Energy Conservation Program: Energy Conservation Standards for Dedicated Purpose Pool Pump Motors, 66966-67041 [2023-20343]

Download as PDF 66966 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations DEPARTMENT OF ENERGY 10 CFR Parts 429 and 431 [EERE–2017–BT–STD–0048] RIN 1904–AF27 Energy Conservation Program: Energy Conservation Standards for Dedicated Purpose Pool Pump Motors Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: 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 dedicated purpose pool pump motors. When DOE is considering adopting energy conservation standards, EPCA requires that the standards be designed to achieve the maximum improvement in energy efficiency, which DOE determines is technologically feasible and economically justified. In this final rule, DOE is adopting amended energy conservation standards for dedicated purpose pool pump motors. It has determined that the new energy conservation standards for these products would result in significant conservation of energy, and are technologically feasible and economically justified. DATES: The effective date of this rule is November 27, 2023. Compliance with the new standards established for dedicated purpose pool pump motors with motor total horsepower <0.5 THP in this final rule is required on and after September 29, 2025. Compliance with the new standards established for dedicated purpose pool pump motors with motor total horsepower ≥0.5 THP and <1.15 THP in this final rule is required on and after September 28, 2027. Finally, compliance with the new standards established for dedicated purpose pool pump motors with motor total horsepower ≥1.15 THP and ≤5 THP in this final rule is required on and after September 29, 2025. The incorporation of refence of certain material listed in this rule is approved by the Director of the Federal Register on November 27 2023. ADDRESSES: The docket for this rulemaking, which includes Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at www.regulations.gov. All ddrumheller on DSK120RN23PROD with RULES2 SUMMARY: VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 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/EERE2017-BT-STD-0048. The docket web page contains instructions on how to access all documents, including public comments, in the docket. For further information on how to review the docket, contact the Appliance and Equipment Standards Program staff at (202) 287–1445 or by email: 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. Ms. Amelia Whiting, U.S. Department of Energy, Office of the General Counsel, GC–33, 1000 Independence Avenue SW, Washington, DC 20585–0121. Telephone: (202) 586–2588. Email: amelia.whiting@hq.doe.gov. SUPPLEMENTARY INFORMATION: DOE incorporates by reference the following standard into parts 429 and 431: UL 1004–10, Standard for Safety for Pool Pump Motors, Revised First Edition, Dated March 24, 2022 (‘‘UL 1004–10:2022’’). Copies of UL 1004–10:2022 can be obtained from: Underwriters Laboratories (‘‘UL’’), 333 Pfingsten Road, Northbrook, IL 60062, (841) 272– 8800, or go to www.ul.com. For a further discussion of this standard, see section VI.N of this document. Table of Contents I. Synopsis of the Final Rule A. Benefits and Costs to Consumers B. Impact on Manufacturers C. National Benefits and Costs D. Conclusion II. Introduction A. Authority B. Background 1. Current Standards 2. History of Standards Rulemaking for DPPP Motors III. General Discussion A. General Comments B. Test Procedure C. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels D. Energy Savings 1. Determination of Savings PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 2. Significance of Savings E. Economic Justification 1. Specific Criteria a. Economic Impact on Manufacturers and Consumers b. Savings in Operating Costs Compared to Increase in Price (LCC and PBP) c. Energy Savings d. Lessening of Utility or Performance of Products e. Impact of Any Lessening of Competition f. Need for National Energy Conservation g. Other Factors 2. Rebuttable Presumption IV. Methodology and Discussion of Related Comments A. Market and Technology Assessment 1. Scope of Coverage and Definitions 2. Market Review 3. Equipment Classes 4. Technology Options B. Screening Analysis C. Engineering Analysis 1. Efficiency Analysis a. Representative Units b. Baseline Efficiency c. Higher Efficiency Levels 2. Cost Analysis D. Markups Analysis E. Energy Use Analysis 1. DPPP Motor Applications 2. DPPP Motor Consumer Sample 3. Self-Priming and Non-Self-Priming Pool Pump Motor Input Power 4. Pressure Cleaner Booster Pumps Motor Input Power 5. Daily Operating Hours 6. Annual Days of Operation F. Life-Cycle Cost and Payback Period Analysis 1. Equipment Cost 2. Installation Costs 3. Annual Energy Consumption 4. Energy Prices 5. Maintenance and Repair Costs 6. Equipment Lifetime 7. Discount Rates 8. Energy Efficiency Distribution in the NoNew-Standards Case 9. Payback Period Analysis G. Shipments Analysis 1. Base-Year Shipments 2. No-New-Standards Case Shipment Projections 3. Standards Case Shipment Projections H. National Impact Analysis 1. Product Efficiency Trends 2. National Energy Savings 3. Net Present Value Analysis I. Consumer Subgroup Analysis J. Manufacturer Impact Analysis 1. Overview 2. Government Regulatory Impact Model and Key Inputs a. Manufacturer Production Costs b. Shipments Projections c. Product and Capital Conversion Costs d. Markup Scenarios 3. Manufacturer Interviews 4. Comments From Interested Parties K. Emissions Analysis 1. Air Quality Regulations Incorporated in DOE’s Analysis L. Monetizing Emissions Impacts 1. Monetization of Greenhouse Gas Emissions E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations a. Social Cost of Carbon b. Social Cost of Methane and Nitrous Oxide 2. Monetization of Other Emissions Impacts M. Utility Impact Analysis N. Employment Impact Analysis V. Analytical Results and Conclusion A. Trial Standard Levels B. Economic Justification and Energy Savings 1. Economic Impacts on Individual Consumers a. Life-Cycle Cost and Payback Period b. Consumer Subgroup Analysis c. Rebuttable Presumption Payback 2. Economic Impacts on Manufacturers a. Industry Cash Flow Analysis Results b. Direct Impacts on Employment c. Impacts on Manufacturing Capacity d. Impacts on Subgroups of Manufacturers e. Cumulative Regulatory Burden 3. National Impact Analysis a. Significance of Energy Savings b. Net Present Value of Consumer Costs and Benefits c. Indirect Impacts on Employment 4. Impact on Utility or Performance of Products 5. Impact of Any Lessening of Competition 6. Need of the Nation To Conserve Energy 7. Other Factors 8. Summary of Economic Impacts C. Conclusion 1. Benefits and Burdens of TSLs Considered for DPPP Motor Standards 2. Annualized Benefits and Costs of the Adopted Standards VI. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866, 13563, and 14904 B. Review Under the Regulatory Flexibility Act 1. Need for, Objectives of, and Legal Basis for, Rule 2. Significant Comments in Response to the IRFA 3. Comments Filed by the Chief Counsel for Advocacy 4. Description on Estimated Number of Small Entities Regulated 5. Description and Estimate of Compliance Requirements Including Differences in Cost, if Any, for Different Groups of Small Entities 6. Significant Alternatives to the Rule C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Information Quality M. Congressional Notification N. Description of Materials Incorporated by Reference VII. Approval of the Office of the Secretary I. Synopsis of the Final Rule The Energy Policy and Conservation Act, Public Law 94–163, as amended (‘‘EPCA’’),1 authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. (42 U.S.C. 6291– 6317) Title III, Part C of the Energy Policy and Conservation Act, as 66967 amended (EPCA) 2 established the Energy Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311–6317) Such equipment includes electric motors, which include dedicated-purpose pool pump motors (‘‘DPPP motors’’ or ‘‘DPPPMs’’ or ‘‘pool pump motors’’), the subject of this rulemaking. (42 U.S.C. 6311(1)(A)). This rulemaking does not concern standards for dedicated-purpose pool pumps (‘‘DPPPs’’), which are being addressed in a separate rulemaking.3 Pursuant to EPCA, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that DOE determines is technologically feasible and economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) In accordance with these and other statutory provisions discussed in this document, DOE is adopting new energy conservation standards for DPPP motors. The adopted standards, which are expressed in full-load efficiency and design requirements, are shown in Table I.1. DOE is finalizing standards that apply to all products listed in Table I.1 and manufactured in, or imported into, the United States starting on the dates provided in the table. TABLE I.1—ENERGY CONSERVATION STANDARDS FOR DPPP MOTORS (TSL 7) Motor total horsepower (THP) Performance standard: fullload efficiency (%) Design requirement: speed capability Design requirement: freeze protection THP <0.5 ......................... 0.5 ≤ THP < 1.15 ............. 69% ........................ None ................................ Variable speed control * ... 1.15 ≤ THP ≤ 5 ................ ........................ Variable speed control * ... None .......................................................... Only for DPPP motors with freeze protection controls **. Only for DPPP motors with freeze protection controls **. Compliance date September 29, 2025. September 28, 2025. September 29, 2025. ddrumheller on DSK120RN23PROD with RULES2 * A variable speed motor is a DPPP motor that meets the definition of ‘‘variable-speed control dedicated-purpose pool pump motor’’ as defined by UL 1004–10:2022. ** DPPP motors with freeze protection controls are to be shipped with the freeze protection feature disabled, or with the following default, useradjustable settings: (a) the default dry-bulb air temperature setting shall be no greater than 40 °F; (b) the default run time setting shall be no greater than 1 hour (before the temperature is rechecked); and (c) the default motor speed in freeze protection mode shall not be more than half of the maximum operating speed. A. Benefits and Costs to Consumers Table I.2 summarizes DOE’s evaluation of the economic impacts of the adopted standards on consumers of DPPP motors, as measured by the average life-cycle cost (‘‘LCC’’) savings and the simple payback period (‘‘PBP’’).4 The average LCC savings are positive for each equipment class, and the PBP is less than the average lifetime of DPPP motors, which is estimated to be 4.5 years (see section IV.F of this document). 1 All references to EPCA in this document refer to the statute as amended through the Energy Act of 2020, Public Law 116–260 (Dec. 27, 2020), which reflect the last statutory amendments that impact Parts A and A–1 of EPCA. 2 For editorial reasons, upon codification in the U.S. Code, Part C was re-designated Part A–1. 3 Docket No. EERE–2022–BT–STD–0001, which is maintained at www.regulations.gov/docket/EERE2022-BT-STD-0001. 4 The average LCC savings refer to consumers that are affected by a standard and are measured relative to the distribution of purchased DPPP motors, and their associated energy efficiency, distribution in the no-new-standards case, which depicts the market in the compliance year in the absence of new or amended standards (see section IV.F.9 of this document). The simple PBP, which is designed to compare specific efficiency levels, is measured relative to the baseline product (see section IV.C of this document). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 66968 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE I.2—IMPACTS OF ADOPTED ENERGY CONSERVATION STANDARDS ON CONSUMERS OF DPPP MOTORS Average LCC savings (2022$) DPPP Motors equipment class Extra-small-size (THP <0.5) ............................................................................................................................ Small-size (0.5 ≤ THP < 1.15) ......................................................................................................................... Standard-size (1.15 ≤ THP ≤ 5) ...................................................................................................................... DOE’s analysis of the impacts of the adopted standards on consumers is described in section IV.F of this document. B. Impact on Manufacturers The industry net present value (‘‘INPV’’) is the sum of the discounted cash flows to the industry, which align with the industry profits from producing DPPP motors, from the base year through the end of the analysis period (2024–2055).5 Using a real discount rate of 7.2 percent, DOE estimates that the INPV for manufacturers of DPPP motors in the case without new standards is $661 million in 2022$. Under the adopted standards, DOE estimates the change in INPV to range from ¥32.4 percent to 12.0 percent, which is approximately ¥$214.2 million to $79.0 million change in profits. In order to bring products into compliance with new standards, it is estimated that industry will incur total conversion costs of $56.2 million.6 DOE’s analysis of the impacts of the adopted standards on manufacturers is described in sections IV.J and V.B.2 of this document. C. National Benefits and Costs 7 ddrumheller on DSK120RN23PROD with RULES2 DOE’s analyses indicate that the adopted energy conservation standards for DPPP motors would save a significant amount of energy. Relative to the case without new standards, the lifetime energy savings for DPPP motors purchased in the 30-year period that begins in the anticipated first full year of compliance with the new standards (2026–2055),8 amount to 1.56 5 This time period captures manufacturers’ profits starting with the years leading up to the compliance date, at which time they are making investments to comply with standards, and throughout the 30-year analysis period after the compliance date. 6 Conversion costs are included in the INPV calculation. 7 All monetary values in this document are expressed in 2021 dollars and, where appropriate, are discounted to 2024 unless explicitly stated otherwise. 8 DOE conducted the analysis over a 30-year period starting in 2026 (2026–2055). As discussed in section III.A of this document, for all TSLs DOE considered a 2-year lead time resulting in a first full year of compliance of 2026, except for small-size DPPP motors at TSL 7 where DOE uses a 4-year VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 quadrillion British thermal units (‘‘Btu’’), or quads.9 This represents a savings of 27.5 percent relative to the energy use of these products in the case without new standards (referred to as the ‘‘no-new-standards case’’). The cumulative net present value (‘‘NPV’’) of total consumer benefits of the standards for DPPP motors ranges from $5.4 billion (at a 7-percent discount rate) to $10.2 billion (at a 3percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased equipment and installation costs for DPPP motors purchased in 2026–2055 relative to the no-new-standards case.10 In addition, the adopted standards for DPPP motors are projected to yield significant environmental benefits. DOE estimates that the standards will result in cumulative emission reductions (over the same period as for energy savings) of 31.2 million metric tons (Mt) 11 of carbon dioxide (CO2), 9.8 thousand tons of sulfur dioxide (SO2), 56.4 thousand tons of nitrogen oxides (NOX), 247.2 thousand tons of methane (CH4), 0.32 thousand tons of nitrous oxide (N2O), and 0.07 tons of mercury (Hg).12 DOE estimates the value of climate benefits from a reduction in greenhouse gases (GHG) using four different estimates of the social cost of CO2 (SC– CO2), the social cost of methane (SC– compliance lead time, resulting in a compliance year of 2028. In this case, DOE considered 28 years of shipments (2028–2055). 9 The quantity refers to full-fuel-cycle (FFC) energy savings. FFC energy savings includes the energy consumed in extracting, processing, and transporting primary fuels (i.e., coal, natural gas, petroleum fuels), and, thus, presents a more complete picture of the impacts of energy efficiency standards. For more information on the FFC metric, see section IV.H.1 of this document. 10 For small size DPPP motors, as noted previously, DOE considered 28 years of shipments (2028–2055). 11 A metric ton is equivalent to 1.1 short tons. Results for emissions other than CO2 are presented in short tons. 12 DOE calculated emissions reductions relative to the no-new-standards-case, which reflects key assumptions in the Annual Energy Outlook 2023 (AEO2023). AEO2023 represents current Federal and State legislation and final implementation of regulations as of the time of its preparation. See section IV.K of this document for further discussion of AEO2023 assumptions that effect air pollutant emissions. PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 $3 4 236 Simple payback period (years) 0.9 3.4 1.3 CH4), and the social cost of nitrous oxide (SC–N2O). Together these represent the social cost of GHG (SC– GHG). DOE used interim SC–GHG values developed by an Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).13 The derivation of these values is discussed in section IV.L of this document. For presentational purposes, the climate benefits associated with the average SC– GHG at a 3-percent discount rate over the period of analysis are estimated to be $2.0 billion. DOE does not have a single central SC–GHG point estimate and it emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. DOE estimated the monetary health benefits of SO2 and NOX emissions reductions, using benefit per ton estimates from the Environmental Protection Agency,14 as discussed in section IV.L of this document. DOE estimated the present value of the health benefits would be $2.0 billion using a 7percent discount rate, and $3.9 billion using a 3-percent discount rate. DOE is currently only monetizing health benefits from changes in ambient fine particulate matter (PM2.5) concentrations from two precursors (SO2 and (for NOX) and from changes in ambient ozone from one precursor (NOX), but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. Table I.3 summarizes the monetized benefits and costs expected to result from the amended standards for DPPP motors. There are other important unquantified effects, including certain unquantified climate benefits, 13 To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the IWG. (‘‘February 2021 SC–GHG TSD’’). www.whitehouse.gov/wpcontent/uploads/2021/02/ TechnicalSupportDocument_ SocialCostofCarbonMethaneNitrousOxide.pdf. 14 U.S. EPA. Estimating the Benefit per Ton of Reducing Directly Emitted PM2.5, PM2.5 Precursors and Ozone Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-tonreducing-pm25-precursors-21-sectors. E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations unquantified public health benefits from the reduction of toxic air pollutants and other emissions, unquantified energy 66969 security benefits, and distributional effects, among others. TABLE I.3—PRESENT VALUE IN 2024 OF MONETIZED BENEFITS AND COSTS OF ADOPTED ENERGY CONSERVATION STANDARDS FOR DPPP MOTORS Billion 2022$ 3% discount rate Consumer Operating Cost Savings ................................................................................................................................................. Climate Benefits * ............................................................................................................................................................................. Health Benefits ** ............................................................................................................................................................................. 14.0 2.0 3.9 Total Monetized Benefits † ....................................................................................................................................................... Consumer Incremental Equipment Costs ‡ ..................................................................................................................................... 19.9 3.9 Net Monetized Benefits ............................................................................................................................................................ Change in Producer Cashflow (INPV ††) ........................................................................................................................................ 16.0 (0.21)–0.08 7% discount rate Consumer Operating Cost Savings ................................................................................................................................................. Climate Benefits * (3% discount rate) .............................................................................................................................................. Health Benefits ** ............................................................................................................................................................................. 7.9 2.0 2.0 Total Monetized Benefits † ....................................................................................................................................................... Consumer Incremental Equipment Costs ‡ ..................................................................................................................................... 11.9 2.6 Net Monetized Benefits ............................................................................................................................................................ Change in Producer Cashflow (INPV ††) ........................................................................................................................................ 9.3 (0.21)–0.08 ddrumheller on DSK120RN23PROD with RULES2 Note: This table presents the present value of the monetized costs and benefits associated with product name shipped in 2026–2055, except for small-size DPPP motors where shipments in 2028–2055 are considered. These results include consumer, climate, and health benefits which accrue after 2055 from the products shipped in 2026–2055 (or 2028–2055). * Climate benefits are calculated using four different estimates of the social cost of carbon (SC–CO2), methane (SC–CH4), and nitrous oxide (SC–N2O) (model average at 2.5-percent, 3-percent, and 5-percent discount rates; 95th percentile at 3-percent discount rate) (see section IV.L of this document). Together these represent the global SC–GHG. For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3-percent discount rate are shown, but DOE does not have a single central SC–GHG point estimate. To monetize the benefits of reducing greenhouse gas emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of this document for more details. † Total and net benefits include those consumer, climate, and health benefits that can be quantified and monetized. For presentation purposes, total and net benefits for both the 3-percent and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate, but DOE does not have a single central SC–GHG point estimate. DOE emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. ‡ Costs include incremental equipment costs as well as installation costs. †† Operating Cost Savings are calculated based on the life cycle costs analysis and national impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE’s NIA includes all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to manufacture the equipment and ending with the increase in price experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J of this document. In the detailed MIA, DOE models manufacturers’ pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule’s expected impact on the INPV. The change in INPV is the present value of all changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. Change in INPV is calculated using the industry weighted average cost of capital value of 7.2% that is estimated in the MIA (see chapter 12 of the Final Rule TSD for a complete description of the industry weighted average cost of capital). For DPPP motors, those values are -$214 million and $79 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated INPV in the above table, drawing on the MIA explained further in Section IV.J of this document, to provide additional context for assessing the estimated impacts of this rule to society, including potential changes in production and consumption, which is consistent with OMB’s Circular A–4 and E.O. 12866. If DOE were to include the INPV into the net benefit calculation for this final rule, the net benefits would range from $15.79 billion to $16.08 billion at 3-percent discount rate and range from $9.09 billion to $9.38 billion at 7-percent discount rate. The benefits and costs of the standards can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are (1) the reduced consumer operating costs, minus (2) the increase in product purchase prices and installation costs, plus (3) the monetized VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 value of climate and health benefits of emission reductions, all annualized.15 The national operating cost savings are domestic private U.S. consumer 15 To convert the time-series of costs and benefits into annualized values, DOE calculated a present value in 2024, the year used for discounting the NPV of total consumer costs and savings. For the benefits, DOE calculated a present value associated with each year’s shipments in the year in which the shipments occur (e.g., 2030 or 2040), and then discounted the present value from each year to 2024. Using the present value, DOE then calculated the fixed annual payment over a 30-year period, starting in the compliance year, that yields the same present value. PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 66970 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations monetary savings that occur as a result of purchasing the covered products and are measured for the lifetime of DPPP motors shipped in (2026–2055).16 The benefits associated with reduced emissions achieved as a result of the adopted standards are also calculated based on the lifetime of DPPP motors shipped in (2026–2055).16 Total benefits for both the 3-percent and 7-percent cases are presented using the average GHG social costs with 3-percent discount rate. Estimates of SC–GHG values are presented for all four discount rates in section V.B.6 of this document. Table I.4 presents the total estimated monetized benefits and costs associated with the standard, expressed in terms of annualized values. The results under the primary estimate are as follows. Using a 7-percent discount rate for consumer benefits and costs and health benefits from reduced NOX and SO2 emissions, and the 3-percent discount rate case for climate benefits from reduced GHG emissions, the estimated monetized cost of the standards adopted in this rule is $221 million per year in increased equipment costs, while the estimated annual benefits are $684 million in reduced equipment operating costs, $103 million in monetized climate benefits, and $173 million in monetized health benefits. In this case, the monetized net benefit would amount to $739 million per year. Using a 3-percent discount rate for all benefits and costs, the estimated monetized cost of the standards is $204 million per year in increased equipment costs, while the estimated annual monetized benefits are $738 million in reduced operating costs, $103 million in monetized climate benefits, and $205 million in monetized health benefits. In this case, the monetized net benefit would amount to $841 million per year. TABLE I.4—ANNUALIZED MONETIZED BENEFITS AND COSTS OF ADOPTED STANDARDS FOR DPPP MOTORS Million 2022$/year Primary estimate Low-net-benefits estimate High-net-benefits estimate 3% discount rate Consumer Operating Cost Savings ......................................................... Climate Benefits * ..................................................................................... Health Benefits ** ..................................................................................... 738 103 205 721 103 205 760 103 205 Total Monetized Benefits † ............................................................... Consumer Incremental Equipment Costs ‡ ............................................. 1,046 204 1029 235 1,068 173 Monetized Net Benefits .................................................................... Change in Producer Cashflow (INPV ††) ................................................ 841 (17)–6 793 (17)–6 895 (17)–6 Consumer Operating Cost Savings ......................................................... Climate Benefits * (3% discount rate) ...................................................... Health Benefits ** ..................................................................................... 684 103 173 671 103 173 703 103 173 Total Monetized Benefits † ............................................................... Consumer Incremental Equipment Costs ‡ ............................................. 960 221 947 250 979 190 Monetized Net Benefits .................................................................... Change in Producer Cashflow (INPV ††) ................................................ 739 (17)–6 696 (17)–6 790 (17)–6 ddrumheller on DSK120RN23PROD with RULES2 7% discount rate Note: This table presents the costs and benefits associated with DPPP motors shipped in 2026–2055, except for small-size DPPP motors where shipments in 2028–2055 are considered. These results include consumer, climate, and health benefits which accrue after 2055 from the products shipped in 2026–2055 (or 2028–2055). The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental equipment costs reflect a medium decline rate in the Primary Estimate, an increasing rate in the Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to derive projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding. * Climate benefits are calculated using four different estimates of the global SC–GHG (see section IV.L of this document). For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3 percent discount rate are shown, but DOE does not have a single central SC–GHG point estimate, and it emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. To monetize the benefits of reducing greenhouse gas emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of this document for more details. † Total benefits for both the 3-percent and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate, but DOE does not have a single central SC–GHG point estimate. ‡ Costs include incremental equipment costs as well as installation costs. 16 For small size DPPP motors, as noted previously, DOE considered 28 years of shipments (2028–2055). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations 66971 †† Operating Cost Savings are calculated based on the life cycle costs analysis and national impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE’s NIA includes all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to manufacture the equipment and ending with the increase in price experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J of this document. In the detailed MIA, DOE models manufacturers’ pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule’s expected impact on the INPV. The change in INPV is the present value of all changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. Annualized change in INPV is calculated using the industry weighted average cost of capital value of 7.2% that is estimated in the MIA (see chapter 12 of the Final Rule TSD for a complete description of the industry weighted average cost of capital). For DPPP motors, those values are ¥$17 million and $6 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized change in INPV in the above table, drawing on the MIA explained further in section IV.J of this document, to provide additional context for assessing the estimated impacts of this rule to society, including potential changes in production and consumption, which is consistent with OMB’s Circular A–4 and E.O. 12866. If DOE were to include the INPV into the annualized net benefit calculation for this final rule, the annualized net benefits would range from $824 million to $847 million at 3-percent discount rate and range from $722 million to $745 million at 7-percent discount rate. DOE’s analysis of the national impacts of the adopted standards is described in sections IV.G.2, IV.K, and IV.L of this document. ddrumheller on DSK120RN23PROD with RULES2 D. Conclusion DOE concludes that the standards adopted in this final rule represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. Specifically, equipment are able to achieve these standard levels using technology options currently available in the DPPPM market. As for economic justification, DOE’s analysis shows that the benefits of the standards exceed the burdens of the standards. Using a 7-percent discount rate for consumer benefits and costs and NOX and SO2 reduction benefits, and a 3percent discount rate case for GHG social costs, the estimated monetized cost of the standards for DPPP motors is $221 million per year in increased equipment costs, while the estimated annual monetized benefits are $684 million in reduced equipment operating costs, $103 million in monetized climate benefits, and $173 million in monetized ambient air pollutant health benefits. The monetized net benefit amounts to $739 million per year. The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.17 For example, some covered products and equipment have most of their energy consumption occur during periods of peak energy demand. The impacts of these products on the energy infrastructure can be more pronounced than products with 17 Procedures, Interpretations, and Policies for Consideration in New or Revised Energy Conservation Standards and Test Procedures for Consumer Products and Commercial/Industrial Equipment, 86 FR 70892, 70901 (Dec. 13, 2021). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 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 18 of 1.56 quads FFC, the equivalent of the primary annual energy use of 16.8 million homes. In addition, they are projected to reduce CO2 emissions by 31.2 Mt. Based on these findings, DOE has determined the energy savings from the standard levels adopted in this final rule are ‘‘significant’’ within the meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed discussion of the basis for these conclusions is contained in the remainder of this document and the accompanying TSD. II. Introduction The following section briefly discusses the statutory authority underlying this final rule, as well as some of the relevant historical background related to the establishment of standards for DPPP motors. A. Authority EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. Title III, Part C of EPCA, added by Public Law 95–619, Title IV, section 441(a) (42 U.S.C. 6311– 6317, as codified), established the Energy Conservation Program for Certain Industrial Equipment, which sets forth a variety of provisions designed to improve energy efficiency. This equipment includes those electric motors that are DPPP motors, the subject of this document. (42 U.S.C. 6311(1)(A)) The energy conservation program under EPCA consists essentially of four parts: (1) testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) 18 Associated with DPPP motors shipped in 2026– 2055, except for small-size DPPP motors where shipments in 2028–2055 are considered. PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 certification and enforcement procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), energy conservation standards (42 U.S.C. 6316 (a); 42 U.S.C. 6295), and the authority to require information and reports from manufacturers (42 U.S.C. 6316). Federal energy efficiency requirements for covered equipment established under EPCA generally supersede State laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6316(a); 42 U.S.C. 6297) There are currently no Federal energy conservation standards for DPPP motors. DOE noted in the July 2021 Final Rule that efforts by States to set energy conservation standards, test procedures, or labeling requirements for DPPP motors—or any other electric motor—are preempted as a matter of law. 86 FR 40765, 40767. Upon further consideration, however, DOE is clarifying here that none of the provisions in 42 U.S.C. 6313 apply to DPPP motors because, although they are a category of electric motor, DPPPP motors are not among the category of electric motors for which Congress established standards and a rulemaking schedule in 42 U.S.C. 6313(b). Thus, State DPPP motor standards are not already preempted as a matter of law. EPCA outlines rules of preemption for State energy conservation standards before a Federal standard promulgated becomes effective. 42 U.S.C. 6316(a); 42 U.S.C. 6297(b). Specifically, it provides that no State regulation concerning energy efficiency or energy use of covered equipment shall be effective with respect to the covered equipment— in the absence of a Federal regulation— unless the State regulation is a regulation regulating electric motors other than those to which 42 U.S.C. 6313 is applicable. 42 U.S.C. 6316(a)(7); 42 U.S.C. 6297(b)(4). As discussed in E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 66972 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations section III.A. of this document, DPPPM are a category of electric motor, but are excepted from the requirements of 42 U.S.C. 6313(b). See 42 U.S.C. 6313(b)(1). Further, there are no other provisions in 42 U.S.C. 6313 that would apply to DPPP motors. Therefore, any State regulations establishing or amending standards for DPPPM are not currently preempted. Instead, under 42 U.S.C. 6297(c), upon the compliance date for the Federal standards in this final rule, the Federal standards will supersede the CEC standards requirements for replacement dedicated-purpose pool pump motors (‘‘RDPPPM’’) for the first time. For extra-small-size and standardsize DPPP motors, the CEC standards will be superseded on the compliance date applicable to these DPPP motors, which is 2 years after the publication of this final rule. For small-size DPPP motors, which have an additional twoyear lead time, the CEC standards would be superseded on the compliance date applicable to small-size DPPP motors, which is 4 years after the publication of this final rule. DOE may, however, grant waivers of Federal preemption in limited instances for particular State laws or regulations, in accordance with the procedures and other provisions set forth under EPCA. (See 42 U.S.C. 6316(a) (applying the preemption waiver provisions of 42 U.S.C. 6297)) Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (See 42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A) and (r)) Manufacturers of covered equipment must use the Federal test procedures as the basis for: (1) certifying to DOE that their equipment complies with the applicable energy conservation standards adopted pursuant to EPCA (42 U.S.C. 6316(a); 42 U.S.C. 6295(s)), and (2) making representations about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly, DOE must use these test procedures to determine whether the equipment complies with relevant standards promulgated under EPCA. (42 U.S.C. 6316(a); 42 U.S.C. 6295(s)) The DOE test procedures for DPPP motors appear at title 10 of the Code of Federal Regulations (‘‘CFR’’) § 431.484. DOE must follow specific statutory criteria for prescribing new or amended standards for covered equipment, including DPPP motors. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that the Secretary of Energy (‘‘Secretary’’) determines is VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 technologically feasible and economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)) Moreover, DOE may not prescribe a standard (1) for certain products, including DPPP motors, if no test procedure has been established for the product, or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A)–(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A)–(B)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors: (1) The economic impact of the standard on manufacturers and consumers of the products subject to the standard; (2) The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard; (3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard; (4) Any lessening of the utility or the performance of the covered products likely to result from the standard; (5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard; (6) The need for national energy and water conservation; and (7) Other factors the Secretary considers relevant. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) Further, EPCA, as codified, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(iii)) DOE must also periodically evaluate the energy conservation standards for certain covered equipment, including electric motors, and publish either a notification of determination that the PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 standards do not need to be amended, or a notice of proposed rulemaking (‘‘NOPR’’) that includes new proposed energy conservation standards (proceeding to a final rule, as appropriate). See 42 U.S.C. 6316(a) and 42 U.S.C. 6295(m)(1). EPCA, as codified, also contains what is known as an ‘‘anti-backsliding’’ provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(4)) Additionally, EPCA specifies requirements when promulgating an energy conservation standard for a covered product that has two or more subcategories. DOE must specify a different standard level for a type or class of products that has the same function or intended use if DOE determines that products within such group (A) consume a different kind of energy from that consumed by other covered products within such type (or class); or (B) have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)(1)) In determining whether a 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)) B. Background 1. Current Standards DPPP motors are electric motors, which are defined as machines that convert electrical power into rotational mechanical power. 10 CFR 431.12. DOE has established test procedures, labeling requirements, and energy conservation standards for certain electric motors (10 CFR part 431, subpart B), but those E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations requirements do not apply to DPPP motors. DOE has separately established a test procedure for DPPP motors in 10 CFR 431.484. The scope of the DPPP motor definition includes DPPP motors regardless of how the equipment is sold; i.e., incorporated in a DPPP or sold separately. Currently, DPPP motors that would be subject to the energy conservation standards are not subject to any Federal energy conservation standards or labeling requirements because they do not fall within any of the specific classes of electric motors that are currently regulated by DOE.19 However, DPPP motors are electric motors and, therefore, are and have been among the types of industrial equipment for which Congress has authorized DOE to establish applicable regulations under EPCA without the need for DOE to undertake any additional prior administrative action. (42 U.S.C. 6311(1)(A)) ddrumheller on DSK120RN23PROD with RULES2 2. History of Standards Rulemaking for DPPP Motors On January 18, 2017, DOE published a direct final rule establishing energy conservation standards for DPPPs. 82 FR 5650 (the ‘‘January 2017 Direct Final Rule’’).20 In comments submitted in response to the direct final rule, several interested parties discussed the issue of the efficiency of electric motors used in DPPPs. Comments were received from a broad range of interested parties, including manufacturers, trade associations, and energy efficiency advocacy organizations suggesting that energy conservation standards were also needed for motors used in pool pumps. 19 The current energy conservation standards at 10 CFR 431.25 apply to electric motors that satisfy nine criteria listed at 10 CFR 431.25(g), subject to the exemptions listed at 10 CFR 431.25(l). The nine criteria are as follows: (1) are single-speed, induction motors; (2) are rated for continuous duty (MG1) operation or for duty type S1 (IEC); (3) contain a squirrel-cage (MG1) or cage (IEC) rotor; (4) operate on polyphase alternating current 60-hertz sinusoidal line power; (5) are rated 600 volts or less; (6) have a 2-, 4-, 6-, or 8-pole configuration; (7) are built in a 3-digit or 4-digit NEMA frame size (or IEC metric equivalent), including those designs between two consecutive NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA frame size (or IEC metric equivalent); (8) produce at least 1 horsepower (0.746 kW) but not greater than 500 horsepower (373 kW), and; (9) meet all of the performance requirements of one of the following motor types: A NEMA Design A, B, or C motor or an IEC Design N or H motor. The exemptions listed at 10 CFR 431.25(l) are: (1) air-over electric motors; (2) component sets of an electric motor; (3) liquidcooled electric motors; (4) submersible electric motors; and (5) inverter-only electric motors. 20 DOE confirmed the adoption of the standards and the effective date and compliance date in a notice published on May 26, 2017. 82 FR 24218. DOE also established a test procedure for DPPPs. 82 FR 36858 (August 7, 2017). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 Commenters wanted to ensure that consumers who purchased pool pumps compliant with the new standards at 10 CFR 431.465(f), who subsequently needed to replace their motor, would do so with a motor of equal or greater efficiency. All comments received that discussed DPPP motors supported further rulemaking to address these motors. (Docket No. EERE–2015–BT– STD–0008; Regal Beloit Corporation (‘‘Regal Beloit’’), No. 122 at p. 1; Hayward Industries, Inc. (‘‘Hayward’’), No. 125 at p. 1; Pentair Water Pool and Spa, Inc. (‘‘Pentair’’), No. 132 at pp. 1– 2; Zodiac Pool Systems (‘‘Zodiac’’), No. 134 at pp. 1–2; Association of Pool and Spa Professionals (‘‘APSP’’), No. 127 at p. 2; Appliance Standards Awareness Project (‘‘ASAP’’), No. 133 at pp. 4–5; Natural Resource Defense Council (‘‘NRDC’’), No. 121 at p. 4; California Investor Owned Utilities (‘‘CA IOUs’’), No. 130 at p. 2) Acknowledging comments received in response to the direct final rule in support of regulating DPPP motors that would serve as replacement motors to the regulated pool pumps, DOE published a notice of public meeting on July 3, 2017 and held a public meeting on August 10, 2017 to consider potential scope, definitions, equipment characteristics, and metrics for pool pump motors. 82 FR 30845. DOE also requested comment on potential requirements for DPPP motors in a request for information (‘‘RFI’’) pertaining to test procedures for small electric motors and electric motors. 82 FR 35468 (July 31, 2017). On August 14, 2018, DOE received a petition submitted by a variety of entities (collectively, the ‘‘Joint Petitioners’’) 21 requesting that DOE issue a direct final rule to establish prescriptive standards and a labeling requirement for DPPP motors (‘‘Joint Petition’’).22 The Joint Petitioners stated that the motor on a pool pump will often fail before the pump itself needs to be replaced, and motor-only replacements are common. (Joint 21 The Joint Petitioners are: the Association of Pool & Spa Professionals, Alliance to Save Energy, American Council for an Energy-Efficient Economy, Appliance Standards Awareness Project, Arizona Public Service, California Energy Commission, California Investor Owned Utilities, Consumer Federation of America, Florida Consumer Action Network, Hayward Industries, National Electrical Manufacturers Association, Natural Resources Defense Council, Nidec Motor Corporation, Northwest Power and Conservation Council, Pentair Water Pool and Spa, Regal Beloit Corporation, Speck Pumps, Texas ROSE (Ratepayers’ Organization to Save Energy), Waterway Plastics, WEG Commercial Motors, and Zodiac Pool Systems. 22 The Joint Petition is available at www.regulations.gov/document?D=EERE-2017-BTSTD-0048-0014. PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 66973 Petition, No. 14 at p. 2) They added that without a complementary standard for DPPP motors, upon replacing a pool pump motor, consumers may install replacement motors that are less efficient than the motor with which the DPPP was originally equipped. (Id.) To address this concern, the Joint Petitioners asked DOE to establish a direct final rule establishing prescriptive standards and a labeling requirement for DPPP motors. (Joint Petition, No. 14 at pp. 6–9) The Joint Petitioners sought a compliance date of July 19, 2021, to align with the standards compliance date for DPPPs. (Id.) See also 82 FR 24218 (May 26, 2017). DOE published a notice of the Joint Petition and sought comment on whether to proceed with the proposal, as well as any data or information that could be used in DOE’s determination of whether to issue a direct final rule. 83 FR 45851 (Sept. 11, 2018).23 On December 12, 2018, representatives from the Association of Pool & Spa Professionals (‘‘APSP’’), the National Electrical Manufacturers Association (‘‘NEMA’’), Nidec Motors, Regal Beloit, and Zodiac met with DOE to reiterate the need for implementation of the Joint Petition. (December 2018 Ex Parte Meeting, No. 42 at p. 1) 24 On February 5, 2019, APSP, NEMA, Hayward, Pentair, Nidec Motors, Regal Beloit, WEG Commercial Motors, and Zodiac Pool Systems met with DOE to present an alternative approach to the Joint Petition, suggesting DOE propose a labeling requirement for DPPP motors. (February 2019 Ex Parte Meeting, No. 43 at p. 1) 25 These interested parties specifically requested that DOE base the labeling requirement on a newly available industry standard for pool pump motors published on July 1, 2019 (UL 1004–10:2019, ‘‘Pool Pump Motors’’), a design standard that incorporates some of the proposals 23 Docket No. EERE–2017–BT–STD–0048, available at www.regulations.gov/docket?D=EERE2017-BT-STD-0048. 24 With respect to each of the ex parte communications noted in this document, DOE posted a memorandum submitted by the interested party/parties that summarized the issues discussed in the relevant meeting as well as its date and attendees, in compliance with DOE’s Guidance on Ex Parte Communications. 74 FR 52795–52796 (Oct. 14, 2009). The memorandum of the meeting as well as any documents given to DOE employees during the meeting were added to the docket as specified in that guidance. See Id. at 74 FR 52796. 25 The parenthetical reference provides a reference for information located in the docket of DOE’s rulemaking to develop the test procedure and labeling requirements for DPPP motors. (Docket No. EERE–2017–BT–STD–0048, which is maintained at www.regulations.gov/docket/EERE-2017-BT-STD0048). The references are arranged as follows: (commenter, comment docket ID number, page of that document). E:\FR\FM\28SER2.SGM 28SER2 66974 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations contained in the Joint Petition. (February 2019 Ex Parte Slides, No. 43 at pp. 9–10) A follow-up memorandum was submitted to DOE on March 1, 2019, providing additional information related to UL 1004–10:2019. (March 2019 Ex Parte Memo, No. 44) The interested parties noted the timelines and costs that would be involved in applying a label to the affected pool pump motors and the impacts flowing from past labeling efforts. (See generally Id. at 1–3.) On April 7, 2020, the California Energy Commission (‘‘CEC’’) adopted new regulations for RDPPPMs, with an effective date of July 19, 2021. The adopted standards included nominal efficiency at full-load and maximum operating speed requirements, in addition to a requirement that RDPPPMs with a total horsepower (‘‘THP’’) greater than or equal to 0.5 THP manufactured on or after July 19, 2021, must be variable-speed.26 On October 5, 2020, in response to the Joint Petition and the alternative recommendation presented by several of the Joint Petitioners following submission of the Joint Petition, DOE published a NOPR proposing to establish a test procedure and an accompanying labeling requirement for DPPP motors. 85 FR 62816 (‘‘October 2020 NOPR’’). Specifically, DOE proposed to incorporate by reference UL Standard 1004–10:2019 ‘‘Outline of Investigation for Pool Pump Motors’’ (‘‘UL 1004–10:2019’’) pertaining to DPPP motor definitions and marking requirements; require the use of Canadian Standards Association (‘‘CSA’’) C747–09 (R2014), ‘‘Energy Efficiency Test Methods for Small Motors’’ (‘‘CSA C747–09’’) for testing the energy efficiency of DPPP motors; require the nameplate of a subject DPPP motor (1) to include the full-load efficiency of the motor as determined under the proposed test procedure, and (2) if the DPPP motor is certified to UL– 1004–10:2019, to include the statement, ‘‘Certified to UL 1004–10:2019’’; require that catalogs and marketing materials include the full-load efficiency of the motor; require manufacturers to notify DOE of the subject DPPP motor models in current production (according to the manufacturer’s model number) and whether the motor model is certified to UL 1004–10:2019; and require manufacturers to report to DOE the fullload efficiency of the subject DPPP motor models as determined pursuant to the proposed test procedure. 85 FR 62816, 62820. Additionally, if a DPPP motor model is certified to UL 1004– 10:2019, DOE proposed to require manufacturers to report the THP and speed configuration of the motor model as provided on the nameplate pursuant to the UL certification. Id. On July 29, 2021, DOE published a final rule adopting a test procedure for DPPP motors. 86 FR 40765. (‘‘July 2021 Final Rule’’). Specifically, the test procedure requires use of CSA C747–09 (R2014), ‘‘Energy Efficiency Test Methods for Small Motors’’ (‘‘CSA C747–09’’) for testing the full-load efficiency of DPPP motors and incorporates by reference UL 1004– 10:2020 ‘‘Standard for Pool Pump Motors’’ (‘‘UL 1004–10:2020’’) pertaining to definitions and scope. The new test procedure is currently located at 10 CFR 431.484. 86 FR 40765, 40768. DOE did not establish a labeling requirement and stated that it intends to address any such labeling and/or energy conservation standards requirement in a separate notification. Id. On June 21, 2022, DOE published a NOPR proposing energy conservation standards for DPPP motors. 87 FR 37122. (‘‘June 2022 NOPR’’). DOE proposed a performance standard for a class of DPPP motors and design requirements for certain classes of DPPP motors. Specifically, DOE proposed to require that DPPP motors less than 0.5 THP must have a full-load efficiency of 69 percent, and DPPP motors greater than or equal to 0.5 THP must be variable speed control DPPP motors. In addition, for DPPP motors greater than or equal to 0.5 THP, DOE also proposed to implement freeze-protection requirements. 87 FR 37122, 37123– 37124. On July 26, 2022, DOE presented the proposed standards and accompanying analysis in a public meeting. DOE received comments in response to the June 2022 NOPR from the interested parties listed in Table II.1. ddrumheller on DSK120RN23PROD with RULES2 TABLE II.1—JUNE 2022 NOPR WRITTEN COMMENTS Comment No. in the Docket Commenter type Anonymous ............... Joint Advocates ......... 89 97 Efficiency Organizations. CEC and NYSERDA 94 State Agencies. Joint SC–GHG Commenters. 95 Efficiency Organizations and Legal Institute. Commenter(s) Abbreviation Anonymous ........................................................................................ Appliance Standards Awareness Project (ASAP), American Council for an Energy-Efficient Economy (ACEEE), National Consumer Law Center, on behalf of its low-income clients (NCLC), Natural Resources Defense Council (NRDC), and Northwest Energy Efficiency Alliance (NEEA). California Energy Commission and New York State Energy Research and Development Authority. Center for Climate and Energy Solutions, Institute for Policy Integrity at New York University School of Law, Natural Resources Defense Council, Sierra Club, Union of Concerned Scientists. Fluidra ................................................................................................ Hayward Industries, Inc. .................................................................... Northwest Energy Efficiency Alliance ................................................ Pacific Gas and Electric Company (PG&E), San Diego Gas and Electric (SDG&E), and Southern California Edison (SCE). Pentair Water Pool and Spa, Inc. ...................................................... The Pool & Hot Tub Alliance and National Electrical Manufacturers Association. The Pool & Hot Tub Alliance ............................................................. Regal Rexnord ................................................................................... 26 See Docket # 19–AAER–02 at www.energy.ca.gov/rules-and-regulations/ VerDate Sep<11>2014 20:01 Sep 27, 2023 Jkt 259001 Fluidra ....................... Hayward .................... NEEA ......................... CA IOUs .................... 91, 101 93 99 96 Pool Pump Manufacturer. Pool Pump Manufacturer. Efficiency Organization. Utilities. Pentair ....................... PHTA and NEMA ...... 90 92 Pool Pump Manufacturer. Trade Associations. PHTA ......................... Regal ......................... 100 98 Trade Association. Motor Manufacturer. appliance-efficiency-regulations-title-20/applianceefficiency-proceedings-2. PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations A parenthetical reference at the end of a comment quotation or paraphrase provides the location of the item in the public record.27 To the extent that interested parties have provided written comments that are substantively consistent with any oral comments provided during the July 26, 2022 public meeting, DOE cites the written comments throughout this final rule. Any oral comments provided during the webinar that are not substantively addressed by written comments are summarized and cited separately throughout this final rule. III. General Discussion DOE developed this final rule after considering oral and written comments, data, and information from interested parties that represent a variety of interests. The following discussion addresses issues raised by these commenters. ddrumheller on DSK120RN23PROD with RULES2 A. General Comments This section summarizes general comments received from interested parties regarding rulemaking timing and process. In the June 2022 NOPR, DOE proposed a performance standard (i.e., full-load efficiency) and design requirements (i.e., speed capability) based on DPPP motor THP. Specifically, for motors <0.5 THP, DOE proposed DPPP motors to meet a full-load efficiency of 69 percent. For motors ≥0.5 THP, DOE proposed variable speed control design requirements, and freeze protection control requirements for DPPP motors with freeze protection controls. 87 FR 37122, 37124. Waterway Plastics commented that the proposal does not align with CEC scope because that scope is only for replacement DPPP motors and requested clarity on the scope of the June 2022 NOPR. (Waterway Plastics, Public Meeting, No. 88 at p. 6) The scope of the final rule includes DPPP motors regardless of how the equipment is sold i.e., incorporated in a DPPP or sold separately (i.e., as a replacement motor). One anonymous commenter stated that the proposed standard for DPPP motors is more stringent than the standard for DPPPs that went into effect in 2021 and would make the DPPP rule obsolete. Specifically, the anonymous commenter stated that with the DPPP 27 The parenthetical reference provides a reference for information located in the docket of DOE’s rulemaking to develop energy conservation standards for DPPP motors. (Docket No. EERE– 2017–BT–STD–0048, which is maintained at www.regulations.gov). The references are arranged as follows: (commenter name, comment docket ID number, page of that document). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 standard, a 1 hp single-speed pump would still meet the weighted energy factor (‘‘WEF’’) requirement, but this does not seem to be the case in the proposed DPPP motor rule. In addition, the anonymous commenter stated that the WEF DPPP standard was less stringent for non-self-priming pumps, whereas the proposed DPPP motor level does not separate non-self-priming pumps motors. The anonymous commenter stated that typically rules for subcomponents (motors) would have less stringent or equal requirements to the fully assembled product (i.e., pumps), otherwise the standard for pool pumps would be obsolete due to the more stringent motor rule. (Anonymous, No. 89 at p. 1) Waterway Plastics commented that the proposal could affect the DPPPs that are being manufactured in the United States, and that they had concerns that the June 2022 NOPR proposal does not align with the DPPP standards. (Waterway Plastics, Public Meeting, No. 88 at p. 6) In addition to setting freeze protection requirements, the standard for DPPPs at 10 CFR 431.465(f) would likely require DPPP motors sold in DPPPs to be variable speed for standard-size self priming pool pumps (using DPPP motors greater than or equal to 1.15 THP) 28 and to have a higher efficiency for small-size self priming pumps, nonself priming pumps, and PCBPs.29 The DPPP standards apply to DPPPs only and do not apply to DPPP motors sold alone as replacement motors. As stated previously, motor-only replacements are common and comments were received from a broad range of interested parties, including manufacturers, trade associations, and energy efficiency advocacy organizations suggesting that energy conservation standards were also needed for motors used in pool pumps to ensure that consumers who purchased pool pumps compliant with the new standards at 10 CFR 431.465(f), who subsequently needed to replace their motor, would do so with a motor of equal or greater efficiency. In contrast, the CEC standards apply to replacement DPPP motors only and would require variable speed replacement DPPP motors at or above 0.5 THP, and also sets requirements for 28 The 0.711 hhp threshold in the DPPP standards for self-priming pool filter pumps aligns with a 1.15 THP motor threshold (1.15 THP is roughly equivalent to 0.711 hhp). See section IV.A.3 of this document. 29 The DPPP standard at 10 CFR 431.465(f) would likely require DPPP motors sold in DPPPs to meet the requirements equivalent to TSL 6, while this DFR establishes standards at TSL 8 for DPPP motors, regardless of how they are sold (i.e., incorporated in a DPPP or sold separately). See section V.A of this document. PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 66975 nominal efficiency at full-load and maximum operating speed.30 In this final rule, DOE establishes DPPP motor standard for both motors sold in DPPPs and sold alone for replacement purposes. While the motor improvements realized by this DPPP motor final rule could be enough to improve a DPPP such that the DPPP would meet the DPPP standard, DOE notes that the DPPP energy conservation standards and the DPPP motor standards are complementary to help ensure a harmonized approach to DPPP and DPPP motors that are replacements. The DPPP standards includes the hydraulic efficiency of the pump, the motor efficiency, and the efficiency of the associated controls and drives supporting the DPPP. By contrast, the DPPP motor standard focuses on just the motor aspect and is meant to complement the DPPP standard by ensuring the replacement motors are at least as efficient as originally intended by the DPPP manufacturer in the DPPP design. Therefore, DOE does not agree with the commenter that these two standards are overlapping. Instead, DOE believes it is addressing complementary but different equipment regulations to help ensure the efficiencies that consumers expect when purchasing their DPPPs are maintained when replacing the motor. Since the regulations apply to both domestically produced equipment and imported equipment and are intended to be complementary by design, DOE does not agree with Waterway Plastics that domestic manufacturers will be disadvantaged. Regarding pressure cleaner booster pumps (‘‘PCBP’’), Fluidra recommended separating PCBP into their own equipment class, requiring 69-percent efficiency for motors less than 1.15 THP, and implementing further review of energy use, efficiency, and cost effectiveness for the motors at 1.15 to 5 THP. (Fluidra, No. 91 at p. 2). PHTA and NEMA recommended that if DOE confirms that a variable speed requirement is not cost-effective for PCBP, DOE should not require variable speed for PCBP motors below 1.15 THP. (PHTA and NEMA, No. 92 at p. 5) On the other hand, CEC and NYSERDA supported DOE’s proposed standards, specifically the proposal to require variable-speed motors, and encouraged that DOE finalize the rule as soon as possible. CEC and NYSERDA stated that the proposed standards will 30 See Docket # 19–AAER–02 at www.energy.ca.gov/rules-and-regulations/ appliance-efficiency-regulations-title-20/applianceefficiency-proceedings-2. E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 66976 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations extend the 2017 DPPP final rule energy efficiency benefits to replacement DPPP motors, which currently are unregulated on the Federal level, and provide additional energy efficiency improvements to new DPPPs. CEC and NYSERDA also stated that some of the energy savings in this NOPR are already being realized in California through that State’s Replacement DPPP Motor Regulations, which went into effect July 19, 2021, and which are projected to provide 451 GWh in annual electricity savings and $82 million in annual savings to California businesses and individuals. (CEC and NYSERDA, No. 94 at p. 2) Further, CEC and NYSERDA commented that variable-speed motors are extremely beneficial to consumers, as DPPPs have different operational modes with different speed requirements, and because real-world pool design complicates the size selection of DPPP motors. Further, CEC and NYSERDA stated that the benefit of variable-speed motors for PCBP applications, which is the ability to adjust motor speed, will eliminate the need to use pressure discs or pressure relief valves. (CEC and NYSERDA, No. 94 at p. 3) The Joint Advocates commented that they support the proposed standards for DPPP motors, which generally align with the existing California standards for replacement DPPP motors, and would ensure that all DPPP motors greater than or equal to 0.5 THP are variable-speed. The Joint Advocates also supported the proposed freeze protection control requirements. (Joint Advocates, No. 97 at p. 1) The CA IOUs supported DOE’s proposal to adopt TSL 7 for DPPP motors. The CA IOUs commented that they surveyed the CEC certifications database and the DOE Compliance Certification Management System (‘‘CCMS’’) database and noted that small-size DPPP motors represent motors in PCBPs, small self-priming pool filter pumps, and small non-selfpriming pool filter pumps. The CA IOUs agreed that the 0.5 THP to 1.15 THP threshold is an appropriate range for the DOE analysis and standard. Further, the CA IOUs commented that the standardsized DPPP motor range, between 1.15 to 5.0 THP, represents motors mostly found in standard-size self-priming pool filter pump applications. (CA IOUs, No. 96 at pp. 1–2) The CA IOUs commented that the proposed standard for a smallsize DPPP motor will provide technically feasible and cost-effective consumer savings through variable speed motor technology, allowing consumers to choose the lowest speed that meets their pool maintenance needs VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 and reducing pressure head losses through the pump affinity laws. The CA IOUs noted that this energy savings strategy is consistent with the industry standard American National Standards Institute/Pool and Hot Tub Alliance/ International Code Council (ANSI/ PHTA/ICC)-15:2021, which recommends that ‘‘for maximum energy efficiency, pool filtration should be operated at the lowest possible flowrate for a time period that provides sufficient water turnover for clarity and sanitation.’’ (CA IOUs, No. 96 at p. 2) Further, the CA IOUs supported DOE’s proposal to adopt freeze protection setting requirements, which aligns with the requirements of the DPPP rule and provides essential energy savings by ensuring that products shopped with freeze protection have the appropriate settings to protect equipment from freezing while not using excessive energy. (CA IOUs, No. 96 at p. 2) Regal commented that they generally support DOE moving forward with the DPPPM energy conservation standards rule. Regal commented that they believe the proposed rule will enable the achievement of significant energy savings, if careful consideration is given to the rule’s underlying technical analysis and the timeline for implementation. (Regal, No. 98 at p.1) ASAP commented in support of DOE’s proposed standards for DPPP motors and noted that these generally align with the existing standards in California. (ASAP, Public Meeting, No. 88 at p.5) As part of this final rule, DOE considered comments received regarding the technical analysis and made any needed updates, as discussed in section IV of this document. DOE also updated the market data information to match the current market of DPPP motors available, as discussed in section IV.A.2 of this document. Finally, DOE notes that DOE conducted DPPP motor manufacturer interviews as part of the June 2022 NOPR, as discussed in the manufacturer impact analysis, and incorporated feedback to estimate the manufacturer impacts of setting variable-speed requirements as standards. 87 FR 37122, 37154. In regard to creating an equipment class for DPPP motors used in PCBP applications, DOE generally does not consider end-use applications (for DPPP motors, end-use would be DPPPs) when analyzing equipment classes for covered equipment. See further discussion in IV.A.3 of this document. DOE also notes that, assuming the same motor output power, there are no technological features that distinguish a DPPP motor used in a PCBP from a DPPP motor used in a self-priming or non-self-priming PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 application. As such, DOE continues to base the analysis in this final rule only on DPPP motor equipment classes determined only by motor THP, as defined in Table III.1 of this document. DOE reviewed the cost-effectiveness of the trial standard levels considered with the updates for this final rule and continues to conclude that the proposal from the June 2022 NOPR is technologically feasible and economically justified. See section V of this document for analytical results. Section IV provides further details on the analysis conducted, the analysis inputs, and responses to any analysisspecific comments that were received regarding the June 2022 NOPR. In the June 2022 NOPR, DOE proposed that new standards would apply to DPPP motors manufactured two years after the date on which any new or amended standard is published.31 DOE estimated the publication of a final rule in the second half of 2023. Therefore, in the June 2022 NOPR, for purposes of its analysis, DOE used 2026 as the first full year of compliance with any new standards for DPPP motors. 87 FR 37122, 37144. Several commenters recommended that DOE consider a two-step approach to allow for further analysis and data collection and coordinate between DPPP and DPPP motors. As a first step, PHTA, NEMA, and Hayward recommended that DOE adopt a final rule as soon as possible that would adopt and require a DPPP motor listing to UL 1004–10:2022 ‘‘Standard for Pool Pump Motors’’ (‘‘UL 1004–10:2022’’) in its entirety, which would provide alignment with the current DPPP rule and a means for certification and labeling that will provide for easier enforcement. Further, PHTA, NEMA, and Hayward noted that manufacturers anticipated compliance with UL 1004–10, which was established in the 2018–2020 efforts to obtain a corresponding DPPP motor rule. Therefore, PHTA, NEMA, and Hayward stated that manufacturers are ready and able to provide compliant product 12 months after a final rule effective date. As a second step, PHTA, NEMA, and Hayward commented that DOE should set up a negotiation working group on both DPPP and DPPP motor rules to dig deeper into the concerns highlighted in their comment submission and ensure performance and timing alignments long term. PHTA, NEMA, and Hayward commented that they are committed to initiating step two as soon as possible and stated that if a two-step approach is unfeasible, that 31 In the June 2022 NOPR, DOE followed the same 2-year lead time. See 87 FR 37122, 37144 at FN67. E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations prior to issuing a final DPPP motor rule, the cost-effective concerns laid out in their comments should be further analyzed and manufacturer interviews conducted. PHTA, NEMA, and Hayward stated that although this approach will slow down obtaining a final rule, the current NOPR deviates from the Joint Petition and the commenters have provided multiple concerns that require attention. (PHTA and NEMA, No. 92 at p. 9; Hayward, No. 93 at pp. 2–3) In response, Fluidra requested a 5year transition period to implement compliance with the DPPP motor regulation proposal. Fluidra noted that this transition period would give manufacturers adequate time to develop, test, certify, launch, and transition product lines, as well as educate distributors, pool builders, and consumers on this product transition. (Fluidra, No. 91 at p. 2) Hayward, PHTA, and NEMA requested a compliance date of at least 5 years following the effective date if DOE decides against the implementation of UL 1004–10 based rule. Hayward, PHTA, and NEMA noted that more time is required to: address the limited product that currently exists in the small fractional motor category; find solutions to the design of other products impacted by a DPPP motor rule; and provide better alignment with any coming revisions to the current DPPP rule. (Hayward, No. 93 at pp. 2–3; PHTA and NEMA, No. 92 at p. 9) PHTA stated that any final DPPPM rule compliance date should be extended a minimum of 5 years to allow manufacturers to recover investments made to comply with the pump rule. (PHTA, No. 100 at p. 3) In addition, Hayward recommended the alignment of the DPPP and DPPP motor implementation dates. (Hayward, No. 93 at p. 2) Regal recommended that DOE endeavor to better align both the performance requirements and compliance deadlines between the DPPP and DPPP motor rules. Regal commented that this will allow for maximizing energy savings, while avoiding unintended market disruptions and significant fiscal impacts to industry and consumers. (Regal, No. 98 at p. 1) Specifically, PHTA and NEMA commented that they were concerned the different implementation dates of the DPPP and DPPP motor rules will cause confusion and difficulties for manufacturers and risk the potential to undercut savings by unaligned implementation of the two rules. (PHTA and NEMA, No. 92 at pp. 2) DOE notes that PHTA and NEMA’s original recommendation to DOE was to adopt UL 1004–10:2022 in its entirety VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 (PHTA and NEMA, No. 92 at p. 9, 10), which includes the requirement that DPPP motors rated greater or equal to 1.15 THP shall not be marked for singlespeed, two-speed, or multi-speed (i.e., shall instead be marked for variablespeed). (section 7.1(b) of UL 1004– 10:2022). Further, PHTA and NEMA stated that manufacturers were ready and able to provide products compliant with UL 1004–10:2022 12 months after a final rule effective date. (PHTA and NEMA, No. 92 at p. 9) Finally, PHTA and NEMA suggested that DOE require compliance with the entire UL 1004–10 standard and not just the scope and definitions sections because doing so would better align and provide consistency with the DPPP rule. They also stated that doing so would provide an easier enforcement tool for DOE by requiring nameplate markings on those motors captured in the scope of the NOPR and in UL 1004–10, and would also ensure products not within the scope, such as rigid electric spa motors, be labelled for that intended use only. (PHTA and NEMA, No. 92 at p. 10) This is an energy conservation standard and not a labeling rulemaking. In this final rule, DOE is requiring variable speed control for standard-size DPPP motors (i.e., 1.15 ≤ THP ≤5), consistent with UL 1004–10:2022. However, DOE is also requiring variable-speed control for small-size DPPP motors (i.e., 0.5 ≤ THP <1.15), which is more stringent than UL 1004–10:2022. In this final rule, DOE has concluded that the proposal from the June 2022 NOPR is technologically feasible and economically justified. See section V for analytical results. As noted previously, PHTA, NEMA, and Hayward recommended a two-step approach. In addition, most if not all comments to the June 2022 NOPR concerned the transition to variablespeed for the small-size equipment class.32 DOE reviewed the compliance dates proposed in the June 2022 NOPR with specific concern for the compliance dates applicable to that class. In the June 2022 NOPR, DOE provided a two-year compliance timeline for DPPP motors based on the statutorily mandated rulemaking schedule provided in section 6313. See 87 FR 37122, 37144 at FN 67, and 37186. Upon further review, DOE has determined that the rulemaking schedule provided in 42 U.S.C. 6313(b) does not apply to DPPPM. As discussed in section II.A. of this document, 32 See: (Anonymous, No. 89 at p. 1), (Pentair, No. 90 at p. 1, 3), (Fluidra, No. 91 at p. 2), (Hayward, No. 93 at p. 2), (CA IOUs, No. 96 at p. 1–2), (Joint Advocates, No. 97 at p. 1), (PHTA and NEMA, No. 92 at p. 10), (PHTA, No. 100 at p. 3) PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 66977 DPPPM are a type of electric motor, but not among the types of electric motor for which Congress established standards and a rulemaking schedule in 42 U.S.C. 6313(b). DPPPM are definite purpose motors. See 42 U.S.C. 6311(13)(C). As such, they are excepted from the requirements of 42 U.S.C. 6313(b), including the compliance deadlines provided in that section. Because 42 U.S.C. 6316(a) applies certain requirements of section 6295(l)-(s) of EPCA to certain equipment, including electric motors, DOE considered whether the compliance deadlines of section 6295(m)(4) applied to DPPPM. Section 6295(m)(4)(A) defines compliance deadlines for specific products. But electric motors and DPPPMs are not listed, nor does section 6316 apply a cross reference on how to apply these paragraphs to electric motors or DPPPMs. Accordingly, DOE determined that these compliance deadlines do not apply to DPPPM. Additionally, DOE reviewed section 6296(m)(4)(B), which states that DOE cannot apply new standards to a product with respect to which other new standards have been required in the prior 6-year period. As this is the first time DOE is establishing standards for this product, this paragraph also does not apply. As such, DOE has determined that it has discretion to establish compliance deadlines for DPPPM. DOE notes CEC’s standards for RDPPM, which include standards for the small-size equipment class, require compliance beginning July of 2021. Docket #19–AAER–02. The CEC standards set a variable speed motor requirement for motors at or above 0.5 THP as well as minimum motor fullload efficiency requirements. 20 CA ADC 1605.3(g)(6)(B). DOE’s final rule matches the stringency of the California standards (requiring variable speed controls for all motors over 0.5 THP) for replacement DPPP motors but DOE’s proposal extends the variable speed requirement to all DPPP motors, regardless of whether they are sold with a DPPP or on their own. DOE believes manufacturers are already producing standard-size and extra-small DPPPMs that will have to comply with DOE’s standards in this final rule. In addition, some manufacturers already produce small-size DPPPMs that align with CEC’s variable speed RDPPM standards.33 However, DOE understands that some manufacturers may need additional time to scale up their 33 https://www.regalrexnord.com/products/ electric-motors/ac-motors-nema/pump-motors/ pool-pump-motors/pool-pump-motor-01-85-hp-1ph-60-hz-115-v-3600-rpm-48y-frame-tefc-elv08tb. E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 66978 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations manufacturing lines, especially for the small-size DPPP motors.34 Therefore, DOE is adopting two different compliance dates in this final rule depending on the total horsepower of the motor. Doing so will allow DOE to begin the transition to a Federal standard for DPPP motors quickly, which will help alleviate any circumvention and unintended consequences that may be occurring because of the DPPP Federal standard, while balancing the needs of industry to have additional time to increase manufacturing scale of the small DPPP motors. Based on the comments received, DOE has concluded that the need for additional time is particularly relevant for small-size equipment. Accordingly, DOE is extending the compliance timeline to 4 years, instead of the proposed two years, for the smallsize equipment class as DOE believes this provides industry sufficient time to scale up their manufacturing lines. For the extra-small-size and standardsize equipment classes, DOE is maintaining the two-year compliance timelines as proposed. For the extrasmall-size and standard-size equipment classes, the adopted TSL (TSL7) aligns with the requirements in UL 1004– 10:2022 and as noted by PHTA and NEMA, manufacturers are ready and able to provide products compliant with UL 1004–10:2022 12 months after a final rule effective date. Therefore, for the extra-small-size and standard-size equipment classes DOE has determined that two years provides sufficient lead time. The CA IOUs recommended that DOE update the DPPP ECS to align with the proposed DPPP motor standards. The CA IOUs commented that the proposed standard requires variable speed capability for small and standard size DPPP motors, which will impact the motors installed in DPPPs. The CA IOUs added that the non-self-priming pool filter pump and PCBP WEF standards allow performance levels achievable by single-speed, dual-speed, and variablespeed motors. (CA IOUs, No. 96 at p. 6) DOE appreciates CA IOUs comments. However, because this rulemaking is concerning DPPP motors only and not DPPPs, DOE may consider coordinating compliance timelines as part of any upcoming DPPP rulemakings. Finally, Pentair stated that after the DPPP rule, it saw a large increase in internet activity selling illegal pumps and motors that do not meet DOE 34 DOE included the capital and product conversion costs necessary for these DPPP motor manufacturers to introduce variable-speed DPPP motor models for the small-size equipment class. See section III.J of this document. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 requirements. (Pentair, No. 90 at pp. 1– 2) Fluidra commented that American manufacturers may also be negatively impacted by imports of non-compliant DPPPs and DPPP motors from foreign manufacturers who unknowingly or knowingly disregard enforcement of this regulation. (Fluidra, No. 91 at p. 2) Based on input from five manufacturers, PHTA and NEMA commented that they estimate approximately 5 percent of the current market to be made up of inexpensive imported pumps sold through online retailers that likely do not comply with DOE’s current energy conservation standard. PHTA and NEMA commented that these manufacturers have indicated that the current value (5 percent) is approximately double what it was prior to the compliance date for the DPPP standard. PHTA and NEMA commented that the manufacturers also estimate that a DPPP motor standard, established as currently proposed by DOE, will double the percentage of the market made up of non-compliant DPPPs, increasing it to 10 percent. (PHTA and NEMA, No. 92 at pp. 7–8) PHTA and NEMA also stated that the misalignment of the compliance dates for the DPPP energy conservation standards and the proposed DPPP motor standards could cause confusion for manufacturers and importers, potentially leading to more noncompliant DPPP motors being imported. PHTA and NEMA reiterated NEMA’s concerns about port of entry enforcement that they have separately commented on numerous times. (PHTA and NEMA, No. 92 at p. 8) Nidec commented that they were concerned that because of the disconnect of the proposal to the current DPPP regulations (DPPPMs between 0.5 to 1.15 THP), there may be issues with enforcement of pumps assembled offshore and coming into the U.S. with non-compliant DPPPMs. Nidec commented that because of the rulemaking, there is a high risk that DPPPs may not get assembled anymore in the U.S. and instead will be done offshore unless there is proper enforcement that brings the DPPP regulations and the proposed DPPPM regulations into harmony. (Nidec, Public Meeting, No. 88, at pp. 45–46) DOE currently does not have any energy conservation standards for DPPP motors. This final rule will finalize standards for DPPP motors and productspecific enforcement requirements at § 429.134. Any enforcement-related issues, particularly compliance dates, regarding DPPPs will be addressed as part of the DPPP rulemaking, or through a separate avenue. PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 Nidec requested comment on whether there are any other examples where an end-product rule defines a lower threshold for compliance versus a component threshold and how DOE has successfully managed that. They stated that in their experience, the end-product generally overrides the component standard, and for the DPPPM proposal, it would not be the case. (Nidec, Public Meeting, No. 88 at p. 47) EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. This equipment includes those electric motors that are DPPP motors, the subject of this document, and also pumps (42 U.S.C. 6311(1)(A)) Accordingly, DOE has the authority to regulate both a component (DPPPM) and the end-product (DPPPs). Given the current misalignment amongst the Federal DPPP standards and the CA DPPP replacement motor standards along with DOE’s authority for electric motors, DOE is taking an approach to facilitate harmonization of the standards at the Federal level and ensure a complimentary regulatory approach for DPPPs and replacement DPPP motors which will help ensure energy savings are realized in the field. Scope of Coverage This document covers equipment meeting the definition of a DPPP motor as defined in § 431.483 and the scope specified in 10 CFR 431.481(b). Specifically, the scope covers DPPP motors with a total THP of less than or equal to 5, but does not apply to: (i) DPPP motors that are polyphase motors capable of operating without a drive and distributed in commerce without a drive that converts single-phase power to polyphase power; (ii) waterfall pump motors; (iii) rigid electric spa pump motors, (iv) storable electric spa pump motors; (v) integral cartridge-filter pool pump motors; and (vi) integral sandfilter pool pump motors.35 When evaluating and establishing energy conservation standards, DOE divides covered equipment into equipment classes by the type of energy used or by capacity or other performance-related features, which other products within such type (or class) do not have, that justify differing standards. In making a determination whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility of the 35 These terms are defined in UL 1004–10:2020, which is incorporated by reference in DOE’s test procedure at 10 CFR 431.484. In this final rule, DOE is incorporating by reference the latest version of the UL standard, UL 1004–10:2022; see discussion in section III.A.1 of this document. E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations feature to the consumer and other factors DOE determines are appropriate. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)) DOE is establishing equipment classes for DPPP motors based on THP. DOE is proposing an extra-small-size equipment class corresponding to motors with a THP less than 0.5 THP, a small-size equipment class corresponding to motors with a total horsepower rating greater than or equal to 0.5 THP but less than 1.15 THP, and a standard-size equipment class corresponding to a motor with a THP greater than or equal to 1.15 THP and less than or equal to 5 THP. Table III.1 provides a summary of the equipment classes. See section IV.A.3 for further details on the reasoning as to why DOE determined these equipment classes are appropriate and justify having separate standards. TABLE III.1—EQUIPMENT CLASSES FOR DPPP MOTORS Equipment class Extra-small-size ......... Small-size .................. Standard-size ............ Motor total horsepower (Hp) THP <0.5. 0.5 ≤ THP < 1.15. 1.15 ≤ THP ≤ 5. ddrumheller on DSK120RN23PROD with RULES2 See section IV.A.1 of this document for discussion of the equipment classes analyzed in this final rule. B. Test Procedure EPCA sets forth generally applicable criteria and procedures for DOE’s adoption and amendment of test procedures. (42 U.S.C. 6314(a)) Manufacturers of covered products must use these test procedures to certify to DOE that their product complies with energy conservation standards and to quantify the efficiency of their product. (42 U.S.C. 6314(d)(1); 42 U.S.C. 6316(a), 42 U.S.C. 6295(s)) The test procedure references UL 1004–10:2020 ‘‘Standard for Safety for Pool Pump Motors’’ for the definitions (10 CFR 431.483) and references CSA C747–09 as the energy efficiency test method for DPPP motors (10 CFR 431.484(b)). The test procedure establishes full-load efficiency as the metric for DPPP motors. 10 CFR 431.484(b). In this final rule, DOE is incorporating by reference the latest version of the UL standard, UL 1004– 10:2022; further discussion on this topic and any comments received are provided in section IV.A.1 of this document. In addition, DOE is also finalizing product-specific enforcement requirements at 10 CFR 429.134 that require DPPP motors to be tested in accordance with UL 1004–10:2022 to VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 verify variable-speed capability and applicable freeze protection design requirements. C. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels When DOE proposes to adopt an amended standard for a type or class of covered product, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such product. (42 U.S.C. 6316(a); 42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (‘‘max-tech’’) improvements in energy efficiency for DPPP motors, using the design parameters for the most efficient products available on the market or in Frm 00015 working prototypes. The max-tech levels that DOE determined for this rulemaking are described in section IV.C of this final rule and in chapter 5 of the final rule TSD. D. Energy Savings In each energy conservation standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the products or equipment that are the subject of the rulemaking. As the first step in such an analysis, DOE develops a list of technology options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determines which of those means for improving efficiency are technologically feasible. DOE considers technologies incorporated in commercially available products or in working prototypes to be technologically feasible. 10 CFR 431.4; sections 6(b)(3)(i) and 7(b)(1) of appendix A to 10 CFR part 430 subpart C (‘‘appendix A’’). After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; (3) adverse impacts on health or safety; and (4) unique-pathway proprietary technologies. 10 CFR 431.4; section 7(b)(2)–(5) of appendix A. Section IV.B of this document discusses the results of the screening analysis for DPPP motors, particularly the designs DOE considered, those it screened out, and those that are the basis for the standards considered in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the final rule technical support document (‘‘TSD’’). PO 00000 66979 Fmt 4701 Sfmt 4700 1. Determination of Savings For each trial standard level (‘‘TSL’’), DOE projected energy savings from application of the TSL to DPPP motors purchased in the 30-year period that begins in the first full year of compliance with the standards (2026– 2055).36 The savings are measured over the entire lifetime of equipment purchased in the 30-year analysis period. DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and the nonew-standards case. The no-newstandards case represents a projection of energy consumption that reflects how the market for a product would likely evolve in the absence of energy conservation standards. DOE used its national impact analysis (‘‘NIA’’) spreadsheet models to estimate national energy savings (‘‘NES’’) from standards for DPPP motors. The NIA spreadsheet model (described in section IV.G.2 of this document) calculates energy savings in terms of site energy, which is the energy directly consumed by products at the locations where they are used. For electricity, DOE reports national energy savings in terms of primary energy savings, which is the savings in the energy that is used to generate and transmit the site electricity. For natural gas, the primary energy savings are considered to be equal to the site energy savings. DOE also calculates NES in terms of FFC’’ energy savings. The FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels (i.e., coal, natural gas, petroleum fuels), and thus presents a more complete picture of the impacts of energy conservation standards.37 DOE’s approach is based on the calculation of an FFC multiplier for each of the energy types used by covered products or equipment. For more information on FFC energy savings, see section IV.H.2 of this document. 2. Significance of Savings To adopt any new or amended standards for a covered product, DOE 36 DOE also presents a sensitivity analysis that considers impacts for products shipped in a 9-year period. 37 The FFC metric is discussed in DOE’s statement of policy and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (Aug. 17, 2012). E:\FR\FM\28SER2.SGM 28SER2 66980 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations must determine that such action would result in significant energy savings. (42 U.S.C. 6295(o)(3)(B)) The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.38 For example, some covered products and equipment have most of their energy consumption occur during periods of peak energy demand. The impacts of these products on the energy infrastructure can be more pronounced than products with relatively constant demand. Accordingly, DOE evaluates the significance of energy savings on a caseby-case basis, taking into account the significance of cumulative FFC national energy savings, the cumulative FFC emissions reductions, and the need to confront the global climate crisis, among other factors. As stated, the standard levels adopted in this final rule are projected to result in national energy savings of 1.56 quads FFC, the equivalent of the electricity use of 16.8 million homes in one year. Based on the amount of FFC savings, the corresponding reduction in emissions, and the need to confront the global climate crisis, DOE has determined the energy savings from the standard levels adopted in this final rule are ‘‘significant’’ within the meaning of 42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B). E. Economic Justification ddrumheller on DSK120RN23PROD with RULES2 1. Specific Criteria As noted previously, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) The following sections discuss how DOE has addressed each of those seven factors in this rulemaking. a. Economic Impact on Manufacturers and Consumers In determining the impacts of potential amended standards on manufacturers, DOE conducts an MIA, as discussed in section IV.J of this document. DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply 38 Procedures, Interpretations, and Policies for Consideration in New or Revised Energy Conservation Standards and Test Procedures for Consumer Products and Commercial/Industrial Equipment, 86 FR 70892, 70901 (Dec. 13, 2021). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include (1) INPV, which values the industry on the basis of expected future cash flows; (2) cash flows by year; (3) changes in revenue and income; and (4) other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers. For individual consumers, measures of economic impact include the changes in LCC and payback period (‘‘PBP’’) associated with new or amended standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national net present value of the consumer costs and benefits expected to result from particular standards. DOE also evaluates the impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a standard. recover the increased purchase cost (including installation) of a more efficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost due to a more-stringent standard by the change in annual operating cost for the year that standards are assumed to take effect. For its LCC and PBP analysis, DOE assumes that consumers will purchase the covered products in the first full year of compliance with new or amended standards. The LCC savings for the considered efficiency levels are calculated relative to the case that reflects projected market trends in the absence of new or amended standards. DOE’s LCC and PBP analysis is discussed in further detail in section IV.F of this document. b. Savings in Operating Costs Compared to Increase in Price (LCC and PBP) EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered product that are likely to result from a standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP analysis. The LCC is the sum of the purchase price of a product (including its installation) and the operating cost (including energy, maintenance, and repair expenditures) discounted over the lifetime of the product. The LCC analysis requires a variety of inputs, such as product prices, product energy consumption, energy prices, maintenance and repair costs, product lifetime, and discount rates appropriate for consumers. To account for uncertainty and variability in specific inputs, such as product lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value. The PBP is the estimated amount of time (in years) it takes consumers to d. Lessening of Utility or Performance of Products In establishing equipment classes, and in evaluating design options and the impact of potential standard levels, DOE evaluates potential standards that would not lessen the utility or performance of the considered equipment. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards adopted in this document would not reduce the utility or performance of the equipment under consideration in this rulemaking. PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 c. Energy Savings Although significant conservation of energy is a separate statutory requirement for adopting an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(III)) As discussed in section IV.G.2 of this document, DOE uses the NIA spreadsheet models to project national energy savings. e. Impact of Any Lessening of Competition EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(V)). It also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6316(a); 42 U.S.C. E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 6295(o)(2)(B)(ii)) To assist the Department of Justice (‘‘DOJ’’) in making such a determination, DOE transmitted copies of its proposed rule and the NOPR TSD to the Attorney General for review, with a request that the DOJ provide its determination on this issue. In its assessment letter responding to DOE, DOJ noted the possibility of anticompetitive effects stemming from the differences between the energy conservation standards for DPPP motors and DPPPs, as well as the high cost of compliance for domestic small businesses identified by DOE. DOJ elaborated that the difference in standards between DPPP motors and DPPPs would force domestic manufacturers to comply with both standards while foreign manufacturers could import DPPPs that are compliant with the DPPP rule but contain a noncompliant motor. DOJ ultimately concluded that they do not have sufficient information to conclude that the proposed energy conservation standards for DPPP motor are likely to have a significant adverse impact on competition. DOE notes that DPPP motors that are a component of an imported DPPP are subject to energy conservation standards. DOE is publishing the Attorney General’s assessment at the end of this final rule. f. Need for National Energy Conservation DOE also considers the need for national energy and water conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the adopted standards are likely to provide improvements to the security and reliability of the Nation’s energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the Nation’s electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the Nation’s needed power generation capacity, as discussed in section IV.M of this document. DOE maintains that environmental and public health benefits associated with the more efficient use of energy are important to take into account when considering the need for national energy conservation. The adopted standards are likely to result in environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases (‘‘GHGs’’) associated with energy production and use. DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 section IV.K of this document; the estimated emissions impacts are reported in section V.B.6 of this document. DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L this document. g. Other Factors In determining whether an energy conservation standard is economically justified, DOE may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant information regarding economic justification that does not fit into the other categories described previously, DOE could consider such information under ‘‘other factors.’’ 2. Rebuttable Presumption EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the equipment that meets the standard is less than three times the value of the first year’s energy savings resulting from the standard, as calculated under the applicable DOE test procedure. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(iii)) DOE’s LCC and PBP analyses generate values used to calculate the effect potential amended energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the Nation, and the environment, as required under 42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE’s evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section IV.F of this final rule. IV. Methodology and Discussion of Related Comments This section addresses the analyses DOE has performed for this rulemaking with regard to DPPP motors. Separate subsections address each component of DOE’s analyses. DOE used several analytical tools to estimate the impact of the standards considered in this document. The first tool is a spreadsheet that calculates the PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 66981 LCC savings and PBP of potential amended or new energy conservation standards. The national impacts analysis uses a second spreadsheet set that provides shipments projections and calculates national energy savings and net present value of total consumer costs and savings expected to result from potential energy conservation standards. DOE uses the third spreadsheet tool, the Government Regulatory Impact Model (‘‘GRIM’’), to assess manufacturer impacts of potential standards. These three spreadsheet tools are available on the DOE website for this rulemaking: www.eere.energy.gov/ buildings/appliance_standards/ standards.aspx?productid=76. Additionally, DOE used output from the latest version of the Energy Information Administration’s (‘‘EIA’s’’) Annual Energy Outlook (‘‘AEO’’) for the emissions and utility impact analyses. A. Market and Technology Assessment DOE develops information in the market and technology assessment that provides an overall picture of the market for the products concerned, including the purpose of the products, the industry structure, manufacturers, market characteristics, and technologies used in the products. This activity includes both quantitative and qualitative assessments, based primarily on publicly available information. The subjects addressed in the market and technology assessment for this rulemaking include (1) a determination of the scope of the rulemaking and product classes, (2) manufacturers and industry structure, (3) existing efficiency programs, (4) shipments information, (5) market and industry trends, and (6) technologies or design options that could improve the energy efficiency of DPPP motors. The key findings of DOE’s market assessment are summarized in the following sections. See chapter 3 of the final rule TSD for further discussion of the market and technology assessment. 1. Scope of Coverage and Definitions This document covers equipment meeting the definition of a DPPP motor as defined in 10 CFR 431.483 and the scope specified in 10 CFR 431.481(b). Specifically, the scope covers DPPP motors with a THP of less than or equal to 5, but does not apply to: (i) DPPP motors that are polyphase motors capable of operating without a drive and distributed in commerce without a drive that converts single-phase power to polyphase power; (ii) waterfall pump motors; (iii) rigid electric spa pump motors; (iv) storable electric spa pump motors; (v) integral cartridge-filter pool E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 66982 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations pump motors; and (vi) integral sandfilter pool pump motors.39 The scope includes DPPP motors regardless of how the equipment is sold; i.e., incorporated in a DPPP or sold separately. The DPPP motors in the scope of this rule are used primarily in the residential sector and light commercial applications, in selfpriming pool filter pumps (typically used in inground pools), non-selfpriming pool filter pumps (typically used in above-ground pools), and pressure cleaner booster pumps (typically used for pressure-side pool cleaner applications). DOE received some comments on scope and definitions. PHTA and NEMA commented that storable pools use nonintegral pumps, which are certified to DPPP, but the current direct motor replacements are not variable-speed capable per what the NOPR would require. PHTA and NEMA stated that the replacement motors made for this type of pool are motors integrated with the control unit, and that these motors are specific to a set pump for the storable pool and cannot be used in other applications, as there is no way to (dis)connect them. PHTA and NEMA further stated that these pools are purchased in retail stores, and based on input from two manufacturers, have an average retail price slightly over $400. Accordingly, PHTA and NEMA recommended that DOE consider exempting this specific type of motor based on application and obtain additional manufacturer information about this specific product related to the current market, shipments, and pricing for this type of pool, and to consider the limited use of replacement motors. (PHTA and NEMA, No. 92 at p. 5) DPPP motors in scope are those electric motors identified in sections 1.2, 1.3, and 1.4 of UL 1004–10:2022. 10 CFR 431.481(n), as updated in this final rule. DOE notes that the DPPP definition comprises self-priming pool filter pumps, non-self-priming pool filter pumps, waterfall pumps, PCBPs, integral sand-filter pool pumps, integralcartridge filter pool pumps, storable electric spa pumps, and rigid electric spa pumps. 10 CFR 431.462. In addition, section 1.4 of UL 1004– 10:2022 specifically excludes DPPP motors that are polyphase motors capable of operating without a drive and distributed in commerce without a drive that converts single-phase power to polyphase power, waterfall pump 39 These terms are defined in UL 1004–10:2020, which is incorporated by reference in DOE’s test procedure at 10 CFR 431.484. In this NOPR, DOE is proposing to reference the latest version of the UL standard, UL 1004–10:2022; see discussion in section III.A.1 of this document. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 motors, rigid electric spa pump motors, storable electric spa pump motors, integral cartridge-filter pool pump motors, and integral sand-filter pool pump motors. As such, the example application provided by PHTA and NEMA would need to meet the definition of DPPP and not be one of the aforementioned exclusions to be considered within the scope of DPPP motor. As previously noted, storable electric spa pump motors are specifically excluded from the scope of this rulemaking. Section 2 of UL 1004– 10:2022 defines storable electric spa pump motor as a DPPP motor that is a component of a storable electric spa pump as defined 10 CFR 431.462, subpart Y, Pumps. Storable electric spa pumps are defined to include an integral heater and an integral air pump. 10 CFR 431.462. The example application provided by PHTA and NEMA specifically stated that it has a non-integral pump. However, PHTA and NEMA did not provide details on what type of DPPP the example would be considered to be. As such, DOE attempted to determine what type of product PHTA and NEMA were referring to and reviewed manufacturer data and specification sheets to confirm what type of DPPP the example could be considered to be. Based on DOE’s review, DOE did not identify any DPPPs for storable pumps that would not be applicable to variablespeed motors as defined due to their integration with controls and other components, and not already be excluded for other reasons. Specifically, of the examples DOE was able to find of variable-speed motors integrated with controllers, they were applicable to integral-cartridge or integral-sand filter pumps, both of which are already excluded from DPPP motor scope. Otherwise, DOE also reviewed an outlier filtration system for storable pools, but could not identify any apparent integration of the DPPP motor with controls, and there was also no indication that it would not be able to be replaceable with a variable-speed option being considered in this rulemaking. As such, DOE could not definitively conclude that there is a need for the exclusion recommended by PHTA and NEMA, and therefore maintains the scope from the June 2022 NOPR. Regarding the variable-speed definition, CEC and NYSERDA recommended that DOE update the definition to align with the definition used in the California Code of Regulations, Title 20, section 1602(g)(4), instead of the current definition based PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 on UL 1004–10:2022. CEC and NYSERDA stated that with the current definition, at minimum, only four operating speeds are required to meet the definition, whereas the California code specifies ‘‘operating at a variety of user-determined speeds,’’ which CEC and NYSERDA suggested described a truly variable-speed motor and aligns with how variable-speed is understood by consumers. CEC and NYSERDA noted that they were unaware of any DPPP motors that meet the current definition of variable speed, but do not meet the Title 20 California definition. However, CED and NYSERDA also commented that if such a motor exists, having only four operating speeds would constrain operational flexibility and lead to non-optimal operation and unnecessary electricity consumption. CEC and NYSERDA stated that allowing for the potential introduction of less energy efficient ‘‘variable-speed’’ motors is unnecessary and might jeopardize some of the energy savings associated with this proposed rule. (CEC and NYSERDA, No. 94 at pp. 3–4) DOE incorporated by reference UL 1004–10:2020, which includes a definition of variable speed in the July 2021 Final Rule. 86 FR 40765, 40769– 40770. UL 1004–10 is an industry standard specific to DPPP motors and has been used by industry since 2019. In this final rule, DOE is not considering any changes in scope; rather, this rulemaking is finalizing standards based on the scope and definitions established in the July 2021 Final Rule, and which are currently in 10 CFR 431.481. Further, as noted by commenters, there are no DPPP motors that meet the current definition of variable speed but do not meet the Title 20 California definition. As such, if there is any discrepancy in the future, DOE may consider this issue in a future rulemaking. In the June 2022 NOPR, DOE also proposed to update the UL 1004–10 reference to the latest version of the industry standard, from UL 1004– 10:2020 to UL 1004–10:2022, in sections 10 CFR 431.481(b), 10 CFR 431.482(c)(1), and 10 CFR 431.483. 87 FR 37122, 37133–37134. DOE concluded that the only update was the addition of a glossary term for ‘‘factory default setting’’ in section 2.7A, which did not change the content and requirements of UL 1004–10:2020, but only provided a clarification regarding the factory default setting as it applies to the industry standard. Id. Further, DOE also proposed product-specific enforcement requirements at 10 CFR 429.134 that require DPPP motors be tested in accordance with UL 1004– E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 10:2022 to verify variable-speed capability and applicable freeze protection design requirements. 87 FR 37122, 37131. In response, PHTA and NEMA supported the DOE’s decision to update from the 2020 to the 2022 version of the UL 1004–10 Standard. (PHTA and NEMA, No. 92 at p. 10) In this final rule, DOE is incorporating by reference the latest version of the UL standard, UL 1004–10:2022 to be consistent with industry practice. Separately, the Joint Advocates supported the proposed productspecific enforcement provisions because they will provide clarity regarding how DOE would determine whether a DPPP motor complies with the requirements regarding variable-speed capability and freeze protection design. (Joint Advocates, No. 97 at p. 2) As such, DOE is also finalizing the proposed productspecific enforcement requirements at 10 CFR 429.134. 2. Market Review In the June 2022 NOPR, to review the current market of DPPP motors incorporated in DPPPs, DOE relied on information from the DOE Compliance and Certification Database, the CEC, and the ENERGY STAR program. (‘‘2021 DPPP Database’’) To supplement the market review, DOE also reviewed general motor catalog data from 2020 and created a database that contained information regarding motor speedcontrol, topology, THP, motor application, and full-load efficiency (‘‘2020 Motor Database’’). To make the two databases more comparable, DOE filtered the 2020 Motor Database to analyze only motors used in DPPP applications. 87 FR 37122, 37134. DOE received a number of comments regarding the data that were used for the market analysis. Pentair commented that a lot has changed in the past 7 years and DOE should consider the latest data versus data used for the DPPP rule in 2015. (Pentair, No. 90 at p. 1) Hayward commented that DOE should update its information on the current market. Specifically, Hayward noted that it has stopped selling any pumps that were not compliant with the minimum WEF requirements and modified other pumps that were marginal in performance. In addition, Hayward noted that variablespeed pumps have continued to gain market share and therefore would provide a different baseline. (Hayward, No. 93 at p. 2) PHTA and NEMA commented that DOE relied heavily on the analysis performed during the 2017 DPPP DFR and recommended that DOE conduct interviews to obtain current market information, pricing, and VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 shipments data. (PHTA and NEMA, No. 92 at p. 2) Regal commented that it agrees with PHTA and NEMA’s comments that DOE should consider conducting additional interviews and analyses to better understand current market offerings, pricing, and shipments. (Regal, No. 98 at p. 1) PHTA commented that using 2015 market data is not accurate because the DPPP market has substantially changed since then and the 2015 data is invalid in its application to the DPPPM analysis. PHTA provided data showing that nearly 60 percent of pool pump listings were non-compliant with the 2017 DPPP rule and had to be modified or removed by the July 19, 2021 compliance date. (PHTA, No. 100 at p. 2) On the other hand, CEC and NYSERDA stated that DOE’s analysis is robust and appropriately representative. (CEC and NYSERDA, No. 94 at p. 3) First, DOE notes that DOE did consider the latest DPPPM market data available for the analysis conducted in the June 2022 NOPR, as previously discussed. In addition, for this final rule, DOE updated the market review using current information from the DOE Compliance and Certification Database, the CEC, and the ENERGY STAR program. (‘‘2022 DPPP Database’’) DOE supplemented this review with information from general motor catalogs surveyed in 2022; these motor catalogs contained information regarding motor THP, topology, full-load efficiency, pole configuration, and speed-control. DOE then analyzed the range of efficiencies offered at a given THP, topology, and pole configuration as well as the average efficiency of that subset of motors. DOE found that the average and range of efficiency offered for a given THP, topology, and pole configuration were not significantly different than what was observed in the data provided by manufacturers for the January 2017 Direct Final Rule. Based on the similar efficiencies being offered, DOE concluded that the technology used to meet each efficiency level has not substantially changed since the analysis for the January 2017 Direct Final Rule. DOE notes that the shipments efficiency distribution are based on a review of the 2022 DPPP Database and that this updated database captures the changes to the DPPP market that have occurred since 2017, including those changes due to the January 2017 Direct Final Rule (See section IV.F.8 of this document for more details). For details on how DOE accounted for the DPPP motor price changes since the January 2017 Direct Final Rule, see section IV.C.2 of this document. DOE also notes that it had conducted manufacturer PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 66983 interviews as part of the January 2017 Direct Final Rule and incorporated the updated manufacturer feedback in its analysis. DOE also conducted DPPP motor manufacturer interviews as part of the June 2022 NOPR, as discussed in the manufacturer impact analysis, and incorporated feedback to estimate the manufacturer impacts of setting variable-speed requirements as standards. 87 FR 37122, 37154. As such, DOE concluded that additional manufacturer interviews were not needed since DOE performed interviews, and already considered recent market offering, pricing, and shipments information in this final rule. 3. Equipment Classes When evaluating and establishing energy conservation standards, DOE shall establish separate standards for a group of covered products (i.e., establish a separate equipment class) if DOE determines that separate standards are justified based on the type of energy used, or if DOE determines that a product’s capacity or other performance-related feature, which other products within such type (or class) do not have, justifies a different standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)) In making a determination whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility of the feature to the consumer and other factors DOE determines are appropriate. (Id.) In the June 2022 NOPR, DOE proposed to establish equipment classes for DPPP motors based on THP. DOE proposed an extra-small-size equipment class corresponding to motors with a THP less than 0.5 THP, a small-size equipment class corresponding to motors with a total horsepower rating greater than or equal to 0.5 THP but less than 1.15 THP, and a standard-size equipment class corresponding to motors with a THP greater than or equal to 1.15 THP and less than or equal to 5 THP. 87 FR 37122, 37130. In response to the June 2022 NOPR, DOE received a number of comments regarding equipment classes. PHTA and NEMA recommended that DOE analyze DPPP motors based on equipment classes considered in the DPPP rule. PHTA and NEMA commented that it is critical to differentiate by application, not just size, to really determine what is or is not cost-effective. As such, PHTA and NEMA commented that if the analysis was separated based on PCBP self-priming and non-self-priming, it would show that not all the current proposed requirements were costeffective. Specifically, PHTA and NEMA E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 66984 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations stated that when looking at PCBP as a separate equipment class, a variablespeed requirement is not cost-effective (PHTA and NEMA, No. 92 at pp. 4–5) In addition, PHTA and NEMA commented that DOE should break down the 0.5–1.15 THP and analyze the following additional THP ranges: 0.5 < 0.75 THP; 0.75 < 1 THP; 1 > 1.15 THP based on the assessment of available products and previously recommended THP disaggregation. (PHTA and NEMA, No. 92 at p. 5; PHTA, No. 100 at p. 3) Further, PHTA and NEMA commented that breaking down the 0.5–1.15 THP into smaller categories for an analysis would provide a truer picture of costeffectiveness when combined with breaking out PCBP self-priming and non-self-priming applications. PHTA and NEMA stated that to do otherwise will cause market confusion and unintended consequences with noncompliant products being distributed. For example, PHTA and NEMA commented that imported pump products with THP ratings between 0.50 and 1.14 can meet the DPPP rule and bypass the DPPP motor proposal, which will negate the DPPP motor proposed rule and not deliver the intended energy savings. (PHTA and NEMA, No. 92 at p. 10) Hayward stated that equipment class should be disaggregated by pump size and application and noted that THP misrepresents the overall effect and impact of the rule. Hayward also supported PHTA and NEMA’s recommendations on disaggregation. (Hayward, No. 93 at p. 2) Fluidra recommended that equipment be disaggregated not only by THP, but also by application type. Specifically, Fluidra commented that it was concerned that PCBPs and pool filtration pumps were combined into the same equipment class. (Fluidra, No. 91 at p. 1) Waterway Plastic commented that in the negotiations that resulted in the January 2017 Direct Final Rule, there was consideration of a separate category for non-self-priming pool pumps that are used in above-ground pool pump applications, that range from 0.75 to 1 THP, and are typically two-speed or single-speed pumps. Accordingly, they stated that the DPPPM rule would not consider this separate category of DPPPs, which allowed for single- or two-speed DPPPMs to be used to meet the ultimate WEF standard, and were concerned on how the DPPPM rulemaking would overwrite the conclusions from the January 2017 Direct Final Rule. (Waterway Plastic, Public Meeting Transcript, No. 88 at pp. 16–17) Dose also commented asking if VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 DOE considered breaking the small-size THP range into subcategories after they suggested the favorable results would be from the higher THPs. (Dose, Public Meeting Transcript, No. 88 at pp. 39–40) DOE notes that this rule concerns DPPP motors, not DPPPs. Further, DOE notes that the scope includes DPPP motors regardless of how the equipment is sold (i.e., incorporated in a DPPP or sold separately). Accordingly, imported pump products that include a DPPP motor would be subject to the DPPP motor standard as well. When considering equipment classes, DOE determines whether separate standards are justified based on the type of energy used for the equipment in question (which in this rulemaking is DPPP motors only), or if a DPPP motor’s capacity or other DPPPM performancerelated feature justifies a different standard. Manufacturers of covered equipment must use the Federal test procedure as the basis for certifying to DOE that their equipment complies with the applicable energy conservation standards adopted pursuant to EPCA (42 U.S.C. 6316(a); 42 U.S.C. 6295(s)). The metric for DPPP motors based on the DOE test procedure is full-load efficiency (10 CFR 431.484(b)), and fullload efficiency does not take into consideration the ultimate application of the DPPP motor in a DPPP and the motor is tested without an associated DPPP. The DPPP motors in this rule also consume the same type of energy. Further, DOE notes that there are no physical or technological distinguishing factors in a DPPP motor that could be used to identify a particular end-use DPPP application (e.g., PCBP, selfpriming, non-self-priming). If sized correctly, a given DPPP motor could serve any of the DPPP applications discussed in this rulemaking. The ranges of motor THP that serve each application overlap and preclude DOE from setting equipment classes using the motor THP to distinguish each application. Accordingly, DOE is not considering DPPP application in addition to motor THP when setting equipment classes and energy conservation standards for this final rule. In the June 2022 NOPR, DOE discussed that full-load efficiency generally correlates with motor horsepower. DOE explained motor horsepower dictates the maximum load that a motor can drive, which means that a motor’s rated horsepower can influence and limit the end use applications where that motor can be used, which in this case is dedicated purpose pool pumps. Horsepower is a critical performance attribute of a DPPP PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 motor, and since horsepower has a direct relationship with full load efficiency and consumer utility, used this element as a criterion for distinguishing among equipment classes. 87 FR 37122, 37134. In determining the proposed equipment classes, DOE considered how motor total horsepower can be used to decide whether separate standards are justified based on the utility of the DPPP motor. Accordingly, DOE first justified a utility argument for the 0.5 THP cut-off based on maximum efficiency potential in non-self-priming pool filter pumps (i.e., two-speed or variable-speed motors below 0.5 THP would provide inadequate flow to the pool pump). Finally, DOE justified a utility argument for the 1.15 THP cut-off based on how almost all DPPP motors greater than or equal to 1.15 THP are primarily used in standard-size self-priming pool filter pumps, while pool pump motors below 1.15 THP are typically found in smallsize, self-priming pool filter pumps, non-self-priming pool filter pumps, and PCBPs. 87 FR 37122, 37135. To review the recommendation from PHTA and NEMA to further break down the 0.5–1.15 THP range (i.e., small-size equipment class), DOE analyzed the 2022 DPPP Database to determine whether there was any other utility argument to consider. DOE identified DPPP motors used in PCBP applications primarily in the 0.75–1.15 DPPP motor THP range; however, PCBPs in that range were only 4 percent of the total model count (96 percent of the models were either self-priming or non-selfpriming). Further, DPPP motors in selfpriming pool filter pumps and non-selfpriming pool filter pumps were identified throughout the small-size equipment class THP range. Accordingly, there was no THP range within the small-size equipment class that clearly illustrated that only PCBP motors would be used and therefore have a specific utility, and so, DOE was unable to determine a clear utility argument that would allow for the small-size equipment class to be segregated further. Therefore, because DOE is not considering DPPP application in addition to motor total horsepower for creating equipment classes, DOE is maintaining the June 2022 NOPR proposed equipment classes in this final rule. Fluidra recommended including a definition for a PCBP DPPP motor as ‘‘a motor used for a pressure cleaner booster pump’’, and a definition for pressure cleaner booster pump as ‘‘an end suction, dry rotor pump designed and marketed for pressure-side pool cleaner applications, and which may be E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 UL listed under ANSI/UL 1081–2016. (Fluidra, No. 91 at p. 2) PHTA and NEMA recommended that DOE define a PCBP DPPP motor as ‘‘an electric motor that is single phase or poly phase and is designed and/or marketed for use on pressure cleaner booster pumps, as defined in 10 CFR 431.462.’’ PHTA and NEMA commented that this definition aligns with the definitions of a DPPP motor and PCBP, both of which define the respective equipment based on the design and marketed purpose of the equipment. (PHTA and NEMA, No. 92 at pp. 4–5) DOE understands that the definitions provided by the commenters were intended for distinguishing PCBP within the equipment class structure. As discussed previously, DOE is not separating equipment classes based on application. As such, DOE does not need to incorporate a definition for a PCBP motor and is therefore not including a definition in this final rule. 4. Technology Options In the June 2022 NOPR market analysis and technology assessment, DOE identified several technology options initially determined to improve the efficiency of DPPP motors. Specifically, DOE stated that the efficiency of a DPPP motor is dependent on motor topology, capacity, and operating speed. Because DOE proposed to delineate equipment classes based on motor capacity (i.e., motor horsepower), DOE considered motor topology and operating speed as technology options. 87 FR 37122, 37135–37136. For motor topology, DOE considered AC induction motors and permanent magnet DPPP motors. Within AC induction motors, DOE identified six categories of motors, including shadedpole, split-phase, capacitor-start (capacitor-start induction-run ‘‘CSIR’’ and capacitor-start capacitor-run ‘‘CSCR’’), permanent-split capacitor (‘‘PSC’’), and polyphase. 87 FR 37122, 37135–37136. For operating speed, DOE considered single-speed, multi-speed, and variable-speed DPPP motors. Single-speed motors can operate at one predefined speed, and therefore the associated pool pump can provide only a single flow rate in any given pool system. Two-speed motors can be sized so that high-flow functions like pool cleaning are effective at full-speed operation and low-flow tasks like filtration can be completed at low-speed operation. Multi-speed motors function similarly to two-speed motors, but provide additional flexibility. Finally, variable-speed motors can provide greater energy savings than two-speed or multi-speed motors due to the ability to program these motors to operate at user- VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 defined speed settings. 87 FR 37122, 37136. Variable-speed motors can also offer non-energy-saving benefits like reduced pool system wear and reduced noise levels during operation, both due to the reduced amount of water flow during pumping. DOE requested comment on the technologies considered for higher DPPP motor efficiency. Id. PHTA and NEMA commented that to meet the current DPPP rulemaking, synchronous motor technologies with a variable frequency drive are already being utilized to meet system efficiency requirements. As such, PHTA and NEMA suggested that small additional increments in already implemented synchronous motor efficiency will have minimal impact on system efficiency, but significant impact on costs. (PHTA and NEMA, No. 92 at p. 10) DOE notes that this rule is specifically regarding the DPPP motor, not DPPP, and therefore technology options considered are with regards to DPPP motors and not the whole DPPP system. DOE also understands that meeting the current DPPP WEF standards would not require synchronous motor technologies for the range of DPPP motor equipment classes being considered. Specifically, in the October 2020 NOPR, DOE specified that only standard-size self-priming pool filter pumps, which are subject to the DOE DPPP energy conservation standards, would likely require a variable-speed control motor. 85 FR 62816, 62824. DOE noted that this generally reflects DPPP motors with a THP greater than or equal to 1.15. Id. As such, there are potential savings to be considered for the full scope of DPPP motors being considered, and as discussed previously, the synchronous motor technology option allows for multiple operating speeds, which can provide energy savings. Finally, DOE included the incremental costs for requiring variable speed as part of the engineering analysis, which is discussed further in section IV.C.2 of this document. Similarly, PHTA and NEMA commented that variable-speed fractional HP pumps cannot provide minimum flow at required lower speeds. (PHTA and NEMA, No. 100 at p. 3) DOE notes that variable-speed motors are only considered as a design option for DPPP motors where the associated pump can provide adequate flow at lower speeds, and that the representative units analyzed in the January 2017 Direct Final Rule contained fractional THP variable-speed motors. See Table 5.6.5 of the January 2017 Direct Final Rule TSD, where a .44 hhp pump is driven by a .75 THP PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 66985 variable-speed motor and provides adequate flow. Separately, Fluidra, PHTA, and NEMA suggested that the operating window of a PCBP in practical application is limited to an approximate motor speed of 2,900 RPM–3,450 RPM (max speed); runs on a timer for 2–2.5 hours a day at a single operating speed; and, once set, is typically not further adjusted for speed like one would for a filtration pump. (Fluidra, No. 101 at p. 1; PHTA and NEMA, No. 100 at p. 3) Accordingly, Fluidra and PHTA stated that the definition for a variable-speed control DPPP motor does not make practical sense in a PCBP application, and therefore recommended separating PCBP requirements from other DPPP applications. (Fluidra, No. 101 at pp. 1– 3; PHTA, No. 100 at pp. 2–3) DOE notes that the definition for variable speed comes from UL 1004–10:2020, which is an industry standard DOE incorporated by reference in the July 2021 Final Rule based on recommendations from several stakeholders. 86 FR 40765, 40769– 40770. (July 29, 2021). Further, the scope of UL 1004–10:2020 does not specifically exclude PCBP applications for DPPP motors. See section 1 of UL 1004–10:2020. As such, DOE concludes that the definitions from UL 1004– 10:2020 are applicable to all DPPP motors in scope, including PCBPs, and there is no technical reasoning to exclude application to PCBPs. Separately, in the January 2017 Direct Final Rule, DOE also considered variable-speed motors for PCBPs (82 FR 5650, 5684), as the WEF metric accounts for energy savings available from reducing the pump speed to reach the minimum required pressure of 60 feet. See section 3.6.2 of the January 2017 Direct Final Rule TSD. While the test procedure specifies only one load point for testing PCBPs (see Table 1 of appendix C to subpart Y of 10 CFR part 431), the test procedure does not specify that PCBPs are tested at maximum speed; rather, it specifies that PCBPs are tested at the lowest speed that can achieve 60 feet of head at the 10 gpm test condition. Therefore, a PCBP may be able to achieve a higher (more beneficial) WEF score if it has the ability to operate at reduced speeds, and as such, the definition for a variable-speed control DPPP motor would still make practical sense in terms of examining energy savings potential. Finally, as part of the January 2017 Direct Final Rule, the DPPP Working Group discussed that PCBPs on the market supply between 100 and 125 feet of head at the pump outlet at the test condition of 10 gpm, but these pumps provide more pressure than the cleaner E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 66986 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations requires because the pump must overcome head losses imposed by piping, couplings, and hoses between the pump and the cleaner. In pool installations with high head loss, these pumps may deliver the recommended amount of head to the cleaner when operating at maximum speed with no flow restriction; in pool installations with low head loss, these pumps may supply more head than is needed to drive the pressure cleaner. As such, the DPPP Working Group discussed how, in installations with low head loss, energy could be conserved by operating the pressure cleaner booster pump at a reduced speed rather than by releasing pressure that was supplied unnecessarily. Therefore, there is benefit to variable-speed control for PCBP applications. See section 3.6.2.2 of the January 2017 Direct Final Rule TSD. NEEA recommended that DOE include non-proprietary, standardized connectivity design requirements for DPPP motors consistent with the voluntary requirements in the ENERGY STAR Product Specification for Pool Pumps Version 3.1. The ENERGY STAR specification presents connected product criteria for a connected pool pump system (‘‘CPPS’’). As part of the CPPS criteria, ENERGY STAR requires communication and demand response functionality. Specifically, ENERGY STAR requires that the CPPS shall meet the communication and equipment performance standards for OpenADR 2.0 and/or CTA–2045. NEEA commented that this requirement to use these nonproprietary communication protocols and hardware standards ensures there is an open-source platform that allows demand response service providers and utilities to interface with as many demand response customers as possible. NEEA noted that the DOE DPPP motor rule would benefit from this additional demand response design requirement because the DPPP motor serves as the energy-consuming component of the pool pump. However, NEEA further recommended that this requirement additionally be applied to the pool pumps themselves, so that the pump controller can provide interface for response signals. Finally, NEEA noted that connectivity design requirements would provide the greatest benefits to two-speed or variable-speed motors, and that DOE should assess the additional cost requirements for integrating connectivity requirements into DPPP motors with the multitude of efficiency and grid benefits that grid-connected pool pumps can provide. NEEA also provided an example of a case study by VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 Electric Power Research Institute,40 which showed connected pool pumps systems can provide significant grid benefits. (NEEA, No. 99 at pp. 1–2) The subject of this final rule is DPPP motors, which are within the scope of electric motors. DOE notes that these potential design criteria described by NEEA would not directly impact the measured efficiency of DPPP motors per the DOE test procedure, but could serve an important purpose for grid flexibility generally, when used in conjunction with the DPPP. For this final rule, DOE is only considering technology options that can be directly implemented as part of the DPPP motor to improve measured efficiency. As such, an additional connectivity design requirement would be beyond the scope of this final rule and therefore is not being considered at this time. B. Screening Analysis DOE uses the following four screening criteria to determine which technology options are suitable for further consideration in an energy conservation standards rulemaking: (1) Technological feasibility. Technologies that are not incorporated in commercial products or in commercially viable, existing prototypes will not be considered further. (2) Practicability to manufacture, install, and service. If it is determined that mass production of a technology in commercial products and reliable installation and servicing of the technology could not be achieved on the scale necessary to serve the relevant market at the time of the projected compliance date of the standard, then that technology will not be considered further. (3) Impacts on product utility. If a technology is determined to have a significant adverse impact on the utility of the product to subgroups of consumers, or results in the unavailability of any covered product type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as products generally available in the United States at the time, it will not be considered further. (4) Safety of technologies. If it is determined that a technology would have significant adverse impacts on health or safety, it will not be considered further. 40 Performance Test Results: CTA–2045 Variable Speed Pool Pumps, https://www.bpa.gov/-/media/ Aep/energy-efficiency/emerging-technologies/ETDocuments/NREL-testing-CTA-2045VariableSpeedPoolPump-Nov2017000000003002011749.pdf. PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 (5) Unique-pathway proprietary technologies. If a technology has proprietary protection and represents a unique pathway to achieving a given EL, it will not be considered further, due to the potential for monopolistic concerns. 10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, sections 6(c)(3) and 7(b). In sum, if DOE determines that a technology, or a combination of technologies, fails to meet one or more of the listed five criteria, it will be excluded from further consideration in the engineering analysis. The reasons for eliminating any technology are discussed in the following sections. In the June 2022 NOPR, DOE determined that all the technology options considered continue to be technologically feasible because they are being used or have previously been used in commercially available products or working prototypes. DOE also found that the technology options continue to meet the other screening criteria (i.e., practicable to manufacture, install, and service; do not result in adverse impacts on consumer utility, product availability, health, or safety; and are not unique-pathway proprietary technologies). 87 FR 37122, 37137. As such, DOE screened-in all technology options considered. DOE did not receive any comments regarding the screening analysis. As such, through a review of each technology, similar to the conclusions from the June 2022 NOPR, DOE concludes that all of the identified technologies listed in section IV.A.4 of this document met all five screening criteria to be examined further as design options in DOE’s final rule analysis. C. Engineering Analysis The purpose of the engineering analysis is to establish the relationship between the efficiency and cost of DPPP motors. There are two elements to consider in the engineering analysis: the selection of efficiency levels to analyze (i.e., the ‘‘efficiency analysis’’) and the determination of product cost at each efficiency level (i.e., the ‘‘cost analysis’’). In determining the performance of higher-efficiency equipment, DOE considers technologies and design option combinations not eliminated by the screening analysis. For each equipment class, DOE estimates the baseline cost, as well as the incremental cost for the equipment at efficiency levels above the baseline. The output of the engineering analysis is a set of cost-efficiency ‘‘curves’’ that are used in downstream analyses (i.e., the LCC and PBP analyses and the NIA). E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations 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 final rule, DOE applied a combination of the two approaches. In line with the January 2017 Direct Final Rule, DOE considered three tiers of motor efficiency (low, medium, and high efficiency) and design requirements specifically for two-speed, multi-speed, and variable-speed motors. As discussed in sections IV.A.2 and IV.A.4 of this document, the motor technologies applicable to pool pump motors analyzed in the January 2017 Direct Final Rule remain relevant and applicable in the current DPPP motor market. 66987 a. Representative Units In the June 2022 NOPR, DOE opted to use representative units for each equipment class for the engineering analysis. The associated motor THP of the proposed representative units were consistent with the motor THPs provided in Table 5.7.1 of the January 2017 Direct Final Rule TSD, with three exceptions: (1) Representative unit 2A was added to represent standard-size DPPP motors that are used in small-size self-priming DPPPs; (2) Representative unit 6 was added to analyze standardsize DPPP motors used in non-selfpriming filter pump applications; and (3) Representative unit 7 at 1.125 THP, instead of 1.25 THP was considered so as to keep this representative unit in the small-size equipment class (EC 2), and to better represent the THP range of motors in PCBPs.41 87 FR 37122, 37137–37138. The proposed representative units are provided in Table IV.1. TABLE IV.1—REPRESENTATIVE UNITS THP AND DPPP APPLICATION Rep. unit 1 ................ 2 ................ 2A ............. 3 ................ 4 ................ 5 ................ 6 ................ 7 ................ Equipment class 2 3 3 3 1 2 3 2 THP (Small) ............................................. (Standard) ....................................... (Standard) ....................................... (Standard) ....................................... (Extra-small) .................................... (Small) ............................................. (Standard) ....................................... (Small) ............................................. DPPP application * 0.75 1.65 1.65 3.45 0.22 1 1.5 1.125 Self-priming Filter Pump, Small-size (0.44 hhp). Self-priming Filter Pump, Standard-size (0.95 hhp). Self-priming Filter Pump, Small-size (0.65 hhp). Self-priming Filter Pump, Standard-size (1.88 hhp). Non-Self-priming Filter Pump, Extra-Small-size (0.09 hhp). Non-Self-priming Filter Pump, Standard-size (0.52 hhp). Non-Self-priming Filter Pump, Standard-size (0.87 hhp). Pressure Cleaner Booster Pump. ddrumheller on DSK120RN23PROD with RULES2 * For self-priming pumps, the terms small and standard refer to the hydraulic horsepower (‘‘hhp’’). Small-size designates pool pump applications with hydraulic horsepower less than 0.711 hhp, while standard-size designates pool pump applications with hydraulic horsepower greater than or equal to 0.711 hhp. DOE distinguishes extra-small non-self-priming filter pumps (less than 0.13 hhp) and standard-size non-self-priming filter pumps (less than 2.5 hhp and greater than 0.13 hhp). In response to the proposal, DOE received a number of comments. Fluidra commented that Rep. Unit #4 appears too small and irrelevant and may only be used for pump/filter combos or spas, which is out of the scope of this regulation. (Fluidra, No. 91 at p. 3) Based on the 2022 DPPP Database, DOE notes that there are at least 15 non-selfpriming filter pumps having DPPP motors at or less than 0.22 THP. While Rep. Unit #4 may be a small segment of the whole DPPPM market (3 percent; see shipments in Table IV.9), these are DPPP motors that would be in scope as they are part of the non-self-priming DPPP motor class. For this final rule, DOE specifically included an extrasmall-size equipment class because DPPP motors in that class have different maximum efficiency potential than small- or standard-size equipment classes and therefore need to be analyzed separately. As such, DOE continues to include Rep. Unit #4 as part of the analysis. Fluidra also stated that Rep. Unit #7 only represents single-stage booster pumps and not multi-stage, which are typically >1.125 THP and significantly higher WEF, and therefore should be reviewed separately. (Fluidra, No. 91 at p. 3) PHTA stated that DOE should review the improvements made in booster pump hydraulic efficiency and go on to note that a multi-stage booster pump can result in a 40-percent higher WEF than a single-stage booster pump. (PHTA, No. 100 at p. 3) DOE notes that representative units exemplify typical capacities in each equipment class and are used to quantify the manufacturing costs and the energy savings potential for each equipment class. As discussed previously, almost all DPPP motors used in PCBPs have THPs less than 1.15 THP. DOE also confirmed the same in the 2022 DPPP Database, with PCBP applications having DPPPMs ranging from 0.75 to 1.13 THP, with the majority of the models in the 1.1 to 1.13 THP range. Accordingly, the chosen DPPP motor representative unit for the PCBP application, Rep. Unit #7 at 1.125 THP, was considered to represent the full THP range of motors in PCBPs, which 41 The Joint Petition noted that almost all motors used in pressure cleaner booster pumps have THPs less than 1.15 THP. (Joint Petition, No. 14 at p. 8). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 66988 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations are primarily in the small-size equipment class. The pump performance curve associated with the DPPP motor Rep. Unit #7 and used in the analysis was based on the pump performance curve used in the January 2017 Direct Final Rule. Section 5.8.2.3 of the January 2017 Direct Final Rule TSD specifically notes that DOE developed the equations by aggregating pump test data that were submitted by manufacturers, and does not specify that the test data was only for single-stage pumps. In reviewing the underlying data that were used to develop the equations, DOE can confirm that the selection of a representative PCBP unit and its corresponding performance characteristics was informed by the presence of more efficient multi-stage pumps available on the market to the extent they represent PCBP units with the exceptionally high hydraulic efficiency. However, DOE believed that these motors do not comprise as significant of a share of the market as single-stage pumps. Consequently, the ultimate representative unit and performance characteristics more closely resembled the single-stage PCBPs. PHTA and NEMA commented that PCBP motors at or above 1.15 THP were not included in the DOE analysis, and if DOE intends to regulate these products, PHTA and NEMA requested that DOE update the analysis. (PHTA and NEMA, No. 92 at p. 5) Further, in a separate comment, PHTA restated the need for analysis of PCBP motors above 1.15 THP. (PHTA, No. 100 at p. 2) Based on the 2022 DPPP Database, DOE identifies only one DPPP motor used in a PCBP application that would be above the 1.15 THP threshold. Further, based on the 2022 DPPP Database, DOE notes that the majority of DPPP motors above 1.15 THP are self-priming DPPP applications (74 percent based on model count), with non-self-priming DPPP applications being the next highest percentage (26 percent based on model count). DOE generally selects representative units based on the quantity of motor models available within an equipment class. Considering that the number of DPPP motors above 1.15 THP with a PCBP application is not significant, and that most DPPP motors with a PCBP application are in the small-size equipment class, DOE continues to consider Rep. Unit #7 only for PCBP applications. b. Baseline Efficiency For each product/equipment class, DOE generally selects a baseline model as a reference point for each class and measures changes resulting from VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 potential energy conservation standards against the baseline. The baseline model in each product/equipment class represents the characteristics of a product/equipment typical of that class (e.g., capacity, physical size). Generally, a baseline model is one that just meets current energy conservation standards, or, if no standards are in place, the baseline is typically the most common or least efficient unit on the market. In the June 2022 NOPR, mirroring the January 2017 Direct Final Rule, DOE considered the least-efficient singlespeed DPPP motor on the market for each representative unit. 87 FR 37122, 37138. DOE did not receive any comments regarding the baseline efficiencies, and therefore is maintaining the same levels from the June 2022 NOPR in this final rule. c. Higher Efficiency Levels As part of DOE’s analysis, the maximum available efficiency level (‘‘EL’’) is the highest efficiency unit currently available on the market. DOE also defines a ‘‘max-tech’’ efficiency level to represent the maximum possible efficiency for a given product. In the June 2022 NOPR, DOE proposed higher efficiency levels by substituting higher full-load efficiency DPPP motors and DPPP motors with finer levels of speed control, consistent with the January 2017 Direct Final Rule. 87 FR 37122, 37138. Efficiency levels 0 through 2 were consistent with Table 5.6.3 of the January 2017 Direct Final Rule TSD and represented the lowefficiency, medium-efficiency, and highefficiency performance of single-speed DPPP motors. Efficiency levels 3 through 6 incorporated certain design requirements based on motor speed capability and topology.42 DOE proposed that EL 3 require motors that are two-speed, multi-speed, or variablespeed, but with no restrictions on motor topology. EL 4 required motors that are two-speed or multi-speed, but did not allow for the low-efficiency motor topologies (split-phase, shaded-pole, CSIR)—or—required variable-speed motors. EL 5 required motors that are two-speed or multi-speed, but did not allow for PSC motors in addition to the other low-efficiency motor topologies— or—requires variable-speed motors. Finally, EL 6 included variable speed only, which provides the highest energy savings. 87 FR 37122, 37139. In response, CEC and NYSERDA commented that DOE should reevaluate 42 For the purposes of the analysis, however, DOE did consider the full-load efficiencies presented in Table 5.6.3 of the January 2017 Direct Final Rule TSD for efficiency levels 3 through 6. PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 the ‘‘max-tech’’ levels considered for small-size and standard-size DPPP motors, and work toward a performance metric that captures the benefits of variable-speed motors. Specifically, CEC and NYSERDA noted that not all variable-speed DPPP motors are created equal, because an AC induction motor paired with a variable-frequency drive and a permanent magnet motor with an integral drive exist and provide different performance characteristics depending on speed settings. Accordingly, CEC and NYSERDA encouraged DOE to update the DPPP motor test method and performance metric that can distinguish between different speed DPPP motors and between different categories of variable-speed DPPP motors. While CEC and NYSERDA noted that this approach may be outside the scope of the current rulemaking, they stated that it is important to acknowledge that the proposed efficiency levels for small-size and standard-size DPPP motors do not represent ‘‘max-tech,’’ and that there are potential future improvements for both the DPPP motor test method and the DPPP motor energy conservation standards. (CEC and NYSERDA, No. 94 at p. 6) The DOE test procedure in 10 CFR 431.484(b) establishes full-load efficiency as the metric for DPPP motors. For the engineering analysis, while DOE considers full-load efficiency per the DOE test procedure for ELs 0 through 3, the higher ELs only consider design requirements based on speed control. Accordingly, the variable-speed requirement considered as part of the analysis is based on the definition of variable-speed control dedicatedpurpose pool pump motor in section 2 ‘‘Glossary’’ of UL 1004–10:2020.43 10 CFR 431.483. The variable-speed definition includes specific requirements for motor operation that are supposed to be met, but does not distinguish between the designs on the motors. As such, for this rulemaking, DOE is basing the engineering analysis on the definitions and test procedures prescribed at 10 CFR 431.484. DOE concurs that there may be future improvements for efficiency, and would consider these improvements in the next stage rulemaking. As such, in this final rule, DOE maintains the DPPP motor engineering 43 In this final rule, DOE is updating UL 1004– 10:2020 to UL 1004–10:2022. See further discussion in section IV.A.1 of this document. E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations 66989 analysis from the June 2022 NOPR, as presented in Table IV.2. TABLE IV.2—PERFORMANCE AND DESIGN REQUIREMENTS FOR DPPP MOTOR ELS EC Rep. unit Motor THP EL0 (%) EL1 (%) EL2 (%) Non-self-priming Filter Pump, Extra-Smallsize (0.09 hhp). Self-priming Filter Pump, Small-size (0.44 hhp). 55 69 55 Non-self-priming Filter Pump, Small-size (0.52 hhp). DPPP application EL3 * EL4 * EL5 * 76 ...................................... ...................................... ...................................... 69 76 Two-speed—OR— Multi-speed—OR— Variable-speed. 55 69 76 Two-speed—OR— Multi-speed—OR— Variable-speed. Pressure Cleaner Booster Pump. 55 69 76 Variable-speed only ..... Two-speed/Multi-speed, not CSIR, not shaded pole, not splitphase;—OR—Variable-speed. Two-speed/Multi-speed, not CSIR, not shaded pole, not splitphase;—OR—Variable-speed. Variable-speed only ..... Two-speed/Multi-speed, not CSIR, not shaded pole, not split-phase, not PSC;—OR—Variable-speed. Two-speed/Multi-speed, not CSIR, not shaded pole, not split-phase, not PSC;—OR—Variable-speed. Variable-speed only ..... Two-speed/Multi-speed, not CSIR, not shaded pole, not splitphase;—OR—Variable-speed. Two-speed/Multi-speed, not CSIR, not shaded pole, not splitphase;—OR—Variable-speed. Two-speed/Multi-speed, not CSIR, not shaded pole, not splitphase;—OR—Variable-speed. Two-speed/Multi-speed, not CSIR, not shaded pole, not splitphase;—OR—Variable-speed. Two-speed/Multi-speed, not CSIR, not shaded pole, not split-phase, not PSC;—OR—Variable-speed. Two-speed/Multi-speed, not CSIR, not shaded pole, not split-phase, not PSC;—OR—Variable-speed. Two-speed/Multi-speed, not CSIR, not shaded pole, not split-phase, not PSC;—OR—Variable-speed. Two-speed/Multi-speed, not CSIR, not shaded pole, not split-phase, not PSC;—OR—Variable-speed. 1 ....... 4 0.22 2 ....... 1 0.75 2 ....... 5 1 2 ....... 7 1.125 3 ....... 6 1.5 Non-self-priming Filter Pump (0.87 hhp). 55 69 77 Two-speed—OR— Multi-speed—OR— Variable-speed. 3 ....... 2 1.65 Self-priming Filter Pump, Standard-size (0.95 hhp). 55 69 77 Two-speed—OR— Multi-speed—OR— Variable-speed. 3 ....... 2A 1.65 Self-priming Filter Pump, Small-size (0.65 hhp). 55 69 77 Two-speed—OR— Multi-speed—OR— Variable-speed. 3 ....... 3 3.45 Self-priming Filter Pump, Standard-size (1.88 hhp). 75 79 84 Two-speed—OR— Multi-speed—OR— Variable-speed. EL6 * Variablespeed only. Variablespeed only. Variablespeed only. Variablespeed only. Variablespeed only. Variablespeed only. Variablespeed only. ddrumheller on DSK120RN23PROD with RULES2 * Includes freeze protection control design requirements. PHTA and NEMA commented that if DOE finds this 0.5 THP requirement feasible from a lifecycle cost analysis, motor manufacturers can produce motors meeting the performance requirements; however, this may result in replacement market fit issues as the product will become larger in size. (PHTA and NEMA, No. 92 at p. 10) Pentair stated concern with the proposal to require replacement motors as small as 0.5 THP to meet variable speed. Specifically, that if motors meeting the DPPP rule fail, then those motors will not be able to be replaced with an original single-speed motor. (Pentair, No. 90 at p. 1) A DPPP motor is subject to standards regardless of how it is sold (i.e., with or without a corresponding DPPP). As such, Pentair is correct that if DPPPs using a 0.5 THP motor or smaller sold before the compliance date of this rule fail after the compliance date of this rule, consumers would likely be unable to replace the original single-speed motor with a similar single-speed motor. See section IV.G.3 for more discussion of repair scenarios in the standards VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 cases. Additionally, DOE notes that there are a number of variable-speed DPPP motors on the market that are currently being used in DPPPs. DOE also notes that PHTA, NEMA, and Pentair did not provide information supporting the claim that there may be fit issues. In other industries, variablespeed motors (particularly electronically commutated motors, or ECMs) have been produced to be drop-in replacements in larger equipment (i.e., with no fit issues) for single-phase and polyphase motors in horsepower ranges identified by commenters.44 There are no unique design characteristics of DPPP motors that would prevent variable-speed motors from being dropin replacements to single-speed DPPP motors.45 Accordingly, DOE cannot 44 www.regalrexnord.com/brands/genteq/ aftermarket-products/Evergreen-Motors/EvergreenVS-Motor. 45 As noted in section 5.7.1 of the January 2017 Direct Final Rule TSD, DOE researched the design and engineering constraints associated with motor substitution by examining manufacturer interview responses and holding discussions with the DPPP Working Group. DOE concluded that for the representative equipment capacities being considered, the wet end of the pump can be paired PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 conclude that there will be fit issues for DPPP motors in this lower THP range, and that in the scenario identified by Pentair the single-speed motor could be replaced by a variable-speed motor. Motor Input Power and Pump Hydraulic Power Each efficiency level presented in Table IV.2 has an associated energy factor (in Gallons/Watt-hour ‘‘G/Wh’’) and flow (in gallons per minute ‘‘gpm’’) used to determine efficiency of the pump system. In the June 2022 NOPR, DOE used the pump performance curves consistent with the January 2017 Direct Final Rule TSD to represent the energy factors and flows. 87 FR 37122, 37139. The CA IOUs commented that DOE should update its analysis to show motor turn-down savings from variablespeed motors. Specifically, the CA IOUs commented that the DOE analysis for PCBP assumes an operating point of 10 with a range of motors with various efficiencies and speed configurations without significant adaptations. See chapter 5 of the dedicated-purpose pool pumps direct final rule TSD, at www.regulations.gov/document?D=EERE-2015-BTSTD-0008-0105. E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 66990 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations gpm and 112 ft of head, which is not representative of variable-speed capability at EL 3 nor consistent with the DPPP test procedure. The CA IOUs recommended that DOE consider an operating point consistent with the DOE test procedure of 10 gpm and 60 ft of head, which the CA IOUs noted the industry and advocates agreed to this test point during the ASRAC negotiation for DPPP standard. The CA IOUs provided estimates of the input power and WEF for a variable-speed PCBP corresponding to a 60 ft head, and showing a 52-percent decrease compared to the values used in DOE’s NOPR analysis. (CA IOUs, No. 96 at p. 4) Nidec commented that PCBPs and variable speed will have to run at nearly full speed or maybe slightly less than full speed. Therefore, they stated that representation of power usage on variable speed is most likely incorrect in the analysis, which would make an assumption of actually having the ability to slow the speed down to take advantage of the power savings in lower speed. (Nidec, Public Meeting, No. 88 at pp. 28–29) As discussed in section IV.A.4, the DPPP Working Group considered variable-speed technology option for PCBPs because in installations with low head loss, energy could be conserved by operating the pressure cleaner booster pump at a reduced speed. In reviewing the January 2017 Direct Final Rule TSD, DOE notes that the analysis does only account for motor and hydraulic efficiency improvements for variable-speed efficiency levels of PCBPs, and does not account for any change in energy consumption from the reduction of motor speed. As such, DOE agrees that a revised approach is necessary to reflect the expected reduced energy use of variable-speed PCBPs resulting more accurately from motor turndowns. Additionally, DOE acknowledges the method of calculation in the CA IOUs comment as properly representative. As such, in this final rule, DOE has updated the pump curves for PCBPs to be consistent with the recommendation by the CA IOUs. Further discussion is provided in chapter 5 of the final rule TSD. Fluidra stated that, at maximum speed, the variable-speed PCBP consumed more energy than the singlespeed system. As such, Fluidra commented that a consumer with operating conditions and equipment similar to those used in this analysis would never be able to recover the additional cost of variable-speed control. (Fluidra, No. 91 at pp. 1–2) In addition, Fluidra stated that while this VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 test represents only two sites and two PCBP models, Fluidra feels that the operating conditions are reasonably representative. (Fluidra, No, 91 at p. 6) Finally, Fluidra stated that the power consumption of the booster pump variable-speed motor operating at maximum speed measured noticeably higher than the single-speed base comparison. Specifically, Fluidra commented that operating the PCBP at maximum speed is necessary in many pool applications due to plumbing head loss from extended pipe runs where the pool equipment pad is further from the pool for aesthetics and noise reduction. (Fluidra, No. 91 at pp. 1–2). PHTA and NEMA referenced the same Fluidra study and assertions in their comment submission. (PHTA and NEMA, No. 92 at pp. 2–3) Further, PHTA and NEMA commented that the restrictor plates in PCBPs have multiple purposes and should not be mistaken as used for flow rate tuning. PHTA and NEMA commented that industry uses restrictor plates/discs in testing to decrease flow and pressure, and that they start off with the largest plates and determine if sufficient flow is present, and if not, go down in size, and if needed, remove completely. PHTA and NEMA pointed out that the plates are ultimately used because many times consumers do not turn off the booster pump when they remove the pressure cleaner; therefore, the plate protects the booster pump if the pressure cleaner is removed. (PHTA and NEMA, No. 92 at p. 3) On the other hand, the CA IOUs supported the technical feasibility of energy savings from variable-speed motors in PCBP applications and discussed the PCBP variable-speedmotor retrofit study that the CA IOUs had conducted for the DPPP rulemaking. Specifically, the CA IOUs stated that the results showed that a variable-speed motor could provide substantial energy savings by reducing the PCBP pump speed, while maintaining consumer utility. The CA IOUs stated that the definition of consumer utility for a pressure side pool cleaner (pool sweep) is the correct number of wheel revolutions per minute in cleaning operation. In addition, the CA IOUs stated that a single-speed PCBP produces more pressure than the pool sweep requires, and the consumer may use the included flow restrictor discs and a bleed to reduce the pressure and flow to the sweep’s required operating condition. Accordingly, the flow restrictor and bleed valve allow unused energy from the pump to escape to the pool, and variable-speed PCBP offers an energy-saving alternative by PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 allowing the consumer to set the speed of the pump to deliver the pressure and flow needed to operate the sweep, with low or no usage of the bleed valve and restrictor rings. The CA IOUs demonstrated the variable-speed capability by retrofitting a variablespeed motor to two PCBPs, which resulted in energy savings of 54 percent to 67 percent. (CA IOUs, No. 96 at p. 3) In the January 2017 Direct Final Rule, for the analysis conducted for PCBPs, DOE selected a DPPP capacity that was representative of the cluster of model capacities on the market. As such, the resulting representative capacity was 10 gpm of flow and 112 ft of head, which equated to 0.28 hhp. See section 5.4.3 of the January 2017 Direct Final Rule TSD. DOE notes that the flow rate of 10 gpm aligns with the testing load point specified in the test procedure. See Table 1 of appendix C to subpart Y of 10 CFR part 431. In addition, while the DPPP Working Group initially recommended that PCBPs be tested at 90 ft of head and a volumetric flow rate that corresponds to 90 ft of head, the DPPP Working Group revised its recommendation for PCBPs to be tested at the load point of 10 gpm and a head greater than 60 ft. See section 5.4.3 of the January 2017 Direct Final Rule TSD. In reviewing the 2022 DPPP Database, DOE observed DPPPMs in PCBP applications ranging from 0.22 to 0.33 hhp, and therefore concluded that 0.28 hhp is in the middle of that range and would still be representative of the PCBP models currently available on the market. As such, with the required test procedure flow rate for PCBPs at 10 gpm (see Table 1 of appendix B to subpart Y of 10 CFR part 431), the representative DPPP head will continue to be around 112 ft.46 In reviewing the analysis that Fluidra, PHTA, and NEMA submitted, the measured sites #1 and #2 are not representative of typical PCBP application, as the supplied heads of 74 ft and 71.5 ft, respectively, which are well below the January 2017 Direct Final Rule analysis representative dynamic head of 112 ft. See section 5.4.3 of the January 2017 Direct Final Rule TSD. In addition, as noted in the January 2017 Direct Final Rule, the DPPP Working Group did acknowledge the existence of ideal systems with head demands as low as 50 ft, they determined that pumps typically supplied 100 ft of head or more. See section 3.6.2.2 of the January 2017 Direct Final Rule TSD. As such, DOE understands that the smaller difference 46 Section 3.3.3 of the January 2017 Direct Final Rule TSD specifies the relationship between pump flow, head, and power. E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations between the operating head of the single-speed and variable-speed PCBPs is responsible for the smaller savings potential and reduced costeffectiveness. DOE does not have any evidence to suggest that the representative capacity used in the January 2017 Direct Final Rule and subsequently in the June 2022 NOPR should be revised. As such, DOE maintains the pump performance inputs from the June 2022 NOPR in this final rule. Further, in chapter 3 of the January 2017 Direct Final Rule TSD, DOE noted that for installations where the PCBP supplies more pressure than is recommended for the cleaner, pressure may be reduced using a throttling valve or restrictor rings, or excess pressure may be relieved using a pressure relief valve. The pressure relief valve is attached to the hose line that connects the pump outlet to the pressure cleaner, and the valve bypasses the cleaner and releases pressure into the pool being serviced. Further, in reviewing manufacturer operating instructions online, DOE observed directions to remove or replace restrictor discs, or to unscrew pressure relief valves, to reduce the pump flow rate. This is consistent with the information provided by the CA IOUs. Further discussion and responses to the commenters’ payback period analysis are provided in section IV.F.9 of this document. Hayward stated that it reviewed energy and cost savings for six of its currently compliant single-speed pumps, including self and non-selfpriming, and estimated that the average payback period for conversion to variable speed was over 12 years. Hayward provided details of its analysis as part of its comment, and noted use of a flow rate of 24.7 gpm, even though some pool equipment requires a greater flow rate. (Hayward, No. 93 at p. 2) In reviewing the analysis provided by Hayward, DOE first notes that the prices used were for the pump. The analysis DOE conducted in the June 2022 NOPR, however, considers the motor only, as this rule is specific to the costeffectiveness of the DPPP motor. While the engineering analysis determines the manufacturer selling price (‘‘MSP’’) (see section IV.C.2 for further discussion), DOE uses the markups from the markups analysis (in section IV.D of this document) to convert the MSP to consumer prices as it relates to the DPPP motor. Accordingly, the costs included in the Hayward analysis do VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 not directly translate to the analysis at hand, which is for the DPPP motor. Further discussion and responses to the commenters’ payback period analysis are provided in section IV.F.9 of this document. 66991 The cost analysis portion of the engineering analysis is conducted using one or a combination of cost approaches. The selection of cost approach depends on a suite of factors, including the availability and reliability of public information, characteristics of the regulated product, and the availability and timeliness of purchasing the equipment on the market. The cost approaches are summarized as follows: b Physical teardowns: Under this approach, DOE physically dismantles a commercially available product, component by component, to develop a detailed bill of materials for the product. b 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. b 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 June 2022 NOPR, DOE used feedback from manufacturers presented in the January 2017 Direct Final Rule to determine the cost of DPPP motors, and updated the cost data to be representative of the market in 2020. DOE adjusted the 2015$ costs to 2020$ using the historical Bureau of Labor Statistics Producer Price Index (‘‘PPI’’) for each product’s industry.47 DOE also conducted physical teardowns to determine updated DPPP motor controller costs for variable-speed motors. To account for manufacturers’ non-production costs and profit margin, DOE applied a non-production cost multiplier (the manufacturer markup) to the MPC to determine the manufacturer selling price (‘‘MSP’’). DOE developed an average manufacturer markup of 1.37 by examining the annual Securities and Exchange Commission (‘‘SEC’’) 10–K reports filed by publicly traded manufacturers primarily engaged in DPPP manufacturing and whose combined product range includes a variety of pool products. 87 FR 37122, 37139–37140. In response, Fluidra noted that singlespeed motor costs have increased roughly 20–22 percent in the last 3 years. This is just material costs and does not include transportation costs, which have risen exponentially since 2020. Further, Fluidra noted that component shortages and inflation have dramatically increased material costs since 2020, and that should be evaluated. (Fluidra, No. 91 at p. 3) To account for the recent price changes to the DPPP motor market, DOE inflated the cost data in 2020$ to 2022$ using the updated PPI values for each industry.48 DOE notes that these indices sufficiently characterize the change in motor prices due to material price changes, transportation costs, and changes in labor costs. PHTA and NEMA commented that they believe the 1.37 manufacturer markup is a reasonable markup for domestically produced product, but it may be a little low if the product is produced overseas. (PHTA and NEMA, No. 92 at p. 10) As previously discussed, the 1.37 markup was based on publicly available financial information for manufacturers of DPPP motors. The calculation includes general and administrative (‘‘SG&A’’) expenses, research and development (‘‘R&D’’) expenses, interest, and profit. DOE does not have data to suggest that these costs would change if a DPPP motor is not manufactured domestically, nor have PHTA and NEMA provided any additional data on how the markup would need to be updated. As such, for this analysis, DOE maintains the manufacturer markup from the June 2022 NOPR. Table IV.3 lists the MSPs of each EL for DPPP motors. See TSD chapter 5 for additional detail on the engineering analysis and complete cost-efficiency results. 47 Series IDs: Integral motors (≥1 hp): WPU117304, Fractional motors (<1 hp): WPU117303, Environmental Controls: WPU1181; www.bls.gov/ppi/. 48 Series IDs: Integral motors (≥1 hp): WPU117304, Fractional motors (<1 hp): WPU117303, Environmental Controls: WPU1181; www.bls.gov/ppi/. 2. Cost Analysis PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 66992 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE IV.3—MSPS IN 2022$ FOR DPPP MOTORS Rep. unit EC 1 2 2 2 3 3 3 3 ............... ............... ............... ............... ............... ............... ............... ............... 4 1 5 7 6 2 2A 3 THP 0.22 0.75 1 1.125 1.5 1.65 1.65 3.45 DPPP application EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 EL 6 Non-self-priming Filter Pump, Extra-Small-size (0.09 hhp) ....... Self-priming Filter Pump, Small-size (0.44 hhp) ........................ Non-self-priming Filter Pump, Small-size (0.52 hhp) ................. Pressure Cleaner Booster Pump ............................................... Non-self-priming Filter Pump (0.87 hhp) .................................... Self-priming Filter Pump, Standard-size (0.95 hhp) .................. Self-priming Filter Pump, Small-size (0.65 hhp) ........................ Self-priming Filter Pump, Standard-size (1.88 hhp) .................. $24.84 56.92 51.94 59.84 67.86 74.52 74.52 160.33 $31.04 70.37 56.45 77.91 89.31 95.97 95.97 199.85 $50.71 90.03 76.21 97.67 107.38 114.04 114.04 223.56 ............ 93.13 78.47 ............ 108.51 115.17 115.17 255.17 ............ 103.48 93.71 ............ 127.70 134.36 134.36 269.85 ............ 114.87 110.09 ............ 148.03 154.68 154.68 285.66 ............ 353.97 353.97 353.97 353.97 353.97 353.97 475.85 D. Markups Analysis The markups analysis develops appropriate markups (e.g., manufacturer markups, retailer markups, distributor markups, contractor markups) in the distribution chain and sales taxes to convert the MSP estimates derived in the engineering analysis to consumer prices, which are then used in the LCC and PBP analysis and in the manufacturer impact analysis. At each step in the distribution channel, companies mark up the price of the product to cover business costs and profit margin. In the June 2022 NOPR, DOE identified distribution channels for DPPP motors incorporated in pumps and replacement DPPP motors sold alone as well as the fraction of shipments sold through each channel. To characterize these channels, DOE referred to information collected in support of the January 2017 Direct Final Rule, which reflects the consensus of the Appliance Standards and Rulemaking Federal Advisory Committee (‘‘ASRAC’’) DPPP Working Group. 87 FR 37122, 37140. Nidec stated that for motors sold alone, they estimate that the market is not 50 percent from the motor manufacturer to a retailer. Instead, Nidec commented that it is significantly weighted to the motor manufacturer, to the wholesaler, to the retailer, then to the end user. (Nidec, Public Meeting, No. 88 pp. 24–25) PHTA and NEMA provided updated estimates of fraction of sales by distribution channels. In addition, for DPPP motors sold within DPPPs and going into new pool installations, NEMA and PHTA commented that these also go through a wholesaler step. For DPPP motors sold alone as replacement motors, NEMA and PHTA also recommended adding an additional channel to capture 5 percent of the market being sold through pool product retailers. (PHTA and NEMA, No. 92 at p. 11) For this final rule, DOE revised its distribution channels to incorporate the feedback from PHTA and NEMA as presented in Table IV.4 and Table IV.5. TABLE IV.4—DISTRIBUTION CHANNELS FOR DPPP MOTORS INCORPORATED IN PUMPS June 2022 NOPR fraction of shipments (%) Distribution channel DPPP Motor Manufacturer → DPPP Manufacturer → Wholesaler → Pool Service Contractor → Consumer ..... DPPP Motor Manufacturer → DPPP Manufacturer → Pool Product Retailer → Consumer ................................. DPPP Motor Manufacturer → DPPP Manufacturer → Pool Builder → Wholesaler → Consumer ........................ 75 20 5 Fraction of shipments (%) 65 15 20 TABLE IV.5—DISTRIBUTION CHANNELS FOR REPLACEMENT DPPP MOTORS SOLD ALONE June 2022 NOPR fraction of shipments (%) Distribution channel ddrumheller on DSK120RN23PROD with RULES2 DPPP DPPP DPPP DPPP Motor Motor Motor Motor Manufacturer Manufacturer Manufacturer Manufacturer → → → → Wholesaler → Contractor → End-User ................................................................... Wholesaler → Retailer → End-User ....................................................................... Pool Pump Retailer → End-User ............................................................................ DPPP Manufacturer → Pool Pump Retailer → End-User ...................................... DOE developed baseline and incremental markups for each actor in the distribution chain. Baseline markups are applied to the price of products with baseline efficiency, while incremental markups are applied to the difference in price between baseline and higher-efficiency models (the incremental cost increase). The incremental markup is typically less than the baseline markup and is VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 designed to maintain similar per-unit operating profit before and after new or amended standards.49 49 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. PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 25 25 50 ........................ Fraction of shipments (%) 45 25 25 5 To estimate average baseline and incremental markups DOE relied on several sources including: (1) for DPPP wholesalers, SEC form 10–K from Pool Corp; 50 (2) for pool product retailers, SEC form 10–K from several major home 50 U.S. Securities and Exchange Commission. SEC 10–K Reports for Pool Corp (2017–2021). Available at www.sec.gov/ (last accessed July 26, 2021.) E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations improvement centers 51 and U.S. Census Bureau 2017 Annual Retail Trade Survey for the miscellaneous store retailers sector (NAICS 453); 52 (3) for pool contractors and pool builders, U.S. Census Bureau 2017 Economic Census data for the plumbing, heating, and airconditioning contractor sector (NAICS 238220) and all other specialty trade contractors sector (NAICS 238990); 53 (4) for motor wholesalers, U.S. Census Bureau 2017 Annual Wholesale Trade Survey for the household appliances and electrical and electronic goods merchant wholesaler sector (NAICS 4536); 54 (5) for electrical contractors, 2022 RSMeans Electrical Cost Data; 55 (6) for motor retailers, U.S. Census Bureau 2017 Annual Retail Trade Survey for the building material and garden equipment and supplies dealers (NAICS 444); and (7) for pool pump retailers, U.S. Census Bureau 2017 Annual Retail Trade Survey for the miscellaneous store retailers sector (NAICS 453). In addition to the markups, DOE obtained State and local taxes from data provided by the Sales Tax Clearinghouse.56 These data represent weighted average taxes that include county and city rates. DOE derived shipment-weighted average tax values for each State considered in the analysis. Chapter 6 of the final rule TSD provides details on DOE’s development of markups for DPPP motors. E. Energy Use Analysis ddrumheller on DSK120RN23PROD with RULES2 The purpose of the energy use analysis is to determine the annual energy consumption of DPPP motors at different efficiencies in representative U.S. single-family homes, multi-family residences, and commercial buildings, and to assess the energy savings potential of increased DPPP motors efficiency. The energy use analysis 51 U.S. Securities and Exchange Commission. SEC 10–K Reports for Home Depot, Lowe’s, Wal-Mart and Costco. (2017–2021) Available at www.sec.gov/ (last accessed July 26, 2022.) 52 U.S. Census Bureau, 2017 Annual Retail Trade Survey, available at www.census.gov/retail/ index.html (last accessed July 26, 2021). 53 U.S. Census Bureau, 2017 Economic Census Data, available at www.census.gov/econ/ (last accessed July 26, 2021). 54 U.S. Census Bureau, 2017 Annual Wholesale Trade Survey, available at www.census.gov/awts (last accessed July 26, 2021). 55 RSMeans Electrical Cost Data, available at www.rsmeans.com (last accessed July 26, 2022). 56 Sales Tax Clearinghouse Inc., State Sales Tax Rates Along with Combined Average City and County Rates, available at thestc.com/STrates.stm (last accessed Jan. 04, 2023). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 estimates the range of energy use of DPPP motors in the field (i.e., as they are actually used by consumers). The energy use analysis provides the basis for other analyses DOE performed, particularly assessments of the energy savings and the savings in consumer operating costs that could result from adoption of amended or new standards. 1. DPPP Motor Applications The annual energy consumption of a DPPP motor is expressed in terms of electricity consumption and depends on the DPPP motor efficiency level, the pool pumping requirement, the performance of the DPPP incorporating the motor, and the DPPP annual operating hours. This electricity consumption is identical to the annual electricity consumption of the DPPP incorporating the motor. The DPPP motor energy consumption value is the sum of the energy consumption values in each mode of operation. Each mode of operation corresponds to a motor speed setting. Single-speed motors only have one mode of operation while dualand variable-speed pool pump motors operate at a low-speed and a high-speed mode. The unit energy consumption values in each mode are calculated based on the DPPP usage, which is calculated based on the pool pump system curve that the DPPP is operating on, the pump flow rate of the mode, the pump energy factor of the mode (which in turn determines the motor input power) 57 and the annual run time of the pool pump spent in that mode. In the June 2022 NOPR, DOE calculated the pool pump annual run time based on the application (residential or commercial), the assumed pool size, the assumed number of turns per day, and the sample application’s geographic location, which implies the corresponding pool seasons. 87 FR 37122, 37141. A typical DPPP application, characterized by the DPPP equipment class and hydraulic horsepower (‘‘hhp’’), was associated to each representative unit in equipment classes 1, 2, and 3 based on inputs from the engineering analysis. See section IV.C.1.a of this document. DOE did not receive comments regarding this methodology and retained the same approach in the final rule. 57 The motor input power is equal to the DPPP flow (gpm) divided by the DPPP Energy Factor (G/ Wh) and multiplied by 60 (number of minutes in an hour). PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 66993 2. DPPP Motor Consumer Sample In the June 2022 NOPR, DOE created individual consumer samples for five DPPP motor markets: (1) single-family homes with a swimming pool; (2) indoor swimming pools in commercial applications; (3) single-family community swimming pools; (4) multifamily community swimming pools; and (5) outdoor swimming pools in commercial applications. DOE used the samples to determine DPPP motor annual energy consumption and to conduct the LCC and PBP analyses. 87 FR 37122, 37141. PTHA and NEMA commented that within the scope of the document, there is little to no distinction between the types of motors that would be used across community and commercial pool applications. As a result, PHTA and NEMA commented that DOE could consider combining community pool types (single and multi-family), as well as commercial (indoor and outdoor). (PHTA and NEMA, No. 92 at p. 12) In the June 2022 NOPR analysis, as noted by NEMA and PTHA, community pools and commercial pools were combined and analyzed as the commercial sector by DOE. In this final rule, DOE continued to use the same approach. 87 FR 37122, 37141 See section 7.3 of chapter 7 of the final rule TSD for details of community and commercial indoor and outdoor pool samples used. DOE used the Energy Information Administration’s (‘‘EIA’’) 2020 Residential Energy Consumption Survey (‘‘RECS 2020’’) to establish a sample of single-family homes that have a swimming pool.58 For DPPPs used in indoor swimming pools in commercial applications, DOE developed a sample using the 2018 Commercial Building Energy Consumption Survey (‘‘CBECS 2018’’).59 RECS and CBECS include information such as the household or building owner demographics and the location of the household or building. Neither RECS nor CBECS provide data on community pools or outdoor swimming pools in commercial applications, so DOE created samples based on other available data. To develop samples for DPPPs in single or 58 U.S. Department of Energy–Energy Information Administration. 2020 RECS Survey Data. www.eia.gov/consumption/residential/data/2020/ (last accessed February 2, 2023). 59 U.S. Department of Energy–Energy Information Administration. 2018 CBECS Survey Data. https:// www.eia.gov/consumption/commercial/data/2018/ (last accessed: February 2, 2023). E:\FR\FM\28SER2.SGM 28SER2 66994 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations multi-family communities, DOE used a combination of RECS 2020, U.S. Census 2009 and 2011 American Home Survey Data (AHS),60 61 62 and the 2022 PK Data report.63 To develop a sample for pool pumps in outdoor commercial swimming pools, DOE relied on data from both CBECS 2018 and the 2022 PK Data report. DPPPs can be installed with either above-ground or in-ground swimming pools. In the June 2022 NOPR, DOE established separate sets of consumer samples for in-ground pools and aboveground pools by adjusting the original sample weights using data on the number of installed in-ground and above-ground pools gathered during the January 2017 Direct Final Rule, which relied on 2014 data per State provided by APSP.64 The consumer samples for DPPP motors used in self-priming and pressure cleaner booster pumps are drawn from the in-ground pool samples; the consumer samples for motors used with non-self-priming pool pumps are obtained from the above-ground pool samples. 87 FR 37122, 37142. See chapter 8 of the June 2022 NOPR TSD. DOE did not receive comments on this approach and retained the same method in this final rule. See chapter 7 of the final rule TSD for more details about the creation of the consumer samples and the regional breakdowns. ddrumheller on DSK120RN23PROD with RULES2 3. Self-priming and Non-Self-Priming Pool Pump Motor Input Power The input power of DPPP motors used in self-priming and non-self-priming pump applications is calculated based on the flow rates (gpm) and typical energy factor (G/Wh) associated with each representative unit.65 At efficiency levels corresponding to single-speed and two-speed motors, the flow and energy factor values were based on input from the engineering analysis and provided for each system curve (A, B, or 60 U.S. Census Bureau. 2009 AHS survey data. www.census.gov/programs-surveys/ahs/data/2009/ ahs-2009-public-use-file--puf-/2009-ahs-nationalpuf-microdata.html (last accessed: February 2, 2023). 61 U.S. Census Bureau. 2011 AHS survey data. www.census.gov/programs-surveys/ahs/data/2011/ ahs-2011-summary-tables/h150-11.html (last accessed: February 2, 2023). 62 The earlier versions of AHS was used due to the lack of pool ownership information in the more recent AHS. 63 PK Data. 2022 Swimming Pool and Pool Heater Customized Report for LBNL. pkdata.com/annualreports/ (last accessed: February 2, 2023). 64 For more details see chapter 7 of the January 2017 Direct Final Rule TSD at www.regulations.gov/ document?D=EERE-2015-BT-STD-0008-0105. 65 The motor input power is equal to the flow (gpm) divided by the energy factor (G/Wh) and multiplied by 60 (number of minutes in an hour). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 C).66 In the June 2022 NOPR, for each user of self-priming and non-selfpriming pool pumps in the consumer sample, DOE specified the system curve used (A, B, or C) by drawing from a probability distribution in which 35 percent of the pool pumps follow curve A, 10 percent of the pool pumps follow curve B, and the remaining 55 percent follow curve C. The probability distribution was based on inputs from the ASRAC DPPP Working Group gathered during the January 2017 Direct Final Rule.67 87 FR 37122, 37142. DOE did not receive any comments on this approach and retained the same methodology and inputs for this final rule. At efficiency levels corresponding to variable-speed motors, the engineering analysis only provides flow and energy factor values for the high-speed mode on each system curve. In the June 2022 NOPR, for the low-speed mode, DOE used data on pool volume and desired time per turnover from the January 2017 Direct Final Rule TSD to calculate a consumer-specific low-speed flow.68 These relied on inputs from stakeholders and several other references.69 70 71 DOE then used the equation provided by the engineering analysis to calculate the energy factor as a function of Q for each representative unit on each system curve. 87 FR 37122, 37142. The equations from the engineering analysis are provided in chapter 5 of the final rule TSD. Pentair and PHTA and NEMA commented that the minimum flow rate of 24.7 gpm that is being used in the energy use analysis is not high enough to operate certain equipment. (Pentair, No. 90 at p. 2; PHTA and NEMA, No. 92 at p. 4) Specifically, PHTA and NEMA commented that in looking at filtration pump motors, DOE did not consider additional factors, such as whether the 66 When a pump is tested on a system curve (such as curve C), any one of the measurements hydraulic power, P (hp), volumetric flow, Q (gpm) and total dynamic head, H (ft of water) can be used to calculate the other two measurements. 67 For more details see chapter 7 of the January 2017 Direct Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BTSTD-0008-0105. 68 Flow (in gpm) is equal to the pool volume (in gallons) divided by the desired time per turnover (in minutes). 69 CEE Residential Swimming Pool Initiative, December 2021. 70 California Energy Commission Pool Heater CASE. efiling.energy.ca.gov/GetDocument.aspx? tn=71754&DocumentContentId=8285 (last accessed July 28, 2016). 71 Evaluation of potential best management practices–Pools, Spas, and Fountains 2010. calwep.org/wp-content/uploads/2021/03/PoolsSpas-and-Fountains-PBMP-2010.pdf (last Accessed July 28, 2016). PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 requirements apply to existing pool versus new construction, and whether the requirements to operate certain equipment. PHTA and NEMA commented that when designing a new pool, the piping and equipment are selected in conjunction with the pump system to ensure the pool works properly and safely. However, in existing pools, the piping and much of the equipment, including sanitation items such as skimmers, main drains, and filters, are already in place and would be cost prohibitive for consumers to replace. As such, PHTA and NEMA commented that any replacement motor needs to be capable to provide the flow rates needed to work with the existing system. PHTA and NEMA stated that previous norm in the pool construction industry was small pipe and bigger pump; and although that has changed over the last 15 years, there are 5.4 million existing inground pools3 with a significant percentage that may have 1.5-inch piping. PHTA and NEMA commented that the smaller more restrictive piping size impacts the pump size, which also impacts the filter maintenance. Further, PHTA and NEMA added that many existing pools have skimmers that need a certain minimum flow rate (historically 30–35 gpm) to properly remove surface debris. A skimmer is one part of the sanitation system of the pool and removes containments off the surface to protect swimmers from infections. In some existing pool cases, PHTA and NEMA commented that this will be compromised based on the requirements found in the NOPR and possibly increase the risk of recreational water illnesses for bathers. PHTA and NEMA commented that the energy savings analysis for filtration pumps assumes a minimum flow rate of 24.7 gpm for all filtration pump systems. However, PHTA and NEMA stated that different equipment has minimum flow rates higher than this value (e.g., electrolytic chlorinators, pool heaters, suction cleaners and skimmers). Further, PHTA and NEMA stated that as equipment begins to wear out over time, higher flow rates may be needed to continue having the equipment work properly. PHTA and NEMA added that while the minimum flow rate of 24.7 gpm was established as a reasonable estimate of the low-flow conditions a pool may see, different equipment have minimum flowrates above 24.7 gpm. PHTA and NEMA commented that through a review of the various equipment, four manufacturers identified products that require flowrates above 24.7 gpm. These manufacturers indicated that they sell E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations various products, including gas heaters, sand filters, high efficiency heaters, skimmers, and suction cleaners that all have minimum flowrates at or above 30 gpm. PHTA and NEMA commented that the NOPR analysis did not assume a range of minimum flow rates, and as a result, does not account for the decreased savings (or incompatibility of small variable-speed motors) associated with existing systems that have higher minimum flow rates. PHTA and NEMA commented that a minimum flow rate of 24.7 gpm would result in an existing small-size pump being run at high speed—once installed with a small variable-speed motor—to ensure the equipment continues to run as intended, and would defeat the energy savings and purpose for requiring variable speed. (PHTA and NEMA, No. 92 at pp. 3–4) Pentair added that the ICC/ANSI/ PHTA 15 Energy Standard has a minimum flow rate of 36 gpm that is being enforced nationwide by many building departments. Therefore, Pentair noted that a variable-speed fractional hp motor would have to operate at a max speed or close to it to produce this minimum flow rate needed at any reasonable total dynamic head loss. (Pentair, No. 90 at p. 2) Pentair further added that in the exiting DPPP rule, there was a minimum filtration rate of 36 gpm. (Pentair, Public Meeting Transcript, No. 88 at p. 62) PHTA commented that DOE’s analysis does not consider the range of minimum flow rates required for certain pool equipment. PHTA stated that in doing so, the analysis does not account for the decreased savings associated with existing systems with and that higher minimum flow rates require the motor to run at higher speeds. (PHTA, No. 100 at p. 4) The CA IOUs commented that during the 2015–2016 ASRAC DPPP Working Group, DOE, industry representatives, and energy efficiency advocates unanimously agreed to a low flow test point of 24.7 gpm on Curve C. The CA IOUs commented that the test point is equivalent to 5 ft of head, the minimum head loss required to account for static losses in the system from the pool filter, pool heater, and skimmer. The CA IOUs recommended that, at this operating point, there would be enough head to push water through the complete pool filtration system, including pool piping, pool filter, and pool heater.72 (CA IOUs, No. 96 at pp. 2–3) The Joint Advocates stated that DOE’s analysis accurately captures the energy 72 The CA IOUs provided the following reference: ASRAC DPPP term sheet, www.regulations.gov/ document/EERE-2015-BT-STD-0008-0051, rec 6. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 savings for variable speed. The Joint Advocates noted that DOE did not assume that the low speed of a variablespeed pump is a fixed percentage of high speed, but rather calculated an appropriate low-speed flow rate and the associated energy factor for each consumer in its sample, taking into account the minimum flow rate thresholds. (Joint Advocates, No. 97 at pp. 1–2) In the June 2022 NOPR, DOE calculated the low-speed flow rate as the sampled pool size (drawn from a distribution) divided by the desired number of hours to complete one turnover of the pool and divided by 60 minutes per hour to get the low-flow rate per minute. In addition, if the calculated low-speed flow rate obtained was below 24.7 gpm or 31.1 gpm, DOE used below 24.7 gpm or 31.1 gpm instead. Such an approach results in a range of low-speed flow rates that are higher than minimum flow rates. See chapter 7 of the June 2022 NOPR TSD. This is consistent with the comments provided by PHTA and NEMA, Pentair, PHTA, and the CA IOUs. As noted by the Joint Advocates, DOE clarifies that the minimum flow rate is used as a threshold to ensure all low-speed flow rates (at which the pump is assumed to operate) would be greater than 24.7 or 31.1 gpm, as appropriate. The minimum flow rate does not represent the assumed flow rate at which the variable speed pump operates. As noted by the CA IOUs, the minimum flow rate of 24.7 gpm was developed during the 2015– 2016 ASRAC DPPP Working Group. Specifically, the CA IOUs commented that the minimum flow rates for twospeed pumps of 24.7 gpm for two-speed pool filter pumps that have a rated hydraulic horsepower less than or equal to 0.75 hp (small pool filter pumps) and 31.1 gpm for two-speed pool filter pumps that have a rated hydraulic horsepower greater than 0.75 (large pool filter pumps) are consistent with the DPPP Working Group’s recommended low-flow rates for multi-speed and variable-speed pool filter pumps (Docket No. EERE–2015–BT–STD–0008, No. 51, Recommendation #6 at p. 5). The DPPP Working Group developed these low-flow rates based on the minimum effective flow rates for typical pool sizes.73 DOE believes these flow rates are also representative of minimum flow rates for two-speed pool 73 The minimum values of 24.7 and 31.1 gpm were used to provide a threshold when developing low flow values in the 2017 DPPP DFR. DOE did not use a value of 36 gpm as stated by Pentair. See Chapter 7 of the January 2017 Direct Final Rule TSD, at www.regulations.gov/document?D=EERE2015-BT-STD-0008-0105, p.7–6, footnote c. PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 66995 filter pumps and effectively prevent the inclusion of unreasonably low speeds on two-speed pool filter pumps for the sole purpose of inflating WEF ratings. 82 FR 36858, 36880 (Aug. 7, 2017) (citing 81 FR 64580, 64606 (Sept. 20, 2016)). DOE believes that the proposed load points for two-speed pool filter pumps are representative of typical pool filter pump operation and energy performance, and that the load points characterize the efficiency of the pump speeds and flow points in typical applications (i.e., cleaning/mixing and filtration). 82 FR 36858, 36880. In addition, while Pentair, NEMA, and PTHA recommended using a range of minimum flow rates, they did not provide supporting information to develop such distribution. In addition, DOE believes that a single value of minimum flow rate is sufficient to set a threshold and has developed a range of low-flow rates. Therefore, in this final rule, DOE retained the same approach as in the June 2022 NOPR. 4. Pressure Cleaner Booster Pumps Motor Input Power The input power of DPPP motors used in pressure cleaner booster pumps is calculated using the relationship between input power and flow and the system curve provided by the engineering analysis. To characterize operating flow for each consumer in the sample, in the June 2022 NOPR, DOE drew a value from a statistical distribution of flow established during the January 2017 Direct Final Rule. This distribution was developed around the test procedure test point of 10 gpm of flow rate, as recommended by the ASRAC DPPP Working Group. (Docket EERE–2015–BT–STD–0008, No. 92 at p. 311) For single-speed pressure cleaner booster pumps, DOE then calculated the input power using the power curve from the engineering analysis. For variablespeed motors used in pressure cleaner booster pumps, DOE also calculated the pool pump motor input power in a lowspeed setting. Based on information from the January 2017 Direct Final Rule, DOE used a value of 10 gpm to characterize the low-speed flow and calculate the hydraulic horsepower using the system curve.74 Then, DOE calculated the input power using the relationship between input power and flow as provided by the engineering analysis. 87 FR 37122, 37142. The Joint Advocates commented that for PCBPs, DOE estimated savings 74 For more details, see chapter 7 of the January 2017 Direct Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BTSTD-0008-0105. E:\FR\FM\28SER2.SGM 28SER2 66996 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 associated with reducing flow rate to the 10 gpm specified in the test procedure, which is the typical flow rate required or recommended for suction-side pressure cleaners to function. In addition, the Joint Advocates noted that the savings associated with variablespeed pressure cleaner booster pump motors are supported by testing conducted by the CA IOUs during the DPPP rulemaking, which demonstrated that variable-speed control can reduce pressure cleaner booster pump energy consumption by 54 to 67 percent. Finally, the Joint Advocates commented that because of the cubic relationship between pump speed and power, reducing the speed of a pump by a small amount can yield large energy savings. (Joint Advocates, No. 97 at p. 2) As previously described in section IV.C.1.c of this document, DOE developed a revised pump curve and input power curves as a function of flow rate for PCBP with variable-speed motors. Accordingly, for both singlespeed and variable-speed PCBPs, DOE calculated the power directly from the equation providing power as a function of flow developed in the from the engineering analysis. For variable-speed PCBPs, as noted by the Joint Advocates, DOE maintained a value of 10 gpm to characterize the flow in the low-speed setting. 5. Daily Operating Hours In the June 2022 NOPR, DOE relied on information gathered during the January 2017 Direct Final Rule to develop estimates of pool pump daily operating hours. For self-priming and non-selfpriming pool filter pumps in residential applications, operating hours are calculated uniquely for each consumer based on pool size, number of turnovers per day (itself based on ambient conditions), and the pump flow rate. In commercial applications, DOE assumed that these pumps operate 24 hours per day. 87 FR 37122, 37142–37143. For PCBPs, operating hours were drawn from a distribution based on the January 2017 Direct Final Rule and assumed a minimum operation of 2 hours per day and a maximum of 3 hours per day. See section 7.4.2.2. of the June 2022 NOPR TSD. PHTA and NEMA commented in support using the same methodology and inputs to estimate DPPP motor energy use that were used in the dedicated-purpose pool pump direct final rule TSD. (PHTA and NEMA, No. 92 at p. 12) PHTA commented that PCBP motors operate within a small window of 2–2.5 hours per day and that once a PCBP is set, customers have no reason to further VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 adjust the speed of the PCBP motor. (PHTA, No. 100 at pp. 2–3) In the June 2022 NOPR analysis, as noted above, DOE assumed that PCBP motors operate between 2 and 3 hours per day, which is in line with the information provided by PHTA regarding PCBP operating windows. In addition, as noted in section IV.A.4 of this document, DOE believes that variable speed is an appropriate design option for these motors and would result in energy savings to the consumer. DOE did not receive any other comments on daily operating hours and retained its approach for calculating the daily operating hours during the pool operating season. 6. Annual Days of Operation In the July 2022 NOPR, DOE calculated the annual unit energy consumption by multiplying the daily operating hours by the annual days of operation, which depend on the number of months of pool operation. For each consumer sample, DOE assigned different annual days of operation depending on the region in which the DPPP is installed. This assignment was based on information related to pool pump operating season based on geographical locations collected during the January 2017 Direct Final Rule. 87 FR 37122, 37143–37144. DOE did not receive any comments on this topic and continued to use the same inputs regarding annual days of operation by region. Chapter 7 of the January 2017 Direct Final Rule TSD provides details on DOE’s energy use analysis for DPPP motors. F. Life-Cycle Cost and Payback Period Analysis DOE conducted LCC and PBP analyses to evaluate the economic impacts on individual consumers of potential energy conservation standards for DPPP motors. The effect of new or amended energy conservation standards on individual consumers usually involves a reduction in operating cost and an increase in purchase cost. DOE used the following two metrics to measure consumer impacts: b 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 PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 purchase and sums them over the lifetime of the product. b 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 DPPP motors in the absence of new or amended energy conservation standards. In contrast, the PBP for a given efficiency level is measured relative to the baseline product. For each considered efficiency level in each product class, DOE calculated the LCC and PBP for a nationally representative set of consumers. As stated previously, DOE developed consumer samples from various data sources including 2009 AHS, 2011 AHS, 2020 RECS, 2018 CBECS and 2022 PK data. For each sample consumer, DOE determined the energy consumption for DPPP motors and the appropriate energy price. By developing a representative sample of households, the analysis captured the variability in energy consumption and energy prices associated with the use of DPPP motors. Inputs to the calculation of total installed cost include the cost of the product—which includes MPCs, manufacturer markups, retailer and distributor markups, and sales taxes— and installation costs. Inputs to the calculation of operating expenses include annual energy consumption, energy prices and price projections, repair and maintenance costs, product lifetimes, and discount rates. DOE created distributions of values for product lifetime, discount rates, and sales taxes, with probabilities attached to each value, to account for their uncertainty and variability. The computer model DOE uses to calculate the LCC relies on a Monte Carlo simulation to incorporate uncertainty and variability into the analysis. The Monte Carlo simulations randomly sample input values from the probability distributions and DPPP motors user samples. For this rulemaking, the Monte Carlo approach is implemented in MS Excel together with the Crystal BallTM add-on.75 The 75 Crystal BallTM is a commercially available software tool to facilitate the creation of these types E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations model calculated the LCC for products at each efficiency level for 10,000 consumers per simulation run. The analytical results include a distribution of 10,000 data points showing the range of LCC savings for a given efficiency level relative to the no-new-standards case efficiency distribution. In performing an iteration of the Monte Carlo simulation for a given consumer, product efficiency is chosen based on its probability. If the chosen product efficiency is greater than or equal to the efficiency of the standard level under consideration, the LCC calculation reveals that a consumer is not impacted by the standard level. By accounting for consumers who already purchase moreefficient products, DOE avoids overstating the potential benefits from increasing product efficiency. DOE calculated the LCC and PBP for consumers of DPPP motors as if each were to purchase a new product in the first year of required compliance with new or amended standards. As discussed in section III.A of this document, for all TSLs except TSL 7, new standards apply to DPPP motors manufactured 2 years after the date on which any new standard is published, which corresponds to a first full year of compliance of 2026.76 At TSL 7, new standards would also apply 2 years after the publication of any new standard 66997 except for small-size DPPP motors, for which new standards apply to DPPP motors manufactured 4 years after the date on which any new standard is published. For the purposes of the LCC and PBP analysis, DOE used 2026 as the first full year of compliance with any amended standards for DPPP motors. Table IV.6 summarizes the approach and data DOE used to derive inputs to the LCC and PBP calculations. The subsections that follow provide further discussion. Details of the spreadsheet model, and of all the inputs to the LCC and PBP analyses, are contained in chapter 8 of the final rule TSD and its appendices. TABLE IV.6—SUMMARY OF INPUTS AND METHODS FOR THE LCC AND PBP ANALYSIS * Inputs Source/method Equipment Cost .............................. Derived by multiplying MPCs by manufacturer and distribution channel markups and sales tax, as appropriate. Used historical data to derive a price scaling index to project equipment costs. Baseline installation costs determined using data from manufacturer gathered during the January 2017 Direct Final Rule. The daily energy consumption multiplied by the number of operating days per year. Variability: Based on the 2009 AHS, 2011 AHS, 2020 RECS, 2018 CBECS, 2022 PK data and other data sources. Electricity: Based on EEI data for 2021. Variability: Regional energy prices determined for nine census divisions for pool pump motors in individual single-family homes and nine census divisions for pool pump motors in community and commercial pool pump motors. Average and marginal prices used for electricity. Based on AEO2023 price projections. Assumed no repair or maintenance on pool pump motors. Average: 3.6 to 5 years depending on the DPPP applications. Variability: Based on Weibull distribution. Residential: Approach involves identifying all possible debt or asset classes that might be used to purchase the considered appliances, or might be affected indirectly. Primary data source was the Federal Reserve Board’s Survey of Consumer Finances. Commercial: Calculated as the weighted average cost of capital for entities purchasing pool pumps. Primary data source was Damodaran Online. 2026 (first full year for analytical purposes). Installation Costs ............................. Annual Energy Use ......................... Energy Prices .................................. Energy Price Trends ....................... Repair and Maintenance Costs ...... Equipment Lifetime ......................... Discount Rates ................................ Compliance Date ............................ * Not used for PBP calculation. References for the data sources mentioned in this table are provided in the sections following the table or in chapter 8 of the 2017 Direct Final Rule TSD. ddrumheller on DSK120RN23PROD with RULES2 1. Equipment Cost To calculate consumer product costs, DOE multiplied the MPCs developed in the engineering analysis by the markups described previously (along with sales taxes). DOE used different markups for baseline products and higher-efficiency products because DOE applies an incremental markup to the increase in MSP associated with higher-efficiency products. In the June 2022 NOPR, to project an equipment price trend, DOE derived an inflation-adjusted index of the Producer Price Index (‘‘PPI’’) for integral and of models by generating probability distributions and summarizing results within Excel, available at www.oracle.com/technetwork/middleware/ crystalball/overview/ (last accessed February 3, 2023). 76 At this time, DOE estimates publication of a final rule in the second half of 2023. Therefore, for VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 fractional horsepower motors and generators manufactured over the period 1967–2020.77 For fractional horsepower motors, the data showed a slightly downward trend prior to the early 2000s, and then the price index increased to a small degree. For integral horsepower motors, the trend was mostly flat before the early 2000s, and then the price index increased slightly. The trend aligned with the copper and steel deflated price indices to some extent, as they are the major materials used in small electric motors. Given the degree of uncertainty, in the June 2022 NOPR, DOE used a constant price assumption as the default price factor index to project future DPPP motor prices. For two-speed DPPP motors 78, however, DOE assumed that the timer control portion of the installation cost would be affected by price learning. DOE used PPI data on ‘‘Automatic environmental control manufacturing’’ between 1980 and 2020 to estimate the historic price trend of the electronic components in the timer control.79 For variable-speed DPPP motors, DOE assumed that the controls portion of the DPPP motor would be affected by price purposes of its analysis, DOE used 2026 as the first full year of compliance with any amended standards for DPPP motors. 77 Series ID PCU 3353123353121; www.bls.gov/ ppi/. 78 DOE uses the terms ‘‘dual-speed’’ and ‘‘twospeed’’ interchangeably throughout this document. 79 Automatic environmental control manufacturing PPI series ID PCU334512334512; www.bls.gov/ppi/. PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 66998 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations learning. Similarly, DOE used PPI data on ‘‘Semiconductors and related device manufacturing’’ between 1967 and 2020 to estimate the historic price trend of electronic components in the control.80 87 FR 37122, 37145. DOE did not receive any comments on the equipment price trends. DOE updated the data used to include an additional year (2021) and retained the same approach to develop equipment price trends. ddrumheller on DSK120RN23PROD with RULES2 2. Installation Costs Installation costs include labor, overhead, and any miscellaneous materials and parts needed to install the equipment. In the June 2022 NOPR, DOE simplified the calculation and only accounted for the difference of installation costs by efficiency levels. Specifically, for two-speed pumps, DOE included the cost of a timer control and its installation where applicable. DOE also incorporated the supplemental installation labor costs for variablespeed pumps where applicable. Id. Pentair commented that older pools with large single-speed pumps would begin to fail and need replacement, as older pools usually do not have any automation to control the pool equipment and automation is needed to be able to program and control a variable-speed pump easily. Pentair commented that the cost to automate is between $2,000 to $3,000, and because of this cost, many pool owners rebuild the motor or purchase a foreign-made motor and pump. (Pentair, No. 90 at p. 1) DOE understands Pentair’s comment regarding automation systems as relating to additional control systems that can be used to further automate the operation of a DPPP via computer or mobile devices. These systems permit sophisticated control over e.g. filtration, pumps, lighting chemical management, wireless remote control.81 DOE notes that these systems are not necessary to operate a variable-speed DPPP. As noted in section 5.7.1 of the January 2017 Direct Final Rule TSD,82 DOE researched the design and engineering constraints associated with motor substitution by examining manufacturer interview responses and holding 80 Semiconductors and related device manufacturing PPI series ID PCU334413334413; www.bls.gov/ppi/. 81 See for example: www.pentair.com/en-us/ products/residential/pool-spa-equipment/poolautomation/easytouch_pl4_andpsl4pooland spacontrolsystems.html?queryID=b1f890f 14ae08bf7d162fc1ae8f116e8&objectID. 82 See chapter 5 of the dedicated-purpose pool pumps direct final rule TSD, at www.regulations.gov/document?D=EERE-2015-BTSTD-0008-0105. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 discussions with the DPPP Working Group. DOE concluded that for the representative equipment capacities being considered, the wet end of the pump can be paired with a range of motors with various efficiencies and speed configurations without significant adaptations. In other words, a motor swap results in negligible incremental costs to the non-motor components of the DPPP. Thus, DOE concluded that the incremental MPC of the motor swap design options (improved motor efficiency and ability to operate at reduced speeds) may be considered equivalent to the incremental MPC of the motor component being swapped. Therefore, for variable-speed DPPP motors, DOE is not including the additional cost of automation systems in its analysis. DOE did not receive other comments on installation costs and retained the same estimates as in the June 2022 NOPR as applied to two-speed and variable-speed DPPP motors.83 3. Annual Energy Consumption For each sampled consumer, DOE determined the energy consumption for a DPPP motor at different efficiency levels using the approach described previously in section IV.E of this document. 4. Energy Prices Because marginal electricity price more accurately captures the incremental savings associated with a change in energy use from higher efficiency, it provides a better representation of incremental change in consumer costs than average electricity prices. Therefore, DOE applied average electricity prices for the energy use of the product purchased in the no-newstandards case, and marginal electricity prices for the incremental change in energy use associated with the other efficiency levels considered. DOE derived electricity prices in 2022 using data from EEI Typical Bills and Average Rates reports. Based upon comprehensive, industry-wide surveys, this semi-annual report presents typical monthly electric bills and average kilowatt-hour costs to the customer as charged by investor-owned utilities. For the residential sector, DOE calculated electricity prices using the methodology described in Coughlin and Beraki (2018).84 For the commercial sector, 83 Adjusted to 2021$. K. and B. Beraki.2018. Residential Electricity Prices: A Review of Data Sources and Estimation Methods. Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL–2001169. ees.lbl.gov/publications/residential-electricityprices-review. 84 Coughlin, PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 DOE calculated electricity prices using the methodology described in Coughlin and Beraki (2019).85 DOE’s methodology allows electricity prices to vary by sector, region, and season. In the analysis, variability in electricity prices is chosen to be consistent with the way the consumer economic and energy use characteristics are defined in the LCC analysis. For DPPP motors, regional weighted-average values for both average and marginal prices were calculated for the nine census divisions. Each EEI utility in a region was assigned a weight based on the number of consumers it serves. Consumer counts were taken from the most recent EIA Form EIA–861 data (2021). See chapter 8 of the final rule TSD for details. To estimate energy prices in future years, DOE multiplied the 2022 energy prices by the projection of annual average price changes for each of the nine census divisions from the Reference case in AEO2023, which has an end year of 2050.86 To estimate price trends after 2050, DOE used the average of 2046–2050 values, held constant. 5. Maintenance and Repair Costs Repair costs are associated with repairing or replacing product components that have failed in the equipment; maintenance costs are associated with maintaining the operation of the equipment. Typically, small incremental increases in equipment efficiency entail no, or only minor, changes in repair and maintenance costs compared to baseline efficiency products. In the June 2022 NOPR, DOE assumed that for maintenance costs, there is no change with efficiency level, and therefore DOE did not include those costs in the model. In addition, DPPP motors are not typically repaired and DOE assumed no repair costs. 87 FR 37122, 37146. DOE did not receive any comments regarding maintenance and repair costs and maintained the same approach in this final rule. 6. Equipment Lifetime In the June 2022 NOPR, for DPPP motors used in residential applications, DOE calculated lifetime estimates using DPPP lifetime data and rates of repair 85 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. ees.lbl.gov/publications/nonresidential-electricity-prices. 86 U.S. Department of Energy—Energy Information Administration. Annual Energy Outlook 2023 with Projections to 2050. Washington, DC. Available at www.eia.gov/forecasts/aeo/ (last accessed May 23, 2023). E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations from the January 2017 Direct Final Rule, which estimated that motor replacement occurs at the halfway point in a pump’s lifetime, but only for those DPPPs whose lifetime exceeds the average lifetime for the relevant equipment class.87 The data allowed DOE to develop a survival function, which provides a distribution of lifetime ranging from a minimum of 1 year based on a period covered by warranty, to a maximum of 10 years, with a mean value of 5 years for self-priming pumps, to a maximum of 8 years, with a mean value of 3.6 years for non-self-priming and pressure cleaner booster pumps. These values are applicable to DPPP motors in residential applications. For commercial applications, DOE adjusted the lifetimes to account for the higher operating hours compared to residential applications, resulting in a reduced average lifetime of 3.2 years for selfpriming pumps and 3.5 years for pressure cleaner booster pumps. The resulting shipments-weighted average lifetime across all DPPP motor equipment classes is 4.5 years. Id. The CA IOUs recommended that DOE increase the PCBP lifetimes to account for shorter operating hours compared to non-self-priming pump applications, similar to how DOE assumed longer lifetimes for DPPP motors used in the residential sector vs. commercial sector. The CA IOUs estimated the PCBP operating hours are about 40 percent shorter than the non-self-priming pool filter pump. (CA IOUs, No. 96 at pp. 5– 6) The CEC and NYSERDA recommended that DOE revise its lifetime estimates for PCBPs pumps, as well as for variable-speed DPPPs as compared to single- or two-speed DPPPs. The CEC and NYSERDA commented that they expected that more up-to-date information would be available to support increased lifetime estimates for PCBPs, as well as for variable-speed DPPPs generally. (CEC and NYSERDA, No. 94 at p. 6) DOE does not have lifetime data for PCBP motors. As stated previously, DOE calculated PCBP motor lifetimes based on information on PCBP lifetimes. DOE developed separate DPPP motor lifetimes by DPPP applications in line with the lifetime estimates from the January 2017 Direct Final Report. Specifically, for PCBPs, a shorter 87 For DPPPs that do not include a repair, the DPPP motor lifetime is equal to the DPPP lifetime. For DPPPs that are repaired, the DPPP motor lifetime is equal to half of the DPPP lifetime. See chapter 8 of the dedicated-purpose pool pumps January 2017 Direct Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BTSTD-0008-0105. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 average lifetime was considered compared to self-priming pumps to reflect a higher risk of failure typical of these DPPPs. (Docket EERE–2015–BT– STD–0008; No. 94 p. 221) The PCBP lifetimes were developed with input from the Working Group and DOE believes these are representative of PCBP lifetimes. In addition, the CA IOUs, the CEC, and NYSERDA did not provide data to support longer lifetimes for DPPP motors used in PCBPs, nor did they provide data to support longer lifetimes for DPPP motors used in variable-speed DPPPs. Therefore, DOE believes its current approach is valid and retains its lifetime estimates for DPPP motors used in PCBPs. The CEC and NYSERDA stated although the approach 88 described in the June 2022 NOPR is reasonable, DOE should revisit its underlying assumptions for the LCC calculations and ensure the product lifetime estimates are consistent with the assumptions for motor replacements and warranty lengths. Specifically, the CEC and NYSERDA noted that there was a mismatch between the assumptions made for product lifetime, repair frequency, and warranty length in the January 2017 Direct Final Rule, and because of this, the resulting estimated equipment lifetime used in this NOPR underestimates the actual lifetimes of DPPP motors. The CEC and NYSERDA stated that they believed the Working Group members did not factor in potential repairs or warranties when coming up with product lifetime estimates. (Docket EERE–2015–BT– STD–0008; No. 94 pp. 209–223). The CEC and NYSERDA added that motor failure is the major failure mode for DPPPs and so if the motor is replaced after failure, the estimated lifetime of a DPPP is doubled. Further, the CEC and NYSERDA noted that if the DPPP fails during the warranty period and is replaced at no cost to the consumer, then the estimated lifetime of the DPPP is increased by the number of years the DPPP worked before it failed. The CEC and NYSERDA provided the example of the lifetime distribution for variablespeed non-self-priming pumps from the January 2017 Direct Final Rule and stated that the assumptions regarding lifetime, repair frequency, and warranty period were incompatible and required increasing the mean and maximum values of the Weibull distributions used to estimate the equipment lifetime. The 88 The CEC and NYSERDA referred to the following description: ‘‘for DPPPs that do not include a repair, the DPPP motor lifetime is equal to the DPPP lifetime. For DPPPs that are repaired, the DPPP motor lifetime is equal to half of the DPPP lifetime.’’ 87 FR 37122, 37146. PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 66999 CEC and NYSERDA commented that DOE relied on an overly conservative assessment of equipment lifetime, which would mean that the economics of the proposed standard, in reality, would be even more favorable than what DOE presented in the LCC analysis. The CEC and NYSERDA, therefore, commented that DOE should ensure that the product lifetime estimates are consistent with the assumptions on motor replacements and warranty lengths. (CEC and NYSERDA, No. 94 at pp. 4–6) DOE reviewed the DPPP lifetime assumptions and notes in the January 2017 Direct Final Rule TSD; the average lifetimes and associated Weibull distributions represent the age at which the equipment is retired from service and include any repairs 89 or motor replacement during the warranty period. (See section 8.2.2.4 of the January 2017 Direct Final Rule TSD) 90 As noted by the CEC and NYSERDA, the DPPP lifetimes used in the January 2017 Direct Final Rule were developed primarily based on input from manufacturers (in responses found in DOE’s manufacturer interviews) and feedback from the ASRAC DPPP Working Group. The manufacturers interview guide reflects that DPPP lifetime is considered to include any motor replacement that would occur. (See section 12A.9 of the January 2017 Direct Final Rule TSD) 91 As such, DOE believes that the lifetimes estimated in the January 2017 Direct Final Rule are inclusive of any repair and warranty periods. In addition, while the CEC and NYSERDA recommended revising equipment lifetimes, they did not provide alternative estimates and DOE retains the lifetimes as calculated in the June 2022 NOPR. 7. Discount Rates In the calculation of LCC, DOE applies discount rates appropriate to consumers to estimate the present value of future operating cost savings. DOE estimated a distribution of discount rates for DPPP motors based on the opportunity cost of consumer funds. DOE applies weighted average discount rates calculated from consumer debt and asset data, rather than marginal 89 The warranty period is represented by the location or delay parameter of the Weibull distribution. 90 See chapter 8 of the January 2017 Direct Final Rule TSD, at www.regulations.gov/ document?D=EERE-2015-BT-STD-0008-0105. 91 See appendix 12A of the January 2017 Direct Final Rule TSD, at www.regulations.gov/ document?D=EERE-2015-BT-STD-0008-0105. E:\FR\FM\28SER2.SGM 28SER2 67000 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 or implicit discount rates.92 The LCC analysis estimates net present value over the lifetime of the product, so the appropriate discount rate will reflect the general opportunity cost of household funds, taking this time scale into account. Given the longtime horizon modeled in the LCC, the application of a marginal interest rate associated with an initial source of funds is inaccurate. Regardless of the method of purchase, consumers are expected to continue to rebalance their debt and asset holdings over the LCC analysis period, based on the restrictions consumers face in their debt payment requirements and the relative size of the interest rates available on debts and assets. DOE estimates the aggregate impact of this rebalancing using the historical distribution of debts and assets. To establish residential discount rates for the LCC analysis, DOE identified all relevant household debt or asset classes in order to approximate a consumer’s opportunity cost of funds related to appliance energy cost savings. It estimated the average percentage shares of the various types of debt and equity by household income group using data from the Federal Reserve Board’s triennial Survey of Consumer Finances 93 (‘‘SCF’’) starting in 1995 and ending in 2019. Using the SCF and other sources, DOE developed a distribution of rates for each type of debt and asset by income group to represent the rates that may apply in the year in which amended standards would take effect. DOE assigned each sample household a specific discount rate drawn from one of the distributions. The average rate across all types of household debt and equity and income groups, weighted by the shares of each type, is 4.26 percent. To establish commercial discount rates for the small fraction of applications where businesses purchase and use DPPP motors, DOE estimated the weighted-average cost of capital 92 The implicit discount rate is inferred from a consumer purchase decision between two otherwise identical goods with different first cost and operating cost. It is the interest rate that equates the increment of first cost to the difference in net present value of lifetime operating cost, incorporating the influence of several factors: transaction costs; risk premiums and response to uncertainty; time preferences; interest rates at which a consumer is able to borrow or lend. The implicit discount rate is not appropriate for the LCC analysis because it reflects a range of factors that influence consumer purchase decisions, rather than the opportunity cost of the funds that are used in purchases. 93 U.S. Board of Governors of the Federal Reserve System. Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 2019. www.federalreserve.gov/econresdata/scf/ scfindex.htm (last accessed September 1, 2022). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 using data from Damodaran Online.94 The weighted-average cost of capital is commonly used to estimate the present value of cash flows to be derived from a typical company project or investment. Most companies use both debt and equity capital to fund investments, so their cost of capital is the weighted average of the cost to the firm of equity and debt financing. DOE estimated the cost of equity using the capital asset pricing model, which assumes that the cost of equity for a particular company is proportional to the systematic risk faced by that company. The average commercial discount rate is 6.77 percent. DOE did not receive any comments related to discount rates. DOE retained the same methodology used in NOPR and updated the discount rate distributions based on the most recent available data. See chapter 8 of the January 2017 Direct Final Rule TSD for further details on the development of consumer discount rates. 8. Energy Efficiency Distribution in the No-New-Standards Case To accurately estimate the share of consumers that would be affected by a potential energy conservation standard at a particular efficiency level, DOE’s LCC analysis considered the projected distribution (market shares) of product efficiencies under the no-new-standards case (i.e., the case without amended or new energy conservation standards). In the June 2022 NOPR, to estimate the efficiency distribution of DPPP motors in 2026, DOE first established efficiency distributions in 2021. Then, as in the January 2017 Direct Final Rule, DOE projected the 2026 efficiency distribution by assuming a 1-percent market shift from EL 0–EL 2 (singlespeed DPPP motors) to EL 6 (variablespeed DPPP motors) where applicable. To establish the efficiency distributions of DPPP motors in 2021, DOE considered two market segments: (1) DPPP motors incorporated in DPPPs and (2) replacement DPPP motors sold alone. 87 FR 37122, 37147. For DPPP motors incorporated in DPPPs, in the June 2022 NOPR, DOE relied on the 2021 DPPP Database that included a total of 345 models of DPPPs with WEF ratings and on the ELs developed in the January 2017 Direct Final Rule to establish the 2021 efficiency distributions of DPPPs. DOE also used the scenario of roll-up market response to the DPPP standards as 94 Damodaran Online, Data Page: Costs of Capital by Industry Sector (2021). pages.stern.nyu.edu/ ∼adamodar/ (last accessed April 22, 2022). PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 presented in the January 2017 Direct Final Rule. DOE then assumed that the distributions of DPPP motors incorporated in DPPPs would be equivalent to the 2021 efficiency distributions of DPPPs, based on the equivalent structure of the ELs used in this NOPR and in the January 2017 Direct Final Rule. For representative units 4 (i.e., DPPP motors used in nonself-priming pumps, extra-small) and 7 (i.e., DPPP motors used in pressure cleaner booster pumps), the 2021 DPPP Database did not include any information specific to these DPPPs. Instead, for these representative units, DOE relied on the efficiency distributions provided in the January 2017 Direct Final Rule and applied a scenario of roll-up market response to the upcoming DPPP standards. Id. For replacement DPPP motors sold alone, in the June 2022 NOPR, for the United States, not including California,95 DOE assumed that the DPPP standards would have no impact on the DPPP motor efficiency distributions. Therefore, to establish the efficiency distributions of replacement DPPP motors sold alone, DOE relied on the 2021 no-new-standards case efficiency distributions provided in the January 2017 Direct Final Rule, which reflect efficiency distributions prior to the compliance date of the DPPP standards. DOE then assumed that the efficiency distributions of replacement DPPP motors sold alone would be equivalent to the efficiency distributions of DPPPs, based on the equivalent structure of the ELs used in this NOPR and in the January 2017 Direct Final Rule. For California, DOE applied a scenario of roll-up market response to the upcoming California replacement DPPP motor standards.96 DOE then relied on the market shares of replacement DPPP motors sold in California 97 and in the rest of the United States to establish the nationwide 2021 replacement DPPP motor efficiency distributions. Id. In response to the June 2022 NOPR, PHTA and NEMA commented that DOE 95 DOE considered California separately in light of the July 2021 California standards for replacement DPPP motors adopted April 7, 2020 with an effective date July 19, 2021. See Docket 19– AAER–02 at www.energy.ca.gov/rules-andregulations/appliance-efficiency-regulations-title20/appliance-efficiency-proceedings-2. 96 For the purposes of this analysis, DOE considered EL 1 (for motors below 0.5 THP) and EL 6 (for motors above 0.5 THP) as equivalent levels to the California standards. 97 California Energy Commission, Final Analysis of Efficiency Standards for Replacement DedicatedPurpose Pool Pump Motors, February 20, 2020. Docket 9–AAER–02 https://efiling.energy.ca.gov/ GetDocument.aspx?tn=232151 (last accessed August 2021). E:\FR\FM\28SER2.SGM 28SER2 67001 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations overestimated the percentage of PCBP and small filter pumps that would be variable speed in 2026. PHTA and NEMA commented that based on a review of the CCMS data, there is limited availability of fractional THP motors currently on the market. Further, PHTA and NEMA commented that the limited models available are not mass produced. Recognizing the limited models of motors that exist in the small motor category, PHTA and NEMA cited this as a rationale for the fact that there are zero or very limited variable-speed replacement motors in the CEC database since the July 19, 2021, compliance date of CEC’s replacement motor rule (the database appears to not identify whether products listed are variable speed or not; it lists only model information). PHTA and NEMA commented that in discussions with the California pool service, installer, and distribution industry as well as PHTA and NEMA manufacturers, it was revealed that small fractional VS motors are simply not being sold and instead consumers are choosing to replace the entire pump or repair the existing motor due to the cost justification and lack of product availability. (PHTA and NEMA, No. 92 at pp. 6–7) Fluidra commented that DOE’s estimate for the share of DPPP motors used in PCBP at EL 2 appears to be too low. Specifically, Fluidra commented that EL 2 represents multistage booster pumps, which it estimates to be approximately a third of total booster pump market share. Fluidra further commented that DOE’s estimated market share of DPPP motors used in PCBP at EL 6 appears to be too high. Although technologically feasible, Fluidra noted that it is not economically practical and there appears to be no availability of this type of pump in distribution at this time. Fluidra also noted that DOE’s estimate for DPPP motors used in small-size 0.75 hp selfpriming DPPP at EL 6 appears to be too high because there are currently no or very limited variable-speed DPPPs of this size in the market. Fluidra added that for representative unit 7, the estimated 35 percent of replacement variable-speed PCBP motors is much too high and should be 0–1 percent, instead. (Fluidra, No. 91 at pp. 3–4) Pentair questioned whether variablespeed motors are being shipped in large numbers and stated that this is not the case. (Pentair, No. 90 at p. 2) PHTA stated that there are no variable-speed pumps on the market below 0.75 hp. (PHTA, No. 100 at p. 3) Hayward recommended that DOE review the availability of lowhorsepower variable-speed DPPP motors in the current market, and that Hayward offers three basic variable-speed pump models that can achieve a rating of 0.85 THP, but only when installed with 115V power. Accordingly, Hayward noted that each of these models is made with dual-voltage capability, and estimated that over 98 percent are installed with 230V power which yields 1.65 THP. (Hayward, No. 93 at p. 2) In this final rule, DOE revised the nonew-standards case efficiency distributions to incorporate stakeholder feedback. First, DOE revised the approach used to develop the no-newstandards case efficiency distributions for replacement DPPP motors in California (which was based on a rollup scenario) and assumed shipments of replacement variable-speed DPPP motors would not always increase as a result of the California standard. Instead, in cases where the California standard requires a variable-speed replacement DPPP motor and the current DOE standards for DPPPs can be met without the use of a variable-speed motor (i.e., for small-size DPPP motors and for standard-size DPPP motors used in non-self priming DPPPs), DOE assumed that consumers would choose to purchase a new, cheaper, nonvariable-speed DPPP instead of purchasing a more expensive variablespeed replacement motor.98 This approach results in a lower market share of variable-speed DPPP motors overall (i.e., lower shipments), and specifically for DPPP motors used in PCBPs as recommended by NEMA, PTHA, and Fluidra. This approach also results in a decrease in the market share of DPPP motors used in small size 0.75 hp selfpriming DPPP at EL 6 compared to the estimates from the June 2022 NOPR, as recommended by Fluidra. In addition, DOE updated the information used to develop the efficiency distributions based on the 2022 DPPP Database. Further to derive the efficiency distributions for each representative unit, DOE relied on all models of DPPP with a DPPP motor THP included in the range represented by the representative unit (e.g., for representative unit 1, DOE relied on DPPP motor data with DPPP motor THP greater than 0.5 and less than 1.15 THP). For this analysis, DOE considered the DPPP motor THP as rated by manufacturers when submitting compliance to the DOE Compliance and Certification Database, the CEC, and the ENERGY STAR program (which DOE collected as part of the 2022 DPPP Database), which may include ratings at different voltages. As a result, although DOE did not find DPPP motors at 0.75 THP, DOE found several variable-speed DPPP motors within the 0.5–1.15 THP range. In addition, DOE does not have any technical basis for, or has not received any comments on, variablespeed technology not being feasible at 0.75 THP (See section IV.A.4 of this document), and believes the efficiency distributions as established are representative of the 0.5–1.15 THP range associated with representative unit 1. Regarding Fluidra’s comment related to the share of shipments at EL 2 for PCBP, Fluidra did not provide supporting data to justify the recommended one-third market share. In addition, DOE notes that EL 2 represents a level achieved by a higherefficiency DPPP motor and does not relate to the pump design (e.g., multistage). The market shares from the June 2022 NOPR were based on information collected during the January 2017 Direct Final Rule. DOE maintained the same approach as the 2022 DPPP Database and did not have sufficient information 99 to revise these estimates. The projected 2026 market shares by EL for the no-new-standards case for DPPP motors are shown in Table IV.7 and Table IV.8 by market segment. See chapter 8 of the final rule TSD for further information on the derivation of the efficiency distributions. TABLE IV.7—DPPP MOTORS INCORPORATED IN DPPPS 2026 NO-NEW-STANDARDS CASE EFFICIENCY DISTRIBUTIONS Rep. unit ddrumheller on DSK120RN23PROD with RULES2 Equipment class Extra-Small-size ......... Small-size ................... Small-size ................... THP 4 I 1 5 0.22 I 0.75 1 Non-self-priming Filter Pump, Extra-Small-size (0.09 hhp). Self-priming Filter Pump, Small-size (0.44 hhp) ...... Non-self-priming Filter Pump, Small-size (0.52 hhp) I 98 As noted by NEMA and PTHA, a consumer may also choose to repair its existing motor. However, DOE notes in section IV.F.5 of this VerDate Sep<11>2014 18:58 Sep 27, 2023 EL 0 (%) DPPP application Jkt 259001 EL 1 (%) 0 I 0 0 document that DPPP motors are typically not repaired and DOE believes that the purchase of a new DPPP represents the more likely scenario. PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 EL 2 (%) 67 I 0 38 33 I 45 27 EL 3 (%) EL 4 (%) EL 5 (%) EL 6 (%) ............ ............ ............ ............ I 9 10 I 0 6 I 1 1 I 44 18 99 The 2022 DPPP Database includes 12 models of PBCPs. E:\FR\FM\28SER2.SGM 28SER2 67002 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE IV.7—DPPP MOTORS INCORPORATED IN DPPPS 2026 NO-NEW-STANDARDS CASE EFFICIENCY DISTRIBUTIONS— Continued Equipment class Small-size ................... Standard-size ............. Standard-size ............. Standard-size ............. Standard-size ............. Rep. unit THP *7 6 2 2A 3 1.125 1.5 1.65 1.65 3.45 EL 0 (%) DPPP application Pressure Cleaner Booster Pump ............................. Non-self-priming Filter Pump (0.87 hhp) ................. Self-priming Filter Pump, Standard-size (0.95 hhp) Self-priming Filter Pump, Small-size (0.65 hhp) ...... Self-priming Filter Pump, Standard-size (1.88 hhp) EL 1 (%) 0 0 0 0 0 81 38 0 0 0 EL 2 (%) 10 27 0 45 0 EL 3 (%) EL 4 (%) EL 5 (%) ............ 10 0 9 0 ............ 6 0 0 0 ............ 1 0 1 0 EL 6 (%) 9 18 100 44 100 * For Pressure cleaner booster pumps EL 3, EL 4, and EL 5 are equivalent to EL 6. Note: may not sum to 100% due to rounding. TABLE IV.8—REPLACEMENT DPPP MOTORS SOLD ALONE 2026 NO-NEW-STANDARDS CASE EFFICIENCY DISTRIBUTIONS Equipment class Rep. unit THP Extra-small-size .......... 4 0.22 Small-size ................... Small-size ................... Small-size ................... Standard-size ............. Standard-size ............. Standard-size ............. Standard-size ............. 1 5 *7 6 2 2A 3 0.75 1 1.125 1.5 1.65 1.65 3.45 EL 0 (%) DPPP application Non-self-priming Filter Pump, Extra-Small size (0.09 hhp). Self-priming Filter Pump, Small-size (0.44 hhp) ...... Non-self-priming Filter Pump, Small-size (0.52 hhp) Pressure Cleaner Booster Pump ............................. Non-Self-priming Filter Pump (0.87 hhp) ................. Self-priming Filter Pump, Standard-size (0.95 hhp) Self-priming Filter Pump, Small-size (0.65 hhp) ...... Self-priming Filter Pump, Standard-size (1.88 hhp) EL 1 (%) EL 2 (%) EL 3 (%) EL 4 (%) EL 5 (%) EL 6 (%) 29 38 33 ............ ............ ............ ............ 33 26 11 26 27 33 27 11 26 65 26 9 11 9 9 31 10 31 7 9 7 2 2 ............ 2 1 2 1 2 1 ............ 1 1 2 1 2 1 ............ 1 1 2 1 42 12 14 12 52 42 52 * For Pressure cleaner booster pumps EL 3, EL 4, and EL 5 are equivalent to EL 6. The LCC Monte Carlo simulations draw from the efficiency distributions and randomly assign an efficiency to the DPPP motor purchased by each sample household in the no-new-standards case. The resulting percent shares within the sample match the market shares in the efficiency distributions. In the June 2022 NOPR, when assigning an equipment efficiency to a sample consumer, DOE relied on a random assignment of no-new-standards case efficiencies (sampled from the developed efficiency distribution) in the LCC model. 87 FR 37142. 37144. DOE did not receive any comments on this approach and continued to rely on a random assignment in this final rule. ddrumheller on DSK120RN23PROD with RULES2 9. Payback Period Analysis The payback period is the amount of time (expressed in years) it takes the consumer to recover the additional installed cost of more-efficient products, compared to baseline products, through energy cost savings. Payback periods that exceed the life of the product mean that the increased total installed cost is not recovered in reduced operating expenses. The inputs to the PBP calculation for each efficiency level are the change in total installed cost of the product and the change in the first-year annual operating expenditures relative to the baseline. DOE refers to this as a ‘‘simple PBP’’ because it does not consider changes over time in operating cost savings. The PBP calculation uses the same inputs as the LCC analysis when deriving first-year operating costs. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 As noted previously, EPCA establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the first year’s energy savings resulting from the standard, as calculated under the applicable test procedure. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency level, DOE determined the value of the first year’s energy savings by calculating the energy savings in accordance with the applicable DOE test procedure, and multiplying those savings by the average energy price projection for the year in which compliance with the new standards would be required. Fluidra presented a study of PCBP power consumption taken from two typical residential in-ground pool installations to compare the power consumption of a production multistage single-speed booster pump, with a multi-stage and a single-stage booster pump fitted with the most compatible variable-speed DPPP motor currently available. Fluidra commented that in the study, power was measured at various motor rotations per minute (‘‘RPM’’) down the lowest possible RPM to maintain the necessary flow and pressure for pool cleaner operation. Fluidra concluded from the study that a minimum payback period of approximately 9 years was needed, and this was larger than the average lifetime of the PCBP motor (at 3.6 years from the 2017 Direct Final Rule TSD). Further, PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 Fluidra noted that the power consumption of the booster pump variable-speed motor operating at maximum speed measured noticeably higher than the single-speed base comparison. Specifically, Fluidra commented that operating a PCBP at maximum speed is necessary because of the plumbing head loss from extended pipe runs where the pool equipment pad is further from the pool for aesthetics and noise reduction. Accordingly, Fluidra concluded that the variable speed would have incremental costs, without ever realizing the fiscal benefit of potential energy savings, and with limited impact to energy and waste reduction. (Fluidra, No. 91 at pp. 1–2, 6–9) Hayward stated that it reviewed energy and cost savings for six of its currently compliant single-speed pumps, including self-priming and nonself-priming, and estimated that the average payback period for conversion to variable speed was over 12 years. Hayward provided a separate analysis spreadsheet of this evaluation. Hayward also noted use of a 24.7 gpm flow rate, although Hayward knows of pool equipment requiring a greater flow rate. (Hayward, No. 93 at p. 2) PHTA and NEMA provided the results of field tests of two separate variable-speed PCBPs showing payback periods of 9–30 years, while a PCBP has an average lifetime of 3.6 years. In addition, PHTA and NEMA noted that in some cases, the variable-speed PCBP consumed more energy than the constant-load system. PHTA and NEMA noted that these results are consistent E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations with the LCC results from the January 2017 Direct Final Rule. (PHTA and NEMA, No. 92 at pp. 2–3) PHTA restated that PCBPs, when analyzed as their own equipment class, would not show cost-effective results; thus, it requested that DOE confirm its analysis and not require variable speed for these motors. (PHTA, No. 100 at p. 2) PHTA added that the rule is not costeffective and pointed to data provided by Hayward that calculated a 12-year payback period for both self-priming and non-self-priming pumps under 1 hp as well as data submitted by Fluidra that calculated a 9-year payback period for a variable-speed PCBP. (PHTA, No. 100 at pp. 3–4) Waterway Plastics commented that savings are application-related. Waterway Plastics noted that non selfpriming pool pumps are used on smaller swimming pools that have less filtration load, and some of them are seasonal. Therefore, they questioned the representativeness of average values for all applications. (Waterway Plastics, Public Meeting, No. 88 at p. 32) Waterway Plastics added that aboveground swimming pool and non-selfpriming pump is used to filter a much smaller body of water on average and therefore averaging and combining the non-self-priming application with the self-priming application do not provide an accurate economic analysis. Further, Waterway Plastics added that using variable speed motors results in energy savings because they are flexible on the speed of operation and do not provide significant savings when used a maximum speed compared to single speed motors. (Waterway Plastics, Public Meeting, No. 88 at pp. 58–59) While the Fluidra and Hayward studies analyzed a number of specific installations, DOE notes that the LCC analyzes a larger consumer sample and characterizes inputs using statistical distributions to reflect variability in the field (see description in sections IV.E. and IV.F of this document). DOE does not believe that the two or six installations considered by Fluidra and Hayward are representative of the entire market as they do not reflect the entire range of possible installation costs, energy usage and usage conditions (e.g. as noted by Hayward, they relied on a single value of 24.7 gpm flow rate, although pool equipment typical runs at VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 higher rates), and related operating costs. Further, as previously described, DOE believes that variable-speed motors can lead to energy savings in PCBPs as discussed in section IV.A.4 of this document. Instead, in the LCC and PBP analysis, DOE considers a distribution of installations with variations in heads and flow rates and efficiency as described in sections IV.E and IV.F.8 of this document. In addition, as presented in section IV.A.3 of this document, DOE’s LCC and PBP analysis results are provided at the equipment-class level and not at the DPPP-application level (e.g., PCBP). The resulting payback periods are presented in section V.B.1.a of this document. G. Shipments Analysis DOE uses projections of annual product shipments to calculate the national impacts of potential amended or new energy conservation standards on energy use, NPV, and future manufacturer cash flows.100 The shipments model takes an accounting approach, tracking market shares of each product class and the vintage of units in the stock. Stock accounting uses product shipments as inputs to estimate the age distribution of in-service product stocks for all years. The age distribution of in-service product stocks is a key input to calculations of both the NES and NPV, because operating costs for any year depend on the age distribution of the stock. 1. Base-Year Shipments In the June 2022 NOPR, DOE estimated motor shipments by DPPP application and considered two pool pump motor market segments: (1) DPPP motors incorporated in DPPPs and (2) replacement DPPP motors sold alone. For DPPP motors incorporated in DPPPs, DOE used the 2015 shipments of DPPPs by DPPP application from the January 2017 Direct Final Rule, which were based on manufacturer interviews. For replacement DPPP motors sold alone, DOE used estimates of historical shipments of DPPPs for the period 2007–2014 and estimates of repair frequency as provided by the ASRAC DPPP Working Group during the 100 DOE uses data on manufacturer shipments as a proxy for national sales, as aggregate data on sales are lacking. In general, one would expect a close correspondence between shipments and sales. PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 67003 January 2017 Direct Final Rule to calculate the resulting number of failing DPPP motors each year, and corresponding replacement DPPP motor shipments by DPPP application.101 DOE also used 2018 confidential DPPP motor shipments data and information from the 2021 DPPP Database to estimate market share of motor shipments by total horsepower and distribution of DPPP motor shipments by representative unit. 87 FR 37122, 37148. Regarding DOE’s base year shipments estimate, Fluidra commented that shipments of replacement DPPP motors for booster pumps appear to be too high. Fluidra stated that it offers two Pressure Cleaner Booster Pump Models (PB4–60 and PB4SQ), and combined ships less than 1,000 replacement motors per year, which includes warranty replacements. Fluidra added that due to the low price point of booster pumps, the cost of a replacement motor and service/repair of a booster pump outweighs the cost of simply replacing the entire booster pump, which also comes with a manufacturer warranty. (Fluidra, No. 91 at p. 4) In this final rule, as described in section IV.F.8 of this document, DOE revised the base year 2021 shipments to account for consumers that elect to purchase a new pump, rather than a replacement motor in California.102 This resulted in reduced shipments of replacement DPPP motors sold alone and increased shipments of motors sold in DPPP for PCBP, small-size selfpriming, small and standard-size nonself-priming filter pump applications. Table IV.9 provides the breakdown of DPPP motor shipments by market segment and representative unit. 101 DOE relied on a repair frequency of 40 percent as provided in the January 2017 Direct Final Rule. At the end of life of a motor, the motor is replaced (i.e., pump repair) 40 percent of the time, and in the remaining 60 percent of the time, the pump is replaced by a new pump. For more details, see chapter 9 of the January 2017 Direct Final Rule TSD, at www.regulations.gov/document?D=EERE2015-BT-STD-0008-0105. 102 As noted in section IV.F.8 of this document, DOE considered California separately in light of the July 2021 California standards for replacement DPPP motors adopted April 8, 2020 with an effective date July 19, 2021. See Docket 19–AAER– 02 at www.energy.ca.gov/rules-and-regulations/ appliance-efficiency-regulations-title-20/applianceefficiency-proceedings-2. E:\FR\FM\28SER2.SGM 28SER2 67004 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE IV.9—2021 SHIPMENTS OF DPPP MOTORS BY MARKET SEGMENT AND REPRESENTATIVE UNIT Equipment class Rep. unit * THP Represented THP range within the DPPP category DPPP category Small-size ..................... 1 0.75 Standard-size ............... Standard-size ............... 2A 2 1.65 1.65 Standard-size ............... Extra-Small-size ........... 3 4 3.45 0.22 Small-size ..................... Standard-size ............... Small-size ..................... 5 6 7 1 1.5 1.125 Small Size Self-priming Filter Pump. Standard Size Selfpriming Filter Pump. Non-self-priming Filter Pump. Pressure Cleaner Booster Pump. DPPP motors incorporated in pumps (thousand units) Replacement DPPP motors sold alone (thousand units) 0.5 ≤ THP < 1.15 ........ 148.3 37.4 1.15 ≤ THP ≤ 5 ........... 1.15 ≤ THP < 1.7 ........ 103.8 155.2 26.1 151.7 1.7 ≤ THP ≤ 5 ............. <0.5 ............................. 243.1 47.4 237.5 16.2 0.5 ≤ THP < 1.15 ........ 1.15 ≤ THP ≤ 5 ........... 0.5 ≤ THP < 1.15 ........ 299.3 116.4 151.8 86.9 33.8 39.7 * Representative unit. ddrumheller on DSK120RN23PROD with RULES2 2. No-New-Standards Case Shipment Projections DOE projected shipments of DPPP motors incorporated in DPPPs and shipments of replacement DPPP motors sold alone separately. In the June 2022 NOPR, in the nonew-standards case, DOE assumed the total shipments of DPPP motors incorporated in DPPPs was equal to the total shipments of DPPPs as projected in the January 2017 Direct Final Rule, at the trial standard level corresponding to the DPPP energy conservation standard.103 87 FR 37122, 37149. DOE did not receive any comments on this approach and retained the same method to estimate DPPP motors incorporated in DPPPs. In the June 2022 NOPR, in the nonew-standards case, for replacement DPPP motors sold alone, DOE used the projected shipments of DPPPs and estimates of repair frequency to calculate the resulting number of failing motors each year and corresponding motor replacement sales. For replacement motors sold alone outside of California, DOE relied on repair frequency rates as provided in the January 2017 Direct Final Rule. For standard-size, self-priming pump motors sold before 2021 and at efficiency levels below the DPPP standards, DOE assumed that the repair frequency would increase from 40 percent to 60 percent to calculate corresponding replacement DPPP 103 These were calculated based on input from the ASRAC DPPP Working Group and using a repairreplace model, and accounted for price elasticity of demand. A price elasticity of –0.02 was used for standard-size self-priming pool pumps. For more details see chapter 9 of the January 2017 Direct Final Rule TSD, at www.regulations.gov/ document?D=EERE-2015-BT-STD-0008-0105. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 motors sales.104 For other categories of DPPPs, DOE relied on a 40-percent repair frequency as provided in the January 2017 Direct Final Rule. These repair-replace rates were based on inputs from the ASRAC DPPP Working Group during the January 2017 Direct Final Rule. For replacement motors sold alone in California, DOE projects that with the California efficiency standards for replacement DPPPs,105 the repair frequency of standard-size, self-priming pump motors will remain at its pre-2021 rate of 40 percent as estimated in the January 2017 Direct Final Rule, rather than increasing to 60 percent due to the smaller price difference between replacing the entire pump and replacing the motor only. Id. In response to the June 2022 NOPR, Fluidra commented that a 60-percent estimate for replacement motors may be too high, adding that the tendency for the consumer is to replace motors only when they are under warranty, and once the motor warranty expires, the consumer purchases a whole new pump to get a new manufacturer’s warranty 104 In the January 2017 Direct Final Rule, DOE assumed that users of standard-size self-priming pool pumps purchased before compliance year of the DPPP standards (i.e., 2021), at efficiency levels below the upcoming DPPP standards, would seek to increase their pump’s lifetime by performing an additional repair (i.e., cheaper motor replacement with a non-variable speed motor), rather than replacing the entire pump with a more efficient and variable-speed DPPP (due to the DPPP energy conversation standards at 10 CFR 431.465(f) which correspond to a variable-speed efficiency levels for these DPPPs). In the January 2017 Direct Final Rule, DOE therefore increased the repair frequency of these DPPPs from 40 percent to 60 percent. For more details see chapter 9 of the January 2017 Direct Final Rule TSD, at www.regulations.gov/ document?D=EERE-2015-BT-STD-0008-0105. 105 Adopted April 7, 2020 with an effective date July 19, 2021. See Docket #19–AAER–02 at www.energy.ca.gov/rules-and-regulations/ appliance-efficiency-regulations-title-20/applianceefficiency-proceedings-2. PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 (typically a 3-year warranty). (Fluidra, No. 91 at p. 4) In the June 2022 NOPR, in order to estimate shipments of DPPP motors, DOE relied on a 40-percent DPPP repair rate for the majority of DPPPs. See footnote 85 of the June 2022 NOPR. 87 FR 37122, 37148. As previously noted, for standard-size self-priming pump motors sold outside California before 2021 and at efficiency levels below the DPPP standards, DOE assumed that the repair frequency would increase from 40 percent to 60 percent to calculate corresponding replacement DPPP motors sales. See 87 FR 37122, 37149. Similar to the assumptions used in the January 2017 Direct Final Rule, DOE assumed that users of standard-size selfpriming pool pumps purchased before compliance year of the DPPP standards (i.e., 2021), at efficiency levels below the upcoming DPPP standards, would seek to increase the pump’s lifetime by performing an additional repair (i.e., cheaper motor replacement with a nonvariable-speed motor), rather than replacing the entire pump with a more efficient and variable-speed DPPP (due to the DPPP energy conversation standards at 10 CFR 431.465(f), which correspond to variable-speed efficiency levels for these DPPPs). See footnote 87 of the June 2022 NOPR 87 FR 37122, 37149. DOE believes this approach is appropriate and continues to rely on a 60-percent DPPP repair rate for DPPPs sold prior to 2021 below the current DPPP standards. For all other categories of DPPPs, DOE relied on a 40-percent repair rate as using a 60-percent rate would be too high as noted by Fluidra. DOE did not receive any other comments on this topic and relied on the same repair rates and approach to estimate replacement DPPP motors sold alone in the no-new-standards case. E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 3. Standards Case Shipment Projections The standards-case shipments projections account for the effects of potential standards on shipments. In the June 2022 NOPR, in the standards cases for which the DPPP motor efficiency level was set below the level equivalent to the standard-size self-priming DPPP standards, DOE assumed the increase in repair frequency (i.e., 60 percent) of standardsize self-priming pool pumps, which was accounted for in the no-newstandards case, was maintained for the entire United States except for California (i.e., TSLs 1 to 5 as described in section V.A of this document). In California, due to the California efficiency standards for replacement DPPP motors, DOE estimated that the repair frequency of standard-size selfpriming pump motors in California would remain at its pre-2021 rate of 40 percent in the standards case (the same as in the no-new-standards case) because California standards are at or above the levels equivalent to the DPPP standards at 10 CFR 431.465(f) for all equipment classes. 87 FR 37122, 37149. In the June 2022 NOPR, outside of California, in the standards cases for which the DPPP motor efficiency levels are set at or above the level equivalent to the standard-size self-priming DPPP standard, DOE assumed the increase in repair for standard-size self-priming pumps would no longer occur starting from the compliance year due to the smaller price difference between replacing the entire pump and replacing the motor only. Under these scenarios, DOE assumed the pumps were repaired 40 percent of the time, and new pumps were purchased 60 percent of the time to replace failed pumps (i.e., TSLs 6 to 8 as described in section V.A of this document). Id. In addition, DOE accounted for potential downsizing that could occur as a result of setting different efficiency levels by equipment classes and THP. Specifically, DOE assumed that DPPP manufacturers may not want to incorporate variable-speed motors in DPPPs, where the DPPP energy conservation standard level does not require the use of a variable-speed motor. Therefore, at TSLs requiring a variable-speed motor for certain equipment classes with larger THP (i.e., TSL 8, 7, 6. See section V.A), DOE assumed that DPPP manufacturers VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 might decide to use motors with smaller THP for DPPPs that were not required to comply with a DPPP standard level corresponding to a variable-speed-motor efficiency level. DOE analyzed DPPP motor THP size as a function of DPPP hhp in the 2021 DPPP Database to estimate where such downsizing may occur. For TSL 8 and 7, DOE did not identify any possible downsizing from small-size DPPP motors to extra-smallsize DPPP motors. Furthermore, at TSL 8 and 7, small-size and standard-size DPPP motors are both set at EL 6. Therefore, DOE did not consider any downsizing at these TSLs. At TSL 6, based on a review of the 2021 DPPP Database, DOE identified representative unit 2A as a candidate for downsizing. Therefore, at TSL 6, DOE assumed that the majority of shipments of standardsize DPPP motors used in small-size self-priming pool pumps (80 percent) would downsize to small-size DPPP motors. For standard-size DPPP motors used in standard-size non-self-priming pumps (i.e., representative unit 5), DOE did not identify DPPP models with oversized DPPP motors in its 2021 DPPP Database and did not assume any downsizing. 87 FR 37122, 37149–37150. DOE did not receive any comments on its approach to establish standards-case shipments projections and maintain the same methodology in this final rule with the following update. For those California consumers that elect to purchase a new DPPP rather than a replacement variable-speed motor in the no-new-standards case (based on the discussion in section IV.F.8 of this document), at the TSLs for which the DPPP motor efficiency levels are set at or above the level equivalent to the PCBP, small-size self-priming, small and standard-size non-self-priming DPPP standards, DOE assumed that these California consumers would select to purchase a replacement motor rather than a new DPPP. This results in an increase of shipments of replacement DPPP motors sold alone and a decrease of shipments of motors sold in DPPP at these TSLs, for those DPPP applications. See chapter 9 of the final rule TSD for more details. 67005 standards at specific efficiency levels.106 (‘‘Consumer’’ in this context refers to consumers of the product being regulated.) DOE calculates the NES and NPV for the potential standard levels considered based on projections of annual product shipments, along with the annual energy consumption and total installed cost data from the energy use and LCC analyses. For the present analysis, DOE projected the energy savings, operating cost savings, product costs, and NPV of consumer benefits over the lifetime of DPPP motors sold from 2026 through 2055, except at TSL 7 where for small size motors at TSL 7, the analysis considers DPPP motors sold from 2028 through 2055.107 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. DOE uses a spreadsheet model to calculate the energy savings and the national consumer costs and savings from each TSL. Interested parties can review DOE’s analyses by changing various input quantities within the spreadsheet. The NIA spreadsheet model uses typical values (as opposed to probability distributions) as inputs. Table IV.10 summarizes the inputs and methods DOE used for the NIA analysis for the final rule. Discussion of these inputs and methods follows the table. See chapter 10 of the final rule TSD for further details. 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 PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 106 The NIA accounts for impacts in the 50 States and U.S. territories. 107 Because the anticipated compliance date is late in the year, for analytical purposes, DOE conducted the analysis for shipments in 2026–2055 and 2028–2055. E:\FR\FM\28SER2.SGM 28SER2 67006 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations 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 Energy Cost per Unit .......... ddrumheller on DSK120RN23PROD with RULES2 Repair and Maintenance Cost per Unit. Energy Price Trends ....................... Energy Site-to-Primary and FFC Conversion. Discount Rate ................................. Present Year ................................... Annual shipments from shipments model. 2026 (2028 at TSL 7 for small-size DPPP motors) (first full year). No-new-standards case: shifted 1 percent per year of the market share in the single-speed levels to the variable-speed efficiency levels. Standard cases: shifted 1 percent per year of the market share in the single-speed levels to the variable-speed efficiency levels. Annual 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. Annual weighted-average values as a function of the annual energy consumption per unit and energy prices. Annual values do not change with efficiency level. AEO 2023 projections (to 2050) and held constant thereafter. A time-series conversion factor based on AEO 2023. Three and seven percent. 2024. 1. Product Efficiency Trends A key component of the NIA is the trend in energy efficiency projected for the no-new-standards case and each of the standards cases. Section IV.F.8 of this document describes how DOE developed an energy efficiency distribution for the no-new-standards case (which yields a shipment-weighted average efficiency) for each of the considered product classes for the year of anticipated compliance with an amended or new standard. To project the trend in efficiency absent amended standards for DPPP motors over the entire shipments projection period, DOE relied on the same approach described in section IV.F.8 this document and shifted 1 percent per year of the market share in the single-speed levels to the variable-speed efficiency levels. The approach is further described in chapter 10 of the final rule TSD. For the standards cases, DOE used a ‘‘roll-up’’ scenario to establish the shipment-weighted efficiency for the year that standards are assumed to become effective (2026 or 2028). In this scenario, the market shares of products in the no-new-standards case that do not meet the standard under consideration would ‘‘roll up’’ to meet the new standard level, and the market share of products above the standard would remain unchanged. In the June 2022 NOPR, to develop standards case efficiency trends after the first full year of compliance (2026 or 2028), DOE also shifted 1 percent per year of the market share in the singlespeed levels to the variable-speed efficiency levels. 87 FR 37122, 37151. This approach is consistent with the assumption made in the 2017 DPPP DFR. See section 8.4 of the June 2022 NOPR TSD. DOE did not receive any VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 comments on this assumption and retained the same approach in the final rule. 2. National Energy Savings The national energy savings analysis involves a comparison of national energy consumption of the considered products between each potential standards case (‘‘TSL’’) and the case with no new or amended energy conservation standards. DOE calculated the national energy consumption by multiplying the number of units (stock) of each product (by vintage or age) by the unit energy consumption (also by vintage). DOE calculated annual NES based on the difference in national energy consumption for the no-newstandards case and for each higher efficiency standard case. DOE estimated energy consumption and savings based on site energy and converted the electricity consumption and savings to primary energy (i.e., the energy consumed by power plants to generate site electricity) using annual conversion factors derived from AEO 2023. Cumulative energy savings are the sum of the NES for each year over the timeframe of the analysis. Use of higher-efficiency products is sometimes associated with a direct rebound effect, which refers to an increase in utilization of the product due to the increase in efficiency. DOE did not find any data on the rebound effect specific to DPPP motors and, in the June 2022 NOPR, DOE did not apply a rebound effect. 87 FR 37122, 37151. DOE did not receive any comments on this topic and maintains the same approach in this final rule. In 2011, in response to the recommendations of a committee on ‘‘Point-of-Use and Full-Fuel-Cycle PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 Measurement Approaches to Energy Efficiency Standards’’ appointed by the National Academy of Sciences, DOE announced its intention to use FFC measures of energy use and greenhouse gas and other emissions in the national impact analyses and emissions analyses included in future energy conservation standards rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the approaches discussed in the August 18, 2011 notice, DOE published a statement of amended policy in which DOE explained its determination that EIA’s National Energy Modeling System (‘‘NEMS’’) is the most appropriate tool for its FFC analysis and its intention to use NEMS for that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, multi-sector, partial equilibrium model of the U.S. energy sector 108 that EIA uses to prepare its Annual Energy Outlook. The FFC factors incorporate losses in production and delivery in the case of natural gas (including fugitive emissions) and additional energy used to produce and deliver the various fuels used by power plants. The approach used for deriving FFC measures of energy use and emissions is described in appendix 10B and 13A of the final rule TSD. 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 108 For more information on NEMS, refer to The National Energy Modeling System: An Overview 2009, DOE/EIA–0581(2009), October 2009. Available at www.eia.gov/analysis/pdfpages/ 0581(2009)index.php (last accessed September 2, 2021). E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations 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 DPPP motors price trends based on historical PPI data. DOE applied the same trends to project prices for each equipment class at each considered efficiency level. By 2055, which is the end date of the projection period, the average DPPP motor price is projected to drop between 0 and 52 percent depending on the efficiency level relative to 2026. DOE’s projection of product prices is described in appendix 10C of the final rule TSD. To evaluate the effect of uncertainty regarding the price trend estimates, DOE investigated the impact of different product price projections on the consumer NPV for the considered TSLs for DPPP motors. In addition to the default price trend, DOE considered two product price sensitivity cases: (1) a high price decline case and (2) a low price decline case based on historical PPI data. The derivation of these price trends and the results of these sensitivity cases are described in appendix 10C of the final rule TSD. The energy cost savings are calculated using the estimated energy savings in each year and the projected price of the appropriate form of energy. To estimate energy prices in future years, DOE multiplied the average regional energy prices by the projection of annual national-average residential energy price changes in the Reference case from AEO 2023, which has an end year of 2050. To estimate price trends after 2050, DOE used the average of 2046 to 2050 prices, held constant. As part of the NIA, DOE also analyzed scenarios that used inputs from variants of the AEO 2023 Reference case that have lower and higher economic growth. Those cases have lower and higher energy price trends compared to the Reference case. NIA results based on these cases are presented in appendix 10D of the final rule TSD. In calculating the NPV, DOE multiplies the net savings in future years by a discount factor to determine their present value. For this final rule, DOE estimated the NPV of consumer benefits using both a 3-percent and a 7percent real discount rate. DOE uses these discount rates in accordance with guidance provided by the Office of Management and Budget (‘‘OMB’’) to VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 Federal agencies on the development of regulatory analysis.109 The discount rates for the determination of NPV are in contrast to the discount rates used in the LCC analysis, which are designed to reflect a consumer’s perspective. The 7percent 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. In the June 2022 NOPR, DOE analyzed the impacts of the considered standard levels on one subgroup: senior-only households. The analysis used subsets of the RECS 2015 sample composed of households that meet the criteria for the subgroup. DOE used the LCC and PBP spreadsheet model to estimate the impacts of the considered efficiency levels on this subgroup. DOE did not evaluate low-income consumer subgroup impacts because the sample size of the subgroup was too small for meaningful analysis. 87 FR 37122, 37152 FN97. NEMA and PHTA commented that DOE should consider the economic impact on lower median income and underserved communities whose consumers utilize above-ground and storable pools that typically fall within the small fractional motor category currently requiring a variable-speed motor in the NOPR. NEMA and PHTA commented that there are 3.3 million permanent above-ground pools in the United States; in 2020, there were 227,000 new above-ground pools installed and in 2021 this number increased to 247,000 (compared to 96,000 in-ground in 2020 and 117,000 in-ground in 2021); the average above109 United States Office of Management and Budget. Circular A–4: Regulatory Analysis. September 17, 2003. Section E. Available at georgewbush-whitehouse.archives.gov/omb/ memoranda/m03-21.html (last accessed Feb. 2, 2023). PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 67007 ground pool price in 2021 was $3,615 compared to $56,000 for the average inground pool. (PHTA and NEMA, No. 92 at p. 5) PHTA commented that lowerincome consumers and underserved communities would be more negatively impacted by a variable-speed requirement for small fractional motors because of the use of such motors in above-ground and storable pools. (PHTA, No. 100 at p. 4) In the June 2022 NOPR, DOE did not evaluate low-income consumer subgroup impacts because the sample size of the subgroup was too small for meaningful analysis. 87 FR 37122, 37186 FN97. In this final rule, DOE updated the sample based on RECS 2020 and found that RECS 2020 only included 37 low-income consumer samples representing 2.6% of U.S households with a pool.110 Therefore, in this final rule, DOE did not evaluate low-income consumer subgroup impacts because the sample size of the subgroup continues to be too small for meaningful analysis. For this final rule, DOE analyzed the impacts of the considered standard levels on senior-only households. The analysis used subsets of the RECS 2020 sample composed of households that meet the criteria for the considered subgroup. DOE used the LCC and PBP spreadsheet model to estimate the impacts of the considered efficiency levels on these subgroups. Chapter 11 in the final rule TSD describes the consumer subgroup analysis. J. Manufacturer Impact Analysis 1. Overview DOE performed an MIA to estimate the financial impacts of new energy conservation standards on manufacturers of DPPP motors and to estimate the potential impacts of such standards on employment and manufacturing capacity. The MIA has both quantitative and qualitative aspects and includes analyses of projected industry cash flows, the INPV, investments in research and development (‘‘R&D’’) and manufacturing capital, and domestic manufacturing employment. Additionally, the MIA seeks to determine how new energy conservation standards might affect manufacturing employment, capacity, and competition, as well as how standards contribute to overall regulatory burden. Finally, the MIA serves to identify any disproportionate impacts on 110 After adjusting the RECS sample to represent the geographic distribution of above ground pools, this results in 2.5 percent of consumers of aboveground pools that are low-income. E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 67008 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations manufacturer subgroups, including small business manufacturers. The quantitative part of the MIA primarily relies on the Government Regulatory Impact Model (‘‘GRIM’’), an industry cash flow model with inputs specific to this rulemaking. The key GRIM inputs include data on the industry cost structure, unit production costs, product shipments, manufacturer markups, and investments in R&D and manufacturing capital required to produce compliant equipment. The key GRIM outputs are the INPV, which is the sum of industry annual cash flows over the analysis period, discounted using the industry-weighted average cost of capital, and the impact to domestic manufacturing employment. The model uses standard accounting principles to estimate the impacts of energy conservation standards on a given industry by comparing changes in INPV and domestic manufacturing employment between a no-newstandards case and the various standards cases (‘‘TSLs’’). To capture the uncertainty relating to manufacturer pricing strategies following new standards, the GRIM estimates a range of possible impacts under different manufacturer markup scenarios. The qualitative part of the MIA addresses manufacturer characteristics and market trends. Specifically, the MIA considers such factors as a potential standard’s impact on manufacturing capacity, competition within the industry, the cumulative impact of other DOE and non-DOE regulations, and impacts on manufacturer subgroups. The complete MIA is outlined in chapter 12 of the final rule TSD. DOE conducted the MIA for this rulemaking in three phases. In Phase 1 of the MIA, DOE prepared a profile of the DPPP motors manufacturing industry based on the market and technology assessment, preliminary manufacturer interviews, and publicly available information. This included a top-down analysis of DPPP motors manufacturers that DOE used to derive preliminary financial inputs for the GRIM (e.g., revenues; materials, labor, overhead, and depreciation expenses; selling, general, and administrative expenses (‘‘SG&A’’); and R&D expenses). DOE also used public sources of information to further calibrate its initial characterization of the DPPP motors manufacturing industry, including company filings of form 10– K from the SEC,111 corporate annual reports, the U.S. Census Bureau’s 111 See online at www.sec.gov/edgar.shtml (Last accessed on January 13, 2023). VerDate Sep<11>2014 22:09 Sep 27, 2023 Jkt 259001 ‘‘Economic Census,’’ 112 and reports from Dunn & Bradstreet.113 In Phase 2 of the MIA, DOE prepared a framework industry cash-flow analysis to quantify the potential impacts of new energy conservation standards. The GRIM uses several factors to determine a series of annual cash flows starting with the announcement of the standard and extending over a 30-year period following the compliance date of the standard. These factors include annual expected revenues, costs of sales, SG&A and R&D expenses, taxes, and capital expenditures. In general, energy conservation standards can affect manufacturer cash flow in three distinct ways: (1) creating a need for increased investment, (2) raising production costs per unit, and (3) altering revenue due to higher per-unit prices and changes in sales volumes. In addition, during Phase 2, DOE developed interview guides to distribute to manufacturers of DPPP motors in order to develop other key GRIM inputs, including product and capital conversion costs, and to gather additional information on the anticipated effects of energy conservation standards on revenues, direct employment, capital assets, industry competitiveness, and subgroup impacts. In Phase 3 of the MIA, DOE conducted structured, detailed interviews with representative manufacturers. During these interviews, DOE discussed engineering, manufacturing, procurement, and financial topics to validate assumptions used in the GRIM and to identify key issues or concerns. See section IV.J.3 of this document for a description of the key issues raised by manufacturers during the interviews. As part of Phase 3, DOE also evaluated subgroups of manufacturers that may be disproportionately impacted by new standards or that may not be accurately represented by the average cost assumptions used to develop the industry cash flow analysis. Such manufacturer subgroups may include small business manufacturers, 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 of 112 See online at www.census.gov/programssurveys/asm/data/tables.html (Last accessed on January 13, 2023). 113 See online at app.avention.com (Last accessed on January 13, 2023). PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 this document, ‘‘Review under the Regulatory Flexibility Act’’ and in chapter 12 of the final rule TSD. 2. Government Regulatory Impact Model and Key Inputs DOE uses the GRIM to quantify the changes in cash flow due to new standards that result in a higher or lower industry value. The GRIM uses a standard, annual discounted cash-flow analysis that incorporates manufacturer costs, manufacturer markups, shipments, and industry financial information as inputs. The GRIM models changes in costs, distribution of shipments, investments, and manufacturer margins that could result from new energy conservation standards. The GRIM spreadsheet uses the inputs to arrive at a series of annual cash flows, beginning in 2024 (the base year of the analysis) and continuing to 2055. DOE calculated INPVs by summing the stream of annual discounted cash flows during this period. For manufacturers of DPPP motors, DOE used a real discount rate of 7.2 percent, which was derived from industry financials and then modified according to feedback received during manufacturer interviews. The GRIM calculates cash flows using standard accounting principles and compares changes in INPV between the no-new-standards case and each standards case. The difference in INPV between the no-new-standards case and a standards case represents the financial impact of the new energy conservation standards on manufacturers. As discussed previously, DOE developed critical GRIM inputs using a number of sources, including publicly available data, results of the engineering analysis, and information gathered from industry stakeholders during the course of manufacturer interviews and subsequent Working Group meetings. The GRIM results are presented in section V.B.2 of this document. Additional details about the GRIM, the discount rate, and other financial parameters can be found in chapter 12 of the final rule TSD. a. Manufacturer Production Costs Manufacturing more efficient equipment is typically more expensive than manufacturing baseline equipment due to the use of more complex components, which are typically more costly than baseline components. The changes in the MPCs of covered equipment can affect the revenues, gross margins, and cash flow of the industry. DOE initially used data from the January 2017 Direct Final Rule to determine the MSP of DPPP E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations motors. Specifically, DOE used Table 5.7.1 of the January 2017 Direct Final Rule TSD, which estimated the MSPs of DPPP motors used in the analysis. For this final rule DOE adjusted the MSPs used in the June 2022 NOPR from 2020 dollars into 2021 dollars. For a complete description of the MPCs, see chapter 5 of the final rule TSD. ddrumheller on DSK120RN23PROD with RULES2 b. Shipments Projections The GRIM estimates manufacturer revenues based on total unit shipment projections and the distribution of those shipments by efficiency level. Changes in sales volumes and efficiency mix over time can significantly affect manufacturer finances. For this analysis, the GRIM uses the NIA’s annual shipment projections derived from the shipments analysis from 2024 (the base year) to 2055 (the end year of the analysis period). See chapter 9 of the final rule TSD for additional details. c. Product and Capital Conversion Costs New energy conservation standards could cause manufacturers to incur conversion costs to bring their production facilities and equipment designs into compliance. DOE evaluated the level of conversion-related expenditures that would be needed to comply with each considered efficiency level in each equipment class. For the MIA, DOE classified these conversion costs into two major groups: (1) product conversion costs; and (2) capital conversion costs. Product conversion costs are investments in research, development, testing, marketing, and other non-capitalized costs necessary to make equipment designs comply with new energy conservation standards. Capital conversion costs are investments in property, plant, and equipment necessary to adapt or change existing production facilities such that new compliant equipment designs can be fabricated and assembled. DOE continued to use the conversion costs estimates form the June 2022 NOPR. DOE updated these conversion cost estimates from 2020 dollars to 2022 dollars using the PPI NAICS code 335312 (motor and generator manufacturing).114 In the June 2022 NOPR, DOE assumed that DPPP motor manufacturers would not incur any capital conversion costs for efficiency levels that single-speed or dual-speed motors would be able to meet. The same production equipment currently used to manufacture single-speed and dualspeed motors would still be able to be used to manufacture more efficient 114 www.bls.gov/ppi/databases/ (last accessed on February 9, 2023). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 single- and dual-speed motors. However, DOE did assume that DPPP motor manufacturers would incur capital conversion costs at efficiency levels that variable-speed motors would be needed to meet the analyzed energy conservation standards. 87 FR 37122, 37153. Additional production equipment would be needed to manufacture both additional variable-speed motor models and a larger production volume of variable-speed motors than are currently being produced. DOE used feedback from manufacturer interviews to estimate the cost of adding a production line to manufacture variable-speed motors. DOE then estimated the number of additional variable-speed production lines needed at each TSL, based on the increase in variable-speed shipments estimated at the analyzed TSL and the number of DPPP motor manufacturers that would need to introduce variablespeed motor models to meet the analyzed TSL. DOE assumed that DPPP motor manufacturers would not incur any additional product conversion costs for the standard size equipment classes. All DPPP motor manufacturers currently manufacture multiple variable-speed motor models in the standard size equipment classes. Additionally, the current DOE energy conservation standard for DPPPs that most commonly use the standard size DPPP motors use variable speed motors to meet those efficiency requirements. Therefore, almost all standard size DPPP motors sold as part of a new DPPP are already variable-speed motors. However, DOE did assume that DPPP motor manufacturers would incur product conversion costs for the other equipment classes at each analyzed efficiency level. Additionally, DPPP motor models would need to be introduced for the extra small-size and small-size DPPP motor equipment classes at each efficiency level analyzed. To evaluate the level of product conversion costs manufacturers would likely incur to comply with the analyzed energy conservation standards for these equipment classes, DOE used a model database to estimate the number of DPPP motor models that would have to be redesigned at each efficiency level for each equipment class. In general, DOE assumes all conversion-related investments occur between the year of publication of the final rule and the year by which manufacturers must comply with the new standards. PHTA and NEMA commented that manufacturers have already made investments that ranged between PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 67009 $50,000 and $6.5 million to comply with the January 2017 Direct Final Rule and that in order to comply with the standards proposed in the June 2022 NOPR, DPPP motor and DPPP manufacturers may have to make investments that are 10 times larger than the investments required to comply with the January 2017 Direct Final Rule. Additionally, PHTA and NEMA stated that some of the investments that were made to comply with the January 2017 Direct Final Rule will not be able to be recouped by the time compliance with the DPPP motor energy conservation standards are required. (PHTA and NEMA, No. 92 at p. 8) DOE accounted for these additional investments that DPPP motor manufacturers will have to make to comply with the analyzed energy conservation standards for DPPP motors, in the form of conversion costs. These investments are displayed as conversion costs in Table V.15 and Table V.16. The conversion cost figures used in the GRIM can be found in section V.B.2 of this document. For additional information on the estimated capital and product conversion costs, see chapter 12 of the final rule TSD. d. Markup Scenarios MSPs include direct manufacturing production costs (i.e., labor, materials, and overhead estimated in DOE’s MPCs) and all non-production costs (i.e., SG&A, R&D, and interest), along with profit. To calculate the MSPs in the GRIM, DOE applied non-production cost markups to the MPCs estimated in the engineering analysis for each product class and efficiency level. Modifying these markups in the standards cases yield different sets of impacts on manufacturers. For the MIA, DOE modeled two standards-case markup scenarios to represent uncertainty regarding the potential impacts on prices and profitability for manufacturers following the implementation of new energy conservation standards: (1) a preservation of gross margin scenario; and (2) a preservation of operating profit scenario. These scenarios lead to different manufacturer markup values that, when applied to the MPCs, result in varying revenue and cash flow impacts. Under the preservation of gross margin scenario, DOE applied a single uniform ‘‘gross margin percentage’’ across all efficiency levels, which assumes that manufacturers would be able to maintain the same amount of profit as a percentage of revenues at all efficiency levels within an equipment class. DOE continued to use a E:\FR\FM\28SER2.SGM 28SER2 67010 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 manufacturer markup of 1.37 for all DPPP motors, which is the same manufacturer markup that was used in the June 2022 NOPR.115 This manufacturer markup scenario represents the upper bound to industry profitability under new energy conservation standards. Under the preservation of operating profit scenario, DOE modeled a situation in which manufacturers are not able to increase per-unit operating profit in proportion to increases in MPC. Under this scenario, as the MPCs increase, manufacturers are generally required to reduce the manufacturer markup to maintain a cost competitive offering in the market. Therefore, gross margin (as a percentage) shrinks in the standards cases. This manufacturer markup scenario represents the lower bound to industry profitability under new energy conservation standards. A comparison of industry financial impacts under the two manufacturer markup scenarios is presented in section V.B.2.a of this document. 3. Manufacturer Interviews DOE conducted interviews with manufacturers prior to the publication of the June 2022 NOPR. In these interviews, DOE asked manufacturers to describe their major concerns regarding this rulemaking. The following section highlights manufacturer concerns that helped inform the projected potential impacts of new energy conservation standards on the industry. Manufacturer interviews are conducted under nondisclosure agreements (‘‘NDAs’’), so DOE does not document these discussions in the same way that it does public comments in the comment summaries and DOE’s responses throughout the rest of this document. Some manufacturers stated they only produce single-speed and dual-speed motors within the small-size equipment class (0.5 ≤ THP < 1.15) and no longer supply DPPP motors used in new DPPP in that range to the California market after the CEC standard took effect. These manufacturers stated that they would need to design variable-speed motor models to meet any energy conservation standard that would require a variablespeed motor for the small-size equipment class. Additionally, these manufacturers would need to build additional production lines or make significant changes to existing singlespeed or dual-speed production lines to be able to meet energy conservation standards requiring variable-speed DPPP motors for this equipment class. DOE included the capital and product 115 87 FR 37122, 37154. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 conversion costs necessary for these DPPP motor manufacturers to introduce variable-speed DPPP motor models for the small-size equipment class. 4. Comments From Interested Parties Several interested parties commented on DOE’s NOPR MIA. These comments were made either in writing during the comment period following the publication of the June 2022 NOPR or during the NOPR public meeting for DPPP motors. PHTA and NEMA commented that the lack of timing alignment between DPPP and DPPP motors standards will impact manufacturer’s ability to make proper investments and product design if the DPPP motor energy conservation standards make the investments made for the DPPP energy conservation standards moot. (PHTA and NEMA, No. 92 at p. 8) PHTA and NEMA also commented that the lack of harmonization between the DPPP energy conservation standards and the DPPP motor energy conservation standard proposed in the NOPR could result in manufacturers being required to produce multiple, separate, motor types to serve aftermarket applications versus OEM applications. PHTA and NEMA stated that harmonization between the two rules would reduce overall regulatory burden on DPPP motor manufacturers by allowing manufacturers to leverage economies of scale. (PHTA and NEMA, No. 92 at p. 13) Pentair also commented that the investments spent to meet the DPPP rule would be wasted because of the new proposal. (Pentair, No. 90 at p. 1) The compliance date for the DPPP energy conservation standards occurred on July 19, 2021. As part of this final rule, and the NOPR, MIA, DOE examined the additional investments that DPPP motor manufacturers will have to make to comply with the analyzed energy conservation standards for DPPP motors. DOE used the methodology described in section IV.J.2.c of this document to estimate the conversion costs for each analyzed TSL. DOE incorporated these conversion costs into the cash flow analysis presented in section V.B.2.a of this document. Additionally, PHTA and NEMA commented that complex DPPP motor energy conservation standards superimposed on the DPPP energy conservation standards which are not aligned will make compliance with both energy conservation standards matters difficult for manufacturers. PHTA and NEMA stated it is essential that DOE align the performance requirements of the DPPP energy conservation standards with the requirements of the DPPP PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 motors energy conservation standards in order to facilitate compliance with both standards. (PHTA and NEMA, No. 92 at pp. 8–9) PHTA and NEMA also expressed concerns on how the regulatory burden of complying with both the DPPP and DPPPM regulations, that are not align in the performance requirements and in the timing, could be burdensome on DPPP motor manufacturers. (PHTA and NEMA, No. 92 at p. 13) EPCA directs DOE to establish energy conservation standards for DPPP motors that are designed to achieve the maximum improvement in energy efficiency that are technologically feasible and economically justified. 42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B)) As previously stated in this section, DOE accounted for the additional investments that DPPP motor manufacturers will have to make to comply with the analyzed energy conservation standards for DPPP motors. DOE examined the regulatory burden on DPPP motor manufacturers when deciding what energy conservation standard was technologically feasible and economically justified in section V.C. of this document. Lastly, DOE may consider separately coordinating a similar compliance timeline with any upcoming DPPP rulemaking. Hayward commented that they have already made substantial investments to comply with DPPP energy conservation standards and noted that if they knew DOE planned to initiate DPPP motor energy conservation standards with more stringent requirements than the DPPP energy conservation standards their strategic direction and investments would have been very different. Additionally, Hayward states that if DOE decides against the implementation of a UL 1004–10 based rule, then they requested a compliance date of at least 5 years following effectivity. (Hayward, No. 93. at p. 2) DOE acknowledges that it is adopting more stringent energy conservation standards for small-size DPPP motors in this final rule than the small-size DPPP energy conservation standards established in the January 2017 Direct Final Rule. DOE notes that the compliance date for DPPPs was on July 19, 2021, while the compliance date for energy conservation standards for these small-size DPPP motors is in 2028, approximately seven years after the compliance date for the DPPP energy conservation standards. Additionally, DOE has initiated an effort to determine whether to amend the current energy conservation standards for DPPPs with E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations the publication of an RFI. 87 FR 3461. If DOE proposes to amend energy conservation standards for DPPPs in a future rulemaking, DOE will consider the impacts of the DPPP motor energy conservation standards that are adopted in this rulemaking. ddrumheller on DSK120RN23PROD with RULES2 K. Emissions Analysis The emissions analysis consists of two components. The first component estimates the effect of potential energy conservation standards on power sector and site (where applicable) combustion emissions of CO2, NOX, SO2, and Hg. The second component estimates the impacts of potential standards on emissions of two additional greenhouse gases, CH4 and N2O, as well as the reductions in emissions of other gases due to ‘‘upstream’’ activities in the fuel production chain. These upstream activities comprise extraction, processing, and transporting fuels to the site of combustion. The analysis of electric power sector emissions of CO2, NOX, SO2, and Hg uses emissions intended to represent the marginal impacts of the change in electricity consumption associated with amended or new standards. The methodology is based on results published for the AEO, including a set of side cases that implement a variety of efficiency-related policies. The methodology is described in appendix 13A in the final rule TSD. The analysis presented in this notice uses projections from AEO 2023. Power sector emissions of CH4 and N2O from fuel combustion are estimated using Emission Factors for Greenhouse Gas Inventories published by the Environmental Protection Agency (EPA).116 FFC upstream emissions, which include emissions from fuel combustion during extraction, processing, and transportation of fuels, and ‘‘fugitive’’ emissions (direct leakage to the atmosphere) of CH4 and CO2, are estimated based on the methodology described in chapter 15 of the final rule TSD. The emissions intensity factors are expressed in terms of physical units per MWh or MMBtu of site energy savings. For power sector emissions, specific emissions intensity factors are calculated by sector and end use. Total emissions reductions are estimated using the energy savings calculated in the national impact analysis. 116 Available at www.epa.gov/sites/production/ files/2021-04/documents/emission-factors_ apr2021.pdf (last accessed July 12, 2021). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 1. Air Quality Regulations Incorporated in DOE’s Analysis DOE’s no-new-standards case for the electric power sector reflects the AEO, which incorporates the projected impacts of existing air quality regulations on emissions. AEO 2023 generally represents current legislation and environmental regulations, including recent government actions, that were in place at the time of preparation of AEO 2023, including the emissions control programs discussed in the following paragraphs.117 SO2 emissions from affected electric generating units (‘‘EGUs’’) are subject to nationwide and regional emissions capand-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 CrossState Air Pollution Rule (‘‘CSAPR’’). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these States to reduce certain emissions, including annual SO2 emissions, and went into effect as of January 1, 2015.118 AEO 2023 incorporates implementation of CSAPR, including the update to the CSAPR ozone season program emission budgets and target dates issued in 2016. 81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among EGUs and is enforced through the use of tradable emissions allowances. Under existing EPA regulations, for states subject to SO2 emissions limits under CSAPR, any excess SO2 emissions allowances resulting from the lower electricity demand caused by the adoption of an efficiency standard could be used to permit offsetting increases in SO2 emissions by another regulated EGU. 117 For further information, see the Assumptions to AEO 2022 report that sets forth the major assumptions used to generate the projections in the Annual Energy Outlook. Available at www.eia.gov/ outlooks/aeo/assumptions/ (last accessed May 23, 2023). 118 CSAPR requires states to address annual emissions of SO2 and NOX, precursors to the formation of fine particulate matter (‘‘PM2.5’’) pollution, in order to address the interstate transport of pollution with respect to the 1997 and 2006 PM2.5 National Ambient Air Quality Standards (‘‘NAAQS’’). CSAPR also requires certain states to address the ozone season (May–September) emissions of NOX, a precursor to the formation of ozone pollution, in order to address the interstate transport of ozone pollution with respect to the 1997 ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a supplemental rule that included an additional five states in the CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011) (Supplemental Rule), and EPA issued the CSAPR Update for the 2008 ozone NAAQS. 81 FR 74504 (Oct. 26, 2016). PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 67011 However, beginning in 2016, SO2 emissions began to fall as a result of the Mercury and Air Toxics Standards (‘‘MATS’’) for power plants. 77 FR 9304 (Feb. 16, 2012). The final rule establishes power plant emission standards for mercury, acid gases, and non-mercury metallic toxic pollutants. In order to continue operating, coal plants must have either flue gas desulfurization or dry sorbent injection systems installed. Both technologies, which are used to reduce acid gas emissions, also reduce SO2 emissions. Because of the emissions reductions under the MATS, it is unlikely that excess SO2 emissions allowances resulting from the lower electricity demand would be needed or used to permit offsetting increases in SO2 emissions by another regulated EGU. Therefore, energy conservation standards that decrease electricity generation will generally reduce SO2 emissions. DOE estimated SO2 emissions reduction using emissions factors based on AEO 2023. CSAPR also established limits on NOX emissions for numerous States in the eastern half of the United States. Energy conservation standards would have little effect on NOX emissions in those States covered by CSAPR emissions limits if excess NOX emissions allowances resulting from the lower electricity demand could be used to permit offsetting increases in NOX emissions from other EGUs. In such case, NOX emissions would remain near the limit even if electricity generation goes down. Depending on the configuration of the power sector in the different regions and the need for allowances, however, NOX emissions might not remain at the limit in the case of lower electricity demand. That would mean that standards might reduce NOX emissions in covered States. Despite this possibility, DOE has chosen to be conservative in its analysis and has maintained the assumption that standards will not reduce NOX emissions in States covered by CSAPR. Standards would be expected to reduce NOX emissions in the States not covered by CSAPR. DOE used AEO 2023 data to derive NOX emissions factors for the group of States not covered by CSAPR. The MATS limit mercury emissions from power plants, but they do not include emissions caps and, as such, DOE’s energy conservation standards would be expected to slightly reduce Hg emissions. DOE estimated mercury emissions reduction using emissions factors based on AEO 2023, which incorporates the MATS. E:\FR\FM\28SER2.SGM 28SER2 67012 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations L. Monetizing Emissions Impacts As part of the development of this final rule, for the purpose of complying with the requirements of Executive Order 12866, DOE considered the estimated monetary benefits from the reduced emissions of CO2, CH4, N2O, NOX, and SO2 that are expected to result from each of the TSLs considered. In order to make this calculation analogous to the calculation of the NPV of consumer benefit, DOE considered the reduced emissions expected to result over the lifetime of products shipped in the projection period for each TSL. This section summarizes the basis for the values used for monetizing the emissions benefits and presents the values considered in this final rule. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). ddrumheller on DSK120RN23PROD with RULES2 1. Monetization of Greenhouse Gas Emissions DOE estimates the monetized benefits of the reductions in emissions of CO2, CH4, and N2O by using a measure of the SC of each pollutant (e.g., ‘‘SC–CO2’’). These estimates represent the monetary value of the net harm to society associated with a marginal increase in emissions of these pollutants in a given year, or the benefit of avoiding that increase. These estimates are intended to include (but are not limited to) climate-change-related changes in net agricultural productivity, human health, property damages from increased flood risk, disruption of energy systems, risk of conflict, environmental migration, and the value of ecosystem services. DOE exercises its own judgment in presenting monetized climate benefits as recommended by applicable Executive orders, and DOE would reach the same conclusion presented in this rulemaking in the absence of the social cost of greenhouse gases. That is, the social costs of greenhouse gases, whether measured using the February 2021 interim estimates presented by the Interagency Working Group on the Social Cost of Greenhouse Gases (‘‘IWG’’) or by another means, did not affect the rule ultimately adopted by DOE. DOE estimated the global social benefits of CO2, CH4, and N2O reductions (i.e., ‘‘SC–GHGs’’) using the estimates presented in the Technical VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990, published in February 2021 by the IWG. The SC–GHGs is the monetary value of the net harm to society associated with a marginal increase in emissions in a given year, or the benefit of avoiding that increase. In principle, SC–GHGs includes the value of all climate change impacts, including (but not limited to) changes in net agricultural productivity, human health effects, property damage from increased flood risk and natural disasters, disruption of energy systems, risk of conflict, environmental migration, and the value of ecosystem services. The SC–GHGs therefore, reflects the societal value of reducing emissions of the gas in question by one metric ton. The SC– GHGs is the theoretically appropriate value to use in conducting benefit-cost analyses of policies that affect CO2, N2O, and CH4 emissions. As a member of the IWG involved in the development of the February 2021 SC–GHG TSD, DOE agrees that the interim SC–GHG estimates represent the most appropriate estimate of the SC–GHG until revised estimates have been developed reflecting the latest, peer-reviewed science. The SC–GHGs estimates presented here were developed over many years, using transparent processes, peerreviewed methodologies, the best science available at the time of that process, and with input from the public. Specifically, in 2009, the IWG, which included the DOE and other executive branch agencies and offices, was established to ensure that agencies were using the best available science and to promote consistency in the SC–CO2 values used across agencies. The IWG published SC–CO2 estimates in 2010 that were developed from an ensemble of three widely cited integrated assessment models (‘‘IAMs’’) that estimate global climate damages using highly aggregated representations of climate processes and the global economy combined into a single modeling framework. The three IAMs were run using a common set of input assumptions in each model for future population, economic, and CO2 emissions growth, as well as equilibrium climate sensitivity—a measure of the globally averaged temperature response to increased atmospheric CO2 concentrations. These estimates were updated in 2013 based on new versions of each IAM. In August 2016, the IWG published estimates of the social cost of methane (‘‘SC–CH4’’) and nitrous oxide (‘‘SC–N2O’’) using PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 methodologies that are consistent with the methodology underlying the SC– CO2 estimates. The modeling approach that extends the IWG SC–CO2 methodology to non-CO2 GHGs has undergone multiple stages of peer review. The SC–CH4 and SC–N2O estimates were developed by Marten et al.119 and underwent a standard 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).120 Shortly thereafter, in March 2017, President Trump issued Executive Order 13783, which disbanded the IWG, withdrew the previous TSDs, and directed agencies to ensure SC–CO2 estimates used in regulatory analyses are consistent with the guidance contained in OMB’s Circular A–4, ‘‘including with respect to the consideration of domestic versus international impacts and the consideration of appropriate discount rates’’ (E.O. 13783, Section 5(c)). Benefit-cost analyses following E.O. 13783 used SC–GHG estimates that attempted to focus on the U.S.-specific share of climate change damages as estimated by the models and were calculated using two discount rates recommended by Circular A–4, 3percent 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 re119 Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold, and A. Wolverton. Incremental CH4 and N2O mitigation benefits consistent with the US Government’s SC–CO2 estimates. Climate Policy. 2015. 15(2): pp. 272–298. 120 National Academies of Sciences, Engineering, and Medicine. Valuing Climate Damages: Updating Estimation of the Social Cost of Carbon Dioxide. 2017. The National Academies Press: Washington, DC. E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations established the IWG and directed it to ensure that the U.S. Government’s estimates of the social cost of carbon and other greenhouse gases reflect the best available science and the recommendations of the National Academies (2017). The IWG was tasked with first reviewing the SC–GHG estimates currently used in Federal analyses and publishing interim estimates within 30 days of the E.O. that reflect the full impact of GHG emissions, including by taking global damages into account. The interim SC– GHG estimates published in February 2021 are used here to estimate the climate benefits for this rulemaking. The E.O. instructs the IWG to undertake a fuller update of the SC–GHG estimates by January 2022 that takes into consideration the advice of the National Academies (2017) and other recent scientific literature. The February 2021 SC–GHG TSD provides a complete discussion of the IWG’s initial review conducted under E.O. 13990. In particular, the IWG found that the SC– GHG estimates used under E.O. 13783 fail to reflect the full impact of GHG emissions in multiple ways. First, the IWG found that the SC–GHG estimates used under E.O. 13783 fail to fully capture many climate impacts that affect the welfare of U.S. citizens and residents, and those impacts are better reflected by global measures of the SC– GHG. Examples of omitted effects from the E.O. 13783 estimates include direct effects on U.S. citizens, assets, and investments located abroad, supply chains, U.S. military assets and interests abroad, and tourism, and spillover pathways such as economic and political destabilization and global migration that can lead to adverse impacts on U.S. national security, public health, and humanitarian concerns. In addition, assessing the benefits of U.S. GHG mitigation activities requires consideration of how those actions may affect mitigation activities by other countries, as those international mitigation actions will provide a benefit to U.S. citizens and residents by mitigating climate impacts that affect U.S. citizens and residents. A wide range of scientific and economic experts have emphasized the issue of reciprocity as support for considering global damages of GHG emissions. If the United States does not consider impacts on other countries, it is difficult to convince other countries to consider the impacts of their emissions on the United States. The only way to achieve an efficient allocation of resources for emissions reduction on a global basis— and so benefit the United States and its VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 citizens—is for all countries to base their policies on global estimates of damages. As a member of the IWG involved in development of the February 2021 SC–GHG TSD, DOE agrees with this assessment and, therefore, in this proposed rule, DOE centers attention on a global measure of SC–GHG. This approach is the same as that taken in DOE regulatory analyses from 2012 through 2016. A robust estimate of climate damages that accrue only to U.S. citizens and residents does not currently exist in the literature. As explained in the February 2021 TSD, existing estimates are both incomplete and an underestimation of total damages that accrue to the citizens and residents of the United States because they do not fully capture the regional interactions and spillovers discussed above; nor do they include all of the important physical, ecological, and economic impacts of climate change recognized in the climate change literature. As noted in the February 2021 SC–GHG TSD, the IWG will continue to review developments in the literature, including more robust methodologies for estimating a U.S.-specific SC–GHG value, and explore ways to better inform the public of the full range of carbon impacts. As a member of the IWG, DOE will continue to follow developments in the literature pertaining to this issue. Second, the IWG found that the use of the social rate of return on capital (7 percent under current OMB Circular A– 4 guidance) to discount the future benefits of reducing GHG emissions inappropriately underestimates the impacts of climate change for the purposes of estimating the SC–GHG. Consistent with the findings of the National Academies (2017) and the economic literature, the IWG continued to conclude that the consumption rate of interest is the theoretically appropriate discount rate in an intergenerational context,121 and recommended that 121 Interagency Working Group on Social Cost of Carbon. Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866. 2010. United States Government. www.epa.gov/sites/ default/files/2016-12/documents/scc_tsd_2010.pdf (last accessed April 15, 2022). Interagency Working Group on Social Cost of Carbon. Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866. 2013. www.federalregister.gov/documents/2013/11/26/ 2013-28242/technical-support-document-technicalupdate-of-the-social-cost-of-carbon-for-regulatoryimpact (last accessed April 15, 2022). Interagency Working Group on Social Cost of Greenhouse Gases, United States Government. Technical Support Document: Technical Update on the Social Cost of Carbon for Regulatory Impact Analysis-Under Executive Order 12866. August 2016 (last accessed January 18, 2022). Interagency Working Group on Social Cost of Greenhouse Gases, United States Government. Addendum to Technical Support Document on Social Cost of Carbon for Regulatory PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 67013 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-percent and 7-percent discount rates as ‘‘default’’ values, Circular A–4 also reminds agencies that ‘‘different regulations may call for different emphases in the analysis, depending on the nature and complexity of the regulatory issues and the sensitivity of the benefit and cost estimates to the key assumptions.’’ On discounting, Circular A–4 recognizes that ‘‘special ethical considerations arise when comparing benefits and costs across generations,’’ and Circular A–4 acknowledges that analyses may appropriately ‘‘discount future costs and consumption benefits . . . at a lower rate than for intragenerational analysis.’’ In the 2015 Response to Comments on the Social Cost of Carbon for Regulatory Impact Analysis, OMB, DOE, and the other IWG members recognized that ‘‘Circular A–4 is a living document’’ and ‘‘the use of 7 percent is not considered appropriate for intergenerational discounting. There is wide support for this view in the academic literature, and it is recognized in Circular A–4 itself.’’ Thus, DOE concludes that a 7-percent discount rate is not appropriate to apply to value the social cost of greenhouse gases in the analysis presented in this document. To calculate the present and annualized values of climate benefits, DOE uses the same discount rate as the rate used to discount the value of damages from future GHG emissions, for internal consistency. That approach to discounting follows the same approach that the February 2021 TSD recommends ‘‘to ensure internal consistency—i.e., future damages from climate change using the SC–GHG at 2.5 percent should be discounted to the base year of the analysis using the same 2.5-percent rate.’’ DOE has also Impact Analysis under Executive Order 12866: Application of the Methodology to Estimate the Social Cost of Methane and the Social Cost of Nitrous Oxide. August 2016. www.epa.gov/sites/ default/files/2016-12/documents/addendum_to_scghg_tsd_august_2016.pdf (last accessed January 18, 2022). E:\FR\FM\28SER2.SGM 28SER2 67014 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations consulted the National Academies’ 2017 recommendations on how SC–GHG estimates can ‘‘be combined in RIAs with other cost and benefits estimates that may use different discount rates.’’ The National Academies reviewed several options, including ‘‘presenting all discount rate combinations of other costs and benefits with [SC–GHG] estimates.’’ As a member of the IWG involved in the development of the February 2021 SC–GHG TSD, DOE agrees with the above assessment and will continue to follow developments in the literature pertaining to this issue. While the IWG works to assess how best to incorporate the latest, peer-reviewed science to develop an updated set of SC–GHG estimates, it set the interim estimates to be the most recent estimates developed by the IWG prior to the group being disbanded in 2017. The estimates rely on the same models and harmonized inputs and are calculated using a range of discount rates. As explained in the February 2021 SC–GHG TSD, the IWG has recommended that agencies revert to the same set of four values drawn from the SC–GHG distributions based on three discount rates as were used in regulatory analyses between 2010 and 2016 and were subject to public comment. For each discount rate, the IWG combined the distributions across models and socioeconomic emissions scenarios (applying equal weight to each) and then selected a set of four values recommended for use in 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 best science available at the time of that process. Those estimates were subject to public comment in the context of dozens of proposed rulemakings as well as in a dedicated public comment period in 2013. There are a number of limitations and uncertainties associated with the SC– GHG estimates. First, the current scientific and economic understanding of discounting approaches suggests discount rates appropriate for intergenerational analysis in the context of climate change are likely to be less than 3 percent—near 2 percent or lower.122 Second, the IAMs used to produce these interim estimates do not include all of the important physical, ecological, and economic impacts of climate change recognized in the climate change literature and the science underlying their ‘‘damage functions’’—i.e., the core parts of the IAMs that map global mean temperature changes and other physical impacts of climate change into economic (both market and nonmarket) damages—lags behind the most recent research. For example, limitations include the incomplete treatment of catastrophic and non-catastrophic impacts in the IAMs, their incomplete treatment of adaptation and technological change, the incomplete way in which interregional 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–CO2, SC– N2O, and SC–CH4 values used for this final rule are discussed in the following sections, and the results of DOE’s analyses estimating the benefits of the reductions in emissions of these GHGs are presented in section V.B.6 of this document. a. Social Cost of Carbon The SC–CO2 values used for this final rule were based on the values developed for the IWG’s February 2021 TSD. Table IV.11 shows the updated sets of SC–CO2 estimates from the IWG’s TSD in 5-year increments from 2020 to 2050. The full set of annual values that DOE used is presented in appendix 14A of the final rule TSD. For purposes of capturing the uncertainties involved in regulatory impact analysis, DOE has determined it is appropriate to include all four sets of SC–CO2 values, as recommended by the IWG.123 TABLE IV.11—ANNUAL SC–CO2 VALUES FROM 2021 INTERAGENCY UPDATE, 2020–2050 [2020$ per metric ton CO2] Discount rate and statistic ddrumheller on DSK120RN23PROD with RULES2 Year 2020 2025 2030 2035 2040 2045 2050 5% Average ............................................................................................................. ............................................................................................................. ............................................................................................................. ............................................................................................................. ............................................................................................................. ............................................................................................................. ............................................................................................................. 122 Interagency Working Group on Social Cost of Greenhouse Gases (IWG). 2021. Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990. February. United States Government. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 3% Average 14 17 19 22 25 28 32 Available at www.whitehouse.gov/wp-content/ uploads/2021/02/TechnicalSupportDocument_ SocialCostofCarbonMethaneNitrousOxide.pdf/. 123 For example, the February 2021 TSD discusses how the understanding of discounting approaches PO 00000 Frm 00050 Fmt 4701 Sfmt 4700 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 suggests that discount rates appropriate for intergenerational analysis in the context of climate change may be lower than 3 percent. E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations For 2051 to 2070, DOE used SC–CO2 estimates published by EPA, adjusted to 2020$.124 These estimates are based on methods, assumptions, and parameters identical to the 2020–2050 estimates published by the IWG. DOE multiplied the CO2 emissions reduction estimated for each year by the SC–CO2 value for that year in each of the four cases. DOE adjusted the values to 2022$ using the implicit price deflator for gross domestic product (‘‘GDP’’) from the Bureau of Economic Analysis. To calculate a present value of the stream of monetary values, DOE discounted the values in each of the four cases using the specific discount rate that had been used to obtain the SC–CO2 values in each case. b. Social Cost of Methane and Nitrous Oxide The SC–CH4 and SC–N2O values used for this final rule were based on the values developed for the February 2021 TSD. Table IV.12 shows the updated 67015 sets of SC–CH4 and SC–N2O estimates from the latest interagency update in 5year increments from 2020 to 2050. The full set of annual values used is presented in appendix 14A of the final rule TSD. To capture the uncertainties involved in regulatory impact analysis, DOE has determined it is appropriate to include all four sets of SC–CH4 and SC– N2O values, as recommended by the IWG. DOE derived values after 2050 using the approach described above for the SC–CO2. TABLE IV.12—ANNUAL SC–CH4 AND SC–N2O VALUES FROM 2021 INTERAGENCY UPDATE, 2020–2050 [2020$ per metric ton] SC–CH4 Discount rate and statistic Year 5% Average 2020 2025 2030 2035 2040 2045 2050 .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... 670 800 940 1,100 1,300 1,500 1,700 3% Average 2.5% Average 1,500 1,700 2,000 2,200 2,500 2,800 3,100 Discount rate and statistic 3% 95th percentile 2,000 2,200 2,500 2,800 3,100 3,500 3,800 3,900 4,500 5,200 6,000 6,700 7,500 8,200 5% Average 3% 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 2.5% Average 27,000 30,000 33,000 36,000 39,000 42,000 45,000 3% 95th percentile 48,000 54,000 60,000 67,000 74,000 81,000 88,000 For this final rule, DOE estimated the monetized value of NOX and SO2 emissions reductions from electricity generation using benefit per ton estimates for that sector from the EPA’s Benefits Mapping and Analysis Program.125 DOE used EPA’s values for PM2.5-related benefits associated with NOX and SO2 and for ozone-related benefits associated with NOX for 2025 and 2030, and 2040, calculated with discount rates of 3 percent and 7 percent. DOE used linear interpolation to define values for the years not given in the 2025 to 2040 range; for years beyond 2040 the values are held constant. DOE combined the EPA benefit per ton estimates with regional information on electricity consumption and emissions to define weightedaverage national values for NOX and SO2 (See appendix 14B of the final rule TSD). DOE multiplied the site emissions reduction (in tons) in each year by the associated $/ton values, and then discounted each series using discount rates of 3 percent and 7 percent as appropriate. The Joint SC–GHG Commenters stated that DOE appropriately applies the social cost estimates developed by the Interagency Working Group on the Social Cost of Greenhouse Gases to its analysis of emissions reduction benefits. The Joint SC–GHG Commenters stated that there are numerous legal, economic, and policy justifications that further DOE’s adoption of the Working Group’s climate-damage valuations. They added that DOE should consider conducting sensitivity analysis using a sound domestic-only social cost estimate as a backstop, and should explicitly conclude that the rule is cost-benefit justified even using a domestic-only valuation that may still undercount climate benefits. They also stated that their comments offer additional justification for adopting the range of discount rates endorsed by the Working Group and urged DOE to consider providing additional sensitivity analysis using discount rates of 2 percent or lower for climate impacts. Lastly, the Joint SC–GHG Commenters commented that DOE should clearly state that any criticisms of the SC–GHG are moot in this rulemaking because the proposed rule is easily cost-justified without any climate benefits. (Joint SC–GHG Commenters, No.95 at. pp. 1–3) In response, DOE maintains that the reasons for using global measures of the SC–GHG previously discussed (See section IV.L.1 of this document) are sufficient for the purposes of this rulemaking. DOE notes that further discussion of this topic is contained in the February 2021 SC–GHG TSD, and DOE agrees with the assessment therein. Regarding conducting sensitivity analysis using a domestic-only social cost estimate, DOE agrees with the assessment in the February 2021 SC– GHG TSD that the only currentlyavailable quantitative characterization of domestic damages from GHG emissions is both incomplete and an underestimate of the share of total damages that accrue to the citizens and residents of the U.S. See section 2 of the February 2021 SC–GHG TSD. Therefore, it would be of questionable value to conduct the suggested sensitivity analysis at this time. DOE considered 124 See EPA, Revised 2023 and Later Model Year Light-Duty Vehicle GHG Emissions Standards: Regulatory Impact Analysis, Washington, DC, December 2021. Available at nepis.epa.gov/Exe/ ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed February 21, 2023). 125 Estimating the Benefit per Ton of Reducing PM2.5 Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-tonreducing-pm25-precursors-21-sectors. DOE multiplied the CH4 and N2O emissions reduction estimated for each year by the SC–CH4 and SC–N2O estimates for that year in each of the cases. DOE adjusted the values to 2022$ using the implicit price deflator for GDP from the Bureau of Economic Analysis. To calculate a present value of the stream of monetary values, DOE discounted the values in each of the cases using the specific discount rate that had been used to obtain the SC–CH4 and SC–N2O estimates in each case. 2. Monetization of Other Emissions Impacts ddrumheller on DSK120RN23PROD with RULES2 SC–N2O VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 PO 00000 Frm 00051 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 67016 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations performing sensitivity analysis using discount rates lower than 2.5% for climate impacts, as suggested by the IWG, but it concluded that such analysis would not add meaningful information in the context of this rulemaking. As noted by the Joint SC–GHG Commenters and previously stated by DOE in section IV.L.1 of this document, the final rule is economically justified without inclusion of climate benefits. See Section V.C.1 of this document for more discussion on economic justification. ddrumheller on DSK120RN23PROD with RULES2 M. Utility Impact Analysis The utility impact analysis estimates the changes in installed electrical capacity and generation projected to result for each considered TSL. The analysis is based on published output from the NEMS associated with AEO 2023. NEMS produces the AEO Reference case, as well as a number of side cases that estimate the 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 AEO 2023 Reference case and various side cases. Details of the methodology are provided in the appendices to chapters 13 and 15 of the final rule TSD. The output of this analysis is a set of time-dependent coefficients that capture the change in electricity generation, primary fuel consumption, installed capacity, and power sector emissions due to a unit reduction in demand for a given end use. These coefficients are multiplied by the stream of electricity savings calculated in the NIA to provide estimates of selected utility impacts of potential new or amended energy conservation standards. N. Employment Impact Analysis DOE considers employment impacts in the domestic economy as one factor in selecting a standard. Employment impacts from new or amended energy conservation standards include both direct and indirect impacts. Direct employment impacts are any changes in the number of employees of manufacturers of the products subject to standards, their suppliers, and related service firms. The MIA addresses those impacts. Indirect employment impacts are changes in national employment that occur due to the shift in expenditures and capital investment caused by the purchase and operation of more-efficient appliances. Indirect employment impacts from standards consist of the net jobs created or eliminated in the national economy, VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 other than in the manufacturing sector being regulated, caused by (1) reduced spending by consumers on energy, (2) reduced spending on new energy supply by the utility industry, (3) increased consumer spending on the products to which the new standards apply and other goods and services, and (4) the effects of those three factors throughout the economy. One method for assessing the possible effects on the demand for labor of such shifts in economic activity is to compare sector employment statistics developed by the Labor Department’s Bureau of Labor Statistics (‘‘BLS’’). BLS regularly publishes its estimates of the number of jobs per million dollars of economic activity in different sectors of the economy, as well as the jobs created elsewhere in the economy by this same economic activity. Data from BLS indicate that expenditures in the utility sector generally create fewer jobs (both directly and indirectly) than expenditures in other sectors of the economy.126 There are many reasons for these differences, including wage differences and the fact that the utility sector is more capital-intensive and less labor-intensive than other sectors. Energy conservation standards have the effect of reducing consumer utility bills. Because reduced consumer expenditures for energy likely lead to increased expenditures in other sectors of the economy, the general effect of efficiency standards is to shift economic activity from a less labor-intensive sector (i.e., the utility sector) to more labor-intensive sectors (e.g., the retail and service sectors). Thus, the BLS data suggest that net national employment may increase due to shifts in economic activity resulting from energy conservation standards. DOE estimated indirect national employment impacts for the standard levels considered in this final rule using an input/output model of the U.S. economy called Impact of Sector Energy Technologies version 4 (‘‘ImSET’’).127 ImSET is a special-purpose version of the ‘‘U.S. Benchmark National InputOutput’’ (‘‘I–O’’) model, which was designed to estimate the national employment and income effects of energy-saving technologies. The ImSET 126 See U.S. Department of Commerce—Bureau of Economic Analysis. Regional Multipliers: A User Handbook for the Regional Input-Output Modeling System (‘‘RIMS II’’). 1997. U.S. Government Printing Office: Washington, DC. Available at www.bea.gov/ resources/methodologies/RIMSII-user-guide (last accessed Feb. 2, 2023). 127 Livingston, O.V., S.R. Bender, M.J. Scott, and R.W. Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model Description and User’s Guide. 2015. Pacific Northwest National Laboratory: Richland, WA. PNNL–24563. PO 00000 Frm 00052 Fmt 4701 Sfmt 4700 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. DOE notes that ImSET is not a general equilibrium forecasting model, and that the uncertainties involved in projecting employment impacts especially change in the later years of the analysis. Because ImSET does not incorporate price changes, the employment effects predicted by ImSET may overestimate actual job impacts over the long run for this rule. Therefore, DOE used ImSET only to generate results for near-term timeframes (2026–2030 or 2028–2030), where these uncertainties are reduced. For more details on the employment impact analysis, see chapter 16 of the final rule TSD. One of the inputs to the employment impact analysis is the fraction of shipments that are imported vs. domestically manufactured. In the June 2022 NOPR, DOE assumed the fraction of DPPP motors shipments that are imported vs. domestically manufactured was identical to small electric motors and assumed a 40 percent were imported vs 60 percent were domestically manufactured. See Chapter 15 of the June NOPR TSD. PHTA and NEMA commented that DOE estimated that 60 percent of pool pump motors are manufactured domestically, with the remaining 40 percent imported. PHTA and NEMA commented that DOE did not conduct manufacturer interviews specific to DPPPM and that much of the analyses relies on market research conducted in 2016 to support the energy conservation standard established for DPPP. PTHA and NEMA commented that while DPPPM are often sold as a component of DPPP, there are different market characteristics that manufacturers feel necessitate new interviews, focused specifically on DPPPM. (PHTA and NEMA, No. 92 at p. 7) In this final rule, DOE revised the fraction of DPPP motors shipments that are imported vs. domestically manufactured used in the employment impact analysis to align with the estimates from the manufacturer impact analysis specific to DPPP motors (See section IV.J of this document) and assumed 50 percent of DPPP motors shipments are imported vs. 50 percent are domestically manufactured.128 128 In the NOPR, DOE assumed that 40 percent of DPPP motors are imported based on estimates for small electric motors. In the final rule, DOE revised the percentage imported to be more specific to DPPP motors and align with the estimate used in the MIA. E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations Finally, DOE notes that DOE conducted DPPP motor manufacturer interviews as part of the June 2022 NOPR, as discussed in the manufacturer impact analysis, and incorporated feedback to estimate this fraction. V. Analytical Results and Conclusion The following section addresses the results from DOE’s analyses with respect to the considered energy conservation standards for DPPP motors. It addresses the TSLs examined by DOE, the projected impacts of each of these levels if adopted as energy conservation standards for DPPP motors, and the standards levels that DOE is adopting in this final rule. Additional details regarding DOE’s analyses are contained in the final rule TSD supporting this document. A. Trial Standard Levels In general, DOE typically evaluates potential amended standards for products and equipment by grouping individual efficiency levels for each class into TSLs. Use of TSLs allows DOE to identify and consider manufacturer cost interactions between the equipment classes, to the extent that there are such interactions, and market cross elasticity from consumer purchasing decisions that may change when different standard levels are set. In the analysis conducted for this final rule, DOE analyzed the benefits and burdens of eight TSLs for DPPP motors. DOE developed TSLs that combine specific efficiency levels for each of the DPPP motor equipment classes analyzed by DOE. The TSLs that were chosen in the final rule represent DPPP motors at maximum technologically feasible (‘‘max-tech’’) energy efficiency levels and similar performance (i.e., variable-speed, twospeed, multi-speed, and/or singlespeed). DOE presents the results for the TSLs in this document, while the results for all efficiency levels that DOE analyzed are in Chapter 8 the final rule TSD.129 Table V.1 and Table V.2 presents the TSLs and the corresponding efficiency levels that DOE has identified for potential amended energy conservation standards for DPPP motors. TSL 8 represents the max-tech energy efficiency for all equipment classes, as well as freeze protection control requirements for DPPP motors greater than and equal to 0.5 THP. TSL 7 represents the California CEC standards 130 and includes a variablespeed requirement for DPPP motors at or above 0.5 THP, an EL 1 efficiency requirement below 0.5 THP, and freezeprotection control requirements for DPPP motors greater than and equal to 0.5 THP. TSL 6 represents the performance requirements included in UL 1004–10:2022, which ensures DPPP motors operate similarly to motors in 67017 DPPPs that comply with the DOE standards at 10 CFR 431.465(f) and includes a variable-speed requirement for DPPP motors at or above 1.15 THP, an EL 1 efficiency requirement below 1.15 THP, and freeze-protection control requirements for DPPP motors greater than and equal to 1.15 THP. TSL 5 represents the two-speed/multi-speed DPPP motor EL 5 level for applicable equipment classes and freeze-protection control requirements for DPPP motors greater than and equal to 0.5 THP. TSL 4 represents the two-speed/multi-speed DPPP motor EL 4 level for applicable equipment classes and freeze protection control requirements for DPPP motors greater than and equal to 0.5 THP. TSL 3 represents the two-speed/multi-speed DPPP motor EL 3 level for applicable equipment classes and freeze-protection control requirements for DPPP motors greater than and equal to 0.5 THP. TSL 2 represents the highest-efficiency single-speed DPPP motor level for all equipment classes. TSL 1 represents the medium-efficiency single-speed DPPP motor level for all equipment classes. In addition, as discussed in section III.A of this document, for all TSLs, DOE considered a 2-year lead time resulting in a first full year of compliance of 2026, except for small-size DPPP motors at TSL 7 where DOE uses a 4-year compliance lead time, resulting in a first full year of compliance year of 2028. TABLE V.1—TRIAL STANDARD LEVELS FOR DPPP MOTORS—EL MAPPING TSL TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8 Extra-small (<0.5 THP) ....................... Small-size (0.5 ≤ THP < 1.15) ........... Standard-size (1.15 ≤ THP ≤ 5) ......... EL 1 ............ EL 1 ............ EL 1 ............ EL 2 ............ EL 2 ............ EL 2 ............ EL 2 ............ EL 3 * .......... EL 3 * .......... EL 2 ............ EL 4 * .......... EL 4 * .......... EL 2 ............ EL 5 * .......... EL 5 * .......... EL 1 ............ EL 1 ............ EL 6 * .......... EL 1 (2026) .......... EL 6 * (2028) ........ EL 6 * (2026) ........ EL 2 EL 6 * EL 6 * * Includes freeze protection control requirements. Note: the analysis uses 2026 as the first full year of compliance except at TSL 7, where the first full year of compliance varies by equipment class as indicated in the table. TABLE V.2—TRIAL STANDARD LEVELS FOR DPPP MOTORS—DESCRIPTION TSL TSL 1 Extra-small (<0.5 THP). Small-size (0.5 ≤ THP < 1.15). Standard-size (1.15 ≤ THP ≤ 5). ddrumheller on DSK120RN23PROD with RULES2 General Description Medium Efficiency Single Speed. Medium Efficiency Single Speed. Medium Efficiency Single Speed. Medium Efficiency Single Speed. TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 High Efficiency High Efficiency High Efficiency High Efficiency Medium EffiSingle Speed. Single Speed. Single Speed. Single Speed. ciency Single Speed. High Efficiency Two and multiTwo and multiTwo and multiMedium EffiSingle Speed. speed EL 3 *. speed EL 4 *. speed EL 5 *. ciency Single Speed. High Efficiency Two and multiTwo and multiTwo and multiVariableSingle Speed. speed EL 3 *. speed EL 4 *. speed EL 5 *. Speed *. High Efficiency two and multiSingle Speed. speed EL3 where applicable. two and multispeed EL4 where applicable. two and multispeed EL5 where applicable. UL 1004– 10:2022 requirements. TSL 7 TSL 8 Medium Efficiency Single Speed (2026). VariableSpeed * (2028). VariableSpeed * (2026). CEC Standards High Efficiency Single Speed. VariableSpeed.* VariableSpeed.* Max-tech. * Includes freeze protection control requirements. Note: the analysis uses 2026 as the first full year of compliance except at TSL 7, where the first full year of compliance varies by equipment class as indicated in the table. 129 Efficiency levels that were analyzed for this final rule are discussed in section IV.C of this VerDate Sep<11>2014 20:01 Sep 27, 2023 Jkt 259001 document. Results by efficiency level are presented in Chapter 8. PO 00000 Frm 00053 Fmt 4701 Sfmt 4700 130 Best approximation based on the efficiency level analyzed. E:\FR\FM\28SER2.SGM 28SER2 67018 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations B. Economic Justification and Energy Savings 1. Economic Impacts on Individual Consumers DOE analyzed the economic impacts on DPPP motors consumers by looking at the effects that potential standards at each TSL would have on the LCC and PBP. DOE also examined the impacts of potential standards on selected consumer subgroups. These analyses are discussed in the following sections. a. Life-Cycle Cost and Payback Period In general, higher-efficiency products affect consumers in two ways: (1) purchase price increases and (2) annual operating costs decrease. Inputs used for calculating the LCC and PBP include total installed costs (i.e., product price plus installation costs), and operating costs (i.e., annual energy use, energy prices, energy price trends, repair costs, and maintenance costs). The LCC calculation also uses product lifetime and a discount rate. Chapter 8 of the final rule TSD provides detailed information on the LCC and PBP analyses. Table V.2 through Table V.7 show the LCC and PBP results for the TSLs considered for each product class. In the first of each pair of tables, the simple payback is measured relative to the baseline product. In the second table, the impacts are measured relative to the efficiency distribution in the no-newstandards case in the compliance year (see section IV.F.8 of this document). Because some consumers purchase products with higher efficiency in the no-new-standards case, the average savings are less than the difference between the average LCC of the baseline product and the average LCC at each TSL. The savings refer only to consumers who are affected by a standard at a given TSL. Those who already purchase a product with efficiency at or above a given TSL are not affected. Consumers for whom the LCC increases at a given TSL experience a net cost. TABLE V.2—AVERAGE LCC AND PBP RESULTS FOR EXTRA-SMALL-SIZE DPPP MOTORS Average costs (2022$) Efficiency level TSL Installed cost 0 1 2 1,6,7 ............................................................... 2–5,8 .............................................................. First year’s operating cost $65 77 115 Lifetime operating cost $72 59 54 Simple payback (years) LCC $236 192 177 $301 269 292 Average lifetime (years) .................. 0.9 2.8 3.6 3.6 3.6 Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product. TABLE V.3—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR EXTRA-SMALL-SIZE DPPP MOTORS Life-cycle cost savings TSL Efficiency level 1,6,7 .......................................................................... 2–5,8 ......................................................................... 1 ................................................................................ 2 ................................................................................ Average LCC savings * (2022$) Percent of consumers that experience net cost (%) $3 (12) 0 59 * The savings represent the average LCC for affected consumers. TABLE V.4—AVERAGE LCC AND PBP RESULTS FOR SMALL-SIZE DPPP MOTORS Average costs (2022$) Efficiency level ddrumheller on DSK120RN23PROD with RULES2 TSL 1,6 .................................................................. 2 ..................................................................... 3 ..................................................................... 4 ..................................................................... 5 ..................................................................... 7,8 .................................................................. Installed cost 0 1 2 3 4 5 6 First year’s operating cost $156 177 218 383 412 443 655 $241 196 180 190 166 158 92 Lifetime operating cost $843 685 628 678 590 561 361 LCC $999 862 846 1,060 1,001 1,003 1,017 Simple payback (years) .................. 0.5 1.0 4.5 3.4 3.4 3.4 Average lifetime (years) 3.9 3.9 3.9 3.9 3.9 3.9 3.9 Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 PO 00000 Frm 00054 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations 67019 TABLE V.5—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR SMALL-SIZE DPPP MOTORS Life-cycle cost savings Efficiency level TSL 1,6 ............................................................................. 2 ................................................................................ 3 ................................................................................ 4 ................................................................................ 5 ................................................................................ 7,8 ............................................................................. 1 2 3 4 5 6 Percent of consumers that experience net cost (%) Average LCC savings * (2022$) ................................................................................ ................................................................................ ................................................................................ ................................................................................ ................................................................................ ................................................................................ $10 14 (54) (12) (16) 4 0 24 52 46 50 44 * The savings represent the average LCC for affected consumers. TABLE V.6—AVERAGE LCC AND PBP RESULTS FOR STANDARD-SIZE DPPP MOTORS Average costs (2022$) Efficiency level TSL Installed cost 0 1 2 3 4 5 6 1 ..................................................................... 2 ..................................................................... 3 ..................................................................... 4 ..................................................................... 5 ..................................................................... 6–8 ................................................................. First year’s operating cost $308 368 412 574 613 654 847 Lifetime operating cost $651 558 517 319 284 259 243 Simple payback (years) LCC $2,637 2,264 2,098 1,306 1,163 1,063 1,056 $2,945 2,633 2,510 1,879 1,776 1,717 1,903 Average lifetime (years) .................. 0.7 0.8 0.8 0.8 0.9 1.3 4.8 4.8 4.8 4.8 4.8 4.8 4.8 Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product. TABLE V.7—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR STANDARD-SIZE DPPP MOTORS Life-cycle cost savings Efficiency level TSL 1 ................................................................................ 2 ................................................................................ 3 ................................................................................ 4 ................................................................................ 5 ................................................................................ 6–8 ............................................................................ 1 2 3 4 5 6 Percent of consumers that experience net cost (%) Average LCC savings * (2022$) ................................................................................ ................................................................................ ................................................................................ ................................................................................ ................................................................................ ................................................................................ $26 44 109 141 151 236 0 2 18 17 19 2 * The savings represent the average LCC for affected consumers. b. Consumer Subgroup Analysis In the consumer subgroup analysis, DOE estimated the impact of the considered TSLs on senior-only households. Table V.8 through Table V.13 compare the average LCC savings and PBP at each efficiency level for the consumer subgroups with similar metrics for the entire consumer sample for DPPP motors. In most cases, the average LCC savings and PBP for senior- only households at the considered efficiency levels are not substantially different from the average for all households. Chapter 11 of the final rule TSD presents the complete LCC and PBP results for the subgroups. ddrumheller on DSK120RN23PROD with RULES2 TABLE V.8—COMPARISON OF AVERAGE LCC SAVINGS AND PBP FOR CONSUMER SUBGROUP AND ALL HOUSEHOLDS FOR EQUIPMENT CLASS 1 EXTRA-SMALL-SIZE DPPP MOTORS Average life-cycle cost savings (2022$) TSL EL Senior-only households 1,6,7 ..................................................................................... 2–5,8 .................................................................................... VerDate Sep<11>2014 18:58 Sep 27, 2023 Simple payback period (years) Jkt 259001 PO 00000 Frm 00055 1 2 Fmt 4701 Sfmt 4700 All households $3 (12) E:\FR\FM\28SER2.SGM $3 (12) 28SER2 Senior-only households 0.9 2.7 All households 0.9 2.8 67020 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE V.9—COMPARISON OF FRACTION OF CONSUMERS EXPERIENCING NET BENEFIT AND NET COST FOR CONSUMER SUBGROUP AND ALL HOUSEHOLDS FOR EQUIPMENT CLASS 1 EXTRA-SMALL-SIZE DPPP MOTORS TSL Percent of consumers that experience net cost (%) EL Senior-only households 1,6,7 ..................................................................................... 2–5,8 .................................................................................... 1 2 Percent of consumers that experience net benefit (%) All households 0 58 Senior-only households 0 59 All households 8 8 8 8 TABLE V.10—COMPARISON OF AVERAGE LCC SAVINGS AND PBP FOR CONSUMER SUBGROUP AND ALL HOUSEHOLDS FOR EQUIPMENT CLASS 2 SMALL-SIZE DPPP MOTORS Average life-cycle cost savings (2022$) TSL Simple payback period (years) EL Senior-only households 1,6 ........................................................................................ 2 ........................................................................................... 3 ........................................................................................... 4 ........................................................................................... 5 ........................................................................................... 7,8 ........................................................................................ 1 2 3 4 5 6 All households $11 18 (47) (0) (2) 33 $10 14 (54) (12) (16) 4 Senior-only households All households 0.4 0.9 4.1 3.1 3.2 3.1 0.5 1.0 4.5 3.4 3.4 3.4 TABLE V.11—COMPARISON OF FRACTION OF CONSUMERS EXPERIENCING NET BENEFIT AND NET COST FOR CONSUMER SUBGROUP AND ALL HOUSEHOLDS FOR EQUIPMENT CLASS 2 SMALL-SIZE DPPP MOTORS TSL Percent of consumers that experience net cost (%) EL Senior-only households 1,6 ........................................................................................ 2 ........................................................................................... 3 ........................................................................................... 4 ........................................................................................... 5 ........................................................................................... 7,8 ........................................................................................ 1 2 3 4 5 6 Percent of consumers that experience net benefit (%) All households 0 23 51 45 48 42 0 24 52 46 50 44 Senior-only households All households 6 25 14 27 27 29 6 24 13 27 26 27 TABLE V.12—COMPARISON OF AVERAGE LCC SAVINGS AND PBP FOR CONSUMER SUBGROUP AND ALL HOUSEHOLDS FOR EQUIPMENT CLASS 3 STANDARD-SIZE DPPP MOTORS Average life-cycle cost savings (2022$) TSL EL Senior-only households ddrumheller on DSK120RN23PROD with RULES2 1 ........................................................................................... 2 ........................................................................................... 3 ........................................................................................... 4 ........................................................................................... 5 ........................................................................................... 6–8 ....................................................................................... VerDate Sep<11>2014 18:58 Sep 27, 2023 Simple payback period (years) Jkt 259001 PO 00000 Frm 00056 1 2 3 4 5 6 Fmt 4701 Sfmt 4700 All households $29 50 128 165 178 269 E:\FR\FM\28SER2.SGM $26 44 109 141 151 236 28SER2 Senior-only households 0.6 0.7 0.7 0.8 0.8 1.2 All households 0.7 0.8 0.8 0.8 0.9 1.3 67021 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE V.13—COMPARISON OF FRACTION OF CONSUMERS EXPERIENCING NET BENEFIT AND NET COST FOR CONSUMER SUBGROUP AND ALL HOUSEHOLDS FOR EQUIPMENT CLASS 3 STANDARD-SIZE DPPP MOTORS TSL Percent of consumers that experience net cost (%) EL Senior-only households 1 ........................................................................................... 2 ........................................................................................... 3 ........................................................................................... 4 ........................................................................................... 5 ........................................................................................... 6–8 ....................................................................................... c. Rebuttable Presumption Payback As discussed in section III.E.2, EPCA establishes a rebuttable presumption that an energy conservation standard is economically justified if the increased purchase cost for a product that meets the standard is less than three times the value of the first-year energy savings resulting from the standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(iii)) In calculating a rebuttable presumption payback period for each of the considered TSLs, DOE used discrete 1 2 3 4 5 6 All households 0 2 18 17 18 2 values, and, as required by EPCA, based the energy use calculation on the DOE test procedures for DPPP motors. In contrast, the PBPs presented in section V.B.1.a were calculated using distributions that reflect the range of energy use in the field. Table V.14 presents the rebuttablepresumption payback periods for the considered TSLs for DPPP motors. While DOE examined the rebuttablepresumption criterion, it considered whether the standard levels considered Percent of consumers that experience net benefit (%) Senior-only households 0 2 18 17 19 2 All households 8 17 24 29 29 17 8 17 23 29 29 18 for this rule are economically justified through a more detailed analysis of the economic impacts of those levels, pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that considers the full range of impacts to the consumer, manufacturer, Nation, and environment. The results of that analysis serve as the basis for DOE to definitively evaluate the economic justification for a potential standard level, thereby supporting or rebutting the results of any preliminary determination of economic justification. TABLE V.14—REBUTTABLE-PRESUMPTION PAYBACK PERIODS (YEARS) Trial standard level Equipment class 1 Extra-small-size ................................................................................................ Small-size ......................................................................................................... Standard-size ................................................................................................... ddrumheller on DSK120RN23PROD with RULES2 2. Economic Impacts on Manufacturers DOE performed an MIA to estimate the impact of new energy conservation standards on manufacturers of DPPP motors. The next section describes the expected impacts on manufacturers at each considered TSL. Chapter 12 of the final rule TSD explains the analysis in further detail. a. Industry Cash Flow Analysis Results In this section, DOE provides GRIM results from the analysis, which examines changes in the industry that would result from new standards. The following tables summarize the estimated financial impacts (represented by changes in INPV) of potential new energy conservation standards on manufacturers of DPPP motors, as well as the conversion costs that DOE estimates manufacturers of DPPP motors would incur at each TSL. As discussed in section IV.J.2.d of this document, DOE modeled two manufacturer markup scenarios to evaluate a range of cash flow impacts on VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 2 0.9 0.4 0.5 2.7 0.9 0.6 the DPPP motor industry: (1) the preservation of gross margin scenario and (2) the preservation of operating profit scenario. DOE considered the preservation of gross margin scenario by applying a ‘‘gross margin percentage’’ for each equipment class across all efficiency levels. As MPCs increase with efficiency, this scenario implies that the absolute dollar markup will increase. DOE assumed a manufacturer markup of 1.37 for all DPPP motors. Because this scenario assumes that a manufacturer’s absolute dollar markup would increase as MPCs increase in the standards cases, it represents the upper-bound to industry profitability under new energy conservation standards. The preservation of operating profit scenario reflects manufacturers’ concerns about their inability to maintain margins as MPCs increase to meet higher efficiency levels. In this scenario, while manufacturers make the necessary investments required to convert their facilities to produce compliant equipment, operating profit PO 00000 Frm 00057 Fmt 4701 Sfmt 4700 3 2.7 3.8 0.7 4 2.7 3.0 0.7 5 2.7 3.0 0.8 6 0.9 0.4 1.0 7 0.9 2.7 1.0 8 2.7 2.7 1.0 remains the same in absolute dollars, but decreases as a percentage of revenue. Each of the modeled manufacturer markup scenarios results in a unique set of cash-flows and corresponding industry values at each TSL. In the following discussion, the INPV results refer to the difference in industry value between the no-new-standards case and each standards case resulting from the sum of discounted cash-flows from 2024 through 2055. To provide perspective on the short-run cash-flow impact, DOE includes in the discussion of results a comparison of free cash flow between the no-new-standards case and the standards case at each TSL in the year before new standards are required. Table V.15 and Table V.16 show the MIA results for DPPP motor manufacturers at each TSL using the manufacturer markup scenarios previously described. E:\FR\FM\28SER2.SGM 28SER2 67022 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE V.15—MANUFACTURER IMPACT ANALYSIS FOR DEDICATED-PURPOSE POOL PUMP MOTORS—PRESERVATION OF GROSS MARGIN SCENARIO Units INPV ........................................ Change in INPV ....................... Product Conversion Costs ....... Capital Conversion Costs ........ Total Investment Required ...... Free Cash Flow (2025) ........... Change in Free Cash Flow ..... 2022$ millions ...... 2022$ millions ...... % .......................... 2022$ millions ...... 2022$ millions ...... 2022$ millions ...... 2022$ millions ...... 2022$ millions ...... % .......................... No-newstandards case Trial standard level * 1 2 661 .................. .................. .................. .................. .................. 31.2 .................. .................. 663 2.6 0.4 0.2 0.0 0.2 31.1 (0.1) (0.2) 672 11.3 1.7 0.9 0.0 0.9 30.8 (0.4) (1.3) 3 684 23.3 3.5 7.5 7.8 15.3 23.6 (7.6) (24.2) 4 695 34.5 5.2 7.6 7.8 15.4 23.6 (7.6) (24.4) 5 708 47.0 7.1 7.9 7.8 15.7 23.4 (7.7) (24.8) 6 675 14.1 2.1 0.2 21.3 21.5 19.4 (11.8) (37.8) 7 740 79.0 12.0 10.6 45.6 56.2 9.9 (21.2) (68.1) 8 755 94.1 14.2 10.7 45.6 56.4 1.4 (29.8) (95.5) * Numbers in parentheses indicate a negative number. Some numbers may not sum exactly due to rounding. TABLE V.16—MANUFACTURER IMPACT ANALYSIS FOR DEDICATED-PURPOSE POOL PUMP MOTORS—PRESERVATION OF OPERATING PROFIT SCENARIO Units INPV ........................................ Change in INPV ....................... Product Conversion Costs ....... Capital Conversion Costs ........ Total Investment Required ...... Free Cash Flow (2025) ........... Change in Free Cash Flow ..... 2022$ millions ...... 2022$ millions ...... % .......................... 2022$ millions ...... 2022$ millions ...... 2022$ millions ...... 2022$ millions ...... 2022$ millions ...... % .......................... No-newstandards case Trial standard level * 1 2 661 .................. .................. .................. .................. .................. 31.2 .................. .................. 660 (0.8) (0.1) 0.2 0.0 0.2 31.1 (0.1) (0.2) 655 (6.2) (0.9) 0.9 0.0 0.9 30.8 (0.4) (1.3) 3 622 (38.9) (5.9) 7.5 7.8 15.3 23.6 (7.6) (24.2) 4 617 (43.4) (6.6) 7.6 7.8 15.4 23.6 (7.6) (24.4) 5 612 (48.5) (7.3) 7.9 7.8 15.7 23.4 (7.7) (24.8) 6 7 8 559 (101.4) (15.3) 0.2 21.3 21.5 19.4 (11.8) (37.8) 47 (214.2) (32.4) 10.6 45.6 56.2 9.9 (21.2) (68.1) 436 (224.4) (34.0) 10.7 45.6 56.4 1.4 (29.8) (95.5) ddrumheller on DSK120RN23PROD with RULES2 * Numbers in parentheses indicate a negative number. Some numbers may not sum exactly due to rounding. At TSL 8, DOE estimated that the impact on INPV would range from ¥$224.4 million to $94.1 million, or a change in INPV of –34.0 percent to 14.2 percent. At TSL 8, industry free cash flow is $1.4 million, which is a decrease of approximately $29.8 million compared to the no-new-standards case value of $31.2 million in 2025, the year leading up to new standards. TSL 8 will set the energy conservation standards at EL 6 for both the small size and standard size DPPP motor equipment classes and at EL 2 for the extra-small size DPPP motor equipment class. This represents max-tech for all DPPP motor equipment classes. DOE estimated that 33 percent of all extrasmall size DPPP motor shipments; 22 percent of all small size DPPP motor shipments; and 62 percent of all standard size DPPP motor shipments will already meet the efficiency levels analyzed at TSL 8 by 2026, in the nonew-standards case. At TSL 8, DPPP motor manufacturers would need to redesign all small size and standard size DPPP motors that do not use variable-speed controls and would need to redesign all extra-small size DPPP motors not using the most efficient single-speed motors. DOE estimated that this redesign effort would VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 cost manufacturers approximately $10.7 million in product conversion costs. In addition to these product conversion costs, DPPP motor manufacturers would need to increase their variable-speed DPPP motor manufacturing production capacity for both the small size and standard size DPPP motors. DOE estimated that expanding their production capacity would cost manufacturers approximately $45.6 million in capital conversion costs at TSL 8. At TSL 8, the shipment weighted average MPC for all DPPP motors increases by 60.0 percent relative to the no-new-standards case shipment weighted average MPC for all DPPP motors in 2026. In the preservation of gross margin scenario, manufacturers fully pass on this cost increase to customers. The increase in the shipment weighted average MPC for DPPP motors outweighs the $56.4 million in conversion costs, causing a positive change in INPV at TSL 8 in the preservation of gross margin scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. PO 00000 Frm 00058 Fmt 4701 Sfmt 4700 In this scenario, the 60.0 percent shipment weighted average MPC increase results in a reduction in the manufacturer margin after the compliance year. This reduction in the manufacturer margin and the $56.4 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 8 in the preservation of operating profit scenario. At TSL 7, DOE estimated that the impact on INPV would range from ¥$214.2 million to $79.0 million, or a change in INPV of –32.4 percent to 12.0 percent. At TSL 7, industry free cash flow is $9.9 million, which is a decrease of approximately $21.2 million compared to the no-new-standards case value of $31.2 million in 2025, the year leading up to new standards for standard size and extra-small size DPPP motors.131 TSL 7 sets the energy conservation standards at EL 6 for both the small size and standard size DPPP motor equipment classes and at EL 1 for the extra-small size DPPP motor equipment class. This represents max-tech for the small size and standard size DPPP 131 The analyzed compliance year for small size DPPP motors is 2028. However, DOE presents the year with the largest decrease in manufacturer cash flow, which is still 2025 for TSL 7. E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations motor equipment classes. DOE estimates that 93 percent of all extra-small size DPPP motor shipments; 24 percent of all small size DPPP motor shipments; and 62 percent of all standard size DPPP motor shipments would already meet or exceed the efficiency levels analyzed at TSL 7 by 2026 for the extra-small and standard size DPPP motors and by 2028 for the small size DPPP motors, in the no-new-standards case. At TSL 7, DPPP motor manufacturers would need to redesign all small size and standard size DPPP motors that do not use variable-speed controls and would need to redesign some extrasmall size DPPP motors to meet EL 1. DOE estimated that this redesign effort would cost manufacturers approximately $10.6 million in product conversion costs. In addition to these product conversion costs, DPPP motor manufacturers would need to increase their variable-speed DPPP motor manufacturing production capacity for both the small size and standard size DPPP motors. DOE estimated that expanding their production capacity would cost manufacturer approximately $45.6 million in capital conversion costs at TSL 7. At TSL 7, the shipment weighted average MPC for all DPPP motors increases by 46.5 percent relative to the no-new-standards case shipment weighted average MPC for all DPPP motors. In the preservation of gross margin scenario, manufacturers can fully pass on this cost increase to customers. The increase in the shipment weighted average MPC for DPPP motors outweighs the $56.2 million in conversion costs, causing a positive change in INPV at TSL 7 in the preservation of gross margin scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the 46.5 percent shipment weighted average MPC increase results in a reduction in the manufacturer margin after the compliance year. This reduction in the manufacturer margin and the $56.2 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 7 in the preservation of operating profit scenario. At TSL 6, DOE estimated that the impact on INPV would range from ¥l$101.4 million to $14.1 million, or a change in INPV of –15.3 percent to 2.1 percent. At TSL 6, industry free cash flow is $19.4 million, which is a decrease of approximately $11.8 million compared to the no-new-standards case VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 value of $31.2 million in 2025, the year leading up to new standards. TSL 6 would set the energy conservation standards at EL 6 for the standard size DPPP motor equipment class and at EL 1 for both the extra-small size and small size DPPP motor equipment classes. This represents maxtech for the standard size DPPP motor equipment class. DOE estimates that 93 percent of all extra-small size DPPP motor shipments; 95 percent of all small size DPPP motor shipments; and 62 percent of all standard size DPPP motor shipments would already meet or exceed the efficiency levels analyzed at TSL 6 by 2026, in the no-new-standards case. At TSL 6, DPPP motor manufacturers would need to redesign all standard size DPPP motors that do not use variablespeed controls and would need to redesign some extra-small size and small size DPPP motors to meet EL 1. DOE estimated that this redesign effort would cost manufacturers approximately $0.2 million in product conversion costs. In addition to these product conversion costs, DPPP motor manufacturers would need to increase their variable-speed DPPP motor manufacturing production capacity for the standard size DPPP motor equipment class. DOE estimated that expanding their production capacity would cost manufacturer approximately $21.3 million in capital conversion costs at TSL 6. At TSL 6, the shipment weighted average MPC for all DPPP motors increases by 22.0 percent relative to the no-new-standards case shipment weighted average MPC for all DPPP motors. In the preservation of gross margin scenario, manufacturers can fully pass on this cost increase to customers. The increase in the shipment weighted average MPC for DPPP motors outweighs the $21.5 million in conversion costs, causing a positive change in INPV at TSL 6 in the preservation of gross margin scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the 22.0 percent shipment weighted average MPC increase results in a reduction in the manufacturer margin after the compliance year. This reduction in the manufacturer margin and the $21.5 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 6 in the preservation of operating profit scenario. PO 00000 Frm 00059 Fmt 4701 Sfmt 4700 67023 At TSL 5, DOE estimated that the impact on INPV would range from ¥$48.5 million to $47.0 million, or a change in INPV of –7.3 percent to 7.1 percent. At TSL 5, industry free cash flow is $23.4 million, which is a decrease of approximately $7.7 million compared to the no-new-standards case value of $31.2 million in 2025, the year leading up to new standards. TSL 5 would set the energy conservation standards at EL 5 for both the small size and standard size DPPP motor equipment classes and at EL 2 for the extra-small size DPPP motor equipment class. DOE estimates that 33 percent of all extra-small size DPPP motor shipments; 23 percent of all small size DPPP motor shipments; and 63 percent of all standard size DPPP motor shipments would already meet or exceed the efficiency levels analyzed at TSL 5 by 2026, in the no-new-standards case. At TSL 5, DPPP motor manufacturers would need to redesign some small size and standard size DPPP motors to meet EL 5 (which is likely to require the most efficient dual-speed motor) and would need to redesign some extra-small size DPPP motors to meet EL 2. DOE estimated that this redesign effort would cost manufacturers approximately $7.9 million in product conversion costs. In addition to these product conversion costs, DPPP motor manufacturers would need to increase their dual-speed DPPP motor manufacturing production capacity for the small size and standard size DPPP motor equipment classes. DOE estimated that expanding their production capacity would cost manufacturer approximately $7.8 million in capital conversion costs at TSL 5. At TSL 5, the shipment weighted average MPC for all DPPP motors increases by 20.2 percent relative to the no-new-standards case shipment weighted average MPC for all DPPP motors. In the preservation of gross margin scenario, manufacturers can fully pass on this cost increase to customers. The increase in the shipment weighted average MPC for DPPP motors outweighs the $15.7 million in conversion costs, causing a positive change in INPV at TSL 5 in the preservation of gross margin scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the 20.2 percent shipment weighted average MPC increase results in a reduction in the manufacturer margin after the E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 67024 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations compliance year. This reduction in the manufacturer margin and the $15.7 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 5 in the preservation of operating profit scenario. At TSL 4, DOE estimated that the impact on INPV would range from ¥$43.4 million to $34.5 million, or a change in INPV of ¥6.6 percent to 5.2 percent. At TSL 4, industry free cash flow is $23.6 million, which is a decrease of approximately $7.6 million compared to the no-new-standards case value of $31.2 million in 2025, the year leading up to new standards. TSL 4 would set the energy conservation standards at EL 4 for both the small size and standard size DPPP motor equipment classes and at EL 2 for the extra-small size DPPP motor equipment class. DOE estimates that 33 percent of all extra-small size DPPP motor shipments; 25 percent of all small size DPPP motor shipments; and 64 percent of all standard size DPPP motor shipments would already meet or exceed the efficiency levels analyzed at TSL 4 by 2026, in the no-new-standards case. At TSL 4, DPPP motor manufacturers would need to redesign some small size and standard size DPPP motors to meet EL 4 (which is likely to require an intermediate efficient dual-speed motor) and would need to redesign some extrasmall size DPPP motors to meet EL 2. DOE estimated that this redesign effort would cost manufacturers approximately $7.6 million in product conversion costs. In addition to these product conversion costs, DPPP motor manufacturers would need to increase their dual-speed DPPP motor manufacturing production capacity for the small size and standard size DPPP motor equipment classes. DOE estimated that expanding their production capacity would cost manufacturer approximately $7.8 million in capital conversion costs at TSL 4. At TSL 4, the shipment weighted average MPC for all DPPP motors increases by 17.0 percent relative to the no-new-standards case shipment weighted average MPC for all DPPP motors. In the preservation of gross margin scenario, manufacturers can fully pass on this cost increase to customers. The increase in the shipment weighted average MPC for DPPP motors outweighs the $15.4 million in conversion costs, causing a positive change in INPV at TSL 4 in the preservation of gross margin scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the 17.0 percent shipment weighted average MPC increase results in a reduction in the manufacturer margin after the compliance year. This reduction in the manufacturer margin and the $15.4 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 4 in the preservation of operating profit scenario. At TSL 3, DOE estimated that the impact on INPV would range from ¥$38.9 million to $23.3 million, or a change in INPV of ¥5.9 percent to 3.5 percent. At TSL 3, industry free cash flow is $23.6 million, which is a decrease of approximately $7.6 million compared to the no-new-standards case value of $31.2 million in 2025, the year leading up to new standards. TSL 3 would set the energy conservation standards at EL 3 for both the small size and standard size DPPP motor equipment classes and at EL 2 for the extra-small size DPPP motor equipment class. DOE estimates that 33 percent of all extra-small size DPPP motor shipments; 31 percent of all small size DPPP motor shipments; and 66 percent of all standard size DPPP motor shipments would already meet or exceed the efficiency levels analyzed at TSL 3 by 2026, in the no-new-standards case. At TSL 3, DPPP motor manufacturers would need to redesign some small size and standard size DPPP motors to meet EL 3 (which is likely to require a dualspeed motor) and would need to redesign some extra-small size DPPP motors to meet EL 2. DOE estimated that this redesign effort would cost manufacturers approximately $7.5 million in product conversion costs. In addition to these product conversion costs, DPPP motor manufacturers would need to increase their dual-speed DPPP motor manufacturing production capacity for the small size and standard size DPPP motor equipment classes. DOE estimated that expanding their production capacity would cost manufacturer approximately $7.8 million in capital conversion costs at TSL 3. At TSL 3, the shipment weighted average MPC for all DPPP motors increases by 14.2 percent relative to the no-new-standards case shipment weighted average MPC for all DPPP motors. In the preservation of gross margin scenario, manufacturers can fully pass on this cost increase to customers. The increase in the shipment weighted average MPC for DPPP motors outweighs the $15.3 million in PO 00000 Frm 00060 Fmt 4701 Sfmt 4700 conversion costs, causing a positive change in INPV at TSL 3 in the preservation of gross margin scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the 14.2 percent shipment weighted average MPC increase results in a reduction in the manufacturer margin after the compliance year. This reduction in the manufacturer margin and the $15.3 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 3 in the preservation of operating profit scenario. At TSL 2, DOE estimated that the impact on INPV would range from ¥$6.2 million to $11.3 million, or a change in INPV of ¥0.9 percent to 1.7 percent. At TSL 2, industry free cash flow is $30.8 million, which is a decrease of approximately $0.4 million compared to the no-new-standards case value of $31.2 million in 2025, the year leading up to new standards. TSL 2 would set the energy conservation standards at EL 2 for all DPPP motor equipment classes. DOE estimates that 33 percent of all extrasmall size DPPP motor shipments; 58 percent of all small size DPPP motor shipments; and 78 percent of all standard size DPPP motor shipments would already meet or exceed the efficiency levels analyzed at TSL 2 by 2026, in the no-new-standards case. At TSL 2, DPPP motor manufacturers would need to redesign some small size and standard size DPPP motors to meet EL 2 (which is likely to require the most efficient single-speed motor) and would need to redesign some extra-small size DPPP motors to meet EL 2. DOE estimated that this redesign effort would cost manufacturers approximately $0.9 million in product conversion costs. DOE estimated that DPPP motor manufacturers have the existing production capacity to manufacturer more efficient single-speed DPPP motors and would not incur any additional capital conversion costs at TSL 2. At TSL 2, the shipment weighted average MPC for all DPPP motors increases by 3.9 percent relative to the no-new-standards case shipment weighted average MPC for all DPPP motors. In the preservation of gross margin scenario, manufacturers can fully pass on this cost increase to customers. The increase in the shipment weighted average MPC for DPPP motors outweighs the $0.9 million in conversion costs, causing a positive E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations change in INPV at TSL 2 in the preservation of gross margin scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the 3.9 percent shipment weighted average MPC increase results in a reduction in the manufacturer margin after the compliance year. This reduction in the manufacturer margin and the $0.9 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 2 in the preservation of operating profit scenario. At TSL 2, DOE estimated that the impact on INPV would range from ¥$0.8 million to $2.6 million, or a change in INPV of ¥0.1 percent to 0.4 percent. At TSL 1, industry free cash flow is $31.1 million, which is a decrease of approximately $0.1 million compared to the no-new-standards case value of $31.2 million in 2025, the year leading up to new standards. TSL 1 would set the energy conservation standards at EL 1 for all DPPP motor equipment classes. DOE estimates that 93 percent of all extrasmall size DPPP motor shipments; 95 percent of all small size DPPP motor shipments; and 86 percent of all standard size DPPP motor shipments would already meet or exceed the efficiency levels analyzed at TSL 1 by 2026, in the no-new-standards case. At TSL 1, DPPP motor manufacturers would need to redesign some extrasmall size, small size, and standard size DPPP motors to meet EL 1 (which is likely to require an intermediate efficient single-speed motor). DOE estimated that this redesign effort would cost manufacturers approximately $0.2 million in product conversion costs. DOE estimated that DPPP motor manufacturers have the existing 67025 closely associated with production operations, such as materials handling tasks using forklifts, are included as production labor, as well as line supervisors. DOE used the GRIM to calculate the number of production employees from labor expenditures. DOE used statistical data from the U.S. Census Bureau’s 2021 Annual Survey of Manufacturers 132 (‘‘ASM’’) and the results of the engineering analysis to calculate industry-wide labor expenditures. Labor expenditures related to product manufacturing depend on the labor intensity of the product, the sales volume, and an assumption that wages remain fixed in real terms over time. The total labor expenditures in the GRIM were then converted to domestic production employment levels by dividing production labor expenditures by the annual payment per production worker. Non-production employees account for those workers that are not directly engaged in the manufacturing of the covered product. This could include sales, human resources, engineering, and management. DOE estimated nonproduction employment levels by multiplying the number of DPPP motor production workers by a scaling factor. The scaling factor is calculated by taking the ratio of the total number of employees, and the total number of production workers associated with the industry NAICS code 335312, which covers DPPP motor manufacturing. Using the GRIM, DOE estimates that there would be approximately 405 domestic production workers and approximately 232 non-production workers for DPPP motors in 2026 in the absence of new energy conservation standards. Table V.17 shows the range of the impacts of energy conservation standards on U.S. production of DPPP motors. production capacity to manufacturer more efficient single-speed DPPP motors and would not incur any additional capital conversion costs at TSL 1. At TSL 1, the shipment weighted average MPC for all DPPP motors increases by 1.2 percent relative to the no-new-standards case shipment weighted average MPC for all DPPP motors. In the preservation of gross margin scenario, manufacturers can fully pass on this cost increase to customers. The increase in the shipment weighted average MPC for DPPP motors outweighs the $0.2 million in conversion costs, causing a positive change in INPV at TSL 1 in the preservation of gross margin scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the 1.2 percent shipment weighted average MPC increase results in a reduction in the manufacturer margin after the compliance year. This reduction in the manufacturer margin and the $0.2 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 1 in the preservation of operating profit scenario. b. Direct Impacts on Employment To quantitatively assess the potential impacts of new energy conservation standards on direct employment in the DPPP motors industry, DOE used the GRIM to estimate the domestic labor expenditures and number of direct employees in the no-new-standards case and in each of the standards cases during the analysis period. Production employees are those who are directly involved in fabricating and assembling products within an original equipment manufacturer facility. Workers performing services that are TABLE V.17—TOTAL NUMBER OF DOMESTIC DEDICATED-PURPOSE POOL PUMP MOTOR PRODUCTION WORKERS IN 2026 ddrumheller on DSK120RN23PROD with RULES2 No-newstandards case Domestic Production Workers in 2026 .............................................. Domestic Non-Production Workers in 2026 .......................................... Total Direct Employment in 2026 .... Potential Changes in Total Direct Employment in 2026 .................... Trial standard level * 1 2 3 4 5 6 7 405 410 421 463 474 487 494 513 648 232 637 235 645 241 662 265 728 272 746 279 766 283 777 294 807 371 1,019 .................... 0–8 0–25 0–91 0–109 0–129 (163)–140 (281)–170 (281)–382 Fmt 4701 Sfmt 4700 132 www.census.gov/programs-surveys/asm/data/ tables.html. VerDate Sep<11>2014 18:58 Sep 27, 2023 8 Jkt 259001 PO 00000 Frm 00061 E:\FR\FM\28SER2.SGM 28SER2 67026 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations The direct employment impacts shown in Table V.17 represent the potential changes in direct employment that could result following the compliance date for the DPPP motors covered in this rulemaking. Employment could increase or decrease due to the labor content of the equipment being manufactured domestically or if manufacturers decided to move production facilities abroad because of the new standards. At the less severe end of the range, DOE assumes that all manufacturers continue to manufacture the same scope of the equipment domestically after compliance with the analyzed new standards. The other end of the range assumes that some domestic manufacturing either is eliminated or moves abroad due to the analyzed new standards. DOE assumes that for DPPP motors, manufacturing is only potentially negatively impacted at TSLs that would most likely require variable-speed DPPP motors. At these TSLs, the maximum number of employees that could be eliminated are the number of domestic employees that would be manufacturing single-speed and dual-speed DPPP motors in the absence of new energy conservation standards. DOE estimated that there would be approximately 76 domestic production employees and 43 non-production employees involved in the production and sale of single-speed and dual-speed small-size DPPP motors (for a total of 119 total employees) in 2026 in the absence of new DPPP motor standards. DOE also estimated that there would be approximately 104 domestic production employees and 59 nonproduction employees involved in the production and sale of single-speed and dual-speed standard-size DPPP motors (for a total of 163 total employees) in 2026 in the absence of new DPPP motor standards. However, DOE notes that motors used in DPPPs are frequently used in other non-DPPP applications and motor manufacturers may choose to continue to manufacture single-speed and dual-speed motors (even at TSL 6, TSL 7, and TSL 8) that would be allowed to be used in other non-DPPP applications. If manufacturers choose to do this, there would likely not be a significant impact on the overall domestic motor employment. c. Impacts on Manufacturing Capacity DOE did not identify any significant capacity constraints for the design options being evaluated for this final rule. The design options evaluated for this final rule are available as equipment that is on the market currently. The materials used to manufacture DPPP motor models at all efficiency levels are widely available on the market. While there were a limited number of small size variable-speed DPPP motor models currently on the market, all manufacturers are capable of manufacturing standard size variablespeed DPPP motor models and would be able to manufacture small size variablespeed DPPP motor models if they choose to make the investments described in section IV.J.2.c of this document. As a result, DOE does not anticipate that the industry would likely experience any capacity constraints directly resulting from energy conservation standards at any of the TSLs considered. d. Impacts on Subgroups of Manufacturers As discussed in section IV.J.1 of this document, using average cost assumptions to develop an industry cash-flow estimate may not be adequate for assessing differential impacts among manufacturer subgroups. Small manufacturers, niche manufacturers, and manufacturers exhibiting a cost structure substantially different from the industry average could be affected disproportionately. DOE used the results of the industry characterization to group manufacturers exhibiting similar characteristics. Consequently, DOE identified small business manufacturers as a subgroup for a separate impact analysis. For the small business subgroup analysis, DOE applied the small business size standards published by the Small Business Administration (‘‘SBA’’) to determine whether a company is considered a small business. The size standards are codified at 13 CFR part 121. To be categorized as a small business under NAICS code 335312, ‘‘Motor and Generator Manufacturing’’ a DPPP motor manufacturer and its affiliates may employ a maximum of 1,250 employees. The 1,250-employee threshold includes all employees in a business’s parent company and any other subsidiaries. Based on this classification, DOE identified one potential manufacturer that could qualify as domestic small businesses. e. Cumulative Regulatory Burden One aspect of assessing manufacturer burden involves looking at the cumulative impact of multiple DOE standards and the regulatory actions of other Federal agencies and States that affect the manufacturers of a covered product or equipment. While any one regulation may not impose a significant burden on manufacturers, the combined effects of several existing or impending regulations may have serious consequences for some manufacturers, groups of manufacturers, or an entire industry. Multiple regulations affecting the same manufacturer can strain profits and lead companies to abandon product lines or markets with lower expected future returns than competing products. For these reasons, DOE conducts an analysis of cumulative regulatory burden as part of its rulemakings pertaining to appliance efficiency. DOE evaluates product-specific regulations that will take effect approximately 3 years before or after the 2026 compliance date of any new energy conservation standards for DPPP motors. This information is presented in Table V.18. TABLE V.18—COMPLIANCE DATES AND EXPECTED CONVERSION EXPENSES OF FEDERAL ENERGY CONSERVATION STANDARDS AFFECTING DEDICATED-PURPOSE POOL PUMP MOTOR MANUFACTURERS Number of Mfrs * ddrumheller on DSK120RN23PROD with RULES2 Federal energy conservation standard Distribution Transformers 88 FR 1722 (Jan. 11, 2023) † ........................................................................ Electric Motors 88 FR 36066 (Jun. 1, 2023) ................. Number of manufacturers affected from this rule ** Approximately standards year 1 5 2027 2027 27 74 Industry conversion costs (millions) 133 $343 (2021$) $468 (2021$) Industry conversion costs/ product (%) 2.7 2.6 * This column presents the total number of manufacturers identified in the energy conservation standard rule contributing to cumulative regulatory burden. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 PO 00000 Frm 00062 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 67027 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations ** This column presents the number of manufacturers producing DPPP motors that are also listed as manufacturers in the listed energy conservation standard contributing to cumulative regulatory burden. *** This column presents industry conversion costs as a percentage of product revenue during the conversion period. Industry conversion costs are the upfront investments manufacturers must make to sell compliant products/equipment. The revenue used for this calculation is the revenue from just the covered product/equipment associated with each row. The conversion period is the time frame over which conversion costs are made and lasts from the publication year of the final rule to the compliance year of the energy conservation standard. The conversion period typically ranges from 3 to 5 years, depending on the rulemaking. † Indicates a NOPR publications. Values may change on publication of a final rule. Fluidra identified the following regulations and certification standards that apply to DPPP and DPPP motors that may contribute to the cumulative regulator burden for DPPP motor manufacturers: DOE’s January 2017 Final Rule (for DPPPs); DPPP UL 1081; DPPP motor UL 1004–1, 1004–4, and 1004–7; NSF–50; and CEC title 20. (Fluidra, No. 91 at p. 4) As part of the cumulative regulatory burden, DOE specifically looks to mitigate the overlapping effects on manufacturers of new or revised DOE standards and other regulatory actions affecting the same products or equipment (10 CFR part 430 appendix A to subpart C) DOE acknowledges that DPPP manufacturers use DPPP motors in their equipment and that change to energy conservation standards to DPPP motors could impact DPPPs. The compliance date for DPPPs was on July 19, 2021. DOE considered these energy conservation standards when determining what energy conservation standards are technologically feasible and economically justified in section V.C. of this document. Specifically, DOE is setting the compliance date for smallsize DPPP motors to be 4 years after the publication of this final rule to allow DPPP motor manufacturers additional time to comply with energy conservation standards for those DPPP motors. result from each of the TSLs considered as potential amended standards. a. Significance of Energy Savings To estimate the energy savings attributable to potential new standards for DPPP motors, DOE compared their energy consumption under the no-newstandards case to their anticipated energy consumption under each TSL. The savings are measured over the entire lifetime of products purchased in the 30-year period that begins in the first full year of anticipated compliance with amended standards (2026– 2055).134 Table V.15 presents DOE’s projections of the national energy savings for each TSL considered for DPPP motors. The savings were calculated using the approach described in section IV.H of this document. 3. National Impact Analysis This section presents DOE’s estimates of the national energy savings and the NPV of consumer benefits that would TABLE V.19—CUMULATIVE NATIONAL ENERGY SAVINGS FOR DPPP MOTORS; 30 YEARS OF SHIPMENTS Trial standard levels I 1 2 I 3 I I 4 5 I 6 I 7 I 8 (quads) Primary energy ................................................................. FFC energy ...................................................................... 0.11 0.11 I 0.20 0.20 I 0.68 0.70 I 0.88 0.90 I 0.99 1.01 I 0.93 0.96 I 1.52 1.56 I 1.56 1.60 ddrumheller on DSK120RN23PROD with RULES2 Note: the analysis considers 30 years for shipments starting in 2026 (2026–2055) except at TSL 7 for small-size DPPP motors where DOE considers shipments in 2028–2055. OMB Circular A–4 135 requires agencies to present analytical results, including separate schedules of the monetized benefits and costs that show the type and timing of benefits and costs. Circular A–4 also directs agencies to consider the variability of key elements underlying the estimates of benefits and costs. For this rulemaking, DOE undertook a sensitivity analysis using 9 years, rather than 30 years, of product shipments. The choice of a 9- year period is a proxy for the timeline in EPCA for the review of certain energy conservation standards and potential revision of and compliance with such revised standards.136 The review timeframe established in EPCA is generally not synchronized with the product lifetime, product manufacturing cycles, or other factors specific to DPPP motors. Thus, such results are presented for informational purposes only and are not indicative of any change in DOE’s analytical methodology. The NES sensitivity analysis results based on a 9year analytical period are presented in Table V.16. The impacts are counted over the lifetime of DPPP motors purchased in 2026–2034, except at TSL 7 for small-size DPPP motors where impacts are counted over the lifetime of DPPP motors purchased in 2028–2036. 133 ;This is the sum of the total conversion costs listed in Table V.46 (TSL 4), which is $270.6 million; Table V.48 (TSL 5), which is $69.4 million; and Table V.50 (TSL 2), which is $3.1 million. 88 FR 1722, 1809–1814. 134 As discussed in section III.A of this document, for all TSLs DOE considered a 2-year lead time resulting in a first full year of compliance of 2026, except for small-size DPPP motors at TSL 7 where DOE uses a 4-year compliance lead time, resulting in a compliance year of 2028. In this case, DOE considered 28 years of shipments (2028–2055). 135 U.S. Office of Management and Budget. Circular A–4: Regulatory Analysis. September 17, 2003. obamawhitehouse.archives.gov/omb/ circulars_a004_a-4 (last accessed September 1, 2021). 136 EPCA requires DOE to review its standards at least once every 6 years, and requires, for certain products, a 3-year period after any new standard is promulgated before compliance is required, except that in no case may any new standards be required within 6 years of the compliance date of the previous standards. While adding a 6-year review to the 3-year compliance period adds up to 9 years, DOE notes that it may undertake reviews at any time within the 6-year period and that the 3-year compliance date may yield to the 6-year backstop. A 9-year analysis period may not be appropriate given the variability that occurs in the timing of standards reviews and the fact that for some products, the compliance period is 5 years rather than 3 years and for this product, DOE is setting compliance periods of 2 and 4 years. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 PO 00000 Frm 00063 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 67028 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE V.20—CUMULATIVE NATIONAL ENERGY SAVINGS FOR DPPP MOTORS; 9 YEARS OF SHIPMENTS Trial standard levels 1 I 2 I 3 4 I I 5 I 6 I 7 I 8 (quads) Primary energy ................................................................. FFC energy ...................................................................... 0.03 0.03 I 0.06 0.06 I 0.21 0.21 0.26 0.27 I I 0.29 0.30 I 0.28 0.29 I 0.46 0.47 I 0.45 0.47 Note: the analysis considers 9 years for shipments starting in 2026 (2026–2034) except at TSL 7 for small-size DPPP motors where DOE considers shipments in 2028–2034. b. Net Present Value of Consumer Costs and Benefits DOE estimated the cumulative NPV of the total costs and savings for percent real discount rate. Table V.17 shows the consumer NPV results with impacts counted over the lifetime of products purchased in 2026–2055 or 2028–2055. consumers that would result from the TSLs considered for DPPP motors. In accordance with OMB’s guidelines on regulatory analysis,137 DOE calculated NPV using both a 7-percent and a 3- TABLE V.21—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR DPPP MOTORS; 30 YEARS OF SHIPMENTS Trial standard levels Discount rate 1 I 2 I 3 4 I I 5 I 6 I 7 I 8 (billion 2022$) 3 percent .......................................................................... 7 percent .......................................................................... 0.85 0.48 I 1.27 0.72 I 2.29 1.16 3.58 1.87 I I 3.92 2.06 I 7.97 4.49 I 10.16 5.37 I 10.06 5.28 Note: the analysis considers 30 years for shipments starting in 2026 (2026–2055) except at TSL 7 for small-size DPPP motors where DOE considers shipments in 2028–2055. The NPV results based on the aforementioned 9-year analytical period are presented in Table V.18. The impacts are counted over the lifetime of products purchased in 2026–2034 or 2028–2036. As mentioned previously, such results are presented for informational purposes only and are not indicative of any change in DOE’s analytical methodology or decision criteria. TABLE V.22—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR DPPP MOTORS; 9 YEARS OF SHIPMENTS Trial standard levels Discount rate I 1 2 I 3 I I 4 5 I 6 I 7 I 8 (billion 2022$) 3 percent .......................................................................... 7 percent .......................................................................... 0.32 0.25 I 0.50 0.38 I 0.79 0.56 I 1.25 0.91 I 1.39 1.00 I 2.91 2.25 I 3.16 2.35 I 2.96 2.19 ddrumheller on DSK120RN23PROD with RULES2 Note: the analysis considers 9 years for shipments starting in 2026 (2026–2034) except at TSL 7 for small-size DPPP motors where DOE considers shipments in 2028–2034. The previous results reflect the use of a default trend to estimate the change in price for DPPP motors over the analysis period (see section IV.F.1 of this document). DOE also conducted a sensitivity analysis that considered one scenario with a lower rate of price decline than the reference case and one scenario with a higher rate of price decline than the reference case. The results of these alternative cases are presented in appendix 10C of the final rule TSD. In the high-price-decline case, the NPV of consumer benefits is higher than in the default case. In the lowprice-decline case, the NPV of consumer benefits is lower than in the default case. 137 U.S. Office of Management and Budget. Circular A–4: Regulatory Analysis. September 17, 2003. obamawhitehouse.archives.gov/omb/ circulars_a004_a-4/ (last accessed July 1, 2021). VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 c. Indirect Impacts on Employment DOE estimates that amended energy conservation standards for DPPP motors will reduce energy expenditures for consumers of those products, with the resulting net savings being redirected to other forms of economic activity. These expected shifts in spending and economic activity could affect the demand for labor. As described in section IV.N of this document, DOE used an input/output model of the U.S. economy to estimate indirect PO 00000 Frm 00064 Fmt 4701 Sfmt 4700 employment impacts of the TSLs that DOE considered. There are uncertainties involved in projecting employment impacts, especially changes in the later years of the analysis. Therefore, DOE generated results for near-term timeframes (2026–2030 or 2028–2030), where these uncertainties are reduced. The results suggest that the adopted standards are likely to have a negligible impact on the net demand for labor in the economy. The net change in jobs is so small that it would be imperceptible in national labor statistics and might be offset by other, unanticipated effects on employment. Chapter 16 of the final E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations rule TSD presents detailed results regarding anticipated indirect employment impacts. 4. Impact on Utility or Performance of Products As discussed in section IV.C.1.b of this document, DOE has concluded that the standards adopted in this final rule will not lessen the utility or performance of the DPPP motors under consideration in this rulemaking. Manufacturers of these products currently offer units that meet or exceed the adopted standards. 5. Impact of Any Lessening of Competition DOE considered any lessening of competition that would be likely to result from new or amended standards. As discussed in section III.F.1.e, EPCA directs the Attorney General of the United States (‘‘Attorney General’’) to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to 67029 production. Reduced electricity demand due to energy conservation standards is also likely to reduce the cost of maintaining the reliability of the electricity system, particularly during peak-load periods. Chapter 15 in the final rule TSD presents the estimated impacts on electricity generating capacity, relative to the no-newstandards case, for the TSLs that DOE considered in this rulemaking. transmit such determination in writing to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. To assist the Attorney General in making this determination, DOE provided the Department of Justice (‘‘DOJ’’) with copies of the NOPR and the TSD for review. In its assessment letter responding to DOE, DOJ ultimately stated that they do not have sufficient information to conclude that the proposed energy conservation standards for DPPP motor are likely to have a significant adverse impact on competition. DOE is publishing the Attorney General’s assessment at the end of this final rule. 6. Need of the Nation To Conserve Energy Enhanced energy efficiency, where economically justified, improves the Nation’s energy security, strengthens the economy, and reduces the environmental impacts (costs) of energy Energy conservation resulting from potential energy conservation standards for DPPP motors is expected to yield environmental benefits in the form of reduced emissions of certain air pollutants and greenhouse gases. Table V.19 provides DOE’s estimate of cumulative emissions reductions expected to result from the TSLs considered in this rulemaking. The emissions were calculated using the multipliers discussed in section IV.K of this document. DOE reports annual emissions reductions for each TSL in chapter 13 of the final rule TSD. TABLE V.23—CUMULATIVE EMISSIONS REDUCTION FOR DPPP MOTORS; 30 YEARS OF SHIPMENTS Trial standard level 1 2 3 4 5 6 7 8 13.04 1.02 0.14 6.63 4.40 0.03 16.82 1.31 0.18 8.54 5.68 0.04 18.84 1.47 0.21 9.56 6.36 0.04 17.94 1.40 0.19 9.09 6.05 0.04 28.52 2.21 0.31 14.41 9.63 0.07 29.60 2.31 0.32 15.00 10.01 0.07 1.22 110.54 0.01 18.94 0.08 0.00 1.58 142.86 0.01 24.48 0.11 0.00 1.77 160.08 0.01 27.43 0.12 0.00 1.69 152.29 0.01 26.09 0.11 0.00 2.71 244.97 0.01 41.99 0.18 0.00 2.79 252.18 0.01 43.22 0.19 0.00 18.40 144.17 0.19 33.02 5.79 0.04 20.61 161.55 0.21 36.99 6.48 0.04 19.63 153.69 0.20 35.18 6.16 0.04 31.23 247.18 0.32 56.40 9.81 0.07 32.39 254.49 0.34 58.22 10.20 0.07 Power Sector Emissions CO2 (million metric tons) .................................................. CH4 (thousand tons) ........................................................ N2O (thousand tons) ........................................................ NOX (thousand tons) ........................................................ SO2 (thousand tons) ........................................................ Hg (tons) .......................................................................... 2.02 0.16 0.02 1.02 0.68 0.00 3.82 0.30 0.04 1.94 1.29 0.01 Upstream Emissions CO2 (million metric tons) .................................................. CH4 (thousand tons) ........................................................ N2O (thousand tons) ........................................................ NOX (thousand tons) ........................................................ SO2 (thousand tons) ........................................................ Hg (tons) .......................................................................... 0.19 17.21 0.00 2.95 0.01 0.00 0.36 32.32 0.00 5.54 0.02 0.00 Total FFC Emissions CO2 (million metric tons) .................................................. CH4 (thousand tons) ........................................................ N2O (thousand tons) ........................................................ NOX (thousand tons) ........................................................ SO2 (thousand tons) ........................................................ Hg (tons) .......................................................................... 2.21 17.37 0.02 3.97 0.70 0.00 4.18 32.62 0.04 7.48 1.32 0.01 14.27 111.56 0.15 25.57 4.49 0.03 ddrumheller on DSK120RN23PROD with RULES2 Note: the analysis considers 30 years for shipments starting in 2026 (2026–2055) except at TSL 7 for small-size DPPP motors where DOE considers shipments in 2028–2055. As part of the analysis for this rule, DOE estimated monetary benefits likely to result from the reduced emissions of CO2 that DOE estimated for each of the considered TSLs for DPPP motors. Section IV.L.1.a of this document VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 discusses the estimated SC–CO2 values that DOE used. Table V.19 presents the value of CO2 emissions reduction at each TSL for each of the SC–CO2 cases. The time-series of annual values is PO 00000 Frm 00065 Fmt 4701 Sfmt 4700 presented for the selected TSL in chapter 14 of the final rule TSD. E:\FR\FM\28SER2.SGM 28SER2 67030 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE V.24—PRESENT VALUE OF CO2 EMISSIONS REDUCTION FOR DPPP MOTORS; 30 YEARS OF SHIPMENTS SC–CO2 case Discount rate and statistics TSL 5% Average 3% Average 2.5% Average 3% 95th percentile (million 2022$) 1 2 3 4 5 6 7 8 ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... 29 55 187 240 268 256 400 420 112 213 726 934 1,045 997 1,570 1,638 171 324 1,106 1,423 1,593 1,519 2,397 2,499 340 646 2,207 2,840 3,178 3,030 4,778 4,984 Note: the analysis considers 30 years for shipments starting in 2026 (2026–2055) except at TSL 7 for small-size DPPP motors where DOE considers shipments in 2028–2055. As discussed in section IV.L.2, DOE estimated the climate benefits likely to result from the reduced emissions of methane and N2O that DOE estimated for each of the considered TSLs for DPPP motors. Table V.21 presents the value of the CH4 emissions reduction at each TSL, and Table V.22 presents the value of the N2O emissions reduction at each TSL. The time-series of annual values is presented for the selected TSL in chapter 14 of the final rule TSD. TABLE V.25—PRESENT VALUE OF METHANE EMISSIONS REDUCTION FOR DPPP MOTORS; 30 YEARS OF SHIPMENTS SC–CH4 case Discount rate and statistics TSL 5% Average 3% Average 2.5% Average 3% 95th percentile (million 2022$) 1 2 3 4 5 6 7 8 ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... 10 19 65 83 93 89 141 146 27 50 172 222 249 237 379 391 36 68 234 302 338 322 517 533 71 134 457 590 661 628 1,007 1,040 Note: the analysis considers 30 years for shipments starting in 2026 (2026–2055) except at TSL 7 for small-size DPPP motors where DOE considers shipments in 2028–2055. TABLE V.26—PRESENT VALUE OF NITROUS OXIDE EMISSIONS REDUCTION FOR DPPP MOTORS; 30 YEARS OF SHIPMENTS SC–N2O case Discount rate and statistics TSL 5% Average 3% Average 2.5% Average 3% 95th percentile ddrumheller on DSK120RN23PROD with RULES2 (million 2022$) 1 2 3 4 5 6 7 8 ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... 0.1 0.2 0.7 0.9 1.0 1.0 1.6 1.6 0.4 0.8 2.6 3.4 3.8 3.6 5.6 5.9 0.6 1.2 3.9 5.1 5.7 5.4 8.5 8.9 1.1 2.0 6.9 8.9 10.0 9.5 14.9 15.6 Note: the analysis considers 30 years for shipments starting in 2026 (2026–2055) except at TSL 7 for small-size DPPP motors where DOE considers shipments in 2028–2055. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 PO 00000 Frm 00066 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations DOE is aware that scientific and economic knowledge about the contribution of CO2 and other GHG emissions to changes in the future global climate and the potential resulting damages to the global and U.S. economy continues to evolve rapidly. DOE, together with other Federal agencies, will continue to review methodologies for estimating the monetary value of reductions in CO2 and other GHG emissions. This ongoing review will consider the comments on this subject that are part of the public record for this and other rulemakings, as well as other methodological assumptions and issues. DOE notes, however, that the adopted standards would be economically justified even without inclusion of monetized benefits of reduced GHG emissions. DOE also estimated the monetary value of the economic benefits associated with NOX and SO2 emissions reductions anticipated to result from the considered TSLs for DPPP motors. The dollar-per-ton values that DOE used are discussed in section IV.L of this 67031 document. Table V.23 presents the present value for NOX emissions reduction for each TSL calculated using 7-percent and 3-percent discount rates, and Table V.24 presents similar results for SO2 emissions reductions. The results in these tables reflect application of EPA’s low dollar-per-ton values, which DOE used to be conservative. The time-series of annual values is presented for the selected TSL in chapter 14 of the final rule TSD. TABLE V.27—PRESENT VALUE OF NOX EMISSIONS REDUCTION FOR DPPP MOTORS; 30 YEARS OF SHIPMENTS TSL 7% Discount rate 3% Discount rate (million 2022$) 1 2 3 4 5 6 7 8 ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... 116 222 759 972 1,086 1,040 1,613 1,698 221 420 1,433 1,847 2,068 1,967 3,139 3,250 Note: the analysis considers 30 years for shipments starting in 2026 (2026–2055) except at TSL 7 for small-size DPPP motors where DOE considers shipments in 2028–2055. TABLE V.28—PRESENT VALUE OF SO2 EMISSIONS REDUCTION FOR DPPP MOTORS; 30 YEARS OF SHIPMENTS TSL 3% Discount rate 7% Discount rate (million 2022$) 1 2 3 4 5 6 7 8 ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... 29 56 190 243 272 260 399 424 54 102 348 449 502 477 756 789 ddrumheller on DSK120RN23PROD with RULES2 Note: the analysis considers 30 years for shipments starting in 2026 (2026–2055) except at TSL 7 for small-size DPPP motors where DOE considers shipments in 2028–2055. Not all the public health and environmental benefits from the reduction of greenhouse gases, NOX, and SO2 are captured in the values above, and additional unquantified benefits from the reductions of those pollutants as well as from the reduction of direct PM and other co-pollutants may be significant. DOE has not included monetary benefits of the reduction of Hg emissions because the amount of reduction is very small. 7. Other Factors The Secretary of Energy, in determining whether a standard is economically justified, may consider VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) No other factors were considered in this analysis. 8. Summary of Economic Impacts Table V.25 presents the NPV values that result from adding the estimates of the economic benefits resulting from reduced GHG and NOX and SO2 emissions to the NPV of consumer benefits calculated for each TSL considered in this rulemaking. The consumer benefits are domestic U.S. monetary savings that occur as a result of purchasing the covered equipment, and are measured for the lifetime of PO 00000 Frm 00067 Fmt 4701 Sfmt 4700 products shipped in 2026–2055, except at TSL 7 for small-size DPPP motors where impacts are counted over the lifetime of DPPP motors purchased in 2028–2055. The climate benefits associated with reduced GHG emissions resulting from the adopted standards are global benefits, and are also calculated based on the lifetime of DPPP motors shipped in 2026–2055, except at TSL 7 for smallsize DPPP motors where impacts are counted over the lifetime of DPPP motors purchased in 2028–2055. E:\FR\FM\28SER2.SGM 28SER2 67032 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE V.29—CONSUMER NPV COMBINED WITH PRESENT VALUE OF CLIMATE BENEFITS AND HEALTH BENEFITS Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8 3% discount rate for Consumer NPV and Health Benefits (billion 2022$) 5% Average SC–GHG case ............................................ 3% Average SC–GHG case ............................................ 2.5% Average SC–GHG case ......................................... 3% 95th percentile SC–GHG case .................................. I 1.2 1.3 1.3 1.5 1.9 2.1 2.2 2.6 I 4.3 5.0 5.4 6.7 6.2 7.0 7.6 9.3 I 6.9 7.8 8.4 10.3 I 10.8 11.6 12.3 14.1 I 14.6 16.0 17.0 19.9 14.7 16.1 17.1 20.1 I 7% discount rate for Consumer NPV and Health Benefits (billion 2022$) 5% Average SC–GHG case ............................................ 3% Average SC–GHG case ............................................ 2.5% Average SC–GHG case ......................................... 3% 95th percentile SC–GHG case .................................. C. Conclusion When considering new or amended energy conservation standards, the standards that DOE adopts for any type (or class) of covered equipment must be designed to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) In determining whether a standard is economically justified, the Secretary must determine whether the benefits of the standard exceed its burdens by, to the greatest extent practicable, considering the seven statutory factors discussed previously. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard must also result in significant conservation of energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B)) For this final rule, DOE considered the impacts of standards for DPPP I 0.7 0.8 0.8 1.0 1.1 1.3 1.4 1.8 I 2.4 3.0 3.5 4.8 3.4 4.2 4.8 6.5 motors 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, 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. 3.8 4.7 5.4 7.3 I I 6.1 7.0 7.6 9.5 I 7.9 9.3 10.3 13.2 8.0 9.4 10.4 13.4 I 1. Benefits and Burdens of TSLs Considered for DPPP Motor Standards Table V.26 and Table V.27 summarize the quantitative impacts estimated for each TSL for DPPP motors. The national impacts are measured over the lifetime of DPPP motors purchased in the 30year period that begins in the anticipated year of compliance with amended standards (2026–2055).138 The energy savings, emissions reductions, and value of emissions reductions refer to full-fuel-cycle results. DOE is presenting monetized benefits of GHG emissions reductions in accordance with the applicable Executive orders and DOE would reach the same conclusion presented in this notice in the absence of the social cost of greenhouse gases, including the interim estimates presented by the Interagency Working Group. The efficiency levels contained in each TSL are described in section V.A of this document. TABLE V.30—SUMMARY OF ANALYTICAL RESULTS FOR DPPP MOTORS TSLS—NATIONAL IMPACTS Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8 Cumulative FFC National Energy Savings Quads ............................................................................................... 0.11 0.20 0.70 0.90 1.01 0.96 1.56 1.60 18.4 144.2 0.19 5.8 33.0 0.04 20.6 161.6 0.21 6.5 37.0 0.04 19.6 153.7 0.20 6.2 35.2 0.04 31.2 247.2 0.32 9.8 56.4 0.07 32.4 254.5 0.34 10.2 58.2 0.07 9.2 1.3 2.6 13.1 8.8 1.2 2.4 12.4 14.0 2.0 3.9 19.9 14.5 2.0 4.0 20.6 Cumulative FFC Emissions Reduction CO2 (million metric tons) .................................................................. CH4 (thousand tons) ........................................................................ N2O (thousand tons) ........................................................................ SO2 (thousand tons) ........................................................................ NOX (thousand tons) ........................................................................ Hg (tons) .......................................................................................... 2.2 17.4 0.02 0.7 4.0 0.00 4.2 32.6 0.04 1.3 7.5 0.01 14.3 111.6 0.15 4.5 25.6 0.03 ddrumheller on DSK120RN23PROD with RULES2 Present Value of Benefits and Costs (3% discount rate, billion 2022$) Consumer Operating Cost Savings ................................................. Climate Benefits * ............................................................................. Health Benefits ** ............................................................................. Total Benefits † ................................................................................ 138 As discussed in section III.A of this document, for all TSLs DOE considered a 2-year lead time resulting in a first full year of compliance of 2026, VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 I 1.0 0.1 0.3 1.4 I 1.9 0.3 0.5 2.7 I 6.4 0.9 1.8 9.1 except for small-size DPPP motors at TSL 7 where DOE uses a 4-year compliance lead time, resulting PO 00000 Frm 00068 Fmt 4701 Sfmt 4700 I 8.2 1.2 2.3 11.7 I in a compliance year of 2028. In this case, DOE considered 28 years of shipments (2028–2055). E:\FR\FM\28SER2.SGM 28SER2 67033 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE V.30—SUMMARY OF ANALYTICAL RESULTS FOR DPPP MOTORS TSLS—NATIONAL IMPACTS—Continued Category TSL 1 Consumer Incremental Product Costs ............................................. Consumer Net Benefits .................................................................... Total Net Benefits ............................................................................ TSL 2 0.1 0.8 1.3 I I 0.6 1.3 2.1 TSL 3 4.1 2.3 5.0 I TSL 4 I TSL 5 4.7 3.6 7.0 TSL 6 5.3 3.9 7.8 I I 0.8 8.0 11.6 TSL 7 3.9 10.2 16.0 I TSL 8 I 4.4 10.1 16.1 Present Value of Benefits and Costs (7% discount rate, billion 2022$) Consumer Operating Cost Savings ................................................. Climate Benefits * ............................................................................. Health Benefits ** ............................................................................. Total Benefits † ................................................................................ Consumer Incremental Product Costs ............................................. Consumer Net Benefits .................................................................... Total Net Benefits ............................................................................ 0.6 0.1 0.1 0.8 0.1 0.5 0.8 1.1 0.3 0.3 1.6 0.4 0.7 1.3 3.7 0.9 0.9 5.6 2.5 1.2 3.0 4.8 1.2 1.2 7.1 2.9 1.9 4.2 5.3 1.3 1.4 8.0 3.3 2.1 4.7 5.1 1.2 1.3 7.6 0.6 4.5 7.0 7.9 2.0 2.0 11.9 2.6 5.4 9.3 8.3 2.0 2.1 12.5 3.0 5.3 9.4 Note: This table presents the costs and benefits associated with DPPP motors shipped in 2026–2055, except at TSL 7 for small-size DPPP motors where shipments in 2028–2055 are considered. These results include benefits to consumers which accrue after 2055 from the products shipped in 2026–2055 (or 2028–2055). * Climate benefits are calculated using four different estimates of the SC–CO2, SC–CH4 and SC–N2O. Together, these represent the global SC–GHG. For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3 percent discount rate are shown, but the Department does not have a single central SC–GHG point estimate. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this document for more details. † Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits for both the 3-percent and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate, but DOE does not have a single central SC–GHG point estimate. DOE emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. ‡ Costs include incremental equipment costs as well as installation costs. TABLE V.31—SUMMARY OF ANALYTICAL RESULTS FOR DPPP MOTORS TSLS—MANUFACTURER AND CONSUMER IMPACTS Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8 617–695 (6.6)¥5.2 612–708 (7.3)¥7.1 559–675 (15.3)¥2.1 447–740 (32.4)¥12.0 436–755 (34.0)¥14.2 ($12) ($12) 141 79 ($12) ($16) 151 83 $3 10 236 144 $3 4 236 141 ($12) 4 236 141 2.8 3.4 0.8 1.9 2.8 3.4 0.9 1.9 0.9 0.5 1.3 1.0 0.9 3.4 1.3 2.1 2.8 3.4 1.3 2.1 59% 50 19 32 0.5% 0 2 1 0.5% 44 2 18 59% 44 2 19 Manufacturer Impacts Industry NPV (million 2022$) (No-new-standards case INPV = 661) .................................. Industry NPV (% change) ................................. 660–663 (0.1)¥0.4 655–672 (0.9)¥1.7 622–684 (5.9)¥3.5 Consumer Average LCC Savings (2022$) Extra-Small-Size ................................................ Small-Size ......................................................... Standard-Size .................................................... Shipment-Weighted Average * .......................... $3 10 26 19 ($12) 14 44 31 ($12) ($54) 109 44 Consumer Simple PBP (years) Extra-Small-Size ................................................ Small-Size ......................................................... Standard-Size .................................................... Shipment-Weighted Average * .......................... 0.9 0.5 0.7 0.6 2.8 1.0 0.8 0.9 2.8 4.5 0.8 2.2 Percent of Consumers that Experience a Net Cost Extra-Small-Size ................................................ Small-Size ......................................................... Standard-Size .................................................... Shipment-Weighted Average * .......................... 0.5% 0.0 0.1 0.1 59% 24 2 12 59% 52 18 32 59% 46 17 29 ddrumheller on DSK120RN23PROD with RULES2 Parentheses indicate negative (-) values. * Weighted by shares of each equipment class in total projected shipments in 2026. DOE first considered TSL 8, which represents the max-tech efficiency levels for all equipment classes and freeze protection control requirements for DPPP motors greater than and equal to 0.5 THP. TSL 8 would save an estimated 1.60 quads of energy, an amount DOE considers significant. Under TSL 8, the NPV of consumer benefit would be $5.3 VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 billion using a discount rate of 7 percent, and $10.1 billion using a discount rate of 3 percent. The cumulative emissions reductions at TSL 8 are 32.4 Mt of CO2, 10.2 thousand tons of SO2, 58.2 thousand tons of NOX, 0.07 tons of Hg, 254.5 thousand tons of CH4, and 0.34 thousand tons of N2O. The estimated monetary value of the climate benefits PO 00000 Frm 00069 Fmt 4701 Sfmt 4700 from reduced GHG emissions (associated with the average SC–GHG at a 3-percent discount rate) at TSL 8 is $2.0 billion. The estimated monetary value of the health benefits from reduced SO2 and NOX emissions at TSL 8 is $2.1 billion using a 7-percent discount rate and $4.0 billion using a 3percent discount rate. E:\FR\FM\28SER2.SGM 28SER2 ddrumheller on DSK120RN23PROD with RULES2 67034 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations Using a 7-percent discount rate for consumer benefits and costs, health benefits from reduced SO2 and NOX emissions, and the 3-percent discount rate case for climate benefits from reduced GHG emissions, the estimated total NPV at TSL 8 is $9.4 billion. Using a 3-percent discount rate for all benefits and costs, the estimated total NPV at TSL 8 is $16.1 billion. The estimated total NPV is provided for additional information, however DOE primarily relies upon the NPV of consumer benefits when determining whether a standard level is economically justified. At TSL 8, the average LCC impact is a loss of $12 for extra-small-size DPPP motors, a saving of $4 for small-size DPPP motors, and $236 for standardsize DPPP motors. The simple payback period is 2.8 years for extra-small-size DPPP motors, 3.4 years for small-size DPPP motors, and 1.3 years for standard-size DPPP motors. The fraction of consumers experiencing a net LCC cost is 59 percent for extra-small-size DPPP motors, 44 percent for small-size DPPP motors, and 2 percent for standard-size DPPP motors. At TSL 8, the projected change in INPV ranges from a decrease of $224.4 million to an increase of $94.1 million, which corresponds to a decrease of 34.0 percent and an increase of 14.2 percent, respectively. DOE estimates that industry must invest $56.4 million to comply with standards set at TSL 8. DOE estimates that approximately 33 percent of extra-small size DPPP motor shipments, 22 percent of small size DPPP motors shipments, and 62 percent of standard size DPPP motor shipments would meet the efficiency levels analyzed at TSL 8, in the no-newstandards case. At TSL 8, most DPPP motor manufacturers would be required to redesign all of their small size DPPP motor models to be variable-speed motors covered by this rulemaking. It is unclear if most manufacturers would have the engineering capacity to complete the necessary redesigns within a 2-year compliance period (between the publication of this final rule and the analyzed compliance date of 2028 for this TSL). If manufacturers require more than 2 years to redesign all of their covered DPPP motor models, they will likely prioritize redesigns based on sales volume. There is a risk that some small size DPPP motor models will become either temporarily or permanently unavailable after the analyzed compliance date for this TSL, given a 2year compliance period. The Secretary concludes that at TSL 8 for DPPP motors, the benefits of energy savings, positive NPV of consumer benefits, emission reductions, VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 and the estimated monetary value of the emissions reductions are outweighed by the economic burden on many consumers and the impacts on manufacturers, including the lack of manufacturers currently offering small size DPPP motor models meeting the efficiency levels required at this TSL and the potential for most DPPP motor manufacturers to redesign their entire small size DPPP motors models in the analyzed 2 year compliance period for this TSL. A majority of extra-small-size DPPP motor consumers (59 percent) would experience a net cost and the average LCC savings would be negative. The potential reduction in INPV could be as high as 34.0 percent. Consequently, the Secretary has concluded that TSL 8 is not economically justified. DOE then considered TSL 7, which represents the California CEC standards 139 and includes a variablespeed requirement for DPPP motors at or above 0.5 THP, an EL 1 efficiency requirement below 0.5 THP, and freezeprotection control requirements for DPPP motors greater than and equal to 0.5 THP. In addition, as discussed in section III.A of this document, this TSL uses a 4-year compliance lead time for small-size DPPP motors, resulting in a first full year of compliance year of 2028 (for all other equipment classes, a compliance lead time of 2 years is applied). TSL 7 would save an estimated 1.56 quads of energy, an amount DOE considers significant. Under TSL 7, the NPV of consumer benefit would be $5.4 billion using a discount rate of 7 percent, and $10.2 billion using a discount rate of 3 percent. The cumulative emissions reductions at TSL 7 are 31.2 Mt of CO2, 9.8 thousand tons of SO2, 56.4 thousand tons of NOX, 0.07 tons of Hg, 247.2 thousand tons of CH4, and 0.32 thousand tons of N2O. The estimated monetary value of the climate benefits from reduced GHG emissions (associated with the average SC–GHG at a 3-percent discount rate) at TSL 7 is $2.0 billion. The estimated monetary value of the health benefits from reduced SO2 and NOX emissions at TSL 7 is $2.0 billion using a 7-percent discount rate and $3.9 billion using a 3percent 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 139 Best approximation based on the efficiency level analyzed. PO 00000 Frm 00070 Fmt 4701 Sfmt 4700 total NPV at TSL 7 is $9.3 billion. Using a 3-percent discount rate for all benefits and costs, the estimated total NPV at TSL 7 is $16.0 billion. The estimated total NPV is provided for additional information, however DOE primarily relies upon the NPV of consumer benefits when determining whether a standard level is economically justified. At TSL 7, the average LCC impact is a savings of $3 for extra-small-size DPPP motors, $4 for small-size DPPP motors, and $236 for standard-size DPPP motors. The simple payback period is 0.9 years for extra-small-size DPPP motors, 3.4 years for small-size DPPP motors, and 1.3 years for standard-size DPPP motors. The fraction of consumers experiencing a net LCC cost is 0.5 percent for extra-small-size DPPP motors, 4 percent for small-size DPPP motors, and 2 percent for standard-size DPPP motors. At TSL 7, the projected change in INPV ranges from a decrease of $214.2 million to an increase of $79.0 million, which correspond to a decrease of 32.4 percent and an increase of 12.0 percent, respectively. DOE estimates that industry must invest $56.2 million to comply with standards set at TSL 7. DOE estimates that approximately 93 percent of extra-small size DPPP motor shipments, 24 percent of small size DPPP motors shipments, and 62 percent of standard size DPPP motor shipments would meet the efficiency levels analyzed at TSL 7, in the no-newstandards case. At TSL 7, most DPPP motor manufacturers would be required to redesign almost all of their small size DPPP motor models to be variable-speed motors covered by this rulemaking. However, as previously stated DPPP motor manufacturers would have 4 years to complete this redesign process for the small size DPPP motor models. After considering the analysis and weighing the benefits and burdens, the Secretary has concluded that a standard set at TSL 7 for DPPP motors is economically justified. At this TSL, the average LCC savings are positive for each equipment classes for which a new standard is considered. An estimated 18 percent of all DPPP motor consumers experience a net cost. The FFC national energy savings are significant and the NPV of consumer benefits is positive at TSL 7 using both a 3-percent and 7percent discount rate. Notably, the benefits to consumers vastly outweigh the cost to manufacturers. At TSL 7, the NPV of consumer benefits, even measured at the more conservative discount rate of 7 percent, is over 25 times higher than the maximum estimated manufacturers’ loss in INPV. The standard levels at TSL 7 are E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations economically justified even without weighing the estimated monetary value of emissions reductions. When those emissions reductions are included— representing $2.0 billion in climate benefits (associated with the average SC–GHG at a 3-percent discount rate), and $3.9 billion (using a 3-percent discount rate) or $2.0 billion (using a 7percent 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 new energy conservation standards, DOE notes while the average LCC savings for extra-small-size DPPP motors are negative at TSL 8, they are positive at TSL 7 and the average LCC savings for standard-size and small size DPPP motors are the same at TSL 7 and TSL 8. In addition, as compared to TSL 8, TSL 7 has smaller percentages of electric motor consumers experiencing a net cost, a lower maximum decrease in INPV, lower manufacturer conversion costs and allow manufacturers 4 years to redesign their small size DPPP motor models to meet the efficiency levels required at TSL 7, compared to 2 years at TSL 8. Across all consumers, TSL 7 represents the largest average LCC savings for each equipment class of any TSL. Although DOE considered new standard levels for DPPP motors by grouping the efficiency levels for each equipment class into TSLs, DOE evaluates all analyzed efficiency levels in its analysis. For standard-size and small-size DPPP motors, TSL 7 (i.e., the adopted TSL) includes the max-tech efficiency levels, which is the maximum level determined to be technologically feasible. For extra-small-size DPPP motors, TSL 7 represents the efficiency level that is one level below the max- 67035 tech efficiency level. As discussed previously, the max-tech efficiency levels for extra-small-size DPPP motor would result in negative LCC savings and a majority of consumers experiencing a net LCC cost. The benefits of max-tech efficiency levels for extra-small-size DPPP motors do not outweigh the negative impacts to consumers and manufacturers. Therefore, DOE has concluded that the max-tech efficiency levels are not justified. The ELs at the adopted TSL result in average positive LCC savings for each equipment class, reduce the number of consumers experiencing a net cost, and reduce the decrease in INPV and conversion costs to the point where DOE has concluded they are economically justified, as discussed for TSL 7 in the preceding paragraphs. Therefore, based on the previous considerations, DOE adopts the energy conservation standards for DPPP motors at TSL 7. The new energy conservation standards for DPPP motors, which are expressed in full-load efficiency and design requirements, are shown in Table V.28. TABLE V.28—ENERGY CONSERVATION STANDARDS FOR DPPP MOTORS (TSL 7) Motor total horsepower (THP) Performance standard: fullload efficiency (%) Design requirement: speed capability Design requirement: freeze protection THP < 0.5 ............................... 0.5 ≤ THP < 1.15 ................... 69 ............................ None ..................................... Variable speed control * ........ 1.15 ≤ THP ≤ 5 ...................... ............................ Variable speed control * ........ None ..................................... Only for DPPP motors with freeze protection controls **. Only for DPPP motors with freeze protection controls **. Compliance date September 29, 2025. September 28, 2027. September 29, 2025. * A variable speed motor is a DPPP motor that meets the definition of ‘‘variable-speed control dedicated-purpose pool pump motor’’ as defined by UL 1004–10:2022. ** DPPP motors with freeze protection controls are to be shipped with the freeze protection feature disabled, or with the following user-adjustable default settings: (a) the dry-bulb air temperature setting shall be no greater than 40 °F; (b) the run time setting shall be no greater than 1 hour (before the temperature is rechecked); and (c) the motor speed in freeze protection mode shall not be more than half of the maximum operating speed. ddrumheller on DSK120RN23PROD with RULES2 2. Annualized Benefits and Costs of the Adopted Standards The benefits and costs of the adopted standards can also be expressed in terms of annualized values. The annualized net benefit is (1) the annualized national economic value (expressed in 2022$) of the benefits from operating products that meet the adopted standards (consisting primarily of operating cost savings from using less energy), minus increases in product purchase costs and (2) the annualized monetary value of the climate and health benefits. Table V.29 shows the annualized values for DPPP motors under TSL 7, VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 expressed in 2022$. The results under the primary estimate are as follows. Using a 7-percent discount rate for consumer benefits and costs and NOX and SO2 reductions, and the 3-percent discount rate case for GHG social costs, the estimated cost of the adopted standards for DPPP motors is $221 million per year in increased equipment installed costs, while the estimated annual benefits are $684 million from reduced equipment operating costs, $103 million in GHG reductions, and $173 million from reduced NOX and SO2 emissions. In this case, the net benefit amounts to $739 million per year. PO 00000 Frm 00071 Fmt 4701 Sfmt 4700 Using a 3-percent discount rate for consumer benefits and costs and NOX and SO2 reductions, and the 3-percent discount rate case for GHG social costs, the estimated cost of the adopted standards for DPPP motors is $204 million per year in increased equipment installed costs, while the estimated annual benefits are $738 million from reduced equipment operating costs, $103 million in GHG reductions, and $205 million from reduced NOX and SO2 emissions. In this case, the net benefit amounts to $841 million per year. E:\FR\FM\28SER2.SGM 28SER2 67036 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations TABLE V.29—ANNUALIZED MONETIZED BENEFITS AND COSTS OF ADOPTED STANDARDS (TSL 7) FOR DPPP MOTORS Million 2022$/year Primary estimate Low-net-benefits estimate High-net-benefits estimate 3% discount rate Consumer Operating Cost Savings ......................................................... Climate Benefits * ..................................................................................... Health Benefits ** ..................................................................................... Total Monetized Benefits † ...................................................................... Consumer Incremental Equipment Costs ................................................ Monetized Net Benefits ........................................................................... Change in Producer Cashflow (INPV ††) ................................................ 738 103 205 1,046 204 841 (17)¥6 721 103 205 1029 235 793 (17)¥6 760 103 205 1,068 173 895 (17)¥6 684 103 173 960 221 739 (17)¥6 671 103 173 947 250 696 (17)¥6 703 103 173 979 190 790 (17)¥6 7% discount rate Consumer Operating Cost Savings ......................................................... Climate Benefits * (3% discount rate) ...................................................... Health Benefits ** ..................................................................................... Total Monetized Benefits † ...................................................................... Consumer Incremental Equipment Costs ................................................ Monetized Net Benefits ........................................................................... Change in Producer Cashflow (INPV ††) ................................................ Note: This table presents the costs and benefits associated with DPPP motors shipped in 2026–2055, except for small-size DPPP motors where shipments in 2028–2055 are considered. These results include benefits to consumers which accrue after 2055 from the products shipped in 2026–2055 (or 2028–2055). The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental equipment costs reflect a medium decline rate in the Primary Estimate, an increasing rate in the Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to derive projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding. * Climate benefits are calculated using four different estimates of the global SC–GHG (see section IV.L of this document). For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3 percent discount rate are shown, but the Department does not have a single central SC–GHG point estimate, and it emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of this document for more details. † 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. †† Operating Cost Savings are calculated based on the life cycle costs analysis and national impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE’s NIA includes all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to manufacture the equipment and ending with the increase in price experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J of this document. In the detailed MIA, DOE models manufacturers’ pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule’s expected impact on the INPV. The change in INPV is the present value of all changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. Annualized change in INPV is calculated using the industry weighted average cost of capital value of 7.2% that is estimated in the manufacturer impact analysis (see chapter 12 of the Final Rule TSD for a complete description of the industry weighted average cost of capital). For DPPP motors, those values are ¥$17 million and $6 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized change in INPV in the above table, drawing on the MIA explained further in section IV.J of this document, to provide additional context for assessing the estimated impacts of this rule to society, including potential changes in production and consumption, which is consistent with OMB’s Circular A–4 and E.O. 12866. If DOE were to include the INPV into the annualized net benefit calculation for this final rule, the annualized net benefits would range from $824 million to $847 million at 3-percent discount rate and range from $722 million to $745 million at 7-percent discount rate. VI. Procedural Issues and Regulatory Review ddrumheller on DSK120RN23PROD with RULES2 A. Review Under Executive Orders 12866, 13563, and 14904 Executive Order (‘‘E.O.’’) 12866, ‘‘Regulatory Planning and Review,’’ as supplemented and reaffirmed by E.O. 13563, ‘‘Improving Regulation and Regulatory Review,’’ 76 FR 3821 (Jan. 21, 2011), and amended by E.O. 14094, ‘‘Modernizing Regulatory Review,’’ 88 FR 21879 (April 11, 2023), requires VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 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 PO 00000 Frm 00072 Fmt 4701 Sfmt 4700 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 E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public. DOE emphasizes as well that E.O. 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, the Office of Information and Regulatory Affairs (‘‘OIRA’’) in the Office of Management and Budget (‘‘OMB’’) has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. For the reasons stated in the preamble, this final regulatory action is consistent with these principles. Section 6(a) of E.O. 12866 also requires agencies to submit ‘‘significant regulatory actions’’ to OIRA for review. OIRA has determined that this final regulatory action constitutes a ‘‘significant regulatory action’’ within the scope of section 3(f)(1) of E.O. 12866, as amended by E.O. 14094. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 12866, DOE has provided to OIRA an assessment, including the underlying analysis, of benefits and costs anticipated from the final regulatory action, together with, to the extent feasible, a quantification of those costs; and an assessment, including the underlying analysis, of costs and benefits of potentially effective and reasonably feasible alternatives to the planned regulation, and an explanation why the planned regulatory action is preferable to the identified potential alternatives. These assessments are summarized in this preamble and further detail can be found in the technical support document for this final rule. B. Review Under the Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation a final regulatory flexibility analysis (‘‘FRFA’’) for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by E.O. 13272, ‘‘Proper Consideration of Small Entities in Agency Rulemaking,’’ 67 FR 53461 (Aug. 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 General Counsel’s website (www.energy.gov/gc/office-generalcounsel). DOE has prepared the following FRFA for the products that are the subject of this final rule. For manufacturers of DPPP motors, the SBA has set a size threshold, which defines those entities classified as ‘‘small businesses’’ for the purposes of the statute. DOE used the SBA’s small business size standards to determine whether any small entities would be subject to the requirements of the rule. (See 13 CFR part 121.) The size standards are listed by North American Industry Classification System (‘‘NAICS’’) code and industry description and are available at www.sba.gov/document/support-tablesize-standards. Manufacturing of DPPP motors is classified under NAICS 335312, ‘‘Motor and Generating Manufacturing.’’ The SBA sets a threshold of 1,250 employees or fewer for an entity to be considered as a small business for this category. 1. Need for, Objectives of, and Legal Basis for, Rule The need for, and objective of this final rule are stated elsewhere in the preamble and not repeated here. 2. Significant Comments in Response to the IRFA DOE received one comment with respect to the initial regulatory flexibility analysis. PHTA and NEMA commented that are not aware of any domestic DPPP motor manufacturer that qualifies as a small business. (PHTA and NEMA, No. 92 at p.13) However, based on information gathered from DPPP motor manufacturer websites, DOE identified one DPPP motor manufacturer that sells DPPP motors covered by this rulemaking and has fewer than 1,250 employees. Additionally, PHTA and NEMA commented that they are aware of one domestic DPPP manufacturer that is a small business and encouraged DOE to verify any impacts of the DPPP motors energy conservation standards on that DPPP small business. (PHTA and NEMA, No. 92 at p.13) DOE conducted an MIA on the manufacturers of the equipment that are being regulated by this rulemaking, which is DPPP motors. DOE did not conduct a MIA on manufacturers of products or equipment that use DPPP motors in the products or equipment they manufacture. 3. Comments Filed by the Chief Counsel for Advocacy The SBA’s Chief Counsel for Advocacy did not submit comments on this rulemaking. PO 00000 Frm 00073 Fmt 4701 Sfmt 4700 67037 4. Description on Estimated Number of Small Entities Regulated DOE reviewed the standard levels considered in this final rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. During its market survey, DOE used publicly available information to identify potential small manufacturers. DOE’s research involved industry trade association membership directories (e.g., AHRI), information from previous rulemakings, individual company websites, and market research tools (e.g., D&B Hoover’s reports) to create a list of companies that manufacture DPPP motors. As previously stated, manufacturing of DPPP motors is classified under NAICS 335312, ‘‘Motor and Generator Manufacturing,’’ for which the SBA sets a threshold of 1,250 employees or fewer for an entity to be considered as a small business. DOE screened out companies that do not offer products impacted by this rulemaking, do not meet the definition of a ‘‘small business,’’ or are foreign owned and operated. DOE identified five companies that manufacture DPPP motors for the domestic market, of those DOE determined that one company met the SBA definition of a small business. DOE contacted this small business regarding a discussion of potential DPPP motor standards, but the small business was not interested in discussing potential impacts of energy conservation standards on DPPP motors. 5. Description and Estimate of Compliance Requirements Including Differences in Cost, if Any, for Different Groups of Small Entities DOE reviewed the website and catalog offerings of the identified small business and determined that the manufacturer offers extra-small size DPPP motors and standard size DPPP motors that would meet requirements under the adopted standards. However, the small business does not manufacturer any small size DPPP motors that would meet the requirements under the adopted standard for small size DPPP motors. Therefore, if the manufacturer chooses to continue to sell small size DPPP motors, this small business is expected to need to introduce at least one variable-speed, small size DPPP motor model in order to comply with the energy conservation standards adopted in this final rule. There are two types of costs the small business could incur due to the adopted standards for DPPP motors: product conversion costs and capital conversion E:\FR\FM\28SER2.SGM 28SER2 67038 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 costs. Product conversion costs are investments in R&D, testing, marketing, and other non-capitalized costs necessary to make equipment designs comply with new energy conservation standards. Capital conversion costs are investments in property, plant, and equipment necessary to adapt or change existing production facilities such that new compliant equipment designs can be fabricated and assembled. DOE anticipates that the small business will incur approximately $1.1 million in product conversion costs— accounting for the compensation of four full-time engineers for 24 months of product design and testing work—and approximately $2.5 million in capital conversion costs to build a suitable production line to manufacture one small size DPPP motor model that would comply with the energy conservation standards for the small size DPPP motors adopted in this final rule. Therefore, this small business would incur a total of approximately $3.6 million in conversion costs. DOE was able to identify an annual revenue estimate of approximately $28.2 million for the small business. The $3.6 million in conversion cost represents approximately 12.8 percent of the estimated annual revenue of the small business. DOE assumes that this small DPPP motor manufacturer would spread these costs over the four-year compliance timeframe, as standards require compliance for the small size DPPP motors four years after the publication of this final rule. Therefore, DOE assumes that this small business would incur on average about $900,000 or approximately 3.2 percent of its annual revenue in each of the four years leading up to the compliance date for small size DPPP motors. 6. Significant Alternatives to the Rule The discussion in the previous section analyzes impacts on small businesses that would result from the adopted standards, represented by TSL 7. In reviewing alternatives to the adopted standards, DOE examined energy conservation standards set at lower efficiency levels. While TSL 1 through TSL 6 would reduce the impacts on small business manufacturers, it would come at the expense of a reduction in energy savings and consumer NPV. TSL 1 achieves 93 percent lower energy savings and 91 percent lower consumer net benefits compared to the energy savings and consumer net benefits at TSL 7. TSL 2 achieves 87 percent lower energy savings and 87 percent lower consumer net benefits compared to the energy VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 savings and consumer net benefits at TSL 7. TSL 3 achieves 55 percent lower energy savings and 78 percent lower consumer net benefits compared to the energy savings and consumer net benefits at TSL 7. TSL 4 achieves 42 percent lower energy savings and 65 percent lower consumer net benefits compared to the energy savings and consumer net benefits at TSL 7. TSL 5 achieves 35 percent lower energy savings and 62 percent lower consumer net benefits compared to the energy savings and consumer net benefits at TSL 7. TSL 6 achieves 39 percent lower energy savings and 16 percent lower consumer net benefits compared to the energy savings and consumer net benefits at TSL 7. DOE believes that establishing standards at TSL 7 balances the benefits of the energy savings at TSL 7 with the potential burdens placed on DPPP motors manufacturers, including the one small business manufacturer. Accordingly, DOE is not adopting one of the other TSLs considered in the analysis, or the other policy alternatives examined as part of the regulatory impact analysis and included in chapter 17 of the final rule TSD. C. Review Under the Paperwork Reduction Act Manufacturers of DPPP motors must certify to DOE that their products comply with any applicable energy conservation standards. In certifying compliance, manufacturers must test their products according to the DOE test procedures for DPPP motors, including any amendments adopted for those test procedures. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including DPPP motors. (See generally 10 CFR part 429). The collection-of-information requirement for the certification and recordkeeping is subject to review and approval by OMB under the Paperwork Reduction Act (‘‘PRA’’). This requirement has been approved by OMB under OMB control number 1910–1400. Public reporting burden for the certification is estimated to average 35 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Certification data will be required for DPPP motors; however, DOE is not adopting certification or reporting requirements for DPPP motors in this final rule. Instead, DOE will consider proposals to establish certification PO 00000 Frm 00074 Fmt 4701 Sfmt 4700 requirements and reporting for DPPP motors under a separate rulemaking regarding appliance and equipment certification. DOE will address changes to OMB Control Number 1910–1400 at that time, as necessary. Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number. D. Review Under the National Environmental Policy Act of 1969 Pursuant to the National Environmental Policy Act of 1969 (‘‘NEPA’’), DOE has analyzed this action rule in accordance with NEPA and DOE’s NEPA implementing regulations (10 CFR part 1021). DOE has determined that this rule qualifies for categorical exclusion under 10 CFR part 1021, subpart D, appendix B5.1 because it is a rulemaking that establishes energy conservation standards for consumer products or industrial equipment, none of the exceptions identified in B5.1(b) apply, no extraordinary circumstances exist that require further environmental analysis, and it meets the requirements for application of a categorical exclusion. See 10 CFR 1021.410. Therefore, DOE has determined that promulgation of this rule is not a major Federal action significantly affecting the quality of the human environment within the meaning of NEPA, and does not require an environmental assessment or an environmental impact statement. E. Review Under Executive Order 13132 E.O. 13132, ‘‘Federalism,’’ 64 FR 43255 (Aug. 10, 1999), imposes certain requirements on Federal agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. The Executive order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. For the reasons described below, DOE has examined this final rule and E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations has determined that this rule meets the relevant standards of E.O. 13132. E.O. 13132 includes special requirements for preemption, including that Federal agencies must only construe a Federal statute to preempt State law where the statute includes express preemption or some other clear evidence that Congress intended preemption of State law, or where the exercise of State authority conflicts with the exercise of Federal authority under the Federal statute. EPCA governs and prescribes express Federal preemption of State regulations as to energy conservation for the equipment that are the subject of this final rule. As such, any State regulation regarding the energy efficiency or use of DPPP motors will be preempted on the compliance dates listed in the DATES section. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6316(a) and (b); 42 U.S.C. 6297) ddrumheller on DSK120RN23PROD with RULES2 F. Review Under Executive Order 12988 With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of E.O. 12988, ‘‘Civil Justice Reform,’’ imposes on Federal agencies the general duty to adhere to the following requirements: (1) eliminate drafting errors and ambiguity, (2) write regulations to minimize litigation, (3) provide a clear legal standard for affected conduct rather than a general standard, and (4) promote simplification and burden reduction. 61 FR 4729 (Feb. 7, 1996). Regarding the review required by section 3(a), section 3(b) of E.O. 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation (1) clearly specifies the preemptive effect, if any, (2) clearly specifies any effect on existing Federal law or regulation, (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction, (4) specifies the retroactive effect, if any, (5) adequately defines key terms, and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of E.O. 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this final rule meets the relevant standards of E.O. 12988. VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 G. Review Under the Unfunded Mandates Reform Act of 1995 Title II of the Unfunded Mandates Reform Act of 1995 (‘‘UMRA’’) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104–4, sec. 201 (codified at 2 U.S.C. 1531). For a regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a ‘‘significant intergovernmental mandate,’’ and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820. DOE’s policy statement is also available at www.energy.gov/sites/prod/files/gcprod/ documents/umra_97.pdf. DOE has concluded that this final rule may require expenditures of $100 million or more in any one year by the private sector. Such expenditures may include (1) investment in research and development and in capital expenditures by DPPP motors manufacturers in the years between the final rule and the compliance date for the new standards and (2) incremental additional expenditures by consumers to purchase higher-efficiency DPPP motors, starting at the compliance date for the applicable standard. Section 202 of UMRA authorizes a Federal agency to respond to the content requirements of UMRA in any other statement or analysis that accompanies the final rule. (2 U.S.C. 1532(c)) The content requirements of section 202(b) of UMRA relevant to a private sector mandate substantially overlap the economic analysis requirements that apply under section 325(o) of EPCA and Executive Order 12866. The SUPPLEMENTARY INFORMATION section of this document and the TSD for this final rule respond to those requirements. Under section 205 of UMRA, the Department is obligated to identify and PO 00000 Frm 00075 Fmt 4701 Sfmt 4700 67039 consider a reasonable number of regulatory alternatives before promulgating a rule for which a written statement under section 202 is required. (2 U.S.C. 1535(a)) DOE is required to select from those alternatives the most cost-effective and least burdensome alternative that achieves the objectives of the rule unless DOE publishes an explanation for doing otherwise, or the selection of such an alternative is inconsistent with law. As required by 42 U.S.C. 6295(o)(A) through 42 U.S.C. 6316(a), this final rule establishes new energy conservation standards for DPPP motors that are designed to achieve the maximum improvement in energy efficiency that DOE has determined to be both technologically feasible and economically justified. A full discussion of the alternatives considered by DOE is presented in chapter 17 of the TSD for this final rule. H. Review Under the Treasury and General Government Appropriations Act, 1999 Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105–277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment. I. Review Under Executive Order 12630 Pursuant to E.O. 12630, ‘‘Governmental Actions and Interference with Constitutionally Protected Property Rights,’’ 53 FR 8859 (March 18, 1988), DOE has determined that this rule would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution. J. Review Under the Treasury and General Government Appropriations Act, 2001 Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB’s guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE’s guidelines were published at 67 FR 62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M–19–15, Improving Implementation of the E:\FR\FM\28SER2.SGM 28SER2 67040 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations Information Quality Act (April 24, 2019), DOE published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/ 12/f70/DOE%20Final%20Updated %20IQA%20Guidelines%20Dec %202019.pdf. DOE has reviewed this final rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines. ddrumheller on DSK120RN23PROD with RULES2 K. Review Under Executive Order 13211 E.O. 13211, ‘‘Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,’’ 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OIRA at OMB, a Statement of Energy Effects for any significant energy action. A ‘‘significant energy action’’ is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that (1) is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator at OIRA as a significant energy action. For any significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. DOE has concluded that this regulatory action, which sets forth new energy conservation standards for DPPP motors, is not a significant energy action because the standards are not likely to have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as such by the Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects on this final rule. L. Information Quality On December 16, 2004, OMB, in consultation with the Office of Science and Technology Policy (‘‘OSTP’’), issued its Final Information Quality Bulletin for Peer Review (‘‘the Bulletin’’). 70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal Government, including influential scientific information related to agency regulatory actions. The purpose of the Bulletin is to enhance the quality and credibility of the Government’s scientific information. Under the Bulletin, the energy conservation VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 standards rulemaking analyses are ‘‘influential scientific information,’’ which the Bulletin defines as ‘‘scientific information the agency reasonably can determine will have, or does have, a clear and substantial impact on important public policies or private sector decisions.’’ 70 FR 2664, 2667. In response to OMB’s Bulletin, DOE conducted formal peer reviews of the energy conservation standards development process and the analyses that are typically used and prepared a report describing that peer review.140 Generation of this report involved a rigorous, formal, and documented evaluation using objective criteria and qualified and independent reviewers to make a judgment as to the technical/ scientific/business merit, the actual or anticipated results, and the productivity and management effectiveness of programs and/or projects. Because available data, models, and technological understanding have changed since 2007, DOE has engaged with the National Academy of Sciences to review DOE’s analytical methodologies to ascertain whether modifications are needed to improve the Department’s analyses. DOE is in the process of evaluating the resulting report.141 M. Congressional Notification As required by 5 U.S.C. 801, DOE will report to Congress on the promulgation of this rule prior to its effective date. The report will state that it has been determined that the rule is a ‘‘major rule’’ as defined by 5 U.S.C. 804(2). N. Description of Materials Incorporated by Reference In this final rule, DOE incorporates by reference UL 1004–10:2022. UL 1004– 10:2022 establishes scope and definition requirements for certain DPPP motors and describes methods to verify the product-specific enforcement requirements. UL 1004–10:2022 is readily available at UL’s website at https://www.shopulstandards.com/ ProductDetail.aspx?productId=UL100410_1_S_20200228. VII. Approval of the Office of the Secretary The Secretary of Energy has approved publication of this final rule. 140 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 2/6/ 2023). 141 The report is available at www.nationalacademies.org/our-work/review-ofmethods-for-setting-building-and-equipmentperformance-standards. PO 00000 Frm 00076 Fmt 4701 Sfmt 4700 List of Subjects 10 CFR Part 429 Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Incorporation by reference, Reporting and recordkeeping requirements. 10 CFR Part 431 Administrative practice and procedure, Confidential business information, Energy conservation test procedures, Incorporation by reference, and Reporting and recordkeeping requirements. Signing Authority This document of the Department of Energy was signed on July 27, 2023, by Francisco Alejandro Moreno, Acting Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register. Signed in Washington, DC, on September 15, 2023. Treena V. Garrett, Federal Register Liaison Officer, U.S. Department of Energy. For the reasons set forth in the preamble, DOE amends parts 429 and 431 of chapter II, subchapter D, of title 10 of the Code of Federal Regulations, as set forth below: PART 429—CERTIFICATION, COMPLIANCE, AND ENFORCEMENT FOR CONSUMER PRODUCTS AND COMMERCIAL AND INDUSTRIAL EQUIPMENT 1. The authority citation for part 429 continues to read as follows: ■ Authority: 42 U.S.C. 6291–6317; 28 U.S.C. 2461 note. 2. Amend § 429.4 by adding paragraph (h) to read as follows: ■ § 429.4 Materials incorporated by reference. * * * * * (h) UL. Underwriters Laboratories, 333 Pfingsten Road, Northbrook, IL 60062; (841) 272–8800; www.ul.com. E:\FR\FM\28SER2.SGM 28SER2 Federal Register / Vol. 88, No. 187 / Thursday, September 28, 2023 / Rules and Regulations (1) UL 1004–10 (‘‘UL 1004–10:2022’’), Standard for Safety for Pool Pump Motors, Revised First Edition, Dated March 24, 2022; IBR approved for § 429.134. (2) [Reserved] ■ 3. Amend § 429.134 by adding paragraph (ee) to read as follows: § 429.134 Product-specific enforcement provisions. * * * * * (ee) Dedicated-purpose pool pump motors. (1) To verify the dedicatedpurpose pool pump motor variable speed capability, a test in accordance with section 5 of UL 1004–10:2022 (incorporated by reference, see § 429.4) will be conducted. (2) To verify that dedicated-purpose pool pump motor comply with the applicable freeze protection design requirements, a test in accordance with section 6 of UL 1004–10:2022 will be conducted. PART 431—ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND INDUSTRIAL EQUIPMENT 4. The authority citation for part 431 continues to read as follows: ■ Authority: 42 U.S.C. 6291–6317; 28 U.S.C. 2461 note. 5. Amend § 431.481 by revising paragraph (b) to read as follows: ■ § 431.481 Purpose and scope. * * * * * (b) Scope. The requirements of this subpart apply to dedicated-purpose pool pump motors, as specified in paragraphs 1.2, 1.3 and 1.4 of UL 1004–10:2022 (incorporated by reference, see § 431.482). * * * * * ■ 6. Amend § 431.482 by revising paragraphs (a) and (c)(1) to read as follows: § 431.482 Materials incorporated by reference. ddrumheller on DSK120RN23PROD with RULES2 (a) Certain material is incorporated by reference into this subpart with the VerDate Sep<11>2014 18:58 Sep 27, 2023 Jkt 259001 approval of the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that specified in this section, the Department of Energy (DOE) must publish a document in the Federal Register and the material must be available to the public. All approved incorporation by reference (IBR) material is available for inspection at DOE, and at the National Archives and Records Administration (NARA). Contact DOE at: the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, 1000 Independence Ave SW, EE–5B, Washington, DC 20585, (202) 586–9127, Buildings@ee.doe.gov, https:// www.energy.gov/eere/buildings/ building-technologies-office. For information on the availability of this material at NARA, visit www.archives.gov/federal-register/cfr/ ibr-locations.html or email fr.inspection@nara.gov. The material may be obtained from the sources in the following paragraphs of this section: * * * * * (c) * * * (1) UL 1004–10 (‘‘UL 1004–10:2022’’), Standard for Safety for Pool Pump Motors, Revised First Edition, Dated March 24, 2022; IBR approved for §§ 431.481 and 431.483. * * * * * ■ 7. Revise § 431.483 to read as follows: § 431.483 Definitions. The definitions applicable to this subpart are defined in section 2 ‘‘Glossary’’ of UL 1004–10:2022 (incorporated by reference, see § 431.482). In addition, the following definition applies: Basic model means all units of dedicated purpose pool pump motors manufactured by a single manufacturer, that are within the same equipment class, have electrical characteristics that are essentially identical, and do not have any differing physical or functional characteristics that affect energy consumption or efficiency. PO 00000 Frm 00077 Fmt 4701 Sfmt 9990 67041 8. Add § 431.485 to subpart Z to read as follows: ■ § 431.485 Energy conservation standards. (a) For the purpose of paragraphs (b), (c) and (d) of this section, ‘‘THP’’ means dedicated-purpose-pool pump motor total horsepower. (b) Each dedicated-purpose pool pump motor manufactured starting on September 29, 2025, with a THP less than 0.5 THP, must have a full-load efficiency that is not less than 69 percent. (c) Each dedicated-purpose pool pump motor manufactured starting on the dates provided in table 1 to this paragraph (c) with a THP greater than or equal to 0.5 THP must be a variable speed control dedicated-purpose pool pump motor, and must follow the requirements in paragraph (d) of this section. TABLE 1 TO PARAGRAPH (c) Equipment class Compliance date Small-size (0.5 ≤ THP <1.15). Standard-size (1.15 ≤ THP ≤ 5). September 28, 2027. September 29, 2025. (d) All dedicated-purpose pool pump motors with a THP greater than or equal to 0.5 THP and distributed in commerce with freeze protection controls, must be shipped with freeze protection disabled or with the following user-adjustable settings: (1) The default dry-bulb air temperature setting is no greater than 40 °F; (2) The default run time setting shall be no greater than 1 hour (before the temperature is rechecked); and (3) The default motor speed (in revolutions per minute, or rpm) in freeze protection mode shall not be more than half of the maximum operating speed. [FR Doc. 2023–20343 Filed 9–27–23; 8:45 am] BILLING CODE 6450–01–P E:\FR\FM\28SER2.SGM 28SER2

Agencies

[Federal Register Volume 88, Number 187 (Thursday, September 28, 2023)]
[Rules and Regulations]
[Pages 66966-67041]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20343]



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Vol. 88

Thursday,

No. 187

September 28, 2023

Part II





Department of Energy





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10 CFR Parts 429 and 431





Energy Conservation Program: Energy Conservation Standards for 
Dedicated Purpose Pool Pump Motors; Final Rule

Federal Register / Vol. 88 , No. 187 / Thursday, September 28, 2023 / 
Rules and Regulations

[[Page 66966]]


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DEPARTMENT OF ENERGY

10 CFR Parts 429 and 431

[EERE-2017-BT-STD-0048]
RIN 1904-AF27


Energy Conservation Program: Energy Conservation Standards for 
Dedicated Purpose Pool Pump Motors

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

ACTION: Final rule.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including dedicated 
purpose pool pump motors. When DOE is considering adopting energy 
conservation standards, EPCA requires that the standards be designed to 
achieve the maximum improvement in energy efficiency, which DOE 
determines is technologically feasible and economically justified. In 
this final rule, DOE is adopting amended energy conservation standards 
for dedicated purpose pool pump motors. It has determined that the new 
energy conservation standards for these products would result in 
significant conservation of energy, and are technologically feasible 
and economically justified.

DATES: The effective date of this rule is November 27, 2023. Compliance 
with the new standards established for dedicated purpose pool pump 
motors with motor total horsepower <0.5 THP in this final rule is 
required on and after September 29, 2025. Compliance with the new 
standards established for dedicated purpose pool pump motors with motor 
total horsepower >=0.5 THP and <1.15 THP in this final rule is required 
on and after September 28, 2027. Finally, compliance with the new 
standards established for dedicated purpose pool pump motors with motor 
total horsepower >=1.15 THP and <=5 THP in this final rule is required 
on and after September 29, 2025. The incorporation of refence of 
certain material listed in this rule is approved by the Director of the 
Federal Register on November 27 2023.

ADDRESSES: The docket for this rulemaking, which includes Federal 
Register notices, public meeting attendee lists and transcripts, 
comments, and other supporting documents/materials, is available for 
review at www.regulations.gov. All documents in the docket are listed 
in the www.regulations.gov index. However, not all documents listed in 
the index may be publicly available, such as information that is exempt 
from public disclosure.
    The docket web page can be found www.regulations.gov/docket/EERE-2017-BT-STD-0048. The docket web page contains instructions on how to 
access all documents, including public comments, in the docket.
    For further information on how to review the docket, contact the 
Appliance and Equipment Standards Program staff at (202) 287-1445 or by 
email: [email protected].

FOR FURTHER INFORMATION CONTACT: 
    Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Email: 
[email protected].
    Ms. Amelia Whiting, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (202) 586-2588. Email: 
[email protected].

SUPPLEMENTARY INFORMATION: DOE incorporates by reference the following 
standard into parts 429 and 431:
    UL 1004-10, Standard for Safety for Pool Pump Motors, Revised First 
Edition, Dated March 24, 2022 (``UL 1004-10:2022'').
    Copies of UL 1004-10:2022 can be obtained from: Underwriters 
Laboratories (``UL''), 333 Pfingsten Road, Northbrook, IL 60062, (841) 
272-8800, or go to www.ul.com.
    For a further discussion of this standard, see section VI.N of this 
document.

Table of Contents

I. Synopsis of the Final Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for DPPP Motors
III. General Discussion
    A. General Comments
    B. Test Procedure
    C. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    D. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    E. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Savings in Operating Costs Compared to Increase in Price (LCC 
and PBP)
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Scope of Coverage and Definitions
    2. Market Review
    3. Equipment Classes
    4. Technology Options
    B. Screening Analysis
    C. Engineering Analysis
    1. Efficiency Analysis
    a. Representative Units
    b. Baseline Efficiency
    c. Higher Efficiency Levels
    2. Cost Analysis
    D. Markups Analysis
    E. Energy Use Analysis
    1. DPPP Motor Applications
    2. DPPP Motor Consumer Sample
    3. Self-Priming and Non-Self-Priming Pool Pump Motor Input Power
    4. Pressure Cleaner Booster Pumps Motor Input Power
    5. Daily Operating Hours
    6. Annual Days of Operation
    F. Life-Cycle Cost and Payback Period Analysis
    1. Equipment Cost
    2. Installation Costs
    3. Annual Energy Consumption
    4. Energy Prices
    5. Maintenance and Repair Costs
    6. Equipment Lifetime
    7. Discount Rates
    8. Energy Efficiency Distribution in the No-New-Standards Case
    9. Payback Period Analysis
    G. Shipments Analysis
    1. Base-Year Shipments
    2. No-New-Standards Case Shipment Projections
    3. Standards Case Shipment Projections
    H. National Impact Analysis
    1. Product Efficiency Trends
    2. National Energy Savings
    3. Net Present Value Analysis
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model and Key Inputs
    a. Manufacturer Production Costs
    b. Shipments Projections
    c. Product and Capital Conversion Costs
    d. Markup Scenarios
    3. Manufacturer Interviews
    4. Comments From Interested Parties
    K. Emissions Analysis
    1. Air Quality Regulations Incorporated in DOE's Analysis
    L. Monetizing Emissions Impacts
    1. Monetization of Greenhouse Gas Emissions

[[Page 66967]]

    a. Social Cost of Carbon
    b. Social Cost of Methane and Nitrous Oxide
    2. Monetization of Other Emissions Impacts
    M. Utility Impact Analysis
    N. Employment Impact Analysis
V. Analytical Results and Conclusion
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Direct Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance of Products
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    8. Summary of Economic Impacts
    C. Conclusion
    1. Benefits and Burdens of TSLs Considered for DPPP Motor 
Standards
    2. Annualized Benefits and Costs of the Adopted Standards
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866, 13563, and 14904
    B. Review Under the Regulatory Flexibility Act
    1. Need for, Objectives of, and Legal Basis for, Rule
    2. Significant Comments in Response to the IRFA
    3. Comments Filed by the Chief Counsel for Advocacy
    4. Description on Estimated Number of Small Entities Regulated
    5. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    6. Significant Alternatives to the Rule
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Information Quality
    M. Congressional Notification
    N. Description of Materials Incorporated by Reference
VII. Approval of the Office of the Secretary

I. Synopsis of the Final Rule

    The Energy Policy and Conservation Act, Public Law 94-163, as 
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency 
of a number of consumer products and certain industrial equipment. (42 
U.S.C. 6291-6317) Title III, Part C of the Energy Policy and 
Conservation Act, as amended (EPCA) \2\ established the Energy 
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes electric motors, which include dedicated-
purpose pool pump motors (``DPPP motors'' or ``DPPPMs'' or ``pool pump 
motors''), the subject of this rulemaking. (42 U.S.C. 6311(1)(A)). This 
rulemaking does not concern standards for dedicated-purpose pool pumps 
(``DPPPs''), which are being addressed in a separate rulemaking.\3\
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    \1\ All references to EPCA in this document refer to the statute 
as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 
27, 2020), which reflect the last statutory amendments that impact 
Parts A and A-1 of EPCA.
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
    \3\ Docket No. EERE-2022-BT-STD-0001, which is maintained at 
www.regulations.gov/docket/EERE-2022-BT-STD-0001.
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    Pursuant to EPCA, any new or amended energy conservation standard 
must be designed to achieve the maximum improvement in energy 
efficiency that DOE determines is technologically feasible and 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) 
Furthermore, the new or amended standard must result in significant 
conservation of energy. (42 U.S.C. 6295(o)(3)(B))
    In accordance with these and other statutory provisions discussed 
in this document, DOE is adopting new energy conservation standards for 
DPPP motors. The adopted standards, which are expressed in full-load 
efficiency and design requirements, are shown in Table I.1. DOE is 
finalizing standards that apply to all products listed in Table I.1 and 
manufactured in, or imported into, the United States starting on the 
dates provided in the table.

                        Table I.1--Energy Conservation Standards for DPPP Motors (TSL 7)
----------------------------------------------------------------------------------------------------------------
                                    Performance
                                  standard: full- Design requirement:   Design requirement:
  Motor total horsepower (THP)          load        speed capability     freeze protection     Compliance date
                                  efficiency (%)
----------------------------------------------------------------------------------------------------------------
THP <0.5........................             69%  None...............  None................  September 29, 2025.
0.5 <= THP < 1.15...............  ..............  Variable speed       Only for DPPP motors  September 28, 2025.
                                                   control *.           with freeze
                                                                        protection controls
                                                                        **.
1.15 <= THP <= 5................  ..............  Variable speed       Only for DPPP motors  September 29, 2025.
                                                   control *.           with freeze
                                                                        protection controls
                                                                        **.
----------------------------------------------------------------------------------------------------------------
* A variable speed motor is a DPPP motor that meets the definition of ``variable-speed control dedicated-purpose
  pool pump motor'' as defined by UL 1004-10:2022.
** DPPP motors with freeze protection controls are to be shipped with the freeze protection feature disabled, or
  with the following default, user-adjustable settings: (a) the default dry-bulb air temperature setting shall
  be no greater than 40 [deg]F; (b) the default run time setting shall be no greater than 1 hour (before the
  temperature is rechecked); and (c) the default motor speed in freeze protection mode shall not be more than
  half of the maximum operating speed.

A. Benefits and Costs to Consumers

    Table I.2 summarizes DOE's evaluation of the economic impacts of 
the adopted standards on consumers of DPPP motors, as measured by the 
average life-cycle cost (``LCC'') savings and the simple payback period 
(``PBP'').\4\ The average LCC savings are positive for each equipment 
class, and the PBP is less than the average lifetime of DPPP motors, 
which is estimated to be 4.5 years (see section IV.F of this document).
---------------------------------------------------------------------------

    \4\ The average LCC savings refer to consumers that are affected 
by a standard and are measured relative to the distribution of 
purchased DPPP motors, and their associated energy efficiency, 
distribution in the no-new-standards case, which depicts the market 
in the compliance year in the absence of new or amended standards 
(see section IV.F.9 of this document). The simple PBP, which is 
designed to compare specific efficiency levels, is measured relative 
to the baseline product (see section IV.C of this document).

[[Page 66968]]



Table I.2--Impacts of Adopted Energy Conservation Standards on Consumers
                             of DPPP Motors
------------------------------------------------------------------------
                                         Average LCC     Simple payback
     DPPP Motors equipment class       savings (2022$)   period (years)
------------------------------------------------------------------------
Extra-small-size (THP <0.5).........                $3               0.9
Small-size (0.5 <= THP < 1.15)......                 4               3.4
Standard-size (1.15 <= THP <= 5)....               236               1.3
------------------------------------------------------------------------

    DOE's analysis of the impacts of the adopted standards on consumers 
is described in section IV.F of this document.

B. Impact on Manufacturers

    The industry net present value (``INPV'') is the sum of the 
discounted cash flows to the industry, which align with the industry 
profits from producing DPPP motors, from the base year through the end 
of the analysis period (2024-2055).\5\ Using a real discount rate of 
7.2 percent, DOE estimates that the INPV for manufacturers of DPPP 
motors in the case without new standards is $661 million in 2022$. 
Under the adopted standards, DOE estimates the change in INPV to range 
from -32.4 percent to 12.0 percent, which is approximately -$214.2 
million to $79.0 million change in profits. In order to bring products 
into compliance with new standards, it is estimated that industry will 
incur total conversion costs of $56.2 million.\6\
---------------------------------------------------------------------------

    \5\ This time period captures manufacturers' profits starting 
with the years leading up to the compliance date, at which time they 
are making investments to comply with standards, and throughout the 
30-year analysis period after the compliance date.
    \6\ Conversion costs are included in the INPV calculation.
---------------------------------------------------------------------------

    DOE's analysis of the impacts of the adopted standards on 
manufacturers is described in sections IV.J and V.B.2 of this document.

C. National Benefits and Costs \7\
---------------------------------------------------------------------------

    \7\ All monetary values in this document are expressed in 2021 
dollars and, where appropriate, are discounted to 2024 unless 
explicitly stated otherwise.
---------------------------------------------------------------------------

    DOE's analyses indicate that the adopted energy conservation 
standards for DPPP motors would save a significant amount of energy. 
Relative to the case without new standards, the lifetime energy savings 
for DPPP motors purchased in the 30-year period that begins in the 
anticipated first full year of compliance with the new standards (2026-
2055),\8\ amount to 1.56 quadrillion British thermal units (``Btu''), 
or quads.\9\ This represents a savings of 27.5 percent relative to the 
energy use of these products in the case without new standards 
(referred to as the ``no-new-standards case'').
---------------------------------------------------------------------------

    \8\ DOE conducted the analysis over a 30-year period starting in 
2026 (2026-2055). As discussed in section III.A of this document, 
for all TSLs DOE considered a 2-year lead time resulting in a first 
full year of compliance of 2026, except for small-size DPPP motors 
at TSL 7 where DOE uses a 4-year compliance lead time, resulting in 
a compliance year of 2028. In this case, DOE considered 28 years of 
shipments (2028-2055).
    \9\ The quantity refers to full-fuel-cycle (FFC) energy savings. 
FFC energy savings includes the energy consumed in extracting, 
processing, and transporting primary fuels (i.e., coal, natural gas, 
petroleum fuels), and, thus, presents a more complete picture of the 
impacts of energy efficiency standards. For more information on the 
FFC metric, see section IV.H.1 of this document.
---------------------------------------------------------------------------

    The cumulative net present value (``NPV'') of total consumer 
benefits of the standards for DPPP motors ranges from $5.4 billion (at 
a 7-percent discount rate) to $10.2 billion (at a 3-percent discount 
rate). This NPV expresses the estimated total value of future 
operating-cost savings minus the estimated increased equipment and 
installation costs for DPPP motors purchased in 2026-2055 relative to 
the no-new-standards case.\10\
---------------------------------------------------------------------------

    \10\ For small size DPPP motors, as noted previously, DOE 
considered 28 years of shipments (2028-2055).
---------------------------------------------------------------------------

    In addition, the adopted standards for DPPP motors are projected to 
yield significant environmental benefits. DOE estimates that the 
standards will result in cumulative emission reductions (over the same 
period as for energy savings) of 31.2 million metric tons (Mt) \11\ of 
carbon dioxide (CO2), 9.8 thousand tons of sulfur dioxide 
(SO2), 56.4 thousand tons of nitrogen oxides 
(NOX), 247.2 thousand tons of methane (CH4), 0.32 
thousand tons of nitrous oxide (N2O), and 0.07 tons of 
mercury (Hg).\12\
---------------------------------------------------------------------------

    \11\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \12\ DOE calculated emissions reductions relative to the no-new-
standards-case, which reflects key assumptions in the Annual Energy 
Outlook 2023 (AEO2023). AEO2023 represents current Federal and State 
legislation and final implementation of regulations as of the time 
of its preparation. See section IV.K of this document for further 
discussion of AEO2023 assumptions that effect air pollutant 
emissions.
---------------------------------------------------------------------------

    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (GHG) using four different estimates of the social 
cost of CO2 (SC-CO2), the social cost of methane 
(SC-CH4), and the social cost of nitrous oxide (SC-
N2O). Together these represent the social cost of GHG (SC-
GHG). DOE used interim SC-GHG values developed by an Interagency 
Working Group on the Social Cost of Greenhouse Gases (IWG).\13\ The 
derivation of these values is discussed in section IV.L of this 
document. For presentational purposes, the climate benefits associated 
with the average SC-GHG at a 3-percent discount rate over the period of 
analysis are estimated to be $2.0 billion. DOE does not have a single 
central SC-GHG point estimate and it emphasizes the importance and 
value of considering the benefits calculated using all four sets of SC-
GHG estimates.
---------------------------------------------------------------------------

    \13\ To monetize the benefits of reducing GHG emissions this 
analysis uses the interim estimates presented in the Technical 
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide 
Interim Estimates Under Executive Order 13990 published in February 
2021 by the IWG. (``February 2021 SC-GHG TSD''). www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------

    DOE estimated the monetary health benefits of SO2 and 
NOX emissions reductions, using benefit per ton estimates 
from the Environmental Protection Agency,\14\ as discussed in section 
IV.L of this document. DOE estimated the present value of the health 
benefits would be $2.0 billion using a 7-percent discount rate, and 
$3.9 billion using a 3-percent discount rate. DOE is currently only 
monetizing health benefits from changes in ambient fine particulate 
matter (PM2.5) concentrations from two precursors 
(SO2 and (for NOX) and from changes in ambient 
ozone from one precursor (NOX), but will continue to assess 
the ability to monetize other effects such as health benefits from 
reductions in direct PM2.5 emissions.
---------------------------------------------------------------------------

    \14\ U.S. EPA. Estimating the Benefit per Ton of Reducing 
Directly Emitted PM2.5, PM2.5 Precursors and 
Ozone Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
---------------------------------------------------------------------------

    Table I.3 summarizes the monetized benefits and costs expected to 
result from the amended standards for DPPP motors. There are other 
important unquantified effects, including certain unquantified climate 
benefits,

[[Page 66969]]

unquantified public health benefits from the reduction of toxic air 
pollutants and other emissions, unquantified energy security benefits, 
and distributional effects, among others.

   Table I.3--Present Value in 2024 of Monetized Benefits and Costs of
          Adopted Energy Conservation Standards for DPPP Motors
------------------------------------------------------------------------
                                                          Billion 2022$
------------------------------------------------------------------------
                            3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.......................              14.0
Climate Benefits *....................................               2.0
Health Benefits **....................................               3.9
                                                       -----------------
    Total Monetized Benefits [dagger].................              19.9
Consumer Incremental Equipment Costs [Dagger].........               3.9
                                                       -----------------
    Net Monetized Benefits............................              16.0
Change in Producer Cashflow (INPV [dagger][dagger])...       (0.21)-0.08
------------------------------------------------------------------------
                            7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.......................               7.9
Climate Benefits * (3% discount rate).................               2.0
Health Benefits **....................................               2.0
                                                       -----------------
    Total Monetized Benefits [dagger].................              11.9
Consumer Incremental Equipment Costs [Dagger].........               2.6
                                                       -----------------
    Net Monetized Benefits............................               9.3
Change in Producer Cashflow (INPV [dagger][dagger])...       (0.21)-0.08
------------------------------------------------------------------------
Note: This table presents the present value of the monetized costs and
  benefits associated with product name shipped in 2026-2055, except for
  small-size DPPP motors where shipments in 2028-2055 are considered.
  These results include consumer, climate, and health benefits which
  accrue after 2055 from the products shipped in 2026-2055 (or 2028-
  2055).
* Climate benefits are calculated using four different estimates of the
  social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
  (SC-N2O) (model average at 2.5-percent, 3-percent, and 5-percent
  discount rates; 95th percentile at 3-percent discount rate) (see
  section IV.L of this document). Together these represent the global SC-
  GHG. For presentational purposes of this table, the climate benefits
  associated with the average SC-GHG at a 3-percent discount rate are
  shown, but DOE does not have a single central SC-GHG point estimate.
  To monetize the benefits of reducing greenhouse gas emissions this
  analysis uses the interim estimates presented in the Technical Support
  Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
  Estimates Under Executive Order 13990 published in February 2021 by
  the Interagency Working Group on the Social Cost of Greenhouse Gases
  (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
  precursor health benefits and (for NOX) ozone precursor health
  benefits, but will continue to assess the ability to monetize other
  effects such as health benefits from reductions in direct PM2.5
  emissions. See section IV.L of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and
  health benefits that can be quantified and monetized. For presentation
  purposes, total and net benefits for both the 3-percent and 7-percent
  cases are presented using the average SC-GHG with 3-percent discount
  rate, but DOE does not have a single central SC-GHG point estimate.
  DOE emphasizes the importance and value of considering the benefits
  calculated using all four sets of SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as
  installation costs.
[dagger][dagger] Operating Cost Savings are calculated based on the life
  cycle costs analysis and national impact analysis as discussed in
  detail below. See sections IV.F and IV.H of this document. DOE's NIA
  includes all impacts (both costs and benefits) along the distribution
  chain beginning with the increased costs to the manufacturer to
  manufacture the equipment and ending with the increase in price
  experienced by the consumer. DOE also separately conducts a detailed
  analysis on the impacts on manufacturers (the MIA). See section IV.J
  of this document. In the detailed MIA, DOE models manufacturers'
  pricing decisions based on assumptions regarding investments,
  conversion costs, cashflow, and margins. The MIA produces a range of
  impacts, which is the rule's expected impact on the INPV. The change
  in INPV is the present value of all changes in industry cash flow,
  including changes in production costs, capital expenditures, and
  manufacturer profit margins. Change in INPV is calculated using the
  industry weighted average cost of capital value of 7.2% that is
  estimated in the MIA (see chapter 12 of the Final Rule TSD for a
  complete description of the industry weighted average cost of
  capital). For DPPP motors, those values are -$214 million and $79
  million. DOE accounts for that range of likely impacts in analyzing
  whether a TSL is economically justified. See section V.C of this
  document. DOE is presenting the range of impacts to the INPV under two
  markup scenarios: the Preservation of Gross Margin scenario, which is
  the manufacturer markup scenario used in the calculation of Consumer
  Operating Cost Savings in this table, and the Preservation of
  Operating Profit Markup scenario, where DOE assumed manufacturers
  would not be able to increase per-unit operating profit in proportion
  to increases in manufacturer production costs. DOE includes the range
  of estimated INPV in the above table, drawing on the MIA explained
  further in Section IV.J of this document, to provide additional
  context for assessing the estimated impacts of this rule to society,
  including potential changes in production and consumption, which is
  consistent with OMB's Circular A-4 and E.O. 12866. If DOE were to
  include the INPV into the net benefit calculation for this final rule,
  the net benefits would range from $15.79 billion to $16.08 billion at
  3-percent discount rate and range from $9.09 billion to $9.38 billion
  at 7-percent discount rate.

    The benefits and costs of the standards can also be expressed in 
terms of annualized values. The monetary values for the total 
annualized net benefits are (1) the reduced consumer operating costs, 
minus (2) the increase in product purchase prices and installation 
costs, plus (3) the monetized value of climate and health benefits of 
emission reductions, all annualized.\15\
---------------------------------------------------------------------------

    \15\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2024, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2030 or 2040), and then discounted the present value from 
each year to 2024. Using the present value, DOE then calculated the 
fixed annual payment over a 30-year period, starting in the 
compliance year, that yields the same present value.
---------------------------------------------------------------------------

    The national operating cost savings are domestic private U.S. 
consumer

[[Page 66970]]

monetary savings that occur as a result of purchasing the covered 
products and are measured for the lifetime of DPPP motors shipped in 
(2026-2055).\16\ The benefits associated with reduced emissions 
achieved as a result of the adopted standards are also calculated based 
on the lifetime of DPPP motors shipped in (2026-2055).\16\ Total 
benefits for both the 3-percent and 7-percent cases are presented using 
the average GHG social costs with 3-percent discount rate. Estimates of 
SC-GHG values are presented for all four discount rates in section 
V.B.6 of this document.
---------------------------------------------------------------------------

    \16\ For small size DPPP motors, as noted previously, DOE 
considered 28 years of shipments (2028-2055).
---------------------------------------------------------------------------

    Table I.4 presents the total estimated monetized benefits and costs 
associated with the standard, expressed in terms of annualized values. 
The results under the primary estimate are as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOX and SO2 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated monetized cost of the 
standards adopted in this rule is $221 million per year in increased 
equipment costs, while the estimated annual benefits are $684 million 
in reduced equipment operating costs, $103 million in monetized climate 
benefits, and $173 million in monetized health benefits. In this case, 
the monetized net benefit would amount to $739 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated monetized cost of the standards is $204 million per year in 
increased equipment costs, while the estimated annual monetized 
benefits are $738 million in reduced operating costs, $103 million in 
monetized climate benefits, and $205 million in monetized health 
benefits. In this case, the monetized net benefit would amount to $841 
million per year.

             Table I.4--Annualized Monetized Benefits and Costs of Adopted Standards for DPPP Motors
----------------------------------------------------------------------------------------------------------------
                                                                       Million 2022$/year
                                               -----------------------------------------------------------------
                                                                        Low-net-benefits      High-net-benefits
                                                  Primary estimate          estimate              estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings...............                   738                   721                   760
Climate Benefits *............................                   103                   103                   103
Health Benefits **............................                   205                   205                   205
                                               -----------------------------------------------------------------
    Total Monetized Benefits [dagger].........                 1,046                  1029                 1,068
Consumer Incremental Equipment Costs [Dagger].                   204                   235                   173
                                               -----------------------------------------------------------------
    Monetized Net Benefits....................                   841                   793                   895
Change in Producer Cashflow (INPV                             (17)-6                (17)-6                (17)-6
 [dagger][dagger])............................
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings...............                   684                   671                   703
Climate Benefits * (3% discount rate).........                   103                   103                   103
Health Benefits **............................                   173                   173                   173
                                               -----------------------------------------------------------------
    Total Monetized Benefits [dagger].........                   960                   947                   979
Consumer Incremental Equipment Costs [Dagger].                   221                   250                   190
                                               -----------------------------------------------------------------
    Monetized Net Benefits....................                   739                   696                   790
Change in Producer Cashflow (INPV                             (17)-6                (17)-6                (17)-6
 [dagger][dagger])............................
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with DPPP motors shipped in 2026-2055, except for
  small-size DPPP motors where shipments in 2028-2055 are considered. These results include consumer, climate,
  and health benefits which accrue after 2055 from the products shipped in 2026-2055 (or 2028-2055). The
  Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the
  AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition,
  incremental equipment costs reflect a medium decline rate in the Primary Estimate, an increasing rate in the
  Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to
  derive projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the
  Benefits and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
  document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
  at a 3 percent discount rate are shown, but DOE does not have a single central SC-GHG point estimate, and it
  emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG
  estimates. To monetize the benefits of reducing greenhouse gas emissions this analysis uses the interim
  estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide
  Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on
  the Social Cost of Greenhouse Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. See section IV.L of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
  percent discount rate, but DOE does not have a single central SC-GHG point estimate.
[Dagger] Costs include incremental equipment costs as well as installation costs.

[[Page 66971]]

 
[dagger][dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
  impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's NIA includes
  all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the
  manufacturer to manufacture the equipment and ending with the increase in price experienced by the consumer.
  DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J
  of this document. In the detailed MIA, DOE models manufacturers' pricing decisions based on assumptions
  regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is
  the rule's expected impact on the INPV. The change in INPV is the present value of all changes in industry
  cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins.
  Annualized change in INPV is calculated using the industry weighted average cost of capital value of 7.2% that
  is estimated in the MIA (see chapter 12 of the Final Rule TSD for a complete description of the industry
  weighted average cost of capital). For DPPP motors, those values are -$17 million and $6 million. DOE accounts
  for that range of likely impacts in analyzing whether a TSL is economically justified. See section V.C of this
  document. DOE is presenting the range of impacts to the INPV under two markup scenarios: the Preservation of
  Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating
  Cost Savings in this table, and the Preservation of Operating Profit Markup scenario, where DOE assumed
  manufacturers would not be able to increase per-unit operating profit in proportion to increases in
  manufacturer production costs. DOE includes the range of estimated annualized change in INPV in the above
  table, drawing on the MIA explained further in section IV.J of this document, to provide additional context
  for assessing the estimated impacts of this rule to society, including potential changes in production and
  consumption, which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE were to include the INPV into
  the annualized net benefit calculation for this final rule, the annualized net benefits would range from $824
  million to $847 million at 3-percent discount rate and range from $722 million to $745 million at 7-percent
  discount rate.

    DOE's analysis of the national impacts of the adopted standards is 
described in sections IV.G.2, IV.K, and IV.L of this document.

D. Conclusion

    DOE concludes that the standards adopted in this final rule 
represent the maximum improvement in energy efficiency that is 
technologically feasible and economically justified, and would result 
in the significant conservation of energy. Specifically, equipment are 
able to achieve these standard levels using technology options 
currently available in the DPPPM market. As for economic justification, 
DOE's analysis shows that the benefits of the standards exceed the 
burdens of the standards.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated monetized cost 
of the standards for DPPP motors is $221 million per year in increased 
equipment costs, while the estimated annual monetized benefits are $684 
million in reduced equipment operating costs, $103 million in monetized 
climate benefits, and $173 million in monetized ambient air pollutant 
health benefits. The monetized net benefit amounts to $739 million per 
year.
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\17\ For 
example, some covered products and equipment have most of their energy 
consumption occur during periods of peak energy demand. The impacts of 
these products on the energy infrastructure can be more pronounced than 
products with relatively constant demand. Accordingly, DOE evaluates 
the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------

    \17\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

    As previously mentioned, the standards are projected to result in 
estimated national energy savings \18\ of 1.56 quads FFC, the 
equivalent of the primary annual energy use of 16.8 million homes. In 
addition, they are projected to reduce CO2 emissions by 31.2 
Mt. Based on these findings, DOE has determined the energy savings from 
the standard levels adopted in this final rule are ``significant'' 
within the meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed 
discussion of the basis for these conclusions is contained in the 
remainder of this document and the accompanying TSD.
---------------------------------------------------------------------------

    \18\ Associated with DPPP motors shipped in 2026-2055, except 
for small-size DPPP motors where shipments in 2028-2055 are 
considered.
---------------------------------------------------------------------------

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this final rule, as well as some of the relevant historical 
background related to the establishment of standards for DPPP motors.

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
C of EPCA, added by Public Law 95-619, Title IV, section 441(a) (42 
U.S.C. 6311-6317, as codified), established the Energy Conservation 
Program for Certain Industrial Equipment, which sets forth a variety of 
provisions designed to improve energy efficiency. This equipment 
includes those electric motors that are DPPP motors, the subject of 
this document. (42 U.S.C. 6311(1)(A))
    The energy conservation program under EPCA consists essentially of 
four parts: (1) testing, (2) labeling, (3) the establishment of Federal 
energy conservation standards, and (4) certification and enforcement 
procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 
6315), energy conservation standards (42 U.S.C. 6316 (a); 42 U.S.C. 
6295), and the authority to require information and reports from 
manufacturers (42 U.S.C. 6316).
    Federal energy efficiency requirements for covered equipment 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6316(a); 42 U.S.C. 6297) There are currently no Federal energy 
conservation standards for DPPP motors. DOE noted in the July 2021 
Final Rule that efforts by States to set energy conservation standards, 
test procedures, or labeling requirements for DPPP motors--or any other 
electric motor--are preempted as a matter of law. 86 FR 40765, 40767.
    Upon further consideration, however, DOE is clarifying here that 
none of the provisions in 42 U.S.C. 6313 apply to DPPP motors because, 
although they are a category of electric motor, DPPPP motors are not 
among the category of electric motors for which Congress established 
standards and a rulemaking schedule in 42 U.S.C. 6313(b). Thus, State 
DPPP motor standards are not already preempted as a matter of law. EPCA 
outlines rules of preemption for State energy conservation standards 
before a Federal standard promulgated becomes effective. 42 U.S.C. 
6316(a); 42 U.S.C. 6297(b). Specifically, it provides that no State 
regulation concerning energy efficiency or energy use of covered 
equipment shall be effective with respect to the covered equipment--in 
the absence of a Federal regulation--unless the State regulation is a 
regulation regulating electric motors other than those to which 42 
U.S.C. 6313 is applicable. 42 U.S.C. 6316(a)(7); 42 U.S.C. 6297(b)(4). 
As discussed in

[[Page 66972]]

section III.A. of this document, DPPPM are a category of electric 
motor, but are excepted from the requirements of 42 U.S.C. 6313(b). See 
42 U.S.C. 6313(b)(1). Further, there are no other provisions in 42 
U.S.C. 6313 that would apply to DPPP motors. Therefore, any State 
regulations establishing or amending standards for DPPPM are not 
currently preempted.
    Instead, under 42 U.S.C. 6297(c), upon the compliance date for the 
Federal standards in this final rule, the Federal standards will 
supersede the CEC standards requirements for replacement dedicated-
purpose pool pump motors (``RDPPPM'') for the first time. For extra-
small-size and standard-size DPPP motors, the CEC standards will be 
superseded on the compliance date applicable to these DPPP motors, 
which is 2 years after the publication of this final rule. For small-
size DPPP motors, which have an additional two-year lead time, the CEC 
standards would be superseded on the compliance date applicable to 
small-size DPPP motors, which is 4 years after the publication of this 
final rule. DOE may, however, grant waivers of Federal preemption in 
limited instances for particular State laws or regulations, in 
accordance with the procedures and other provisions set forth under 
EPCA. (See 42 U.S.C. 6316(a) (applying the preemption waiver provisions 
of 42 U.S.C. 6297))
    Subject to certain criteria and conditions, DOE is required to 
develop test procedures to measure the energy efficiency, energy use, 
or estimated annual operating cost of each covered product. (See 42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A) and (r)) Manufacturers of 
covered equipment must use the Federal test procedures as the basis 
for: (1) certifying to DOE that their equipment complies with the 
applicable energy conservation standards adopted pursuant to EPCA (42 
U.S.C. 6316(a); 42 U.S.C. 6295(s)), and (2) making representations 
about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly, 
DOE must use these test procedures to determine whether the equipment 
complies with relevant standards promulgated under EPCA. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(s)) The DOE test procedures for DPPP motors 
appear at title 10 of the Code of Federal Regulations (``CFR'') Sec.  
431.484.
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered equipment, including DPPP motors. Any new 
or amended standard for a covered product must be designed to achieve 
the maximum improvement in energy efficiency that the Secretary of 
Energy (``Secretary'') determines is technologically feasible and 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 
42 U.S.C. 6295(o)(3)(B)) Furthermore, DOE may not adopt any standard 
that would not result in the significant conservation of energy. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)) Moreover, DOE may not prescribe a 
standard (1) for certain products, including DPPP motors, if no test 
procedure has been established for the product, or (2) if DOE 
determines by rule that the standard is not technologically feasible or 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A)-
(B)) In deciding whether a proposed standard is economically justified, 
DOE must determine whether the benefits of the standard exceed its 
burdens. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A)-(B)) DOE must make 
this determination after receiving comments on the proposed standard, 
and by considering, to the greatest extent practicable, the following 
seven statutory factors:

    (1) The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    (2) The savings in operating costs throughout the estimated 
average life of the covered products in the type (or class) compared 
to any increase in the price, initial charges, or maintenance 
expenses for the covered products that are likely to result from the 
standard;
    (3) The total projected amount of energy (or as applicable, 
water) savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the 
covered products likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary considers relevant.

(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))

    Further, EPCA, as codified, establishes a rebuttable presumption 
that a standard is economically justified if the Secretary finds that 
the additional cost to the consumer of purchasing a product complying 
with an energy conservation standard level will be less than three 
times the value of the energy savings during the first year that the 
consumer will receive as a result of the standard, as calculated under 
the applicable test procedure. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(iii))
    DOE must also periodically evaluate the energy conservation 
standards for certain covered equipment, including electric motors, and 
publish either a notification of determination that the standards do 
not need to be amended, or a notice of proposed rulemaking (``NOPR'') 
that includes new proposed energy conservation standards (proceeding to 
a final rule, as appropriate). See 42 U.S.C. 6316(a) and 42 U.S.C. 
6295(m)(1).
    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any amended standard that either increases the maximum allowable energy 
use or decreases the minimum required energy efficiency of a covered 
product. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(1)) Also, the Secretary 
may not prescribe an amended or new standard if interested persons have 
established by a preponderance of the evidence that the standard is 
likely to result in the unavailability in the United States in any 
covered product type (or class) of performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(4))
    Additionally, EPCA specifies requirements when promulgating an 
energy conservation standard for a covered product that has two or more 
subcategories. DOE must specify a different standard level for a type 
or class of products that has the same function or intended use if DOE 
determines that products within such group (A) consume a different kind 
of energy from that consumed by other covered products within such type 
(or class); or (B) have a capacity or other performance-related feature 
which other products within such type (or class) do not have and such 
feature justifies a higher or lower standard. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(q)(1)) In determining whether a performance-related feature 
justifies a different standard for a group of products, DOE must 
consider such factors as the utility to the consumer of such a feature 
and other factors DOE deems appropriate. Id. Any rule prescribing such 
a standard must include an explanation of the basis on which such 
higher or lower level was established. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(q)(2))

B. Background

1. Current Standards
    DPPP motors are electric motors, which are defined as machines that 
convert electrical power into rotational mechanical power. 10 CFR 
431.12. DOE has established test procedures, labeling requirements, and 
energy conservation standards for certain electric motors (10 CFR part 
431, subpart B), but those

[[Page 66973]]

requirements do not apply to DPPP motors. DOE has separately 
established a test procedure for DPPP motors in 10 CFR 431.484. The 
scope of the DPPP motor definition includes DPPP motors regardless of 
how the equipment is sold; i.e., incorporated in a DPPP or sold 
separately.
    Currently, DPPP motors that would be subject to the energy 
conservation standards are not subject to any Federal energy 
conservation standards or labeling requirements because they do not 
fall within any of the specific classes of electric motors that are 
currently regulated by DOE.\19\ However, DPPP motors are electric 
motors and, therefore, are and have been among the types of industrial 
equipment for which Congress has authorized DOE to establish applicable 
regulations under EPCA without the need for DOE to undertake any 
additional prior administrative action. (42 U.S.C. 6311(1)(A))
---------------------------------------------------------------------------

    \19\ The current energy conservation standards at 10 CFR 431.25 
apply to electric motors that satisfy nine criteria listed at 10 CFR 
431.25(g), subject to the exemptions listed at 10 CFR 431.25(l). The 
nine criteria are as follows: (1) are single-speed, induction 
motors; (2) are rated for continuous duty (MG1) operation or for 
duty type S1 (IEC); (3) contain a squirrel-cage (MG1) or cage (IEC) 
rotor; (4) operate on polyphase alternating current 60-hertz 
sinusoidal line power; (5) are rated 600 volts or less; (6) have a 
2-, 4-, 6-, or 8-pole configuration; (7) are built in a 3-digit or 
4-digit NEMA frame size (or IEC metric equivalent), including those 
designs between two consecutive NEMA frame sizes (or IEC metric 
equivalent), or an enclosed 56 NEMA frame size (or IEC metric 
equivalent); (8) produce at least 1 horsepower (0.746 kW) but not 
greater than 500 horsepower (373 kW), and; (9) meet all of the 
performance requirements of one of the following motor types: A NEMA 
Design A, B, or C motor or an IEC Design N or H motor. The 
exemptions listed at 10 CFR 431.25(l) are: (1) air-over electric 
motors; (2) component sets of an electric motor; (3) liquid-cooled 
electric motors; (4) submersible electric motors; and (5) inverter-
only electric motors.
---------------------------------------------------------------------------

2. History of Standards Rulemaking for DPPP Motors
    On January 18, 2017, DOE published a direct final rule establishing 
energy conservation standards for DPPPs. 82 FR 5650 (the ``January 2017 
Direct Final Rule'').\20\
---------------------------------------------------------------------------

    \20\ DOE confirmed the adoption of the standards and the 
effective date and compliance date in a notice published on May 26, 
2017. 82 FR 24218. DOE also established a test procedure for DPPPs. 
82 FR 36858 (August 7, 2017).
---------------------------------------------------------------------------

    In comments submitted in response to the direct final rule, several 
interested parties discussed the issue of the efficiency of electric 
motors used in DPPPs. Comments were received from a broad range of 
interested parties, including manufacturers, trade associations, and 
energy efficiency advocacy organizations suggesting that energy 
conservation standards were also needed for motors used in pool pumps. 
Commenters wanted to ensure that consumers who purchased pool pumps 
compliant with the new standards at 10 CFR 431.465(f), who subsequently 
needed to replace their motor, would do so with a motor of equal or 
greater efficiency. All comments received that discussed DPPP motors 
supported further rulemaking to address these motors. (Docket No. EERE-
2015-BT-STD-0008; Regal Beloit Corporation (``Regal Beloit''), No. 122 
at p. 1; Hayward Industries, Inc. (``Hayward''), No. 125 at p. 1; 
Pentair Water Pool and Spa, Inc. (``Pentair''), No. 132 at pp. 1-2; 
Zodiac Pool Systems (``Zodiac''), No. 134 at pp. 1-2; Association of 
Pool and Spa Professionals (``APSP''), No. 127 at p. 2; Appliance 
Standards Awareness Project (``ASAP''), No. 133 at pp. 4-5; Natural 
Resource Defense Council (``NRDC''), No. 121 at p. 4; California 
Investor Owned Utilities (``CA IOUs''), No. 130 at p. 2)
    Acknowledging comments received in response to the direct final 
rule in support of regulating DPPP motors that would serve as 
replacement motors to the regulated pool pumps, DOE published a notice 
of public meeting on July 3, 2017 and held a public meeting on August 
10, 2017 to consider potential scope, definitions, equipment 
characteristics, and metrics for pool pump motors. 82 FR 30845. DOE 
also requested comment on potential requirements for DPPP motors in a 
request for information (``RFI'') pertaining to test procedures for 
small electric motors and electric motors. 82 FR 35468 (July 31, 2017). 
On August 14, 2018, DOE received a petition submitted by a variety of 
entities (collectively, the ``Joint Petitioners'') \21\ requesting that 
DOE issue a direct final rule to establish prescriptive standards and a 
labeling requirement for DPPP motors (``Joint Petition'').\22\ The 
Joint Petitioners stated that the motor on a pool pump will often fail 
before the pump itself needs to be replaced, and motor-only 
replacements are common. (Joint Petition, No. 14 at p. 2) They added 
that without a complementary standard for DPPP motors, upon replacing a 
pool pump motor, consumers may install replacement motors that are less 
efficient than the motor with which the DPPP was originally equipped. 
(Id.) To address this concern, the Joint Petitioners asked DOE to 
establish a direct final rule establishing prescriptive standards and a 
labeling requirement for DPPP motors. (Joint Petition, No. 14 at pp. 6-
9) The Joint Petitioners sought a compliance date of July 19, 2021, to 
align with the standards compliance date for DPPPs. (Id.) See also 82 
FR 24218 (May 26, 2017). DOE published a notice of the Joint Petition 
and sought comment on whether to proceed with the proposal, as well as 
any data or information that could be used in DOE's determination of 
whether to issue a direct final rule. 83 FR 45851 (Sept. 11, 2018).\23\
---------------------------------------------------------------------------

    \21\ The Joint Petitioners are: the Association of Pool & Spa 
Professionals, Alliance to Save Energy, American Council for an 
Energy-Efficient Economy, Appliance Standards Awareness Project, 
Arizona Public Service, California Energy Commission, California 
Investor Owned Utilities, Consumer Federation of America, Florida 
Consumer Action Network, Hayward Industries, National Electrical 
Manufacturers Association, Natural Resources Defense Council, Nidec 
Motor Corporation, Northwest Power and Conservation Council, Pentair 
Water Pool and Spa, Regal Beloit Corporation, Speck Pumps, Texas 
ROSE (Ratepayers' Organization to Save Energy), Waterway Plastics, 
WEG Commercial Motors, and Zodiac Pool Systems.
    \22\ The Joint Petition is available at www.regulations.gov/document?D=EERE-2017-BT-STD-0048-0014.
    \23\ Docket No. EERE-2017-BT-STD-0048, available at 
www.regulations.gov/docket?D=EERE-2017-BT-STD-0048.
---------------------------------------------------------------------------

    On December 12, 2018, representatives from the Association of Pool 
& Spa Professionals (``APSP''), the National Electrical Manufacturers 
Association (``NEMA''), Nidec Motors, Regal Beloit, and Zodiac met with 
DOE to reiterate the need for implementation of the Joint Petition. 
(December 2018 Ex Parte Meeting, No. 42 at p. 1) \24\ On February 5, 
2019, APSP, NEMA, Hayward, Pentair, Nidec Motors, Regal Beloit, WEG 
Commercial Motors, and Zodiac Pool Systems met with DOE to present an 
alternative approach to the Joint Petition, suggesting DOE propose a 
labeling requirement for DPPP motors. (February 2019 Ex Parte Meeting, 
No. 43 at p. 1) \25\ These interested parties specifically requested 
that DOE base the labeling requirement on a newly available industry 
standard for pool pump motors published on July 1, 2019 (UL 1004-
10:2019, ``Pool Pump Motors''), a design standard that incorporates 
some of the proposals

[[Page 66974]]

contained in the Joint Petition. (February 2019 Ex Parte Slides, No. 43 
at pp. 9-10) A follow-up memorandum was submitted to DOE on March 1, 
2019, providing additional information related to UL 1004-10:2019. 
(March 2019 Ex Parte Memo, No. 44) The interested parties noted the 
timelines and costs that would be involved in applying a label to the 
affected pool pump motors and the impacts flowing from past labeling 
efforts. (See generally Id. at 1-3.)
---------------------------------------------------------------------------

    \24\ With respect to each of the ex parte communications noted 
in this document, DOE posted a memorandum submitted by the 
interested party/parties that summarized the issues discussed in the 
relevant meeting as well as its date and attendees, in compliance 
with DOE's Guidance on Ex Parte Communications. 74 FR 52795-52796 
(Oct. 14, 2009). The memorandum of the meeting as well as any 
documents given to DOE employees during the meeting were added to 
the docket as specified in that guidance. See Id. at 74 FR 52796.
    \25\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop the 
test procedure and labeling requirements for DPPP motors. (Docket 
No. EERE-2017-BT-STD-0048, which is maintained at 
www.regulations.gov/docket/EERE-2017-BT-STD-0048). The references 
are arranged as follows: (commenter, comment docket ID number, page 
of that document).
---------------------------------------------------------------------------

    On April 7, 2020, the California Energy Commission (``CEC'') 
adopted new regulations for RDPPPMs, with an effective date of July 19, 
2021. The adopted standards included nominal efficiency at full-load 
and maximum operating speed requirements, in addition to a requirement 
that RDPPPMs with a total horsepower (``THP'') greater than or equal to 
0.5 THP manufactured on or after July 19, 2021, must be variable-
speed.\26\
---------------------------------------------------------------------------

    \26\ See Docket # 19-AAER-02 at www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20/appliance-efficiency-proceedings-2.
---------------------------------------------------------------------------

    On October 5, 2020, in response to the Joint Petition and the 
alternative recommendation presented by several of the Joint 
Petitioners following submission of the Joint Petition, DOE published a 
NOPR proposing to establish a test procedure and an accompanying 
labeling requirement for DPPP motors. 85 FR 62816 (``October 2020 
NOPR''). Specifically, DOE proposed to incorporate by reference UL 
Standard 1004-10:2019 ``Outline of Investigation for Pool Pump Motors'' 
(``UL 1004-10:2019'') pertaining to DPPP motor definitions and marking 
requirements; require the use of Canadian Standards Association 
(``CSA'') C747-09 (R2014), ``Energy Efficiency Test Methods for Small 
Motors'' (``CSA C747-09'') for testing the energy efficiency of DPPP 
motors; require the nameplate of a subject DPPP motor (1) to include 
the full-load efficiency of the motor as determined under the proposed 
test procedure, and (2) if the DPPP motor is certified to UL-1004-
10:2019, to include the statement, ``Certified to UL 1004-10:2019''; 
require that catalogs and marketing materials include the full-load 
efficiency of the motor; require manufacturers to notify DOE of the 
subject DPPP motor models in current production (according to the 
manufacturer's model number) and whether the motor model is certified 
to UL 1004-10:2019; and require manufacturers to report to DOE the 
full-load efficiency of the subject DPPP motor models as determined 
pursuant to the proposed test procedure. 85 FR 62816, 62820. 
Additionally, if a DPPP motor model is certified to UL 1004-10:2019, 
DOE proposed to require manufacturers to report the THP and speed 
configuration of the motor model as provided on the nameplate pursuant 
to the UL certification. Id.
    On July 29, 2021, DOE published a final rule adopting a test 
procedure for DPPP motors. 86 FR 40765. (``July 2021 Final Rule''). 
Specifically, the test procedure requires use of CSA C747-09 (R2014), 
``Energy Efficiency Test Methods for Small Motors'' (``CSA C747-09'') 
for testing the full-load efficiency of DPPP motors and incorporates by 
reference UL 1004-10:2020 ``Standard for Pool Pump Motors'' (``UL 1004-
10:2020'') pertaining to definitions and scope. The new test procedure 
is currently located at 10 CFR 431.484. 86 FR 40765, 40768. DOE did not 
establish a labeling requirement and stated that it intends to address 
any such labeling and/or energy conservation standards requirement in a 
separate notification. Id.
    On June 21, 2022, DOE published a NOPR proposing energy 
conservation standards for DPPP motors. 87 FR 37122. (``June 2022 
NOPR''). DOE proposed a performance standard for a class of DPPP motors 
and design requirements for certain classes of DPPP motors. 
Specifically, DOE proposed to require that DPPP motors less than 0.5 
THP must have a full-load efficiency of 69 percent, and DPPP motors 
greater than or equal to 0.5 THP must be variable speed control DPPP 
motors. In addition, for DPPP motors greater than or equal to 0.5 THP, 
DOE also proposed to implement freeze-protection requirements. 87 FR 
37122, 37123-37124. On July 26, 2022, DOE presented the proposed 
standards and accompanying analysis in a public meeting.
    DOE received comments in response to the June 2022 NOPR from the 
interested parties listed in Table II.1.

                                   Table II.1--June 2022 NOPR Written Comments
----------------------------------------------------------------------------------------------------------------
                                                                       Comment No. in
               Commenter(s)                       Abbreviation           the Docket          Commenter type
----------------------------------------------------------------------------------------------------------------
Anonymous................................  Anonymous.................              89  .........................
Appliance Standards Awareness Project      Joint Advocates...........              97  Efficiency Organizations.
 (ASAP), American Council for an Energy-
 Efficient Economy (ACEEE), National
 Consumer Law Center, on behalf of its
 low-income clients (NCLC), Natural
 Resources Defense Council (NRDC), and
 Northwest Energy Efficiency Alliance
 (NEEA).
California Energy Commission and New York  CEC and NYSERDA...........              94  State Agencies.
 State Energy Research and Development
 Authority.
Center for Climate and Energy Solutions,   Joint SC-GHG Commenters...              95  Efficiency Organizations
 Institute for Policy Integrity at New                                                  and Legal Institute.
 York University School of Law, Natural
 Resources Defense Council, Sierra Club,
 Union of Concerned Scientists.
Fluidra..................................  Fluidra...................         91, 101  Pool Pump Manufacturer.
Hayward Industries, Inc..................  Hayward...................              93  Pool Pump Manufacturer.
Northwest Energy Efficiency Alliance.....  NEEA......................              99  Efficiency Organization.
Pacific Gas and Electric Company (PG&E),   CA IOUs...................              96  Utilities.
 San Diego Gas and Electric (SDG&E), and
 Southern California Edison (SCE).
Pentair Water Pool and Spa, Inc..........  Pentair...................              90  Pool Pump Manufacturer.
The Pool & Hot Tub Alliance and National   PHTA and NEMA.............              92  Trade Associations.
 Electrical Manufacturers Association.
The Pool & Hot Tub Alliance..............  PHTA......................             100  Trade Association.
Regal Rexnord............................  Regal.....................              98  Motor Manufacturer.
----------------------------------------------------------------------------------------------------------------


[[Page 66975]]

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\27\ 
To the extent that interested parties have provided written comments 
that are substantively consistent with any oral comments provided 
during the July 26, 2022 public meeting, DOE cites the written comments 
throughout this final rule. Any oral comments provided during the 
webinar that are not substantively addressed by written comments are 
summarized and cited separately throughout this final rule.
---------------------------------------------------------------------------

    \27\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
energy conservation standards for DPPP motors. (Docket No. EERE-
2017-BT-STD-0048, which is maintained at www.regulations.gov). The 
references are arranged as follows: (commenter name, comment docket 
ID number, page of that document).
---------------------------------------------------------------------------

III. General Discussion

    DOE developed this final rule after considering oral and written 
comments, data, and information from interested parties that represent 
a variety of interests. The following discussion addresses issues 
raised by these commenters.

A. General Comments

    This section summarizes general comments received from interested 
parties regarding rulemaking timing and process.
    In the June 2022 NOPR, DOE proposed a performance standard (i.e., 
full-load efficiency) and design requirements (i.e., speed capability) 
based on DPPP motor THP. Specifically, for motors <0.5 THP, DOE 
proposed DPPP motors to meet a full-load efficiency of 69 percent. For 
motors >=0.5 THP, DOE proposed variable speed control design 
requirements, and freeze protection control requirements for DPPP 
motors with freeze protection controls. 87 FR 37122, 37124.
    Waterway Plastics commented that the proposal does not align with 
CEC scope because that scope is only for replacement DPPP motors and 
requested clarity on the scope of the June 2022 NOPR. (Waterway 
Plastics, Public Meeting, No. 88 at p. 6) The scope of the final rule 
includes DPPP motors regardless of how the equipment is sold i.e., 
incorporated in a DPPP or sold separately (i.e., as a replacement 
motor).
    One anonymous commenter stated that the proposed standard for DPPP 
motors is more stringent than the standard for DPPPs that went into 
effect in 2021 and would make the DPPP rule obsolete. Specifically, the 
anonymous commenter stated that with the DPPP standard, a 1 hp single-
speed pump would still meet the weighted energy factor (``WEF'') 
requirement, but this does not seem to be the case in the proposed DPPP 
motor rule. In addition, the anonymous commenter stated that the WEF 
DPPP standard was less stringent for non-self-priming pumps, whereas 
the proposed DPPP motor level does not separate non-self-priming pumps 
motors. The anonymous commenter stated that typically rules for 
subcomponents (motors) would have less stringent or equal requirements 
to the fully assembled product (i.e., pumps), otherwise the standard 
for pool pumps would be obsolete due to the more stringent motor rule. 
(Anonymous, No. 89 at p. 1) Waterway Plastics commented that the 
proposal could affect the DPPPs that are being manufactured in the 
United States, and that they had concerns that the June 2022 NOPR 
proposal does not align with the DPPP standards. (Waterway Plastics, 
Public Meeting, No. 88 at p. 6)
    In addition to setting freeze protection requirements, the standard 
for DPPPs at 10 CFR 431.465(f) would likely require DPPP motors sold in 
DPPPs to be variable speed for standard-size self priming pool pumps 
(using DPPP motors greater than or equal to 1.15 THP) \28\ and to have 
a higher efficiency for small-size self priming pumps, non-self priming 
pumps, and PCBPs.\29\ The DPPP standards apply to DPPPs only and do not 
apply to DPPP motors sold alone as replacement motors. As stated 
previously, motor-only replacements are common and comments were 
received from a broad range of interested parties, including 
manufacturers, trade associations, and energy efficiency advocacy 
organizations suggesting that energy conservation standards were also 
needed for motors used in pool pumps to ensure that consumers who 
purchased pool pumps compliant with the new standards at 10 CFR 
431.465(f), who subsequently needed to replace their motor, would do so 
with a motor of equal or greater efficiency. In contrast, the CEC 
standards apply to replacement DPPP motors only and would require 
variable speed replacement DPPP motors at or above 0.5 THP, and also 
sets requirements for nominal efficiency at full-load and maximum 
operating speed.\30\ In this final rule, DOE establishes DPPP motor 
standard for both motors sold in DPPPs and sold alone for replacement 
purposes. While the motor improvements realized by this DPPP motor 
final rule could be enough to improve a DPPP such that the DPPP would 
meet the DPPP standard, DOE notes that the DPPP energy conservation 
standards and the DPPP motor standards are complementary to help ensure 
a harmonized approach to DPPP and DPPP motors that are replacements. 
The DPPP standards includes the hydraulic efficiency of the pump, the 
motor efficiency, and the efficiency of the associated controls and 
drives supporting the DPPP. By contrast, the DPPP motor standard 
focuses on just the motor aspect and is meant to complement the DPPP 
standard by ensuring the replacement motors are at least as efficient 
as originally intended by the DPPP manufacturer in the DPPP design. 
Therefore, DOE does not agree with the commenter that these two 
standards are overlapping. Instead, DOE believes it is addressing 
complementary but different equipment regulations to help ensure the 
efficiencies that consumers expect when purchasing their DPPPs are 
maintained when replacing the motor. Since the regulations apply to 
both domestically produced equipment and imported equipment and are 
intended to be complementary by design, DOE does not agree with 
Waterway Plastics that domestic manufacturers will be disadvantaged.
---------------------------------------------------------------------------

    \28\ The 0.711 hhp threshold in the DPPP standards for self-
priming pool filter pumps aligns with a 1.15 THP motor threshold 
(1.15 THP is roughly equivalent to 0.711 hhp). See section IV.A.3 of 
this document.
    \29\ The DPPP standard at 10 CFR 431.465(f) would likely require 
DPPP motors sold in DPPPs to meet the requirements equivalent to TSL 
6, while this DFR establishes standards at TSL 8 for DPPP motors, 
regardless of how they are sold (i.e., incorporated in a DPPP or 
sold separately). See section V.A of this document.
    \30\ See Docket # 19-AAER-02 at www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20/appliance-efficiency-proceedings-2.
---------------------------------------------------------------------------

    Regarding pressure cleaner booster pumps (``PCBP''), Fluidra 
recommended separating PCBP into their own equipment class, requiring 
69-percent efficiency for motors less than 1.15 THP, and implementing 
further review of energy use, efficiency, and cost effectiveness for 
the motors at 1.15 to 5 THP. (Fluidra, No. 91 at p. 2). PHTA and NEMA 
recommended that if DOE confirms that a variable speed requirement is 
not cost-effective for PCBP, DOE should not require variable speed for 
PCBP motors below 1.15 THP. (PHTA and NEMA, No. 92 at p. 5)
    On the other hand, CEC and NYSERDA supported DOE's proposed 
standards, specifically the proposal to require variable-speed motors, 
and encouraged that DOE finalize the rule as soon as possible. CEC and 
NYSERDA stated that the proposed standards will

[[Page 66976]]

extend the 2017 DPPP final rule energy efficiency benefits to 
replacement DPPP motors, which currently are unregulated on the Federal 
level, and provide additional energy efficiency improvements to new 
DPPPs. CEC and NYSERDA also stated that some of the energy savings in 
this NOPR are already being realized in California through that State's 
Replacement DPPP Motor Regulations, which went into effect July 19, 
2021, and which are projected to provide 451 GWh in annual electricity 
savings and $82 million in annual savings to California businesses and 
individuals. (CEC and NYSERDA, No. 94 at p. 2) Further, CEC and NYSERDA 
commented that variable-speed motors are extremely beneficial to 
consumers, as DPPPs have different operational modes with different 
speed requirements, and because real-world pool design complicates the 
size selection of DPPP motors. Further, CEC and NYSERDA stated that the 
benefit of variable-speed motors for PCBP applications, which is the 
ability to adjust motor speed, will eliminate the need to use pressure 
discs or pressure relief valves. (CEC and NYSERDA, No. 94 at p. 3)
    The Joint Advocates commented that they support the proposed 
standards for DPPP motors, which generally align with the existing 
California standards for replacement DPPP motors, and would ensure that 
all DPPP motors greater than or equal to 0.5 THP are variable-speed. 
The Joint Advocates also supported the proposed freeze protection 
control requirements. (Joint Advocates, No. 97 at p. 1)
    The CA IOUs supported DOE's proposal to adopt TSL 7 for DPPP 
motors. The CA IOUs commented that they surveyed the CEC certifications 
database and the DOE Compliance Certification Management System 
(``CCMS'') database and noted that small-size DPPP motors represent 
motors in PCBPs, small self-priming pool filter pumps, and small non-
self-priming pool filter pumps. The CA IOUs agreed that the 0.5 THP to 
1.15 THP threshold is an appropriate range for the DOE analysis and 
standard. Further, the CA IOUs commented that the standard-sized DPPP 
motor range, between 1.15 to 5.0 THP, represents motors mostly found in 
standard-size self-priming pool filter pump applications. (CA IOUs, No. 
96 at pp. 1-2) The CA IOUs commented that the proposed standard for a 
small-size DPPP motor will provide technically feasible and cost-
effective consumer savings through variable speed motor technology, 
allowing consumers to choose the lowest speed that meets their pool 
maintenance needs and reducing pressure head losses through the pump 
affinity laws. The CA IOUs noted that this energy savings strategy is 
consistent with the industry standard American National Standards 
Institute/Pool and Hot Tub Alliance/International Code Council (ANSI/
PHTA/ICC)-15:2021, which recommends that ``for maximum energy 
efficiency, pool filtration should be operated at the lowest possible 
flowrate for a time period that provides sufficient water turnover for 
clarity and sanitation.'' (CA IOUs, No. 96 at p. 2) Further, the CA 
IOUs supported DOE's proposal to adopt freeze protection setting 
requirements, which aligns with the requirements of the DPPP rule and 
provides essential energy savings by ensuring that products shopped 
with freeze protection have the appropriate settings to protect 
equipment from freezing while not using excessive energy. (CA IOUs, No. 
96 at p. 2)
    Regal commented that they generally support DOE moving forward with 
the DPPPM energy conservation standards rule. Regal commented that they 
believe the proposed rule will enable the achievement of significant 
energy savings, if careful consideration is given to the rule's 
underlying technical analysis and the timeline for implementation. 
(Regal, No. 98 at p.1) ASAP commented in support of DOE's proposed 
standards for DPPP motors and noted that these generally align with the 
existing standards in California. (ASAP, Public Meeting, No. 88 at p.5) 
As part of this final rule, DOE considered comments received regarding 
the technical analysis and made any needed updates, as discussed in 
section IV of this document. DOE also updated the market data 
information to match the current market of DPPP motors available, as 
discussed in section IV.A.2 of this document. Finally, DOE notes that 
DOE conducted DPPP motor manufacturer interviews as part of the June 
2022 NOPR, as discussed in the manufacturer impact analysis, and 
incorporated feedback to estimate the manufacturer impacts of setting 
variable-speed requirements as standards. 87 FR 37122, 37154.
    In regard to creating an equipment class for DPPP motors used in 
PCBP applications, DOE generally does not consider end-use applications 
(for DPPP motors, end-use would be DPPPs) when analyzing equipment 
classes for covered equipment. See further discussion in IV.A.3 of this 
document. DOE also notes that, assuming the same motor output power, 
there are no technological features that distinguish a DPPP motor used 
in a PCBP from a DPPP motor used in a self-priming or non-self-priming 
application. As such, DOE continues to base the analysis in this final 
rule only on DPPP motor equipment classes determined only by motor THP, 
as defined in Table III.1 of this document.
    DOE reviewed the cost-effectiveness of the trial standard levels 
considered with the updates for this final rule and continues to 
conclude that the proposal from the June 2022 NOPR is technologically 
feasible and economically justified. See section V of this document for 
analytical results. Section IV provides further details on the analysis 
conducted, the analysis inputs, and responses to any analysis-specific 
comments that were received regarding the June 2022 NOPR.
    In the June 2022 NOPR, DOE proposed that new standards would apply 
to DPPP motors manufactured two years after the date on which any new 
or amended standard is published.\31\ DOE estimated the publication of 
a final rule in the second half of 2023. Therefore, in the June 2022 
NOPR, for purposes of its analysis, DOE used 2026 as the first full 
year of compliance with any new standards for DPPP motors. 87 FR 37122, 
37144.
---------------------------------------------------------------------------

    \31\ In the June 2022 NOPR, DOE followed the same 2-year lead 
time. See 87 FR 37122, 37144 at FN67.
---------------------------------------------------------------------------

    Several commenters recommended that DOE consider a two-step 
approach to allow for further analysis and data collection and 
coordinate between DPPP and DPPP motors. As a first step, PHTA, NEMA, 
and Hayward recommended that DOE adopt a final rule as soon as possible 
that would adopt and require a DPPP motor listing to UL 1004-10:2022 
``Standard for Pool Pump Motors'' (``UL 1004-10:2022'') in its 
entirety, which would provide alignment with the current DPPP rule and 
a means for certification and labeling that will provide for easier 
enforcement. Further, PHTA, NEMA, and Hayward noted that manufacturers 
anticipated compliance with UL 1004-10, which was established in the 
2018-2020 efforts to obtain a corresponding DPPP motor rule. Therefore, 
PHTA, NEMA, and Hayward stated that manufacturers are ready and able to 
provide compliant product 12 months after a final rule effective date. 
As a second step, PHTA, NEMA, and Hayward commented that DOE should set 
up a negotiation working group on both DPPP and DPPP motor rules to dig 
deeper into the concerns highlighted in their comment submission and 
ensure performance and timing alignments long term. PHTA, NEMA, and 
Hayward commented that they are committed to initiating step two as 
soon as possible and stated that if a two-step approach is unfeasible, 
that

[[Page 66977]]

prior to issuing a final DPPP motor rule, the cost-effective concerns 
laid out in their comments should be further analyzed and manufacturer 
interviews conducted. PHTA, NEMA, and Hayward stated that although this 
approach will slow down obtaining a final rule, the current NOPR 
deviates from the Joint Petition and the commenters have provided 
multiple concerns that require attention. (PHTA and NEMA, No. 92 at p. 
9; Hayward, No. 93 at pp. 2-3)
    In response, Fluidra requested a 5-year transition period to 
implement compliance with the DPPP motor regulation proposal. Fluidra 
noted that this transition period would give manufacturers adequate 
time to develop, test, certify, launch, and transition product lines, 
as well as educate distributors, pool builders, and consumers on this 
product transition. (Fluidra, No. 91 at p. 2) Hayward, PHTA, and NEMA 
requested a compliance date of at least 5 years following the effective 
date if DOE decides against the implementation of UL 1004-10 based 
rule. Hayward, PHTA, and NEMA noted that more time is required to: 
address the limited product that currently exists in the small 
fractional motor category; find solutions to the design of other 
products impacted by a DPPP motor rule; and provide better alignment 
with any coming revisions to the current DPPP rule. (Hayward, No. 93 at 
pp. 2-3; PHTA and NEMA, No. 92 at p. 9) PHTA stated that any final 
DPPPM rule compliance date should be extended a minimum of 5 years to 
allow manufacturers to recover investments made to comply with the pump 
rule. (PHTA, No. 100 at p. 3) In addition, Hayward recommended the 
alignment of the DPPP and DPPP motor implementation dates. (Hayward, 
No. 93 at p. 2) Regal recommended that DOE endeavor to better align 
both the performance requirements and compliance deadlines between the 
DPPP and DPPP motor rules. Regal commented that this will allow for 
maximizing energy savings, while avoiding unintended market disruptions 
and significant fiscal impacts to industry and consumers. (Regal, No. 
98 at p. 1) Specifically, PHTA and NEMA commented that they were 
concerned the different implementation dates of the DPPP and DPPP motor 
rules will cause confusion and difficulties for manufacturers and risk 
the potential to undercut savings by unaligned implementation of the 
two rules. (PHTA and NEMA, No. 92 at pp. 2)
    DOE notes that PHTA and NEMA's original recommendation to DOE was 
to adopt UL 1004-10:2022 in its entirety (PHTA and NEMA, No. 92 at p. 
9, 10), which includes the requirement that DPPP motors rated greater 
or equal to 1.15 THP shall not be marked for single-speed, two-speed, 
or multi-speed (i.e., shall instead be marked for variable-speed). 
(section 7.1(b) of UL 1004-10:2022). Further, PHTA and NEMA stated that 
manufacturers were ready and able to provide products compliant with UL 
1004-10:2022 12 months after a final rule effective date. (PHTA and 
NEMA, No. 92 at p. 9) Finally, PHTA and NEMA suggested that DOE require 
compliance with the entire UL 1004-10 standard and not just the scope 
and definitions sections because doing so would better align and 
provide consistency with the DPPP rule. They also stated that doing so 
would provide an easier enforcement tool for DOE by requiring nameplate 
markings on those motors captured in the scope of the NOPR and in UL 
1004-10, and would also ensure products not within the scope, such as 
rigid electric spa motors, be labelled for that intended use only. 
(PHTA and NEMA, No. 92 at p. 10) This is an energy conservation 
standard and not a labeling rulemaking. In this final rule, DOE is 
requiring variable speed control for standard-size DPPP motors (i.e., 
1.15 <= THP <=5), consistent with UL 1004-10:2022. However, DOE is also 
requiring variable-speed control for small-size DPPP motors (i.e., 0.5 
<= THP <1.15), which is more stringent than UL 1004-10:2022. In this 
final rule, DOE has concluded that the proposal from the June 2022 NOPR 
is technologically feasible and economically justified. See section V 
for analytical results.
    As noted previously, PHTA, NEMA, and Hayward recommended a two-step 
approach. In addition, most if not all comments to the June 2022 NOPR 
concerned the transition to variable-speed for the small-size equipment 
class.\32\ DOE reviewed the compliance dates proposed in the June 2022 
NOPR with specific concern for the compliance dates applicable to that 
class. In the June 2022 NOPR, DOE provided a two-year compliance 
timeline for DPPP motors based on the statutorily mandated rulemaking 
schedule provided in section 6313. See 87 FR 37122, 37144 at FN 67, and 
37186. Upon further review, DOE has determined that the rulemaking 
schedule provided in 42 U.S.C. 6313(b) does not apply to DPPPM. As 
discussed in section II.A. of this document, DPPPM are a type of 
electric motor, but not among the types of electric motor for which 
Congress established standards and a rulemaking schedule in 42 U.S.C. 
6313(b). DPPPM are definite purpose motors. See 42 U.S.C. 6311(13)(C). 
As such, they are excepted from the requirements of 42 U.S.C. 6313(b), 
including the compliance deadlines provided in that section. Because 42 
U.S.C. 6316(a) applies certain requirements of section 6295(l)-(s) of 
EPCA to certain equipment, including electric motors, DOE considered 
whether the compliance deadlines of section 6295(m)(4) applied to 
DPPPM. Section 6295(m)(4)(A) defines compliance deadlines for specific 
products. But electric motors and DPPPMs are not listed, nor does 
section 6316 apply a cross reference on how to apply these paragraphs 
to electric motors or DPPPMs. Accordingly, DOE determined that these 
compliance deadlines do not apply to DPPPM. Additionally, DOE reviewed 
section 6296(m)(4)(B), which states that DOE cannot apply new standards 
to a product with respect to which other new standards have been 
required in the prior 6-year period. As this is the first time DOE is 
establishing standards for this product, this paragraph also does not 
apply. As such, DOE has determined that it has discretion to establish 
compliance deadlines for DPPPM.
---------------------------------------------------------------------------

    \32\ See: (Anonymous, No. 89 at p. 1), (Pentair, No. 90 at p. 1, 
3), (Fluidra, No. 91 at p. 2), (Hayward, No. 93 at p. 2), (CA IOUs, 
No. 96 at p. 1-2), (Joint Advocates, No. 97 at p. 1), (PHTA and 
NEMA, No. 92 at p. 10), (PHTA, No. 100 at p. 3)
---------------------------------------------------------------------------

    DOE notes CEC's standards for RDPPM, which include standards for 
the small-size equipment class, require compliance beginning July of 
2021. Docket #19-AAER-02. The CEC standards set a variable speed motor 
requirement for motors at or above 0.5 THP as well as minimum motor 
full-load efficiency requirements. 20 CA ADC 1605.3(g)(6)(B). DOE's 
final rule matches the stringency of the California standards 
(requiring variable speed controls for all motors over 0.5 THP) for 
replacement DPPP motors but DOE's proposal extends the variable speed 
requirement to all DPPP motors, regardless of whether they are sold 
with a DPPP or on their own. DOE believes manufacturers are already 
producing standard-size and extra-small DPPPMs that will have to comply 
with DOE's standards in this final rule. In addition, some 
manufacturers already produce small-size DPPPMs that align with CEC's 
variable speed RDPPM standards.\33\ However, DOE understands that some 
manufacturers may need additional time to scale up their

[[Page 66978]]

manufacturing lines, especially for the small-size DPPP motors.\34\ 
Therefore, DOE is adopting two different compliance dates in this final 
rule depending on the total horsepower of the motor. Doing so will 
allow DOE to begin the transition to a Federal standard for DPPP motors 
quickly, which will help alleviate any circumvention and unintended 
consequences that may be occurring because of the DPPP Federal 
standard, while balancing the needs of industry to have additional time 
to increase manufacturing scale of the small DPPP motors. Based on the 
comments received, DOE has concluded that the need for additional time 
is particularly relevant for small-size equipment. Accordingly, DOE is 
extending the compliance timeline to 4 years, instead of the proposed 
two years, for the small-size equipment class as DOE believes this 
provides industry sufficient time to scale up their manufacturing 
lines.
---------------------------------------------------------------------------

    \33\ https://www.regalrexnord.com/products/electric-motors/ac-motors-nema/pump-motors/pool-pump-motors/pool-pump-motor-01-85-hp-1-ph-60-hz-115-v-3600-rpm-48y-frame-tefc-elv08tb.
    \34\ DOE included the capital and product conversion costs 
necessary for these DPPP motor manufacturers to introduce variable-
speed DPPP motor models for the small-size equipment class. See 
section III.J of this document.
---------------------------------------------------------------------------

    For the extra-small-size and standard-size equipment classes, DOE 
is maintaining the two-year compliance timelines as proposed. For the 
extra-small-size and standard-size equipment classes, the adopted TSL 
(TSL7) aligns with the requirements in UL 1004-10:2022 and as noted by 
PHTA and NEMA, manufacturers are ready and able to provide products 
compliant with UL 1004-10:2022 12 months after a final rule effective 
date. Therefore, for the extra-small-size and standard-size equipment 
classes DOE has determined that two years provides sufficient lead 
time.
    The CA IOUs recommended that DOE update the DPPP ECS to align with 
the proposed DPPP motor standards. The CA IOUs commented that the 
proposed standard requires variable speed capability for small and 
standard size DPPP motors, which will impact the motors installed in 
DPPPs. The CA IOUs added that the non-self-priming pool filter pump and 
PCBP WEF standards allow performance levels achievable by single-speed, 
dual-speed, and variable-speed motors. (CA IOUs, No. 96 at p. 6) DOE 
appreciates CA IOUs comments. However, because this rulemaking is 
concerning DPPP motors only and not DPPPs, DOE may consider 
coordinating compliance timelines as part of any upcoming DPPP 
rulemakings.
    Finally, Pentair stated that after the DPPP rule, it saw a large 
increase in internet activity selling illegal pumps and motors that do 
not meet DOE requirements. (Pentair, No. 90 at pp. 1-2) Fluidra 
commented that American manufacturers may also be negatively impacted 
by imports of non-compliant DPPPs and DPPP motors from foreign 
manufacturers who unknowingly or knowingly disregard enforcement of 
this regulation. (Fluidra, No. 91 at p. 2) Based on input from five 
manufacturers, PHTA and NEMA commented that they estimate approximately 
5 percent of the current market to be made up of inexpensive imported 
pumps sold through online retailers that likely do not comply with 
DOE's current energy conservation standard. PHTA and NEMA commented 
that these manufacturers have indicated that the current value (5 
percent) is approximately double what it was prior to the compliance 
date for the DPPP standard. PHTA and NEMA commented that the 
manufacturers also estimate that a DPPP motor standard, established as 
currently proposed by DOE, will double the percentage of the market 
made up of non-compliant DPPPs, increasing it to 10 percent. (PHTA and 
NEMA, No. 92 at pp. 7-8) PHTA and NEMA also stated that the 
misalignment of the compliance dates for the DPPP energy conservation 
standards and the proposed DPPP motor standards could cause confusion 
for manufacturers and importers, potentially leading to more non-
compliant DPPP motors being imported. PHTA and NEMA reiterated NEMA's 
concerns about port of entry enforcement that they have separately 
commented on numerous times. (PHTA and NEMA, No. 92 at p. 8) Nidec 
commented that they were concerned that because of the disconnect of 
the proposal to the current DPPP regulations (DPPPMs between 0.5 to 
1.15 THP), there may be issues with enforcement of pumps assembled 
offshore and coming into the U.S. with non-compliant DPPPMs. Nidec 
commented that because of the rulemaking, there is a high risk that 
DPPPs may not get assembled anymore in the U.S. and instead will be 
done offshore unless there is proper enforcement that brings the DPPP 
regulations and the proposed DPPPM regulations into harmony. (Nidec, 
Public Meeting, No. 88, at pp. 45-46) DOE currently does not have any 
energy conservation standards for DPPP motors. This final rule will 
finalize standards for DPPP motors and product-specific enforcement 
requirements at Sec.  429.134. Any enforcement-related issues, 
particularly compliance dates, regarding DPPPs will be addressed as 
part of the DPPP rulemaking, or through a separate avenue.
    Nidec requested comment on whether there are any other examples 
where an end-product rule defines a lower threshold for compliance 
versus a component threshold and how DOE has successfully managed that. 
They stated that in their experience, the end-product generally 
overrides the component standard, and for the DPPPM proposal, it would 
not be the case. (Nidec, Public Meeting, No. 88 at p. 47) EPCA 
authorizes DOE to regulate the energy efficiency of a number of 
consumer products and certain industrial equipment. This equipment 
includes those electric motors that are DPPP motors, the subject of 
this document, and also pumps (42 U.S.C. 6311(1)(A)) Accordingly, DOE 
has the authority to regulate both a component (DPPPM) and the end-
product (DPPPs). Given the current misalignment amongst the Federal 
DPPP standards and the CA DPPP replacement motor standards along with 
DOE's authority for electric motors, DOE is taking an approach to 
facilitate harmonization of the standards at the Federal level and 
ensure a complimentary regulatory approach for DPPPs and replacement 
DPPP motors which will help ensure energy savings are realized in the 
field.
Scope of Coverage
    This document covers equipment meeting the definition of a DPPP 
motor as defined in Sec.  431.483 and the scope specified in 10 CFR 
431.481(b). Specifically, the scope covers DPPP motors with a total THP 
of less than or equal to 5, but does not apply to: (i) DPPP motors that 
are polyphase motors capable of operating without a drive and 
distributed in commerce without a drive that converts single-phase 
power to polyphase power; (ii) waterfall pump motors; (iii) rigid 
electric spa pump motors, (iv) storable electric spa pump motors; (v) 
integral cartridge-filter pool pump motors; and (vi) integral sand-
filter pool pump motors.\35\
---------------------------------------------------------------------------

    \35\ These terms are defined in UL 1004-10:2020, which is 
incorporated by reference in DOE's test procedure at 10 CFR 431.484. 
In this final rule, DOE is incorporating by reference the latest 
version of the UL standard, UL 1004-10:2022; see discussion in 
section III.A.1 of this document.
---------------------------------------------------------------------------

    When evaluating and establishing energy conservation standards, DOE 
divides covered equipment into equipment classes by the type of energy 
used or by capacity or other performance-related features, which other 
products within such type (or class) do not have, that justify 
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such 
factors as the utility of the

[[Page 66979]]

feature to the consumer and other factors DOE determines are 
appropriate. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q))
    DOE is establishing equipment classes for DPPP motors based on THP. 
DOE is proposing an extra-small-size equipment class corresponding to 
motors with a THP less than 0.5 THP, a small-size equipment class 
corresponding to motors with a total horsepower rating greater than or 
equal to 0.5 THP but less than 1.15 THP, and a standard-size equipment 
class corresponding to a motor with a THP greater than or equal to 1.15 
THP and less than or equal to 5 THP. Table III.1 provides a summary of 
the equipment classes. See section IV.A.3 for further details on the 
reasoning as to why DOE determined these equipment classes are 
appropriate and justify having separate standards.

             Table III.1--Equipment Classes for DPPP Motors
------------------------------------------------------------------------
              Equipment class                Motor total horsepower (Hp)
------------------------------------------------------------------------
Extra-small-size..........................  THP <0.5.
Small-size................................  0.5 <= THP < 1.15.
Standard-size.............................  1.15 <= THP <= 5.
------------------------------------------------------------------------

    See section IV.A.1 of this document for discussion of the equipment 
classes analyzed in this final rule.

B. Test Procedure

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a)) 
Manufacturers of covered products must use these test procedures to 
certify to DOE that their product complies with energy conservation 
standards and to quantify the efficiency of their product. (42 U.S.C. 
6314(d)(1); 42 U.S.C. 6316(a), 42 U.S.C. 6295(s))
    The test procedure references UL 1004-10:2020 ``Standard for Safety 
for Pool Pump Motors'' for the definitions (10 CFR 431.483) and 
references CSA C747-09 as the energy efficiency test method for DPPP 
motors (10 CFR 431.484(b)). The test procedure establishes full-load 
efficiency as the metric for DPPP motors. 10 CFR 431.484(b). In this 
final rule, DOE is incorporating by reference the latest version of the 
UL standard, UL 1004-10:2022; further discussion on this topic and any 
comments received are provided in section IV.A.1 of this document. In 
addition, DOE is also finalizing product-specific enforcement 
requirements at 10 CFR 429.134 that require DPPP motors to be tested in 
accordance with UL 1004-10:2022 to verify variable-speed capability and 
applicable freeze protection design requirements.

C. Technological Feasibility

1. General
    In each energy conservation standards rulemaking, DOE conducts a 
screening analysis based on information gathered on all current 
technology options and prototype designs that could improve the 
efficiency of the products or equipment that are the subject of the 
rulemaking. As the first step in such an analysis, DOE develops a list 
of technology options for consideration in consultation with 
manufacturers, design engineers, and other interested parties. DOE then 
determines which of those means for improving efficiency are 
technologically feasible. DOE considers technologies incorporated in 
commercially available products or in working prototypes to be 
technologically feasible. 10 CFR 431.4; sections 6(b)(3)(i) and 7(b)(1) 
of appendix A to 10 CFR part 430 subpart C (``appendix A'').
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
practicability to manufacture, install, and service; (2) adverse 
impacts on product utility or availability; (3) adverse impacts on 
health or safety; and (4) unique-pathway proprietary technologies. 10 
CFR 431.4; section 7(b)(2)-(5) of appendix A. Section IV.B of this 
document discusses the results of the screening analysis for DPPP 
motors, particularly the designs DOE considered, those it screened out, 
and those that are the basis for the standards considered in this 
rulemaking. For further details on the screening analysis for this 
rulemaking, see chapter 4 of the final rule technical support document 
(``TSD'').
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt an amended standard for a type or class 
of covered product, it must determine the maximum improvement in energy 
efficiency or maximum reduction in energy use that is technologically 
feasible for such product. (42 U.S.C. 6316(a); 42 U.S.C. 6295(p)(1)) 
Accordingly, in the engineering analysis, DOE determined the maximum 
technologically feasible (``max-tech'') improvements in energy 
efficiency for DPPP motors, using the design parameters for the most 
efficient products available on the market or in working prototypes. 
The max-tech levels that DOE determined for this rulemaking are 
described in section IV.C of this final rule and in chapter 5 of the 
final rule TSD.

D. Energy Savings

1. Determination of Savings
    For each trial standard level (``TSL''), DOE projected energy 
savings from application of the TSL to DPPP motors purchased in the 30-
year period that begins in the first full year of compliance with the 
standards (2026-2055).\36\ The savings are measured over the entire 
lifetime of equipment purchased in the 30-year analysis period. DOE 
quantified the energy savings attributable to each TSL as the 
difference in energy consumption between each standards case and the 
no-new-standards case. The no-new-standards case represents a 
projection of energy consumption that reflects how the market for a 
product would likely evolve in the absence of energy conservation 
standards.
---------------------------------------------------------------------------

    \36\ DOE also presents a sensitivity analysis that considers 
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet models 
to estimate national energy savings (``NES'') from standards for DPPP 
motors. The NIA spreadsheet model (described in section IV.G.2 of this 
document) calculates energy savings in terms of site energy, which is 
the energy directly consumed by products at the locations where they 
are used. For electricity, DOE reports national energy savings in terms 
of primary energy savings, which is the savings in the energy that is 
used to generate and transmit the site electricity. For natural gas, 
the primary energy savings are considered to be equal to the site 
energy savings. DOE also calculates NES in terms of FFC'' energy 
savings. The FFC metric includes the energy consumed in extracting, 
processing, and transporting primary fuels (i.e., coal, natural gas, 
petroleum fuels), and thus presents a more complete picture of the 
impacts of energy conservation standards.\37\ DOE's approach is based 
on the calculation of an FFC multiplier for each of the energy types 
used by covered products or equipment. For more information on FFC 
energy savings, see section IV.H.2 of this document.
---------------------------------------------------------------------------

    \37\ The FFC metric is discussed in DOE's statement of policy 
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as 
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    To adopt any new or amended standards for a covered product, DOE

[[Page 66980]]

must determine that such action would result in significant energy 
savings. (42 U.S.C. 6295(o)(3)(B))
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\38\ For 
example, some covered products and equipment have most of their energy 
consumption occur during periods of peak energy demand. The impacts of 
these products on the energy infrastructure can be more pronounced than 
products with relatively constant demand. Accordingly, DOE evaluates 
the significance of energy savings on a case-by-case basis, taking into 
account the significance of cumulative FFC national energy savings, the 
cumulative FFC emissions reductions, and the need to confront the 
global climate crisis, among other factors.
---------------------------------------------------------------------------

    \38\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

    As stated, the standard levels adopted in this final rule are 
projected to result in national energy savings of 1.56 quads FFC, the 
equivalent of the electricity use of 16.8 million homes in one year. 
Based on the amount of FFC savings, the corresponding reduction in 
emissions, and the need to confront the global climate crisis, DOE has 
determined the energy savings from the standard levels adopted in this 
final rule are ``significant'' within the meaning of 42 U.S.C. 6316(a); 
42 U.S.C. 6295(o)(3)(B).

E. Economic Justification

1. Specific Criteria
    As noted previously, EPCA provides seven factors to be evaluated in 
determining whether a potential energy conservation standard is 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has 
addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of potential amended standards on 
manufacturers, DOE conducts an MIA, as discussed in section IV.J of 
this document. DOE first uses an annual cash-flow approach to determine 
the quantitative impacts. This step includes both a short-term 
assessment--based on the cost and capital requirements during the 
period between when a regulation is issued and when entities must 
comply with the regulation--and a long-term assessment over a 30-year 
period. The industry-wide impacts analyzed include (1) INPV, which 
values the industry on the basis of expected future cash flows; (2) 
cash flows by year; (3) changes in revenue and income; and (4) other 
measures of impact, as appropriate. Second, DOE analyzes and reports 
the impacts on different types of manufacturers, including impacts on 
small manufacturers. Third, DOE considers the impact of standards on 
domestic manufacturer employment and manufacturing capacity, as well as 
the potential for standards to result in plant closures and loss of 
capital investment. Finally, DOE takes into account cumulative impacts 
of various DOE regulations and other regulatory requirements on 
manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and payback period (``PBP'') associated with new or 
amended standards. These measures are discussed further in the 
following section. For consumers in the aggregate, DOE also calculates 
the national net present value of the consumer costs and benefits 
expected to result from particular standards. DOE also evaluates the 
impacts of potential standards on identifiable subgroups of consumers 
that may be affected disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered product in the 
type (or class) compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered product 
that are likely to result from a standard. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC 
and PBP analysis.
    The LCC is the sum of the purchase price of a product (including 
its installation) and the operating cost (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the product. The LCC analysis requires a variety of inputs, such as 
product prices, product energy consumption, energy prices, maintenance 
and repair costs, product lifetime, and discount rates appropriate for 
consumers. To account for uncertainty and variability in specific 
inputs, such as product lifetime and discount rate, DOE uses a 
distribution of values, with probabilities attached to each value.
    The PBP is the estimated amount of time (in years) it takes 
consumers to recover the increased purchase cost (including 
installation) of a more efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analysis, DOE assumes that consumers will 
purchase the covered products in the first full year of compliance with 
new or amended standards. The LCC savings for the considered efficiency 
levels are calculated relative to the case that reflects projected 
market trends in the absence of new or amended standards. DOE's LCC and 
PBP analysis is discussed in further detail in section IV.F of this 
document.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(III)) As discussed in section IV.G.2 of this document, 
DOE uses the NIA spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
    In establishing equipment classes, and in evaluating design options 
and the impact of potential standard levels, DOE evaluates potential 
standards that would not lessen the utility or performance of the 
considered equipment. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards 
adopted in this document would not reduce the utility or performance of 
the equipment under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from a standard. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(V)). It also directs the Attorney General to determine 
the impact, if any, of any lessening of competition likely to result 
from a standard and to transmit such determination to the Secretary 
within 60 days of the publication of a proposed rule, together with an 
analysis of the nature and extent of the impact. (42 U.S.C. 6316(a); 42 
U.S.C.

[[Page 66981]]

6295(o)(2)(B)(ii)) To assist the Department of Justice (``DOJ'') in 
making such a determination, DOE transmitted copies of its proposed 
rule and the NOPR TSD to the Attorney General for review, with a 
request that the DOJ provide its determination on this issue. In its 
assessment letter responding to DOE, DOJ noted the possibility of 
anticompetitive effects stemming from the differences between the 
energy conservation standards for DPPP motors and DPPPs, as well as the 
high cost of compliance for domestic small businesses identified by 
DOE. DOJ elaborated that the difference in standards between DPPP 
motors and DPPPs would force domestic manufacturers to comply with both 
standards while foreign manufacturers could import DPPPs that are 
compliant with the DPPP rule but contain a non-compliant motor. DOJ 
ultimately concluded that they do not have sufficient information to 
conclude that the proposed energy conservation standards for DPPP motor 
are likely to have a significant adverse impact on competition. DOE 
notes that DPPP motors that are a component of an imported DPPP are 
subject to energy conservation standards. DOE is publishing the 
Attorney General's assessment at the end of this final rule.
f. Need for National Energy Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new or amended standard is 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(VI)) The energy savings from the adopted standards are 
likely to provide improvements to the security and reliability of the 
Nation's energy system. Reductions in the demand for electricity also 
may result in reduced costs for maintaining the reliability of the 
Nation's electricity system. DOE conducts a utility impact analysis to 
estimate how standards may affect the Nation's needed power generation 
capacity, as discussed in section IV.M of this document.
    DOE maintains that environmental and public health benefits 
associated with the more efficient use of energy are important to take 
into account when considering the need for national energy 
conservation. The adopted standards are likely to result in 
environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases (``GHGs'') associated with energy 
production and use. DOE conducts an emissions analysis to estimate how 
potential standards may affect these emissions, as discussed in section 
IV.K of this document; the estimated emissions impacts are reported in 
section V.B.6 of this document. DOE also estimates the economic value 
of emissions reductions resulting from the considered TSLs, as 
discussed in section IV.L this document.
g. Other Factors
    In determining whether an energy conservation standard is 
economically justified, DOE may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant 
information regarding economic justification that does not fit into the 
other categories described previously, DOE could consider such 
information under ``other factors.''
2. Rebuttable Presumption
    EPCA creates a rebuttable presumption that an energy conservation 
standard is economically justified if the additional cost to the 
equipment that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. (42 U.S.C. 6316(a); 
42 U.S.C. 6295(o)(2)(B)(iii)) DOE's LCC and PBP analyses generate 
values used to calculate the effect potential amended energy 
conservation standards would have on the payback period for consumers. 
These analyses include, but are not limited to, the 3-year payback 
period contemplated under the rebuttable-presumption test. In addition, 
DOE routinely conducts an economic analysis that considers the full 
range of impacts to consumers, manufacturers, the Nation, and the 
environment, as required under 42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i). The results of this analysis serve as the basis for 
DOE's evaluation of the economic justification for a potential standard 
level (thereby supporting or rebutting the results of any preliminary 
determination of economic justification). The rebuttable presumption 
payback calculation is discussed in section IV.F of this final rule.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
rulemaking with regard to DPPP motors. Separate subsections address 
each component of DOE's analyses.
    DOE used several analytical tools to estimate the impact of the 
standards considered in this document. The first tool is a spreadsheet 
that calculates the LCC savings and PBP of potential amended or new 
energy conservation standards. The national impacts analysis uses a 
second spreadsheet set that provides shipments projections and 
calculates national energy savings and net present value of total 
consumer costs and savings expected to result from potential energy 
conservation standards. DOE uses the third spreadsheet tool, the 
Government Regulatory Impact Model (``GRIM''), to assess manufacturer 
impacts of potential standards. These three spreadsheet tools are 
available on the DOE website for this rulemaking: www.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=76. 
Additionally, DOE used output from the latest version of the Energy 
Information Administration's (``EIA's'') Annual Energy Outlook 
(``AEO'') for the emissions and utility impact analyses.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the products 
concerned, including the purpose of the products, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the products. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly available 
information. The subjects addressed in the market and technology 
assessment for this rulemaking include (1) a determination of the scope 
of the rulemaking and product classes, (2) manufacturers and industry 
structure, (3) existing efficiency programs, (4) shipments information, 
(5) market and industry trends, and (6) technologies or design options 
that could improve the energy efficiency of DPPP motors. The key 
findings of DOE's market assessment are summarized in the following 
sections. See chapter 3 of the final rule TSD for further discussion of 
the market and technology assessment.
1. Scope of Coverage and Definitions
    This document covers equipment meeting the definition of a DPPP 
motor as defined in 10 CFR 431.483 and the scope specified in 10 CFR 
431.481(b). Specifically, the scope covers DPPP motors with a THP of 
less than or equal to 5, but does not apply to: (i) DPPP motors that 
are polyphase motors capable of operating without a drive and 
distributed in commerce without a drive that converts single-phase 
power to polyphase power; (ii) waterfall pump motors; (iii) rigid 
electric spa pump motors; (iv) storable electric spa pump motors; (v) 
integral cartridge-filter pool

[[Page 66982]]

pump motors; and (vi) integral sand-filter pool pump motors.\39\ The 
scope includes DPPP motors regardless of how the equipment is sold; 
i.e., incorporated in a DPPP or sold separately. The DPPP motors in the 
scope of this rule are used primarily in the residential sector and 
light commercial applications, in self-priming pool filter pumps 
(typically used in inground pools), non-self-priming pool filter pumps 
(typically used in above-ground pools), and pressure cleaner booster 
pumps (typically used for pressure-side pool cleaner applications).
---------------------------------------------------------------------------

    \39\ These terms are defined in UL 1004-10:2020, which is 
incorporated by reference in DOE's test procedure at 10 CFR 431.484. 
In this NOPR, DOE is proposing to reference the latest version of 
the UL standard, UL 1004-10:2022; see discussion in section III.A.1 
of this document.
---------------------------------------------------------------------------

    DOE received some comments on scope and definitions. PHTA and NEMA 
commented that storable pools use non-integral pumps, which are 
certified to DPPP, but the current direct motor replacements are not 
variable-speed capable per what the NOPR would require. PHTA and NEMA 
stated that the replacement motors made for this type of pool are 
motors integrated with the control unit, and that these motors are 
specific to a set pump for the storable pool and cannot be used in 
other applications, as there is no way to (dis)connect them. PHTA and 
NEMA further stated that these pools are purchased in retail stores, 
and based on input from two manufacturers, have an average retail price 
slightly over $400. Accordingly, PHTA and NEMA recommended that DOE 
consider exempting this specific type of motor based on application and 
obtain additional manufacturer information about this specific product 
related to the current market, shipments, and pricing for this type of 
pool, and to consider the limited use of replacement motors. (PHTA and 
NEMA, No. 92 at p. 5)
    DPPP motors in scope are those electric motors identified in 
sections 1.2, 1.3, and 1.4 of UL 1004-10:2022. 10 CFR 431.481(n), as 
updated in this final rule. DOE notes that the DPPP definition 
comprises self-priming pool filter pumps, non-self-priming pool filter 
pumps, waterfall pumps, PCBPs, integral sand-filter pool pumps, 
integral-cartridge filter pool pumps, storable electric spa pumps, and 
rigid electric spa pumps. 10 CFR 431.462. In addition, section 1.4 of 
UL 1004-10:2022 specifically excludes DPPP motors that are polyphase 
motors capable of operating without a drive and distributed in commerce 
without a drive that converts single-phase power to polyphase power, 
waterfall pump motors, rigid electric spa pump motors, storable 
electric spa pump motors, integral cartridge-filter pool pump motors, 
and integral sand-filter pool pump motors. As such, the example 
application provided by PHTA and NEMA would need to meet the definition 
of DPPP and not be one of the aforementioned exclusions to be 
considered within the scope of DPPP motor.
    As previously noted, storable electric spa pump motors are 
specifically excluded from the scope of this rulemaking. Section 2 of 
UL 1004-10:2022 defines storable electric spa pump motor as a DPPP 
motor that is a component of a storable electric spa pump as defined 10 
CFR 431.462, subpart Y, Pumps. Storable electric spa pumps are defined 
to include an integral heater and an integral air pump. 10 CFR 431.462. 
The example application provided by PHTA and NEMA specifically stated 
that it has a non-integral pump. However, PHTA and NEMA did not provide 
details on what type of DPPP the example would be considered to be.
    As such, DOE attempted to determine what type of product PHTA and 
NEMA were referring to and reviewed manufacturer data and specification 
sheets to confirm what type of DPPP the example could be considered to 
be. Based on DOE's review, DOE did not identify any DPPPs for storable 
pumps that would not be applicable to variable-speed motors as defined 
due to their integration with controls and other components, and not 
already be excluded for other reasons. Specifically, of the examples 
DOE was able to find of variable-speed motors integrated with 
controllers, they were applicable to integral-cartridge or integral-
sand filter pumps, both of which are already excluded from DPPP motor 
scope. Otherwise, DOE also reviewed an outlier filtration system for 
storable pools, but could not identify any apparent integration of the 
DPPP motor with controls, and there was also no indication that it 
would not be able to be replaceable with a variable-speed option being 
considered in this rulemaking. As such, DOE could not definitively 
conclude that there is a need for the exclusion recommended by PHTA and 
NEMA, and therefore maintains the scope from the June 2022 NOPR.
    Regarding the variable-speed definition, CEC and NYSERDA 
recommended that DOE update the definition to align with the definition 
used in the California Code of Regulations, Title 20, section 
1602(g)(4), instead of the current definition based on UL 1004-10:2022. 
CEC and NYSERDA stated that with the current definition, at minimum, 
only four operating speeds are required to meet the definition, whereas 
the California code specifies ``operating at a variety of user-
determined speeds,'' which CEC and NYSERDA suggested described a truly 
variable-speed motor and aligns with how variable-speed is understood 
by consumers. CEC and NYSERDA noted that they were unaware of any DPPP 
motors that meet the current definition of variable speed, but do not 
meet the Title 20 California definition. However, CED and NYSERDA also 
commented that if such a motor exists, having only four operating 
speeds would constrain operational flexibility and lead to non-optimal 
operation and unnecessary electricity consumption. CEC and NYSERDA 
stated that allowing for the potential introduction of less energy 
efficient ``variable-speed'' motors is unnecessary and might jeopardize 
some of the energy savings associated with this proposed rule. (CEC and 
NYSERDA, No. 94 at pp. 3-4)
    DOE incorporated by reference UL 1004-10:2020, which includes a 
definition of variable speed in the July 2021 Final Rule. 86 FR 40765, 
40769-40770. UL 1004-10 is an industry standard specific to DPPP motors 
and has been used by industry since 2019. In this final rule, DOE is 
not considering any changes in scope; rather, this rulemaking is 
finalizing standards based on the scope and definitions established in 
the July 2021 Final Rule, and which are currently in 10 CFR 431.481. 
Further, as noted by commenters, there are no DPPP motors that meet the 
current definition of variable speed but do not meet the Title 20 
California definition. As such, if there is any discrepancy in the 
future, DOE may consider this issue in a future rulemaking.
    In the June 2022 NOPR, DOE also proposed to update the UL 1004-10 
reference to the latest version of the industry standard, from UL 1004-
10:2020 to UL 1004-10:2022, in sections 10 CFR 431.481(b), 10 CFR 
431.482(c)(1), and 10 CFR 431.483. 87 FR 37122, 37133-37134. DOE 
concluded that the only update was the addition of a glossary term for 
``factory default setting'' in section 2.7A, which did not change the 
content and requirements of UL 1004-10:2020, but only provided a 
clarification regarding the factory default setting as it applies to 
the industry standard. Id. Further, DOE also proposed product-specific 
enforcement requirements at 10 CFR 429.134 that require DPPP motors be 
tested in accordance with UL 1004-

[[Page 66983]]

10:2022 to verify variable-speed capability and applicable freeze 
protection design requirements. 87 FR 37122, 37131.
    In response, PHTA and NEMA supported the DOE's decision to update 
from the 2020 to the 2022 version of the UL 1004-10 Standard. (PHTA and 
NEMA, No. 92 at p. 10) In this final rule, DOE is incorporating by 
reference the latest version of the UL standard, UL 1004-10:2022 to be 
consistent with industry practice.
    Separately, the Joint Advocates supported the proposed product-
specific enforcement provisions because they will provide clarity 
regarding how DOE would determine whether a DPPP motor complies with 
the requirements regarding variable-speed capability and freeze 
protection design. (Joint Advocates, No. 97 at p. 2) As such, DOE is 
also finalizing the proposed product-specific enforcement requirements 
at 10 CFR 429.134.
2. Market Review
    In the June 2022 NOPR, to review the current market of DPPP motors 
incorporated in DPPPs, DOE relied on information from the DOE 
Compliance and Certification Database, the CEC, and the ENERGY STAR 
program. (``2021 DPPP Database'') To supplement the market review, DOE 
also reviewed general motor catalog data from 2020 and created a 
database that contained information regarding motor speed-control, 
topology, THP, motor application, and full-load efficiency (``2020 
Motor Database''). To make the two databases more comparable, DOE 
filtered the 2020 Motor Database to analyze only motors used in DPPP 
applications. 87 FR 37122, 37134.
    DOE received a number of comments regarding the data that were used 
for the market analysis. Pentair commented that a lot has changed in 
the past 7 years and DOE should consider the latest data versus data 
used for the DPPP rule in 2015. (Pentair, No. 90 at p. 1) Hayward 
commented that DOE should update its information on the current market. 
Specifically, Hayward noted that it has stopped selling any pumps that 
were not compliant with the minimum WEF requirements and modified other 
pumps that were marginal in performance. In addition, Hayward noted 
that variable-speed pumps have continued to gain market share and 
therefore would provide a different baseline. (Hayward, No. 93 at p. 2) 
PHTA and NEMA commented that DOE relied heavily on the analysis 
performed during the 2017 DPPP DFR and recommended that DOE conduct 
interviews to obtain current market information, pricing, and shipments 
data. (PHTA and NEMA, No. 92 at p. 2) Regal commented that it agrees 
with PHTA and NEMA's comments that DOE should consider conducting 
additional interviews and analyses to better understand current market 
offerings, pricing, and shipments. (Regal, No. 98 at p. 1) PHTA 
commented that using 2015 market data is not accurate because the DPPP 
market has substantially changed since then and the 2015 data is 
invalid in its application to the DPPPM analysis. PHTA provided data 
showing that nearly 60 percent of pool pump listings were non-compliant 
with the 2017 DPPP rule and had to be modified or removed by the July 
19, 2021 compliance date. (PHTA, No. 100 at p. 2) On the other hand, 
CEC and NYSERDA stated that DOE's analysis is robust and appropriately 
representative. (CEC and NYSERDA, No. 94 at p. 3)
    First, DOE notes that DOE did consider the latest DPPPM market data 
available for the analysis conducted in the June 2022 NOPR, as 
previously discussed. In addition, for this final rule, DOE updated the 
market review using current information from the DOE Compliance and 
Certification Database, the CEC, and the ENERGY STAR program. (``2022 
DPPP Database'') DOE supplemented this review with information from 
general motor catalogs surveyed in 2022; these motor catalogs contained 
information regarding motor THP, topology, full-load efficiency, pole 
configuration, and speed-control. DOE then analyzed the range of 
efficiencies offered at a given THP, topology, and pole configuration 
as well as the average efficiency of that subset of motors. DOE found 
that the average and range of efficiency offered for a given THP, 
topology, and pole configuration were not significantly different than 
what was observed in the data provided by manufacturers for the January 
2017 Direct Final Rule. Based on the similar efficiencies being 
offered, DOE concluded that the technology used to meet each efficiency 
level has not substantially changed since the analysis for the January 
2017 Direct Final Rule.
    DOE notes that the shipments efficiency distribution are based on a 
review of the 2022 DPPP Database and that this updated database 
captures the changes to the DPPP market that have occurred since 2017, 
including those changes due to the January 2017 Direct Final Rule (See 
section IV.F.8 of this document for more details). For details on how 
DOE accounted for the DPPP motor price changes since the January 2017 
Direct Final Rule, see section IV.C.2 of this document. DOE also notes 
that it had conducted manufacturer interviews as part of the January 
2017 Direct Final Rule and incorporated the updated manufacturer 
feedback in its analysis. DOE also conducted DPPP motor manufacturer 
interviews as part of the June 2022 NOPR, as discussed in the 
manufacturer impact analysis, and incorporated feedback to estimate the 
manufacturer impacts of setting variable-speed requirements as 
standards. 87 FR 37122, 37154. As such, DOE concluded that additional 
manufacturer interviews were not needed since DOE performed interviews, 
and already considered recent market offering, pricing, and shipments 
information in this final rule.
3. Equipment Classes
    When evaluating and establishing energy conservation standards, DOE 
shall establish separate standards for a group of covered products 
(i.e., establish a separate equipment class) if DOE determines that 
separate standards are justified based on the type of energy used, or 
if DOE determines that a product's capacity or other performance-
related feature, which other products within such type (or class) do 
not have, justifies a different standard. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(q)) In making a determination whether a performance-related 
feature justifies a different standard, DOE must consider such factors 
as the utility of the feature to the consumer and other factors DOE 
determines are appropriate. (Id.)
    In the June 2022 NOPR, DOE proposed to establish equipment classes 
for DPPP motors based on THP. DOE proposed an extra-small-size 
equipment class corresponding to motors with a THP less than 0.5 THP, a 
small-size equipment class corresponding to motors with a total 
horsepower rating greater than or equal to 0.5 THP but less than 1.15 
THP, and a standard-size equipment class corresponding to motors with a 
THP greater than or equal to 1.15 THP and less than or equal to 5 THP. 
87 FR 37122, 37130.
    In response to the June 2022 NOPR, DOE received a number of 
comments regarding equipment classes. PHTA and NEMA recommended that 
DOE analyze DPPP motors based on equipment classes considered in the 
DPPP rule. PHTA and NEMA commented that it is critical to differentiate 
by application, not just size, to really determine what is or is not 
cost-effective. As such, PHTA and NEMA commented that if the analysis 
was separated based on PCBP self-priming and non-self-priming, it would 
show that not all the current proposed requirements were cost-
effective. Specifically, PHTA and NEMA

[[Page 66984]]

stated that when looking at PCBP as a separate equipment class, a 
variable-speed requirement is not cost-effective (PHTA and NEMA, No. 92 
at pp. 4-5) In addition, PHTA and NEMA commented that DOE should break 
down the 0.5-1.15 THP and analyze the following additional THP ranges: 
0.5 < 0.75 THP; 0.75 < 1 THP; 1 > 1.15 THP based on the assessment of 
available products and previously recommended THP disaggregation. (PHTA 
and NEMA, No. 92 at p. 5; PHTA, No. 100 at p. 3) Further, PHTA and NEMA 
commented that breaking down the 0.5-1.15 THP into smaller categories 
for an analysis would provide a truer picture of cost-effectiveness 
when combined with breaking out PCBP self-priming and non-self-priming 
applications. PHTA and NEMA stated that to do otherwise will cause 
market confusion and unintended consequences with non-compliant 
products being distributed. For example, PHTA and NEMA commented that 
imported pump products with THP ratings between 0.50 and 1.14 can meet 
the DPPP rule and bypass the DPPP motor proposal, which will negate the 
DPPP motor proposed rule and not deliver the intended energy savings. 
(PHTA and NEMA, No. 92 at p. 10)
    Hayward stated that equipment class should be disaggregated by pump 
size and application and noted that THP misrepresents the overall 
effect and impact of the rule. Hayward also supported PHTA and NEMA's 
recommendations on disaggregation. (Hayward, No. 93 at p. 2) Fluidra 
recommended that equipment be disaggregated not only by THP, but also 
by application type. Specifically, Fluidra commented that it was 
concerned that PCBPs and pool filtration pumps were combined into the 
same equipment class. (Fluidra, No. 91 at p. 1)
    Waterway Plastic commented that in the negotiations that resulted 
in the January 2017 Direct Final Rule, there was consideration of a 
separate category for non-self-priming pool pumps that are used in 
above-ground pool pump applications, that range from 0.75 to 1 THP, and 
are typically two-speed or single-speed pumps. Accordingly, they stated 
that the DPPPM rule would not consider this separate category of DPPPs, 
which allowed for single- or two-speed DPPPMs to be used to meet the 
ultimate WEF standard, and were concerned on how the DPPPM rulemaking 
would overwrite the conclusions from the January 2017 Direct Final 
Rule. (Waterway Plastic, Public Meeting Transcript, No. 88 at pp. 16-
17) Dose also commented asking if DOE considered breaking the small-
size THP range into subcategories after they suggested the favorable 
results would be from the higher THPs. (Dose, Public Meeting 
Transcript, No. 88 at pp. 39-40)
    DOE notes that this rule concerns DPPP motors, not DPPPs. Further, 
DOE notes that the scope includes DPPP motors regardless of how the 
equipment is sold (i.e., incorporated in a DPPP or sold separately). 
Accordingly, imported pump products that include a DPPP motor would be 
subject to the DPPP motor standard as well.
    When considering equipment classes, DOE determines whether separate 
standards are justified based on the type of energy used for the 
equipment in question (which in this rulemaking is DPPP motors only), 
or if a DPPP motor's capacity or other DPPPM performance-related 
feature justifies a different standard. Manufacturers of covered 
equipment must use the Federal test procedure as the basis for 
certifying to DOE that their equipment complies with the applicable 
energy conservation standards adopted pursuant to EPCA (42 U.S.C. 
6316(a); 42 U.S.C. 6295(s)). The metric for DPPP motors based on the 
DOE test procedure is full-load efficiency (10 CFR 431.484(b)), and 
full-load efficiency does not take into consideration the ultimate 
application of the DPPP motor in a DPPP and the motor is tested without 
an associated DPPP. The DPPP motors in this rule also consume the same 
type of energy. Further, DOE notes that there are no physical or 
technological distinguishing factors in a DPPP motor that could be used 
to identify a particular end-use DPPP application (e.g., PCBP, self-
priming, non-self-priming). If sized correctly, a given DPPP motor 
could serve any of the DPPP applications discussed in this rulemaking. 
The ranges of motor THP that serve each application overlap and 
preclude DOE from setting equipment classes using the motor THP to 
distinguish each application. Accordingly, DOE is not considering DPPP 
application in addition to motor THP when setting equipment classes and 
energy conservation standards for this final rule.
    In the June 2022 NOPR, DOE discussed that full-load efficiency 
generally correlates with motor horsepower. DOE explained motor 
horsepower dictates the maximum load that a motor can drive, which 
means that a motor's rated horsepower can influence and limit the end 
use applications where that motor can be used, which in this case is 
dedicated purpose pool pumps. Horsepower is a critical performance 
attribute of a DPPP motor, and since horsepower has a direct 
relationship with full load efficiency and consumer utility, used this 
element as a criterion for distinguishing among equipment classes. 87 
FR 37122, 37134. In determining the proposed equipment classes, DOE 
considered how motor total horsepower can be used to decide whether 
separate standards are justified based on the utility of the DPPP 
motor. Accordingly, DOE first justified a utility argument for the 0.5 
THP cut-off based on maximum efficiency potential in non-self-priming 
pool filter pumps (i.e., two-speed or variable-speed motors below 0.5 
THP would provide inadequate flow to the pool pump). Finally, DOE 
justified a utility argument for the 1.15 THP cut-off based on how 
almost all DPPP motors greater than or equal to 1.15 THP are primarily 
used in standard-size self-priming pool filter pumps, while pool pump 
motors below 1.15 THP are typically found in small-size, self-priming 
pool filter pumps, non-self-priming pool filter pumps, and PCBPs. 87 FR 
37122, 37135.
    To review the recommendation from PHTA and NEMA to further break 
down the 0.5-1.15 THP range (i.e., small-size equipment class), DOE 
analyzed the 2022 DPPP Database to determine whether there was any 
other utility argument to consider. DOE identified DPPP motors used in 
PCBP applications primarily in the 0.75-1.15 DPPP motor THP range; 
however, PCBPs in that range were only 4 percent of the total model 
count (96 percent of the models were either self-priming or non-self-
priming). Further, DPPP motors in self-priming pool filter pumps and 
non-self-priming pool filter pumps were identified throughout the 
small-size equipment class THP range. Accordingly, there was no THP 
range within the small-size equipment class that clearly illustrated 
that only PCBP motors would be used and therefore have a specific 
utility, and so, DOE was unable to determine a clear utility argument 
that would allow for the small-size equipment class to be segregated 
further. Therefore, because DOE is not considering DPPP application in 
addition to motor total horsepower for creating equipment classes, DOE 
is maintaining the June 2022 NOPR proposed equipment classes in this 
final rule.
    Fluidra recommended including a definition for a PCBP DPPP motor as 
``a motor used for a pressure cleaner booster pump'', and a definition 
for pressure cleaner booster pump as ``an end suction, dry rotor pump 
designed and marketed for pressure-side pool cleaner applications, and 
which may be

[[Page 66985]]

UL listed under ANSI/UL 1081-2016. (Fluidra, No. 91 at p. 2) PHTA and 
NEMA recommended that DOE define a PCBP DPPP motor as ``an electric 
motor that is single phase or poly phase and is designed and/or 
marketed for use on pressure cleaner booster pumps, as defined in 10 
CFR 431.462.'' PHTA and NEMA commented that this definition aligns with 
the definitions of a DPPP motor and PCBP, both of which define the 
respective equipment based on the design and marketed purpose of the 
equipment. (PHTA and NEMA, No. 92 at pp. 4-5) DOE understands that the 
definitions provided by the commenters were intended for distinguishing 
PCBP within the equipment class structure. As discussed previously, DOE 
is not separating equipment classes based on application. As such, DOE 
does not need to incorporate a definition for a PCBP motor and is 
therefore not including a definition in this final rule.
4. Technology Options
    In the June 2022 NOPR market analysis and technology assessment, 
DOE identified several technology options initially determined to 
improve the efficiency of DPPP motors. Specifically, DOE stated that 
the efficiency of a DPPP motor is dependent on motor topology, 
capacity, and operating speed. Because DOE proposed to delineate 
equipment classes based on motor capacity (i.e., motor horsepower), DOE 
considered motor topology and operating speed as technology options. 87 
FR 37122, 37135-37136.
    For motor topology, DOE considered AC induction motors and 
permanent magnet DPPP motors. Within AC induction motors, DOE 
identified six categories of motors, including shaded-pole, split-
phase, capacitor-start (capacitor-start induction-run ``CSIR'' and 
capacitor-start capacitor-run ``CSCR''), permanent-split capacitor 
(``PSC''), and polyphase. 87 FR 37122, 37135-37136. For operating 
speed, DOE considered single-speed, multi-speed, and variable-speed 
DPPP motors. Single-speed motors can operate at one predefined speed, 
and therefore the associated pool pump can provide only a single flow 
rate in any given pool system. Two-speed motors can be sized so that 
high-flow functions like pool cleaning are effective at full-speed 
operation and low-flow tasks like filtration can be completed at low-
speed operation. Multi-speed motors function similarly to two-speed 
motors, but provide additional flexibility. Finally, variable-speed 
motors can provide greater energy savings than two-speed or multi-speed 
motors due to the ability to program these motors to operate at user-
defined speed settings. 87 FR 37122, 37136. Variable-speed motors can 
also offer non-energy-saving benefits like reduced pool system wear and 
reduced noise levels during operation, both due to the reduced amount 
of water flow during pumping. DOE requested comment on the technologies 
considered for higher DPPP motor efficiency. Id.
    PHTA and NEMA commented that to meet the current DPPP rulemaking, 
synchronous motor technologies with a variable frequency drive are 
already being utilized to meet system efficiency requirements. As such, 
PHTA and NEMA suggested that small additional increments in already 
implemented synchronous motor efficiency will have minimal impact on 
system efficiency, but significant impact on costs. (PHTA and NEMA, No. 
92 at p. 10) DOE notes that this rule is specifically regarding the 
DPPP motor, not DPPP, and therefore technology options considered are 
with regards to DPPP motors and not the whole DPPP system. DOE also 
understands that meeting the current DPPP WEF standards would not 
require synchronous motor technologies for the range of DPPP motor 
equipment classes being considered. Specifically, in the October 2020 
NOPR, DOE specified that only standard-size self-priming pool filter 
pumps, which are subject to the DOE DPPP energy conservation standards, 
would likely require a variable-speed control motor. 85 FR 62816, 
62824. DOE noted that this generally reflects DPPP motors with a THP 
greater than or equal to 1.15. Id. As such, there are potential savings 
to be considered for the full scope of DPPP motors being considered, 
and as discussed previously, the synchronous motor technology option 
allows for multiple operating speeds, which can provide energy savings. 
Finally, DOE included the incremental costs for requiring variable 
speed as part of the engineering analysis, which is discussed further 
in section IV.C.2 of this document.
    Similarly, PHTA and NEMA commented that variable-speed fractional 
HP pumps cannot provide minimum flow at required lower speeds. (PHTA 
and NEMA, No. 100 at p. 3) DOE notes that variable-speed motors are 
only considered as a design option for DPPP motors where the associated 
pump can provide adequate flow at lower speeds, and that the 
representative units analyzed in the January 2017 Direct Final Rule 
contained fractional THP variable-speed motors. See Table 5.6.5 of the 
January 2017 Direct Final Rule TSD, where a .44 hhp pump is driven by a 
.75 THP variable-speed motor and provides adequate flow.
    Separately, Fluidra, PHTA, and NEMA suggested that the operating 
window of a PCBP in practical application is limited to an approximate 
motor speed of 2,900 RPM-3,450 RPM (max speed); runs on a timer for 2-
2.5 hours a day at a single operating speed; and, once set, is 
typically not further adjusted for speed like one would for a 
filtration pump. (Fluidra, No. 101 at p. 1; PHTA and NEMA, No. 100 at 
p. 3) Accordingly, Fluidra and PHTA stated that the definition for a 
variable-speed control DPPP motor does not make practical sense in a 
PCBP application, and therefore recommended separating PCBP 
requirements from other DPPP applications. (Fluidra, No. 101 at pp. 1-
3; PHTA, No. 100 at pp. 2-3) DOE notes that the definition for variable 
speed comes from UL 1004-10:2020, which is an industry standard DOE 
incorporated by reference in the July 2021 Final Rule based on 
recommendations from several stakeholders. 86 FR 40765, 40769-40770. 
(July 29, 2021). Further, the scope of UL 1004-10:2020 does not 
specifically exclude PCBP applications for DPPP motors. See section 1 
of UL 1004-10:2020. As such, DOE concludes that the definitions from UL 
1004-10:2020 are applicable to all DPPP motors in scope, including 
PCBPs, and there is no technical reasoning to exclude application to 
PCBPs.
    Separately, in the January 2017 Direct Final Rule, DOE also 
considered variable-speed motors for PCBPs (82 FR 5650, 5684), as the 
WEF metric accounts for energy savings available from reducing the pump 
speed to reach the minimum required pressure of 60 feet. See section 
3.6.2 of the January 2017 Direct Final Rule TSD. While the test 
procedure specifies only one load point for testing PCBPs (see Table 1 
of appendix C to subpart Y of 10 CFR part 431), the test procedure does 
not specify that PCBPs are tested at maximum speed; rather, it 
specifies that PCBPs are tested at the lowest speed that can achieve 60 
feet of head at the 10 gpm test condition. Therefore, a PCBP may be 
able to achieve a higher (more beneficial) WEF score if it has the 
ability to operate at reduced speeds, and as such, the definition for a 
variable-speed control DPPP motor would still make practical sense in 
terms of examining energy savings potential.
    Finally, as part of the January 2017 Direct Final Rule, the DPPP 
Working Group discussed that PCBPs on the market supply between 100 and 
125 feet of head at the pump outlet at the test condition of 10 gpm, 
but these pumps provide more pressure than the cleaner

[[Page 66986]]

requires because the pump must overcome head losses imposed by piping, 
couplings, and hoses between the pump and the cleaner. In pool 
installations with high head loss, these pumps may deliver the 
recommended amount of head to the cleaner when operating at maximum 
speed with no flow restriction; in pool installations with low head 
loss, these pumps may supply more head than is needed to drive the 
pressure cleaner. As such, the DPPP Working Group discussed how, in 
installations with low head loss, energy could be conserved by 
operating the pressure cleaner booster pump at a reduced speed rather 
than by releasing pressure that was supplied unnecessarily. Therefore, 
there is benefit to variable-speed control for PCBP applications. See 
section 3.6.2.2 of the January 2017 Direct Final Rule TSD.
    NEEA recommended that DOE include non-proprietary, standardized 
connectivity design requirements for DPPP motors consistent with the 
voluntary requirements in the ENERGY STAR Product Specification for 
Pool Pumps Version 3.1. The ENERGY STAR specification presents 
connected product criteria for a connected pool pump system (``CPPS''). 
As part of the CPPS criteria, ENERGY STAR requires communication and 
demand response functionality. Specifically, ENERGY STAR requires that 
the CPPS shall meet the communication and equipment performance 
standards for OpenADR 2.0 and/or CTA-2045. NEEA commented that this 
requirement to use these non-proprietary communication protocols and 
hardware standards ensures there is an open-source platform that allows 
demand response service providers and utilities to interface with as 
many demand response customers as possible. NEEA noted that the DOE 
DPPP motor rule would benefit from this additional demand response 
design requirement because the DPPP motor serves as the energy-
consuming component of the pool pump. However, NEEA further recommended 
that this requirement additionally be applied to the pool pumps 
themselves, so that the pump controller can provide interface for 
response signals. Finally, NEEA noted that connectivity design 
requirements would provide the greatest benefits to two-speed or 
variable-speed motors, and that DOE should assess the additional cost 
requirements for integrating connectivity requirements into DPPP motors 
with the multitude of efficiency and grid benefits that grid-connected 
pool pumps can provide. NEEA also provided an example of a case study 
by Electric Power Research Institute,\40\ which showed connected pool 
pumps systems can provide significant grid benefits. (NEEA, No. 99 at 
pp. 1-2)
---------------------------------------------------------------------------

    \40\ Performance Test Results: CTA-2045 Variable Speed Pool 
Pumps, https://www.bpa.gov/-/media/Aep/energy-efficiency/emerging-technologies/ET-Documents/NREL-testing-CTA-2045-VariableSpeedPoolPump-Nov2017-000000003002011749.pdf.
---------------------------------------------------------------------------

    The subject of this final rule is DPPP motors, which are within the 
scope of electric motors. DOE notes that these potential design 
criteria described by NEEA would not directly impact the measured 
efficiency of DPPP motors per the DOE test procedure, but could serve 
an important purpose for grid flexibility generally, when used in 
conjunction with the DPPP. For this final rule, DOE is only considering 
technology options that can be directly implemented as part of the DPPP 
motor to improve measured efficiency. As such, an additional 
connectivity design requirement would be beyond the scope of this final 
rule and therefore is not being considered at this time.

B. Screening Analysis

    DOE uses the following four screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking:
    (1) Technological feasibility. Technologies that are not 
incorporated in commercial products or in commercially viable, existing 
prototypes will not be considered further.
    (2) Practicability to manufacture, install, and service. If it is 
determined that mass production of a technology in commercial products 
and reliable installation and servicing of the technology could not be 
achieved on the scale necessary to serve the relevant market at the 
time of the projected compliance date of the standard, then that 
technology will not be considered further.
    (3) Impacts on product utility. If a technology is determined to 
have a significant adverse impact on the utility of the product to 
subgroups of consumers, or results in the unavailability of any covered 
product type with performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as products generally available in the United States at the time, 
it will not be considered further.
    (4) Safety of technologies. If it is determined that a technology 
would have significant adverse impacts on health or safety, it will not 
be considered further.
    (5) Unique-pathway proprietary technologies. If a technology has 
proprietary protection and represents a unique pathway to achieving a 
given EL, it will not be considered further, due to the potential for 
monopolistic concerns. 10 CFR 431.4; 10 CFR part 430, subpart C, 
appendix A, sections 6(c)(3) and 7(b).
    In sum, if DOE determines that a technology, or a combination of 
technologies, fails to meet one or more of the listed five criteria, it 
will be excluded from further consideration in the engineering 
analysis. The reasons for eliminating any technology are discussed in 
the following sections.
    In the June 2022 NOPR, DOE determined that all the technology 
options considered continue to be technologically feasible because they 
are being used or have previously been used in commercially available 
products or working prototypes. DOE also found that the technology 
options continue to meet the other screening criteria (i.e., 
practicable to manufacture, install, and service; do not result in 
adverse impacts on consumer utility, product availability, health, or 
safety; and are not unique-pathway proprietary technologies). 87 FR 
37122, 37137. As such, DOE screened-in all technology options 
considered.
    DOE did not receive any comments regarding the screening analysis. 
As such, through a review of each technology, similar to the 
conclusions from the June 2022 NOPR, DOE concludes that all of the 
identified technologies listed in section IV.A.4 of this document met 
all five screening criteria to be examined further as design options in 
DOE's final rule analysis.

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of DPPP motors. There are 
two elements to consider in the engineering analysis: the selection of 
efficiency levels to analyze (i.e., the ``efficiency analysis'') and 
the determination of product cost at each efficiency level (i.e., the 
``cost analysis''). In determining the performance of higher-efficiency 
equipment, DOE considers technologies and design option combinations 
not eliminated by the screening analysis. For each equipment class, DOE 
estimates the baseline cost, as well as the incremental cost for the 
equipment at efficiency levels above the baseline. The output of the 
engineering analysis is a set of cost-efficiency ``curves'' that are 
used in downstream analyses (i.e., the LCC and PBP analyses and the 
NIA).

[[Page 66987]]

1. Efficiency Analysis
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing products (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). Using the design-option approach, the 
efficiency levels established for the analysis are determined through 
detailed engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options that 
have been identified in the technology assessment. DOE may also rely on 
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended 
using the design-option approach to interpolate to define ``gap fill'' 
levels (to bridge large gaps between other identified efficiency 
levels) and/or to extrapolate to the ``max-tech'' level (particularly 
in cases where the ``max-tech'' level exceeds the maximum efficiency 
level currently available on the market).
    In this final rule, DOE applied a combination of the two 
approaches. In line with the January 2017 Direct Final Rule, DOE 
considered three tiers of motor efficiency (low, medium, and high 
efficiency) and design requirements specifically for two-speed, multi-
speed, and variable-speed motors. As discussed in sections IV.A.2 and 
IV.A.4 of this document, the motor technologies applicable to pool pump 
motors analyzed in the January 2017 Direct Final Rule remain relevant 
and applicable in the current DPPP motor market.
a. Representative Units
    In the June 2022 NOPR, DOE opted to use representative units for 
each equipment class for the engineering analysis. The associated motor 
THP of the proposed representative units were consistent with the motor 
THPs provided in Table 5.7.1 of the January 2017 Direct Final Rule TSD, 
with three exceptions: (1) Representative unit 2A was added to 
represent standard-size DPPP motors that are used in small-size self-
priming DPPPs; (2) Representative unit 6 was added to analyze standard-
size DPPP motors used in non-self-priming filter pump applications; and 
(3) Representative unit 7 at 1.125 THP, instead of 1.25 THP was 
considered so as to keep this representative unit in the small-size 
equipment class (EC 2), and to better represent the THP range of motors 
in PCBPs.\41\ 87 FR 37122, 37137-37138. The proposed representative 
units are provided in Table IV.1.
---------------------------------------------------------------------------

    \41\ The Joint Petition noted that almost all motors used in 
pressure cleaner booster pumps have THPs less than 1.15 THP. (Joint 
Petition, No. 14 at p. 8).

        Table IV.1--Representative Units THP and DPPP Application
------------------------------------------------------------------------
    Rep. unit      Equipment class       THP        DPPP application *
------------------------------------------------------------------------
1...............  2 (Small)........         0.75  Self-priming Filter
                                                   Pump, Small-size
                                                   (0.44 hhp).
2...............  3 (Standard).....         1.65  Self-priming Filter
                                                   Pump, Standard-size
                                                   (0.95 hhp).
2A..............  3 (Standard).....         1.65  Self-priming Filter
                                                   Pump, Small-size
                                                   (0.65 hhp).
3...............  3 (Standard).....         3.45  Self-priming Filter
                                                   Pump, Standard-size
                                                   (1.88 hhp).
4...............  1 (Extra-small)..         0.22  Non-Self-priming
                                                   Filter Pump, Extra-
                                                   Small-size (0.09
                                                   hhp).
5...............  2 (Small)........            1  Non-Self-priming
                                                   Filter Pump, Standard-
                                                   size (0.52 hhp).
6...............  3 (Standard).....          1.5  Non-Self-priming
                                                   Filter Pump, Standard-
                                                   size (0.87 hhp).
7...............  2 (Small)........        1.125  Pressure Cleaner
                                                   Booster Pump.
------------------------------------------------------------------------
* For self-priming pumps, the terms small and standard refer to the
  hydraulic horsepower (``hhp''). Small-size designates pool pump
  applications with hydraulic horsepower less than 0.711 hhp, while
  standard-size designates pool pump applications with hydraulic
  horsepower greater than or equal to 0.711 hhp. DOE distinguishes extra-
  small non-self-priming filter pumps (less than 0.13 hhp) and standard-
  size non-self-priming filter pumps (less than 2.5 hhp and greater than
  0.13 hhp).

    In response to the proposal, DOE received a number of comments. 
Fluidra commented that Rep. Unit #4 appears too small and irrelevant 
and may only be used for pump/filter combos or spas, which is out of 
the scope of this regulation. (Fluidra, No. 91 at p. 3) Based on the 
2022 DPPP Database, DOE notes that there are at least 15 non-self-
priming filter pumps having DPPP motors at or less than 0.22 THP. While 
Rep. Unit #4 may be a small segment of the whole DPPPM market (3 
percent; see shipments in Table IV.9), these are DPPP motors that would 
be in scope as they are part of the non-self-priming DPPP motor class. 
For this final rule, DOE specifically included an extra-small-size 
equipment class because DPPP motors in that class have different 
maximum efficiency potential than small- or standard-size equipment 
classes and therefore need to be analyzed separately. As such, DOE 
continues to include Rep. Unit #4 as part of the analysis.
    Fluidra also stated that Rep. Unit #7 only represents single-stage 
booster pumps and not multi-stage, which are typically >1.125 THP and 
significantly higher WEF, and therefore should be reviewed separately. 
(Fluidra, No. 91 at p. 3) PHTA stated that DOE should review the 
improvements made in booster pump hydraulic efficiency and go on to 
note that a multi-stage booster pump can result in a 40-percent higher 
WEF than a single-stage booster pump. (PHTA, No. 100 at p. 3) DOE notes 
that representative units exemplify typical capacities in each 
equipment class and are used to quantify the manufacturing costs and 
the energy savings potential for each equipment class. As discussed 
previously, almost all DPPP motors used in PCBPs have THPs less than 
1.15 THP. DOE also confirmed the same in the 2022 DPPP Database, with 
PCBP applications having DPPPMs ranging from 0.75 to 1.13 THP, with the 
majority of the models in the 1.1 to 1.13 THP range. Accordingly, the 
chosen DPPP motor representative unit for the PCBP application, Rep. 
Unit #7 at 1.125 THP, was considered to represent the full THP range of 
motors in PCBPs, which

[[Page 66988]]

are primarily in the small-size equipment class.
    The pump performance curve associated with the DPPP motor Rep. Unit 
#7 and used in the analysis was based on the pump performance curve 
used in the January 2017 Direct Final Rule. Section 5.8.2.3 of the 
January 2017 Direct Final Rule TSD specifically notes that DOE 
developed the equations by aggregating pump test data that were 
submitted by manufacturers, and does not specify that the test data was 
only for single-stage pumps. In reviewing the underlying data that were 
used to develop the equations, DOE can confirm that the selection of a 
representative PCBP unit and its corresponding performance 
characteristics was informed by the presence of more efficient multi-
stage pumps available on the market to the extent they represent PCBP 
units with the exceptionally high hydraulic efficiency. However, DOE 
believed that these motors do not comprise as significant of a share of 
the market as single-stage pumps. Consequently, the ultimate 
representative unit and performance characteristics more closely 
resembled the single-stage PCBPs.
    PHTA and NEMA commented that PCBP motors at or above 1.15 THP were 
not included in the DOE analysis, and if DOE intends to regulate these 
products, PHTA and NEMA requested that DOE update the analysis. (PHTA 
and NEMA, No. 92 at p. 5) Further, in a separate comment, PHTA restated 
the need for analysis of PCBP motors above 1.15 THP. (PHTA, No. 100 at 
p. 2) Based on the 2022 DPPP Database, DOE identifies only one DPPP 
motor used in a PCBP application that would be above the 1.15 THP 
threshold. Further, based on the 2022 DPPP Database, DOE notes that the 
majority of DPPP motors above 1.15 THP are self-priming DPPP 
applications (74 percent based on model count), with non-self-priming 
DPPP applications being the next highest percentage (26 percent based 
on model count). DOE generally selects representative units based on 
the quantity of motor models available within an equipment class. 
Considering that the number of DPPP motors above 1.15 THP with a PCBP 
application is not significant, and that most DPPP motors with a PCBP 
application are in the small-size equipment class, DOE continues to 
consider Rep. Unit #7 only for PCBP applications.
b. Baseline Efficiency
    For each product/equipment class, DOE generally selects a baseline 
model as a reference point for each class and measures changes 
resulting from potential energy conservation standards against the 
baseline. The baseline model in each product/equipment class represents 
the characteristics of a product/equipment typical of that class (e.g., 
capacity, physical size). Generally, a baseline model is one that just 
meets current energy conservation standards, or, if no standards are in 
place, the baseline is typically the most common or least efficient 
unit on the market.
    In the June 2022 NOPR, mirroring the January 2017 Direct Final 
Rule, DOE considered the least-efficient single-speed DPPP motor on the 
market for each representative unit. 87 FR 37122, 37138. DOE did not 
receive any comments regarding the baseline efficiencies, and therefore 
is maintaining the same levels from the June 2022 NOPR in this final 
rule.
c. Higher Efficiency Levels
    As part of DOE's analysis, the maximum available efficiency level 
(``EL'') is the highest efficiency unit currently available on the 
market. DOE also defines a ``max-tech'' efficiency level to represent 
the maximum possible efficiency for a given product.
    In the June 2022 NOPR, DOE proposed higher efficiency levels by 
substituting higher full-load efficiency DPPP motors and DPPP motors 
with finer levels of speed control, consistent with the January 2017 
Direct Final Rule. 87 FR 37122, 37138. Efficiency levels 0 through 2 
were consistent with Table 5.6.3 of the January 2017 Direct Final Rule 
TSD and represented the low-efficiency, medium-efficiency, and high-
efficiency performance of single-speed DPPP motors. Efficiency levels 3 
through 6 incorporated certain design requirements based on motor speed 
capability and topology.\42\ DOE proposed that EL 3 require motors that 
are two-speed, multi-speed, or variable-speed, but with no restrictions 
on motor topology. EL 4 required motors that are two-speed or multi-
speed, but did not allow for the low-efficiency motor topologies 
(split-phase, shaded-pole, CSIR)--or--required variable-speed motors. 
EL 5 required motors that are two-speed or multi-speed, but did not 
allow for PSC motors in addition to the other low-efficiency motor 
topologies--or--requires variable-speed motors. Finally, EL 6 included 
variable speed only, which provides the highest energy savings. 87 FR 
37122, 37139.
---------------------------------------------------------------------------

    \42\ For the purposes of the analysis, however, DOE did consider 
the full-load efficiencies presented in Table 5.6.3 of the January 
2017 Direct Final Rule TSD for efficiency levels 3 through 6.
---------------------------------------------------------------------------

    In response, CEC and NYSERDA commented that DOE should reevaluate 
the ``max-tech'' levels considered for small-size and standard-size 
DPPP motors, and work toward a performance metric that captures the 
benefits of variable-speed motors. Specifically, CEC and NYSERDA noted 
that not all variable-speed DPPP motors are created equal, because an 
AC induction motor paired with a variable-frequency drive and a 
permanent magnet motor with an integral drive exist and provide 
different performance characteristics depending on speed settings. 
Accordingly, CEC and NYSERDA encouraged DOE to update the DPPP motor 
test method and performance metric that can distinguish between 
different speed DPPP motors and between different categories of 
variable-speed DPPP motors. While CEC and NYSERDA noted that this 
approach may be outside the scope of the current rulemaking, they 
stated that it is important to acknowledge that the proposed efficiency 
levels for small-size and standard-size DPPP motors do not represent 
``max-tech,'' and that there are potential future improvements for both 
the DPPP motor test method and the DPPP motor energy conservation 
standards. (CEC and NYSERDA, No. 94 at p. 6)
    The DOE test procedure in 10 CFR 431.484(b) establishes full-load 
efficiency as the metric for DPPP motors. For the engineering analysis, 
while DOE considers full-load efficiency per the DOE test procedure for 
ELs 0 through 3, the higher ELs only consider design requirements based 
on speed control. Accordingly, the variable-speed requirement 
considered as part of the analysis is based on the definition of 
variable-speed control dedicated-purpose pool pump motor in section 2 
``Glossary'' of UL 1004-10:2020.\43\ 10 CFR 431.483. The variable-speed 
definition includes specific requirements for motor operation that are 
supposed to be met, but does not distinguish between the designs on the 
motors. As such, for this rulemaking, DOE is basing the engineering 
analysis on the definitions and test procedures prescribed at 10 CFR 
431.484. DOE concurs that there may be future improvements for 
efficiency, and would consider these improvements in the next stage 
rulemaking.
---------------------------------------------------------------------------

    \43\ In this final rule, DOE is updating UL 1004-10:2020 to UL 
1004-10:2022. See further discussion in section IV.A.1 of this 
document.
---------------------------------------------------------------------------

    As such, in this final rule, DOE maintains the DPPP motor 
engineering

[[Page 66989]]

analysis from the June 2022 NOPR, as presented in Table IV.2.

                                           Table IV.2--Performance and Design Requirements for DPPP Motor ELs
--------------------------------------------------------------------------------------------------------------------------------------------------------
             Rep.    Motor                        EL0    EL1    EL2
    EC       unit     THP     DPPP application    (%)    (%)    (%)          EL3 *                EL4 *                EL5 *                EL6 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.........       4    0.22  Non-self-priming        55     69     76  ...................  ...................  ...................  ...................
                             Filter Pump, Extra-
                             Small-size (0.09
                             hhp).
2.........       1    0.75  Self-priming Filter     55     69     76  Two-speed--OR--      Two-speed/Multi-     Two-speed/Multi-     Variable-speed
                             Pump, Small-size                          Multi-speed--OR--    speed, not CSIR,     speed, not CSIR,     only.
                             (0.44 hhp).                               Variable-speed.      not shaded pole,     not shaded pole,
                                                                                            not split-phase;--   not split-phase,
                                                                                            OR--Variable-speed.  not PSC;--OR--
                                                                                                                 Variable-speed.
2.........       5       1  Non-self-priming        55     69     76  Two-speed--OR--      Two-speed/Multi-     Two-speed/Multi-     Variable-speed
                             Filter Pump, Small-                       Multi-speed--OR--    speed, not CSIR,     speed, not CSIR,     only.
                             size (0.52 hhp).                          Variable-speed.      not shaded pole,     not shaded pole,
                                                                                            not split-phase;--   not split-phase,
                                                                                            OR--Variable-speed.  not PSC;--OR--
                                                                                                                 Variable-speed.
2.........       7   1.125  Pressure Cleaner        55     69     76  Variable-speed only  Variable-speed only  Variable-speed only  Variable-speed
                             Booster Pump.                                                                                            only.
3.........       6     1.5  Non-self-priming        55     69     77  Two-speed--OR--      Two-speed/Multi-     Two-speed/Multi-     Variable-speed
                             Filter Pump (0.87                         Multi-speed--OR--    speed, not CSIR,     speed, not CSIR,     only.
                             hhp).                                     Variable-speed.      not shaded pole,     not shaded pole,
                                                                                            not split-phase;--   not split-phase,
                                                                                            OR--Variable-speed.  not PSC;--OR--
                                                                                                                 Variable-speed.
3.........       2    1.65  Self-priming Filter     55     69     77  Two-speed--OR--      Two-speed/Multi-     Two-speed/Multi-     Variable-speed
                             Pump, Standard-                           Multi-speed--OR--    speed, not CSIR,     speed, not CSIR,     only.
                             size (0.95 hhp).                          Variable-speed.      not shaded pole,     not shaded pole,
                                                                                            not split-phase;--   not split-phase,
                                                                                            OR--Variable-speed.  not PSC;--OR--
                                                                                                                 Variable-speed.
3.........      2A    1.65  Self-priming Filter     55     69     77  Two-speed--OR--      Two-speed/Multi-     Two-speed/Multi-     Variable-speed
                             Pump, Small-size                          Multi-speed--OR--    speed, not CSIR,     speed, not CSIR,     only.
                             (0.65 hhp).                               Variable-speed.      not shaded pole,     not shaded pole,
                                                                                            not split-phase;--   not split-phase,
                                                                                            OR--Variable-speed.  not PSC;--OR--
                                                                                                                 Variable-speed.
3.........       3    3.45  Self-priming Filter     75     79     84  Two-speed--OR--      Two-speed/Multi-     Two-speed/Multi-     Variable-speed
                             Pump, Standard-                           Multi-speed--OR--    speed, not CSIR,     speed, not CSIR,     only.
                             size (1.88 hhp).                          Variable-speed.      not shaded pole,     not shaded pole,
                                                                                            not split-phase;--   not split-phase,
                                                                                            OR--Variable-speed.  not PSC;--OR--
                                                                                                                 Variable-speed.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Includes freeze protection control design requirements.

    PHTA and NEMA commented that if DOE finds this 0.5 THP requirement 
feasible from a lifecycle cost analysis, motor manufacturers can 
produce motors meeting the performance requirements; however, this may 
result in replacement market fit issues as the product will become 
larger in size. (PHTA and NEMA, No. 92 at p. 10) Pentair stated concern 
with the proposal to require replacement motors as small as 0.5 THP to 
meet variable speed. Specifically, that if motors meeting the DPPP rule 
fail, then those motors will not be able to be replaced with an 
original single-speed motor. (Pentair, No. 90 at p. 1)
    A DPPP motor is subject to standards regardless of how it is sold 
(i.e., with or without a corresponding DPPP). As such, Pentair is 
correct that if DPPPs using a 0.5 THP motor or smaller sold before the 
compliance date of this rule fail after the compliance date of this 
rule, consumers would likely be unable to replace the original single-
speed motor with a similar single-speed motor. See section IV.G.3 for 
more discussion of repair scenarios in the standards cases. 
Additionally, DOE notes that there are a number of variable-speed DPPP 
motors on the market that are currently being used in DPPPs. DOE also 
notes that PHTA, NEMA, and Pentair did not provide information 
supporting the claim that there may be fit issues. In other industries, 
variable-speed motors (particularly electronically commutated motors, 
or ECMs) have been produced to be drop-in replacements in larger 
equipment (i.e., with no fit issues) for single-phase and polyphase 
motors in horsepower ranges identified by commenters.\44\ There are no 
unique design characteristics of DPPP motors that would prevent 
variable-speed motors from being drop-in replacements to single-speed 
DPPP motors.\45\ Accordingly, DOE cannot conclude that there will be 
fit issues for DPPP motors in this lower THP range, and that in the 
scenario identified by Pentair the single-speed motor could be replaced 
by a variable-speed motor.
---------------------------------------------------------------------------

    \44\ www.regalrexnord.com/brands/genteq/aftermarket-products/Evergreen-Motors/Evergreen-VS-Motor.
    \45\ As noted in section 5.7.1 of the January 2017 Direct Final 
Rule TSD, DOE researched the design and engineering constraints 
associated with motor substitution by examining manufacturer 
interview responses and holding discussions with the DPPP Working 
Group. DOE concluded that for the representative equipment 
capacities being considered, the wet end of the pump can be paired 
with a range of motors with various efficiencies and speed 
configurations without significant adaptations. See chapter 5 of the 
dedicated-purpose pool pumps direct final rule TSD, at 
www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------

Motor Input Power and Pump Hydraulic Power
    Each efficiency level presented in Table IV.2 has an associated 
energy factor (in Gallons/Watt-hour ``G/Wh'') and flow (in gallons per 
minute ``gpm'') used to determine efficiency of the pump system. In the 
June 2022 NOPR, DOE used the pump performance curves consistent with 
the January 2017 Direct Final Rule TSD to represent the energy factors 
and flows. 87 FR 37122, 37139.
    The CA IOUs commented that DOE should update its analysis to show 
motor turn-down savings from variable-speed motors. Specifically, the 
CA IOUs commented that the DOE analysis for PCBP assumes an operating 
point of 10

[[Page 66990]]

gpm and 112 ft of head, which is not representative of variable-speed 
capability at EL 3 nor consistent with the DPPP test procedure. The CA 
IOUs recommended that DOE consider an operating point consistent with 
the DOE test procedure of 10 gpm and 60 ft of head, which the CA IOUs 
noted the industry and advocates agreed to this test point during the 
ASRAC negotiation for DPPP standard. The CA IOUs provided estimates of 
the input power and WEF for a variable-speed PCBP corresponding to a 60 
ft head, and showing a 52-percent decrease compared to the values used 
in DOE's NOPR analysis. (CA IOUs, No. 96 at p. 4) Nidec commented that 
PCBPs and variable speed will have to run at nearly full speed or maybe 
slightly less than full speed. Therefore, they stated that 
representation of power usage on variable speed is most likely 
incorrect in the analysis, which would make an assumption of actually 
having the ability to slow the speed down to take advantage of the 
power savings in lower speed. (Nidec, Public Meeting, No. 88 at pp. 28-
29) As discussed in section IV.A.4, the DPPP Working Group considered 
variable-speed technology option for PCBPs because in installations 
with low head loss, energy could be conserved by operating the pressure 
cleaner booster pump at a reduced speed. In reviewing the January 2017 
Direct Final Rule TSD, DOE notes that the analysis does only account 
for motor and hydraulic efficiency improvements for variable-speed 
efficiency levels of PCBPs, and does not account for any change in 
energy consumption from the reduction of motor speed. As such, DOE 
agrees that a revised approach is necessary to reflect the expected 
reduced energy use of variable-speed PCBPs resulting more accurately 
from motor turndowns. Additionally, DOE acknowledges the method of 
calculation in the CA IOUs comment as properly representative. As such, 
in this final rule, DOE has updated the pump curves for PCBPs to be 
consistent with the recommendation by the CA IOUs. Further discussion 
is provided in chapter 5 of the final rule TSD.
    Fluidra stated that, at maximum speed, the variable-speed PCBP 
consumed more energy than the single-speed system. As such, Fluidra 
commented that a consumer with operating conditions and equipment 
similar to those used in this analysis would never be able to recover 
the additional cost of variable-speed control. (Fluidra, No. 91 at pp. 
1-2) In addition, Fluidra stated that while this test represents only 
two sites and two PCBP models, Fluidra feels that the operating 
conditions are reasonably representative. (Fluidra, No, 91 at p. 6) 
Finally, Fluidra stated that the power consumption of the booster pump 
variable-speed motor operating at maximum speed measured noticeably 
higher than the single-speed base comparison. Specifically, Fluidra 
commented that operating the PCBP at maximum speed is necessary in many 
pool applications due to plumbing head loss from extended pipe runs 
where the pool equipment pad is further from the pool for aesthetics 
and noise reduction. (Fluidra, No. 91 at pp. 1-2).
    PHTA and NEMA referenced the same Fluidra study and assertions in 
their comment submission. (PHTA and NEMA, No. 92 at pp. 2-3) Further, 
PHTA and NEMA commented that the restrictor plates in PCBPs have 
multiple purposes and should not be mistaken as used for flow rate 
tuning. PHTA and NEMA commented that industry uses restrictor plates/
discs in testing to decrease flow and pressure, and that they start off 
with the largest plates and determine if sufficient flow is present, 
and if not, go down in size, and if needed, remove completely. PHTA and 
NEMA pointed out that the plates are ultimately used because many times 
consumers do not turn off the booster pump when they remove the 
pressure cleaner; therefore, the plate protects the booster pump if the 
pressure cleaner is removed. (PHTA and NEMA, No. 92 at p. 3)
    On the other hand, the CA IOUs supported the technical feasibility 
of energy savings from variable-speed motors in PCBP applications and 
discussed the PCBP variable-speed-motor retrofit study that the CA IOUs 
had conducted for the DPPP rulemaking. Specifically, the CA IOUs stated 
that the results showed that a variable-speed motor could provide 
substantial energy savings by reducing the PCBP pump speed, while 
maintaining consumer utility. The CA IOUs stated that the definition of 
consumer utility for a pressure side pool cleaner (pool sweep) is the 
correct number of wheel revolutions per minute in cleaning operation. 
In addition, the CA IOUs stated that a single-speed PCBP produces more 
pressure than the pool sweep requires, and the consumer may use the 
included flow restrictor discs and a bleed to reduce the pressure and 
flow to the sweep's required operating condition. Accordingly, the flow 
restrictor and bleed valve allow unused energy from the pump to escape 
to the pool, and variable-speed PCBP offers an energy-saving 
alternative by allowing the consumer to set the speed of the pump to 
deliver the pressure and flow needed to operate the sweep, with low or 
no usage of the bleed valve and restrictor rings. The CA IOUs 
demonstrated the variable-speed capability by retrofitting a variable-
speed motor to two PCBPs, which resulted in energy savings of 54 
percent to 67 percent. (CA IOUs, No. 96 at p. 3)
    In the January 2017 Direct Final Rule, for the analysis conducted 
for PCBPs, DOE selected a DPPP capacity that was representative of the 
cluster of model capacities on the market. As such, the resulting 
representative capacity was 10 gpm of flow and 112 ft of head, which 
equated to 0.28 hhp. See section 5.4.3 of the January 2017 Direct Final 
Rule TSD. DOE notes that the flow rate of 10 gpm aligns with the 
testing load point specified in the test procedure. See Table 1 of 
appendix C to subpart Y of 10 CFR part 431. In addition, while the DPPP 
Working Group initially recommended that PCBPs be tested at 90 ft of 
head and a volumetric flow rate that corresponds to 90 ft of head, the 
DPPP Working Group revised its recommendation for PCBPs to be tested at 
the load point of 10 gpm and a head greater than 60 ft. See section 
5.4.3 of the January 2017 Direct Final Rule TSD.
    In reviewing the 2022 DPPP Database, DOE observed DPPPMs in PCBP 
applications ranging from 0.22 to 0.33 hhp, and therefore concluded 
that 0.28 hhp is in the middle of that range and would still be 
representative of the PCBP models currently available on the market. As 
such, with the required test procedure flow rate for PCBPs at 10 gpm 
(see Table 1 of appendix B to subpart Y of 10 CFR part 431), the 
representative DPPP head will continue to be around 112 ft.\46\ In 
reviewing the analysis that Fluidra, PHTA, and NEMA submitted, the 
measured sites #1 and #2 are not representative of typical PCBP 
application, as the supplied heads of 74 ft and 71.5 ft, respectively, 
which are well below the January 2017 Direct Final Rule analysis 
representative dynamic head of 112 ft. See section 5.4.3 of the January 
2017 Direct Final Rule TSD. In addition, as noted in the January 2017 
Direct Final Rule, the DPPP Working Group did acknowledge the existence 
of ideal systems with head demands as low as 50 ft, they determined 
that pumps typically supplied 100 ft of head or more. See section 
3.6.2.2 of the January 2017 Direct Final Rule TSD. As such, DOE 
understands that the smaller difference

[[Page 66991]]

between the operating head of the single-speed and variable-speed PCBPs 
is responsible for the smaller savings potential and reduced cost-
effectiveness. DOE does not have any evidence to suggest that the 
representative capacity used in the January 2017 Direct Final Rule and 
subsequently in the June 2022 NOPR should be revised. As such, DOE 
maintains the pump performance inputs from the June 2022 NOPR in this 
final rule.
---------------------------------------------------------------------------

    \46\ Section 3.3.3 of the January 2017 Direct Final Rule TSD 
specifies the relationship between pump flow, head, and power.
---------------------------------------------------------------------------

    Further, in chapter 3 of the January 2017 Direct Final Rule TSD, 
DOE noted that for installations where the PCBP supplies more pressure 
than is recommended for the cleaner, pressure may be reduced using a 
throttling valve or restrictor rings, or excess pressure may be 
relieved using a pressure relief valve. The pressure relief valve is 
attached to the hose line that connects the pump outlet to the pressure 
cleaner, and the valve bypasses the cleaner and releases pressure into 
the pool being serviced. Further, in reviewing manufacturer operating 
instructions online, DOE observed directions to remove or replace 
restrictor discs, or to unscrew pressure relief valves, to reduce the 
pump flow rate. This is consistent with the information provided by the 
CA IOUs. Further discussion and responses to the commenters' payback 
period analysis are provided in section IV.F.9 of this document.
    Hayward stated that it reviewed energy and cost savings for six of 
its currently compliant single-speed pumps, including self and non-
self-priming, and estimated that the average payback period for 
conversion to variable speed was over 12 years. Hayward provided 
details of its analysis as part of its comment, and noted use of a flow 
rate of 24.7 gpm, even though some pool equipment requires a greater 
flow rate. (Hayward, No. 93 at p. 2) In reviewing the analysis provided 
by Hayward, DOE first notes that the prices used were for the pump. The 
analysis DOE conducted in the June 2022 NOPR, however, considers the 
motor only, as this rule is specific to the cost-effectiveness of the 
DPPP motor. While the engineering analysis determines the manufacturer 
selling price (``MSP'') (see section IV.C.2 for further discussion), 
DOE uses the markups from the markups analysis (in section IV.D of this 
document) to convert the MSP to consumer prices as it relates to the 
DPPP motor. Accordingly, the costs included in the Hayward analysis do 
not directly translate to the analysis at hand, which is for the DPPP 
motor. Further discussion and responses to the commenters' payback 
period analysis are provided in section IV.F.9 of this document.
2. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
product, and the availability and timeliness of purchasing the 
equipment on the market. The cost approaches are summarized as follows:
    [ballot] Physical teardowns: Under this approach, DOE physically 
dismantles a commercially available product, component by component, to 
develop a detailed bill of materials for the product.
    [ballot] Catalog teardowns: In lieu of physically deconstructing a 
product, DOE identifies each component using parts diagrams (available 
from manufacturer websites or appliance repair websites, for example) 
to develop the bill of materials for the product.
    [ballot] Price surveys: If neither a physical nor catalog teardown 
is feasible (for example, for tightly integrated products such as 
fluorescent lamps, which are infeasible to disassemble and for which 
parts diagrams are unavailable) or cost-prohibitive and otherwise 
impractical (e.g., large commercial boilers), DOE conducts price 
surveys using publicly available pricing data published on major online 
retailer websites and/or by soliciting prices from distributors and 
other commercial channels.
    In the June 2022 NOPR, DOE used feedback from manufacturers 
presented in the January 2017 Direct Final Rule to determine the cost 
of DPPP motors, and updated the cost data to be representative of the 
market in 2020. DOE adjusted the 2015$ costs to 2020$ using the 
historical Bureau of Labor Statistics Producer Price Index (``PPI'') 
for each product's industry.\47\ DOE also conducted physical teardowns 
to determine updated DPPP motor controller costs for variable-speed 
motors. To account for manufacturers' non-production costs and profit 
margin, DOE applied a non-production cost multiplier (the manufacturer 
markup) to the MPC to determine the manufacturer selling price 
(``MSP''). DOE developed an average manufacturer markup of 1.37 by 
examining the annual Securities and Exchange Commission (``SEC'') 10-K 
reports filed by publicly traded manufacturers primarily engaged in 
DPPP manufacturing and whose combined product range includes a variety 
of pool products. 87 FR 37122, 37139-37140.
---------------------------------------------------------------------------

    \47\ Series IDs: Integral motors (>=1 hp): WPU117304, Fractional 
motors (<1 hp): WPU117303, Environmental Controls: WPU1181; 
www.bls.gov/ppi/.
---------------------------------------------------------------------------

    In response, Fluidra noted that single-speed motor costs have 
increased roughly 20-22 percent in the last 3 years. This is just 
material costs and does not include transportation costs, which have 
risen exponentially since 2020. Further, Fluidra noted that component 
shortages and inflation have dramatically increased material costs 
since 2020, and that should be evaluated. (Fluidra, No. 91 at p. 3) To 
account for the recent price changes to the DPPP motor market, DOE 
inflated the cost data in 2020$ to 2022$ using the updated PPI values 
for each industry.\48\ DOE notes that these indices sufficiently 
characterize the change in motor prices due to material price changes, 
transportation costs, and changes in labor costs.
---------------------------------------------------------------------------

    \48\ Series IDs: Integral motors (>=1 hp): WPU117304, Fractional 
motors (<1 hp): WPU117303, Environmental Controls: WPU1181; 
www.bls.gov/ppi/.
---------------------------------------------------------------------------

    PHTA and NEMA commented that they believe the 1.37 manufacturer 
markup is a reasonable markup for domestically produced product, but it 
may be a little low if the product is produced overseas. (PHTA and 
NEMA, No. 92 at p. 10) As previously discussed, the 1.37 markup was 
based on publicly available financial information for manufacturers of 
DPPP motors. The calculation includes general and administrative 
(``SG&A'') expenses, research and development (``R&D'') expenses, 
interest, and profit. DOE does not have data to suggest that these 
costs would change if a DPPP motor is not manufactured domestically, 
nor have PHTA and NEMA provided any additional data on how the markup 
would need to be updated. As such, for this analysis, DOE maintains the 
manufacturer markup from the June 2022 NOPR.
    Table IV.3 lists the MSPs of each EL for DPPP motors. See TSD 
chapter 5 for additional detail on the engineering analysis and 
complete cost-efficiency results.

[[Page 66992]]



                                    Table IV.3--MSPs in 2022$ for DPPP Motors
----------------------------------------------------------------------------------------------------------------
                 Rep.
      EC         unit     THP    DPPP application    EL 0     EL 1     EL 2     EL 3     EL 4     EL 5     EL 6
----------------------------------------------------------------------------------------------------------------
1............        4     0.22  Non-self-priming   $24.84   $31.04   $50.71  .......  .......  .......  .......
                                  Filter Pump,
                                  Extra-Small-
                                  size (0.09 hhp).
2............        1     0.75  Self-priming        56.92    70.37    90.03    93.13   103.48   114.87   353.97
                                  Filter Pump,
                                  Small-size
                                  (0.44 hhp).
2............        5        1  Non-self-priming    51.94    56.45    76.21    78.47    93.71   110.09   353.97
                                  Filter Pump,
                                  Small-size
                                  (0.52 hhp).
2............        7    1.125  Pressure Cleaner    59.84    77.91    97.67  .......  .......  .......   353.97
                                  Booster Pump.
3............        6      1.5  Non-self-priming    67.86    89.31   107.38   108.51   127.70   148.03   353.97
                                  Filter Pump
                                  (0.87 hhp).
3............        2     1.65  Self-priming        74.52    95.97   114.04   115.17   134.36   154.68   353.97
                                  Filter Pump,
                                  Standard-size
                                  (0.95 hhp).
3............       2A     1.65  Self-priming        74.52    95.97   114.04   115.17   134.36   154.68   353.97
                                  Filter Pump,
                                  Small-size
                                  (0.65 hhp).
3............        3     3.45  Self-priming       160.33   199.85   223.56   255.17   269.85   285.66   475.85
                                  Filter Pump,
                                  Standard-size
                                  (1.88 hhp).
----------------------------------------------------------------------------------------------------------------

D. Markups Analysis

    The markups analysis develops appropriate markups (e.g., 
manufacturer markups, retailer markups, distributor markups, contractor 
markups) in the distribution chain and sales taxes to convert the MSP 
estimates derived in the engineering analysis to consumer prices, which 
are then used in the LCC and PBP analysis and in the manufacturer 
impact analysis. At each step in the distribution channel, companies 
mark up the price of the product to cover business costs and profit 
margin.
    In the June 2022 NOPR, DOE identified distribution channels for 
DPPP motors incorporated in pumps and replacement DPPP motors sold 
alone as well as the fraction of shipments sold through each channel. 
To characterize these channels, DOE referred to information collected 
in support of the January 2017 Direct Final Rule, which reflects the 
consensus of the Appliance Standards and Rulemaking Federal Advisory 
Committee (``ASRAC'') DPPP Working Group. 87 FR 37122, 37140.
    Nidec stated that for motors sold alone, they estimate that the 
market is not 50 percent from the motor manufacturer to a retailer. 
Instead, Nidec commented that it is significantly weighted to the motor 
manufacturer, to the wholesaler, to the retailer, then to the end user. 
(Nidec, Public Meeting, No. 88 pp. 24-25)
    PHTA and NEMA provided updated estimates of fraction of sales by 
distribution channels. In addition, for DPPP motors sold within DPPPs 
and going into new pool installations, NEMA and PHTA commented that 
these also go through a wholesaler step. For DPPP motors sold alone as 
replacement motors, NEMA and PHTA also recommended adding an additional 
channel to capture 5 percent of the market being sold through pool 
product retailers. (PHTA and NEMA, No. 92 at p. 11)
    For this final rule, DOE revised its distribution channels to 
incorporate the feedback from PHTA and NEMA as presented in Table IV.4 
and Table IV.5.

 Table IV.4--Distribution Channels for DPPP Motors Incorporated in Pumps
------------------------------------------------------------------------
                                          June 2022 NOPR
          Distribution channel              fraction of     Fraction of
                                          shipments  (%)  shipments  (%)
------------------------------------------------------------------------
DPPP Motor Manufacturer [rarr] DPPP                   75              65
 Manufacturer [rarr] Wholesaler [rarr]
 Pool Service Contractor [rarr] Consumer
DPPP Motor Manufacturer [rarr] DPPP                   20              15
 Manufacturer [rarr] Pool Product
 Retailer [rarr] Consumer...............
DPPP Motor Manufacturer [rarr] DPPP                    5              20
 Manufacturer [rarr] Pool Builder [rarr]
 Wholesaler [rarr] Consumer.............
------------------------------------------------------------------------


Table IV.5--Distribution Channels for Replacement DPPP Motors Sold Alone
------------------------------------------------------------------------
                                          June 2022 NOPR
          Distribution channel              fraction of     Fraction of
                                          shipments  (%)  shipments  (%)
------------------------------------------------------------------------
DPPP Motor Manufacturer [rarr]                        25              45
 Wholesaler [rarr] Contractor [rarr] End-
 User...................................
DPPP Motor Manufacturer [rarr]                        25              25
 Wholesaler [rarr] Retailer [rarr] End-
 User...................................
DPPP Motor Manufacturer [rarr] Pool Pump              50              25
 Retailer [rarr] End-User...............
DPPP Motor Manufacturer [rarr] DPPP       ..............               5
 Manufacturer [rarr] Pool Pump Retailer
 [rarr] End-User........................
------------------------------------------------------------------------

    DOE developed baseline and incremental markups for each actor in 
the distribution chain. Baseline markups are applied to the price of 
products with baseline efficiency, while incremental markups are 
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental 
markup is typically less than the baseline markup and is designed to 
maintain similar per-unit operating profit before and after new or 
amended standards.\49\
---------------------------------------------------------------------------

    \49\ Because the projected price of standards-compliant products 
is typically higher than the price of baseline products, using the 
same markup for the incremental cost and the baseline cost would 
result in higher per-unit operating profit. While such an outcome is 
possible, DOE maintains that in markets that are reasonably 
competitive it is unlikely that standards would lead to a 
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

    To estimate average baseline and incremental markups DOE relied on 
several sources including: (1) for DPPP wholesalers, SEC form 10-K from 
Pool Corp; \50\ (2) for pool product retailers, SEC form 10-K from 
several major home

[[Page 66993]]

improvement centers \51\ and U.S. Census Bureau 2017 Annual Retail 
Trade Survey for the miscellaneous store retailers sector (NAICS 453); 
\52\ (3) for pool contractors and pool builders, U.S. Census Bureau 
2017 Economic Census data for the plumbing, heating, and air-
conditioning contractor sector (NAICS 238220) and all other specialty 
trade contractors sector (NAICS 238990); \53\ (4) for motor 
wholesalers, U.S. Census Bureau 2017 Annual Wholesale Trade Survey for 
the household appliances and electrical and electronic goods merchant 
wholesaler sector (NAICS 4536); \54\ (5) for electrical contractors, 
2022 RSMeans Electrical Cost Data; \55\ (6) for motor retailers, U.S. 
Census Bureau 2017 Annual Retail Trade Survey for the building material 
and garden equipment and supplies dealers (NAICS 444); and (7) for pool 
pump retailers, U.S. Census Bureau 2017 Annual Retail Trade Survey for 
the miscellaneous store retailers sector (NAICS 453).
---------------------------------------------------------------------------

    \50\ U.S. Securities and Exchange Commission. SEC 10-K Reports 
for Pool Corp (2017-2021). Available at www.sec.gov/ (last accessed 
July 26, 2021.)
    \51\ U.S. Securities and Exchange Commission. SEC 10-K Reports 
for Home Depot, Lowe's, Wal-Mart and Costco. (2017-2021) Available 
at www.sec.gov/ (last accessed July 26, 2022.)
    \52\ U.S. Census Bureau, 2017 Annual Retail Trade Survey, 
available at www.census.gov/retail/ (last accessed July 
26, 2021).
    \53\ U.S. Census Bureau, 2017 Economic Census Data, available at 
www.census.gov/econ/ (last accessed July 26, 2021).
    \54\ U.S. Census Bureau, 2017 Annual Wholesale Trade Survey, 
available at www.census.gov/awts (last accessed July 26, 2021).
    \55\ RSMeans Electrical Cost Data, available at www.rsmeans.com 
(last accessed July 26, 2022).
---------------------------------------------------------------------------

    In addition to the markups, DOE obtained State and local taxes from 
data provided by the Sales Tax Clearinghouse.\56\ These data represent 
weighted average taxes that include county and city rates. DOE derived 
shipment-weighted average tax values for each State considered in the 
analysis.
---------------------------------------------------------------------------

    \56\ Sales Tax Clearinghouse Inc., State Sales Tax Rates Along 
with Combined Average City and County Rates, available at 
thestc.com/STrates.stm (last accessed Jan. 04, 2023).
---------------------------------------------------------------------------

    Chapter 6 of the final rule TSD provides details on DOE's 
development of markups for DPPP motors.

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of DPPP motors at different efficiencies in 
representative U.S. single-family homes, multi-family residences, and 
commercial buildings, and to assess the energy savings potential of 
increased DPPP motors efficiency. The energy use analysis estimates the 
range of energy use of DPPP motors in the field (i.e., as they are 
actually used by consumers). The energy use analysis provides the basis 
for other analyses DOE performed, particularly assessments of the 
energy savings and the savings in consumer operating costs that could 
result from adoption of amended or new standards.
1. DPPP Motor Applications
    The annual energy consumption of a DPPP motor is expressed in terms 
of electricity consumption and depends on the DPPP motor efficiency 
level, the pool pumping requirement, the performance of the DPPP 
incorporating the motor, and the DPPP annual operating hours. This 
electricity consumption is identical to the annual electricity 
consumption of the DPPP incorporating the motor. The DPPP motor energy 
consumption value is the sum of the energy consumption values in each 
mode of operation. Each mode of operation corresponds to a motor speed 
setting. Single-speed motors only have one mode of operation while 
dual- and variable-speed pool pump motors operate at a low-speed and a 
high-speed mode. The unit energy consumption values in each mode are 
calculated based on the DPPP usage, which is calculated based on the 
pool pump system curve that the DPPP is operating on, the pump flow 
rate of the mode, the pump energy factor of the mode (which in turn 
determines the motor input power) \57\ and the annual run time of the 
pool pump spent in that mode. In the June 2022 NOPR, DOE calculated the 
pool pump annual run time based on the application (residential or 
commercial), the assumed pool size, the assumed number of turns per 
day, and the sample application's geographic location, which implies 
the corresponding pool seasons. 87 FR 37122, 37141. A typical DPPP 
application, characterized by the DPPP equipment class and hydraulic 
horsepower (``hhp''), was associated to each representative unit in 
equipment classes 1, 2, and 3 based on inputs from the engineering 
analysis. See section IV.C.1.a of this document.
---------------------------------------------------------------------------

    \57\ The motor input power is equal to the DPPP flow (gpm) 
divided by the DPPP Energy Factor (G/Wh) and multiplied by 60 
(number of minutes in an hour).
---------------------------------------------------------------------------

    DOE did not receive comments regarding this methodology and 
retained the same approach in the final rule.
2. DPPP Motor Consumer Sample
    In the June 2022 NOPR, DOE created individual consumer samples for 
five DPPP motor markets: (1) single-family homes with a swimming pool; 
(2) indoor swimming pools in commercial applications; (3) single-family 
community swimming pools; (4) multi-family community swimming pools; 
and (5) outdoor swimming pools in commercial applications. DOE used the 
samples to determine DPPP motor annual energy consumption and to 
conduct the LCC and PBP analyses. 87 FR 37122, 37141.
    PTHA and NEMA commented that within the scope of the document, 
there is little to no distinction between the types of motors that 
would be used across community and commercial pool applications. As a 
result, PHTA and NEMA commented that DOE could consider combining 
community pool types (single and multi-family), as well as commercial 
(indoor and outdoor). (PHTA and NEMA, No. 92 at p. 12)
    In the June 2022 NOPR analysis, as noted by NEMA and PTHA, 
community pools and commercial pools were combined and analyzed as the 
commercial sector by DOE. In this final rule, DOE continued to use the 
same approach. 87 FR 37122, 37141 See section 7.3 of chapter 7 of the 
final rule TSD for details of community and commercial indoor and 
outdoor pool samples used.
    DOE used the Energy Information Administration's (``EIA'') 2020 
Residential Energy Consumption Survey (``RECS 2020'') to establish a 
sample of single-family homes that have a swimming pool.\58\ For DPPPs 
used in indoor swimming pools in commercial applications, DOE developed 
a sample using the 2018 Commercial Building Energy Consumption Survey 
(``CBECS 2018'').\59\ RECS and CBECS include information such as the 
household or building owner demographics and the location of the 
household or building.
---------------------------------------------------------------------------

    \58\ U.S. Department of Energy-Energy Information 
Administration. 2020 RECS Survey Data. www.eia.gov/consumption/residential/data/2020/ (last accessed February 2, 2023).
    \59\ U.S. Department of Energy-Energy Information 
Administration. 2018 CBECS Survey Data. https://www.eia.gov/consumption/commercial/data/2018/ (last accessed: February 2, 2023).
---------------------------------------------------------------------------

    Neither RECS nor CBECS provide data on community pools or outdoor 
swimming pools in commercial applications, so DOE created samples based 
on other available data. To develop samples for DPPPs in single or

[[Page 66994]]

multi-family communities, DOE used a combination of RECS 2020, U.S. 
Census 2009 and 2011 American Home Survey Data 
(AHS),60 61 62 and the 2022 PK Data report.\63\ To develop a 
sample for pool pumps in outdoor commercial swimming pools, DOE relied 
on data from both CBECS 2018 and the 2022 PK Data report.
---------------------------------------------------------------------------

    \60\ U.S. Census Bureau. 2009 AHS survey data. www.census.gov/
programs-surveys/ahs/data/2009/ahs-2009-public-use-file_puf-/2009-
ahs-national-puf-microdata.html (last accessed: February 2, 2023).
    \61\ U.S. Census Bureau. 2011 AHS survey data. www.census.gov/programs-surveys/ahs/data/2011/ahs-2011-summary-tables/h150-11.html 
(last accessed: February 2, 2023).
    \62\ The earlier versions of AHS was used due to the lack of 
pool ownership information in the more recent AHS.
    \63\ PK Data. 2022 Swimming Pool and Pool Heater Customized 
Report for LBNL. pkdata.com/annual-reports/ (last accessed: February 
2, 2023).
---------------------------------------------------------------------------

    DPPPs can be installed with either above-ground or in-ground 
swimming pools. In the June 2022 NOPR, DOE established separate sets of 
consumer samples for in-ground pools and above-ground pools by 
adjusting the original sample weights using data on the number of 
installed in-ground and above-ground pools gathered during the January 
2017 Direct Final Rule, which relied on 2014 data per State provided by 
APSP.\64\ The consumer samples for DPPP motors used in self-priming and 
pressure cleaner booster pumps are drawn from the in-ground pool 
samples; the consumer samples for motors used with non-self-priming 
pool pumps are obtained from the above-ground pool samples. 87 FR 
37122, 37142. See chapter 8 of the June 2022 NOPR TSD. DOE did not 
receive comments on this approach and retained the same method in this 
final rule.
---------------------------------------------------------------------------

    \64\ For more details see chapter 7 of the January 2017 Direct 
Final Rule TSD at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------

    See chapter 7 of the final rule TSD for more details about the 
creation of the consumer samples and the regional breakdowns.
3. Self-priming and Non-Self-Priming Pool Pump Motor Input Power
    The input power of DPPP motors used in self-priming and non-self-
priming pump applications is calculated based on the flow rates (gpm) 
and typical energy factor (G/Wh) associated with each representative 
unit.\65\ At efficiency levels corresponding to single-speed and two-
speed motors, the flow and energy factor values were based on input 
from the engineering analysis and provided for each system curve (A, B, 
or C).\66\ In the June 2022 NOPR, for each user of self-priming and 
non-self-priming pool pumps in the consumer sample, DOE specified the 
system curve used (A, B, or C) by drawing from a probability 
distribution in which 35 percent of the pool pumps follow curve A, 10 
percent of the pool pumps follow curve B, and the remaining 55 percent 
follow curve C. The probability distribution was based on inputs from 
the ASRAC DPPP Working Group gathered during the January 2017 Direct 
Final Rule.\67\ 87 FR 37122, 37142.
---------------------------------------------------------------------------

    \65\ The motor input power is equal to the flow (gpm) divided by 
the energy factor (G/Wh) and multiplied by 60 (number of minutes in 
an hour).
    \66\ When a pump is tested on a system curve (such as curve C), 
any one of the measurements hydraulic power, P (hp), volumetric 
flow, Q (gpm) and total dynamic head, H (ft of water) can be used to 
calculate the other two measurements.
    \67\ For more details see chapter 7 of the January 2017 Direct 
Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------

    DOE did not receive any comments on this approach and retained the 
same methodology and inputs for this final rule.
    At efficiency levels corresponding to variable-speed motors, the 
engineering analysis only provides flow and energy factor values for 
the high-speed mode on each system curve. In the June 2022 NOPR, for 
the low-speed mode, DOE used data on pool volume and desired time per 
turnover from the January 2017 Direct Final Rule TSD to calculate a 
consumer-specific low-speed flow.\68\ These relied on inputs from 
stakeholders and several other references.69 70 71 DOE then 
used the equation provided by the engineering analysis to calculate the 
energy factor as a function of Q for each representative unit on each 
system curve. 87 FR 37122, 37142. The equations from the engineering 
analysis are provided in chapter 5 of the final rule TSD.
---------------------------------------------------------------------------

    \68\ Flow (in gpm) is equal to the pool volume (in gallons) 
divided by the desired time per turnover (in minutes).
    \69\ CEE Residential Swimming Pool Initiative, December 2021.
    \70\ California Energy Commission Pool Heater CASE. 
efiling.energy.ca.gov/GetDocument.aspx?tn=71754&DocumentContentId=8285 (last accessed July 
28, 2016).
    \71\ Evaluation of potential best management practices-Pools, 
Spas, and Fountains 2010. calwep.org/wp-content/uploads/2021/03/Pools-Spas-and-Fountains-PBMP-2010.pdf (last Accessed July 28, 
2016).
---------------------------------------------------------------------------

    Pentair and PHTA and NEMA commented that the minimum flow rate of 
24.7 gpm that is being used in the energy use analysis is not high 
enough to operate certain equipment. (Pentair, No. 90 at p. 2; PHTA and 
NEMA, No. 92 at p. 4)
    Specifically, PHTA and NEMA commented that in looking at filtration 
pump motors, DOE did not consider additional factors, such as whether 
the requirements apply to existing pool versus new construction, and 
whether the requirements to operate certain equipment. PHTA and NEMA 
commented that when designing a new pool, the piping and equipment are 
selected in conjunction with the pump system to ensure the pool works 
properly and safely. However, in existing pools, the piping and much of 
the equipment, including sanitation items such as skimmers, main 
drains, and filters, are already in place and would be cost prohibitive 
for consumers to replace. As such, PHTA and NEMA commented that any 
replacement motor needs to be capable to provide the flow rates needed 
to work with the existing system. PHTA and NEMA stated that previous 
norm in the pool construction industry was small pipe and bigger pump; 
and although that has changed over the last 15 years, there are 5.4 
million existing inground pools3 with a significant percentage that may 
have 1.5-inch piping. PHTA and NEMA commented that the smaller more 
restrictive piping size impacts the pump size, which also impacts the 
filter maintenance. Further, PHTA and NEMA added that many existing 
pools have skimmers that need a certain minimum flow rate (historically 
30-35 gpm) to properly remove surface debris. A skimmer is one part of 
the sanitation system of the pool and removes containments off the 
surface to protect swimmers from infections. In some existing pool 
cases, PHTA and NEMA commented that this will be compromised based on 
the requirements found in the NOPR and possibly increase the risk of 
recreational water illnesses for bathers. PHTA and NEMA commented that 
the energy savings analysis for filtration pumps assumes a minimum flow 
rate of 24.7 gpm for all filtration pump systems. However, PHTA and 
NEMA stated that different equipment has minimum flow rates higher than 
this value (e.g., electrolytic chlorinators, pool heaters, suction 
cleaners and skimmers). Further, PHTA and NEMA stated that as equipment 
begins to wear out over time, higher flow rates may be needed to 
continue having the equipment work properly. PHTA and NEMA added that 
while the minimum flow rate of 24.7 gpm was established as a reasonable 
estimate of the low-flow conditions a pool may see, different equipment 
have minimum flowrates above 24.7 gpm. PHTA and NEMA commented that 
through a review of the various equipment, four manufacturers 
identified products that require flowrates above 24.7 gpm. These 
manufacturers indicated that they sell

[[Page 66995]]

various products, including gas heaters, sand filters, high efficiency 
heaters, skimmers, and suction cleaners that all have minimum flowrates 
at or above 30 gpm. PHTA and NEMA commented that the NOPR analysis did 
not assume a range of minimum flow rates, and as a result, does not 
account for the decreased savings (or incompatibility of small 
variable-speed motors) associated with existing systems that have 
higher minimum flow rates. PHTA and NEMA commented that a minimum flow 
rate of 24.7 gpm would result in an existing small-size pump being run 
at high speed--once installed with a small variable-speed motor--to 
ensure the equipment continues to run as intended, and would defeat the 
energy savings and purpose for requiring variable speed. (PHTA and 
NEMA, No. 92 at pp. 3-4) Pentair added that the ICC/ANSI/PHTA 15 Energy 
Standard has a minimum flow rate of 36 gpm that is being enforced 
nationwide by many building departments. Therefore, Pentair noted that 
a variable-speed fractional hp motor would have to operate at a max 
speed or close to it to produce this minimum flow rate needed at any 
reasonable total dynamic head loss. (Pentair, No. 90 at p. 2) Pentair 
further added that in the exiting DPPP rule, there was a minimum 
filtration rate of 36 gpm. (Pentair, Public Meeting Transcript, No. 88 
at p. 62)
    PHTA commented that DOE's analysis does not consider the range of 
minimum flow rates required for certain pool equipment. PHTA stated 
that in doing so, the analysis does not account for the decreased 
savings associated with existing systems with and that higher minimum 
flow rates require the motor to run at higher speeds. (PHTA, No. 100 at 
p. 4)
    The CA IOUs commented that during the 2015-2016 ASRAC DPPP Working 
Group, DOE, industry representatives, and energy efficiency advocates 
unanimously agreed to a low flow test point of 24.7 gpm on Curve C. The 
CA IOUs commented that the test point is equivalent to 5 ft of head, 
the minimum head loss required to account for static losses in the 
system from the pool filter, pool heater, and skimmer. The CA IOUs 
recommended that, at this operating point, there would be enough head 
to push water through the complete pool filtration system, including 
pool piping, pool filter, and pool heater.\72\ (CA IOUs, No. 96 at pp. 
2-3)
---------------------------------------------------------------------------

    \72\ The CA IOUs provided the following reference: ASRAC DPPP 
term sheet, www.regulations.gov/document/EERE-2015-BT-STD-0008-0051, 
rec 6.
---------------------------------------------------------------------------

    The Joint Advocates stated that DOE's analysis accurately captures 
the energy savings for variable speed. The Joint Advocates noted that 
DOE did not assume that the low speed of a variable-speed pump is a 
fixed percentage of high speed, but rather calculated an appropriate 
low-speed flow rate and the associated energy factor for each consumer 
in its sample, taking into account the minimum flow rate thresholds. 
(Joint Advocates, No. 97 at pp. 1-2)
    In the June 2022 NOPR, DOE calculated the low-speed flow rate as 
the sampled pool size (drawn from a distribution) divided by the 
desired number of hours to complete one turnover of the pool and 
divided by 60 minutes per hour to get the low-flow rate per minute. In 
addition, if the calculated low-speed flow rate obtained was below 24.7 
gpm or 31.1 gpm, DOE used below 24.7 gpm or 31.1 gpm instead. Such an 
approach results in a range of low-speed flow rates that are higher 
than minimum flow rates. See chapter 7 of the June 2022 NOPR TSD. This 
is consistent with the comments provided by PHTA and NEMA, Pentair, 
PHTA, and the CA IOUs. As noted by the Joint Advocates, DOE clarifies 
that the minimum flow rate is used as a threshold to ensure all low-
speed flow rates (at which the pump is assumed to operate) would be 
greater than 24.7 or 31.1 gpm, as appropriate. The minimum flow rate 
does not represent the assumed flow rate at which the variable speed 
pump operates. As noted by the CA IOUs, the minimum flow rate of 24.7 
gpm was developed during the 2015-2016 ASRAC DPPP Working Group. 
Specifically, the CA IOUs commented that the minimum flow rates for 
two-speed pumps of 24.7 gpm for two-speed pool filter pumps that have a 
rated hydraulic horsepower less than or equal to 0.75 hp (small pool 
filter pumps) and 31.1 gpm for two-speed pool filter pumps that have a 
rated hydraulic horsepower greater than 0.75 (large pool filter pumps) 
are consistent with the DPPP Working Group's recommended low-flow rates 
for multi-speed and variable-speed pool filter pumps (Docket No. EERE-
2015-BT-STD-0008, No. 51, Recommendation #6 at p. 5). The DPPP Working 
Group developed these low-flow rates based on the minimum effective 
flow rates for typical pool sizes.\73\ DOE believes these flow rates 
are also representative of minimum flow rates for two-speed pool filter 
pumps and effectively prevent the inclusion of unreasonably low speeds 
on two-speed pool filter pumps for the sole purpose of inflating WEF 
ratings. 82 FR 36858, 36880 (Aug. 7, 2017) (citing 81 FR 64580, 64606 
(Sept. 20, 2016)). DOE believes that the proposed load points for two-
speed pool filter pumps are representative of typical pool filter pump 
operation and energy performance, and that the load points characterize 
the efficiency of the pump speeds and flow points in typical 
applications (i.e., cleaning/mixing and filtration). 82 FR 36858, 
36880. In addition, while Pentair, NEMA, and PTHA recommended using a 
range of minimum flow rates, they did not provide supporting 
information to develop such distribution. In addition, DOE believes 
that a single value of minimum flow rate is sufficient to set a 
threshold and has developed a range of low-flow rates. Therefore, in 
this final rule, DOE retained the same approach as in the June 2022 
NOPR.
---------------------------------------------------------------------------

    \73\ The minimum values of 24.7 and 31.1 gpm were used to 
provide a threshold when developing low flow values in the 2017 DPPP 
DFR. DOE did not use a value of 36 gpm as stated by Pentair. See 
Chapter 7 of the January 2017 Direct Final Rule TSD, at 
www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105, p.7-6, 
footnote c.
---------------------------------------------------------------------------

4. Pressure Cleaner Booster Pumps Motor Input Power
    The input power of DPPP motors used in pressure cleaner booster 
pumps is calculated using the relationship between input power and flow 
and the system curve provided by the engineering analysis. To 
characterize operating flow for each consumer in the sample, in the 
June 2022 NOPR, DOE drew a value from a statistical distribution of 
flow established during the January 2017 Direct Final Rule. This 
distribution was developed around the test procedure test point of 10 
gpm of flow rate, as recommended by the ASRAC DPPP Working Group. 
(Docket EERE-2015-BT-STD-0008, No. 92 at p. 311) For single-speed 
pressure cleaner booster pumps, DOE then calculated the input power 
using the power curve from the engineering analysis. For variable-speed 
motors used in pressure cleaner booster pumps, DOE also calculated the 
pool pump motor input power in a low-speed setting. Based on 
information from the January 2017 Direct Final Rule, DOE used a value 
of 10 gpm to characterize the low-speed flow and calculate the 
hydraulic horsepower using the system curve.\74\ Then, DOE calculated 
the input power using the relationship between input power and flow as 
provided by the engineering analysis. 87 FR 37122, 37142.
---------------------------------------------------------------------------

    \74\ For more details, see chapter 7 of the January 2017 Direct 
Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------

    The Joint Advocates commented that for PCBPs, DOE estimated savings

[[Page 66996]]

associated with reducing flow rate to the 10 gpm specified in the test 
procedure, which is the typical flow rate required or recommended for 
suction-side pressure cleaners to function. In addition, the Joint 
Advocates noted that the savings associated with variable-speed 
pressure cleaner booster pump motors are supported by testing conducted 
by the CA IOUs during the DPPP rulemaking, which demonstrated that 
variable-speed control can reduce pressure cleaner booster pump energy 
consumption by 54 to 67 percent. Finally, the Joint Advocates commented 
that because of the cubic relationship between pump speed and power, 
reducing the speed of a pump by a small amount can yield large energy 
savings. (Joint Advocates, No. 97 at p. 2)
    As previously described in section IV.C.1.c of this document, DOE 
developed a revised pump curve and input power curves as a function of 
flow rate for PCBP with variable-speed motors. Accordingly, for both 
single-speed and variable-speed PCBPs, DOE calculated the power 
directly from the equation providing power as a function of flow 
developed in the from the engineering analysis. For variable-speed 
PCBPs, as noted by the Joint Advocates, DOE maintained a value of 10 
gpm to characterize the flow in the low-speed setting.
5. Daily Operating Hours
    In the June 2022 NOPR, DOE relied on information gathered during 
the January 2017 Direct Final Rule to develop estimates of pool pump 
daily operating hours. For self-priming and non-self-priming pool 
filter pumps in residential applications, operating hours are 
calculated uniquely for each consumer based on pool size, number of 
turnovers per day (itself based on ambient conditions), and the pump 
flow rate. In commercial applications, DOE assumed that these pumps 
operate 24 hours per day. 87 FR 37122, 37142-37143. For PCBPs, 
operating hours were drawn from a distribution based on the January 
2017 Direct Final Rule and assumed a minimum operation of 2 hours per 
day and a maximum of 3 hours per day. See section 7.4.2.2. of the June 
2022 NOPR TSD.
    PHTA and NEMA commented in support using the same methodology and 
inputs to estimate DPPP motor energy use that were used in the 
dedicated-purpose pool pump direct final rule TSD. (PHTA and NEMA, No. 
92 at p. 12)
    PHTA commented that PCBP motors operate within a small window of 2-
2.5 hours per day and that once a PCBP is set, customers have no reason 
to further adjust the speed of the PCBP motor. (PHTA, No. 100 at pp. 2-
3)
    In the June 2022 NOPR analysis, as noted above, DOE assumed that 
PCBP motors operate between 2 and 3 hours per day, which is in line 
with the information provided by PHTA regarding PCBP operating windows. 
In addition, as noted in section IV.A.4 of this document, DOE believes 
that variable speed is an appropriate design option for these motors 
and would result in energy savings to the consumer.
    DOE did not receive any other comments on daily operating hours and 
retained its approach for calculating the daily operating hours during 
the pool operating season.
6. Annual Days of Operation
    In the July 2022 NOPR, DOE calculated the annual unit energy 
consumption by multiplying the daily operating hours by the annual days 
of operation, which depend on the number of months of pool operation. 
For each consumer sample, DOE assigned different annual days of 
operation depending on the region in which the DPPP is installed. This 
assignment was based on information related to pool pump operating 
season based on geographical locations collected during the January 
2017 Direct Final Rule. 87 FR 37122, 37143-37144.
    DOE did not receive any comments on this topic and continued to use 
the same inputs regarding annual days of operation by region.
    Chapter 7 of the January 2017 Direct Final Rule TSD provides 
details on DOE's energy use analysis for DPPP motors.

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
DPPP motors. The effect of new or amended energy conservation standards 
on individual consumers usually involves a reduction in operating cost 
and an increase in purchase cost. DOE used the following two metrics to 
measure consumer impacts:
    [ballot] The LCC is the total consumer expense of an appliance or 
product over the life of that product, consisting of total installed 
cost (manufacturer selling price, distribution chain markups, sales 
tax, and installation costs) plus operating costs (expenses for energy 
use, maintenance, and repair). To compute the operating costs, DOE 
discounts future operating costs to the time of purchase and sums them 
over the lifetime of the product.
    [ballot] The PBP is the estimated amount of time (in years) it 
takes consumers to recover the increased purchase cost (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
at higher efficiency levels by the change in annual operating cost for 
the year that amended or new standards are assumed to take effect.
    For any given efficiency level, DOE measures the change in LCC 
relative to the LCC in the no-new-standards case, which reflects the 
estimated efficiency distribution of DPPP motors in the absence of new 
or amended energy conservation standards. In contrast, the PBP for a 
given efficiency level is measured relative to the baseline product.
    For each considered efficiency level in each product class, DOE 
calculated the LCC and PBP for a nationally representative set of 
consumers. As stated previously, DOE developed consumer samples from 
various data sources including 2009 AHS, 2011 AHS, 2020 RECS, 2018 
CBECS and 2022 PK data. For each sample consumer, DOE determined the 
energy consumption for DPPP motors and the appropriate energy price. By 
developing a representative sample of households, the analysis captured 
the variability in energy consumption and energy prices associated with 
the use of DPPP motors.
    Inputs to the calculation of total installed cost include the cost 
of the product--which includes MPCs, manufacturer markups, retailer and 
distributor markups, and sales taxes--and installation costs. Inputs to 
the calculation of operating expenses include annual energy 
consumption, energy prices and price projections, repair and 
maintenance costs, product lifetimes, and discount rates. DOE created 
distributions of values for product lifetime, discount rates, and sales 
taxes, with probabilities attached to each value, to account for their 
uncertainty and variability.
    The computer model DOE uses to calculate the LCC relies on a Monte 
Carlo simulation to incorporate uncertainty and variability into the 
analysis. The Monte Carlo simulations randomly sample input values from 
the probability distributions and DPPP motors user samples. For this 
rulemaking, the Monte Carlo approach is implemented in MS Excel 
together with the Crystal Ball\TM\ add-on.\75\ The

[[Page 66997]]

model calculated the LCC for products at each efficiency level for 
10,000 consumers per simulation run. The analytical results include a 
distribution of 10,000 data points showing the range of LCC savings for 
a given efficiency level relative to the no-new-standards case 
efficiency distribution. In performing an iteration of the Monte Carlo 
simulation for a given consumer, product efficiency is chosen based on 
its probability. If the chosen product efficiency is greater than or 
equal to the efficiency of the standard level under consideration, the 
LCC calculation reveals that a consumer is not impacted by the standard 
level. By accounting for consumers who already purchase more-efficient 
products, DOE avoids overstating the potential benefits from increasing 
product efficiency.
---------------------------------------------------------------------------

    \75\ Crystal Ball\TM\ is a commercially available software tool 
to facilitate the creation of these types of models by generating 
probability distributions and summarizing results within Excel, 
available at www.oracle.com/technetwork/middleware/crystalball/overview/ (last accessed February 3, 2023).
---------------------------------------------------------------------------

    DOE calculated the LCC and PBP for consumers of DPPP motors as if 
each were to purchase a new product in the first year of required 
compliance with new or amended standards. As discussed in section III.A 
of this document, for all TSLs except TSL 7, new standards apply to 
DPPP motors manufactured 2 years after the date on which any new 
standard is published, which corresponds to a first full year of 
compliance of 2026.\76\ At TSL 7, new standards would also apply 2 
years after the publication of any new standard except for small-size 
DPPP motors, for which new standards apply to DPPP motors manufactured 
4 years after the date on which any new standard is published. For the 
purposes of the LCC and PBP analysis, DOE used 2026 as the first full 
year of compliance with any amended standards for DPPP motors.
---------------------------------------------------------------------------

    \76\ At this time, DOE estimates publication of a final rule in 
the second half of 2023. Therefore, for purposes of its analysis, 
DOE used 2026 as the first full year of compliance with any amended 
standards for DPPP motors.
---------------------------------------------------------------------------

    Table IV.6 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the spreadsheet model, and of 
all the inputs to the LCC and PBP analyses, are contained in chapter 8 
of the final rule TSD and its appendices.

                    Table IV.6--Summary of Inputs and Methods for the LCC and PBP Analysis *
----------------------------------------------------------------------------------------------------------------
                         Inputs                                                Source/method
----------------------------------------------------------------------------------------------------------------
Equipment Cost..........................................  Derived by multiplying MPCs by manufacturer and
                                                           distribution channel markups and sales tax, as
                                                           appropriate. Used historical data to derive a price
                                                           scaling index to project equipment costs.
Installation Costs......................................  Baseline installation costs determined using data from
                                                           manufacturer gathered during the January 2017 Direct
                                                           Final Rule.
Annual Energy Use.......................................  The daily energy consumption multiplied by the number
                                                           of operating days per year.
                                                          Variability: Based on the 2009 AHS, 2011 AHS, 2020
                                                           RECS, 2018 CBECS, 2022 PK data and other data
                                                           sources.
Energy Prices...........................................  Electricity: Based on EEI data for 2021.
                                                          Variability: Regional energy prices determined for
                                                           nine census divisions for pool pump motors in
                                                           individual single-family homes and nine census
                                                           divisions for pool pump motors in community and
                                                           commercial pool pump motors.
                                                          Average and marginal prices used for electricity.
Energy Price Trends.....................................  Based on AEO2023 price projections.
Repair and Maintenance Costs............................  Assumed no repair or maintenance on pool pump motors.
Equipment Lifetime......................................  Average: 3.6 to 5 years depending on the DPPP
                                                           applications.
                                                          Variability: Based on Weibull distribution.
Discount Rates..........................................  Residential: Approach involves identifying all
                                                           possible debt or asset classes that might be used to
                                                           purchase the considered appliances, or might be
                                                           affected indirectly. Primary data source was the
                                                           Federal Reserve Board's Survey of Consumer Finances.
                                                          Commercial: Calculated as the weighted average cost of
                                                           capital for entities purchasing pool pumps. Primary
                                                           data source was Damodaran Online.
Compliance Date.........................................  2026 (first full year for analytical purposes).
----------------------------------------------------------------------------------------------------------------
* Not used for PBP calculation. References for the data sources mentioned in this table are provided in the
  sections following the table or in chapter 8 of the 2017 Direct Final Rule TSD.

1. Equipment Cost
    To calculate consumer product costs, DOE multiplied the MPCs 
developed in the engineering analysis by the markups described 
previously (along with sales taxes). DOE used different markups for 
baseline products and higher-efficiency products because DOE applies an 
incremental markup to the increase in MSP associated with higher-
efficiency products.
    In the June 2022 NOPR, to project an equipment price trend, DOE 
derived an inflation-adjusted index of the Producer Price Index 
(``PPI'') for integral and fractional horsepower motors and generators 
manufactured over the period 1967-2020.\77\ For fractional horsepower 
motors, the data showed a slightly downward trend prior to the early 
2000s, and then the price index increased to a small degree. For 
integral horsepower motors, the trend was mostly flat before the early 
2000s, and then the price index increased slightly. The trend aligned 
with the copper and steel deflated price indices to some extent, as 
they are the major materials used in small electric motors. Given the 
degree of uncertainty, in the June 2022 NOPR, DOE used a constant price 
assumption as the default price factor index to project future DPPP 
motor prices. For two-speed DPPP motors \78\, however, DOE assumed that 
the timer control portion of the installation cost would be affected by 
price learning. DOE used PPI data on ``Automatic environmental control 
manufacturing'' between 1980 and 2020 to estimate the historic price 
trend of the electronic components in the timer control.\79\ For 
variable-speed DPPP motors, DOE assumed that the controls portion of 
the DPPP motor would be affected by price

[[Page 66998]]

learning. Similarly, DOE used PPI data on ``Semiconductors and related 
device manufacturing'' between 1967 and 2020 to estimate the historic 
price trend of electronic components in the control.\80\ 87 FR 37122, 
37145.
---------------------------------------------------------------------------

    \77\ Series ID PCU 3353123353121; www.bls.gov/ppi/.
    \78\ DOE uses the terms ``dual-speed'' and ``two-speed'' 
interchangeably throughout this document.
    \79\ Automatic environmental control manufacturing PPI series ID 
PCU334512334512; www.bls.gov/ppi/.
    \80\ Semiconductors and related device manufacturing PPI series 
ID PCU334413334413; www.bls.gov/ppi/.
---------------------------------------------------------------------------

    DOE did not receive any comments on the equipment price trends. DOE 
updated the data used to include an additional year (2021) and retained 
the same approach to develop equipment price trends.
2. Installation Costs
    Installation costs include labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment. In the June 2022 
NOPR, DOE simplified the calculation and only accounted for the 
difference of installation costs by efficiency levels. Specifically, 
for two-speed pumps, DOE included the cost of a timer control and its 
installation where applicable. DOE also incorporated the supplemental 
installation labor costs for variable-speed pumps where applicable. Id.
    Pentair commented that older pools with large single-speed pumps 
would begin to fail and need replacement, as older pools usually do not 
have any automation to control the pool equipment and automation is 
needed to be able to program and control a variable-speed pump easily. 
Pentair commented that the cost to automate is between $2,000 to 
$3,000, and because of this cost, many pool owners rebuild the motor or 
purchase a foreign-made motor and pump. (Pentair, No. 90 at p. 1)
    DOE understands Pentair's comment regarding automation systems as 
relating to additional control systems that can be used to further 
automate the operation of a DPPP via computer or mobile devices. These 
systems permit sophisticated control over e.g. filtration, pumps, 
lighting chemical management, wireless remote control.\81\ DOE notes 
that these systems are not necessary to operate a variable-speed DPPP. 
As noted in section 5.7.1 of the January 2017 Direct Final Rule 
TSD,\82\ DOE researched the design and engineering constraints 
associated with motor substitution by examining manufacturer interview 
responses and holding discussions with the DPPP Working Group. DOE 
concluded that for the representative equipment capacities being 
considered, the wet end of the pump can be paired with a range of 
motors with various efficiencies and speed configurations without 
significant adaptations. In other words, a motor swap results in 
negligible incremental costs to the non-motor components of the DPPP. 
Thus, DOE concluded that the incremental MPC of the motor swap design 
options (improved motor efficiency and ability to operate at reduced 
speeds) may be considered equivalent to the incremental MPC of the 
motor component being swapped. Therefore, for variable-speed DPPP 
motors, DOE is not including the additional cost of automation systems 
in its analysis.
---------------------------------------------------------------------------

    \81\ See for example: www.pentair.com/en-us/products/residential/pool-spa-equipment/pool-automation/easytouch_pl4_andpsl4poolandspacontrolsystems.html?queryID=b1f890f14ae08bf7d162fc1ae8f116e8&objectID.
    \82\ See chapter 5 of the dedicated-purpose pool pumps direct 
final rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------

    DOE did not receive other comments on installation costs and 
retained the same estimates as in the June 2022 NOPR as applied to two-
speed and variable-speed DPPP motors.\83\
---------------------------------------------------------------------------

    \83\ Adjusted to 2021$.
---------------------------------------------------------------------------

3. Annual Energy Consumption
    For each sampled consumer, DOE determined the energy consumption 
for a DPPP motor at different efficiency levels using the approach 
described previously in section IV.E of this document.
4. Energy Prices
    Because marginal electricity price more accurately captures the 
incremental savings associated with a change in energy use from higher 
efficiency, it provides a better representation of incremental change 
in consumer costs than average electricity prices. Therefore, DOE 
applied average electricity prices for the energy use of the product 
purchased in the no-new-standards case, and marginal electricity prices 
for the incremental change in energy use associated with the other 
efficiency levels considered.
    DOE derived electricity prices in 2022 using data from EEI Typical 
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric 
bills and average kilowatt-hour costs to the customer as charged by 
investor-owned utilities. For the residential sector, DOE calculated 
electricity prices using the methodology described in Coughlin and 
Beraki (2018).\84\ For the commercial sector, DOE calculated 
electricity prices using the methodology described in Coughlin and 
Beraki (2019).\85\
---------------------------------------------------------------------------

    \84\ Coughlin, K. and B. Beraki.2018. Residential Electricity 
Prices: A Review of Data Sources and Estimation Methods. Lawrence 
Berkeley National Lab. Berkeley, CA. Report No. LBNL-2001169. 
ees.lbl.gov/publications/residential-electricity-prices-review.
    \85\ Coughlin, K. and B. Beraki. 2019. Non-residential 
Electricity Prices: A Review of Data Sources and Estimation Methods. 
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. ees.lbl.gov/publications/non-residential-electricity-prices.
---------------------------------------------------------------------------

    DOE's methodology allows electricity prices to vary by sector, 
region, and season. In the analysis, variability in electricity prices 
is chosen to be consistent with the way the consumer economic and 
energy use characteristics are defined in the LCC analysis. For DPPP 
motors, regional weighted-average values for both average and marginal 
prices were calculated for the nine census divisions. Each EEI utility 
in a region was assigned a weight based on the number of consumers it 
serves. Consumer counts were taken from the most recent EIA Form EIA-
861 data (2021). See chapter 8 of the final rule TSD for details.
    To estimate energy prices in future years, DOE multiplied the 2022 
energy prices by the projection of annual average price changes for 
each of the nine census divisions from the Reference case in AEO2023, 
which has an end year of 2050.\86\ To estimate price trends after 2050, 
DOE used the average of 2046-2050 values, held constant.
---------------------------------------------------------------------------

    \86\ U.S. Department of Energy--Energy Information 
Administration. Annual Energy Outlook 2023 with Projections to 2050. 
Washington, DC. Available at www.eia.gov/forecasts/aeo/ (last 
accessed May 23, 2023).
---------------------------------------------------------------------------

5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing product 
components that have failed in the equipment; maintenance costs are 
associated with maintaining the operation of the equipment. Typically, 
small incremental increases in equipment efficiency entail no, or only 
minor, changes in repair and maintenance costs compared to baseline 
efficiency products. In the June 2022 NOPR, DOE assumed that for 
maintenance costs, there is no change with efficiency level, and 
therefore DOE did not include those costs in the model. In addition, 
DPPP motors are not typically repaired and DOE assumed no repair costs. 
87 FR 37122, 37146.
    DOE did not receive any comments regarding maintenance and repair 
costs and maintained the same approach in this final rule.
6. Equipment Lifetime
    In the June 2022 NOPR, for DPPP motors used in residential 
applications, DOE calculated lifetime estimates using DPPP lifetime 
data and rates of repair

[[Page 66999]]

from the January 2017 Direct Final Rule, which estimated that motor 
replacement occurs at the halfway point in a pump's lifetime, but only 
for those DPPPs whose lifetime exceeds the average lifetime for the 
relevant equipment class.\87\ The data allowed DOE to develop a 
survival function, which provides a distribution of lifetime ranging 
from a minimum of 1 year based on a period covered by warranty, to a 
maximum of 10 years, with a mean value of 5 years for self-priming 
pumps, to a maximum of 8 years, with a mean value of 3.6 years for non-
self-priming and pressure cleaner booster pumps. These values are 
applicable to DPPP motors in residential applications. For commercial 
applications, DOE adjusted the lifetimes to account for the higher 
operating hours compared to residential applications, resulting in a 
reduced average lifetime of 3.2 years for self-priming pumps and 3.5 
years for pressure cleaner booster pumps. The resulting shipments-
weighted average lifetime across all DPPP motor equipment classes is 
4.5 years. Id.
---------------------------------------------------------------------------

    \87\ For DPPPs that do not include a repair, the DPPP motor 
lifetime is equal to the DPPP lifetime. For DPPPs that are repaired, 
the DPPP motor lifetime is equal to half of the DPPP lifetime. See 
chapter 8 of the dedicated-purpose pool pumps January 2017 Direct 
Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------

    The CA IOUs recommended that DOE increase the PCBP lifetimes to 
account for shorter operating hours compared to non-self-priming pump 
applications, similar to how DOE assumed longer lifetimes for DPPP 
motors used in the residential sector vs. commercial sector. The CA 
IOUs estimated the PCBP operating hours are about 40 percent shorter 
than the non-self-priming pool filter pump. (CA IOUs, No. 96 at pp. 5-
6)
    The CEC and NYSERDA recommended that DOE revise its lifetime 
estimates for PCBPs pumps, as well as for variable-speed DPPPs as 
compared to single- or two-speed DPPPs. The CEC and NYSERDA commented 
that they expected that more up-to-date information would be available 
to support increased lifetime estimates for PCBPs, as well as for 
variable-speed DPPPs generally. (CEC and NYSERDA, No. 94 at p. 6)
    DOE does not have lifetime data for PCBP motors. As stated 
previously, DOE calculated PCBP motor lifetimes based on information on 
PCBP lifetimes. DOE developed separate DPPP motor lifetimes by DPPP 
applications in line with the lifetime estimates from the January 2017 
Direct Final Report. Specifically, for PCBPs, a shorter average 
lifetime was considered compared to self-priming pumps to reflect a 
higher risk of failure typical of these DPPPs. (Docket EERE-2015-BT-
STD-0008; No. 94 p. 221) The PCBP lifetimes were developed with input 
from the Working Group and DOE believes these are representative of 
PCBP lifetimes. In addition, the CA IOUs, the CEC, and NYSERDA did not 
provide data to support longer lifetimes for DPPP motors used in PCBPs, 
nor did they provide data to support longer lifetimes for DPPP motors 
used in variable-speed DPPPs. Therefore, DOE believes its current 
approach is valid and retains its lifetime estimates for DPPP motors 
used in PCBPs.
    The CEC and NYSERDA stated although the approach \88\ described in 
the June 2022 NOPR is reasonable, DOE should revisit its underlying 
assumptions for the LCC calculations and ensure the product lifetime 
estimates are consistent with the assumptions for motor replacements 
and warranty lengths. Specifically, the CEC and NYSERDA noted that 
there was a mismatch between the assumptions made for product lifetime, 
repair frequency, and warranty length in the January 2017 Direct Final 
Rule, and because of this, the resulting estimated equipment lifetime 
used in this NOPR underestimates the actual lifetimes of DPPP motors. 
The CEC and NYSERDA stated that they believed the Working Group members 
did not factor in potential repairs or warranties when coming up with 
product lifetime estimates. (Docket EERE-2015-BT-STD-0008; No. 94 pp. 
209-223). The CEC and NYSERDA added that motor failure is the major 
failure mode for DPPPs and so if the motor is replaced after failure, 
the estimated lifetime of a DPPP is doubled. Further, the CEC and 
NYSERDA noted that if the DPPP fails during the warranty period and is 
replaced at no cost to the consumer, then the estimated lifetime of the 
DPPP is increased by the number of years the DPPP worked before it 
failed. The CEC and NYSERDA provided the example of the lifetime 
distribution for variable-speed non-self-priming pumps from the January 
2017 Direct Final Rule and stated that the assumptions regarding 
lifetime, repair frequency, and warranty period were incompatible and 
required increasing the mean and maximum values of the Weibull 
distributions used to estimate the equipment lifetime. The CEC and 
NYSERDA commented that DOE relied on an overly conservative assessment 
of equipment lifetime, which would mean that the economics of the 
proposed standard, in reality, would be even more favorable than what 
DOE presented in the LCC analysis. The CEC and NYSERDA, therefore, 
commented that DOE should ensure that the product lifetime estimates 
are consistent with the assumptions on motor replacements and warranty 
lengths. (CEC and NYSERDA, No. 94 at pp. 4-6)
---------------------------------------------------------------------------

    \88\ The CEC and NYSERDA referred to the following description: 
``for DPPPs that do not include a repair, the DPPP motor lifetime is 
equal to the DPPP lifetime. For DPPPs that are repaired, the DPPP 
motor lifetime is equal to half of the DPPP lifetime.'' 87 FR 37122, 
37146.
---------------------------------------------------------------------------

    DOE reviewed the DPPP lifetime assumptions and notes in the January 
2017 Direct Final Rule TSD; the average lifetimes and associated 
Weibull distributions represent the age at which the equipment is 
retired from service and include any repairs \89\ or motor replacement 
during the warranty period. (See section 8.2.2.4 of the January 2017 
Direct Final Rule TSD) \90\ As noted by the CEC and NYSERDA, the DPPP 
lifetimes used in the January 2017 Direct Final Rule were developed 
primarily based on input from manufacturers (in responses found in 
DOE's manufacturer interviews) and feedback from the ASRAC DPPP Working 
Group. The manufacturers interview guide reflects that DPPP lifetime is 
considered to include any motor replacement that would occur. (See 
section 12A.9 of the January 2017 Direct Final Rule TSD) \91\ As such, 
DOE believes that the lifetimes estimated in the January 2017 Direct 
Final Rule are inclusive of any repair and warranty periods. In 
addition, while the CEC and NYSERDA recommended revising equipment 
lifetimes, they did not provide alternative estimates and DOE retains 
the lifetimes as calculated in the June 2022 NOPR.
---------------------------------------------------------------------------

    \89\ The warranty period is represented by the location or delay 
parameter of the Weibull distribution.
    \90\ See chapter 8 of the January 2017 Direct Final Rule TSD, at 
www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
    \91\ See appendix 12A of the January 2017 Direct Final Rule TSD, 
at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------

7. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to consumers to estimate the present value of future operating cost 
savings. DOE estimated a distribution of discount rates for DPPP motors 
based on the opportunity cost of consumer funds.
    DOE applies weighted average discount rates calculated from 
consumer debt and asset data, rather than marginal

[[Page 67000]]

or implicit discount rates.\92\ The LCC analysis estimates net present 
value over the lifetime of the product, so the appropriate discount 
rate will reflect the general opportunity cost of household funds, 
taking this time scale into account. Given the longtime horizon modeled 
in the LCC, the application of a marginal interest rate associated with 
an initial source of funds is inaccurate. Regardless of the method of 
purchase, consumers are expected to continue to rebalance their debt 
and asset holdings over the LCC analysis period, based on the 
restrictions consumers face in their debt payment requirements and the 
relative size of the interest rates available on debts and assets. DOE 
estimates the aggregate impact of this rebalancing using the historical 
distribution of debts and assets.
---------------------------------------------------------------------------

    \92\ The implicit discount rate is inferred from a consumer 
purchase decision between two otherwise identical goods with 
different first cost and operating cost. It is the interest rate 
that equates the increment of first cost to the difference in net 
present value of lifetime operating cost, incorporating the 
influence of several factors: transaction costs; risk premiums and 
response to uncertainty; time preferences; interest rates at which a 
consumer is able to borrow or lend. The implicit discount rate is 
not appropriate for the LCC analysis because it reflects a range of 
factors that influence consumer purchase decisions, rather than the 
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------

    To establish residential discount rates for the LCC analysis, DOE 
identified all relevant household debt or asset classes in order to 
approximate a consumer's opportunity cost of funds related to appliance 
energy cost savings. It estimated the average percentage shares of the 
various types of debt and equity by household income group using data 
from the Federal Reserve Board's triennial Survey of Consumer Finances 
\93\ (``SCF'') starting in 1995 and ending in 2019. Using the SCF and 
other sources, DOE developed a distribution of rates for each type of 
debt and asset by income group to represent the rates that may apply in 
the year in which amended standards would take effect. DOE assigned 
each sample household a specific discount rate drawn from one of the 
distributions. The average rate across all types of household debt and 
equity and income groups, weighted by the shares of each type, is 4.26 
percent.
---------------------------------------------------------------------------

    \93\ U.S. Board of Governors of the Federal Reserve System. 
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 
2013, 2016, and 2019. www.federalreserve.gov/econresdata/scf/scfindex.htm (last accessed September 1, 2022).
---------------------------------------------------------------------------

    To establish commercial discount rates for the small fraction of 
applications where businesses purchase and use DPPP motors, DOE 
estimated the weighted-average cost of capital using data from 
Damodaran Online.\94\ The weighted-average cost of capital is commonly 
used to estimate the present value of cash flows to be derived from a 
typical company project or investment. Most companies use both debt and 
equity capital to fund investments, so their cost of capital is the 
weighted average of the cost to the firm of equity and debt financing. 
DOE estimated the cost of equity using the capital asset pricing model, 
which assumes that the cost of equity for a particular company is 
proportional to the systematic risk faced by that company. The average 
commercial discount rate is 6.77 percent.
---------------------------------------------------------------------------

    \94\ Damodaran Online, Data Page: Costs of Capital by Industry 
Sector (2021). pages.stern.nyu.edu/~adamodar/ (last accessed April 
22, 2022).
---------------------------------------------------------------------------

    DOE did not receive any comments related to discount rates. DOE 
retained the same methodology used in NOPR and updated the discount 
rate distributions based on the most recent available data.
    See chapter 8 of the January 2017 Direct Final Rule TSD for further 
details on the development of consumer discount rates.
8. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of product efficiencies under the no-new-
standards case (i.e., the case without amended or new energy 
conservation standards).
    In the June 2022 NOPR, to estimate the efficiency distribution of 
DPPP motors in 2026, DOE first established efficiency distributions in 
2021. Then, as in the January 2017 Direct Final Rule, DOE projected the 
2026 efficiency distribution by assuming a 1-percent market shift from 
EL 0-EL 2 (single-speed DPPP motors) to EL 6 (variable-speed DPPP 
motors) where applicable. To establish the efficiency distributions of 
DPPP motors in 2021, DOE considered two market segments: (1) DPPP 
motors incorporated in DPPPs and (2) replacement DPPP motors sold 
alone. 87 FR 37122, 37147.
    For DPPP motors incorporated in DPPPs, in the June 2022 NOPR, DOE 
relied on the 2021 DPPP Database that included a total of 345 models of 
DPPPs with WEF ratings and on the ELs developed in the January 2017 
Direct Final Rule to establish the 2021 efficiency distributions of 
DPPPs. DOE also used the scenario of roll-up market response to the 
DPPP standards as presented in the January 2017 Direct Final Rule. DOE 
then assumed that the distributions of DPPP motors incorporated in 
DPPPs would be equivalent to the 2021 efficiency distributions of 
DPPPs, based on the equivalent structure of the ELs used in this NOPR 
and in the January 2017 Direct Final Rule. For representative units 4 
(i.e., DPPP motors used in non-self-priming pumps, extra-small) and 7 
(i.e., DPPP motors used in pressure cleaner booster pumps), the 2021 
DPPP Database did not include any information specific to these DPPPs. 
Instead, for these representative units, DOE relied on the efficiency 
distributions provided in the January 2017 Direct Final Rule and 
applied a scenario of roll-up market response to the upcoming DPPP 
standards. Id.
    For replacement DPPP motors sold alone, in the June 2022 NOPR, for 
the United States, not including California,\95\ DOE assumed that the 
DPPP standards would have no impact on the DPPP motor efficiency 
distributions. Therefore, to establish the efficiency distributions of 
replacement DPPP motors sold alone, DOE relied on the 2021 no-new-
standards case efficiency distributions provided in the January 2017 
Direct Final Rule, which reflect efficiency distributions prior to the 
compliance date of the DPPP standards. DOE then assumed that the 
efficiency distributions of replacement DPPP motors sold alone would be 
equivalent to the efficiency distributions of DPPPs, based on the 
equivalent structure of the ELs used in this NOPR and in the January 
2017 Direct Final Rule. For California, DOE applied a scenario of roll-
up market response to the upcoming California replacement DPPP motor 
standards.\96\ DOE then relied on the market shares of replacement DPPP 
motors sold in California \97\ and in the rest of the United States to 
establish the nationwide 2021 replacement DPPP motor efficiency 
distributions. Id.
---------------------------------------------------------------------------

    \95\ DOE considered California separately in light of the July 
2021 California standards for replacement DPPP motors adopted April 
7, 2020 with an effective date July 19, 2021. See Docket 19-AAER-02 
at www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20/appliance-efficiency-proceedings-2.
    \96\ For the purposes of this analysis, DOE considered EL 1 (for 
motors below 0.5 THP) and EL 6 (for motors above 0.5 THP) as 
equivalent levels to the California standards.
    \97\ California Energy Commission, Final Analysis of Efficiency 
Standards for Replacement Dedicated-Purpose Pool Pump Motors, 
February 20, 2020. Docket 9-AAER-02 https://efiling.energy.ca.gov/GetDocument.aspx?tn=232151 (last accessed August 2021).
---------------------------------------------------------------------------

    In response to the June 2022 NOPR, PHTA and NEMA commented that DOE

[[Page 67001]]

overestimated the percentage of PCBP and small filter pumps that would 
be variable speed in 2026. PHTA and NEMA commented that based on a 
review of the CCMS data, there is limited availability of fractional 
THP motors currently on the market. Further, PHTA and NEMA commented 
that the limited models available are not mass produced. Recognizing 
the limited models of motors that exist in the small motor category, 
PHTA and NEMA cited this as a rationale for the fact that there are 
zero or very limited variable-speed replacement motors in the CEC 
database since the July 19, 2021, compliance date of CEC's replacement 
motor rule (the database appears to not identify whether products 
listed are variable speed or not; it lists only model information). 
PHTA and NEMA commented that in discussions with the California pool 
service, installer, and distribution industry as well as PHTA and NEMA 
manufacturers, it was revealed that small fractional VS motors are 
simply not being sold and instead consumers are choosing to replace the 
entire pump or repair the existing motor due to the cost justification 
and lack of product availability. (PHTA and NEMA, No. 92 at pp. 6-7)
    Fluidra commented that DOE's estimate for the share of DPPP motors 
used in PCBP at EL 2 appears to be too low. Specifically, Fluidra 
commented that EL 2 represents multistage booster pumps, which it 
estimates to be approximately a third of total booster pump market 
share. Fluidra further commented that DOE's estimated market share of 
DPPP motors used in PCBP at EL 6 appears to be too high. Although 
technologically feasible, Fluidra noted that it is not economically 
practical and there appears to be no availability of this type of pump 
in distribution at this time. Fluidra also noted that DOE's estimate 
for DPPP motors used in small-size 0.75 hp self-priming DPPP at EL 6 
appears to be too high because there are currently no or very limited 
variable-speed DPPPs of this size in the market. Fluidra added that for 
representative unit 7, the estimated 35 percent of replacement 
variable-speed PCBP motors is much too high and should be 0-1 percent, 
instead. (Fluidra, No. 91 at pp. 3-4)
    Pentair questioned whether variable-speed motors are being shipped 
in large numbers and stated that this is not the case. (Pentair, No. 90 
at p. 2)
    PHTA stated that there are no variable-speed pumps on the market 
below 0.75 hp. (PHTA, No. 100 at p. 3) Hayward recommended that DOE 
review the availability of low-horsepower variable-speed DPPP motors in 
the current market, and that Hayward offers three basic variable-speed 
pump models that can achieve a rating of 0.85 THP, but only when 
installed with 115V power. Accordingly, Hayward noted that each of 
these models is made with dual-voltage capability, and estimated that 
over 98 percent are installed with 230V power which yields 1.65 THP. 
(Hayward, No. 93 at p. 2)
    In this final rule, DOE revised the no-new-standards case 
efficiency distributions to incorporate stakeholder feedback. First, 
DOE revised the approach used to develop the no-new-standards case 
efficiency distributions for replacement DPPP motors in California 
(which was based on a roll-up scenario) and assumed shipments of 
replacement variable-speed DPPP motors would not always increase as a 
result of the California standard. Instead, in cases where the 
California standard requires a variable-speed replacement DPPP motor 
and the current DOE standards for DPPPs can be met without the use of a 
variable-speed motor (i.e., for small-size DPPP motors and for 
standard-size DPPP motors used in non-self priming DPPPs), DOE assumed 
that consumers would choose to purchase a new, cheaper, non-variable-
speed DPPP instead of purchasing a more expensive variable-speed 
replacement motor.\98\ This approach results in a lower market share of 
variable-speed DPPP motors overall (i.e., lower shipments), and 
specifically for DPPP motors used in PCBPs as recommended by NEMA, 
PTHA, and Fluidra. This approach also results in a decrease in the 
market share of DPPP motors used in small size 0.75 hp self-priming 
DPPP at EL 6 compared to the estimates from the June 2022 NOPR, as 
recommended by Fluidra. In addition, DOE updated the information used 
to develop the efficiency distributions based on the 2022 DPPP 
Database. Further to derive the efficiency distributions for each 
representative unit, DOE relied on all models of DPPP with a DPPP motor 
THP included in the range represented by the representative unit (e.g., 
for representative unit 1, DOE relied on DPPP motor data with DPPP 
motor THP greater than 0.5 and less than 1.15 THP). For this analysis, 
DOE considered the DPPP motor THP as rated by manufacturers when 
submitting compliance to the DOE Compliance and Certification Database, 
the CEC, and the ENERGY STAR program (which DOE collected as part of 
the 2022 DPPP Database), which may include ratings at different 
voltages. As a result, although DOE did not find DPPP motors at 0.75 
THP, DOE found several variable-speed DPPP motors within the 0.5-1.15 
THP range. In addition, DOE does not have any technical basis for, or 
has not received any comments on, variable-speed technology not being 
feasible at 0.75 THP (See section IV.A.4 of this document), and 
believes the efficiency distributions as established are representative 
of the 0.5-1.15 THP range associated with representative unit 1.
---------------------------------------------------------------------------

    \98\ As noted by NEMA and PTHA, a consumer may also choose to 
repair its existing motor. However, DOE notes in section IV.F.5 of 
this document that DPPP motors are typically not repaired and DOE 
believes that the purchase of a new DPPP represents the more likely 
scenario.
---------------------------------------------------------------------------

    Regarding Fluidra's comment related to the share of shipments at EL 
2 for PCBP, Fluidra did not provide supporting data to justify the 
recommended one-third market share. In addition, DOE notes that EL 2 
represents a level achieved by a higher-efficiency DPPP motor and does 
not relate to the pump design (e.g., multi-stage). The market shares 
from the June 2022 NOPR were based on information collected during the 
January 2017 Direct Final Rule. DOE maintained the same approach as the 
2022 DPPP Database and did not have sufficient information \99\ to 
revise these estimates.
---------------------------------------------------------------------------

    \99\ The 2022 DPPP Database includes 12 models of PBCPs.
---------------------------------------------------------------------------

    The projected 2026 market shares by EL for the no-new-standards 
case for DPPP motors are shown in Table IV.7 and Table IV.8 by market 
segment. See chapter 8 of the final rule TSD for further information on 
the derivation of the efficiency distributions.

                            Table IV.7--DPPP Motors Incorporated in DPPPs 2026 No-New-Standards Case Efficiency Distributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Rep.                                              EL 0     EL 1     EL 2     EL 3     EL 4     EL 5     EL 6
            Equipment class                unit     THP           DPPP application           (%)      (%)      (%)      (%)      (%)      (%)      (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Extra-Small-size.......................        4     0.22  Non-self-priming Filter Pump,         0       67       33  .......  .......  .......  .......
                                                            Extra-Small-size (0.09 hhp).
Small-size.............................        1     0.75  Self-priming Filter Pump,             0        0       45        9        0        1       44
                                                            Small-size (0.44 hhp).
Small-size.............................        5        1  Non-self-priming Filter Pump,         0       38       27       10        6        1       18
                                                            Small-size (0.52 hhp).

[[Page 67002]]

 
Small-size.............................      * 7    1.125  Pressure Cleaner Booster Pump.        0       81       10  .......  .......  .......        9
Standard-size..........................        6      1.5  Non-self-priming Filter Pump          0       38       27       10        6        1       18
                                                            (0.87 hhp).
Standard-size..........................        2     1.65  Self-priming Filter Pump,             0        0        0        0        0        0      100
                                                            Standard-size (0.95 hhp).
Standard-size..........................       2A     1.65  Self-priming Filter Pump,             0        0       45        9        0        1       44
                                                            Small-size (0.65 hhp).
Standard-size..........................        3     3.45  Self-priming Filter Pump,             0        0        0        0        0        0      100
                                                            Standard-size (1.88 hhp).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For Pressure cleaner booster pumps EL 3, EL 4, and EL 5 are equivalent to EL 6.
Note: may not sum to 100% due to rounding.


                           Table IV.8--Replacement DPPP Motors Sold Alone 2026 No-New-Standards Case Efficiency Distributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Rep.                                              EL 0     EL 1     EL 2     EL 3     EL 4     EL 5     EL 6
            Equipment class                unit     THP           DPPP application           (%)      (%)      (%)      (%)      (%)      (%)      (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Extra-small-size.......................        4     0.22  Non-self-priming Filter Pump,        29       38       33  .......  .......  .......  .......
                                                            Extra-Small size (0.09 hhp).
Small-size.............................        1     0.75  Self-priming Filter Pump,            33       11        9        2        2        2       42
                                                            Small-size (0.44 hhp).
Small-size.............................        5        1  Non-self-priming Filter Pump,        26       26       31        2        1        1       12
                                                            Small-size (0.52 hhp).
Small-size.............................      * 7    1.125  Pressure Cleaner Booster Pump.       11       65       10  .......  .......  .......       14
Standard-size..........................        6      1.5  Non-Self-priming Filter Pump         26       26       31        2        1        1       12
                                                            (0.87 hhp).
Standard-size..........................        2     1.65  Self-priming Filter Pump,            27        9        7        1        1        1       52
                                                            Standard-size (0.95 hhp).
Standard-size..........................       2A     1.65  Self-priming Filter Pump,            33       11        9        2        2        2       42
                                                            Small-size (0.65 hhp).
Standard-size..........................        3     3.45  Self-priming Filter Pump,            27        9        7        1        1        1       52
                                                            Standard-size (1.88 hhp).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For Pressure cleaner booster pumps EL 3, EL 4, and EL 5 are equivalent to EL 6.

    The LCC Monte Carlo simulations draw from the efficiency 
distributions and randomly assign an efficiency to the DPPP motor 
purchased by each sample household in the no-new-standards case. The 
resulting percent shares within the sample match the market shares in 
the efficiency distributions.
    In the June 2022 NOPR, when assigning an equipment efficiency to a 
sample consumer, DOE relied on a random assignment of no-new-standards 
case efficiencies (sampled from the developed efficiency distribution) 
in the LCC model. 87 FR 37142. 37144. DOE did not receive any comments 
on this approach and continued to rely on a random assignment in this 
final rule.
9. Payback Period Analysis
    The payback period is the amount of time (expressed in years) it 
takes the consumer to recover the additional installed cost of more-
efficient products, compared to baseline products, through energy cost 
savings. Payback periods that exceed the life of the product mean that 
the increased total installed cost is not recovered in reduced 
operating expenses.
    The inputs to the PBP calculation for each efficiency level are the 
change in total installed cost of the product and the change in the 
first-year annual operating expenditures relative to the baseline. DOE 
refers to this as a ``simple PBP'' because it does not consider changes 
over time in operating cost savings. The PBP calculation uses the same 
inputs as the LCC analysis when deriving first-year operating costs.
    As noted previously, EPCA establishes a rebuttable presumption that 
a standard is economically justified if the Secretary finds that the 
additional cost to the consumer of purchasing a product complying with 
an energy conservation standard level will be less than three times the 
value of the first year's energy savings resulting from the standard, 
as calculated under the applicable test procedure. (42 U.S.C. 6316(a); 
42 U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency level, DOE 
determined the value of the first year's energy savings by calculating 
the energy savings in accordance with the applicable DOE test 
procedure, and multiplying those savings by the average energy price 
projection for the year in which compliance with the new standards 
would be required.
    Fluidra presented a study of PCBP power consumption taken from two 
typical residential in-ground pool installations to compare the power 
consumption of a production multi-stage single-speed booster pump, with 
a multi-stage and a single-stage booster pump fitted with the most 
compatible variable-speed DPPP motor currently available. Fluidra 
commented that in the study, power was measured at various motor 
rotations per minute (``RPM'') down the lowest possible RPM to maintain 
the necessary flow and pressure for pool cleaner operation. Fluidra 
concluded from the study that a minimum payback period of approximately 
9 years was needed, and this was larger than the average lifetime of 
the PCBP motor (at 3.6 years from the 2017 Direct Final Rule TSD). 
Further, Fluidra noted that the power consumption of the booster pump 
variable-speed motor operating at maximum speed measured noticeably 
higher than the single-speed base comparison. Specifically, Fluidra 
commented that operating a PCBP at maximum speed is necessary because 
of the plumbing head loss from extended pipe runs where the pool 
equipment pad is further from the pool for aesthetics and noise 
reduction. Accordingly, Fluidra concluded that the variable speed would 
have incremental costs, without ever realizing the fiscal benefit of 
potential energy savings, and with limited impact to energy and waste 
reduction. (Fluidra, No. 91 at pp. 1-2, 6-9)
    Hayward stated that it reviewed energy and cost savings for six of 
its currently compliant single-speed pumps, including self-priming and 
non-self-priming, and estimated that the average payback period for 
conversion to variable speed was over 12 years. Hayward provided a 
separate analysis spreadsheet of this evaluation. Hayward also noted 
use of a 24.7 gpm flow rate, although Hayward knows of pool equipment 
requiring a greater flow rate. (Hayward, No. 93 at p. 2)
    PHTA and NEMA provided the results of field tests of two separate 
variable-speed PCBPs showing payback periods of 9-30 years, while a 
PCBP has an average lifetime of 3.6 years. In addition, PHTA and NEMA 
noted that in some cases, the variable-speed PCBP consumed more energy 
than the constant-load system. PHTA and NEMA noted that these results 
are consistent

[[Page 67003]]

with the LCC results from the January 2017 Direct Final Rule. (PHTA and 
NEMA, No. 92 at pp. 2-3)
    PHTA restated that PCBPs, when analyzed as their own equipment 
class, would not show cost-effective results; thus, it requested that 
DOE confirm its analysis and not require variable speed for these 
motors. (PHTA, No. 100 at p. 2) PHTA added that the rule is not cost-
effective and pointed to data provided by Hayward that calculated a 12-
year payback period for both self-priming and non-self-priming pumps 
under 1 hp as well as data submitted by Fluidra that calculated a 9-
year payback period for a variable-speed PCBP. (PHTA, No. 100 at pp. 3-
4)
    Waterway Plastics commented that savings are application-related. 
Waterway Plastics noted that non self-priming pool pumps are used on 
smaller swimming pools that have less filtration load, and some of them 
are seasonal. Therefore, they questioned the representativeness of 
average values for all applications. (Waterway Plastics, Public 
Meeting, No. 88 at p. 32) Waterway Plastics added that above-ground 
swimming pool and non-self-priming pump is used to filter a much 
smaller body of water on average and therefore averaging and combining 
the non-self-priming application with the self-priming application do 
not provide an accurate economic analysis. Further, Waterway Plastics 
added that using variable speed motors results in energy savings 
because they are flexible on the speed of operation and do not provide 
significant savings when used a maximum speed compared to single speed 
motors. (Waterway Plastics, Public Meeting, No. 88 at pp. 58-59)
    While the Fluidra and Hayward studies analyzed a number of specific 
installations, DOE notes that the LCC analyzes a larger consumer sample 
and characterizes inputs using statistical distributions to reflect 
variability in the field (see description in sections IV.E. and IV.F of 
this document). DOE does not believe that the two or six installations 
considered by Fluidra and Hayward are representative of the entire 
market as they do not reflect the entire range of possible installation 
costs, energy usage and usage conditions (e.g. as noted by Hayward, 
they relied on a single value of 24.7 gpm flow rate, although pool 
equipment typical runs at higher rates), and related operating costs. 
Further, as previously described, DOE believes that variable-speed 
motors can lead to energy savings in PCBPs as discussed in section 
IV.A.4 of this document. Instead, in the LCC and PBP analysis, DOE 
considers a distribution of installations with variations in heads and 
flow rates and efficiency as described in sections IV.E and IV.F.8 of 
this document. In addition, as presented in section IV.A.3 of this 
document, DOE's LCC and PBP analysis results are provided at the 
equipment-class level and not at the DPPP-application level (e.g., 
PCBP). The resulting payback periods are presented in section V.B.1.a 
of this document.

G. Shipments Analysis

    DOE uses projections of annual product shipments to calculate the 
national impacts of potential amended or new energy conservation 
standards on energy use, NPV, and future manufacturer cash flows.\100\ 
The shipments model takes an accounting approach, tracking market 
shares of each product class and the vintage of units in the stock. 
Stock accounting uses product shipments as inputs to estimate the age 
distribution of in-service product stocks for all years. The age 
distribution of in-service product stocks is a key input to 
calculations of both the NES and NPV, because operating costs for any 
year depend on the age distribution of the stock.
---------------------------------------------------------------------------

    \100\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general, 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

1. Base-Year Shipments
    In the June 2022 NOPR, DOE estimated motor shipments by DPPP 
application and considered two pool pump motor market segments: (1) 
DPPP motors incorporated in DPPPs and (2) replacement DPPP motors sold 
alone. For DPPP motors incorporated in DPPPs, DOE used the 2015 
shipments of DPPPs by DPPP application from the January 2017 Direct 
Final Rule, which were based on manufacturer interviews. For 
replacement DPPP motors sold alone, DOE used estimates of historical 
shipments of DPPPs for the period 2007-2014 and estimates of repair 
frequency as provided by the ASRAC DPPP Working Group during the 
January 2017 Direct Final Rule to calculate the resulting number of 
failing DPPP motors each year, and corresponding replacement DPPP motor 
shipments by DPPP application.\101\ DOE also used 2018 confidential 
DPPP motor shipments data and information from the 2021 DPPP Database 
to estimate market share of motor shipments by total horsepower and 
distribution of DPPP motor shipments by representative unit. 87 FR 
37122, 37148.
---------------------------------------------------------------------------

    \101\ DOE relied on a repair frequency of 40 percent as provided 
in the January 2017 Direct Final Rule. At the end of life of a 
motor, the motor is replaced (i.e., pump repair) 40 percent of the 
time, and in the remaining 60 percent of the time, the pump is 
replaced by a new pump. For more details, see chapter 9 of the 
January 2017 Direct Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------

    Regarding DOE's base year shipments estimate, Fluidra commented 
that shipments of replacement DPPP motors for booster pumps appear to 
be too high. Fluidra stated that it offers two Pressure Cleaner Booster 
Pump Models (PB4-60 and PB4SQ), and combined ships less than 1,000 
replacement motors per year, which includes warranty replacements. 
Fluidra added that due to the low price point of booster pumps, the 
cost of a replacement motor and service/repair of a booster pump 
outweighs the cost of simply replacing the entire booster pump, which 
also comes with a manufacturer warranty. (Fluidra, No. 91 at p. 4)
    In this final rule, as described in section IV.F.8 of this 
document, DOE revised the base year 2021 shipments to account for 
consumers that elect to purchase a new pump, rather than a replacement 
motor in California.\102\ This resulted in reduced shipments of 
replacement DPPP motors sold alone and increased shipments of motors 
sold in DPPP for PCBP, small-size self-priming, small and standard-size 
non-self-priming filter pump applications.
---------------------------------------------------------------------------

    \102\ As noted in section IV.F.8 of this document, DOE 
considered California separately in light of the July 2021 
California standards for replacement DPPP motors adopted April 8, 
2020 with an effective date July 19, 2021. See Docket 19-AAER-02 at 
www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20/appliance-efficiency-proceedings-2.
---------------------------------------------------------------------------

    Table IV.9 provides the breakdown of DPPP motor shipments by market 
segment and representative unit.

[[Page 67004]]



                                   Table IV.9--2021 Shipments of DPPP Motors by Market Segment and Representative Unit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            DPPP motors     Replacement
                                                                                                  Represented THP range    incorporated     DPPP motors
           Equipment class               Rep. unit *         THP             DPPP category           within the DPPP         in pumps       sold alone
                                                                                                         category            (thousand       (thousand
                                                                                                                              units)          units)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small-size...........................               1            0.75  Small Size Self-priming   0.5 <= THP < 1.15......           148.3            37.4
                                                                        Filter Pump.
Standard-size........................              2A            1.65                            1.15 <= THP <= 5.......           103.8            26.1
Standard-size........................               2            1.65  Standard Size Self-       1.15 <= THP < 1.7......           155.2           151.7
                                                                        priming Filter Pump.
Standard-size........................               3            3.45                            1.7 <= THP <= 5........           243.1           237.5
Extra-Small-size.....................               4            0.22  Non-self-priming Filter   <0.5...................            47.4            16.2
                                                                        Pump.
Small-size...........................               5               1                            0.5 <= THP < 1.15......           299.3            86.9
Standard-size........................               6             1.5                            1.15 <= THP <= 5.......           116.4            33.8
Small-size...........................               7           1.125  Pressure Cleaner Booster  0.5 <= THP < 1.15......           151.8            39.7
                                                                        Pump.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Representative unit.

2. No-New-Standards Case Shipment Projections
    DOE projected shipments of DPPP motors incorporated in DPPPs and 
shipments of replacement DPPP motors sold alone separately.
    In the June 2022 NOPR, in the no-new-standards case, DOE assumed 
the total shipments of DPPP motors incorporated in DPPPs was equal to 
the total shipments of DPPPs as projected in the January 2017 Direct 
Final Rule, at the trial standard level corresponding to the DPPP 
energy conservation standard.\103\ 87 FR 37122, 37149. DOE did not 
receive any comments on this approach and retained the same method to 
estimate DPPP motors incorporated in DPPPs.
---------------------------------------------------------------------------

    \103\ These were calculated based on input from the ASRAC DPPP 
Working Group and using a repair-replace model, and accounted for 
price elasticity of demand. A price elasticity of -0.02 was used for 
standard-size self-priming pool pumps. For more details see chapter 
9 of the January 2017 Direct Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
---------------------------------------------------------------------------

    In the June 2022 NOPR, in the no-new-standards case, for 
replacement DPPP motors sold alone, DOE used the projected shipments of 
DPPPs and estimates of repair frequency to calculate the resulting 
number of failing motors each year and corresponding motor replacement 
sales. For replacement motors sold alone outside of California, DOE 
relied on repair frequency rates as provided in the January 2017 Direct 
Final Rule. For standard-size, self-priming pump motors sold before 
2021 and at efficiency levels below the DPPP standards, DOE assumed 
that the repair frequency would increase from 40 percent to 60 percent 
to calculate corresponding replacement DPPP motors sales.\104\ For 
other categories of DPPPs, DOE relied on a 40-percent repair frequency 
as provided in the January 2017 Direct Final Rule. These repair-replace 
rates were based on inputs from the ASRAC DPPP Working Group during the 
January 2017 Direct Final Rule. For replacement motors sold alone in 
California, DOE projects that with the California efficiency standards 
for replacement DPPPs,\105\ the repair frequency of standard-size, 
self-priming pump motors will remain at its pre-2021 rate of 40 percent 
as estimated in the January 2017 Direct Final Rule, rather than 
increasing to 60 percent due to the smaller price difference between 
replacing the entire pump and replacing the motor only. Id.
---------------------------------------------------------------------------

    \104\ In the January 2017 Direct Final Rule, DOE assumed that 
users of standard-size self-priming pool pumps purchased before 
compliance year of the DPPP standards (i.e., 2021), at efficiency 
levels below the upcoming DPPP standards, would seek to increase 
their pump's lifetime by performing an additional repair (i.e., 
cheaper motor replacement with a non-variable speed motor), rather 
than replacing the entire pump with a more efficient and variable-
speed DPPP (due to the DPPP energy conversation standards at 10 CFR 
431.465(f) which correspond to a variable-speed efficiency levels 
for these DPPPs). In the January 2017 Direct Final Rule, DOE 
therefore increased the repair frequency of these DPPPs from 40 
percent to 60 percent. For more details see chapter 9 of the January 
2017 Direct Final Rule TSD, at www.regulations.gov/document?D=EERE-2015-BT-STD-0008-0105.
    \105\ Adopted April 7, 2020 with an effective date July 19, 
2021. See Docket #19-AAER-02 at www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20/appliance-efficiency-proceedings-2.
---------------------------------------------------------------------------

    In response to the June 2022 NOPR, Fluidra commented that a 60-
percent estimate for replacement motors may be too high, adding that 
the tendency for the consumer is to replace motors only when they are 
under warranty, and once the motor warranty expires, the consumer 
purchases a whole new pump to get a new manufacturer's warranty 
(typically a 3-year warranty). (Fluidra, No. 91 at p. 4)
    In the June 2022 NOPR, in order to estimate shipments of DPPP 
motors, DOE relied on a 40-percent DPPP repair rate for the majority of 
DPPPs. See footnote 85 of the June 2022 NOPR. 87 FR 37122, 37148. As 
previously noted, for standard-size self-priming pump motors sold 
outside California before 2021 and at efficiency levels below the DPPP 
standards, DOE assumed that the repair frequency would increase from 40 
percent to 60 percent to calculate corresponding replacement DPPP 
motors sales. See 87 FR 37122, 37149. Similar to the assumptions used 
in the January 2017 Direct Final Rule, DOE assumed that users of 
standard-size self-priming pool pumps purchased before compliance year 
of the DPPP standards (i.e., 2021), at efficiency levels below the 
upcoming DPPP standards, would seek to increase the pump's lifetime by 
performing an additional repair (i.e., cheaper motor replacement with a 
non-variable-speed motor), rather than replacing the entire pump with a 
more efficient and variable-speed DPPP (due to the DPPP energy 
conversation standards at 10 CFR 431.465(f), which correspond to 
variable-speed efficiency levels for these DPPPs). See footnote 87 of 
the June 2022 NOPR 87 FR 37122, 37149. DOE believes this approach is 
appropriate and continues to rely on a 60-percent DPPP repair rate for 
DPPPs sold prior to 2021 below the current DPPP standards. For all 
other categories of DPPPs, DOE relied on a 40-percent repair rate as 
using a 60-percent rate would be too high as noted by Fluidra. DOE did 
not receive any other comments on this topic and relied on the same 
repair rates and approach to estimate replacement DPPP motors sold 
alone in the no-new-standards case.

[[Page 67005]]

3. Standards Case Shipment Projections
    The standards-case shipments projections account for the effects of 
potential standards on shipments.
    In the June 2022 NOPR, in the standards cases for which the DPPP 
motor efficiency level was set below the level equivalent to the 
standard-size self-priming DPPP standards, DOE assumed the increase in 
repair frequency (i.e., 60 percent) of standard-size self-priming pool 
pumps, which was accounted for in the no-new-standards case, was 
maintained for the entire United States except for California (i.e., 
TSLs 1 to 5 as described in section V.A of this document). In 
California, due to the California efficiency standards for replacement 
DPPP motors, DOE estimated that the repair frequency of standard-size 
self-priming pump motors in California would remain at its pre-2021 
rate of 40 percent in the standards case (the same as in the no-new-
standards case) because California standards are at or above the levels 
equivalent to the DPPP standards at 10 CFR 431.465(f) for all equipment 
classes. 87 FR 37122, 37149.
    In the June 2022 NOPR, outside of California, in the standards 
cases for which the DPPP motor efficiency levels are set at or above 
the level equivalent to the standard-size self-priming DPPP standard, 
DOE assumed the increase in repair for standard-size self-priming pumps 
would no longer occur starting from the compliance year due to the 
smaller price difference between replacing the entire pump and 
replacing the motor only. Under these scenarios, DOE assumed the pumps 
were repaired 40 percent of the time, and new pumps were purchased 60 
percent of the time to replace failed pumps (i.e., TSLs 6 to 8 as 
described in section V.A of this document). Id.
    In addition, DOE accounted for potential downsizing that could 
occur as a result of setting different efficiency levels by equipment 
classes and THP. Specifically, DOE assumed that DPPP manufacturers may 
not want to incorporate variable-speed motors in DPPPs, where the DPPP 
energy conservation standard level does not require the use of a 
variable-speed motor. Therefore, at TSLs requiring a variable-speed 
motor for certain equipment classes with larger THP (i.e., TSL 8, 7, 6. 
See section V.A), DOE assumed that DPPP manufacturers might decide to 
use motors with smaller THP for DPPPs that were not required to comply 
with a DPPP standard level corresponding to a variable-speed-motor 
efficiency level. DOE analyzed DPPP motor THP size as a function of 
DPPP hhp in the 2021 DPPP Database to estimate where such downsizing 
may occur. For TSL 8 and 7, DOE did not identify any possible 
downsizing from small-size DPPP motors to extra-small-size DPPP motors. 
Furthermore, at TSL 8 and 7, small-size and standard-size DPPP motors 
are both set at EL 6. Therefore, DOE did not consider any downsizing at 
these TSLs. At TSL 6, based on a review of the 2021 DPPP Database, DOE 
identified representative unit 2A as a candidate for downsizing. 
Therefore, at TSL 6, DOE assumed that the majority of shipments of 
standard-size DPPP motors used in small-size self-priming pool pumps 
(80 percent) would downsize to small-size DPPP motors. For standard-
size DPPP motors used in standard-size non-self-priming pumps (i.e., 
representative unit 5), DOE did not identify DPPP models with oversized 
DPPP motors in its 2021 DPPP Database and did not assume any 
downsizing. 87 FR 37122, 37149-37150.
    DOE did not receive any comments on its approach to establish 
standards-case shipments projections and maintain the same methodology 
in this final rule with the following update. For those California 
consumers that elect to purchase a new DPPP rather than a replacement 
variable-speed motor in the no-new-standards case (based on the 
discussion in section IV.F.8 of this document), at the TSLs for which 
the DPPP motor efficiency levels are set at or above the level 
equivalent to the PCBP, small-size self-priming, small and standard-
size non-self-priming DPPP standards, DOE assumed that these California 
consumers would select to purchase a replacement motor rather than a 
new DPPP. This results in an increase of shipments of replacement DPPP 
motors sold alone and a decrease of shipments of motors sold in DPPP at 
these TSLs, for those DPPP applications. See chapter 9 of the final 
rule TSD for more details.

H. National Impact Analysis

    The NIA assesses the national energy savings (``NES'') and the NPV 
from a national perspective of total consumer costs and savings that 
would be expected to result from new or amended standards at specific 
efficiency levels.\106\ (``Consumer'' in this context refers to 
consumers of the product being regulated.) DOE calculates the NES and 
NPV for the potential standard levels considered based on projections 
of annual product shipments, along with the annual energy consumption 
and total installed cost data from the energy use and LCC analyses. For 
the present analysis, DOE projected the energy savings, operating cost 
savings, product costs, and NPV of consumer benefits over the lifetime 
of DPPP motors sold from 2026 through 2055, except at TSL 7 where for 
small size motors at TSL 7, the analysis considers DPPP motors sold 
from 2028 through 2055.\107\
---------------------------------------------------------------------------

    \106\ The NIA accounts for impacts in the 50 States and U.S. 
territories.
    \107\ Because the anticipated compliance date is late in the 
year, for analytical purposes, DOE conducted the analysis for 
shipments in 2026-2055 and 2028-2055.
---------------------------------------------------------------------------

    DOE evaluates the impacts of new or amended standards by comparing 
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each 
product class in the absence of new or amended energy conservation 
standards. For this projection, DOE considers historical trends in 
efficiency and various forces that are likely to affect the mix of 
efficiencies over time. DOE compares the no-new-standards case with 
projections characterizing the market for each product class if DOE 
adopted new or amended standards at specific energy efficiency levels 
(i.e., the TSLs or standards cases) for that class. For the standards 
cases, DOE considers how a given standard would likely affect the 
market shares of products with efficiencies greater than the standard.
    DOE uses a spreadsheet model to calculate the energy savings and 
the national consumer costs and savings from each TSL. Interested 
parties can review DOE's analyses by changing various input quantities 
within the spreadsheet. The NIA spreadsheet model uses typical values 
(as opposed to probability distributions) as inputs.
    Table IV.10 summarizes the inputs and methods DOE used for the NIA 
analysis for the final rule. Discussion of these inputs and methods 
follows the table. See chapter 10 of the final rule TSD for further 
details.

[[Page 67006]]



   Table IV.10--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
              Inputs                               Method
------------------------------------------------------------------------
Shipments.........................  Annual shipments from shipments
                                     model.
Compliance Date of Standard.......  2026 (2028 at TSL 7 for small-size
                                     DPPP motors) (first full year).
Efficiency Trends.................  No-new-standards case: shifted 1
                                     percent per year of the market
                                     share in the single-speed levels to
                                     the variable-speed efficiency
                                     levels. Standard cases: shifted 1
                                     percent per year of the market
                                     share in the single-speed levels to
                                     the variable-speed efficiency
                                     levels.
Annual Energy Consumption per Unit  Annual weighted-average values are a
                                     function of energy use at each TSL.
Total Installed Cost per Unit.....  Annual weighted-average values are a
                                     function of cost at each TSL.
                                     Incorporates projection of future
                                     product prices based on historical
                                     data.
Annual Energy Cost per Unit.......  Annual weighted-average values as a
                                     function of the annual energy
                                     consumption per unit and energy
                                     prices.
Repair and Maintenance Cost per     Annual values do not change with
 Unit.                               efficiency level.
Energy Price Trends...............  AEO 2023 projections (to 2050) and
                                     held constant thereafter.
Energy Site-to-Primary and FFC      A time-series conversion factor
 Conversion.                         based on AEO 2023.
Discount Rate.....................  Three and seven percent.
Present Year......................  2024.
------------------------------------------------------------------------

1. Product Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. Section IV.F.8 of this document describes how DOE developed an 
energy efficiency distribution for the no-new-standards case (which 
yields a shipment-weighted average efficiency) for each of the 
considered product classes for the year of anticipated compliance with 
an amended or new standard. To project the trend in efficiency absent 
amended standards for DPPP motors over the entire shipments projection 
period, DOE relied on the same approach described in section IV.F.8 
this document and shifted 1 percent per year of the market share in the 
single-speed levels to the variable-speed efficiency levels. The 
approach is further described in chapter 10 of the final rule TSD.
    For the standards cases, DOE used a ``roll-up'' scenario to 
establish the shipment-weighted efficiency for the year that standards 
are assumed to become effective (2026 or 2028). In this scenario, the 
market shares of products in the no-new-standards case that do not meet 
the standard under consideration would ``roll up'' to meet the new 
standard level, and the market share of products above the standard 
would remain unchanged.
    In the June 2022 NOPR, to develop standards case efficiency trends 
after the first full year of compliance (2026 or 2028), DOE also 
shifted 1 percent per year of the market share in the single-speed 
levels to the variable-speed efficiency levels. 87 FR 37122, 37151. 
This approach is consistent with the assumption made in the 2017 DPPP 
DFR. See section 8.4 of the June 2022 NOPR TSD. DOE did not receive any 
comments on this assumption and retained the same approach in the final 
rule.
2. National Energy Savings
    The national energy savings analysis involves a comparison of 
national energy consumption of the considered products between each 
potential standards case (``TSL'') and the case with no new or amended 
energy conservation standards. DOE calculated the national energy 
consumption by multiplying the number of units (stock) of each product 
(by vintage or age) by the unit energy consumption (also by vintage). 
DOE calculated annual NES based on the difference in national energy 
consumption for the no-new-standards case and for each higher 
efficiency standard case. DOE estimated energy consumption and savings 
based on site energy and converted the electricity consumption and 
savings to primary energy (i.e., the energy consumed by power plants to 
generate site electricity) using annual conversion factors derived from 
AEO 2023. Cumulative energy savings are the sum of the NES for each 
year over the timeframe of the analysis.
    Use of higher-efficiency products is sometimes associated with a 
direct rebound effect, which refers to an increase in utilization of 
the product due to the increase in efficiency. DOE did not find any 
data on the rebound effect specific to DPPP motors and, in the June 
2022 NOPR, DOE did not apply a rebound effect. 87 FR 37122, 37151. DOE 
did not receive any comments on this topic and maintains the same 
approach in this final rule.
    In 2011, in response to the recommendations of a committee on 
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards'' appointed by the National Academy of Sciences, 
DOE announced its intention to use FFC measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the 
approaches discussed in the August 18, 2011 notice, DOE published a 
statement of amended policy in which DOE explained its determination 
that EIA's National Energy Modeling System (``NEMS'') is the most 
appropriate tool for its FFC analysis and its intention to use NEMS for 
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, 
multi-sector, partial equilibrium model of the U.S. energy sector \108\ 
that EIA uses to prepare its Annual Energy Outlook. The FFC factors 
incorporate losses in production and delivery in the case of natural 
gas (including fugitive emissions) and additional energy used to 
produce and deliver the various fuels used by power plants. The 
approach used for deriving FFC measures of energy use and emissions is 
described in appendix 10B and 13A of the final rule TSD.
---------------------------------------------------------------------------

    \108\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009. 
Available at www.eia.gov/analysis/pdfpages/0581(2009)index.php (last 
accessed September 2, 2021).
---------------------------------------------------------------------------

3. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are (1) total annual installed cost, (2) total 
annual operating costs (energy costs and repair and maintenance costs), 
and (3) a

[[Page 67007]]

discount factor to calculate the present value of costs and savings. 
DOE calculates net savings each year as the difference between the no-
new-standards case and each standards case in terms of total savings in 
operating costs versus total increases in installed costs. DOE 
calculates operating cost savings over the lifetime of each product 
shipped during the projection period.
    As discussed in section IV.F.1 of this document, DOE developed DPPP 
motors price trends based on historical PPI data. DOE applied the same 
trends to project prices for each equipment class at each considered 
efficiency level. By 2055, which is the end date of the projection 
period, the average DPPP motor price is projected to drop between 0 and 
52 percent depending on the efficiency level relative to 2026. DOE's 
projection of product prices is described in appendix 10C of the final 
rule TSD.
    To evaluate the effect of uncertainty regarding the price trend 
estimates, DOE investigated the impact of different product price 
projections on the consumer NPV for the considered TSLs for DPPP 
motors. In addition to the default price trend, DOE considered two 
product price sensitivity cases: (1) a high price decline case and (2) 
a low price decline case based on historical PPI data. The derivation 
of these price trends and the results of these sensitivity cases are 
described in appendix 10C of the final rule TSD.
    The energy cost savings are calculated using the estimated energy 
savings in each year and the projected price of the appropriate form of 
energy. To estimate energy prices in future years, DOE multiplied the 
average regional energy prices by the projection of annual national-
average residential energy price changes in the Reference case from AEO 
2023, which has an end year of 2050. To estimate price trends after 
2050, DOE used the average of 2046 to 2050 prices, held constant. As 
part of the NIA, DOE also analyzed scenarios that used inputs from 
variants of the AEO 2023 Reference case that have lower and higher 
economic growth. Those cases have lower and higher energy price trends 
compared to the Reference case. NIA results based on these cases are 
presented in appendix 10D of the final rule TSD.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
final rule, DOE estimated the NPV of consumer benefits using both a 3-
percent and a 7-percent real discount rate. DOE uses these discount 
rates in accordance with guidance provided by the Office of Management 
and Budget (``OMB'') to Federal agencies on the development of 
regulatory analysis.\109\ The discount rates for the determination of 
NPV are in contrast to the discount rates used in the LCC analysis, 
which are designed to reflect a consumer's perspective. The 7-percent 
real value is an estimate of the average before-tax rate of return to 
private capital in the U.S. economy. The 3-percent real value 
represents the ``social rate of time preference,'' which is the rate at 
which society discounts future consumption flows to their present 
value.
---------------------------------------------------------------------------

    \109\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at 
georgewbush-whitehouse.archives.gov/omb/memoranda/m03-21.html (last 
accessed Feb. 2, 2023).
---------------------------------------------------------------------------

I. Consumer Subgroup Analysis

    In analyzing the potential impact of new or amended energy 
conservation standards on consumers, DOE evaluates the impact on 
identifiable subgroups of consumers that may be disproportionately 
affected by a new or amended national standard. The purpose of a 
subgroup analysis is to determine the extent of any such 
disproportional impacts. DOE evaluates impacts on particular subgroups 
of consumers by analyzing the LCC impacts and PBP for those particular 
consumers from alternative standard levels.
    In the June 2022 NOPR, DOE analyzed the impacts of the considered 
standard levels on one subgroup: senior-only households. The analysis 
used subsets of the RECS 2015 sample composed of households that meet 
the criteria for the subgroup. DOE used the LCC and PBP spreadsheet 
model to estimate the impacts of the considered efficiency levels on 
this subgroup. DOE did not evaluate low-income consumer subgroup 
impacts because the sample size of the subgroup was too small for 
meaningful analysis. 87 FR 37122, 37152 FN97.
    NEMA and PHTA commented that DOE should consider the economic 
impact on lower median income and underserved communities whose 
consumers utilize above-ground and storable pools that typically fall 
within the small fractional motor category currently requiring a 
variable-speed motor in the NOPR. NEMA and PHTA commented that there 
are 3.3 million permanent above-ground pools in the United States; in 
2020, there were 227,000 new above-ground pools installed and in 2021 
this number increased to 247,000 (compared to 96,000 in-ground in 2020 
and 117,000 in-ground in 2021); the average above-ground pool price in 
2021 was $3,615 compared to $56,000 for the average in-ground pool. 
(PHTA and NEMA, No. 92 at p. 5) PHTA commented that lower-income 
consumers and underserved communities would be more negatively impacted 
by a variable-speed requirement for small fractional motors because of 
the use of such motors in above-ground and storable pools. (PHTA, No. 
100 at p. 4)
    In the June 2022 NOPR, DOE did not evaluate low-income consumer 
subgroup impacts because the sample size of the subgroup was too small 
for meaningful analysis. 87 FR 37122, 37186 FN97. In this final rule, 
DOE updated the sample based on RECS 2020 and found that RECS 2020 only 
included 37 low-income consumer samples representing 2.6% of U.S 
households with a pool.\110\ Therefore, in this final rule, DOE did not 
evaluate low-income consumer subgroup impacts because the sample size 
of the subgroup continues to be too small for meaningful analysis.
---------------------------------------------------------------------------

    \110\ After adjusting the RECS sample to represent the 
geographic distribution of above ground pools, this results in 2.5 
percent of consumers of above-ground pools that are low-income.
---------------------------------------------------------------------------

    For this final rule, DOE analyzed the impacts of the considered 
standard levels on senior-only households. The analysis used subsets of 
the RECS 2020 sample composed of households that meet the criteria for 
the considered subgroup. DOE used the LCC and PBP spreadsheet model to 
estimate the impacts of the considered efficiency levels on these 
subgroups. Chapter 11 in the final rule TSD describes the consumer 
subgroup analysis.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impacts of new 
energy conservation standards on manufacturers of DPPP motors and to 
estimate the potential impacts of such standards on employment and 
manufacturing capacity. The MIA has both quantitative and qualitative 
aspects and includes analyses of projected industry cash flows, the 
INPV, investments in research and development (``R&D'') and 
manufacturing capital, and domestic manufacturing employment. 
Additionally, the MIA seeks to determine how new energy conservation 
standards might affect manufacturing employment, capacity, and 
competition, as well as how standards contribute to overall regulatory 
burden. Finally, the MIA serves to identify any disproportionate 
impacts on

[[Page 67008]]

manufacturer subgroups, including small business manufacturers.
    The quantitative part of the MIA primarily relies on the Government 
Regulatory Impact Model (``GRIM''), an industry cash flow model with 
inputs specific to this rulemaking. The key GRIM inputs include data on 
the industry cost structure, unit production costs, product shipments, 
manufacturer markups, and investments in R&D and manufacturing capital 
required to produce compliant equipment. The key GRIM outputs are the 
INPV, which is the sum of industry annual cash flows over the analysis 
period, discounted using the industry-weighted average cost of capital, 
and the impact to domestic manufacturing employment. The model uses 
standard accounting principles to estimate the impacts of energy 
conservation standards on a given industry by comparing changes in INPV 
and domestic manufacturing employment between a no-new-standards case 
and the various standards cases (``TSLs''). To capture the uncertainty 
relating to manufacturer pricing strategies following new standards, 
the GRIM estimates a range of possible impacts under different 
manufacturer markup scenarios.
    The qualitative part of the MIA addresses manufacturer 
characteristics and market trends. Specifically, the MIA considers such 
factors as a potential standard's impact on manufacturing capacity, 
competition within the industry, the cumulative impact of other DOE and 
non-DOE regulations, and impacts on manufacturer subgroups. The 
complete MIA is outlined in chapter 12 of the final rule TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the DPPP motors manufacturing 
industry based on the market and technology assessment, preliminary 
manufacturer interviews, and publicly available information. This 
included a top-down analysis of DPPP motors manufacturers that DOE used 
to derive preliminary financial inputs for the GRIM (e.g., revenues; 
materials, labor, overhead, and depreciation expenses; selling, 
general, and administrative expenses (``SG&A''); and R&D expenses). DOE 
also used public sources of information to further calibrate its 
initial characterization of the DPPP motors manufacturing industry, 
including company filings of form 10-K from the SEC,\111\ corporate 
annual reports, the U.S. Census Bureau's ``Economic Census,'' \112\ and 
reports from Dunn & Bradstreet.\113\
---------------------------------------------------------------------------

    \111\ See online at www.sec.gov/edgar.shtml (Last accessed on 
January 13, 2023).
    \112\ See online at www.census.gov/programs-surveys/asm/data/tables.html (Last accessed on January 13, 2023).
    \113\ See online at app.avention.com (Last accessed on January 
13, 2023).
---------------------------------------------------------------------------

    In Phase 2 of the MIA, DOE prepared a framework industry cash-flow 
analysis to quantify the potential impacts of new energy conservation 
standards. The GRIM uses several factors to determine a series of 
annual cash flows starting with the announcement of the standard and 
extending over a 30-year period following the compliance date of the 
standard. These factors include annual expected revenues, costs of 
sales, SG&A and R&D expenses, taxes, and capital expenditures. In 
general, energy conservation standards can affect manufacturer cash 
flow in three distinct ways: (1) creating a need for increased 
investment, (2) raising production costs per unit, and (3) altering 
revenue due to higher per-unit prices and changes in sales volumes.
    In addition, during Phase 2, DOE developed interview guides to 
distribute to manufacturers of DPPP motors in order to develop other 
key GRIM inputs, including product and capital conversion costs, and to 
gather additional information on the anticipated effects of energy 
conservation standards on revenues, direct employment, capital assets, 
industry competitiveness, and subgroup impacts.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with representative manufacturers. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics to validate assumptions used in the GRIM and to identify key 
issues or concerns. See section IV.J.3 of this document for a 
description of the key issues raised by manufacturers during the 
interviews. As part of Phase 3, DOE also evaluated subgroups of 
manufacturers that may be disproportionately impacted by new standards 
or that may not be accurately represented by the average cost 
assumptions used to develop the industry cash flow analysis. Such 
manufacturer subgroups may include small business manufacturers, low-
volume manufacturers (``LVMs''), niche players, and/or manufacturers 
exhibiting a cost structure that largely differs from the industry 
average. DOE identified one subgroup for a separate impact analysis: 
small business manufacturers. The small business subgroup is discussed 
in section VI.B of this document, ``Review under the Regulatory 
Flexibility Act'' and in chapter 12 of the final rule TSD.
2. Government Regulatory Impact Model and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow due to new 
standards that result in a higher or lower industry value. The GRIM 
uses a standard, annual discounted cash-flow analysis that incorporates 
manufacturer costs, manufacturer markups, shipments, and industry 
financial information as inputs. The GRIM models changes in costs, 
distribution of shipments, investments, and manufacturer margins that 
could result from new energy conservation standards. The GRIM 
spreadsheet uses the inputs to arrive at a series of annual cash flows, 
beginning in 2024 (the base year of the analysis) and continuing to 
2055. DOE calculated INPVs by summing the stream of annual discounted 
cash flows during this period. For manufacturers of DPPP motors, DOE 
used a real discount rate of 7.2 percent, which was derived from 
industry financials and then modified according to feedback received 
during manufacturer interviews.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the no-new-standards case and each 
standards case. The difference in INPV between the no-new-standards 
case and a standards case represents the financial impact of the new 
energy conservation standards on manufacturers. As discussed 
previously, DOE developed critical GRIM inputs using a number of 
sources, including publicly available data, results of the engineering 
analysis, and information gathered from industry stakeholders during 
the course of manufacturer interviews and subsequent Working Group 
meetings. The GRIM results are presented in section V.B.2 of this 
document. Additional details about the GRIM, the discount rate, and 
other financial parameters can be found in chapter 12 of the final rule 
TSD.
a. Manufacturer Production Costs
    Manufacturing more efficient equipment is typically more expensive 
than manufacturing baseline equipment due to the use of more complex 
components, which are typically more costly than baseline components. 
The changes in the MPCs of covered equipment can affect the revenues, 
gross margins, and cash flow of the industry.
    DOE initially used data from the January 2017 Direct Final Rule to 
determine the MSP of DPPP

[[Page 67009]]

motors. Specifically, DOE used Table 5.7.1 of the January 2017 Direct 
Final Rule TSD, which estimated the MSPs of DPPP motors used in the 
analysis. For this final rule DOE adjusted the MSPs used in the June 
2022 NOPR from 2020 dollars into 2021 dollars. For a complete 
description of the MPCs, see chapter 5 of the final rule TSD.
b. Shipments Projections
    The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments by 
efficiency level. Changes in sales volumes and efficiency mix over time 
can significantly affect manufacturer finances. For this analysis, the 
GRIM uses the NIA's annual shipment projections derived from the 
shipments analysis from 2024 (the base year) to 2055 (the end year of 
the analysis period). See chapter 9 of the final rule TSD for 
additional details.
c. Product and Capital Conversion Costs
    New energy conservation standards could cause manufacturers to 
incur conversion costs to bring their production facilities and 
equipment designs into compliance. DOE evaluated the level of 
conversion-related expenditures that would be needed to comply with 
each considered efficiency level in each equipment class. For the MIA, 
DOE classified these conversion costs into two major groups: (1) 
product conversion costs; and (2) capital conversion costs. Product 
conversion costs are investments in research, development, testing, 
marketing, and other non-capitalized costs necessary to make equipment 
designs comply with new energy conservation standards. Capital 
conversion costs are investments in property, plant, and equipment 
necessary to adapt or change existing production facilities such that 
new compliant equipment designs can be fabricated and assembled.
    DOE continued to use the conversion costs estimates form the June 
2022 NOPR. DOE updated these conversion cost estimates from 2020 
dollars to 2022 dollars using the PPI NAICS code 335312 (motor and 
generator manufacturing).\114\ In the June 2022 NOPR, DOE assumed that 
DPPP motor manufacturers would not incur any capital conversion costs 
for efficiency levels that single-speed or dual-speed motors would be 
able to meet. The same production equipment currently used to 
manufacture single-speed and dual-speed motors would still be able to 
be used to manufacture more efficient single- and dual-speed motors. 
However, DOE did assume that DPPP motor manufacturers would incur 
capital conversion costs at efficiency levels that variable-speed 
motors would be needed to meet the analyzed energy conservation 
standards. 87 FR 37122, 37153.
---------------------------------------------------------------------------

    \114\ www.bls.gov/ppi/databases/ (last accessed on February 9, 
2023).
---------------------------------------------------------------------------

    Additional production equipment would be needed to manufacture both 
additional variable-speed motor models and a larger production volume 
of variable-speed motors than are currently being produced. DOE used 
feedback from manufacturer interviews to estimate the cost of adding a 
production line to manufacture variable-speed motors. DOE then 
estimated the number of additional variable-speed production lines 
needed at each TSL, based on the increase in variable-speed shipments 
estimated at the analyzed TSL and the number of DPPP motor 
manufacturers that would need to introduce variable-speed motor models 
to meet the analyzed TSL.
    DOE assumed that DPPP motor manufacturers would not incur any 
additional product conversion costs for the standard size equipment 
classes. All DPPP motor manufacturers currently manufacture multiple 
variable-speed motor models in the standard size equipment classes. 
Additionally, the current DOE energy conservation standard for DPPPs 
that most commonly use the standard size DPPP motors use variable speed 
motors to meet those efficiency requirements. Therefore, almost all 
standard size DPPP motors sold as part of a new DPPP are already 
variable-speed motors. However, DOE did assume that DPPP motor 
manufacturers would incur product conversion costs for the other 
equipment classes at each analyzed efficiency level.
    Additionally, DPPP motor models would need to be introduced for the 
extra small-size and small-size DPPP motor equipment classes at each 
efficiency level analyzed. To evaluate the level of product conversion 
costs manufacturers would likely incur to comply with the analyzed 
energy conservation standards for these equipment classes, DOE used a 
model database to estimate the number of DPPP motor models that would 
have to be redesigned at each efficiency level for each equipment 
class. In general, DOE assumes all conversion-related investments occur 
between the year of publication of the final rule and the year by which 
manufacturers must comply with the new standards.
    PHTA and NEMA commented that manufacturers have already made 
investments that ranged between $50,000 and $6.5 million to comply with 
the January 2017 Direct Final Rule and that in order to comply with the 
standards proposed in the June 2022 NOPR, DPPP motor and DPPP 
manufacturers may have to make investments that are 10 times larger 
than the investments required to comply with the January 2017 Direct 
Final Rule. Additionally, PHTA and NEMA stated that some of the 
investments that were made to comply with the January 2017 Direct Final 
Rule will not be able to be recouped by the time compliance with the 
DPPP motor energy conservation standards are required. (PHTA and NEMA, 
No. 92 at p. 8) DOE accounted for these additional investments that 
DPPP motor manufacturers will have to make to comply with the analyzed 
energy conservation standards for DPPP motors, in the form of 
conversion costs. These investments are displayed as conversion costs 
in Table V.15 and Table V.16.
    The conversion cost figures used in the GRIM can be found in 
section V.B.2 of this document. For additional information on the 
estimated capital and product conversion costs, see chapter 12 of the 
final rule TSD.
d. Markup Scenarios
    MSPs include direct manufacturing production costs (i.e., labor, 
materials, and overhead estimated in DOE's MPCs) and all non-production 
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate 
the MSPs in the GRIM, DOE applied non-production cost markups to the 
MPCs estimated in the engineering analysis for each product class and 
efficiency level. Modifying these markups in the standards cases yield 
different sets of impacts on manufacturers. For the MIA, DOE modeled 
two standards-case markup scenarios to represent uncertainty regarding 
the potential impacts on prices and profitability for manufacturers 
following the implementation of new energy conservation standards: (1) 
a preservation of gross margin scenario; and (2) a preservation of 
operating profit scenario. These scenarios lead to different 
manufacturer markup values that, when applied to the MPCs, result in 
varying revenue and cash flow impacts.
    Under the preservation of gross margin scenario, DOE applied a 
single uniform ``gross margin percentage'' across all efficiency 
levels, which assumes that manufacturers would be able to maintain the 
same amount of profit as a percentage of revenues at all efficiency 
levels within an equipment class. DOE continued to use a

[[Page 67010]]

manufacturer markup of 1.37 for all DPPP motors, which is the same 
manufacturer markup that was used in the June 2022 NOPR.\115\ This 
manufacturer markup scenario represents the upper bound to industry 
profitability under new energy conservation standards.
---------------------------------------------------------------------------

    \115\ 87 FR 37122, 37154.
---------------------------------------------------------------------------

    Under the preservation of operating profit scenario, DOE modeled a 
situation in which manufacturers are not able to increase per-unit 
operating profit in proportion to increases in MPC. Under this 
scenario, as the MPCs increase, manufacturers are generally required to 
reduce the manufacturer markup to maintain a cost competitive offering 
in the market. Therefore, gross margin (as a percentage) shrinks in the 
standards cases. This manufacturer markup scenario represents the lower 
bound to industry profitability under new energy conservation 
standards.
    A comparison of industry financial impacts under the two 
manufacturer markup scenarios is presented in section V.B.2.a of this 
document.
3. Manufacturer Interviews
    DOE conducted interviews with manufacturers prior to the 
publication of the June 2022 NOPR. In these interviews, DOE asked 
manufacturers to describe their major concerns regarding this 
rulemaking. The following section highlights manufacturer concerns that 
helped inform the projected potential impacts of new energy 
conservation standards on the industry. Manufacturer interviews are 
conducted under non-disclosure agreements (``NDAs''), so DOE does not 
document these discussions in the same way that it does public comments 
in the comment summaries and DOE's responses throughout the rest of 
this document.
    Some manufacturers stated they only produce single-speed and dual-
speed motors within the small-size equipment class (0.5 <= THP < 1.15) 
and no longer supply DPPP motors used in new DPPP in that range to the 
California market after the CEC standard took effect. These 
manufacturers stated that they would need to design variable-speed 
motor models to meet any energy conservation standard that would 
require a variable-speed motor for the small-size equipment class. 
Additionally, these manufacturers would need to build additional 
production lines or make significant changes to existing single-speed 
or dual-speed production lines to be able to meet energy conservation 
standards requiring variable-speed DPPP motors for this equipment 
class. DOE included the capital and product conversion costs necessary 
for these DPPP motor manufacturers to introduce variable-speed DPPP 
motor models for the small-size equipment class.
4. Comments From Interested Parties
    Several interested parties commented on DOE's NOPR MIA. These 
comments were made either in writing during the comment period 
following the publication of the June 2022 NOPR or during the NOPR 
public meeting for DPPP motors.
    PHTA and NEMA commented that the lack of timing alignment between 
DPPP and DPPP motors standards will impact manufacturer's ability to 
make proper investments and product design if the DPPP motor energy 
conservation standards make the investments made for the DPPP energy 
conservation standards moot. (PHTA and NEMA, No. 92 at p. 8) PHTA and 
NEMA also commented that the lack of harmonization between the DPPP 
energy conservation standards and the DPPP motor energy conservation 
standard proposed in the NOPR could result in manufacturers being 
required to produce multiple, separate, motor types to serve 
aftermarket applications versus OEM applications. PHTA and NEMA stated 
that harmonization between the two rules would reduce overall 
regulatory burden on DPPP motor manufacturers by allowing manufacturers 
to leverage economies of scale. (PHTA and NEMA, No. 92 at p. 13) 
Pentair also commented that the investments spent to meet the DPPP rule 
would be wasted because of the new proposal. (Pentair, No. 90 at p. 1) 
The compliance date for the DPPP energy conservation standards occurred 
on July 19, 2021. As part of this final rule, and the NOPR, MIA, DOE 
examined the additional investments that DPPP motor manufacturers will 
have to make to comply with the analyzed energy conservation standards 
for DPPP motors. DOE used the methodology described in section IV.J.2.c 
of this document to estimate the conversion costs for each analyzed 
TSL. DOE incorporated these conversion costs into the cash flow 
analysis presented in section V.B.2.a of this document.
    Additionally, PHTA and NEMA commented that complex DPPP motor 
energy conservation standards superimposed on the DPPP energy 
conservation standards which are not aligned will make compliance with 
both energy conservation standards matters difficult for manufacturers. 
PHTA and NEMA stated it is essential that DOE align the performance 
requirements of the DPPP energy conservation standards with the 
requirements of the DPPP motors energy conservation standards in order 
to facilitate compliance with both standards. (PHTA and NEMA, No. 92 at 
pp. 8-9) PHTA and NEMA also expressed concerns on how the regulatory 
burden of complying with both the DPPP and DPPPM regulations, that are 
not align in the performance requirements and in the timing, could be 
burdensome on DPPP motor manufacturers. (PHTA and NEMA, No. 92 at p. 
13)
    EPCA directs DOE to establish energy conservation standards for 
DPPP motors that are designed to achieve the maximum improvement in 
energy efficiency that are technologically feasible and economically 
justified. 42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 
6295(o)(3)(B)) As previously stated in this section, DOE accounted for 
the additional investments that DPPP motor manufacturers will have to 
make to comply with the analyzed energy conservation standards for DPPP 
motors. DOE examined the regulatory burden on DPPP motor manufacturers 
when deciding what energy conservation standard was technologically 
feasible and economically justified in section V.C. of this document. 
Lastly, DOE may consider separately coordinating a similar compliance 
timeline with any upcoming DPPP rulemaking.
    Hayward commented that they have already made substantial 
investments to comply with DPPP energy conservation standards and noted 
that if they knew DOE planned to initiate DPPP motor energy 
conservation standards with more stringent requirements than the DPPP 
energy conservation standards their strategic direction and investments 
would have been very different. Additionally, Hayward states that if 
DOE decides against the implementation of a UL 1004-10 based rule, then 
they requested a compliance date of at least 5 years following 
effectivity. (Hayward, No. 93. at p. 2) DOE acknowledges that it is 
adopting more stringent energy conservation standards for small-size 
DPPP motors in this final rule than the small-size DPPP energy 
conservation standards established in the January 2017 Direct Final 
Rule. DOE notes that the compliance date for DPPPs was on July 19, 
2021, while the compliance date for energy conservation standards for 
these small-size DPPP motors is in 2028, approximately seven years 
after the compliance date for the DPPP energy conservation standards. 
Additionally, DOE has initiated an effort to determine whether to amend 
the current energy conservation standards for DPPPs with

[[Page 67011]]

the publication of an RFI. 87 FR 3461. If DOE proposes to amend energy 
conservation standards for DPPPs in a future rulemaking, DOE will 
consider the impacts of the DPPP motor energy conservation standards 
that are adopted in this rulemaking.

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of CO2, NOX, SO2, and Hg. 
The second component estimates the impacts of potential standards on 
emissions of two additional greenhouse gases, CH4 and 
N2O, as well as the reductions in emissions of other gases 
due to ``upstream'' activities in the fuel production chain. These 
upstream activities comprise extraction, processing, and transporting 
fuels to the site of combustion.
    The analysis of electric power sector emissions of CO2, 
NOX, SO2, and Hg uses emissions intended to 
represent the marginal impacts of the change in electricity consumption 
associated with amended or new standards. The methodology is based on 
results published for the AEO, including a set of side cases that 
implement a variety of efficiency-related policies. The methodology is 
described in appendix 13A in the final rule TSD. The analysis presented 
in this notice uses projections from AEO 2023. Power sector emissions 
of CH4 and N2O from fuel combustion are estimated 
using Emission Factors for Greenhouse Gas Inventories published by the 
Environmental Protection Agency (EPA).\116\
---------------------------------------------------------------------------

    \116\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12, 
2021).
---------------------------------------------------------------------------

    FFC upstream emissions, which include emissions from fuel 
combustion during extraction, processing, and transportation of fuels, 
and ``fugitive'' emissions (direct leakage to the atmosphere) of 
CH4 and CO2, are estimated based on the 
methodology described in chapter 15 of the final rule TSD.
    The emissions intensity factors are expressed in terms of physical 
units per MWh or MMBtu of site energy savings. For power sector 
emissions, specific emissions intensity factors are calculated by 
sector and end use. Total emissions reductions are estimated using the 
energy savings calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
    DOE's no-new-standards case for the electric power sector reflects 
the AEO, which incorporates the projected impacts of existing air 
quality regulations on emissions. AEO 2023 generally represents current 
legislation and environmental regulations, including recent government 
actions, that were in place at the time of preparation of AEO 2023, 
including the emissions control programs discussed in the following 
paragraphs.\117\
---------------------------------------------------------------------------

    \117\ For further information, see the Assumptions to AEO 2022 
report that sets forth the major assumptions used to generate the 
projections in the Annual Energy Outlook. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed May 23, 2023).
---------------------------------------------------------------------------

    SO2 emissions from affected electric generating units 
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions 
cap on SO2 for affected EGUs in the 48 contiguous States and 
the District of Columbia (``DC''). (42 U.S.C. 7651 et seq.) 
SO2 emissions from numerous States in the eastern half of 
the United States are also limited under the Cross-State Air Pollution 
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these 
States to reduce certain emissions, including annual SO2 
emissions, and went into effect as of January 1, 2015.\118\ AEO 2023 
incorporates implementation of CSAPR, including the update to the CSAPR 
ozone season program emission budgets and target dates issued in 2016. 
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among 
EGUs and is enforced through the use of tradable emissions allowances. 
Under existing EPA regulations, for states subject to SO2 
emissions limits under CSAPR, any excess SO2 emissions 
allowances resulting from the lower electricity demand caused by the 
adoption of an efficiency standard could be used to permit offsetting 
increases in SO2 emissions by another regulated EGU.
---------------------------------------------------------------------------

    \118\ CSAPR requires states to address annual emissions of 
SO2 and NOX, precursors to the formation of 
fine particulate matter (``PM2.5'') pollution, in order 
to address the interstate transport of pollution with respect to the 
1997 and 2006 PM2.5 National Ambient Air Quality 
Standards (``NAAQS''). CSAPR also requires certain states to address 
the ozone season (May-September) emissions of NOX, a 
precursor to the formation of ozone pollution, in order to address 
the interstate transport of ozone pollution with respect to the 1997 
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a 
supplemental rule that included an additional five states in the 
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011) 
(Supplemental Rule), and EPA issued the CSAPR Update for the 2008 
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
---------------------------------------------------------------------------

    However, beginning in 2016, SO2 emissions began to fall 
as a result of the Mercury and Air Toxics Standards (``MATS'') for 
power plants. 77 FR 9304 (Feb. 16, 2012). The final rule establishes 
power plant emission standards for mercury, acid gases, and non-mercury 
metallic toxic pollutants. In order to continue operating, coal plants 
must have either flue gas desulfurization or dry sorbent injection 
systems installed. Both technologies, which are used to reduce acid gas 
emissions, also reduce SO2 emissions. Because of the 
emissions reductions under the MATS, it is unlikely that excess 
SO2 emissions allowances resulting from the lower 
electricity demand would be needed or used to permit offsetting 
increases in SO2 emissions by another regulated EGU. 
Therefore, energy conservation standards that decrease electricity 
generation will generally reduce SO2 emissions. DOE 
estimated SO2 emissions reduction using emissions factors 
based on AEO 2023.
    CSAPR also established limits on NOX emissions for 
numerous States in the eastern half of the United States. Energy 
conservation standards would have little effect on NOX 
emissions in those States covered by CSAPR emissions limits if excess 
NOX emissions allowances resulting from the lower 
electricity demand could be used to permit offsetting increases in 
NOX emissions from other EGUs. In such case, NOX 
emissions would remain near the limit even if electricity generation 
goes down. Depending on the configuration of the power sector in the 
different regions and the need for allowances, however, NOX 
emissions might not remain at the limit in the case of lower 
electricity demand. That would mean that standards might reduce 
NOX emissions in covered States. Despite this possibility, 
DOE has chosen to be conservative in its analysis and has maintained 
the assumption that standards will not reduce NOX emissions 
in States covered by CSAPR. Standards would be expected to reduce 
NOX emissions in the States not covered by CSAPR. DOE used 
AEO 2023 data to derive NOX emissions factors for the group 
of States not covered by CSAPR.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would be expected to slightly reduce Hg emissions. DOE 
estimated mercury emissions reduction using emissions factors based on 
AEO 2023, which incorporates the MATS.

[[Page 67012]]

L. Monetizing Emissions Impacts

    As part of the development of this final rule, for the purpose of 
complying with the requirements of Executive Order 12866, DOE 
considered the estimated monetary benefits from the reduced emissions 
of CO2, CH4, N2O, NOX, and 
SO2 that are expected to result from each of the TSLs 
considered. In order to make this calculation analogous to the 
calculation of the NPV of consumer benefit, DOE considered the reduced 
emissions expected to result over the lifetime of products shipped in 
the projection period for each TSL. This section summarizes the basis 
for the values used for monetizing the emissions benefits and presents 
the values considered in this final rule.
    To monetize the benefits of reducing GHG emissions this analysis 
uses the interim estimates presented in the Technical Support Document: 
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates 
Under Executive Order 13990 published in February 2021 by the 
Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
1. Monetization of Greenhouse Gas Emissions
    DOE estimates the monetized benefits of the reductions in emissions 
of CO2, CH4, and N2O by using a 
measure of the SC of each pollutant (e.g., ``SC-CO2''). 
These estimates represent the monetary value of the net harm to society 
associated with a marginal increase in emissions of these pollutants in 
a given year, or the benefit of avoiding that increase. These estimates 
are intended to include (but are not limited to) climate-change-related 
changes in net agricultural productivity, human health, property 
damages from increased flood risk, disruption of energy systems, risk 
of conflict, environmental migration, and the value of ecosystem 
services.
    DOE exercises its own judgment in presenting monetized climate 
benefits as recommended by applicable Executive orders, and DOE would 
reach the same conclusion presented in this rulemaking in the absence 
of the social cost of greenhouse gases. That is, the social costs of 
greenhouse gases, whether measured using the February 2021 interim 
estimates presented by the Interagency Working Group on the Social Cost 
of Greenhouse Gases (``IWG'') or by another means, did not affect the 
rule ultimately adopted by DOE.
    DOE estimated the global social benefits of CO2, 
CH4, and N2O reductions (i.e., ``SC-GHGs'') using 
the estimates presented in the Technical Support Document: Social Cost 
of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990, published in February 2021 by the IWG. The SC-GHGs is the 
monetary value of the net harm to society associated with a marginal 
increase in emissions in a given year, or the benefit of avoiding that 
increase. In principle, SC-GHGs includes the value of all climate 
change impacts, including (but not limited to) changes in net 
agricultural productivity, human health effects, property damage from 
increased flood risk and natural disasters, disruption of energy 
systems, risk of conflict, environmental migration, and the value of 
ecosystem services. The SC-GHGs therefore, reflects the societal value 
of reducing emissions of the gas in question by one metric ton. The SC-
GHGs is the theoretically appropriate value to use in conducting 
benefit-cost analyses of policies that affect CO2, 
N2O, and CH4 emissions. As a member of the IWG 
involved in the development of the February 2021 SC-GHG TSD, DOE agrees 
that the interim SC-GHG estimates represent the most appropriate 
estimate of the SC-GHG until revised estimates have been developed 
reflecting the latest, peer-reviewed science.
    The SC-GHGs estimates presented here were developed over many 
years, using transparent processes, peer-reviewed methodologies, the 
best science available at the time of that process, and with input from 
the public. Specifically, in 2009, the IWG, which included the DOE and 
other executive branch agencies and offices, was established to ensure 
that agencies were using the best available science and to promote 
consistency in the SC-CO2 values used across agencies. The 
IWG published SC-CO2 estimates in 2010 that were developed 
from an ensemble of three widely cited integrated assessment models 
(``IAMs'') that estimate global climate damages using highly aggregated 
representations of climate processes and the global economy combined 
into a single modeling framework. The three IAMs were run using a 
common set of input assumptions in each model for future population, 
economic, and CO2 emissions growth, as well as equilibrium 
climate sensitivity--a measure of the globally averaged temperature 
response to increased atmospheric CO2 concentrations. These 
estimates were updated in 2013 based on new versions of each IAM. In 
August 2016, the IWG published estimates of the social cost of methane 
(``SC-CH4'') and nitrous oxide (``SC-N2O'') using 
methodologies that are consistent with the methodology underlying the 
SC-CO2 estimates. The modeling approach that extends the IWG 
SC-CO2 methodology to non-CO2 GHGs has undergone 
multiple stages of peer review. The SC-CH4 and SC-
N2O estimates were developed by Marten et al.119 
and underwent a standard double-blind peer review process prior to 
journal publication. In 2015, as part of the response to public 
comments received to a 2013 solicitation for comments on the SC-
CO2 estimates, the IWG announced a National Academies of 
Sciences, Engineering, and Medicine review of the SC-CO2 
estimates to offer advice on how to approach future updates to ensure 
that the estimates continue to reflect the best available science and 
methodologies. In January 2017, the National Academies released their 
final report, Valuing Climate Damages: Updating Estimation of the 
Social Cost of Carbon Dioxide, and recommended specific criteria for 
future updates to the SC-CO2 estimates, a modeling framework 
to satisfy the specified criteria, and both near-term updates and 
longer-term research needs pertaining to various components of the 
estimation process (National Academies, 2017).\120\ Shortly thereafter, 
in March 2017, President Trump issued Executive Order 13783, which 
disbanded the IWG, withdrew the previous TSDs, and directed agencies to 
ensure SC-CO2 estimates used in regulatory analyses are 
consistent with the guidance contained in OMB's Circular A-4, 
``including with respect to the consideration of domestic versus 
international impacts and the consideration of appropriate discount 
rates'' (E.O. 13783, Section 5(c)). Benefit-cost analyses following 
E.O. 13783 used SC-GHG estimates that attempted to focus on the U.S.-
specific share of climate change damages as estimated by the models and 
were calculated using two discount rates recommended by Circular A-4, 
3-percent and 7-percent. All other methodological decisions and model 
versions used in SC-GHG calculations remained the same as those used by 
the IWG in 2010 and 2013, respectively.
---------------------------------------------------------------------------

    \119\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold, 
and A. Wolverton. Incremental CH4 and N2O 
mitigation benefits consistent with the US Government's SC-
CO2 estimates. Climate Policy. 2015. 15(2): pp. 272-298.
    \120\ National Academies of Sciences, Engineering, and Medicine. 
Valuing Climate Damages: Updating Estimation of the Social Cost of 
Carbon Dioxide. 2017. The National Academies Press: Washington, DC.
---------------------------------------------------------------------------

    On January 20, 2021, President Biden issued Executive Order 13990, 
which re-

[[Page 67013]]

established the IWG and directed it to ensure that the U.S. 
Government's estimates of the social cost of carbon and other 
greenhouse gases reflect the best available science and the 
recommendations of the National Academies (2017). The IWG was tasked 
with first reviewing the SC-GHG estimates currently used in Federal 
analyses and publishing interim estimates within 30 days of the E.O. 
that reflect the full impact of GHG emissions, including by taking 
global damages into account. The interim SC-GHG estimates published in 
February 2021 are used here to estimate the climate benefits for this 
rulemaking. The E.O. instructs the IWG to undertake a fuller update of 
the SC-GHG estimates by January 2022 that takes into consideration the 
advice of the National Academies (2017) and other recent scientific 
literature. The February 2021 SC-GHG TSD provides a complete discussion 
of the IWG's initial review conducted under E.O. 13990. In particular, 
the IWG found that the SC-GHG estimates used under E.O. 13783 fail to 
reflect the full impact of GHG emissions in multiple ways.
    First, the IWG found that the SC-GHG estimates used under E.O. 
13783 fail to fully capture many climate impacts that affect the 
welfare of U.S. citizens and residents, and those impacts are better 
reflected by global measures of the SC-GHG. Examples of omitted effects 
from the E.O. 13783 estimates include direct effects on U.S. citizens, 
assets, and investments located abroad, supply chains, U.S. military 
assets and interests abroad, and tourism, and spillover pathways such 
as economic and political destabilization and global migration that can 
lead to adverse impacts on U.S. national security, public health, and 
humanitarian concerns. In addition, assessing the benefits of U.S. GHG 
mitigation activities requires consideration of how those actions may 
affect mitigation activities by other countries, as those international 
mitigation actions will provide a benefit to U.S. citizens and 
residents by mitigating climate impacts that affect U.S. citizens and 
residents. A wide range of scientific and economic experts have 
emphasized the issue of reciprocity as support for considering global 
damages of GHG emissions. If the United States does not consider 
impacts on other countries, it is difficult to convince other countries 
to consider the impacts of their emissions on the United States. The 
only way to achieve an efficient allocation of resources for emissions 
reduction on a global basis--and so benefit the United States and its 
citizens--is for all countries to base their policies on global 
estimates of damages. As a member of the IWG involved in development of 
the February 2021 SC-GHG TSD, DOE agrees with this assessment and, 
therefore, in this proposed rule, DOE centers attention on a global 
measure of SC-GHG. This approach is the same as that taken in DOE 
regulatory analyses from 2012 through 2016. A robust estimate of 
climate damages that accrue only to U.S. citizens and residents does 
not currently exist in the literature. As explained in the February 
2021 TSD, existing estimates are both incomplete and an underestimation 
of total damages that accrue to the citizens and residents of the 
United States because they do not fully capture the regional 
interactions and spillovers discussed above; nor do they include all of 
the important physical, ecological, and economic impacts of climate 
change recognized in the climate change literature. As noted in the 
February 2021 SC-GHG TSD, the IWG will continue to review developments 
in the literature, including more robust methodologies for estimating a 
U.S.-specific SC-GHG value, and explore ways to better inform the 
public of the full range of carbon impacts. As a member of the IWG, DOE 
will continue to follow developments in the literature pertaining to 
this issue.
    Second, the IWG found that the use of the social rate of return on 
capital (7 percent under current OMB Circular A-4 guidance) to discount 
the future benefits of reducing GHG emissions inappropriately 
underestimates the impacts of climate change for the purposes of 
estimating the SC-GHG. Consistent with the findings of the National 
Academies (2017) and the economic literature, the IWG continued to 
conclude that the consumption rate of interest is the theoretically 
appropriate discount rate in an intergenerational context,\121\ and 
recommended that discount rate uncertainty and relevant aspects of 
intergenerational ethical considerations be accounted for in selecting 
future discount rates.
---------------------------------------------------------------------------

    \121\ Interagency Working Group on Social Cost of Carbon. Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866. 2010. United States Government. www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf (last accessed April 15, 
2022). Interagency Working Group on Social Cost of Carbon. Technical 
Update of the Social Cost of Carbon for Regulatory Impact Analysis 
Under Executive Order 12866. 2013. www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact 
(last accessed April 15, 2022). Interagency Working Group on Social 
Cost of Greenhouse Gases, United States Government. Technical 
Support Document: Technical Update on the Social Cost of Carbon for 
Regulatory Impact Analysis-Under Executive Order 12866. August 2016 
(last accessed January 18, 2022). Interagency Working Group on 
Social Cost of Greenhouse Gases, United States Government. Addendum 
to Technical Support Document on Social Cost of Carbon for 
Regulatory Impact Analysis under Executive Order 12866: Application 
of the Methodology to Estimate the Social Cost of Methane and the 
Social Cost of Nitrous Oxide. August 2016. www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf (last accessed January 18, 2022).
---------------------------------------------------------------------------

    Furthermore, the damage estimates developed for use in the SC-GHG 
are estimated in consumption-equivalent terms, and so an application of 
OMB Circular A-4's guidance for regulatory analysis would then use the 
consumption discount rate to calculate the SC-GHG. DOE agrees with this 
assessment and will continue to follow developments in the literature 
pertaining to this issue. DOE also notes that while OMB Circular A-4, 
as published in 2003, recommends using 3-percent and 7-percent discount 
rates as ``default'' values, Circular A-4 also reminds agencies that 
``different regulations may call for different emphases in the 
analysis, depending on the nature and complexity of the regulatory 
issues and the sensitivity of the benefit and cost estimates to the key 
assumptions.'' On discounting, Circular A-4 recognizes that ``special 
ethical considerations arise when comparing benefits and costs across 
generations,'' and Circular A-4 acknowledges that analyses may 
appropriately ``discount future costs and consumption benefits . . . at 
a lower rate than for intragenerational analysis.'' In the 2015 
Response to Comments on the Social Cost of Carbon for Regulatory Impact 
Analysis, OMB, DOE, and the other IWG members recognized that 
``Circular A-4 is a living document'' and ``the use of 7 percent is not 
considered appropriate for intergenerational discounting. There is wide 
support for this view in the academic literature, and it is recognized 
in Circular A-4 itself.'' Thus, DOE concludes that a 7-percent discount 
rate is not appropriate to apply to value the social cost of greenhouse 
gases in the analysis presented in this document.
    To calculate the present and annualized values of climate benefits, 
DOE uses the same discount rate as the rate used to discount the value 
of damages from future GHG emissions, for internal consistency. That 
approach to discounting follows the same approach that the February 
2021 TSD recommends ``to ensure internal consistency--i.e., future 
damages from climate change using the SC-GHG at 2.5 percent should be 
discounted to the base year of the analysis using the same 2.5-percent 
rate.'' DOE has also

[[Page 67014]]

consulted the National Academies' 2017 recommendations on how SC-GHG 
estimates can ``be combined in RIAs with other cost and benefits 
estimates that may use different discount rates.'' The National 
Academies reviewed several options, including ``presenting all discount 
rate combinations of other costs and benefits with [SC-GHG] 
estimates.''
    As a member of the IWG involved in the development of the February 
2021 SC-GHG TSD, DOE agrees with the above assessment and will continue 
to follow developments in the literature pertaining to this issue. 
While the IWG works to assess how best to incorporate the latest, peer-
reviewed science to develop an updated set of SC-GHG estimates, it set 
the interim estimates to be the most recent estimates developed by the 
IWG prior to the group being disbanded in 2017. The estimates rely on 
the same models and harmonized inputs and are calculated using a range 
of discount rates. As explained in the February 2021 SC-GHG TSD, the 
IWG has recommended that agencies revert to the same set of four values 
drawn from the SC-GHG distributions based on three discount rates as 
were used in regulatory analyses between 2010 and 2016 and were subject 
to public comment. For each discount rate, the IWG combined the 
distributions across models and socioeconomic emissions scenarios 
(applying equal weight to each) and then selected a set of four values 
recommended for use in benefit-cost analyses: an average value 
resulting from the model runs for each of three discount rates (2.5 
percent, 3 percent, and 5 percent), plus a fourth value, selected as 
the 95th percentile of estimates based on a 3-percent discount rate. 
The fourth value was included to provide information on potentially 
higher-than-expected economic impacts from climate change. As explained 
in the February 2021 SC-GHG TSD, and DOE agrees, this update reflects 
the immediate need to have an operational SC-GHG for use in regulatory 
benefit-cost analyses and other applications that was developed using a 
transparent process, peer-reviewed methodologies, and the best science 
available at the time of that process. Those estimates were subject to 
public comment in the context of dozens of proposed rulemakings as well 
as in a dedicated public comment period in 2013.
    There are a number of limitations and uncertainties associated with 
the SC-GHG estimates. First, the current scientific and economic 
understanding of discounting approaches suggests discount rates 
appropriate for intergenerational analysis in the context of climate 
change are likely to be less than 3 percent--near 2 percent or 
lower.\122\ Second, the IAMs used to produce these interim estimates do 
not include all of the important physical, ecological, and economic 
impacts of climate change recognized in the climate change literature 
and the science underlying their ``damage functions''--i.e., the core 
parts of the IAMs that map global mean temperature changes and other 
physical impacts of climate change into economic (both market and 
nonmarket) damages--lags behind the most recent research. For example, 
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the IAMs, their incomplete treatment of 
adaptation and technological change, the incomplete way in which inter-
regional and intersectoral linkages are modeled, uncertainty in the 
extrapolation of damages to high temperatures, and inadequate 
representation of the relationship between the discount rate and 
uncertainty in economic growth over long-time horizons. Likewise, the 
socioeconomic and emissions scenarios used as inputs to the models do 
not reflect new information from the last decade of scenario generation 
or the full range of projections. The modeling limitations do not all 
work in the same direction in terms of their influence on the SC-
CO2 estimates. However, as discussed in the February 2021 
TSD, the IWG has recommended that, taken together, the limitations 
suggest that the interim SC-GHG estimates used in this final rule 
likely underestimate the damages from GHG emissions. DOE concurs with 
this assessment.
---------------------------------------------------------------------------

    \122\ Interagency Working Group on Social Cost of Greenhouse 
Gases (IWG). 2021. Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990. February. United States Government. Available at 
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf/.
---------------------------------------------------------------------------

    DOE's derivations of the SC-CO2, SC-N2O, and 
SC-CH4 values used for this final rule are discussed in the 
following sections, and the results of DOE's analyses estimating the 
benefits of the reductions in emissions of these GHGs are presented in 
section V.B.6 of this document.
a. Social Cost of Carbon
    The SC-CO2 values used for this final rule were based on 
the values developed for the IWG's February 2021 TSD. Table IV.11 shows 
the updated sets of SC-CO2 estimates from the IWG's TSD in 
5-year increments from 2020 to 2050. The full set of annual values that 
DOE used is presented in appendix 14A of the final rule TSD. For 
purposes of capturing the uncertainties involved in regulatory impact 
analysis, DOE has determined it is appropriate to include all four sets 
of SC-CO2 values, as recommended by the IWG.\123\
---------------------------------------------------------------------------

    \123\ For example, the February 2021 TSD discusses how the 
understanding of discounting approaches suggests that discount rates 
appropriate for intergenerational analysis in the context of climate 
change may be lower than 3 percent.

                    Table IV.11--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
                                           [2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                   Discount rate and statistic
                                               -----------------------------------------------------------------
                     Year                                                                            3% 95th
                                                  5% Average      3% Average     2.5% Average      percentile
----------------------------------------------------------------------------------------------------------------
2020..........................................              14              51              76               152
2025..........................................              17              56              83               169
2030..........................................              19              62              89               187
2035..........................................              22              67              96               206
2040..........................................              25              73             103               225
2045..........................................              28              79             110               242
2050..........................................              32              85             116               260
----------------------------------------------------------------------------------------------------------------


[[Page 67015]]

    For 2051 to 2070, DOE used SC-CO2 estimates published by 
EPA, adjusted to 2020$.\124\ These estimates are based on methods, 
assumptions, and parameters identical to the 2020-2050 estimates 
published by the IWG.
---------------------------------------------------------------------------

    \124\ See EPA, Revised 2023 and Later Model Year Light-Duty 
Vehicle GHG Emissions Standards: Regulatory Impact Analysis, 
Washington, DC, December 2021. Available at nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed February 21, 2023).
---------------------------------------------------------------------------

    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SC-CO2 value for that year in each of the 
four cases. DOE adjusted the values to 2022$ using the implicit price 
deflator for gross domestic product (``GDP'') from the Bureau of 
Economic Analysis. To calculate a present value of the stream of 
monetary values, DOE discounted the values in each of the four cases 
using the specific discount rate that had been used to obtain the SC-
CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
    The SC-CH4 and SC-N2O values used for this 
final rule were based on the values developed for the February 2021 
TSD. Table IV.12 shows the updated sets of SC-CH4 and SC-
N2O estimates from the latest interagency update in 5-year 
increments from 2020 to 2050. The full set of annual values used is 
presented in appendix 14A of the final rule TSD. To capture the 
uncertainties involved in regulatory impact analysis, DOE has 
determined it is appropriate to include all four sets of SC-
CH4 and SC-N2O values, as recommended by the IWG. 
DOE derived values after 2050 using the approach described above for 
the SC-CO2.

                                  Table IV.12--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
                                                                 [2020$ per metric ton]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         SC-CH4                                              SC-N2O
                                                  ------------------------------------------------------------------------------------------------------
                                                               Discount rate and statistic                        Discount rate and statistic
                       Year                       ------------------------------------------------------------------------------------------------------
                                                       5%         3%        2.5%         3% 95th           5%         3%        2.5%         3% 95th
                                                    Average    Average    Average       percentile      Average    Average    Average      percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020.............................................        670      1,500      2,000             3,900       5,800     18,000     27,000            48,000
2025.............................................        800      1,700      2,200             4,500       6,800     21,000     30,000            54,000
2030.............................................        940      2,000      2,500             5,200       7,800     23,000     33,000            60,000
2035.............................................      1,100      2,200      2,800             6,000       9,000     25,000     36,000            67,000
2040.............................................      1,300      2,500      3,100             6,700      10,000     28,000     39,000            74,000
2045.............................................      1,500      2,800      3,500             7,500      12,000     30,000     42,000            81,000
2050.............................................      1,700      3,100      3,800             8,200      13,000     33,000     45,000            88,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE multiplied the CH4 and N2O emissions 
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. DOE 
adjusted the values to 2022$ using the implicit price deflator for GDP 
from the Bureau of Economic Analysis. To calculate a present value of 
the stream of monetary values, DOE discounted the values in each of the 
cases using the specific discount rate that had been used to obtain the 
SC-CH4 and SC-N2O estimates in each case.
2. Monetization of Other Emissions Impacts
    For this final rule, DOE estimated the monetized value of 
NOX and SO2 emissions reductions from electricity 
generation using benefit per ton estimates for that sector from the 
EPA's Benefits Mapping and Analysis Program.\125\ DOE used EPA's values 
for PM2.5-related benefits associated with NOX 
and SO2 and for ozone-related benefits associated with 
NOX for 2025 and 2030, and 2040, calculated with discount 
rates of 3 percent and 7 percent. DOE used linear interpolation to 
define values for the years not given in the 2025 to 2040 range; for 
years beyond 2040 the values are held constant. DOE combined the EPA 
benefit per ton estimates with regional information on electricity 
consumption and emissions to define weighted-average national values 
for NOX and SO2 (See appendix 14B of the final 
rule TSD).
---------------------------------------------------------------------------

    \125\ Estimating the Benefit per Ton of Reducing 
PM2.5 Precursors from 21 Sectors. Available at 
www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
---------------------------------------------------------------------------

    DOE multiplied the site emissions reduction (in tons) in each year 
by the associated $/ton values, and then discounted each series using 
discount rates of 3 percent and 7 percent as appropriate.
    The Joint SC-GHG Commenters stated that DOE appropriately applies 
the social cost estimates developed by the Interagency Working Group on 
the Social Cost of Greenhouse Gases to its analysis of emissions 
reduction benefits. The Joint SC-GHG Commenters stated that there are 
numerous legal, economic, and policy justifications that further DOE's 
adoption of the Working Group's climate-damage valuations. They added 
that DOE should consider conducting sensitivity analysis using a sound 
domestic-only social cost estimate as a backstop, and should explicitly 
conclude that the rule is cost-benefit justified even using a domestic-
only valuation that may still undercount climate benefits. They also 
stated that their comments offer additional justification for adopting 
the range of discount rates endorsed by the Working Group and urged DOE 
to consider providing additional sensitivity analysis using discount 
rates of 2 percent or lower for climate impacts. Lastly, the Joint SC-
GHG Commenters commented that DOE should clearly state that any 
criticisms of the SC-GHG are moot in this rulemaking because the 
proposed rule is easily cost-justified without any climate benefits. 
(Joint SC-GHG Commenters, No.95 at. pp. 1-3)
    In response, DOE maintains that the reasons for using global 
measures of the SC-GHG previously discussed (See section IV.L.1 of this 
document) are sufficient for the purposes of this rulemaking. DOE notes 
that further discussion of this topic is contained in the February 2021 
SC-GHG TSD, and DOE agrees with the assessment therein. Regarding 
conducting sensitivity analysis using a domestic-only social cost 
estimate, DOE agrees with the assessment in the February 2021 SC-GHG 
TSD that the only currently-available quantitative characterization of 
domestic damages from GHG emissions is both incomplete and an 
underestimate of the share of total damages that accrue to the citizens 
and residents of the U.S. See section 2 of the February 2021 SC-GHG 
TSD. Therefore, it would be of questionable value to conduct the 
suggested sensitivity analysis at this time. DOE considered

[[Page 67016]]

performing sensitivity analysis using discount rates lower than 2.5% 
for climate impacts, as suggested by the IWG, but it concluded that 
such analysis would not add meaningful information in the context of 
this rulemaking.
    As noted by the Joint SC-GHG Commenters and previously stated by 
DOE in section IV.L.1 of this document, the final rule is economically 
justified without inclusion of climate benefits. See Section V.C.1 of 
this document for more discussion on economic justification.

M. Utility Impact Analysis

    The utility impact analysis estimates the changes in installed 
electrical capacity and generation projected to result for each 
considered TSL. The analysis is based on published output from the NEMS 
associated with AEO 2023. NEMS produces the AEO Reference case, as well 
as a number of side cases that estimate the economy-wide impacts of 
changes to energy supply and demand. For the current analysis, impacts 
are quantified by comparing the levels of electricity sector 
generation, installed capacity, fuel consumption and emissions in the 
AEO 2023 Reference case and various side cases. Details of the 
methodology are provided in the appendices to chapters 13 and 15 of the 
final rule TSD.
    The output of this analysis is a set of time-dependent coefficients 
that capture the change in electricity generation, primary fuel 
consumption, installed capacity, and power sector emissions due to a 
unit reduction in demand for a given end use. These coefficients are 
multiplied by the stream of electricity savings calculated in the NIA 
to provide estimates of selected utility impacts of potential new or 
amended energy conservation standards.

N. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a standard. Employment impacts from new or amended 
energy conservation standards include both direct and indirect impacts. 
Direct employment impacts are any changes in the number of employees of 
manufacturers of the products subject to standards, their suppliers, 
and related service firms. The MIA addresses those impacts. Indirect 
employment impacts are changes in national employment that occur due to 
the shift in expenditures and capital investment caused by the purchase 
and operation of more-efficient appliances. Indirect employment impacts 
from standards consist of the net jobs created or eliminated in the 
national economy, other than in the manufacturing sector being 
regulated, caused by (1) reduced spending by consumers on energy, (2) 
reduced spending on new energy supply by the utility industry, (3) 
increased consumer spending on the products to which the new standards 
apply and other goods and services, and (4) the effects of those three 
factors throughout the economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (``BLS''). BLS regularly publishes its estimates of 
the number of jobs per million dollars of economic activity in 
different sectors of the economy, as well as the jobs created elsewhere 
in the economy by this same economic activity. Data from BLS indicate 
that expenditures in the utility sector generally create fewer jobs 
(both directly and indirectly) than expenditures in other sectors of 
the economy.\126\ There are many reasons for these differences, 
including wage differences and the fact that the utility sector is more 
capital-intensive and less labor-intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic activity from a 
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, the BLS 
data suggest that net national employment may increase due to shifts in 
economic activity resulting from energy conservation standards.
---------------------------------------------------------------------------

    \126\ See U.S. Department of Commerce--Bureau of Economic 
Analysis. Regional Multipliers: A User Handbook for the Regional 
Input-Output Modeling System (``RIMS II''). 1997. U.S. Government 
Printing Office: Washington, DC. Available at www.bea.gov/resources/methodologies/RIMSII-user-guide (last accessed Feb. 2, 2023).
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this final rule using an input/output model of the 
U.S. economy called Impact of Sector Energy Technologies version 4 
(``ImSET'').\127\ ImSET is a special-purpose version of the ``U.S. 
Benchmark National Input-Output'' (``I-O'') model, which was designed 
to estimate the national employment and income effects of energy-saving 
technologies. The ImSET software includes a computer-based I-O model 
having structural coefficients that characterize economic flows among 
187 sectors most relevant to industrial, commercial, and residential 
building energy use.
---------------------------------------------------------------------------

    \127\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W. 
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model 
Description and User's Guide. 2015. Pacific Northwest National 
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------

    DOE notes that ImSET is not a general equilibrium forecasting 
model, and that the uncertainties involved in projecting employment 
impacts especially change in the later years of the analysis. Because 
ImSET does not incorporate price changes, the employment effects 
predicted by ImSET may overestimate actual job impacts over the long 
run for this rule. Therefore, DOE used ImSET only to generate results 
for near-term timeframes (2026-2030 or 2028-2030), where these 
uncertainties are reduced. For more details on the employment impact 
analysis, see chapter 16 of the final rule TSD.
    One of the inputs to the employment impact analysis is the fraction 
of shipments that are imported vs. domestically manufactured. In the 
June 2022 NOPR, DOE assumed the fraction of DPPP motors shipments that 
are imported vs. domestically manufactured was identical to small 
electric motors and assumed a 40 percent were imported vs 60 percent 
were domestically manufactured. See Chapter 15 of the June NOPR TSD.
    PHTA and NEMA commented that DOE estimated that 60 percent of pool 
pump motors are manufactured domestically, with the remaining 40 
percent imported. PHTA and NEMA commented that DOE did not conduct 
manufacturer interviews specific to DPPPM and that much of the analyses 
relies on market research conducted in 2016 to support the energy 
conservation standard established for DPPP. PTHA and NEMA commented 
that while DPPPM are often sold as a component of DPPP, there are 
different market characteristics that manufacturers feel necessitate 
new interviews, focused specifically on DPPPM. (PHTA and NEMA, No. 92 
at p. 7)
    In this final rule, DOE revised the fraction of DPPP motors 
shipments that are imported vs. domestically manufactured used in the 
employment impact analysis to align with the estimates from the 
manufacturer impact analysis specific to DPPP motors (See section IV.J 
of this document) and assumed 50 percent of DPPP motors shipments are 
imported vs. 50 percent are domestically manufactured.\128\

[[Page 67017]]

Finally, DOE notes that DOE conducted DPPP motor manufacturer 
interviews as part of the June 2022 NOPR, as discussed in the 
manufacturer impact analysis, and incorporated feedback to estimate 
this fraction.
---------------------------------------------------------------------------

    \128\ In the NOPR, DOE assumed that 40 percent of DPPP motors 
are imported based on estimates for small electric motors. In the 
final rule, DOE revised the percentage imported to be more specific 
to DPPP motors and align with the estimate used in the MIA.
---------------------------------------------------------------------------

V. Analytical Results and Conclusion

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for DPPP 
motors. It addresses the TSLs examined by DOE, the projected impacts of 
each of these levels if adopted as energy conservation standards for 
DPPP motors, and the standards levels that DOE is adopting in this 
final rule. Additional details regarding DOE's analyses are contained 
in the final rule TSD supporting this document.

A. Trial Standard Levels

    In general, DOE typically evaluates potential amended standards for 
products and equipment by grouping individual efficiency levels for 
each class into TSLs. Use of TSLs allows DOE to identify and consider 
manufacturer cost interactions between the equipment classes, to the 
extent that there are such interactions, and market cross elasticity 
from consumer purchasing decisions that may change when different 
standard levels are set.
    In the analysis conducted for this final rule, DOE analyzed the 
benefits and burdens of eight TSLs for DPPP motors. DOE developed TSLs 
that combine specific efficiency levels for each of the DPPP motor 
equipment classes analyzed by DOE. The TSLs that were chosen in the 
final rule represent DPPP motors at maximum technologically feasible 
(``max-tech'') energy efficiency levels and similar performance (i.e., 
variable-speed, two-speed, multi-speed, and/or single-speed). DOE 
presents the results for the TSLs in this document, while the results 
for all efficiency levels that DOE analyzed are in Chapter 8 the final 
rule TSD.\129\
---------------------------------------------------------------------------

    \129\ Efficiency levels that were analyzed for this final rule 
are discussed in section IV.C of this document. Results by 
efficiency level are presented in Chapter 8.
---------------------------------------------------------------------------

    Table V.1 and Table V.2 presents the TSLs and the corresponding 
efficiency levels that DOE has identified for potential amended energy 
conservation standards for DPPP motors. TSL 8 represents the max-tech 
energy efficiency for all equipment classes, as well as freeze 
protection control requirements for DPPP motors greater than and equal 
to 0.5 THP. TSL 7 represents the California CEC standards \130\ and 
includes a variable-speed requirement for DPPP motors at or above 0.5 
THP, an EL 1 efficiency requirement below 0.5 THP, and freeze-
protection control requirements for DPPP motors greater than and equal 
to 0.5 THP. TSL 6 represents the performance requirements included in 
UL 1004-10:2022, which ensures DPPP motors operate similarly to motors 
in DPPPs that comply with the DOE standards at 10 CFR 431.465(f) and 
includes a variable-speed requirement for DPPP motors at or above 1.15 
THP, an EL 1 efficiency requirement below 1.15 THP, and freeze-
protection control requirements for DPPP motors greater than and equal 
to 1.15 THP. TSL 5 represents the two-speed/multi-speed DPPP motor EL 5 
level for applicable equipment classes and freeze-protection control 
requirements for DPPP motors greater than and equal to 0.5 THP. TSL 4 
represents the two-speed/multi-speed DPPP motor EL 4 level for 
applicable equipment classes and freeze protection control requirements 
for DPPP motors greater than and equal to 0.5 THP. TSL 3 represents the 
two-speed/multi-speed DPPP motor EL 3 level for applicable equipment 
classes and freeze-protection control requirements for DPPP motors 
greater than and equal to 0.5 THP. TSL 2 represents the highest-
efficiency single-speed DPPP motor level for all equipment classes. TSL 
1 represents the medium-efficiency single-speed DPPP motor level for 
all equipment classes.
---------------------------------------------------------------------------

    \130\ Best approximation based on the efficiency level analyzed.
---------------------------------------------------------------------------

    In addition, as discussed in section III.A of this document, for 
all TSLs, DOE considered a 2-year lead time resulting in a first full 
year of compliance of 2026, except for small-size DPPP motors at TSL 7 
where DOE uses a 4-year compliance lead time, resulting in a first full 
year of compliance year of 2028.

                                                                  Table V.1--Trial Standard Levels for DPPP Motors--EL Mapping
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
               TSL                       TSL 1              TSL 2              TSL 3              TSL 4              TSL 5              TSL 6                  TSL 7                 TSL 8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Extra-small (<0.5 THP)...........  EL 1.............  EL 2.............  EL 2.............  EL 2.............  EL 2.............  EL 1.............  EL 1 (2026).............  EL 2
Small-size (0.5 <= THP < 1.15)...  EL 1.............  EL 2.............  EL 3 *...........  EL 4 *...........  EL 5 *...........  EL 1.............  EL 6 * (2028)...........  EL 6 *
Standard-size (1.15 <= THP <= 5).  EL 1.............  EL 2.............  EL 3 *...........  EL 4 *...........  EL 5 *...........  EL 6 *...........  EL 6 * (2026)...........  EL 6 *
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Includes freeze protection control requirements.
Note: the analysis uses 2026 as the first full year of compliance except at TSL 7, where the first full year of compliance varies by equipment class as indicated in the table.


                                                                  Table V.2--Trial Standard Levels for DPPP Motors--Description
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
               TSL                       TSL 1               TSL 2               TSL 3               TSL 4               TSL 5               TSL 6               TSL 7               TSL 8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Extra-small (<0.5 THP)..........  Medium Efficiency   High Efficiency     High Efficiency     High Efficiency     High Efficiency     Medium Efficiency   Medium Efficiency   High Efficiency
                                   Single Speed.       Single Speed.       Single Speed.       Single Speed.       Single Speed.       Single Speed.       Single Speed        Single Speed.
                                                                                                                                                           (2026).
Small-size (0.5 <= THP < 1.15)..  Medium Efficiency   High Efficiency     Two and multi-      Two and multi-      Two and multi-      Medium Efficiency   Variable-Speed *    Variable-Speed.*
                                   Single Speed.       Single Speed.       speed EL 3 *.       speed EL 4 *.       speed EL 5 *.       Single Speed.       (2028).
Standard-size (1.15 <= THP <= 5)  Medium Efficiency   High Efficiency     Two and multi-      Two and multi-      Two and multi-      Variable-Speed *..  Variable-Speed *    Variable-Speed.*
                                   Single Speed.       Single Speed.       speed EL 3 *.       speed EL 4 *.       speed EL 5 *.                           (2026).
General Description.............  Medium Efficiency   High Efficiency     two and multi-      two and multi-      two and multi-      UL 1004-10:2022     CEC Standards.....  Max-tech.
                                   Single Speed.       Single Speed.       speed EL3 where     speed EL4 where     speed EL5 where     requirements.
                                                                           applicable.         applicable.         applicable.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Includes freeze protection control requirements.
Note: the analysis uses 2026 as the first full year of compliance except at TSL 7, where the first full year of compliance varies by equipment class as indicated in the table.


[[Page 67018]]

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on DPPP motors consumers by 
looking at the effects that potential standards at each TSL would have 
on the LCC and PBP. DOE also examined the impacts of potential 
standards on selected consumer subgroups. These analyses are discussed 
in the following sections.
a. Life-Cycle Cost and Payback Period
    In general, higher-efficiency products affect consumers in two 
ways: (1) purchase price increases and (2) annual operating costs 
decrease. Inputs used for calculating the LCC and PBP include total 
installed costs (i.e., product price plus installation costs), and 
operating costs (i.e., annual energy use, energy prices, energy price 
trends, repair costs, and maintenance costs). The LCC calculation also 
uses product lifetime and a discount rate. Chapter 8 of the final rule 
TSD provides detailed information on the LCC and PBP analyses.
    Table V.2 through Table V.7 show the LCC and PBP results for the 
TSLs considered for each product class. In the first of each pair of 
tables, the simple payback is measured relative to the baseline 
product. In the second table, the impacts are measured relative to the 
efficiency distribution in the no-new-standards case in the compliance 
year (see section IV.F.8 of this document). Because some consumers 
purchase products with higher efficiency in the no-new-standards case, 
the average savings are less than the difference between the average 
LCC of the baseline product and the average LCC at each TSL. The 
savings refer only to consumers who are affected by a standard at a 
given TSL. Those who already purchase a product with efficiency at or 
above a given TSL are not affected. Consumers for whom the LCC 
increases at a given TSL experience a net cost.

                                         Table V.2--Average LCC and PBP Results for Extra-Small-Size DPPP Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Average costs (2022$)
                                                                             ----------------------------------------------------   Simple      Average
                              TSL                                 Efficiency                               Lifetime                 payback    lifetime
                                                                    level      Installed   First year's    operating      LCC       (years)     (years)
                                                                                 cost     operating cost     cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           0         $65             $72        $236        $301  ..........         3.6
1,6,7..........................................................            1          77              59         192         269         0.9         3.6
2-5,8..........................................................            2         115              54         177         292         2.8         3.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


      Table V.3--Average LCC Savings Relative to the No-New-Standards Case for Extra-Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost savings
                                                                             -----------------------------------
                                                                                                   Percent of
                     TSL                             Efficiency level            Average LCC     consumers that
                                                                                  savings *      experience net
                                                                                   (2022$)          cost (%)
----------------------------------------------------------------------------------------------------------------
1,6,7.......................................  1.............................                $3                 0
2-5,8.......................................  2.............................              (12)                59
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                            Table V.4--Average LCC and PBP Results for Small-Size DPPP Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Average costs (2022$)
                                                                             ----------------------------------------------------   Simple      Average
                              TSL                                 Efficiency                               Lifetime                 payback    lifetime
                                                                    level      Installed   First year's    operating      LCC       (years)     (years)
                                                                                 cost     operating cost     cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           0        $156            $241        $843        $999  ..........         3.9
1,6............................................................            1         177             196         685         862         0.5         3.9
2..............................................................            2         218             180         628         846         1.0         3.9
3..............................................................            3         383             190         678       1,060         4.5         3.9
4..............................................................            4         412             166         590       1,001         3.4         3.9
5..............................................................            5         443             158         561       1,003         3.4         3.9
7,8............................................................            6         655              92         361       1,017         3.4         3.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


[[Page 67019]]


         Table V.5--Average LCC Savings Relative to the No-New-Standards Case for Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost savings
                                                                             -----------------------------------
                                                                                                   Percent of
                     TSL                             Efficiency level            Average LCC     consumers that
                                                                                  savings *      experience net
                                                                                   (2022$)          cost (%)
----------------------------------------------------------------------------------------------------------------
1,6.........................................  1.............................               $10                 0
2...........................................  2.............................                14                24
3...........................................  3.............................              (54)                52
4...........................................  4.............................              (12)                46
5...........................................  5.............................              (16)                50
7,8.........................................  6.............................                 4                44
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                          Table V.6--Average LCC and PBP Results for Standard-Size DPPP Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Average costs (2022$)
                                                                             ----------------------------------------------------   Simple      Average
                              TSL                                 Efficiency                               Lifetime                 payback    lifetime
                                                                    level      Installed   First year's    operating      LCC       (years)     (years)
                                                                                 cost     operating cost     cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           0        $308            $651      $2,637      $2,945  ..........         4.8
1..............................................................            1         368             558       2,264       2,633         0.7         4.8
2..............................................................            2         412             517       2,098       2,510         0.8         4.8
3..............................................................            3         574             319       1,306       1,879         0.8         4.8
4..............................................................            4         613             284       1,163       1,776         0.8         4.8
5..............................................................            5         654             259       1,063       1,717         0.9         4.8
6-8............................................................            6         847             243       1,056       1,903         1.3         4.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


       Table V.7--Average LCC Savings Relative to the No-New-Standards Case for Standard-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost savings
                                                                             -----------------------------------
                                                                                                   Percent of
                     TSL                             Efficiency level            Average LCC     consumers that
                                                                                  savings *      experience net
                                                                                   (2022$)          cost (%)
----------------------------------------------------------------------------------------------------------------
1...........................................  1.............................               $26                 0
2...........................................  2.............................                44                 2
3...........................................  3.............................               109                18
4...........................................  4.............................               141                17
5...........................................  5.............................               151                19
6-8.........................................  6.............................               236                 2
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.

b. Consumer Subgroup Analysis
    In the consumer subgroup analysis, DOE estimated the impact of the 
considered TSLs on senior-only households. Table V.8 through Table V.13 
compare the average LCC savings and PBP at each efficiency level for 
the consumer subgroups with similar metrics for the entire consumer 
sample for DPPP motors. In most cases, the average LCC savings and PBP 
for senior-only households at the considered efficiency levels are not 
substantially different from the average for all households. Chapter 11 
of the final rule TSD presents the complete LCC and PBP results for the 
subgroups.

   Table V.8--Comparison of Average LCC Savings and PBP for Consumer Subgroup and All Households for Equipment
                                      Class 1 Extra-Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
                                                      Average life-cycle cost      Simple payback period (years)
                                                          savings (2022$)        -------------------------------
               TSL                      EL       --------------------------------
                                                    Senior-only                     Senior-only   All households
                                                    households    All households    households
----------------------------------------------------------------------------------------------------------------
1,6,7...........................               1              $3              $3             0.9             0.9
2-5,8...........................               2            (12)            (12)             2.7             2.8
----------------------------------------------------------------------------------------------------------------


[[Page 67020]]


 Table V.9--Comparison of Fraction of Consumers Experiencing Net Benefit and Net Cost for Consumer Subgroup and
                        All Households for Equipment Class 1 Extra-Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
                                                     Percent of consumers that       Percent of consumers that
                                                      experience net cost (%)       experience net benefit (%)
               TSL                      EL       ---------------------------------------------------------------
                                                    Senior-only                     Senior-only
                                                    households    All households    households    All households
----------------------------------------------------------------------------------------------------------------
1,6,7...........................               1               0               0               8               8
2-5,8...........................               2              58              59               8               8
----------------------------------------------------------------------------------------------------------------


  Table V.10--Comparison of Average LCC Savings and PBP for Consumer Subgroup and All Households for Equipment
                                         Class 2 Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
                                                      Average life-cycle cost      Simple payback period (years)
                                                          savings (2022$)        -------------------------------
               TSL                      EL       --------------------------------
                                                    Senior-only                     Senior-only   All households
                                                    households    All households    households
----------------------------------------------------------------------------------------------------------------
1,6.............................               1             $11             $10             0.4             0.5
2...............................               2              18              14             0.9             1.0
3...............................               3            (47)            (54)             4.1             4.5
4...............................               4             (0)            (12)             3.1             3.4
5...............................               5             (2)            (16)             3.2             3.4
7,8.............................               6              33               4             3.1             3.4
----------------------------------------------------------------------------------------------------------------


 Table V.11--Comparison of Fraction of Consumers Experiencing Net Benefit and Net Cost for Consumer Subgroup and
                           All Households for Equipment Class 2 Small-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
                                                     Percent of consumers that       Percent of consumers that
                                                      experience net cost (%)       experience net benefit (%)
               TSL                      EL       ---------------------------------------------------------------
                                                    Senior-only                     Senior-only
                                                    households    All households    households    All households
----------------------------------------------------------------------------------------------------------------
1,6.............................               1               0               0               6               6
2...............................               2              23              24              25              24
3...............................               3              51              52              14              13
4...............................               4              45              46              27              27
5...............................               5              48              50              27              26
7,8.............................               6              42              44              29              27
----------------------------------------------------------------------------------------------------------------


  Table V.12--Comparison of Average LCC Savings and PBP for Consumer Subgroup and All Households for Equipment
                                        Class 3 Standard-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
                                                      Average life-cycle cost      Simple payback period (years)
                                                          savings (2022$)        -------------------------------
               TSL                      EL       --------------------------------
                                                    Senior-only                     Senior-only   All households
                                                    households    All households    households
----------------------------------------------------------------------------------------------------------------
1...............................               1             $29             $26             0.6             0.7
2...............................               2              50              44             0.7             0.8
3...............................               3             128             109             0.7             0.8
4...............................               4             165             141             0.8             0.8
5...............................               5             178             151             0.8             0.9
6-8.............................               6             269             236             1.2             1.3
----------------------------------------------------------------------------------------------------------------


[[Page 67021]]


 Table V.13--Comparison of Fraction of Consumers Experiencing Net Benefit and Net Cost for Consumer Subgroup and
                         All Households for Equipment Class 3 Standard-Size DPPP Motors
----------------------------------------------------------------------------------------------------------------
                                                     Percent of consumers that       Percent of consumers that
                                                      experience net cost (%)       experience net benefit (%)
               TSL                      EL       ---------------------------------------------------------------
                                                    Senior-only                     Senior-only
                                                    households    All households    households    All households
----------------------------------------------------------------------------------------------------------------
1...............................               1               0               0               8               8
2...............................               2               2               2              17              17
3...............................               3              18              18              24              23
4...............................               4              17              17              29              29
5...............................               5              18              19              29              29
6-8.............................               6               2               2              17              18
----------------------------------------------------------------------------------------------------------------

c. Rebuttable Presumption Payback
    As discussed in section III.E.2, EPCA establishes a rebuttable 
presumption that an energy conservation standard is economically 
justified if the increased purchase cost for a product that meets the 
standard is less than three times the value of the first-year energy 
savings resulting from the standard. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(iii)) In calculating a rebuttable presumption payback 
period for each of the considered TSLs, DOE used discrete values, and, 
as required by EPCA, based the energy use calculation on the DOE test 
procedures for DPPP motors. In contrast, the PBPs presented in section 
V.B.1.a were calculated using distributions that reflect the range of 
energy use in the field.
    Table V.14 presents the rebuttable-presumption payback periods for 
the considered TSLs for DPPP motors. While DOE examined the rebuttable-
presumption criterion, it considered whether the standard levels 
considered for this rule are economically justified through a more 
detailed analysis of the economic impacts of those levels, pursuant to 
42 U.S.C. 6295(o)(2)(B)(i), that considers the full range of impacts to 
the consumer, manufacturer, Nation, and environment. The results of 
that analysis serve as the basis for DOE to definitively evaluate the 
economic justification for a potential standard level, thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification.

                           Table V.14--Rebuttable-Presumption Payback Periods (Years)
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                 Equipment class                 ---------------------------------------------------------------
                                                     1       2       3       4       5       6       7       8
----------------------------------------------------------------------------------------------------------------
Extra-small-size................................     0.9     2.7     2.7     2.7     2.7     0.9     0.9     2.7
Small-size......................................     0.4     0.9     3.8     3.0     3.0     0.4     2.7     2.7
Standard-size...................................     0.5     0.6     0.7     0.7     0.8     1.0     1.0     1.0
----------------------------------------------------------------------------------------------------------------

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of new energy 
conservation standards on manufacturers of DPPP motors. The next 
section describes the expected impacts on manufacturers at each 
considered TSL. Chapter 12 of the final rule TSD explains the analysis 
in further detail.
a. Industry Cash Flow Analysis Results
    In this section, DOE provides GRIM results from the analysis, which 
examines changes in the industry that would result from new standards. 
The following tables summarize the estimated financial impacts 
(represented by changes in INPV) of potential new energy conservation 
standards on manufacturers of DPPP motors, as well as the conversion 
costs that DOE estimates manufacturers of DPPP motors would incur at 
each TSL.
    As discussed in section IV.J.2.d of this document, DOE modeled two 
manufacturer markup scenarios to evaluate a range of cash flow impacts 
on the DPPP motor industry: (1) the preservation of gross margin 
scenario and (2) the preservation of operating profit scenario. DOE 
considered the preservation of gross margin scenario by applying a 
``gross margin percentage'' for each equipment class across all 
efficiency levels. As MPCs increase with efficiency, this scenario 
implies that the absolute dollar markup will increase. DOE assumed a 
manufacturer markup of 1.37 for all DPPP motors. Because this scenario 
assumes that a manufacturer's absolute dollar markup would increase as 
MPCs increase in the standards cases, it represents the upper-bound to 
industry profitability under new energy conservation standards.
    The preservation of operating profit scenario reflects 
manufacturers' concerns about their inability to maintain margins as 
MPCs increase to meet higher efficiency levels. In this scenario, while 
manufacturers make the necessary investments required to convert their 
facilities to produce compliant equipment, operating profit remains the 
same in absolute dollars, but decreases as a percentage of revenue.
    Each of the modeled manufacturer markup scenarios results in a 
unique set of cash-flows and corresponding industry values at each TSL. 
In the following discussion, the INPV results refer to the difference 
in industry value between the no-new-standards case and each standards 
case resulting from the sum of discounted cash-flows from 2024 through 
2055. To provide perspective on the short-run cash-flow impact, DOE 
includes in the discussion of results a comparison of free cash flow 
between the no-new-standards case and the standards case at each TSL in 
the year before new standards are required.
    Table V.15 and Table V.16 show the MIA results for DPPP motor 
manufacturers at each TSL using the manufacturer markup scenarios 
previously described.

[[Page 67022]]



                 Table V.15--Manufacturer Impact Analysis for Dedicated-Purpose Pool Pump Motors--Preservation of Gross Margin Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        No-new-                           Trial standard level *
                                                   Units               standards -----------------------------------------------------------------------
                                                                         case        1        2        3        4        5        6        7        8
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................  2022$ millions................         661      663      672      684      695      708      675      740      755
Change in INPV......................  2022$ millions................  ..........      2.6     11.3     23.3     34.5     47.0     14.1     79.0     94.1
                                      %.............................  ..........      0.4      1.7      3.5      5.2      7.1      2.1     12.0     14.2
Product Conversion Costs............  2022$ millions................  ..........      0.2      0.9      7.5      7.6      7.9      0.2     10.6     10.7
Capital Conversion Costs............  2022$ millions................  ..........      0.0      0.0      7.8      7.8      7.8     21.3     45.6     45.6
Total Investment Required...........  2022$ millions................  ..........      0.2      0.9     15.3     15.4     15.7     21.5     56.2     56.4
Free Cash Flow (2025)...............  2022$ millions................        31.2     31.1     30.8     23.6     23.6     23.4     19.4      9.9      1.4
Change in Free Cash Flow............  2022$ millions................  ..........    (0.1)    (0.4)    (7.6)    (7.6)    (7.7)   (11.8)   (21.2)   (29.8)
                                      %.............................  ..........    (0.2)    (1.3)   (24.2)   (24.4)   (24.8)   (37.8)   (68.1)   (95.5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate a negative number. Some numbers may not sum exactly due to rounding.


               Table V.16--Manufacturer Impact Analysis for Dedicated-Purpose Pool Pump Motors--Preservation of Operating Profit Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        No-new-                           Trial standard level *
                                                   Units               standards -----------------------------------------------------------------------
                                                                         case        1        2        3        4        5        6        7        8
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................  2022$ millions................         661      660      655      622      617      612      559       47      436
Change in INPV......................  2022$ millions................  ..........    (0.8)    (6.2)   (38.9)   (43.4)   (48.5)  (101.4)  (214.2)  (224.4)
                                      %.............................  ..........    (0.1)    (0.9)    (5.9)    (6.6)    (7.3)   (15.3)   (32.4)   (34.0)
Product Conversion Costs............  2022$ millions................  ..........      0.2      0.9      7.5      7.6      7.9      0.2     10.6     10.7
Capital Conversion Costs............  2022$ millions................  ..........      0.0      0.0      7.8      7.8      7.8     21.3     45.6     45.6
Total Investment Required...........  2022$ millions................  ..........      0.2      0.9     15.3     15.4     15.7     21.5     56.2     56.4
Free Cash Flow (2025)...............  2022$ millions................        31.2     31.1     30.8     23.6     23.6     23.4     19.4      9.9      1.4
Change in Free Cash Flow............  2022$ millions................  ..........    (0.1)    (0.4)    (7.6)    (7.6)    (7.7)   (11.8)   (21.2)   (29.8)
                                      %.............................  ..........    (0.2)    (1.3)   (24.2)   (24.4)   (24.8)   (37.8)   (68.1)   (95.5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate a negative number. Some numbers may not sum exactly due to rounding.

    At TSL 8, DOE estimated that the impact on INPV would range from -
$224.4 million to $94.1 million, or a change in INPV of -34.0 percent 
to 14.2 percent. At TSL 8, industry free cash flow is $1.4 million, 
which is a decrease of approximately $29.8 million compared to the no-
new-standards case value of $31.2 million in 2025, the year leading up 
to new standards.
    TSL 8 will set the energy conservation standards at EL 6 for both 
the small size and standard size DPPP motor equipment classes and at EL 
2 for the extra-small size DPPP motor equipment class. This represents 
max-tech for all DPPP motor equipment classes. DOE estimated that 33 
percent of all extra-small size DPPP motor shipments; 22 percent of all 
small size DPPP motor shipments; and 62 percent of all standard size 
DPPP motor shipments will already meet the efficiency levels analyzed 
at TSL 8 by 2026, in the no-new-standards case.
    At TSL 8, DPPP motor manufacturers would need to redesign all small 
size and standard size DPPP motors that do not use variable-speed 
controls and would need to redesign all extra-small size DPPP motors 
not using the most efficient single-speed motors. DOE estimated that 
this redesign effort would cost manufacturers approximately $10.7 
million in product conversion costs. In addition to these product 
conversion costs, DPPP motor manufacturers would need to increase their 
variable-speed DPPP motor manufacturing production capacity for both 
the small size and standard size DPPP motors. DOE estimated that 
expanding their production capacity would cost manufacturers 
approximately $45.6 million in capital conversion costs at TSL 8.
    At TSL 8, the shipment weighted average MPC for all DPPP motors 
increases by 60.0 percent relative to the no-new-standards case 
shipment weighted average MPC for all DPPP motors in 2026. In the 
preservation of gross margin scenario, manufacturers fully pass on this 
cost increase to customers. The increase in the shipment weighted 
average MPC for DPPP motors outweighs the $56.4 million in conversion 
costs, causing a positive change in INPV at TSL 8 in the preservation 
of gross margin scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. In this scenario, the 60.0 percent shipment 
weighted average MPC increase results in a reduction in the 
manufacturer margin after the compliance year. This reduction in the 
manufacturer margin and the $56.4 million in conversion costs incurred 
by manufacturers cause a negative change in INPV at TSL 8 in the 
preservation of operating profit scenario.
    At TSL 7, DOE estimated that the impact on INPV would range from -
$214.2 million to $79.0 million, or a change in INPV of -32.4 percent 
to 12.0 percent. At TSL 7, industry free cash flow is $9.9 million, 
which is a decrease of approximately $21.2 million compared to the no-
new-standards case value of $31.2 million in 2025, the year leading up 
to new standards for standard size and extra-small size DPPP 
motors.\131\
---------------------------------------------------------------------------

    \131\ The analyzed compliance year for small size DPPP motors is 
2028. However, DOE presents the year with the largest decrease in 
manufacturer cash flow, which is still 2025 for TSL 7.
---------------------------------------------------------------------------

    TSL 7 sets the energy conservation standards at EL 6 for both the 
small size and standard size DPPP motor equipment classes and at EL 1 
for the extra-small size DPPP motor equipment class. This represents 
max-tech for the small size and standard size DPPP

[[Page 67023]]

motor equipment classes. DOE estimates that 93 percent of all extra-
small size DPPP motor shipments; 24 percent of all small size DPPP 
motor shipments; and 62 percent of all standard size DPPP motor 
shipments would already meet or exceed the efficiency levels analyzed 
at TSL 7 by 2026 for the extra-small and standard size DPPP motors and 
by 2028 for the small size DPPP motors, in the no-new-standards case.
    At TSL 7, DPPP motor manufacturers would need to redesign all small 
size and standard size DPPP motors that do not use variable-speed 
controls and would need to redesign some extra-small size DPPP motors 
to meet EL 1. DOE estimated that this redesign effort would cost 
manufacturers approximately $10.6 million in product conversion costs. 
In addition to these product conversion costs, DPPP motor manufacturers 
would need to increase their variable-speed DPPP motor manufacturing 
production capacity for both the small size and standard size DPPP 
motors. DOE estimated that expanding their production capacity would 
cost manufacturer approximately $45.6 million in capital conversion 
costs at TSL 7.
    At TSL 7, the shipment weighted average MPC for all DPPP motors 
increases by 46.5 percent relative to the no-new-standards case 
shipment weighted average MPC for all DPPP motors. In the preservation 
of gross margin scenario, manufacturers can fully pass on this cost 
increase to customers. The increase in the shipment weighted average 
MPC for DPPP motors outweighs the $56.2 million in conversion costs, 
causing a positive change in INPV at TSL 7 in the preservation of gross 
margin scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. In this scenario, the 46.5 percent shipment 
weighted average MPC increase results in a reduction in the 
manufacturer margin after the compliance year. This reduction in the 
manufacturer margin and the $56.2 million in conversion costs incurred 
by manufacturers cause a negative change in INPV at TSL 7 in the 
preservation of operating profit scenario.
    At TSL 6, DOE estimated that the impact on INPV would range from -
l$101.4 million to $14.1 million, or a change in INPV of -15.3 percent 
to 2.1 percent. At TSL 6, industry free cash flow is $19.4 million, 
which is a decrease of approximately $11.8 million compared to the no-
new-standards case value of $31.2 million in 2025, the year leading up 
to new standards.
    TSL 6 would set the energy conservation standards at EL 6 for the 
standard size DPPP motor equipment class and at EL 1 for both the 
extra-small size and small size DPPP motor equipment classes. This 
represents max-tech for the standard size DPPP motor equipment class. 
DOE estimates that 93 percent of all extra-small size DPPP motor 
shipments; 95 percent of all small size DPPP motor shipments; and 62 
percent of all standard size DPPP motor shipments would already meet or 
exceed the efficiency levels analyzed at TSL 6 by 2026, in the no-new-
standards case.
    At TSL 6, DPPP motor manufacturers would need to redesign all 
standard size DPPP motors that do not use variable-speed controls and 
would need to redesign some extra-small size and small size DPPP motors 
to meet EL 1. DOE estimated that this redesign effort would cost 
manufacturers approximately $0.2 million in product conversion costs. 
In addition to these product conversion costs, DPPP motor manufacturers 
would need to increase their variable-speed DPPP motor manufacturing 
production capacity for the standard size DPPP motor equipment class. 
DOE estimated that expanding their production capacity would cost 
manufacturer approximately $21.3 million in capital conversion costs at 
TSL 6.
    At TSL 6, the shipment weighted average MPC for all DPPP motors 
increases by 22.0 percent relative to the no-new-standards case 
shipment weighted average MPC for all DPPP motors. In the preservation 
of gross margin scenario, manufacturers can fully pass on this cost 
increase to customers. The increase in the shipment weighted average 
MPC for DPPP motors outweighs the $21.5 million in conversion costs, 
causing a positive change in INPV at TSL 6 in the preservation of gross 
margin scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. In this scenario, the 22.0 percent shipment 
weighted average MPC increase results in a reduction in the 
manufacturer margin after the compliance year. This reduction in the 
manufacturer margin and the $21.5 million in conversion costs incurred 
by manufacturers cause a negative change in INPV at TSL 6 in the 
preservation of operating profit scenario.
    At TSL 5, DOE estimated that the impact on INPV would range from -
$48.5 million to $47.0 million, or a change in INPV of -7.3 percent to 
7.1 percent. At TSL 5, industry free cash flow is $23.4 million, which 
is a decrease of approximately $7.7 million compared to the no-new-
standards case value of $31.2 million in 2025, the year leading up to 
new standards.
    TSL 5 would set the energy conservation standards at EL 5 for both 
the small size and standard size DPPP motor equipment classes and at EL 
2 for the extra-small size DPPP motor equipment class. DOE estimates 
that 33 percent of all extra-small size DPPP motor shipments; 23 
percent of all small size DPPP motor shipments; and 63 percent of all 
standard size DPPP motor shipments would already meet or exceed the 
efficiency levels analyzed at TSL 5 by 2026, in the no-new-standards 
case.
    At TSL 5, DPPP motor manufacturers would need to redesign some 
small size and standard size DPPP motors to meet EL 5 (which is likely 
to require the most efficient dual-speed motor) and would need to 
redesign some extra-small size DPPP motors to meet EL 2. DOE estimated 
that this redesign effort would cost manufacturers approximately $7.9 
million in product conversion costs. In addition to these product 
conversion costs, DPPP motor manufacturers would need to increase their 
dual-speed DPPP motor manufacturing production capacity for the small 
size and standard size DPPP motor equipment classes. DOE estimated that 
expanding their production capacity would cost manufacturer 
approximately $7.8 million in capital conversion costs at TSL 5.
    At TSL 5, the shipment weighted average MPC for all DPPP motors 
increases by 20.2 percent relative to the no-new-standards case 
shipment weighted average MPC for all DPPP motors. In the preservation 
of gross margin scenario, manufacturers can fully pass on this cost 
increase to customers. The increase in the shipment weighted average 
MPC for DPPP motors outweighs the $15.7 million in conversion costs, 
causing a positive change in INPV at TSL 5 in the preservation of gross 
margin scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. In this scenario, the 20.2 percent shipment 
weighted average MPC increase results in a reduction in the 
manufacturer margin after the

[[Page 67024]]

compliance year. This reduction in the manufacturer margin and the 
$15.7 million in conversion costs incurred by manufacturers cause a 
negative change in INPV at TSL 5 in the preservation of operating 
profit scenario.
    At TSL 4, DOE estimated that the impact on INPV would range from -
$43.4 million to $34.5 million, or a change in INPV of -6.6 percent to 
5.2 percent. At TSL 4, industry free cash flow is $23.6 million, which 
is a decrease of approximately $7.6 million compared to the no-new-
standards case value of $31.2 million in 2025, the year leading up to 
new standards.
    TSL 4 would set the energy conservation standards at EL 4 for both 
the small size and standard size DPPP motor equipment classes and at EL 
2 for the extra-small size DPPP motor equipment class. DOE estimates 
that 33 percent of all extra-small size DPPP motor shipments; 25 
percent of all small size DPPP motor shipments; and 64 percent of all 
standard size DPPP motor shipments would already meet or exceed the 
efficiency levels analyzed at TSL 4 by 2026, in the no-new-standards 
case.
    At TSL 4, DPPP motor manufacturers would need to redesign some 
small size and standard size DPPP motors to meet EL 4 (which is likely 
to require an intermediate efficient dual-speed motor) and would need 
to redesign some extra-small size DPPP motors to meet EL 2. DOE 
estimated that this redesign effort would cost manufacturers 
approximately $7.6 million in product conversion costs. In addition to 
these product conversion costs, DPPP motor manufacturers would need to 
increase their dual-speed DPPP motor manufacturing production capacity 
for the small size and standard size DPPP motor equipment classes. DOE 
estimated that expanding their production capacity would cost 
manufacturer approximately $7.8 million in capital conversion costs at 
TSL 4.
    At TSL 4, the shipment weighted average MPC for all DPPP motors 
increases by 17.0 percent relative to the no-new-standards case 
shipment weighted average MPC for all DPPP motors. In the preservation 
of gross margin scenario, manufacturers can fully pass on this cost 
increase to customers. The increase in the shipment weighted average 
MPC for DPPP motors outweighs the $15.4 million in conversion costs, 
causing a positive change in INPV at TSL 4 in the preservation of gross 
margin scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. In this scenario, the 17.0 percent shipment 
weighted average MPC increase results in a reduction in the 
manufacturer margin after the compliance year. This reduction in the 
manufacturer margin and the $15.4 million in conversion costs incurred 
by manufacturers cause a negative change in INPV at TSL 4 in the 
preservation of operating profit scenario.
    At TSL 3, DOE estimated that the impact on INPV would range from -
$38.9 million to $23.3 million, or a change in INPV of -5.9 percent to 
3.5 percent. At TSL 3, industry free cash flow is $23.6 million, which 
is a decrease of approximately $7.6 million compared to the no-new-
standards case value of $31.2 million in 2025, the year leading up to 
new standards.
    TSL 3 would set the energy conservation standards at EL 3 for both 
the small size and standard size DPPP motor equipment classes and at EL 
2 for the extra-small size DPPP motor equipment class. DOE estimates 
that 33 percent of all extra-small size DPPP motor shipments; 31 
percent of all small size DPPP motor shipments; and 66 percent of all 
standard size DPPP motor shipments would already meet or exceed the 
efficiency levels analyzed at TSL 3 by 2026, in the no-new-standards 
case.
    At TSL 3, DPPP motor manufacturers would need to redesign some 
small size and standard size DPPP motors to meet EL 3 (which is likely 
to require a dual-speed motor) and would need to redesign some extra-
small size DPPP motors to meet EL 2. DOE estimated that this redesign 
effort would cost manufacturers approximately $7.5 million in product 
conversion costs. In addition to these product conversion costs, DPPP 
motor manufacturers would need to increase their dual-speed DPPP motor 
manufacturing production capacity for the small size and standard size 
DPPP motor equipment classes. DOE estimated that expanding their 
production capacity would cost manufacturer approximately $7.8 million 
in capital conversion costs at TSL 3.
    At TSL 3, the shipment weighted average MPC for all DPPP motors 
increases by 14.2 percent relative to the no-new-standards case 
shipment weighted average MPC for all DPPP motors. In the preservation 
of gross margin scenario, manufacturers can fully pass on this cost 
increase to customers. The increase in the shipment weighted average 
MPC for DPPP motors outweighs the $15.3 million in conversion costs, 
causing a positive change in INPV at TSL 3 in the preservation of gross 
margin scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. In this scenario, the 14.2 percent shipment 
weighted average MPC increase results in a reduction in the 
manufacturer margin after the compliance year. This reduction in the 
manufacturer margin and the $15.3 million in conversion costs incurred 
by manufacturers cause a negative change in INPV at TSL 3 in the 
preservation of operating profit scenario.
    At TSL 2, DOE estimated that the impact on INPV would range from -
$6.2 million to $11.3 million, or a change in INPV of -0.9 percent to 
1.7 percent. At TSL 2, industry free cash flow is $30.8 million, which 
is a decrease of approximately $0.4 million compared to the no-new-
standards case value of $31.2 million in 2025, the year leading up to 
new standards.
    TSL 2 would set the energy conservation standards at EL 2 for all 
DPPP motor equipment classes. DOE estimates that 33 percent of all 
extra-small size DPPP motor shipments; 58 percent of all small size 
DPPP motor shipments; and 78 percent of all standard size DPPP motor 
shipments would already meet or exceed the efficiency levels analyzed 
at TSL 2 by 2026, in the no-new-standards case.
    At TSL 2, DPPP motor manufacturers would need to redesign some 
small size and standard size DPPP motors to meet EL 2 (which is likely 
to require the most efficient single-speed motor) and would need to 
redesign some extra-small size DPPP motors to meet EL 2. DOE estimated 
that this redesign effort would cost manufacturers approximately $0.9 
million in product conversion costs. DOE estimated that DPPP motor 
manufacturers have the existing production capacity to manufacturer 
more efficient single-speed DPPP motors and would not incur any 
additional capital conversion costs at TSL 2.
    At TSL 2, the shipment weighted average MPC for all DPPP motors 
increases by 3.9 percent relative to the no-new-standards case shipment 
weighted average MPC for all DPPP motors. In the preservation of gross 
margin scenario, manufacturers can fully pass on this cost increase to 
customers. The increase in the shipment weighted average MPC for DPPP 
motors outweighs the $0.9 million in conversion costs, causing a 
positive

[[Page 67025]]

change in INPV at TSL 2 in the preservation of gross margin scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. In this scenario, the 3.9 percent shipment 
weighted average MPC increase results in a reduction in the 
manufacturer margin after the compliance year. This reduction in the 
manufacturer margin and the $0.9 million in conversion costs incurred 
by manufacturers cause a negative change in INPV at TSL 2 in the 
preservation of operating profit scenario.
    At TSL 2, DOE estimated that the impact on INPV would range from -
$0.8 million to $2.6 million, or a change in INPV of -0.1 percent to 
0.4 percent. At TSL 1, industry free cash flow is $31.1 million, which 
is a decrease of approximately $0.1 million compared to the no-new-
standards case value of $31.2 million in 2025, the year leading up to 
new standards.
    TSL 1 would set the energy conservation standards at EL 1 for all 
DPPP motor equipment classes. DOE estimates that 93 percent of all 
extra-small size DPPP motor shipments; 95 percent of all small size 
DPPP motor shipments; and 86 percent of all standard size DPPP motor 
shipments would already meet or exceed the efficiency levels analyzed 
at TSL 1 by 2026, in the no-new-standards case.
    At TSL 1, DPPP motor manufacturers would need to redesign some 
extra-small size, small size, and standard size DPPP motors to meet EL 
1 (which is likely to require an intermediate efficient single-speed 
motor). DOE estimated that this redesign effort would cost 
manufacturers approximately $0.2 million in product conversion costs. 
DOE estimated that DPPP motor manufacturers have the existing 
production capacity to manufacturer more efficient single-speed DPPP 
motors and would not incur any additional capital conversion costs at 
TSL 1.
    At TSL 1, the shipment weighted average MPC for all DPPP motors 
increases by 1.2 percent relative to the no-new-standards case shipment 
weighted average MPC for all DPPP motors. In the preservation of gross 
margin scenario, manufacturers can fully pass on this cost increase to 
customers. The increase in the shipment weighted average MPC for DPPP 
motors outweighs the $0.2 million in conversion costs, causing a 
positive change in INPV at TSL 1 in the preservation of gross margin 
scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. In this scenario, the 1.2 percent shipment 
weighted average MPC increase results in a reduction in the 
manufacturer margin after the compliance year. This reduction in the 
manufacturer margin and the $0.2 million in conversion costs incurred 
by manufacturers cause a negative change in INPV at TSL 1 in the 
preservation of operating profit scenario.
b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of new energy 
conservation standards on direct employment in the DPPP motors 
industry, DOE used the GRIM to estimate the domestic labor expenditures 
and number of direct employees in the no-new-standards case and in each 
of the standards cases during the analysis period.
    Production employees are those who are directly involved in 
fabricating and assembling products within an original equipment 
manufacturer facility. Workers performing services that are closely 
associated with production operations, such as materials handling tasks 
using forklifts, are included as production labor, as well as line 
supervisors.
    DOE used the GRIM to calculate the number of production employees 
from labor expenditures. DOE used statistical data from the U.S. Census 
Bureau's 2021 Annual Survey of Manufacturers \132\ (``ASM'') and the 
results of the engineering analysis to calculate industry-wide labor 
expenditures. Labor expenditures related to product manufacturing 
depend on the labor intensity of the product, the sales volume, and an 
assumption that wages remain fixed in real terms over time. The total 
labor expenditures in the GRIM were then converted to domestic 
production employment levels by dividing production labor expenditures 
by the annual payment per production worker.
---------------------------------------------------------------------------

    \132\ www.census.gov/programs-surveys/asm/data/tables.html.
---------------------------------------------------------------------------

    Non-production employees account for those workers that are not 
directly engaged in the manufacturing of the covered product. This 
could include sales, human resources, engineering, and management. DOE 
estimated non-production employment levels by multiplying the number of 
DPPP motor production workers by a scaling factor. The scaling factor 
is calculated by taking the ratio of the total number of employees, and 
the total number of production workers associated with the industry 
NAICS code 335312, which covers DPPP motor manufacturing. Using the 
GRIM, DOE estimates that there would be approximately 405 domestic 
production workers and approximately 232 non-production workers for 
DPPP motors in 2026 in the absence of new energy conservation 
standards. Table V.17 shows the range of the impacts of energy 
conservation standards on U.S. production of DPPP motors.

                            Table V.17--Total Number of Domestic Dedicated-Purpose Pool Pump Motor Production Workers in 2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           No-new-                                  Trial standard level *
                                                          standards  -----------------------------------------------------------------------------------
                                                             case        1        2        3        4        5          6            7            8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Domestic Production Workers in 2026....................          405      410      421      463      474      487          494          513          648
Domestic Non-Production Workers in 2026................          232      235      241      265      272      279          283          294          371
Total Direct Employment in 2026........................          637      645      662      728      746      766          777          807        1,019
Potential Changes in Total Direct Employment in 2026...  ...........      0-8     0-25     0-91    0-109    0-129    (163)-140    (281)-170    (281)-382
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 67026]]

    The direct employment impacts shown in Table V.17 represent the 
potential changes in direct employment that could result following the 
compliance date for the DPPP motors covered in this rulemaking. 
Employment could increase or decrease due to the labor content of the 
equipment being manufactured domestically or if manufacturers decided 
to move production facilities abroad because of the new standards. At 
the less severe end of the range, DOE assumes that all manufacturers 
continue to manufacture the same scope of the equipment domestically 
after compliance with the analyzed new standards. The other end of the 
range assumes that some domestic manufacturing either is eliminated or 
moves abroad due to the analyzed new standards.
    DOE assumes that for DPPP motors, manufacturing is only potentially 
negatively impacted at TSLs that would most likely require variable-
speed DPPP motors. At these TSLs, the maximum number of employees that 
could be eliminated are the number of domestic employees that would be 
manufacturing single-speed and dual-speed DPPP motors in the absence of 
new energy conservation standards. DOE estimated that there would be 
approximately 76 domestic production employees and 43 non-production 
employees involved in the production and sale of single-speed and dual-
speed small-size DPPP motors (for a total of 119 total employees) in 
2026 in the absence of new DPPP motor standards. DOE also estimated 
that there would be approximately 104 domestic production employees and 
59 non-production employees involved in the production and sale of 
single-speed and dual-speed standard-size DPPP motors (for a total of 
163 total employees) in 2026 in the absence of new DPPP motor 
standards. However, DOE notes that motors used in DPPPs are frequently 
used in other non-DPPP applications and motor manufacturers may choose 
to continue to manufacture single-speed and dual-speed motors (even at 
TSL 6, TSL 7, and TSL 8) that would be allowed to be used in other non-
DPPP applications. If manufacturers choose to do this, there would 
likely not be a significant impact on the overall domestic motor 
employment.
c. Impacts on Manufacturing Capacity
    DOE did not identify any significant capacity constraints for the 
design options being evaluated for this final rule. The design options 
evaluated for this final rule are available as equipment that is on the 
market currently. The materials used to manufacture DPPP motor models 
at all efficiency levels are widely available on the market. While 
there were a limited number of small size variable-speed DPPP motor 
models currently on the market, all manufacturers are capable of 
manufacturing standard size variable-speed DPPP motor models and would 
be able to manufacture small size variable-speed DPPP motor models if 
they choose to make the investments described in section IV.J.2.c of 
this document. As a result, DOE does not anticipate that the industry 
would likely experience any capacity constraints directly resulting 
from energy conservation standards at any of the TSLs considered.
d. Impacts on Subgroups of Manufacturers
    As discussed in section IV.J.1 of this document, using average cost 
assumptions to develop an industry cash-flow estimate may not be 
adequate for assessing differential impacts among manufacturer 
subgroups. Small manufacturers, niche manufacturers, and manufacturers 
exhibiting a cost structure substantially different from the industry 
average could be affected disproportionately. DOE used the results of 
the industry characterization to group manufacturers exhibiting similar 
characteristics. Consequently, DOE identified small business 
manufacturers as a subgroup for a separate impact analysis.
    For the small business subgroup analysis, DOE applied the small 
business size standards published by the Small Business Administration 
(``SBA'') to determine whether a company is considered a small 
business. The size standards are codified at 13 CFR part 121. To be 
categorized as a small business under NAICS code 335312, ``Motor and 
Generator Manufacturing'' a DPPP motor manufacturer and its affiliates 
may employ a maximum of 1,250 employees. The 1,250-employee threshold 
includes all employees in a business's parent company and any other 
subsidiaries. Based on this classification, DOE identified one 
potential manufacturer that could qualify as domestic small businesses.
e. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden involves looking at the 
cumulative impact of multiple DOE standards and the regulatory actions 
of other Federal agencies and States that affect the manufacturers of a 
covered product or equipment. While any one regulation may not impose a 
significant burden on manufacturers, the combined effects of several 
existing or impending regulations may have serious consequences for 
some manufacturers, groups of manufacturers, or an entire industry. 
Multiple regulations affecting the same manufacturer can strain profits 
and lead companies to abandon product lines or markets with lower 
expected future returns than competing products. For these reasons, DOE 
conducts an analysis of cumulative regulatory burden as part of its 
rulemakings pertaining to appliance efficiency.
    DOE evaluates product-specific regulations that will take effect 
approximately 3 years before or after the 2026 compliance date of any 
new energy conservation standards for DPPP motors. This information is 
presented in Table V.18.

Table V.18--Comp