
quality of the human environment within the meaning of NEPA, and does
not require an environmental assessment or an environmental impact
statement.
E. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The Executive order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions. The Executive order also requires
agencies to have an accountable process to ensure meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications. On March 14, 2000, DOE
published a statement of policy describing the intergovernmental
consultation process it will follow in the development of such
regulations. 65 FR 13735. DOE has examined this rule and has determined
that it would not have a substantial direct effect on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government. EPCA governs and prescribes Federal preemption of State
regulations as to energy conservation for the equipment that are the
subject of this final rule. States can petition DOE for exemption from
such preemption to the extent, and based on criteria, set forth in
EPCA. (42 U.S.C. 6316(a) and (b); 42 U.S.C. 6297) Therefore, no further
action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation (1)
clearly specifies the preemptive effect, if any, (2) clearly specifies
any effect on existing Federal law or regulation, (3) provides a clear
legal standard for affected conduct while promoting simplification and
burden reduction, (4) specifies the retroactive effect, if any, (5)
adequately defines key terms, and (6) addresses other important issues
affecting clarity and general draftsmanship under any guidelines issued
by the Attorney General. Section 3(c) of E.O. 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. DOE has completed the
required review and determined that, to the extent permitted by law,
this direct final rule meets the relevant standards of E.O. 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a regulatory action likely to result in a rule that may cause the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector of $100 million or more in any one year
(adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. On March 18, 1997, DOE published
a statement of policy on its process for intergovernmental consultation
under UMRA. 62 FR 12820. DOE's policy statement is also available at
www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
DOE has concluded that this direct final rule may require
expenditures of $100 million or more in any one year by the private
sector. Such expenditures may include (1) investment in research and
development and in capital expenditures by electric motor manufacturers
in the years between the direct final rule and the compliance date for
the new standards and (2) incremental additional expenditures by
consumers to purchase higher-efficiency electric motors, starting at
the compliance date for the applicable standard.
Section 202 of UMRA authorizes a Federal agency to respond to the
content requirements of UMRA in any other statement or analysis that
accompanies the direct final rule. (2 U.S.C. 1532(c)) The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap with the economic analysis requirements
that apply under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of this document and the TSD for this
direct final rule respond to those requirements.
Under section 205 of UMRA, the Department is obligated to identify
and consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. (2 U.S.C. 1535(a)) DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives of the rule unless DOE publishes an
explanation for doing otherwise, or the selection of such an
alternative is inconsistent with law. As required by 42 U.S.C. 6295(m)
and 42 U.S.C. 6316(a), this rule establishes new and amended energy
conservation standards for electric motors that are designed to achieve
the maximum improvement in energy efficiency that DOE has determined to
be both technologically feasible and economically justified, as
required by 42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C.
6295(o)(3)(B). A full discussion of the alternatives considered by DOE
is presented in chapter 17 of the TSD for this rule.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule
[[Page 36149]]
that may affect family well-being. This rule will not have any impact
on the autonomy or integrity of the family as an institution.
Accordingly, DOE has concluded that it is not necessary to prepare a
Family Policymaking Assessment.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15,
1988), DOE has determined that this rule would not result in any
takings that might require compensation under the Fifth Amendment to
the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review
most disseminations of information to the public under information
quality guidelines established by each agency pursuant to general
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving
Implementation of the Information Quality Act (April 24, 2019), DOE
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has
reviewed this direct final rule under the OMB and DOE guidelines and
has concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13211
E.O. 13211, ``Actions Concerning Regulations That Significantly
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22,
2001), requires Federal agencies to prepare and submit to OIRA at OMB,
a Statement of Energy Effects for any significant energy action. A
``significant energy action'' is defined as any action by an agency
that promulgates or is expected to lead to promulgation of a final
rule, and that (1) is a significant regulatory action under Executive
Order 12866, or any successor order; and (2) is likely to have a
significant adverse effect on the supply, distribution, or use of
energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any significant energy action, the
agency must give a detailed statement of any adverse effects on energy
supply, distribution, or use should the proposal be implemented, and of
reasonable alternatives to the action and their expected benefits on
energy supply, distribution, and use.
DOE concludes that this regulatory action, which sets forth new and
amended energy conservation standards for electric motors, is not a
significant energy action because standards are not likely to have a
significant adverse effect on the supply, distribution, or use of
energy, nor has it been designated as such by the Administrator at
OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects
on this direct final rule.
L. Information Quality
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (``OSTP''), issued its Final Information
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan.
14, 2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
the agency reasonably can determine will have, or does have, a clear
and substantial impact on important public policies or private sector
decisions.'' 70 FR 2664, 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and the analyses
that are typically used and has prepared a report describing that peer
review.\98\ Generation of this report involved a rigorous, formal, and
documented evaluation using objective criteria and qualified and
independent reviewers to make a judgment as to the technical/
scientific/business merit, the actual or anticipated results, and the
productivity and management effectiveness of programs and/or projects.
Because available data, models, and technological understanding have
changed since 2007, DOE has engaged with the National Academy of
Sciences to review DOE's analytical methodologies to ascertain whether
modifications are needed to improve the Department's analyses. DOE is
in the process of evaluating the resulting report.\99\
---------------------------------------------------------------------------
\98\ The 2007 ``Energy Conservation Standards Rulemaking Peer
Review Report'' is available at the following website: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last accessed December 12, 2022).
\99\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------
NEMA MG 1-2016 was previously approved for incorporation by
reference in the section where it appears in this proposed rule and no
change is made.
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. The report will
state that it has been determined that the rule is a ``major rule'' as
defined by 5 U.S.C. 804(2).
VII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this direct
final rule.
List of Subjects in 10 CFR Part 431
Administrative practice and procedure, Confidential business
information, Energy conservation test procedures, Incorporation by
reference, Reporting and recordkeeping requirements.
Signing Authority
This document of the Department of Energy was signed on May 1,
2023, Francisco Alejandro Moreno, Acting Assistant Secretary for Energy
Efficiency and Renewable Energy. That document with the original
signature and date is maintained by DOE. For administrative purposes
only, and in compliance with requirements of the Office of the Federal
Register, the undersigned DOE Federal Register Liaison Officer has been
authorized to sign and submit the document in electronic format for
publication, as an official document of the Department of Energy. This
administrative process in no way alters the legal effect of this
document upon publication in the Federal Register.
Signed in Washington, DC, on May 5, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons stated in the preamble, DOE amends part 431 of
chapter II of title 10 of the Code of Federal Regulations, as set forth
below:
[[Page 36150]]
PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND
INDUSTRIAL EQUIPMENT
0
1. The authority citation for part 431 continues to read as follows:
Authority: 42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.
0
2. Amend Sec. 431.12 by adding, in alphabetical order, definitions for
``Specialized frame size'' and ``Standard frame size,'' to read as
follows:
Sec. 431.12 Definitions.
* * * * *
Specialized frame size means an electric motor frame size for which
the rated output power of the motor exceeds the motor frame size limits
specified for standard frame size. Specialized frame sizes have maximum
diameters corresponding to the following NEMA Frame Sizes:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum NEMA frame diameters
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 48 ......... 48 48 48 48 140 140
1.5/1.1......................................................... 48 48 48 48 140 140 140 140
2/1.5........................................................... 48 48 48 48 140 140 180 180
3/2.2........................................................... 140 48 140 140 180 180 180 180
5/3.7........................................................... 140 140 140 140 180 180 210 210
7.5/5.5......................................................... 180 140 180 180 210 210 210 210
10/7.5.......................................................... 180 180 180 180 210 210 ......... .........
15/11........................................................... 210 180 210 210 ......... ......... ......... .........
20/15........................................................... 210 210 210 210 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Standard frame size means a motor frame size that aligns with the
specifications in NEMA MG 1-2016, section 13.2 for open motors, and
NEMA MG 1-2016, section 13.3 for enclosed motors (incorporated by
reference, see Sec. 431.15).
* * * * *
0
3. Amend Sec. 431.25 by:
0
a. Revising paragraph (h) introductory text; and
0
b. Adding paragraphs (m) through (r).
The revision and additions read as follows:
Sec. 431.25 Energy conservation standards and effective dates.
* * * * *
(h) Each NEMA Design A motor, NEMA Design B motor, and IEC Design N
(including NE, NEY, or NY variants) motor that is an electric motor
meeting the criteria in paragraph (g) of this section and with a power
rating from 1 horsepower through 500 horsepower, but excluding fire
pump electric motors, manufactured (alone or as a component of another
piece of equipment) on or after June 1, 2016, but before June 1, 2027,
shall have a nominal full-load efficiency of not less than the
following:
* * * * *
(m) The standards in tables 8 through 10 of this section apply only
to electric motors, including partial electric motors, that satisfy the
following criteria:
(1) Are single-speed, induction motors;
(2) Are rated for continuous duty (MG 1) operation or for duty type
S1 (IEC);
(3) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
(4) Operate on polyphase alternating current 60-hertz sinusoidal
line power;
(5) Are rated 600 volts or less;
(6) Have a 2-, 4-, 6-, or 8-pole configuration,
(7) Are built in a three-digit or four-digit NEMA frame size (or
IEC metric equivalent), including those designs between two consecutive
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA
frame size (or IEC metric equivalent),
(8) Produce at least one horsepower (0.746 kW) but not greater than
750 horsepower (559 kW), and
(9) Meet all of the performance requirements of one of the
following motor types: A NEMA Design A, B, or C motor or an IEC Design
N, NE, NEY, NY or H, HE, HEY, HY motor.
(n) Starting on June 1, 2027, each NEMA Design A motor, NEMA Design
B motor, and IEC Design N (including NE, NEY, or NY variants) motor
that is an electric motor meeting the criteria in paragraph (m) of this
section and with a power rating from 1 horsepower through 750
horsepower, but excluding fire pump electric motors and air-over
electric motors, manufactured (alone or as a component of another piece
of equipment) shall have a nominal full-load efficiency of not less
than the following:
Table 8 to Paragraph (n)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding Fire Pump
Electric Motors and Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
[[Page 36151]]
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
300/224......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
350/261......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
400/298......................................................... 95.8 95.8 96.2 95.8 ......... ......... ......... .........
450/336......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
500/373......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
550/410......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
600/447......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
650/485......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
700/522......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
750/559......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(o) Starting on June 1, 2027, each NEMA Design A motor, NEMA Design
B motor, and IEC Design N (including NE, NEY, or NY variants) motor
that is an air-over electric motor meeting the criteria in paragraph
(m) of this section and with a power rating from 1 horsepower through
250 horsepower, built in a standard frame size, but excluding fire pump
electric motors, manufactured (alone or as a component of another piece
of equipment) shall have a nominal full-load efficiency of not less
than the following:
Table 9 to Paragraph (o)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Standard Frame Size Air-Over
Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 36152]]
(p) Starting on June 1, 2027, each NEMA Design A motor, NEMA Design
B motor, and IEC Design N (including NE, NEY, or NY variants) motor
that is an air-over electric motor meeting the criteria in paragraph
(m) of this section and with a power rating from 1 horsepower through
20 horsepower, built in a specialized frame size, but excluding fire
pump electric motors, manufactured (alone or as a component of another
piece of equipment) shall have a nominal full-load efficiency of not
less than the following:
Table 10 to Paragraph (p)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Specialized Frame Size Air-
Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 74.0 ......... 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1......................................................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5........................................................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2........................................................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7........................................................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5......................................................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5.......................................................... 89.5 88.5 89.5 89.5 89.5 90.2 ......... .........
15/11........................................................... 90.2 89.5 91.0 91.0 ......... ......... ......... .........
20/15........................................................... 90.2 90.2 91.0 91.0 ......... ......... ......... .........
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(q) For purposes of determining the required minimum nominal full-
load efficiency of an electric motor that has a horsepower or kilowatt
rating between two horsepower or two kilowatt ratings listed in any
table of energy conservation standards in paragraphs (n) through (p)
through of this section, each such motor shall be deemed to have a
listed horsepower or kilowatt rating, determined as follows:
(1) A horsepower at or above the midpoint between the two
consecutive horsepowers shall be rounded up to the higher of the two
horsepowers;
(2) A horsepower below the midpoint between the two consecutive
horsepowers shall be rounded down to the lower of the two horsepowers;
or
(3) A kilowatt rating shall be directly converted from kilowatts to
horsepower using the formula 1 kilowatt = (\1/0.746\) horsepower. The
conversion should be calculated to three significant decimal places,
and the resulting horsepower shall be rounded in accordance with
paragraphs (q)(1) or (2) of this section, whichever applies.
(r) The standards in tables 8 through 10 of this section do not
apply to the following electric motors exempted by the Secretary, or
any additional electric motors that the Secretary may exempt:
(1) Component sets of an electric motor;
(2) Liquid-cooled electric motors;
(3) Submersible electric motors; and
(4) Inverter-only electric motors.
[FR Doc. 2023-10019 Filed 5-31-23; 8:45 am]
BILLING CODE 6450-01-P
