Energy Conservation Program: Energy Conservation Standards for Expanded Scope Electric Motors, 87062-87153 [2023-26531]
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Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
DEPARTMENT OF ENERGY
10 CFR Parts 429 and 431
[EERE–2020–BT–STD–0007]
RIN 1904–AF55
Energy Conservation Program: Energy
Conservation Standards for Expanded
Scope Electric Motors
Office of Energy Efficiency and
Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking
and announcement of public meeting.
AGENCY:
The Energy Policy and
Conservation Act, as amended
(‘‘EPCA’’), prescribes energy
conservation standards for various
consumer products and certain
commercial and industrial equipment,
including electric motors. In this notice
of proposed rulemaking (‘‘NOPR’’), DOE
proposes new energy conservation
standards for a subset of electric motors,
expanded scope electric motors,
expressed in terms of average full-load
efficiency, and also announces a public
meeting to receive comment on these
proposed standards and associated
analyses and results.
DATES:
Comments: DOE will accept
comments, data, and information
regarding this NOPR no later than
February 13, 2024.
Meeting: DOE will hold a public
meeting on Wednesday, January 17,
2024, from 10 a.m. to 4 p.m., in
Washington, DC. This meeting will also
be broadcast as a webinar.
Comments regarding the likely
competitive impact of the proposed
standard should be sent to the
Department of Justice contact listed in
the ADDRESSES section on or before
January 16, 2024.
ADDRESSES: The public meeting will be
held at the U.S. Department of Energy,
Forrestal Building, Room 1E–245, 1000
Independence Avenue SW, Washington,
DC 20585. See section VII of this
document, ‘‘Public Participation,’’ for
further details, including procedures for
attending the in-person meeting,
webinar registration information,
participant instructions, and
information about the capabilities
available to webinar participants.
Interested persons are encouraged to
submit comments using the Federal
eRulemaking Portal at
www.regulations.gov under docket
number EERE–2020–BT–STD–0007.
Follow the instructions for submitting
comments. Alternatively, interested
persons may submit comments,
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SUMMARY:
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identified by docket number EERE–
2020–BT–STD–0007, by any of the
following methods:
Email: ElecMotors2020STD0007@
ee.doe.gov. Include the docket number
EERE–2020–BT–STD–0007 in the
subject line of the message.
Postal Mail: Appliance and
Equipment Standards Program, U.S.
Department of Energy, Building
Technologies Office, Mailstop EE–5B,
1000 Independence Avenue SW,
Washington, DC 20585–0121.
Telephone: (202) 287–1445. If possible,
please submit all items on a compact
disc (‘‘CD’’), in which case it is not
necessary to include printed copies.
Hand Delivery/Courier: Appliance
and Equipment Standards Program, U.S.
Department of Energy, Building
Technologies Office, 950 L’Enfant Plaza
SW, 6th Floor, Washington, DC 20024.
Telephone: (202) 287–1445. If possible,
please submit all items on a CD, in
which case it is not necessary to include
printed copies.
No telefacsimiles (‘‘faxes’’) will be
accepted. For detailed instructions on
submitting comments and additional
information on this process, see section
VII of this document.
Docket: The docket for this activity,
which includes Federal Register
notices, comments, and other
supporting documents/materials, is
available for review at
www.regulations.gov. All documents in
the docket are listed in the
www.regulations.gov index. However,
not all documents listed in the index
may be publicly available, such as
information that is exempt from public
disclosure.
The docket web page can be found at
www.regulations.gov/docket/EERE2020-BT-STD-0007. The docket web
page contains instructions on how to
access all documents, including public
comments, in the docket. See section VII
of this document for information on
how to submit comments through
www.regulations.gov.
EPCA requires the Attorney General
to provide DOE a written determination
of whether the proposed standard is
likely to lessen competition. The U.S.
Department of Justice Antitrust Division
invites input from market participants
and other interested persons with views
on the likely competitive impact of the
proposed standard. Interested persons
may contact the Antitrust Division at
energy.standards@usdoj.gov on or
before the date specified in the DATES
section. Please indicate in the ‘‘Subject’’
line of your email the title and Docket
Number of this proposed rulemaking.
FOR FURTHER INFORMATION CONTACT:
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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. Kristin Koernig, U.S. Department
of Energy, Office of the General Counsel,
GC–33, 1000 Independence Avenue SW,
Washington, DC 20585–0121.
Telephone: (202) 586–3593. Email:
kristin.koernig@hq.doe.gov.
For further information on how to
submit a comment, review other public
comments and the docket, or participate
in the public meeting, contact the
Appliance and Equipment Standards
Program staff at (202) 287–1445 or by
email: ApplianceStandardsQuestions@
ee.doe.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Proposed 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
ESEMs
3. Electric Motors Working Group
Recommended Standard Levels
C. Deviation From Process Rule
1. Public Comment Period
2. Framework Document
III. General Discussion
A. Scope of Coverage and Equipment
Classes
1. General Scope of Coverage and
Equipment Classes
2. Structure of the Regulatory Text
3. Air-Over Medium Electric Motors and
Air-Over ESEMs
B. Test Procedure
C. Represented Values
D. Technological Feasibility
1. General
2. Maximum Technologically Feasible
Levels
E. Energy Savings
1. Determination of Savings
2. Significance of Savings
F. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and
Consumers
b. Savings in Operating Costs Compared To
Increase in Price (LCC and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of
Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related
Comments
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A. Market and Technology Assessment
1. Scope of Coverage
2. Air-Over ESEMs
3. Equipment Classes
4. Technology Options
5. Imported Embedded Motors
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Representative Units Analyzed
b. Baseline Efficiency
c. Higher Efficiency Levels
2. Cost Analysis
3. Technical Specifications
4. Cost-Efficiency Results
5. Scaling Methodology
D. Markups Analysis
E. Energy Use Analysis
1. Consumer Sample
2. Motor Input Power
3. Annual Operating Hours
4. Impact of Electric Motor Speed
F. Life-Cycle Cost and Payback Period
Analysis
1. Equipment Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Equipment Lifetime
7. Discount Rates
8. Energy Efficiency Distribution in the NoNew-Standards Case
9. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Equipment Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model
and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Product and Capital Conversion Costs
d. Manufacturer Markup Scenarios
3. Manufacturer Interviews
K. Emissions Analysis
1. Air Quality Regulations Incorporated in
DOE’s Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas
Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous
Oxide
2. Monetization of Other Emissions
Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
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
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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 ESEM Standards
2. Annualized Benefits and Costs of the
Proposed Standards
D. Reporting, Certification, and Sampling
Plan
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866,
13563, and 14094
B. Review Under the Regulatory Flexibility
Act
1. Description of Reasons Why Action Is
Being Considered
2. Objectives of, and Legal Basis for, Rule
3. Description and Estimated Number of
Small Entities Regulated
4. Description and Estimate of Compliance
Requirements Including Differences in
Cost, if Any, for Different Groups of
Small Entities
5. Duplication, Overlap, and Conflict With
Other Rules and Regulations
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
VII. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Prepared
General Statements for Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary
I. Synopsis of the Proposed 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–
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.
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6317) Title III, Part C 2 of EPCA
established the Energy Conservation
Program for Certain Industrial
Equipment. (42 U.S.C. 6311–6317) Such
equipment includes electric motors.
Expanded scope electric motors
(‘‘ESEMs’’), a subcategory of electric
motors, are the subject of this
rulemaking. This proposed rulemaking
does not address small electric motors
that are covered under title 10 of the
Code of Federal Regulations (‘‘CFR’’)
part 431 subpart X.
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.
6316(a); 42 U.S.C. 6295(o)(3)(B))
In accordance with these and other
statutory provisions discussed in this
document, DOE analyzed the benefits
and burdens of four trial standard levels
(‘‘TSLs’’) for ESEMs. The TSLs and their
associated benefits and burdens are
discussed in detail in sections V.A
through V.C of this document. As
discussed in section V.C of this
document, DOE has tentatively
determined that TSL 2 represents the
maximum improvement in energy
efficiency that is technologically
feasible and economically justified. The
proposed standards, which are
expressed in average full-load
efficiency, are shown in Table I–1
through Table I–3 and are equivalent to
those recommended in a joint
recommendation for energy
conservation standards for ESEMs 3
(‘‘December 2022 Joint
Recommendation’’) from the Electric
Motors Working Group, representing the
motors industry, energy efficiency
organizations and utilities.4 5
Upon receipt of the December 2022
Joint Recommendation, DOE considered
whether the statutory requirements of
2 For editorial reasons, upon codification in the
U.S. Code, Part C was re-designated Part A–1.
3 In the letter, this category is referred to as
‘‘SNEM.’’ See discussion on the change in
terminology in sections III.A and III.B of this
document.
4 Full recommendation available at:
www.regulations.gov/comment/EERE-2020-BT-STD0007-0038.
5 The members of the Electric Motors Working
Group included American Council for an EnergyEfficient Economy, Appliance Standards Awareness
Project, National Electrical Manufacturers
Association, Natural Resources Defense Council,
Northwest Energy Efficiency Alliance, Pacific Gas &
Electric Company, San Diego Gas & Electric, and
Southern California Edison.
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Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
42 U.S.C. 6295(p)(4) would be satisfied
and thus warrant the issuance of a direct
final rule by DOE. In particular, EPCA
requires DOE to determine whether the
recommended standard contained in a
statement submitted jointly by
interested parties is in accordance with
42 U.S.C. 6295(o); i.e., whether the
recommended standard would achieve
the maximum improvement in energy
efficiency that is technologically
feasible and economically justified. (42
U.S.C. 6295(p)(4)(A)(i)) If the Secretary
determines the recommended standard
is in accordance with 42 U.S.C. 6295(o),
the Secretary may issue a final rule that
establishes the recommended energy
conservation standard. (Id.) If the
Secretary determines that a direct final
rule cannot be issued based on the
statement, the Secretary must publish a
notice of the determination, together
with an explanation of the reasons for
such determination. (42 U.S.C.
6295(p)(4)(A)(ii)) EPCA defines seven
factors by which DOE must determine
whether a proposed standard is
economically justified. (42 U.S.C.
6295(o)(2)(B)(i)(I)–(VII)) Having
considered the December 2022 Joint
Recommendation, DOE has tentatively
determined that the recommended
standard is in accordance with 42 U.S.C.
6295(o). However, because EPCA does
not require DOE to issue a direct final
rule under 42 U.S.C. 6295(p), DOE is
interested in seeking public comment
on the proposed, and recommended,
standards level through this proposed
rule to better understand the impacts of
those standards.
These proposed standards, if adopted,
would apply to all ESEMs listed in
Table I–1 through Table I–3
manufactured in, or imported into, the
United States starting on January 1,
2029.
TABLE I–1—PROPOSED ENERGY CONSERVATION STANDARDS FOR HIGH AND MEDIUM-TORQUE ESEMS
[Compliance Starting on January 1, 2029] [Recommended TSL 2]
Average full load efficiency
hp
Open
2-pole
0.25 ..................................................................
0.33 ..................................................................
0.5 ....................................................................
0.75 ..................................................................
1 .......................................................................
1.5 ....................................................................
2 .......................................................................
3 .......................................................................
59.5
64.0
68.0
76.2
80.4
81.5
82.9
84.1
Enclosed
4-pole
6-pole
8-pole
59.5
64.0
69.2
81.8
82.6
83.8
84.5
................
57.5
62.0
68.0
80.2
81.1
................
................
................
................
50.5
52.5
72.0
74.0
................
................
................
2-pole
59.5
64.0
68.0
75.5
77.0
81.5
82.5
84.0
4-pole
6-pole
8-pole
59.5
64.0
67.4
75.5
80.0
81.5
82.5
................
57.5
62.0
68.0
75.5
77.0
80.0
................
................
................
50.5
52.5
72.0
74.0
................
................
................
TABLE I–2—PROPOSED ENERGY CONSERVATION STANDARDS FOR LOW-TORQUE ESEMS
[Compliance Starting on January 1, 2029] [Recommended TSL 2]
Average full load efficiency
hp
Open
2-pole
0.25 ..................................................................
0.33 ..................................................................
0.5 ....................................................................
0.75 ..................................................................
1 .......................................................................
1.5 ....................................................................
2 .......................................................................
3 .......................................................................
4-pole
63.9
66.9
68.8
70.5
74.3
79.9
81.0
82.4
Enclosed
6-pole
66.1
69.7
70.1
74.8
77.1
82.1
82.9
84.0
8-pole
60.2
65.0
66.8
73.1
77.3
80.5
81.4
82.5
52.5
56.6
57.1
62.8
65.7
72.2
73.3
74.9
2-pole
4-pole
60.9
63.9
65.8
67.5
71.3
76.9
78.0
79.4
6-pole
64.1
67.7
68.1
72.8
75.1
80.1
80.9
82.0
59.2
64.0
65.8
72.1
76.3
79.5
80.4
81.5
8-pole
52.5
56.6
57.1
62.8
65.7
72.2
73.3
74.9
TABLE I–3—PROPOSED ENERGY CONSERVATION STANDARDS FOR POLYPHASE ESEMS
[Compliance Starting on January 1, 2029] [Recommended TSL 2]
Average full load efficiency
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hp
Open
2-pole
0.25 ..................................................................
0.33 ..................................................................
0.5 ....................................................................
0.75 ..................................................................
1 .......................................................................
1.5 ....................................................................
2 .......................................................................
3 .......................................................................
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4-pole
65.6
69.5
73.4
76.8
77.0
84.0
85.5
85.5
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Enclosed
6-pole
69.5
73.4
78.2
81.1
83.5
86.5
86.5
86.9
67.5
71.4
75.3
81.7
82.5
83.8
................
................
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8-pole
62.0
64.0
66.0
70.0
75.5
77.0
86.5
87.5
2-pole
4-pole
66.0
70.0
72.0
75.5
75.5
84.0
85.5
86.5
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68.0
72.0
75.5
77.0
77.0
82.5
85.5
86.5
6-pole
66.0
70.0
72.0
74.0
74.0
87.5
88.5
89.5
8-pole
62.0
64.0
66.0
70.0
75.5
78.5
84.0
85.5
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
A. Benefits and Costs to Consumers
Table I–4 presents DOE’s evaluation
of the economic impacts of the proposed
standards on consumers of ESEMs, as
measured by the average life-cycle cost
(‘‘LCC’’) savings and the simple payback
period (‘‘PBP’’).6 The average LCC
savings are positive for all
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representative units, and the PBP is less
than the average lifetime of ESEMs,
which is estimated to be 7.1 years (see
section IV.F of this document).
TABLE I–4—IMPACTS OF PROPOSED ENERGY CONSERVATION STANDARDS ON CONSUMERS OF ESEMS
Average LCC savings
(2022$)
Representative unit
ESEM High/Med Torque, 4 poles, enclosed, 0.25 hp .............................................................
ESEM High/Med Torque, 4 poles, enclosed, 1 hp ..................................................................
ESEM High/Med Torque, 4 poles, enclosed, 5 hp ..................................................................
ESEM Low Torque, 6 poles, enclosed, 0.25 hp .....................................................................
ESEM Low Torque, 6 poles, enclosed, 0.5 hp .......................................................................
ESEM Polyphase, 4 poles, enclosed, 0.25 hp ........................................................................
AO–ESEM High/Med Torque, 4 poles, enclosed, 0.25 hp .....................................................
AO–ESEM High/Med Torque, 4 poles, enclosed, 1 hp ..........................................................
AO–ESEM High/Med Torque, 4 poles, enclosed, 5 hp ..........................................................
AO–ESEM Low Torque, 6 poles, enclosed, 0.25 hp ..............................................................
AO–ESEM Low Torque, 6 poles, enclosed, 0.5 hp ................................................................
AO–ESEM Polyphase, 4 poles, enclosed, 0.25 hp .................................................................
1.1
0.9
0.7
1.5
2.0
0.8
0.8
0.7
1.3
1.8
1.2
1.1
The industry net present value
(‘‘INPV’’) is the sum of the discounted
cash flows to the industry from the base
year through the end of the analysis
period (2024–2058). Using a real
discount rate of 9.1 percent, DOE
estimates that the INPV for
manufacturers of ESEMs in the case
without new standards is $2,019 million
in 2022$. Under the proposed
standards, DOE estimates the change in
INPV to range from ¥13.1 percent to
¥6.5 percent, which is approximately
¥$264 million to ¥$131 million. In
order to bring equipment into
compliance with new standards, it is
estimated that industry will incur total
conversion costs of $339 million.
DOE’s analysis of the impacts of the
proposed standards on manufacturers is
described in section IV.J of this
document. The analytic results of the
manufacturer impact analysis (‘‘MIA’’)
are presented in section V.B.2 of this
document.
DOE’s analyses indicate that the
proposed energy conservation standards
for ESEMs would save a significant
amount of energy. Relative to the case
without new standards, the lifetime
energy savings for ESEMs purchased in
the 30-year period that begins in the
anticipated year of compliance with the
new standards (2029–2058) amount to
8.9 quadrillion British thermal units
(‘‘Btu’’), or quads.8 This represents a
savings of 9 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 proposed standards for ESEMs
ranges from $38.3 billion (at a 7-percent
discount rate) to $72.8 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 ESEMs purchased
in 2029–2058.
In addition, the proposed standards
for ESEMs are projected to yield
significant environmental benefits. DOE
estimates that the proposed standards
would result in cumulative emission
reductions (over the same period as for
energy savings) of 160.5 million metric
tons (‘‘Mt’’) 9 of carbon dioxide (‘‘CO2’’),
43.8 thousand tons of sulfur dioxide
(‘‘SO2’’), 299.8 thousand tons of nitrogen
oxides (‘‘NOX’’), 1,362.2 thousand tons
of methane (‘‘CH4’’), 1.4 thousand tons
of nitrous oxide (‘‘N2O’’), and 0.3 tons
of mercury (‘‘Hg’’).10
DOE estimates the value of climate
benefits from a reduction in greenhouse
gases (‘‘GHG’’) using four different
estimates of the social cost of CO2 (‘‘SC–
CO2’’), the social cost of methane (‘‘SC–
CH4’’), and the social cost of nitrous
oxide (‘‘SC–N2O’’). Together these
represent the social cost of GHG (‘‘SC–
GHG’’). DOE used interim SC–GHG
values (in terms of benefit per ton of
GHG avoided) developed by an
Interagency Working Group on the
Social Cost of Greenhouse Gases
(‘‘IWG’’).11 The derivation of these
values is discussed in section IV.L of
this document. For presentational
purposes, the climate benefits
associated with the average SC–GHG at
a 3-percent discount rate are estimated
to be $9.4 billion. DOE does not have a
single central SC–GHG point estimate
and it emphasizes the importance and
value of considering the benefits
6 The average LCC savings refer to consumers that
are affected by a standard and are measured relative
to the efficiency distribution in the no-newstandards case, which depicts the market in the
compliance year in the absence of new 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).
7 All monetary values in this document are
expressed in 2022 dollars.
8 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.
9 A metric ton is equivalent to 1.1 short tons.
Results for emissions other than CO2 are presented
in short tons.
10 DOE calculated emissions reductions relative
to the no-new-standards case, which reflects key
assumptions in the Annual Energy Outlook 2023
(‘‘AEO2023’’). AEO2023 reflects, to the extent
possible, laws and regulations adopted through
mid-November 2022, including the Inflation
Reduction Act. See section IV.K of this document
for further discussion of AEO2023 assumptions that
effect air pollutant emissions.
11 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.
DOE’s analysis of the impacts of the
proposed standards on consumers is
described in section IV.F of this
document.
C. National Benefits and Costs 7
B. Impact on Manufacturers
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51
138
147
100
26
83
160
121
88
40
51
138
Simple payback period
(years)
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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 (‘‘EPA’’),12 as
discussed in section IV.L of this
document. DOE estimated the present
value of the health benefits would be
$7.9 billion using a 7-percent discount
rate, and $18.3 billion using a 3-percent
discount rate.13 DOE is currently only
monetizing health benefits from changes
in ambient fine particulate matter
(‘‘PM2.5’’) concentrations from two
precursors (SO2 and NOX), and from
changes in ambient ozone from one
precursor (for NOX), but will continue to
assess the ability to monetize other
effects such as health benefits from
reductions in direct PM2.5 emissions.
Table I–5 summarizes the monetized
benefits and costs expected to result
from the proposed standards for ESEMs.
There are other important unquantified
effects, including certain unquantified
climate benefits, unquantified public
health benefits from the reduction of
toxic air pollutants and other emissions,
unquantified energy security benefits,
and distributional effects, among others.
TABLE I–5—SUMMARY OF MONETIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR
ESEMS
[TSL 2]
Billion $2022
3% discount rate
Consumer Operating Cost Savings ...................................................................................................................................................
Climate Benefits * ...............................................................................................................................................................................
Health Benefits ** ...............................................................................................................................................................................
Total Benefits † ..................................................................................................................................................................................
Consumer Incremental Equipment Costs ‡ .......................................................................................................................................
Net Benefits .......................................................................................................................................................................................
Change in Producer Cashflow (INPV ††) ..........................................................................................................................................
54.7
9.4
18.3
82.4
9.7
72.8
(0.3)–(0.1)
7% discount rate
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Consumer Operating Cost Savings ...................................................................................................................................................
Climate Benefits * (3% discount rate) ................................................................................................................................................
Health Benefits ** ...............................................................................................................................................................................
Total Benefits † ..................................................................................................................................................................................
Consumer Incremental Equipment Costs ‡ .......................................................................................................................................
Net Benefits .......................................................................................................................................................................................
Change in Producer Cashflow (INPV ††) ..........................................................................................................................................
26.1
9.4
7.9
43.5
5.1
38.3
(0.3)–(0.1)
Note: This table presents the costs and benefits associated with ESEMs shipped in 2029–2058. These results include consumer, climate, and
health benefits which accrue after 2029 from the equipment shipped in 2029–2058.
* 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; however, DOE 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 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.
‡ Costs include incremental equipment 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 national impacts analysis 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 9.1 percent that is estimated in the MIA (see chapter 12 of the NOPR
TSD for a complete description of the industry weighted average cost of capital). For ESEMs, those values are ¥$264 million and ¥$131 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section IV.J 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 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
proposed rule, the net benefits would range from $72.5 billion to $72.7 billion at 3-percent discount rate and would range from $38.0 billion to
$38.2 billion at 7-percent discount rate. Numbers in parentheses are negative numbers. DOE seeks comment on this approach.
12 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
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13 DOE estimates the economic value of these
emissions reductions resulting from the considered
TSLs for the purpose of complying with the
requirements of Executive Order 12866.
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The benefits and costs of the proposed
standards can also be expressed in terms
of annualized values. The monetary
values for the total annualized net
benefits are (1) the reduced consumer
operating costs, minus (2) the increase
in product purchase prices and
installation costs, plus (3) the value of
climate and health benefits of emission
reductions, all annualized.14
The national operating cost savings
are domestic private U.S. consumer
monetary savings that occur as a result
of purchasing the covered products and
are measured for the lifetime of ESEMs
shipped in 2029–2058. The benefits
associated with reduced emissions
achieved as a result of the proposed
standards are also calculated based on
the lifetime of ESEMs shipped in 2029–
2058. Total benefits for both the 3percent 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 of this document.
Table I–6 presents the total estimated
monetized benefits and costs associated
with the proposed 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
87067
cost of the standards proposed in this
rule is $543 million per year in
increased equipment costs, while the
estimated annual benefits are $2,757
million in reduced equipment operating
costs, $542 million in climate benefits,
and $836 million in health benefits. In
this case. The net benefit would amount
to $3,592 million per year.
Using a 3-percent discount rate for all
benefits and costs, the estimated cost of
the proposed standards is $556 million
per year in increased equipment costs,
while the estimated annual benefits are
$3,140 million in reduced operating
costs, $542 million in climate benefits,
and $1,052 million in health benefits. In
this case, the net benefit would amount
to $4,179 million per year.
TABLE I–6—ANNUALIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR ESEMS
[TSL 2]
Million 2022$/year
Primary
estimate
Low-netbenefits
estimate
High-netbenefits
estimate
3% discount rate
Consumer Operating Cost Savings .............................................................................................
Climate Benefits * .........................................................................................................................
Health Benefits ** .........................................................................................................................
Total Benefits † ............................................................................................................................
Consumer Incremental Equipment Costs ‡ .................................................................................
Net Benefits .................................................................................................................................
Change in Producer Cashflow (INPV ††) ....................................................................................
3,140
542
1,052
4,734
556
4,179
(25)–(13)
2,962
526
1,021
4,509
598
3,911
(25)–(13)
3,341
562
1,089
4,992
529
4,464
(25)–(13)
2,757
542
836
4,135
543
3,592
(25)–(13)
2,615
526
814
3,955
578
3,377
(25)–(13)
2,921
562
863
4,346
520
3,826
(25)–(13)
7% discount rate
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Consumer Operating Cost Savings .............................................................................................
Climate Benefits * (3% discount rate) ..........................................................................................
Health Benefits ** .........................................................................................................................
Total Benefits † ............................................................................................................................
Consumer Incremental Equipment Costs ‡ .................................................................................
Net Benefits .................................................................................................................................
Change in Producer Cashflow (INPV ††) ....................................................................................
Note: This table presents the costs and benefits associated with ESEMs shipped in 2029–2058. These results include consumer, climate, and
health benefits which accrue after 2058 from the equipment shipped in 2029–2058. 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 constant rate in the Primary Estimate, an increasing rate in the Low Net Benefits
Estimate, and a declining rate in the High Net Benefits Estimate. The methods used to derive projected price trends are explained in sections
IV.F and IV.4 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; however, DOE 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 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.
‡ Costs include incremental equipment costs.
14 To convert the time-series of costs and benefits
into annualized values, DOE calculated a present
value in 2022, the year used for discounting the
NPV of total consumer costs and savings. For the
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benefits, DOE calculated a present value associated
with each year’s shipments in the year in which the
shipments occur (e.g., 2030), and then discounted
the present value from each year to 2022. Using the
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present value, DOE then calculated the fixed annual
payment over a 30-year period, starting in the
compliance year, that yields the same present value.
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†† 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 national impacts analysis 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. The annualized
change in INPV is calculated using the industry weighted average cost of capital value of 9.1 percent that is estimated in the MIA (see chapter
12 of the NOPR TSD for a complete description of the industry weighted average cost of capital). For ESEMs, those values are ¥$25 million
and ¥$13 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section IV.J of this
NOPR. 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 proposed rule, the annualized net benefits would range from $4,154 million to $4,166 million at
3-percent discount rate and would range from $3,567 million to $3,579 million at 7-percent discount rate. Numbers in parentheses are negative
numbers. DOE seeks comment on this approach.
ddrumheller on DSK120RN23PROD with PROPOSALS2
DOE’s analysis of the national impacts
of the proposed standards is described
in sections IV.G, IV.K, and IV.L of this
document.
D. Conclusion
DOE has tentatively concluded that
the proposed standards represent the
maximum improvement in energy
efficiency that is technologically
feasible and economically justified, and
would result in the significant
conservation of energy. Specifically,
with regards to technological feasibility,
equipment achieving these standard
levels are already commercially
available for all equipment classes
covered by this proposal. As for
economic justification, DOE’s analysis
shows that the benefits of the proposed
standard exceed, to a great extent, the
burdens of the proposed 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 cost of the
proposed standards for ESEMs is $543
million per year in increased equipment
costs, while the estimated annual
benefits are $2,757 million in reduced
equipment operating costs, $542 million
in climate benefits and $836 million in
health benefits. The net benefit amounts
to $3,592 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.15 For example, some
covered products and equipment have
substantial 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
15 Procedures, Interpretations, and Policies for
Consideration in New or Revised Energy
Conservation Standards and Test Procedures for
Consumer Products and Commercial/Industrial
Equipment, 86 FR 70892, 70901 (Dec. 13, 2021).
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relatively constant demand.
Accordingly, DOE evaluates the
significance of energy savings on a caseby-case basis.
As previously mentioned, the
standards are projected to result in
estimated national energy savings of 8.9
quad FFC, the equivalent of the primary
annual energy use of 95.7 million
homes. In addition, they are projected to
reduce CO2 emissions by 160.5 Mt.
Based on these findings, DOE has
initially determined the energy savings
from the proposed standard levels are
‘‘significant’’ within the meaning of 42
U.S.C. 6295(o)(3)(B). A more detailed
discussion of the basis for these
tentative conclusions is contained in the
remainder of this document and the
accompanying technical support
document (‘‘TSD’’).
DOE also considered more-stringent
energy efficiency levels as potential
standards, and is still considering them
in this proposed rulemaking. However,
DOE has tentatively concluded that the
potential burdens of the more-stringent
energy efficiency levels would outweigh
the projected benefits.
Based on consideration of the public
comments DOE receives in response to
this document and related information
collected and analyzed during the
course of this proposed rulemaking
effort, DOE may adopt energy efficiency
levels presented in this document that
are either higher or lower than the
proposed standards, or some
combination of level(s) that incorporate
the proposed standards in part.
II. Introduction
The following section briefly
discusses the statutory authority
underlying this proposed rule, as well
as some of the relevant historical
background related to the establishment
of standards for ESEMs.
A. Authority
EPCA authorizes DOE to regulate the
energy efficiency of a number of
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consumer products and certain
industrial equipment. Title III, Part C of
EPCA, added by Public Law 95–619,
Title IV, section 441(a), established the
Energy Conservation Program for
Certain Industrial Equipment, which
sets forth a variety of provisions
designed to improve the energy
efficiency of certain types of industrial
equipment, including electric motors.
(42 U.S.C. 6311(1)(A)) ESEMs, the
subject of this document, are a category
of electric motors.
The Energy Policy Act of 1992
(‘‘EPACT 1992’’) (Pub. L. 102–486 (Oct.
24, 1992)) further amended EPCA by
establishing energy conservation
standards and test procedures for
certain commercial and industrial
electric motors that are manufactured
alone or as a component of another
piece of equipment. In December 2007,
Congress enacted the Energy
Independence and Security Act of 2007
(‘‘EISA 2007’’) (Pub. L. 110–140 (Dec.
19, 2007). Section 313(b)(1) of EISA
2007 updated the energy conservation
standards for those electric motors
already covered by EPCA and
established energy conservation
standards for a larger scope of motors
not previously covered by standards. (42
U.S.C. 6313(b)(2)) EISA 2007 also
revised certain statutory definitions
related to electric motors. See EISA
2007, sec. 313 (amending statutory
definitions related to electric motors at
42 U.S.C. 6311(13)).
The energy conservation program
under EPCA, consists essentially of four
parts: (1) testing, (2) labeling, (3) the
establishment of Federal energy
conservation standards, and (4)
certification and enforcement
procedures. Relevant provisions of
EPCA include definitions (42 U.S.C.
6311), test procedures (42 U.S.C. 6314),
labeling provisions (42 U.S.C. 6315),
energy conservation standards (42
U.S.C. 6313), and the authority to
require information and reports from
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manufacturers (42 U.S.C. 6316; U.S.C.
6296).
Federal energy efficiency
requirements for covered equipment
established under EPCA generally
supersede state laws and regulations
concerning energy conservation testing,
labeling, and standards. (42 U.S.C.
6316(a) and 42 U.S.C. 6316(b); 42 U.S.C.
6297) DOE may, however, grant waivers
of Federal preemption in limited
instances for particular state laws or
regulations, in accordance with the
procedures and other provisions set
forth under EPCA. (See 42 U.S.C.
6316(a) (applying the preemption
waiver provisions of 42 U.S.C. 6297))
Subject to certain criteria and
conditions, DOE is required to develop
test procedures to measure the energy
efficiency, energy use, or estimated
annual operating cost of each covered
equipment. (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 procedure for ESEMs appear at
10 CFR part 431, subpart B, appendix B
(‘‘appendix B’’).
DOE must follow specific statutory
criteria for prescribing new or amended
standards for covered equipment,
including ESEMs. Any new or amended
standard for a covered product must be
designed to achieve the maximum
improvement in energy efficiency that
the Secretary of Energy determines is
technologically feasible and
economically justified. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(A))
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 equipment,
including ESEMs, if no test procedure
has been established for the equipment,
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))
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DOE must make this determination after
receiving comments on the proposed
standard, and by considering, to the
greatest extent practicable, the following
seven statutory factors:
(1) The economic impact of the
standard on manufacturers and
consumers of the products subject to the
standard;
(2) The savings in operating costs
throughout the estimated average life of
the covered products in the type (or
class) compared to any increase in the
price, initial charges, or maintenance
expenses for the covered products that
are likely to result from the standard;
(3) The total projected amount of
energy (or as applicable, water) savings
likely to result directly from the
standard;
(4) Any lessening of the utility or the
performance of the covered products
likely to result from the standard;
(5) The impact of any lessening of
competition, as determined in writing
by the Attorney General, that is likely to
result from the standard;
(6) The need for national energy and
water conservation; and
(7) Other factors the Secretary of
Energy (‘‘Secretary’’) considers relevant.
(42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(I)–(VII))
Further, EPCA establishes a rebuttable
presumption that a standard is
economically justified if the Secretary
finds that the additional cost to the
consumer of purchasing a product
complying with an energy conservation
standard level will be less than three
times the value of the energy savings
during the first year that the consumer
will receive as a result of the standard,
as calculated under the applicable test
procedure. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(iii))
EPCA 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
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87069
energy conservation standard for a
covered product or equipment that has
two or more subcategories. DOE must
specify a different standard level for a
type or class of product 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 equipment, 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
DOE does not currently have energy
conservation standards for ESEMs even
though DOE has the authority to
regulate electric motors broadly. DOE
has adopted energy conservation
standards for medium electric motors
(‘‘MEMs’’) at 10 CFR 431.25 (see section
III.A of this document for further
description), as well as small electric
motors (‘‘SEMs’’) at 10 CFR 431.446,
which are separately regulated
categories.
2. History of Standards Rulemaking for
ESEMs
On May 21, 2020, DOE issued an early
assessment request for information
(‘‘RFI’’) (‘‘May 2020 Early Assessment
Review RFI’’) in which DOE stated that
it was initiating an early assessment
review to determine whether any new or
amended standards would satisfy the
relevant requirements of EPCA for a
new or amended energy conservation
standard for electric motors and sought
information related to that effort.
Specifically, DOE sought data and
information that could enable the
agency to determine whether DOE
should propose a ‘‘no new standard’’
determination because a more stringent
standard: (1) would not result in a
significant savings of energy; (2) is not
technologically feasible; (3) is not
economically justified; or (4) any
combination of the foregoing. 85 FR
30878, 30879.
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On March 2, 2022, DOE published a
Preliminary Analysis for electric motors
(‘‘March 2022 Preliminary Analysis’’).
87 FR 11650. In conjunction with the
March 2022 Preliminary Analysis, DOE
published the March 2022 Preliminary
TSD, which presented the results of the
in-depth technical analyses in the
following areas: (1) engineering; (2)
markups to determine equipment price;
(3) energy use; (4) LCC and PBP; and (5)
national impacts. The results presented
included the current scope of electric
motors regulated at 10 CFR 431.25, in
addition to an expanded scope of
motors, including electric motors above
500 horsepower, air-over electric
motors, and ESEMs.16 See chapter 2 of
the March 2022 Preliminary TSD. DOE
requested comment on a number of
topics regarding the analysis presented.
However, DOE is only responding to
comments pertaining to ESEMs and airover expanded scope electric motors
(‘‘AO–ESEMs’’) in this NOPR, as DOE
responded to the rest of the comments
pertaining to medium electric motors
and their air-over equivalents in the
Electric Motors Direct Final Rule
published on June 1, 2023 (‘‘June 2023
DFR’’) that amended energy
conservation standards for medium
electric motors and their air-over
equivalents. 88 FR 36066.
On April 5, 2022, DOE held a public
webinar in which it presented the
methods and analysis in the March 2022
Preliminary Analysis and solicited
public comment. (‘‘April 5, 2022, Public
Meeting’’).
TABLE II–1—MARCH 2022 PRELIMINARY ANALYSIS WRITTEN COMMENTERS
Commenter(s)
Reference in
this NOPR
American Council for an Energy-Efficient Economy, Appliance Standards Awareness Project,
National Electrical Manufacturers Association, Natural Resources Defense Council, Northwest
Energy Efficiency Alliance, Pacific Gas & Electric Company, San Diego Gas & Electric,
Southern California Edison.
Appliance Standards Awareness Project, American Council for an Energy-Efficient Economy,
Natural Resources Defense Council, New York State Energy Research and Development Authority.
Association of Home Appliance Manufacturers; Air-Conditioning, Heating, and Refrigeration Institute.
Air-Conditioning, Heating, and Refrigeration Institute .....................................................................
Pacific Gas and Electric Company, San Diego Gas and Electric, and Southern California Edison; collectively, the California Investor-Owned Utilities.
Electrical Apparatus Service Association, Inc .................................................................................
Hydraulics Institute ...........................................................................................................................
Lennox International ........................................................................................................................
Northwest Energy Efficiency Alliance ..............................................................................................
Electric Motors Working
Group.
38
Working Group.
Joint Advocates ...........
27
Efficiency Advocacy Organizations.
AHAM and AHRI ..........
25
Trade Association.
AHRI ............................
CA IOUs .......................
26
30
Trade Association.
Utilities.
EASA ...........................
HI .................................
Lennox .........................
NEEA ...........................
21
31
29
33
Joint Industry Stakeholders.
23
Trade Association.
Trade Association.
Manufacturer.
Efficiency Advocacy Organization.
Trade Associations.
NEMA ...........................
22
Trade Association.
ddrumheller on DSK120RN23PROD with PROPOSALS2
National Electrical Manufacturers Association, Association of Home Appliance Manufacturers,
the Air-Conditioning, Heating, and Refrigeration Institute, the Medical Imaging Technology Alliance, the Outdoor Power Equipment Institute, Home Ventilating Institute, and the Power
Tool Institute.
National Electrical Manufacturers Association .................................................................................
Docket No.
Commenter type
A parenthetical reference at the end of
a comment quotation or paraphrase
provides the location of the item in the
public record.17 To the extent that
interested parties have provided written
comments that are substantively
consistent with any oral comments
provided during the April 5, 2022,
public meeting, DOE cites the written
comments throughout this document.
By letter dated December 22, 2022,
DOE received the December 2022 Joint
Recommendation from the Electric
Motors Working Group. The December
2022 Joint Recommendation addressed
energy conservation standards for hightorque, medium-torque, low-torque, and
polyphase ESEMs that are 0.25–3 hp,
and AO–ESEMs. The December 2022
Joint Recommendation recommended a
compliance date for updated energy
conservation standards for AO–ESEMs
as well. (Electric Motors Working
Group, No. 38 at p. 5)
3. Electric Motors Working Group
Recommended Standard Levels
This section summarizes the standard
levels recommended in the December
2022 Joint Recommendation and the
subsequent procedural steps taken by
DOE. Further discussion on scope is
provided in section III.A of this
document. The Electric Motors Working
Group stated that the recommended
levels would minimize potential market
disruptions by allowing smaller designs
to remain on the market. Specifically
the Electric Motors Working Group
stated that the recommended levels for
high and medium torque ESEM could
allow smaller capacitor start induction
run (‘‘CSIR’’) motors and currently
unregulated split-phase motors, which
are common in certain spaceconstrained products; for low torque
ESEMs, the Electric Motors Working
Group stated that manufacturers believe
efficiency levels above the
recommended levels could result in
significant increases in the physical
size, unavailability of product, and, in
some cases, may be extremely difficult
to achieve with current permanent split
capacitor (‘‘PSC’’) technology; and for
AO–ESEMs, the Electric Motors
Working Group stated that the
recommended levels represented the
highest feasible efficiencies given the
potential design constraints associated
with their use in covered equipment.
(Id. at pp. 3–5)
Recommendation A: For high-torque
and medium-torque ESEMs (i.e., CSIR,
capacitor start capacitor run (‘‘CSCR’’),
and split-phase motors), the Electric
Motors Working Group recommended
the following standard levels, expressed
in average full-load efficiency:
(1) Values for open and enclosed
motors rated at 0.25, 0.33, and 0.5 hp
(all pole configurations) that are largely
based on the levels in NEMA MG 1,
Table 12–19, ‘‘Premium Efficiency
Levels for Capacitor-Start/Induction-
16 In the March 2022 Preliminary Analysis, DOE
used the term small, non-small electric motor,
electric motors (‘‘SNEMs’’) to designate ESEMs.
17 The parenthetical reference provides a
reference for information located in the docket of
DOE’s rulemaking to develop energy conservation
standards for electric motors. (Docket No. EERE–
2020–BT–STD–0007, which is maintained at
www.regulations.gov). The references are arranged
as follows: (commenter name, comment docket ID
number, page of that document).
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Run Single-Phase Small Motors.’’ The
exceptions are the open and enclosed
0.5 hp 4-pole values, which have lower
efficiency standards described in Table
II–2. For cases where Table 12–19 lists
two frame sizes (e.g., 48 and 56 frame)
for a given hp rating, the recommended
efficiency level reflects the smaller
frame size (i.e., lower efficiency).
(2) Values for open motors (2-, 4-, 6pole) above 0.5 hp that are consistent
with the current small electric motor
standards for CSCR and CSIR motors
found in 10 CFR part 431, subpart X
(§ 431.446).
(3) Values for 8-pole open motors
above 0.5 hp and all enclosed motors
above 0.5 hp that are based on the levels
in NEMA MG 1, Table 12–20, ‘‘Premium
Efficiency Levels for Capacitor-Start/
Capacitor-Run Single-Phase Small
Motors.’’ For cases where Table 12–20
lists two frame sizes (e.g., 48 and 56
frame) for a given hp rating, the
recommended efficiency level reflects
the smaller frame size (i.e., lower
efficiency).
TABLE II–2—RECOMMENDED ENERGY CONSERVATION STANDARDS FOR HIGH-TORQUE AND MEDIUM-TORQUE ESEMS
[i.e., CSIR, CSCR, and split-phase motors]
Average full load efficiency
hp
Open
2-pole
0.25 ..................................................................
0.33 ..................................................................
0.5 ....................................................................
0.75 ..................................................................
1 .......................................................................
1.5 ....................................................................
2 .......................................................................
3 .......................................................................
(Id. at pp. 3, 6).
Recommendation B: For low-torque
ESEMs (i.e., shaded pole and PSC
motors), the Electric motors Working
Group recommended the following
standard levels, expressed in terms of
average full-load efficiency:
(1) Values for open motors rated at
0.25 hp, 0.33 hp, and 1.5 hp and above
59.5
64.0
68.0
76.2
80.4
81.5
82.9
84.1
Enclosed
4-pole
6-pole
8-pole
59.5
64.0
69.2
81.8
82.6
83.8
84.5
................
57.5
62.0
68.0
80.2
81.1
................
................
................
................
50.5
52.5
72.0
74.0
................
................
................
that are based on DOE’s new efficiency
level (EL 3).18
(2) Values for open motors rated at
0.5, 0.75, and 1.0 hp that are based on
DOE’s new EL 2, with two exceptions: 19
(a) The 6-pole, 1.0 hp value is the
mid-point between EL 2 (75.3%) and EL
3 (79.2%)
(b) The 2-pole, 0.5 hp value is the
mid-point between EL 2 (66.4%) and EL
3 (71.1%)
2-pole
59.5
64.0
68.0
75.5
77.0
81.5
82.5
84.0
4-pole
6-pole
8-pole
59.5
64.0
67.4
75.5
80.0
81.5
82.5
................
57.5
62.0
68.0
75.5
77.0
80.0
................
................
................
50.5
52.5
72.0
74.0
................
................
................
(3) Values for enclosed motors that are
based on the equivalent open motor
efficiency but are adjusted to account
for the lack of additional cooling, which
is a function of motor rpm (i.e., number
of poles). The adjustment is 3% for 2pole motors, 2% for 4-pole motors, 1%
for 6-pole motors, and 0% for 8-pole
motors.
TABLE II–3—RECOMMENDED ENERGY CONSERVATION STANDARDS FOR LOW-TORQUE ESEMS
[i.e., shaded pole and PSC motors]
Average full load efficiency
hp
Open
2-pole
ddrumheller on DSK120RN23PROD with PROPOSALS2
0.25 ..................................................................
0.33 ..................................................................
0.5 ....................................................................
0.75 ..................................................................
1 .......................................................................
1.5 ....................................................................
2 .......................................................................
3 .......................................................................
4-pole
63.9
66.9
68.8
70.5
74.3
79.9
81.0
82.4
66.1
69.7
70.1
74.8
77.1
82.1
82.9
84.0
Enclosed
6-pole
60.2
65.0
66.8
73.1
77.3
80.5
81.4
82.5
8-pole
52.5
56.6
57.1
62.8
65.7
72.2
73.3
74.9
(Id. at pp. 4, 6)
Recommendation C: For polyphase
ESEMs (i.e., three-phase ESEMs), the
Electric Motors Working Group
recommended the following standard
levels, expressed in terms of average
full-load efficiency:
(1) Values for 2-pole, 4-pole, and 6pole open motors that are consistent
with the current small electric motor
standards for polyphase motors found in
10 CFR part 431, subpart X (§ 431.446).
(2) Values for 8-pole open and all
enclosed motors from NEMA MG 1,
Table 12–21, ‘‘Premium Efficiency
18 ‘‘DOE’s new efficiency level’’ refers to
preliminary efficiency levels that were developed
during the private negotiations of the Electric
Motors Working Group. See Table II–3 for the final
values chosen from those preliminary efficiency
levels.
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2-pole
4-pole
60.9
63.9
65.8
67.5
71.3
76.9
78.0
79.4
64.1
67.7
68.1
72.8
75.1
80.1
80.9
82.0
6-pole
59.2
64.0
65.8
72.1
76.3
79.5
80.4
81.5
8-pole
52.5
56.6
57.1
62.8
65.7
72.2
73.3
74.9
Levels for Three-Phase Induction Small
Motors.’’ For cases where Table 12–21
lists two frame sizes (e.g., 48 and 56
frame) for a given hp rating, the
recommended efficiency level reflects
the smaller frame size (i.e., lower
efficiency).
19 See
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TABLE II–4—RECOMMENDED ENERGY CONSERVATION STANDARDS FOR POLYPHASE ESEMS
[i.e., Three-Phase ESEMs]
Average full load efficiency
hp
Open
2-pole
ddrumheller on DSK120RN23PROD with PROPOSALS2
0.25 ..................................................................
0.33 ..................................................................
0.5 ....................................................................
0.75 ..................................................................
1 .......................................................................
1.5 ....................................................................
2 .......................................................................
3 .......................................................................
(Id.)
Recommendation D: The Electric
Motors Working Group recommended
that if standards are warranted for AO–
ESEMs, DOE set the standards at the
same levels as those for comparable
ESEMs used in non-air-over
applications. (Id. at p. 5)
Recommendation E: The Electric
Motors Working Group recommended
that DOE align the compliance date for
AO–ESEMs with the compliance date
for updated energy conservation
standards for Commercial Unitary Air
Conditioners/Heat Pumps (‘‘CUAC/
HPs’’) currently under negotiation in
DOE’s Appliance Standards and
Rulemaking Federal Advisory
Committee (‘‘ASRAC’’) Working Group
on CUAC/HPs. The Electric Motors
Working Group stated this
recommended compliance date would
appropriately balance energy savings
and the time needed for manufacturers
of equipment with AO–ESEMs to redesign products. (Id.)
DOE notes that the scope and
standards proposed in this document
are equivalent to those recommended by
the Electric Motors Working Group.
Regarding the compliance year for
energy conservation standards for
ESEMs, the Electric Motors Working
Group recommended that DOE align the
compliance date for AO–ESEMs with
the compliance date for updated energy
conservation standards for CUAC/HP,
which were under negotiation in DOE’s
ASRAC Working Group on CUAC/HPs
at the time. Since then, the CUAC/HP
negotiations have concluded and
include a recommended compliance
year of 2029 (i.e., January 1, 2029).20
ESEMs 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.
20 See CUAC/HP ASRAC Working group term
sheet at: www.regulations.gov/document/EERE2022-BT-STD-0015-0087.
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4-pole
65.6
69.5
73.4
76.8
77.0
84.0
85.5
85.5
69.5
73.4
78.2
81.1
83.5
86.5
86.5
86.9
Enclosed
6-pole
67.5
71.4
75.3
81.7
82.5
83.8
................
................
8-pole
62.0
64.0
66.0
70.0
75.5
77.0
86.5
87.5
2-pole
4-pole
66.0
70.0
72.0
75.5
75.5
84.0
85.5
86.5
6-pole
68.0
72.0
75.5
77.0
77.0
82.5
85.5
86.5
66.0
70.0
72.0
74.0
74.0
87.5
88.5
89.5
8-pole
62.0
64.0
66.0
70.0
75.5
78.5
84.0
85.5
6313(b). As such, they are exempt from
the requirements of 42 U.S.C. 6313(b),
including the compliance deadlines
provided in that section. Because
section 42 U.S.C. 6316(a) applies certain
requirements of 42 U.S.C. 6295(l)–(s) of
EPCA to certain equipment, including
electric motors, DOE considered
whether the compliance deadlines of 42
U.S.C. 6295(m)(4) applies to ESEMs. 42
U.S.C. 6295(m)(4)(A) defines
compliance deadlines for specific
products; however, electric motors and
ESEMs are not listed, nor does 42 U.S.C.
6316 apply a cross reference on how to
apply these paragraphs to electric
motors or ESEMs. Accordingly, DOE has
determined that these compliance
deadlines do not apply to ESEMs.
Additionally, DOE reviewed section
6295(m)(4)(B), which states that a
manufacturer shall not be required to
apply new standards to a product with
respect to which other new standards
have been required in the prior 6-year
period. As no standards for ESEMs have
not yet been established, this paragraph
also does not apply to ESEMs. As such,
DOE has determined that it has
discretion to establish compliance
deadlines for ESEMs. Therefore, DOE
proposes a January 1, 2029, compliance
date in accordance with the
recommendation from the Electric
Motors Working Group. DOE has
tentatively determined that this
compliance date would provide
sufficient lead time to motor
manufacturers based on the
recommendation from the Electric
Motors Working Group, which includes
NEMA.
1. Public Comment Period
C. Deviation From Process Rule
In accordance with section 3(a) of 10
CFR part 430, subpart C, appendix A
(‘‘Process Rule’’), DOE notes that it is
deviating from the provision in the
Process Rule regarding the pre-NOPR
and NOPR stages for an energy
conservation standards rulemaking.
Section 6(a)(2) of the Process Rule
states that if DOE determines it is
appropriate to proceed with a
rulemaking, the preliminary stages of a
rulemaking to issue or amend an energy
conservation standard that DOE will
undertake will be a framework
document and preliminary analysis, or
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Section 6(f)(2) of the Process Rule
specifies that the length of the public
comment period for a NOPR will be not
less than 75 calendar days. For this
NOPR, DOE has opted instead to
provide a 60-day comment period,
consistent with EPCA requirements. (42
U.S.C. 6316(a); 42 U.S.C. 6295(p). DOE
is opting to deviate from the 75-day
comment period because stakeholders
have already been afforded multiple
opportunities to provide comments on
this proposed rulemaking. As noted
previously, DOE requested comment on
various issues pertaining to this
standards rulemaking in the May 2020
Early Assessment Review RFI and
provided stakeholders with a 30-day
comment period. 85 FR 30878.
Additionally, DOE provided a 60-day
comment period for stakeholders to
provide input on the analyses presented
in the March 2022 Preliminary Analysis.
87 FR 11650. The analytical
assumptions and approaches used for
the analyses conducted for this NOPR
are similar to those used for the
preliminary analysis. Furthermore, as
discussed previously in this document,
the standards proposed in this
document are equivalent to those
recommended by the Electric Motors
Working Group for the electric motor
types subject to this proposal. Therefore,
DOE believes a 60-day comment period
is appropriate and will provide
interested parties with a meaningful
opportunity to comment on the
proposed rule.
2. Framework Document
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an advance notice of proposed
rulemaking. While DOE published a
preliminary analysis for this rulemaking
(see 87 FR 11650), DOE did not publish
a framework document in conjunction
with the preliminary analysis. DOE
notes, however, that chapter 2 of the
March 2022 Preliminary TSD that
accompanied the March 2022
Preliminary Analysis—entitled
Analytical Framework, Comments from
Interested Parties, and DOE
Responses—describes the general
analytical framework that DOE uses in
evaluating and developing potential
new energy conservation standards.21
As such, publication of a separate
framework document would be largely
redundant of chapter 2 of the March
2022 Preliminary TSD.
III. General Discussion
DOE developed this proposal after
considering oral and written comments,
data, and information from interested
parties that represent a variety of
interests, including the December 2022
Joint Recommendation. The following
discussion addresses issues raised by
these commenters.
A. Scope of Coverage and Equipment
Classes
ddrumheller on DSK120RN23PROD with PROPOSALS2
1. General Scope of Coverage and
Equipment Classes
This document covers certain
equipment meeting the definition of
electric motors as defined in 10 CFR
431.12. Specifically, the definition for
‘‘electric motor’’ is ‘‘a machine that
converts electrical power into rotational
mechanical power.’’ 10 CFR 431.12.
This NOPR addresses ESEMs, which are
covered under 10 CFR part 431 subpart
B. This NOPR does not address small
electric motors, which are covered
under 10 CFR part 431 subpart X.22
Currently, DOE regulates MEMs
falling into the NEMA Design A, NEMA
Design B, NEMA Design C, and fire
pump motor categories and those
electric motors that meet the criteria
specified at 10 CFR 431.25(g). 10 CFR
431.25(h)–(j). Section 431.25(g) specifies
that the relevant standards apply only to
21 The March 2022 Preliminary TSD is available
at www.regulations.gov/document/EERE-2020-BTSTD-0007-0010.
22 DOE uses the term ‘‘expanded scope electric
motor’’ or ‘‘ESEM’’ (formally known as ‘‘small, nonsmall electric motor, electric motors’’ or ‘‘SNEMs’’),
to describe those small electric motors that are not
included in the definition ‘‘small electric motor’’
under EPCA, but otherwise fall within the
definition of ‘‘electric motor’’ under EPCA. The
term ‘‘small electric motor’’ means a NEMA general
purpose alternating current single-speed induction
motor, built in a two-digit frame number series in
accordance with NEMA Standards Publication
MG1–1987. (42 U.S.C. 6311(13)(G)).
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electric motors, including partial
electric motors, that satisfy the
following criteria:
(1) Are single-speed, induction
motors;
(2) Are rated for continuous duty (MG
1) operation or for duty type S1 (IEC);
(3) Contain a squirrel-cage (MG 1) or
cage (IEC) rotor;
(4) Operate on polyphase alternating
current 60-hertz sinusoidal line power;
(5) Are rated 600 volts or less;
(6) Have a 2-, 4-, 6-, or 8-pole
configuration;
(7) Are built in a three-digit or fourdigit NEMA frame size (or IEC metric
equivalent), including those designs
between two consecutive NEMA frame
sizes (or IEC metric equivalent), or an
enclosed 56 NEMA frame size (or IEC
metric equivalent);
(8) Produce at least one horsepower
(0.746 kW) but not greater than 500
horsepower (373 kW), and
(9) Meet all of the performance
requirements of one of the following
motor types: A NEMA Design A, B, or
C motor or an IEC Design N, NE, NEY,
NY or H, HE, HEY, HYmotor.23
10 CFR 431.25(g).
The definitions for ‘‘NEMA Design A
motors,’’ ‘‘NEMA Design B motors,’’
‘‘NEMA Design C motors,’’ ‘‘fire pump
electric motors,’’ ‘‘IEC Design N motor,’’
and ‘‘IEC Design H motor,’’ as well as
‘‘E’’ and ‘‘Y’’ designated IEC Design
motors, are codified in 10 CFR 431.12.
DOE has also currently exempted
certain categories of motors from
standards. The exemptions are as
follows:
(1) Air-over electric motors;
(2) Component sets of an electric
motor;
(3) Liquid-cooled electric motors;
(4) Submersible electric motors; and
(5) Inverter-only electric motors.
10 CFR 431.25(l).
On October 19, 2022, DOE published
the electric motors test procedure final
rule (‘‘October 2022 Final Rule’’). 87 FR
63588. As part of the October 2022 Final
Rule, DOE expanded the test procedure
scope to additional categories of electric
motors that currently do not have
energy conservation standards. 87 FR
63588, 63593–63606. The expanded test
procedure scope included the following:
(1) Electric motors having a rated
horsepower above 500 and up to 750 hp
that meets the criteria listed at
§ 431.25(g), with the exception of
criteria § 431.25(g)(8) to air-over electric
motors (‘‘AO–MEMs’’), and inverteronly electric motors;
23 DOE added the ‘‘E’’ and ‘‘Y’’ designations for
IEC Design motors into 10 CFR 431.25(g) in the
electric motors test procedure final rule. 87 FR
63588, 63596–636597, 63606 (Oct. 19, 2022).
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(2) Expanded Scope Electric Motors
(‘‘ESEM’’, formally known as ‘‘small,
non-small electric motor, electric
motors’’ or ‘‘SNEMs’’), that are not airover electric motors, which:
(a) Are not a small electric motor, as
defined at § 431.442 and is not a
dedicated pool pump motors as defined
at § 431.483;
(b) Are rated for continuous duty (MG
1) operation or for duty type S1 (IEC);
(c) Operate on polyphase or singlephase alternating current 60-hertz (Hz)
sinusoidal line power; or is used with
an inverter that operates on polyphase
or single-phase alternating current 60hertz (Hz) sinusoidal line power;
(d) Are rated for 600 volts or less;
(e) Are a single-speed induction motor
capable of operating without an inverter
or is an inverter-only electric motor;
(f) Produce a rated motor horsepower
greater than or equal to 0.25 horsepower
(0.18 kW); and
(g) Are built in the following frame
sizes: any two-, or three-digit NEMA
frame size (or IEC equivalent) if the
motor operates on single-phase power;
any two-, or three-digit NEMA frame
size (or IEC equivalent) if the motor
operates on polyphase power, and has a
rated motor horsepower less than 1
horsepower (0.75 kW); or a two-digit
NEMA frame size (or IEC metric
equivalent), if the motor operates on
polyphase power, has a rated motor
horsepower equal to or greater than 1
horsepower (0.75 kW), and is not an
enclosed 56 NEMA frame size (or IEC
metric equivalent).
(3) ESEMs that are air-over electric
motors (‘‘AO–ESEMs’’) and inverteronly electric motors;
(4) A synchronous electric motor,
which:
(a) Is not a dedicated pool pump
motor as defined at § 431.483 or is not
an air-over electric motor;
(b) Is a synchronous electric motor;
(c) Is rated for continuous duty (MG
1) operation or for duty type S1 (IEC);
(d) Operates on polyphase or singlephase alternating current 60-hertz (Hz)
sinusoidal line power; or is used with
an inverter that operates on polyphase
or single-phase alternating current 60hertz (Hz) sinusoidal line power;
(e) Is rated 600 volts or less; and
(f) Produces at least 0.25 hp (0.18 kW)
but not greater than 750 hp (559 kW).
(5) Synchronous electric motors that
are inverter-only electric motors.
See section 1.2, appendix B.
In the October 2022 Final Rule, DOE
noted that, for these motors newly
included within the scope of the test
procedure for which there was no
established energy conservation
standards, such as ESEMs and AO–
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ESEMs, manufacturers would not be
required to use the test procedure to
certify these motors to DOE until such
time as a standard is established. 87 FR
63588, 63591.24 Further, the October
2022 Final Rule continued to exclude
the following categories of electric
motors:
(1) Inverter-only electric motors that
are air-over electric motors;
(2) Component sets of an electric
motor;
(3) Liquid-cooled electric motors; and
(4) Submersible electric motors.
Due to the number of electric motor
characteristics (e.g., horsepower rating,
pole configuration, and enclosure), in
the March 2022 Preliminary Analysis,
DOE used two constructs to help
develop appropriate energy
conservation standards for electric
motors: ‘‘equipment class’’ and
‘‘equipment class groups.’’ An
equipment class represents a unique
combination of motor characteristics for
which DOE is establishing a specific
energy conservation standard. This
includes permutations of electric motor
design topologies (i.e., CSIR/CSCR, split
phase, shaded pole, PSC, or polyphase),
standard horsepower ratings (i.e.,
standard ratings from 0.25 to 3
horsepower varying based on torque
level and pole count), pole
configurations (i.e., 2-, 4-, 6-, or 8-pole),
and enclosure types (i.e., open or
enclosed). An ECG is a collection of
electric motors that share a common
design trait. Equipment class groups
include motors over a range of
horsepower ratings, enclosure types,
and pole configurations. Essentially,
each equipment class group is a
collection of a large number of
equipment classes with the same design
trait. As such, in the March 2022
Preliminary Analysis, DOE presented
equipment class groups based on
electric motor topology, horsepower
rating, pole configuration. and enclosure
type. See sections 2.3.1 and 3.2.2 of the
March 2022 Preliminary TSD.
In the March 2022 Preliminary
Analysis, DOE analyzed the additional
motors now included within the scope
of the test procedure after the October
2022 Final Rule. See sections 2.2.1 and
2.2.3.2 of the March 2022 Preliminary
TSD. This analysis included MEMs from
1–500hp, AO–MEMs, and ESEMs
(including AO–ESEMs). This NOPR
proposes new standards for only a
portion of the scope analyzed in the
March 2022 Preliminary Analysis and
included within the scope of the test
procedure after the October 2022 Final
Rule. Specifically, in this NOPR, DOE is
only proposing standards for ESEMs,
including AO–ESEMs. As further
described in section IV.A.3 of this
document, DOE used multiple
performance characteristics to establish
the equipment classes used in this
NOPR. Among these performance
characteristics are locked-rotor torque
and number of phases of the input
power of a motor, used to create the
following groups: high and medium
torque single-phase ESEMs (i.e., CSIR/
CSCR and split phase), low torque
single phase ESEMs (i.e., shaded pole,
PSC) and polyphase ESEMs that meet
the criteria a) through g) as listed
previously (See section 1.2, 10 CFR part
431, appendix B). These are typically
used in residential as well as
commercial and industrial applications.
Further discussion on equipment
classes and the basis used to establish
them is provided in section IV.A.3 of
this document.
2. Structure of the Regulatory Text
In addition to proposing new
requirements for ESEMs, in this NOPR,
DOE proposes to move portions of the
existing electric motor regulations that
pertain to the energy conservation
standards and their compliance dates (at
10 CFR 431.25) to improve clarity. In
this NOPR, DOE proposes to revise 10
CFR 431.25 by retaining the existing
electric motor energy conservation
standards and their compliance dates,
adding provisions pertaining to ESEMs,
and reorganizing all provisions
currently in 10 CFR 431.25 by
compliance date (i.e., each section has a
different compliance date) to improve
clarity. See Table III–1 for details.
TABLE III–1—REVISIONS TO 10 CFR 431.25
Current location
Content high-level description
Proposed revised location
§ 431.25(a)–(f) ..................
Describes standards for certain electric motors manufactured on or
after December 19, 2010, but before June 1, 2016.
Describes how to establish the
horsepower for purposes of determining the required minimum
nominal full-load efficiency of an
electric motor.
Describes the criteria for inclusion for
certain electric motors manufactured on or after June 1, 2016, but
before June 1, 2027 subject to energy conservation standards.
Describes standards for certain
NEMA Design A and B electric
motors (and IEC equivalent) manufactured on or after June 1, 2016,
but before June 1, 2027.
Describes standards for certain
NEMA Design C electric motors
(and IEC equivalent) manufactured
on or after June 1, 2016.
None ..................................................
None—Removed as these requirements are no longer current.
§ 431.25(a) .........................................
Avoids repeating identical provisions
in each subsection.
§ 431.25(b)(1)(i) .................................
Moves the ‘‘inclusion’’ criteria, so
that the proper scope is presented
fully upfront in each section.
§ 431.25(b)(2)(i) .................................
Makes each section ‘‘comprehensive’’ by carrying over the existing
standards for all electric motors
categories in each section.
§ 431.25(b)(2)(ii), § 431.25(c)(2)(iv),
§ 431.25(d)(3)(iv).
Makes each section ‘‘comprehensive’’ by carrying over the existing
standards for all electric motors
categories in each section.
§ 431.25(k), § 431.25(q) ...
§ 431.25(g) .......................
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§ 431.25(h) .......................
§ 431.25(i) ........................
24 However, manufacturers making voluntary
representations respecting the energy consumption
or cost of energy consumed by such motors are
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required to use the DOE test procedure for making
such representations beginning 180 days following
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Impact
publication of the October 2022 Final Rule. Id. at
87 FR 63591.
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TABLE III–1—REVISIONS TO 10 CFR 431.25—Continued
Current location
Content high-level description
§ 431.25(j) ........................
Describes standards for certain fire
pump electric motors (and IEC
equivalent) manufactured on or
after June 1, 2016.
Describes the criteria for exclusion
for certain electric motors manufactured on or after June 1, 2016,
but before June 1, 2027 subject to
energy conservation standards.
§ 431.25(b)(2)(iii), § 431.25(c)(2)(v),
§ 431.25(d)(3)(v).
Describes the criteria for inclusion for
certain electric motors manufactured on or after June 1, 2027
subject to energy conservation
standards.
Describes standards for certain
NEMA Design A and B electric
motors (and IEC equivalent),but
excluding fire pump electric motors
and air-over electric motors manufactured on or after June 1, 2027.
Describes standards for certain airover NEMA Design A and B electric motors (and IEC equivalent),
built in standard frame size manufactured on or after June 1, 2027.
Describes standards for certain airover NEMA Design A and B electric motors (and IEC equivalent),
built in specialized frame size
manufactured on or after June 1,
2027.
Describes the criteria for exclusion
for certain electric motors manufactured on or after June 1, 2027,
subject to energy conservation
standards.
§ 431.25(c)(1)(i) .................................
Describes the criteria for inclusion as
ESEM.
Describes the criteria for exclusion
for certain ESEM electric motors
manufactured on or after January
1, 2029.
Describes standards for certain high
and medium torque ESEM manufactured on or after January 1,
2029.
Describes standards for certain low
torque ESEMs manufactured on or
after January 1, 2029.
Describes standards for certain polyphase ESEMs manufactured on or
after January 1, 2029.
§ 431.25(d)(2)(i) .................................
§ 431.25(l) ........................
§ 431.25(m) ......................
§ 431.25(n) .......................
§ 431.25(o) .......................
§ 431.25(p) .......................
§ 431.25(r) ........................
New section .....................
New section .....................
New section .....................
New section .....................
New section .....................
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3. Air-Over Medium Electric Motors and
Air-Over ESEMs
The June 2023 DFR amended the
existing energy conservation standards
for electric motors by establishing
higher standards for certain horsepower
electric motors and expanding the scope
of the energy conservation standards to
include certain air-over electric motors
and electric motors with horsepower
greater than 500. DOE adopted
standards that were consistent with a
joint recommendation that was
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Proposed revised location
§ 431.25(b)(1)(ii) ................................
Frm 00015
Makes each section ‘‘comprehensive’’ by carrying over the existing
standards for all electric motors
categories in each section.
Moves the ‘‘exemptions’’ to directly
after the ‘‘inclusion’’ criteria, so
that the proper scope is presented
fully upfront in each section, prior
to presenting the sub-group criteria
and standards.
Moves the ‘‘inclusion’’ criteria, so
that the proper scope is presented
fully upfront in each section.
§ 431.25(c)(2)(i), § 431.25(d)(3)(i) .....
Makes each section ‘‘comprehensive’’ by carrying over the existing
standards for all electric motors
categories in each section.
§ 431.25(c)(2)(ii), § 431.25(d)(3)(ii) ....
Makes each section ‘‘comprehensive’’ by carrying over the existing
standards for all electric motors
categories in each section.
§ 431.25(c)(2)(iii), § 431.25(d)(3)(iii) ..
Makes each section ‘‘comprehensive’’ by carrying over the existing
standards for all electric motors
categories in each section.
§ 431.25(c)(1)(ii) ................................
Moves the ‘‘exemptions’’ to directly
after the ‘‘inclusion’’ criteria, so
that the proper scope is presented
fully upfront in each section, prior
to presenting the sub-group criteria
and standards.
New section—Adds the ESEM provisions proposed in this NOPR.
New section—Adds the ESEM provisions proposed in this NOPR.
§ 431.25(d)(2)(ii) ................................
§ 431.25(d)(3)(vi) ...............................
New section—Adds the ESEM provisions proposed in this NOPR.
§ 431.25(d)(3)(vii) ..............................
New section—Adds the ESEM provisions proposed in this NOPR.
§ 431.25(d)(3)(viii) ..............................
New section—Adds the ESEM provisions proposed in this NOPR.
submitted to DOE on November 15,
2022 (the ‘‘November 2022 Joint
Recommendation’’), after determining
that the new and amended energy
conservation standards for these
products would result in significant
conservation of energy and are
technologically feasible and
economically justified. 88 FR 36066,
36067–36069.
In the June 2023 DFR, DOE described
that DOE currently regulates MEMs
falling into the NEMA Design A, NEMA
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Design B, NEMA Design C, and fire
pump motor categories and those
electric motors that meet the criteria
specified at 10 CFR 431.25(g). See id. at
88 FR 36079–36080; 10 CFR 431.25(h)–
(j). Specifically, DOE noted the nine
criteria used to describe currently
regulated MEMs, including the criteria
at 10 CFR 431.25(g)(7), which specifies
MEMs: ‘‘Are built in a three-digit or
four-digit NEMA frame size (or IEC
metric equivalent), including those
designs between two consecutive NEMA
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frame sizes (or IEC metric equivalent),
or an enclosed 56 NEMA frame size (or
IEC metric equivalent)’’. 88 FR 36066,
36080.
In the June 2023 DFR, to support the
new energy conservations standards for
air-over electric motors, DOE created
new equipment classes: one for standard
frame size air-over motors (‘‘AO–MEM
(Standard frame size)’’)) and one for
specialized frame size air-over electric
motors (‘‘AO-Polyphase (Specialized
frame size)’’). Id. at 88 FR 36088. DOE
also established a definition for
‘‘specialized frame size,’’ based on a
table that specified the maximum
NEMA frame diameter (or size) for a
given motor horsepower, pole
configuration, and enclosure
combination. Id. This table was part of
the November 2022 Joint
Recommendation. Id. In this table, the
maximum frame diameter specified
ranges from a 48 NEMA frame motor
diameter up to a 210 NEMA frame
diameter, therefore including
intermediate sizes such as 56 NEMA
frame size in enclosed and open
enclosure configurations. Id.
To clarify that AO-Polyphase
(Specialized frame size) are not
included in the scope of electric motors
included as ESEMs, DOE proposes to
add ‘‘and do not have an air-over
enclosure and a specialized frame size
if the motor operates on polyphase
power’’ to the ESEM scope criteria in
the proposed paragraph (d)(2)(i)(1) of 10
CFR 431.25 in this NOPR. DOE notes
that AO–MEM (Standard frame size) do
not meet the frame criteria for ESEMs
and are not included in the scope of
ESEMs.
In the June 2023 DFR, DOE further
noted that the specialized frame size airover electric motors equipment class
included frame sizes beyond those
described at 10 CFR 431.25(g)(7). Id. To
better characterize this distinction in
frame sizes, DOE stated that it was
renaming ‘‘Specialized Frame Size AO–
MEMs’’ (from the November 2022 Joint
Recommendation) to ‘‘AO–Polyphase
(Specialized frame size).’’ Id. DOE
added that only the naming convention
was changed compared to the November
2022 Joint Recommendation; and the
scope of motors being represented in
that equipment class continued to stay
the same as in the November 2022 Joint
Recommendation. Id.
The general scope description in 10
CFR 431.25(m) of the regulatory text
published in the June 2023 DFR
presents the nine criteria that determine
what electric motors the standards in 10
CFR 431.25 apply to. Specifically, the
criteria at 10 CFR 431.25(m)(7) specifies
that the standards apply to electric
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motors that: ‘‘Are built in a three-digit
or four-digit NEMA frame size (or IEC
metric equivalent), including those
designs between two consecutive NEMA
frame sizes (or IEC metric equivalent),
or an enclosed 56 NEMA frame size (or
IEC metric equivalent).’’
When describing the energy
conversation standards adopted for
specialized frame sizes air-over electric
motors, DOE specified that the
standards are applicable to ‘‘air-over
electric motor meeting the criteria in
paragraph (m) of this section and [. . .]
built in a specialized frame size’’ in
section 10 CFR 431.25(p) of the
regulatory text published in the June
2023 DFR. 88 FR 36066, 36150.
As published, the general scope
description in 10 CFR 431.25(m)(7) of
the regulatory text in the June 2023
DFR, and the scope description in
section 10 CFR 431.25(p) may be
interpreted as inconsistent with the
scope of electric motors included in the
AO–Polyphase (Specialized frame size)
equipment class analyzed in the June
2023 DFR, and for which DOE intended
to establish new standards in 10 CFR
431.25(p). Specifically, DOE identified
that the criteria at 10 CFR 431.25 (m)(7),
which is identical to the criteria
currently at 10 CFR 431.25(g)(7),
excludes specialized frame air-over
motors built in two-digit NEMA frame
sizes (other than enclosed 56 frame size
motors). Therefore, while in the
preamble, DOE explicitly stated that the
specialized frame size air-over electric
motors equipment class included frame
sizes beyond those described at 10 CFR
431.25(g)(7), the regulatory text as
written may be interpreted as limiting
the covered frame sizes to those
specifically described at 10 CFR
431.25(g)(7).
Therefore, to clarify the intent of the
preamble of the June 2023 DFR when
establishing standards for the AOpolyphase (Specialized frame size)
equipment class, which was to include
frame sizes beyond those described at
10 CFR 431.25(g)(7), DOE proposes to
make the following clarification by
adding ‘‘or have an air-over enclosure
and a specialized frame size’’ to the
criteria originally included under 10
CFR 431.25 (m)(7) in the June 2023 DFR,
to read as follows: ‘‘Are built in a threedigit or four-digit NEMA frame size (or
IEC metric equivalent), including those
designs between two consecutive NEMA
frame sizes (or IEC metric equivalent),
or an enclosed 56 NEMA frame size (or
IEC metric equivalent), or have an airover enclosure and a specialized frame
size’’. As previously discussed, DOE
proposes to re-organize the regulatory
text at 10 CFR 431.25 and therefore is
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adding this proposed clarification in the
new paragraphs (c)(1)(i)(7) and
(d)(1)(i)(7).
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 equipment
must use these test procedures to certify
to DOE that their equipment complies
with energy conservation standards and
to quantify the efficiency of their
equipment. On October 19, 2022, DOE
published the October 2022 Final Rule.
87 FR 63588. As described previously in
this document, the October 2022 Final
Rule expanded the types of motors
included within the scope of the test
procedure, including the new class of
ESEMs for which DOE is establishing
energy conservation standards in this
NOPR. DOE’s test procedures for
electric motors are currently prescribed
at appendix B as ‘‘small, non-smallelectric-motor electric motor’’ and
measure the full-load efficiency of an
electric motor. To harmonize
terminology, in this NOPR, DOE is
replacing any reference to small, nonsmall-electric-motor electric motor
(‘‘SNEM’’) in appendix B with the term
‘‘expanded scope electric motor,’’ or
‘‘ESEM.’’
C. Represented Values
DOE’s energy conservation standards
for electric motors are currently
prescribed at 10 CFR 431.25. DOE’s
current energy conservation standards
for electric motors are expressed in
terms of nominal full-load efficiency
and manufacturers must certify the
represented value of nominal full-load
efficiency of each basic model. 10 CFR
429.64. The provisions establishing how
to determine the average full-load
efficiency and the nominal full-load
efficiency of a basic model are provided
at 10 CFR 429.64.
As discussed in section II.B.3 of this
document, the ESEM standard levels
recommended by the Electric Motors
Working Group are expressed in average
full-load efficiency and not in terms of
nominal full-load efficiency. To align
with the Electric Motors Working Group
recommendations, DOE proposes to
revise the provisions related to the
determination of the represented values
for ESEMs at 10 CFR 429.64 such that
manufacturers of ESEMs would certify a
represented value of average full-load
efficiency instead of a represented value
of nominal full-load efficiency. DOE
also proposes edits to 10 CFR 429.70(j)
to reflect the use of a represented value
of average full-load efficiency instead of
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D. Technological Feasibility
ESEMs, 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 proposed
rulemaking are described in section IV.C
of this proposed rule and in chapter 5
of the NOPR TSD.
1. General
E. 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 this
proposed 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(c)(3)(i) and 7(b)(1), Process
Rule.
After DOE has determined that
particular technology options are
technologically feasible, it further
evaluates each technology option in
light of the following additional
screening criteria: (1) practicability to
manufacture, install, and service; (2)
adverse impacts on product utility or
availability; (3) adverse impacts on
health or safety, and (4) unique-pathway
proprietary technologies. 10 CFR 431.4;
sections 6(b)(3)(ii)–(v) and 7(b)(2)–(5),
Process Rule. Section IV.B of this
document discusses the results of the
screening analysis for ESEMs,
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 proposed rulemaking, see
chapter 4 of the NOPR TSD.
1. Determination of Savings
a represented value of nominal full-load
efficiency for ESEMs.
DOE requests comments on the
proposal to use a represented value of
average full-load efficiency for ESEMs
and proposed revisions to 10 CFR
429.64 and 429.70(j).
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2. Maximum Technologically Feasible
Levels
When DOE proposes to adopt a new
or amended standard for a type or class
of covered product, it must determine
the maximum improvement in energy
efficiency or maximum reduction in
energy use that is technologically
feasible for such product. (42 U.S.C.
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
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For each TSL, DOE projected energy
savings from application of the TSL to
ESEMs purchased in the 30-year period
that begins in the year of compliance
with the proposed standards (2029–
2058).25 The savings are measured over
the entire lifetime of ESEMs purchased
in the previous 30-year 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 new energy
conservation standards.
DOE used its national impact analysis
(‘‘NIA’’) spreadsheet model to estimate
national energy savings (‘‘NES’’) from
potential new standards for ESEMs. The
NIA spreadsheet model (described in
section IV.H of this document)
calculates energy savings in terms of site
energy, which is the energy directly
consumed by products at the locations
where they are used. For electricity,
DOE reports national energy savings in
terms of primary energy savings, which
is the savings in the energy that is used
to generate and transmit the site
electricity. DOE also calculates NES in
terms of FFC energy savings. The FFC
metric includes the energy consumed in
extracting, processing, and transporting
primary fuels (i.e., coal, natural gas,
petroleum fuels), and thus presents a
more complete picture of the impacts of
energy conservation standards.26 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 of
this document.
25 Each TSL is composed of specific efficiency
levels for each product class. The TSLs considered
for this NOPR are described in section V.A of this
document. DOE conducted a sensitivity analysis
that considers impacts for products shipped in a 9year period.
26 The FFC metric is discussed in DOE’s
statement of policy and notice of policy
amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
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2. Significance of Savings
To adopt any new or amended
standards for a covered product, DOE
must determine that such action would
result in significant energy savings. (42
U.S.C. 6316(a); 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 proposed rulemaking.27 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.
As stated, the standard levels
proposed in this NOPR are projected to
result in national energy savings of 8.9
quad FFC, the equivalent of the primary
annual energy use of 95.7 million
homes. Based on the amount of FFC
savings, the corresponding reduction in
emissions, and need to confront the
global climate crisis, DOE has
tentatively determined the energy
savings from the standard levels
proposed in this NOPR are ‘‘significant’’
within the meaning of 42 U.S.C. 6316(a)
and 42 U.S.C. 6295(o)(3)(B).
F. Economic Justification
1. Specific Criteria
As noted previously, EPCA provides
seven factors to be evaluated in
determining whether a potential energy
conservation standard is economically
justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(I)–(VII)) The following
sections discuss how DOE has
addressed each of those seven factors in
this proposed rulemaking.
a. Economic Impact on Manufacturers
and Consumers
In determining the impacts of a
potential new or amended standard on
manufacturers, DOE conducts an MIA,
as discussed in section IV.J of this
document. DOE first uses an annual
cash-flow approach to determine the
quantitative impacts. This step includes
27 The numeric threshold for determining the
significance of energy savings established in a final
rule published on February 14, 2020 (85 FR 8626,
8670) was subsequently eliminated in a final rule
published on December 13, 2021 (86 FR 70892).
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both a short-term assessment—based on
the cost and capital requirements during
the period between when a regulation is
issued and when entities must comply
with the regulation—and a long-term
assessment over a 30-year period. The
industry-wide impacts analyzed include
(1) INPV, which values the industry on
the basis of expected future cash flows,
(2) cash flows by year, (3) changes in
revenue and income, and (4) other
measures of impact, as appropriate.
Second, DOE analyzes and reports the
impacts on different types of
manufacturers, including impacts on
small manufacturers. Third, DOE
considers the impact of standards on
domestic manufacturer employment and
manufacturing capacity, as well as the
potential for standards to result in plant
closures and loss of capital investment.
Finally, DOE takes into account
cumulative impacts of various DOE
regulations and other regulatory
requirements on manufacturers.
For individual consumers, measures
of economic impact include the changes
in LCC and PBP associated with new or
amended standards. These measures are
discussed further in the following
section. For consumers in the aggregate,
DOE also calculates the national net
present value of the consumer costs and
benefits expected to result from
particular standards. DOE also evaluates
the impacts of potential standards on
identifiable subgroups of consumers
that may be affected disproportionately
by a standard.
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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 equipment (including its
installation) and the operating expense
(including energy, maintenance, and
repair expenditures) discounted over
the lifetime of the equipment. The LCC
analysis requires a variety of inputs,
such as equipment prices, equipment
energy consumption, energy prices,
maintenance and repair costs,
equipment lifetime, and discount rates
appropriate for consumers. To account
for uncertainty and variability in
specific inputs, such as equipment
lifetime and discount rate, DOE uses a
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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 moreefficient equipment 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 equipment in the first year
of compliance with new 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 standards.
DOE’s LCC and PBP analysis is
discussed in further detail in section
IV.F of this document.
c. Energy Savings
Although significant conservation of
energy is a separate statutory
requirement for adopting an energy
conservation standard, EPCA requires
DOE, in determining the economic
justification of a standard, to consider
the total projected energy savings that
are expected to result directly from the
standard. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(III)) As discussed in
section IV.H of this document, DOE uses
the NIA spreadsheet models to project
national energy savings.
d. Lessening of Utility or Performance of
Products
In establishing product classes and in
evaluating design options and the
impact of potential standard levels, DOE
evaluates potential standards that would
not lessen the utility or performance of
the considered products. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(IV))
Based on data available to DOE, the
standards proposed in this document
would not reduce the utility or
performance of the equipment under
consideration in this proposed
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 proposed 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 proposed standard and to
transmit such determination to the
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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. 6295(o)(2)(B)(ii)) DOE will
transmit a copy of this proposed rule to
the Attorney General with a request that
the Department of Justice (‘‘DOJ’’)
provide its determination on this issue.
DOE will publish and respond to the
Attorney General’s determination in the
final rule. DOE invites comment from
the public regarding the competitive
impacts that are likely to result from
this proposed rule. In addition,
stakeholders may also provide
comments separately to DOJ regarding
these potential impacts. See the
ADDRESSES section for information to
send comments to DOJ.
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 proposed 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 proposed standards
are likely to result in environmental
benefits in the form of reduced
emissions of air pollutants and
greenhouse gases (‘‘GHGs’’) associated
with energy production and use. DOE
conducts an emissions analysis to
estimate how potential standards may
affect these emissions, as discussed in
section IV.K of this document; the
estimated emissions impacts are
reported in section V.B.6 of this
document. DOE also estimates the
economic value of emissions reductions
resulting from the considered TSLs, as
discussed in section IV.L of this
document.
g. Other Factors
In determining whether an energy
conservation standard is economically
justified, DOE may consider any other
factors that the Secretary deems to be
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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.’’
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2. Rebuttable Presumption
EPCA creates a rebuttable
presumption that an energy
conservation standard is economically
justified if the additional cost to the
consumer of 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. 6313(a); 42
U.S.C. 6295(o)(2)(B)(iii) DOE’s LCC and
PBP analyses generate values used to
calculate the effects that new energy
conservation standards would have on
the PBP for consumers. These analyses
include, but are not limited to, the 3year PBP 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. 6313(a) and 42 U.S.C.
6295(o)(2)(B). 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 V.B.1.c of this
document.
IV. Methodology and Discussion of
Related Comments
This section addresses the analyses
DOE has performed for this proposed
rulemaking with regard to ESEMs.
Separate subsections address each
component of DOE’s analyses. In this
NOPR, DOE is only addressing
comments and analysis specific to the
scope of motors provided in the
December 2022 Joint Recommendation
(i.e., ESEMs and AO–ESEMs). As such,
any analysis and comments related to
MEMs and AO–MEMs were addressed
in the separate June 2023 DFR
published on June 1, 2023. 88 FR 36066.
DOE used several analytical tools to
estimate the impact of the standards
proposed in this document. The first
tool is a spreadsheet that presents the
calculations of the LCC savings and PBP
of potential new energy conservation
standards. The national impacts
analysis uses a second spreadsheet set
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that provides shipments projections and
calculates national energy savings and
net present value of total consumer
costs and savings expected to result
from potential energy conservation
standards. DOE uses the third
spreadsheet tool, the Government
Regulatory Impact Model (‘‘GRIM’’), to
assess manufacturer impacts of potential
standards. These three spreadsheet tools
are available on the DOE website for this
rulemaking: www.regulations.gov/
docket/EERE-2020-BT-STD-0007.
Additionally, DOE used output from the
latest version of the Energy Information
Administration’s (‘‘EIA’s’’) Annual
Energy Outlook (‘‘AEO’’), a widely
known energy projection for the United
States, 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 proposed
rulemaking include (1) a determination
of the scope of the proposed rulemaking
and equipment 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 ESEMs. The key
findings of DOE’s market assessment are
summarized in the following sections.
See chapter 3 of the NOPR TSD for
further discussion of the market and
technology assessment.
1. Scope of Coverage
This document covers ESEMs, a
category of electric motors. The term
‘‘electric motor’’ is defined at 10 CFR
431.12. Specifically, the definition for
‘‘electric motor’’ is ‘‘a machine that
converts electrical power into rotational
mechanical power.’’ 10 CFR 431.12.
In the March 2022 Preliminary
Analysis, DOE presented analysis for
the current scope of electric motors
regulated at 10 CFR 431.25, in addition
to certain expanded scope, including
air-over electric motors, and ESEMs and
AO–ESEMs. See chapter 2 of the March
2022 Preliminary TSD. Since then, DOE
has published the October 2022 Final
Rule, which established test procedures
for expanded scope, as discussed in
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detail in section III.B of this NOPR.
Additionally, DOE has also published
the June 2023 DFR, which established
energy conservations standards for
MEMs and AO–MEMs.
In response to the scope presented in
the March 2022 Preliminary Analysis,
DOE received a number of comments,
which are discussed in the subsections
below. In this NOPR, DOE is only
addressing comments and analysis
specific to the scope of motors proposed
in this NOPR, which includes ESEMs
and AO–ESEMs.
NEEA supported the inclusion of
ESEMs in the scope of the standards.
NEEA noted that including ESEMs will
allow comparison of performance and
informed purchase decisions. (NEEA,
No. 33 at p. 2)
AHAM and AHRI strongly opposed
DOE’s plan to expand the existing scope
of coverage of electric motors to include
motors destined for particular
applications in finished goods, and
instead recommended that DOE should
apply a finished-product approach to
energy efficiency regulations. (AHAM
and AHRI, No. 25 at pp. 7–9) Lennox
added that it strongly objects to any
expansion of coverage (including
development of test procedures, energy
conservation requirements, and/or
certification requirements) for electric
motors that would circumvent the
statutory exemption that Congress
provided for small electric motors that
are components of EPCA-covered
products/equipment. (Lennox, No. 29 at
p. 3) AHAM and AHRI commented that
they interpret the EPCA exemption for
SEMs that are components of covered
product and equipment as to also mean
that small special and definite purpose
motors, whether they are classified as
small electric motors or as an ESEM,
should not be subject to energy
conservation standards. AHAM and
AHRI stated that such motors are, by
definition, destined for particular
products, and when that product is a
covered product/piece of equipment,
that motor is destined for a product
already subject to energy conservation
standards and has defining features to
identify it as such. (AHAM and AHRI,
No. 25 at pp. 1,6)
AHRI and AHAM further commented
that regulating ESEMs could affect the
following product categories: clothes
washers (top and front load), clothes
dryers, food waste disposers,
refrigerators, room air conditioners, and
stick vacuums. Apart from stick
vacuums and food waste disposers,
AHAM and AHRI noted that the
products listed are already subject to
energy conservation standards. AHAM
and AHRI also commented that
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regulating ESEM and AO motors could
impact the following products: small,
large, very large commercial package air
conditioning and heating equipment,
residential air conditioners and heat
pumps, single package vertical air
conditioners and heat pumps,
commercial and residential furnaces,
commercial and residential boilers,
commercial and residential water
heaters, air cooled condensing unit,
central station air handling units,
geothermal heat pumps, unit coolers,
unit ventilators, and water source heat
pumps. (AHAM and AHRI, No. 25 at pp.
1–2)
HI recommended that dedicatedpurpose ESEMs should be regulated as
part of their final product instead of as
motors specifically. (HI, No. 31 at p. 1)
The Joint Industry Stakeholders
commented that they strongly object to
any expansion of coverage (including
development of test procedures, energy
conservation requirements, and/or
certification requirements) for electric
motors that would circumvent the
statutory exemption that Congress
provided for small electric motors that
are components of EPCA-covered
products/equipment. They stated that
embedded motor testing, and ultimately
energy conservation standards, would
save minimal energy and would create
needless testing, paperwork, and recordkeeping requirements that would raise
costs for consumers. (Joint Industry
Stakeholders, No. 23 at pp. 3–4) The
Joint Industry Stakeholders and AHAM
and AHRI agreed with the previous
determination in which DOE recognized
that Congress intentionally excluded
these motors from coverage by DOE
regulation when such motors are used
as components of products and
equipment that are already subject to
DOE regulation, and they noted that
these are the motors that DOE now seeks
to regulate as ESEMs and by expanding
the scope of the test procedure to 1⁄4 hp.
The Joint Industry Stakeholders and
AHAM and AHRI added that, despite
the similarity between ESEMs and
SEMs, DOE is proposing to subject
ESEMs used as components in EPCAcovered equipment/products to
duplicative energy conservation
standards at both the motor level and
the finished product/equipment stage
and that DOE provides no rationale or
explanation for doing so. (Joint Industry
Stakeholders, No. 23 at pp. 3–4; AHAM
and AHRI, No. 25 at pp. 7- 9) Further,
the Joint Industry Stakeholders
commented that ESEMs include special
and definite purpose motors that have
been built to meet the needs of original
equipment manufacturer (‘‘OEM’’)
products. The Joint Industry
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Stakeholders added that many of these
OEM products are already regulated by
DOE. (Joint Industry Stakeholders, No.
23 at p. 2)
As discussed in the October 2022
Final Rule, EPCA, as amended through
EISA 2007, provides DOE with the
authority to regulate the expanded
scope of motors addressed in this rule.
87 FR 63588, 63596. Before the
enactment of EISA 2007, EPCA defined
the term ‘‘electric motor’’ as any motor
that is a general purpose T-frame,
single-speed, foot-mounting, polyphase
squirrel-cage induction motor of the
NEMA, Design A and B, continuous
rated, operating on 230/460 volts and
constant 60 Hertz line power as defined
in NEMA Standards Publication MG1–
1987. (See 42 U.S.C. 6311(13)(A) (2006))
Section 313(a)(2) of EISA 2007 removed
that definition and the prior limits that
narrowly defined what types of motors
would be considered as electric motors.
In its place, EISA 2007 inserted a new
‘‘Electric motors’’ heading, and created
two new subtypes of electric motors:
General purpose electric motor (subtype
I) and general purpose electric motor
(subtype II). (42 U.S.C. 6311(13)(A)–(B)
(2011)) In addition, section 313(b)(2) of
EISA 2007 established energy
conservation standards for four types of
electric motors: general purpose electric
motors (subtype I) (i.e., subtype I
motors) with a power rating of 1 to 200
horsepower; fire pump motors; general
purpose electric motor (subtype II) (i.e.,
subtype II motors) with a power rating
of 1 to 200 horsepower; and NEMA
Design B, general purpose electric
motors with a power rating of more than
200 horsepower, but less than or equal
to 500 horsepower. (42 U.S.C.
6313(b)(2)) The term ‘‘electric motor’’
was left undefined. However, in a May
4, 2012 final rule amending the electric
motors test procedure (the ‘‘May 2012
TP Final Rule’’), DOE adopted the
broader definition of ‘‘electric motor,’’
currently found in 10 CFR 431.12,
because DOE noted that the absence of
a definition may cause confusion about
which electric motors are required to
comply with mandatory test procedures
and energy conservation standards, and
the broader definition provided DOE
with the flexibility to set energy
conservation standards for other types
of electric motors without having to
continuously update the definition of
‘‘electric motors’’. 77 FR 26608, 26613.
Some electric motors included in this
proposed rule may be sold embedded
into covered products and equipment or
sold alone as replacements. DOE is
proposing new energy conservation
standards for ESEMs in this proposed
rule that apply to the motor’s efficiency
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regardless of whether the ESEM is being
sold alone or embedded into a covered
product or equipment. As discussed in
section III.D of this document, DOE has
determined that energy savings from the
standard levels proposed in this NOPR
are ‘‘significant’’ within the meaning of
42 U.S.C. 6316(a) and 42 U.S.C.
6295(o)(3)(B)
The provisions of EPCA make clear
that DOE may regulate electric motors
‘‘alone or as a component of another
piece of equipment.’’ (See 42 U.S.C.
6313(b)(1) and (2) (providing that
standards for electric motors be applied
to electric motors manufactured ‘‘alone
or as a component of another piece of
equipment’’)) In contrast, Congress
exempted SEM that are a component of
a covered product or a covered
equipment from the standards that DOE
was required to establish under 42
U.S.C. 6317(b). Congress did not,
however, similarly restrict electric
motors.
Congress defined what equipment
comprises a SEM—specifically, ‘‘a
NEMA general purpose alternating
current single-speed induction motor,
built in a two-digit frame number series
in accordance with NEMA Standards
Publication MG1–1987.’’ 28 (42 U.S.C.
6311(13)(G)) ESEMs, which are electric
motors, are not SEMs because they do
not satisfy the more specific statutory
SEM definition. Unlike SEMs, the
statute does not limit DOE’s authority to
regulate an electric motor with respect
to whether ‘‘electric motors’’ are standalone equipment items or components
of a covered product or covered
equipment. Rather, Congress
specifically provided that DOE could
regulate electric motors that are
components of other covered equipment
in the standards established by DOE.
(See 42 U.S.C. 6313(b)(1) (providing that
standards for electric motors be applied
to electric motors manufactured ‘‘alone
or as a component of another piece of
equipment’’)) Accordingly, DOE
disagrees with commenters that the
SEM component exemption should
apply to ESEMs and, therefore, includes
ESEMs installed as components in other
DOE-regulated products and equipment
in these proposed energy conservation
standards.
In addition, ESEMs are built in
standard NEMA frame sizes and are not
common in currently regulated
consumer products including those
listed by AHAM and AHRI (i.e., clothes
washers (top and front load), clothes
28 DOE clarified, at industry’s urging, that the
definition also includes motors that are IEC metric
equivalents to the specified NEMA motors
prescribed by the statute. See 74 FR 32059, 32061–
32062 (July 7, 2009); 10 CFR 431.442.
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dryers, food waste disposers,
refrigerators, room air conditioners, and
stick vacuums). Therefore, DOE believes
the standards proposed in this NOPR
would not impact manufacturers of
consumer products. In commercial
equipment, DOE identified the
following equipment as potentially
incorporating ESEMs: walk-in coolers
and freezers,29 circulator pumps,30 air
circulating fans,31 and commercial
unitary air conditioning equipment.32 If
the proposed energy conservation
standards for these rules finalize as
proposed, DOE has identified that these
rules would all: (1) have a compliance
year that is at or before the ESEM
standard compliance year (2029) and/or
(2) require a motor that is either outside
of the scope of this rule (e.g., an
electronically commutated motor
(‘‘ECM’’)) or an ESEM with an efficiency
above the proposed ESEM standards,
and therefore not be impacted by the
proposed ESEM rule (i.e., the ESEM rule
would not trigger a redesign of these
equipment).
Furthermore, EPCA requires that any
new or amended standard for covered
equipment must be designed to achieve
the maximum improvement in energy
efficiency that the Secretary of Energy
determines is technologically feasible
and economically justified. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(A) and 42
U.S.C. 6295(o)(3)(B)) In this NOPR, DOE
performs the necessary analyses to
determine what new standards would
meet the aforementioned criteria.
Further, DOE has determined that the
proposed standards provide costeffective standards that would result in
the significant conservation of energy.
Further discussion on the analytical
results and DOE’s justification is
provided in section V of this document.
NEEA commented that the term
‘‘small, non-small electric motors’’ is
confusing and recommended using
‘‘Other Small HP Motors (OSHM)’’ or
‘‘Other Small Electric Motors (OSEM)’’
as alternative options. (NEEA, No. 33 at
p. 2) DOE has opted to use the term
‘‘ESEM’’ in this NOPR.
The Joint Industry Stakeholders
commented that the proposed definition
29 The walk-in coolers and walk-in freezers
standards rulemaking docket number is: EERE–
2015–BT–STD–0016.
30 The circulator pumps energy conservation
standard rulemaking docket number is: EERE–
2016–BT–STD–0004.
31 The commercial and industrial fans and
blowers energy conservation standard rulemaking
docket number is: EERE–2013–BT–STD–0006. Air
circulating fans are a subcategory of fans.
32 The small, large, and very large air-cooled
commercial package air conditioners and heat
pumps energy conservation standard rulemaking
docket number is: EERE–2013–BT–STD–0007.
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for ESEMs used in the March 2022
Preliminary Analysis is vague.
Specifically, the Joint Industry
Stakeholders requested clarification
regarding (1) the definition of full-rated
load; (2) whether brushless permanent
magnet motors were included; (3)
whether some motors, which have
motor assemblies that are connected to
60 Hz and which are rectified internally
to DC power and require brush
maintenance were included. (Joint
Industry Stakeholders, No. 23 at pp. 1–
2) In response, DOE notes that the
October 2022 Final Rule finalized a
definition for ‘‘rated load,’’ which is
currently provided in 10 CFR 431.12 (87
FR 63588, 63623), and included
specifications on what electric motors
meet the definition of ESEM, which is
currently provided in section 1 of
appendix B (87 FR 63588, 63599).
Specifically, 10 CFR 431.12 currently
relates rated load to full-load, full rated
load, or rated full-load, and defines it as
‘‘the rated output power of an electric
motor.’’ Further, section 1.1 of appendix
B states that an ESEM means a motor
that ‘‘is a single-speed induction motor
capable of operating without an inverter
or is an inverter-only electric motor’’;
therefore, the ESEM scope does not
include non-induction electric motors.
However, DOE does separately include
in scope ‘‘synchronous electric motors,’’
which entails an electric motor that is
‘‘synchronous’’ and ‘‘produces at least
0.25 hp but not greater than 750 hp’’.
See Section 1.1, appendix B. However,
DOE is not adopting standards for
synchronous electric motors in this
NOPR. Finally, the ESEM scope
specifically states that an electric motor
would meet the scope if it operates on
polyphase or single-phase alternating
current 60-hertz (Hz) sinusoidal line
power; or is used with an inverter that
operates on polyphase or single-phase
alternating current 60-hertz (Hz)
sinusoidal line power. An ‘‘inverter’’ is
defined as ‘‘an electronic device that
converts an input AC or DC power into
a controlled output AC or DC voltage or
current. An inverter may also be called
a converter.’’ 10 CFR 431.12.
The Joint Industry Stakeholders
recommended that DOE exclude
refrigeration compressor motors from
the scope of the ESEM rulemaking. The
Joint Industry Stakeholders explained
that such motors are hermetically sealed
and are cooled by the refrigerant flowing
within the appliance/equipment, and
that there is no accurate way to measure
the efficiency of just the motor and thus,
it is not appropriate or feasible to
include refrigeration compressor motors
in the scope of this rulemaking. (Joint
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Industry Stakeholders, No. 23 at p. 9)
DOE defines a liquid-cooled electric
motor as a motor that is cooled by liquid
circulated using a designated cooling
apparatus such that the liquid or liquidfilled conductors come into direct
contact with the parts of the motor but
is not submerged in a liquid during
operation. 10 CFR 431.12. DOE
reviewed refrigeration compressor
motors and understands that they would
be considered a liquid-cooled electric
motor according to this definition
because they require flowing refrigerant
to adequately cool during operation.
The designated cooling apparatus in this
case is shared with the greater
refrigeration system. Liquid-cooled
electric motors are currently exempt
from DOE’s standards for electric
motors, generally. See 10 CFR
431.25(l)(3). Accordingly, because the
refrigeration compressor motor
described by the commenters meets the
definition of a ‘‘liquid-cooled electric
motor,’’ it is exempt from the test
procedure and energy conservation
standards proposed by this NOPR. DOE
also notes that many refrigeration
compressor motors are not built in
standard NEMA frame sizes, and this
would also disqualify them from the
scope of this NOPR. As such, DOE does
not see a need to specifically exempt
refrigeration compression motors from
the scope of this NOPR, but may revisit
the issue in the future, as necessary.
Additionally, NEMA stated that there
is no room for explosion proof motors
to accommodate a run capacitor because
of the added enclosure constraints
associated with explosion proof motors.
(NEMA, No. 22 at p. 3) DOE agrees with
NEMA that the enclosure constraints for
explosion proof motors do not allow for
the addition of a run capacitor. The new
standard levels proposed by this NOPR
will not require CSIR motors to
incorporate an additional run capacitor
and will not require CSIR motors to be
replaced by CSCR motors. Therefore,
DOE believes NEMA’s concern is
addressed.
The CA IOUs recommended exploring
stakeholder interest in convening an
ASRAC Working Group to clearly define
the scope of an ESEM regulation before
moving forward with an energy
conservation standard rulemaking. (CA
IOUs, No. 30 at p. 2) In response, DOE
notes that several members of industry
and other stakeholders did convene on
a negotiation, which ended in the
December 2022 Joint Recommendation.
The December 2022 Joint
Recommendation limited its scope to
high-torque and medium-torque ESEMs,
low-torque ESEMs, and polyphase
ESEMs.
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The Joint Industry Stakeholders also
commented that ESEMs are the same as
SEMs and that DOE’s reliance on the
SEM data as an analog to ESEM
performance demonstrates that the
products are the same. Additionally, the
Joint Industry Stakeholders said that
DOE did not provide sufficient data to
support its analysis or to allow
commenters to fully understand,
interpret, or analyze the March 2022
Preliminary TSD and provide
meaningful comment. The Joint
Industry Stakeholders also stated that
DOE’s reliance on old data for what
DOE claims is a different product and
its drawing of conclusions without
providing further detail fails to meet the
requirements of the Administrative
Procedure Act (‘‘APA’’) or the Data
Quality Act. (Joint Industry
Stakeholders, No. 23 at pp. 2–3) As
noted previously, EPCA provides a very
specific definition for SEMs that DOE
regulates under 10 CFR part 431 subpart
X. ESEMs can be similar to SEMs in
many aspects, but nevertheless fall
outside of the EPCA-provided
definition. Accordingly, ESEMs are
treated differently for purposes of DOE’s
energy conservation standards. That
DOE used SEMs data as an analog to
ESEM performance to help construct the
March 2022 Preliminary Analysis does
not change the fact that they are treated
differently under EPCA, or that, as
electric motors, DOE may regulate
ESEMs used as components in other
covered equipment. Notably, in
response to the comment from the Joint
Stakeholders, DOE has made updates to
the ESEMs analysis in this NOPR
compared to what was presented in the
March 2022 Preliminary Analysis;
specifically, DOE has performed
additional testing, teardowns, and
modeling of electric motors that more
closely align with the ESEM scope and
updated the engineering analysis
accordingly. In addition, DOE reviewed
the latest motor catalog data to inform
the updated analyses. Further
discussion on this updated analysis is
provided in section IV.C of this
document. Therefore, DOE has met the
APA’s requirements as DOE has
explained throughout this NOPR and in
the NOPR TSD the details of the
analysis conducted by DOE and the
information DOE relied on in
conducting that analysis. Further, DOE
has complied with DOE’s guidelines for
implementing the Data Quality Act that
ensure the quality, objectivity, utility,
and integrity of the data presented in
this document.33
2. Air-Over ESEMs
In response to the March 2022
Preliminary Analysis, AHRI commented
that air-over motors are explicitly
exempted from regulation in 10 CFR
431.25(l), and that DOE has not
overcome the challenges to include
these exempted products, procedurally
or technically. AHRI added that the
claimed similarities between SEMs and
the newly proposed AO–ESEMs
category warrant the same exemption
for AO–ESEMs that Congress expressly
provided for small electric motors, and
AHRI referenced the requirement of
EPCA, which says that energy
conservation standards ‘‘shall not apply
to any small electric motor which is a
component of a covered product under
section 6292(a) of this title or covered
equipment under section 6311 of this
title.’’ (AHRI, No. 26 at pp. 1, 2)
With regards to the comment from
AHRI, DOE is covering AO–ESEMs
under its ‘‘electric motors’’ authority.
(42 U.S.C. 6311(1)(A); 42 U.S.C. 6313(b))
As discussed in section III.A of this
document, the statute does not limit
DOE’s authority to regulate electric
motors (that are not SEMs) with respect
to whether they are stand-alone
equipment items or as components of a
covered product or covered equipment.
See 42 U.S.C. 6313(b)(1) (providing that
standards for electric motors be applied
to electric motors manufactured ‘‘alone
or as a component of another piece of
equipment’’) AO–ESEMs do not fall
within the SEMs definition under
EPCA, and, therefore, DOE is regulating
AO–ESEMs under its ‘‘electric motors’’
authority.
DOE’s previous determination in the
December 2013 Final Rule to exclude
air-over electric motors from scope was
due to insufficient information available
to DOE at the time to support
establishment of a test method. 78 FR
75962, 75974–75975. Since that time,
NEMA published a test standard for airover motors in Section IV, ‘‘Performance
Standards Applying to All Machines,’’
Part 34 ‘‘Air-Over Motor Efficiency Test
Method’’ of NEMA MG 1–2016 (‘‘NEMA
Air-over Motor Efficiency Test
Method’’). The air-over method was
originally published as part of the 2017
NEMA MG–1 Supplements and is also
included in the latest version of NEMA
MG 1–2016. Accordingly, in the October
2022 Final Rule, DOE included air-over
electric motors in the test procedure
scope and established test procedures
for such motors. 87 FR 63588, 63597. In
this NOPR, DOE has analyzed the scope
of electric motors based on the finalized
33 See the discussion of the Data Quality Act in
section VI.J of this document; see also
www.energy.gov/sites/prod/files/cioprod/
documents/finalinfoqualityguidelines03072011.pdf.
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test procedures and proposes new
energy conservation standards for AO–
ESEMs that align with the December
2022 Joint Recommendation.
3. Equipment Classes
When evaluating and establishing
energy conservation standards, DOE
may 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 justifies a
different standard. (42 U.S.C. 6316(a);
42 U.S.C. 6295(q)(1)) In making a
determination whether a performancerelated feature justifies a different
standard, DOE must consider such
factors as the utility of the feature to the
consumer and other factors DOE
determines are appropriate. (Id.)
In the March 2022 Preliminary
Analysis, DOE considered potential
equipment classes defined on the basis
of motor horsepower rating, pole
configuration (i.e., 2, 4, 6, or 8 poles),
enclosure type (i.e., open or enclosed
construction), locked-rotor torque level
(i.e., high, medium, or low), type of
input power (i.e., phase), and motor
cooling approach (i.e., air-over or nonair-over). See chapter 2 of the March
2022 Preliminary TSD.
Regarding horsepower, DOE has
previously established separate
equipment classes for electric motors on
the basis of horsepower rating. In an
electric motors final rule that published
on May 29, 2014 (‘‘May 2014 Electric
Motors Final Rule’’), DOE discussed that
horsepower is a performance attribute of
an electric motor that is directly related
to the capacity of an electric motor to
perform useful work, and that
horsepower generally scales with
efficiency. 79 FR 30934, 30958. For
example, a 50-horsepower electric
motor would generally be considered
more efficient than a 10-horsepower
electric motor. Id. For these reasons,
DOE has tentatively determined that
horsepower represents a performancerelated feature that justifies separate
equipment classes for ESEMs.
Regarding pole configuration, DOE
has also previously established separate
equipment classes for electric motors on
the basis of pole configuration. In the
May 2014 Electric Motors Final Rule,
DOE discussed that the number of poles
in an induction motor determines the
synchronous speed (i.e., revolutions per
minute) of that motor, and that there is
an inverse relationship between the
number of poles and a motor’s speed. Id.
at 79 FR 30958–30959. As the number
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of poles increases from two to four to six
to eight, the synchronous speed drops
from 3,600 to 1,800 to 1,200 to 900
revolutions per minute, respectively. Id.
The number of poles has a direct impact
on the electric motor’s performance and
achievable efficiency because the
number of poles affects the amount of
available space inside an electric motor
that can be used to accommodate
efficiency improvements. Id. For
example, eight pole motors have twice
as many poles as four-pole motors and,
correspondingly, less space for
efficiency improvements. Id. For these
reasons, DOE has tentatively determined
that pole configuration represents a
performance-related feature that justifies
separate equipment classes for ESEMs.
Regarding enclosure type, DOE has
also previously established separate
equipment classes for electric motors on
the basis of enclosure type. In the May
2014 Electric Motors Final Rule, DOE
discussed that electric motors
manufactured with open construction
allow a free interchange of air between
the electric motor’s interior and exterior.
Id. at 79 FR 30959. Whereas, electric
motors with enclosed construction have
no direct air interchange between the
motor’s interior and exterior (but are not
necessarily air-tight) and may be
equipped with an internal fan for
cooling. Id. Whether an electric motor is
open or enclosed affects its utility; open
motors are generally not used in harsh
operating environments, whereas totally
enclosed electric motors often are. Id.
The enclosure type also affects an
electric motor’s ability to dissipate heat,
which directly affects efficiency. For
these reasons, DOE has tentatively
determined that the enclosure type
represents a performance-related feature
that justifies separate equipment classes
ESEMs.
Regarding locked-rotor torque level,
DOE considered three classifications of
locked-rotor torque in the March 2022
Preliminary Analysis: high, medium,
and low. The high locked-rotor torque
motor topologies included CSCR and
CSIR motors; the medium locked-rotor
torque topologies included split phase
motors; and the low locked-rotor torque
topologies included PSC and shaded
pole motors. Locked-rotor torque refers
to torque developed by an electric motor
whose rotor is locked in place, i.e., not
rotating. Locked-rotor torque
characterizes a motor’s ability to begin
moving loads at rest, an attribute which
is important to varying degree across
applications. Certain applications, for
example, some fans, may be relatively
indifferent to locked-rotor torque;
whereas for others, a minimum lockedrotor torque may be required to begin
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operation. DOE understands that high
and medium locked-rotor torque motors
are generally physically larger than lowlocked rotor torque motors and may not
fit in many embedded applications that
low locked-rotor torque motors are used
in. Additionally, low locked-rotor
torque motors may not provide
sufficient starting torque (i.e., the motor
would stall and the application would
never start) to the many applications
that have a high starting load (e.g.,
compressors and pumps). DOE also
understands that high and medium
locked-rotor torque motors generally
operate inherently more efficiently than
low locked-rotor torque motors. As
such, DOE has tentatively determined
that separate standards (i.e., separate
equipment classes) are warranted for the
high/medium locked-rotor torque
topologies (i.e., CSCR, CSIR, and split
phase) and low locked-rotor torque
topologies (i.e., PSC and shaded pole).
In the March 2022 Preliminary Analysis,
DOE sought comment on whether any
applications require a low locked-rotor
torque and would not operate with a
high locked-rotor torque motor, and
whether locked-rotor torque is necessary
to maintain as an equipment class factor
if the highest-torque motor types (e.g.,
CSCR) can reach the highest available
efficiency levels among the set of
electric motors which are used as
substitutes for similar applications.
Section 2.3.1.2 of the March 2022 TSD.
In response to the equipment classes
presented in the March 2022
Preliminary Analysis, NEMA agreed
that locked-rotor torque (or
alternatively, the motor technology) is
necessary to maintain as an equipment
class factor even if the high locked-rotor
torque ESEMs can reach the highest
efficiencies among the full range of
ESEMs (regardless of locked-rotor
torque categorization). They
substantiated their recommendation by
stating that certain high locked-rotor
torque motors are often not
interchangeable with lower locked-rotor
torque motors in specific applications
because of the larger physical size of the
high locked-rotor torque motor due to
the presence of additional capacitors.
(NEMA, No. 22 at pp. 6–7) The
December 2022 Joint Recommendation
recommended equipment classes with
locked-rotor torque as one of the
differentiators among equipment
classes, although in contrast to the
March 2022 Preliminary Analysis, it
merged the high and medium lockedrotor torque classes to form a single high
locked-rotor torque class. DOE infers
from this recommendation that the
performance of split phase motors does
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not inherently differ substantially from
the performance of CSCR and CSIR
motors, such that a higher or lower
energy conservation standard for split
phase motors would not be warranted in
relation to a standard established for
CSCR and CSIR motors. As such, DOE
has tentatively determined that separate
equipment classes for ESEMs are
warranted for two groupings of lockedrotor torque: high and medium lockedrotor torque (represented by the
grouping of CSCR, CSIR, and split phase
topologies) and low locked-rotor torque
(represented by the grouping of PSC and
shaded pole topologies).
Regarding motor cooling approach,
DOE discussed the differentiation
between air-over and non-air-over
motors in the March 2022 Preliminary
Analysis. See section 2.3.1.2 of the
March 2022 Preliminary TSD. DOE
currently defines an air-over electric
motor at 10 CFR 431.12 as an electric
motor ‘‘rated to operate in and be cooled
by the airstream of a fan or blower that
is not supplied with the motor and
whose primary purpose is providing
airflow to an application other than the
motor driving it.’’ As such, air-over
motors are often designed without an
internal fan, which allows for smaller
packaging, reduced cost, and the
potential for higher-efficiency
performance because the motor is not
driving an internal fan. DOE notes,
however, the inability to self-cool may
be a limitation in many applications
where cooling airflow is unavailable or
too variable to provide a reliable cooling
source. For these reasons, DOE has
tentatively determined that the cooling
approach represents a performancerelated feature that justifies separate
equipment classes for AO–ESEMs.
Based on the above considerations,
DOE is proposing to establish
equipment class groupings for ESEMs
based on the following characteristics:
horsepower rating, pole configuration
(i.e., 2, 4, 6, or 8 poles), enclosure type
(i.e., open or enclosed), locked-rotor
torque level (i.e., high and medium
locked-rotor torque, represented by the
grouping of CSCR, CSIR, and split phase
topologies; and low locked-rotor torque,
represented by the grouping of PSC and
shaded pole topologies), type of input
power (i.e., phase), and motor cooling
approach (i.e., air-over or non-air-over).
Table IV–1 presents the equipment class
groups proposed in this NOPR. Within
each equipment class group, DOE would
establish individual equipment classes
for each pole configuration, enclosure
type, and horsepower range. The
equipment class groups shown in Table
IV–1 represent a total of 350 equipment
classes.
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TABLE IV–1—EQUIPMENT CLASS GROUPS
Equipment class
groups (‘‘ECG’’)
Motor topology
1 ....................................
CSCR, CSIR, Split Phase ................................
.25–3
2, 4, 6, 8
2 ....................................
PSC, Shaded Pole ...........................................
.25–3
2, 4, 6, 8
3 ....................................
Polyphase ........................................................
.25–3
2, 4, 6, 8
4 ....................................
CSCR, CSIR, Split Phase ................................
.25–3
2, 4, 6, 8
5 ....................................
PSC, Shaded Pole ...........................................
.25–3
2, 4, 6, 8
6 ....................................
Polyphase ........................................................
.25–3
2, 4, 6, 8
DOE requests comment on the
proposed equipment classes for this
NOPR.
Horsepower
rating
Pole
configuration
4. Technology Options
In the March 2022 Preliminary
Analysis market and technology
assessment, DOE identified several
technology options that were initially
Enclosure
Open ..............
Enclosed.
Open ..............
Enclosed.
Open ..............
Enclosed.
Open ..............
Enclosed.
Open ..............
Enclosed.
Open ..............
Cooling
requirements
Non-Air-Over.
Non-Air-Over.
Non-Air-Over.
Air-Over
Air-Over
Air-Over
determined to improve the efficiency of
ESEMs, as measured by the DOE test
procedure. Table IV–2 presents the
technology options considered in the
March 2022 Preliminary Analysis.
TABLE IV–2—MARCH 2022 PRELIMINARY ANALYSIS TECHNOLOGY OPTIONS TO INCREASE MOTOR EFFICIENCY
Type of loss to reduce
Technology option
Stator I2R Losses .....................................................................................
Rotor I2R Losses ......................................................................................
Core Losses .............................................................................................
Friction and Windage Losses ...................................................................
Stray-Load Losses ....................................................................................
DOE maintains the same technology
options from the March 2022
Preliminary Analysis in this NOPR.
DOE received a number of comments
regarding technology options. As these
options are applicable to electric
motors, broadly, DOE responded to
these comments in the June 2023 DFR
and refers to that discussion for
purposes of technology options
considered in this NOPR. See 88 FR
36066, 36089–36090.
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5. Imported Embedded Motors
In response to the March 2022
Preliminary Analysis, DOE received
comments regarding compliance
logistics and general issues regarding
embedded motors being imported into
the United States. NEMA commented
that they estimate between 30 and 60
percent of ESEMs will be imported as a
motor or embedded in a piece of
equipment, and that the importers of
these equipment are the responsible
parties to comply. NEMA stated that if
DOE ignores these importers, the rule
will harm American equipment
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Increase cross-sectional area of copper in stator slots.
Decrease the length of coil extensions.
Increase cross-sectional area of end rings.
Increase cross-sectional area of rotor conductor bars.
Use a die-cast copper rotor cage.
Use electrical steel laminations with lower losses (watts/lb).
Use thinner steel laminations.
Increase stack length (i.e., add electrical steel laminations).
Optimize bearing and lubrication selection.
Improve cooling system design.
Reduce skew on rotor cage.
Improve rotor bar insulation.
manufacturers incorporating ESEMs
who compete with offshore suppliers
and will not maintain a ‘‘level playing
field’’ amongst motor manufacturers.
NEMA added that they believe that
adding the ESEM categories as defined
in the March 2022 Preliminary TSD will
have significant negative effects on U.S.
suppliers and jobs, giving offshore
equipment producers an unfair
advantage over American producers.
NEMA continued by saying that if DOE
does not provide a funded and feasible
border enforcement plan, the energy
savings estimates for a regulation for
ESEM will need to be adjusted by
removing the savings of the offshore
motors that escape regulation. (NEMA,
No. 22 at pp. 18–19) DOE recognizes
that importing embedded motors within
larger pieces of equipment poses
logistical challenges regarding the
compliance of these embedded motors
with the new energy conservation
standards. However, DOE notes that
imported motors that meet the scope
criteria proposed in this NOPR will be
subject to the energy conservation
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standards that are being promulgated
regardless of whether the motor is
imported on its own or embedded in a
separate piece of equipment. DOE is
committed to enforcing its regulations
in a fair and equitable manner to ensure
a level playing field is preserved for
domestic manufacturers.
B. Screening Analysis
DOE uses the following five screening
criteria to determine which technology
options are suitable for further
consideration in an energy conservation
standards rulemaking:
(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
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that technology will not be considered
further.
(3) Impacts on product utility. If a
technology is determined to have a
significant adverse impact on the utility
of the product to subgroups of
consumers, or result in the
unavailability of any covered product
type with performance characteristics
(including reliability), features, sizes,
capacities, and volumes that are
substantially the same as products
generally available in the United States
at the time, it will not be considered
further.
(4) Safety of technologies. If it is
determined that a technology would
have significant adverse impacts on
health or safety, it will not be
considered further.
(5) Unique-pathway proprietary
technologies. If a technology has
proprietary protection and represents a
unique pathway to achieving a given
efficiency level, it will not be
considered further, due to the potential
for monopolistic concerns.
10 CFR 431.4; 10 CFR part 430,
subpart C, appendix A, 6(c)(3) and 7(b).
In summary, if DOE determines that a
technology, or a combination of
technologies, fails to meet one or more
of the listed five criteria, it will be
excluded from further consideration in
the engineering analysis. The reasons
for eliminating any technology are
discussed in the following sections.
The subsequent sections include
comments from interested parties
pertinent to the screening criteria,
DOE’s evaluation of each technology
option against the screening analysis
criteria, and whether DOE determined
that a technology option should be
excluded (‘‘screened out’’) based on the
screening criteria.
1. Screened-Out Technologies
In the March 2022 Preliminary TSD,
DOE screened out amorphous metal
laminations and plastic bonded iron
powder (‘‘PBIP’’) from the analysis. DOE
requested further data on the feasibility
of amorphous steel being used in
electric motors at scale. See chapter 3 of
the March 2022 Preliminary TSD. In
response, DOE received comments
regarding the technologies excluded
from this engineering analysis, which
DOE responded to in the June 2023 DFR
as those comments are applicable to the
broader suite of electric motors
(including ESEMs). In the June 2023
DFR, DOE determined that it was not
definitive that amorphous steel could
meet all the screening criteria, and
therefore, DOE continued to screen out
amorphous metal in the June 2023 DFR
on the basis of technological feasibility.
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88 FR 36066, 36091. That reasoning
continues to apply in the case of the
ESEMs within the scope of this NOPR.
Accordingly, consistent with the
March 2022 Preliminary Analysis and
the June 2023 DFR, DOE is continuing
to screen out amorphous metal
laminations and PBIP in this NOPR.
2. Remaining Technologies
In the March 2022 Preliminary TSD,
DOE did not screen out the following
technology options: increasing crosssectional area of copper in stator slots;
decreasing the length of coil extensions;
increasing cross-sectional area of end
rings; increasing cross-sectional area of
rotor conductor bars; using a die-cast
copper rotor cage; using electrical steel
laminations with lower losses (watts/lb);
using thinner steel laminations;
increasing stack length; optimizing
bearing and lubrication selection;
improving cooling system design;
reducing skew on rotor cage; and
improving rotor bar insulation. See
chapter 3 of the March 2022 Preliminary
TSD. DOE received comments regarding
the remaining technologies included in
this engineering analysis, which were
responded to in the June 2023 DFR as
those comments are applicable to the
broader suite of electric motors
(including ESEMs). 88 FR 36066,
36091–36092. DOE believes the
responses to those comments in the June
2023 DFR are applicable to this
discussion regarding ESEMs.
Accordingly, DOE has not screened out
any of these technologies for its analysis
in this NOPR.
Otherwise, through a review of each
technology, DOE concludes that all of
the other identified technologies listed
in this section met all five screening
criteria to be examined further as design
options in DOE’s NOPR analysis. The
design options screened-in are
consistent with the design options from
the March 2022 Preliminary Analysis.
DOE determined that these technology
options are technologically feasible
because they are being used or have
previously been used in commerciallyavailable equipment or working
prototypes. DOE also finds that all of the
remaining technology options meet the
other screening criteria (i.e., practicable
to manufacture, install, and service and
do not result in adverse impacts on
consumer utility, product availability,
health, or safety). For additional details,
see chapter 4 of the NOPR TSD.
DOE requests comment on the
remaining technology options
considered in this NOPR.
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C. Engineering Analysis
The purpose of the engineering
analysis is to establish the relationship
between the efficiency and cost of
ESEMs. 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 product/
equipment at efficiency levels above the
baseline. The output of the engineering
analysis is a set of cost-efficiency
‘‘curves’’ that are used in downstream
analyses (i.e., the LCC and PBP analyses
and the NIA).
1. Efficiency Analysis
DOE typically uses one of two
approaches to develop energy efficiency
levels for the engineering analysis: (1)
relying on observed efficiency levels in
the market (i.e., the efficiency-level
approach), or (2) determining the
incremental efficiency improvements
associated with incorporating specific
design options to a baseline model (i.e.,
the design-option approach). Using the
efficiency-level approach, the efficiency
levels established for the analysis are
determined based on the market
distribution of existing equipment (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 ‘‘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 proposed rulemaking, DOE
applied a combination of the efficiencylevel approach and the design-option
approach to establish efficiency levels to
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analyze. The design-option approach
was used to characterize efficiency
levels that are not available on the
market but appear to be market
solutions for those higher efficiency
levels if sufficient demand existed. For
the efficiency levels available on the
market, sufficient performance data was
publicly available to characterize these
levels.
a. Representative Units Analyzed
Due to the large number of equipment
classes, DOE did not directly analyze all
equipment classes of electric motors
considered in this NOPR. Instead, DOE
selected representative units based on
two factors: (1) the quantity of motor
models available within an equipment
class and (2) the ability to scale to other
equipment classes.
For this NOPR, DOE updated the
horsepower output and pole
configuration in response to feedback
received on the March 2022 Preliminary
Analysis and on feedback received
through manufacturer interviews. For
more information on the manufacturer
interviews, see section IV.J.2 of this
document. Table IV–3 presents the
representative units analyzed, and the
covered horsepower ranges for each of
the representative units.
TABLE IV–3 REPRESENTATIVE UNITS ANALYZED
Representative
unit
(RU)
ECG
ESEM High Torque .........................................................................................
ESEM Low Torque ..........................................................................................
ESEM Polyphase ............................................................................................
AO–ESEM High Torque ..................................................................................
AO–ESEM Low Torque ...................................................................................
AO–ESEM Polyphase .....................................................................................
In response to the March 2022
Preliminary Analysis, DOE received a
comment from NEMA stating that DOE
should conduct more testing of motor
efficiency at higher efficiency levels
rather than relying so heavily on scaled
results. (NEMA, No. 22 at pp. 15, 24)
DOE notes that teardowns of motors at
higher efficiency levels were conducted
for each ECG that was directly analyzed.
This comment was also discussed in
section IV.C.1 of the June 2023 DFR. See
88 FR 36066, 36093. DOE believes the
responses to that comment in the June
2023 DFR are applicable to this
discussion regarding ESEMs.
Additionally, for more information on
scaling as it pertains to ESEMs, see
section IV.C.5 of this document.
DOE requests comment on the
representative units used in this NOPR.
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b. Baseline Efficiency
For each equipment class, DOE
generally selects a baseline model as a
reference point for each class and
measures changes resulting from
potential energy conservation standards
against the baseline. The baseline model
in each equipment class represents the
characteristics of an equipment typical
of that class (e.g., capacity, physical
size). Generally, a baseline model is one
that just meets current energy
conservation standards, or, if no
standards are in place, the baseline is
typically the most common or least
efficient unit on the market.
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1
2
3
4
5
6
7
8
9
10
In the March 2022 Preliminary
Analysis, DOE generated a baseline
efficiency level for ESEMs by creating a
curve-fit of motor losses vs. hp based on
the SEM energy conservation standards
located at 10 CFR 431.446, and shifting
this curve-fit down to fit what was
observed in catalog data for a given
ESEM ECG. See chapter 5 of the March
2022 Preliminary TSD. In response to
the March 2022 Preliminary Analysis,
DOE received comments on how the
baseline efficiencies were established
for ESEMs.
The Joint Advocates commented that
DOE tested five ESEMs with and
without the fan using the proposed
NOPR test procedure to determine the
difference in efficiency between AO and
non-AO motors. Removing the motor
fan resulted in baseline efficiencies
several percent higher for the AO–
ESEMs. As such, the Joint Advocates
recommend that DOE analyze
appropriate baseline efficiency levels for
AO motors. (Joint Advocates, No. 27 at
p. 3)
NEMA disagreed with how DOE
created the baseline for ESEMs and
suggested that the baseline be
determined through testing and not rely
on unverified performance models.
(NEMA, No. 22 at p. 15) With regards
to the comment from NEMA, DOE
acknowledges that testing individual
models is the most ideal way to gather
performance data for electric motors.
However, due to the very high volume
of combinations of motor topologies,
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Representative
unit horsepower
0.25
1
0.25
0.5
0.25
0.25
1
0.25
0.5
0.25
Represented
horsepower range
(all poles, all enclosures)
0.25 ≤ hp ≤ 0.50.
0.5 < hp ≤ 3.
0.25 hp.
0.25 < hp ≤ 3.
0.25 ≤ hp ≤ 3.
0.25 ≤ hp ≤ 0.50.
0.5 < hp ≤ 3.
0.25 hp.
0.25 < hp ≤ 3
0.25 ≤ hp ≤ 3.
horsepower, frame sizes, pole counts,
speeds, unique motor construction, and
other parameters, DOE has recognized it
to be unrealistic to test every possible
motor available in the U.S. market. As
such, DOE is modeling performance
using a catalog of all electric motors
(including ESEMs) available for sale in
the U.S. market, which contains specific
data for all relevant parameters of
electric motor performance, including
locked rotor torque, pole count,
horsepower output, speed, nominal
efficiency, current draw, as well as
many others. DOE created the baseline
using a similar combination of the
catalog performance data and trends
that DOE developed and modeled in the
2010 SEM standard rulemaking when
DOE was similarly faced with a high
volume of potential SEM model
possibilities. Given the similarities
between SEMs and ESEMs, DOE
believes that a baseline created with a
methodology parallel to the previous
SEM rulemaking is a reasonable
approach for creating energy
conservation standards for ESEMs.
Accordingly, in this NOPR, DOE used a
mix of catalog data, current SEM
standards, and test data to establish the
baseline efficiencies. For ECGs 1–3,
DOE began with the methodology that
was used in March 2022 Preliminary
Analysis to establish the baseline. For
ECGs 1 and 3, DOE then shifted the
baseline (i.e., increased the losses across
all horsepowers by a flat multiplier to
shift the entire curve uniformly) to
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account for the least efficient ESEMs in
each ECG at various horsepower ratings.
For ECG 2, DOE used test data to
determine the efficiency of shaded pole
motors at the horsepower ratings where
they are used and combined that with
the shifted SEM standard to create a
baseline. For more information, see
chapter 5 of the NOPR TSD.
DOE requests comment on the
baseline efficiencies used in this NOPR.
c. Higher Efficiency Levels
As part of DOE’s analysis, the
maximum available efficiency level is
the highest efficiency unit currently
available on the market. DOE also
defines a ‘‘max-tech’’ efficiency level to
represent the maximum possible
efficiency for a given equipment.
In the March 2022 Preliminary
Analysis, DOE established the higher
efficiency levels by shifting the baseline
efficiencies up a certain number of
NEMA bands. In response to the March
2022 Preliminary Analysis, DOE
received comments regarding the
analysis used to determine efficiencies
at higher levels, which were responded
to in the June 2023 DFR. 88 FR 36066,
36096–36097. In that final rule, DOE
determined that the approach used in
the March 2022 Preliminary Analysis
continued to be appropriate. Id. at 88 FR
36097. DOE believes the rationale from
its responses in the June 2023 DFR is
applicable to this NOPR. As such, for
this NOPR, DOE considered several
design options for higher efficiencies:
improved electrical steel for the stator
and rotor, using die-cast copper rotors,
increasing stack length, and any other
applicable design options remaining
after the screening analysis when
improving electric motor efficiency from
the baseline level up to a max-tech
level. As each of these design options
are added, the manufacturer’s cost
generally increases and the electric
motor’s efficiency improves. DOE
worked with a subject matter expert
with design experience and motor
performance simulation software to
develop the highest efficiency levels
technologically feasible for each
representative unit analyzed, and used a
combination of electric motor software
design programs and subject matter
expert input to develop these levels.
The subject matter expert also checked
his designs against tear-down data and
calibrated his software using the
relevant test results. DOE notes that for
all efficiency levels of directly modeled
representative units, the frame size was
constrained to that of the baseline unit.
DOE also notes that the full-load speed
of the simulated motors did not stay the
same throughout all efficiency levels.
Depending on the materials used to
meet a given efficiency level, the fullload speed of the motor may increase
compared to a lower efficiency model,
but for the representative units analyzed
this was not always the case. Employing
these design options, higher efficiency
levels can be reached without resulting
in any significant size increase and
without changing the key electrical and
mechanical characteristics of the motor.
See chapter 5 of the NOPR TSD for more
87087
details on the full-load speeds of
modeled units.
DOE requests comment on the
proposal to constrain the frame size of
all efficiency levels to that of the
baseline unit.
For the max-tech efficiencies in the
engineering analysis, DOE considered
35H210 silicon steel, which has the
lowest theoretical maximum core loss of
all steels considered in this engineering
analysis, and the thinnest practical
thickness for use in motor laminations.
The max-tech designs also have the
highest possible slot fill, maximizing the
number of motor laminations that can fit
inside the motor. Further details are
provided in chapter 5 of the NOPR TSD.
The max-tech for all equipment
classes was created by using the curve
shape of motor losses vs. horsepower for
the SEM energy conservation standards
and shifting that curve up to intersect
with the representative unit efficiencies
for a given ECG. For intermediate
efficiency levels that were higher than
an ECG’s baseline but not the max-tech
efficiency considered, DOE used a
consistent approach across all ECGs. EL
1 was an average of the full-load
efficiencies of the baseline, EL 2
contained the levels recommended in
the December 2022 Joint
Recommendation, and EL 3 was an
average of the full-load efficiencies of
EL 2 and max-tech.
Table IV–4 presents a summary of the
description of the higher efficiency
levels analyzed in this NOPR. For
additional details on the efficiency
levels, see chapter 5 of the NOPR TSD.
TABLE IV–4—HIGHER EFFICIENCIES ANALYZED
EL0
EL1
EL2
EL3
Baseline .....................
Average of EL0 and EL2 ...........
Joint Recommended Levels ......
Average of EL2 and EL4 ...........
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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 equipment, 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 equipment,
component-by-component, to develop a
detailed bill of materials for the product.
b Catalog teardowns: In lieu of
physically deconstructing an
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equipment, 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 equipment.
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.
PO 00000
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EL4
Max-tech.
In the March 2022 Preliminary
Analysis, DOE conducted the analysis
using a combination of physical
teardowns and software modeling. DOE
contracted a professional motor
laboratory to disassemble various
electric motors and record what types of
materials were present and how much
of each material was present, recorded
in a final bill of materials (‘‘BOM’’). To
supplement the physical teardowns,
software modeling by a subject matter
expert was also used to generate BOMs
for select efficiency levels of directly
analyzed representative units. The
resulting bill of materials provides the
basis for the manufacturer production
cost (‘‘MPC’’) estimates. See chapter 5 of
the March 2022 Preliminary TSD.
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In response to the March 2022
Preliminary Analysis, DOE received a
number of comments pertaining to the
cost analysis, which were responded to
in the June 2023 DFR. 88 FR 36066,
36098–36099. In that final rule, DOE
determined that the approach used in
the March 2022 Preliminary Analysis
continued to be appropriate. Id. at 88 FR
36099. DOE believes the rationale from
its responses in the June 2023 DFR is
applicable to this NOPR. Accordingly,
in this NOPR, DOE continues to use the
approach from the March 2022
Preliminary Analysis by determining
costs using a combination of physical
teardowns and software modeling. In
addition, as part of this NOPR, DOE
supplemented other critical inputs to
the MPC estimate, including material
prices assumed, scrap costs, overhead
costs, and conversion costs incurred by
the manufacturer, using information
provided by manufacturers under a
nondisclosure agreement (‘‘NDA’’)
through both manufacturer interviews
and the Electric Motors Working Group.
Through these nondisclosure
agreements, DOE solicited and received
feedback on inputs like recent electrical
steel prices by grade, the cost of critical
components of ESEMs like capacitors or
conductors, motors at different
efficiency levels, and rated motor
output. See chapter 5 of the NOPR TSD
for more detail on the scrap, overhead,
and conversion costs, as well as material
prices used.
Finally, to account for manufacturers’
non-production costs and profit margin,
DOE applies a non-production cost
multiplier (the manufacturer markup) to
the MPC. The resulting manufacturer
selling price (‘‘MSP’’) is the price at
which the manufacturer distributes a
unit into commerce. DOE developed an
average manufacturer markup by
examining the annual Securities and
Exchange Commission (‘‘SEC’’) 10–K
reports filed by publicly-traded
manufacturers primarily engaged in
ESEM manufacturing and whose
combined product range includes
ESEMs. DOE used a non-production
markup of 37 percent for all ESEMs
considered in this NOPR.
3. Technical Specifications
DOE received comments in response
to the March 2022 Preliminary Analysis
regarding the technical design and
performance specifications of ESEMs
analyzed in this NOPR. The Joint
Industry Stakeholders and AHAM and
AHRI commented that more-efficient
motors become heavier and larger and
that DOE needs to account for the loss
of consumer demanded utility in terms
of portability or ease of lifting by one
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person. (Joint Industry Stakeholders,
No. 23 at p. 6; AHAM and AHRI, No. 25
at p. 12) The Joint Industry Stakeholders
commented that DOE must factor
portability into its calculations and
considerations for technological
feasibility or risk violation of EPCA
provision 42 U.S.C. 6295(o)(2)(B)(i)(I)–
(VII) The Joint Industry Stakeholders
provided results of the AHAM Home
Comfort Survey showing that portability
is important to PAC owners. The Joint
Industry Stakeholders added that DOE
should screen out technology options
that increase weight and should not use
it as a design option in its analysis of
higher efficiency levels. The Joint
Industry Stakeholders added that DOE
must account for physical growth (i.e.,
girth) of appliances as a result of
incorporation of larger ESEMs as a
consumer-demanded utility with
regards to portability, or fall short of
EPCA 6295(o)(2)(B)(i)(I)–(VII). (Joint
Industry Stakeholders, No. 23 at pp. 6–
8) AHAM and AHRI noted that space
constraints in many appliances require
that manufacturers use the smallest
possible component that meets the
required performance for the product.
Additionally, they stated larger motors
will also decrease the space available for
additional features, thereby preventing
finished product manufacturers from
offering those features to consumers.
(AHAM and AHRI, No. 25 at p. 12)
In response to these comments, DOE
notes that size increase of ESEMs
analyzed as part of this NOPR is limited,
and efficiency levels at or below the
levels recommended in the December
2022 Joint Recommendation will not
result in a significant weight increase
relative to the present weight of ESEMs,
specifically at the selected TSL 2 (i.e.,
recommended level). DOE revised the
preliminary analysis to account for
space-constrained and non-space
constrained motor designs that actively
limit the amount of additional active
material that can fit into the ESEM,
limiting the potential for size and
weight increase as well. DOE’s analysis
assumes that higher ELs can be reached
without significant increase in size.
DOE made this assumption to analyze a
representative unit that could be more
widely adopted without significant
redesign from end-users. However, as
discussed in section II.B.3 of this
document, the Electric Motor Working
Group expressed that any efficiency
requirements at or above EL 3, could
result in market disruption and may not
allow smaller size motors to remain on
the market. DOE acknowledges that at or
above EL 3, some manufacturers may
choose to rely on design options that
PO 00000
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would significantly increase the
physical size of ESEMs. This could
result in a significant and widespread
disruption to the OEM markets that
used ESEMs as an embedded product,
as those OEMs may have to make
significant changes to their equipment
that use ESEMs because those ESEMs
could become larger in physical size.34
DOE requests comment on the
assumption that higher ELs (particularly
ELs 3 and 4) can be reached without
significant increase in size.
DOE requests comment on the
potential for market disruption at higher
ELs and if manufacturers could design
motors at ELs 3 and 4 that do not
increase in size, or if for the final rule,
DOE should model motors larger than
what is considered in this NOPR.
The Joint Industry Stakeholders
commented that if lower speed motors
are no longer available, appliances may
be forced to incorporate higher speed
motors which may cause short-cycling
in HVAC and refrigeration applications
and result in negative impacts in other
appliances. The Joint Industry
Stakeholders provided the example of a
vacuum cleaner where a higher speed
motor could lead to increased suction
and reduce the ability to move the
vacuum. (Joint Industry Stakeholders,
No. 23 at pp. 8–9)
DOE notes that the ESEM
performance models generated by the
subject matter expert for the
representative units did not always
increase in speed as efficiency increased
and that the energy conservation
standards proposed by this NOPR apply
to motors of varying operating speeds
across multiple pole-configurations. As
such, DOE does not expect the
respective standard levels and
equipment classes to result in the
unavailability of motors with specific
speed characteristics. DOE has also
found that many vacuum cleaners
currently on the market utilize
suction 35 motors and universal 36
motors that have brushes, and are not
34 DOE believes there will be several impacts of
larger motors on downstream users and consumers
of these motors, and the difficulty to accommodate
a larger motor varies across applications. An
increase in motor size may result in new motors
that fit in their existing systems. DOE notes that this
impact to OEMs and end users may be difficult to
quantify because of range of applications these
motors go into, and DOE expects the potential
impacts of larger motors to vary by end use
application.
35 Suction motor design & operation are described
at www.ristenbatt.com/xcart/Suction-Motor-Designand-Operation.html—(last accessed on 5/31/2023).
36 A major application of Universal Motors is
electric vacuum cleaners. ‘‘Universal motor’’ is
defined at www.nidec.com/en/technology/motor/
glossary/000/0565/ (last accessed on 5/31/2023).
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single-speed induction motors, thus are
not within the scope of this NOPR.
AHAM and AHRI commented that
they expect electric motors, particularly
fractional horsepower electric motors,
would increase in price because larger/
faster motors will require additional
materials for the motor stack, windings,
and other components. Moreover,
AHAM and AHRI commented that
efficiency requirements could push
manufacturers to different, more
expensive, motor topologies. AHAM
and AHRI added that the certification,
testing, and reporting requirements will
also add cost. AHAM and AHRI
provided an estimate that 6,015 basic
models of equipment would have one or
more motors under the scope of this
proposed regulation. Applying a
$304,000 per basic model cost estimate
to redesign the equipment to
accommodate a redesigned motor,
AHAM and AHRI estimate the cost of
this regulation for OEMs will exceed
$1.83 billion. (AHAM and AHRI, No. 25
at pp. 9–12)
The Joint Industry Stakeholders and
Lennox stated that if a new ESEM
cannot be incorporated into an existing,
previously-purchased appliance or OEM
product, the consumer must source
salvage/repaired component motors or
purchase new products entirely. The
Joint Stakeholders and Lennox
commented that consumers will either
face significant repair bills due to field
modifications to incorporate new ESEM
or lost use of devices due to inability to
repair with a new ESEM. The Joint
Industry Stakeholders and Lennox
commented that DOE did not
incorporate the impact of consumers
being forced to prematurely purchase
new equipment. The Joint Industry
Stakeholders and Lennox added that
DOE fails to account for these additional
OEM equipment repair costs and for the
fact that many consumers will be left
without a repair option and forced to
prematurely purchase new equipment
or a new appliance and place additional
burden on low-income consumers.
(Joint Industry Stakeholders, No. 23 at
pp. 5–6; Lennox, No. 29 at p. 5) AHAM
and AHRI commented that setting
energy conservation standards on
motors that are components of finished
goods would result in unavailability of
replacement motors and consumers
would be forced to purchase a new
appliance they cannot afford because
the existing equipment can no longer be
serviced. (AHAM and AHRI, No. 25 at
p. 10)
Lennox commented that DOE must
thoroughly evaluate the loss of
repairability for installed/owned
HVACR systems that contain newly
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regulated ESEMs, which could force
consumers to undertake unnecessary
and costly premature replacement of
HVACR systems. (Lennox, No. 29 at p.
5)
As discussed previously in this
section, DOE revised the engineering
analysis from the March 2022
Preliminary Analysis, and, as such, the
proposed standards in this NOPR result
in no significant increases to the size of
an affected ESEM, which means there is
no loss in repairability for previouslypurchased appliances because the form,
fit, and function of the ESEMs are
maintained at the proposed TSLs. In
addition, the proposed levels would
preserve key criteria that are used to
identify suitable replacement motors,37
such as frame sizes, voltages,
horsepower, pole configurations,
enclosure constructions, and mountings,
and DOE believes drop-in replacement
motors would remain available and
there would be no major market
disruption, as highlighted by the
Electric Motors Working Group. DOE
further notes that OEM equipment can
usually accommodate different models
of motors and online cross-referencing
tools 38 exist to help consumers identify
motors that can be used as drop-in
replacements. However, as discussed in
section II.B.3 of this document, the
Electric Motor Working group expressed
that any efficiency requirements at or
above EL 3, could result in market
disruption and may not allow smaller
size motor to remain on the market.
Although DOE’s engineering analysis
assumes that higher ELs can be reached
without significant increase in size,
DOE acknowledges that at or above EL
3 (i.e., above the proposed TSL), some
manufacturers may choose to rely on
design options that would significantly
increase the physical size of ESEMs and
there is uncertainty as to whether the
size, fit and function would be
maintained at these levels. At or above
EL3, this could result in a significant
and widespread disruption to the OEM
markets that used ESEMs as an
embedded product, as those OEMs may
have to make significant changes to
their equipment that use ESEMs because
those ESEMs could become larger in
physical size.
Regarding the additional OEM testing
and certification costs, while DOE
37 See ‘‘How to cross reference an OEM motor.’’
Available at https://hvacknowitall.com/blog/how-tocross-reference-an-oem-motor (last accessed
September 28, 2023); Rheem and Ruud PROTECH
‘‘Selecting a Motor.’’ Available at
assets.unilogcorp.com/267/ITEM/DOC/PROTECH_
51_100998_33_Catalog.pdf (last accessed
September 28, 2023).
38 See www.emotorsdirect.ca/hvac.
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conducts a MIA to address the industry
burden on the manufacturer of the
considered covered equipment, DOE
typically does not include the impacts
to other manufacturers. The MIA for this
rulemaking specifically examined the
conversion costs that electric motor
manufacturers (including OEMs that
also manufacture electric motors) would
incur due to the analyzed energy
conservation standards for electric
motors in comparison to the revenue
and free cash electric motor
manufacturers receive. The OEM testing
and certification costs were not
included in the MIA, and neither were
the OEM revenues and free cash flows,
as these costs and revenue are not
specific to electric motor manufacturers.
However, as noted by the Electric
Motors Working Group, the proposed
standards for ESEMs are not expected to
cause broad market disruption. In
addition, DOE fixed the frame size,
which remained the same across
efficiency levels. As such, the energy
conservation standards proposed in this
NOPR would preserve the frame sizes of
electric motors on the market today.
Further, as discussed in section IV.A.1
of this document, ESEMs are built in
standard NEMA frame sizes and are not
common in currently regulated
consumer products including those
listed by AHAM and AHRI (i.e., clothes
washers (top and front load), clothes
dryers, food waste disposers,
refrigerators, room air conditioners, and
stick vacuums). Therefore, DOE believes
the standards as proposed would not
impact manufacturers of consumer
products. In commercial equipment,
DOE identified the following equipment
as potentially incorporating ESEMs:
walk-in coolers and freezers, circulator
pumps, air circulating fans, and
commercial unitary air conditioning
equipment. If the proposed energy
conservation standards for these rules
finalize as proposed, DOE identified
that these rules would all: (1) have a
compliance year that is at or before the
ESEM standard compliance year (2029)
and/or (2) require a motor that is either
outside of the scope of this rule (e.g., an
ECM) or an ESEM with an efficiency
above the proposed ESEM standards,
and therefore not be impacted by the
proposed ESEM rule (i.e., the ESEM rule
would not trigger a redesign of these
equipment). Therefore, DOE has
tentatively determined that OEMs
would already have to redesign these
equipment to comply with these energy
conservation standards, and the ESEM
rule would not trigger another redesign
of these equipment because the end-use
equipment regulation would require
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4. Cost-Efficiency Results
The results of the engineering analysis
are reported as cost-efficiency data (or
‘‘curves’’) in the form of MSP (in
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5. Scaling Methodology
Due to the large number of equipment
classes, DOE was not able to perform a
detailed engineering analysis on each
one. Instead, DOE focused its analysis
on the representative units and scaled
the results to equipment classes not
directly analyzed in the engineering
analysis. In the March 2022 Preliminary
Analysis, DOE used the current
standards at 10 CFR 431.25 as a basis to
scale the efficiency of the representative
units to all other equipment classes. In
order to scale for efficiency levels above
baseline, the efficiencies for the
representative units were shifted up or
down by however many NEMA bands,
because these bands are commonly used
by industry when describing motor
efficiency, that efficiency level was
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dollars) versus full-load efficiency (in
%), which form the basis for subsequent
analysis. DOE developed ten curves
representing the six equipment class
groups. The methodology for developing
the curves started with determining the
full-load efficiency and MPCs for
baseline motors. Above the baseline,
DOE implemented various combinations
of design options to achieve each
efficiency level. Design options were
implemented until all available
technologies were employed (i.e., at a
max-tech level). To account for
manufacturers’ non-production costs
and profit margin, DOE applies a
manufacturer markup to the MPC,
resulting in the MSP. See the following
tables for the final results and chapter
5 of the NOPR TSD for additional detail
on the engineering analysis.
above current standards. DOE received
a number of comments regarding scaling
methodology, to which DOE responded
to in the June 2023 DFR. 88 FR 36066,
36099–36100. In that final rule, DOE
determined that the approach used in
the March 2022 Preliminary Analysis
continued to be appropriate. Id. at 88 FR
36100. DOE believes the rationale from
its responses in the June 2023 DFR is
applicable to this NOPR.
In this NOPR, to scale across
horsepower, pole configuration, and
enclosure, DOE again relied on
industry-recognized levels of efficiency
when possible, or shifted forms of these
levels. For example: when an efficiency
level for a representative unit was
NEMA Premium, Table 12–12 of NEMA
MG 1–2016 was used to determine the
efficiency of all the non-representative
unit equipment classes. This method of
scaling was also done for IE4 levels of
efficiency, electric motor fire pump
levels, and shifted versions of NEMA
Premium (see section IV.C.1 of this
document for a description of efficiency
levels analyzed). DOE relied on
industry-recognized levels because they
sufficiently capture the effects of
enclosure, pole configuration, frame
size, and horsepower on motor
efficiency.
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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
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higher efficiency ESEMs or out of scope
electric motors. Consequently, although
DOE did not include any OEM testing
and certification costs in this NOPR,
DOE does not estimate these impacts to
be significant.
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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
equipment to cover business costs and
profit margin.
In the March 2022 Preliminary
Analysis, DOE identified distribution
channels for electric motors and their
respective market shares (i.e.,
percentage of sales going through each
channel). For ESEMs, the main parties
in the distribution chain are OEMs,
equipment or motor wholesalers,
retailers, and contractors. See section
6.2 of the March 2022 Preliminary TSD.
DOE did not receive any comment on
the distribution channels identified in
response to the March 2022 Preliminary
Analysis. DOE retained these
distribution channels for this NOPR.
DOE developed baseline and
incremental markups for each actor in
the distribution chain. Baseline
markups are applied to the price of
equipment with baseline efficiency,
while incremental markups are applied
to the difference in price between
baseline and higher-efficiency models
(the incremental cost increase). The
incremental markup is typically less
than the baseline markup and is
designed to maintain similar per-unit
operating profit before and after new or
amended standards.39
In the March 2022 Preliminary
Analysis, DOE relied on economic data
from the U.S. Census Bureau and on
2020 RS Means Electrical Cost Data to
estimate average baseline and
incremental markups. Specifically, DOE
estimated the OEM markups for electric
motors based on financial data of
different sets of OEMs that use
respective electric motors from the latest
2019 Annual Survey of Manufactures.40
The relevant sets of OEMs identified
were listed in Table 6.4.2 of the March
2022 Preliminary TSD, using six-digit
code level North American Industry
Classification System (‘‘NAICS’’).
Further, DOE collected information
regarding sales taxes from the Sales Tax
Clearinghouse.41
39 Because the projected price of standardscompliant equipment is typically higher than the
price of baseline equipment, using the same markup
for the incremental cost and the baseline cost would
result in higher per-unit operating profit. While
such an outcome is possible, DOE maintains that in
markets that are reasonably competitive it is
unlikely that standards would lead to a sustainable
increase in profitability in the long run.
40 U. S. Census Bureau. 2019 Annual Survey of
Manufactures (ASM): Statistics for Industry Groups
and Industries. www.census.gov/programs-surveys/
asm.html (last accessed March 23, 2021).
41 Sales Tax Clearinghouse Inc. State Sales Tax
Rates Along with Combined Average City and
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In response to the March 2022
Preliminary Analysis, NEMA agreed
that 95 percent of ESEMs reach the
market through the OEM equipment
channel. NEMA further commented that
Table 6.4.2 of the March 2022
Preliminary TSD should be replaced by
Table IV.3 of the Import Data
Declaration Proposed Rule.42 (NEMA,
No. 22 at p. 18) Table IV.3 of the Import
Data Declaration Proposed Rule
provides a list of five-digit code level
NAICS.43 DOE reviewed the
corresponding six-digit code level
NAICS and identified the following
additional OEM as relevant in the
context of OEMs incorporating ESEMs
in their equipment: 333991 ‘‘Powerdriven handtool manufacturing;’’
333999 ‘‘All other miscellaneous
general Purpose machinery
manufacturing;’’ 335210 ‘‘Small
electrical appliance manufacturing;’’
and 335220 ‘‘Major appliance
manufacturing’’. Other NAICS codes
were either already included in the
March 2022 Preliminary Analysis or did
not correspond to OEMs incorporating
ESEMs in their equipment.
For this NOPR, DOE revised the OEM
baseline and incremental markups
calculation to account for these
additional NAICS codes. In addition,
DOE relied on updated data from the
economic data from the U.S. Census
Bureau, 2023 RS Means Electrical Cost
Data, and the updated data from the
Sales Tax Clearinghouse.
Chapter 6 of the NOPR TSD provides
details on DOE’s development of
markups for ESEMs.
DOE requests data and information to
characterize the distribution channels
for ESEMs and associated market shares.
E. Energy Use Analysis
The purpose of the energy use
analysis is to determine the annual
energy consumption of ESEMs at
different efficiencies for a representative
sample of residential, commercial, and
industrial consumers, and to assess the
energy savings potential of increased
ESEM efficiency. The energy use
analysis estimates the range of energy
use of ESEMs in the field (i.e., as they
are actually used by consumers). For
each consumer in the sample, the
energy use is calculated by multiplying
the annual average motor input power
by the annual operating hours. The
energy use analysis provides the basis
County Rates. July 2021. thestc.com/STrates.stm
(last accessed July 1, 2021).
42 NEMA also provided the following link:
www.regulations.gov/document/EERE-2015-BT-CE0019-0001.
43 Each five-digit code level NAICS includes
several six-digit code level NAICS.
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for other analyses DOE performed,
particularly assessments of the energy
savings and the savings in consumer
operating costs that could result from
adoption of new standards.
1. Consumer Sample
DOE created a consumer sample to
represent consumers of electric motors
in the commercial, industrial, and
residential sectors. DOE used the
sample to determine electric motor
annual energy consumption as well as
to conduct the LCC and PBP analyses.
Each consumer in the sample was
assigned a sector, an application, and a
region. The sector and application
determine the usage profile of the
electric motor and the economic
characteristics of the motor owner vary
by sector and region. In addition,
residential consumers were assigned
household income groups. In the March
2022 Preliminary Analysis, DOE
primarily relied on data from the 2018
Commercial Building Energy
Consumption Survey (‘‘CBECS’’),44 the
2018 Manufacturing Energy
Consumption Survey (‘‘MECS’’),45 the
2015 Residential Energy Consumption
Survey (‘‘RECS’’), a previous DOE
Technical Support Document (‘‘January
2021 Final Determination Technical
Support Document’’) related to small
electric motors,46 and a DOE–AMO
report ‘‘U.S. Industrial and Commercial
Motor System Market Assessment
Report Volume 1: Characteristics of the
Installed Base’’ (‘‘MSMA’’ or ‘‘DOE–
AMO report’’).47 See chapter 7 of the
March 2022 Preliminary TSD.
Specifically, in the March 2022
Preliminary Analysis, for ESEMs, DOE
used information from the Small
Electric Motors January 2021 Final
Determination Technical Support
Document to develop sector specific
distributions. Since the publication of
the March 2022 Preliminary Analysis,
DOE updated the consumer sample to
44 U.S. Department of Energy–Energy Information
Administration, ‘‘2018 Commercial Buildings
Energy Consumption Survey (CBECS),’’ 2018
CBECS Survey Data, 2018, https://www.eia.gov/
consumption/commercial/data/2018/index.php?
view=methodology.
45 2018 Manufacturing Energy Consumption
Survey,’’ https://www.eia.gov/consumption/
manufacturing/data/2018/pdf/Table11_1.pdf.
46 Technical Support Document: Energy
Efficiency Program for Consumer Products and
Commercial and Industrial Equipment: Small
Electric Motors Final Determination (Prepared for
the Department of Energy by Staff Members of
Navigant Consulting, Inc and Lawrence Berkeley
National Laboratory, January 2021),’’
www.regulations.gov/document/EERE-2019-BTSTD-0008-0035.
47 Prakash Rao et al., ‘‘U.S. Industrial and
Commercial Motor System Market Assessment
Report Volume 1: Characteristics of the Installed
Base,’’ January 12, 2021, doi.org/10.2172/1760267.
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reflect the latest version of RECS (i.e.,
2020 RECS).48 DOE also revised the
distribution of ESEMs by sector to
reflect that the majority of single-phase
motors are used in the residential and
commercial sectors 49 and incorporate
the industrial and commercial sector
distributions as published in the June
2023 DFR.
In response to DOE’s requests for
feedback regarding consumer sample in
the March 2022 Preliminary Analysis,
NEMA referred DOE to the MSMA
report (NEMA, No. 22 at p. 19) As
previously described, DOE relied on
information from the MSMA report to
inform its consumer sample. DOE did
not receive any additional comments
related to the consumer sample
developed in the March 2022
Preliminary Analysis and, in this NOPR,
DOE continued to rely on the MSMA
report to characterize motor use in the
commercial and industrial sectors.
DOE requests data and information to
characterize the distribution of ESEMs
by sector (commercial, industrial, and
residential sectors) as well as the
distribution of ESEMs by application in
each sector.
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2. Motor Input Power
In the March 2022 Preliminary
Analysis, DOE calculated the motor
input power as the sum of (1) the
electric motor’s rated horsepower
multiplied by its operating load (i.e., the
motor output power), and (2) the losses
at the operating load (i.e., part-load
losses). DOE estimated distributions of
motor average annual operating load by
application and sector based on
information from the MSMA report.
DOE determined the part-load losses
using outputs from the engineering
analysis (full-load efficiency at each
efficiency level) and published part-load
efficiency information from 2016 and
2020 catalog data from several
manufacturers to model motor part-load
losses as a function of the motor’s
operating load. See section 7.2.2 of the
March 2022 Preliminary TSD.
In response to DOE’s requests for
feedback regarding distributions of
average annual operating load by
application and sector in the March
2022 Preliminary Analysis, NEMA
48 ‘‘2020 Residential Energy Consumption Survey
Data,’’, https://www.eia.gov/consumption/
residential/data/2020/https://www.eia.gov/
consumption/residential/data/2020/ (last accessed
July 5, 2023).
49 Goetzler, William, Sutherland, Timothy, and
Reis, Callie. Energy Savings Potential and
Opportunities for High-Efficiency Electric Motors in
Residential and Commercial Equipment. United
States: N. p., 2013. Web. doi:10.2172/1220812.
Available at: osti.gov/biblio/1220812 (last accessed
April 18, 2023).
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referred DOE to the MSMA report.
(NEMA, No. 22 at p. 19) As previously
described, DOE relied on information
from the MSMA report to characterize
average annual operating loads. DOE
did not receive any additional
comments related to the distributions of
operating loads developed in the March
2022 Preliminary Analysis and retained
the same approach for this NOPR.
DOE did not receive any comments on
its approach to determine part-load
losses and retained the same
methodology for this NOPR. However,
DOE updated its analysis to account for
more recent part-load efficiency
information from 2022 manufacturer
catalogs.
DOE seeks data and additional
information to characterize ESEM
operating loads.
(NEMA, No. 22 at p. 20) As previously
described, DOE relied on information
from the MSMA report to inform its
distributions of annual operating hours
in the commercial and industrial
sectors. For other sectors not included
in the MSMA report, DOE relied on
additional data sources as previously
described. DOE did not receive any
additional comments related to the
distributions of operating hours
developed in the March 2022
Preliminary Analysis and retained the
same approach for this NOPR.
DOE requests comment on the
distribution of average annual operating
hours by application and sector used to
characterize the variability in energy use
for ESEMs.
3. Annual Operating Hours
In the March 2022 Preliminary
Analysis, DOE used information from
the MSMA report to establish
distributions of motor annual hours of
operation by application for the
commercial and industrial sectors. See
section 7.2.5 of the March 2022
Preliminary TSD. The MSMA report
provided average, mean, median,
minimum, maximum, and quartile
boundaries for annual operating hours
across industrial and commercial
sectors by application and showed no
significant difference in average annual
hours of operation between horsepower
ranges. DOE used this information to
develop application-specific statistical
distributions of annual operating hours
in the commercial and industrial
sectors.
For electric motors used in the
agricultural sector (which were not
included in the MSMA report), DOE
derived statistical distributions of
annual operating hours of irrigation
pumps by region using data from the
2013 Census of Agriculture Farm and
Ranch Irrigation Survey.
For ESEMs used in the residential
sector (which is a sector that was not
studied in the MSMA report), DOE did
not receive any comments specific to
the residential sector. DOE retained the
approach used in the March 2022
Preliminary Analysis and relied on the
distributions of operating hours by
application as presented in chapter 7 of
the January 2021 Final Determination
Technical Support Document pertaining
to SEMs.
In response to DOE’s requests for
feedback regarding distributions of
average annual operating hours by
application and sector in the March
2022 Preliminary Analysis, NEMA
referred DOE to the MSMA report.
Any increase in operating speeds as
the efficiency of the motor is increased
could affect the energy saving benefits
of more efficient motors in certain
variable torque applications (i.e., fans,
pumps, and compressors) due to the
cubic relation between speed and power
requirements (i.e., ‘‘affinity law’’). In the
March 2022 Preliminary Analysis, DOE
accounted for any changes in the
motor’s rated speed with an increase in
efficiency levels, for those electric
motors that are currently regulated
under 10 CFR 431.25 and for AO–MEMs
and for which the engineering analysis
provided speed information by EL.
Based on information from a European
motor study,50 DOE assumed that 20
percent of consumers with fan, pump,
and air compressor applications would
be negatively impacted by higher
operating speeds. For other electric
motor categories that it analyzed in the
March 2022 Preliminary Analysis,
including ESEMs, DOE did not
characterize the motor speed by ELs as
part of the engineering analysis and
DOE did not include this impact in the
analysis. See section 7.2.2.1 of the
March 2022 Preliminary TSD.
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4. Impact of Electric Motor Speed
50 ‘‘EuP–LOT–30-Task-7-Jun-2014.Pdf,’’ Available
at www.eup-network.de/fileadmin/user_upload/
EuP-LOT-30-Task-7-Jun-2014.pdf (last accessed
April 26, 2021). The European motor study
estimated, as a ‘‘worst case scenario,’’ that up to 40
percent of consumers purchasing motors for
replacement applications may not see any decrease
or increase in energy use due to this impact and did
not incorporate any change in energy use with
increased speed. In addition, the European motor
study also predicts that any energy use impact will
be reduced over time because new motor driven
equipment would be designed to take account of
this change in speed. Therefore, the study did not
incorporate this effect in the analysis (i.e., 0 percent
of negatively impacted consumers). In the absence
of additional data to estimate the percentage of
consumers that may be negatively impacted in the
compliance year, DOE relied on the mid-point value
of 20 percent.
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In response to the March 2022
Preliminary Analysis, the Joint
Advocates requested clarifications
regarding how DOE accounted for the
impact of the increase motor speed on
the energy use, as well as how motor
slip was incorporated into the energy
use analysis. (Joint Advocates, No. 27 at
pp. 4–5) 51
DOE described the method and
assumptions used to calculate the
impact of higher speed on energy use in
section 7.2.2.1 of the March 2022
Preliminary TSD. In this NOPR, DOE
provided additional details on the
methodology and equations used as part
of Appendix 7A in the NOPR TSD.
NEMA commented that nearly 100
percent of fans, pumps and compressors
using ESEMs would be negatively
impacted by an increase in speed. In
addition, NEMA commented that it
would take up to two years for OEMs to
redesign and recertify an equipment
with a motor that has higher speed and
provided an example calculation to
illustrate the impacts of higher speed
operation. (NEMA, No. 22 at pp. 20–21,
49)
The Joint Industry Stakeholders
commented that DOE should consider
the full impact of higher speed motors
by considering new products as well as
replacement. The Joint Industry
Stakeholders added that DOE only
incorporated the effect of increased
speeds in currently regulated motors
and air-over motors and that this effect
should also be accounted for in ESEMs.
The Joint Industry Stakeholders
commented that if lower speed motors
are no longer available, appliances may
be forced to incorporate higher speed
motors, which may cause short-cycling
in HVAC and refrigeration applications
and result in negative impacts in other
appliances. (Joint Industry Stakeholders,
No. 23 at pp. 8–9)
In this NOPR, DOE included the effect
of increased speeds in the energy use
calculation for all equipment classes.
DOE reviewed information related to
pump, fans, and compressor
applications driven by electric motors 52
and notes that in the commercial land
industrial sectors: (1) 7 to 20 percent of
motors used in these applications are
paired with VFDs, which allow the user
to adjust the speed of the motor; 53 (2)
51 The motor slip is the difference between the
motor’s synchronous speed and actual speed which
is lower than the synchronous speed). At higher
ELs, the speed of a given motor may increase and
the motor slip may decrease.
52 DOE did not have data specific to pumps
driven by ESEMs and relied on pump, fans, and
compressor applications driven by the broader
category of electric motors.
53 See Figure 64 and Figure 71 of the MSMA
report.
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approximately half of fans operate with
belts, which also allow the user to
adjust the speed of the driven fan; 54 (3)
some applications would benefit from
increase in speeds as the work would be
completed at a higher load in less
operating hours (e.g., pump filling water
tank faster at increased speed); and (4)
not all fans, pumps and compressors are
variable torque loads to which the
affinity laws applies. Therefore, less
than 100 percent of motor in these
applications would experience an
increase in energy use as a result of an
increase in speed. In addition, as
described in the European motor study,
the increase in speed would primarily
impact replacement motors installed in
applications that previously operated
with a lower speed motor. For these
reasons, DOE has determined that
assuming that 100 percent of fans,
pumps and compressors using ESEM
would be negatively impacted by an
increase in speed would not be
representative. DOE continues to rely on
a 20 percent assumption used in the
March 2022 Preliminary Analysis, based
on the European motor study. In
addition, DOE incorporated a sensitivity
analysis allowing the user to consider
this effect for three additional scenarios
described in appendix 7–A of the NOPR
TSD (i.e., 0 percent, 50 percent and 100
percent).
Chapter 7 of the NOPR TSD provides
details on DOE’s energy use analysis for
ESEMs.
DOE seeks data and additional
information to support the analysis of
projected energy use impacts related to
any increases in motor nominal speed.
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 ESEMs. The effect of new 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 equipment over the life of
that equipment, 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
54 See 2016 Fan Notice of Data Availability, 81 FR
75742 (Nov. 1, 2016); LCC spreadsheet, ‘‘LCC
sample’’ worksheet, ‘‘Belt vs. direct driven fan
distribution’’ available at www.regulations.gov/
document/EERE-2013-BT-STD-0006-0190.
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the operating costs, DOE discounts
future operating costs to the time of
purchase and sums them over the
lifetime of the equipment.
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 equipment 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
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 ESEMs in the absence of
new energy conservation standards. In
contrast, the PBP for a given efficiency
level is measured relative to the baseline
equipment.
For each considered efficiency level
in each equipment class, DOE
calculated the LCC and PBP for a
nationally representative set of
consumers. As stated previously, DOE
developed consumer samples from
various data sources (see section IV.E.1
of this document). For each sample
consumer, DOE determined the energy
consumption for the ESEM and the
appropriate energy price. By developing
a representative sample of consumers,
the analysis captured the variability in
energy consumption and energy prices
associated with the use of ESEMs.
Inputs to the calculation of total
installed cost include the cost of the
equipment—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,
equipment lifetimes, and discount rates.
DOE created distributions of values for
equipment 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 ESEM
consumer samples. The model
calculated the LCC for equipment 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
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level relative to the no-new-standards
case efficiency distribution. In
performing an iteration of the Monte
Carlo simulation for a given consumer,
equipment efficiency is chosen based on
its probability. If the chosen equipment
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 equipment, DOE avoids
overstating the potential benefits from
increasing equipment efficiency. DOE
calculated the LCC and PBP for
consumers of ESEMs as if each were to
purchase a new equipment in the first
year of required compliance with new
standards. DOE used 2029 as the first
year of compliance with any new
standards for ESEMs as discussed in
section II.B.3 of this document.
Table IV–7 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 NOPR TSD and its
appendices.
TABLE IV–7—SUMMARY OF INPUTS AND METHODS FOR THE LCC AND PBP ANALYSIS *
Inputs
Source/method
Equipment Cost ..............................
Derived by multiplying MPCs by manufacturer and retailer markups and sales tax, as appropriate. Used a
constant price trend to project equipment costs based on historical data.
Assumed no change with efficiency level other than shipping costs.
Motor input power multiplied by annual operating hours per year.
Variability: Primarily based on the MSMA report, 2018 CBECS, 2018 MECS, and 2020 RECS.
Electricity: Based on EEI Typical Bills and Average Rates Reports data for 2022.
Variability: Regional energy prices determined for four census regions.
Based on AEO2023 price projections.
Assumed ESEMs are not repaired.
Assumed no change in maintenance costs with efficiency level.
Average: 7.1 years (6.8 to 9.3 years depending on the equipment class group and horsepower considered).
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.
Non-residential: Calculated as the weighted average cost of capital for entities purchasing electric motors.
Primary data source was Damodaran Online.
2029.
Installation Costs .............................
Annual Energy Use .........................
Energy Prices ..................................
Energy Price Trends .......................
Repair and Maintenance Costs ......
Equipment Lifetime .........................
Discount Rates ................................
Compliance Date ............................
ddrumheller on DSK120RN23PROD with PROPOSALS2
* 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 NOPR TSD.
In response to the March 2022
Preliminary Analysis, the Joint Industry
Stakeholders commented that doubleregulation has no corresponding
consumer benefits in the form of
reduced power consumption given the
appliance regulations being unchanged
and the fact that a more efficient motor
does not necessarily translate to a more
efficient product when incorporated
into a finished good. The Joint Industry
Stakeholders commented that to
potentially increase the cost of an OEM
product, without a corresponding
energy savings, would mean a net loss
for consumers and negative national
impacts. The Joint Industry
Stakeholders noted that the DOE used
operating hours for the following
categories of equipment: air
compressors, refrigeration compressors,
fans and blowers, pumps material
handling, material processing, other,
and agricultural pumps. Of these, the
Joint Industry Stakeholders noted that
electric motors used in air compressors,
refrigeration compressors, fans and
blowers, pumps and agricultural pumps
are already regulated to some extent and
that DOE made no apparent effort to
account for this and deduct a significant
portion of those estimated hours. (Joint
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Industry Stakeholders, No. 23 at p. 5)
AHAM and AHRI commented that
expanding coverage to special and
definite purpose motors would force
manufacturers to incorporate more
expensive motors and increase the cost
of appliances and equipment, while not
necessarily improving the energy
performance of the finished product
(whether it be a covered product/
equipment or not). (AHAM and AHRI,
No. 25 at p. 9) Lennox commented that
DOE must accurately assess, and avoid
double-counting, energy savings when
assessing potential efficiency
improvements from motors used in
already-regulated HVAC equipment.
Lennox commented that it is unclear in
the LCC and PBP analysis if DOE
accounted for double regulation and
eliminated energy savings already
achieved from system-level HVACR
regulation. (Lennox, No. 29 at p. 4) HI
commented that there is a potential for
duplicate accounting of energy savings
when regulating motors in general. HI
stated that, in addition to the ESEMs,
there is a potential for other motor
product efficiencies to be counted twice
such as the use of inverter-only
products in pumps when the DOE
calculates savings in their evaluations
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(one for inverter only motors, and
another for pumps using those motors).
(HI, No. 31 at p. 1)
As highlighted in a previous DOE
report, motor energy savings potential
and opportunities for higher efficiency
electric motors in commercial and
residential equipment would result in
overall energy savings.55 In addition,
some manufacturers advertise electric
motors as resulting in energy savings in
HVAC equipment.56 All other
characteristics of the equipment and
motor being held constant, increasing
the efficiency of the motor component
will increase the efficiency of the
overall equipment.57 Therefore, DOE
disagrees with the Joint Industry
Stakeholders that an increase in motor
efficiency would not result in a more
55 U.S. DOE Building technology Office, Energy
Savings Potential and Opportunities for HighEfficiency Electric Motors in residential and
Commercial Equipment, December 2013. Available
at: www.energy.gov/eere/buildings/downloads/
motor-energy-savings-potential-report.
56 See, for example, Nidec and ABB: https://
acim.nidec.com/motors/usmotors/industryapplications/hvac;bit.ly/3wEIQyu.
57 As discussed in section IV.E.4 of this
document, DOE acknowledges that in some cases
higher efficiency motors may operate at higher
speeds which could offset some of the expected
energy savings.
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efficient equipment when incorporated
into a given equipment. In addition,
DOE’s analysis ensures the LCC and
NIA analysis do not result in doublecounting of energy savings by
accounting for consumers who already
purchase more-efficient products and
calculating LCC and energy savings
relative to a no-new standards case
efficiency distribution. See section
IV.F.8 of this document. Finally, any
future analysis in support of energy
conservation standards for equipment
incorporating motors would also
account for equipment that already
incorporate more-efficient electric
motors and would not result in any
double counting of energy savings
resulting from motor efficiency
improvements.
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1. Equipment Cost
To calculate consumer equipment
costs, DOE multiplied the MSPs
developed in the engineering analysis
by the distribution channel markups
described previously (along with sales
taxes). DOE used different markups for
baseline equipment and higherefficiency equipment, because DOE
applies an incremental markup to the
increase in MSP associated with higherefficiency equipment.
To project an equipment price trend
for electric motors, DOE obtained
historical Producer Price Index (‘‘PPI’’)
data for integral horsepower motors and
generators manufacturing spanning the
time period 1969–2022 and for
fractional horsepower motors and
generators manufacturing between
1967–2022 from the Bureau of Labor
Statistics (‘‘BLS’’).58 The PPI data reflect
nominal prices, adjusted for electric
motor quality changes. An inflationadjusted (deflated) price index for
integral and fractional horsepower
motors and generators manufacturing
was calculated by dividing the PPI
series by the implicit price deflator for
Gross Domestic Product. The deflated
price index for integral horsepower
motors was found to align with the
copper, steel and aluminum deflated
price indices. DOE believes that the
extent to how these trends will continue
in the future is very uncertain. In
addition, the deflated price index for
fractional horsepower motors was
mostly flat during the entire period from
1967 to 2022. Therefore, DOE relied on
a constant price assumption as the
default price factor index to project
future electric motor prices.
58 Series ID PCU3353123353123 and
PCU3353123353121 for integral and fractional
horsepower motors and generators manufacturing,
respectively; www.bls.gov/ppi/.
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DOE did not receive any comments on
price trends in response to the March
2022 Preliminary Analysis and retained
the same approach in this NOPR.
DOE requests data and information
regarding the most appropriate price
trend to use to project ESEM prices.
2. Installation Cost
Installation cost includes labor,
overhead, and any miscellaneous
materials and parts needed to install the
equipment. Electric motor installation
cost data from 2023 RS Means Electrical
Cost Data show a variation in
installation costs according to the motor
horsepower (for three-phase electric
motors), but not according to efficiency.
DOE found no evidence that installation
costs would be impacted with increased
efficiency levels. Therefore, in the
March 2022 Preliminary Analysis, DOE
did not incorporate changes in
installation costs for motors that are
more efficient than baseline equipment.
DOE assumed there is no variation in
installation costs between a baseline
efficiency motor and a higher efficiency
motor except in terms of shipping costs.
These shipping costs were based on
weight data from the engineering
analysis for the representative units. See
section 8.2.4 of the March 2022
Preliminary Analysis.
In response to the March 2022
Preliminary Analysis, EASA
commented that if a motor is replaced
with a physically larger frame, the
replacement would have higher
installation costs because of the added
complexity of modifying the mounting
setup to accommodate the larger motor,
and in some case would be impossible.
(EASA, No. 21 at pp. 2–3)
As noted in section IV.C.1.c of this
document, DOE fixed the frame size,
which remains the same across
efficiency levels in the analysis.
Therefore, DOE did not account for any
changes in installation costs due to
changes in frame sizes and, in this
NOPR, DOE retained the approach used
in the March 2022 Preliminary Analysis
and assumed there is no variation in
installation costs between a baseline
efficiency motor and a higher efficiency
motor except in terms of shipping costs.
DOE requests comment on whether
any of the efficiency levels considered
in this NOPR might lead to an increase
in installation costs, and if so, DOE
seeks supporting data regarding the
magnitude of the increased cost per unit
for each relevant efficiency level and the
reasons for those differences.
3. Annual Energy Consumption
For each sampled consumer, DOE
determined the energy consumption for
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an electric motor at different efficiency
levels using the approach described
previously in section IV.E of this
document.
4. Energy Prices
Because marginal electricity price
more accurately captures the
incremental savings associated with a
change in energy use from higher
efficiency, it provides a better
representation of incremental change in
consumer costs than average electricity
prices. Therefore, DOE applied average
electricity prices for the energy use of
the equipment purchased in the nonew-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).59 For the non-residential sectors,
DOE calculated electricity prices using
the methodology described in Coughlin
and Beraki (2019).60
DOE’s methodology allows electricity
prices to vary by sector, region and
season. In the analysis, variability in
electricity prices is chosen to be
consistent with the way the consumer
economic and energy use characteristics
are defined in the LCC analysis. For
electric motors, DOE relied on
variability by region and sector. See
chapter 8 of the NOPR TSD for more
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 2050.61 To estimate price
trends after 2050, the 2050 prices were
held constant.
59 Coughlin, K. and B. Beraki.2018. Residential
Electricity Prices: A Review of Data Sources and
Estimation Methods. Lawrence Berkeley National
Lab. Berkeley, CA. Report No. LBNL–2001169.
https://ees.lbl.gov/publications/residentialelectricity-prices-review.
60 Coughlin, K. and B. Beraki. 2019. Nonresidential Electricity Prices: A Review of Data
Sources and Estimation Methods. Lawrence
Berkeley National Lab. Berkeley, CA. Report No.
LBNL–2001203. https://ees.lbl.gov/publications/
non-residential-electricity-prices.
61 Energy Information Administration. Annual
Energy Outlook 2023. Available at www.eia.gov/
outlooks/aeo/ (last accessed May 1, 2023).
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5. Maintenance and Repair Costs
Repair costs are associated with
repairing or replacing equipment
components that have failed in an
equipment; maintenance costs are
associated with maintaining the
operation of the equipment.
In the March 2022 Preliminary
Analysis, for the maintenance costs,
DOE did not find data indicating a
variation in maintenance costs between
baseline efficiency and higher efficiency
motors. The cost of replacing bearings,
which is the most common maintenance
practice, is constant across efficiency
levels. Therefore, DOE did not include
maintenance costs in the LCC analysis.
See Section 8.3.3 of the March 2022
Preliminary Analysis.
DOE did not receive any comments
related to maintenance costs and
retained the same approach in this
NOPR.
DOE considers a motor repair as
including rewinding and
reconditioning. See section 8.3.3 of the
March 2022 Preliminary Analysis TSD.
In the March 2022 Preliminary Analysis,
DOE only included repair costs for units
with a horsepower greater than 20
horsepower and did not consider any
repair for the ESEM representative
units. See section 8.3.3 of the March
2022 Preliminary Analysis.
In response to the March 2022
Preliminary Analysis, EASA
commented that the definition of repair
must be clear for the purposes of
estimating the number of repairs and
should be provided in a separate
‘‘Definitions’’ section. (EASA, No. 21 at
p. 5) As noted previously, DOE
considers a motor repair as including
rewinding and reconditioning and
describes the term in chapter 8 of the
NOPR TSD (this was also described in
chapter 8 of the March 2022 Preliminary
Analysis). Other non-rewinding related
practices, such as bearing replacement,
were considered as part of the
maintenance costs.
DOE did not receive any comments
supporting inclusion of repair costs for
ESEMs and, in this NOPR, continued to
exclude repair costs for ESEMs in line
with the approach used in the March
2022 Preliminary Analysis.
DOE requests comment on whether
any of the efficiency levels considered
in this NOPR might lead to an increase
in maintenance and repair costs, and if
so, DOE seeks supporting data regarding
the magnitude of the increased cost per
unit for each relevant efficiency level
and the reasons for those differences.
6. Equipment Lifetime
In the March 2022 Preliminary
Analysis, DOE established separate
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average mechanical lifetime estimates
for single phase and polyphase ESEMs
and AO–ESEMs. DOE then developed
Weibull distributions of mechanical
lifetimes (in hours). The lifetime in
years for a sampled electric motor is
calculated by dividing the sampled
mechanical lifetime by the sampled
annual operating hours of the electric
motor. In addition, DOE considered that
ESEMs and AO–ESEMs are typically
embedded in a piece of equipment (i.e.,
an application). For such applications,
DOE developed Weibull distributions of
application lifetimes expressed in years
and compared the sampled motor
mechanical lifetime (in years) with the
sampled application lifetime. DOE
assumed that the electric motor would
be retired at the earlier of the two ages.
See section 8.3.4 of the March 2022
Preliminary Analysis.
In response to the March 2022
Preliminary Analysis, EASA
commented that the definition of
lifetime must be clear and should be
provided in a separate ‘‘Definitions’’
section. (EASA, No. 21 at p. 5) In
response, DOE notes that it considers a
motor lifetime as the age at which an
equipment is retired from service and
describes the term in chapter 8 of the
NOPR TSD (this was also described in
chapter 8 of the March 2022 Preliminary
Analysis).
DOE did not receive any comments
regarding ESEMs and AO–ESEMs
lifetimes and continued to apply the
same approach in this NOPR as in the
March 2022 Preliminary Analysis.
DOE requests comment on the
equipment lifetimes (both in years and
in mechanical hours) used for each
representative unit considered in the
LCC and PBP analyses.
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 sectorspecific discount rates for ESEMs based
on the opportunity cost of consumer
funds.
DOE applies weighted average
discount rates calculated from consumer
debt and asset data, rather than marginal
or implicit discount rates.62 The LCC
analysis estimates net present value
over the lifetime of the equipment, so
the appropriate discount rate will reflect
the general opportunity cost of
consumer funds, taking this time scale
into account. Given the long-time
horizon modeled in the LCC, the
application of a marginal interest rate
associated with an initial source of
funds is inaccurate. Regardless of the
method of purchase, consumers are
expected to continue to rebalance their
debt and asset holdings over the LCC
analysis period, based on the
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 63 (‘‘SCF’’) starting in 1995 and
ending in 2019. Using the SCF and other
sources, DOE developed a distribution
of rates for each type of debt and asset
by income group to represent the rates
that may apply in the year in which the
new 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 3.7 percent.
To establish non-residential discount
rates, DOE estimated the weightedaverage cost of capital using data from
Damodaran Online.64 The weightedaverage 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
62 The implicit discount rate is inferred from a
consumer purchase decision between two otherwise
identical goods with different first cost and
operating cost. It is the interest rate that equates the
increment of first cost to the difference in net
present value of lifetime operating cost,
incorporating the influence of several factors:
transaction costs; risk premiums and response to
uncertainty; time preferences; interest rates at
which a consumer is able to borrow or lend. The
implicit discount rate is not appropriate for the LCC
analysis because it reflects a range of factors that
influence consumer purchase decisions, rather than
the opportunity cost of the funds that are used in
purchases.
63 Federal Reserve Board. Survey of Consumer
Finances (SCF) for 1995, 1998, 2001, 2004, 2007,
2010, 2013, 2016, and 2019.
64 Damodaran, A. Data Page: Historical Returns
on Stocks, Bonds and Bills—United States. 2021.
pages.stern.nyu.edu/∼adamodar/ (last accessed
April 26, 2022).
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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 and industrial discount
rates are 6.8 percent and 7.3 percent,
respectively.
See chapter 8 of the NOPR TSD for
further details on the development of
consumer discount rates.
8. Energy Efficiency Distribution in the
No-New-Standards Case
To accurately estimate the share of
consumers that would be affected by a
potential energy conservation standard
at a particular efficiency level, DOE’s
LCC analysis considered the projected
distribution (market shares) of
equipment efficiencies under the nonew-standards case (i.e., the case
without amended or new energy
conservation standards).
In the March 2022 Preliminary
Analysis, DOE relied on model counts
by efficiency from the 2016 and 2020
Manufacturer Catalog Data to estimate
the energy efficiency distribution of
electric motors for 2027 and assumed no
changes in electric motor efficiency over
time. For some AO–ESEM
representative units, DOE did not have
enough models with efficiency
information and used the efficiency
distributions of the corresponding nonAO equipment class instead. In the
March 2022 Preliminary Analysis, DOE
used a Monte Carlo simulation to draw
from the efficiency distributions and
randomly assign an efficiency to the
electric motor purchased by each
sample household in the no-newstandards case. The resulting percent
shares within the sample match the
market shares in the efficiency
distributions. See chapter 8 of the
March 2022 Preliminary TSD.
In response to the March 2022
Preliminary Analysis, NEMA disagreed
with the DOE estimates for ESEM and
AO–ESEM efficiency distributions and
commented that these distributions
were modeled/estimated, rather than
gathered properly and accurately
through testing and other means. NEMA
commented that DOE should not
develop estimates and interpolations
and instead finalize test procedures.
NEMA added that energy efficiency
information does not exist because
Federal test procedures for some of
these motors have not been established.
(NEMA, No. 22 at p. 23)
As noted previously, due to the very
high volume of combinations of motor
topologies, horsepower, frame sizes,
pole counts, speeds, unique motor
construction, and other parameters,
DOE has recognized it to be unrealistic
to test every possible motor available in
the U.S. market. In the absence of such
data, DOE relied on model counts by
efficiency from manufacturer Catalog
Data and updated the data to reflect
2022 catalog offerings (using the 2022
Motor Database). In addition, the
electric motors test procedure finalized
in the October 2022 Final Rule relies on
industry test methods published in
2016.65 87 FR 63588. For ESEMs, DOE
believes manufacturers have used, and
currently use, these industry test
methods to evaluate the efficiency of
electric motors as reported in their
catalogs.
As previously noted, in the March
2022 Preliminary Analysis, DOE
assumed no changes in electric motor
efficiency over time. DOE did not
receive any comment on this
assumption and retained the same
approach in this NOPR: to estimate the
energy efficiency distribution of electric
motors for 2029, DOE assumed no
changes in electric motor efficiency over
time. The estimated market shares for
the no-new-standards case for electric
motors are shown in Table IV–8 by
equipment class group and horsepower
range.
TABLE IV–8—NO-NEW STANDARDS CASE EFFICIENCY DISTRIBUTIONS IN THE COMPLIANCE YEAR
EL0
(%)
Equipment class group
Horsepower range
ESEM High/Med Torque ....................
0.25 ≤ hp ≤ 0.50 ................................
0.5 < hp ≤ 3 .......................................
0.25 hp ...............................................
0.25 < hp ≤ 3 .....................................
0.25 ≤ hp ≤ 3 .....................................
0.25 ≤ hp ≤ 0.50 ................................
0.5 < hp ≤ 3 .......................................
0.25 hp ...............................................
0.25 < hp ≤ 3 .....................................
0.25 ≤ hp ≤ 3 .....................................
ESEM Low Torque ............................
ESEM Polyphase ...............................
AO–ESEM High/Med Torque ............
AO–ESEM Low Torque .....................
AO–ESEM Polyphase ........................
24.1
37.5
4.2
41.5
9.6
26.7
32.4
1.8
9.8
37.7
EL1
(%)
EL2
(%)
43.1
49.1
16.0
22.0
23.1
33.3
38.2
21.8
26.1
26.0
16.2
11.9
79.9
26.8
53.3
20.0
17.6
58.2
55.4
33.8
EL3
(%)
16.0
1.4
0.0
9.8
13.4
6.7
11.8
18.2
8.7
2.6
EL4
(%)
0.7
0.1
0.0
0.0
0.5
13.3
0.0
0.0
0.0
0.0
ddrumheller on DSK120RN23PROD with PROPOSALS2
* May not sum to 100% due to rounding.
The LCC Monte Carlo simulations
draw from the efficiency distributions
and randomly assign an efficiency to the
ESEM 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.
The existence of market failures in the
commercial and industrial sectors is
well supported by the economics
literature and by a number of case
studies as discussed in the remainder of
this section. DOE did not receive any
comments specific to the random
assignment of no-new-standards case
efficiencies (sampled from the
developed efficiency distribution) in the
LCC model and continued to rely on the
same approach to reflect market failures
in the ESEM market, as noted in the
following examples. First, a recognized
problem in commercial settings is the
principal-agent problem, where the
building owner (or building developer)
selects the equipment and the tenant (or
subsequent building owner) pays for
energy costs.66 67 In the case of ESEMs,
for many companies, the energy bills are
paid for the company as a whole and
65 NEMA Standards Publication MG 1–2016,
‘‘Motors and Generators: Air-Over Motor Efficiency
Test Method Section IV Part 34’’, www.nema.org/
docs/default-source/standards-document-library/
part-34-addition-to-mg1-2016-watermarkd91d7834cf4f-4a87-b86f-bef96b7dad54.pdf?sfvrsn=cbf1386d_
3.
66 Vernon, D., and Meier, A. (2012).
‘‘Identification and quantification of principal-agent
problems affecting energy efficiency investments
and use decisions in the trucking industry,’’ Energy
Policy, 49, 266–273.
67 Blum, H. and Sathaye, J. (2010). ‘‘Quantitative
Analysis of the Principal-Agent Problem in
Commercial Buildings in the U.S.: Focus on Central
Space Heating and Cooling,’’ Lawrence Berkeley
National Laboratory, LBNL–3557E. (Available at:
escholarship.org/uc/item/6p1525mg) (Last accessed
January 20, 2022).
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not allocated to individual departments.
This practice provides maintenance and
engineering staff little incentives to
pursue energy saving investments
because the savings in energy bills
provide little benefits to the decisionmaking maintenance and engineering
staff. (Nadel et al.) 68 Second, the nature
of the organizational structure and
design can influence priorities for
capital budgeting, resulting in choices
that do not necessarily maximize
profitability.69 In the case of ESEMs,
within manufacturing as a whole, motor
system energy costs constitute less than
1 percent of total operating costs and
energy efficiency has a low level of
priority among capital investment and
operating objectives. (Xenergy,70 Nadel
et al.) Third, there are asymmetric
information and other potential market
failures in financial markets in general,
which can affect decisions by firms with
regard to their choice among alternative
investment options, with energy
efficiency being one such option.71 In
the case of electric motors, Xenergy
identified the lack of information
concerning the nature of motor system
efficiency measures—their benefits,
costs, and implementation procedures—
as a principal barrier to their adoption.
In addition, Almeida 72 reports that the
attitude of electric motor end-user is
characterized by bounded rationality
68 Nadel, S., R.N. Elliott, M. Shepard, S.
Greenberg, G. Katz & A.T. de Almedia. 2002.
Energy-Efficient Motor Systems: A Handbook on
Technology, Program and Policy Opportunities.
Washington, DC: American Council for an EnergyEfficient Economy. Second Edition.
69 DeCanio, S.J. (1994). ‘‘Agency and control
problems in US corporations: the case of energyefficient investment projects,’’ Journal of the
Economics of Business, 1(1), 105–124.
Stole, L.A., and Zwiebel, J. (1996).
‘‘Organizational design and technology choice
under intrafirm bargaining,’’ The American
Economic Review, 195–222.
70 Xenergy, Inc. (1998). United States Industrial
Electric Motor Systems Market Opportunity
Assessment. (Available at: www.energy.gov/sites/
default/files/2014/04/f15/mtrmkt.pdf) (Last
accessed January 20, 2022).
71 Fazzari, S.M., Hubbard, R.G., Petersen, B.C.,
Blinder, A.S., and Poterba, J.M. (1988). ‘‘Financing
constraints and corporate investment,’’ Brookings
Papers on Economic Activity, 1988(1), 141–206.
Cummins, J.G., Hassett, K.A., Hubbard, R.G., Hall,
R.E., and Caballero, R.J. (1994). ‘‘A reconsideration
of investment behavior using tax reforms as natural
experiments,’’ Brookings Papers on Economic
Activity, 1994(2), 1–74.
DeCanio, S.J., and Watkins, W.E. (1998).
‘‘Investment in energy efficiency: do the
characteristics of firms matter?’’ Review of
Economics and Statistics, 80(1), 95–107.
Hubbard R.G. and Kashyap A. (1992). ‘‘Internal
Net Worth and the Investment Process: An
Application to U.S. Agriculture,’’ Journal of
Political Economy, 100, 506–534.
72 de Almeida, E.L.F. (1998). ‘‘Energy efficiency
and the limits of market forces: The example of the
electric motor market in France’’, Energy Policy,
26(8), 643–653.
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where they adopt ‘‘rule of thumb’’
routines because of the complexity of
market structure which makes it
difficult for motors end-users to get all
the information they need to make an
optimum decision concerning allocation
of resources. The rule of thumb is to buy
the same type and brand as the failed
motor from the nearest retailer. Almeida
adds that the same problem of bounded
rationality exists when end-users
purchase electric motors incorporated in
larger equipment. In general, end-users
are only concerned about the overall
performance of a machine, and energy
efficiency is rarely a key factor in this
performance. Motor selection is
therefore often left to the OEM, which
are not responsible for energy costs and
prioritize price and reliability.
See chapter 8 of the NOPR TSD for
further information on the derivation of
the efficiency distributions.
DOE seeks information and data to
help establish efficiency distribution in
the no-new standards case for ESEMs.
DOE requests data and information on
any trends in the electric motor market
that could be used to forecast expected
trends in market share by efficiency
levels for each equipment class.
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
equipment, compared to baseline
equipment, through energy cost savings.
Payback periods that exceed the life of
the equipment 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 equipment 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 an
equipment 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
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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.
G. Shipments Analysis
DOE uses projections of annual
equipment shipments to calculate the
national impacts of potential new
energy conservation standards on
energy use, NPV, and future
manufacturer cash flows.73 The
shipments model takes an accounting
approach, tracking market shares of
each equipment class and the vintage of
units in the stock. Stock accounting uses
equipment shipments as inputs to
estimate the age distribution of inservice 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.
First, in the March 2022 Preliminary
Analysis, DOE estimated shipments in
the base year (2020). DOE estimated the
total shipments of ESEMs in 2020 to be
28.6 million units (including 7.9 million
units of AO ESEMs). DOE developed a
distribution of shipments by equipment
class group and horsepower range based
on model counts from the 2020 and
2016/2020 Manufacturer Catalog Data.
See chapter 9 of the March 2022
Preliminary Analysis TSD.
DOE did not receive any comments
related to the base year shipments
estimates for ESEMs and retained the
values estimated in the preliminary
analysis in this NOPR, however, DOE
only included motors up to 3hp, which
were in the recommended scope of the
December 2022 Joint Recommendation.
For ESEMs (including AO ESEMs), DOE
revised the distribution of shipments by
horsepower range based on model
counts from the 2022 Manufacturer
Catalog Data.
In the March 2022 Preliminary
Analysis, DOE projected shipments for
ESEMs in the no-new standards case
under the assumption that long-term
growth of electric motor shipments will
be driven the following sector-specific
market drivers from AEO2021:
commercial building floor space,
housing numbers, and value of
manufacturing activity for the
commercial, residential, and industrial
sector, respectively. In addition, DOE
kept the distribution of shipments by
73 DOE uses data on manufacturer shipments as
a proxy for national sales, as aggregate data on sales
are lacking. In general, one would expect a close
correspondence between shipments and sales.
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equipment class group and horsepower
range constant across the analysis
period.
In response to the March 2022
Preliminary Analysis, NEMA
commented that legacy induction
motors are being replaced by PDS (or
power drive systems) consisting of a
motor and controls/drives as a means to
dramatically reduce power and integrate
motor driven systems into sophisticated
control schemes that continuously
monitor processes managing flow,
pressure, etc., to reduce operating costs
and emissions. (NEMA, No. 22 at p. 23)
In the case of ESEMs, DOE agrees with
NEMA that some ESEMs could be
replaced by non-induction motors such
as ECMs. However, DOE does not have
sufficient data to quantify the
magnitude of such substitution, which
could result in lower ESEM shipments.
Instead, DOE established two additional
shipments sensitivity scenario to
account for the impacts of lower/higher
ESEMs shipments estimates.
DOE did not receive any other
comments specific to ESEM shipments
projections and retained the same
methodology as in the March 2022
Preliminary Analysis in this NOPR and
revised the projections based on
AEO2023.
DOE requests comment and
additional data on its 2020 shipments
estimates for ESEMs. DOE seeks
comment on the methodology used to
project future shipments of ESEMs. DOE
seeks information on other data sources
that can be used to estimate future
shipments.
H. National Impact Analysis
The NIA assesses the NES and the
NPV from a national perspective of total
consumer costs and savings that would
be expected to result from new
standards at specific efficiency levels.74
(‘‘Consumer’’ in this context refers to
consumers of the equipment being
regulated.) DOE calculates the NES and
NPV for the potential standard levels
considered based on projections of
annual equipment 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 ESEMs sold
from 2029 through 2058.
DOE evaluates the impacts of new
standards by comparing a case without
such standards with standards-case
projections. The no-new-standards case
87099
characterizes energy use and consumer
costs for each equipment class in the
absence of new energy conservation
standards. For this projection, DOE
considers any historical trends in
efficiency and various forces that are
likely to affect the mix of efficiencies
over time. DOE compares the no-newstandards case with projections
characterizing the market for each
equipment class if DOE adopted new
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
equipment 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–9 summarizes the inputs
and methods DOE used for the NIA
analysis for the NOPR. Discussion of
these inputs and methods follows the
table. See chapter 10 of the NOPR TSD
for further details.
TABLE IV–9—SUMMARY OF INPUTS AND METHODS FOR THE NATIONAL IMPACT ANALYSIS
Inputs
Method
Shipments .......................................................
Compliance Date of Standard .........................
Efficiency Trends .............................................
Annual shipments from shipments model.
2029.
No-new-standards case: constant trend.
Standards cases: constant trend.
Annual weighted-average values are a function of energy use at each TSL.
Annual weighted-average values are a function of cost at each TSL.
Incorporates projection of future product prices based on historical data. (constant trend).
Annual weighted-average values as a function of the annual energy consumption per unit and
energy prices.
Maintenance costs: No change with efficiency level.
Repair costs: No repair.
AEO2023 projections (to 2050) and held constant thereafter.
A time-series conversion factor based on AEO2023.
Three and seven percent.
2024.
Annual Energy Consumption per Unit ............
Total Installed Cost per Unit ...........................
Annual Energy Cost per Unit ..........................
Repair and Maintenance Cost per Unit ..........
Energy Price Trends .......................................
Energy Site-to-Primary and FFC Conversion
Discount Rate ..................................................
Present Year ...................................................
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1. Equipment Efficiency Trends
A key component of the NIA is the
trend in energy efficiency projected for
the no-new-standards case and each of
the standards cases. Section IV.F.8 of
this document describes how DOE
developed an energy efficiency
distribution for the no-new-standards
case (which yields a shipment-weighted
average efficiency) for each of the
considered equipment classes for the
year of anticipated compliance with a
new standard. To project the trend in
efficiency absent new standards for
ESEMs and AO–ESEMs over the entire
shipments projection period, DOE
applied a constant trend, similar to what
was done in the March 2022
Preliminary Analysis. The approach is
further described in chapter 10 of the
NOPR 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 (2029). In this
scenario, the market shares of
equipment 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.
74 The NIA accounts for impacts in the 50 states
and U.S. territories.
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To develop standards case efficiency
trends after 2029, DOE assumed no
change over the forecast period.
DOE did not receive any comments on
the projected efficiency trends in
response to the March 2022 Preliminary
Analysis and retained the same
approach in this NOPR.
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 energy conservation
standards. DOE calculated the national
energy consumption by multiplying the
number of units (stock) of each
equipment (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 AEO2023.
Cumulative energy savings are the sum
of the NES for each year over the
timeframe of the analysis.
Use of higher-efficiency equipment is
sometimes associated with a direct
rebound effect, which refers to an
increase in utilization of the equipment
due to the increase in efficiency. In the
March 2022 Preliminary Analysis, DOE
requested comment and data regarding
the potential increase in utilization of
electric motors due to any increase in
efficiency. See section 2.10.1 of the
March 2022 Preliminary TSD. DOE did
not find any data on the rebound effect
specific to electric motors 75 and did not
receive any comments supporting the
inclusion of a rebound effect for ESEMs
and AO–ESEMs. Therefore, DOE did not
apply a rebound effect for ESEMs and
AO–ESEMs.
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
75 See, e.g., 86 FR 36111 for further discussion
regarding DOE’s explanation and findings regarding
rebound effect for electric motors, broadly.
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standards rulemakings. 76 FR 51281
(Aug. 18, 2011). After evaluating the
approaches discussed in the August 18,
2011 notice, DOE published a statement
of amended policy in which DOE
explained its determination that EIA’s
National Energy Modeling System
(‘‘NEMS’’) is the most appropriate tool
for its FFC analysis and its intention to
use NEMS for that purpose. 77 FR 49701
(Aug. 17, 2012). NEMS is a public
domain, multi-sector, partial
equilibrium model of the U.S. energy
sector 76 that EIA uses to prepare its
Annual Energy Outlook. The FFC factors
incorporate losses in production and
delivery in the case of natural gas
(including fugitive emissions) and
additional energy used to produce and
deliver the various fuels used by power
plants. The approach used for deriving
FFC measures of energy use and
emissions is described in appendix 10B
of the NOPR 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
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
equipment shipped during the
projection period.
As discussed in section IV.F.1 of this
document, DOE developed constant
ESEM price trends based on historical
PPI data. DOE applied the same trends
to project prices for each equipment
class at each considered efficiency level.
DOE’s projection of equipment prices is
described in appendix 10C of the NOPR
TSD.
To evaluate the effect of uncertainty
regarding the price trend estimates, DOE
investigated the impact of different
equipment price projections on the
consumer NPV for the considered TSLs
for ESEMs. In addition to the default
price trend, DOE considered two
equipment 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
76 For
more information on NEMS, refer to The
National Energy Modeling System: An Overview
2009, DOE/EIA–0581(2009), October 2009.
Available at www.eia.gov/forecasts/aeo/index.cfm
(last accessed 5/1/2023).
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sensitivity cases are described in
appendix 10C of the NOPR 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
AEO2023, which has an end year of
2050. To estimate price trends after
2050, the 2050 value was used for all
years. As part of the NIA, DOE also
analyzed scenarios that used inputs
from variants of the AEO2023 Reference
case that have lower and higher
economic growth. Those cases have
lower and higher energy price trends
compared to the Reference case. NIA
results based on these cases are
presented in appendix 10C of the NOPR
TSD.
In calculating the NPV, DOE
multiplies the net savings in future
years by a discount factor to determine
their present value. For this NOPR, DOE
estimated the NPV of consumer benefits
using both a 3-percent and a 7-percent
real discount rate. DOE uses these
discount rates in accordance with
guidance provided by the Office of
Management and Budget (‘‘OMB’’) to
Federal agencies on the development of
regulatory analysis.77 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.
DOE requests comment and data
regarding the potential increase in
utilization of electric motors due to any
increase in efficiency (‘‘rebound
effect’’).
I. Consumer Subgroup Analysis
In analyzing the potential impact of
new energy conservation standards on
consumers, DOE evaluates the impact
on identifiable subgroups of consumers
that may be disproportionately affected
by a new national standard. The
purpose of a subgroup analysis is to
determine the extent of any such
77 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 May 1,
2023).
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disproportional impacts. DOE evaluates
impacts on particular subgroups of
consumers by analyzing the LCC
impacts and PBP for those particular
consumers from alternative standard
levels. For this NOPR, DOE analyzed the
impacts of the considered standard
levels on three subgroups: (1) lowincome households (for ESEMs used in
the residential sector); (2) senior-only
households (for ESEMs used in the
residential sector); and (3) smallbusinesses. The analysis used subsets of
the RECS 2020 sample composed of
households that meet the criteria for the
low-income and senior-only household
subgroups. For small-businesses
subgroup, DOE used the same sample of
consumers but with subgroup-specific
inputs. DOE determined the impact on
the electric motors subgroups using the
same LCC model, which is used for all
consumers, but with subgroup-specific
inputs as applicable.
In response to the March 2022
Preliminary Analysis, AHAM and AHRI
commented that a forced redesign of
motors used in finished goods will force
changes by the OEM. AHAM and AHRI
commented that this would be
particularly damaging for small
appliances and floor care products,
which use special purpose motors and
are sensitive to even small increases in
component part costs. AHAM and AHRI
commented that the increased cost
could make some appliances and
equipment too costly for low-income
consumers to purchase and delay
purchases of more efficient appliances
and equipment for middle-income
consumers. (AHAM and AHRI, No. 25 at
pp. 9–10) In response to these
comments, DOE performed a subgroup
analysis for low-income consumers
showing these consumers would not be
disproportionately impacted. See
section V.B.1.b of this document.
Chapter 11 in the NOPR TSD
describes the consumer subgroup
analysis.
DOE requests comment and data on
the overall methodology used for the
consumer subgroup analysis. DOE
requests comment on whether
additional consumer subgroups may be
disproportionately affected by a new
standard and warrant additional
analysis in the final rule.
J. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate
the financial impacts of new energy
conservation standards on
manufacturers of ESEMs and to estimate
the potential impacts of such standards
on employment and manufacturing
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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
manufacturer subgroups, including
small business manufacturers.
The quantitative part of the MIA
primarily relies on the GRIM, an
industry cash flow model with inputs
specific to this proposed rulemaking.
The key GRIM inputs include data on
the industry cost structure, unit
production costs, equipment shipments,
manufacturer markups, and investments
in R&D and manufacturing capital
required to produce compliant products.
The key GRIM outputs are the INPV,
which is the sum of industry annual
cash flows over the analysis period,
discounted using the industry-weighted
average cost of capital, and the impact
to domestic manufacturing employment.
The model uses standard accounting
principles to estimate the impacts of
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 (i.e., 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 NOPR TSD.
DOE conducted the MIA for this
rulemaking in three phases. In Phase 1
of the MIA, DOE prepared a profile of
the ESEMs manufacturing industry
based on the market and technology
assessment, preliminary manufacturer
interviews, and publicly-available
information. This included a top-down
analysis of ESEM manufacturers that
DOE used to derive preliminary
financial inputs for the GRIM (e.g.,
revenues; materials, labor, overhead,
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87101
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 ESEM
manufacturing industry, including
company filings of form 10–K from the
SEC, corporate annual reports,78 the
U.S. Census Bureau’s Economic
Census,79 and reports from D&B
Hoovers.80
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 ESEMs 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
78 See
www.sec.gov/edgar.
www.census.gov/programs-surveys/asm/
data/tables.html.
80 See app.avention.com.
79 See
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small business manufacturers, lowvolume manufacturers, niche players,
and/or manufacturers exhibiting a cost
structure that largely differs from the
industry average. DOE identified one
subgroup for a separate impact analysis:
small business manufacturers. The
small business subgroup is discussed in
section VI.B, ‘‘Review under the
Regulatory Flexibility Act’’, of this
document and in chapter 12 of the
NOPR 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, 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
standard. The GRIM spreadsheet uses
the inputs to arrive at a series of annual
cash flows, beginning in 2024 (the base
year of the analysis) and continuing to
2058. DOE calculated INPVs by
summing the stream of annual
discounted cash flows during this
period. For manufacturers of ESEMs,
DOE initially estimated a real discount
rate of 9.1 percent, which was the real
discount rate used in the previous
medium electric motors final rule that
published on May 29, 2014 (‘‘May 2014
Electric Motors Final Rule’’). 79 FR
30934, 30938. DOE then asked for
feedback on this value during
manufacturer interviews. Manufacturers
agreed this was still an appropriate
value to use. Therefore, DOE used a real
discount rate of 9.1 percent for the
analysis in this NOPR.
The GRIM calculates cash flows using
standard accounting principles and
compares changes in INPV between the
no-new-standards case and each
standards case. The difference in INPV
between the no-new-standards case and
a standards case represents the financial
impact of new 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
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parameters can be found in chapter 12
of the NOPR 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 conducted the engineering
analysis using a combination of physical
teardowns and software modeling. DOE
contracted a professional motor
laboratory to disassemble various
ESEMs and record what types of
materials were present and how much
of each material was present, recorded
in a final BOM. To supplement the
physical teardowns, software modeling
by a subject matter expert was also used
to generate BOMs for select efficiency
levels of directly analyzed
representative units.
For a complete description of the
MPCs, see chapter 5 of the NOPR 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 2058 (the end year of the
analysis period). See chapter 9 of the
NOPR 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
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compliant equipment designs can be
fabricated and assembled.
DOE calculated the product and
capital conversion costs using a bottomup approach based on feedback from
manufacturers during manufacturer
interviews. During manufacturer
interviews, DOE asked manufacturers
questions regarding the estimated
equipment and capital conversion costs
needed to produce ESEMs within an
equipment class at each specific EL.
DOE used the feedback provided by
manufacturers to estimate the
approximate amount of engineering
time, testing costs, and capital
equipment that would need to be
purchased in order to redesign a single
frame size for each EL. Some of the
types of capital conversion costs
manufacturers identified were the
purchase of lamination die sets,
winding machines, frame casts, and
assembly equipment as well as other
retooling costs. The two main types of
product conversion costs manufacturers
shared with DOE during interviews
were the number of engineer hours
necessary to re-engineer frames to meet
higher efficiency standards and the
testing costs, including thermal
protection testing, to comply with
higher efficiency standards.
DOE then took average values (i.e.,
costs or number of hours) based on the
range of responses given by
manufacturers to calculate both the
equipment and capital conversion cost
necessary for a manufacturer to increase
the efficiency of one frame size to a
specific EL. DOE multiplied the
conversion costs associated with
manufacturing a single frame size at
each EL by the number of frames each
interviewed manufacturer produces.
DOE finally scaled this number based
on the market share of the
manufacturers DOE interviewed to
arrive at an industry-wide bottom-up
product and capital conversion cost
estimate for each representative unit at
each EL.
In response to the March 2022
Preliminary Analysis, the Joint Industry
Stakeholders and Lennox commented
that there may be instances where
substitution of a newer, larger, heavier,
faster ESEM is feasible, but that it was
not reasonable to assume this is always
the case. The Joint Industry
Stakeholders and Lennox added that
OEM companies would be forced to
expend significant resources seeking
retrofit and repair options for recently
purchased end-use OEM goods to
account for unnecessary motor
subcomponent changes. (Joint Industry
Stakeholders, No. 23 at pp. 5–6; Lennox,
No. 29 at p. 5) The Joint Industry
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Stakeholders added that this could
particularly impact small businesses.
(Joint Industry Stakeholders, No. 23 at
p. 5–6) The Joint Stakeholder also
commented that while OEM
manufacturers would likely redesign
product, and incur a cost to do so, to
avoid issues resulting from new motors,
there may not be suitable replacement
motors, which are immediately
available due to DOE’s proposed
certification requirements, limiting
approvals to a few third-party labs. The
Joint Stakeholder added that these costs
need to be accounted for in DOE’s
analysis. (Id. at p. 8)
In this NOPR, as noted in section
IV.C.1 of this document, DOE assumes
higher efficiency levels can be reached
without resulting in any significant size
increase and without changing the key
electrical and mechanical characteristics
of the motor. Therefore, DOE disagrees
with the Joint Stakeholders and Lennox
that the higher efficiency levels would
force OEMs to redesign their equipment
and result in redesign and re-tooling
costs.
As previously discussed, DOE revised
the March 2022 Preliminary Analysis to
account for space-constrained and nonspace constrained motor designs, which
will continue to provide repair options
to consumers. As stated in the December
2022 Joint Recommendation, motor
manufacturers believe that efficiency
levels higher than EL 2 could result in
significant increases in the physical size
of certain motors. (Electric Motors
Working Group, No. 38 at p. 4) As part
of the engineering analysis, DOE models
representative units that are able to meet
the efficiency requirements of EL 2 and
below that would not result in a
significantly increase in the physical
size of the ESEMs. For ELs higher than
EL 2 (i.e., EL 3 and EL 4), DOE
recognizes that ESEMs may significantly
increase in physical size in order to
meet those higher efficiency
requirements. DOE also recognizes that
this may result in a significant
disruption to the OEM markets that
used ESEMs as an embedded product.
In addition, as discussed in section
IV.C.3 of this document, DOE accounted
for the impacts of any potential changes
in speeds at higher efficiency levels.
In response to the March 2022
Preliminary Analysis, NEMA stated that
many ESEMs have agency listings for
thermal protection and any redesign of
the motor will require retesting with the
respective agencies. NEMA commented
additionally that the time needed to
complete this testing should be
considered when setting the compliance
date of any ESEM energy conservation
standards, and that the cost associated
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with this agency testing must be
accounted for in the cost analysis.
(NEMA, No. 22 at pp. 3, 17) As
previously stated in this section, DOE
accounted for additional thermal
protection testing in addition to the
costs associated with redesigning each
ESEM model as part of the product
conversion costs. These product
conversion costs, in addition to the
capital conversion costs, are included
when calculating the potential change
in manufacturer INPV.
NEMA also commented that DOE
must capture the OEM impacts in terms
of costs of redesigning and retooling.
NEMA noted that these costs will have
a very wide variation: some will involve
a few hours’ worth of work while others
could require several hundred hours
plus material and recertification to
regulating bodies and safety testers.
NEMA commented further that single
phase (and some small three phase)
motors with agency certified overload
protection will need several years to be
recertified. In addition, NEMA noted
that DOE should capture the installation
cost impacts on end-users trying to
repair appliances with larger, heavier, or
faster replacement motors built to meet
new standards. (NEMA, No. 22 at p. 21)
In response to these comments and as
noted in section IV.F of this document,
DOE determined that the installation
costs for ESEMs would not change at
higher efficiency levels compared to the
baseline as DOE is maintaining the
frame size of ESEMs constant across all
efficiency levels analyzed. DOE is
further limiting the stack length to be no
greater than 20 percent longer than the
baseline unit for that representative
unit. In addition, as noted in section
IV.C.3 of this document, the speed of
the ESEMs across efficiency levels did
not always increase with increasing
efficiency and DOE accounted for speed
variations in its energy use analysis (see
section IV.E.4 of this document for more
details).
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 new
standards. 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 NOPR TSD.
d. Manufacturer Markup Scenarios
MSPs include direct manufacturing
production costs (i.e., labor, materials,
and overhead estimated in DOE’s MPCs)
and all non-production costs (i.e.,
SG&A, R&D, and interest), along with
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profit. To calculate the MSPs in the
GRIM, DOE applied non-production
cost markups to the MPCs estimated in
the engineering analysis for each
equipment class and efficiency level.
Modifying these markups in the
standards case yields different sets of
impacts on manufacturers. For the MIA,
DOE modeled two standards-case
markup scenarios to represent
uncertainty regarding the potential
impacts on prices and profitability for
manufacturers following the
implementation of new energy
conservation standards: (1) a
preservation of gross margin scenario;
and (2) a preservation of operating profit
scenario. These scenarios lead to
different markup values that, when
applied to the MPCs, result in varying
revenue and cash flow impacts.
Under the preservation of gross
margin 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 initially estimated a
manufacturer markup of 1.37 for all
ESEMs covered by this rulemaking in
the no-new-standards case, which was
the manufacturer markup for medium
electric motors under 5 hp used in the
May 2014 Electric Motors Final Rule. 79
FR 30934, 30938. DOE then asked for
feedback on this manufacturer markup
during manufacturer interviews.
Manufacturers agreed this was an
appropriate manufacturer markup to use
for ESEMs covered by this rulemaking.
Therefore, DOE used this same
manufacturer markup of 1.37 for all
equipment classes and ELs at each TSL
(i.e., the standards cases) in the
preservation of gross margin scenario.
This manufacturer markup scenario
represents the upper-bound of
manufacturer INPV and is the
manufacturer markup scenario used to
calculate the economic impacts on
consumers.
Under the preservation of operating
profit scenario, DOE modeled a
situation in which manufacturers are
not able to increase per-unit operating
profit in proportion to increases in
MPCs. Under this scenario, as MPCs
increase, manufacturers reduce their
manufacturer margins to maintain a cost
competitive offering in the market.
However, in this scenario manufacturers
maintain their total operating profit in
absolute dollars in the standards case,
despite higher product costs and
investment. Therefore, gross margin (as
a percentage) shrinks in the standards
cases for this manufacturer markup
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scenario. 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 markup
scenarios is presented in section V.B.2.a
of this document.
3. Manufacturer Interviews
DOE conducted additional interviews
with manufacturers following the
publication of the March 2022
Preliminary TSD in preparation for this
analysis. In interviews, DOE asked
manufacturers to describe their major
concerns regarding this rulemaking. The
following section highlights
manufacturer concerns that helped
inform the projected potential impacts
of new standards on the industry.
Manufacturer interviews are conducted
under NDAs, so DOE does not
document these discussions in the same
way that it does public comments in the
comment summaries and DOE’s
responses throughout the rest of this
document.
During these interviews, most
manufacturers stated that they were
concerned that if energy conservation
standards were set at the higher ELs,
ESEM manufacturers may have to
increase the size and footprint of
potentially non-compliant ESEM
models to meet these higher ELs. While
ESEM manufacturers stated it is
possible for them to meet higher ELs by
increasing the size or footprint of their
ESEMs, many of the ESEMs that they
manufacture are embedded or
incorporated in another product or
equipment. They further stated that
several of these products or equipment
with embedded ESEMs are not able to
accommodate a larger ESEMs into these
space-constrained products or
equipment.
As previously discussed, DOE revised
the engineering analysis for this NOPR
based on comments from the December
2022 Joint Recommendation, to assume
that ESEMs at EL 2 or below would not
result in a significant increase in
physical size. (See Electric Motors
Working Group, No. 38 at p. 4) For ELs
higher than EL 2 (i.e., EL 3 and EL 4),
DOE recognizes that ESEMs may
significantly increase in physical size in
order to meet those higher efficiency
requirements. DOE also recognizes that
this may result in a significant
disruption to the OEM market that used
ESEMs as an embedded product.
K. Emissions Analysis
The emissions analysis consists of
two components. The first component
estimates the effect of potential energy
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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
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 NOPR TSD. The
analysis presented in this notice uses
projections from AEO2023. Power sector
emissions of CH4 and N2O from fuel
combustion are estimated using
Emission Factors for Greenhouse Gas
Inventories published by the EPA.81
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 NOPR
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. AEO2023
reflects, to the extent possible, laws and
regulations adopted through midNovember 2022, including the
emissions control programs discussed in
the following paragraphs the emissions
control programs discussed in the
following paragraphs, and the Inflation
Reduction Act.82
81 Available at www.epa.gov/sites/production/
files/2021-04/documents/emission-factors_
apr2021.pdf (last accessed July 12, 2021).
82 For further information, see the Assumptions to
AEO2023 report that sets forth the major
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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, 2015.83 The AEO
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.
However, beginning in 2016, SO2
emissions began to fall as a result of the
Mercury and Air Toxics Standards
(‘‘MATS’’) for power plants.84 77 FR
9304 (Feb. 16, 2012). The final rule
establishes power plant emission
standards for mercury, acid gases, and
non-mercury metallic toxic pollutants.
Because of the emissions reductions
under the MATS, it is unlikely that
excess SO2 emissions allowances
resulting from the lower electricity
demand would be needed or used to
assumptions used to generate the projections in the
Annual Energy Outlook. Available at www.eia.gov/
outlooks/aeo/assumptions/ (last accessed May 1,
2023).
83 CSAPR requires states to address annual
emissions of SO2 and NOX, precursors to the
formation of fine particulate matter (‘‘PM2.5’’)
pollution, in order to address the interstate
transport of pollution with respect to the 1997 and
2006 PM2.5 National Ambient Air Quality Standards
(‘‘NAAQS’’). CSAPR also requires certain states to
address the ozone season (May-September)
emissions of NOX, a precursor to the formation of
ozone pollution, in order to address the interstate
transport of ozone pollution with respect to the
1997 ozone NAAQS. 76 FR 48208 (Aug. 8, 2011).
EPA subsequently issued a supplemental rule that
included an additional five states in the CSAPR
ozone season program; 76 FR 80760 (Dec. 27, 2011)
(Supplemental Rule), and EPA issued the CSAPR
Update for the 2008 ozone NAAQS. 81 FR 74504
(Oct. 26, 2016).
84 In order to continue operating, coal power
plants must have either flue gas desulfurization or
dry sorbent injection systems installed. Both
technologies, which are used to reduce acid gas
emissions, also reduce SO2 emissions.
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permit offsetting increases in SO2
emissions by another regulated EGU.
Therefore, energy conservation
standards that decrease electricity
generation will generally reduce SO2
emissions. DOE estimated SO2
emissions reduction using emissions
factors based on AEO2023.
CSAPR also established limits on NOX
emissions for numerous states in the
eastern half of the United States. Energy
conservation standards would have
little effect on NOX emissions in those
states covered by CSAPR emissions
limits if excess NOX emissions
allowances resulting from the lower
electricity demand could be used to
permit offsetting increases in NOX
emissions from other EGUs. In such
case, NOX emissions would remain near
the limit even if electricity generation
goes down. Depending on the
configuration of the power sector in the
different regions and the need for
allowances, however, NOX emissions
might not remain at the limit in the case
of lower electricity demand. That would
mean that standards might reduce NOX
emissions in covered states. Despite this
possibility, DOE has chosen to be
conservative in its analysis and has
maintained the assumption that
standards will not reduce NOX
emissions in states covered by CSAPR.
Standards would be expected to reduce
NOX emissions in the states not covered
by CSAPR. DOE used AEO2023 data to
derive NOX emissions factors for the
group of states not covered by CSAPR.
The MATS limit mercury emissions
from power plants, but they do not
include emissions caps and, as such,
DOE’s energy conservation standards
would be expected to slightly reduce Hg
emissions. DOE estimated mercury
emissions reduction using emissions
factors based on AEO2023, which
incorporates the MATS.
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L. Monetizing Emissions Impacts
As part of the development of this
NOPR, 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 equipment 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 NOPR.
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To monetize the benefits of reducing
GHG emissions, this analysis uses the
interim estimates presented in the
Technical Support Document: Social
Cost of Carbon, Methane, and Nitrous
Oxide Interim Estimates Under
Executive Order 13990 published in
February 2021 by the IWG.
1. Monetization of Greenhouse Gas
Emissions
DOE estimates the monetized benefits
of the reductions in emissions of CO2,
CH4, and N2O by using a measure of the
SC of each pollutant (e.g., SC–CO2).
These estimates represent the monetary
value of the net harm to society
associated with a marginal increase in
emissions of these pollutants in a given
year, or the benefit of avoiding that
increase. These estimates are intended
to include (but are not limited to)
climate-change-related changes in net
agricultural productivity, human health,
property damages from increased flood
risk, disruption of energy systems, risk
of conflict, environmental migration,
and the value of ecosystem services.
DOE exercises its own judgment in
presenting monetized climate benefits
as recommended by applicable
Executive orders, and DOE would reach
the same conclusion presented in this
NOPR in the absence of the social cost
of greenhouse gases. That is, the social
costs of greenhouse gases, whether
measured using the February 2021
interim estimates presented by the
Interagency Working Group on the
Social Cost of Greenhouse Gases or by
another means, did not affect this NOPR
by DOE.
DOE estimated the global social
benefits of CO2, CH4, and N2O
reductions using SC–GHG values that
were based on the interim values
presented in the Technical Support
Document: Social Cost of Carbon,
Methane, and Nitrous Oxide Interim
Estimates under Executive Order 13990,
published in February 2021 by the IWG.
(‘‘February 2021 SC–GHG TSD’’) 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, reflect
the societal value of reducing emissions
of the gas in question by one metric ton.
The SC–GHGs is the theoretically
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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, peerreviewed science.
The SC–GHGs estimates presented
here were developed over many years,
using transparent process, peerreviewed methodologies, the best
science available at the time of that
process, and with input from the public.
Specifically, in 2009, the IWG, that
included the DOE and other executive
branch agencies and offices was
established to ensure that agencies were
using the best available science and to
promote consistency in the social cost of
carbon (‘‘SC–CO2’’) values used across
agencies. The IWG published SC–CO2
estimates in 2010 that were developed
from an ensemble of three widely cited
integrated assessment models (‘‘IAMs’’)
that estimate global climate damages
using highly aggregated representations
of climate processes and the global
economy combined into a single
modeling framework. The three IAMs
were run using a common set of input
assumptions in each model for future
population, economic, and CO2
emissions growth, as well as
equilibrium climate sensitivity—a
measure of the globally averaged
temperature response to increased
atmospheric CO2 concentrations. These
estimates were updated in 2013 based
on new versions of each IAM. In August
2016 the IWG published estimates of the
social cost of methane (‘‘SC–CH4’’) and
nitrous oxide (‘‘SC–N2O’’) using
methodologies that are consistent with
the methodology underlying the SC–
CO2 estimates. The modeling approach
that extends the IWG SC–CO2
methodology to non-CO2 GHGs has
undergone multiple stages of peer
review. The SC–CH4 and SC–N2O
estimates were developed by Marten et
al.85 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
85 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.
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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.86 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.
On January 20, 2021, President Biden
issued Executive Order 13990, which reestablished the IWG and directed it to
ensure that the U.S. Government’s
estimates of the social cost of carbon
and other greenhouse gases reflect the
best available science and the
recommendations of in the National
Academies 2017 report. The IWG was
tasked with first reviewing the SC–GHG
estimates currently used in Federal
analyses and publishing interim
estimates within 30 days of the E.O. that
reflect the full impact of GHG
emissions, including by taking global
damages into account. The interim SC–
GHG estimates published in February
2021 are used here to estimate the
climate benefits for this proposed
rulemaking. The E.O. instructs the IWG
to undertake a fuller update of the SC–
GHG estimates that takes into
consideration the advice in the National
86 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. https://nap.nationalacademies.org/catalog/
24651/valuing-climate-damages-updatingestimation-of-the-social-cost-of.
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Academies 2017 report and other recent
scientific literature. The February 2021
SC–GHG TSD provides a complete
discussion of the IWG’s initial review
conducted under E.O. 13990. In
particular, the IWG found that the SC–
GHG estimates used under E.O. 13783
fail to reflect the full impact of GHG
emissions in multiple ways.
First, the IWG found that the SC–GHG
estimates used under E.O. 13783 fail to
fully capture many climate impacts that
affect the welfare of U.S. citizens and
residents, and those impacts are better
reflected by global measures of the SC–
GHG. Examples of omitted effects from
the E.O. 13783 estimates include direct
effects on U.S. citizens, assets, and
investments located abroad, supply
chains, U.S. military assets and interests
abroad, and tourism, and spillover
pathways such as economic and
political destabilization and global
migration that can lead to adverse
impacts on U.S. national security,
public health, and humanitarian
concerns. In addition, assessing the
benefits of U.S. GHG mitigation
activities requires consideration of how
those actions may affect mitigation
activities by other countries, as those
international mitigation actions will
provide a benefit to U.S. citizens and
residents by mitigating climate impacts
that affect U.S. citizens and residents. A
wide range of scientific and economic
experts have emphasized the issue of
reciprocity as support for considering
global damages of GHG emissions. If the
United States does not consider impacts
on other countries, it is difficult to
convince other countries to consider the
impacts of their emissions on the United
States. The only way to achieve an
efficient allocation of resources for
emissions reduction on a global basis—
and so benefit the U.S. and its citizens—
is for all countries to base their policies
on global estimates of damages. As a
member of the IWG involved in the
development of the February 2021 SC–
GHG TSD, DOE agrees with this
assessment and, therefore, in this NOPR,
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
SC–GHG 2021 TSD, existing estimates
are both incomplete and an
underestimate of total damages that
accrue to the citizens and residents of
the U.S. because they do not fully
capture the regional interactions and
spillovers discussed above, nor do they
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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 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,87 and recommended that
discount rate uncertainty and relevant
aspects of intergenerational ethical
considerations be accounted for in
selecting future discount rates.
Furthermore, the damage estimates
developed for use in the SC–GHG are
estimated in consumption-equivalent
terms, and so an application of OMB
Circular A–4’s guidance for regulatory
analysis would then use the
consumption discount rate to calculate
the SC–GHG. DOE agrees with this
assessment and will continue to follow
developments in the literature
pertaining to this issue. DOE also notes
87 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. www.epa.gov/
sites/default/files/2016-12/documents/sc_co2_tsd_
august_2016.pdf (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/201612/documents/addendum_to_sc-ghg_tsd_august_
2016.pdf (last accessed January 18, 2022).
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that while OMB Circular A–4, as
published in 2003, recommends using
3% and 7% discount rates as ‘‘default’’
values, Circular A–4 also reminds
agencies that ‘‘different regulations may
call for different emphases in the
analysis, depending on the nature and
complexity of the regulatory issues and
the sensitivity of the benefit and cost
estimates to the key assumptions.’’ On
discounting, Circular A–4 recognizes
that ‘‘special ethical considerations arise
when comparing benefits and costs
across generations,’’ and Circular A–4
acknowledges that analyses may
appropriately ‘‘discount future costs and
consumption benefits . . . at a lower
rate than for intragenerational analysis.’’
In the 2015 Response to Comments on
the Social Cost of Carbon for Regulatory
Impact Analysis, OMB, DOE, and the
other IWG members recognized that
‘‘Circular A–4 is a living document’’ and
‘‘the use of 7 percent is not considered
appropriate for intergenerational
discounting. There is wide support for
this view in the academic literature, and
it is recognized in Circular A–4 itself.’’
Thus, DOE concludes that a 7%
discount rate is not appropriate to apply
to value the social cost of greenhouse
gases in the analysis presented in this
analysis.
To calculate the present and
annualized values of climate benefits,
DOE uses the same discount rate as the
rate used to discount the value of
damages from future GHG emissions, for
internal consistency. That approach to
discounting follows the same approach
that the February 2021 TSD
recommends ‘‘to ensure internal
consistency—i.e., future damages from
climate change using the SC–GHG at 2.5
percent should be discounted to the
base year of the analysis using the same
2.5 percent rate.’’ DOE has also
consulted the National Academies’ 2017
recommendations on how SC–GHG
estimates can ‘‘be combined in RIAs
with other cost and benefits estimates
that may use different discount rates.’’
The National Academies reviewed
several options, including ‘‘presenting
all discount rate combinations of other
costs and benefits with [SC–GHG]
estimates.’’
As a member of the IWG involved in
the development of the February 2021
SC–GHG TSD, DOE agrees with the
above assessment and will continue to
follow developments in the literature
pertaining to this issue. While the IWG
works to assess how best to incorporate
the latest, peer reviewed science to
develop an updated set of SC–GHG
estimates, it set the interim estimates to
be the most recent estimates developed
by the IWG prior to the group being
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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 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.88 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
88 Interagency Working Group on Social Cost of
Greenhouse Gases (IWG). 2021. Technical Support
Document: Social Cost of Carbon, Methane, and
Nitrous Oxide Interim Estimates under Executive
Order 13990. February. United States Government.
Available at: www.whitehouse.gov/briefing-room/
blog/2021/02/26/a-return-to-science-evidencebased-estimates-of-the-benefits-of-reducing-climatepollution/.
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market and nonmarket) damages—lags
behind the most recent research. For
example, limitations include the
incomplete treatment of catastrophic
and non-catastrophic impacts in the
integrated assessment models, their
incomplete treatment of adaptation and
technological change, the incomplete
way in which inter-regional and
intersectoral linkages are modeled,
uncertainty in the extrapolation of
damages to high temperatures, and
inadequate representation of the
relationship between the discount rate
and uncertainty in economic growth
over long time horizons. Likewise, the
socioeconomic and emissions scenarios
used as inputs to the models do not
reflect new information from the last
decade of scenario generation or the full
range of projections. The modeling
limitations do not all work in the same
direction in terms of their influence on
the SC–CO2 estimates. However, as
discussed in the February 2021 TSD, the
IWG has recommended that, taken
together, the limitations suggest that the
interim SC–GHG estimates used in this
NOPR 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
NOPR are discussed in the following
sections, and the results of DOE’s
analyses estimating the benefits of the
reductions in emissions of these GHGs
are presented in section V.B.6 of this
document.
In response to the March 2022
Preliminary Analysis, NEMA disagreed
with DOE’s approach for estimating
monetary benefits associated with
emissions reductions. NEMA
commented that this topic is too
convoluted and subjective to be
included in a rulemaking analysis for
electric motor standards. NEMA added
that DOE does not adequately examine
or account for the significant impacts
from ever-increasing investment in and
use of renewable energy sources and
associated decrease in emissions.
(NEMA, No. 22 at p. 25)
DOE acknowledges that increasing
use of renewable electricity sources will
reduce CO2 emissions and likely other
emissions from the power sector faster
than could have been expected when
AEO2023 was prepared. Nevertheless,
DOE has used AEO2023 for the
purposes of quantifying emissions as
DOE believes it continues to be the most
appropriate projection at this time for
such purposes. And to comply 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
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expected to result from each of the TSLs
considered. It is important to note that
even a significant reduction in the
emissions benefits projected in this
NOPR would not change DOE’s decision
about which standard levels to propose
based on the December 2022 Joint
Recommendation and DOE’s analysis.
a. Social Cost of Carbon
The SC–CO2 values used for this
NOPR were based on the values
developed for the IWG’s February 2021
TSD, which are shown in Table IV–10
in five-year increments from 2020 to
2050. The set of annual values that DOE
used, which was adapted from estimates
published by EPA,89 is presented in
Appendix 14A of the NOPR TSD. These
estimates are based on methods,
assumptions, and parameters identical
to the estimates published by the IWG
(which were based on EPA modeling)
and include values for 2051 to 2070.
TABLE IV–10—ANNUAL SC–CO2 VALUES FROM 2021 INTERAGENCY UPDATE, 2020–2050
[2020$ per metric ton CO2]
Discount rate and statistic
Year
2020
2025
2030
2035
2040
2045
2050
5%
Average
...................................................................................................................................
...................................................................................................................................
...................................................................................................................................
...................................................................................................................................
...................................................................................................................................
...................................................................................................................................
...................................................................................................................................
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
3%
Average
14
17
19
22
25
28
32
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 NOPR were based on the values
developed for the February 2021 TSD.
Table IV–11 shows the updated sets of
SC–CH4 and SC–N2O estimates from the
latest interagency update in 5-year
2.5%
Average
51
56
62
67
73
79
85
3%
95th percentile
76
83
89
96
103
110
116
152
169
187
206
225
242
260
increments from 2020 to 2050. The full
set of annual values used is presented
in Appendix 14–A of the NOPR 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–11—ANNUAL SC–CH4 AND SC–N2O VALUES FROM 2021 INTERAGENCY UPDATE, 2020–2050
[2020$ per metric ton]
Year
5%
Average
ddrumheller on DSK120RN23PROD with PROPOSALS2
2020
2025
2030
2035
2040
2045
2050
.....................................
.....................................
.....................................
.....................................
.....................................
.....................................
.....................................
SC–CH4
SC–N2O
Discount rate and statistic
Discount rate and statistic
3%
Average
670
800
940
1,100
1,300
1,500
1,700
1,500
1,700
2,000
2,200
2,500
2,800
3,100
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
89 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/
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2.5%
Average
3%
95th percentile
2,000
2,200
2,500
2,800
3,100
3,500
3,800
5%
Average
3,900
4,500
5,200
6,000
6,700
7,500
8,200
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 NOPR, DOE estimated the
monetized value of NOX and SO2
emissions reductions from electricity
generation using the latest benefit-perton estimates for that sector from the
EPA’s Benefits Mapping and Analysis
Program.90 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,
2030, and 2040, calculated with
ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed
February 21, 2023).
90 U.S. Environmental Protection Agency.
Estimating the Benefit per Ton of Reducing
Directly-Emitted PM2.5, PM2.5 Precursors and Ozone
Precursors from 21 Sectors. www.epa.gov/benmap/
estimating-benefit-ton-reducing-directly-emittedpm25-pm25-precursors-and-ozone-precursors.
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
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discount rates of 3 percent and 7
percent. DOE used linear interpolation
to define values for the years not given
in the 2025 to 2040 period; for years
beyond 2040, the values are held
constant. DOE combined the EPA
regional benefit-per-ton estimates with
regional information on electricity
consumption and emissions from
AEO2023 to define weighted-average
national values for NOX and SO2 (see
appendix 14B of the NOPR 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.
DOE requests comment on how to
address the climate benefits and nonmonetized effects of the proposal.
M. Utility Impact Analysis
In the March 2022 Preliminary
Analysis, DOE described the approach
for conducting the utility impact
analysis. See chapter 15 of the March
2022 Preliminary TSD. In response,
NEMA commented that the proposed
approach for assessing utility impacts
appears to be sufficient. (NEMA, No. 22
at p. 25) In this NOPR, DOE continues
to follow the same approach.
The utility impact analysis estimates
the changes in installed electrical
capacity and generation projected to
result for each considered TSL. The
analysis is based on published output
from the NEMS associated with
AEO2023. NEMS produces the AEO
Reference case, as well as a number of
side cases that estimate the 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
AEO2023 Reference case and various
side cases. Details of the methodology
are provided in the appendices to
chapters 13 and 15 of the NOPR 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 energy conservation
standards.
N. Employment Impact Analysis
In the March 2022 Preliminary
Analysis, DOE described the approach
for conducting the employment impact
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analysis. See chapter 16 of the March
2022 Preliminary TSD. In response,
NEMA commented that the proposed
approach for assessing national
employment impacts appears to be
sufficient. (NEMA, No. 22 at p. 25) In
this NOPR, DOE continues to follow the
same approach.
DOE considers employment impacts
in the domestic economy as one factor
in selecting a proposed standard.
Employment impacts from new 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 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.91 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
91 See U.S. Department of Commerce—Bureau of
Economic Analysis. Regional Multipliers: A User
Handbook for the Regional Input-Output Modeling
System (RIMS II). 1997. U.S. Government Printing
Office: Washington, DC. Available at www.bea.gov/
scb/pdf/regional/perinc/meth/rims2.pdf (last
accessed July 1, 2021).
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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 NOPR using an
input/output model of the U.S. economy
called Impact of Sector Energy
Technologies version 4 (‘‘ImSET’’).92
ImSET is a special-purpose version of
the ‘‘U.S. Benchmark National InputOutput’’ (‘‘I–O’’) model, which was
designed to estimate the national
employment and income effects of
energy-saving technologies. The ImSET
software includes a computer- based I–
O model having structural coefficients
that characterize economic flows among
187 sectors most relevant to industrial,
commercial, and residential building
energy use.
DOE notes that ImSET is not a general
equilibrium forecasting model, and that
the uncertainties involved in projecting
employment impacts, especially
changes in the later years of the
analysis. Because ImSET does not
incorporate price changes, the
employment effects predicted by ImSET
may over-estimate actual job impacts
over the long run for this proposed rule.
Therefore, DOE used ImSET only to
generate results for near-term
timeframes (2034), where these
uncertainties are reduced. For more
details on the employment impact
analysis, see chapter 16 of the NOPR
TSD.
V. Analytical Results and Conclusions
The following section addresses the
results from DOE’s analyses with
respect to the considered energy
conservation standards for ESEMs. It
addresses the TSLs examined by DOE,
the projected impacts of each of these
levels if adopted as energy conservation
standards for ESEMs, and the standards
levels that DOE is proposing to adopt in
this NOPR. Additional details regarding
DOE’s analyses are contained in the
NOPR TSD supporting this document.
A. Trial Standard Levels
In general, DOE typically evaluates
potential new standards for products
92 Livingston, O.V., S.R. Bender, M.J. Scott, and
R.W. Schultz. ImSET 4.0: Impact of Sector Energy
Technologies Model Description and User Guide.
2015. Pacific Northwest National Laboratory:
Richland, WA. PNNL–24563.
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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 price elasticity of
consumer purchasing decisions that
may change when different standard
levels are set.
In the analysis conducted for this
NOPR, DOE analyzed the benefits and
burdens of four TSLs for ESEMs. DOE
developed TSLs that combine efficiency
levels for each analyzed equipment
class. DOE presents the results for the
TSLs in this document, while the results
for all efficiency levels that DOE
analyzed are in the NOPR TSD.93
Table V–1 presents the TSLs and the
corresponding efficiency levels that
DOE has identified for potential new
energy conservation standards for
ESEMs. TSL 4 represents the maximum
technologically feasible (‘‘max-tech’’)
energy efficiency for all equipment
classes. TSL 3 is equivalent to EL 3 for
all equipment classes. TSL 2 is
equivalent to EL 2 for all equipment
classes and corresponds to the Electric
Motors Working Group recommended
levels. TSL 1 is equivalent to EL 1 for
all equipment classes.
TABLE V–1—TRIAL STANDARD LEVELS FOR ESEMS
Equipment class group
Horsepower range
ESEM High/Med Torque ............................................................
ESEM Low Torque ....................................................................
ESEM Polyphase .......................................................................
AO–ESEM High/Med Torque ....................................................
AO–ESEM Low Torque .............................................................
AO–ESEM Polyphase ...............................................................
DOE constructed the TSLs for this
NOPR to include ELs representative of
ELs with similar characteristics (i.e.,
using similar efficiencies). Specifically,
DOE aligned the efficiency levels for airover and non-air-over ESEMs because of
the similarities in the manufacturing
processes between air-over and non-airover ESEMs. In some cases, an AO–
ESEM could be manufactured on the
same line as a non-air-over ESEM by
omitting the steps of manufacturing
associated with the fan of a motor. DOE
notes this alignment is in line with
Electric Motors Working Group’s
recommendation in the December 2022
Joint Recommendation. While
representative ELs were included in the
TSLs, DOE considered all efficiency
levels as part of its analysis.94
TSL2
TSL3
TSL4
Average of
EL0 and
EL2
Recommended
levels
Average of
EL2 and
EL4
Max-tech
EL1
EL1
EL1
EL1
EL1
EL1
EL1
EL1
EL1
EL1
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
effects that potential ESEM 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
1. Economic Impacts on Individual
Consumers
DOE analyzed the economic impacts
on ESEM consumers by looking at the
In general, higher-efficiency
equipment 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.,
equipment 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
equipment lifetime and a discount rate.
Chapter 8 of the NOPR TSD provides
detailed information on the LCC and
PBP analyses.
Table V–2 through Table V–21 show
the LCC and PBP results for the TSLs
considered for each equipment class. In
the first of each pair of tables, the
93 Results by efficiency level are presented in
chapters 8, 10, and 12 of the NOPR TSD.
94 Efficiency levels that were analyzed for this
NOPR are discussed in section IV.C.4 of this
B. Economic Justification and Energy
Savings
ddrumheller on DSK120RN23PROD with PROPOSALS2
0.25 ≤ hp ≤ 0.50 ....
0.5 < hp ≤ 3 ...........
0.25 hp ...................
0.25 < hp ...............
0.25 ≤ hp ................
0.25 ≤ hp ≤ 0.50 ....
0.5 < hp ≤ 3 ...........
0.25 hp ...................
0.25 < hp ...............
0.25 ≤ hp ................
TSL1
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EL2
EL2
EL2
EL2
EL2
EL2
EL2
EL2
EL2
EL2
................
................
................
................
................
................
................
................
................
................
EL3
EL3
EL3
EL3
EL3
EL3
EL3
EL3
EL3
EL3
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
EL4.
EL4.
EL4.
EL4.
EL4.
EL4.
EL4.
EL4.
EL4.
EL4.
simple payback is measured relative to
the baseline product. In the second
table, the impacts are measured relative
to the efficiency distribution in the nonew-standards case in the compliance
year (see section IV.F.8 of this
document). Because some consumers
purchase equipment with higher
efficiency in the no-new-standards case,
the average savings are less than the
difference between the average LCC of
the baseline equipment 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 an equipment 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.
document. Results by efficiency level are presented
in chapters 8, 10, and 12 of the NOPR TSD.
E:\FR\FM\15DEP2.SGM
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Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
87111
TABLE V–2—AVERAGE LCC AND PBP RESULTS FOR ESEM—HIGH/MED TORQUE, 0.25 hp
Average costs
(2022$)
Efficiency
level
TSL
1
2
3
4
.............................................................
.............................................................
.............................................................
.............................................................
First year’s
operating
cost
Installed
cost
Baseline .......
1 ...................
2 ...................
3 ...................
4 ...................
186
192
211
296
434
Lifetime
operating
cost
98
86
76
68
62
Simple
payback
(years)
LCC
509
447
397
354
322
696
639
607
649
755
....................
0.5
1.1
3.7
6.9
Average
lifetime
(years)
7.7
7.7
7.7
7.7
7.7
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 ESEM—HIGH/MED TORQUE,
0.25 hp
Life-cycle cost savings
Efficiency
level
TSL
1
2
3
4
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
Percent of consumers that
experience net cost
1
2
3
4
Average LCC savings *
(2022)
2.0
16.7
51.2
85.9
56
51
¥1
¥107
* The savings represent the average LCC for affected consumers.
TABLE V–4—AVERAGE LCC AND PBP RESULTS FOR ESEM—HIGH/MED TORQUE, 1 hp
Average costs
(2022$)
Efficiency
level
TSL
1
2
3
4
.............................................................
.............................................................
.............................................................
.............................................................
First year’s
operating
cost
Installed
cost
Baseline .......
1 ...................
2 ...................
3 ...................
4 ...................
351
368
395
534
733
Lifetime
operating
cost
243
218
196
189
183
Simple
payback
(years)
LCC
1,272
1,142
1,028
989
955
1,624
1,510
1,423
1,522
1,688
....................
0.7
0.9
3.4
6.3
Average
lifetime
(years)
7.5
7.5
7.5
7.5
7.5
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative
to the baseline product.
TABLE V–5—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR ESEM—HIGH/MED TORQUE,
1 hp
Life-cycle cost savings
Efficiency
level
TSL
1
2
3
4
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
Percent of consumers that
experience net cost
1
2
3
4
Average LCC savings *
(2022)
3.5
11.7
53.5
82.5
116
138
21
¥145
* The savings represent the average LCC for affected consumers.
ddrumheller on DSK120RN23PROD with PROPOSALS2
TABLE V–6—AVERAGE LCC AND PBP RESULTS FOR ESEM—LOW TORQUE, 0.25 hp
Average costs
(2022$)
Efficiency
level
TSL
1 .............................................................
2 .............................................................
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cost
Baseline .......
1 ...................
2 ...................
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153
174
213
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operating
cost
216
163
131
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Lifetime
operating
cost
956
718
576
E:\FR\FM\15DEP2.SGM
LCC
1,108
892
789
15DEP2
Simple
payback
(years)
....................
0.4
0.7
Average
lifetime
(years)
6.8
6.8
6.8
87112
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
TABLE V–6—AVERAGE LCC AND PBP RESULTS FOR ESEM—LOW TORQUE, 0.25 hp—Continued
Average costs
(2022$)
Efficiency
level
TSL
3 .............................................................
4 .............................................................
First year’s
operating
cost
Installed
cost
3 ...................
4 ...................
277
366
Lifetime
operating
cost
118
107
Simple
payback
(years)
LCC
518
470
795
836
1.3
2.0
Average
lifetime
(years)
6.8
6.8
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative
to the baseline product.
TABLE V–7—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR ESEM—LOW TORQUE, 0.25 hp
Life-cycle cost savings
Efficiency
level
TSL
1
2
3
4
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
Percent of consumers that
experience net cost
1
2
3
4
Average LCC savings *
(2022)
0.2
2.9
52.0
67.7
213
147
24
¥17
* The savings represent the average LCC for affected consumers.
TABLE V–8—AVERAGE LCC AND PBP RESULTS FOR ESEM—LOW TORQUE, 0.5 hp
Average costs
(2022$)
Efficiency
level
TSL
1
2
3
4
.............................................................
.............................................................
.............................................................
.............................................................
First year’s
operating
cost
Installed
cost
Baseline .......
1 ...................
2 ...................
3 ...................
4 ...................
223
269
276
372
455
Lifetime
operating
cost
237
218
201
178
159
Simple
payback
(years)
LCC
1,074
987
908
805
719
1,297
1,256
1,184
1,177
1,174
....................
2.4
1.5
2.5
3.0
Average
lifetime
(years)
6.9
6.9
6.9
6.9
6.9
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.
TABLE V–9—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR ESEM—LOW TORQUE, 0.5 hp
Life-cycle cost savings
Efficiency
level
TSL
1
2
3
4
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
Percent of consumers that
experience net cost
1
2
3
4
Average LCC savings *
(2022)
10.8
7.8
30.4
40.1
41
100
78
73
* The savings represent the average LCC for affected consumers.
TABLE V–10—AVERAGE LCC AND PBP RESULTS FOR ESEM—POLYPHASE TORQUE, 0.25 hp
Average costs
(2022$)
Efficiency
level
ddrumheller on DSK120RN23PROD with PROPOSALS2
TSL
1
2
3
4
.............................................................
.............................................................
.............................................................
.............................................................
Installed
cost
Baseline .......
1 ...................
2 ...................
3 ...................
4 ...................
First year’s
operating
cost
199
206
222
277
405
68
62
57
51
47
Lifetime
operating
cost
432
394
362
325
297
Simple
payback
(years)
LCC
631
600
584
602
702
....................
1.2
2.0
4.6
9.7
Average
lifetime
(years)
9.3
9.3
9.3
9.3
9.3
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative
to the baseline product.
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87113
TABLE V–11—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR ESEM—POLYPHASE, 0.25 hp
Life-cycle cost savings
Efficiency
level
TSL
1
2
3
4
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
Percent of consumers that
experience net cost
1
2
3
4
Average LCC savings *
(2022)
1.0
7.2
58.6
95.0
32
26
¥8
¥107
* The savings represent the average LCC for affected consumers.
TABLE V–12—AVERAGE LCC AND PBP RESULTS FOR AO–ESEM—HIGH/MED TORQUE, 0.25 hp
Average costs
(2022$)
Efficiency
level
TSL
1
2
3
4
.............................................................
.............................................................
.............................................................
.............................................................
First year’s
operating
cost
Installed
cost
Baseline .......
1 ...................
2 ...................
3 ...................
4 ...................
174
180
200
282
419
Lifetime
operating
cost
158
139
123
110
101
Simple
payback
(years)
LCC
695
611
543
485
444
869
791
743
767
863
Average
lifetime
(years)
....................
0.3
0.8
2.3
4.3
6.8
6.8
6.8
6.8
6.8
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–13—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR AO–ESEM—HIGH/MED
TORQUE, 0.25 hp
Life-cycle cost savings
Efficiency
level
TSL
1
2
3
4
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
Percent of consumers that
experience net cost
1
2
3
4
Average LCC savings *
(2022)
1.3
7.8
36.0
64.6
76
83
37
¥61
* The savings represent the average LCC for affected consumers.
TABLE V–14—AVERAGE LCC AND PBP RESULTS FOR AO–ESEM—HIGH/MED TORQUE, 1 hp
Average costs
(2022$)
Efficiency
level
TSL
1
2
3
4
.............................................................
.............................................................
.............................................................
.............................................................
First year’s
operating
cost
Installed
cost
Baseline .......
1 ...................
2 ...................
3 ...................
4 ...................
338
355
382
520
716
312
283
255
246
238
Lifetime
operating
cost
Simple
payback
(years)
LCC
1,492
1,352
1,219
1,173
1,138
1,830
1,707
1,601
1,693
1,854
Average
lifetime
(years)
....................
0.6
0.8
2.7
5.1
7.0
7.0
7.0
7.0
7.0
ddrumheller on DSK120RN23PROD with PROPOSALS2
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–15—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR AO–ESEM—HIGH/MED
TORQUE, 1 hp
Life-cycle cost savings
Efficiency
level
TSL
1 .......................................................................................................
2 .......................................................................................................
3 .......................................................................................................
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Percent of consumers that
experience net cost
1
2
3
Sfmt 4702
2.0
5.9
44.4
E:\FR\FM\15DEP2.SGM
15DEP2
Average LCC savings *
(2022)
122
160
37
87114
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
TABLE V–15—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR AO–ESEM—HIGH/MED
TORQUE, 1 hp—Continued
Life-cycle cost savings
Efficiency
level
TSL
4 .......................................................................................................
Percent of consumers that
experience net cost
4
Average LCC savings *
(2022)
¥128
81.9
* The savings represent the average LCC for affected consumers.
TABLE V–16—AVERAGE LCC AND PBP RESULTS FOR AO–ESEM—LOW TORQUE, 0.25 hp
Average costs
(2022$)
Efficiency
level
TSL
1
2
3
4
.............................................................
.............................................................
.............................................................
.............................................................
First year’s
operating
cost
Installed
cost
Baseline .......
1 ...................
2 ...................
3 ...................
4 ...................
141
163
202
264
352
Lifetime
operating
cost
218
164
132
119
108
Simple
payback
(years)
LCC
962
722
579
521
472
1,103
885
781
785
824
....................
0.4
0.7
1.2
1.9
Average
lifetime
(years)
6.8
6.8
6.8
6.8
6.8
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–17—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR AO–ESEM—LOW TORQUE,
0.25 hp
Life-cycle cost savings
Efficiency
level
TSL
1
2
3
4
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
Percent of consumers that
experience net cost
1
2
3
4
Average LCC savings *
(2022$)
0.1
3.7
39.1
67.9
217
121
32
¥13
* The savings represent the average LCC for affected consumers.
TABLE V–18—AVERAGE LCC AND PBP RESULTS FOR AO–ESEM—LOW TORQUE, 0.5 hp
Average costs
(2022$)
Efficiency
level
TSL
1
2
3
4
.............................................................
.............................................................
.............................................................
.............................................................
First year’s
operating
cost
Installed
cost
Baseline .......
1 ...................
2 ...................
3 ...................
4 ...................
213
257
265
358
441
257
237
218
194
174
Lifetime
operating
cost
Simple
payback
(years)
LCC
1,144
1,053
969
860
770
1,357
1,310
1,234
1,218
1,211
....................
2.2
1.3
2.3
2.7
Average
lifetime
(years)
6.8
6.8
6.8
6.8
6.8
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.
ddrumheller on DSK120RN23PROD with PROPOSALS2
TABLE V–19—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR AO–ESEM—LOW TORQUE,
0.5 hp
Life-cycle cost savings
Efficiency
level
TSL
1
2
3
4
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
Percent of consumers that
experience net cost
1
2
3
4
2.1
2.9
34.4
42.2
* The savings represent the average LCC for affected consumers.
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15DEP2
Average LCC savings *
(2022$)
48
88
50
52
87115
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
TABLE V–20—AVERAGE LCC AND PBP RESULTS FOR AO–ESEM—POLYPHASE, 0.25 hp
Average costs
(2022$)
Efficiency
level
TSL
1
2
3
4
.............................................................
.............................................................
.............................................................
.............................................................
First year’s
operating
cost
Installed
cost
Baseline .......
1 ...................
2 ...................
3 ...................
4 ...................
189
197
212
267
394
Lifetime
operating
cost
81
74
68
61
56
Simple
payback
(years)
LCC
488
446
411
369
340
678
643
623
636
734
Average
lifetime
(years)
....................
1.1
1.8
3.9
8.3
8.9
8.9
8.9
8.9
8.9
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.
TABLE V–21—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR AO–ESEM—POLYPHASE,
0.25 hp
Life-cycle cost savings
Efficiency
level
TSL
1
2
3
4
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
Percent of consumers that
experience net cost
1
2
3
4
Average LCC savings *
(2022$)
2.7
9.7
48.6
87.8
35
40
13
¥85
* The savings represent the average LCC for affected consumers.
representative units with consumers in
the residential sector), and small
businesses. Table V–22 to Table V–24
compare the average LCC savings and
PBP at each efficiency level for the
consumer subgroups with similar
metrics for the entire consumer sample
for all equipment classes. In most cases,
b. Consumer Subgroup Analysis
In the consumer subgroup analysis,
DOE estimated the impact of the
considered TSLs on low-income
households (for representative units
with consumers in the residential
sector 95), senior-only households (for
the average LCC savings and PBP for
low-income households, senior-only
household, and small-businesses at the
considered efficiency levels are not
substantially different from the average
for all. Chapter 11 of the NOPR TSD
presents the complete LCC and PBP
results for the subgroups.
TABLE V–22—COMPARISON OF LCC SAVINGS AND PBP FOR LOW-INCOME HOUSEHOLD SUBGROUP AND ALL CONSUMERS
Average LCC
savings *
(2021$)
TSL
Lowincome
All
Simple payback
(years)
Lowincome
Consumers with
net benefit
(%)
All
Lowincome
All
Consumers with
net cost
(%)
Lowincome
All
ESEM—High/Med Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
56
53
7
¥90
56
51
¥1
¥107
0.5
1.4
4.9
9.2
0.5
1.5
5.3
10.0
22.3
52.1
36.1
19.7
22.5
51.0
32.4
13.6
1.7
14.3
45.9
77.9
2.0
16.7
51.2
85.9
0.7
1.1
4.7
8.7
33.9
74.4
46.0
18.9
34.0
74.2
44.9
17.4
3.4
11.1
51.9
80.5
3.5
11.7
53.5
82.5
0.4
1.0
3.3
5.0
3.9
17.5
50.2
35.7
4.0
17.5
48.0
32.3
0.2
2.6
48.1
62.6
0.2
3.0
52.0
67.7
ESEM—High/Med Torque, 1 hp
ddrumheller on DSK120RN23PROD with PROPOSALS2
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
116
138
24
¥138
116
138
21
¥145
0.7
1.0
4.6
8.6
ESEM—Low Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
210
148
29
¥6
213
147
24
¥17
0.4
0.9
3.1
4.6
95 All representative units except for the ESEM
Polyphase and AO–ESEM Polyphase, 0.5 hp are
used in the residential sector.
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TABLE V–22—COMPARISON OF LCC SAVINGS AND PBP FOR LOW-INCOME HOUSEHOLD SUBGROUP AND ALL
CONSUMERS—Continued
Average LCC
savings *
(2021$)
TSL
Lowincome
Simple payback
(years)
Lowincome
All
Consumers with
net benefit
(%)
All
Lowincome
All
Consumers with
net cost
(%)
Lowincome
All
ESEM—Low Torque, 0.5 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
43
101
84
82
41
100
78
73
2.3
1.2
2.7
3.2
2.4
1.3
2.8
3.3
32.0
56.2
61.1
61.0
31.7
56.2
60.1
59.9
10.0
7.1
28.3
37.7
10.8
7.8
30.4
40.1
0.3
1.0
3.2
6.1
25.1
51.1
44.6
25.7
25.5
51.5
43.0
21.8
1.2
7.0
32.8
59.1
1.3
7.8
36.0
64.6
0.6
0.9
3.9
7.7
30.5
65.3
44.3
18.8
30.6
65.5
44.0
18.1
2.0
5.8
43.8
80.9
2.0
5.9
44.4
81.9
0.4
1.1
3.1
4.9
1.6
20.4
45.0
35.7
1.7
20.5
43.2
32.1
0.1
3.3
36.1
62.7
0.1
3.7
39.1
67.9
2.2
0.8
3.0
3.4
7.1
31.9
58.0
59.3
7.0
32.0
56.7
57.8
2.0
2.5
31.5
38.8
2.2
2.9
34.4
42.2
AO–ESEM—High/Med Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
77
84
44
¥46
76
83
37
¥61
0.3
0.9
3.0
5.7
AO–ESEM—High/Med Torque, 1 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
122
160
39
¥124
122
160
37
¥128
0.6
0.9
3.9
7.6
AO–ESEM—Low Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
220
124
36
¥3
217
121
32
¥13
0.4
1.0
2.9
4.6
AO–ESEM—Low Torque, 0.5 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
51
90
56
64
48
88
50
52
2.1
0.8
2.8
3.2
TABLE V–23—COMPARISON OF LCC SAVINGS AND PBP FOR SENIOR-ONLY HOUSEHOLD SUBGROUP AND ALL
CONSUMERS
Average LCC
savings *
(2021$)
TSL
Senioronly
All
Simple payback
(years)
Senioronly
Consumers with
net benefit
(%)
All
Senioronly
All
Consumers with
net cost
(%)
Senioronly
All
ESEM—High/Med Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
56
51
¥1
¥107
56
51
¥1
¥107
0.5
1.5
5.3
10.0
0.5
1.5
5.3
10.0
22.4
51.0
32.4
13.6
22.5
51.0
32.4
13.6
2.1
16.7
51.3
85.9
2.0
16.7
51.2
85.9
0.7
1.1
4.7
8.7
34.0
74.1
44.8
17.4
34.0
74.2
44.9
17.4
3.5
11.7
53.6
82.5
3.5
11.7
53.5
82.5
0.4
1.0
3.3
5.0
4.0
17.5
48.0
32.1
4.0
17.5
48.0
32.3
0.2
3.0
52.0
67.9
0.2
3.0
52.0
67.7
ddrumheller on DSK120RN23PROD with PROPOSALS2
ESEM—High/Med Torque hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
116
138
21
¥145
116
138
21
¥145
0.7
1.1
4.7
8.7
ESEM—Low Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
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Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
TABLE V–23—COMPARISON OF LCC SAVINGS AND PBP FOR SENIOR-ONLY HOUSEHOLD SUBGROUP AND ALL
CONSUMERS—Continued
Average LCC
savings *
(2021$)
TSL
Senioronly
Simple payback
(years)
Senioronly
All
Consumers with
net benefit
(%)
All
Senioronly
All
Consumers with
net cost
(%)
Senioronly
All
ESEM—Low Torque, 0.5 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
41
99
78
72
41
100
78
73
2.4
1.3
2.8
3.3
2.4
1.3
2.8
3.3
31.6
56.2
60.0
59.8
31.7
56.2
60.1
59.9
10.8
7.8
30.5
40.2
10.8
7.8
30.4
40.1
0.3
1.0
3.2
6.1
25.5
51.4
42.9
21.7
25.5
51.5
43.0
21.8
1.3
7.9
36.1
64.7
1.3
7.8
36.0
64.6
0.6
0.9
3.9
7.7
30.6
65.5
44.0
18.1
30.6
65.5
44.0
18.1
2.0
5.9
44.4
81.9
2.0
5.9
44.4
81.9
0.4
1.1
3.1
4.9
1.7
20.5
43.2
32.1
1.7
20.5
43.2
32.1
0.1
3.7
39.2
67.9
0.1
3.7
39.1
67.9
2.2
0.8
3.0
3.4
7.0
32.0
56.7
57.8
7.0
32.0
56.7
57.8
2.1
2.9
34.5
42.2
2.2
2.9
34.4
42.2
AO–ESEM—High/Med Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
76
83
37
¥62
76
83
37
¥61
0.3
1.0
3.2
6.1
AO–ESEM—High/Med Torque, 1 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
122
160
37
¥128
122
160
37
¥128
0.6
0.9
3.9
7.7
AO–ESEM—Low Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
216
121
31
¥14
217
121
32
¥13
0.4
1.1
3.1
4.9
AO–ESEM—Low Torque, 0.5 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
47
88
50
52
48
88
50
52
2.2
0.8
3.0
3.4
TABLE V–24—COMPARISON OF LCC SAVINGS AND PBP FOR SMALL BUSINESS AND ALL CONSUMERS
Average LCC
savings *
(2021$)
TSL
Small
business
All
Simple payback
(years)
Small
business
Consumers with
net benefit
(%)
All
Small
business
All
Consumers with
net cost
(%)
Small
business
All
ESEM—High/Med Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
58
54
3
¥102
56
51
¥1
¥107
0.5
1.4
4.9
9.3
0.5
1.5
5.3
10.0
22.5
51.2
33.8
15.2
22.5
51.0
32.4
13.6
2.0
16.5
49.9
84.3
2.0
16.7
51.2
85.9
0.7
1.1
4.7
8.7
34.0
74.4
46.0
19.1
34.0
74.2
44.9
17.4
3.4
11.5
52.4
80.8
3.5
11.7
53.5
82.5
0.4
1.0
3.3
5.0
4.0
17.6
50.6
34.6
4.0
17.5
48.0
32.3
0.2
2.9
49.4
65.4
0.2
3.0
52.0
67.7
ddrumheller on DSK120RN23PROD with PROPOSALS2
ESEM—High/Med Torque, 1 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
121
145
28
¥136
116
138
21
¥145
0.6
1.0
4.3
8.1
ESEM—Low Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
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3.2
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TABLE V–24—COMPARISON OF LCC SAVINGS AND PBP FOR SMALL BUSINESS AND ALL CONSUMERS—Continued
Average LCC
savings *
(2021$)
TSL
Small
business
Simple payback
(years)
Small
business
All
Consumers with
net benefit
(%)
All
Small
business
All
Consumers with
net cost
(%)
Small
business
All
ESEM—Low Torque, 0.5 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
44
105
85
82
41
100
78
73
2.3
1.2
2.6
3.1
2.4
1.3
2.8
3.3
32.0
56.4
61.1
61.7
31.7
56.2
60.1
59.9
10.5
7.6
29.4
38.3
10.8
7.8
30.4
40.1
1.1
2.6
7.4
15.6
9.3
26.4
29.1
5.2
9.2
26.3
27.8
4.5
1.0
7.1
57.3
94.3
1.0
7.2
58.6
95.0
0.3
1.0
3.2
6.1
25.5
51.6
44.4
23.4
25.5
51.5
43.0
21.8
1.3
7.7
34.6
62.9
1.3
7.8
36.0
64.6
0.6
0.9
3.9
7.7
30.6
65.6
45.0
20.2
30.6
65.5
44.0
18.1
2.0
5.8
43.4
79.8
2.0
5.9
44.4
81.9
0.4
1.1
3.1
4.9
1.7
20.6
45.1
34.3
1.7
20.5
43.2
32.1
0.1
3.7
37.3
65.7
0.1
3.7
39.1
67.9
2.2
0.8
3.0
3.4
7.1
32.1
58.1
59.7
7.0
32.0
56.7
57.8
2.1
2.8
33.1
40.3
2.2
2.9
34.4
42.2
1.1
2.0
5.1
10.8
33.8
53.4
50.1
13.9
33.7
53.3
48.8
12.2
2.6
9.6
47.3
86.1
2.7
9.7
48.6
87.8
ESEM—Polyphase, 0.5 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
33
28
¥7
¥105
32
26
¥8
¥107
1.0
2.4
6.8
14.3
AO–ESEM—High/Med Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
79
86
42
¥56
76
83
37
¥61
0.3
0.9
3.0
5.7
AO–ESEM—High/Med Torque, 1 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
128
168
46
¥119
122
160
37
¥128
0.5
0.8
3.6
7.1
AO–ESEM—Low Torque, 0.25 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
225
127
35
¥9
217
121
32
¥13
0.4
1.0
2.9
4.6
AO–ESEM—Low Torque, 0.5 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
51
92
55
60
48
88
50
52
2.1
0.8
2.8
3.3
AO–ESEM—Polyphase, 0.5 hp
1
2
3
4
.......................................................................
.......................................................................
.......................................................................
.......................................................................
ddrumheller on DSK120RN23PROD with PROPOSALS2
c. Rebuttable Presumption Payback
As discussed in section IV.F.9 of this
document, EPCA establishes a
rebuttable presumption that an energy
conservation standard is economically
justified if the increased purchase cost
for a product that meets the standard is
less than three times the value of the
first-year energy savings resulting from
the standard. (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
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16
¥81
35
40
13
¥85
1.0
1.9
4.7
9.9
used discrete values, and, as required by
EPCA, based the energy use calculation
on the DOE test procedures for ESEMs.
In contrast, the PBPs presented in
section V.B.1.a of this document were
calculated using distributions that
reflect the range of energy use in the
field.
Table V–25 presents the rebuttablepresumption payback periods for the
considered TSLs for ESEMs. While DOE
examined the rebuttable-presumption
criterion, it considered whether the
standard levels considered for this
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proposed rule are economically justified
through a more detailed analysis of the
economic impacts of those levels,
pursuant to 42 U.S.C. 6313(a) and 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.
E:\FR\FM\15DEP2.SGM
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TABLE V–25—REBUTTABLE-PRESUMPTION PAYBACK PERIODS
Payback period
(years)
Equipment class
TSL1
ESEM—High and Medium Torque, 0.25 hp ....................................................
ESEM—High and Medium Torque, 1 hp .........................................................
ESEM—Low Torque, 0.25 hp ..........................................................................
ESEM—Low Torque, 0.5 hp ............................................................................
ESEM—Polyphase, 0.25 hp ............................................................................
AO–ESEM—High and Medium Torque, 0.25 hp .............................................
AO–ESEM—High and Medium Torque, 1 hp ..................................................
AO–ESEM—Low Torque, 0.25 hp ..................................................................
AO–ESEM—Low Torque, 0.5 hp ....................................................................
AO–ESEM—Polyphase, 0.25 hp .....................................................................
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate
the impact of new energy conservation
standards on manufacturers of ESEM.
The following section describes the
expected impacts on manufacturers at
each considered TSL. Chapter 12 of the
NOPR 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 ESEMs, as well as the
conversion costs that DOE estimates
manufacturers of ESEMs would incur at
each TSL.
To evaluate the range of cash flow
impacts on the ESEM industry, DOE
modeled two manufacturer markup
scenarios that correspond to the range of
TSL2
0.4
0.6
0.4
2.2
1.0
0.3
0.5
0.4
2.0
0.9
possible market responses to new
standards. Each manufacturer markup
scenario results in a unique set of cash
flows and corresponding INPVs at each
TSL.
In the following discussion, the INPV
results refer to the difference in industry
value between the no-new-standards
case and the standards cases that result
from the sum of discounted cash flows
from the base year (2024) through the
end of the analysis period (2058). The
results also discuss the difference in
cash flows between the no-new
standards case and the standards cases
in the year before the estimated
compliance date for new energy
conservation standards. This figure
represents the size of the required
conversion costs relative to the cash
flow generated by the ESEM industry in
the absence of new energy conservation
standards.
To assess the upper (less severe) end
of the range of potential impacts on
ESEM manufacturers, DOE modeled a
preservation of gross margin scenario.
TSL3
1.0
0.8
0.7
1.3
1.7
0.6
0.7
0.6
1.2
1.5
TSL4
3.1
2.9
1.2
2.3
3.9
1.9
2.4
1.1
2.1
3.4
5.8
5.4
1.8
2.7
8.3
3.7
4.4
1.7
2.5
7.1
This scenario assumes that, in the
standards cases, ESEM manufacturers
will be able to pass along all the higher
MPCs required for more efficient
equipment to their customers.
Specifically, the industry will be able to
maintain its average no-new-standards
case gross margin (as a percentage of
revenue) despite the higher MPCs in the
standards cases. In general, the larger
the MPC increases, the less likely
manufacturers are to achieve the cash
flow from operations calculated in this
scenario because it is less likely that
manufacturers will be able to fully pass
on these larger production cost
increases.
To assess the lower (more severe) end
of the range of potential impacts on the
ESEM manufacturers, DOE modeled a
preservation of operating profit
scenario. This scenario represents the
lower end of the range of impacts on
manufacturers because no additional
operating profit is earned on the higher
MPCs, eroding profit margins as a
percentage of total revenue.
TABLE V–26—INDUSTRY NET PRESENT VALUE FOR ESEM MANUFACTURERS—PRESERVATION OF GROSS MARGIN
SCENARIO
Units
INPV .........................................................................................
Change in INPV .......................................................................
2022$ millions .....
2022$ millions .....
% .........................
No-newstandards
case
Trial standard level *
1
2
3
4
2,019
..................
..................
1,883
(136)
(6.7)
1,888
(131)
(6.5)
1,820
(199)
(9.9)
1,710
(309)
(15.3)
ddrumheller on DSK120RN23PROD with PROPOSALS2
* Numbers may not sum exactly due to rounding. Numbers in parentheses are negative numbers.
TABLE V–27—INDUSTRY NET PRESENT VALUE FOR ESEM MANUFACTURERS—PRESERVATION OF OPERATING PROFIT
SCENARIO
Units
INPV .........................................................................................
Change in INPV .......................................................................
2022$ millions .....
2022$ millions .....
% .........................
No-newstandards
case
Trial standard level *
1
2
3
2,019
..................
..................
1,818
(201)
(9.9)
1,755
(264)
(13.1)
1,035
(984)
(48.7)
* Numbers may not sum exactly due to rounding. Numbers in parentheses are negative numbers.
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4
73
(1,946)
(96.4)
87120
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
TABLE V–28—CASH FLOW ANALYSIS FOR ESEM MANUFACTURERS
No-newstandards
case
1
2
3
4
Product Conversion Costs .......................................................
Capital Conversion Costs ........................................................
2022$ millions .....
2022$ millions .....
% .........................
2022$ millions .....
2022$ millions .....
154
..................
..................
..................
..................
45
(110)
(71)
125
149
17
(137)
(89)
141
198
(313)
(468)
(303)
326
792
(764)
(919)
(595)
572
1,584
Total Conversion Costs ....................................................
2022$ millions .....
..................
274
339
1,118
2,156
Units
Free Cash Flow (2028) ............................................................
Change in Free Cash Flow (2028) ..........................................
Trial standard level *
ddrumheller on DSK120RN23PROD with PROPOSALS2
* Numbers may not sum exactly due to rounding. Numbers in parentheses are negative numbers.
TSL 4 sets the efficiency level at EL
4 for all ESEM equipment classes. At
TSL 4, DOE estimates the impacts to
INPV will range from a decrease of
$1,946 million to a decrease of $309
million, which represents decreases to
INPV by approximately 96.4 percent
and 15.3 percent, respectively. At TSL
4, industry free cash flow (operating
cash flow minus capital expenditures) is
estimated to decrease to ¥$764 million,
or a drop of 595 percent, compared to
the no-new-standards case value of $154
million in 2028, the year leading up to
the compliance date of new energy
conservation standards. The
significantly negative free cash flow in
the years leading up to the compliance
date implies that most, if not all, ESEM
manufacturers will need to borrow
funds in order to make the investments
necessary to comply with standards at
TSL 4. This has the potential to
significantly alter the market dynamics
as some smaller ESEM manufacturers
may not be able to secure this funding
and could exit the market as a result of
standards set at TSL 4.
In the absence of new energy
conservation standards, DOE estimates
that less than 1 percent of ESEM (High/
Med Torque), no ESEM (Low Torque),
less than 1 percent of ESEM
(Polyphase), 6 percent of AO–ESEM
(High/Med Torque), no AO–ESEM (Low
Torque), and no AO–ESEM (Polyphase)
shipments will meet the ELs required at
TSL 4 in 2029, the compliance year of
new standards. Therefore, DOE
estimates that manufacturers will have
to redesign models representing over 99
percent of all ESEM shipments by the
compliance date. It is unclear if most
ESEM manufacturers would have the
engineering capacity to complete the
necessary redesigns within the 4-year
compliance period. If manufacturers
require more than 4 years to redesign
their non-compliant ESEM models, they
will likely prioritize redesigns based on
sales volume, which could result in
customers not being able to obtain
compliant ESEMs covering the entire
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range of horsepower and motor
configurations that they require.
Almost all ESEMs covered by this
rulemaking will need to be redesigned
at TSL 4. Therefore, DOE estimates that
manufacturers will have to make
significant investments in their
manufacturing production equipment
and the engineering resources dedicated
to redesigning ESEM models. DOE
estimates that manufacturers will incur
approximately $572 million in product
conversion costs and approximately
$1,584 million in capital conversion
costs. Product conversion costs include
the engineering time to redesign almost
all ESEM models and to re-test these
newly redesigned models to meet the
standards set at TSL 4. Capital
conversion costs include the purchase
of almost all new lamination die sets,
winding machines, frame casts, and
assembly equipment as well as other
retooling costs to accommodate almost
all ESEM models covered by this
proposed rulemaking that will need to
be redesigned.
At TSL 4, under the preservation of
gross margin scenario, the shipment
weighted average MPC significantly
increases by approximately 117.7
percent relative to the no-new-standards
case MPC. While this price increase
results in additional revenue for
manufacturers, the $2,156 million in
total conversion costs estimated at TSL
4 outweighs this increase in
manufacturer revenue and results in
moderately negative INPV impacts at
TSL 4 under the preservation of gross
margin scenario.
Under the preservation of operating
profit scenario, manufacturers earn the
same nominal operating profit as would
be earned in the no-new-standards case,
but manufacturers do not earn
additional profit from their investments.
The significant increase in the shipment
weighted average MPC results in a lower
average manufacturer margin. This
lower average manufacturer margin and
the significant $2,156 million in total
conversion costs result in significantly
negative INPV impacts at TSL 4 under
PO 00000
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Fmt 4701
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the preservation of operating profit
scenario.
TSL 3 sets the efficiency level at EL
3 for all ESEM equipment classes. At
TSL 3, DOE estimates the impacts to
INPV will range from a decrease of $984
million to a decrease of $199 million,
which represents decreases to INPV by
approximately 48.7 percent and 9.9
percent, respectively. At TSL 3, industry
free cash flow is estimated to decrease
to ¥$313 million, or a drop of 303
percent, compared to the no-newstandards case value of $154 million in
2028, the year leading up to the
compliance date of new energy
conservation standards. The negative
free cash flow in the years leading up to
the compliance date implies that most,
if not all, ESEM manufacturers will
need to borrow funds in order to make
the investments necessary to comply
with standards. This has the potential to
significantly alter the market dynamics
as some smaller ESEM manufacturers
may not be able to secure this funding
and could exit the market as a result of
standards set at TSL 3.
In the absence of new energy
conservation standards, DOE estimates
that 8 percent of ESEM (High/Med
Torque), 8 percent of ESEM (Low
Torque), 14 percent of ESEM
(Polyphase), 15 percent of AO–ESEM
(High/Med Torque), 11 percent of
AOESEM (Low Torque), and 3 percent
of AO–ESEM (Polyphase) shipments
will meet or exceed the ELs requires at
TSL 3 in 2029, the compliance year of
new standards. Therefore, DOE
estimates that manufacturers will have
to redesign models representing
approximately 91 percent of all ESEM
shipments by the compliance date. It is
unclear if most ESEM manufacturers
would have the engineering capacity to
complete the necessary redesigns within
the 4-year compliance period. If
manufacturers require more than 4 years
to redesign their non-compliant ESEM
models, they will likely prioritize
redesigns based on sales volume, which
could result in customers not being able
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Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
to obtain compliant ESEMs covering the
entire range of horsepower and motor
configurations that they require.
The majority of ESEMs covered by
this rulemaking will need to be
redesigned at TSL 3. Therefore, DOE
estimates that manufacturers will have
to make significant investments in their
manufacturing production equipment
and the engineering resources dedicated
to redesigning ESEM models. DOE
estimates that manufacturers will incur
approximately $326 million in product
conversion costs and approximately
$792 million in capital conversion costs.
Product conversion costs include the
engineering time to redesign
approximately 91 percent of all ESEM
models and to re-test these newly
redesigned models to meet the
standards set at TSL 3. Capital
conversion costs include the purchase
of almost all new lamination die sets,
winding machines, frame casts, and
assembly equipment as well as other
retooling costs for approximately 91
percent of all ESEM models covered by
this proposed rulemaking.
At TSL 3, under the preservation of
gross margin scenario, the shipment
weighted average MPC significantly
increases by approximately 56.4 percent
relative to the no-new-standards case
MPC. While this price increase results
in additional revenue for manufacturers,
the $1,118 million in total conversion
costs estimated at TSL 3 outweighs this
increase in manufacturer revenue and
results in moderately negative INPV
impacts at TSL 3 under the preservation
of gross margin scenario.
Under the preservation of operating
profit scenario, manufacturers earn the
same nominal operating profit as would
be earned in the no-new-standards case,
but manufacturers do not earn
additional profit from their investments.
The significant increase in the shipment
weighted average MPC results in a lower
average manufacturer margin. This
lower average manufacturer margin and
the significant $1,118 million in total
conversion costs result in significantly
negative INPV impacts at TSL 3 under
the preservation of operating profit
scenario.
TSL 2 sets the efficiency level at EL
2 for all ESEM equipment classes,
which is the recommended level from
the December 2022 Joint
Recommendation. At TSL 2, DOE
estimates the impacts to INPV will range
from a decrease of $264 million to a
decrease of $131 million, which
represents decreases to INPV by
approximately 13.1 percent and 6.5
percent, respectively. At TSL 2, industry
free cash flow is estimated to decrease
to $17 million, or a drop of 89 percent,
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compared to the no-new-standards case
value of $154 million in 2028, the year
leading up to the compliance date of
new energy conservation standards.
In the absence of new energy
conservation standards, DOE estimates
that 22 percent of ESEM (High/Med
Torque), 45 percent of ESEM (Low
Torque), 67 percent of ESEM
(Polyphase), 34 percent of AO–ESEM
(High/Med Torque), 67 percent of AO–
ESEM (Low Torque), and 36 percent of
AO–ESEM (Polyphase) shipments will
meet or exceed the ELs requires at TSL
2 in 2029, the compliance year of new
standards. Therefore, DOE estimates
that manufacturers will have to redesign
models representing approximately 55
percent of all ESEM shipments by the
compliance date.
DOE estimates that manufacturers
will incur approximately $141 million
in product conversion costs and
approximately $198 million in capital
conversion costs. Product conversion
costs primarily include engineering time
to redesign non-compliance ESEM
models and to re-test these newly
redesigned models to meet the
standards set at TSL 2. Capital
conversion costs include the purchase
of lamination die sets, winding
machines, frame casts, and assembly
equipment as well as other retooling
costs for all non-compliant ESEM
models covered by this proposed
rulemaking.
At TSL 2, under the preservation of
gross margin scenario, the shipment
weighted average MPC increases by
approximately 9.6 percent relative to the
no-new-standards case MPC. While this
price increase results in additional
revenue for manufacturers, the $339
million in total conversion costs
estimated at TSL 2 outweighs this
increase in manufacturer revenue and
results in moderately negative INPV
impacts at TSL 2 under the preservation
of gross margin scenario.
Under the preservation of operating
profit scenario, manufacturers earn the
same nominal operating profit as would
be earned in the no-new-standards case,
but manufacturers do not earn
additional profit from their investments.
The increase in the shipment weighted
average MPC results in a slightly lower
average manufacturer margin. This
lower average manufacturer margin and
the $339 million in total conversion
costs result in moderately negative INPV
impacts at TSL 2 under the preservation
of operating profit scenario.
TSL 1 sets the efficiency level at EL
1 for all ESEM equipment classes. At
TSL 1, DOE estimates the impacts to
INPV will range from a decrease of $201
million to a decrease of $136 million,
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87121
which represents decreases to INPV by
approximately 9.9 percent and 6.7
percent, respectively. At TSL 1, industry
free cash flow is estimated to decrease
to $45 million, or a drop of 71 percent,
compared to the no-new-standards case
value of $154 million in 2028, the year
leading up to the compliance date of
new energy conservation standards.
In the absence of new energy
conservation standards, DOE estimates
that 68 percent of ESEM (High/Med
Torque), 66 percent of ESEM (Low
Torque), 90 percent of ESEM
(Polyphase), 70 percent of AO–ESEM
(High/Med Torque), 92 percent of AO–
ESEM (Low Torque), and 62 percent of
AO–ESEM (Polyphase) shipments will
meet or exceed the ELs requires at TSL
1 in 2029, the compliance year of new
standards. Therefore, DOE estimates
that manufacturers will have to redesign
models representing approximately 26
percent of all ESEM shipments by the
compliance date.
DOE estimates that manufacturers
will incur approximately $125 million
in product conversion costs and
approximately $149 million in capital
conversion costs. Product conversion
costs primarily include engineering time
to redesign non-compliance ESEM
models and to re-test these newly
redesigned models to meet the
standards set at TSL 1. Capital
conversion costs include the purchase
of lamination die sets, winding
machines, frame casts, and assembly
equipment, as well as other retooling
costs for all non-compliant ESEM
models covered by this proposed
rulemaking.
At TSL 1, under the preservation of
gross margin scenario, the shipment
weighted average MPC increases slightly
by approximately 4.7 percent relative to
the no-new-standards case MPC. While
this price increase results in additional
revenue for manufacturers, the $274
million in total conversion costs
estimated at TSL 1 outweighs this
increase in manufacturer revenue and
results in moderately negative INPV
impacts at TSL 1 under the preservation
of gross margin scenario.
Under the preservation of operating
profit scenario, manufacturers earn the
same nominal operating profit as would
be earned in the no-new-standards case,
but manufacturers do not earn
additional profit from their investments.
The increase in the shipment weighted
average MPC results in a slightly lower
average manufacturer margin. This
lower average manufacturer margin and
the $274 million in total conversion
costs result in moderately negative INPV
impacts at TSL 1 under the preservation
of operating profit scenario.
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b. Direct Impacts on Employment
To quantitatively assess the potential
impacts of new energy conservation
standards on direct employment in the
ESEM industry, DOE used the GRIM to
estimate the domestic labor
expenditures and number of direct
employees in the no-new-standards case
and in each of the standards cases
during the analysis period.
DOE used statistical data from the
U.S. Census Bureau’s 2021 Annual
Survey of Manufacturers (‘‘ASM’’), the
results of the engineering analysis, and
interviews with manufacturers to
determine the inputs necessary to
calculate industry-wide labor
expenditures and domestic employment
levels. Labor expenditures involved
with the manufacturing of ESEMs are a
function of the labor intensity of the
product, the sales volume, and an
assumption that wages remain fixed in
real terms over time.
In the GRIM, DOE used the labor
content of each piece of equipment and
the MPCs to estimate the annual labor
expenditures of the industry. DOE used
Census data and interviews with
manufacturers to estimate the portion of
the total labor expenditures attributable
to domestic labor.
The production worker estimates in
this employment section cover only
workers up to the line-supervisor level
who are directly involved in fabricating
and assembling ESEMs within a motor
facility. Workers performing services
that are closely associated with
production operations, such as material
handling with a forklift, are also
included as production labor. DOE’s
estimates account for only production
workers who manufacture the specific
equipment covered by this proposed
rulemaking.
The employment impacts shown in
Table V–29 represent the potential
production employment impacts
resulting from new energy conservation
standards. The upper bound of the
results estimates the maximum change
in the number of production workers
that could occur after compliance with
new energy conservation standards
when assuming that manufacturers
continue to produce the same scope of
covered equipment in the same
production facilities. It also assumes
that domestic production does not shift
to lower-labor-cost countries. Because
there is a real risk of manufacturers
evaluating sourcing decisions in
response to new energy conservation
standards, the lower bound of the
employment results includes the
estimated total number of U.S.
production workers in the industry who
could lose their jobs if some existing
ESEM production was moved outside of
the U.S. While the results present a
range of employment impacts following
2029, this section also includes
qualitative discussions of the likelihood
of negative employment impacts at the
various TSLs. Finally, the employment
impacts shown are independent of the
indirect employment impacts from the
broader U.S. economy, which are
documented in chapter 16 of the NOPR
TSD.
Based on 2021 ASM data and
interviews with manufacturers, DOE
estimates approximately 15 percent of
ESEMs covered by this proposed
rulemaking sold in the U.S. are
manufactured domestically. Using this
assumption, DOE estimates that in the
absence of new energy conservation
standards, there would be
approximately 784 domestic production
workers involved in manufacturing all
ESEMs covered by this rulemaking in
2029. Table V–29 shows the range of
potential impacts of new energy
conservation standards on U.S.
production workers involved in the
production of ESEMs covered by this
rulemaking.
TABLE V–29—POTENTIAL CHANGE IN THE NUMBER OF DOMESTIC ESEM WORKERS
No-newstandards
case
Domestic Production Workers in 2029 ................................
Domestic Non-Production Workers in 2029 ........................
Total Domestic Employment in 2029 ...................................
Potential Changes in Total Domestic Employment in
2029 * ................................................................................
Trail standard level
1
2
3
4
784
449
1,233
821
470
1,291
859
492
1,351
1,226
702
1,928
1,706
977
2,683
........................
58–(37)
118–(75)
695–(442)
1,450–(784)
ddrumheller on DSK120RN23PROD with PROPOSALS2
* DOE presents a range of potential impacts. Numbers in parentheses indicate negative values.
At the upper end of the range, all
examined TSLs show an increase in the
number of domestic production workers
for ESEMs. The upper end of the range
represents a scenario where
manufacturers increase production
hiring due to the increase in the labor
associated with adding the required
components and additional labor (e.g.,
hand winding, etc.) to make more
efficient ESEMs. However, as previously
stated, this assumes that in addition to
hiring more production employees, all
existing domestic production would
remain in the United States and not
shift to lower labor-cost countries.
At the lower end of the range, all
examined TSLs show a decrease in
domestic production employment. The
lower end of the domestic employment
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range assumes that some, or all, ESEM
domestic production employment may
shift to lower labor-cost countries in
response to energy conservation
standards. DOE estimates that
approximately 85 percent of all ESEMs
sold in the U.S. are manufactured
abroad. At max-tech, TSL 4, DOE
conservatively estimates that the
remaining 15 percent of domestic
production could shift to foreign
production locations. DOE estimated
this lower bound potential change in
domestic employment based on the
percent change in the MPC at each
TSL.96
96 Except for TSL 4, which has an MPC increase
of higher than 100 percent. Therefore, DOE assumes
all domestic employment moves abroad at this TSL.
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c. Impacts on Manufacturing Capacity
The December 2022 Joint
Recommendation stated that standards
set at EL 2 for the ESEM High/Med
Torque equipment class would
minimize potential market disruptions
by allowing CSIR and split-phase
topologies to remain on the market, but
only at smaller (0.25–0.5 hp)
horsepower ratings. (Electric Motors
Working Group, No. 38 at p. 3) The
December 2022 Joint Recommendation
also stated that standards set at EL 2 for
the ESEM Low Torque equipment class
would not create widespread market
disruptions and that standards set at
higher ELs could result in significant
increases in the physical size,
unavailability of product, and in some
cases, may be extremely difficult to
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Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
achieve with current PSC technology.
(Id.)
Many ESEM manufacturers do not
offer any ESEM models that would meet
max-tech levels or one EL below maxtech (i.e., TSL 4 and TSL 3,
respectively). Based on the shipments
analysis used in the NIA, DOE estimates
that less than one percent and 9 percent
of all ESEM shipments will meet maxtech and one EL below max-tech,
respectively, in the no-new-standards
case in 2029, the compliance year of
new standards. Therefore, at TSL 4 and
TSL 3, DOE estimates that
manufacturers will have to redesign
models representing over 99 percent
and 91 percent, respectively, of all
ESEM shipments by the compliance
date. It is unclear if any ESEM
manufacturers would have the
engineering capacity to complete the
necessary redesigns within the 4-year
compliance period. If manufacturers
require more than 4 years to redesign
their non-compliant ESEM models, they
will likely prioritize redesigns based on
sales volume, which could result in
customers not being able to obtain
compliant ESEMs covering the entire
range of horsepower and motor
configurations that they require.
Lastly, during manufacturer
interviews, most manufacturers stated
they would not be able to provide a full
portfolio of any ESEM equipment class
for any standards that would be met
using copper rotors. In DOE’s
engineering analysis, all representative
units, except the ESEM—Low Torque,
0.5 hp and AO–ESEM—Low Torque, 0.5
hp representative units, are modeled to
use copper rotors at the max-tech
efficiency design (i.e., EL 4). No other
lower ELs are modeled to use die-cast
copper rotors. Most manufacturers
stated that they do not currently have
the machinery, technology, or
engineering resources to produce copper
rotors in-house. Some manufacturers
claim that the few manufacturers that do
have the capability of producing copper
rotors are not able to produce these
motors in volumes sufficient to fulfill all
shipments of that equipment class and
would not be able to ramp up those
production volumes over the four-year
compliance period. For manufacturers
to either completely redesign their
motor production lines or significantly
expand their very limited copper rotor
production line would require a massive
retooling and engineering effort, which
could take more than a decade to
complete. Most manufacturers stated
they would have to outsource copper
rotor production because they would
not be able to modify their facilities and
production processes to produce copper
rotors in-house within a four-year time
period. Most manufacturers agreed that
outsourcing rotor die casting would
constrain capacity by creating a
bottleneck in rotor production, as there
are very few companies that produce
copper rotors.
Manufacturers also pointed out that
there is substantial uncertainty
surrounding the global availability and
price of copper, which has the potential
to constrain capacity. Several
manufacturers expressed concern that
the combination of all of these factors
would make it impossible to support
existing customers while redesigning
equipment lines and retooling.
DOE estimates there is a strong
likelihood of manufacturer capacity
constraints in the near term for any
standards that would likely require the
use of copper rotors for any equipment
classes both due to the uncertainty of
the global supply of copper and due to
the quantity of machinery that would
need to be purchased and the
engineering resources that would be
required to produce copper rotors.
Therefore, there could be significant
market disruption for any standards set
at EL 4 for any equipment class, except
for the ESEM—Low Torque, 0.25–3 hp
and the AO–ESEM—Low Torque, 0.25–
3 hp equipment classes.
d. Impacts on Subgroups of
Manufacturers
Using average cost assumptions to
develop an industry cash-flow estimate
may not be adequate for assessing
differential impacts among
manufacturer subgroups. Small
manufacturers, niche equipment
manufacturers, and manufacturers
exhibiting cost structures substantially
different from the industry average
could be affected disproportionately.
DOE discusses the impacts on small
businesses in section VI.B of this
document and did not identify any
other adversely impacted ESEM-related
manufacturer subgroups for this
proposed rulemaking based on the
results of the industry characterization.
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer
burden involves looking at the
cumulative impact of multiple DOE
standards and the product-specific
regulatory actions of other Federal
agencies that affect the manufacturers of
a covered product or equipment. While
any one regulation may not impose a
significant burden on manufacturers,
the combined effects of several existing
or impending regulations may have
serious consequences for some
manufacturers, groups of manufacturers,
or an entire industry. Assessing the
impact of a single regulation may
overlook this cumulative regulatory
burden. In addition to energy
conservation standards, other
regulations can significantly affect
manufacturers’ financial operations.
Multiple regulations affecting the same
manufacturer can strain profits and lead
companies to abandon equipment 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 requests
information regarding the impact of
cumulative regulatory burden on
manufacturers of ESEMs associated with
multiple DOE standards or productspecific regulatory actions of other
Federal agencies.
DOE evaluates product-specific
regulations that will take effect
approximately 3 years before or after the
2029 compliance date of any new
energy conservation standards for
ESEMs. This information is presented in
Table V.30.
ddrumheller on DSK120RN23PROD with PROPOSALS2
TABLE V.30—COMPLIANCE DATES AND EXPECTED CONVERSION EXPENSES OF FEDERAL ENERGY CONSERVATION
STANDARDS AFFECTING ESEM MANUFACTURERS
Number of
mfrs *
Federal energy conservation standard
Dedicated-Purpose Pool Pump Motors 88 FR 66966 (Sep.
28, 2023) ..........................................................................
Distribution Transformer 88 FR 1722 (Jan. 11, 2023) † ......
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Number of
manufacturers
affected from
this rule **
5
27
Fmt 4701
5
6
Sfmt 4702
Approx.
standards
year
Industry
conversion
costs
(millions)
2026 & 2028
2027
$56.2 (2022$)
$343 (2021$)
E:\FR\FM\15DEP2.SGM
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Industry
conversion
costs/product
revenue ***
(%)
5.1
2.7
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TABLE V.30—COMPLIANCE DATES AND EXPECTED CONVERSION EXPENSES OF FEDERAL ENERGY CONSERVATION
STANDARDS AFFECTING ESEM MANUFACTURERS—Continued
Number of
mfrs *
Federal energy conservation standard
Electric Motors 88 FR 36066 (Jun. 1, 2023) .......................
Number of
manufacturers
affected from
this rule **
74
Industry
conversion
costs
(millions)
Approx.
standards
year
74
2027
Industry
conversion
costs/product
revenue ***
(%)
$468 (2021$)
2.6
* This column presents the total number of manufacturers identified in the energy conservation standard rule contributing to cumulative regulatory burden.
** This column presents the number of manufacturers producing ESEMs that are also listed as manufacturers in the listed energy conservation
standard contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of product revenue during the conversion period. Industry conversion costs
are the upfront investments manufacturers must make to sell compliant products/equipment. The revenue used for this calculation is the revenue
from just the covered product/equipment associated with each row. The conversion period is the time frame over which conversion costs are
made and lasts from the publication year of the final rule to the compliance year of the energy conservation standard. The conversion period
typically ranges from 3 to 5 years, depending on the rulemaking.
† Indicates a proposed rulemaking. Final values may change upon the publication of a final rule.
In response to the March 2022
Preliminary Analysis, the Joint
Stakeholders commented that regulating
motors that are components
significantly increases the burden on
manufacturers if all products using
special and definite purpose motors
were suddenly forced to certify
compliance with standards for
component parts, including the testing,
paperwork, and record-keeping
requirements that accompany
certification. (Joint Stakeholders, No. 23
at p. 5) As stated in section II.A and
section IV.A.1 of this document, EPCA,
as amended through EISA 2007,
provides DOE with the authority to
regulate the expanded scope of motors
addressed in this rule, whether those
electric motors are manufactured alone
or as a component of another piece of
equipment. DOE believes this ESEM
proposed rulemaking would not impact
manufacturers of consumer products.
For commercial equipment, DOE
identified the following equipment as
potentially incorporating ESEMs: walkin coolers and freezers, circulator
pumps, air circulating fans, and
commercial unitary air conditioning
equipment. If the proposed energy
conservation standards for these rules
finalize as proposed, DOE identified
that these rules would all: (1) have a
compliance year that is at or before the
ESEM standard compliance year (2029)
and/or (2) require a motor that is either
outside of the scope of ESEM (e.g., an
ECM) or an ESEM with an efficiency
above the proposed ESEM standards,
and therefore would not be impacted by
this ESEM proposed rulemaking (i.e.,
the ESEM rule would not trigger a
redesign of these equipment).
3. National Impact Analysis
This section presents DOE’s estimates
of the national energy savings and the
NPV of consumer benefits that would
result from each of the TSLs considered
as potential new standards.
a. Significance of Energy Savings
To estimate the energy savings
attributable to potential new standards
for ESEMs, 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
year of anticipated compliance with
new standards (2029–2058). Table V–31
presents DOE’s projections of the
national energy savings for each TSL
considered for ESEMs. The savings were
calculated using the approach described
in section IV.H.2 of this document.
TABLE V–31—CUMULATIVE NATIONAL ENERGY SAVINGS FOR ESEMS; 30 YEARS OF SHIPMENTS
[2029–2058]
Trial standard level
1
2
3
4
(Quads)
ddrumheller on DSK120RN23PROD with PROPOSALS2
Primary energy ................................................................................................
FFC energy ......................................................................................................
OMB Circular A–4 97 requires
agencies to present analytical results,
including separate schedules of the
monetized benefits and costs that show
the type and timing of benefits and
costs. Circular A–4 also directs agencies
to consider the variability of key
97 U.S. Office of Management and Budget.
Circular A–4: Regulatory Analysis. September 17,
2003. https://obamawhitehouse.archives.gov/omb/
circulars_a004_a-4 (last accessed May 1, 2023).
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3.0
3.1
elements underlying the estimates of
benefits and costs. For this NOPR, DOE
undertook a sensitivity analysis using 9
years, rather than 30 years, of
equipment 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
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8.9
16.5
17.0
23.6
24.2
revised standards.98 The review
98 EPCA requires DOE to review its standards at
least once every 6 years, and requires, for certain
products, a 3-year period after any new standard is
promulgated before compliance is required, except
that in no case may any new standards be required
within 6 years of the compliance date of the
previous standards. (42 U.S.C. 6316(a); 42 U.S.C.
6295(m)) While adding a 6-year review to the 3-year
compliance period adds up to 9 years, DOE notes
that it may undertake reviews at any time within
the 6-year period and that the 3-year compliance
date may yield to the 6-year backstop. A 9-year
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timeframe established in EPCA is
generally not synchronized with the
equipment lifetime, equipment
manufacturing cycles, or other factors
specific to ESEMs. Thus, such results
are presented for informational
purposes only and are not indicative of
any change in DOE’s analytical
methodology. The NES sensitivity
analysis results based on a 9-year
87125
analytical period are presented in Table
V–32. The impacts are counted over the
lifetime of ESEMs purchased in 2029–
2037.
TABLE V–32—CUMULATIVE NATIONAL ENERGY SAVINGS FOR ESEMS; 9 YEARS OF SHIPMENTS
[2029–2037]
Trial standard level
1
2
3
4
(Quads)
Primary energy ................................................................................................
FFC energy ......................................................................................................
b. Net Present Value of Consumer Costs
and Benefits
DOE estimated the cumulative NPV of
the total costs and savings for
0.8
0.8
consumers that would result from the
TSLs considered for ESEMs. In
accordance with OMB’s guidelines on
regulatory analysis,99 DOE calculated
NPV using both a 7-percent and a 3-
2.4
2.4
4.5
4.6
6.4
6.6
percent real discount rate. Table V–33
shows the consumer NPV results with
impacts counted over the lifetime of
equipment purchased in 2029–2058.
TABLE V–33—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR ESEMS; 30 YEARS OF SHIPMENTS
[2029–2058]
Trial standard level
Discount rate
1
2
3
4
(billion 2022$)
3 percent ..........................................................................................................
7 percent ..........................................................................................................
The NPV results based on the
aforementioned 9-year analytical period
are presented in Table V–34. The
impacts are counted over the lifetime of
14.0
6.4
equipment purchased in 2029–2037. As
mentioned previously, such results are
presented for informational purposes
only and are not indicative of any
45.0
21.0
50.4
21.0
36.8
11.2
change in DOE’s analytical methodology
or decision criteria.
TABLE V–34—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR ESEMS; 9 YEARS OF SHIPMENTS
[2029–2037]
Trial standard level
Discount rate
1
2
3
4
(billion 2022$)
ddrumheller on DSK120RN23PROD with PROPOSALS2
3 percent ..........................................................................................................
7 percent ..........................................................................................................
5.1
3.2
The previous results reflect the use of
a default trend to estimate the change in
price for ESEMs over the analysis period
(see section IV.F.1 of this document).
DOE also conducted a sensitivity
analysis that considered one scenario
with a price decline and one scenario
with a price increase compared to the
reference case. The results of these
alternative cases are presented in
appendix 10C of the NOPR TSD. In the
decreasing price case, the NPV of
consumer benefits is higher than in the
default case. In the increasing price
case, the NPV of consumer benefits is
lower than in the default case.
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.
99 U.S. Office of Management and Budget.
Circular A–4: Regulatory Analysis. September 17,
2003. obamawhitehouse.archives.gov/omb/
circulars_a004_a-4 (last accessed July 1, 2021).
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c. Indirect Impacts on Employment
DOE estimates that new energy
conservation standards for ESEMs will
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10.3
18.1
10.1
12.9
5.2
reduce energy expenditures for
consumers of those equipment, 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
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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 (2029–2034), where these
uncertainties are reduced.
The results suggest that the proposed
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 NOPR
TSD presents detailed results regarding
anticipated indirect employment
impacts.
4. Impact on Utility or Performance of
Products
As discussed in section IV.C.1.c of
this document, DOE has tentatively
concluded that the standards proposed
in this NOPR would not lessen the
utility or performance of the ESEMs
under consideration in this proposed
rulemaking. Manufacturers of these
products currently offer units that meet
or exceed the proposed standards.
5. Impact of Any Lessening of
Competition
6. Need of the Nation To Conserve
Energy
DOE considered any lessening of
competition that would be likely to
result from new or amended standards.
As discussed in section III.F.1.e of this
document, the Attorney General
determines the impact, if any, of any
lessening of competition likely to result
from a proposed standard, and transmits
such determination in writing to the
Secretary, together with an analysis of
the nature and extent of such impact. To
assist the Attorney General in making
this determination, DOE has provided
DOJ with copies of this NOPR and the
accompanying NOPR TSD for review.
DOE will consider DOJ’s comments on
the proposed rule in determining
whether to proceed to a final rule. DOE
will publish and respond to DOJ’s
comments in that document. DOE
invites comment from the public
regarding the competitive impacts that
are likely to result from this proposed
rule. In addition, stakeholders may also
provide comments separately to DOJ
regarding these potential impacts. See
the ADDRESSES section for information
to send comments to DOJ.
Enhanced energy efficiency, where
economically justified, improves the
Nation’s energy security, strengthens the
economy, and reduces the
environmental impacts (costs) of energy
production. Reduced electricity demand
due to energy conservation standards is
also likely to reduce the cost of
maintaining the reliability of the
electricity system, particularly during
peak-load periods. Chapter 15 in the
NOPR TSD presents the estimated
impacts on electricity generating
capacity, relative to the no-newstandards case, for the TSLs that DOE
considered in this proposed rulemaking.
Energy conservation resulting from
potential energy conservation standards
for ESEMs is expected to yield
environmental benefits in the form of
reduced emissions of certain air
pollutants and greenhouse gases. Table
V–35 provides DOE’s estimate of
cumulative emissions reductions
expected to result from the TSLs
considered in this NOPR. The emissions
were calculated using the multipliers
discussed in section IV.L of this
document. DOE reports annual
emissions reductions for each TSL in
chapter 13 of the NOPR TSD.
TABLE V–35—CUMULATIVE EMISSIONS REDUCTION FOR ESEMS SHIPPED IN 2029–2058
Trial standard level
1
2
3
4
Electric Power Sector Emissions
CO2 (million metric tons) .................................................................................................
CH4 (thousand tons) ........................................................................................................
N2O (thousand tons) ........................................................................................................
SO2 (thousand tons) ........................................................................................................
NOX (thousand tons) .......................................................................................................
Hg (tons) ..........................................................................................................................
50.0
3.4
0.5
23.3
14.7
0.1
145.6
10.0
1.4
67.8
42.9
0.3
277.6
19.2
2.6
129.6
82.6
0.6
397.2
27.5
3.8
185.6
118.6
0.8
5.1
464.2
0.0
79.6
0.3
0.0
14.9
1,352.2
0.1
232.0
0.9
0.0
28.4
2,574.8
0.1
441.7
1.7
0.0
40.6
3,682.0
0.2
631.7
2.5
0.0
55.1
467.6
0.5
102.9
15.0
0.1
160.5
1,362.2
1.4
299.8
43.8
0.3
306.0
2,593.9
2.8
571.3
84.3
0.6
437.8
3,709.4
4.0
817.3
121.1
0.8
Upstream Emissions
CO2 (million metric tons) .................................................................................................
CH4 (thousand tons) ........................................................................................................
N2O (thousand tons) ........................................................................................................
SO2 (thousand tons) ........................................................................................................
NOX (thousand tons) .......................................................................................................
Hg (tons) ..........................................................................................................................
ddrumheller on DSK120RN23PROD with PROPOSALS2
Total FFC Emissions
CO2 (million metric tons) .................................................................................................
CH4 (thousand tons) ........................................................................................................
N2O (thousand tons) ........................................................................................................
SO2 (thousand tons) ........................................................................................................
NOX (thousand tons) .......................................................................................................
Hg (tons) ..........................................................................................................................
As part of the analysis for this
rulemaking, DOE estimated monetary
benefits likely to result from the
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reduced emissions of CO2 that DOE
estimated for each of the considered
TSLs for ESEMs. Section IV.L of this
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document discusses the SC–CO2 values
that DOE used. Table V–36 presents the
value of CO2 emissions reduction at
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each TSL for each of the SC–CO2 cases.
The time-series of annual values is
presented for the proposed TSL in
chapter 14 of the NOPR TSD.
TABLE V–36—PRESENT VALUE OF CO2 EMISSIONS REDUCTION FOR ESEMS SHIPPED IN 2029–2058
SC–CO2 case
Discount rate and statistics
TSL
5%
Average
3%
Average
2.5%
Average
3%
95th percentile
(billion 2022$)
1
2
3
4
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
As discussed in section IV.L.2 of this
document, DOE estimated the climate
benefits likely to result from the
reduced emissions of methane and N2O
that DOE estimated for each of the
0.61
1.79
3.42
4.89
considered TSLs for ESEMs. Table V–37
presents the value of the CH4 emissions
reduction at each TSL, and Table V–38
presents the value of the N2O emissions
reduction at each TSL. The time-series
2.55
7.43
14.18
20.29
3.95
11.52
21.97
31.43
7.76
22.59
43.10
61.67
of annual values is presented for the
proposed TSL in chapter 14 of the
NOPR TSD.
TABLE V–37—PRESENT VALUE OF METHANE EMISSIONS REDUCTION FOR ESEMS SHIPPED IN 2029–2058
SC–CH4 case
Discount rate and statistics
TSL
5%
Average
3%
Average
2.5%
Average
3%
95th percentile
(billion 2022$)
1
2
3
4
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
0.24
0.69
1.32
1.88
0.68
1.99
3.79
5.42
0.94
2.75
5.24
7.49
1.80
5.26
10.01
14.32
TABLE V–38—PRESENT VALUE OF NITROUS OXIDE EMISSIONS REDUCTION FOR ESEMS SHIPPED IN 2029–2058
SC–N2O case
Discount rate and statistics
TSL
5%
Average
3%
Average
2.5%
Average
3%
95th percentile
(billion 2022$)
ddrumheller on DSK120RN23PROD with PROPOSALS2
1
2
3
4
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
DOE is well aware that scientific and
economic knowledge about the
contribution of CO2 and other GHG
emissions to changes in the future
global climate and the potential
resulting damages to the global and U.S.
economy continues to evolve rapidly.
DOE, together with other Federal
agencies, will continue to review
methodologies for estimating the
monetary value of reductions in CO2
and other GHG emissions. This ongoing
review will consider the comments on
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0.002
0.006
0.012
0.017
this subject that are part of the public
record for this and other rulemakings, as
well as other methodological
assumptions and issues. DOE notes that
the proposed standards would be
economically justified even without
inclusion of monetized benefits of
reduced GHG emissions.
DOE also estimated the monetary
value of the health benefits associated
with NOX and SO2 emissions reductions
anticipated to result from the
considered TSLs for ESEMs. The dollarper-ton values that DOE used are
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0.008
0.024
0.045
0.065
0.012
0.036
0.070
0.100
0.022
0.063
0.121
0.173
discussed in section IV.L of this
document. Table V–39 presents the
present value for NOX emissions
reduction for each TSL calculated using
7-percent and 3-percent discount rates,
and Table V–40 presents similar results
for SO2 emissions reductions. The
results in these tables reflect application
of EPA’s low dollar-per-ton values,
which DOE used to be conservative. The
time-series of annual values is presented
for the proposed TSL in chapter 14 of
the NOPR TSD.
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TABLE V–39—PRESENT VALUE OF NOX EMISSIONS REDUCTION FOR ESEMS SHIPPED IN 2029–2058
TSL
7% Discount rate
3% Discount rate
(million 2022$)
1
2
3
4
...............................................................................................................................................................
...............................................................................................................................................................
...............................................................................................................................................................
...............................................................................................................................................................
2,249.3
6,551.5
12,497.5
17,883.3
5,221.7
15,211.6
29,002.1
41,492.7
TABLE V–40—PRESENT VALUE OF SO2 EMISSIONS REDUCTION FOR ESEMS SHIPPED IN 2029–2058
TSL
3% Discount rate
7% Discount rate
(million 2022$)
1
2
3
4
...............................................................................................................................................................
...............................................................................................................................................................
...............................................................................................................................................................
...............................................................................................................................................................
Not all the public health and
environmental benefits from the
reduction of greenhouse gases, NOX,
and SO2 are captured in the values
above, and additional unquantified
benefits from the reductions of those
pollutants as well as from the reduction
of direct PM and other co-pollutants
may be significant. DOE has not
included 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
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)) No other
factors were considered in this analysis.
8. Summary of Economic Impacts
Table V–41 presents the NPV values
that result from adding the estimates of
the potential economic benefits
resulting from reduced GHG and NOX
467.5
1,362.5
2,624.4
3,767.9
1,065.7
3,106.6
5,981.4
8,586.2
and SO2 emissions to the NPV of
consumer benefits calculated for each
TSL considered in this proposed
rulemaking. The consumer benefits are
domestic U.S. monetary savings that
occur as a result of purchasing the
covered ESEMs and are measured for
the lifetime of products shipped in
2029–2058. The climate benefits
associated with reduced GHG emissions
resulting from the proposed standards
are global benefits and are also
calculated based on the lifetime of
ESEMs shipped in 2029–2058.
TABLE V–41—CONSUMER NPV COMBINED WITH PRESENT VALUE OF CLIMATE BENEFITS AND HEALTH BENEFITS
Category
TSL 1
TSL 2
TSL 3
TSL 4
Using 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 ..................................................................................................
21.2
23.6
25.2
29.9
65.8
72.8
77.6
91.2
90.1
103.4
112.6
138.6
93.7
112.7
125.9
163.1
31.4
38.3
43.2
56.8
40.8
54.1
63.4
89.3
39.7
58.7
71.9
109.1
Using 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 ..................................................................................................
ddrumheller on DSK120RN23PROD with PROPOSALS2
C. Conclusion
When considering new or amended
energy conservation standards, the
standards that DOE adopts for any type
(or class) of covered equipment must be
designed to achieve the maximum
improvement in energy efficiency that
the Secretary determines is
technologically feasible and
economically justified. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(A)) In
determining whether a standard is
economically justified, the Secretary
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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 NOPR, DOE considered the
impacts of new standards for ESEMs at
each TSL, beginning with the maximum
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12.4
14.1
18.7
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
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of the results of DOE’s quantitative
analysis for each TSL. In addition to the
quantitative results presented in the
tables, DOE also considers other
burdens and benefits that affect
economic justification. These include
the impacts on identifiable subgroups of
consumers who may be
disproportionately affected by a national
standard and impacts on employment.
1. Benefits and Burdens of TSLs
Considered for ESEM Standards
Table V–42 and Table V–43
summarize the quantitative impacts
estimated for each TSL for ESEMs. The
national impacts are measured over the
lifetime of ESEMs purchased in the 30-
year period that begins in the
anticipated year of compliance with
new standards (2029–2058). The energy
savings, emissions reductions, and
value of emissions reductions refer to
full-fuel-cycle results. The efficiency
levels contained in each TSL are
described in section V.A of this
document.
TABLE V–42—SUMMARY OF ANALYTICAL RESULTS FOR ESEMS TSLS: NATIONAL IMPACTS
Category
TSL 1
TSL 2
TSL 3
TSL 4
Cumulative FFC National Energy Savings
Quads ..............................................................................................................................................
3.1
8.9
17.0
24.2
55.1
467.6
0.5
102.9
15.0
0.1
160.5
1,362.2
1.4
299.8
43.8
0.3
306.0
2,593.9
2.8
571.3
84.3
0.6
437.8
3,709.4
4.0
817.3
121.1
0.8
54.7
9.4
18.3
82.4
9.7
45.0
72.8
107.0
18.0
35.0
160.0
56.7
50.4
103.4
154.5
25.8
50.1
230.3
117.7
36.8
112.7
26.10
9.45
7.91
43.46
5.14
20.95
38.31
51.09
18.01
15.12
84.23
30.12
20.98
54.11
73.76
25.77
21.65
121.18
62.52
11.24
58.66
Cumulative FFC Emissions Reduction
CO2 (million metric tons) .................................................................................................................
CH4 (thousand tons) ........................................................................................................................
N2O (thousand tons) ........................................................................................................................
SO2 (thousand tons) ........................................................................................................................
NOX (thousand tons) .......................................................................................................................
Hg (tons) ..........................................................................................................................................
Present Value of Benefits and Costs (3% discount rate, billion 2022$)
Consumer Operating Cost Savings .................................................................................................
Climate Benefits * .............................................................................................................................
Health Benefits ** .............................................................................................................................
Total Benefits † ................................................................................................................................
Consumer Incremental Equipment Costs ‡ .....................................................................................
Consumer Net Benefits ...................................................................................................................
Total Net Benefits ............................................................................................................................
18.7
3.2
6.3
28.3
4.7
14.0
23.6
Present Value of Benefits and Costs (7% discount rate, billion 2022$)
Consumer Operating Cost Savings .................................................................................................
Climate Benefits * .............................................................................................................................
Health Benefits ** .............................................................................................................................
Total Benefits † ................................................................................................................................
Consumer Incremental Equipment Costs ‡ .....................................................................................
Consumer Net Benefits ...................................................................................................................
Total Net Benefits ............................................................................................................................
8.94
3.24
2.72
14.89
2.49
6.45
12.41
Note: This table presents the costs and benefits associated with ESEMs shipped in 2029–2058. These results include consumer, climate, and
health benefits which accrue after 2058 from the products shipped in 2029–2058.
* 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; however, DOE 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 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.
‡ Costs include incremental equipment costs.
TABLE V–43—SUMMARY OF ANALYTICAL RESULTS FOR ESEMS TSLS: MANUFACTURER AND CONSUMER IMPACTS
ddrumheller on DSK120RN23PROD with PROPOSALS2
Category
TSL 1
TSL 2
TSL 3
TSL 4
1,883 to 1,818 ....
1,888 to 1,755 ....
1,820 to 1,035 ....
1,710 to 73.
(6.7) to (9.9) .......
(6.5) to (13.1) .....
(9.9) to (48.7) .....
(15.3) to (96.4).
(0.8) ....................
20.8 ....................
(106.5).
(145.2).
Manufacturer Impacts
Industry NPV (million 2022$) (No-new-standards case INPV =
2,019).
Industry NPV (% change) .............................................................
Consumer Average LCC Savings (2022$)
ESEM—High/Medium Torque, 0.25 hp ........................................
ESEM—High/Medium Torque, 1 hp .............................................
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55.6 ....................
116.1 ..................
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51.3 ....................
137.7 ..................
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Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
TABLE V–43—SUMMARY OF ANALYTICAL RESULTS FOR ESEMS TSLS: MANUFACTURER AND CONSUMER IMPACTS—
Continued
Category
TSL 1
TSL 2
ESEM—Low Torque, 0.25 hp .......................................................
ESEM—Low Torque, 0.5 hp .........................................................
ESEM—Polyphase, 0.25 hp .........................................................
AO–ESEM—High/Medium Torque, 0.25 hp .................................
AO–ESEM—High/Medium Torque, 1 hp ......................................
AO–ESEM—Low Torque, 0.25 hp ...............................................
AO–ESEM—Low Torque, 0.5 hp .................................................
AO–ESEM—Polyphase, 0.25 hp ..................................................
Shipment-Weighted Average * ......................................................
212.8 ..................
41.2 ....................
31.9 ....................
76.3 ....................
121.9 ..................
217.2 ..................
47.6 ....................
35.1 ....................
82.8 ....................
146.8 ..................
99.6 ....................
26.2 ....................
82.9 ....................
160.3 ..................
121.3 ..................
88.4 ....................
39.9 ....................
101.8 ..................
TSL 3
24.1
77.8
(8.3)
37.4
37.1
31.6
50.0
12.7
43.6
....................
....................
....................
....................
....................
....................
....................
....................
....................
TSL 4
(16.7).
72.5.
(107.3).
(61.4).
(128.2).
(13.4)..
52.4.
(85.0).
(9.6).
Consumer Simple PBP (years)
ESEM—High/Medium Torque, 0.25 hp ........................................
ESEM—High/Medium Torque, 1 hp .............................................
ESEM—Low Torque, 0.25 hp .......................................................
ESEM—Low Torque, 0.5 hp .........................................................
ESEM—Polyphase, 0.25 hp .........................................................
AO–ESEM—High/Medium Torque, 0.25 hp .................................
AO–ESEM—High/Medium Torque, 1 hp ......................................
AO–ESEM—Low Torque, 0.25 hp ...............................................
AO–ESEM—Low Torque, 0.5 hp .................................................
AO–ESEM—Polyphase, 0.25 hp ..................................................
Shipment-Weighted Average * ......................................................
0.5
0.7
0.4
2.4
1.1
0.3
0.6
0.4
2.2
1.1
1.5
......................
......................
......................
......................
......................
......................
......................
......................
......................
......................
......................
1.5
1.1
1.0
1.3
2.6
1.0
0.9
1.1
0.8
2.0
1.2
......................
......................
......................
......................
......................
......................
......................
......................
......................
......................
......................
5.3
4.7
3.3
2.8
7.4
3.2
3.9
3.1
3.0
5.1
3.6
......................
......................
......................
......................
......................
......................
......................
......................
......................
......................
......................
10.0.
8.7.
5.0.
3.3.
15.6.
6.1.
7.7.
4.9.
3.4.
10.8.
5.7.
Percent of Consumers that Experience a Net Cost
ESEM—High/Medium Torque, 0.25 hp ........................................
ESEM—High/Medium Torque, 1 hp .............................................
ESEM—Low Torque, 0.25 hp .......................................................
ESEM—Low Torque, 0.5 hp .........................................................
ESEM—Polyphase, 0.25 hp .........................................................
AO–ESEM—High/Medium Torque, 0.25 hp .................................
AO–ESEM—High/Medium Torque, 1 hp ......................................
AO–ESEM—Low Torque, 0.25 hp ...............................................
AO–ESEM—Low Torque, 0.5 hp .................................................
AO–ESEM—Polyphase, 0.25 hp ..................................................
Shipment-Weighted Average * ......................................................
2% ......................
3% ......................
0% ......................
11% ....................
1% ......................
1% ......................
2% ......................
0% ......................
2% ......................
3% ......................
5% ......................
17% ....................
12% ....................
3% ......................
8% ......................
7% ......................
8% ......................
6% ......................
4% ......................
3% ......................
10% ....................
8% ......................
51%
54%
52%
30%
59%
36%
44%
39%
34%
49%
41%
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
86%.
82%.
68%.
40%.
95%.
65%.
82%.
68%.
42%
88%.
59%.
ddrumheller on DSK120RN23PROD with PROPOSALS2
Parentheses indicate negative (¥) values.
* Weighted by shares of each equipment class in total projected shipments in 2022.
DOE first considered TSL 4, which
represents the max-tech efficiency
levels. TSL 4 would save an estimated
24.2 quads of energy, an amount DOE
considers significant. Under TSL 4, the
NPV of consumer benefit would be
$11.24 billion using a discount rate of
7 percent and $36.8 billion using a
discount rate of 3 percent.
The cumulative emissions reductions
at TSL 4 are 437.8 Mt of CO2, 817.3
thousand tons of SO2, 121.1 thousand
tons of NOX, 0.8 tons of Hg, 3,709.4
thousand tons of CH4, and 4.0 thousand
tons of N2O. The estimated monetary
value of the climate benefits from
reduced GHG emissions (associated
with the average SC–GHG at a 3-percent
discount rate) at TSL 4 is $25.8 billion.
The estimated monetary value of the
health benefits from reduced SO2 and
NOX emissions at TSL 4 is $21.7 billion
using a 7-percent discount rate and
$50.1 billion using a 3-percent discount
rate.
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Using a 7-percent discount rate for
consumer benefits and costs, health
benefits from reduced SO2 and NOX
emissions, and the 3-percent discount
rate case for climate benefits from
reduced GHG emissions, the estimated
total NPV at TSL 4 is $58.7 billion.
Using a 3-percent discount rate for all
benefits and costs, the estimated total
NPV at TSL 4 is $112.7 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 4, the average LCC impact for
non-air over ESEMs is a savings of
¥$107 and ¥$145 for high/medium
torque ESEMs (0.25 and 1 hp,
respectively); ¥$17 and $73 for low
torque ESEMs (0.25 and 0.5 hp,
respectively); and ¥$107 for Polyphase
ESEMs. At TSL 4, the average LCC
impact for AO–ESEMs is a savings of
¥$61 and ¥$128 for high/medium
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torque AO–ESEMs (0.25 and 1 hp,
respectively); ¥$13 and $52 for low
torque AO–ESEMs (0.25 and 0.5 hp,
respectively); and ¥$85 for Polyphase
AO–ESEMs. Overall, the shipmentsweighted average LCC impact is a
savings of ¥$10. The simple payback
period for non-air-over ESEMs is 6.9
and 6.3 years for high/medium torque
ESEMs (0.25 and 1 hp, respectively); 2.0
and 3.0 years for low torque ESEMs
(0.25 and 0.5 hp, respectively); and 9.7
years for polyphase ESEMs. The simple
payback period for AO–ESEMs is 4.3
and 5.1 years for high/medium torque
AO–ESEMs (0.25 and 1 hp,
respectively); 1.9 and 2.7 years for low
torque AO–ESEMs (0.25 and 0.5 hp,
respectively); and 8.3 years for
polyphase AO–ESEMs. Overall, the
shipments-weighted average PBP is 4.0
years. The fraction of consumers
experiencing a net LCC cost for non-airover ESEMs is 85.9 and 82.5 percent for
high/medium torque ESEMs (0.25 and 1
hp, respectively); 67.7 and 40.1 percent
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Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
for low torque ESEMs (0.25 and 0.5 hp,
respectively); and 95.0 percent for
polyphase ESEMs. The fraction of
consumers experiencing a net LCC cost
for AO–ESEMs is 64.6 and 81.9 percent
for high/medium torque AO–ESEMs
(0.25 and 1 hp, respectively); 67.9 and
42.2 percent for low torque AO–ESEMs
(0.25 and 0.5 hp, respectively); and 87.8
percent for polyphase AO–ESEMs.
Overall, the shipments-weighted
average fraction of consumers
experiencing a net LCC cost is 59.3
percent.
At TSL 4, the projected change in
INPV ranges from a decrease of $1,946
million to a decrease of $309 million,
which corresponds to decreases of 96.4
percent and 15.3 percent, respectively.
DOE estimates that industry must invest
$2,156 million to redesign almost all
ESEM models and to purchase new
lamination die sets, winding machines,
frame casts, and assembly equipment as
well as other retooling costs to
manufacturer compliant ESEM models
at TSL 4. An investment of $2,156
million in conversion costs represents
over 3.3 times the sum of the annual
free cash flows over the years between
the expected publication of the final
rule and the compliance year (i.e., the
time period that these conversion costs
would be incurred) and represents over
100 percent of the entire no-newstandards case INPV over the 30-year
analysis period.100
In the no-new-standards case, free
cash flow is estimated to be $154
million in 2028, the year before the
compliance date. At TSL 4, the
estimated free cash flow is ¥$764
million in 2028. This represents a
decrease in free cash flow of 595
percent, or a decrease of $919 million,
in 2028. A negative free cash flow
implies that most, if not all,
manufacturers will need to borrow
substantial funds to be able to make
investments necessary to comply with
energy conservation standards at TSL 4.
The extremely large drop in free cash
flows could cause some ESEM
manufacturers to exit the ESEM market
entirely, even though recovery may be
possible over the 30-year analysis
period. At TSL 4, models representing
less than 1 percent of all ESEM
shipments are estimated to meet the
efficiency requirements at this TSL in
the no-new-standards case by 2029, the
compliance year. Therefore, models
representing over 99 percent of all
ESEM shipments will need be
100 The sum of annual free cash flows is estimated
to be $636 million for 2025–2028 in the no-newstandards case and the no-new-standards case INPV
is estimated to be $2,019 million.
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remodeled in the 4-year compliance
period.
Manufacturers are unlikely to have
the engineering capacity to conduct this
massive redesign effort in 4 years.
Instead, they will likely prioritize
redesigns based on sales volume, which
could leave market gaps in equipment
offered by manufacturers and even the
entire ESEMs industry. The resulting
market gaps in equipment offerings
could result in sub-optimal selection of
ESEMs for some applications. Lastly,
although DOE’s analysis assumes that
TSL 4 can be reached without
significant increase in size, as discussed
in sections IV.C.3 and IV.J.2.c of this
NOPR and in the December 2022 Joint
Recommendation, the Electric Motor
Working group expressed that in order
to meet the efficiency requirements at
TSL 4, some manufacturers may choose
to rely on design options that could
significantly increase the physical size
of ESEMs. This could result in a
significant and widespread disruption
to the OEM markets that used ESEMs as
an embedded product, as those OEMs
may have to make significant changes to
their equipment that use ESEMs because
those ESEMs could become larger in
physical size.
DOE requests comment on if
manufacturers would have the
engineering capacity to conduct design
efforts to be able to offer a full portfolio
of complaint ESEM at TSL 4. If not,
please provide any data or information
on the potential impacts that could arise
due to these market gaps in equipment
offerings.
Under 42 U.S.C. 6316(a) and 42 U.S.C.
6295(o)(2)(B)(i), DOE determines
whether a standard is economically
justified after considering seven factors.
Based on these factors, the Secretary
tentatively concludes that at TSL 4 for
ESEMs, the benefits of energy savings,
positive NPV of consumer benefits,
emission reductions, and the estimated
monetary value of the emissions
reductions would be outweighed by the
economic burden on many consumers
and the impacts on manufacturers,
including the extremely large
conversion costs (representing over 3.3
times the sum of the annual free cash
flows during the time period that these
conversion costs will be incurred and
over 100 percent of the entire no-newstandards case INPV), profitability
impacts that could result in a large
reduction in INPV (up to a decrease of
96.4 percent), the large negative free
cash flows in the years leading up to the
compliance date (annual free cash flow
is estimated to be ¥$764 million in the
year before the compliance date), the
lack of manufacturers currently offering
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Sfmt 4702
87131
equipment meeting the efficiency levels
required at TSL 4 (models representing
over 99 percent of shipments will need
to be redesigned to meet this TSL), and
the likelihood of the significant
disruption in the ESEM market. Due to
the limited amount of engineering
resources each manufacturer has, it is
unclear if most manufacturers will be
able to redesign models representing on
average 99 percent of their ESEM
shipments covered by this rulemaking
in the 4-year compliance period.
Consequently, the Secretary has
tentatively concluded that TSL 4 is not
economically justified.
DOE then considered TSL 3, which
represents efficiency level 3 for all
equipment class groups. TSL 3 would
save an estimated 17 quads of energy, an
amount DOE considers significant.
Under TSL 3, the NPV of consumer
benefit would be $11.2 billion using a
discount rate of 7 percent and $36.8
billion using a discount rate of 3
percent.
The cumulative emissions reductions
at TSL 3 are 306.0 Mt of CO2, 571.3
thousand tons of SO2, 84.3 thousand
tons of NOX, 0.6 tons of Hg, 2,593.9
thousand tons of CH4, and 2.8 thousand
tons of N2O. The estimated monetary
value of the climate benefits from
reduced GHG emissions (associated
with the average SC–GHG at a 3-percent
discount rate) at TSL 3 is $18.0 billion.
The estimated monetary value of the
health benefits from reduced SO2 and
NOX emissions at TSL 3 is $15.1 billion
using a 7-percent discount rate and
$35.0 billion using a 3-percent discount
rate.
Using a 7-percent discount rate for
consumer benefits and costs, health
benefits from reduced SO2 and NOX
emissions, and the 3-percent discount
rate case for climate benefits from
reduced GHG emissions, the estimated
total NPV at TSL 3 is $54.1 billion.
Using a 3-percent discount rate for all
benefits and costs, the estimated total
NPV at TSL 3 is $103.4 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 3, the average LCC impact for
non-air over ESEMs is a savings of ¥$1
and $21 for high/medium torque ESEMs
(0.25 and 1 hp, respectively); $24 and
$78 for low torque ESEMs (0.25 and 0.5
hp, respectively); and ¥$8 for
Polyphase ESEMs. At TSL 3, the average
LCC impact for AO–ESEMs is a savings
of $37 and $37 for high/medium torque
AO–ESEMs (0.25 and 1 hp,
respectively); $32 and $50 for low
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Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
torque AO ESEMs (0.25 and 0.5 hp,
respectively); and $13 for Polyphase
AO–ESEMs. Overall, the shipmentsweighted average LCC impact is a
savings of $44. The simple payback
period for non-air-over ESEMs is 3.7
and 3.4 years for high/medium torque
ESEMs (0.25 and 1 hp, respectively); 1.3
and 2.5 years for low torque ESEMs
(0.25 and 0.5 hp, respectively); and 4.6
years for polyphase ESEMs. The simple
payback period for AO–ESEMs is 2.3
and 2.7 years for high/medium torque
AO–ESEMs (0.25 and 1 hp,
respectively); 1.2 and 2.3 years for low
torque AO–ESEMs (0.25 and 0.5 hp,
respectively); and 3.9 years for
polyphase AO–ESEMs. Overall, the
shipments-weighted average PBP is 2.6
years. The fraction of consumers
experiencing a net LCC cost, for non-airover ESEMs is 51.2 and 53.5 percent for
high/medium torque ESEMs (0.25 and 1
hp, respectively); 52.0 and 30.4 percent
for low torque ESEMs (0.25 and 0.5 hp,
respectively); and 58.6 percent for
polyphase ESEMs. The fraction of
consumers experiencing a net LCC cost,
for AO–ESEMs is 36.0 and 44.4 percent
for high/medium torque AO–ESEMs
(0.25 and 1 hp, respectively); 39.1 and
34.4 percent for low torque AO–ESEMs
(0.25 and 0.5 hp, respectively); and 48.6
percent for polyphase AO–ESEMs.
Overall, the shipments-weighted
average fraction of consumers
experiencing a net LCC cost is 40.6
percent.
At TSL 3, the projected change in
INPV ranges from a decrease of $1,035
million to a decrease of $199 million,
which corresponds to decreases of 48.7
percent and 9.9 percent, respectively.
DOE estimates that industry must invest
$1,118 million to redesign the majority
of ESEM models and to purchase new
lamination die sets, winding machines,
frame casts, and assembly equipment as
well as other retooling costs to
manufacturer compliant ESEM models
at TSL 3. An investment of $1,118
million in conversion costs represents
over 1.7 times the sum of the annual
free cash flows over the years between
the expected publication of the final
rule and the compliance year (i.e., the
time period that these conversion costs
would be incurred) and represents over
55 percent of the entire no-newstandards case INPV over the 30-year
analysis period.101
In the no-new-standards case, free
cash flow is estimated to be $154
million in 2028, the year before the
101 The sum of annual free cash flows is estimated
to be $636 million for 2025–2028 in the no-newstandards case and the no-new-standards case INPV
is estimated to be $2,019 million.
VerDate Sep<11>2014
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Jkt 262001
compliance date. At TSL 3, the
estimated free cash flow is ¥$313
million in 2028. This represents a
decrease in free cash flow of 303
percent, or a decrease of $468 million,
in 2028. A negative free cash flow
implies that most, if not all,
manufacturers will need to borrow
substantial funds to be able to make
investments necessary to comply with
energy conservation standards at TSL 3.
The extremely large drop in free cash
flows could cause some ESEM
manufacturers to exit the ESEM market
entirely, even though recovery may be
possible over the 30-year analysis
period. At TSL 3, models representing
approximately 9 percent of all ESEM
shipments are estimated to meet the
efficiency requirements at this TSL in
the no-new-standards case by 2029, the
compliance year. Therefore, models
representing approximately 91 percent
of all ESEM shipments will need be
remodeled in the 4-year compliance
period.
Manufacturers are unlikely to have
the engineering capacity to conduct this
massive redesign effort in 4 years.
Instead, they will likely prioritize
redesigns based on sales volume, which
could leave market gaps in equipment
offered by manufacturers and even the
entire ESEMs industry. The resulting
market gaps in equipment offerings
could result in sub-optimal selection of
ESEMs for some applications. Lastly,
although DOE’s analysis assumes that
TSL 3 can be reached without
significant increase in size, as discussed
in sections IV.C.3 and IV.J.2.c of this
NOPR and in the December 2022 Joint
Recommendation, the Electric Motor
Working group expressed that in order
to meet the efficiency requirements at
TSL 3, some manufacturers may choose
to rely on design options that would
significantly increase the physical size
of ESEMs. This could result in a
significant and widespread disruption
to the OEM markets that used ESEMs as
an embedded product, as those OEMs
may have to make significant changes to
their equipment that use ESEMs since
those ESEMs could become larger in
physical size.
DOE requests comment on if
manufacturers would have the
engineering capacity to conduct design
efforts to be able to offer a full portfolio
of compliant ESEMs at TSL 3. If not,
please provide any data or information
on the potential impacts that could arise
due to these market gaps in equipment
offerings.
Under 42 U.S.C. 6316(a) and 42 U.S.C.
6295(o)(2)(B)(i), DOE determines
whether a standard is economically
justified after considering seven factors.
PO 00000
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Fmt 4701
Sfmt 4702
Based on these factors, the Secretary
tentatively concludes that at TSL 3 for
ESEMs, the benefits of energy savings,
the economic benefit on many
consumers, positive NPV of consumer
benefits, emission reductions, and the
estimated monetary value of the
emissions reductions would be
outweighed by the impacts on
manufacturers, including the extremely
large conversion costs (representing
over 1.7 times the sum of the annual
free cash flows during the time period
that these conversion costs will be
incurred and over 55 percent of the
entire no-new-standards case INPV),
profitability impacts that could result in
a large reduction in INPV (up to a
decrease of 48.7 percent), the large
negative free cash flows in the years
leading up to the compliance date
(annual free cash flow is estimated to be
¥$313 million in the year before the
compliance date), the lack of
manufacturers currently offering
equipment meeting the efficiency levels
required at this TSL (models
representing approximately 91 percent
of shipments will need to be redesigned
to meet this TSL), and the likelihood of
the significant disruption in the ESEM
market. Due to the limited amount of
engineering resources each
manufacturer has, it is unclear if most
manufacturers will be able to redesign
models representing on average 91
percent of their ESEM shipments
covered by this rulemaking in the 4-year
compliance period. Consequently, the
Secretary has tentatively concluded that
TSL 3 is not economically justified.
DOE then considered TSL 2, the
standards level recommended in the
December 2022 Joint Recommendation,
which represents EL 2 for all equipment
class groups. TSL 2 would save an
estimated 8.9 quads of energy, an
amount DOE considers significant.
Under TSL 2, the NPV of consumer
benefit would be $21.0 billion using a
discount rate of 7 percent and $45.0
billion using a discount rate of 3
percent.
The cumulative emissions reductions
at TSL 2 are 160.5 Mt of CO2, 299.8
thousand tons of SO2, 43.8 thousand
tons of NOX, 0.3 tons of Hg, 1,362.2
thousand tons of CH4, and 1.4 thousand
tons of N2O. The estimated monetary
value of the climate benefits from
reduced GHG emissions (associated
with the average SC–GHG at a 3-percent
discount rate) at TSL 2 is $9.4 billion.
The estimated monetary value of the
health benefits from reduced SO2 and
NOX emissions at TSL 2 is $7.9 billion
using a 7-percent discount rate and
$18.3 billion using a 3-percent discount
rate.
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Using a 7-percent discount rate for
consumer benefits and costs, health
benefits from reduced SO2 and NOX
emissions, and the 3-percent discount
rate case for climate benefits from
reduced GHG emissions, the estimated
total NPV at TSL 2 is $38.3 billion.
Using a 3-percent discount rate for all
benefits and costs, the estimated total
NPV at TSL 2 is $72.8 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 2, the average LCC impact for
non-air over ESEMs is a savings of $51
and $138 for high/medium torque
ESEMs (0.25 and 1 hp, respectively);
$147 and $100 for low torque ESEMs
(0.25 and 0.5 hp, respectively); and $26
for Polyphase ESEMs. At TSL 2, the
average LCC impact for AO–ESEMs is a
savings of $83 and $160 for high/
medium torque AO–ESEMs (0.25 and 1
hp, respectively); $121 and $88 for low
torque AO–ESEMs (0.25 and 0.5 hp,
respectively); and $40 for Polyphase
AO–ESEMs. Overall, the shipmentsweighted average LCC impact is a
savings of $102. The simple payback
period for non-air-over ESEMs is 1.1
and 0.9 years for high/medium torque
ESEMs (0.25 and 1 hp, respectively); 0.7
and 1.5 years for low torque ESEMs
(0.25 and 0.5 hp, respectively); and 2.0
years for polyphase ESEMs. The simple
payback period for AO–ESEMs is 0.8
and 0.8 years for high/medium torque
AO–ESEMs (0.25 and 1 hp,
respectively); 0.7 and 1.3 years for low
torque AO–ESEMs (0.25 and 0.5 hp,
respectively); and 1.8 years for
polyphase AO–ESEMs. Overall, the
shipments-weighted average PBP is 1.2
years. The fraction of consumers
experiencing a net LCC cost, for non-airover ESEMs is 16.7 and 11.7 percent for
high/medium torque ESEMs (0.25 and 1
hp, respectively); 3.0 and 7.8 percent for
low torque ESEMs (0.25 and 0.5 hp,
respectively); and 7.2 percent for
polyphase ESEMs. The fraction of
consumers experiencing a net LCC cost
for AO–ESEMs is 7.8 and 5.9 percent for
high/medium torque AO–ESEMs (0.25
and 1 hp, respectively); 3.7 and 2.9
percent for low torque AO–ESEMs (0.25
and 0.5 hp, respectively); and 9.7
percent for polyphase AO–ESEMs.
Overall, the shipments-weighted
average fraction of consumers
experiencing a net LCC cost is 7.8
percent.
At TSL 2, the projected change in
INPV ranges from a decrease of $264
million to a decrease of $131 million,
which corresponds to decreases of 13.1
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percent and 6.5 percent, respectively.
DOE estimates that industry must invest
$339 million to comply with standards
set at TSL 2. An investment of $339
million in conversion costs represents
approximately 53 percent of the sum of
the annual free cash flows over the years
between the expected publication date
of the final rule and the standards year
(i.e., the time period that these
conversion costs would be incurred)
and represents approximately 17
percent of the entire no-new-standards
case INPV over the 30-year analysis
period.102
Under 42 U.S.C. 6316(a) and 42 U.S.C.
6295(o)(2)(B)(i), DOE determines
whether a standard is economically
justified after considering seven factors.
After considering the seven factors and
weighing the benefits and burdens, the
Secretary has tentatively concluded that
standards set at TSL 2, the
recommended TSL from the Electric
Motors Working Group, for ESEMs
would be economically justified. At this
TSL, the average LCC savings for all
equipment classes is positive. An
estimated 7.8 percent of ESEM
consumers experience a net cost. The
FFC national energy savings are
significant and the NPV of consumer
benefits is positive using both a 3percent and 7-percent discount rate.
Notably, the benefits to consumers
vastly outweigh the cost to
manufacturers. At TSL 2, the NPV of
consumer benefits, even measured at the
more conservative discount rate of 7
percent is over 79 times higher than the
maximum estimated manufacturers’ loss
in INPV. The proposed standard levels
at TSL 2 are economically justified even
without weighing the estimated
monetary value of emissions reductions.
When those emissions reductions are
included—representing $9.4 billion in
climate benefits (associated with the
average SC–GHG at a 3-percent discount
rate), and $18.3 billion (using a 3percent discount rate) or $7.9 billion
(using a 7-percent discount rate) in
health benefits—the rationale becomes
stronger still.
Accordingly, the Secretary has
tentatively concluded that TSL 2, the
TSL recommended by the Electric
Motors Working Group, would offer the
maximum improvement in efficiency
that is technologically feasible and
economically justified and would result
in the significant conservation of
energy. In addition, as discussed in
section V.A of this document, DOE is
102 The sum of annual free cash flows is estimated
to be $636 million for 2025–2028 in the no-newstandards case and the no-new-standards case INPV
is estimated to be $2,019 million.
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87133
establishing the TSLs by equipment
class groups and aligning the AO–ESEM
levels with the non-AO–ESEMs.
Although results are presented here in
terms of TSLs, DOE analyzes and
evaluates all possible ELs for each
equipment class in its analysis. For all
equipment classes, TSL 2 is comprised
of EL 2, and represents two levels below
max-tech. The max tech efficiency
levels (TSL 4) result in negative LCC
savings for most equipment classes and
a large percentage of consumers that
experience a net LCC cost for most
equipment classes, in addition to
significant manufacturer impacts. The
ELs one level below max tech (TSL 3)
result in negative LCC savings for some
equipment classes and a large
percentage of consumers that experience
a net LCC cost for most equipment
classes. Additionally, the impact to
manufacturers is significantly reduced
at TSL 2. While manufacturers will have
to invest $339 million to comply with
standards at TSL 2, annual free cash
flows remain positive for all years
leading up to the modeled compliance
date. DOE also estimates that most
ESEM manufacturers will have the
engineering capacity to complete these
redesigns in a 4-year compliance period.
Lastly, as discussed in the December
2022 Joint Recommendation,103 TSL 2
would not result in ESEMs significantly
increasing in physical size and therefore
would not result in a significant and
widespread disruption to the OEM
markets that used ESEMs as an
embedded product.
The ELs two levels below max-tech
(TSL 2), which represents the proposed
standard levels as recommended by the
Electric Motors Working Group, result
in positive LCC savings for all
equipment classes, significantly reduce
the number of consumers experiencing
a net cost, and reduce the decrease in
INPV and conversion costs to the point
where DOE has tentatively concluded
they are economically justified, as
discussed for TSL 2 in the preceding
paragraphs.
As presented in section V.A in this
document, DOE developed TSLs that
aligned the efficiency levels for air-over
and non-air-over ESEMs because of the
similarities in the manufacturing
processes between air-over and non-airover ESEMs. In some cases, an air-over
ESEM could be manufactured on the
same line as a non-air-over ESEM by
omitting the steps of manufacturing
associated with the fan of a motor.
While DOE did not explicitly analyze
a TSL that would require TSL 3
efficiency levels for AO–ESEMs and
103 See
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TSL 2 efficiency levels for non-air over
ESEMs, DOE may consider this
alternative combination for any
potential final rule. In that case, DOE
seeks feedback on the potential
consequences of adopting a moreefficient level of AO–ESEMs as
compared to non-air over ESEMs. DOE
seeks information about whether there
would be any decrease in the shipments
of AO–ESEMs (and a decrease in the
potential benefits from a more efficient
proposed standard at TSL 3 efficiency
levels for AO–ESEMs) by shifting the
market to predominantly non-air over
ESEMs. In such a scenario, the savings
associated with this TSL option may
never be realized. In addition, while
DOE did not consider a TSL that would
require TSL 2 for all equipment classes
except TSL3 efficiency levels for low
torque ESEMs (both air-over and nonair-over) due to the uncertainties as to
whether the size, fit and function would
be maintained and potential significant
and widespread disruption to the OEM
markets, DOE seeks information related
to potential size increase and impact on
OEM markets at TSL 3 and above.
DOE seeks comment on these
alternative proposed standard levels.
DOE requests comment on the
unintended market consequences and
the changes industry would make as a
result of standards that require the use
of different motor technologies for nonair over and AO–ESEMs. In addition, if
DOE were to consider a TSL that would
require TSL 2 for all equipment classes
except TSL3 efficiency levels for low
torque ESEMs, DOE seeks information
related to potential ESEM size increase
and impact on OEM markets at TSL 3
and above.
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 EPCA. 86
FR 70892, 70908 (Dec. 12, 2021).
Although DOE has not conducted a
comparative analysis to select the
proposed new energy conservation
standards, DOE notes that as compared
to TSL 3 and TSL 4, TSL 2 has higher
average LCC savings for consumers,
significantly smaller percentages of
consumers experiencing a net cost, a
lower maximum decrease in INPV,
lower manufacturer conversion costs,
and a significant decrease in the
likelihood of a major disruption to the
both the ESEM market and the OEM
markets that use ESEMs as an embedded
product in their equipment, as DOE
does not anticipate gaps in ESEM
equipment offerings or a significant
increase in the physical size of ESEMs
at TSL 2.
Although DOE considered proposing
new standard levels for ESEMs by
grouping the efficiency levels for each
equipment class into TSLs, DOE
evaluates all analyzed efficiency levels
in its analysis. For all equipment
classes, TSL 2 represents the maximum
energy savings that does not result in
significant negative economic impacts
to ESEM manufacturers. At TSL 2,
conversion costs are estimated to be
$339 million, significantly less than at
TSL 3 ($1,118 million) or at TSL 4
($2,156 million). At TSL 2, conversion
costs represent a significantly smaller
size of the sum of ESEM manufacturers’
annual free cash flows for 2025 to 2028
(53 percent), than at TSL 3 (176 percent)
or at TSL 4 (339 percent) and a
significantly smaller portion of ESEM
manufacturers’ no-new-standards case
INPV (17 percent), than at TSL 3 (55
percent) or at TSL 4 (107 percent). At
TSL 2, ESEM manufacturers will have to
redesign a significantly smaller portion
of their ESEM models to meet the ELs
set at TSL 2 (models representing 55
percent of all ESEM shipments), than at
TSL 3 (91 percent) or at TSL 4 (99
percent). Lastly, ESEM manufacturers’
free cash flow remains positive at TSL
2 for all years leading up to the
compliance date. Whereas at TSL 3
annual free cash flow is estimated to be
¥$313 million and at TSL 4 annual free
cash flow is estimated to be ¥$764
million in 2028, the year before the
compliance year. Additionally, the ELs
at the proposed TSL result in average
positive LCC savings for all equipment
class groups and significantly reduce
the number of consumers experiencing
a net cost to the point where DOE has
tentatively concluded they are
economically justified, as discussed for
TSL 2 in the preceding paragraphs.
Therefore, based on the previous
considerations, DOE proposes to adopt
the energy conservation standards for
ESEMs at TSL 2, which was the
recommended TSL by the Electric
Motors Working Group. The proposed
energy conservation standards for
ESEMs, which are expressed as average
full-load efficiency, are shown in Table
V–44 through Table V–46.
TABLE V–44—PROPOSED ENERGY CONSERVATION STANDARDS FOR HIGH AND MEDIUM-TORQUE ESEMS
Average full load efficiency
hp
Open
ddrumheller on DSK120RN23PROD with PROPOSALS2
2-pole
0.25 ..................................................................
0.33 ..................................................................
0.5 ....................................................................
0.75 ..................................................................
1 .......................................................................
1.5 ....................................................................
2 .......................................................................
3 .......................................................................
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59.5
64.0
68.0
76.2
80.4
81.5
82.9
84.1
Enclosed
4-pole
6-pole
8-pole
59.5
64.0
69.2
81.8
82.6
83.8
84.5
................
57.5
62.0
68.0
80.2
81.1
................
................
................
................
50.5
52.5
72.0
74.0
................
................
................
Frm 00074
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Sfmt 4702
2-pole
59.5
64.0
68.0
75.5
77.0
81.5
82.5
84.0
E:\FR\FM\15DEP2.SGM
4-pole
6-pole
8-pole
59.5
64.0
67.4
75.5
80.0
81.5
82.5
................
57.5
62.0
68.0
75.5
77.0
80.0
................
................
................
50.5
52.5
72.0
74.0
................
................
................
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TABLE V–45—PROPOSED ENERGY CONSERVATION STANDARDS FOR LOW-TORQUE ESEMS
Average full load efficiency
hp
Open
2-pole
0.25 ..................................................................
0.33 ..................................................................
0.5 ....................................................................
0.75 ..................................................................
1 .......................................................................
1.5 ....................................................................
2 .......................................................................
3 .......................................................................
4-pole
63.9
66.9
68.8
70.5
74.3
79.9
81.0
82.4
Enclosed
6-pole
66.1
69.7
70.1
74.8
77.1
82.1
82.9
84.0
8-pole
60.2
65.0
66.8
73.1
77.3
80.5
81.4
82.5
52.5
56.6
57.1
62.8
65.7
72.2
73.3
74.9
2-pole
4-pole
60.9
63.9
65.8
67.5
71.3
76.9
78.0
79.4
6-pole
64.1
67.7
68.1
72.8
75.1
80.1
80.9
82.0
8-pole
59.2
64.0
65.8
72.1
76.3
79.5
80.4
81.5
52.5
56.6
57.1
62.8
65.7
72.2
73.3
74.9
TABLE V–46—PROPOSED ENERGY CONSERVATION STANDARDS FOR POLYPHASE ESEMS
Average full load efficiency
hp
Open
2-pole
0.25 ..................................................................
0.33 ..................................................................
0.5 ....................................................................
0.75 ..................................................................
1 .......................................................................
1.5 ....................................................................
2 .......................................................................
3 .......................................................................
2. Annualized Benefits and Costs of the
Proposed Standards
The benefits and costs of the proposed
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 equipment
that meet the proposed standards
(consisting primarily of operating cost
savings from using less energy, minus
increases in equipment purchase costs,
and (2) the annualized monetary value
of the climate and health benefits from
emission reductions.
4-pole
65.6
69.5
73.4
76.8
77.0
84.0
85.5
85.5
69.5
73.4
78.2
81.1
83.5
86.5
86.5
86.9
Enclosed
6-pole
67.5
71.4
75.3
81.7
82.5
83.8
................
................
8-pole
62.0
64.0
66.0
70.0
75.5
77.0
86.5
87.5
Table V–47 shows the annualized
values for ESEMs under TSL 2,
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 reduction benefits, and a 3percent discount rate case for GHG
social costs, the estimated cost of the
proposed standards for ESEMs is $543
million per year in increased equipment
costs, while the estimated annual
benefits are $2,757 million in reduced
product operating costs, $542 million in
climate benefits, and $836 million in
2-pole
4-pole
66.0
70.0
72.0
75.5
75.5
84.0
85.5
86.5
6-pole
68.0
72.0
75.5
77.0
77.0
82.5
85.5
86.5
8-pole
66.0
70.0
72.0
74.0
74.0
87.5
88.5
89.5
62.0
64.0
66.0
70.0
75.5
78.5
84.0
85.5
health benefits. In this case, the net
benefit amounts to $3,592 million per
year.
Using a 3-percent discount rate for all
benefits and costs, the estimated cost of
the proposed standards for ESEMs is
$556 million per year in increased
equipment costs, while the estimated
annual benefits are $3,140 million in
reduced operating costs, $542 million in
climate benefits, and $1,052 million in
health benefits. In this case, the net
benefit amounts to $4,179 million per
year.
TABLE V–47—ANNUALIZED MONETIZED BENEFITS AND COSTS OF PROPOSED STANDARDS FOR ESEMS
[Proposed TSL 2]
Million 2022$/year
Primary
estimate
Low-netbenefits
estimate
High-netbenefits
estimate
ddrumheller on DSK120RN23PROD with PROPOSALS2
3% discount rate
Consumer Operating Cost Savings .............................................................................................
Climate Benefits * .........................................................................................................................
Health Benefits ** .........................................................................................................................
Total Benefits † ............................................................................................................................
Consumer Incremental Equipment Costs ‡ .................................................................................
Net Benefits .................................................................................................................................
Change in Producer Cashflow (INPV ††) ....................................................................................
3,140
542
1,052
4,734
556
4,179
(25)–(13)
2,962
526
1,021
4,509
598
3,911
(25)–(13)
3,341
562
1,089
4,992
529
4,464
(25)–(13)
2,757
2,615
2,921
7% discount rate
Consumer Operating Cost Savings .............................................................................................
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TABLE V–47—ANNUALIZED MONETIZED BENEFITS AND COSTS OF PROPOSED STANDARDS FOR ESEMS—Continued
[Proposed TSL 2]
Million 2022$/year
Primary
estimate
Climate Benefits * (3% discount rate) ..........................................................................................
Health Benefits ** .........................................................................................................................
Total Benefits † ............................................................................................................................
Consumer Incremental Equipment Costs ‡ .................................................................................
Net Benefits .................................................................................................................................
Change in Producer Cashflow (INPV ††) ....................................................................................
542
836
4,135
543
3,592
(25)–(13)
Low-netbenefits
estimate
526
814
3,955
578
3,377
(25)–(13)
High-netbenefits
estimate
562
863
4,346
520
3,826
(25)–(13)
ddrumheller on DSK120RN23PROD with PROPOSALS2
Note: This table presents the costs and benefits associated with ESEMs shipped in 2029–2058. These results include consumer, climate, and
health benefits which accrue after 2058 from the equipment shipped in 2029–2058. 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 constant rate in the Primary Estimate, an increasing rate in the Low Net Benefits
Estimate, and a declining rate in the High Net Benefits Estimate. The methods used to derive projected price trends are explained in 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 notice). For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3 percent discount rate are shown, but 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 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.
** 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.
†† 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 national impacts analysis 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. The annualized
change in INPV is calculated using the industry weighted average cost of capital value of 9.1 percent that is estimated in the MIA (see chapter
12 of the NOPR TSD for a complete description of the industry weighted average cost of capital). For ESEMs, those values are ¥$25 million
and ¥$13 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 NOPR, the annualized net benefits would range from $4,154 million to $4,166 million at 3-percent discount rate and would range from $3,567 million to $3,579 million at 7-percent discount rate. Numbers in parentheses are negative
numbers.
D. Reporting, Certification, and
Sampling Plan
Manufacturers, including importers,
must use equipment-specific
certification templates to certify
compliance to DOE. For currently
regulated electric motors, the
certification template is specified at 10
CFR 429.36. DOE is not proposing new
product-specific certification reporting
requirements for ESEMs. However, as
discussed in section III.C of this
document, DOE proposes to amend the
determinations of represented values for
ESEMs.
VI. Procedural Issues and Regulatory
Review
A. Review Under Executive Orders
12866, 13563, and 14094
Executive Order (‘‘E.O.’’) 12866,
‘‘Regulatory Planning and Review,’’ as
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supplemented and reaffirmed by E.O.
13563, ‘‘Improving Regulation and
Regulatory Review,’’ 76 FR 3821 (Jan.
21, 2011) and amended by E.O. 14094,
‘‘Modernizing Regulatory Review,’’ 88
FR 21879 (April 11, 2023), requires
agencies, to the extent permitted by law,
to (1) propose or adopt a regulation only
upon a reasoned determination that its
benefits justify its costs (recognizing
that some benefits and costs are difficult
to quantify); (2) tailor regulations to
impose the least burden on society,
consistent with obtaining regulatory
objectives, taking into account, among
other things, and to the extent
practicable, the costs of cumulative
regulations; (3) select, in choosing
among alternative regulatory
approaches, those approaches that
maximize net benefits (including
potential economic, environmental,
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public health and safety, and other
advantages; distributive impacts; and
equity); (4) to the extent feasible, specify
performance objectives, rather than
specifying the behavior or manner of
compliance that regulated entities must
adopt; and (5) identify and assess
available alternatives to direct
regulation, including providing
economic incentives to encourage the
desired behavior, such as user fees or
marketable permits, or providing
information upon which choices can be
made by the public. DOE emphasizes as
well that E.O. 13563 requires agencies to
use the best available techniques to
quantify anticipated present and future
benefits and costs as accurately as
possible. In its guidance, the Office of
Information and Regulatory Affairs
(‘‘OIRA’’) in the Office of Management
and Budget (‘‘OMB’’) has emphasized
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ddrumheller on DSK120RN23PROD with PROPOSALS2
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 proposed
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 proposed
regulatory action constitutes a
‘‘significant regulatory action’’ within
the scope of section 3(f)(1) of E.O.
12866. Accordingly, pursuant to section
6(a)(3)(C) of E.O. 12866, DOE has
provided to OIRA an assessment,
including the underlying analysis, of
benefits and costs anticipated from the
proposed 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 proposed rulemaking.
B. Review Under the Regulatory
Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) requires preparation
of an initial regulatory flexibility
analysis (‘‘IRFA’’) for any rule that by
law must be proposed for public
comment, unless the agency certifies
that the rule, if promulgated, will not
have a significant economic impact on
a substantial number of small entities.
As required by E.O. 13272, ‘‘Proper
Consideration of Small Entities in
Agency Rulemaking,’’ 67 FR 53461
(Aug. 16, 2002), DOE published
procedures and policies on February 19,
2003, to ensure that the potential
impacts of its rules on small entities are
properly considered during the
rulemaking process. 68 FR 7990. DOE
has made its procedures and policies
available on the Office of the General
Counsel’s website (www.energy.gov/gc/
office-general-counsel). DOE has
prepared the following IRFA for the
equipment that are the subject of this
proposed rulemaking.
For manufacturers of ESEMs, the
Small Business Administration (‘‘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
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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 ESEMs
is classified under NAICS 335312,
‘‘Motor and Generator 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. Description of Reasons Why Action Is
Being Considered
DOE previously established energy
conservation standards for some types
of electric motors at 10 CFR 431.25.
These previous rulemakings did not
establish energy conservation standards
for ESEMs when establishing or
amending energy conservation
standards for other electric motors. In
the March 2022 Preliminary Analysis,
DOE analyzed potential efficiency levels
for ESEMs. See 87 FR 11650 (March 2,
2022). On December 22, 2022, DOE
received a joint recommendation for
energy conservation standards for
ESEMs. These standard levels were
submitted jointly to DOE, by groups
representing manufacturers, energy and
environmental advocates, and consumer
groups (the Electric Motors Working
Group). The December 2022 Joint
Recommendation recommends specific
energy conservation standards for
ESEMs.
2. Objectives of, and Legal Basis for,
Rule
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 the energy
efficiency of certain types of industrial
equipment, including ESEMs, a category
of electric motors, the subject of this
notice. (42 U.S.C. 6311(1)(A)).
DOE must follow specific statutory
criteria for prescribing new or amended
standards for covered equipment,
including electric motors. Any new or
amended standard for covered
equipment must be designed to achieve
the maximum improvement in energy
efficiency that the Secretary of Energy
determines is technologically feasible
and economically justified. (42 U.S.C.
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87137
6316(a); 42 U.S.C. 6295(o)(2)(A) and 42
U.S.C. 6295(o)(3)(B))
3. Description and Estimated Number of
Small Entities Regulated
To estimate the number of companies
that could be small business
manufacturers of ESEMs covered by this
rulemaking, DOE conducted a market
survey using publicly available
information. DOE’s research involved
DOE’s publicly available Compliance
Certification Database (‘‘CCD’’), industry
trade association membership
directories (including NEMA), and
information from previous rulemakings.
DOE also asked stakeholders and
industry representatives if they were
aware of any other small manufacturers
during manufacturer interviews and
DOE working groups. DOE used
information from these sources to create
a list of companies that potentially
manufacture ESEMs covered by this
proposed rulemaking. As necessary,
DOE contacted companies to determine
whether they met the SBA’s definition
of a small business manufacturer. DOE
screened out companies that do not
offer equipment covered by this
proposed rulemaking, do not meet the
definition of a ‘‘small business,’’ or are
foreign owned and operated.
DOE initially identified
approximately 74 unique potential
manufacturers of ESEMs sold in the U.S
that are covered by this proposed
rulemaking. DOE screened out
companies that had more than 1,250
employees or companies that were
completely foreign-owned and operated.
Of the 74 manufacturers that potentially
manufacture ESEMs covered by this
proposed rulemaking, DOE identified 3
companies that meet SBA’s definition of
a small business.
4. Description and Estimate of
Compliance Requirements Including
Differences in Cost, if Any, for Different
Groups of Small Entities
In this NOPR, DOE is proposing new
energy conservation standards for
ESEMs. The primary value added by
these 3 small businesses is creating
ESEMs that serve an application specific
purpose that the OEMs require. This
includes combining an ESEM with
specific mechanic couplings,
weatherproofing, or controls to suit the
OEM’s needs. Most small businesses
manufacture motor housing and
couplings but do not manufacture the
rotors and stators used in the ESEMs
they sell. While these small businesses
may have to create new ESEM housings
and/or couplings if the ESEM
characteristics change in response to the
proposed energy conservation
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standards, DOE was not able to identify
any small businesses that own their own
lamination dies sets and winding
machines that are used to manufacture
rotors and stators for ESEMs.
The 3 small businesses identified do
not manufacture the rotors and stators of
their ESEMs and instead purchase these
components from other manufacturers.
Thus, they would not need to purchase
the machinery necessary to manufacture
these components (i.e., would not need
to purchase costly lamination dies sets
and winding machines) nor would they
need to spend R&D efforts to develop
ESEM designs to meet energy
conservation standards. Instead, these
small manufacturers may have to create
new moldings for ESEM housings (if the
ESEM characteristics change in
response to the proposed energy
conservation standards).
DOE estimated conversion costs
associated with redesigning an
equipment line for ESEM housings. DOE
estimates this will cost approximately
$50,000 in molding equipment per
ESEM housing; $37,330 in engineering
design effort per ESEM housing; 104 and
$10,000 in testing costs per ESEM
housing. Based on these estimates, each
ESEM housing that will need to be
redesigned would cost a small business
approximately $97,330.
DOE displays in Table VI–1 the
estimated average conversion costs per
small business compared to the annual
revenue for each small business. DOE
used D&B Hoovers 105 to estimate the
annual revenue for each small business.
Manufacturers will have 4 years
between the expected publication of the
final rule and the date of compliance
with the proposed energy conservation
standards. Therefore, DOE presents the
estimated conversion costs and testing
costs as a percent of the estimated 4
years of annual revenue for each small
business.
TABLE VI–1—ESTIMATED CONVERSION COSTS AND ANNUAL REVENUE FOR EACH SMALL BUSINESS
Number of
ESEM
housing that
need to be
redesigned
Manufacturer
Estimated
annual
revenue
4 Years of
annual
revenue
Conversion
costs as a %
of 4 years of
annual revenue
Small Business 1 .........................................................................
Small Business 2 .........................................................................
Small Business 3 .........................................................................
27
19
24
$2,627,910
1,849,270
2,335,920
$6,270,000
10,120,00
28,210,000
$25,080,000
40,480,000
112,840,000
10.5
4.6
2.1
Average Small Business .......................................................
23
2,271,033
14,866,667
59,466,667
3.8
5. Duplication, Overlap, and Conflict
With Other Rules and Regulations
As described in section IV.A. of this
document, DOE believes the standards
proposed in this NOPR would not
impact manufacturers of consumer
products. In commercial equipment,
DOE identified the following equipment
as potentially incorporating ESEMs:
walk-in coolers and freezers, circulator
pumps, air circulating fans, and
commercial unitary air conditioning
equipment. If the proposed energy
conservation standards for these rules
finalize as proposed, DOE has identified
that these rules would all: (1) have a
compliance year that is at or before the
ESEM standard compliance year (2029)
and/or (2) require a motor that is either
outside of the scope of this rule (e.g., an
ECM) or an ESEM with an efficiency
above the proposed ESEM standards,
and therefore not be impacted by the
proposed ESEM rule (i.e., the ESEM rule
would not trigger a redesign of these
equipment).
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Total
conversion
costs
6. Significant Alternatives to the Rule
The discussion in the previous
section analyzes impacts on small
businesses that would result from DOE’s
104 DOE estimated that it would take
approximately three months of engineering time to
redesign each ESEM housing. Based on data from
BLS, the mean hourly wage of an electrical engineer
is $54.83 (www.bls.gov/oes/current/oes172071.htm)
and wages comprise 70.5 percent of an employee’s
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proposal to adopt standards represented
by TSL 2. In reviewing alternatives to
the proposed rule, DOE examined
energy conservation standards set at
lower efficiency levels. While TSL 1
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 65 percent lower energy
savings and 69 percent lower consumer
NPV compared to the energy savings at
TSL 2.
Based on the presented discussion,
proposing standards at TSL 2 balances
the benefits of the energy savings at TSL
2 with the potential burdens placed on
ESEM manufacturers, including small
business manufacturers. Accordingly,
DOE does not propose 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 NOPR
TSD.
Additional compliance flexibilities
may be available through other means.
Manufacturers subject to DOE’s energy
efficiency standards may apply to DOE’s
Office of Hearings and Appeals for
exception relief under certain
circumstances. Manufacturers should
refer to 10 CFR part 1003 for additional
details.
total compensation (www.bls.gov/news.release/
archives/ecec_06162023.pdf).
$54.83 (hourly wage) ÷ 0.705 (wage as a
percentage of total compensation) = $77.77 (fully
burdened hourly labor rate).
$77.77 × 8 (hours in a workday) × 20 (working
days in a month) × 3 (months) = $37,330
105 app.avention.com.
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C. Review Under the Paperwork
Reduction Act
Manufacturers of expanded scope
electric motors must test their
equipment according to the DOE test
procedures for ESEMs, including any
amendments adopted for those test
procedures, and use the results of the
test procedure and applicable sampling
plan if they choose to make
representations of the energy efficiency
or energy use of ESEMs. DOE has
established regulations for
recordkeeping requirements for all
covered consumer products and
commercial equipment, including
ESEMs. (See generally 10 CFR part 429).
The collection-of-information
requirement for the testing 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
and is in the process of being renewed.
Public reporting burden is estimated to
average 35 hours per response,
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including the time for reviewing
instructions, searching existing data
sources, gathering and maintaining the
data needed, and completing and
reviewing the collection of information.
DOE does not currently have
certification or labeling requirements for
ESEMs and is not proposing to establish
either of those as part of this proposed
rule. Thus, DOE expects the
recordkeeping requirements associated
with testing and maintaining test data
would be less than the average estimate
per response for this paperwork
package.
Currently, DOE is seeking comment
on DOE’s renewal of its paperwork
reduction approval under OMB control
number 1910–1400. See 88 FR 65994
(Sept. 26, 2023).
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.
ddrumheller on DSK120RN23PROD with PROPOSALS2
D. Review Under the National
Environmental Policy Act of 1969
DOE is analyzing this proposed
regulation in accordance with the
National Environmental Policy Act of
1969 (‘‘NEPA’’) and DOE’s NEPA
implementing regulations (10 CFR part
1021). DOE’s regulations include a
categorical exclusion for rulemakings
that establish energy conservation
standards for consumer products or
industrial equipment. 10 CFR part 1021,
subpart D, appendix B5.1. DOE
anticipates that this proposed
rulemaking qualifies for categorical
exclusion B5.1 because it is a
rulemaking that establishes energy
conservation standards for consumer
products or industrial equipment, none
of the exceptions identified in
categorical exclusion B5.1(b) apply, no
extraordinary circumstances exist that
require further environmental analysis,
and it otherwise meets the requirements
for application of a categorical
exclusion. See 10 CFR 1021.410. DOE
will complete its NEPA review before
issuing the final rule.
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
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of the states and to carefully assess the
necessity for such actions. The
Executive order also requires agencies to
have an accountable process to ensure
meaningful and timely input by state
and local officials in the development of
regulatory policies that have federalism
implications. On March 14, 2000, DOE
published a statement of policy
describing the intergovernmental
consultation process it will follow in the
development of such regulations. 65 FR
13735. DOE has examined this proposed
rule and has tentatively determined that
it would not have a substantial direct
effect on the states, on the relationship
between the national government and
the states, or on the distribution of
power and responsibilities among the
various levels of government. EPCA
governs and prescribes Federal
preemption of state regulations as to
energy conservation for the equipment
that are the subject of this proposed
rule. States can petition DOE for
exemption from such preemption to the
extent, and based on criteria, set forth in
EPCA. (See 42 U.S.C. 6316(a) and (b); 42
U.S.C. 6297) Therefore, no further
action is required by Executive Order
13132.
F. Review Under Executive Order 12988
With respect to the review of existing
regulations and the promulgation of
new regulations, section 3(a) of E.O.
12988, ‘‘Civil Justice Reform,’’ imposes
on Federal agencies the general duty to
adhere to the following requirements:
(1) eliminate drafting errors and
ambiguity, (2) write regulations to
minimize litigation, (3) provide a clear
legal standard for affected conduct
rather than a general standard, and (4)
promote simplification and burden
reduction. 61 FR 4729 (Feb. 7, 1996).
Regarding the review required by
section 3(a), section 3(b) of E.O. 12988
specifically requires that Executive
agencies make every reasonable effort to
ensure that the regulation: (1) clearly
specifies the preemptive effect, if any,
(2) clearly specifies any effect on
existing Federal law or regulation, (3)
provides a clear legal standard for
affected conduct while promoting
simplification and burden reduction, (4)
specifies the retroactive effect, if any, (5)
adequately defines key terms, and (6)
addresses other important issues
affecting clarity and general
draftsmanship under any guidelines
issued by the Attorney General. Section
3(c) of Executive Order 12988 requires
Executive agencies to review regulations
in light of applicable standards in
section 3(a) and section 3(b) to
determine whether they are met or it is
unreasonable to meet one or more of
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87139
them. DOE has completed the required
review and determined that, to the
extent permitted by law, this proposed
rule meets the relevant standards of E.O.
12988.
G. Review Under the Unfunded
Mandates Reform Act of 1995
Title II of the Unfunded Mandates
Reform Act of 1995 (‘‘UMRA’’) requires
each Federal agency to assess the effects
of Federal regulatory actions on state,
local, and Tribal governments and the
private sector. Public Law 104–4,
section 201 (codified at 2 U.S.C. 1531).
For a proposed regulatory action likely
to result in a rule that may cause the
expenditure by state, local, and Tribal
governments, in the aggregate, or by the
private sector of $100 million or more
in any one year (adjusted annually for
inflation), section 202 of UMRA requires
a Federal agency to publish a written
statement that estimates the resulting
costs, benefits, and other effects on the
national economy. (2 U.S.C. 1532(a), (b))
The UMRA also requires a Federal
agency to develop an effective process
to permit timely input by elected
officers of state, local, and Tribal
governments on a proposed ‘‘significant
intergovernmental mandate,’’ and
requires an agency plan for giving notice
and opportunity for timely input to
potentially affected small governments
before establishing any requirements
that might significantly or uniquely
affect 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.
Although this proposed rule does not
contain a Federal intergovernmental
mandate, it 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 ESEM 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 ESEMs, 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 proposed rule. (2 U.S.C. 1532(c))
The content requirements of section
202(b) of UMRA relevant to a private
sector mandate substantially overlap the
economic analysis requirements that
apply under section 325(o) of EPCA and
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Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
Executive Order 12866. The
section of
this NOPR and the TSD for this
proposed rule respond to those
requirements.
Under section 205 of UMRA, DOE is
obligated to identify and consider a
reasonable number of regulatory
alternatives before promulgating a rule
for which a written statement under
section 202 is required. (2 U.S.C.
1535(a)) DOE is required to select from
those alternatives the most cost-effective
and least burdensome alternative that
achieves the objectives of the proposed
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. 6316(a) and 42 U.S.C. 6295(o),
this proposed rule would establish new
energy conservation standards for 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 proposed rule.
SUPPLEMENTARY INFORMATION
I. Review Under Executive Order 12630
Pursuant to E.O. 12630,
‘‘Governmental Actions and Interference
with Constitutionally Protected Property
Rights,’’ 53 FR 8859 (Mar. 15, 1988),
DOE has determined that this proposed
rule would not result in any takings that
might require compensation under the
Fifth Amendment to the U.S.
Constitution.
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 proposed significant
energy action. A ‘‘significant energy
action’’ is defined as any action by an
agency that promulgates or is expected
to lead to promulgation of a final rule,
and that (1) is a significant regulatory
action under Executive Order 12866, or
any successor order; and (2) is likely to
have a significant adverse effect on the
supply, distribution, or use of energy, or
(3) is designated by the Administrator of
OIRA as a significant energy action. For
any proposed significant energy action,
the agency must give a detailed
statement of any adverse effects on
energy supply, distribution, or use
should the proposal be implemented,
and of reasonable alternatives to the
action and their expected benefits on
energy supply, distribution, and use.
DOE has tentatively concluded that
this proposed regulatory action, which
proposes new energy conservation
standards for ESEMs, is not a significant
energy action because the proposed
standards are not likely to have a
significant adverse effect on the supply,
distribution, or use of energy, nor has it
been designated as such by the
Administrator at OIRA. Accordingly,
DOE has not prepared a Statement of
Energy Effects on this proposed rule.
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
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
H. Review Under the Treasury and
General Government Appropriations
Act, 1999
Section 654 of the Treasury and
General Government Appropriations
Act, 1999 (Pub. L. 105–277) requires
Federal agencies to issue a Family
Policymaking Assessment for any rule
that may affect family well-being. This
proposed rule would not have any
impact on the autonomy or integrity of
the family as an institution.
Accordingly, DOE has concluded that it
is not necessary to prepare a Family
Policymaking Assessment.
ddrumheller on DSK120RN23PROD with PROPOSALS2
OMB. OMB’s guidelines were published
at 67 FR 8452 (Feb. 22, 2002), and
DOE’s guidelines were published at 67
FR 62446 (Oct. 7, 2002). Pursuant to
OMB Memorandum M–19–15,
Improving Implementation of the
Information Quality Act (April 24,
2019), DOE published updated
guidelines which are available at
www.energy.gov/sites/prod/files/2019/
12/f70/DOE%20Final%
20Updated%20IQA%20Guidelines%20
Dec%202019.pdf. DOE has reviewed
this NOPR under the OMB and DOE
guidelines and has concluded that it is
consistent with applicable policies in
those guidelines.
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Government, including influential
scientific information related to agency
regulatory actions. The purpose of the
bulletin is to enhance the quality and
credibility of the Government’s
scientific information. Under the
Bulletin, the energy conservation
standards rulemaking analyses are
‘‘influential scientific information,’’
which the Bulletin defines as ‘‘scientific
information the agency reasonably can
determine will have, or does have, a
clear and substantial impact on
important public policies or private
sector decisions.’’ 70 FR 2664, 2667.
In response to OMB’s Bulletin, DOE
conducted formal peer reviews of the
energy conservation standards
development process and the analyses
that are typically used and has prepared
a report describing that peer review.106
Generation of this report involved a
rigorous, formal, and documented
evaluation using objective criteria and
qualified and independent reviewers to
make a judgment as to the technical/
scientific/business merit, the actual or
anticipated results, and the productivity
and management effectiveness of
programs and/or projects. Because
available data, models, and
technological understanding have
changed since 2007, DOE has engaged
with the National Academy of Sciences
to review DOE’s analytical
methodologies to ascertain whether
modifications are needed to improve
DOE’s analyses. DOE is in the process
of evaluating the resulting report.107
VII. Public Participation
A. Attendance at the Public Meeting
The time, date, and location of the
public meeting are listed in the DATES
and ADDRESSES sections at the beginning
of this document. If you plan to attend
the public meeting, please notify the
Appliance and Equipment Standards
staff at (202) 287–1445 or Appliance_
Standards_Public_Meetings@ee.doe.gov.
Please note that foreign nationals
visiting DOE Headquarters are subject to
advance security screening procedures
which require advance notice prior to
attendance at the public meeting. If a
foreign national wishes to participate in
the public meeting, please inform DOE
of this fact as soon as possible by
contacting Ms. Regina Washington at
106 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
October 10, 2023).
107 The report is available at
www.nationalacademies.org/our-work/review-ofmethods-for-setting-building-and-equipmentperformance-standards.
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ddrumheller on DSK120RN23PROD with PROPOSALS2
(202) 586–1214 or by email
(Regina.Washington@ee.doe.gov) so that
the necessary procedures can be
completed.
DOE requires visitors to have laptops
and other devices, such as tablets,
checked upon entry into the Forrestal
Building. Any person wishing to bring
these devices into the building will be
required to obtain a property pass.
Visitors should avoid bringing these
devices, or allow an extra 45 minutes to
check in. Please report to the visitor’s
desk to have devices checked before
proceeding through security.
Due to the REAL ID Act implemented
by the Department of Homeland
Security (‘‘DHS’’), there have been
recent changes regarding ID
requirements for individuals wishing to
enter Federal buildings from specific
states and U.S. territories. DHS
maintains an updated website
identifying the state and territory
driver’s licenses that currently are
acceptable for entry into DOE facilities
at www.dhs.gov/real-id-enforcementbrief. A driver’s licenses from a state or
territory identified as not compliant by
DHS will not be accepted for building
entry and one of the alternate forms of
ID listed below will be required.
Acceptable alternate forms of Photo-ID
include U.S. Passport or Passport Card;
an Enhanced Driver’s License or
Enhanced ID-Card issued by states and
territories as identified on the DHS
website (Enhanced licenses issued by
these states and territories are clearly
marked Enhanced or Enhanced Driver’s
License); a military ID or other Federal
Government-issued Photo-ID card.
In addition, you can attend the public
meeting via webinar. Webinar
registration information, participant
instructions, and information about the
capabilities available to webinar
participants will be published on DOE’s
website at www.eere.energy.gov/
buildings/appliance_standards/
product.aspx/productid/50. Participants
are responsible for ensuring their
systems are compatible with the
webinar software.
B. Procedure for Submitting Prepared
General Statements for Distribution
Any person who has plans to present
a prepared general statement may
request that copies of his or her
statement be made available at the
public meeting. Such persons may
submit requests, along with an advance
electronic copy of their statement in
PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file
format, to the appropriate address
shown in the ADDRESSES section at the
beginning of this document. The request
VerDate Sep<11>2014
18:55 Dec 14, 2023
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and advance copy of statements must be
received at least one week before the
public meeting and are to be emailed.
Please include a telephone number to
enable DOE staff to make follow-up
contact, if needed.
C. Conduct of the Public Meeting
DOE will designate a DOE official to
preside at the public meeting and may
also use a professional facilitator to aid
discussion. The meeting will not be a
judicial or evidentiary-type public
hearing, but DOE will conduct it in
accordance with section 336 of EPCA.
(42 U.S.C. 6306) A court reporter will be
present to record the proceedings and
prepare a transcript. DOE reserves the
right to schedule the order of
presentations and to establish the
procedures governing the conduct of the
public meeting. There shall not be
discussion of proprietary information,
costs or prices, market share, or other
commercial matters regulated by U.S.
anti-trust laws. After the public meeting,
interested parties may submit further
comments on the proceedings, as well
as on any aspect of the proposed
rulemaking, until the end of the
comment period.
The public meeting will be conducted
in an informal, conference style. DOE
will present a general overview of the
topics addressed in this rulemaking,
allow time for prepared general
statements by participants, and
encourage all interested parties to share
their views on issues affecting this
proposed rulemaking. Each participant
will be allowed to make a general
statement (within time limits
determined by DOE), before the
discussion of specific topics. DOE will
allow, as time permits, other
participants to comment briefly on any
general statements.
At the end of all prepared statements
on a topic, DOE will permit participants
to clarify their statements briefly.
Participants should be prepared to
answer questions by DOE and by other
participants concerning these issues.
DOE representatives may also ask
questions of participants concerning
other matters relevant to this proposed
rulemaking. The official conducting the
public meeting will accept additional
comments or questions from those
attending, as time permits. The
presiding official will announce any
further procedural rules or modification
of the previous procedures that may be
needed for the proper conduct of the
public meeting.
A transcript of the public meeting will
be included in the docket, which can be
viewed as described in the Docket
section at the beginning of this
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87141
document and will be accessible on the
DOE website. In addition, any person
may buy a copy of the transcript from
the transcribing reporter.
D. Submission of Comments
DOE will accept comments, data, and
information regarding this proposed
rule before or after the public meeting,
but no later than the date provided in
the DATES section at the beginning of
this proposed rule. Interested parties
may submit comments, data, and other
information using any of the methods
described in the ADDRESSES section at
the beginning of this document.
Submitting comments via
www.regulations.gov. The
www.regulations.gov web page will
require you to provide your name and
contact information. Your contact
information will be viewable to DOE
Building Technologies staff only. Your
contact information will not be publicly
viewable except for your first and last
names, organization name (if any), and
submitter representative name (if any).
If your comment is not processed
properly because of technical
difficulties, DOE will use this
information to contact you. If DOE
cannot read your comment due to
technical difficulties and cannot contact
you for clarification, DOE may not be
able to consider your comment.
However, your contact information
will be publicly viewable if you include
it in the comment itself or in any
documents attached to your comment.
Any information that you do not want
to be publicly viewable should not be
included in your comment, nor in any
document attached to your comment.
Otherwise, persons viewing comments
will see only first and last names,
organization names, correspondence
containing comments, and any
documents submitted with the
comments.
Do not submit to www.regulations.gov
information for which disclosure is
restricted by statute, such as trade
secrets and commercial or financial
information (hereinafter referred to as
Confidential Business Information
(‘‘CBI’’)). Comments submitted through
www.regulations.gov cannot be claimed
as CBI. Comments received through the
website will waive any CBI claims for
the information submitted. For
information on submitting CBI, see the
Confidential Business Information
section.
DOE processes submissions made
through www.regulations.gov before
posting. Normally, comments will be
posted within a few days of being
submitted. However, if large volumes of
comments are being processed
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simultaneously, your comment may not
be viewable for up to several weeks.
Please keep the comment tracking
number that www.regulations.gov
provides after you have successfully
uploaded your comment.
Submitting comments via email, hand
delivery/courier, or postal mail.
Comments and documents submitted
via email, hand delivery/courier, or
postal mail also will be posted to
www.regulations.gov. If you do not want
your personal contact information to be
publicly viewable, do not include it in
your comment or any accompanying
documents. Instead, provide your
contact information in a cover letter.
Include your first and last names, email
address, telephone number, and
optional mailing address. The cover
letter will not be publicly viewable as
long as it does not include any
comments.
Include contact information each time
you submit comments, data, documents,
and other information to DOE. If you
submit via postal mail or hand delivery/
courier, please provide all items on a
CD, if feasible, in which case it is not
necessary to submit printed copies. No
telefacsimiles (‘‘faxes’’) will be
accepted.
Comments, data, and other
information submitted to DOE
electronically should be provided in
PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file
format. Provide documents that are not
secured, that are written in English, and
that are free of any defects or viruses.
Documents should not contain special
characters or any form of encryption
and, if possible, they should carry the
electronic signature of the author.
Campaign form letters. Please submit
campaign form letters by the originating
organization in batches of between 50 to
500 form letters per PDF or as one form
letter with a list of supporters’ names
compiled into one or more PDFs. This
reduces comment processing and
posting time.
Confidential Business Information.
Pursuant to 10 CFR 1004.11, any person
submitting information that he or she
believes to be confidential and exempt
by law from public disclosure should
submit via email two well-marked
copies: one copy of the document
marked ‘‘confidential’’ including all the
information believed to be confidential,
and one copy of the document marked
‘‘non-confidential’’ with the information
believed to be confidential deleted. DOE
will make its own determination about
the confidential status of the
information and treat it according to its
determination.
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18:55 Dec 14, 2023
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It is DOE’s policy that all comments
may be included in the public docket,
without change and as received,
including any personal information
provided in the comments (except
information deemed to be exempt from
public disclosure).
E. Issues on Which DOE Seeks Comment
Although DOE welcomes comments
on any aspect of this proposal, DOE is
particularly interested in receiving
comments and views of interested
parties concerning the following issues:
(1) DOE requests comments on the
proposal to use a represented value of
average full-load efficiency for ESEMs
and proposed revisions to 10 CFR
429.64 and 429.70(j).
(2) DOE requests comment on the
proposed equipment classes for this
NOPR.
(3) DOE requests comment on the
remaining technology options
considered in this NOPR.
(4) DOE requests comment on the
representative units used in this NOPR.
(5) DOE requests comment on the
baseline efficiencies used in this NOPR.
(6) DOE requests comment on the
proposal to constrain the frame size of
all efficiency levels to that of the
baseline unit.
(7) DOE requests comment on the
assumption that higher ELs (particularly
ELs 3 and 4) can be reached without
significant increase in size.
(8) DOE requests comment on the
potential for market disruption at higher
ELs and if manufacturers could design
motors at ELs 3 and 4 that do not
increase in size, or if for the final rule,
DOE should model motors larger than
what is considered in this NOPR.
(9) DOE requests data and information
to characterize the distribution channels
for ESEMs and associated market shares.
(10) DOE requests data and
information to characterize the
distribution of ESEMs by sector
(commercial, industrial, and residential
sectors) as well as the distribution of
ESEMs by application in each sector.
(11) DOE seeks data and additional
information to characterize ESEM
operating loads.
(12) DOE requests comment on the
distribution of average annual operating
hours by application and sector used to
characterize the variability in energy use
for ESEMs
(13) DOE seeks data and additional
information to support the analysis of
projected energy use impacts related to
any increases in motor nominal speed.
(14) DOE requests data and
information regarding the most
appropriate price trend to use to project
ESEM prices.
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(15) DOE requests comment on
whether any of the efficiency levels
considered in this NOPR might lead to
an increase in installation costs, and if
so, DOE seeks supporting data regarding
the magnitude of the increased cost per
unit for each relevant efficiency level
and the reasons for those differences.
(16) DOE requests comment on
whether any of the efficiency levels
considered in this NOPR might lead to
an increase in maintenance and repair
costs, and if so, DOE seeks supporting
data regarding the magnitude of the
increased cost per unit for each relevant
efficiency level and the reasons for
those differences.
(17) DOE requests comment on the
equipment lifetimes (both in years and
in mechanical hours) used for each
representative unit considered in the
LCC and PBP analyses
(18) DOE seeks information and data
to help establish efficiency distribution
in the no-new standards case for ESEMs.
DOE requests data and information on
any trends in the electric motor market
that could be used to forecast expected
trends in market share by efficiency
levels for each equipment class.
(19) DOE requests comment and
additional data on its 2020 shipments
estimates for ESEMs. DOE seeks
comment on the methodology used to
project future shipments of ESEMs. DOE
seeks information on other data sources
that can be used to estimate future
shipments.
(20) DOE requests comment and data
regarding the potential increase in
utilization of electric motors due to any
increase in efficiency (‘‘rebound
effect’’).
(21) DOE requests comment and data
on the overall methodology used for the
consumer subgroup analysis. DOE
requests comment on whether
additional consumer subgroups may be
disproportionately affected by a new
standard and warrant additional
analysis in the final rule.
(22) DOE requests comment on how to
address the climate benefits and nonmonetized effects of the proposal.
(23) DOE requests comment on if
manufacturers would have the
engineering capacity to conduct design
efforts to be able to offer a full portfolio
of complaint ESEM at TSL 4. If not,
please provide any data or information
on the potential impacts that could arise
due to these market gaps in equipment
offerings.
(24) DOE requests comment on if
manufacturers would have the
engineering capacity to conduct design
efforts to be able to offer a full portfolio
of compliant ESEMs at TSL 3. If not,
please provide any data or information
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on the potential impacts that could arise
due to these market gaps in equipment
offerings.
(25) DOE seeks comment on these
alternative proposed standard levels.
DOE requests comment on the
unintended market consequences and
the changes industry would make as a
result of standards that require the use
of different motor technologies for nonair over and AO–ESEMs. In addition, if
DOE were to consider a TSL that would
require TSL 2 for all equipment classes
except TSL3 efficiency levels for low
torque ESEMs, DOE seeks information
related to potential ESEM size increase
and impact on OEM markets at TSL 3
and above.
Additionally, DOE welcomes
comments on other issues relevant to
the conduct of this proposed rulemaking
that may not specifically be identified in
this document.
VIII. Approval of the Office of the
Secretary
The Secretary of Energy has approved
publication of this notice of proposed
rulemaking and announcement of
public meeting.
List of Subjects
10 CFR Part 429
10 CFR Part 431
Administrative practice and
procedure, Confidential business
information, Energy conservation test
procedures, and Reporting and
recordkeeping requirements.
ddrumheller on DSK120RN23PROD with PROPOSALS2
Signing Authority
This document of the Department of
Energy was signed on November 21,
2023, by Jeffrey Marootian, Principal
Deputy Assistant Secretary for Energy
Efficiency and Renewable Energy,
pursuant to delegated authority from the
Secretary of Energy. That document
with the original signature and date is
maintained by DOE. For administrative
purposes only, and in compliance with
requirements of the Office of the Federal
Register, the undersigned DOE Federal
Register Liaison Officer has been
authorized to sign and submit the
document in electronic format for
publication, as an official document of
the Department of Energy. This
administrative process in no way alters
the legal effect of this document upon
publication in the Federal Register.
18:55 Dec 14, 2023
Jkt 262001
For the reasons set forth in the
preamble, DOE is proposing to amend
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: 2 U.S.C. 6291–6317; 28 U.S.C.
2461 note.
2. Amend § 429.64 by:
a. Revising paragraphs (a)(3) and
(d)(2);
■ b. Revising paragraphs (e)
introductory text and (e)(1)(iii);
■ c. Redesignating paragraph (e)(1)(iv)
as paragraph (e)(1)(v);
■ d. Adding paragraph (e)(1)(iv); and
■ e. Revising paragraphs (e)(2)
introductory text and (e)(2)(ii).
The revisions and addition read as
follows:
■
■
§ 429.64
Administrative practice and
procedure, Confidential business
information, Energy conservation,
Household appliances, Reporting and
recordkeeping requirements.
VerDate Sep<11>2014
Signed in Washington, DC, on November
29, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S.
Department of Energy.
Electric motors.
(a) * * *
(3) On or after April 17, 2023,
manufacturers of electric motors that are
subject to the test procedures in
appendix B of subpart B of part 431 but
are not subject to the energy
conservation standards in subpart B of
part 431 of this subchapter, must, if they
chose to voluntarily make
representations of energy efficiency,
follow the provisions in paragraph (e) of
this section.
*
*
*
*
*
(d) * * *
(2) Testing was conducted using a
laboratory other than an accredited
laboratory that meets the requirements
of paragraph (f) of this section, or the
represented value of the electric motor
basic model was determined through
the application of an AEDM pursuant to
the requirements of § 429.70(j), and a
third-party certification organization
that is nationally recognized in the
United States under § 429.73 has
certified the represented value of the
electric motor basic model through
issuance of a certificate of conformity
for the basic model.
(e) Determination of represented
value. Manufacturers of electric motors
that are subject to energy conservation
standards in subpart B of part 431 of
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87143
this subchapter, and for which
minimum values of nominal full-load
efficiency are prescribed, must
determine the represented value of
nominal full-load efficiency (inclusive
of the inverter for inverter-only electric
motors) for each basic model of electric
motor either by testing in conjunction
with the applicable sampling provisions
or by applying an AEDM as set forth in
this section and in § 429.70(j).
Manufacturers of electric motors that are
subject to energy conservation standards
in subpart B of part 431 of this
subchapter, and for which minimum
values of average full-load efficiency are
prescribed, must determine the
represented value of average full-load
efficiency (inclusive of the inverter for
inverter-only electric motors) for each
basic model of electric motor either by
testing in conjunction with the
applicable sampling provisions or by
applying an AEDM as set forth in this
section and in § 429.70(j).
(1) * * *
(iii) Nominal Full-load Efficiency.
Manufacturers of electric motors that are
subject to energy conservation standards
in subpart B of part 431 of this
subchapter, and for which minimum
values of nominal full-load efficiency
are prescribed, must determine the
nominal full-load efficiency by selecting
an efficiency from the ‘‘Nominal Fullload Efficiency’’ table in appendix B
that is no greater than the average fullload efficiency of the basic model as
calculated in paragraph (e)(1)(ii) of this
section.
(iv) Represented value. For electric
motors subject to energy conservation
standards in subpart B of part 431 of
this subchapter and for which minimum
values of nominal full-load efficiency
are prescribed the represented value is
the nominal full-load efficiency of a
basic model of electric motor and is to
be used in marketing materials and all
public representations, as the certified
value of efficiency, and on the
nameplate. (See § 431.31(a) of this
subchapter.) For electric motors subject
to energy conservation standards in
subpart B of part 431 of this subchapter
and for which minimum values of
average full-load efficiency are
prescribed the represented value is the
average full-load efficiency of a basic
model of electric motor and is to be
used in marketing materials and all
public representations, as the certified
value of efficiency, and on the
nameplate. (See § 431.31(a) of this
subchapter.)
*
*
*
*
*
(2) Alternative efficiency
determination methods. In lieu of
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testing, the represented value of a basic
model of electric motor must be
determined through the application of
an AEDM pursuant to the requirements
of § 429.70(j) and the provisions of this
section, where:
*
*
*
*
*
(ii) For electric motors subject to
energy conservation standards in
subpart B of part 431 of this subchapter
and for which minimum values of
nominal full-load efficiency are
prescribed the represented value is the
nominal full-load efficiency of a basic
model of electric motor and is to be
used in marketing materials and all
public representations, as the certified
value of efficiency, and on the
nameplate. (See § 431.31(a) of this
subchapter) Determine the nominal fullload efficiency by selecting a value from
the ‘‘Nominal Full-Load Efficiency’’
table in appendix B to subpart B of this
part, that is no greater than the
simulated full-load efficiency predicted
by the AEDM for the basic model. For
electric motors subject to energy
conservation standards in subpart B of
part 431 of this subchapter and for
which minimum values of average fullload efficiency are prescribed the
represented value is the average fullload efficiency of a basic model of
electric motor and is to be used in
marketing materials and all public
representations, as the certified value of
efficiency, and on the nameplate. (See
§ 431.31(a) of this subchapter.)
*
*
*
*
*
■ 3. Amend § 429.70 by revising
paragraph (j)(2)(i)(D) to read as follows:
§ 429.70 Alternative methods for
determining energy efficiency and energy
use.
*
*
*
*
(j) * * *
(2) * * *
(i) * * *
(D) Each basic model must have the
lowest represented value of nominal
full-load efficiency or represented value
of average full-load efficiency, as
applicable, among the basic models
within the same equipment class.
*
*
*
*
*
ddrumheller on DSK120RN23PROD with PROPOSALS2
*
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 § 431.12 by adding in
alphabetical order definitions for
■
VerDate Sep<11>2014
18:55 Dec 14, 2023
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‘‘Capacitor start capacitor run motor’’,
‘‘Capacitor start induction run motor’’,
‘‘Permanent split capacitor motor’’,
‘‘Polyphase motor’’, ‘‘Shaded pole
motor’’, and ‘‘Split-phase motor’’ to read
as follows:
§ 431.12
Definitions.
*
*
*
*
*
Capacitor start capacitor run motor
means a single-phase induction electric
motor equipped with a start capacitor to
provide the starting torque, as well as a
run capacitor to maintain a running
torque while the motor is loaded.
Capacitor start induction run motor
means a single-phase induction electric
motor equipped with a start capacitor to
provide the starting torque, which is
capable of operating without a run
capacitor.
*
*
*
*
*
Permanent split capacitor motor
means a single-phase induction electric
motor that has a capacitor permanently
connected in series with the starting
winding of the motor and is
permanently connected in the circuit
both at starting and running conditions
of the motor.
*
*
*
*
*
Polyphase motor means an electric
motor that has a stator containing
multiple distinct windings per motor
pole, driven by corresponding timeshifted sine waves.
*
*
*
*
*
Shaded pole motor means a selfstarting single-phase induction electric
motor with a copper ring shading one of
the poles.
*
*
*
*
*
Split-phase motor means a singlephase induction electric motor that
possesses two windings: a main/running
winding, and a starting/auxiliary
winding.
*
*
*
*
*
■ 6. Revise § 431.25 to read as follows:
§ 431.25 Energy conservation standards
and effective dates.
(a) For purposes of determining the
required minimum nominal full-load
efficiency or minimum average full-load
efficiency of an electric motor that has
a horsepower or kilowatt rating between
two horsepower or two kilowatt ratings
listed in any table of energy
conservation standards in paragraphs (b)
through (d) of this section, each such
electric motor shall be deemed to have
a listed horsepower or kilowatt rating,
determined as follows:
(1) A horsepower at or above the
midpoint between the two consecutive
horsepowers shall be rounded up to the
higher of the two horsepowers;
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(2) A horsepower below the midpoint
between the two consecutive
horsepowers shall be rounded down to
the lower of the two horsepowers; or
(3) A kilowatt rating shall be directly
converted from kilowatts to horsepower
using the formula 1 kilowatt = (1⁄0.746)
horsepower. The conversion should be
calculated to three significant decimal
places, and the resulting horsepower
shall be rounded in accordance with
paragraph (a)(1) or (a)(2) of this section,
whichever applies.
(b) This section applies to electric
motors manufactured (alone or as a
component of another piece of
equipment) on or after June 1, 2016, but
before June 1, 2027, that satisfy the
criteria in paragraph (b)(1)(i) of this
section, with the exclusion listed in
paragraph (b)(1)(ii) of this section.
(1) Scope. (i) The standards in
paragraph (b)(2) of this section apply
only to electric motors, including partial
electric motors, that satisfy the
following criteria:
(A) Are single-speed, induction
motors;
(B) Are rated for continuous duty (MG
1) operation or for duty type S1 (IEC);
(C) Contain a squirrel-cage (MG 1) or
cage (IEC) rotor;
(D) Operate on polyphase alternating
current 60-hertz sinusoidal line power;
(E) Are rated 600 volts or less;
(F) Have a 2-, 4-, 6-, or 8-pole
configuration,
(G) Are built in a three-digit or fourdigit 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),
(H) Produce at least one horsepower
(0.746 kW) but not greater than 500
horsepower (373 kW); and
(I) Meet all of the performance
requirements of one of the following
motor types: A NEMA Design A, B, or
C motor or an IEC Design N, NE, NEY,
NY or H, HE, HEY, HY motor.
(ii) The standards in paragraph (b)(2)
of this section do not apply to the
following electric motors exempted by
the Secretary, or any additional electric
motors that the Secretary may exempt:
(A) Air-over electric motors;
(B) Component sets of an electric
motor;
(C) Liquid-cooled electric motors;
(D) Submersible electric motors; and
(E) Inverter-only electric motors.
(2) Standards. (i) Each NEMA Design
A motor, NEMA Design B motor, and
IEC Design N (including NE, NEY, or
NY variants) motor that is an electric
motor meeting the criteria in paragraph
(b)(1) of this section and with a power
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rating from 1 horsepower through 500
horsepower, but excluding fire pump
electric motors, shall have a nominal
full-load efficiency of not less than the
following:
TABLE 1 TO PARAGRAPH (b)(2)(i)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC
DESIGN N, NE, NEY OR NY MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
300/224 ............................................................
350/261 ............................................................
400/298 ............................................................
450/336 ............................................................
500/373 ............................................................
(ii) Each NEMA Design C motor and
IEC Design H (including HE, HEY, or
HY variants) electric motor meeting the
77.0
84.0
85.5
86.5
88.5
89.5
90.2
91.0
91.0
91.7
91.7
92.4
93.0
93.6
93.6
94.1
95.0
95.0
95.4
95.8
95.8
95.8
95.8
95.8
95.8
4 Pole
Open
77.0
84.0
85.5
85.5
86.5
88.5
89.5
90.2
91.0
91.7
91.7
92.4
93.0
93.6
93.6
93.6
94.1
94.1
95.0
95.0
95.4
95.4
95.8
96.2
96.2
Enclosed
6 Pole
Open
85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
95.4
95.4
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
95.4
95.4
95.8
95.8
95.8
95.8
95.8
95.8
96.2
96.2
criteria in paragraph (b)(1) of this
section and with a power rating from 1
horsepower through 200 horsepower,
8 Pole
Enclosed
Open
Enclosed
Open
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.0
95.0
95.8
95.8
95.8
95.8
95.8
................
................
................
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.0
95.0
95.4
95.4
95.8
95.8
95.8
................
................
................
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
93.6
94.1
94.1
94.5
95.0
................
................
................
................
................
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
94.1
94.1
94.1
94.1
95.0
................
................
................
................
................
shall have a nominal full-load efficiency
that is not less than the following:
TABLE 2 TO PARAGRAPH (b)(2)(ii)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN C AND IEC DESIGN H, HE,
HEY OR HY MOTORS AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
4 Pole
ddrumheller on DSK120RN23PROD with PROPOSALS2
Enclosed
1/.75 .........................................................................................................
1.5/1.1 ......................................................................................................
2/1.5 .........................................................................................................
3/2.2 .........................................................................................................
5/3.7 .........................................................................................................
7.5/5.5 ......................................................................................................
10/7.5 .......................................................................................................
15/11 ........................................................................................................
20/15 ........................................................................................................
25/18.5 .....................................................................................................
30/22 ........................................................................................................
40/30 ........................................................................................................
50/37 ........................................................................................................
60/45 ........................................................................................................
75/55 ........................................................................................................
100/75 ......................................................................................................
125/90 ......................................................................................................
150/110 ....................................................................................................
200/150 ....................................................................................................
VerDate Sep<11>2014
18:55 Dec 14, 2023
Jkt 262001
PO 00000
Frm 00085
Fmt 4701
85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
95.4
95.4
95.8
96.2
Sfmt 4702
6 Pole
Open
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
95.4
95.4
95.8
95.8
Enclosed
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.0
95.0
95.8
95.8
E:\FR\FM\15DEP2.SGM
15DEP2
8 Pole
Open
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.0
95.0
95.4
95.4
Enclosed
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
93.6
94.1
94.1
94.5
Open
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
94.1
94.1
94.1
94.1
87146
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
(iii) Each fire pump electric motor
meeting the criteria in paragraph (b)(1)
of this section and with a power rating
of 1 horsepower through 500
horsepower, shall have a nominal full-
load efficiency that is not less than the
following:
TABLE 3 TO PARAGRAPH (b)(2)(iii)—NOMINAL FULL-LOAD EFFICIENCIES OF FIRE PUMP ELECTRIC MOTORS AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
300/224 ............................................................
350/261 ............................................................
400/298 ............................................................
450/336 ............................................................
500/373 ............................................................
ddrumheller on DSK120RN23PROD with PROPOSALS2
(c) This section applies to electric
motors manufactured (alone or as a
component of another piece of
equipment) on or after June 1, 2027, but
before January 1, 2029, that satisfy the
criteria in paragraph (c)(1)(i) of this
section, with the exclusion listed in
paragraph (c)(1)(ii) of this section.
(1) Scope. (i) The standards in
paragraph (c)(2) of this section apply
only to electric motors, including partial
electric motors, that satisfy the
following criteria:
(A) Are single-speed, induction
motors;
(B) Are rated for continuous duty (MG
1) operation or for duty type S1 (IEC);
(C) Contain a squirrel-cage (MG 1) or
cage (IEC) rotor;
(D) Operate on polyphase alternating
current 60-hertz sinusoidal line power;
75.5
82.5
84.0
85.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
92.4
93.0
93.0
93.6
94.5
94.5
95.0
95.4
95.4
95.4
95.4
95.4
95.4
4 Pole
Open
................
82.5
84.0
84.0
85.5
87.5
88.5
89.5
90.2
91.0
91.0
91.7
92.4
93.0
93.0
93.0
93.6
93.6
94.5
94.5
95.0
95.0
95.4
95.8
95.8
Enclosed
6 Pole
Open
82.5
84.0
84.0
87.5
87.5
89.5
89.5
91.0
91.0
92.4
92.4
93.0
93.0
93.6
94.1
94.5
94.5
95.0
95.0
95.0
95.4
95.4
95.4
95.4
95.8
82.5
84.0
84.0
86.5
87.5
88.5
89.5
91.0
91.0
91.7
92.4
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
95.4
95.4
95.4
95.4
95.8
95.8
(E) Are rated 600 volts or less;
(F) Have a 2-, 4-, 6-, or 8-pole
configuration,
(G) Are built in a three-digit or fourdigit 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), or have an air-over
enclosure and a specialized frame size,
(H) Produce at least one horsepower
(0.746 kW) but not greater than 750
horsepower (559 kW); and
(I) Meet all of the performance
requirements of one of the following
motor types: A NEMA Design A, B, or
C motor or an IEC Design N, NE, NEY,
NY or H, HE, HEY, HY motor.
(ii) The standards in paragraph (c)(2)
of this section do not apply to the
8 Pole
Enclosed
Open
Enclosed
Open
80.0
85.5
86.5
87.5
87.5
89.5
89.5
90.2
90.2
91.7
91.7
93.0
93.0
93.6
93.6
94.1
94.1
95.0
95.0
95.0
95.0
95.0
................
................
................
80.0
84.0
85.5
86.5
87.5
88.5
90.2
90.2
91.0
91.7
92.4
93.0
93.0
93.6
93.6
94.1
94.1
94.5
94.5
95.4
95.4
95.4
................
................
................
74.0
77.0
82.5
84.0
85.5
85.5
88.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
93.6
93.6
94.1
94.5
................
................
................
................
................
74.0
75.5
85.5
86.5
87.5
88.5
89.5
89.5
90.2
90.2
91.0
91.0
91.7
92.4
93.6
93.6
93.6
93.6
93.6
94.5
................
................
................
................
................
following electric motors exempted by
the Secretary, or any additional electric
motors that the Secretary may exempt:
(A) Component sets of an electric
motor;
(B) Liquid-cooled electric motors;
(C) Submersible electric motors; and
(D) Inverter-only electric motors.
(2) Standards. (i) Each NEMA Design
A motor, NEMA Design B motor, and
IEC Design N (including NE, NEY, or
NY variants) motor that is an electric
motor meeting the criteria in paragraph
(c)(1) of this section but excluding fire
pump electric motors and air-over
electric motors, and with a power rating
from 1 horsepower through 750
horsepower, shall have a nominal fullload efficiency of not less than the
following:
TABLE 4 TO PARAGRAPH (c)(2)(i)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC
DESIGN N, NE, NEY OR NY MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS AND AIR-OVER ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
VerDate Sep<11>2014
18:55 Dec 14, 2023
Jkt 262001
PO 00000
77.0
84.0
Frm 00086
4 Pole
Open
77.0
84.0
Fmt 4701
Enclosed
85.5
86.5
Sfmt 4702
6 Pole
Open
85.5
86.5
Enclosed
82.5
87.5
E:\FR\FM\15DEP2.SGM
15DEP2
8 Pole
Open
82.5
86.5
Enclosed
75.5
78.5
Open
75.5
77.0
87147
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
TABLE 4 TO PARAGRAPH (c)(2)(i)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC
DESIGN N, NE, NEY OR NY MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS AND AIR-OVER ELECTRIC MOTORS) AT 60 Hz—Continued
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
300/224 ............................................................
350/261 ............................................................
400/298 ............................................................
450/336 ............................................................
500/373 ............................................................
550/410 ............................................................
600/447 ............................................................
650/485 ............................................................
700/522 ............................................................
750/559 ............................................................
(ii) Each NEMA Design A motor,
NEMA Design B motor, and IEC Design
N (including NE, NEY, or NY variants)
motor that is an air-over electric motor
85.5
86.5
88.5
89.5
90.2
91.0
91.0
91.7
91.7
92.4
93.0
93.6
93.6
95.0
95.4
95.4
95.8
96.2
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
4 Pole
Open
85.5
85.5
86.5
88.5
89.5
90.2
91.0
91.7
91.7
92.4
93.0
93.6
93.6
94.5
94.5
94.5
95.4
95.4
95.4
95.4
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
Enclosed
6 Pole
Open
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
96.2
96.2
96.2
96.5
96.5
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
96.2
96.2
96.2
96.2
96.2
95.8
95.8
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
meeting the criteria in paragraph (c)(1)
of this section, but excluding fire pump
electric motors, and with a power rating
from 1 horsepower through 250
8 Pole
Enclosed
Open
Enclosed
Open
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.8
95.8
96.2
96.2
96.2
95.8
95.8
................
................
................
................
................
................
................
................
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.8
95.8
95.8
95.8
96.2
95.8
95.8
................
................
................
................
................
................
................
................
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
94.5
95.0
95.0
95.4
95.4
................
................
................
................
................
................
................
................
................
................
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
95.0
95.0
95.0
95.0
95.4
................
................
................
................
................
................
................
................
................
................
horsepower, built in a standard frame
size, shall have a nominal full-load
efficiency of not less than the following:
TABLE 5 TO PARAGRAPH (c)(2)(ii)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC
DESIGN N, NE, NEY OR NY STANDARD FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
ddrumheller on DSK120RN23PROD with PROPOSALS2
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
VerDate Sep<11>2014
18:55 Dec 14, 2023
Jkt 262001
PO 00000
77.0
84.0
85.5
86.5
88.5
89.5
90.2
91.0
91.0
91.7
91.7
92.4
93.0
93.6
93.6
95.0
95.4
95.4
95.8
Frm 00087
4 Pole
Open
77.0
84.0
85.5
85.5
86.5
88.5
89.5
90.2
91.0
91.7
91.7
92.4
93.0
93.6
93.6
94.5
94.5
94.5
95.4
Fmt 4701
Enclosed
85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
96.2
96.2
96.2
96.5
Sfmt 4702
6 Pole
Open
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
96.2
96.2
96.2
96.2
Enclosed
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.8
95.8
96.2
96.2
E:\FR\FM\15DEP2.SGM
15DEP2
8 Pole
Open
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.8
95.8
95.8
95.8
Enclosed
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
94.5
95.0
95.0
95.4
Open
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
95.0
95.0
95.0
95.0
87148
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
TABLE 5 TO PARAGRAPH (c)(2)(ii)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC
DESIGN N, NE, NEY OR NY STANDARD FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS) AT 60 Hz—Continued
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
250/186 ............................................................
(iii) Each NEMA Design A motor,
NEMA Design B motor, and IEC Design
N (including NE, NEY, or NY variants)
motor that is an air-over electric motor
4 Pole
Open
96.2
95.4
Enclosed
6 Pole
Open
96.5
96.2
meeting the criteria in paragraph (c)(1)
of this section, but excluding fire pump
electric motors, and with a power rating
from 1 horsepower through 20
Enclosed
8 Pole
Open
96.2
Enclosed
96.2
Open
95.4
95.4
horsepower, built in a specialized frame
size, shall have a nominal full-load
efficiency of not less than the following:
TABLE 6 TO PARAGRAPH (c)(2)(iii)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND IEC
DESIGN N, NE, NEY OR NY SPECIALIZED FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
(iv) Each NEMA Design C motor and
IEC Design H (including HE, HEY, or
HY variants) electric motor meeting the
74.0
82.5
84.0
85.5
87.5
88.5
89.5
90.2
90.2
4 Pole
Open
................
82.5
84.0
84.0
85.5
87.5
88.5
89.5
90.2
Enclosed
6 Pole
Open
82.5
84.0
84.0
87.5
87.5
89.5
89.5
91.0
91.0
82.5
84.0
84.0
86.5
87.5
88.5
89.5
91.0
91.0
criteria in paragraph (c)(1) of this
section but excluding air-over electric
motors and with a power rating from 1
8 Pole
Enclosed
Open
Enclosed
Open
80.0
85.5
86.5
87.5
87.5
89.5
89.5
................
................
80.0
84.0
85.5
86.5
87.5
88.5
90.2
................
................
74.0
77.0
82.5
84.0
85.5
85.5
................
................
................
74.0
75.5
85.5
86.5
87.5
88.5
................
................
................
horsepower through 200 horsepower,
shall have a nominal full-load efficiency
that is not less than the following:
TABLE 7 TO PARAGRAPH (c)(2)(iv)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN C AND IEC DESIGN H, HE,
HEY OR HY MOTORS (EXCLUDING AIR-OVER ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
4 Pole
ddrumheller on DSK120RN23PROD with PROPOSALS2
Enclosed
1/.75 .........................................................................................................
1.5/1.1 ......................................................................................................
2/1.5 .........................................................................................................
3/2.2 .........................................................................................................
5/3.7 .........................................................................................................
7.5/5.5 ......................................................................................................
10/7.5 .......................................................................................................
15/11 ........................................................................................................
20/15 ........................................................................................................
25/18.5 .....................................................................................................
30/22 ........................................................................................................
40/30 ........................................................................................................
50/37 ........................................................................................................
60/45 ........................................................................................................
75/55 ........................................................................................................
100/75 ......................................................................................................
125/90 ......................................................................................................
150/110 ....................................................................................................
200/150 ....................................................................................................
VerDate Sep<11>2014
18:55 Dec 14, 2023
Jkt 262001
PO 00000
Frm 00088
Fmt 4701
85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
95.4
95.4
95.8
96.2
Sfmt 4702
6 Pole
Open
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
95.4
95.4
95.8
95.8
Enclosed
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.0
95.0
95.8
95.8
E:\FR\FM\15DEP2.SGM
15DEP2
8 Pole
Open
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.0
95.0
95.4
95.4
Enclosed
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
93.6
94.1
94.1
94.5
Open
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
94.1
94.1
94.1
94.1
87149
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
(v) Each fire pump electric motor
meeting the criteria in paragraph (c)(1)
of this section, but excluding air-over
electric motors, and with a power rating
of 1 horsepower through 500
horsepower, shall have a nominal full-
load efficiency that is not less than the
following:
TABLE 8 TO PARAGRAPH (c)(2)(v)—NOMINAL FULL-LOAD EFFICIENCIES OF FIRE PUMP ELECTRIC MOTORS (EXCLUDING
AIR-OVER ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
ddrumheller on DSK120RN23PROD with PROPOSALS2
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
300/224 ............................................................
350/261 ............................................................
400/298 ............................................................
450/336 ............................................................
500/373 ............................................................
(d) This section applies to electric
motors manufactured (alone or as a
component of another piece of
equipment) on or after January 1, 2029.
(1) The standards in paragraph
(d)(1)(ii) of this section apply only to
electric motors that satisfy the criteria in
paragraph (d)(1)(i)(A) of this section and
with the exclusion listed in paragraph
(d)(1)(i)(B) of this section.
(i) Scope. (A) The standards in
paragraph (d)(1)(ii) of this section apply
only to electric motors, including partial
electric motors, that satisfy the
following criteria:
(1) Are single-speed, induction
motors;
(2) Are rated for continuous duty (MG
1) operation or for duty type S1 (IEC);
(3) Contain a squirrel-cage (MG 1) or
cage (IEC) rotor;
(4) Operate on polyphase alternating
current 60-hertz sinusoidal line power;
VerDate Sep<11>2014
18:55 Dec 14, 2023
Jkt 262001
75.5
82.5
84.0
85.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
92.4
93.0
93.0
93.6
94.5
94.5
95.0
95.4
95.4
95.4
95.4
95.4
95.4
4 Pole
Open
................
82.5
84.0
84.0
85.5
87.5
88.5
89.5
90.2
91.0
91.0
91.7
92.4
93.0
93.0
93.0
93.6
93.6
94.5
94.5
95.0
95.0
95.4
95.8
95.8
Enclosed
82.5
84.0
84.0
87.5
87.5
89.5
89.5
91.0
91.0
92.4
92.4
93.0
93.0
93.6
94.1
94.5
94.5
95.0
95.0
95.0
95.4
95.4
95.4
95.4
95.8
6 Pole
Open
82.5
84.0
84.0
86.5
87.5
88.5
89.5
91.0
91.0
91.7
92.4
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
95.4
95.4
95.4
95.4
95.8
95.8
(5) Are rated 600 volts or less;
(6) Have a 2-, 4-, 6-, or 8-pole
configuration,
(7) Are built in a three-digit or fourdigit NEMA frame size (or IEC metric
equivalent), including those designs
between two consecutive NEMA frame
sizes (or IEC metric equivalent), or an
enclosed 56 NEMA frame size (or IEC
metric equivalent), or have an air-over
enclosure and a specialized frame size,
(8) Produce at least one horsepower
(0.746 kW) but not greater than 750
horsepower (559 kW); and
(9) Meet all of the performance
requirements of one of the following
motor types: A NEMA Design A, B, or
C motor or an IEC Design N, NE, NEY,
NY or H, HE, HEY, HY motor.
(B) The standards in paragraph
(d)(1)(ii) of this section do not apply to
the following electric motors exempted
PO 00000
Frm 00089
Fmt 4701
Sfmt 4702
8 Pole
Enclosed
Open
Enclosed
Open
80.0
85.5
86.5
87.5
87.5
89.5
89.5
90.2
90.2
91.7
91.7
93.0
93.0
93.6
93.6
94.1
94.1
95.0
95.0
95.0
95.0
95.0
................
................
................
80.0
84.0
85.5
86.5
87.5
88.5
90.2
90.2
91.0
91.7
92.4
93.0
93.0
93.6
93.6
94.1
94.1
94.5
94.5
95.4
95.4
95.4
................
................
................
74.0
77.0
82.5
84.0
85.5
85.5
88.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
93.6
93.6
94.1
94.5
................
................
................
................
................
74.0
75.5
85.5
86.5
87.5
88.5
89.5
89.5
90.2
90.2
91.0
91.0
91.7
92.4
93.6
93.6
93.6
93.6
93.6
94.5
................
................
................
................
................
by the Secretary, or any additional
electric motors that the Secretary may
exempt:
(1) Component sets of an electric
motor;
(2) Liquid-cooled electric motors;
(3) Submersible electric motors; and
(4) Inverter-only electric motors.
(ii) Standards. (A) Each NEMA Design
A motor, NEMA Design B motor, and
IEC Design N (including NE, NEY, or
NY variants) motor that is an electric
motor meeting the criteria in paragraph
(d)(1)(i) of this section but excluding fire
pump electric motors and air-over
electric motors, and with a power rating
from 1 horsepower through 750
horsepower, shall have a nominal fullload efficiency of not less than the
following:
E:\FR\FM\15DEP2.SGM
15DEP2
87150
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
TABLE 9 TO PARAGRAPH (d)(1)(ii)(A)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND
IEC DESIGN N, NE, NEY OR NY MOTORS (EXCLUDING FIRE PUMP ELECTRIC MOTORS AND AIR-OVER ELECTRIC
MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
300/224 ............................................................
350/261 ............................................................
400/298 ............................................................
450/336 ............................................................
500/373 ............................................................
550/410 ............................................................
600/447 ............................................................
650/485 ............................................................
700/522 ............................................................
750/559 ............................................................
(B) Each NEMA Design A motor,
NEMA Design B motor, and IEC Design
N (including NE, NEY, or NY variants)
motor that is an air-over electric motor
77.0
84.0
85.5
86.5
88.5
89.5
90.2
91.0
91.0
91.7
91.7
92.4
93.0
93.6
93.6
95.0
95.4
95.4
95.8
96.2
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
95.8
4 Pole
Open
77.0
84.0
85.5
85.5
86.5
88.5
89.5
90.2
91.0
91.7
91.7
92.4
93.0
93.6
93.6
94.5
94.5
94.5
95.4
95.4
95.4
95.4
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
Enclosed
6 Pole
Open
85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
96.2
96.2
96.2
96.5
96.5
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
96.2
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
96.2
96.2
96.2
96.2
96.2
95.8
95.8
95.8
96.2
96.2
96.2
96.2
96.2
96.2
96.2
meeting the criteria in paragraph
(d)(1)(i) of this section, but excluding
fire pump electric motors, and with a
power rating from 1 horsepower through
8 Pole
Enclosed
Open
Enclosed
Open
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.8
95.8
96.2
96.2
96.2
95.8
95.8
................
................
................
................
................
................
................
................
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.8
95.8
95.8
95.8
96.2
95.8
95.8
................
................
................
................
................
................
................
................
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
94.5
95.0
95.0
95.4
95.4
................
................
................
................
................
................
................
................
................
................
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
95.0
95.0
95.0
95.0
95.4
................
................
................
................
................
................
................
................
................
................
250 horsepower, built in a standard
frame size, shall have a nominal fullload efficiency of not less than the
following:
TABLE 10 TO PARAGRAPH (d)(1)(ii)(B)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND
IEC DESIGN N, NE, NEY OR NY STANDARD FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP
ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
ddrumheller on DSK120RN23PROD with PROPOSALS2
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
VerDate Sep<11>2014
18:55 Dec 14, 2023
Jkt 262001
PO 00000
77.0
84.0
85.5
86.5
88.5
89.5
90.2
91.0
91.0
91.7
91.7
92.4
93.0
93.6
93.6
95.0
95.4
Frm 00090
4 Pole
Open
77.0
84.0
85.5
85.5
86.5
88.5
89.5
90.2
91.0
91.7
91.7
92.4
93.0
93.6
93.6
94.5
94.5
Fmt 4701
Enclosed
85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
96.2
96.2
Sfmt 4702
6 Pole
Open
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
96.2
96.2
Enclosed
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.8
95.8
E:\FR\FM\15DEP2.SGM
15DEP2
8 Pole
Open
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.8
95.8
Enclosed
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
94.5
95.0
Open
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
95.0
95.0
87151
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
TABLE 10 TO PARAGRAPH (d)(1)(ii)(B)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND
IEC DESIGN N, NE, NEY OR NY STANDARD FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP
ELECTRIC MOTORS) AT 60 Hz—Continued
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
(C) Each NEMA Design A motor,
NEMA Design B motor, and IEC Design
N (including NE, NEY, or NY variants)
motor that is an air-over electric motor
4 Pole
Open
95.4
95.8
96.2
94.5
95.4
95.4
Enclosed
6 Pole
Open
96.2
96.5
96.5
96.2
96.2
96.2
meeting the criteria in paragraph
(d)(1)(i) of this section, but excluding
fire pump electric motors, and with a
power rating from 1 horsepower through
Enclosed
8 Pole
Open
96.2
96.2
96.2
Enclosed
95.8
95.8
96.2
Open
95.0
95.4
95.4
95.0
95.0
95.4
20 horsepower, built in a specialized
frame size, shall have a nominal fullload efficiency of not less than the
following:
TABLE 11 TO PARAGRAPH (d)(1)(ii)(C)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN A, NEMA DESIGN B AND
IEC DESIGN N, NE, NEY OR NY SPECIALIZED FRAME SIZE AIR-OVER ELECTRIC MOTORS (EXCLUDING FIRE PUMP
ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
(D) Each NEMA Design C motor and
IEC Design H (including HE, HEY, or
HY variants) electric motor meeting the
74.0
82.5
84.0
85.5
87.5
88.5
89.5
90.2
90.2
4 Pole
Open
................
82.5
84.0
84.0
85.5
87.5
88.5
89.5
90.2
Enclosed
6 Pole
Open
82.5
84.0
84.0
87.5
87.5
89.5
89.5
91.0
91.0
82.5
84.0
84.0
86.5
87.5
88.5
89.5
91.0
91.0
criteria in paragraph (d)(1)(i) of this
section but excluding air-over electric
motors and with a power rating from 1
8 Pole
Enclosed
Open
Enclosed
Open
80.0
85.5
86.5
87.5
87.5
89.5
89.5
................
................
80.0
84.0
85.5
86.5
87.5
88.5
90.2
................
................
74.0
77.0
82.5
84.0
85.5
85.5
................
................
................
74.0
75.5
85.5
86.5
87.5
88.5
................
................
................
horsepower through 200 horsepower,
shall have a nominal full-load efficiency
that is not less than the following:
TABLE 12 TO PARAGRAPH (d)(1)(ii)(D)—NOMINAL FULL-LOAD EFFICIENCIES OF NEMA DESIGN C AND IEC DESIGN H,
HE, HEY OR HY MOTORS (EXCLUDING AIR-OVER ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
4 Pole
ddrumheller on DSK120RN23PROD with PROPOSALS2
Enclosed
1/.75 .........................................................................................................
1.5/1.1 ......................................................................................................
2/1.5 .........................................................................................................
3/2.2 .........................................................................................................
5/3.7 .........................................................................................................
7.5/5.5 ......................................................................................................
10/7.5 .......................................................................................................
15/11 ........................................................................................................
20/15 ........................................................................................................
25/18.5 .....................................................................................................
30/22 ........................................................................................................
40/30 ........................................................................................................
50/37 ........................................................................................................
60/45 ........................................................................................................
75/55 ........................................................................................................
100/75 ......................................................................................................
125/90 ......................................................................................................
150/110 ....................................................................................................
200/150 ....................................................................................................
VerDate Sep<11>2014
18:55 Dec 14, 2023
Jkt 262001
PO 00000
Frm 00091
Fmt 4701
85.5
86.5
86.5
89.5
89.5
91.7
91.7
92.4
93.0
93.6
93.6
94.1
94.5
95.0
95.4
95.4
95.4
95.8
96.2
Sfmt 4702
6 Pole
Open
85.5
86.5
86.5
89.5
89.5
91.0
91.7
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
95.4
95.4
95.8
95.8
Enclosed
82.5
87.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
94.1
94.1
94.5
94.5
95.0
95.0
95.8
95.8
E:\FR\FM\15DEP2.SGM
15DEP2
8 Pole
Open
82.5
86.5
87.5
88.5
89.5
90.2
91.7
91.7
92.4
93.0
93.6
94.1
94.1
94.5
94.5
95.0
95.0
95.4
95.4
Enclosed
75.5
78.5
84.0
85.5
86.5
86.5
89.5
89.5
90.2
90.2
91.7
91.7
92.4
92.4
93.6
93.6
94.1
94.1
94.5
Open
75.5
77.0
86.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
91.7
92.4
93.0
94.1
94.1
94.1
94.1
94.1
87152
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
(E) Each fire pump electric motor
meeting the criteria in paragraph
(d)(1)(i) of this section, but excluding
air-over electric motors, and with a
power rating of 1 horsepower through
500 horsepower, shall have a nominal
full-load efficiency that is not less than
the following:
TABLE 13 TO PARAGRAPH (d)(1)(ii)(E)—NOMINAL FULL-LOAD EFFICIENCIES OF FIRE PUMP ELECTRIC MOTORS
(EXCLUDING AIR-OVER ELECTRIC MOTORS) AT 60 Hz
Nominal full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
ddrumheller on DSK120RN23PROD with PROPOSALS2
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
5/3.7 .................................................................
7.5/5.5 ..............................................................
10/7.5 ...............................................................
15/11 ................................................................
20/15 ................................................................
25/18.5 .............................................................
30/22 ................................................................
40/30 ................................................................
50/37 ................................................................
60/45 ................................................................
75/55 ................................................................
100/75 ..............................................................
125/90 ..............................................................
150/110 ............................................................
200/150 ............................................................
250/186 ............................................................
300/224 ............................................................
350/261 ............................................................
400/298 ............................................................
450/336 ............................................................
500/373 ............................................................
(2) The standards in paragraph
(d)(2)(ii) of this section apply only to
electric motors that satisfy the criteria in
paragraph (d)(2)(i)(A) of this section and
with the exclusion listed in paragraph
(d)(2)(i)(B) of this section
(i) Scope. (A) The standards in
paragraph (d)(2)(ii) of this section apply
only to electric motors, including partial
electric motors, that satisfy the
following criteria:
(1) Are not small electric motors, as
defined at § 431.442 and are not a
dedicated pool pump motors as defined
at § 431.483; and do not have an air-over
enclosure and a specialized frame size
if the motor operates on polyphase
power;
(2) Are rated for continuous duty (MG
1) operation or for duty type S1 (IEC);
(3) Operate on polyphase or singlephase alternating current 60-hertz (Hz)
sinusoidal line power; or are used with
an inverter that operates on polyphase
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75.5
82.5
84.0
85.5
87.5
88.5
89.5
90.2
90.2
91.0
91.0
91.7
92.4
93.0
93.0
93.6
94.5
94.5
95.0
95.4
95.4
95.4
95.4
95.4
95.4
4 Pole
Open
................
82.5
84.0
84.0
85.5
87.5
88.5
89.5
90.2
91.0
91.0
91.7
92.4
93.0
93.0
93.0
93.6
93.6
94.5
94.5
95.0
95.0
95.4
95.8
95.8
Enclosed
82.5
84.0
84.0
87.5
87.5
89.5
89.5
91.0
91.0
92.4
92.4
93.0
93.0
93.6
94.1
94.5
94.5
95.0
95.0
95.0
95.4
95.4
95.4
95.4
95.8
6 Pole
Open
82.5
84.0
84.0
86.5
87.5
88.5
89.5
91.0
91.0
91.7
92.4
93.0
93.0
93.6
94.1
94.1
94.5
95.0
95.0
95.4
95.4
95.4
95.4
95.8
95.8
or single-phase alternating current 60hertz (Hz) sinusoidal line power;
(4) Are rated for 600 volts or less;
(5) Are single-speed induction motors
capable of operating without an inverter
or are inverter-only electric motors;
(6) Produce a rated motor horsepower
greater than or equal to 0.25 horsepower
(0.18 kW); and
(7) Are built in the following frame
sizes: any two-, or three-digit NEMA
frame size (or IEC equivalent) if the
motor operates on single-phase power;
any two-, or three-digit NEMA frame
size (or IEC equivalent) if the motor
operates on polyphase power, and has a
rated motor horsepower less than 1
horsepower (0.75 kW); or a two-digit
NEMA frame size (or IEC metric
equivalent), if the motor operates on
polyphase power, has a rated motor
horsepower equal to or greater than 1
horsepower (0.75 kW), and is not an
enclosed 56 NEMA frame size (or IEC
metric equivalent).
PO 00000
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8 Pole
Enclosed
Open
Enclosed
Open
80.0
85.5
86.5
87.5
87.5
89.5
89.5
90.2
90.2
91.7
91.7
93.0
93.0
93.6
93.6
94.1
94.1
95.0
95.0
95.0
95.0
95.0
................
................
................
80.0
84.0
85.5
86.5
87.5
88.5
90.2
90.2
91.0
91.7
92.4
93.0
93.0
93.6
93.6
94.1
94.1
94.5
94.5
95.4
95.4
95.4
................
................
................
74.0
77.0
82.5
84.0
85.5
85.5
88.5
88.5
89.5
89.5
91.0
91.0
91.7
91.7
93.0
93.0
93.6
93.6
94.1
94.5
................
................
................
................
................
74.0
75.5
85.5
86.5
87.5
88.5
89.5
89.5
90.2
90.2
91.0
91.0
91.7
92.4
93.6
93.6
93.6
93.6
93.6
94.5
................
................
................
................
................
(B) The standards in paragraph
(d)(2)(ii) of this section do not apply to
the following electric motors exempted
by the Secretary, or any additional
electric motors that the Secretary may
exempt:
(1) Component sets of an electric
motor;
(2) Liquid-cooled electric motors;
(3) Submersible electric motors; and
(4) Inverter-only electric motors.
(ii) Standards. (A) Each high-torque
and medium-torque electric motor (i.e.,
capacitor-start-induction-run (‘‘CSIR’’),
capacitor-start-capacitor-run (‘‘CSCR’’),
and split-phase motor) meeting the
criteria in paragraph (d)(2)(i) of this
section and with a power rating of
greater than or equal to 0.25 horsepower
and less than or equal to 3 horsepower,
shall have an average full-load
efficiency that is not less than the
following:
E:\FR\FM\15DEP2.SGM
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87153
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Proposed Rules
TABLE 14 TO PARAGRAPH (d)(2)(ii)(A)—AVERAGE FULL-LOAD EFFICIENCIES OF HIGH AND MEDIUM-TORQUE ELECTRIC
MOTOR (CSIR, CSCR, AND SPLIT-PHASE MOTORS) AT 60 Hz
Average full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
.25/.19 ..............................................................
.33/.25 ..............................................................
.5/.37 ................................................................
.75/.56 ..............................................................
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
(B) Each low-torque electric motor
(i.e., shaded pole and permanent split
capacitor motor) meeting the criteria in
59.5
64.0
68.0
75.5
77.0
81.5
82.5
84.0
4 Pole
Open
59.5
64.0
68.0
76.2
80.4
81.5
82.9
84.1
6 Pole
8 Pole
Enclosed
Open
Enclosed
Open
Enclosed
Open
59.5
64.0
67.4
75.5
80.0
81.5
82.5
................
59.5
64.0
69.2
81.8
82.6
83.8
84.5
................
57.5
62.0
68.0
75.5
77.0
80.0
................
................
57.5
62.0
68.0
80.2
81.1
................
................
................
................
50.5
52.5
72.0
74.0
................
................
................
................
50.5
52.5
72.0
74.0
................
................
................
paragraph (d)(2)(i) of this section and
with a power rating of greater than or
equal to 0.25 horsepower and less than
or equal to 3 horsepower, shall have an
average full-load efficiency of not less
than the following:
TABLE 15 TO PARAGRAPH (d)(2)(ii)(B)—AVERAGE FULL-LOAD EFFICIENCIES OF LOW-TORQUE ELECTRIC MOTOR (SHADED
POLE AND PERMANENT SPLIT CAPACITOR MOTORS) AT 60 Hz
Average full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
.25/.19 ..............................................................
.33/.25 ..............................................................
.5/.37 ................................................................
.75/.56 ..............................................................
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
(C) Each polyphase electric motor
meeting the criteria in paragraph
(d)(2)(i) of this section and with a power
60.9
63.9
65.8
67.5
71.3
76.9
78.0
79.4
4 Pole
Open
63.9
66.9
68.8
70.5
74.3
79.9
81.0
82.4
Enclosed
6 Pole
Open
64.1
67.7
68.1
72.8
75.1
80.1
80.9
82.0
66.1
69.7
70.1
74.8
77.1
82.1
82.9
84.0
rating of greater than or equal to 0.25
horsepower and less than or equal to 3
horsepower, shall have an average full-
Enclosed
8 Pole
Open
59.2
64.0
65.8
72.1
76.3
79.5
80.4
81.5
60.2
65.0
66.8
73.1
77.3
80.5
81.4
82.5
Enclosed
Open
52.5
56.6
57.1
62.8
65.7
72.2
73.3
74.9
52.5
56.6
57.1
62.8
65.7
72.2
73.3
74.9
load efficiency of not less than the
following:
TABLE 16 TO PARAGRAPH (d)(2)(ii)(C)—AVERAGE FULL-LOAD EFFICIENCIES OF POLYPHASE ELECTRIC MOTOR AT 60 Hz
Average full-load efficiency (%)
Motor horsepower/standard kilowatt equivalent
2 Pole
Enclosed
ddrumheller on DSK120RN23PROD with PROPOSALS2
.25/.19 ..............................................................
.33/.25 ..............................................................
.5/.37 ................................................................
.75/.56 ..............................................................
1/.75 .................................................................
1.5/1.1 ..............................................................
2/1.5 .................................................................
3/2.2 .................................................................
Appendix B to Subpart B of Part 431
[Amended]
7. Appendix B to subpart B of part 431
is amended by:
■ a. In sections 1 and 1.2., removing the
words ‘‘Small, non-small-electric-motor
electric motor’’ wherever it appears, and
■
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66.0
70.0
72.0
75.5
75.5
84.0
85.5
86.5
4 Pole
Open
65.6
69.5
73.4
76.8
77.0
84.0
85.5
85.5
Enclosed
68.0
72.0
75.5
77.0
77.0
82.5
85.5
86.5
6 Pole
Open
69.5
73.4
78.2
81.1
83.5
86.5
86.5
86.9
adding in its place the words
‘‘Expanded scope electric motor’’.
■ b. In section 1.2, removing the term
‘‘SNEM’’ wherever it appears, and
adding in its place ‘‘ESEM’’.
■ c. In sections 2.3, 2.3.1, and 2.3.3,
removing the term ‘‘SNEMs’’ wherever
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70.0
72.0
74.0
74.0
87.5
88.5
89.5
8 Pole
Open
67.5
71.4
75.3
81.7
82.5
83.8
................
................
Enclosed
Open
62.0
64.0
66.0
70.0
75.5
78.5
84.0
85.5
it appears, and adding in its place
‘‘ESEMs’’.
[FR Doc. 2023–26531 Filed 12–14–23; 8:45 am]
BILLING CODE 6450–01–P
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87.5
]]>Agencies
[Federal Register Volume 88, Number 240 (Friday, December 15, 2023)]
[Proposed Rules]
[Pages 87062-87153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-26531]
[[Page 87061]]
Vol. 88
Friday,
No. 240
December 15, 2023
Part II
Department of Energy
-----------------------------------------------------------------------
10 CFR Parts 429 and 431
Energy Conservation Program: Energy Conservation Standards for Expanded
Scope Electric Motors; Proposed Rule
Federal Register / Vol. 88 , No. 240 / Friday, December 15, 2023 /
Proposed Rules
[[Page 87062]]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
10 CFR Parts 429 and 431
[EERE-2020-BT-STD-0007]
RIN 1904-AF55
Energy Conservation Program: Energy Conservation Standards for
Expanded Scope Electric Motors
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking and announcement of public
meeting.
-----------------------------------------------------------------------
SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including electric
motors. In this notice of proposed rulemaking (``NOPR''), DOE proposes
new energy conservation standards for a subset of electric motors,
expanded scope electric motors, expressed in terms of average full-load
efficiency, and also announces a public meeting to receive comment on
these proposed standards and associated analyses and results.
DATES:
Comments: DOE will accept comments, data, and information regarding
this NOPR no later than February 13, 2024.
Meeting: DOE will hold a public meeting on Wednesday, January 17,
2024, from 10 a.m. to 4 p.m., in Washington, DC. This meeting will also
be broadcast as a webinar.
Comments regarding the likely competitive impact of the proposed
standard should be sent to the Department of Justice contact listed in
the ADDRESSES section on or before January 16, 2024.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue SW,
Washington, DC 20585. See section VII of this document, ``Public
Participation,'' for further details, including procedures for
attending the in-person meeting, webinar registration information,
participant instructions, and information about the capabilities
available to webinar participants.
Interested persons are encouraged to submit comments using the
Federal eRulemaking Portal at www.regulations.gov under docket number
EERE-2020-BT-STD-0007. Follow the instructions for submitting comments.
Alternatively, interested persons may submit comments, identified by
docket number EERE-2020-BT-STD-0007, by any of the following methods:
Email: [email protected]. Include the docket number
EERE-2020-BT-STD-0007 in the subject line of the message.
Postal Mail: Appliance and Equipment Standards Program, U.S.
Department of Energy, Building Technologies Office, Mailstop EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 287-1445. If possible, please submit all items on a compact disc
(``CD''), in which case it is not necessary to include printed copies.
Hand Delivery/Courier: Appliance and Equipment Standards Program,
U.S. Department of Energy, Building Technologies Office, 950 L'Enfant
Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 287-1445.
If possible, please submit all items on a CD, in which case it is not
necessary to include printed copies.
No telefacsimiles (``faxes'') will be accepted. For detailed
instructions on submitting comments and additional information on this
process, see section VII of this document.
Docket: The docket for this activity, which includes Federal
Register notices, comments, and other supporting documents/materials,
is available for review at www.regulations.gov. All documents in the
docket are listed in the www.regulations.gov index. However, not all
documents listed in the index may be publicly available, such as
information that is exempt from public disclosure.
The docket web page can be found at www.regulations.gov/docket/EERE-2020-BT-STD-0007. The docket web page contains instructions on how
to access all documents, including public comments, in the docket. See
section VII of this document for information on how to submit comments
through www.regulations.gov.
EPCA requires the Attorney General to provide DOE a written
determination of whether the proposed standard is likely to lessen
competition. The U.S. Department of Justice Antitrust Division invites
input from market participants and other interested persons with views
on the likely competitive impact of the proposed standard. Interested
persons may contact the Antitrust Division at
[email protected] on or before the date specified in the DATES
section. Please indicate in the ``Subject'' line of your email the
title and Docket Number of this proposed rulemaking.
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. Kristin Koernig, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (202) 586-3593. Email:
[email protected].
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact the Appliance and Equipment Standards Program staff at (202)
287-1445 or by email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Proposed 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 ESEMs
3. Electric Motors Working Group Recommended Standard Levels
C. Deviation From Process Rule
1. Public Comment Period
2. Framework Document
III. General Discussion
A. Scope of Coverage and Equipment Classes
1. General Scope of Coverage and Equipment Classes
2. Structure of the Regulatory Text
3. Air-Over Medium Electric Motors and Air-Over ESEMs
B. Test Procedure
C. Represented Values
D. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
E. Energy Savings
1. Determination of Savings
2. Significance of Savings
F. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Savings in Operating Costs Compared To Increase in Price (LCC
and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
[[Page 87063]]
A. Market and Technology Assessment
1. Scope of Coverage
2. Air-Over ESEMs
3. Equipment Classes
4. Technology Options
5. Imported Embedded Motors
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Representative Units Analyzed
b. Baseline Efficiency
c. Higher Efficiency Levels
2. Cost Analysis
3. Technical Specifications
4. Cost-Efficiency Results
5. Scaling Methodology
D. Markups Analysis
E. Energy Use Analysis
1. Consumer Sample
2. Motor Input Power
3. Annual Operating Hours
4. Impact of Electric Motor Speed
F. Life-Cycle Cost and Payback Period Analysis
1. Equipment Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Equipment Lifetime
7. Discount Rates
8. Energy Efficiency Distribution in the No-New-Standards Case
9. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Equipment Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Product and Capital Conversion Costs
d. Manufacturer Markup Scenarios
3. Manufacturer Interviews
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous Oxide
2. Monetization of Other Emissions Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
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 ESEM Standards
2. Annualized Benefits and Costs of the Proposed Standards
D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
B. Review Under the Regulatory Flexibility Act
1. Description of Reasons Why Action Is Being Considered
2. Objectives of, and Legal Basis for, Rule
3. Description and Estimated Number of Small Entities Regulated
4. Description and Estimate of Compliance Requirements Including
Differences in Cost, if Any, for Different Groups of Small Entities
5. Duplication, Overlap, and Conflict With Other Rules and
Regulations
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
VII. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary
I. Synopsis of the Proposed Rule
The Energy Policy and Conservation Act, Public Law 94-163, as
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency
of a number of consumer products and certain industrial equipment. (42
U.S.C. 6291-6317) Title III, Part C \2\ of EPCA established the Energy
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes electric motors. Expanded scope electric
motors (``ESEMs''), a subcategory of electric motors, are the subject
of this rulemaking. This proposed rulemaking does not address small
electric motors that are covered under title 10 of the Code of Federal
Regulations (``CFR'') part 431 subpart X.
---------------------------------------------------------------------------
\1\ All references to EPCA in this document refer to the statute
as amended through the Energy Act of 2020, Public Law 116-260 (Dec.
27, 2020), which reflect the last statutory amendments that impact
Parts A and A-1 of EPCA.
\2\ For editorial reasons, upon codification in the U.S. Code,
Part C was re-designated Part A-1.
---------------------------------------------------------------------------
Pursuant to EPCA, any new or amended energy conservation standard
must be designed to achieve the maximum improvement in energy
efficiency that DOE determines is technologically feasible and
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A))
Furthermore, the new or amended standard must result in significant
conservation of energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B))
In accordance with these and other statutory provisions discussed
in this document, DOE analyzed the benefits and burdens of four trial
standard levels (``TSLs'') for ESEMs. The TSLs and their associated
benefits and burdens are discussed in detail in sections V.A through
V.C of this document. As discussed in section V.C of this document, DOE
has tentatively determined that TSL 2 represents the maximum
improvement in energy efficiency that is technologically feasible and
economically justified. The proposed standards, which are expressed in
average full-load efficiency, are shown in Table I-1 through Table I-3
and are equivalent to those recommended in a joint recommendation for
energy conservation standards for ESEMs \3\ (``December 2022 Joint
Recommendation'') from the Electric Motors Working Group, representing
the motors industry, energy efficiency organizations and
utilities.4 5
---------------------------------------------------------------------------
\3\ In the letter, this category is referred to as ``SNEM.'' See
discussion on the change in terminology in sections III.A and III.B
of this document.
\4\ Full recommendation available at: www.regulations.gov/comment/EERE-2020-BT-STD-0007-0038.
\5\ The members of the Electric Motors Working Group included
American Council for an Energy-Efficient Economy, Appliance
Standards Awareness Project, National Electrical Manufacturers
Association, Natural Resources Defense Council, Northwest Energy
Efficiency Alliance, Pacific Gas & Electric Company, San Diego Gas &
Electric, and Southern California Edison.
---------------------------------------------------------------------------
Upon receipt of the December 2022 Joint Recommendation, DOE
considered whether the statutory requirements of
[[Page 87064]]
42 U.S.C. 6295(p)(4) would be satisfied and thus warrant the issuance
of a direct final rule by DOE. In particular, EPCA requires DOE to
determine whether the recommended standard contained in a statement
submitted jointly by interested parties is in accordance with 42 U.S.C.
6295(o); i.e., whether the recommended standard would achieve the
maximum improvement in energy efficiency that is technologically
feasible and economically justified. (42 U.S.C. 6295(p)(4)(A)(i)) If
the Secretary determines the recommended standard is in accordance with
42 U.S.C. 6295(o), the Secretary may issue a final rule that
establishes the recommended energy conservation standard. (Id.) If the
Secretary determines that a direct final rule cannot be issued based on
the statement, the Secretary must publish a notice of the
determination, together with an explanation of the reasons for such
determination. (42 U.S.C. 6295(p)(4)(A)(ii)) EPCA defines seven factors
by which DOE must determine whether a proposed standard is economically
justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) Having considered the
December 2022 Joint Recommendation, DOE has tentatively determined that
the recommended standard is in accordance with 42 U.S.C. 6295(o).
However, because EPCA does not require DOE to issue a direct final rule
under 42 U.S.C. 6295(p), DOE is interested in seeking public comment on
the proposed, and recommended, standards level through this proposed
rule to better understand the impacts of those standards.
These proposed standards, if adopted, would apply to all ESEMs
listed in Table I-1 through Table I-3 manufactured in, or imported
into, the United States starting on January 1, 2029.
Table I-1--Proposed Energy Conservation Standards for High and Medium-Torque ESEMs
[Compliance Starting on January 1, 2029] [Recommended TSL 2]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full load efficiency
----------------------------------------------------------------------------------------
hp Open Enclosed
----------------------------------------------------------------------------------------
2-pole 4-pole 6-pole 8-pole 2-pole 4-pole 6-pole 8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25........................................................... 59.5 59.5 57.5 .......... 59.5 59.5 57.5 .........
0.33........................................................... 64.0 64.0 62.0 50.5 64.0 64.0 62.0 50.5
0.5............................................................ 68.0 69.2 68.0 52.5 68.0 67.4 68.0 52.5
0.75........................................................... 76.2 81.8 80.2 72.0 75.5 75.5 75.5 72.0
1.............................................................. 80.4 82.6 81.1 74.0 77.0 80.0 77.0 74.0
1.5............................................................ 81.5 83.8 ......... .......... 81.5 81.5 80.0 .........
2.............................................................. 82.9 84.5 ......... .......... 82.5 82.5 ......... .........
3.............................................................. 84.1 ......... ......... .......... 84.0 ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table I-2--Proposed Energy Conservation Standards for Low-Torque ESEMs
[Compliance Starting on January 1, 2029] [Recommended TSL 2]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full load efficiency
----------------------------------------------------------------------------------------
hp Open Enclosed
----------------------------------------------------------------------------------------
2-pole 4-pole 6-pole 8-pole 2-pole 4-pole 6-pole 8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25........................................................... 63.9 66.1 60.2 52.5 60.9 64.1 59.2 52.5
0.33........................................................... 66.9 69.7 65.0 56.6 63.9 67.7 64.0 56.6
0.5............................................................ 68.8 70.1 66.8 57.1 65.8 68.1 65.8 57.1
0.75........................................................... 70.5 74.8 73.1 62.8 67.5 72.8 72.1 62.8
1.............................................................. 74.3 77.1 77.3 65.7 71.3 75.1 76.3 65.7
1.5............................................................ 79.9 82.1 80.5 72.2 76.9 80.1 79.5 72.2
2.............................................................. 81.0 82.9 81.4 73.3 78.0 80.9 80.4 73.3
3.............................................................. 82.4 84.0 82.5 74.9 79.4 82.0 81.5 74.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table I-3--Proposed Energy Conservation Standards for Polyphase ESEMs
[Compliance Starting on January 1, 2029] [Recommended TSL 2]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full load efficiency
----------------------------------------------------------------------------------------
hp Open Enclosed
----------------------------------------------------------------------------------------
2-pole 4-pole 6-pole 8-pole 2-pole 4-pole 6-pole 8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25........................................................... 65.6 69.5 67.5 62.0 66.0 68.0 66.0 62.0
0.33........................................................... 69.5 73.4 71.4 64.0 70.0 72.0 70.0 64.0
0.5............................................................ 73.4 78.2 75.3 66.0 72.0 75.5 72.0 66.0
0.75........................................................... 76.8 81.1 81.7 70.0 75.5 77.0 74.0 70.0
1.............................................................. 77.0 83.5 82.5 75.5 75.5 77.0 74.0 75.5
1.5............................................................ 84.0 86.5 83.8 77.0 84.0 82.5 87.5 78.5
2.............................................................. 85.5 86.5 ......... 86.5 85.5 85.5 88.5 84.0
3.............................................................. 85.5 86.9 ......... 87.5 86.5 86.5 89.5 85.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 87065]]
A. Benefits and Costs to Consumers
Table I-4 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of ESEMs, as measured by the average
life-cycle cost (``LCC'') savings and the simple payback period
(``PBP'').\6\ The average LCC savings are positive for all
representative units, and the PBP is less than the average lifetime of
ESEMs, which is estimated to be 7.1 years (see section IV.F of this
document).
---------------------------------------------------------------------------
\6\ The average LCC savings refer to consumers that are affected
by a standard and are measured relative to the efficiency
distribution in the no-new-standards case, which depicts the market
in the compliance year in the absence of new 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).
Table I-4--Impacts of Proposed Energy Conservation Standards on Consumers of ESEMs
----------------------------------------------------------------------------------------------------------------
Average LCC savings Simple payback period
Representative unit (2022$) (years)
----------------------------------------------------------------------------------------------------------------
ESEM High/Med Torque, 4 poles, enclosed, 0.25 hp............... 51 1.1
ESEM High/Med Torque, 4 poles, enclosed, 1 hp.................. 138 0.9
ESEM High/Med Torque, 4 poles, enclosed, 5 hp.................. 147 0.7
ESEM Low Torque, 6 poles, enclosed, 0.25 hp.................... 100 1.5
ESEM Low Torque, 6 poles, enclosed, 0.5 hp..................... 26 2.0
ESEM Polyphase, 4 poles, enclosed, 0.25 hp..................... 83 0.8
AO-ESEM High/Med Torque, 4 poles, enclosed, 0.25 hp............ 160 0.8
AO-ESEM High/Med Torque, 4 poles, enclosed, 1 hp............... 121 0.7
AO-ESEM High/Med Torque, 4 poles, enclosed, 5 hp............... 88 1.3
AO-ESEM Low Torque, 6 poles, enclosed, 0.25 hp................. 40 1.8
AO-ESEM Low Torque, 6 poles, enclosed, 0.5 hp.................. 51 1.2
AO-ESEM Polyphase, 4 poles, enclosed, 0.25 hp.................. 138 1.1
----------------------------------------------------------------------------------------------------------------
DOE's analysis of the impacts of the proposed standards on
consumers is described in section IV.F of this document.
B. Impact on Manufacturers
The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the base year through the
end of the analysis period (2024-2058). Using a real discount rate of
9.1 percent, DOE estimates that the INPV for manufacturers of ESEMs in
the case without new standards is $2,019 million in 2022$. Under the
proposed standards, DOE estimates the change in INPV to range from -
13.1 percent to -6.5 percent, which is approximately -$264 million to -
$131 million. In order to bring equipment into compliance with new
standards, it is estimated that industry will incur total conversion
costs of $339 million.
DOE's analysis of the impacts of the proposed standards on
manufacturers is described in section IV.J of this document. The
analytic results of the manufacturer impact analysis (``MIA'') are
presented in section V.B.2 of this document.
C. National Benefits and Costs 7
---------------------------------------------------------------------------
\7\ All monetary values in this document are expressed in 2022
dollars.
---------------------------------------------------------------------------
DOE's analyses indicate that the proposed energy conservation
standards for ESEMs would save a significant amount of energy. Relative
to the case without new standards, the lifetime energy savings for
ESEMs purchased in the 30-year period that begins in the anticipated
year of compliance with the new standards (2029-2058) amount to 8.9
quadrillion British thermal units (``Btu''), or quads.\8\ This
represents a savings of 9 percent relative to the energy use of these
products in the case without new standards (referred to as the ``no-
new-standards case'').
---------------------------------------------------------------------------
\8\ 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 proposed standards for ESEMs ranges from $38.3 billion
(at a 7-percent discount rate) to $72.8 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 ESEMs purchased in 2029-2058.
In addition, the proposed standards for ESEMs are projected to
yield significant environmental benefits. DOE estimates that the
proposed standards would result in cumulative emission reductions (over
the same period as for energy savings) of 160.5 million metric tons
(``Mt'') \9\ of carbon dioxide (``CO2''), 43.8 thousand tons
of sulfur dioxide (``SO2''), 299.8 thousand tons of nitrogen
oxides (``NOX''), 1,362.2 thousand tons of methane
(``CH4''), 1.4 thousand tons of nitrous oxide
(``N2O''), and 0.3 tons of mercury (``Hg'').\10\
---------------------------------------------------------------------------
\9\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\10\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2023 (``AEO2023''). AEO2023 reflects, to the extent
possible, laws and regulations adopted through mid-November 2022,
including the Inflation Reduction Act. See section IV.K of this
document for further discussion of AEO2023 assumptions that 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 (in terms of benefit
per ton of GHG avoided) developed by an Interagency Working Group on
the Social Cost of Greenhouse Gases (``IWG'').\11\ The derivation of
these values is discussed in section IV.L of this document. For
presentational purposes, the climate benefits associated with the
average SC-GHG at a 3-percent discount rate are estimated to be $9.4
billion. DOE does not have a single central SC-GHG point estimate and
it emphasizes the importance and value of considering the benefits
[[Page 87066]]
calculated using all four sets of SC-GHG estimates.
---------------------------------------------------------------------------
\11\ 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 (``EPA''),\12\ as discussed in
section IV.L of this document. DOE estimated the present value of the
health benefits would be $7.9 billion using a 7-percent discount rate,
and $18.3 billion using a 3-percent discount rate.\13\ DOE is currently
only monetizing health benefits from changes in ambient fine
particulate matter (``PM2.5'') concentrations from two
precursors (SO2 and NOX), and from changes in
ambient ozone from one precursor (for NOX), but will
continue to assess the ability to monetize other effects such as health
benefits from reductions in direct PM2.5 emissions.
---------------------------------------------------------------------------
\12\ 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.
\13\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------
Table I-5 summarizes the monetized benefits and costs expected to
result from the proposed standards for ESEMs. There are other important
unquantified effects, including certain unquantified climate benefits,
unquantified public health benefits from the reduction of toxic air
pollutants and other emissions, unquantified energy security benefits,
and distributional effects, among others.
Table I-5--Summary of Monetized Benefits and Costs of Proposed Energy
Conservation Standards for ESEMs
[TSL 2]
------------------------------------------------------------------------
Billion $2022
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings........................ 54.7
Climate Benefits *..................................... 9.4
Health Benefits **..................................... 18.3
Total Benefits [dagger]................................ 82.4
Consumer Incremental Equipment Costs [Dagger].......... 9.7
Net Benefits........................................... 72.8
Change in Producer Cashflow (INPV [dagger][dagger]).... (0.3)-(0.1)
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings........................ 26.1
Climate Benefits * (3% discount rate).................. 9.4
Health Benefits **..................................... 7.9
Total Benefits [dagger]................................ 43.5
Consumer Incremental Equipment Costs [Dagger].......... 5.1
Net Benefits........................................... 38.3
Change in Producer Cashflow (INPV [dagger][dagger]).... (0.3)-(0.1)
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with ESEMs
shipped in 2029-2058. These results include consumer, climate, and
health benefits which accrue after 2029 from the equipment shipped in
2029-2058.
* 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; however, DOE 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 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.
[Dagger] Costs include incremental equipment 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
national impacts analysis 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 9.1 percent that is estimated in the MIA (see chapter 12 of the
NOPR TSD for a complete description of the industry weighted average
cost of capital). For ESEMs, those values are -$264 million and -$131
million. DOE accounts for that range of likely impacts in analyzing
whether a TSL is economically justified. See section IV.J 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 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 proposed
rule, the net benefits would range from $72.5 billion to $72.7 billion
at 3-percent discount rate and would range from $38.0 billion to $38.2
billion at 7-percent discount rate. Numbers in parentheses are
negative numbers. DOE seeks comment on this approach.
[[Page 87067]]
The benefits and costs of the proposed standards can also be
expressed in terms of annualized values. The monetary values for the
total annualized net benefits are (1) the reduced consumer operating
costs, minus (2) the increase in product purchase prices and
installation costs, plus (3) the value of climate and health benefits
of emission reductions, all annualized.\14\
---------------------------------------------------------------------------
\14\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2022, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2030), and then discounted the present value from each year
to 2022. 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 monetary savings that occur as a result of purchasing the
covered products and are measured for the lifetime of ESEMs shipped in
2029-2058. The benefits associated with reduced emissions achieved as a
result of the proposed standards are also calculated based on the
lifetime of ESEMs shipped in 2029-2058. 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 of this document.
Table I-6 presents the total estimated monetized benefits and costs
associated with the proposed standard, expressed in terms of annualized
values. The results under the primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced NOX and SO2
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated cost of the standards
proposed in this rule is $543 million per year in increased equipment
costs, while the estimated annual benefits are $2,757 million in
reduced equipment operating costs, $542 million in climate benefits,
and $836 million in health benefits. In this case. The net benefit
would amount to $3,592 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards is $556 million per year in
increased equipment costs, while the estimated annual benefits are
$3,140 million in reduced operating costs, $542 million in climate
benefits, and $1,052 million in health benefits. In this case, the net
benefit would amount to $4,179 million per year.
Table I-6--Annualized Benefits and Costs of Proposed Energy Conservation Standards for ESEMs
[TSL 2]
----------------------------------------------------------------------------------------------------------------
Million 2022$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 3,140 2,962 3,341
Climate Benefits *.............................................. 542 526 562
Health Benefits **.............................................. 1,052 1,021 1,089
Total Benefits [dagger]......................................... 4,734 4,509 4,992
Consumer Incremental Equipment Costs [Dagger]................... 556 598 529
Net Benefits.................................................... 4,179 3,911 4,464
Change in Producer Cashflow (INPV [dagger][dagger])............. (25)-(13) (25)-(13) (25)-(13)
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 2,757 2,615 2,921
Climate Benefits * (3% discount rate)........................... 542 526 562
Health Benefits **.............................................. 836 814 863
Total Benefits [dagger]......................................... 4,135 3,955 4,346
Consumer Incremental Equipment Costs [Dagger]................... 543 578 520
Net Benefits.................................................... 3,592 3,377 3,826
Change in Producer Cashflow (INPV [dagger][dagger])............. (25)-(13) (25)-(13) (25)-(13)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with ESEMs shipped in 2029-2058. These results
include consumer, climate, and health benefits which accrue after 2058 from the equipment shipped in 2029-
2058. 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 constant rate in the Primary Estimate, an increasing rate in
the Low Net Benefits Estimate, and a declining rate in the High Net Benefits Estimate. The methods used to
derive projected price trends are explained in sections IV.F and IV.4 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; however, DOE 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 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.
[Dagger] Costs include incremental equipment costs.
[[Page 87068]]
[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 national
impacts analysis 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. The annualized change in INPV is calculated using the industry
weighted average cost of capital value of 9.1 percent that is estimated in the MIA (see chapter 12 of the NOPR
TSD for a complete description of the industry weighted average cost of capital). For ESEMs, those values are
$25 million and -$13 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is
economically justified. See section IV.J of this NOPR. 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 proposed
rule, the annualized net benefits would range from $4,154 million to $4,166 million at 3-percent discount rate
and would range from $3,567 million to $3,579 million at 7-percent discount rate. Numbers in parentheses are
negative numbers. DOE seeks comment on this approach.
DOE's analysis of the national impacts of the proposed standards is
described in sections IV.G, IV.K, and IV.L of this document.
D. Conclusion
DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in the
significant conservation of energy. Specifically, with regards to
technological feasibility, equipment achieving these standard levels
are already commercially available for all equipment classes covered by
this proposal. As for economic justification, DOE's analysis shows that
the benefits of the proposed standard exceed, to a great extent, the
burdens of the proposed standards.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
proposed standards for ESEMs is $543 million per year in increased
equipment costs, while the estimated annual benefits are $2,757 million
in reduced equipment operating costs, $542 million in climate benefits
and $836 million in health benefits. The net benefit amounts to $3,592
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.\15\ For
example, some covered products and equipment have substantial 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.
---------------------------------------------------------------------------
\15\ Procedures, Interpretations, and Policies for Consideration
in New or Revised Energy Conservation Standards and Test Procedures
for Consumer Products and Commercial/Industrial Equipment, 86 FR
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------
As previously mentioned, the standards are projected to result in
estimated national energy savings of 8.9 quad FFC, the equivalent of
the primary annual energy use of 95.7 million homes. In addition, they
are projected to reduce CO2 emissions by 160.5 Mt. Based on
these findings, DOE has initially determined the energy savings from
the proposed standard levels are ``significant'' within the meaning of
42 U.S.C. 6295(o)(3)(B). A more detailed discussion of the basis for
these tentative conclusions is contained in the remainder of this
document and the accompanying technical support document (``TSD'').
DOE also considered more-stringent energy efficiency levels as
potential standards, and is still considering them in this proposed
rulemaking. However, DOE has tentatively concluded that the potential
burdens of the more-stringent energy efficiency levels would outweigh
the projected benefits.
Based on consideration of the public comments DOE receives in
response to this document and related information collected and
analyzed during the course of this proposed rulemaking effort, DOE may
adopt energy efficiency levels presented in this document that are
either higher or lower than the proposed standards, or some combination
of level(s) that incorporate the proposed standards in part.
II. Introduction
The following section briefly discusses the statutory authority
underlying this proposed rule, as well as some of the relevant
historical background related to the establishment of standards for
ESEMs.
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),
established the Energy Conservation Program for Certain Industrial
Equipment, which sets forth a variety of provisions designed to improve
the energy efficiency of certain types of industrial equipment,
including electric motors. (42 U.S.C. 6311(1)(A)) ESEMs, the subject of
this document, are a category of electric motors.
The Energy Policy Act of 1992 (``EPACT 1992'') (Pub. L. 102-486
(Oct. 24, 1992)) further amended EPCA by establishing energy
conservation standards and test procedures for certain commercial and
industrial electric motors that are manufactured alone or as a
component of another piece of equipment. In December 2007, Congress
enacted the Energy Independence and Security Act of 2007 (``EISA
2007'') (Pub. L. 110-140 (Dec. 19, 2007). Section 313(b)(1) of EISA
2007 updated the energy conservation standards for those electric
motors already covered by EPCA and established energy conservation
standards for a larger scope of motors not previously covered by
standards. (42 U.S.C. 6313(b)(2)) EISA 2007 also revised certain
statutory definitions related to electric motors. See EISA 2007, sec.
313 (amending statutory definitions related to electric motors at 42
U.S.C. 6311(13)).
The energy conservation program under EPCA, consists essentially of
four parts: (1) testing, (2) labeling, (3) the establishment of Federal
energy conservation standards, and (4) certification and enforcement
procedures. Relevant provisions of EPCA include definitions (42 U.S.C.
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C.
6315), energy conservation standards (42 U.S.C. 6313), and the
authority to require information and reports from
[[Page 87069]]
manufacturers (42 U.S.C. 6316; U.S.C. 6296).
Federal energy efficiency requirements for covered equipment
established under EPCA generally supersede state laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6316(a) and 42 U.S.C. 6316(b); 42 U.S.C. 6297) DOE may, however,
grant waivers of Federal preemption in limited instances for particular
state laws or regulations, in accordance with the procedures and other
provisions set forth under EPCA. (See 42 U.S.C. 6316(a) (applying the
preemption waiver provisions of 42 U.S.C. 6297))
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered equipment. (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 procedure for ESEMs appear at
10 CFR part 431, subpart B, appendix B (``appendix B'').
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered equipment, including ESEMs. Any new or
amended standard for a covered product must be designed to achieve the
maximum improvement in energy efficiency that the Secretary of Energy
determines is technologically feasible and economically justified. (42
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) 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
equipment, including ESEMs, if no test procedure has been established
for the equipment, 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 of Energy (``Secretary'') considers
relevant.
(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, 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 energy savings during the first year that the consumer will receive
as a result of the standard, as calculated under the applicable test
procedure. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(iii))
EPCA 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 or equipment that
has two or more subcategories. DOE must specify a different standard
level for a type or class of product 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 equipment, 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
DOE does not currently have energy conservation standards for ESEMs
even though DOE has the authority to regulate electric motors broadly.
DOE has adopted energy conservation standards for medium electric
motors (``MEMs'') at 10 CFR 431.25 (see section III.A of this document
for further description), as well as small electric motors (``SEMs'')
at 10 CFR 431.446, which are separately regulated categories.
2. History of Standards Rulemaking for ESEMs
On May 21, 2020, DOE issued an early assessment request for
information (``RFI'') (``May 2020 Early Assessment Review RFI'') in
which DOE stated that it was initiating an early assessment review to
determine whether any new or amended standards would satisfy the
relevant requirements of EPCA for a new or amended energy conservation
standard for electric motors and sought information related to that
effort. Specifically, DOE sought data and information that could enable
the agency to determine whether DOE should propose a ``no new
standard'' determination because a more stringent standard: (1) would
not result in a significant savings of energy; (2) is not
technologically feasible; (3) is not economically justified; or (4) any
combination of the foregoing. 85 FR 30878, 30879.
[[Page 87070]]
On March 2, 2022, DOE published a Preliminary Analysis for electric
motors (``March 2022 Preliminary Analysis''). 87 FR 11650. In
conjunction with the March 2022 Preliminary Analysis, DOE published the
March 2022 Preliminary TSD, which presented the results of the in-depth
technical analyses in the following areas: (1) engineering; (2) markups
to determine equipment price; (3) energy use; (4) LCC and PBP; and (5)
national impacts. The results presented included the current scope of
electric motors regulated at 10 CFR 431.25, in addition to an expanded
scope of motors, including electric motors above 500 horsepower, air-
over electric motors, and ESEMs.\16\ See chapter 2 of the March 2022
Preliminary TSD. DOE requested comment on a number of topics regarding
the analysis presented. However, DOE is only responding to comments
pertaining to ESEMs and air-over expanded scope electric motors (``AO-
ESEMs'') in this NOPR, as DOE responded to the rest of the comments
pertaining to medium electric motors and their air-over equivalents in
the Electric Motors Direct Final Rule published on June 1, 2023 (``June
2023 DFR'') that amended energy conservation standards for medium
electric motors and their air-over equivalents. 88 FR 36066.
---------------------------------------------------------------------------
\16\ In the March 2022 Preliminary Analysis, DOE used the term
small, non-small electric motor, electric motors (``SNEMs'') to
designate ESEMs.
---------------------------------------------------------------------------
On April 5, 2022, DOE held a public webinar in which it presented
the methods and analysis in the March 2022 Preliminary Analysis and
solicited public comment. (``April 5, 2022, Public Meeting'').
Table II-1--March 2022 Preliminary Analysis Written Commenters
----------------------------------------------------------------------------------------------------------------
Reference in this
Commenter(s) NOPR Docket No. Commenter type
----------------------------------------------------------------------------------------------------------------
American Council for an Energy-Efficient Electric Motors 38 Working Group.
Economy, Appliance Standards Awareness Project, Working Group.
National Electrical Manufacturers Association,
Natural Resources Defense Council, Northwest
Energy Efficiency Alliance, Pacific Gas &
Electric Company, San Diego Gas & Electric,
Southern California Edison.
Appliance Standards Awareness Project, American Joint Advocates....... 27 Efficiency Advocacy
Council for an Energy-Efficient Economy, Organizations.
Natural Resources Defense Council, New York
State Energy Research and Development Authority.
Association of Home Appliance Manufacturers; Air- AHAM and AHRI......... 25 Trade Association.
Conditioning, Heating, and Refrigeration
Institute.
Air-Conditioning, Heating, and Refrigeration AHRI.................. 26 Trade Association.
Institute.
Pacific Gas and Electric Company, San Diego Gas CA IOUs............... 30 Utilities.
and Electric, and Southern California Edison;
collectively, the California Investor-Owned
Utilities.
Electrical Apparatus Service Association, Inc... EASA.................. 21 Trade Association.
Hydraulics Institute............................ HI.................... 31 Trade Association.
Lennox International............................ Lennox................ 29 Manufacturer.
Northwest Energy Efficiency Alliance............ NEEA.................. 33 Efficiency Advocacy
Organization.
National Electrical Manufacturers Association, Joint Industry 23 Trade Associations.
Association of Home Appliance Manufacturers, Stakeholders.
the Air-Conditioning, Heating, and
Refrigeration Institute, the Medical Imaging
Technology Alliance, the Outdoor Power
Equipment Institute, Home Ventilating
Institute, and the Power Tool Institute.
National Electrical Manufacturers Association... NEMA.................. 22 Trade Association.
----------------------------------------------------------------------------------------------------------------
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\17\
To the extent that interested parties have provided written comments
that are substantively consistent with any oral comments provided
during the April 5, 2022, public meeting, DOE cites the written
comments throughout this document.
---------------------------------------------------------------------------
\17\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for electric motors. (Docket No. EERE-
2020-BT-STD-0007, which is maintained at www.regulations.gov). The
references are arranged as follows: (commenter name, comment docket
ID number, page of that document).
---------------------------------------------------------------------------
By letter dated December 22, 2022, DOE received the December 2022
Joint Recommendation from the Electric Motors Working Group. The
December 2022 Joint Recommendation addressed energy conservation
standards for high-torque, medium-torque, low-torque, and polyphase
ESEMs that are 0.25-3 hp, and AO-ESEMs. The December 2022 Joint
Recommendation recommended a compliance date for updated energy
conservation standards for AO-ESEMs as well. (Electric Motors Working
Group, No. 38 at p. 5)
3. Electric Motors Working Group Recommended Standard Levels
This section summarizes the standard levels recommended in the
December 2022 Joint Recommendation and the subsequent procedural steps
taken by DOE. Further discussion on scope is provided in section III.A
of this document. The Electric Motors Working Group stated that the
recommended levels would minimize potential market disruptions by
allowing smaller designs to remain on the market. Specifically the
Electric Motors Working Group stated that the recommended levels for
high and medium torque ESEM could allow smaller capacitor start
induction run (``CSIR'') motors and currently unregulated split-phase
motors, which are common in certain space-constrained products; for low
torque ESEMs, the Electric Motors Working Group stated that
manufacturers believe efficiency levels above the recommended levels
could result in significant increases in the physical size,
unavailability of product, and, in some cases, may be extremely
difficult to achieve with current permanent split capacitor (``PSC'')
technology; and for AO-ESEMs, the Electric Motors Working Group stated
that the recommended levels represented the highest feasible
efficiencies given the potential design constraints associated with
their use in covered equipment. (Id. at pp. 3-5)
Recommendation A: For high-torque and medium-torque ESEMs (i.e.,
CSIR, capacitor start capacitor run (``CSCR''), and split-phase
motors), the Electric Motors Working Group recommended the following
standard levels, expressed in average full-load efficiency:
(1) Values for open and enclosed motors rated at 0.25, 0.33, and
0.5 hp (all pole configurations) that are largely based on the levels
in NEMA MG 1, Table 12-19, ``Premium Efficiency Levels for Capacitor-
Start/Induction-
[[Page 87071]]
Run Single-Phase Small Motors.'' The exceptions are the open and
enclosed 0.5 hp 4-pole values, which have lower efficiency standards
described in Table II-2. For cases where Table 12-19 lists two frame
sizes (e.g., 48 and 56 frame) for a given hp rating, the recommended
efficiency level reflects the smaller frame size (i.e., lower
efficiency).
(2) Values for open motors (2-, 4-, 6-pole) above 0.5 hp that are
consistent with the current small electric motor standards for CSCR and
CSIR motors found in 10 CFR part 431, subpart X (Sec. 431.446).
(3) Values for 8-pole open motors above 0.5 hp and all enclosed
motors above 0.5 hp that are based on the levels in NEMA MG 1, Table
12-20, ``Premium Efficiency Levels for Capacitor-Start/Capacitor-Run
Single-Phase Small Motors.'' For cases where Table 12-20 lists two
frame sizes (e.g., 48 and 56 frame) for a given hp rating, the
recommended efficiency level reflects the smaller frame size (i.e.,
lower efficiency).
Table II-2--Recommended Energy Conservation Standards for High-Torque and Medium-Torque ESEMs
[i.e., CSIR, CSCR, and split-phase motors]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full load efficiency
----------------------------------------------------------------------------------------
hp Open Enclosed
----------------------------------------------------------------------------------------
2-pole 4-pole 6-pole 8-pole 2-pole 4-pole 6-pole 8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25........................................................... 59.5 59.5 57.5 .......... 59.5 59.5 57.5 .........
0.33........................................................... 64.0 64.0 62.0 50.5 64.0 64.0 62.0 50.5
0.5............................................................ 68.0 69.2 68.0 52.5 68.0 67.4 68.0 52.5
0.75........................................................... 76.2 81.8 80.2 72.0 75.5 75.5 75.5 72.0
1.............................................................. 80.4 82.6 81.1 74.0 77.0 80.0 77.0 74.0
1.5............................................................ 81.5 83.8 ......... .......... 81.5 81.5 80.0 .........
2.............................................................. 82.9 84.5 ......... .......... 82.5 82.5 ......... .........
3.............................................................. 84.1 ......... ......... .......... 84.0 ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(Id. at pp. 3, 6).
Recommendation B: For low-torque ESEMs (i.e., shaded pole and PSC
motors), the Electric motors Working Group recommended the following
standard levels, expressed in terms of average full-load efficiency:
(1) Values for open motors rated at 0.25 hp, 0.33 hp, and 1.5 hp
and above that are based on DOE's new efficiency level (EL 3).\18\
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\18\ ``DOE's new efficiency level'' refers to preliminary
efficiency levels that were developed during the private
negotiations of the Electric Motors Working Group. See Table II-3
for the final values chosen from those preliminary efficiency
levels.
---------------------------------------------------------------------------
(2) Values for open motors rated at 0.5, 0.75, and 1.0 hp that are
based on DOE's new EL 2, with two exceptions: \19\
---------------------------------------------------------------------------
\19\ See footnote 18.
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(a) The 6-pole, 1.0 hp value is the mid-point between EL 2 (75.3%)
and EL 3 (79.2%)
(b) The 2-pole, 0.5 hp value is the mid-point between EL 2 (66.4%)
and EL 3 (71.1%)
(3) Values for enclosed motors that are based on the equivalent
open motor efficiency but are adjusted to account for the lack of
additional cooling, which is a function of motor rpm (i.e., number of
poles). The adjustment is 3% for 2-pole motors, 2% for 4-pole motors,
1% for 6-pole motors, and 0% for 8-pole motors.
Table II-3--Recommended Energy Conservation Standards for Low-Torque ESEMs
[i.e., shaded pole and PSC motors]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full load efficiency
----------------------------------------------------------------------------------------
hp Open Enclosed
----------------------------------------------------------------------------------------
2-pole 4-pole 6-pole 8-pole 2-pole 4-pole 6-pole 8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25........................................................... 63.9 66.1 60.2 52.5 60.9 64.1 59.2 52.5
0.33........................................................... 66.9 69.7 65.0 56.6 63.9 67.7 64.0 56.6
0.5............................................................ 68.8 70.1 66.8 57.1 65.8 68.1 65.8 57.1
0.75........................................................... 70.5 74.8 73.1 62.8 67.5 72.8 72.1 62.8
1.............................................................. 74.3 77.1 77.3 65.7 71.3 75.1 76.3 65.7
1.5............................................................ 79.9 82.1 80.5 72.2 76.9 80.1 79.5 72.2
2.............................................................. 81.0 82.9 81.4 73.3 78.0 80.9 80.4 73.3
3.............................................................. 82.4 84.0 82.5 74.9 79.4 82.0 81.5 74.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
(Id. at pp. 4, 6)
Recommendation C: For polyphase ESEMs (i.e., three-phase ESEMs),
the Electric Motors Working Group recommended the following standard
levels, expressed in terms of average full-load efficiency:
(1) Values for 2-pole, 4-pole, and 6-pole open motors that are
consistent with the current small electric motor standards for
polyphase motors found in 10 CFR part 431, subpart X (Sec. 431.446).
(2) Values for 8-pole open and all enclosed motors from NEMA MG 1,
Table 12-21, ``Premium Efficiency Levels for Three-Phase Induction
Small Motors.'' For cases where Table 12-21 lists two frame sizes
(e.g., 48 and 56 frame) for a given hp rating, the recommended
efficiency level reflects the smaller frame size (i.e., lower
efficiency).
[[Page 87072]]
Table II-4--Recommended Energy Conservation Standards for Polyphase ESEMs
[i.e., Three-Phase ESEMs]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full load efficiency
----------------------------------------------------------------------------------------
hp Open Enclosed
----------------------------------------------------------------------------------------
2-pole 4-pole 6-pole 8-pole 2-pole 4-pole 6-pole 8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25........................................................... 65.6 69.5 67.5 62.0 66.0 68.0 66.0 62.0
0.33........................................................... 69.5 73.4 71.4 64.0 70.0 72.0 70.0 64.0
0.5............................................................ 73.4 78.2 75.3 66.0 72.0 75.5 72.0 66.0
0.75........................................................... 76.8 81.1 81.7 70.0 75.5 77.0 74.0 70.0
1.............................................................. 77.0 83.5 82.5 75.5 75.5 77.0 74.0 75.5
1.5............................................................ 84.0 86.5 83.8 77.0 84.0 82.5 87.5 78.5
2.............................................................. 85.5 86.5 ......... 86.5 85.5 85.5 88.5 84.0
3.............................................................. 85.5 86.9 ......... 87.5 86.5 86.5 89.5 85.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
(Id.)
Recommendation D: The Electric Motors Working Group recommended
that if standards are warranted for AO-ESEMs, DOE set the standards at
the same levels as those for comparable ESEMs used in non-air-over
applications. (Id. at p. 5)
Recommendation E: The Electric Motors Working Group recommended
that DOE align the compliance date for AO-ESEMs with the compliance
date for updated energy conservation standards for Commercial Unitary
Air Conditioners/Heat Pumps (``CUAC/HPs'') currently under negotiation
in DOE's Appliance Standards and Rulemaking Federal Advisory Committee
(``ASRAC'') Working Group on CUAC/HPs. The Electric Motors Working
Group stated this recommended compliance date would appropriately
balance energy savings and the time needed for manufacturers of
equipment with AO-ESEMs to re-design products. (Id.)
DOE notes that the scope and standards proposed in this document
are equivalent to those recommended by the Electric Motors Working
Group. Regarding the compliance year for energy conservation standards
for ESEMs, the Electric Motors Working Group recommended that DOE align
the compliance date for AO-ESEMs with the compliance date for updated
energy conservation standards for CUAC/HP, which were under negotiation
in DOE's ASRAC Working Group on CUAC/HPs at the time. Since then, the
CUAC/HP negotiations have concluded and include a recommended
compliance year of 2029 (i.e., January 1, 2029).\20\ ESEMs 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). As such, they are exempt from the requirements of 42 U.S.C.
6313(b), including the compliance deadlines provided in that section.
Because section 42 U.S.C. 6316(a) applies certain requirements of 42
U.S.C. 6295(l)-(s) of EPCA to certain equipment, including electric
motors, DOE considered whether the compliance deadlines of 42 U.S.C.
6295(m)(4) applies to ESEMs. 42 U.S.C. 6295(m)(4)(A) defines compliance
deadlines for specific products; however, electric motors and ESEMs are
not listed, nor does 42 U.S.C. 6316 apply a cross reference on how to
apply these paragraphs to electric motors or ESEMs. Accordingly, DOE
has determined that these compliance deadlines do not apply to ESEMs.
Additionally, DOE reviewed section 6295(m)(4)(B), which states that a
manufacturer shall not be required to apply new standards to a product
with respect to which other new standards have been required in the
prior 6-year period. As no standards for ESEMs have not yet been
established, this paragraph also does not apply to ESEMs. As such, DOE
has determined that it has discretion to establish compliance deadlines
for ESEMs. Therefore, DOE proposes a January 1, 2029, compliance date
in accordance with the recommendation from the Electric Motors Working
Group. DOE has tentatively determined that this compliance date would
provide sufficient lead time to motor manufacturers based on the
recommendation from the Electric Motors Working Group, which includes
NEMA.
---------------------------------------------------------------------------
\20\ See CUAC/HP ASRAC Working group term sheet at:
www.regulations.gov/document/EERE-2022-BT-STD-0015-0087.
---------------------------------------------------------------------------
C. Deviation From Process Rule
In accordance with section 3(a) of 10 CFR part 430, subpart C,
appendix A (``Process Rule''), DOE notes that it is deviating from the
provision in the Process Rule regarding the pre-NOPR and NOPR stages
for an energy conservation standards rulemaking.
1. Public Comment Period
Section 6(f)(2) of the Process Rule specifies that the length of
the public comment period for a NOPR will be not less than 75 calendar
days. For this NOPR, DOE has opted instead to provide a 60-day comment
period, consistent with EPCA requirements. (42 U.S.C. 6316(a); 42
U.S.C. 6295(p). DOE is opting to deviate from the 75-day comment period
because stakeholders have already been afforded multiple opportunities
to provide comments on this proposed rulemaking. As noted previously,
DOE requested comment on various issues pertaining to this standards
rulemaking in the May 2020 Early Assessment Review RFI and provided
stakeholders with a 30-day comment period. 85 FR 30878. Additionally,
DOE provided a 60-day comment period for stakeholders to provide input
on the analyses presented in the March 2022 Preliminary Analysis. 87 FR
11650. The analytical assumptions and approaches used for the analyses
conducted for this NOPR are similar to those used for the preliminary
analysis. Furthermore, as discussed previously in this document, the
standards proposed in this document are equivalent to those recommended
by the Electric Motors Working Group for the electric motor types
subject to this proposal. Therefore, DOE believes a 60-day comment
period is appropriate and will provide interested parties with a
meaningful opportunity to comment on the proposed rule.
2. Framework Document
Section 6(a)(2) of the Process Rule states that if DOE determines
it is appropriate to proceed with a rulemaking, the preliminary stages
of a rulemaking to issue or amend an energy conservation standard that
DOE will undertake will be a framework document and preliminary
analysis, or
[[Page 87073]]
an advance notice of proposed rulemaking. While DOE published a
preliminary analysis for this rulemaking (see 87 FR 11650), DOE did not
publish a framework document in conjunction with the preliminary
analysis. DOE notes, however, that chapter 2 of the March 2022
Preliminary TSD that accompanied the March 2022 Preliminary Analysis--
entitled Analytical Framework, Comments from Interested Parties, and
DOE Responses--describes the general analytical framework that DOE uses
in evaluating and developing potential new energy conservation
standards.\21\ As such, publication of a separate framework document
would be largely redundant of chapter 2 of the March 2022 Preliminary
TSD.
---------------------------------------------------------------------------
\21\ The March 2022 Preliminary TSD is available at
www.regulations.gov/document/EERE-2020-BT-STD-0007-0010.
---------------------------------------------------------------------------
III. General Discussion
DOE developed this proposal after considering oral and written
comments, data, and information from interested parties that represent
a variety of interests, including the December 2022 Joint
Recommendation. The following discussion addresses issues raised by
these commenters.
A. Scope of Coverage and Equipment Classes
1. General Scope of Coverage and Equipment Classes
This document covers certain equipment meeting the definition of
electric motors as defined in 10 CFR 431.12. Specifically, the
definition for ``electric motor'' is ``a machine that converts
electrical power into rotational mechanical power.'' 10 CFR 431.12.
This NOPR addresses ESEMs, which are covered under 10 CFR part 431
subpart B. This NOPR does not address small electric motors, which are
covered under 10 CFR part 431 subpart X.\22\
---------------------------------------------------------------------------
\22\ DOE uses the term ``expanded scope electric motor'' or
``ESEM'' (formally known as ``small, non-small electric motor,
electric motors'' or ``SNEMs''), to describe those small electric
motors that are not included in the definition ``small electric
motor'' under EPCA, but otherwise fall within the definition of
``electric motor'' under EPCA. The term ``small electric motor''
means a NEMA general purpose alternating current single-speed
induction motor, built in a two-digit frame number series in
accordance with NEMA Standards Publication MG1-1987. (42 U.S.C.
6311(13)(G)).
---------------------------------------------------------------------------
Currently, DOE regulates MEMs falling into the NEMA Design A, NEMA
Design B, NEMA Design C, and fire pump motor categories and those
electric motors that meet the criteria specified at 10 CFR 431.25(g).
10 CFR 431.25(h)-(j). Section 431.25(g) specifies that the relevant
standards apply only to electric motors, including partial electric
motors, that satisfy the following criteria:
(1) Are single-speed, induction motors;
(2) Are rated for continuous duty (MG 1) operation or for duty type
S1 (IEC);
(3) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
(4) Operate on polyphase alternating current 60-hertz sinusoidal
line power;
(5) Are rated 600 volts or less;
(6) Have a 2-, 4-, 6-, or 8-pole configuration;
(7) Are built in a three-digit or four-digit NEMA frame size (or
IEC metric equivalent), including those designs between two consecutive
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA
frame size (or IEC metric equivalent);
(8) Produce at least one horsepower (0.746 kW) but not greater than
500 horsepower (373 kW), and
(9) Meet all of the performance requirements of one of the
following motor types: A NEMA Design A, B, or C motor or an IEC Design
N, NE, NEY, NY or H, HE, HEY, HYmotor.\23\
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\23\ DOE added the ``E'' and ``Y'' designations for IEC Design
motors into 10 CFR 431.25(g) in the electric motors test procedure
final rule. 87 FR 63588, 63596-636597, 63606 (Oct. 19, 2022).
---------------------------------------------------------------------------
10 CFR 431.25(g).
The definitions for ``NEMA Design A motors,'' ``NEMA Design B
motors,'' ``NEMA Design C motors,'' ``fire pump electric motors,''
``IEC Design N motor,'' and ``IEC Design H motor,'' as well as ``E''
and ``Y'' designated IEC Design motors, are codified in 10 CFR 431.12.
DOE has also currently exempted certain categories of motors from
standards. The exemptions are as follows:
(1) Air-over electric motors;
(2) Component sets of an electric motor;
(3) Liquid-cooled electric motors;
(4) Submersible electric motors; and
(5) Inverter-only electric motors.
10 CFR 431.25(l).
On October 19, 2022, DOE published the electric motors test
procedure final rule (``October 2022 Final Rule''). 87 FR 63588. As
part of the October 2022 Final Rule, DOE expanded the test procedure
scope to additional categories of electric motors that currently do not
have energy conservation standards. 87 FR 63588, 63593-63606. The
expanded test procedure scope included the following:
(1) Electric motors having a rated horsepower above 500 and up to
750 hp that meets the criteria listed at Sec. 431.25(g), with the
exception of criteria Sec. 431.25(g)(8) to air-over electric motors
(``AO-MEMs''), and inverter-only electric motors;
(2) Expanded Scope Electric Motors (``ESEM'', formally known as
``small, non-small electric motor, electric motors'' or ``SNEMs''),
that are not air-over electric motors, which:
(a) Are not a small electric motor, as defined at Sec. 431.442 and
is not a dedicated pool pump motors as defined at Sec. 431.483;
(b) Are rated for continuous duty (MG 1) operation or for duty type
S1 (IEC);
(c) Operate on polyphase or single-phase alternating current 60-
hertz (Hz) sinusoidal line power; or is used with an inverter that
operates on polyphase or single-phase alternating current 60-hertz (Hz)
sinusoidal line power;
(d) Are rated for 600 volts or less;
(e) Are a single-speed induction motor capable of operating without
an inverter or is an inverter-only electric motor;
(f) Produce a rated motor horsepower greater than or equal to 0.25
horsepower (0.18 kW); and
(g) Are built in the following frame sizes: any two-, or three-
digit NEMA frame size (or IEC equivalent) if the motor operates on
single-phase power; any two-, or three-digit NEMA frame size (or IEC
equivalent) if the motor operates on polyphase power, and has a rated
motor horsepower less than 1 horsepower (0.75 kW); or a two-digit NEMA
frame size (or IEC metric equivalent), if the motor operates on
polyphase power, has a rated motor horsepower equal to or greater than
1 horsepower (0.75 kW), and is not an enclosed 56 NEMA frame size (or
IEC metric equivalent).
(3) ESEMs that are air-over electric motors (``AO-ESEMs'') and
inverter-only electric motors;
(4) A synchronous electric motor, which:
(a) Is not a dedicated pool pump motor as defined at Sec. 431.483
or is not an air-over electric motor;
(b) Is a synchronous electric motor;
(c) Is rated for continuous duty (MG 1) operation or for duty type
S1 (IEC);
(d) Operates on polyphase or single-phase alternating current 60-
hertz (Hz) sinusoidal line power; or is used with an inverter that
operates on polyphase or single-phase alternating current 60-hertz (Hz)
sinusoidal line power;
(e) Is rated 600 volts or less; and
(f) Produces at least 0.25 hp (0.18 kW) but not greater than 750 hp
(559 kW).
(5) Synchronous electric motors that are inverter-only electric
motors.
See section 1.2, appendix B.
In the October 2022 Final Rule, DOE noted that, for these motors
newly included within the scope of the test procedure for which there
was no established energy conservation standards, such as ESEMs and AO-
[[Page 87074]]
ESEMs, manufacturers would not be required to use the test procedure to
certify these motors to DOE until such time as a standard is
established. 87 FR 63588, 63591.\24\ Further, the October 2022 Final
Rule continued to exclude the following categories of electric motors:
---------------------------------------------------------------------------
\24\ However, manufacturers making voluntary representations
respecting the energy consumption or cost of energy consumed by such
motors are required to use the DOE test procedure for making such
representations beginning 180 days following publication of the
October 2022 Final Rule. Id. at 87 FR 63591.
---------------------------------------------------------------------------
(1) Inverter-only electric motors that are air-over electric
motors;
(2) Component sets of an electric motor;
(3) Liquid-cooled electric motors; and
(4) Submersible electric motors.
Due to the number of electric motor characteristics (e.g.,
horsepower rating, pole configuration, and enclosure), in the March
2022 Preliminary Analysis, DOE used two constructs to help develop
appropriate energy conservation standards for electric motors:
``equipment class'' and ``equipment class groups.'' An equipment class
represents a unique combination of motor characteristics for which DOE
is establishing a specific energy conservation standard. This includes
permutations of electric motor design topologies (i.e., CSIR/CSCR,
split phase, shaded pole, PSC, or polyphase), standard horsepower
ratings (i.e., standard ratings from 0.25 to 3 horsepower varying based
on torque level and pole count), pole configurations (i.e., 2-, 4-, 6-,
or 8-pole), and enclosure types (i.e., open or enclosed). An ECG is a
collection of electric motors that share a common design trait.
Equipment class groups include motors over a range of horsepower
ratings, enclosure types, and pole configurations. Essentially, each
equipment class group is a collection of a large number of equipment
classes with the same design trait. As such, in the March 2022
Preliminary Analysis, DOE presented equipment class groups based on
electric motor topology, horsepower rating, pole configuration. and
enclosure type. See sections 2.3.1 and 3.2.2 of the March 2022
Preliminary TSD.
In the March 2022 Preliminary Analysis, DOE analyzed the additional
motors now included within the scope of the test procedure after the
October 2022 Final Rule. See sections 2.2.1 and 2.2.3.2 of the March
2022 Preliminary TSD. This analysis included MEMs from 1-500hp, AO-
MEMs, and ESEMs (including AO-ESEMs). This NOPR proposes new standards
for only a portion of the scope analyzed in the March 2022 Preliminary
Analysis and included within the scope of the test procedure after the
October 2022 Final Rule. Specifically, in this NOPR, DOE is only
proposing standards for ESEMs, including AO-ESEMs. As further described
in section IV.A.3 of this document, DOE used multiple performance
characteristics to establish the equipment classes used in this NOPR.
Among these performance characteristics are locked-rotor torque and
number of phases of the input power of a motor, used to create the
following groups: high and medium torque single-phase ESEMs (i.e.,
CSIR/CSCR and split phase), low torque single phase ESEMs (i.e., shaded
pole, PSC) and polyphase ESEMs that meet the criteria a) through g) as
listed previously (See section 1.2, 10 CFR part 431, appendix B). These
are typically used in residential as well as commercial and industrial
applications.
Further discussion on equipment classes and the basis used to
establish them is provided in section IV.A.3 of this document.
2. Structure of the Regulatory Text
In addition to proposing new requirements for ESEMs, in this NOPR,
DOE proposes to move portions of the existing electric motor
regulations that pertain to the energy conservation standards and their
compliance dates (at 10 CFR 431.25) to improve clarity. In this NOPR,
DOE proposes to revise 10 CFR 431.25 by retaining the existing electric
motor energy conservation standards and their compliance dates, adding
provisions pertaining to ESEMs, and reorganizing all provisions
currently in 10 CFR 431.25 by compliance date (i.e., each section has a
different compliance date) to improve clarity. See Table III-1 for
details.
Table III-1--Revisions to 10 CFR 431.25
----------------------------------------------------------------------------------------------------------------
Content high-level Proposed revised
Current location description location Impact
----------------------------------------------------------------------------------------------------------------
Sec. 431.25(a)-(f)................. Describes standards for None................... None--Removed as these
certain electric requirements are no
motors manufactured on longer current.
or after December 19,
2010, but before June
1, 2016.
Sec. 431.25(k), Sec. 431.25(q)... Describes how to Sec. 431.25(a)....... Avoids repeating
establish the identical provisions
horsepower for in each subsection.
purposes of
determining the
required minimum
nominal full-load
efficiency of an
electric motor.
Sec. 431.25(g)..................... Describes the criteria Sec. 431.25(b)(1)(i). Moves the ``inclusion''
for inclusion for criteria, so that the
certain electric proper scope is
motors manufactured on presented fully
or after June 1, 2016, upfront in each
but before June 1, section.
2027 subject to energy
conservation standards.
Sec. 431.25(h)..................... Describes standards for Sec. 431.25(b)(2)(i). Makes each section
certain NEMA Design A ``comprehensive'' by
and B electric motors carrying over the
(and IEC equivalent) existing standards for
manufactured on or all electric motors
after June 1, 2016, categories in each
but before June 1, section.
2027.
Sec. 431.25(i)..................... Describes standards for Sec. Makes each section
certain NEMA Design C 431.25(b)(2)(ii), Sec. ``comprehensive'' by
electric motors (and 431.25(c)(2)(iv), carrying over the
IEC equivalent) Sec. existing standards for
manufactured on or 431.25(d)(3)(iv). all electric motors
after June 1, 2016. categories in each
section.
[[Page 87075]]
Sec. 431.25(j)..................... Describes standards for Sec. Makes each section
certain fire pump 431.25(b)(2)(iii), ``comprehensive'' by
electric motors (and Sec. carrying over the
IEC equivalent) 431.25(c)(2)(v), Sec. existing standards for
manufactured on or 431.25(d)(3)(v). all electric motors
after June 1, 2016. categories in each
section.
Sec. 431.25(l)..................... Describes the criteria Sec. 431.25(b)(1)(ii) Moves the
for exclusion for ``exemptions'' to
certain electric directly after the
motors manufactured on ``inclusion''
or after June 1, 2016, criteria, so that the
but before June 1, proper scope is
2027 subject to energy presented fully
conservation standards. upfront in each
section, prior to
presenting the sub-
group criteria and
standards.
Sec. 431.25(m)..................... Describes the criteria Sec. 431.25(c)(1)(i). Moves the ``inclusion''
for inclusion for criteria, so that the
certain electric proper scope is
motors manufactured on presented fully
or after June 1, 2027 upfront in each
subject to energy section.
conservation standards.
Sec. 431.25(n)..................... Describes standards for Sec. 431.25(c)(2)(i), Makes each section
certain NEMA Design A Sec. 431.25(d)(3)(i). ``comprehensive'' by
and B electric motors carrying over the
(and IEC existing standards for
equivalent),but all electric motors
excluding fire pump categories in each
electric motors and section.
air-over electric
motors manufactured on
or after June 1, 2027.
Sec. 431.25(o)..................... Describes standards for Sec. Makes each section
certain air-over NEMA 431.25(c)(2)(ii), Sec. ``comprehensive'' by
Design A and B 431.25(d)(3)(ii). carrying over the
electric motors (and existing standards for
IEC equivalent), built all electric motors
in standard frame size categories in each
manufactured on or section.
after June 1, 2027.
Sec. 431.25(p)..................... Describes standards for Sec. Makes each section
certain air-over NEMA 431.25(c)(2)(iii), ``comprehensive'' by
Design A and B Sec. carrying over the
electric motors (and 431.25(d)(3)(iii). existing standards for
IEC equivalent), built all electric motors
in specialized frame categories in each
size manufactured on section.
or after June 1, 2027.
Sec. 431.25(r)..................... Describes the criteria Sec. 431.25(c)(1)(ii) Moves the
for exclusion for ``exemptions'' to
certain electric directly after the
motors manufactured on ``inclusion''
or after June 1, 2027, criteria, so that the
subject to energy proper scope is
conservation standards. presented fully
upfront in each
section, prior to
presenting the sub-
group criteria and
standards.
New section.......................... Describes the criteria Sec. 431.25(d)(2)(i). New section--Adds the
for inclusion as ESEM. ESEM provisions
proposed in this NOPR.
New section.......................... Describes the criteria Sec. 431.25(d)(2)(ii) New section--Adds the
for exclusion for ESEM provisions
certain ESEM electric proposed in this NOPR.
motors manufactured on
or after January 1,
2029.
New section.......................... Describes standards for Sec. 431.25(d)(3)(vi) New section--Adds the
certain high and ESEM provisions
medium torque ESEM proposed in this NOPR.
manufactured on or
after January 1, 2029.
New section.......................... Describes standards for Sec. New section--Adds the
certain low torque 431.25(d)(3)(vii). ESEM provisions
ESEMs manufactured on proposed in this NOPR.
or after January 1,
2029.
New section.......................... Describes standards for Sec. New section--Adds the
certain polyphase 431.25(d)(3)(viii). ESEM provisions
ESEMs manufactured on proposed in this NOPR.
or after January 1,
2029.
----------------------------------------------------------------------------------------------------------------
3. Air-Over Medium Electric Motors and Air-Over ESEMs
The June 2023 DFR amended the existing energy conservation
standards for electric motors by establishing higher standards for
certain horsepower electric motors and expanding the scope of the
energy conservation standards to include certain air-over electric
motors and electric motors with horsepower greater than 500. DOE
adopted standards that were consistent with a joint recommendation that
was submitted to DOE on November 15, 2022 (the ``November 2022 Joint
Recommendation''), after determining that the new and amended energy
conservation standards for these products would result in significant
conservation of energy and are technologically feasible and
economically justified. 88 FR 36066, 36067-36069.
In the June 2023 DFR, DOE described that DOE currently regulates
MEMs falling into the NEMA Design A, NEMA Design B, NEMA Design C, and
fire pump motor categories and those electric motors that meet the
criteria specified at 10 CFR 431.25(g). See id. at 88 FR 36079-36080;
10 CFR 431.25(h)-(j). Specifically, DOE noted the nine criteria used to
describe currently regulated MEMs, including the criteria at 10 CFR
431.25(g)(7), which specifies MEMs: ``Are built in a three-digit or
four-digit NEMA frame size (or IEC metric equivalent), including those
designs between two consecutive NEMA
[[Page 87076]]
frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA frame
size (or IEC metric equivalent)''. 88 FR 36066, 36080.
In the June 2023 DFR, to support the new energy conservations
standards for air-over electric motors, DOE created new equipment
classes: one for standard frame size air-over motors (``AO-MEM
(Standard frame size)'')) and one for specialized frame size air-over
electric motors (``AO-Polyphase (Specialized frame size)''). Id. at 88
FR 36088. DOE also established a definition for ``specialized frame
size,'' based on a table that specified the maximum NEMA frame diameter
(or size) for a given motor horsepower, pole configuration, and
enclosure combination. Id. This table was part of the November 2022
Joint Recommendation. Id. In this table, the maximum frame diameter
specified ranges from a 48 NEMA frame motor diameter up to a 210 NEMA
frame diameter, therefore including intermediate sizes such as 56 NEMA
frame size in enclosed and open enclosure configurations. Id.
To clarify that AO-Polyphase (Specialized frame size) are not
included in the scope of electric motors included as ESEMs, DOE
proposes to add ``and do not have an air-over enclosure and a
specialized frame size if the motor operates on polyphase power'' to
the ESEM scope criteria in the proposed paragraph (d)(2)(i)(1) of 10
CFR 431.25 in this NOPR. DOE notes that AO-MEM (Standard frame size) do
not meet the frame criteria for ESEMs and are not included in the scope
of ESEMs.
In the June 2023 DFR, DOE further noted that the specialized frame
size air-over electric motors equipment class included frame sizes
beyond those described at 10 CFR 431.25(g)(7). Id. To better
characterize this distinction in frame sizes, DOE stated that it was
renaming ``Specialized Frame Size AO-MEMs'' (from the November 2022
Joint Recommendation) to ``AO-Polyphase (Specialized frame size).'' Id.
DOE added that only the naming convention was changed compared to the
November 2022 Joint Recommendation; and the scope of motors being
represented in that equipment class continued to stay the same as in
the November 2022 Joint Recommendation. Id.
The general scope description in 10 CFR 431.25(m) of the regulatory
text published in the June 2023 DFR presents the nine criteria that
determine what electric motors the standards in 10 CFR 431.25 apply to.
Specifically, the criteria at 10 CFR 431.25(m)(7) specifies that the
standards apply to electric motors that: ``Are built in a three-digit
or four-digit NEMA frame size (or IEC metric equivalent), including
those designs between two consecutive NEMA frame sizes (or IEC metric
equivalent), or an enclosed 56 NEMA frame size (or IEC metric
equivalent).''
When describing the energy conversation standards adopted for
specialized frame sizes air-over electric motors, DOE specified that
the standards are applicable to ``air-over electric motor meeting the
criteria in paragraph (m) of this section and [. . .] built in a
specialized frame size'' in section 10 CFR 431.25(p) of the regulatory
text published in the June 2023 DFR. 88 FR 36066, 36150.
As published, the general scope description in 10 CFR 431.25(m)(7)
of the regulatory text in the June 2023 DFR, and the scope description
in section 10 CFR 431.25(p) may be interpreted as inconsistent with the
scope of electric motors included in the AO-Polyphase (Specialized
frame size) equipment class analyzed in the June 2023 DFR, and for
which DOE intended to establish new standards in 10 CFR 431.25(p).
Specifically, DOE identified that the criteria at 10 CFR 431.25 (m)(7),
which is identical to the criteria currently at 10 CFR 431.25(g)(7),
excludes specialized frame air-over motors built in two-digit NEMA
frame sizes (other than enclosed 56 frame size motors). Therefore,
while in the preamble, DOE explicitly stated that the specialized frame
size air-over electric motors equipment class included frame sizes
beyond those described at 10 CFR 431.25(g)(7), the regulatory text as
written may be interpreted as limiting the covered frame sizes to those
specifically described at 10 CFR 431.25(g)(7).
Therefore, to clarify the intent of the preamble of the June 2023
DFR when establishing standards for the AO-polyphase (Specialized frame
size) equipment class, which was to include frame sizes beyond those
described at 10 CFR 431.25(g)(7), DOE proposes to make the following
clarification by adding ``or have an air-over enclosure and a
specialized frame size'' to the criteria originally included under 10
CFR 431.25 (m)(7) in the June 2023 DFR, to read as follows: ``Are built
in a three-digit or four-digit NEMA frame size (or IEC metric
equivalent), including those designs between two consecutive NEMA frame
sizes (or IEC metric equivalent), or an enclosed 56 NEMA frame size (or
IEC metric equivalent), or have an air-over enclosure and a specialized
frame size''. As previously discussed, DOE proposes to re-organize the
regulatory text at 10 CFR 431.25 and therefore is adding this proposed
clarification in the new paragraphs (c)(1)(i)(7) and (d)(1)(i)(7).
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 equipment must use these test procedures to
certify to DOE that their equipment complies with energy conservation
standards and to quantify the efficiency of their equipment. On October
19, 2022, DOE published the October 2022 Final Rule. 87 FR 63588. As
described previously in this document, the October 2022 Final Rule
expanded the types of motors included within the scope of the test
procedure, including the new class of ESEMs for which DOE is
establishing energy conservation standards in this NOPR. DOE's test
procedures for electric motors are currently prescribed at appendix B
as ``small, non-small-electric-motor electric motor'' and measure the
full-load efficiency of an electric motor. To harmonize terminology, in
this NOPR, DOE is replacing any reference to small, non-small-electric-
motor electric motor (``SNEM'') in appendix B with the term ``expanded
scope electric motor,'' or ``ESEM.''
C. Represented Values
DOE's energy conservation standards for electric motors are
currently prescribed at 10 CFR 431.25. DOE's current energy
conservation standards for electric motors are expressed in terms of
nominal full-load efficiency and manufacturers must certify the
represented value of nominal full-load efficiency of each basic model.
10 CFR 429.64. The provisions establishing how to determine the average
full-load efficiency and the nominal full-load efficiency of a basic
model are provided at 10 CFR 429.64.
As discussed in section II.B.3 of this document, the ESEM standard
levels recommended by the Electric Motors Working Group are expressed
in average full-load efficiency and not in terms of nominal full-load
efficiency. To align with the Electric Motors Working Group
recommendations, DOE proposes to revise the provisions related to the
determination of the represented values for ESEMs at 10 CFR 429.64 such
that manufacturers of ESEMs would certify a represented value of
average full-load efficiency instead of a represented value of nominal
full-load efficiency. DOE also proposes edits to 10 CFR 429.70(j) to
reflect the use of a represented value of average full-load efficiency
instead of
[[Page 87077]]
a represented value of nominal full-load efficiency for ESEMs.
DOE requests comments on the proposal to use a represented value of
average full-load efficiency for ESEMs and proposed revisions to 10 CFR
429.64 and 429.70(j).
D. Technological Feasibility
1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of this
proposed 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(c)(3)(i) and
7(b)(1), Process Rule.
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
practicability to manufacture, install, and service; (2) adverse
impacts on product utility or availability; (3) adverse impacts on
health or safety, and (4) unique-pathway proprietary technologies. 10
CFR 431.4; sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5), Process Rule.
Section IV.B of this document discusses the results of the screening
analysis for ESEMs, 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 proposed rulemaking, see chapter 4 of the NOPR TSD.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt a new or amended standard for a type or
class of covered product, it must determine the maximum improvement in
energy efficiency or maximum reduction in energy use that is
technologically feasible for such product. (42 U.S.C. 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 ESEMs, 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
proposed rulemaking are described in section IV.C of this proposed rule
and in chapter 5 of the NOPR TSD.
E. Energy Savings
1. Determination of Savings
For each TSL, DOE projected energy savings from application of the
TSL to ESEMs purchased in the 30-year period that begins in the year of
compliance with the proposed standards (2029-2058).\25\ The savings are
measured over the entire lifetime of ESEMs purchased in the previous
30-year 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 new energy conservation
standards.
---------------------------------------------------------------------------
\25\ Each TSL is composed of specific efficiency levels for each
product class. The TSLs considered for this NOPR are described in
section V.A of this document. DOE conducted a sensitivity analysis
that considers impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------
DOE used its national impact analysis (``NIA'') spreadsheet model
to estimate national energy savings (``NES'') from potential new
standards for ESEMs. The NIA spreadsheet model (described in section
IV.H of this document) calculates energy savings in terms of site
energy, which is the energy directly consumed by products at the
locations where they are used. For electricity, DOE reports national
energy savings in terms of primary energy savings, which is the savings
in the energy that is used to generate and transmit the site
electricity. DOE also calculates NES in terms of FFC energy savings.
The FFC metric includes the energy consumed in extracting, processing,
and transporting primary fuels (i.e., coal, natural gas, petroleum
fuels), and thus presents a more complete picture of the impacts of
energy conservation standards.\26\ 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 of this document.
---------------------------------------------------------------------------
\26\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------
2. Significance of Savings
To adopt any new or amended standards for a covered product, DOE
must determine that such action would result in significant energy
savings. (42 U.S.C. 6316(a); 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 proposed rulemaking.\27\
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.
---------------------------------------------------------------------------
\27\ The numeric threshold for determining the significance of
energy savings established in a final rule published on February 14,
2020 (85 FR 8626, 8670) was subsequently eliminated in a final rule
published on December 13, 2021 (86 FR 70892).
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As stated, the standard levels proposed in this NOPR are projected
to result in national energy savings of 8.9 quad FFC, the equivalent of
the primary annual energy use of 95.7 million homes. Based on the
amount of FFC savings, the corresponding reduction in emissions, and
need to confront the global climate crisis, DOE has tentatively
determined the energy savings from the standard levels proposed in this
NOPR are ``significant'' within the meaning of 42 U.S.C. 6316(a) and 42
U.S.C. 6295(o)(3)(B).
F. Economic Justification
1. Specific Criteria
As noted previously, EPCA provides seven factors to be evaluated in
determining whether a potential energy conservation standard is
economically justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has
addressed each of those seven factors in this proposed rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential new or amended standard
on manufacturers, DOE conducts an MIA, as discussed in section IV.J of
this document. DOE first uses an annual cash-flow approach to determine
the quantitative impacts. This step includes
[[Page 87078]]
both a short-term assessment--based on the cost and capital
requirements during the period between when a regulation is issued and
when entities must comply with the regulation--and a long-term
assessment over a 30-year period. The industry-wide impacts analyzed
include (1) INPV, which values the industry on the basis of expected
future cash flows, (2) cash flows by year, (3) changes in revenue and
income, and (4) other measures of impact, as appropriate. Second, DOE
analyzes and reports the impacts on different types of manufacturers,
including impacts on small manufacturers. Third, DOE considers the
impact of standards on domestic manufacturer employment and
manufacturing capacity, as well as the potential for standards to
result in plant closures and loss of capital investment. Finally, DOE
takes into account cumulative impacts of various DOE regulations and
other regulatory requirements on manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national net present value of
the consumer costs and benefits expected to result from particular
standards. DOE also evaluates the impacts of potential standards on
identifiable subgroups of consumers that may be affected
disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC
and PBP analysis.
The LCC is the sum of the purchase price of equipment (including
its installation) and the operating expense (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the equipment. The LCC analysis requires a variety of inputs, such as
equipment prices, equipment energy consumption, energy prices,
maintenance and repair costs, equipment lifetime, and discount rates
appropriate for consumers. To account for uncertainty and variability
in specific inputs, such as equipment 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 equipment 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 equipment in the first year of compliance with new
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 standards. DOE's LCC and PBP analysis is
discussed in further detail in section IV.F of this document.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(III)) As discussed in section IV.H of this document,
DOE uses the NIA spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards
proposed in this document would not reduce the utility or performance
of the equipment under consideration in this proposed 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 proposed 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 proposed standard and to transmit such determination to
the Secretary within 60 days of the publication of a proposed rule,
together with an analysis of the nature and extent of the impact. (42
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy
of this proposed rule to the Attorney General with a request that the
Department of Justice (``DOJ'') provide its determination on this
issue. DOE will publish and respond to the Attorney General's
determination in the final rule. DOE invites comment from the public
regarding the competitive impacts that are likely to result from this
proposed rule. In addition, stakeholders may also provide comments
separately to DOJ regarding these potential impacts. See the ADDRESSES
section for information to send comments to DOJ.
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 proposed 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 proposed standards are likely to result in
environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases (``GHGs'') associated with energy
production and use. DOE conducts an emissions analysis to estimate how
potential standards may affect these emissions, as discussed in section
IV.K of this document; the estimated emissions impacts are reported in
section V.B.6 of this document. DOE also estimates the economic value
of emissions reductions resulting from the considered TSLs, as
discussed in section IV.L of this document.
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be
[[Page 87079]]
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
consumer of 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. 6313(a); 42 U.S.C. 6295(o)(2)(B)(iii) DOE's LCC and PBP analyses
generate values used to calculate the effects that new energy
conservation standards would have on the PBP for consumers. These
analyses include, but are not limited to, the 3-year PBP 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. 6313(a) and 42
U.S.C. 6295(o)(2)(B). 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 V.B.1.c of this
document.
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this
proposed rulemaking with regard to ESEMs. Separate subsections address
each component of DOE's analyses. In this NOPR, DOE is only addressing
comments and analysis specific to the scope of motors provided in the
December 2022 Joint Recommendation (i.e., ESEMs and AO-ESEMs). As such,
any analysis and comments related to MEMs and AO-MEMs were addressed in
the separate June 2023 DFR published on June 1, 2023. 88 FR 36066.
DOE used several analytical tools to estimate the impact of the
standards proposed in this document. The first tool is a spreadsheet
that presents the calculations of the LCC savings and PBP of potential
new energy conservation standards. The national impacts analysis uses a
second spreadsheet set that provides shipments projections and
calculates national energy savings and net present value of total
consumer costs and savings expected to result from potential energy
conservation standards. DOE uses the third spreadsheet tool, the
Government Regulatory Impact Model (``GRIM''), to assess manufacturer
impacts of potential standards. These three spreadsheet tools are
available on the DOE website for this rulemaking: www.regulations.gov/docket/EERE-2020-BT-STD-0007. Additionally, DOE used output from the
latest version of the Energy Information Administration's (``EIA's'')
Annual Energy Outlook (``AEO''), a widely known energy projection for
the United States, 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 proposed rulemaking include (1) a determination of
the scope of the proposed rulemaking and equipment 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 ESEMs. The key findings of DOE's market assessment are summarized in
the following sections. See chapter 3 of the NOPR TSD for further
discussion of the market and technology assessment.
1. Scope of Coverage
This document covers ESEMs, a category of electric motors. The term
``electric motor'' is defined at 10 CFR 431.12. Specifically, the
definition for ``electric motor'' is ``a machine that converts
electrical power into rotational mechanical power.'' 10 CFR 431.12.
In the March 2022 Preliminary Analysis, DOE presented analysis for
the current scope of electric motors regulated at 10 CFR 431.25, in
addition to certain expanded scope, including air-over electric motors,
and ESEMs and AO-ESEMs. See chapter 2 of the March 2022 Preliminary
TSD. Since then, DOE has published the October 2022 Final Rule, which
established test procedures for expanded scope, as discussed in detail
in section III.B of this NOPR. Additionally, DOE has also published the
June 2023 DFR, which established energy conservations standards for
MEMs and AO-MEMs.
In response to the scope presented in the March 2022 Preliminary
Analysis, DOE received a number of comments, which are discussed in the
subsections below. In this NOPR, DOE is only addressing comments and
analysis specific to the scope of motors proposed in this NOPR, which
includes ESEMs and AO-ESEMs.
NEEA supported the inclusion of ESEMs in the scope of the
standards. NEEA noted that including ESEMs will allow comparison of
performance and informed purchase decisions. (NEEA, No. 33 at p. 2)
AHAM and AHRI strongly opposed DOE's plan to expand the existing
scope of coverage of electric motors to include motors destined for
particular applications in finished goods, and instead recommended that
DOE should apply a finished-product approach to energy efficiency
regulations. (AHAM and AHRI, No. 25 at pp. 7-9) Lennox added that it
strongly objects to any expansion of coverage (including development of
test procedures, energy conservation requirements, and/or certification
requirements) for electric motors that would circumvent the statutory
exemption that Congress provided for small electric motors that are
components of EPCA-covered products/equipment. (Lennox, No. 29 at p. 3)
AHAM and AHRI commented that they interpret the EPCA exemption for SEMs
that are components of covered product and equipment as to also mean
that small special and definite purpose motors, whether they are
classified as small electric motors or as an ESEM, should not be
subject to energy conservation standards. AHAM and AHRI stated that
such motors are, by definition, destined for particular products, and
when that product is a covered product/piece of equipment, that motor
is destined for a product already subject to energy conservation
standards and has defining features to identify it as such. (AHAM and
AHRI, No. 25 at pp. 1,6)
AHRI and AHAM further commented that regulating ESEMs could affect
the following product categories: clothes washers (top and front load),
clothes dryers, food waste disposers, refrigerators, room air
conditioners, and stick vacuums. Apart from stick vacuums and food
waste disposers, AHAM and AHRI noted that the products listed are
already subject to energy conservation standards. AHAM and AHRI also
commented that
[[Page 87080]]
regulating ESEM and AO motors could impact the following products:
small, large, very large commercial package air conditioning and
heating equipment, residential air conditioners and heat pumps, single
package vertical air conditioners and heat pumps, commercial and
residential furnaces, commercial and residential boilers, commercial
and residential water heaters, air cooled condensing unit, central
station air handling units, geothermal heat pumps, unit coolers, unit
ventilators, and water source heat pumps. (AHAM and AHRI, No. 25 at pp.
1-2)
HI recommended that dedicated-purpose ESEMs should be regulated as
part of their final product instead of as motors specifically. (HI, No.
31 at p. 1)
The Joint Industry Stakeholders commented that they strongly object
to any expansion of coverage (including development of test procedures,
energy conservation requirements, and/or certification requirements)
for electric motors that would circumvent the statutory exemption that
Congress provided for small electric motors that are components of
EPCA-covered products/equipment. They stated that embedded motor
testing, and ultimately energy conservation standards, would save
minimal energy and would create needless testing, paperwork, and
record-keeping requirements that would raise costs for consumers.
(Joint Industry Stakeholders, No. 23 at pp. 3-4) The Joint Industry
Stakeholders and AHAM and AHRI agreed with the previous determination
in which DOE recognized that Congress intentionally excluded these
motors from coverage by DOE regulation when such motors are used as
components of products and equipment that are already subject to DOE
regulation, and they noted that these are the motors that DOE now seeks
to regulate as ESEMs and by expanding the scope of the test procedure
to \1/4\ hp. The Joint Industry Stakeholders and AHAM and AHRI added
that, despite the similarity between ESEMs and SEMs, DOE is proposing
to subject ESEMs used as components in EPCA-covered equipment/products
to duplicative energy conservation standards at both the motor level
and the finished product/equipment stage and that DOE provides no
rationale or explanation for doing so. (Joint Industry Stakeholders,
No. 23 at pp. 3-4; AHAM and AHRI, No. 25 at pp. 7- 9) Further, the
Joint Industry Stakeholders commented that ESEMs include special and
definite purpose motors that have been built to meet the needs of
original equipment manufacturer (``OEM'') products. The Joint Industry
Stakeholders added that many of these OEM products are already
regulated by DOE. (Joint Industry Stakeholders, No. 23 at p. 2)
As discussed in the October 2022 Final Rule, EPCA, as amended
through EISA 2007, provides DOE with the authority to regulate the
expanded scope of motors addressed in this rule. 87 FR 63588, 63596.
Before the enactment of EISA 2007, EPCA defined the term ``electric
motor'' as any motor that is a general purpose T-frame, single-speed,
foot-mounting, polyphase squirrel-cage induction motor of the NEMA,
Design A and B, continuous rated, operating on 230/460 volts and
constant 60 Hertz line power as defined in NEMA Standards Publication
MG1-1987. (See 42 U.S.C. 6311(13)(A) (2006)) Section 313(a)(2) of EISA
2007 removed that definition and the prior limits that narrowly defined
what types of motors would be considered as electric motors. In its
place, EISA 2007 inserted a new ``Electric motors'' heading, and
created two new subtypes of electric motors: General purpose electric
motor (subtype I) and general purpose electric motor (subtype II). (42
U.S.C. 6311(13)(A)-(B) (2011)) In addition, section 313(b)(2) of EISA
2007 established energy conservation standards for four types of
electric motors: general purpose electric motors (subtype I) (i.e.,
subtype I motors) with a power rating of 1 to 200 horsepower; fire pump
motors; general purpose electric motor (subtype II) (i.e., subtype II
motors) with a power rating of 1 to 200 horsepower; and NEMA Design B,
general purpose electric motors with a power rating of more than 200
horsepower, but less than or equal to 500 horsepower. (42 U.S.C.
6313(b)(2)) The term ``electric motor'' was left undefined. However, in
a May 4, 2012 final rule amending the electric motors test procedure
(the ``May 2012 TP Final Rule''), DOE adopted the broader definition of
``electric motor,'' currently found in 10 CFR 431.12, because DOE noted
that the absence of a definition may cause confusion about which
electric motors are required to comply with mandatory test procedures
and energy conservation standards, and the broader definition provided
DOE with the flexibility to set energy conservation standards for other
types of electric motors without having to continuously update the
definition of ``electric motors''. 77 FR 26608, 26613.
Some electric motors included in this proposed rule may be sold
embedded into covered products and equipment or sold alone as
replacements. DOE is proposing new energy conservation standards for
ESEMs in this proposed rule that apply to the motor's efficiency
regardless of whether the ESEM is being sold alone or embedded into a
covered product or equipment. As discussed in section III.D of this
document, DOE has determined that energy savings from the standard
levels proposed in this NOPR are ``significant'' within the meaning of
42 U.S.C. 6316(a) and 42 U.S.C. 6295(o)(3)(B)
The provisions of EPCA make clear that DOE may regulate electric
motors ``alone or as a component of another piece of equipment.'' (See
42 U.S.C. 6313(b)(1) and (2) (providing that standards for electric
motors be applied to electric motors manufactured ``alone or as a
component of another piece of equipment'')) In contrast, Congress
exempted SEM that are a component of a covered product or a covered
equipment from the standards that DOE was required to establish under
42 U.S.C. 6317(b). Congress did not, however, similarly restrict
electric motors.
Congress defined what equipment comprises a SEM--specifically, ``a
NEMA general purpose alternating current single-speed induction motor,
built in a two-digit frame number series in accordance with NEMA
Standards Publication MG1-1987.'' \28\ (42 U.S.C. 6311(13)(G)) ESEMs,
which are electric motors, are not SEMs because they do not satisfy the
more specific statutory SEM definition. Unlike SEMs, the statute does
not limit DOE's authority to regulate an electric motor with respect to
whether ``electric motors'' are stand-alone equipment items or
components of a covered product or covered equipment. Rather, Congress
specifically provided that DOE could regulate electric motors that are
components of other covered equipment in the standards established by
DOE. (See 42 U.S.C. 6313(b)(1) (providing that standards for electric
motors be applied to electric motors manufactured ``alone or as a
component of another piece of equipment'')) Accordingly, DOE disagrees
with commenters that the SEM component exemption should apply to ESEMs
and, therefore, includes ESEMs installed as components in other DOE-
regulated products and equipment in these proposed energy conservation
standards.
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\28\ DOE clarified, at industry's urging, that the definition
also includes motors that are IEC metric equivalents to the
specified NEMA motors prescribed by the statute. See 74 FR 32059,
32061-32062 (July 7, 2009); 10 CFR 431.442.
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In addition, ESEMs are built in standard NEMA frame sizes and are
not common in currently regulated consumer products including those
listed by AHAM and AHRI (i.e., clothes washers (top and front load),
clothes
[[Page 87081]]
dryers, food waste disposers, refrigerators, room air conditioners, and
stick vacuums). Therefore, DOE believes the standards proposed in this
NOPR would not impact manufacturers of consumer products. In commercial
equipment, DOE identified the following equipment as potentially
incorporating ESEMs: walk-in coolers and freezers,\29\ circulator
pumps,\30\ air circulating fans,\31\ and commercial unitary air
conditioning equipment.\32\ If the proposed energy conservation
standards for these rules finalize as proposed, DOE has identified that
these rules would all: (1) have a compliance year that is at or before
the ESEM standard compliance year (2029) and/or (2) require a motor
that is either outside of the scope of this rule (e.g., an
electronically commutated motor (``ECM'')) or an ESEM with an
efficiency above the proposed ESEM standards, and therefore not be
impacted by the proposed ESEM rule (i.e., the ESEM rule would not
trigger a redesign of these equipment).
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\29\ The walk-in coolers and walk-in freezers standards
rulemaking docket number is: EERE-2015-BT-STD-0016.
\30\ The circulator pumps energy conservation standard
rulemaking docket number is: EERE-2016-BT-STD-0004.
\31\ The commercial and industrial fans and blowers energy
conservation standard rulemaking docket number is: EERE-2013-BT-STD-
0006. Air circulating fans are a subcategory of fans.
\32\ The small, large, and very large air-cooled commercial
package air conditioners and heat pumps energy conservation standard
rulemaking docket number is: EERE-2013-BT-STD-0007.
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Furthermore, EPCA requires that any new or amended standard for
covered equipment must be designed to achieve the maximum improvement
in energy efficiency that the Secretary of Energy determines is
technologically feasible and economically justified. (42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B)) In this
NOPR, DOE performs the necessary analyses to determine what new
standards would meet the aforementioned criteria. Further, DOE has
determined that the proposed standards provide cost-effective standards
that would result in the significant conservation of energy. Further
discussion on the analytical results and DOE's justification is
provided in section V of this document.
NEEA commented that the term ``small, non-small electric motors''
is confusing and recommended using ``Other Small HP Motors (OSHM)'' or
``Other Small Electric Motors (OSEM)'' as alternative options. (NEEA,
No. 33 at p. 2) DOE has opted to use the term ``ESEM'' in this NOPR.
The Joint Industry Stakeholders commented that the proposed
definition for ESEMs used in the March 2022 Preliminary Analysis is
vague. Specifically, the Joint Industry Stakeholders requested
clarification regarding (1) the definition of full-rated load; (2)
whether brushless permanent magnet motors were included; (3) whether
some motors, which have motor assemblies that are connected to 60 Hz
and which are rectified internally to DC power and require brush
maintenance were included. (Joint Industry Stakeholders, No. 23 at pp.
1-2) In response, DOE notes that the October 2022 Final Rule finalized
a definition for ``rated load,'' which is currently provided in 10 CFR
431.12 (87 FR 63588, 63623), and included specifications on what
electric motors meet the definition of ESEM, which is currently
provided in section 1 of appendix B (87 FR 63588, 63599). Specifically,
10 CFR 431.12 currently relates rated load to full-load, full rated
load, or rated full-load, and defines it as ``the rated output power of
an electric motor.'' Further, section 1.1 of appendix B states that an
ESEM means a motor that ``is a single-speed induction motor capable of
operating without an inverter or is an inverter-only electric motor'';
therefore, the ESEM scope does not include non-induction electric
motors. However, DOE does separately include in scope ``synchronous
electric motors,'' which entails an electric motor that is
``synchronous'' and ``produces at least 0.25 hp but not greater than
750 hp''. See Section 1.1, appendix B. However, DOE is not adopting
standards for synchronous electric motors in this NOPR. Finally, the
ESEM scope specifically states that an electric motor would meet the
scope if it operates on polyphase or single-phase alternating current
60-hertz (Hz) sinusoidal line power; or is used with an inverter that
operates on polyphase or single-phase alternating current 60-hertz (Hz)
sinusoidal line power. An ``inverter'' is defined as ``an electronic
device that converts an input AC or DC power into a controlled output
AC or DC voltage or current. An inverter may also be called a
converter.'' 10 CFR 431.12.
The Joint Industry Stakeholders recommended that DOE exclude
refrigeration compressor motors from the scope of the ESEM rulemaking.
The Joint Industry Stakeholders explained that such motors are
hermetically sealed and are cooled by the refrigerant flowing within
the appliance/equipment, and that there is no accurate way to measure
the efficiency of just the motor and thus, it is not appropriate or
feasible to include refrigeration compressor motors in the scope of
this rulemaking. (Joint Industry Stakeholders, No. 23 at p. 9) DOE
defines a liquid-cooled electric motor as a motor that is cooled by
liquid circulated using a designated cooling apparatus such that the
liquid or liquid-filled conductors come into direct contact with the
parts of the motor but is not submerged in a liquid during operation.
10 CFR 431.12. DOE reviewed refrigeration compressor motors and
understands that they would be considered a liquid-cooled electric
motor according to this definition because they require flowing
refrigerant to adequately cool during operation. The designated cooling
apparatus in this case is shared with the greater refrigeration system.
Liquid-cooled electric motors are currently exempt from DOE's standards
for electric motors, generally. See 10 CFR 431.25(l)(3). Accordingly,
because the refrigeration compressor motor described by the commenters
meets the definition of a ``liquid-cooled electric motor,'' it is
exempt from the test procedure and energy conservation standards
proposed by this NOPR. DOE also notes that many refrigeration
compressor motors are not built in standard NEMA frame sizes, and this
would also disqualify them from the scope of this NOPR. As such, DOE
does not see a need to specifically exempt refrigeration compression
motors from the scope of this NOPR, but may revisit the issue in the
future, as necessary.
Additionally, NEMA stated that there is no room for explosion proof
motors to accommodate a run capacitor because of the added enclosure
constraints associated with explosion proof motors. (NEMA, No. 22 at p.
3) DOE agrees with NEMA that the enclosure constraints for explosion
proof motors do not allow for the addition of a run capacitor. The new
standard levels proposed by this NOPR will not require CSIR motors to
incorporate an additional run capacitor and will not require CSIR
motors to be replaced by CSCR motors. Therefore, DOE believes NEMA's
concern is addressed.
The CA IOUs recommended exploring stakeholder interest in convening
an ASRAC Working Group to clearly define the scope of an ESEM
regulation before moving forward with an energy conservation standard
rulemaking. (CA IOUs, No. 30 at p. 2) In response, DOE notes that
several members of industry and other stakeholders did convene on a
negotiation, which ended in the December 2022 Joint Recommendation. The
December 2022 Joint Recommendation limited its scope to high-torque and
medium-torque ESEMs, low-torque ESEMs, and polyphase ESEMs.
[[Page 87082]]
The Joint Industry Stakeholders also commented that ESEMs are the
same as SEMs and that DOE's reliance on the SEM data as an analog to
ESEM performance demonstrates that the products are the same.
Additionally, the Joint Industry Stakeholders said that DOE did not
provide sufficient data to support its analysis or to allow commenters
to fully understand, interpret, or analyze the March 2022 Preliminary
TSD and provide meaningful comment. The Joint Industry Stakeholders
also stated that DOE's reliance on old data for what DOE claims is a
different product and its drawing of conclusions without providing
further detail fails to meet the requirements of the Administrative
Procedure Act (``APA'') or the Data Quality Act. (Joint Industry
Stakeholders, No. 23 at pp. 2-3) As noted previously, EPCA provides a
very specific definition for SEMs that DOE regulates under 10 CFR part
431 subpart X. ESEMs can be similar to SEMs in many aspects, but
nevertheless fall outside of the EPCA-provided definition. Accordingly,
ESEMs are treated differently for purposes of DOE's energy conservation
standards. That DOE used SEMs data as an analog to ESEM performance to
help construct the March 2022 Preliminary Analysis does not change the
fact that they are treated differently under EPCA, or that, as electric
motors, DOE may regulate ESEMs used as components in other covered
equipment. Notably, in response to the comment from the Joint
Stakeholders, DOE has made updates to the ESEMs analysis in this NOPR
compared to what was presented in the March 2022 Preliminary Analysis;
specifically, DOE has performed additional testing, teardowns, and
modeling of electric motors that more closely align with the ESEM scope
and updated the engineering analysis accordingly. In addition, DOE
reviewed the latest motor catalog data to inform the updated analyses.
Further discussion on this updated analysis is provided in section IV.C
of this document. Therefore, DOE has met the APA's requirements as DOE
has explained throughout this NOPR and in the NOPR TSD the details of
the analysis conducted by DOE and the information DOE relied on in
conducting that analysis. Further, DOE has complied with DOE's
guidelines for implementing the Data Quality Act that ensure the
quality, objectivity, utility, and integrity of the data presented in
this document.\33\
---------------------------------------------------------------------------
\33\ See the discussion of the Data Quality Act in section VI.J
of this document; see also www.energy.gov/sites/prod/files/cioprod/documents/finalinfoqualityguidelines03072011.pdf.
---------------------------------------------------------------------------
2. Air-Over ESEMs
In response to the March 2022 Preliminary Analysis, AHRI commented
that air-over motors are explicitly exempted from regulation in 10 CFR
431.25(l), and that DOE has not overcome the challenges to include
these exempted products, procedurally or technically. AHRI added that
the claimed similarities between SEMs and the newly proposed AO-ESEMs
category warrant the same exemption for AO-ESEMs that Congress
expressly provided for small electric motors, and AHRI referenced the
requirement of EPCA, which says that energy conservation standards
``shall not apply to any small electric motor which is a component of a
covered product under section 6292(a) of this title or covered
equipment under section 6311 of this title.'' (AHRI, No. 26 at pp. 1,
2)
With regards to the comment from AHRI, DOE is covering AO-ESEMs
under its ``electric motors'' authority. (42 U.S.C. 6311(1)(A); 42
U.S.C. 6313(b)) As discussed in section III.A of this document, the
statute does not limit DOE's authority to regulate electric motors
(that are not SEMs) with respect to whether they are stand-alone
equipment items or as components of a covered product or covered
equipment. See 42 U.S.C. 6313(b)(1) (providing that standards for
electric motors be applied to electric motors manufactured ``alone or
as a component of another piece of equipment'') AO-ESEMs do not fall
within the SEMs definition under EPCA, and, therefore, DOE is
regulating AO-ESEMs under its ``electric motors'' authority.
DOE's previous determination in the December 2013 Final Rule to
exclude air-over electric motors from scope was due to insufficient
information available to DOE at the time to support establishment of a
test method. 78 FR 75962, 75974-75975. Since that time, NEMA published
a test standard for air-over motors in Section IV, ``Performance
Standards Applying to All Machines,'' Part 34 ``Air-Over Motor
Efficiency Test Method'' of NEMA MG 1-2016 (``NEMA Air-over Motor
Efficiency Test Method''). The air-over method was originally published
as part of the 2017 NEMA MG-1 Supplements and is also included in the
latest version of NEMA MG 1-2016. Accordingly, in the October 2022
Final Rule, DOE included air-over electric motors in the test procedure
scope and established test procedures for such motors. 87 FR 63588,
63597. In this NOPR, DOE has analyzed the scope of electric motors
based on the finalized test procedures and proposes new energy
conservation standards for AO-ESEMs that align with the December 2022
Joint Recommendation.
3. Equipment Classes
When evaluating and establishing energy conservation standards, DOE
may 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 justifies a different standard. (42 U.S.C. 6316(a); 42 U.S.C.
6295(q)(1)) 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 March 2022 Preliminary Analysis, DOE considered potential
equipment classes defined on the basis of motor horsepower rating, pole
configuration (i.e., 2, 4, 6, or 8 poles), enclosure type (i.e., open
or enclosed construction), locked-rotor torque level (i.e., high,
medium, or low), type of input power (i.e., phase), and motor cooling
approach (i.e., air-over or non-air-over). See chapter 2 of the March
2022 Preliminary TSD.
Regarding horsepower, DOE has previously established separate
equipment classes for electric motors on the basis of horsepower
rating. In an electric motors final rule that published on May 29, 2014
(``May 2014 Electric Motors Final Rule''), DOE discussed that
horsepower is a performance attribute of an electric motor that is
directly related to the capacity of an electric motor to perform useful
work, and that horsepower generally scales with efficiency. 79 FR
30934, 30958. For example, a 50-horsepower electric motor would
generally be considered more efficient than a 10-horsepower electric
motor. Id. For these reasons, DOE has tentatively determined that
horsepower represents a performance-related feature that justifies
separate equipment classes for ESEMs.
Regarding pole configuration, DOE has also previously established
separate equipment classes for electric motors on the basis of pole
configuration. In the May 2014 Electric Motors Final Rule, DOE
discussed that the number of poles in an induction motor determines the
synchronous speed (i.e., revolutions per minute) of that motor, and
that there is an inverse relationship between the number of poles and a
motor's speed. Id. at 79 FR 30958-30959. As the number
[[Page 87083]]
of poles increases from two to four to six to eight, the synchronous
speed drops from 3,600 to 1,800 to 1,200 to 900 revolutions per minute,
respectively. Id. The number of poles has a direct impact on the
electric motor's performance and achievable efficiency because the
number of poles affects the amount of available space inside an
electric motor that can be used to accommodate efficiency improvements.
Id. For example, eight pole motors have twice as many poles as four-
pole motors and, correspondingly, less space for efficiency
improvements. Id. For these reasons, DOE has tentatively determined
that pole configuration represents a performance-related feature that
justifies separate equipment classes for ESEMs.
Regarding enclosure type, DOE has also previously established
separate equipment classes for electric motors on the basis of
enclosure type. In the May 2014 Electric Motors Final Rule, DOE
discussed that electric motors manufactured with open construction
allow a free interchange of air between the electric motor's interior
and exterior. Id. at 79 FR 30959. Whereas, electric motors with
enclosed construction have no direct air interchange between the
motor's interior and exterior (but are not necessarily air-tight) and
may be equipped with an internal fan for cooling. Id. Whether an
electric motor is open or enclosed affects its utility; open motors are
generally not used in harsh operating environments, whereas totally
enclosed electric motors often are. Id. The enclosure type also affects
an electric motor's ability to dissipate heat, which directly affects
efficiency. For these reasons, DOE has tentatively determined that the
enclosure type represents a performance-related feature that justifies
separate equipment classes ESEMs.
Regarding locked-rotor torque level, DOE considered three
classifications of locked-rotor torque in the March 2022 Preliminary
Analysis: high, medium, and low. The high locked-rotor torque motor
topologies included CSCR and CSIR motors; the medium locked-rotor
torque topologies included split phase motors; and the low locked-rotor
torque topologies included PSC and shaded pole motors. Locked-rotor
torque refers to torque developed by an electric motor whose rotor is
locked in place, i.e., not rotating. Locked-rotor torque characterizes
a motor's ability to begin moving loads at rest, an attribute which is
important to varying degree across applications. Certain applications,
for example, some fans, may be relatively indifferent to locked-rotor
torque; whereas for others, a minimum locked-rotor torque may be
required to begin operation. DOE understands that high and medium
locked-rotor torque motors are generally physically larger than low-
locked rotor torque motors and may not fit in many embedded
applications that low locked-rotor torque motors are used in.
Additionally, low locked-rotor torque motors may not provide sufficient
starting torque (i.e., the motor would stall and the application would
never start) to the many applications that have a high starting load
(e.g., compressors and pumps). DOE also understands that high and
medium locked-rotor torque motors generally operate inherently more
efficiently than low locked-rotor torque motors. As such, DOE has
tentatively determined that separate standards (i.e., separate
equipment classes) are warranted for the high/medium locked-rotor
torque topologies (i.e., CSCR, CSIR, and split phase) and low locked-
rotor torque topologies (i.e., PSC and shaded pole). In the March 2022
Preliminary Analysis, DOE sought comment on whether any applications
require a low locked-rotor torque and would not operate with a high
locked-rotor torque motor, and whether locked-rotor torque is necessary
to maintain as an equipment class factor if the highest-torque motor
types (e.g., CSCR) can reach the highest available efficiency levels
among the set of electric motors which are used as substitutes for
similar applications. Section 2.3.1.2 of the March 2022 TSD.
In response to the equipment classes presented in the March 2022
Preliminary Analysis, NEMA agreed that locked-rotor torque (or
alternatively, the motor technology) is necessary to maintain as an
equipment class factor even if the high locked-rotor torque ESEMs can
reach the highest efficiencies among the full range of ESEMs
(regardless of locked-rotor torque categorization). They substantiated
their recommendation by stating that certain high locked-rotor torque
motors are often not interchangeable with lower locked-rotor torque
motors in specific applications because of the larger physical size of
the high locked-rotor torque motor due to the presence of additional
capacitors. (NEMA, No. 22 at pp. 6-7) The December 2022 Joint
Recommendation recommended equipment classes with locked-rotor torque
as one of the differentiators among equipment classes, although in
contrast to the March 2022 Preliminary Analysis, it merged the high and
medium locked-rotor torque classes to form a single high locked-rotor
torque class. DOE infers from this recommendation that the performance
of split phase motors does not inherently differ substantially from the
performance of CSCR and CSIR motors, such that a higher or lower energy
conservation standard for split phase motors would not be warranted in
relation to a standard established for CSCR and CSIR motors. As such,
DOE has tentatively determined that separate equipment classes for
ESEMs are warranted for two groupings of locked-rotor torque: high and
medium locked-rotor torque (represented by the grouping of CSCR, CSIR,
and split phase topologies) and low locked-rotor torque (represented by
the grouping of PSC and shaded pole topologies).
Regarding motor cooling approach, DOE discussed the differentiation
between air-over and non-air-over motors in the March 2022 Preliminary
Analysis. See section 2.3.1.2 of the March 2022 Preliminary TSD. DOE
currently defines an air-over electric motor at 10 CFR 431.12 as an
electric motor ``rated to operate in and be cooled by the airstream of
a fan or blower that is not supplied with the motor and whose primary
purpose is providing airflow to an application other than the motor
driving it.'' As such, air-over motors are often designed without an
internal fan, which allows for smaller packaging, reduced cost, and the
potential for higher-efficiency performance because the motor is not
driving an internal fan. DOE notes, however, the inability to self-cool
may be a limitation in many applications where cooling airflow is
unavailable or too variable to provide a reliable cooling source. For
these reasons, DOE has tentatively determined that the cooling approach
represents a performance-related feature that justifies separate
equipment classes for AO-ESEMs.
Based on the above considerations, DOE is proposing to establish
equipment class groupings for ESEMs based on the following
characteristics: horsepower rating, pole configuration (i.e., 2, 4, 6,
or 8 poles), enclosure type (i.e., open or enclosed), locked-rotor
torque level (i.e., high and medium locked-rotor torque, represented by
the grouping of CSCR, CSIR, and split phase topologies; and low locked-
rotor torque, represented by the grouping of PSC and shaded pole
topologies), type of input power (i.e., phase), and motor cooling
approach (i.e., air-over or non-air-over). Table IV-1 presents the
equipment class groups proposed in this NOPR. Within each equipment
class group, DOE would establish individual equipment classes for each
pole configuration, enclosure type, and horsepower range. The equipment
class groups shown in Table IV-1 represent a total of 350 equipment
classes.
[[Page 87084]]
Table IV-1--Equipment Class Groups
--------------------------------------------------------------------------------------------------------------------------------------------------------
Horsepower Pole
Equipment class groups (``ECG'') Motor topology rating configuration Enclosure Cooling requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................... CSCR, CSIR, Split Phase .25-3 2, 4, 6, 8 Open...................... Non-Air-Over.
Enclosed..................
2.................................... PSC, Shaded Pole....... .25-3 2, 4, 6, 8 Open...................... Non-Air-Over.
Enclosed..................
3.................................... Polyphase.............. .25-3 2, 4, 6, 8 Open...................... Non-Air-Over.
Enclosed..................
4.................................... CSCR, CSIR, Split Phase .25-3 2, 4, 6, 8 Open...................... Air-Over
Enclosed..................
5.................................... PSC, Shaded Pole....... .25-3 2, 4, 6, 8 Open...................... Air-Over
Enclosed..................
6.................................... Polyphase.............. .25-3 2, 4, 6, 8 Open...................... Air-Over
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE requests comment on the proposed equipment classes for this
NOPR.
4. Technology Options
In the March 2022 Preliminary Analysis market and technology
assessment, DOE identified several technology options that were
initially determined to improve the efficiency of ESEMs, as measured by
the DOE test procedure. Table IV-2 presents the technology options
considered in the March 2022 Preliminary Analysis.
Table IV-2--March 2022 Preliminary Analysis Technology Options To
Increase Motor Efficiency
------------------------------------------------------------------------
Type of loss to reduce Technology option
------------------------------------------------------------------------
Stator I2R Losses...................... Increase cross-sectional area
of copper in stator slots.
Decrease the length of coil
extensions.
Rotor I2R Losses....................... Increase cross-sectional area
of end rings.
Increase cross-sectional area
of rotor conductor bars.
Use a die-cast copper rotor
cage.
Core Losses............................ Use electrical steel
laminations with lower losses
(watts/lb).
Use thinner steel laminations.
Increase stack length (i.e.,
add electrical steel
laminations).
Friction and Windage Losses............ Optimize bearing and
lubrication selection.
Improve cooling system design.
Stray-Load Losses...................... Reduce skew on rotor cage.
Improve rotor bar insulation.
------------------------------------------------------------------------
DOE maintains the same technology options from the March 2022
Preliminary Analysis in this NOPR. DOE received a number of comments
regarding technology options. As these options are applicable to
electric motors, broadly, DOE responded to these comments in the June
2023 DFR and refers to that discussion for purposes of technology
options considered in this NOPR. See 88 FR 36066, 36089-36090.
5. Imported Embedded Motors
In response to the March 2022 Preliminary Analysis, DOE received
comments regarding compliance logistics and general issues regarding
embedded motors being imported into the United States. NEMA commented
that they estimate between 30 and 60 percent of ESEMs will be imported
as a motor or embedded in a piece of equipment, and that the importers
of these equipment are the responsible parties to comply. NEMA stated
that if DOE ignores these importers, the rule will harm American
equipment manufacturers incorporating ESEMs who compete with offshore
suppliers and will not maintain a ``level playing field'' amongst motor
manufacturers. NEMA added that they believe that adding the ESEM
categories as defined in the March 2022 Preliminary TSD will have
significant negative effects on U.S. suppliers and jobs, giving
offshore equipment producers an unfair advantage over American
producers. NEMA continued by saying that if DOE does not provide a
funded and feasible border enforcement plan, the energy savings
estimates for a regulation for ESEM will need to be adjusted by
removing the savings of the offshore motors that escape regulation.
(NEMA, No. 22 at pp. 18-19) DOE recognizes that importing embedded
motors within larger pieces of equipment poses logistical challenges
regarding the compliance of these embedded motors with the new energy
conservation standards. However, DOE notes that imported motors that
meet the scope criteria proposed in this NOPR will be subject to the
energy conservation standards that are being promulgated regardless of
whether the motor is imported on its own or embedded in a separate
piece of equipment. DOE is committed to enforcing its regulations in a
fair and equitable manner to ensure a level playing field is preserved
for domestic manufacturers.
B. Screening Analysis
DOE uses the following five screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
(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
[[Page 87085]]
that technology will not be considered further.
(3) Impacts on product utility. If a technology is determined to
have a significant adverse impact on the utility of the product to
subgroups of consumers, or result in the unavailability of any covered
product type with performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as products generally available in the United States at the time,
it will not be considered further.
(4) Safety of technologies. If it is determined that a technology
would have significant adverse impacts on health or safety, it will not
be considered further.
(5) Unique-pathway proprietary technologies. If a technology has
proprietary protection and represents a unique pathway to achieving a
given efficiency level, it will not be considered further, due to the
potential for monopolistic concerns.
10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, 6(c)(3) and
7(b).
In summary, if DOE determines that a technology, or a combination
of technologies, fails to meet one or more of the listed five criteria,
it will be excluded from further consideration in the engineering
analysis. The reasons for eliminating any technology are discussed in
the following sections.
The subsequent sections include comments from interested parties
pertinent to the screening criteria, DOE's evaluation of each
technology option against the screening analysis criteria, and whether
DOE determined that a technology option should be excluded (``screened
out'') based on the screening criteria.
1. Screened-Out Technologies
In the March 2022 Preliminary TSD, DOE screened out amorphous metal
laminations and plastic bonded iron powder (``PBIP'') from the
analysis. DOE requested further data on the feasibility of amorphous
steel being used in electric motors at scale. See chapter 3 of the
March 2022 Preliminary TSD. In response, DOE received comments
regarding the technologies excluded from this engineering analysis,
which DOE responded to in the June 2023 DFR as those comments are
applicable to the broader suite of electric motors (including ESEMs).
In the June 2023 DFR, DOE determined that it was not definitive that
amorphous steel could meet all the screening criteria, and therefore,
DOE continued to screen out amorphous metal in the June 2023 DFR on the
basis of technological feasibility. 88 FR 36066, 36091. That reasoning
continues to apply in the case of the ESEMs within the scope of this
NOPR.
Accordingly, consistent with the March 2022 Preliminary Analysis
and the June 2023 DFR, DOE is continuing to screen out amorphous metal
laminations and PBIP in this NOPR.
2. Remaining Technologies
In the March 2022 Preliminary TSD, DOE did not screen out the
following technology options: increasing cross-sectional area of copper
in stator slots; decreasing the length of coil extensions; increasing
cross-sectional area of end rings; increasing cross-sectional area of
rotor conductor bars; using a die-cast copper rotor cage; using
electrical steel laminations with lower losses (watts/lb); using
thinner steel laminations; increasing stack length; optimizing bearing
and lubrication selection; improving cooling system design; reducing
skew on rotor cage; and improving rotor bar insulation. See chapter 3
of the March 2022 Preliminary TSD. DOE received comments regarding the
remaining technologies included in this engineering analysis, which
were responded to in the June 2023 DFR as those comments are applicable
to the broader suite of electric motors (including ESEMs). 88 FR 36066,
36091-36092. DOE believes the responses to those comments in the June
2023 DFR are applicable to this discussion regarding ESEMs.
Accordingly, DOE has not screened out any of these technologies for its
analysis in this NOPR.
Otherwise, through a review of each technology, DOE concludes that
all of the other identified technologies listed in this section met all
five screening criteria to be examined further as design options in
DOE's NOPR analysis. The design options screened-in are consistent with
the design options from the March 2022 Preliminary Analysis. DOE
determined that these technology options are technologically feasible
because they are being used or have previously been used in
commercially-available equipment or working prototypes. DOE also finds
that all of the remaining technology options meet the other screening
criteria (i.e., practicable to manufacture, install, and service and do
not result in adverse impacts on consumer utility, product
availability, health, or safety). For additional details, see chapter 4
of the NOPR TSD.
DOE requests comment on the remaining technology options considered
in this NOPR.
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of ESEMs. 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
product/equipment at efficiency levels above the baseline. The output
of the engineering analysis is a set of cost-efficiency ``curves'' that
are used in downstream analyses (i.e., the LCC and PBP analyses and the
NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing equipment (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 ``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 proposed rulemaking, DOE applied a combination of the
efficiency-level approach and the design-option approach to establish
efficiency levels to
[[Page 87086]]
analyze. The design-option approach was used to characterize efficiency
levels that are not available on the market but appear to be market
solutions for those higher efficiency levels if sufficient demand
existed. For the efficiency levels available on the market, sufficient
performance data was publicly available to characterize these levels.
a. Representative Units Analyzed
Due to the large number of equipment classes, DOE did not directly
analyze all equipment classes of electric motors considered in this
NOPR. Instead, DOE selected representative units based on two factors:
(1) the quantity of motor models available within an equipment class
and (2) the ability to scale to other equipment classes.
For this NOPR, DOE updated the horsepower output and pole
configuration in response to feedback received on the March 2022
Preliminary Analysis and on feedback received through manufacturer
interviews. For more information on the manufacturer interviews, see
section IV.J.2 of this document. Table IV-3 presents the representative
units analyzed, and the covered horsepower ranges for each of the
representative units.
Table IV-3 Representative Units Analyzed
----------------------------------------------------------------------------------------------------------------
Representative Representative Represented horsepower range (all
ECG unit (RU) unit horsepower poles, all enclosures)
----------------------------------------------------------------------------------------------------------------
ESEM High Torque................... 1 0.25 0.25 <= hp <= 0.50.
2 1 0.5 < hp <= 3.
ESEM Low Torque.................... 3 0.25 0.25 hp.
4 0.5 0.25 < hp <= 3.
ESEM Polyphase..................... 5 0.25 0.25 <= hp <= 3.
AO-ESEM High Torque................ 6 0.25 0.25 <= hp <= 0.50.
7 1 0.5 < hp <= 3.
AO-ESEM Low Torque................. 8 0.25 0.25 hp.
9 0.5 0.25 < hp <= 3
AO-ESEM Polyphase.................. 10 0.25 0.25 <= hp <= 3.
----------------------------------------------------------------------------------------------------------------
In response to the March 2022 Preliminary Analysis, DOE received a
comment from NEMA stating that DOE should conduct more testing of motor
efficiency at higher efficiency levels rather than relying so heavily
on scaled results. (NEMA, No. 22 at pp. 15, 24) DOE notes that
teardowns of motors at higher efficiency levels were conducted for each
ECG that was directly analyzed. This comment was also discussed in
section IV.C.1 of the June 2023 DFR. See 88 FR 36066, 36093. DOE
believes the responses to that comment in the June 2023 DFR are
applicable to this discussion regarding ESEMs. Additionally, for more
information on scaling as it pertains to ESEMs, see section IV.C.5 of
this document.
DOE requests comment on the representative units used in this NOPR.
b. Baseline Efficiency
For each equipment class, DOE generally selects a baseline model as
a reference point for each class and measures changes resulting from
potential energy conservation standards against the baseline. The
baseline model in each equipment class represents the characteristics
of an equipment typical of that class (e.g., capacity, physical size).
Generally, a baseline model is one that just meets current energy
conservation standards, or, if no standards are in place, the baseline
is typically the most common or least efficient unit on the market.
In the March 2022 Preliminary Analysis, DOE generated a baseline
efficiency level for ESEMs by creating a curve-fit of motor losses vs.
hp based on the SEM energy conservation standards located at 10 CFR
431.446, and shifting this curve-fit down to fit what was observed in
catalog data for a given ESEM ECG. See chapter 5 of the March 2022
Preliminary TSD. In response to the March 2022 Preliminary Analysis,
DOE received comments on how the baseline efficiencies were established
for ESEMs.
The Joint Advocates commented that DOE tested five ESEMs with and
without the fan using the proposed NOPR test procedure to determine the
difference in efficiency between AO and non-AO motors. Removing the
motor fan resulted in baseline efficiencies several percent higher for
the AO-ESEMs. As such, the Joint Advocates recommend that DOE analyze
appropriate baseline efficiency levels for AO motors. (Joint Advocates,
No. 27 at p. 3)
NEMA disagreed with how DOE created the baseline for ESEMs and
suggested that the baseline be determined through testing and not rely
on unverified performance models. (NEMA, No. 22 at p. 15) With regards
to the comment from NEMA, DOE acknowledges that testing individual
models is the most ideal way to gather performance data for electric
motors. However, due to the very high volume of combinations of motor
topologies, horsepower, frame sizes, pole counts, speeds, unique motor
construction, and other parameters, DOE has recognized it to be
unrealistic to test every possible motor available in the U.S. market.
As such, DOE is modeling performance using a catalog of all electric
motors (including ESEMs) available for sale in the U.S. market, which
contains specific data for all relevant parameters of electric motor
performance, including locked rotor torque, pole count, horsepower
output, speed, nominal efficiency, current draw, as well as many
others. DOE created the baseline using a similar combination of the
catalog performance data and trends that DOE developed and modeled in
the 2010 SEM standard rulemaking when DOE was similarly faced with a
high volume of potential SEM model possibilities. Given the
similarities between SEMs and ESEMs, DOE believes that a baseline
created with a methodology parallel to the previous SEM rulemaking is a
reasonable approach for creating energy conservation standards for
ESEMs. Accordingly, in this NOPR, DOE used a mix of catalog data,
current SEM standards, and test data to establish the baseline
efficiencies. For ECGs 1-3, DOE began with the methodology that was
used in March 2022 Preliminary Analysis to establish the baseline. For
ECGs 1 and 3, DOE then shifted the baseline (i.e., increased the losses
across all horsepowers by a flat multiplier to shift the entire curve
uniformly) to
[[Page 87087]]
account for the least efficient ESEMs in each ECG at various horsepower
ratings. For ECG 2, DOE used test data to determine the efficiency of
shaded pole motors at the horsepower ratings where they are used and
combined that with the shifted SEM standard to create a baseline. For
more information, see chapter 5 of the NOPR TSD.
DOE requests comment on the baseline efficiencies used in this
NOPR.
c. Higher Efficiency Levels
As part of DOE's analysis, the maximum available efficiency level
is the highest efficiency unit currently available on the market. DOE
also defines a ``max-tech'' efficiency level to represent the maximum
possible efficiency for a given equipment.
In the March 2022 Preliminary Analysis, DOE established the higher
efficiency levels by shifting the baseline efficiencies up a certain
number of NEMA bands. In response to the March 2022 Preliminary
Analysis, DOE received comments regarding the analysis used to
determine efficiencies at higher levels, which were responded to in the
June 2023 DFR. 88 FR 36066, 36096-36097. In that final rule, DOE
determined that the approach used in the March 2022 Preliminary
Analysis continued to be appropriate. Id. at 88 FR 36097. DOE believes
the rationale from its responses in the June 2023 DFR is applicable to
this NOPR. As such, for this NOPR, DOE considered several design
options for higher efficiencies: improved electrical steel for the
stator and rotor, using die-cast copper rotors, increasing stack
length, and any other applicable design options remaining after the
screening analysis when improving electric motor efficiency from the
baseline level up to a max-tech level. As each of these design options
are added, the manufacturer's cost generally increases and the electric
motor's efficiency improves. DOE worked with a subject matter expert
with design experience and motor performance simulation software to
develop the highest efficiency levels technologically feasible for each
representative unit analyzed, and used a combination of electric motor
software design programs and subject matter expert input to develop
these levels. The subject matter expert also checked his designs
against tear-down data and calibrated his software using the relevant
test results. DOE notes that for all efficiency levels of directly
modeled representative units, the frame size was constrained to that of
the baseline unit. DOE also notes that the full-load speed of the
simulated motors did not stay the same throughout all efficiency
levels. Depending on the materials used to meet a given efficiency
level, the full-load speed of the motor may increase compared to a
lower efficiency model, but for the representative units analyzed this
was not always the case. Employing these design options, higher
efficiency levels can be reached without resulting in any significant
size increase and without changing the key electrical and mechanical
characteristics of the motor. See chapter 5 of the NOPR TSD for more
details on the full-load speeds of modeled units.
DOE requests comment on the proposal to constrain the frame size of
all efficiency levels to that of the baseline unit.
For the max-tech efficiencies in the engineering analysis, DOE
considered 35H210 silicon steel, which has the lowest theoretical
maximum core loss of all steels considered in this engineering
analysis, and the thinnest practical thickness for use in motor
laminations. The max-tech designs also have the highest possible slot
fill, maximizing the number of motor laminations that can fit inside
the motor. Further details are provided in chapter 5 of the NOPR TSD.
The max-tech for all equipment classes was created by using the
curve shape of motor losses vs. horsepower for the SEM energy
conservation standards and shifting that curve up to intersect with the
representative unit efficiencies for a given ECG. For intermediate
efficiency levels that were higher than an ECG's baseline but not the
max-tech efficiency considered, DOE used a consistent approach across
all ECGs. EL 1 was an average of the full-load efficiencies of the
baseline, EL 2 contained the levels recommended in the December 2022
Joint Recommendation, and EL 3 was an average of the full-load
efficiencies of EL 2 and max-tech.
Table IV-4 presents a summary of the description of the higher
efficiency levels analyzed in this NOPR. For additional details on the
efficiency levels, see chapter 5 of the NOPR TSD.
Table IV-4--Higher Efficiencies Analyzed
----------------------------------------------------------------------------------------------------------------
EL0 EL1 EL2 EL3 EL4
----------------------------------------------------------------------------------------------------------------
Baseline....................... Average of EL0 and Joint Recommended Average of EL2 Max-tech.
EL2. Levels. and EL4.
----------------------------------------------------------------------------------------------------------------
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
equipment, 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 equipment, component-by-component,
to develop a detailed bill of materials for the product.
[ballot] Catalog teardowns: In lieu of physically deconstructing an
equipment, 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 equipment.
[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 March 2022 Preliminary Analysis, DOE conducted the analysis
using a combination of physical teardowns and software modeling. DOE
contracted a professional motor laboratory to disassemble various
electric motors and record what types of materials were present and how
much of each material was present, recorded in a final bill of
materials (``BOM''). To supplement the physical teardowns, software
modeling by a subject matter expert was also used to generate BOMs for
select efficiency levels of directly analyzed representative units. The
resulting bill of materials provides the basis for the manufacturer
production cost (``MPC'') estimates. See chapter 5 of the March 2022
Preliminary TSD.
[[Page 87088]]
In response to the March 2022 Preliminary Analysis, DOE received a
number of comments pertaining to the cost analysis, which were
responded to in the June 2023 DFR. 88 FR 36066, 36098-36099. In that
final rule, DOE determined that the approach used in the March 2022
Preliminary Analysis continued to be appropriate. Id. at 88 FR 36099.
DOE believes the rationale from its responses in the June 2023 DFR is
applicable to this NOPR. Accordingly, in this NOPR, DOE continues to
use the approach from the March 2022 Preliminary Analysis by
determining costs using a combination of physical teardowns and
software modeling. In addition, as part of this NOPR, DOE supplemented
other critical inputs to the MPC estimate, including material prices
assumed, scrap costs, overhead costs, and conversion costs incurred by
the manufacturer, using information provided by manufacturers under a
nondisclosure agreement (``NDA'') through both manufacturer interviews
and the Electric Motors Working Group. Through these nondisclosure
agreements, DOE solicited and received feedback on inputs like recent
electrical steel prices by grade, the cost of critical components of
ESEMs like capacitors or conductors, motors at different efficiency
levels, and rated motor output. See chapter 5 of the NOPR TSD for more
detail on the scrap, overhead, and conversion costs, as well as
material prices used.
Finally, to account for manufacturers' non-production costs and
profit margin, DOE applies a non-production cost multiplier (the
manufacturer markup) to the MPC. The resulting manufacturer selling
price (``MSP'') is the price at which the manufacturer distributes a
unit into commerce. DOE developed an average manufacturer markup by
examining the annual Securities and Exchange Commission (``SEC'') 10-K
reports filed by publicly-traded manufacturers primarily engaged in
ESEM manufacturing and whose combined product range includes ESEMs. DOE
used a non-production markup of 37 percent for all ESEMs considered in
this NOPR.
3. Technical Specifications
DOE received comments in response to the March 2022 Preliminary
Analysis regarding the technical design and performance specifications
of ESEMs analyzed in this NOPR. The Joint Industry Stakeholders and
AHAM and AHRI commented that more-efficient motors become heavier and
larger and that DOE needs to account for the loss of consumer demanded
utility in terms of portability or ease of lifting by one person.
(Joint Industry Stakeholders, No. 23 at p. 6; AHAM and AHRI, No. 25 at
p. 12) The Joint Industry Stakeholders commented that DOE must factor
portability into its calculations and considerations for technological
feasibility or risk violation of EPCA provision 42 U.S.C.
6295(o)(2)(B)(i)(I)-(VII) The Joint Industry Stakeholders provided
results of the AHAM Home Comfort Survey showing that portability is
important to PAC owners. The Joint Industry Stakeholders added that DOE
should screen out technology options that increase weight and should
not use it as a design option in its analysis of higher efficiency
levels. The Joint Industry Stakeholders added that DOE must account for
physical growth (i.e., girth) of appliances as a result of
incorporation of larger ESEMs as a consumer-demanded utility with
regards to portability, or fall short of EPCA 6295(o)(2)(B)(i)(I)-
(VII). (Joint Industry Stakeholders, No. 23 at pp. 6-8) AHAM and AHRI
noted that space constraints in many appliances require that
manufacturers use the smallest possible component that meets the
required performance for the product. Additionally, they stated larger
motors will also decrease the space available for additional features,
thereby preventing finished product manufacturers from offering those
features to consumers. (AHAM and AHRI, No. 25 at p. 12)
In response to these comments, DOE notes that size increase of
ESEMs analyzed as part of this NOPR is limited, and efficiency levels
at or below the levels recommended in the December 2022 Joint
Recommendation will not result in a significant weight increase
relative to the present weight of ESEMs, specifically at the selected
TSL 2 (i.e., recommended level). DOE revised the preliminary analysis
to account for space-constrained and non-space constrained motor
designs that actively limit the amount of additional active material
that can fit into the ESEM, limiting the potential for size and weight
increase as well. DOE's analysis assumes that higher ELs can be reached
without significant increase in size. DOE made this assumption to
analyze a representative unit that could be more widely adopted without
significant redesign from end-users. However, as discussed in section
II.B.3 of this document, the Electric Motor Working Group expressed
that any efficiency requirements at or above EL 3, could result in
market disruption and may not allow smaller size motors to remain on
the market. DOE acknowledges that at or above EL 3, some manufacturers
may choose to rely on design options that would significantly increase
the physical size of ESEMs. This could result in a significant and
widespread disruption to the OEM markets that used ESEMs as an embedded
product, as those OEMs may have to make significant changes to their
equipment that use ESEMs because those ESEMs could become larger in
physical size.\34\
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\34\ DOE believes there will be several impacts of larger motors
on downstream users and consumers of these motors, and the
difficulty to accommodate a larger motor varies across applications.
An increase in motor size may result in new motors that fit in their
existing systems. DOE notes that this impact to OEMs and end users
may be difficult to quantify because of range of applications these
motors go into, and DOE expects the potential impacts of larger
motors to vary by end use application.
---------------------------------------------------------------------------
DOE requests comment on the assumption that higher ELs
(particularly ELs 3 and 4) can be reached without significant increase
in size.
DOE requests comment on the potential for market disruption at
higher ELs and if manufacturers could design motors at ELs 3 and 4 that
do not increase in size, or if for the final rule, DOE should model
motors larger than what is considered in this NOPR.
The Joint Industry Stakeholders commented that if lower speed
motors are no longer available, appliances may be forced to incorporate
higher speed motors which may cause short-cycling in HVAC and
refrigeration applications and result in negative impacts in other
appliances. The Joint Industry Stakeholders provided the example of a
vacuum cleaner where a higher speed motor could lead to increased
suction and reduce the ability to move the vacuum. (Joint Industry
Stakeholders, No. 23 at pp. 8-9)
DOE notes that the ESEM performance models generated by the subject
matter expert for the representative units did not always increase in
speed as efficiency increased and that the energy conservation
standards proposed by this NOPR apply to motors of varying operating
speeds across multiple pole-configurations. As such, DOE does not
expect the respective standard levels and equipment classes to result
in the unavailability of motors with specific speed characteristics.
DOE has also found that many vacuum cleaners currently on the market
utilize suction \35\ motors and universal \36\ motors that have
brushes, and are not
[[Page 87089]]
single-speed induction motors, thus are not within the scope of this
NOPR.
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\35\ Suction motor design & operation are described at
www.ristenbatt.com/xcart/Suction-Motor-Design-and-Operation.html--
(last accessed on 5/31/2023).
\36\ A major application of Universal Motors is electric vacuum
cleaners. ``Universal motor'' is defined at www.nidec.com/en/technology/motor/glossary/000/0565/ (last accessed on 5/31/2023).
---------------------------------------------------------------------------
AHAM and AHRI commented that they expect electric motors,
particularly fractional horsepower electric motors, would increase in
price because larger/faster motors will require additional materials
for the motor stack, windings, and other components. Moreover, AHAM and
AHRI commented that efficiency requirements could push manufacturers to
different, more expensive, motor topologies. AHAM and AHRI added that
the certification, testing, and reporting requirements will also add
cost. AHAM and AHRI provided an estimate that 6,015 basic models of
equipment would have one or more motors under the scope of this
proposed regulation. Applying a $304,000 per basic model cost estimate
to redesign the equipment to accommodate a redesigned motor, AHAM and
AHRI estimate the cost of this regulation for OEMs will exceed $1.83
billion. (AHAM and AHRI, No. 25 at pp. 9-12)
The Joint Industry Stakeholders and Lennox stated that if a new
ESEM cannot be incorporated into an existing, previously-purchased
appliance or OEM product, the consumer must source salvage/repaired
component motors or purchase new products entirely. The Joint
Stakeholders and Lennox commented that consumers will either face
significant repair bills due to field modifications to incorporate new
ESEM or lost use of devices due to inability to repair with a new ESEM.
The Joint Industry Stakeholders and Lennox commented that DOE did not
incorporate the impact of consumers being forced to prematurely
purchase new equipment. The Joint Industry Stakeholders and Lennox
added that DOE fails to account for these additional OEM equipment
repair costs and for the fact that many consumers will be left without
a repair option and forced to prematurely purchase new equipment or a
new appliance and place additional burden on low-income consumers.
(Joint Industry Stakeholders, No. 23 at pp. 5-6; Lennox, No. 29 at p.
5) AHAM and AHRI commented that setting energy conservation standards
on motors that are components of finished goods would result in
unavailability of replacement motors and consumers would be forced to
purchase a new appliance they cannot afford because the existing
equipment can no longer be serviced. (AHAM and AHRI, No. 25 at p. 10)
Lennox commented that DOE must thoroughly evaluate the loss of
repairability for installed/owned HVACR systems that contain newly
regulated ESEMs, which could force consumers to undertake unnecessary
and costly premature replacement of HVACR systems. (Lennox, No. 29 at
p. 5)
As discussed previously in this section, DOE revised the
engineering analysis from the March 2022 Preliminary Analysis, and, as
such, the proposed standards in this NOPR result in no significant
increases to the size of an affected ESEM, which means there is no loss
in repairability for previously-purchased appliances because the form,
fit, and function of the ESEMs are maintained at the proposed TSLs. In
addition, the proposed levels would preserve key criteria that are used
to identify suitable replacement motors,\37\ such as frame sizes,
voltages, horsepower, pole configurations, enclosure constructions, and
mountings, and DOE believes drop-in replacement motors would remain
available and there would be no major market disruption, as highlighted
by the Electric Motors Working Group. DOE further notes that OEM
equipment can usually accommodate different models of motors and online
cross-referencing tools \38\ exist to help consumers identify motors
that can be used as drop-in replacements. However, as discussed in
section II.B.3 of this document, the Electric Motor Working group
expressed that any efficiency requirements at or above EL 3, could
result in market disruption and may not allow smaller size motor to
remain on the market. Although DOE's engineering analysis assumes that
higher ELs can be reached without significant increase in size, DOE
acknowledges that at or above EL 3 (i.e., above the proposed TSL), some
manufacturers may choose to rely on design options that would
significantly increase the physical size of ESEMs and there is
uncertainty as to whether the size, fit and function would be
maintained at these levels. At or above EL3, this could result in a
significant and widespread disruption to the OEM markets that used
ESEMs as an embedded product, as those OEMs may have to make
significant changes to their equipment that use ESEMs because those
ESEMs could become larger in physical size.
---------------------------------------------------------------------------
\37\ See ``How to cross reference an OEM motor.'' Available at
https://hvacknowitall.com/blog/how-to-cross-reference-an-oem-motor
(last accessed September 28, 2023); Rheem and Ruud PROTECH
``Selecting a Motor.'' Available at assets.unilogcorp.com/267/ITEM/DOC/PROTECH_51_100998_33_Catalog.pdf (last accessed September 28,
2023).
\38\ See www.emotorsdirect.ca/hvac.
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Regarding the additional OEM testing and certification costs, while
DOE conducts a MIA to address the industry burden on the manufacturer
of the considered covered equipment, DOE typically does not include the
impacts to other manufacturers. The MIA for this rulemaking
specifically examined the conversion costs that electric motor
manufacturers (including OEMs that also manufacture electric motors)
would incur due to the analyzed energy conservation standards for
electric motors in comparison to the revenue and free cash electric
motor manufacturers receive. The OEM testing and certification costs
were not included in the MIA, and neither were the OEM revenues and
free cash flows, as these costs and revenue are not specific to
electric motor manufacturers. However, as noted by the Electric Motors
Working Group, the proposed standards for ESEMs are not expected to
cause broad market disruption. In addition, DOE fixed the frame size,
which remained the same across efficiency levels. As such, the energy
conservation standards proposed in this NOPR would preserve the frame
sizes of electric motors on the market today. Further, as discussed in
section IV.A.1 of this document, ESEMs are built in standard NEMA frame
sizes and are not common in currently regulated consumer products
including those listed by AHAM and AHRI (i.e., clothes washers (top and
front load), clothes dryers, food waste disposers, refrigerators, room
air conditioners, and stick vacuums). Therefore, DOE believes the
standards as proposed would not impact manufacturers of consumer
products. In commercial equipment, DOE identified the following
equipment as potentially incorporating ESEMs: walk-in coolers and
freezers, circulator pumps, air circulating fans, and commercial
unitary air conditioning equipment. If the proposed energy conservation
standards for these rules finalize as proposed, DOE identified that
these rules would all: (1) have a compliance year that is at or before
the ESEM standard compliance year (2029) and/or (2) require a motor
that is either outside of the scope of this rule (e.g., an ECM) or an
ESEM with an efficiency above the proposed ESEM standards, and
therefore not be impacted by the proposed ESEM rule (i.e., the ESEM
rule would not trigger a redesign of these equipment). Therefore, DOE
has tentatively determined that OEMs would already have to redesign
these equipment to comply with these energy conservation standards, and
the ESEM rule would not trigger another redesign of these equipment
because the end-use equipment regulation would require
[[Page 87090]]
higher efficiency ESEMs or out of scope electric motors. Consequently,
although DOE did not include any OEM testing and certification costs in
this NOPR, DOE does not estimate these impacts to be significant.
4. Cost-Efficiency Results
The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of MSP (in dollars) versus
full-load efficiency (in %), which form the basis for subsequent
analysis. DOE developed ten curves representing the six equipment class
groups. The methodology for developing the curves started with
determining the full-load efficiency and MPCs for baseline motors.
Above the baseline, DOE implemented various combinations of design
options to achieve each efficiency level. Design options were
implemented until all available technologies were employed (i.e., at a
max-tech level). To account for manufacturers' non-production costs and
profit margin, DOE applies a manufacturer markup to the MPC, resulting
in the MSP. See the following tables for the final results and chapter
5 of the NOPR TSD for additional detail on the engineering analysis.
[GRAPHIC] [TIFF OMITTED] TP15DE23.003
[GRAPHIC] [TIFF OMITTED] TP15DE23.004
5. Scaling Methodology
Due to the large number of equipment classes, DOE was not able to
perform a detailed engineering analysis on each one. Instead, DOE
focused its analysis on the representative units and scaled the results
to equipment classes not directly analyzed in the engineering analysis.
In the March 2022 Preliminary Analysis, DOE used the current standards
at 10 CFR 431.25 as a basis to scale the efficiency of the
representative units to all other equipment classes. In order to scale
for efficiency levels above baseline, the efficiencies for the
representative units were shifted up or down by however many NEMA
bands, because these bands are commonly used by industry when
describing motor efficiency, that efficiency level was above current
standards. DOE received a number of comments regarding scaling
methodology, to which DOE responded to in the June 2023 DFR. 88 FR
36066, 36099-36100. In that final rule, DOE determined that the
approach used in the March 2022 Preliminary Analysis continued to be
appropriate. Id. at 88 FR 36100. DOE believes the rationale from its
responses in the June 2023 DFR is applicable to this NOPR.
In this NOPR, to scale across horsepower, pole configuration, and
enclosure, DOE again relied on industry-recognized levels of efficiency
when possible, or shifted forms of these levels. For example: when an
efficiency level for a representative unit was NEMA Premium, Table 12-
12 of NEMA MG 1-2016 was used to determine the efficiency of all the
non-representative unit equipment classes. This method of scaling was
also done for IE4 levels of efficiency, electric motor fire pump
levels, and shifted versions of NEMA Premium (see section IV.C.1 of
this document for a description of efficiency levels analyzed). DOE
relied on industry-recognized levels because they sufficiently capture
the effects of enclosure, pole configuration, frame size, and
horsepower on motor efficiency.
D. Markups Analysis
The markups analysis develops appropriate markups (e.g.,
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
[[Page 87091]]
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 equipment to cover business costs
and profit margin.
In the March 2022 Preliminary Analysis, DOE identified distribution
channels for electric motors and their respective market shares (i.e.,
percentage of sales going through each channel). For ESEMs, the main
parties in the distribution chain are OEMs, equipment or motor
wholesalers, retailers, and contractors. See section 6.2 of the March
2022 Preliminary TSD. DOE did not receive any comment on the
distribution channels identified in response to the March 2022
Preliminary Analysis. DOE retained these distribution channels for this
NOPR.
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
equipment with baseline efficiency, while incremental markups are
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental
markup is typically less than the baseline markup and is designed to
maintain similar per-unit operating profit before and after new or
amended standards.\39\
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\39\ Because the projected price of standards-compliant
equipment is typically higher than the price of baseline equipment,
using the same markup for the incremental cost and the baseline cost
would result in higher per-unit operating profit. While such an
outcome is possible, DOE maintains that in markets that are
reasonably competitive it is unlikely that standards would lead to a
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------
In the March 2022 Preliminary Analysis, DOE relied on economic data
from the U.S. Census Bureau and on 2020 RS Means Electrical Cost Data
to estimate average baseline and incremental markups. Specifically, DOE
estimated the OEM markups for electric motors based on financial data
of different sets of OEMs that use respective electric motors from the
latest 2019 Annual Survey of Manufactures.\40\ The relevant sets of
OEMs identified were listed in Table 6.4.2 of the March 2022
Preliminary TSD, using six-digit code level North American Industry
Classification System (``NAICS''). Further, DOE collected information
regarding sales taxes from the Sales Tax Clearinghouse.\41\
---------------------------------------------------------------------------
\40\ U. S. Census Bureau. 2019 Annual Survey of Manufactures
(ASM): Statistics for Industry Groups and Industries.
www.census.gov/programs-surveys/asm.html (last accessed March 23,
2021).
\41\ Sales Tax Clearinghouse Inc. State Sales Tax Rates Along
with Combined Average City and County Rates. July 2021. thestc.com/STrates.stm (last accessed July 1, 2021).
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In response to the March 2022 Preliminary Analysis, NEMA agreed
that 95 percent of ESEMs reach the market through the OEM equipment
channel. NEMA further commented that Table 6.4.2 of the March 2022
Preliminary TSD should be replaced by Table IV.3 of the Import Data
Declaration Proposed Rule.\42\ (NEMA, No. 22 at p. 18) Table IV.3 of
the Import Data Declaration Proposed Rule provides a list of five-digit
code level NAICS.\43\ DOE reviewed the corresponding six-digit code
level NAICS and identified the following additional OEM as relevant in
the context of OEMs incorporating ESEMs in their equipment: 333991
``Power-driven handtool manufacturing;'' 333999 ``All other
miscellaneous general Purpose machinery manufacturing;'' 335210 ``Small
electrical appliance manufacturing;'' and 335220 ``Major appliance
manufacturing''. Other NAICS codes were either already included in the
March 2022 Preliminary Analysis or did not correspond to OEMs
incorporating ESEMs in their equipment.
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\42\ NEMA also provided the following link: www.regulations.gov/document/EERE-2015-BT-CE-0019-0001.
\43\ Each five-digit code level NAICS includes several six-digit
code level NAICS.
---------------------------------------------------------------------------
For this NOPR, DOE revised the OEM baseline and incremental markups
calculation to account for these additional NAICS codes. In addition,
DOE relied on updated data from the economic data from the U.S. Census
Bureau, 2023 RS Means Electrical Cost Data, and the updated data from
the Sales Tax Clearinghouse.
Chapter 6 of the NOPR TSD provides details on DOE's development of
markups for ESEMs.
DOE requests data and information to characterize the distribution
channels for ESEMs and associated market shares.
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of ESEMs at different efficiencies for a
representative sample of residential, commercial, and industrial
consumers, and to assess the energy savings potential of increased ESEM
efficiency. The energy use analysis estimates the range of energy use
of ESEMs in the field (i.e., as they are actually used by consumers).
For each consumer in the sample, the energy use is calculated by
multiplying the annual average motor input power by the annual
operating hours. The 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 new standards.
1. Consumer Sample
DOE created a consumer sample to represent consumers of electric
motors in the commercial, industrial, and residential sectors. DOE used
the sample to determine electric motor annual energy consumption as
well as to conduct the LCC and PBP analyses. Each consumer in the
sample was assigned a sector, an application, and a region. The sector
and application determine the usage profile of the electric motor and
the economic characteristics of the motor owner vary by sector and
region. In addition, residential consumers were assigned household
income groups. In the March 2022 Preliminary Analysis, DOE primarily
relied on data from the 2018 Commercial Building Energy Consumption
Survey (``CBECS''),\44\ the 2018 Manufacturing Energy Consumption
Survey (``MECS''),\45\ the 2015 Residential Energy Consumption Survey
(``RECS''), a previous DOE Technical Support Document (``January 2021
Final Determination Technical Support Document'') related to small
electric motors,\46\ and a DOE-AMO report ``U.S. Industrial and
Commercial Motor System Market Assessment Report Volume 1:
Characteristics of the Installed Base'' (``MSMA'' or ``DOE-AMO
report'').\47\ See chapter 7 of the March 2022 Preliminary TSD.
---------------------------------------------------------------------------
\44\ U.S. Department of Energy-Energy Information
Administration, ``2018 Commercial Buildings Energy Consumption
Survey (CBECS),'' 2018 CBECS Survey Data, 2018, https://www.eia.gov/consumption/commercial/data/2018/index.php?view=methodology.
\45\ 2018 Manufacturing Energy Consumption Survey,'' https://www.eia.gov/consumption/manufacturing/data/2018/pdf/Table11_1.pdf.
\46\ Technical Support Document: Energy Efficiency Program for
Consumer Products and Commercial and Industrial Equipment: Small
Electric Motors Final Determination (Prepared for the Department of
Energy by Staff Members of Navigant Consulting, Inc and Lawrence
Berkeley National Laboratory, January 2021),'' www.regulations.gov/document/EERE-2019-BT-STD-0008-0035.
\47\ Prakash Rao et al., ``U.S. Industrial and Commercial Motor
System Market Assessment Report Volume 1: Characteristics of the
Installed Base,'' January 12, 2021, doi.org/10.2172/1760267.
---------------------------------------------------------------------------
Specifically, in the March 2022 Preliminary Analysis, for ESEMs,
DOE used information from the Small Electric Motors January 2021 Final
Determination Technical Support Document to develop sector specific
distributions. Since the publication of the March 2022 Preliminary
Analysis, DOE updated the consumer sample to
[[Page 87092]]
reflect the latest version of RECS (i.e., 2020 RECS).\48\ DOE also
revised the distribution of ESEMs by sector to reflect that the
majority of single-phase motors are used in the residential and
commercial sectors \49\ and incorporate the industrial and commercial
sector distributions as published in the June 2023 DFR.
---------------------------------------------------------------------------
\48\ ``2020 Residential Energy Consumption Survey Data,'',
https://www.eia.gov/consumption/residential/data/2020/https://www.eia.gov/consumption/residential/data/2020/ (last accessed July
5, 2023).
\49\ Goetzler, William, Sutherland, Timothy, and Reis, Callie.
Energy Savings Potential and Opportunities for High-Efficiency
Electric Motors in Residential and Commercial Equipment. United
States: N. p., 2013. Web. doi:10.2172/1220812. Available at:
osti.gov/biblio/1220812 (last accessed April 18, 2023).
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In response to DOE's requests for feedback regarding consumer
sample in the March 2022 Preliminary Analysis, NEMA referred DOE to the
MSMA report (NEMA, No. 22 at p. 19) As previously described, DOE relied
on information from the MSMA report to inform its consumer sample. DOE
did not receive any additional comments related to the consumer sample
developed in the March 2022 Preliminary Analysis and, in this NOPR, DOE
continued to rely on the MSMA report to characterize motor use in the
commercial and industrial sectors.
DOE requests data and information to characterize the distribution
of ESEMs by sector (commercial, industrial, and residential sectors) as
well as the distribution of ESEMs by application in each sector.
2. Motor Input Power
In the March 2022 Preliminary Analysis, DOE calculated the motor
input power as the sum of (1) the electric motor's rated horsepower
multiplied by its operating load (i.e., the motor output power), and
(2) the losses at the operating load (i.e., part-load losses). DOE
estimated distributions of motor average annual operating load by
application and sector based on information from the MSMA report. DOE
determined the part-load losses using outputs from the engineering
analysis (full-load efficiency at each efficiency level) and published
part-load efficiency information from 2016 and 2020 catalog data from
several manufacturers to model motor part-load losses as a function of
the motor's operating load. See section 7.2.2 of the March 2022
Preliminary TSD.
In response to DOE's requests for feedback regarding distributions
of average annual operating load by application and sector in the March
2022 Preliminary Analysis, NEMA referred DOE to the MSMA report. (NEMA,
No. 22 at p. 19) As previously described, DOE relied on information
from the MSMA report to characterize average annual operating loads.
DOE did not receive any additional comments related to the
distributions of operating loads developed in the March 2022
Preliminary Analysis and retained the same approach for this NOPR.
DOE did not receive any comments on its approach to determine part-
load losses and retained the same methodology for this NOPR. However,
DOE updated its analysis to account for more recent part-load
efficiency information from 2022 manufacturer catalogs.
DOE seeks data and additional information to characterize ESEM
operating loads.
3. Annual Operating Hours
In the March 2022 Preliminary Analysis, DOE used information from
the MSMA report to establish distributions of motor annual hours of
operation by application for the commercial and industrial sectors. See
section 7.2.5 of the March 2022 Preliminary TSD. The MSMA report
provided average, mean, median, minimum, maximum, and quartile
boundaries for annual operating hours across industrial and commercial
sectors by application and showed no significant difference in average
annual hours of operation between horsepower ranges. DOE used this
information to develop application-specific statistical distributions
of annual operating hours in the commercial and industrial sectors.
For electric motors used in the agricultural sector (which were not
included in the MSMA report), DOE derived statistical distributions of
annual operating hours of irrigation pumps by region using data from
the 2013 Census of Agriculture Farm and Ranch Irrigation Survey.
For ESEMs used in the residential sector (which is a sector that
was not studied in the MSMA report), DOE did not receive any comments
specific to the residential sector. DOE retained the approach used in
the March 2022 Preliminary Analysis and relied on the distributions of
operating hours by application as presented in chapter 7 of the January
2021 Final Determination Technical Support Document pertaining to SEMs.
In response to DOE's requests for feedback regarding distributions
of average annual operating hours by application and sector in the
March 2022 Preliminary Analysis, NEMA referred DOE to the MSMA report.
(NEMA, No. 22 at p. 20) As previously described, DOE relied on
information from the MSMA report to inform its distributions of annual
operating hours in the commercial and industrial sectors. For other
sectors not included in the MSMA report, DOE relied on additional data
sources as previously described. DOE did not receive any additional
comments related to the distributions of operating hours developed in
the March 2022 Preliminary Analysis and retained the same approach for
this NOPR.
DOE requests comment on the distribution of average annual
operating hours by application and sector used to characterize the
variability in energy use for ESEMs.
4. Impact of Electric Motor Speed
Any increase in operating speeds as the efficiency of the motor is
increased could affect the energy saving benefits of more efficient
motors in certain variable torque applications (i.e., fans, pumps, and
compressors) due to the cubic relation between speed and power
requirements (i.e., ``affinity law''). In the March 2022 Preliminary
Analysis, DOE accounted for any changes in the motor's rated speed with
an increase in efficiency levels, for those electric motors that are
currently regulated under 10 CFR 431.25 and for AO-MEMs and for which
the engineering analysis provided speed information by EL. Based on
information from a European motor study,\50\ DOE assumed that 20
percent of consumers with fan, pump, and air compressor applications
would be negatively impacted by higher operating speeds. For other
electric motor categories that it analyzed in the March 2022
Preliminary Analysis, including ESEMs, DOE did not characterize the
motor speed by ELs as part of the engineering analysis and DOE did not
include this impact in the analysis. See section 7.2.2.1 of the March
2022 Preliminary TSD.
---------------------------------------------------------------------------
\50\ ``EuP-LOT-30-Task-7-Jun-2014.Pdf,'' Available at www.eup-
network.de/fileadmin/user_upload/EuP-LOT-30-Task-7-Jun-2014.pdf
(last accessed April 26, 2021). The European motor study estimated,
as a ``worst case scenario,'' that up to 40 percent of consumers
purchasing motors for replacement applications may not see any
decrease or increase in energy use due to this impact and did not
incorporate any change in energy use with increased speed. In
addition, the European motor study also predicts that any energy use
impact will be reduced over time because new motor driven equipment
would be designed to take account of this change in speed.
Therefore, the study did not incorporate this effect in the analysis
(i.e., 0 percent of negatively impacted consumers). In the absence
of additional data to estimate the percentage of consumers that may
be negatively impacted in the compliance year, DOE relied on the
mid-point value of 20 percent.
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[[Page 87093]]
In response to the March 2022 Preliminary Analysis, the Joint
Advocates requested clarifications regarding how DOE accounted for the
impact of the increase motor speed on the energy use, as well as how
motor slip was incorporated into the energy use analysis. (Joint
Advocates, No. 27 at pp. 4-5) \51\
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\51\ The motor slip is the difference between the motor's
synchronous speed and actual speed which is lower than the
synchronous speed). At higher ELs, the speed of a given motor may
increase and the motor slip may decrease.
---------------------------------------------------------------------------
DOE described the method and assumptions used to calculate the
impact of higher speed on energy use in section 7.2.2.1 of the March
2022 Preliminary TSD. In this NOPR, DOE provided additional details on
the methodology and equations used as part of Appendix 7A in the NOPR
TSD.
NEMA commented that nearly 100 percent of fans, pumps and
compressors using ESEMs would be negatively impacted by an increase in
speed. In addition, NEMA commented that it would take up to two years
for OEMs to redesign and recertify an equipment with a motor that has
higher speed and provided an example calculation to illustrate the
impacts of higher speed operation. (NEMA, No. 22 at pp. 20-21, 49)
The Joint Industry Stakeholders commented that DOE should consider
the full impact of higher speed motors by considering new products as
well as replacement. The Joint Industry Stakeholders added that DOE
only incorporated the effect of increased speeds in currently regulated
motors and air-over motors and that this effect should also be
accounted for in ESEMs. The Joint Industry Stakeholders commented that
if lower speed motors are no longer available, appliances may be forced
to incorporate higher speed motors, which may cause short-cycling in
HVAC and refrigeration applications and result in negative impacts in
other appliances. (Joint Industry Stakeholders, No. 23 at pp. 8-9)
In this NOPR, DOE included the effect of increased speeds in the
energy use calculation for all equipment classes. DOE reviewed
information related to pump, fans, and compressor applications driven
by electric motors \52\ and notes that in the commercial land
industrial sectors: (1) 7 to 20 percent of motors used in these
applications are paired with VFDs, which allow the user to adjust the
speed of the motor; \53\ (2) approximately half of fans operate with
belts, which also allow the user to adjust the speed of the driven fan;
\54\ (3) some applications would benefit from increase in speeds as the
work would be completed at a higher load in less operating hours (e.g.,
pump filling water tank faster at increased speed); and (4) not all
fans, pumps and compressors are variable torque loads to which the
affinity laws applies. Therefore, less than 100 percent of motor in
these applications would experience an increase in energy use as a
result of an increase in speed. In addition, as described in the
European motor study, the increase in speed would primarily impact
replacement motors installed in applications that previously operated
with a lower speed motor. For these reasons, DOE has determined that
assuming that 100 percent of fans, pumps and compressors using ESEM
would be negatively impacted by an increase in speed would not be
representative. DOE continues to rely on a 20 percent assumption used
in the March 2022 Preliminary Analysis, based on the European motor
study. In addition, DOE incorporated a sensitivity analysis allowing
the user to consider this effect for three additional scenarios
described in appendix 7-A of the NOPR TSD (i.e., 0 percent, 50 percent
and 100 percent).
---------------------------------------------------------------------------
\52\ DOE did not have data specific to pumps driven by ESEMs and
relied on pump, fans, and compressor applications driven by the
broader category of electric motors.
\53\ See Figure 64 and Figure 71 of the MSMA report.
\54\ See 2016 Fan Notice of Data Availability, 81 FR 75742 (Nov.
1, 2016); LCC spreadsheet, ``LCC sample'' worksheet, ``Belt vs.
direct driven fan distribution'' available at www.regulations.gov/document/EERE-2013-BT-STD-0006-0190.
---------------------------------------------------------------------------
Chapter 7 of the NOPR TSD provides details on DOE's energy use
analysis for ESEMs.
DOE seeks data and additional information to support the analysis
of projected energy use impacts related to any increases in motor
nominal speed.
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
ESEMs. The effect of new 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 equipment over
the life of that equipment, 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 equipment.
[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 equipment 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 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 ESEMs in the absence of new energy
conservation standards. In contrast, the PBP for a given efficiency
level is measured relative to the baseline equipment.
For each considered efficiency level in each equipment class, DOE
calculated the LCC and PBP for a nationally representative set of
consumers. As stated previously, DOE developed consumer samples from
various data sources (see section IV.E.1 of this document). For each
sample consumer, DOE determined the energy consumption for the ESEM and
the appropriate energy price. By developing a representative sample of
consumers, the analysis captured the variability in energy consumption
and energy prices associated with the use of ESEMs.
Inputs to the calculation of total installed cost include the cost
of the equipment--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, equipment lifetimes, and discount rates. DOE created
distributions of values for equipment 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 ESEM consumer samples. The model
calculated the LCC for equipment 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
[[Page 87094]]
level relative to the no-new-standards case efficiency distribution. In
performing an iteration of the Monte Carlo simulation for a given
consumer, equipment efficiency is chosen based on its probability. If
the chosen equipment 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
equipment, DOE avoids overstating the potential benefits from
increasing equipment efficiency. DOE calculated the LCC and PBP for
consumers of ESEMs as if each were to purchase a new equipment in the
first year of required compliance with new standards. DOE used 2029 as
the first year of compliance with any new standards for ESEMs as
discussed in section II.B.3 of this document.
Table IV-7 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 NOPR TSD and its appendices.
Table IV-7--Summary of Inputs and Methods for the LCC and PBP Analysis *
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Equipment Cost.................... Derived by multiplying MPCs by
manufacturer and retailer markups
and sales tax, as appropriate. Used
a constant price trend to project
equipment costs based on historical
data.
Installation Costs................ Assumed no change with efficiency
level other than shipping costs.
Annual Energy Use................. Motor input power multiplied by
annual operating hours per year.
Variability: Primarily based on the
MSMA report, 2018 CBECS, 2018 MECS,
and 2020 RECS.
Energy Prices..................... Electricity: Based on EEI Typical
Bills and Average Rates Reports
data for 2022.
Variability: Regional energy prices
determined for four census regions.
Energy Price Trends............... Based on AEO2023 price projections.
Repair and Maintenance Costs...... Assumed ESEMs are not repaired.
Assumed no change in maintenance
costs with efficiency level.
Equipment Lifetime................ Average: 7.1 years (6.8 to 9.3 years
depending on the equipment class
group and horsepower considered).
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.
Non-residential: Calculated as the
weighted average cost of capital
for entities purchasing electric
motors. Primary data source was
Damodaran Online.
Compliance Date................... 2029.
------------------------------------------------------------------------
* 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 NOPR TSD.
In response to the March 2022 Preliminary Analysis, the Joint
Industry Stakeholders commented that double-regulation has no
corresponding consumer benefits in the form of reduced power
consumption given the appliance regulations being unchanged and the
fact that a more efficient motor does not necessarily translate to a
more efficient product when incorporated into a finished good. The
Joint Industry Stakeholders commented that to potentially increase the
cost of an OEM product, without a corresponding energy savings, would
mean a net loss for consumers and negative national impacts. The Joint
Industry Stakeholders noted that the DOE used operating hours for the
following categories of equipment: air compressors, refrigeration
compressors, fans and blowers, pumps material handling, material
processing, other, and agricultural pumps. Of these, the Joint Industry
Stakeholders noted that electric motors used in air compressors,
refrigeration compressors, fans and blowers, pumps and agricultural
pumps are already regulated to some extent and that DOE made no
apparent effort to account for this and deduct a significant portion of
those estimated hours. (Joint Industry Stakeholders, No. 23 at p. 5)
AHAM and AHRI commented that expanding coverage to special and definite
purpose motors would force manufacturers to incorporate more expensive
motors and increase the cost of appliances and equipment, while not
necessarily improving the energy performance of the finished product
(whether it be a covered product/equipment or not). (AHAM and AHRI, No.
25 at p. 9) Lennox commented that DOE must accurately assess, and avoid
double-counting, energy savings when assessing potential efficiency
improvements from motors used in already-regulated HVAC equipment.
Lennox commented that it is unclear in the LCC and PBP analysis if DOE
accounted for double regulation and eliminated energy savings already
achieved from system-level HVACR regulation. (Lennox, No. 29 at p. 4)
HI commented that there is a potential for duplicate accounting of
energy savings when regulating motors in general. HI stated that, in
addition to the ESEMs, there is a potential for other motor product
efficiencies to be counted twice such as the use of inverter-only
products in pumps when the DOE calculates savings in their evaluations
(one for inverter only motors, and another for pumps using those
motors). (HI, No. 31 at p. 1)
As highlighted in a previous DOE report, motor energy savings
potential and opportunities for higher efficiency electric motors in
commercial and residential equipment would result in overall energy
savings.\55\ In addition, some manufacturers advertise electric motors
as resulting in energy savings in HVAC equipment.\56\ All other
characteristics of the equipment and motor being held constant,
increasing the efficiency of the motor component will increase the
efficiency of the overall equipment.\57\ Therefore, DOE disagrees with
the Joint Industry Stakeholders that an increase in motor efficiency
would not result in a more
[[Page 87095]]
efficient equipment when incorporated into a given equipment. In
addition, DOE's analysis ensures the LCC and NIA analysis do not result
in double-counting of energy savings by accounting for consumers who
already purchase more-efficient products and calculating LCC and energy
savings relative to a no-new standards case efficiency distribution.
See section IV.F.8 of this document. Finally, any future analysis in
support of energy conservation standards for equipment incorporating
motors would also account for equipment that already incorporate more-
efficient electric motors and would not result in any double counting
of energy savings resulting from motor efficiency improvements.
---------------------------------------------------------------------------
\55\ U.S. DOE Building technology Office, Energy Savings
Potential and Opportunities for High-Efficiency Electric Motors in
residential and Commercial Equipment, December 2013. Available at:
www.energy.gov/eere/buildings/downloads/motor-energy-savings-potential-report.
\56\ See, for example, Nidec and ABB: https://acim.nidec.com/motors/usmotors/industry-applications/hvac;bit.ly/3wEIQyu.
\57\ As discussed in section IV.E.4 of this document, DOE
acknowledges that in some cases higher efficiency motors may operate
at higher speeds which could offset some of the expected energy
savings.
---------------------------------------------------------------------------
1. Equipment Cost
To calculate consumer equipment costs, DOE multiplied the MSPs
developed in the engineering analysis by the distribution channel
markups described previously (along with sales taxes). DOE used
different markups for baseline equipment and higher-efficiency
equipment, because DOE applies an incremental markup to the increase in
MSP associated with higher-efficiency equipment.
To project an equipment price trend for electric motors, DOE
obtained historical Producer Price Index (``PPI'') data for integral
horsepower motors and generators manufacturing spanning the time period
1969-2022 and for fractional horsepower motors and generators
manufacturing between 1967-2022 from the Bureau of Labor Statistics
(``BLS'').\58\ The PPI data reflect nominal prices, adjusted for
electric motor quality changes. An inflation-adjusted (deflated) price
index for integral and fractional horsepower motors and generators
manufacturing was calculated by dividing the PPI series by the implicit
price deflator for Gross Domestic Product. The deflated price index for
integral horsepower motors was found to align with the copper, steel
and aluminum deflated price indices. DOE believes that the extent to
how these trends will continue in the future is very uncertain. In
addition, the deflated price index for fractional horsepower motors was
mostly flat during the entire period from 1967 to 2022. Therefore, DOE
relied on a constant price assumption as the default price factor index
to project future electric motor prices.
---------------------------------------------------------------------------
\58\ Series ID PCU3353123353123 and PCU3353123353121 for
integral and fractional horsepower motors and generators
manufacturing, respectively; www.bls.gov/ppi/.
---------------------------------------------------------------------------
DOE did not receive any comments on price trends in response to the
March 2022 Preliminary Analysis and retained the same approach in this
NOPR.
DOE requests data and information regarding the most appropriate
price trend to use to project ESEM prices.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the equipment. Electric motor
installation cost data from 2023 RS Means Electrical Cost Data show a
variation in installation costs according to the motor horsepower (for
three-phase electric motors), but not according to efficiency. DOE
found no evidence that installation costs would be impacted with
increased efficiency levels. Therefore, in the March 2022 Preliminary
Analysis, DOE did not incorporate changes in installation costs for
motors that are more efficient than baseline equipment. DOE assumed
there is no variation in installation costs between a baseline
efficiency motor and a higher efficiency motor except in terms of
shipping costs. These shipping costs were based on weight data from the
engineering analysis for the representative units. See section 8.2.4 of
the March 2022 Preliminary Analysis.
In response to the March 2022 Preliminary Analysis, EASA commented
that if a motor is replaced with a physically larger frame, the
replacement would have higher installation costs because of the added
complexity of modifying the mounting setup to accommodate the larger
motor, and in some case would be impossible. (EASA, No. 21 at pp. 2-3)
As noted in section IV.C.1.c of this document, DOE fixed the frame
size, which remains the same across efficiency levels in the analysis.
Therefore, DOE did not account for any changes in installation costs
due to changes in frame sizes and, in this NOPR, DOE retained the
approach used in the March 2022 Preliminary Analysis and assumed there
is no variation in installation costs between a baseline efficiency
motor and a higher efficiency motor except in terms of shipping costs.
DOE requests comment on whether any of the efficiency levels
considered in this NOPR might lead to an increase in installation
costs, and if so, DOE seeks supporting data regarding the magnitude of
the increased cost per unit for each relevant efficiency level and the
reasons for those differences.
3. Annual Energy Consumption
For each sampled consumer, DOE determined the energy consumption
for an electric motor at different efficiency levels using the approach
described previously in section IV.E of this document.
4. Energy Prices
Because marginal electricity price more accurately captures the
incremental savings associated with a change in energy use from higher
efficiency, it provides a better representation of incremental change
in consumer costs than average electricity prices. Therefore, DOE
applied average electricity prices for the energy use of the equipment
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).\59\ For the non-residential sectors, DOE calculated
electricity prices using the methodology described in Coughlin and
Beraki (2019).\60\
---------------------------------------------------------------------------
\59\ Coughlin, K. and B. Beraki.2018. Residential Electricity
Prices: A Review of Data Sources and Estimation Methods. Lawrence
Berkeley National Lab. Berkeley, CA. Report No. LBNL-2001169.
https://ees.lbl.gov/publications/residential-electricity-prices-review.
\60\ Coughlin, K. and B. Beraki. 2019. Non-residential
Electricity Prices: A Review of Data Sources and Estimation Methods.
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. https://ees.lbl.gov/publications/non-residential-electricity-prices.
---------------------------------------------------------------------------
DOE's methodology allows electricity prices to vary by sector,
region and season. In the analysis, variability in electricity prices
is chosen to be consistent with the way the consumer economic and
energy use characteristics are defined in the LCC analysis. For
electric motors, DOE relied on variability by region and sector. See
chapter 8 of the NOPR TSD for more 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.\61\ To estimate price trends after 2050,
the 2050 prices were held constant.
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\61\ Energy Information Administration. Annual Energy Outlook
2023. Available at www.eia.gov/outlooks/aeo/ (last accessed May 1,
2023).
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[[Page 87096]]
5. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing equipment
components that have failed in an equipment; maintenance costs are
associated with maintaining the operation of the equipment.
In the March 2022 Preliminary Analysis, for the maintenance costs,
DOE did not find data indicating a variation in maintenance costs
between baseline efficiency and higher efficiency motors. The cost of
replacing bearings, which is the most common maintenance practice, is
constant across efficiency levels. Therefore, DOE did not include
maintenance costs in the LCC analysis. See Section 8.3.3 of the March
2022 Preliminary Analysis.
DOE did not receive any comments related to maintenance costs and
retained the same approach in this NOPR.
DOE considers a motor repair as including rewinding and
reconditioning. See section 8.3.3 of the March 2022 Preliminary
Analysis TSD. In the March 2022 Preliminary Analysis, DOE only included
repair costs for units with a horsepower greater than 20 horsepower and
did not consider any repair for the ESEM representative units. See
section 8.3.3 of the March 2022 Preliminary Analysis.
In response to the March 2022 Preliminary Analysis, EASA commented
that the definition of repair must be clear for the purposes of
estimating the number of repairs and should be provided in a separate
``Definitions'' section. (EASA, No. 21 at p. 5) As noted previously,
DOE considers a motor repair as including rewinding and reconditioning
and describes the term in chapter 8 of the NOPR TSD (this was also
described in chapter 8 of the March 2022 Preliminary Analysis). Other
non-rewinding related practices, such as bearing replacement, were
considered as part of the maintenance costs.
DOE did not receive any comments supporting inclusion of repair
costs for ESEMs and, in this NOPR, continued to exclude repair costs
for ESEMs in line with the approach used in the March 2022 Preliminary
Analysis.
DOE requests comment on whether any of the efficiency levels
considered in this NOPR might lead to an increase in maintenance and
repair costs, and if so, DOE seeks supporting data regarding the
magnitude of the increased cost per unit for each relevant efficiency
level and the reasons for those differences.
6. Equipment Lifetime
In the March 2022 Preliminary Analysis, DOE established separate
average mechanical lifetime estimates for single phase and polyphase
ESEMs and AO-ESEMs. DOE then developed Weibull distributions of
mechanical lifetimes (in hours). The lifetime in years for a sampled
electric motor is calculated by dividing the sampled mechanical
lifetime by the sampled annual operating hours of the electric motor.
In addition, DOE considered that ESEMs and AO-ESEMs are typically
embedded in a piece of equipment (i.e., an application). For such
applications, DOE developed Weibull distributions of application
lifetimes expressed in years and compared the sampled motor mechanical
lifetime (in years) with the sampled application lifetime. DOE assumed
that the electric motor would be retired at the earlier of the two
ages. See section 8.3.4 of the March 2022 Preliminary Analysis.
In response to the March 2022 Preliminary Analysis, EASA commented
that the definition of lifetime must be clear and should be provided in
a separate ``Definitions'' section. (EASA, No. 21 at p. 5) In response,
DOE notes that it considers a motor lifetime as the age at which an
equipment is retired from service and describes the term in chapter 8
of the NOPR TSD (this was also described in chapter 8 of the March 2022
Preliminary Analysis).
DOE did not receive any comments regarding ESEMs and AO-ESEMs
lifetimes and continued to apply the same approach in this NOPR as in
the March 2022 Preliminary Analysis.
DOE requests comment on the equipment lifetimes (both in years and
in mechanical hours) used for each representative unit considered in
the LCC and PBP analyses.
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 sector-specific discount rates
for ESEMs based on the opportunity cost of consumer funds.
DOE applies weighted average discount rates calculated from
consumer debt and asset data, rather than marginal or implicit discount
rates.\62\ The LCC analysis estimates net present value over the
lifetime of the equipment, so the appropriate discount rate will
reflect the general opportunity cost of consumer funds, taking this
time scale into account. Given the long-time horizon modeled in the
LCC, the application of a marginal interest rate associated with an
initial source of funds is inaccurate. Regardless of the method of
purchase, consumers are expected to continue to rebalance their debt
and asset holdings over the LCC analysis period, based on the
restrictions consumers face in their debt payment requirements and the
relative size of the interest rates available on debts and assets. DOE
estimates the aggregate impact of this rebalancing using the historical
distribution of debts and assets.
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\62\ The implicit discount rate is inferred from a consumer
purchase decision between two otherwise identical goods with
different first cost and operating cost. It is the interest rate
that equates the increment of first cost to the difference in net
present value of lifetime operating cost, incorporating the
influence of several factors: transaction costs; risk premiums and
response to uncertainty; time preferences; interest rates at which a
consumer is able to borrow or lend. The implicit discount rate is
not appropriate for the LCC analysis because it reflects a range of
factors that influence consumer purchase decisions, rather than the
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------
To establish residential discount rates for the LCC analysis, DOE
identified all relevant household debt or asset classes in order to
approximate a consumer's opportunity cost of funds related to appliance
energy cost savings. It estimated the average percentage shares of the
various types of debt and equity by household income group using data
from the Federal Reserve Board's triennial Survey of Consumer Finances
\63\ (``SCF'') starting in 1995 and ending in 2019. Using the SCF and
other sources, DOE developed a distribution of rates for each type of
debt and asset by income group to represent the rates that may apply in
the year in which the new 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 3.7
percent.
---------------------------------------------------------------------------
\63\ Federal Reserve Board. Survey of Consumer Finances (SCF)
for 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 2019.
---------------------------------------------------------------------------
To establish non-residential discount rates, DOE estimated the
weighted-average cost of capital using data from Damodaran Online.\64\
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
[[Page 87097]]
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 and industrial discount rates are 6.8 percent and
7.3 percent, respectively.
---------------------------------------------------------------------------
\64\ Damodaran, A. Data Page: Historical Returns on Stocks,
Bonds and Bills--United States. 2021. pages.stern.nyu.edu/~adamodar/
(last accessed April 26, 2022).
---------------------------------------------------------------------------
See chapter 8 of the NOPR TSD for further details on the
development of consumer discount rates.
8. Energy Efficiency Distribution in the No-New-Standards Case
To accurately estimate the share of consumers that would be
affected by a potential energy conservation standard at a particular
efficiency level, DOE's LCC analysis considered the projected
distribution (market shares) of equipment efficiencies under the no-
new-standards case (i.e., the case without amended or new energy
conservation standards).
In the March 2022 Preliminary Analysis, DOE relied on model counts
by efficiency from the 2016 and 2020 Manufacturer Catalog Data to
estimate the energy efficiency distribution of electric motors for 2027
and assumed no changes in electric motor efficiency over time. For some
AO-ESEM representative units, DOE did not have enough models with
efficiency information and used the efficiency distributions of the
corresponding non-AO equipment class instead. In the March 2022
Preliminary Analysis, DOE used a Monte Carlo simulation to draw from
the efficiency distributions and randomly assign an efficiency to the
electric motor purchased by each sample household in the no-new-
standards case. The resulting percent shares within the sample match
the market shares in the efficiency distributions. See chapter 8 of the
March 2022 Preliminary TSD.
In response to the March 2022 Preliminary Analysis, NEMA disagreed
with the DOE estimates for ESEM and AO-ESEM efficiency distributions
and commented that these distributions were modeled/estimated, rather
than gathered properly and accurately through testing and other means.
NEMA commented that DOE should not develop estimates and interpolations
and instead finalize test procedures. NEMA added that energy efficiency
information does not exist because Federal test procedures for some of
these motors have not been established. (NEMA, No. 22 at p. 23)
As noted previously, due to the very high volume of combinations of
motor topologies, horsepower, frame sizes, pole counts, speeds, unique
motor construction, and other parameters, DOE has recognized it to be
unrealistic to test every possible motor available in the U.S. market.
In the absence of such data, DOE relied on model counts by efficiency
from manufacturer Catalog Data and updated the data to reflect 2022
catalog offerings (using the 2022 Motor Database). In addition, the
electric motors test procedure finalized in the October 2022 Final Rule
relies on industry test methods published in 2016.\65\ 87 FR 63588. For
ESEMs, DOE believes manufacturers have used, and currently use, these
industry test methods to evaluate the efficiency of electric motors as
reported in their catalogs.
---------------------------------------------------------------------------
\65\ NEMA Standards Publication MG 1-2016, ``Motors and
Generators: Air-Over Motor Efficiency Test Method Section IV Part
34'', www.nema.org/docs/default-source/standards-document-library/part-34-addition-to-mg1-2016-watermarkd91d7834-cf4f-4a87-b86f-bef96b7dad54.pdf?sfvrsn=cbf1386d_3.
---------------------------------------------------------------------------
As previously noted, in the March 2022 Preliminary Analysis, DOE
assumed no changes in electric motor efficiency over time. DOE did not
receive any comment on this assumption and retained the same approach
in this NOPR: to estimate the energy efficiency distribution of
electric motors for 2029, DOE assumed no changes in electric motor
efficiency over time. The estimated market shares for the no-new-
standards case for electric motors are shown in Table IV-8 by equipment
class group and horsepower range.
Table IV-8--No-New Standards Case Efficiency Distributions in the Compliance Year
----------------------------------------------------------------------------------------------------------------
Equipment class group Horsepower range EL0 (%) EL1 (%) EL2 (%) EL3 (%) EL4 (%)
----------------------------------------------------------------------------------------------------------------
ESEM High/Med Torque............ 0.25 <= hp <= 0.50 24.1 43.1 16.2 16.0 0.7
0.5 < hp <= 3..... 37.5 49.1 11.9 1.4 0.1
ESEM Low Torque................. 0.25 hp........... 4.2 16.0 79.9 0.0 0.0
0.25 < hp <= 3.... 41.5 22.0 26.8 9.8 0.0
ESEM Polyphase.................. 0.25 <= hp <= 3... 9.6 23.1 53.3 13.4 0.5
AO-ESEM High/Med Torque......... 0.25 <= hp <= 0.50 26.7 33.3 20.0 6.7 13.3
0.5 < hp <= 3..... 32.4 38.2 17.6 11.8 0.0
AO-ESEM Low Torque.............. 0.25 hp........... 1.8 21.8 58.2 18.2 0.0
0.25 < hp <= 3.... 9.8 26.1 55.4 8.7 0.0
AO-ESEM Polyphase............... 0.25 <= hp <= 3... 37.7 26.0 33.8 2.6 0.0
----------------------------------------------------------------------------------------------------------------
* May not sum to 100% due to rounding.
The LCC Monte Carlo simulations draw from the efficiency
distributions and randomly assign an efficiency to the ESEM 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.
The existence of market failures in the commercial and industrial
sectors is well supported by the economics literature and by a number
of case studies as discussed in the remainder of this section. DOE did
not receive any comments specific to the random assignment of no-new-
standards case efficiencies (sampled from the developed efficiency
distribution) in the LCC model and continued to rely on the same
approach to reflect market failures in the ESEM market, as noted in the
following examples. First, a recognized problem in commercial settings
is the principal-agent problem, where the building owner (or building
developer) selects the equipment and the tenant (or subsequent building
owner) pays for energy costs.66 67 In the case of ESEMs, for
many companies, the energy bills are paid for the company as a whole
and
[[Page 87098]]
not allocated to individual departments. This practice provides
maintenance and engineering staff little incentives to pursue energy
saving investments because the savings in energy bills provide little
benefits to the decision-making maintenance and engineering staff.
(Nadel et al.) \68\ Second, the nature of the organizational structure
and design can influence priorities for capital budgeting, resulting in
choices that do not necessarily maximize profitability.\69\ In the case
of ESEMs, within manufacturing as a whole, motor system energy costs
constitute less than 1 percent of total operating costs and energy
efficiency has a low level of priority among capital investment and
operating objectives. (Xenergy,\70\ Nadel et al.) Third, there are
asymmetric information and other potential market failures in financial
markets in general, which can affect decisions by firms with regard to
their choice among alternative investment options, with energy
efficiency being one such option.\71\ In the case of electric motors,
Xenergy identified the lack of information concerning the nature of
motor system efficiency measures--their benefits, costs, and
implementation procedures--as a principal barrier to their adoption. In
addition, Almeida \72\ reports that the attitude of electric motor end-
user is characterized by bounded rationality where they adopt ``rule of
thumb'' routines because of the complexity of market structure which
makes it difficult for motors end-users to get all the information they
need to make an optimum decision concerning allocation of resources.
The rule of thumb is to buy the same type and brand as the failed motor
from the nearest retailer. Almeida adds that the same problem of
bounded rationality exists when end-users purchase electric motors
incorporated in larger equipment. In general, end-users are only
concerned about the overall performance of a machine, and energy
efficiency is rarely a key factor in this performance. Motor selection
is therefore often left to the OEM, which are not responsible for
energy costs and prioritize price and reliability.
---------------------------------------------------------------------------
\66\ Vernon, D., and Meier, A. (2012). ``Identification and
quantification of principal-agent problems affecting energy
efficiency investments and use decisions in the trucking industry,''
Energy Policy, 49, 266-273.
\67\ Blum, H. and Sathaye, J. (2010). ``Quantitative Analysis of
the Principal-Agent Problem in Commercial Buildings in the U.S.:
Focus on Central Space Heating and Cooling,'' Lawrence Berkeley
National Laboratory, LBNL-3557E. (Available at: escholarship.org/uc/item/6p1525mg) (Last accessed January 20, 2022).
\68\ Nadel, S., R.N. Elliott, M. Shepard, S. Greenberg, G. Katz
& A.T. de Almedia. 2002. Energy-Efficient Motor Systems: A Handbook
on Technology, Program and Policy Opportunities. Washington, DC:
American Council for an Energy-Efficient Economy. Second Edition.
\69\ DeCanio, S.J. (1994). ``Agency and control problems in US
corporations: the case of energy-efficient investment projects,''
Journal of the Economics of Business, 1(1), 105-124.
Stole, L.A., and Zwiebel, J. (1996). ``Organizational design and
technology choice under intrafirm bargaining,'' The American
Economic Review, 195-222.
\70\ Xenergy, Inc. (1998). United States Industrial Electric
Motor Systems Market Opportunity Assessment. (Available at:
www.energy.gov/sites/default/files/2014/04/f15/mtrmkt.pdf) (Last
accessed January 20, 2022).
\71\ Fazzari, S.M., Hubbard, R.G., Petersen, B.C., Blinder,
A.S., and Poterba, J.M. (1988). ``Financing constraints and
corporate investment,'' Brookings Papers on Economic Activity,
1988(1), 141-206.
Cummins, J.G., Hassett, K.A., Hubbard, R.G., Hall, R.E., and
Caballero, R.J. (1994). ``A reconsideration of investment behavior
using tax reforms as natural experiments,'' Brookings Papers on
Economic Activity, 1994(2), 1-74.
DeCanio, S.J., and Watkins, W.E. (1998). ``Investment in energy
efficiency: do the characteristics of firms matter?'' Review of
Economics and Statistics, 80(1), 95-107.
Hubbard R.G. and Kashyap A. (1992). ``Internal Net Worth and the
Investment Process: An Application to U.S. Agriculture,'' Journal of
Political Economy, 100, 506-534.
\72\ de Almeida, E.L.F. (1998). ``Energy efficiency and the
limits of market forces: The example of the electric motor market in
France'', Energy Policy, 26(8), 643-653.
---------------------------------------------------------------------------
See chapter 8 of the NOPR TSD for further information on the
derivation of the efficiency distributions.
DOE seeks information and data to help establish efficiency
distribution in the no-new standards case for ESEMs. DOE requests data
and information on any trends in the electric motor market that could
be used to forecast expected trends in market share by efficiency
levels for each equipment class.
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 equipment, compared to baseline equipment, through energy
cost savings. Payback periods that exceed the life of the equipment
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 equipment 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 an equipment 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.
G. Shipments Analysis
DOE uses projections of annual equipment shipments to calculate the
national impacts of potential new energy conservation standards on
energy use, NPV, and future manufacturer cash flows.\73\ The shipments
model takes an accounting approach, tracking market shares of each
equipment class and the vintage of units in the stock. Stock accounting
uses equipment 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.
---------------------------------------------------------------------------
\73\ 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.
---------------------------------------------------------------------------
First, in the March 2022 Preliminary Analysis, DOE estimated
shipments in the base year (2020). DOE estimated the total shipments of
ESEMs in 2020 to be 28.6 million units (including 7.9 million units of
AO ESEMs). DOE developed a distribution of shipments by equipment class
group and horsepower range based on model counts from the 2020 and
2016/2020 Manufacturer Catalog Data. See chapter 9 of the March 2022
Preliminary Analysis TSD.
DOE did not receive any comments related to the base year shipments
estimates for ESEMs and retained the values estimated in the
preliminary analysis in this NOPR, however, DOE only included motors up
to 3hp, which were in the recommended scope of the December 2022 Joint
Recommendation. For ESEMs (including AO ESEMs), DOE revised the
distribution of shipments by horsepower range based on model counts
from the 2022 Manufacturer Catalog Data.
In the March 2022 Preliminary Analysis, DOE projected shipments for
ESEMs in the no-new standards case under the assumption that long-term
growth of electric motor shipments will be driven the following sector-
specific market drivers from AEO2021: commercial building floor space,
housing numbers, and value of manufacturing activity for the
commercial, residential, and industrial sector, respectively. In
addition, DOE kept the distribution of shipments by
[[Page 87099]]
equipment class group and horsepower range constant across the analysis
period.
In response to the March 2022 Preliminary Analysis, NEMA commented
that legacy induction motors are being replaced by PDS (or power drive
systems) consisting of a motor and controls/drives as a means to
dramatically reduce power and integrate motor driven systems into
sophisticated control schemes that continuously monitor processes
managing flow, pressure, etc., to reduce operating costs and emissions.
(NEMA, No. 22 at p. 23) In the case of ESEMs, DOE agrees with NEMA that
some ESEMs could be replaced by non-induction motors such as ECMs.
However, DOE does not have sufficient data to quantify the magnitude of
such substitution, which could result in lower ESEM shipments. Instead,
DOE established two additional shipments sensitivity scenario to
account for the impacts of lower/higher ESEMs shipments estimates.
DOE did not receive any other comments specific to ESEM shipments
projections and retained the same methodology as in the March 2022
Preliminary Analysis in this NOPR and revised the projections based on
AEO2023.
DOE requests comment and additional data on its 2020 shipments
estimates for ESEMs. DOE seeks comment on the methodology used to
project future shipments of ESEMs. DOE seeks information on other data
sources that can be used to estimate future shipments.
H. National Impact Analysis
The NIA assesses the NES and the NPV from a national perspective of
total consumer costs and savings that would be expected to result from
new standards at specific efficiency levels.\74\ (``Consumer'' in this
context refers to consumers of the equipment being regulated.) DOE
calculates the NES and NPV for the potential standard levels considered
based on projections of annual equipment 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 ESEMs sold from 2029 through
2058.
---------------------------------------------------------------------------
\74\ The NIA accounts for impacts in the 50 states and U.S.
territories.
---------------------------------------------------------------------------
DOE evaluates the impacts of new 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
equipment class in the absence of new energy conservation standards.
For this projection, DOE considers any 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 equipment class if DOE adopted new
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 equipment
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-9 summarizes the inputs and methods DOE used for the NIA
analysis for the NOPR. Discussion of these inputs and methods follows
the table. See chapter 10 of the NOPR TSD for further details.
Table IV-9--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments......................... Annual shipments from shipments
model.
Compliance Date of Standard....... 2029.
Efficiency Trends................. No-new-standards case: constant
trend.
Standards cases: constant trend.
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. (constant trend).
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 Maintenance costs: No change with
Unit. efficiency level.
Repair costs: No repair.
Energy Price Trends............... AEO2023 projections (to 2050) and
held constant thereafter.
Energy Site-to-Primary and FFC A time-series conversion factor
Conversion. based on AEO2023.
Discount Rate..................... Three and seven percent.
Present Year...................... 2024.
------------------------------------------------------------------------
1. Equipment Efficiency Trends
A key component of the NIA is the trend in energy efficiency
projected for the no-new-standards case and each of the standards
cases. Section IV.F.8 of this document describes how DOE developed an
energy efficiency distribution for the no-new-standards case (which
yields a shipment-weighted average efficiency) for each of the
considered equipment classes for the year of anticipated compliance
with a new standard. To project the trend in efficiency absent new
standards for ESEMs and AO-ESEMs over the entire shipments projection
period, DOE applied a constant trend, similar to what was done in the
March 2022 Preliminary Analysis. The approach is further described in
chapter 10 of the NOPR 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 (2029). In this scenario, the market
shares of equipment 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.
[[Page 87100]]
To develop standards case efficiency trends after 2029, DOE assumed
no change over the forecast period.
DOE did not receive any comments on the projected efficiency trends
in response to the March 2022 Preliminary Analysis and retained the
same approach in this NOPR.
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 energy
conservation standards. DOE calculated the national energy consumption
by multiplying the number of units (stock) of each equipment (by
vintage or age) by the unit energy consumption (also by vintage). DOE
calculated annual NES based on the difference in national energy
consumption for the no-new-standards case and for each higher
efficiency standard case. DOE estimated energy consumption and savings
based on site energy and converted the electricity consumption and
savings to primary energy (i.e., the energy consumed by power plants to
generate site electricity) using annual conversion factors derived from
AEO2023. Cumulative energy savings are the sum of the NES for each year
over the timeframe of the analysis.
Use of higher-efficiency equipment is sometimes associated with a
direct rebound effect, which refers to an increase in utilization of
the equipment due to the increase in efficiency. In the March 2022
Preliminary Analysis, DOE requested comment and data regarding the
potential increase in utilization of electric motors due to any
increase in efficiency. See section 2.10.1 of the March 2022
Preliminary TSD. DOE did not find any data on the rebound effect
specific to electric motors \75\ and did not receive any comments
supporting the inclusion of a rebound effect for ESEMs and AO-ESEMs.
Therefore, DOE did not apply a rebound effect for ESEMs and AO-ESEMs.
---------------------------------------------------------------------------
\75\ See, e.g., 86 FR 36111 for further discussion regarding
DOE's explanation and findings regarding rebound effect for electric
motors, broadly.
---------------------------------------------------------------------------
In 2011, in response to the recommendations of a committee on
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy
Efficiency Standards'' appointed by the National Academy of Sciences,
DOE announced its intention to use FFC measures of energy use and
greenhouse gas and other emissions in the national impact analyses and
emissions analyses included in future energy conservation standards
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the
approaches discussed in the August 18, 2011 notice, DOE published a
statement of amended policy in which DOE explained its determination
that EIA's National Energy Modeling System (``NEMS'') is the most
appropriate tool for its FFC analysis and its intention to use NEMS for
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain,
multi-sector, partial equilibrium model of the U.S. energy sector \76\
that EIA uses to prepare its Annual Energy Outlook. The FFC factors
incorporate losses in production and delivery in the case of natural
gas (including fugitive emissions) and additional energy used to
produce and deliver the various fuels used by power plants. The
approach used for deriving FFC measures of energy use and emissions is
described in appendix 10B of the NOPR TSD.
---------------------------------------------------------------------------
\76\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009.
Available at www.eia.gov/forecasts/aeo/index.cfm (last accessed 5/1/
2023).
---------------------------------------------------------------------------
3. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers are (1) total annual installed cost, (2) total
annual operating costs (energy costs and repair and maintenance costs),
and (3) a discount factor to calculate the present value of costs and
savings. DOE calculates net savings each year as the difference between
the no-new-standards case and each standards case in terms of total
savings in operating costs versus total increases in installed costs.
DOE calculates operating cost savings over the lifetime of each
equipment shipped during the projection period.
As discussed in section IV.F.1 of this document, DOE developed
constant ESEM price trends based on historical PPI data. DOE applied
the same trends to project prices for each equipment class at each
considered efficiency level. DOE's projection of equipment prices is
described in appendix 10C of the NOPR TSD.
To evaluate the effect of uncertainty regarding the price trend
estimates, DOE investigated the impact of different equipment price
projections on the consumer NPV for the considered TSLs for ESEMs. In
addition to the default price trend, DOE considered two equipment 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 NOPR 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
AEO2023, which has an end year of 2050. To estimate price trends after
2050, the 2050 value was used for all years. As part of the NIA, DOE
also analyzed scenarios that used inputs from variants of the AEO2023
Reference case that have lower and higher economic growth. Those cases
have lower and higher energy price trends compared to the Reference
case. NIA results based on these cases are presented in appendix 10C of
the NOPR TSD.
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent
and a 7-percent real discount rate. DOE uses these discount rates in
accordance with guidance provided by the Office of Management and
Budget (``OMB'') to Federal agencies on the development of regulatory
analysis.\77\ 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.
---------------------------------------------------------------------------
\77\ 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 May 1, 2023).
---------------------------------------------------------------------------
DOE requests comment and data regarding the potential increase in
utilization of electric motors due to any increase in efficiency
(``rebound effect'').
I. Consumer Subgroup Analysis
In analyzing the potential impact of new energy conservation
standards on consumers, DOE evaluates the impact on identifiable
subgroups of consumers that may be disproportionately affected by a new
national standard. The purpose of a subgroup analysis is to determine
the extent of any such
[[Page 87101]]
disproportional impacts. DOE evaluates impacts on particular subgroups
of consumers by analyzing the LCC impacts and PBP for those particular
consumers from alternative standard levels. For this NOPR, DOE analyzed
the impacts of the considered standard levels on three subgroups: (1)
low-income households (for ESEMs used in the residential sector); (2)
senior-only households (for ESEMs used in the residential sector); and
(3) small-businesses. The analysis used subsets of the RECS 2020 sample
composed of households that meet the criteria for the low-income and
senior-only household subgroups. For small-businesses subgroup, DOE
used the same sample of consumers but with subgroup-specific inputs.
DOE determined the impact on the electric motors subgroups using the
same LCC model, which is used for all consumers, but with subgroup-
specific inputs as applicable.
In response to the March 2022 Preliminary Analysis, AHAM and AHRI
commented that a forced redesign of motors used in finished goods will
force changes by the OEM. AHAM and AHRI commented that this would be
particularly damaging for small appliances and floor care products,
which use special purpose motors and are sensitive to even small
increases in component part costs. AHAM and AHRI commented that the
increased cost could make some appliances and equipment too costly for
low-income consumers to purchase and delay purchases of more efficient
appliances and equipment for middle-income consumers. (AHAM and AHRI,
No. 25 at pp. 9-10) In response to these comments, DOE performed a
subgroup analysis for low-income consumers showing these consumers
would not be disproportionately impacted. See section V.B.1.b of this
document.
Chapter 11 in the NOPR TSD describes the consumer subgroup
analysis.
DOE requests comment and data on the overall methodology used for
the consumer subgroup analysis. DOE requests comment on whether
additional consumer subgroups may be disproportionately affected by a
new standard and warrant additional analysis in the final rule.
J. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the financial impacts of new
energy conservation standards on manufacturers of ESEMs 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 manufacturer
subgroups, including small business manufacturers.
The quantitative part of the MIA primarily relies on the GRIM, an
industry cash flow model with inputs specific to this proposed
rulemaking. The key GRIM inputs include data on the industry cost
structure, unit production costs, equipment shipments, manufacturer
markups, and investments in R&D and manufacturing capital required to
produce compliant products. The key GRIM outputs are the INPV, which is
the sum of industry annual cash flows over the analysis period,
discounted using the industry-weighted average cost of capital, and the
impact to domestic manufacturing employment. The model uses standard
accounting principles to estimate the impacts of energy conservation
standards on a given industry by comparing changes in INPV and domestic
manufacturing employment between a no-new-standards case and the
various standards cases (i.e., TSLs). To capture the uncertainty
relating to manufacturer pricing strategies following new 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 NOPR TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase
1 of the MIA, DOE prepared a profile of the ESEMs manufacturing
industry based on the market and technology assessment, preliminary
manufacturer interviews, and publicly-available information. This
included a top-down analysis of ESEM 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 ESEM manufacturing industry, including
company filings of form 10-K from the SEC, corporate annual
reports,\78\ the U.S. Census Bureau's Economic Census,\79\ and reports
from D&B Hoovers.\80\
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\78\ See www.sec.gov/edgar.
\79\ See www.census.gov/programs-surveys/asm/data/tables.html.
\80\ See app.avention.com.
---------------------------------------------------------------------------
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 ESEMs 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
[[Page 87102]]
small business manufacturers, low-volume manufacturers, niche players,
and/or manufacturers exhibiting a cost structure that largely differs
from the industry average. DOE identified one subgroup for a separate
impact analysis: small business manufacturers. The small business
subgroup is discussed in section VI.B, ``Review under the Regulatory
Flexibility Act'', of this document and in chapter 12 of the NOPR 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, 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 standard. The GRIM spreadsheet uses the
inputs to arrive at a series of annual cash flows, beginning in 2024
(the base year of the analysis) and continuing to 2058. DOE calculated
INPVs by summing the stream of annual discounted cash flows during this
period. For manufacturers of ESEMs, DOE initially estimated a real
discount rate of 9.1 percent, which was the real discount rate used in
the previous medium electric motors final rule that published on May
29, 2014 (``May 2014 Electric Motors Final Rule''). 79 FR 30934, 30938.
DOE then asked for feedback on this value during manufacturer
interviews. Manufacturers agreed this was still an appropriate value to
use. Therefore, DOE used a real discount rate of 9.1 percent for the
analysis in this NOPR.
The GRIM calculates cash flows using standard accounting principles
and compares changes in INPV between the no-new-standards case and each
standards case. The difference in INPV between the no-new-standards
case and a standards case represents the financial impact of new 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 NOPR 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 conducted the engineering analysis using a combination of
physical teardowns and software modeling. DOE contracted a professional
motor laboratory to disassemble various ESEMs and record what types of
materials were present and how much of each material was present,
recorded in a final BOM. To supplement the physical teardowns, software
modeling by a subject matter expert was also used to generate BOMs for
select efficiency levels of directly analyzed representative units.
For a complete description of the MPCs, see chapter 5 of the NOPR
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 2058 (the end year of
the analysis period). See chapter 9 of the NOPR 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 calculated the product and capital conversion costs using a
bottom-up approach based on feedback from manufacturers during
manufacturer interviews. During manufacturer interviews, DOE asked
manufacturers questions regarding the estimated equipment and capital
conversion costs needed to produce ESEMs within an equipment class at
each specific EL. DOE used the feedback provided by manufacturers to
estimate the approximate amount of engineering time, testing costs, and
capital equipment that would need to be purchased in order to redesign
a single frame size for each EL. Some of the types of capital
conversion costs manufacturers identified were the purchase of
lamination die sets, winding machines, frame casts, and assembly
equipment as well as other retooling costs. The two main types of
product conversion costs manufacturers shared with DOE during
interviews were the number of engineer hours necessary to re-engineer
frames to meet higher efficiency standards and the testing costs,
including thermal protection testing, to comply with higher efficiency
standards.
DOE then took average values (i.e., costs or number of hours) based
on the range of responses given by manufacturers to calculate both the
equipment and capital conversion cost necessary for a manufacturer to
increase the efficiency of one frame size to a specific EL. DOE
multiplied the conversion costs associated with manufacturing a single
frame size at each EL by the number of frames each interviewed
manufacturer produces. DOE finally scaled this number based on the
market share of the manufacturers DOE interviewed to arrive at an
industry-wide bottom-up product and capital conversion cost estimate
for each representative unit at each EL.
In response to the March 2022 Preliminary Analysis, the Joint
Industry Stakeholders and Lennox commented that there may be instances
where substitution of a newer, larger, heavier, faster ESEM is
feasible, but that it was not reasonable to assume this is always the
case. The Joint Industry Stakeholders and Lennox added that OEM
companies would be forced to expend significant resources seeking
retrofit and repair options for recently purchased end-use OEM goods to
account for unnecessary motor subcomponent changes. (Joint Industry
Stakeholders, No. 23 at pp. 5-6; Lennox, No. 29 at p. 5) The Joint
Industry
[[Page 87103]]
Stakeholders added that this could particularly impact small
businesses. (Joint Industry Stakeholders, No. 23 at p. 5-6) The Joint
Stakeholder also commented that while OEM manufacturers would likely
redesign product, and incur a cost to do so, to avoid issues resulting
from new motors, there may not be suitable replacement motors, which
are immediately available due to DOE's proposed certification
requirements, limiting approvals to a few third-party labs. The Joint
Stakeholder added that these costs need to be accounted for in DOE's
analysis. (Id. at p. 8)
In this NOPR, as noted in section IV.C.1 of this document, DOE
assumes higher efficiency levels can be reached without resulting in
any significant size increase and without changing the key electrical
and mechanical characteristics of the motor. Therefore, DOE disagrees
with the Joint Stakeholders and Lennox that the higher efficiency
levels would force OEMs to redesign their equipment and result in
redesign and re-tooling costs.
As previously discussed, DOE revised the March 2022 Preliminary
Analysis to account for space-constrained and non-space constrained
motor designs, which will continue to provide repair options to
consumers. As stated in the December 2022 Joint Recommendation, motor
manufacturers believe that efficiency levels higher than EL 2 could
result in significant increases in the physical size of certain motors.
(Electric Motors Working Group, No. 38 at p. 4) As part of the
engineering analysis, DOE models representative units that are able to
meet the efficiency requirements of EL 2 and below that would not
result in a significantly increase in the physical size of the ESEMs.
For ELs higher than EL 2 (i.e., EL 3 and EL 4), DOE recognizes that
ESEMs may significantly increase in physical size in order to meet
those higher efficiency requirements. DOE also recognizes that this may
result in a significant disruption to the OEM markets that used ESEMs
as an embedded product. In addition, as discussed in section IV.C.3 of
this document, DOE accounted for the impacts of any potential changes
in speeds at higher efficiency levels.
In response to the March 2022 Preliminary Analysis, NEMA stated
that many ESEMs have agency listings for thermal protection and any
redesign of the motor will require retesting with the respective
agencies. NEMA commented additionally that the time needed to complete
this testing should be considered when setting the compliance date of
any ESEM energy conservation standards, and that the cost associated
with this agency testing must be accounted for in the cost analysis.
(NEMA, No. 22 at pp. 3, 17) As previously stated in this section, DOE
accounted for additional thermal protection testing in addition to the
costs associated with redesigning each ESEM model as part of the
product conversion costs. These product conversion costs, in addition
to the capital conversion costs, are included when calculating the
potential change in manufacturer INPV.
NEMA also commented that DOE must capture the OEM impacts in terms
of costs of redesigning and retooling. NEMA noted that these costs will
have a very wide variation: some will involve a few hours' worth of
work while others could require several hundred hours plus material and
recertification to regulating bodies and safety testers. NEMA commented
further that single phase (and some small three phase) motors with
agency certified overload protection will need several years to be
recertified. In addition, NEMA noted that DOE should capture the
installation cost impacts on end-users trying to repair appliances with
larger, heavier, or faster replacement motors built to meet new
standards. (NEMA, No. 22 at p. 21)
In response to these comments and as noted in section IV.F of this
document, DOE determined that the installation costs for ESEMs would
not change at higher efficiency levels compared to the baseline as DOE
is maintaining the frame size of ESEMs constant across all efficiency
levels analyzed. DOE is further limiting the stack length to be no
greater than 20 percent longer than the baseline unit for that
representative unit. In addition, as noted in section IV.C.3 of this
document, the speed of the ESEMs across efficiency levels did not
always increase with increasing efficiency and DOE accounted for speed
variations in its energy use analysis (see section IV.E.4 of this
document for more details).
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 new standards. 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 NOPR TSD.
d. Manufacturer Markup Scenarios
MSPs include direct manufacturing production costs (i.e., labor,
materials, and overhead estimated in DOE's MPCs) and all non-production
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate
the MSPs in the GRIM, DOE applied non-production cost markups to the
MPCs estimated in the engineering analysis for each equipment class and
efficiency level. Modifying these markups in the standards case yields
different sets of impacts on manufacturers. For the MIA, DOE modeled
two standards-case markup scenarios to represent uncertainty regarding
the potential impacts on prices and profitability for manufacturers
following the implementation of new energy conservation standards: (1)
a preservation of gross margin scenario; and (2) a preservation of
operating profit scenario. These scenarios lead to different markup
values that, when applied to the MPCs, result in varying revenue and
cash flow impacts.
Under the preservation of gross margin 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 initially estimated a
manufacturer markup of 1.37 for all ESEMs covered by this rulemaking in
the no-new-standards case, which was the manufacturer markup for medium
electric motors under 5 hp used in the May 2014 Electric Motors Final
Rule. 79 FR 30934, 30938. DOE then asked for feedback on this
manufacturer markup during manufacturer interviews. Manufacturers
agreed this was an appropriate manufacturer markup to use for ESEMs
covered by this rulemaking. Therefore, DOE used this same manufacturer
markup of 1.37 for all equipment classes and ELs at each TSL (i.e., the
standards cases) in the preservation of gross margin scenario. This
manufacturer markup scenario represents the upper-bound of manufacturer
INPV and is the manufacturer markup scenario used to calculate the
economic impacts on consumers.
Under the preservation of operating profit scenario, DOE modeled a
situation in which manufacturers are not able to increase per-unit
operating profit in proportion to increases in MPCs. Under this
scenario, as MPCs increase, manufacturers reduce their manufacturer
margins to maintain a cost competitive offering in the market. However,
in this scenario manufacturers maintain their total operating profit in
absolute dollars in the standards case, despite higher product costs
and investment. Therefore, gross margin (as a percentage) shrinks in
the standards cases for this manufacturer markup
[[Page 87104]]
scenario. 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 markup
scenarios is presented in section V.B.2.a of this document.
3. Manufacturer Interviews
DOE conducted additional interviews with manufacturers following
the publication of the March 2022 Preliminary TSD in preparation for
this analysis. In interviews, DOE asked manufacturers to describe their
major concerns regarding this rulemaking. The following section
highlights manufacturer concerns that helped inform the projected
potential impacts of new standards on the industry. Manufacturer
interviews are conducted under NDAs, so DOE does not document these
discussions in the same way that it does public comments in the comment
summaries and DOE's responses throughout the rest of this document.
During these interviews, most manufacturers stated that they were
concerned that if energy conservation standards were set at the higher
ELs, ESEM manufacturers may have to increase the size and footprint of
potentially non-compliant ESEM models to meet these higher ELs. While
ESEM manufacturers stated it is possible for them to meet higher ELs by
increasing the size or footprint of their ESEMs, many of the ESEMs that
they manufacture are embedded or incorporated in another product or
equipment. They further stated that several of these products or
equipment with embedded ESEMs are not able to accommodate a larger
ESEMs into these space-constrained products or equipment.
As previously discussed, DOE revised the engineering analysis for
this NOPR based on comments from the December 2022 Joint
Recommendation, to assume that ESEMs at EL 2 or below would not result
in a significant increase in physical size. (See Electric Motors
Working Group, No. 38 at p. 4) For ELs higher than EL 2 (i.e., EL 3 and
EL 4), DOE recognizes that ESEMs may significantly increase in physical
size in order to meet those higher efficiency requirements. DOE also
recognizes that this may result in a significant disruption to the OEM
market that used ESEMs as an embedded product.
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 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 NOPR TSD. The analysis presented in this notice
uses projections from AEO2023. Power sector emissions of CH4
and N2O from fuel combustion are estimated using Emission
Factors for Greenhouse Gas Inventories published by the EPA.\81\
---------------------------------------------------------------------------
\81\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12,
2021).
---------------------------------------------------------------------------
FFC upstream emissions, which include emissions from fuel
combustion during extraction, processing, and transportation of fuels,
and ``fugitive'' emissions (direct leakage to the atmosphere) of
CH4 and CO2, are estimated based on the
methodology described in chapter 15 of the NOPR 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. AEO2023 reflects, to the extent
possible, laws and regulations adopted through mid-November 2022,
including the emissions control programs discussed in the following
paragraphs the emissions control programs discussed in the following
paragraphs, and the Inflation Reduction Act.\82\
---------------------------------------------------------------------------
\82\ For further information, see the Assumptions to AEO2023
report that sets forth the major assumptions used to generate the
projections in the Annual Energy Outlook. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed May 1, 2023).
---------------------------------------------------------------------------
SO2 emissions from affected electric generating units
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions
cap on SO2 for affected EGUs in the 48 contiguous States and
the District of Columbia (``DC''). (42 U.S.C. 7651 et seq.)
SO2 emissions from numerous States in the eastern half of
the United States are also limited under the Cross-State Air Pollution
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these
states to reduce certain emissions, including annual SO2
emissions, and went into effect as of January 1, 2015.\83\ The AEO
incorporates implementation of CSAPR, including the update to the CSAPR
ozone season program emission budgets and target dates issued in 2016.
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among
EGUs and is enforced through the use of tradable emissions allowances.
Under existing EPA regulations, for states subject to SO2
emissions limits under CSAPR, any excess SO2 emissions
allowances resulting from the lower electricity demand caused by the
adoption of an efficiency standard could be used to permit offsetting
increases in SO2 emissions by another regulated EGU.
---------------------------------------------------------------------------
\83\ CSAPR requires states to address annual emissions of
SO2 and NOX, precursors to the formation of
fine particulate matter (``PM2.5'') pollution, in order
to address the interstate transport of pollution with respect to the
1997 and 2006 PM2.5 National Ambient Air Quality
Standards (``NAAQS''). CSAPR also requires certain states to address
the ozone season (May-September) emissions of NOX, a
precursor to the formation of ozone pollution, in order to address
the interstate transport of ozone pollution with respect to the 1997
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a
supplemental rule that included an additional five states in the
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011)
(Supplemental Rule), and EPA issued the CSAPR Update for the 2008
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
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However, beginning in 2016, SO2 emissions began to fall
as a result of the Mercury and Air Toxics Standards (``MATS'') for
power plants.\84\ 77 FR 9304 (Feb. 16, 2012). The final rule
establishes power plant emission standards for mercury, acid gases, and
non-mercury metallic toxic pollutants. Because of the emissions
reductions under the MATS, it is unlikely that excess SO2
emissions allowances resulting from the lower electricity demand would
be needed or used to
[[Page 87105]]
permit offsetting increases in SO2 emissions by another
regulated EGU. Therefore, energy conservation standards that decrease
electricity generation will generally reduce SO2 emissions.
DOE estimated SO2 emissions reduction using emissions
factors based on AEO2023.
---------------------------------------------------------------------------
\84\ In order to continue operating, coal power plants must have
either flue gas desulfurization or dry sorbent injection systems
installed. Both technologies, which are used to reduce acid gas
emissions, also reduce SO2 emissions.
---------------------------------------------------------------------------
CSAPR also established limits on NOX emissions for
numerous states in the eastern half of the United States. Energy
conservation standards would have little effect on NOX
emissions in those states covered by CSAPR emissions limits if excess
NOX emissions allowances resulting from the lower
electricity demand could be used to permit offsetting increases in
NOX emissions from other EGUs. In such case, NOX
emissions would remain near the limit even if electricity generation
goes down. Depending on the configuration of the power sector in the
different regions and the need for allowances, however, NOX
emissions might not remain at the limit in the case of lower
electricity demand. That would mean that standards might reduce
NOX emissions in covered states. Despite this possibility,
DOE has chosen to be conservative in its analysis and has maintained
the assumption that standards will not reduce NOX emissions
in states covered by CSAPR. Standards would be expected to reduce
NOX emissions in the states not covered by CSAPR. DOE used
AEO2023 data to derive NOX emissions factors for the group
of states not covered by CSAPR.
The MATS limit mercury emissions from power plants, but they do not
include emissions caps and, as such, DOE's energy conservation
standards would be expected to slightly reduce Hg emissions. DOE
estimated mercury emissions reduction using emissions factors based on
AEO2023, which incorporates the MATS.
L. Monetizing Emissions Impacts
As part of the development of this NOPR, 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 equipment 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 NOPR.
To monetize the benefits of reducing GHG emissions, this analysis
uses the interim estimates presented in the Technical Support Document:
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates
Under Executive Order 13990 published in February 2021 by the IWG.
1. Monetization of Greenhouse Gas Emissions
DOE estimates the monetized benefits of the reductions in emissions
of CO2, CH4, and N2O by using a
measure of the SC of each pollutant (e.g., SC-CO2). These
estimates represent the monetary value of the net harm to society
associated with a marginal increase in emissions of these pollutants in
a given year, or the benefit of avoiding that increase. These estimates
are intended to include (but are not limited to) climate-change-related
changes in net agricultural productivity, human health, property
damages from increased flood risk, disruption of energy systems, risk
of conflict, environmental migration, and the value of ecosystem
services.
DOE exercises its own judgment in presenting monetized climate
benefits as recommended by applicable Executive orders, and DOE would
reach the same conclusion presented in this NOPR in the absence of the
social cost of greenhouse gases. That is, the social costs of
greenhouse gases, whether measured using the February 2021 interim
estimates presented by the Interagency Working Group on the Social Cost
of Greenhouse Gases or by another means, did not affect this NOPR by
DOE.
DOE estimated the global social benefits of CO2,
CH4, and N2O reductions using SC-GHG values that
were based on the interim values presented in the Technical Support
Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates under Executive Order 13990, published in February 2021 by
the IWG. (``February 2021 SC-GHG TSD'') 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, reflect the societal value of reducing emissions
of the gas in question by one metric ton. The SC-GHGs is the
theoretically appropriate value to use in conducting benefit-cost
analyses of policies that affect CO2, N2O and
CH4 emissions. As a member of the IWG involved in the
development of the February 2021 SC-GHG TSD, DOE agrees that the
interim SC-GHG estimates represent the most appropriate estimate of the
SC-GHG until revised estimates have been developed reflecting the
latest, peer-reviewed science.
The SC-GHGs estimates presented here were developed over many
years, using transparent process, peer-reviewed methodologies, the best
science available at the time of that process, and with input from the
public. Specifically, in 2009, the IWG, that included the DOE and other
executive branch agencies and offices was established to ensure that
agencies were using the best available science and to promote
consistency in the social cost of carbon (``SC-CO2'') values
used across agencies. The IWG published SC-CO2 estimates in
2010 that were developed from an ensemble of three widely cited
integrated assessment models (``IAMs'') that estimate global climate
damages using highly aggregated representations of climate processes
and the global economy combined into a single modeling framework. The
three IAMs were run using a common set of input assumptions in each
model for future population, economic, and CO2 emissions
growth, as well as equilibrium climate sensitivity--a measure of the
globally averaged temperature response to increased atmospheric
CO2 concentrations. These estimates were updated in 2013
based on new versions of each IAM. In August 2016 the IWG published
estimates of the social cost of methane (``SC-CH4'') and
nitrous oxide (``SC-N2O'') using methodologies that are
consistent with the methodology underlying the SC-CO2
estimates. The modeling approach that extends the IWG SC-CO2
methodology to non-CO2 GHGs has undergone multiple stages of
peer review. The SC-CH4 and SC-N2O estimates were
developed by Marten et al.\85\ 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
[[Page 87106]]
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.\86\
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.
---------------------------------------------------------------------------
\85\ 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.
\86\ 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.
https://nap.nationalacademies.org/catalog/24651/valuing-climate-damages-updating-estimation-of-the-social-cost-of.
---------------------------------------------------------------------------
On January 20, 2021, President Biden issued Executive Order 13990,
which re-established the IWG and directed it to ensure that the U.S.
Government's estimates of the social cost of carbon and other
greenhouse gases reflect the best available science and the
recommendations of in the National Academies 2017 report. The IWG was
tasked with first reviewing the SC-GHG estimates currently used in
Federal analyses and publishing interim estimates within 30 days of the
E.O. that reflect the full impact of GHG emissions, including by taking
global damages into account. The interim SC-GHG estimates published in
February 2021 are used here to estimate the climate benefits for this
proposed rulemaking. The E.O. instructs the IWG to undertake a fuller
update of the SC-GHG estimates that takes into consideration the advice
in the National Academies 2017 report and other recent scientific
literature. The February 2021 SC-GHG TSD provides a complete discussion
of the IWG's initial review conducted under E.O. 13990. In particular,
the IWG found that the SC-GHG estimates used under E.O. 13783 fail to
reflect the full impact of GHG emissions in multiple ways.
First, the IWG found that the SC-GHG estimates used under E.O.
13783 fail to fully capture many climate impacts that affect the
welfare of U.S. citizens and residents, and those impacts are better
reflected by global measures of the SC-GHG. Examples of omitted effects
from the E.O. 13783 estimates include direct effects on U.S. citizens,
assets, and investments located abroad, supply chains, U.S. military
assets and interests abroad, and tourism, and spillover pathways such
as economic and political destabilization and global migration that can
lead to adverse impacts on U.S. national security, public health, and
humanitarian concerns. In addition, assessing the benefits of U.S. GHG
mitigation activities requires consideration of how those actions may
affect mitigation activities by other countries, as those international
mitigation actions will provide a benefit to U.S. citizens and
residents by mitigating climate impacts that affect U.S. citizens and
residents. A wide range of scientific and economic experts have
emphasized the issue of reciprocity as support for considering global
damages of GHG emissions. If the United States does not consider
impacts on other countries, it is difficult to convince other countries
to consider the impacts of their emissions on the United States. The
only way to achieve an efficient allocation of resources for emissions
reduction on a global basis--and so benefit the U.S. and its citizens--
is for all countries to base their policies on global estimates of
damages. As a member of the IWG involved in the development of the
February 2021 SC-GHG TSD, DOE agrees with this assessment and,
therefore, in this NOPR, 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 SC-GHG 2021 TSD,
existing estimates are both incomplete and an underestimate of total
damages that accrue to the citizens and residents of the U.S. because
they do not fully capture the regional interactions and spillovers
discussed above, nor do they include all of the important physical,
ecological, and economic impacts of climate change recognized in the
climate change literature. As noted in the February 2021 SC-GHG TSD,
the IWG will continue to review developments in the literature,
including more robust methodologies for estimating a U.S.-specific SC-
GHG value, and explore ways to better inform the public of the full
range of carbon impacts. As a member of the IWG, DOE will continue to
follow developments in the literature pertaining to this issue.
Second, the IWG found that the use of the social rate of return on
capital (7 percent under current OMB Circular A-4 guidance) to discount
the future benefits of reducing GHG emissions inappropriately
underestimates the impacts of climate change for the purposes of
estimating the SC-GHG. Consistent with the findings of the National
Academies 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,\87\ and recommended that
discount rate uncertainty and relevant aspects of intergenerational
ethical considerations be accounted for in selecting future discount
rates.
---------------------------------------------------------------------------
\87\ 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.
www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf (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
[[Page 87107]]
that while OMB Circular A-4, as published in 2003, recommends using 3%
and 7% discount rates as ``default'' values, Circular A-4 also reminds
agencies that ``different regulations may call for different emphases
in the analysis, depending on the nature and complexity of the
regulatory issues and the sensitivity of the benefit and cost estimates
to the key assumptions.'' On discounting, Circular A-4 recognizes that
``special ethical considerations arise when comparing benefits and
costs across generations,'' and Circular A-4 acknowledges that analyses
may appropriately ``discount future costs and consumption benefits . .
. at a lower rate than for intragenerational analysis.'' In the 2015
Response to Comments on the Social Cost of Carbon for Regulatory Impact
Analysis, OMB, DOE, and the other IWG members recognized that
``Circular A-4 is a living document'' and ``the use of 7 percent is not
considered appropriate for intergenerational discounting. There is wide
support for this view in the academic literature, and it is recognized
in Circular A-4 itself.'' Thus, DOE concludes that a 7% discount rate
is not appropriate to apply to value the social cost of greenhouse
gases in the analysis presented in this analysis.
To calculate the present and annualized values of climate benefits,
DOE uses the same discount rate as the rate used to discount the value
of damages from future GHG emissions, for internal consistency. That
approach to discounting follows the same approach that the February
2021 TSD recommends ``to ensure internal consistency--i.e., future
damages from climate change using the SC-GHG at 2.5 percent should be
discounted to the base year of the analysis using the same 2.5 percent
rate.'' DOE has also consulted the National Academies' 2017
recommendations on how SC-GHG estimates can ``be combined in RIAs with
other cost and benefits estimates that may use different discount
rates.'' The National Academies reviewed several options, including
``presenting all discount rate combinations of other costs and benefits
with [SC-GHG] estimates.''
As a member of the IWG involved in the development of the February
2021 SC-GHG TSD, DOE agrees with the above assessment and will continue
to follow developments in the literature pertaining to this issue.
While the IWG works to assess how best to incorporate the latest, peer
reviewed science to develop an updated set of SC-GHG estimates, it set
the interim estimates to be the most recent estimates developed by the
IWG prior to the group being disbanded in 2017. The estimates rely on
the same models and harmonized inputs and are calculated using a range
of discount rates. As explained in the February 2021 SC-GHG TSD, the
IWG has recommended that agencies revert to the same set of four values
drawn from the SC-GHG distributions based on three discount rates as
were used in regulatory analyses between 2010 and 2016 and were subject
to public comment. For each discount rate, the IWG combined the
distributions across models and socioeconomic emissions scenarios
(applying equal weight to each) and then selected a set of four values
recommended for use in benefit-cost analyses: an average value
resulting from the model runs for each of three discount rates (2.5
percent, 3 percent, and 5 percent), plus a fourth value, selected as
the 95th percentile of estimates based on a 3 percent discount rate.
The fourth value was included to provide information on potentially
higher-than-expected economic impacts from climate change. As explained
in the February 2021 SC-GHG TSD, and DOE agrees, this update reflects
the immediate need to have an operational SC-GHG for use in regulatory
benefit-cost analyses and other applications that was developed using a
transparent process, peer-reviewed methodologies, and the science
available at the time of that process. Those estimates were subject to
public comment in the context of dozens of proposed rulemakings as well
as in a dedicated public comment period in 2013.
There are a number of limitations and uncertainties associated with
the SC-GHG estimates. First, the current scientific and economic
understanding of discounting approaches suggests discount rates
appropriate for intergenerational analysis in the context of climate
change are likely to be less than 3 percent, near 2 percent or
lower.\88\ Second, the IAMs used to produce these interim estimates do
not include all of the important physical, ecological, and economic
impacts of climate change recognized in the climate change literature
and the science underlying their ``damage functions''--i.e., the core
parts of the IAMs that map global mean temperature changes and other
physical impacts of climate change into economic (both market and
nonmarket) damages--lags behind the most recent research. For example,
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the integrated assessment models, their
incomplete treatment of adaptation and technological change, the
incomplete way in which inter-regional and intersectoral linkages are
modeled, uncertainty in the extrapolation of damages to high
temperatures, and inadequate representation of the relationship between
the discount rate and uncertainty in economic growth over long time
horizons. Likewise, the socioeconomic and emissions scenarios used as
inputs to the models do not reflect new information from the last
decade of scenario generation or the full range of projections. The
modeling limitations do not all work in the same direction in terms of
their influence on the SC-CO2 estimates. However, as
discussed in the February 2021 TSD, the IWG has recommended that, taken
together, the limitations suggest that the interim SC-GHG estimates
used in this NOPR likely underestimate the damages from GHG emissions.
DOE concurs with this assessment.
---------------------------------------------------------------------------
\88\ Interagency Working Group on Social Cost of Greenhouse
Gases (IWG). 2021. Technical Support Document: Social Cost of
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive
Order 13990. February. United States Government. Available at:
www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/.
---------------------------------------------------------------------------
DOE's derivations of the SC-CO2, SC-N2O, and
SC-CH4 values used for this NOPR are discussed in the
following sections, and the results of DOE's analyses estimating the
benefits of the reductions in emissions of these GHGs are presented in
section V.B.6 of this document.
In response to the March 2022 Preliminary Analysis, NEMA disagreed
with DOE's approach for estimating monetary benefits associated with
emissions reductions. NEMA commented that this topic is too convoluted
and subjective to be included in a rulemaking analysis for electric
motor standards. NEMA added that DOE does not adequately examine or
account for the significant impacts from ever-increasing investment in
and use of renewable energy sources and associated decrease in
emissions. (NEMA, No. 22 at p. 25)
DOE acknowledges that increasing use of renewable electricity
sources will reduce CO2 emissions and likely other emissions
from the power sector faster than could have been expected when AEO2023
was prepared. Nevertheless, DOE has used AEO2023 for the purposes of
quantifying emissions as DOE believes it continues to be the most
appropriate projection at this time for such purposes. And to comply
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
[[Page 87108]]
expected to result from each of the TSLs considered. It is important to
note that even a significant reduction in the emissions benefits
projected in this NOPR would not change DOE's decision about which
standard levels to propose based on the December 2022 Joint
Recommendation and DOE's analysis.
a. Social Cost of Carbon
The SC-CO2 values used for this NOPR were based on the
values developed for the IWG's February 2021 TSD, which are shown in
Table IV-10 in five-year increments from 2020 to 2050. The set of
annual values that DOE used, which was adapted from estimates published
by EPA,\89\ is presented in Appendix 14A of the NOPR TSD. These
estimates are based on methods, assumptions, and parameters identical
to the estimates published by the IWG (which were based on EPA
modeling) and include values for 2051 to 2070.
---------------------------------------------------------------------------
\89\ 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).
Table IV-10--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
[2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
Discount rate and statistic
---------------------------------------------------
Year 5% 3% 2.5% 3% 95th
Average Average 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
----------------------------------------------------------------------------------------------------------------
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
NOPR were based on the values developed for the February 2021 TSD.
Table IV-11 shows the updated sets of SC-CH4 and SC-
N2O estimates from the latest interagency update in 5-year
increments from 2020 to 2050. The full set of annual values used is
presented in Appendix 14-A of the NOPR 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-11--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% 5% 3% 2.5% 3% 95th
Average Average Average 3% 95th 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 NOPR, DOE estimated the monetized value of NOX
and SO2 emissions reductions from electricity generation
using the latest benefit-per-ton estimates for that sector from the
EPA's Benefits Mapping and Analysis Program.\90\ 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, 2030, and 2040, calculated with
[[Page 87109]]
discount rates of 3 percent and 7 percent. DOE used linear
interpolation to define values for the years not given in the 2025 to
2040 period; for years beyond 2040, the values are held constant. DOE
combined the EPA regional benefit-per-ton estimates with regional
information on electricity consumption and emissions from AEO2023 to
define weighted-average national values for NOX and
SO2 (see appendix 14B of the NOPR TSD).
---------------------------------------------------------------------------
\90\ U.S. Environmental Protection Agency. Estimating the
Benefit per Ton of Reducing Directly-Emitted PM2.5,
PM2.5 Precursors and Ozone Precursors from 21 Sectors.
www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-and-ozone-precursors.
---------------------------------------------------------------------------
DOE multiplied the site emissions reduction (in tons) in each year
by the associated $/ton values, and then discounted each series using
discount rates of 3 percent and 7 percent as appropriate.
DOE requests comment on how to address the climate benefits and
non-monetized effects of the proposal.
M. Utility Impact Analysis
In the March 2022 Preliminary Analysis, DOE described the approach
for conducting the utility impact analysis. See chapter 15 of the March
2022 Preliminary TSD. In response, NEMA commented that the proposed
approach for assessing utility impacts appears to be sufficient. (NEMA,
No. 22 at p. 25) In this NOPR, DOE continues to follow the same
approach.
The utility impact analysis estimates the changes in installed
electrical capacity and generation projected to result for each
considered TSL. The analysis is based on published output from the NEMS
associated with AEO2023. NEMS produces the AEO Reference case, as well
as a number of side cases that estimate the economy-wide impacts of
changes to energy supply and demand. For the current analysis, impacts
are quantified by comparing the levels of electricity sector
generation, installed capacity, fuel consumption and emissions in the
AEO2023 Reference case and various side cases. Details of the
methodology are provided in the appendices to chapters 13 and 15 of the
NOPR 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
energy conservation standards.
N. Employment Impact Analysis
In the March 2022 Preliminary Analysis, DOE described the approach
for conducting the employment impact analysis. See chapter 16 of the
March 2022 Preliminary TSD. In response, NEMA commented that the
proposed approach for assessing national employment impacts appears to
be sufficient. (NEMA, No. 22 at p. 25) In this NOPR, DOE continues to
follow the same approach.
DOE considers employment impacts in the domestic economy as one
factor in selecting a proposed standard. Employment impacts from new
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 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.\91\ 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.
---------------------------------------------------------------------------
\91\ See U.S. Department of Commerce--Bureau of Economic
Analysis. Regional Multipliers: A User Handbook for the Regional
Input-Output Modeling System (RIMS II). 1997. U.S. Government
Printing Office: Washington, DC. Available at www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed July 1, 2021).
---------------------------------------------------------------------------
DOE estimated indirect national employment impacts for the standard
levels considered in this NOPR using an input/output model of the U.S.
economy called Impact of Sector Energy Technologies version 4
(``ImSET'').\92\ 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.
---------------------------------------------------------------------------
\92\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W.
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model
Description and User Guide. 2015. Pacific Northwest National
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------
DOE notes that ImSET is not a general equilibrium forecasting
model, and that the uncertainties involved in projecting employment
impacts, especially changes in the later years of the analysis. Because
ImSET does not incorporate price changes, the employment effects
predicted by ImSET may over-estimate actual job impacts over the long
run for this proposed rule. Therefore, DOE used ImSET only to generate
results for near-term timeframes (2034), where these uncertainties are
reduced. For more details on the employment impact analysis, see
chapter 16 of the NOPR TSD.
V. Analytical Results and Conclusions
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for ESEMs.
It addresses the TSLs examined by DOE, the projected impacts of each of
these levels if adopted as energy conservation standards for ESEMs, and
the standards levels that DOE is proposing to adopt in this NOPR.
Additional details regarding DOE's analyses are contained in the NOPR
TSD supporting this document.
A. Trial Standard Levels
In general, DOE typically evaluates potential new standards for
products
[[Page 87110]]
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 price elasticity of consumer
purchasing decisions that may change when different standard levels are
set.
In the analysis conducted for this NOPR, DOE analyzed the benefits
and burdens of four TSLs for ESEMs. DOE developed TSLs that combine
efficiency levels for each analyzed equipment class. DOE presents the
results for the TSLs in this document, while the results for all
efficiency levels that DOE analyzed are in the NOPR TSD.\93\
---------------------------------------------------------------------------
\93\ Results by efficiency level are presented in chapters 8,
10, and 12 of the NOPR TSD.
---------------------------------------------------------------------------
Table V-1 presents the TSLs and the corresponding efficiency levels
that DOE has identified for potential new energy conservation standards
for ESEMs. TSL 4 represents the maximum technologically feasible
(``max-tech'') energy efficiency for all equipment classes. TSL 3 is
equivalent to EL 3 for all equipment classes. TSL 2 is equivalent to EL
2 for all equipment classes and corresponds to the Electric Motors
Working Group recommended levels. TSL 1 is equivalent to EL 1 for all
equipment classes.
Table V-1--Trial Standard Levels for ESEMs
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL1 TSL2 TSL3 TSL4
---------------------------------------------------------------------------------------
Equipment class group Horsepower range Average of EL0 and Average of EL2 and
EL2 Recommended levels EL4 Max-tech
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM High/Med Torque............. 0.25 <= hp <= 0.50........... EL1................. EL2.................... EL3................. EL4.
0.5 < hp <= 3................ EL1................. EL2.................... EL3................. EL4.
ESEM Low Torque.................. 0.25 hp...................... EL1................. EL2.................... EL3................. EL4.
0.25 < hp.................... EL1................. EL2.................... EL3................. EL4.
ESEM Polyphase................... 0.25 <= hp................... EL1................. EL2.................... EL3................. EL4.
AO-ESEM High/Med Torque.......... 0.25 <= hp <= 0.50........... EL1................. EL2.................... EL3................. EL4.
0.5 < hp <= 3................ EL1................. EL2.................... EL3................. EL4.
AO-ESEM Low Torque............... 0.25 hp...................... EL1................. EL2.................... EL3................. EL4.
0.25 < hp.................... EL1................. EL2.................... EL3................. EL4.
AO-ESEM Polyphase................ 0.25 <= hp................... EL1................. EL2.................... EL3................. EL4.
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE constructed the TSLs for this NOPR to include ELs
representative of ELs with similar characteristics (i.e., using similar
efficiencies). Specifically, DOE aligned the efficiency levels for air-
over and non-air-over ESEMs because of the similarities in the
manufacturing processes between air-over and non-air-over ESEMs. In
some cases, an AO-ESEM could be manufactured on the same line as a non-
air-over ESEM by omitting the steps of manufacturing associated with
the fan of a motor. DOE notes this alignment is in line with Electric
Motors Working Group's recommendation in the December 2022 Joint
Recommendation. While representative ELs were included in the TSLs, DOE
considered all efficiency levels as part of its analysis.\94\
---------------------------------------------------------------------------
\94\ Efficiency levels that were analyzed for this NOPR are
discussed in section IV.C.4 of this document. Results by efficiency
level are presented in chapters 8, 10, and 12 of the NOPR TSD.
---------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on ESEM consumers by looking at
the effects that potential ESEM 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 equipment 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., equipment 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 equipment lifetime and a discount rate. Chapter 8 of the NOPR TSD
provides detailed information on the LCC and PBP analyses.
Table V-2 through Table V-21 show the LCC and PBP results for the
TSLs considered for each equipment 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 equipment with higher efficiency in the no-new-standards case,
the average savings are less than the difference between the average
LCC of the baseline equipment 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 an equipment 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.
[[Page 87111]]
Table V-2--Average LCC and PBP Results for ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
First Simple Average
TSL Efficiency level Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................... 186 98 509 696 ........... 7.7
1......................................... 1............................. 192 86 447 639 0.5 7.7
2......................................... 2............................. 211 76 397 607 1.1 7.7
3......................................... 3............................. 296 68 354 649 3.7 7.7
4......................................... 4............................. 434 62 322 755 6.9 7.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 ESEM--High/Med Torque, 0.25 hp
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
Efficiency -------------------------------------------------------
TSL level Percent of consumers that Average LCC savings *
experience net cost (2022)
----------------------------------------------------------------------------------------------------------------
1....................................... 1 2.0 56
2....................................... 2 16.7 51
3....................................... 3 51.2 -1
4....................................... 4 85.9 -107
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V-4--Average LCC and PBP Results for ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
First Simple Average
TSL Efficiency level Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................... 351 243 1,272 1,624 ........... 7.5
1......................................... 1............................. 368 218 1,142 1,510 0.7 7.5
2......................................... 2............................. 395 196 1,028 1,423 0.9 7.5
3......................................... 3............................. 534 189 989 1,522 3.4 7.5
4......................................... 4............................. 733 183 955 1,688 6.3 7.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
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-5--Average LCC Savings Relative to the No-New-Standards Case for ESEM--High/Med Torque, 1 hp
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
Efficiency -------------------------------------------------------
TSL level Percent of consumers that Average LCC savings *
experience net cost (2022)
----------------------------------------------------------------------------------------------------------------
1....................................... 1 3.5 116
2....................................... 2 11.7 138
3....................................... 3 53.5 21
4....................................... 4 82.5 -145
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V-6--Average LCC and PBP Results for ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
First Simple Average
TSL Efficiency level Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................... 153 216 956 1,108 ........... 6.8
1......................................... 1............................. 174 163 718 892 0.4 6.8
2......................................... 2............................. 213 131 576 789 0.7 6.8
[[Page 87112]]
3......................................... 3............................. 277 118 518 795 1.3 6.8
4......................................... 4............................. 366 107 470 836 2.0 6.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 ESEM--Low Torque, 0.25 hp
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
Efficiency -------------------------------------------------------
TSL level Percent of consumers that Average LCC savings *
experience net cost (2022)
----------------------------------------------------------------------------------------------------------------
1....................................... 1 0.2 213
2....................................... 2 2.9 147
3....................................... 3 52.0 24
4....................................... 4 67.7 -17
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V-8--Average LCC and PBP Results for ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
First Simple Average
TSL Efficiency level Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................... 223 237 1,074 1,297 ........... 6.9
1......................................... 1............................. 269 218 987 1,256 2.4 6.9
2......................................... 2............................. 276 201 908 1,184 1.5 6.9
3......................................... 3............................. 372 178 805 1,177 2.5 6.9
4......................................... 4............................. 455 159 719 1,174 3.0 6.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
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.
Table V-9--Average LCC Savings Relative to the No-New-Standards Case for ESEM--Low Torque, 0.5 hp
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
Efficiency -------------------------------------------------------
TSL level Percent of consumers that Average LCC savings *
experience net cost (2022)
----------------------------------------------------------------------------------------------------------------
1....................................... 1 10.8 41
2....................................... 2 7.8 100
3....................................... 3 30.4 78
4....................................... 4 40.1 73
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V-10--Average LCC and PBP Results for ESEM--Polyphase Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
First Simple Average
TSL Efficiency level Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................... 199 68 432 631 ........... 9.3
1......................................... 1............................. 206 62 394 600 1.2 9.3
2......................................... 2............................. 222 57 362 584 2.0 9.3
3......................................... 3............................. 277 51 325 602 4.6 9.3
4......................................... 4............................. 405 47 297 702 9.7 9.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 87113]]
Table V-11--Average LCC Savings Relative to the No-New-Standards Case for ESEM--Polyphase, 0.25 hp
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
Efficiency -------------------------------------------------------
TSL level Percent of consumers that Average LCC savings *
experience net cost (2022)
----------------------------------------------------------------------------------------------------------------
1....................................... 1 1.0 32
2....................................... 2 7.2 26
3....................................... 3 58.6 -8
4....................................... 4 95.0 -107
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V-12--Average LCC and PBP Results for AO-ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
First Simple Average
TSL Efficiency level Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................... 174 158 695 869 ........... 6.8
1......................................... 1............................. 180 139 611 791 0.3 6.8
2......................................... 2............................. 200 123 543 743 0.8 6.8
3......................................... 3............................. 282 110 485 767 2.3 6.8
4......................................... 4............................. 419 101 444 863 4.3 6.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
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-13--Average LCC Savings Relative to the No-New-Standards Case for AO-ESEM--High/Med Torque, 0.25 hp
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
Efficiency -------------------------------------------------------
TSL level Percent of consumers that Average LCC savings *
experience net cost (2022)
----------------------------------------------------------------------------------------------------------------
1....................................... 1 1.3 76
2....................................... 2 7.8 83
3....................................... 3 36.0 37
4....................................... 4 64.6 -61
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V-14--Average LCC and PBP Results for AO-ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
First Simple Average
TSL Efficiency level Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................... 338 312 1,492 1,830 ........... 7.0
1......................................... 1............................. 355 283 1,352 1,707 0.6 7.0
2......................................... 2............................. 382 255 1,219 1,601 0.8 7.0
3......................................... 3............................. 520 246 1,173 1,693 2.7 7.0
4......................................... 4............................. 716 238 1,138 1,854 5.1 7.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
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-15--Average LCC Savings Relative to the No-New-Standards Case for AO-ESEM--High/Med Torque, 1 hp
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
Efficiency -------------------------------------------------------
TSL level Percent of consumers that Average LCC savings *
experience net cost (2022)
----------------------------------------------------------------------------------------------------------------
1....................................... 1 2.0 122
2....................................... 2 5.9 160
3....................................... 3 44.4 37
[[Page 87114]]
4....................................... 4 81.9 -128
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V-16--Average LCC and PBP Results for AO-ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
First Simple Average
TSL Efficiency level Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................... 141 218 962 1,103 ........... 6.8
1......................................... 1............................. 163 164 722 885 0.4 6.8
2......................................... 2............................. 202 132 579 781 0.7 6.8
3......................................... 3............................. 264 119 521 785 1.2 6.8
4......................................... 4............................. 352 108 472 824 1.9 6.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
Table V-17--Average LCC Savings Relative to the No-New-Standards Case for AO-ESEM--Low Torque, 0.25 hp
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
Efficiency -------------------------------------------------------
TSL level Percent of consumers that Average LCC savings *
experience net cost (2022$)
----------------------------------------------------------------------------------------------------------------
1....................................... 1 0.1 217
2....................................... 2 3.7 121
3....................................... 3 39.1 32
4....................................... 4 67.9 -13
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V-18--Average LCC and PBP Results for AO-ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
First Simple Average
TSL Efficiency level Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................... 213 257 1,144 1,357 ........... 6.8
1......................................... 1............................. 257 237 1,053 1,310 2.2 6.8
2......................................... 2............................. 265 218 969 1,234 1.3 6.8
3......................................... 3............................. 358 194 860 1,218 2.3 6.8
4......................................... 4............................. 441 174 770 1,211 2.7 6.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
Table V-19--Average LCC Savings Relative to the No-New-Standards Case for AO-ESEM--Low Torque, 0.5 hp
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
Efficiency -------------------------------------------------------
TSL level Percent of consumers that Average LCC savings *
experience net cost (2022$)
----------------------------------------------------------------------------------------------------------------
1....................................... 1 2.1 48
2....................................... 2 2.9 88
3....................................... 3 34.4 50
4....................................... 4 42.2 52
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
[[Page 87115]]
Table V-20--Average LCC and PBP Results for AO-ESEM--Polyphase, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
First Simple Average
TSL Efficiency level Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................... 189 81 488 678 ........... 8.9
1......................................... 1............................. 197 74 446 643 1.1 8.9
2......................................... 2............................. 212 68 411 623 1.8 8.9
3......................................... 3............................. 267 61 369 636 3.9 8.9
4......................................... 4............................. 394 56 340 734 8.3 8.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
Table V-21--Average LCC Savings Relative to the No-New-Standards Case for AO-ESEM--Polyphase, 0.25 hp
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
Efficiency -------------------------------------------------------
TSL level Percent of consumers that Average LCC savings *
experience net cost (2022$)
----------------------------------------------------------------------------------------------------------------
1....................................... 1 2.7 35
2....................................... 2 9.7 40
3....................................... 3 48.6 13
4....................................... 4 87.8 -85
----------------------------------------------------------------------------------------------------------------
* 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 low-income households (for representative units with
consumers in the residential sector \95\), senior-only households (for
representative units with consumers in the residential sector), and
small businesses. Table V-22 to Table V-24 compare the average LCC
savings and PBP at each efficiency level for the consumer subgroups
with similar metrics for the entire consumer sample for all equipment
classes. In most cases, the average LCC savings and PBP for low-income
households, senior-only household, and small-businesses at the
considered efficiency levels are not substantially different from the
average for all. Chapter 11 of the NOPR TSD presents the complete LCC
and PBP results for the subgroups.
---------------------------------------------------------------------------
\95\ All representative units except for the ESEM Polyphase and
AO-ESEM Polyphase, 0.5 hp are used in the residential sector.
Table V-22--Comparison of LCC Savings and PBP for Low-Income Household Subgroup and All Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average LCC savings Simple payback Consumers with net Consumers with net
* (2021$) (years) benefit (%) cost (%)
TSL ---------------------------------------------------------------------------------------
Low- Low- Low- Low-
income All income All income All income All
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 56 56 0.5 0.5 22.3 22.5 1.7 2.0
2............................................................... 53 51 1.4 1.5 52.1 51.0 14.3 16.7
3............................................................... 7 -1 4.9 5.3 36.1 32.4 45.9 51.2
4............................................................... -90 -107 9.2 10.0 19.7 13.6 77.9 85.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 116 116 0.7 0.7 33.9 34.0 3.4 3.5
2............................................................... 138 138 1.0 1.1 74.4 74.2 11.1 11.7
3............................................................... 24 21 4.6 4.7 46.0 44.9 51.9 53.5
4............................................................... -138 -145 8.6 8.7 18.9 17.4 80.5 82.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 210 213 0.4 0.4 3.9 4.0 0.2 0.2
2............................................................... 148 147 0.9 1.0 17.5 17.5 2.6 3.0
3............................................................... 29 24 3.1 3.3 50.2 48.0 48.1 52.0
4............................................................... -6 -17 4.6 5.0 35.7 32.3 62.6 67.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 87116]]
ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 43 41 2.3 2.4 32.0 31.7 10.0 10.8
2............................................................... 101 100 1.2 1.3 56.2 56.2 7.1 7.8
3............................................................... 84 78 2.7 2.8 61.1 60.1 28.3 30.4
4............................................................... 82 73 3.2 3.3 61.0 59.9 37.7 40.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 77 76 0.3 0.3 25.1 25.5 1.2 1.3
2............................................................... 84 83 0.9 1.0 51.1 51.5 7.0 7.8
3............................................................... 44 37 3.0 3.2 44.6 43.0 32.8 36.0
4............................................................... -46 -61 5.7 6.1 25.7 21.8 59.1 64.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 122 122 0.6 0.6 30.5 30.6 2.0 2.0
2............................................................... 160 160 0.9 0.9 65.3 65.5 5.8 5.9
3............................................................... 39 37 3.9 3.9 44.3 44.0 43.8 44.4
4............................................................... -124 -128 7.6 7.7 18.8 18.1 80.9 81.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 220 217 0.4 0.4 1.6 1.7 0.1 0.1
2............................................................... 124 121 1.0 1.1 20.4 20.5 3.3 3.7
3............................................................... 36 32 2.9 3.1 45.0 43.2 36.1 39.1
4............................................................... -3 -13 4.6 4.9 35.7 32.1 62.7 67.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 51 48 2.1 2.2 7.1 7.0 2.0 2.2
2............................................................... 90 88 0.8 0.8 31.9 32.0 2.5 2.9
3............................................................... 56 50 2.8 3.0 58.0 56.7 31.5 34.4
4............................................................... 64 52 3.2 3.4 59.3 57.8 38.8 42.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-23--Comparison of LCC Savings and PBP for Senior-Only Household Subgroup and All Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average LCC savings Simple payback Consumers with net Consumers with net
* (2021$) (years) benefit (%) cost (%)
TSL ---------------------------------------------------------------------------------------
Senior- Senior- Senior- Senior-
only All only All only All only All
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 56 56 0.5 0.5 22.4 22.5 2.1 2.0
2............................................................... 51 51 1.5 1.5 51.0 51.0 16.7 16.7
3............................................................... -1 -1 5.3 5.3 32.4 32.4 51.3 51.2
4............................................................... -107 -107 10.0 10.0 13.6 13.6 85.9 85.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Med Torque hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 116 116 0.7 0.7 34.0 34.0 3.5 3.5
2............................................................... 138 138 1.1 1.1 74.1 74.2 11.7 11.7
3............................................................... 21 21 4.7 4.7 44.8 44.9 53.6 53.5
4............................................................... -145 -145 8.7 8.7 17.4 17.4 82.5 82.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 212 213 0.4 0.4 4.0 4.0 0.2 0.2
2............................................................... 146 147 1.0 1.0 17.5 17.5 3.0 3.0
3............................................................... 24 24 3.3 3.3 48.0 48.0 52.0 52.0
4............................................................... -17 -17 5.0 5.0 32.1 32.3 67.9 67.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 87117]]
ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 41 41 2.4 2.4 31.6 31.7 10.8 10.8
2............................................................... 99 100 1.3 1.3 56.2 56.2 7.8 7.8
3............................................................... 78 78 2.8 2.8 60.0 60.1 30.5 30.4
4............................................................... 72 73 3.3 3.3 59.8 59.9 40.2 40.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 76 76 0.3 0.3 25.5 25.5 1.3 1.3
2............................................................... 83 83 1.0 1.0 51.4 51.5 7.9 7.8
3............................................................... 37 37 3.2 3.2 42.9 43.0 36.1 36.0
4............................................................... -62 -61 6.1 6.1 21.7 21.8 64.7 64.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 122 122 0.6 0.6 30.6 30.6 2.0 2.0
2............................................................... 160 160 0.9 0.9 65.5 65.5 5.9 5.9
3............................................................... 37 37 3.9 3.9 44.0 44.0 44.4 44.4
4............................................................... -128 -128 7.7 7.7 18.1 18.1 81.9 81.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 216 217 0.4 0.4 1.7 1.7 0.1 0.1
2............................................................... 121 121 1.1 1.1 20.5 20.5 3.7 3.7
3............................................................... 31 32 3.1 3.1 43.2 43.2 39.2 39.1
4............................................................... -14 -13 4.9 4.9 32.1 32.1 67.9 67.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 47 48 2.2 2.2 7.0 7.0 2.1 2.2
2............................................................... 88 88 0.8 0.8 32.0 32.0 2.9 2.9
3............................................................... 50 50 3.0 3.0 56.7 56.7 34.5 34.4
4............................................................... 52 52 3.4 3.4 57.8 57.8 42.2 42.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-24--Comparison of LCC Savings and PBP for Small Business and All Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average LCC savings Simple payback Consumers with net Consumers with net
* (2021$) (years) benefit (%) cost (%)
TSL ---------------------------------------------------------------------------------------
Small Small Small Small
business All business All business All business All
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 58 56 0.5 0.5 22.5 22.5 2.0 2.0
2............................................................... 54 51 1.4 1.5 51.2 51.0 16.5 16.7
3............................................................... 3 -1 4.9 5.3 33.8 32.4 49.9 51.2
4............................................................... -102 -107 9.3 10.0 15.2 13.6 84.3 85.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 121 116 0.6 0.7 34.0 34.0 3.4 3.5
2............................................................... 145 138 1.0 1.1 74.4 74.2 11.5 11.7
3............................................................... 28 21 4.3 4.7 46.0 44.9 52.4 53.5
4............................................................... -136 -145 8.1 8.7 19.1 17.4 80.8 82.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 220 213 0.4 0.4 4.0 4.0 0.2 0.2
2............................................................... 153 147 1.0 1.0 17.6 17.5 2.9 3.0
3............................................................... 27 24 3.2 3.3 50.6 48.0 49.4 52.0
4............................................................... -12 -17 4.7 5.0 34.6 32.3 65.4 67.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 87118]]
ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 44 41 2.3 2.4 32.0 31.7 10.5 10.8
2............................................................... 105 100 1.2 1.3 56.4 56.2 7.6 7.8
3............................................................... 85 78 2.6 2.8 61.1 60.1 29.4 30.4
4............................................................... 82 73 3.1 3.3 61.7 59.9 38.3 40.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--Polyphase, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 33 32 1.0 1.1 9.3 9.2 1.0 1.0
2............................................................... 28 26 2.4 2.6 26.4 26.3 7.1 7.2
3............................................................... -7 -8 6.8 7.4 29.1 27.8 57.3 58.6
4............................................................... -105 -107 14.3 15.6 5.2 4.5 94.3 95.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 79 76 0.3 0.3 25.5 25.5 1.3 1.3
2............................................................... 86 83 0.9 1.0 51.6 51.5 7.7 7.8
3............................................................... 42 37 3.0 3.2 44.4 43.0 34.6 36.0
4............................................................... -56 -61 5.7 6.1 23.4 21.8 62.9 64.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 128 122 0.5 0.6 30.6 30.6 2.0 2.0
2............................................................... 168 160 0.8 0.9 65.6 65.5 5.8 5.9
3............................................................... 46 37 3.6 3.9 45.0 44.0 43.4 44.4
4............................................................... -119 -128 7.1 7.7 20.2 18.1 79.8 81.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 225 217 0.4 0.4 1.7 1.7 0.1 0.1
2............................................................... 127 121 1.0 1.1 20.6 20.5 3.7 3.7
3............................................................... 35 32 2.9 3.1 45.1 43.2 37.3 39.1
4............................................................... -9 -13 4.6 4.9 34.3 32.1 65.7 67.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 51 48 2.1 2.2 7.1 7.0 2.1 2.2
2............................................................... 92 88 0.8 0.8 32.1 32.0 2.8 2.9
3............................................................... 55 50 2.8 3.0 58.1 56.7 33.1 34.4
4............................................................... 60 52 3.3 3.4 59.7 57.8 40.3 42.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
AO-ESEM--Polyphase, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 37 35 1.0 1.1 33.8 33.7 2.6 2.7
2............................................................... 42 40 1.9 2.0 53.4 53.3 9.6 9.7
3............................................................... 16 13 4.7 5.1 50.1 48.8 47.3 48.6
4............................................................... -81 -85 9.9 10.8 13.9 12.2 86.1 87.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
c. Rebuttable Presumption Payback
As discussed in section IV.F.9 of this document, EPCA establishes a
rebuttable presumption that an energy conservation standard is
economically justified if the increased purchase cost for a product
that meets the standard is less than three times the value of the
first-year energy savings resulting from the standard. (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 ESEMs. In contrast, the PBPs
presented in section V.B.1.a of this document were calculated using
distributions that reflect the range of energy use in the field.
Table V-25 presents the rebuttable-presumption payback periods for
the considered TSLs for ESEMs. While DOE examined the rebuttable-
presumption criterion, it considered whether the standard levels
considered for this proposed rule are economically justified through a
more detailed analysis of the economic impacts of those levels,
pursuant to 42 U.S.C. 6313(a) and 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.
[[Page 87119]]
Table V-25--Rebuttable-Presumption Payback Periods
----------------------------------------------------------------------------------------------------------------
Payback period (years)
Equipment class ---------------------------------------------------------------
TSL1 TSL2 TSL3 TSL4
----------------------------------------------------------------------------------------------------------------
ESEM--High and Medium Torque, 0.25 hp........... 0.4 1.0 3.1 5.8
ESEM--High and Medium Torque, 1 hp.............. 0.6 0.8 2.9 5.4
ESEM--Low Torque, 0.25 hp....................... 0.4 0.7 1.2 1.8
ESEM--Low Torque, 0.5 hp........................ 2.2 1.3 2.3 2.7
ESEM--Polyphase, 0.25 hp........................ 1.0 1.7 3.9 8.3
AO-ESEM--High and Medium Torque, 0.25 hp........ 0.3 0.6 1.9 3.7
AO-ESEM--High and Medium Torque, 1 hp........... 0.5 0.7 2.4 4.4
AO-ESEM--Low Torque, 0.25 hp.................... 0.4 0.6 1.1 1.7
AO-ESEM--Low Torque, 0.5 hp..................... 2.0 1.2 2.1 2.5
AO-ESEM--Polyphase, 0.25 hp..................... 0.9 1.5 3.4 7.1
----------------------------------------------------------------------------------------------------------------
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of new energy
conservation standards on manufacturers of ESEM. The following section
describes the expected impacts on manufacturers at each considered TSL.
Chapter 12 of the NOPR 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 ESEMs, as well as the conversion costs
that DOE estimates manufacturers of ESEMs would incur at each TSL.
To evaluate the range of cash flow impacts on the ESEM industry,
DOE modeled two manufacturer markup scenarios that correspond to the
range of possible market responses to new standards. Each manufacturer
markup scenario results in a unique set of cash flows and corresponding
INPVs at each TSL.
In the following discussion, the INPV results refer to the
difference in industry value between the no-new-standards case and the
standards cases that result from the sum of discounted cash flows from
the base year (2024) through the end of the analysis period (2058). The
results also discuss the difference in cash flows between the no-new
standards case and the standards cases in the year before the estimated
compliance date for new energy conservation standards. This figure
represents the size of the required conversion costs relative to the
cash flow generated by the ESEM industry in the absence of new energy
conservation standards.
To assess the upper (less severe) end of the range of potential
impacts on ESEM manufacturers, DOE modeled a preservation of gross
margin scenario. This scenario assumes that, in the standards cases,
ESEM manufacturers will be able to pass along all the higher MPCs
required for more efficient equipment to their customers. Specifically,
the industry will be able to maintain its average no-new-standards case
gross margin (as a percentage of revenue) despite the higher MPCs in
the standards cases. In general, the larger the MPC increases, the less
likely manufacturers are to achieve the cash flow from operations
calculated in this scenario because it is less likely that
manufacturers will be able to fully pass on these larger production
cost increases.
To assess the lower (more severe) end of the range of potential
impacts on the ESEM manufacturers, DOE modeled a preservation of
operating profit scenario. This scenario represents the lower end of
the range of impacts on manufacturers because no additional operating
profit is earned on the higher MPCs, eroding profit margins as a
percentage of total revenue.
Table V-26--Industry Net Present Value for ESEM Manufacturers--Preservation of Gross Margin Scenario
----------------------------------------------------------------------------------------------------------------
No-new- Trial standard level *
Units standards -------------------------------------------
case 1 2 3 4
----------------------------------------------------------------------------------------------------------------
INPV.......................... 2022$ millions.......... 2,019 1,883 1,888 1,820 1,710
Change in INPV................ 2022$ millions.......... .......... (136) (131) (199) (309)
%....................... .......... (6.7) (6.5) (9.9) (15.3)
----------------------------------------------------------------------------------------------------------------
* Numbers may not sum exactly due to rounding. Numbers in parentheses are negative numbers.
Table V-27--Industry Net Present Value for ESEM Manufacturers--Preservation of Operating Profit Scenario
----------------------------------------------------------------------------------------------------------------
No-new- Trial standard level *
Units standards -------------------------------------------
case 1 2 3 4
----------------------------------------------------------------------------------------------------------------
INPV.......................... 2022$ millions.......... 2,019 1,818 1,755 1,035 73
Change in INPV................ 2022$ millions.......... .......... (201) (264) (984) (1,946)
%....................... .......... (9.9) (13.1) (48.7) (96.4)
----------------------------------------------------------------------------------------------------------------
* Numbers may not sum exactly due to rounding. Numbers in parentheses are negative numbers.
[[Page 87120]]
Table V-28--Cash Flow Analysis for ESEM Manufacturers
----------------------------------------------------------------------------------------------------------------
No-new- Trial standard level *
Units standards -------------------------------------------
case 1 2 3 4
----------------------------------------------------------------------------------------------------------------
Free Cash Flow (2028)......... 2022$ millions.......... 154 45 17 (313) (764)
Change in Free Cash Flow 2022$ millions.......... .......... (110) (137) (468) (919)
(2028).
%....................... .......... (71) (89) (303) (595)
Product Conversion Costs...... 2022$ millions.......... .......... 125 141 326 572
Capital Conversion Costs...... 2022$ millions.......... .......... 149 198 792 1,584
-------------------------------------------------------
Total Conversion Costs.... 2022$ millions.......... .......... 274 339 1,118 2,156
----------------------------------------------------------------------------------------------------------------
* Numbers may not sum exactly due to rounding. Numbers in parentheses are negative numbers.
TSL 4 sets the efficiency level at EL 4 for all ESEM equipment
classes. At TSL 4, DOE estimates the impacts to INPV will range from a
decrease of $1,946 million to a decrease of $309 million, which
represents decreases to INPV by approximately 96.4 percent and 15.3
percent, respectively. At TSL 4, industry free cash flow (operating
cash flow minus capital expenditures) is estimated to decrease to -$764
million, or a drop of 595 percent, compared to the no-new-standards
case value of $154 million in 2028, the year leading up to the
compliance date of new energy conservation standards. The significantly
negative free cash flow in the years leading up to the compliance date
implies that most, if not all, ESEM manufacturers will need to borrow
funds in order to make the investments necessary to comply with
standards at TSL 4. This has the potential to significantly alter the
market dynamics as some smaller ESEM manufacturers may not be able to
secure this funding and could exit the market as a result of standards
set at TSL 4.
In the absence of new energy conservation standards, DOE estimates
that less than 1 percent of ESEM (High/Med Torque), no ESEM (Low
Torque), less than 1 percent of ESEM (Polyphase), 6 percent of AO-ESEM
(High/Med Torque), no AO-ESEM (Low Torque), and no AO-ESEM (Polyphase)
shipments will meet the ELs required at TSL 4 in 2029, the compliance
year of new standards. Therefore, DOE estimates that manufacturers will
have to redesign models representing over 99 percent of all ESEM
shipments by the compliance date. It is unclear if most ESEM
manufacturers would have the engineering capacity to complete the
necessary redesigns within the 4-year compliance period. If
manufacturers require more than 4 years to redesign their non-compliant
ESEM models, they will likely prioritize redesigns based on sales
volume, which could result in customers not being able to obtain
compliant ESEMs covering the entire range of horsepower and motor
configurations that they require.
Almost all ESEMs covered by this rulemaking will need to be
redesigned at TSL 4. Therefore, DOE estimates that manufacturers will
have to make significant investments in their manufacturing production
equipment and the engineering resources dedicated to redesigning ESEM
models. DOE estimates that manufacturers will incur approximately $572
million in product conversion costs and approximately $1,584 million in
capital conversion costs. Product conversion costs include the
engineering time to redesign almost all ESEM models and to re-test
these newly redesigned models to meet the standards set at TSL 4.
Capital conversion costs include the purchase of almost all new
lamination die sets, winding machines, frame casts, and assembly
equipment as well as other retooling costs to accommodate almost all
ESEM models covered by this proposed rulemaking that will need to be
redesigned.
At TSL 4, under the preservation of gross margin scenario, the
shipment weighted average MPC significantly increases by approximately
117.7 percent relative to the no-new-standards case MPC. While this
price increase results in additional revenue for manufacturers, the
$2,156 million in total conversion costs estimated at TSL 4 outweighs
this increase in manufacturer revenue and results in moderately
negative INPV impacts at TSL 4 under the preservation of gross margin
scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The significant increase in the shipment
weighted average MPC results in a lower average manufacturer margin.
This lower average manufacturer margin and the significant $2,156
million in total conversion costs result in significantly negative INPV
impacts at TSL 4 under the preservation of operating profit scenario.
TSL 3 sets the efficiency level at EL 3 for all ESEM equipment
classes. At TSL 3, DOE estimates the impacts to INPV will range from a
decrease of $984 million to a decrease of $199 million, which
represents decreases to INPV by approximately 48.7 percent and 9.9
percent, respectively. At TSL 3, industry free cash flow is estimated
to decrease to -$313 million, or a drop of 303 percent, compared to the
no-new-standards case value of $154 million in 2028, the year leading
up to the compliance date of new energy conservation standards. The
negative free cash flow in the years leading up to the compliance date
implies that most, if not all, ESEM manufacturers will need to borrow
funds in order to make the investments necessary to comply with
standards. This has the potential to significantly alter the market
dynamics as some smaller ESEM manufacturers may not be able to secure
this funding and could exit the market as a result of standards set at
TSL 3.
In the absence of new energy conservation standards, DOE estimates
that 8 percent of ESEM (High/Med Torque), 8 percent of ESEM (Low
Torque), 14 percent of ESEM (Polyphase), 15 percent of AO-ESEM (High/
Med Torque), 11 percent of AOESEM (Low Torque), and 3 percent of AO-
ESEM (Polyphase) shipments will meet or exceed the ELs requires at TSL
3 in 2029, the compliance year of new standards. Therefore, DOE
estimates that manufacturers will have to redesign models representing
approximately 91 percent of all ESEM shipments by the compliance date.
It is unclear if most ESEM manufacturers would have the engineering
capacity to complete the necessary redesigns within the 4-year
compliance period. If manufacturers require more than 4 years to
redesign their non-compliant ESEM models, they will likely prioritize
redesigns based on sales volume, which could result in customers not
being able
[[Page 87121]]
to obtain compliant ESEMs covering the entire range of horsepower and
motor configurations that they require.
The majority of ESEMs covered by this rulemaking will need to be
redesigned at TSL 3. Therefore, DOE estimates that manufacturers will
have to make significant investments in their manufacturing production
equipment and the engineering resources dedicated to redesigning ESEM
models. DOE estimates that manufacturers will incur approximately $326
million in product conversion costs and approximately $792 million in
capital conversion costs. Product conversion costs include the
engineering time to redesign approximately 91 percent of all ESEM
models and to re-test these newly redesigned models to meet the
standards set at TSL 3. Capital conversion costs include the purchase
of almost all new lamination die sets, winding machines, frame casts,
and assembly equipment as well as other retooling costs for
approximately 91 percent of all ESEM models covered by this proposed
rulemaking.
At TSL 3, under the preservation of gross margin scenario, the
shipment weighted average MPC significantly increases by approximately
56.4 percent relative to the no-new-standards case MPC. While this
price increase results in additional revenue for manufacturers, the
$1,118 million in total conversion costs estimated at TSL 3 outweighs
this increase in manufacturer revenue and results in moderately
negative INPV impacts at TSL 3 under the preservation of gross margin
scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The significant increase in the shipment
weighted average MPC results in a lower average manufacturer margin.
This lower average manufacturer margin and the significant $1,118
million in total conversion costs result in significantly negative INPV
impacts at TSL 3 under the preservation of operating profit scenario.
TSL 2 sets the efficiency level at EL 2 for all ESEM equipment
classes, which is the recommended level from the December 2022 Joint
Recommendation. At TSL 2, DOE estimates the impacts to INPV will range
from a decrease of $264 million to a decrease of $131 million, which
represents decreases to INPV by approximately 13.1 percent and 6.5
percent, respectively. At TSL 2, industry free cash flow is estimated
to decrease to $17 million, or a drop of 89 percent, compared to the
no-new-standards case value of $154 million in 2028, the year leading
up to the compliance date of new energy conservation standards.
In the absence of new energy conservation standards, DOE estimates
that 22 percent of ESEM (High/Med Torque), 45 percent of ESEM (Low
Torque), 67 percent of ESEM (Polyphase), 34 percent of AO-ESEM (High/
Med Torque), 67 percent of AO-ESEM (Low Torque), and 36 percent of AO-
ESEM (Polyphase) shipments will meet or exceed the ELs requires at TSL
2 in 2029, the compliance year of new standards. Therefore, DOE
estimates that manufacturers will have to redesign models representing
approximately 55 percent of all ESEM shipments by the compliance date.
DOE estimates that manufacturers will incur approximately $141
million in product conversion costs and approximately $198 million in
capital conversion costs. Product conversion costs primarily include
engineering time to redesign non-compliance ESEM models and to re-test
these newly redesigned models to meet the standards set at TSL 2.
Capital conversion costs include the purchase of lamination die sets,
winding machines, frame casts, and assembly equipment as well as other
retooling costs for all non-compliant ESEM models covered by this
proposed rulemaking.
At TSL 2, under the preservation of gross margin scenario, the
shipment weighted average MPC increases by approximately 9.6 percent
relative to the no-new-standards case MPC. While this price increase
results in additional revenue for manufacturers, the $339 million in
total conversion costs estimated at TSL 2 outweighs this increase in
manufacturer revenue and results in moderately negative INPV impacts at
TSL 2 under the preservation of gross margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The increase in the shipment weighted average
MPC results in a slightly lower average manufacturer margin. This lower
average manufacturer margin and the $339 million in total conversion
costs result in moderately negative INPV impacts at TSL 2 under the
preservation of operating profit scenario.
TSL 1 sets the efficiency level at EL 1 for all ESEM equipment
classes. At TSL 1, DOE estimates the impacts to INPV will range from a
decrease of $201 million to a decrease of $136 million, which
represents decreases to INPV by approximately 9.9 percent and 6.7
percent, respectively. At TSL 1, industry free cash flow is estimated
to decrease to $45 million, or a drop of 71 percent, compared to the
no-new-standards case value of $154 million in 2028, the year leading
up to the compliance date of new energy conservation standards.
In the absence of new energy conservation standards, DOE estimates
that 68 percent of ESEM (High/Med Torque), 66 percent of ESEM (Low
Torque), 90 percent of ESEM (Polyphase), 70 percent of AO-ESEM (High/
Med Torque), 92 percent of AO-ESEM (Low Torque), and 62 percent of AO-
ESEM (Polyphase) shipments will meet or exceed the ELs requires at TSL
1 in 2029, the compliance year of new standards. Therefore, DOE
estimates that manufacturers will have to redesign models representing
approximately 26 percent of all ESEM shipments by the compliance date.
DOE estimates that manufacturers will incur approximately $125
million in product conversion costs and approximately $149 million in
capital conversion costs. Product conversion costs primarily include
engineering time to redesign non-compliance ESEM models and to re-test
these newly redesigned models to meet the standards set at TSL 1.
Capital conversion costs include the purchase of lamination die sets,
winding machines, frame casts, and assembly equipment, as well as other
retooling costs for all non-compliant ESEM models covered by this
proposed rulemaking.
At TSL 1, under the preservation of gross margin scenario, the
shipment weighted average MPC increases slightly by approximately 4.7
percent relative to the no-new-standards case MPC. While this price
increase results in additional revenue for manufacturers, the $274
million in total conversion costs estimated at TSL 1 outweighs this
increase in manufacturer revenue and results in moderately negative
INPV impacts at TSL 1 under the preservation of gross margin scenario.
Under the preservation of operating profit scenario, manufacturers
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit
from their investments. The increase in the shipment weighted average
MPC results in a slightly lower average manufacturer margin. This lower
average manufacturer margin and the $274 million in total conversion
costs result in moderately negative INPV impacts at TSL 1 under the
preservation of operating profit scenario.
[[Page 87122]]
b. Direct Impacts on Employment
To quantitatively assess the potential impacts of new energy
conservation standards on direct employment in the ESEM industry, DOE
used the GRIM to estimate the domestic labor expenditures and number of
direct employees in the no-new-standards case and in each of the
standards cases during the analysis period.
DOE used statistical data from the U.S. Census Bureau's 2021 Annual
Survey of Manufacturers (``ASM''), the results of the engineering
analysis, and interviews with manufacturers to determine the inputs
necessary to calculate industry-wide labor expenditures and domestic
employment levels. Labor expenditures involved with the manufacturing
of ESEMs are a function of the labor intensity of the product, the
sales volume, and an assumption that wages remain fixed in real terms
over time.
In the GRIM, DOE used the labor content of each piece of equipment
and the MPCs to estimate the annual labor expenditures of the industry.
DOE used Census data and interviews with manufacturers to estimate the
portion of the total labor expenditures attributable to domestic labor.
The production worker estimates in this employment section cover
only workers up to the line-supervisor level who are directly involved
in fabricating and assembling ESEMs within a motor facility. Workers
performing services that are closely associated with production
operations, such as material handling with a forklift, are also
included as production labor. DOE's estimates account for only
production workers who manufacture the specific equipment covered by
this proposed rulemaking.
The employment impacts shown in Table V-29 represent the potential
production employment impacts resulting from new energy conservation
standards. The upper bound of the results estimates the maximum change
in the number of production workers that could occur after compliance
with new energy conservation standards when assuming that manufacturers
continue to produce the same scope of covered equipment in the same
production facilities. It also assumes that domestic production does
not shift to lower-labor-cost countries. Because there is a real risk
of manufacturers evaluating sourcing decisions in response to new
energy conservation standards, the lower bound of the employment
results includes the estimated total number of U.S. production workers
in the industry who could lose their jobs if some existing ESEM
production was moved outside of the U.S. While the results present a
range of employment impacts following 2029, this section also includes
qualitative discussions of the likelihood of negative employment
impacts at the various TSLs. Finally, the employment impacts shown are
independent of the indirect employment impacts from the broader U.S.
economy, which are documented in chapter 16 of the NOPR TSD.
Based on 2021 ASM data and interviews with manufacturers, DOE
estimates approximately 15 percent of ESEMs covered by this proposed
rulemaking sold in the U.S. are manufactured domestically. Using this
assumption, DOE estimates that in the absence of new energy
conservation standards, there would be approximately 784 domestic
production workers involved in manufacturing all ESEMs covered by this
rulemaking in 2029. Table V-29 shows the range of potential impacts of
new energy conservation standards on U.S. production workers involved
in the production of ESEMs covered by this rulemaking.
Table V-29--Potential Change in the Number of Domestic ESEM Workers
----------------------------------------------------------------------------------------------------------------
Trail standard level
No-new- ---------------------------------------------------------------
standards case 1 2 3 4
----------------------------------------------------------------------------------------------------------------
Domestic Production Workers in 784 821 859 1,226 1,706
2029...........................
Domestic Non-Production Workers 449 470 492 702 977
in 2029........................
Total Domestic Employment in 1,233 1,291 1,351 1,928 2,683
2029...........................
Potential Changes in Total .............. 58-(37) 118-(75) 695-(442) 1,450-(784)
Domestic Employment in 2029 *..
----------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential impacts. Numbers in parentheses indicate negative values.
At the upper end of the range, all examined TSLs show an increase
in the number of domestic production workers for ESEMs. The upper end
of the range represents a scenario where manufacturers increase
production hiring due to the increase in the labor associated with
adding the required components and additional labor (e.g., hand
winding, etc.) to make more efficient ESEMs. However, as previously
stated, this assumes that in addition to hiring more production
employees, all existing domestic production would remain in the United
States and not shift to lower labor-cost countries.
At the lower end of the range, all examined TSLs show a decrease in
domestic production employment. The lower end of the domestic
employment range assumes that some, or all, ESEM domestic production
employment may shift to lower labor-cost countries in response to
energy conservation standards. DOE estimates that approximately 85
percent of all ESEMs sold in the U.S. are manufactured abroad. At max-
tech, TSL 4, DOE conservatively estimates that the remaining 15 percent
of domestic production could shift to foreign production locations. DOE
estimated this lower bound potential change in domestic employment
based on the percent change in the MPC at each TSL.\96\
---------------------------------------------------------------------------
\96\ Except for TSL 4, which has an MPC increase of higher than
100 percent. Therefore, DOE assumes all domestic employment moves
abroad at this TSL.
---------------------------------------------------------------------------
c. Impacts on Manufacturing Capacity
The December 2022 Joint Recommendation stated that standards set at
EL 2 for the ESEM High/Med Torque equipment class would minimize
potential market disruptions by allowing CSIR and split-phase
topologies to remain on the market, but only at smaller (0.25-0.5 hp)
horsepower ratings. (Electric Motors Working Group, No. 38 at p. 3) The
December 2022 Joint Recommendation also stated that standards set at EL
2 for the ESEM Low Torque equipment class would not create widespread
market disruptions and that standards set at higher ELs could result in
significant increases in the physical size, unavailability of product,
and in some cases, may be extremely difficult to
[[Page 87123]]
achieve with current PSC technology. (Id.)
Many ESEM manufacturers do not offer any ESEM models that would
meet max-tech levels or one EL below max-tech (i.e., TSL 4 and TSL 3,
respectively). Based on the shipments analysis used in the NIA, DOE
estimates that less than one percent and 9 percent of all ESEM
shipments will meet max-tech and one EL below max-tech, respectively,
in the no-new-standards case in 2029, the compliance year of new
standards. Therefore, at TSL 4 and TSL 3, DOE estimates that
manufacturers will have to redesign models representing over 99 percent
and 91 percent, respectively, of all ESEM shipments by the compliance
date. It is unclear if any ESEM manufacturers would have the
engineering capacity to complete the necessary redesigns within the 4-
year compliance period. If manufacturers require more than 4 years to
redesign their non-compliant ESEM models, they will likely prioritize
redesigns based on sales volume, which could result in customers not
being able to obtain compliant ESEMs covering the entire range of
horsepower and motor configurations that they require.
Lastly, during manufacturer interviews, most manufacturers stated
they would not be able to provide a full portfolio of any ESEM
equipment class for any standards that would be met using copper
rotors. In DOE's engineering analysis, all representative units, except
the ESEM--Low Torque, 0.5 hp and AO-ESEM--Low Torque, 0.5 hp
representative units, are modeled to use copper rotors at the max-tech
efficiency design (i.e., EL 4). No other lower ELs are modeled to use
die-cast copper rotors. Most manufacturers stated that they do not
currently have the machinery, technology, or engineering resources to
produce copper rotors in-house. Some manufacturers claim that the few
manufacturers that do have the capability of producing copper rotors
are not able to produce these motors in volumes sufficient to fulfill
all shipments of that equipment class and would not be able to ramp up
those production volumes over the four-year compliance period. For
manufacturers to either completely redesign their motor production
lines or significantly expand their very limited copper rotor
production line would require a massive retooling and engineering
effort, which could take more than a decade to complete. Most
manufacturers stated they would have to outsource copper rotor
production because they would not be able to modify their facilities
and production processes to produce copper rotors in-house within a
four-year time period. Most manufacturers agreed that outsourcing rotor
die casting would constrain capacity by creating a bottleneck in rotor
production, as there are very few companies that produce copper rotors.
Manufacturers also pointed out that there is substantial
uncertainty surrounding the global availability and price of copper,
which has the potential to constrain capacity. Several manufacturers
expressed concern that the combination of all of these factors would
make it impossible to support existing customers while redesigning
equipment lines and retooling.
DOE estimates there is a strong likelihood of manufacturer capacity
constraints in the near term for any standards that would likely
require the use of copper rotors for any equipment classes both due to
the uncertainty of the global supply of copper and due to the quantity
of machinery that would need to be purchased and the engineering
resources that would be required to produce copper rotors. Therefore,
there could be significant market disruption for any standards set at
EL 4 for any equipment class, except for the ESEM--Low Torque, 0.25-3
hp and the AO-ESEM--Low Torque, 0.25-3 hp equipment classes.
d. Impacts on Subgroups of Manufacturers
Using average cost assumptions to develop an industry cash-flow
estimate may not be adequate for assessing differential impacts among
manufacturer subgroups. Small manufacturers, niche equipment
manufacturers, and manufacturers exhibiting cost structures
substantially different from the industry average could be affected
disproportionately. DOE discusses the impacts on small businesses in
section VI.B of this document and did not identify any other adversely
impacted ESEM-related manufacturer subgroups for this proposed
rulemaking based on the results of the industry characterization.
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer burden involves looking at the
cumulative impact of multiple DOE standards and the product-specific
regulatory actions of other Federal agencies that affect the
manufacturers of a covered product or equipment. While any one
regulation may not impose a significant burden on manufacturers, the
combined effects of several existing or impending regulations may have
serious consequences for some manufacturers, groups of manufacturers,
or an entire industry. Assessing the impact of a single regulation may
overlook this cumulative regulatory burden. In addition to energy
conservation standards, other regulations can significantly affect
manufacturers' financial operations. Multiple regulations affecting the
same manufacturer can strain profits and lead companies to abandon
equipment 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 requests information regarding the impact of
cumulative regulatory burden on manufacturers of ESEMs associated with
multiple DOE standards or product-specific regulatory actions of other
Federal agencies.
DOE evaluates product-specific regulations that will take effect
approximately 3 years before or after the 2029 compliance date of any
new energy conservation standards for ESEMs. This information is
presented in Table V.30.
Table V.30--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting
ESEM Manufacturers
----------------------------------------------------------------------------------------------------------------
Number of Industry Industry
Federal energy conservation Number of manufacturers Approx. conversion conversion
standard mfrs * affected from standards year costs costs/product
this rule ** (millions) revenue *** (%)
----------------------------------------------------------------------------------------------------------------
Dedicated-Purpose Pool Pump 5 5 2026 & 2028 $56.2 (2022$) 5.1
Motors 88 FR 66966 (Sep. 28,
2023)...........................
Distribution Transformer 88 FR 27 6 2027 $343 (2021$) 2.7
1722 (Jan. 11, 2023) [dagger]...
[[Page 87124]]
Electric Motors 88 FR 36066 (Jun. 74 74 2027 $468 (2021$) 2.6
1, 2023)........................
----------------------------------------------------------------------------------------------------------------
* This column presents the total number of manufacturers identified in the energy conservation standard rule
contributing to cumulative regulatory burden.
** This column presents the number of manufacturers producing ESEMs that are also listed as manufacturers in the
listed energy conservation standard contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of product revenue during the conversion
period. Industry conversion costs are the upfront investments manufacturers must make to sell compliant
products/equipment. The revenue used for this calculation is the revenue from just the covered product/
equipment associated with each row. The conversion period is the time frame over which conversion costs are
made and lasts from the publication year of the final rule to the compliance year of the energy conservation
standard. The conversion period typically ranges from 3 to 5 years, depending on the rulemaking.
[dagger] Indicates a proposed rulemaking. Final values may change upon the publication of a final rule.
In response to the March 2022 Preliminary Analysis, the Joint
Stakeholders commented that regulating motors that are components
significantly increases the burden on manufacturers if all products
using special and definite purpose motors were suddenly forced to
certify compliance with standards for component parts, including the
testing, paperwork, and record-keeping requirements that accompany
certification. (Joint Stakeholders, No. 23 at p. 5) As stated in
section II.A and section IV.A.1 of this document, EPCA, as amended
through EISA 2007, provides DOE with the authority to regulate the
expanded scope of motors addressed in this rule, whether those electric
motors are manufactured alone or as a component of another piece of
equipment. DOE believes this ESEM proposed rulemaking would not impact
manufacturers of consumer products. For commercial equipment, DOE
identified the following equipment as potentially incorporating ESEMs:
walk-in coolers and freezers, circulator pumps, air circulating fans,
and commercial unitary air conditioning equipment. If the proposed
energy conservation standards for these rules finalize as proposed, DOE
identified that these rules would all: (1) have a compliance year that
is at or before the ESEM standard compliance year (2029) and/or (2)
require a motor that is either outside of the scope of ESEM (e.g., an
ECM) or an ESEM with an efficiency above the proposed ESEM standards,
and therefore would not be impacted by this ESEM proposed rulemaking
(i.e., the ESEM rule would not trigger a redesign of these equipment).
3. National Impact Analysis
This section presents DOE's estimates of the national energy
savings and the NPV of consumer benefits that would result from each of
the TSLs considered as potential new standards.
a. Significance of Energy Savings
To estimate the energy savings attributable to potential new
standards for ESEMs, DOE compared their energy consumption under the
no-new-standards case to their anticipated energy consumption under
each TSL. The savings are measured over the entire lifetime of products
purchased in the 30-year period that begins in the year of anticipated
compliance with new standards (2029-2058). Table V-31 presents DOE's
projections of the national energy savings for each TSL considered for
ESEMs. The savings were calculated using the approach described in
section IV.H.2 of this document.
Table V-31--Cumulative National Energy Savings for ESEMs; 30 Years of Shipments
[2029-2058]
----------------------------------------------------------------------------------------------------------------
Trial standard level
---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
(Quads)
----------------------------------------------------------------------------------------------------------------
Primary energy.................................. 3.0 8.7 16.5 23.6
FFC energy...................................... 3.1 8.9 17.0 24.2
----------------------------------------------------------------------------------------------------------------
OMB Circular A-4 \97\ requires agencies to present analytical
results, including separate schedules of the monetized benefits and
costs that show the type and timing of benefits and costs. Circular A-4
also directs agencies to consider the variability of key elements
underlying the estimates of benefits and costs. For this NOPR, DOE
undertook a sensitivity analysis using 9 years, rather than 30 years,
of equipment shipments. The choice of a 9-year period is a proxy for
the timeline in EPCA for the review of certain energy conservation
standards and potential revision of and compliance with such revised
standards.\98\ The review
[[Page 87125]]
timeframe established in EPCA is generally not synchronized with the
equipment lifetime, equipment manufacturing cycles, or other factors
specific to ESEMs. Thus, such results are presented for informational
purposes only and are not indicative of any change in DOE's analytical
methodology. The NES sensitivity analysis results based on a 9-year
analytical period are presented in Table V-32. The impacts are counted
over the lifetime of ESEMs purchased in 2029-2037.
---------------------------------------------------------------------------
\97\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003. https://obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed
May 1, 2023).
\98\ EPCA requires DOE to review its standards at least once
every 6 years, and requires, for certain products, a 3-year period
after any new standard is promulgated before compliance is required,
except that in no case may any new standards be required within 6
years of the compliance date of the previous standards. (42 U.S.C.
6316(a); 42 U.S.C. 6295(m)) While adding a 6-year review to the 3-
year compliance period adds up to 9 years, DOE notes that it may
undertake reviews at any time within the 6-year period and that the
3-year compliance date may yield to the 6-year backstop. A 9-year
analysis period may not be appropriate given the variability that
occurs in the timing of standards reviews and the fact that for some
products, the compliance period is 5 years rather than 3 years.
Table V-32--Cumulative National Energy Savings for ESEMs; 9 Years of Shipments
[2029-2037]
----------------------------------------------------------------------------------------------------------------
Trial standard level
---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
(Quads)
----------------------------------------------------------------------------------------------------------------
Primary energy.................................. 0.8 2.4 4.5 6.4
FFC energy...................................... 0.8 2.4 4.6 6.6
----------------------------------------------------------------------------------------------------------------
b. Net Present Value of Consumer Costs and Benefits
DOE estimated the cumulative NPV of the total costs and savings for
consumers that would result from the TSLs considered for ESEMs. In
accordance with OMB's guidelines on regulatory analysis,\99\ DOE
calculated NPV using both a 7-percent and a 3-percent real discount
rate. Table V-33 shows the consumer NPV results with impacts counted
over the lifetime of equipment purchased in 2029-2058.
---------------------------------------------------------------------------
\99\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003.
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed
July 1, 2021).
Table V-33--Cumulative Net Present Value of Consumer Benefits for ESEMs; 30 Years of Shipments
[2029-2058]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
(billion 2022$)
----------------------------------------------------------------------------------------------------------------
3 percent....................................... 14.0 45.0 50.4 36.8
7 percent....................................... 6.4 21.0 21.0 11.2
----------------------------------------------------------------------------------------------------------------
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V-34. The impacts are counted over the
lifetime of equipment purchased in 2029-2037. As mentioned previously,
such results are presented for informational purposes only and are not
indicative of any change in DOE's analytical methodology or decision
criteria.
Table V-34--Cumulative Net Present Value of Consumer Benefits for ESEMs; 9 Years of Shipments
[2029-2037]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
(billion 2022$)
----------------------------------------------------------------------------------------------------------------
3 percent....................................... 5.1 16.3 18.1 12.9
7 percent....................................... 3.2 10.3 10.1 5.2
----------------------------------------------------------------------------------------------------------------
The previous results reflect the use of a default trend to estimate
the change in price for ESEMs over the analysis period (see section
IV.F.1 of this document). DOE also conducted a sensitivity analysis
that considered one scenario with a price decline and one scenario with
a price increase compared to the reference case. The results of these
alternative cases are presented in appendix 10C of the NOPR TSD. In the
decreasing price case, the NPV of consumer benefits is higher than in
the default case. In the increasing price case, the NPV of consumer
benefits is lower than in the default case.
c. Indirect Impacts on Employment
DOE estimates that new energy conservation standards for ESEMs will
reduce energy expenditures for consumers of those equipment, 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
[[Page 87126]]
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 (2029-2034), where these uncertainties
are reduced.
The results suggest that the proposed 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 NOPR TSD presents detailed results
regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
As discussed in section IV.C.1.c of this document, DOE has
tentatively concluded that the standards proposed in this NOPR would
not lessen the utility or performance of the ESEMs under consideration
in this proposed rulemaking. Manufacturers of these products currently
offer units that meet or exceed the proposed standards.
5. Impact of Any Lessening of Competition
DOE considered any lessening of competition that would be likely to
result from new or amended standards. As discussed in section III.F.1.e
of this document, the Attorney General determines the impact, if any,
of any lessening of competition likely to result from a proposed
standard, and transmits such determination in writing to the Secretary,
together with an analysis of the nature and extent of such impact. To
assist the Attorney General in making this determination, DOE has
provided DOJ with copies of this NOPR and the accompanying NOPR TSD for
review. DOE will consider DOJ's comments on the proposed rule in
determining whether to proceed to a final rule. DOE will publish and
respond to DOJ's comments in that document. DOE invites comment from
the public regarding the competitive impacts that are likely to result
from this proposed rule. In addition, stakeholders may also provide
comments separately to DOJ regarding these potential impacts. See the
ADDRESSES section for information to send comments to DOJ.
6. Need of the Nation To Conserve Energy
Enhanced energy efficiency, where economically justified, improves
the Nation's energy security, strengthens the economy, and reduces the
environmental impacts (costs) of energy production. Reduced electricity
demand due to energy conservation standards is also likely to reduce
the cost of maintaining the reliability of the electricity system,
particularly during peak-load periods. Chapter 15 in the NOPR TSD
presents the estimated impacts on electricity generating capacity,
relative to the no-new-standards case, for the TSLs that DOE considered
in this proposed rulemaking.
Energy conservation resulting from potential energy conservation
standards for ESEMs is expected to yield environmental benefits in the
form of reduced emissions of certain air pollutants and greenhouse
gases. Table V-35 provides DOE's estimate of cumulative emissions
reductions expected to result from the TSLs considered in this NOPR.
The emissions were calculated using the multipliers discussed in
section IV.L of this document. DOE reports annual emissions reductions
for each TSL in chapter 13 of the NOPR TSD.
Table V-35--Cumulative Emissions Reduction for ESEMs Shipped in 2029-2058
----------------------------------------------------------------------------------------------------------------
Trial standard level
---------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Electric Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)................................... 50.0 145.6 277.6 397.2
CH4 (thousand tons)......................................... 3.4 10.0 19.2 27.5
N2O (thousand tons)......................................... 0.5 1.4 2.6 3.8
SO2 (thousand tons)......................................... 23.3 67.8 129.6 185.6
NOX (thousand tons)......................................... 14.7 42.9 82.6 118.6
Hg (tons)................................................... 0.1 0.3 0.6 0.8
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)................................... 5.1 14.9 28.4 40.6
CH4 (thousand tons)......................................... 464.2 1,352.2 2,574.8 3,682.0
N2O (thousand tons)......................................... 0.0 0.1 0.1 0.2
SO2 (thousand tons)......................................... 79.6 232.0 441.7 631.7
NOX (thousand tons)......................................... 0.3 0.9 1.7 2.5
Hg (tons)................................................... 0.0 0.0 0.0 0.0
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)................................... 55.1 160.5 306.0 437.8
CH4 (thousand tons)......................................... 467.6 1,362.2 2,593.9 3,709.4
N2O (thousand tons)......................................... 0.5 1.4 2.8 4.0
SO2 (thousand tons)......................................... 102.9 299.8 571.3 817.3
NOX (thousand tons)......................................... 15.0 43.8 84.3 121.1
Hg (tons)................................................... 0.1 0.3 0.6 0.8
----------------------------------------------------------------------------------------------------------------
As part of the analysis for this rulemaking, DOE estimated monetary
benefits likely to result from the reduced emissions of CO2
that DOE estimated for each of the considered TSLs for ESEMs. Section
IV.L of this document discusses the SC-CO2 values that DOE
used. Table V-36 presents the value of CO2 emissions
reduction at
[[Page 87127]]
each TSL for each of the SC-CO2 cases. The time-series of
annual values is presented for the proposed TSL in chapter 14 of the
NOPR TSD.
Table V-36--Present Value of CO2 Emissions Reduction for ESEMs Shipped in 2029-2058
----------------------------------------------------------------------------------------------------------------
SC-CO2 case
---------------------------------------------------------
Discount rate and statistics
TSL ---------------------------------------------------------
2.5% 3% 95th
5% Average 3% Average Average percentile
----------------------------------------------------------------------------------------------------------------
(billion 2022$)
----------------------------------------------------------------------------------------------------------------
1..................................................... 0.61 2.55 3.95 7.76
2..................................................... 1.79 7.43 11.52 22.59
3..................................................... 3.42 14.18 21.97 43.10
4..................................................... 4.89 20.29 31.43 61.67
----------------------------------------------------------------------------------------------------------------
As discussed in section IV.L.2 of this document, DOE estimated the
climate benefits likely to result from the reduced emissions of methane
and N2O that DOE estimated for each of the considered TSLs
for ESEMs. Table V-37 presents the value of the CH4
emissions reduction at each TSL, and Table V-38 presents the value of
the N2O emissions reduction at each TSL. The time-series of
annual values is presented for the proposed TSL in chapter 14 of the
NOPR TSD.
Table V-37--Present Value of Methane Emissions Reduction for ESEMs Shipped in 2029-2058
----------------------------------------------------------------------------------------------------------------
SC-CH4 case
---------------------------------------------------------
Discount rate and statistics
TSL ---------------------------------------------------------
2.5% 3% 95th
5% Average 3% Average Average percentile
----------------------------------------------------------------------------------------------------------------
(billion 2022$)
----------------------------------------------------------------------------------------------------------------
1..................................................... 0.24 0.68 0.94 1.80
2..................................................... 0.69 1.99 2.75 5.26
3..................................................... 1.32 3.79 5.24 10.01
4..................................................... 1.88 5.42 7.49 14.32
----------------------------------------------------------------------------------------------------------------
Table V-38--Present Value of Nitrous Oxide Emissions Reduction for ESEMs Shipped in 2029-2058
----------------------------------------------------------------------------------------------------------------
SC-N2O case
---------------------------------------------------------
Discount rate and statistics
TSL ---------------------------------------------------------
2.5% 3% 95th
5% Average 3% Average Average percentile
----------------------------------------------------------------------------------------------------------------
(billion 2022$)
----------------------------------------------------------------------------------------------------------------
1..................................................... 0.002 0.008 0.012 0.022
2..................................................... 0.006 0.024 0.036 0.063
3..................................................... 0.012 0.045 0.070 0.121
4..................................................... 0.017 0.065 0.100 0.173
----------------------------------------------------------------------------------------------------------------
DOE is well aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
global and U.S. economy continues to evolve rapidly. DOE, together with
other Federal agencies, will continue to review methodologies for
estimating the monetary value of reductions in CO2 and other
GHG emissions. This ongoing review will consider the comments on this
subject that are part of the public record for this and other
rulemakings, as well as other methodological assumptions and issues.
DOE notes that the proposed standards would be economically justified
even without inclusion of monetized benefits of reduced GHG emissions.
DOE also estimated the monetary value of the health benefits
associated with NOX and SO2 emissions reductions
anticipated to result from the considered TSLs for ESEMs. The dollar-
per-ton values that DOE used are discussed in section IV.L of this
document. Table V-39 presents the present value for NOX
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and Table V-40 presents similar results for
SO2 emissions reductions. The results in these tables
reflect application of EPA's low dollar-per-ton values, which DOE used
to be conservative. The time-series of annual values is presented for
the proposed TSL in chapter 14 of the NOPR TSD.
[[Page 87128]]
Table V-39--Present Value of NOX Emissions Reduction for ESEMs Shipped
in 2029-2058
------------------------------------------------------------------------
TSL 7% Discount rate 3% Discount rate
------------------------------------------------------------------------
(million 2022$)
------------------------------------------------------------------------
1............................... 2,249.3 5,221.7
2............................... 6,551.5 15,211.6
3............................... 12,497.5 29,002.1
4............................... 17,883.3 41,492.7
------------------------------------------------------------------------
Table V-40--Present Value of SO2 Emissions Reduction for ESEMs Shipped
in 2029-2058
------------------------------------------------------------------------
TSL 3% Discount rate 7% Discount rate
------------------------------------------------------------------------
(million 2022$)
------------------------------------------------------------------------
1............................... 467.5 1,065.7
2............................... 1,362.5 3,106.6
3............................... 2,624.4 5,981.4
4............................... 3,767.9 8,586.2
------------------------------------------------------------------------
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 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)) No other factors were considered in this
analysis.
8. Summary of Economic Impacts
Table V-41 presents the NPV values that result from adding the
estimates of the potential economic benefits resulting from reduced GHG
and NOX and SO2 emissions to the NPV of consumer
benefits calculated for each TSL considered in this proposed
rulemaking. The consumer benefits are domestic U.S. monetary savings
that occur as a result of purchasing the covered ESEMs and are measured
for the lifetime of products shipped in 2029-2058. The climate benefits
associated with reduced GHG emissions resulting from the proposed
standards are global benefits and are also calculated based on the
lifetime of ESEMs shipped in 2029-2058.
Table V-41--Consumer NPV Combined With Present Value of Climate Benefits and Health Benefits
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
Using 3% discount rate for Consumer NPV and Health Benefits (billion 2022$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.............................................. 21.2 65.8 90.1 93.7
3% Average SC-GHG case.............................................. 23.6 72.8 103.4 112.7
2.5% Average SC-GHG case............................................ 25.2 77.6 112.6 125.9
3% 95th percentile SC-GHG case...................................... 29.9 91.2 138.6 163.1
----------------------------------------------------------------------------------------------------------------
Using 7% discount rate for Consumer NPV and Health Benefits (billion 2022$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.............................................. 10.0 31.4 40.8 39.7
3% Average SC-GHG case.............................................. 12.4 38.3 54.1 58.7
2.5% Average SC-GHG case............................................ 14.1 43.2 63.4 71.9
3% 95th percentile SC-GHG case...................................... 18.7 56.8 89.3 109.1
----------------------------------------------------------------------------------------------------------------
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 NOPR, DOE considered the impacts of new standards for
ESEMs at each TSL, beginning with the maximum technologically feasible
level, to determine whether that level was economically justified.
Where the max-tech level was not justified, DOE then considered the
next most efficient level and undertook the same evaluation until it
reached the highest efficiency level that is both technologically
feasible and economically justified and saves a significant amount of
energy.
To aid the reader as DOE discusses the benefits and/or burdens of
each TSL, tables in this section present a summary
[[Page 87129]]
of the results of DOE's quantitative analysis for each TSL. In addition
to the quantitative results presented in the tables, DOE also considers
other burdens and benefits that affect economic justification. These
include the impacts on identifiable subgroups of consumers who may be
disproportionately affected by a national standard and impacts on
employment.
1. Benefits and Burdens of TSLs Considered for ESEM Standards
Table V-42 and Table V-43 summarize the quantitative impacts
estimated for each TSL for ESEMs. The national impacts are measured
over the lifetime of ESEMs purchased in the 30-year period that begins
in the anticipated year of compliance with new standards (2029-2058).
The energy savings, emissions reductions, and value of emissions
reductions refer to full-fuel-cycle results. The efficiency levels
contained in each TSL are described in section V.A of this document.
Table V-42--Summary of Analytical Results for ESEMs TSLs: National
Impacts
------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
------------------------------------------------------------------------
Cumulative FFC National Energy Savings
------------------------------------------------------------------------
Quads....................... 3.1 8.9 17.0 24.2
------------------------------------------------------------------------
Cumulative FFC Emissions Reduction
------------------------------------------------------------------------
CO2 (million metric tons)... 55.1 160.5 306.0 437.8
CH4 (thousand tons)......... 467.6 1,362.2 2,593.9 3,709.4
N2O (thousand tons)......... 0.5 1.4 2.8 4.0
SO2 (thousand tons)......... 102.9 299.8 571.3 817.3
NOX (thousand tons)......... 15.0 43.8 84.3 121.1
Hg (tons)................... 0.1 0.3 0.6 0.8
------------------------------------------------------------------------
Present Value of Benefits and Costs (3% discount rate, billion 2022$)
------------------------------------------------------------------------
Consumer Operating Cost 18.7 54.7 107.0 154.5
Savings....................
Climate Benefits *.......... 3.2 9.4 18.0 25.8
Health Benefits **.......... 6.3 18.3 35.0 50.1
Total Benefits [dagger]..... 28.3 82.4 160.0 230.3
Consumer Incremental 4.7 9.7 56.7 117.7
Equipment Costs [Dagger]...
Consumer Net Benefits....... 14.0 45.0 50.4 36.8
Total Net Benefits.......... 23.6 72.8 103.4 112.7
------------------------------------------------------------------------
Present Value of Benefits and Costs (7% discount rate, billion 2022$)
------------------------------------------------------------------------
Consumer Operating Cost 8.94 26.10 51.09 73.76
Savings....................
Climate Benefits *.......... 3.24 9.45 18.01 25.77
Health Benefits **.......... 2.72 7.91 15.12 21.65
Total Benefits [dagger]..... 14.89 43.46 84.23 121.18
Consumer Incremental 2.49 5.14 30.12 62.52
Equipment Costs [Dagger]...
Consumer Net Benefits....... 6.45 20.95 20.98 11.24
Total Net Benefits.......... 12.41 38.31 54.11 58.66
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with ESEMs
shipped in 2029-2058. These results include consumer, climate, and
health benefits which accrue after 2058 from the products shipped in
2029-2058.
* 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; however, DOE 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 IWG.
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing (for NOX and SO2) PM2.5
precursor health benefits and (for NOX) ozone precursor health
benefits, but will continue to assess the ability to monetize other
effects such as health benefits from reductions in direct PM2.5
emissions. The health benefits are presented at real discount rates of
3 and 7 percent. See section IV.L of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health
benefits. For presentation purposes, total and net benefits for both
the 3-percent and 7-percent cases are presented using the average SC-
GHG with 3-percent discount rate.
[Dagger] Costs include incremental equipment costs.
Table V-43--Summary of Analytical Results for ESEMs TSLs: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (million 2022$) (No- 1,883 to 1,818.............. 1,888 to 1,755............. 1,820 to 1,035............. 1,710 to 73.
new-standards case INPV = 2,019).
Industry NPV (% change)............ (6.7) to (9.9).............. (6.5) to (13.1)............ (9.9) to (48.7)............ (15.3) to (96.4).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Average LCC Savings (2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Medium Torque, 0.25 hp.. 55.6........................ 51.3....................... (0.8)...................... (106.5).
ESEM--High/Medium Torque, 1 hp..... 116.1....................... 137.7...................... 20.8....................... (145.2).
[[Page 87130]]
ESEM--Low Torque, 0.25 hp.......... 212.8....................... 146.8...................... 24.1....................... (16.7).
ESEM--Low Torque, 0.5 hp........... 41.2........................ 99.6....................... 77.8....................... 72.5.
ESEM--Polyphase, 0.25 hp........... 31.9........................ 26.2....................... (8.3)...................... (107.3).
AO-ESEM--High/Medium Torque, 0.25 76.3........................ 82.9....................... 37.4....................... (61.4).
hp.
AO-ESEM--High/Medium Torque, 1 hp.. 121.9....................... 160.3...................... 37.1....................... (128.2).
AO-ESEM--Low Torque, 0.25 hp....... 217.2....................... 121.3...................... 31.6....................... (13.4)..
AO-ESEM--Low Torque, 0.5 hp........ 47.6........................ 88.4....................... 50.0....................... 52.4.
AO-ESEM--Polyphase, 0.25 hp........ 35.1........................ 39.9....................... 12.7....................... (85.0).
Shipment-Weighted Average *........ 82.8........................ 101.8...................... 43.6....................... (9.6).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Medium Torque, 0.25 hp.. 0.5......................... 1.5........................ 5.3........................ 10.0.
ESEM--High/Medium Torque, 1 hp..... 0.7......................... 1.1........................ 4.7........................ 8.7.
ESEM--Low Torque, 0.25 hp.......... 0.4......................... 1.0........................ 3.3........................ 5.0.
ESEM--Low Torque, 0.5 hp........... 2.4......................... 1.3........................ 2.8........................ 3.3.
ESEM--Polyphase, 0.25 hp........... 1.1......................... 2.6........................ 7.4........................ 15.6.
AO-ESEM--High/Medium Torque, 0.25 0.3......................... 1.0........................ 3.2........................ 6.1.
hp.
AO-ESEM--High/Medium Torque, 1 hp.. 0.6......................... 0.9........................ 3.9........................ 7.7.
AO-ESEM--Low Torque, 0.25 hp....... 0.4......................... 1.1........................ 3.1........................ 4.9.
AO-ESEM--Low Torque, 0.5 hp........ 2.2......................... 0.8........................ 3.0........................ 3.4.
AO-ESEM--Polyphase, 0.25 hp........ 1.1......................... 2.0........................ 5.1........................ 10.8.
Shipment-Weighted Average *........ 1.5......................... 1.2........................ 3.6........................ 5.7.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of Consumers that Experience a Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Medium Torque, 0.25 hp.. 2%.......................... 17%........................ 51%........................ 86%.
ESEM--High/Medium Torque, 1 hp..... 3%.......................... 12%........................ 54%........................ 82%.
ESEM--Low Torque, 0.25 hp.......... 0%.......................... 3%......................... 52%........................ 68%.
ESEM--Low Torque, 0.5 hp........... 11%......................... 8%......................... 30%........................ 40%.
ESEM--Polyphase, 0.25 hp........... 1%.......................... 7%......................... 59%........................ 95%.
AO-ESEM--High/Medium Torque, 0.25 1%.......................... 8%......................... 36%........................ 65%.
hp.
AO-ESEM--High/Medium Torque, 1 hp.. 2%.......................... 6%......................... 44%........................ 82%.
AO-ESEM--Low Torque, 0.25 hp....... 0%.......................... 4%......................... 39%........................ 68%.
AO-ESEM--Low Torque, 0.5 hp........ 2%.......................... 3%......................... 34%........................ 42%
AO-ESEM--Polyphase, 0.25 hp........ 3%.......................... 10%........................ 49%........................ 88%.
Shipment-Weighted Average *........ 5%.......................... 8%......................... 41%........................ 59%.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* Weighted by shares of each equipment class in total projected shipments in 2022.
DOE first considered TSL 4, which represents the max-tech
efficiency levels. TSL 4 would save an estimated 24.2 quads of energy,
an amount DOE considers significant. Under TSL 4, the NPV of consumer
benefit would be $11.24 billion using a discount rate of 7 percent and
$36.8 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 437.8 Mt of
CO2, 817.3 thousand tons of SO2, 121.1 thousand
tons of NOX, 0.8 tons of Hg, 3,709.4 thousand tons of
CH4, and 4.0 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 4 is $25.8 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 4 is $21.7 billion using a 7-percent discount rate and $50.1
billion using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 4 is $58.7
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 4 is $112.7 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 4, the average LCC impact for non-air over ESEMs is a
savings of -$107 and -$145 for high/medium torque ESEMs (0.25 and 1 hp,
respectively); -$17 and $73 for low torque ESEMs (0.25 and 0.5 hp,
respectively); and -$107 for Polyphase ESEMs. At TSL 4, the average LCC
impact for AO-ESEMs is a savings of -$61 and -$128 for high/medium
torque AO-ESEMs (0.25 and 1 hp, respectively); -$13 and $52 for low
torque AO-ESEMs (0.25 and 0.5 hp, respectively); and -$85 for Polyphase
AO-ESEMs. Overall, the shipments-weighted average LCC impact is a
savings of -$10. The simple payback period for non-air-over ESEMs is
6.9 and 6.3 years for high/medium torque ESEMs (0.25 and 1 hp,
respectively); 2.0 and 3.0 years for low torque ESEMs (0.25 and 0.5 hp,
respectively); and 9.7 years for polyphase ESEMs. The simple payback
period for AO-ESEMs is 4.3 and 5.1 years for high/medium torque AO-
ESEMs (0.25 and 1 hp, respectively); 1.9 and 2.7 years for low torque
AO-ESEMs (0.25 and 0.5 hp, respectively); and 8.3 years for polyphase
AO-ESEMs. Overall, the shipments-weighted average PBP is 4.0 years. The
fraction of consumers experiencing a net LCC cost for non-air-over
ESEMs is 85.9 and 82.5 percent for high/medium torque ESEMs (0.25 and 1
hp, respectively); 67.7 and 40.1 percent
[[Page 87131]]
for low torque ESEMs (0.25 and 0.5 hp, respectively); and 95.0 percent
for polyphase ESEMs. The fraction of consumers experiencing a net LCC
cost for AO-ESEMs is 64.6 and 81.9 percent for high/medium torque AO-
ESEMs (0.25 and 1 hp, respectively); 67.9 and 42.2 percent for low
torque AO-ESEMs (0.25 and 0.5 hp, respectively); and 87.8 percent for
polyphase AO-ESEMs. Overall, the shipments-weighted average fraction of
consumers experiencing a net LCC cost is 59.3 percent.
At TSL 4, the projected change in INPV ranges from a decrease of
$1,946 million to a decrease of $309 million, which corresponds to
decreases of 96.4 percent and 15.3 percent, respectively. DOE estimates
that industry must invest $2,156 million to redesign almost all ESEM
models and to purchase new lamination die sets, winding machines, frame
casts, and assembly equipment as well as other retooling costs to
manufacturer compliant ESEM models at TSL 4. An investment of $2,156
million in conversion costs represents over 3.3 times the sum of the
annual free cash flows over the years between the expected publication
of the final rule and the compliance year (i.e., the time period that
these conversion costs would be incurred) and represents over 100
percent of the entire no-new-standards case INPV over the 30-year
analysis period.\100\
---------------------------------------------------------------------------
\100\ The sum of annual free cash flows is estimated to be $636
million for 2025-2028 in the no-new-standards case and the no-new-
standards case INPV is estimated to be $2,019 million.
---------------------------------------------------------------------------
In the no-new-standards case, free cash flow is estimated to be
$154 million in 2028, the year before the compliance date. At TSL 4,
the estimated free cash flow is -$764 million in 2028. This represents
a decrease in free cash flow of 595 percent, or a decrease of $919
million, in 2028. A negative free cash flow implies that most, if not
all, manufacturers will need to borrow substantial funds to be able to
make investments necessary to comply with energy conservation standards
at TSL 4. The extremely large drop in free cash flows could cause some
ESEM manufacturers to exit the ESEM market entirely, even though
recovery may be possible over the 30-year analysis period. At TSL 4,
models representing less than 1 percent of all ESEM shipments are
estimated to meet the efficiency requirements at this TSL in the no-
new-standards case by 2029, the compliance year. Therefore, models
representing over 99 percent of all ESEM shipments will need be
remodeled in the 4-year compliance period.
Manufacturers are unlikely to have the engineering capacity to
conduct this massive redesign effort in 4 years. Instead, they will
likely prioritize redesigns based on sales volume, which could leave
market gaps in equipment offered by manufacturers and even the entire
ESEMs industry. The resulting market gaps in equipment offerings could
result in sub-optimal selection of ESEMs for some applications. Lastly,
although DOE's analysis assumes that TSL 4 can be reached without
significant increase in size, as discussed in sections IV.C.3 and
IV.J.2.c of this NOPR and in the December 2022 Joint Recommendation,
the Electric Motor Working group expressed that in order to meet the
efficiency requirements at TSL 4, some manufacturers may choose to rely
on design options that could significantly increase the physical size
of ESEMs. This could result in a significant and widespread disruption
to the OEM markets that used ESEMs as an embedded product, as those
OEMs may have to make significant changes to their equipment that use
ESEMs because those ESEMs could become larger in physical size.
DOE requests comment on if manufacturers would have the engineering
capacity to conduct design efforts to be able to offer a full portfolio
of complaint ESEM at TSL 4. If not, please provide any data or
information on the potential impacts that could arise due to these
market gaps in equipment offerings.
Under 42 U.S.C. 6316(a) and 42 U.S.C. 6295(o)(2)(B)(i), DOE
determines whether a standard is economically justified after
considering seven factors. Based on these factors, the Secretary
tentatively concludes that at TSL 4 for ESEMs, the benefits of energy
savings, positive NPV of consumer benefits, emission reductions, and
the estimated monetary value of the emissions reductions would be
outweighed by the economic burden on many consumers and the impacts on
manufacturers, including the extremely large conversion costs
(representing over 3.3 times the sum of the annual free cash flows
during the time period that these conversion costs will be incurred and
over 100 percent of the entire no-new-standards case INPV),
profitability impacts that could result in a large reduction in INPV
(up to a decrease of 96.4 percent), the large negative free cash flows
in the years leading up to the compliance date (annual free cash flow
is estimated to be -$764 million in the year before the compliance
date), the lack of manufacturers currently offering equipment meeting
the efficiency levels required at TSL 4 (models representing over 99
percent of shipments will need to be redesigned to meet this TSL), and
the likelihood of the significant disruption in the ESEM market. Due to
the limited amount of engineering resources each manufacturer has, it
is unclear if most manufacturers will be able to redesign models
representing on average 99 percent of their ESEM shipments covered by
this rulemaking in the 4-year compliance period. Consequently, the
Secretary has tentatively concluded that TSL 4 is not economically
justified.
DOE then considered TSL 3, which represents efficiency level 3 for
all equipment class groups. TSL 3 would save an estimated 17 quads of
energy, an amount DOE considers significant. Under TSL 3, the NPV of
consumer benefit would be $11.2 billion using a discount rate of 7
percent and $36.8 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 306.0 Mt of
CO2, 571.3 thousand tons of SO2, 84.3 thousand
tons of NOX, 0.6 tons of Hg, 2,593.9 thousand tons of
CH4, and 2.8 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 3 is $18.0 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 3 is $15.1 billion using a 7-percent discount rate and $35.0
billion using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 3 is $54.1
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 3 is $103.4 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 3, the average LCC impact for non-air over ESEMs is a
savings of -$1 and $21 for high/medium torque ESEMs (0.25 and 1 hp,
respectively); $24 and $78 for low torque ESEMs (0.25 and 0.5 hp,
respectively); and -$8 for Polyphase ESEMs. At TSL 3, the average LCC
impact for AO-ESEMs is a savings of $37 and $37 for high/medium torque
AO-ESEMs (0.25 and 1 hp, respectively); $32 and $50 for low
[[Page 87132]]
torque AO ESEMs (0.25 and 0.5 hp, respectively); and $13 for Polyphase
AO-ESEMs. Overall, the shipments-weighted average LCC impact is a
savings of $44. The simple payback period for non-air-over ESEMs is 3.7
and 3.4 years for high/medium torque ESEMs (0.25 and 1 hp,
respectively); 1.3 and 2.5 years for low torque ESEMs (0.25 and 0.5 hp,
respectively); and 4.6 years for polyphase ESEMs. The simple payback
period for AO-ESEMs is 2.3 and 2.7 years for high/medium torque AO-
ESEMs (0.25 and 1 hp, respectively); 1.2 and 2.3 years for low torque
AO-ESEMs (0.25 and 0.5 hp, respectively); and 3.9 years for polyphase
AO-ESEMs. Overall, the shipments-weighted average PBP is 2.6 years. The
fraction of consumers experiencing a net LCC cost, for non-air-over
ESEMs is 51.2 and 53.5 percent for high/medium torque ESEMs (0.25 and 1
hp, respectively); 52.0 and 30.4 percent for low torque ESEMs (0.25 and
0.5 hp, respectively); and 58.6 percent for polyphase ESEMs. The
fraction of consumers experiencing a net LCC cost, for AO-ESEMs is 36.0
and 44.4 percent for high/medium torque AO-ESEMs (0.25 and 1 hp,
respectively); 39.1 and 34.4 percent for low torque AO-ESEMs (0.25 and
0.5 hp, respectively); and 48.6 percent for polyphase AO-ESEMs.
Overall, the shipments-weighted average fraction of consumers
experiencing a net LCC cost is 40.6 percent.
At TSL 3, the projected change in INPV ranges from a decrease of
$1,035 million to a decrease of $199 million, which corresponds to
decreases of 48.7 percent and 9.9 percent, respectively. DOE estimates
that industry must invest $1,118 million to redesign the majority of
ESEM models and to purchase new lamination die sets, winding machines,
frame casts, and assembly equipment as well as other retooling costs to
manufacturer compliant ESEM models at TSL 3. An investment of $1,118
million in conversion costs represents over 1.7 times the sum of the
annual free cash flows over the years between the expected publication
of the final rule and the compliance year (i.e., the time period that
these conversion costs would be incurred) and represents over 55
percent of the entire no-new-standards case INPV over the 30-year
analysis period.\101\
---------------------------------------------------------------------------
\101\ The sum of annual free cash flows is estimated to be $636
million for 2025-2028 in the no-new-standards case and the no-new-
standards case INPV is estimated to be $2,019 million.
---------------------------------------------------------------------------
In the no-new-standards case, free cash flow is estimated to be
$154 million in 2028, the year before the compliance date. At TSL 3,
the estimated free cash flow is -$313 million in 2028. This represents
a decrease in free cash flow of 303 percent, or a decrease of $468
million, in 2028. A negative free cash flow implies that most, if not
all, manufacturers will need to borrow substantial funds to be able to
make investments necessary to comply with energy conservation standards
at TSL 3. The extremely large drop in free cash flows could cause some
ESEM manufacturers to exit the ESEM market entirely, even though
recovery may be possible over the 30-year analysis period. At TSL 3,
models representing approximately 9 percent of all ESEM shipments are
estimated to meet the efficiency requirements at this TSL in the no-
new-standards case by 2029, the compliance year. Therefore, models
representing approximately 91 percent of all ESEM shipments will need
be remodeled in the 4-year compliance period.
Manufacturers are unlikely to have the engineering capacity to
conduct this massive redesign effort in 4 years. Instead, they will
likely prioritize redesigns based on sales volume, which could leave
market gaps in equipment offered by manufacturers and even the entire
ESEMs industry. The resulting market gaps in equipment offerings could
result in sub-optimal selection of ESEMs for some applications. Lastly,
although DOE's analysis assumes that TSL 3 can be reached without
significant increase in size, as discussed in sections IV.C.3 and
IV.J.2.c of this NOPR and in the December 2022 Joint Recommendation,
the Electric Motor Working group expressed that in order to meet the
efficiency requirements at TSL 3, some manufacturers may choose to rely
on design options that would significantly increase the physical size
of ESEMs. This could result in a significant and widespread disruption
to the OEM markets that used ESEMs as an embedded product, as those
OEMs may have to make significant changes to their equipment that use
ESEMs since those ESEMs could become larger in physical size.
DOE requests comment on if manufacturers would have the engineering
capacity to conduct design efforts to be able to offer a full portfolio
of compliant ESEMs at TSL 3. If not, please provide any data or
information on the potential impacts that could arise due to these
market gaps in equipment offerings.
Under 42 U.S.C. 6316(a) and 42 U.S.C. 6295(o)(2)(B)(i), DOE
determines whether a standard is economically justified after
considering seven factors. Based on these factors, the Secretary
tentatively concludes that at TSL 3 for ESEMs, the benefits of energy
savings, the economic benefit on many consumers, positive NPV of
consumer benefits, emission reductions, and the estimated monetary
value of the emissions reductions would be outweighed by the impacts on
manufacturers, including the extremely large conversion costs
(representing over 1.7 times the sum of the annual free cash flows
during the time period that these conversion costs will be incurred and
over 55 percent of the entire no-new-standards case INPV),
profitability impacts that could result in a large reduction in INPV
(up to a decrease of 48.7 percent), the large negative free cash flows
in the years leading up to the compliance date (annual free cash flow
is estimated to be -$313 million in the year before the compliance
date), the lack of manufacturers currently offering equipment meeting
the efficiency levels required at this TSL (models representing
approximately 91 percent of shipments will need to be redesigned to
meet this TSL), and the likelihood of the significant disruption in the
ESEM market. Due to the limited amount of engineering resources each
manufacturer has, it is unclear if most manufacturers will be able to
redesign models representing on average 91 percent of their ESEM
shipments covered by this rulemaking in the 4-year compliance period.
Consequently, the Secretary has tentatively concluded that TSL 3 is not
economically justified.
DOE then considered TSL 2, the standards level recommended in the
December 2022 Joint Recommendation, which represents EL 2 for all
equipment class groups. TSL 2 would save an estimated 8.9 quads of
energy, an amount DOE considers significant. Under TSL 2, the NPV of
consumer benefit would be $21.0 billion using a discount rate of 7
percent and $45.0 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 2 are 160.5 Mt of
CO2, 299.8 thousand tons of SO2, 43.8 thousand
tons of NOX, 0.3 tons of Hg, 1,362.2 thousand tons of
CH4, and 1.4 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 2 is $9.4 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 2 is $7.9 billion using a 7-percent discount rate and $18.3 billion
using a 3-percent discount rate.
[[Page 87133]]
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 2 is $38.3
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 2 is $72.8 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 2, the average LCC impact for non-air over ESEMs is a
savings of $51 and $138 for high/medium torque ESEMs (0.25 and 1 hp,
respectively); $147 and $100 for low torque ESEMs (0.25 and 0.5 hp,
respectively); and $26 for Polyphase ESEMs. At TSL 2, the average LCC
impact for AO-ESEMs is a savings of $83 and $160 for high/medium torque
AO-ESEMs (0.25 and 1 hp, respectively); $121 and $88 for low torque AO-
ESEMs (0.25 and 0.5 hp, respectively); and $40 for Polyphase AO-ESEMs.
Overall, the shipments-weighted average LCC impact is a savings of
$102. The simple payback period for non-air-over ESEMs is 1.1 and 0.9
years for high/medium torque ESEMs (0.25 and 1 hp, respectively); 0.7
and 1.5 years for low torque ESEMs (0.25 and 0.5 hp, respectively); and
2.0 years for polyphase ESEMs. The simple payback period for AO-ESEMs
is 0.8 and 0.8 years for high/medium torque AO-ESEMs (0.25 and 1 hp,
respectively); 0.7 and 1.3 years for low torque AO-ESEMs (0.25 and 0.5
hp, respectively); and 1.8 years for polyphase AO-ESEMs. Overall, the
shipments-weighted average PBP is 1.2 years. The fraction of consumers
experiencing a net LCC cost, for non-air-over ESEMs is 16.7 and 11.7
percent for high/medium torque ESEMs (0.25 and 1 hp, respectively); 3.0
and 7.8 percent for low torque ESEMs (0.25 and 0.5 hp, respectively);
and 7.2 percent for polyphase ESEMs. The fraction of consumers
experiencing a net LCC cost for AO-ESEMs is 7.8 and 5.9 percent for
high/medium torque AO-ESEMs (0.25 and 1 hp, respectively); 3.7 and 2.9
percent for low torque AO-ESEMs (0.25 and 0.5 hp, respectively); and
9.7 percent for polyphase AO-ESEMs. Overall, the shipments-weighted
average fraction of consumers experiencing a net LCC cost is 7.8
percent.
At TSL 2, the projected change in INPV ranges from a decrease of
$264 million to a decrease of $131 million, which corresponds to
decreases of 13.1 percent and 6.5 percent, respectively. DOE estimates
that industry must invest $339 million to comply with standards set at
TSL 2. An investment of $339 million in conversion costs represents
approximately 53 percent of the sum of the annual free cash flows over
the years between the expected publication date of the final rule and
the standards year (i.e., the time period that these conversion costs
would be incurred) and represents approximately 17 percent of the
entire no-new-standards case INPV over the 30-year analysis
period.\102\
---------------------------------------------------------------------------
\102\ The sum of annual free cash flows is estimated to be $636
million for 2025-2028 in the no-new-standards case and the no-new-
standards case INPV is estimated to be $2,019 million.
---------------------------------------------------------------------------
Under 42 U.S.C. 6316(a) and 42 U.S.C. 6295(o)(2)(B)(i), DOE
determines whether a standard is economically justified after
considering seven factors. After considering the seven factors and
weighing the benefits and burdens, the Secretary has tentatively
concluded that standards set at TSL 2, the recommended TSL from the
Electric Motors Working Group, for ESEMs would be economically
justified. At this TSL, the average LCC savings for all equipment
classes is positive. An estimated 7.8 percent of ESEM consumers
experience a net cost. The FFC national energy savings are significant
and the NPV of consumer benefits is positive using both a 3-percent and
7-percent discount rate. Notably, the benefits to consumers vastly
outweigh the cost to manufacturers. At TSL 2, the NPV of consumer
benefits, even measured at the more conservative discount rate of 7
percent is over 79 times higher than the maximum estimated
manufacturers' loss in INPV. The proposed standard levels at TSL 2 are
economically justified even without weighing the estimated monetary
value of emissions reductions. When those emissions reductions are
included--representing $9.4 billion in climate benefits (associated
with the average SC-GHG at a 3-percent discount rate), and $18.3
billion (using a 3-percent discount rate) or $7.9 billion (using a 7-
percent discount rate) in health benefits--the rationale becomes
stronger still.
Accordingly, the Secretary has tentatively concluded that TSL 2,
the TSL recommended by the Electric Motors Working Group, would offer
the maximum improvement in efficiency that is technologically feasible
and economically justified and would result in the significant
conservation of energy. In addition, as discussed in section V.A of
this document, DOE is establishing the TSLs by equipment class groups
and aligning the AO-ESEM levels with the non-AO-ESEMs. Although results
are presented here in terms of TSLs, DOE analyzes and evaluates all
possible ELs for each equipment class in its analysis. For all
equipment classes, TSL 2 is comprised of EL 2, and represents two
levels below max-tech. The max tech efficiency levels (TSL 4) result in
negative LCC savings for most equipment classes and a large percentage
of consumers that experience a net LCC cost for most equipment classes,
in addition to significant manufacturer impacts. The ELs one level
below max tech (TSL 3) result in negative LCC savings for some
equipment classes and a large percentage of consumers that experience a
net LCC cost for most equipment classes. Additionally, the impact to
manufacturers is significantly reduced at TSL 2. While manufacturers
will have to invest $339 million to comply with standards at TSL 2,
annual free cash flows remain positive for all years leading up to the
modeled compliance date. DOE also estimates that most ESEM
manufacturers will have the engineering capacity to complete these
redesigns in a 4-year compliance period. Lastly, as discussed in the
December 2022 Joint Recommendation,\103\ TSL 2 would not result in
ESEMs significantly increasing in physical size and therefore would not
result in a significant and widespread disruption to the OEM markets
that used ESEMs as an embedded product.
---------------------------------------------------------------------------
\103\ See EERE-2020-BT-STD-0007-0038 at p. 4.
---------------------------------------------------------------------------
The ELs two levels below max-tech (TSL 2), which represents the
proposed standard levels as recommended by the Electric Motors Working
Group, result in positive LCC savings for all equipment classes,
significantly reduce the number of consumers experiencing a net cost,
and reduce the decrease in INPV and conversion costs to the point where
DOE has tentatively concluded they are economically justified, as
discussed for TSL 2 in the preceding paragraphs.
As presented in section V.A in this document, DOE developed TSLs
that aligned the efficiency levels for air-over and non-air-over ESEMs
because of the similarities in the manufacturing processes between air-
over and non-air-over ESEMs. In some cases, an air-over ESEM could be
manufactured on the same line as a non-air-over ESEM by omitting the
steps of manufacturing associated with the fan of a motor.
While DOE did not explicitly analyze a TSL that would require TSL 3
efficiency levels for AO-ESEMs and
[[Page 87134]]
TSL 2 efficiency levels for non-air over ESEMs, DOE may consider this
alternative combination for any potential final rule. In that case, DOE
seeks feedback on the potential consequences of adopting a more-
efficient level of AO-ESEMs as compared to non-air over ESEMs. DOE
seeks information about whether there would be any decrease in the
shipments of AO-ESEMs (and a decrease in the potential benefits from a
more efficient proposed standard at TSL 3 efficiency levels for AO-
ESEMs) by shifting the market to predominantly non-air over ESEMs. In
such a scenario, the savings associated with this TSL option may never
be realized. In addition, while DOE did not consider a TSL that would
require TSL 2 for all equipment classes except TSL3 efficiency levels
for low torque ESEMs (both air-over and non-air-over) due to the
uncertainties as to whether the size, fit and function would be
maintained and potential significant and widespread disruption to the
OEM markets, DOE seeks information related to potential size increase
and impact on OEM markets at TSL 3 and above.
DOE seeks comment on these alternative proposed standard levels.
DOE requests comment on the unintended market consequences and the
changes industry would make as a result of standards that require the
use of different motor technologies for non-air over and AO-ESEMs. In
addition, if DOE were to consider a TSL that would require TSL 2 for
all equipment classes except TSL3 efficiency levels for low torque
ESEMs, DOE seeks information related to potential ESEM size increase
and impact on OEM markets at TSL 3 and above.
As stated, DOE conducts the walk-down analysis to determine the TSL
that represents the maximum improvement in energy efficiency that is
technologically feasible and economically justified as required under
EPCA. The walk-down is not a comparative analysis, as a comparative
analysis would result in the maximization of net benefits instead of
energy savings that are technologically feasible and economically
justified, which would be contrary to EPCA. 86 FR 70892, 70908 (Dec.
12, 2021). Although DOE has not conducted a comparative analysis to
select the proposed new energy conservation standards, DOE notes that
as compared to TSL 3 and TSL 4, TSL 2 has higher average LCC savings
for consumers, significantly smaller percentages of consumers
experiencing a net cost, a lower maximum decrease in INPV, lower
manufacturer conversion costs, and a significant decrease in the
likelihood of a major disruption to the both the ESEM market and the
OEM markets that use ESEMs as an embedded product in their equipment,
as DOE does not anticipate gaps in ESEM equipment offerings or a
significant increase in the physical size of ESEMs at TSL 2.
Although DOE considered proposing new standard levels for ESEMs by
grouping the efficiency levels for each equipment class into TSLs, DOE
evaluates all analyzed efficiency levels in its analysis. For all
equipment classes, TSL 2 represents the maximum energy savings that
does not result in significant negative economic impacts to ESEM
manufacturers. At TSL 2, conversion costs are estimated to be $339
million, significantly less than at TSL 3 ($1,118 million) or at TSL 4
($2,156 million). At TSL 2, conversion costs represent a significantly
smaller size of the sum of ESEM manufacturers' annual free cash flows
for 2025 to 2028 (53 percent), than at TSL 3 (176 percent) or at TSL 4
(339 percent) and a significantly smaller portion of ESEM
manufacturers' no-new-standards case INPV (17 percent), than at TSL 3
(55 percent) or at TSL 4 (107 percent). At TSL 2, ESEM manufacturers
will have to redesign a significantly smaller portion of their ESEM
models to meet the ELs set at TSL 2 (models representing 55 percent of
all ESEM shipments), than at TSL 3 (91 percent) or at TSL 4 (99
percent). Lastly, ESEM manufacturers' free cash flow remains positive
at TSL 2 for all years leading up to the compliance date. Whereas at
TSL 3 annual free cash flow is estimated to be -$313 million and at TSL
4 annual free cash flow is estimated to be -$764 million in 2028, the
year before the compliance year. Additionally, the ELs at the proposed
TSL result in average positive LCC savings for all equipment class
groups and significantly reduce the number of consumers experiencing a
net cost to the point where DOE has tentatively concluded they are
economically justified, as discussed for TSL 2 in the preceding
paragraphs.
Therefore, based on the previous considerations, DOE proposes to
adopt the energy conservation standards for ESEMs at TSL 2, which was
the recommended TSL by the Electric Motors Working Group. The proposed
energy conservation standards for ESEMs, which are expressed as average
full-load efficiency, are shown in Table V-44 through Table V-46.
Table V-44--Proposed Energy Conservation Standards for High and Medium-Torque ESEMs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full load efficiency
----------------------------------------------------------------------------------------
hp Open Enclosed
----------------------------------------------------------------------------------------
2-pole 4-pole 6-pole 8-pole 2-pole 4-pole 6-pole 8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25........................................................... 59.5 59.5 57.5 .......... 59.5 59.5 57.5 .........
0.33........................................................... 64.0 64.0 62.0 50.5 64.0 64.0 62.0 50.5
0.5............................................................ 68.0 69.2 68.0 52.5 68.0 67.4 68.0 52.5
0.75........................................................... 76.2 81.8 80.2 72.0 75.5 75.5 75.5 72.0
1.............................................................. 80.4 82.6 81.1 74.0 77.0 80.0 77.0 74.0
1.5............................................................ 81.5 83.8 ......... .......... 81.5 81.5 80.0 .........
2.............................................................. 82.9 84.5 ......... .......... 82.5 82.5 ......... .........
3.............................................................. 84.1 ......... ......... .......... 84.0 ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 87135]]
Table V-45--Proposed Energy Conservation Standards for Low-Torque ESEMs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full load efficiency
----------------------------------------------------------------------------------------
hp Open Enclosed
----------------------------------------------------------------------------------------
2-pole 4-pole 6-pole 8-pole 2-pole 4-pole 6-pole 8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25........................................................... 63.9 66.1 60.2 52.5 60.9 64.1 59.2 52.5
0.33........................................................... 66.9 69.7 65.0 56.6 63.9 67.7 64.0 56.6
0.5............................................................ 68.8 70.1 66.8 57.1 65.8 68.1 65.8 57.1
0.75........................................................... 70.5 74.8 73.1 62.8 67.5 72.8 72.1 62.8
1.............................................................. 74.3 77.1 77.3 65.7 71.3 75.1 76.3 65.7
1.5............................................................ 79.9 82.1 80.5 72.2 76.9 80.1 79.5 72.2
2.............................................................. 81.0 82.9 81.4 73.3 78.0 80.9 80.4 73.3
3.............................................................. 82.4 84.0 82.5 74.9 79.4 82.0 81.5 74.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-46--Proposed Energy Conservation Standards for Polyphase ESEMs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full load efficiency
----------------------------------------------------------------------------------------
hp Open Enclosed
----------------------------------------------------------------------------------------
2-pole 4-pole 6-pole 8-pole 2-pole 4-pole 6-pole 8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25........................................................... 65.6 69.5 67.5 62.0 66.0 68.0 66.0 62.0
0.33........................................................... 69.5 73.4 71.4 64.0 70.0 72.0 70.0 64.0
0.5............................................................ 73.4 78.2 75.3 66.0 72.0 75.5 72.0 66.0
0.75........................................................... 76.8 81.1 81.7 70.0 75.5 77.0 74.0 70.0
1.............................................................. 77.0 83.5 82.5 75.5 75.5 77.0 74.0 75.5
1.5............................................................ 84.0 86.5 83.8 77.0 84.0 82.5 87.5 78.5
2.............................................................. 85.5 86.5 ......... 86.5 85.5 85.5 88.5 84.0
3.............................................................. 85.5 86.9 ......... 87.5 86.5 86.5 89.5 85.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. Annualized Benefits and Costs of the Proposed Standards
The benefits and costs of the proposed 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 equipment that meet the proposed standards
(consisting primarily of operating cost savings from using less energy,
minus increases in equipment purchase costs, and (2) the annualized
monetary value of the climate and health benefits from emission
reductions.
Table V-47 shows the annualized values for ESEMs under TSL 2,
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 reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
proposed standards for ESEMs is $543 million per year in increased
equipment costs, while the estimated annual benefits are $2,757 million
in reduced product operating costs, $542 million in climate benefits,
and $836 million in health benefits. In this case, the net benefit
amounts to $3,592 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards for ESEMs is $556 million per
year in increased equipment costs, while the estimated annual benefits
are $3,140 million in reduced operating costs, $542 million in climate
benefits, and $1,052 million in health benefits. In this case, the net
benefit amounts to $4,179 million per year.
Table V-47--Annualized Monetized Benefits and Costs of Proposed Standards for ESEMs
[Proposed TSL 2]
----------------------------------------------------------------------------------------------------------------
Million 2022$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 3,140 2,962 3,341
Climate Benefits *.............................................. 542 526 562
Health Benefits **.............................................. 1,052 1,021 1,089
Total Benefits [dagger]......................................... 4,734 4,509 4,992
Consumer Incremental Equipment Costs [Dagger]................... 556 598 529
Net Benefits.................................................... 4,179 3,911 4,464
Change in Producer Cashflow (INPV [dagger][dagger])............. (25)-(13) (25)-(13) (25)-(13)
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 2,757 2,615 2,921
[[Page 87136]]
Climate Benefits * (3% discount rate)........................... 542 526 562
Health Benefits **.............................................. 836 814 863
Total Benefits [dagger]......................................... 4,135 3,955 4,346
Consumer Incremental Equipment Costs [Dagger]................... 543 578 520
Net Benefits.................................................... 3,592 3,377 3,826
Change in Producer Cashflow (INPV [dagger][dagger])............. (25)-(13) (25)-(13) (25)-(13)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with ESEMs shipped in 2029-2058. These results
include consumer, climate, and health benefits which accrue after 2058 from the equipment shipped in 2029-
2058. 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 constant rate in the Primary Estimate, an increasing rate in
the Low Net Benefits Estimate, and a declining rate in the High Net Benefits Estimate. The methods used to
derive projected price trends are explained in 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
notice). For presentational purposes of this table, the climate benefits associated with the average SC-GHG at
a 3 percent discount rate are shown, but 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 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.
** 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.
[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 national
impacts analysis 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. The annualized change in INPV is calculated using the industry weighted average cost of
capital value of 9.1 percent that is estimated in the MIA (see chapter 12 of the NOPR TSD for a complete
description of the industry weighted average cost of capital). For ESEMs, those values are -$25 million and -
$13 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 NOPR, the annualized net benefits
would range from $4,154 million to $4,166 million at 3-percent discount rate and would range from $3,567
million to $3,579 million at 7-percent discount rate. Numbers in parentheses are negative numbers.
D. Reporting, Certification, and Sampling Plan
Manufacturers, including importers, must use equipment-specific
certification templates to certify compliance to DOE. For currently
regulated electric motors, the certification template is specified at
10 CFR 429.36. DOE is not proposing new product-specific certification
reporting requirements for ESEMs. However, as discussed in section
III.C of this document, DOE proposes to amend the determinations of
represented values for ESEMs.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
Executive Order (``E.O.'') 12866, ``Regulatory Planning and
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving
Regulation and Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011) and
amended by E.O. 14094, ``Modernizing Regulatory Review,'' 88 FR 21879
(April 11, 2023), requires agencies, to the extent permitted by law, to
(1) propose or adopt a regulation only upon a reasoned determination
that its benefits justify its costs (recognizing that some benefits and
costs are difficult to quantify); (2) tailor regulations to impose the
least burden on society, consistent with obtaining regulatory
objectives, taking into account, among other things, and to the extent
practicable, the costs of cumulative regulations; (3) select, in
choosing among alternative regulatory approaches, those approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts;
and equity); (4) to the extent feasible, specify performance
objectives, rather than specifying the behavior or manner of compliance
that regulated entities must adopt; and (5) identify and assess
available alternatives to direct regulation, including providing
economic incentives to encourage the desired behavior, such as user
fees or marketable permits, or providing information upon which choices
can be made by the public. DOE emphasizes as well that E.O. 13563
requires agencies to use the best available techniques to quantify
anticipated present and future benefits and costs as accurately as
possible. In its guidance, the Office of Information and Regulatory
Affairs (``OIRA'') in the Office of Management and Budget (``OMB'') has
emphasized
[[Page 87137]]
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
proposed 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 proposed regulatory action constitutes a
``significant regulatory action'' within the scope of section 3(f)(1)
of E.O. 12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O.
12866, DOE has provided to OIRA an assessment, including the underlying
analysis, of benefits and costs anticipated from the proposed
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 proposed rulemaking.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (``IRFA'')
for any rule that by law must be proposed for public comment, unless
the agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
As required by E.O. 13272, ``Proper Consideration of Small Entities in
Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published
procedures and policies on February 19, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's website (www.energy.gov/gc/office-general-counsel). DOE has
prepared the following IRFA for the equipment that are the subject of
this proposed rulemaking.
For manufacturers of ESEMs, the Small Business Administration
(``SBA'') has set a size threshold, which defines those entities
classified as ``small businesses'' for the purposes of the statute. DOE
used the SBA's small business size standards to determine whether any
small entities would be subject to the requirements of the rule. (See
13 CFR part 121.) The size standards are listed by North American
Industry Classification System (``NAICS'') code and industry
description and are available at www.sba.gov/document/support-table-size-standards. Manufacturing of ESEMs is classified under NAICS
335312, ``Motor and Generator 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. Description of Reasons Why Action Is Being Considered
DOE previously established energy conservation standards for some
types of electric motors at 10 CFR 431.25. These previous rulemakings
did not establish energy conservation standards for ESEMs when
establishing or amending energy conservation standards for other
electric motors. In the March 2022 Preliminary Analysis, DOE analyzed
potential efficiency levels for ESEMs. See 87 FR 11650 (March 2, 2022).
On December 22, 2022, DOE received a joint recommendation for energy
conservation standards for ESEMs. These standard levels were submitted
jointly to DOE, by groups representing manufacturers, energy and
environmental advocates, and consumer groups (the Electric Motors
Working Group). The December 2022 Joint Recommendation recommends
specific energy conservation standards for ESEMs.
2. Objectives of, and Legal Basis for, Rule
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 the energy efficiency of certain types
of industrial equipment, including ESEMs, a category of electric
motors, the subject of this notice. (42 U.S.C. 6311(1)(A)).
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered equipment, including electric motors. Any
new or amended standard for covered equipment must be designed to
achieve the maximum improvement in energy efficiency that the Secretary
of Energy determines is technologically feasible and economically
justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C.
6295(o)(3)(B))
3. Description and Estimated Number of Small Entities Regulated
To estimate the number of companies that could be small business
manufacturers of ESEMs covered by this rulemaking, DOE conducted a
market survey using publicly available information. DOE's research
involved DOE's publicly available Compliance Certification Database
(``CCD''), industry trade association membership directories (including
NEMA), and information from previous rulemakings. DOE also asked
stakeholders and industry representatives if they were aware of any
other small manufacturers during manufacturer interviews and DOE
working groups. DOE used information from these sources to create a
list of companies that potentially manufacture ESEMs covered by this
proposed rulemaking. As necessary, DOE contacted companies to determine
whether they met the SBA's definition of a small business manufacturer.
DOE screened out companies that do not offer equipment covered by this
proposed rulemaking, do not meet the definition of a ``small
business,'' or are foreign owned and operated.
DOE initially identified approximately 74 unique potential
manufacturers of ESEMs sold in the U.S that are covered by this
proposed rulemaking. DOE screened out companies that had more than
1,250 employees or companies that were completely foreign-owned and
operated. Of the 74 manufacturers that potentially manufacture ESEMs
covered by this proposed rulemaking, DOE identified 3 companies that
meet SBA's definition of a small business.
4. Description and Estimate of Compliance Requirements Including
Differences in Cost, if Any, for Different Groups of Small Entities
In this NOPR, DOE is proposing new energy conservation standards
for ESEMs. The primary value added by these 3 small businesses is
creating ESEMs that serve an application specific purpose that the OEMs
require. This includes combining an ESEM with specific mechanic
couplings, weatherproofing, or controls to suit the OEM's needs. Most
small businesses manufacture motor housing and couplings but do not
manufacture the rotors and stators used in the ESEMs they sell. While
these small businesses may have to create new ESEM housings and/or
couplings if the ESEM characteristics change in response to the
proposed energy conservation
[[Page 87138]]
standards, DOE was not able to identify any small businesses that own
their own lamination dies sets and winding machines that are used to
manufacture rotors and stators for ESEMs.
The 3 small businesses identified do not manufacture the rotors and
stators of their ESEMs and instead purchase these components from other
manufacturers. Thus, they would not need to purchase the machinery
necessary to manufacture these components (i.e., would not need to
purchase costly lamination dies sets and winding machines) nor would
they need to spend R&D efforts to develop ESEM designs to meet energy
conservation standards. Instead, these small manufacturers may have to
create new moldings for ESEM housings (if the ESEM characteristics
change in response to the proposed energy conservation standards).
DOE estimated conversion costs associated with redesigning an
equipment line for ESEM housings. DOE estimates this will cost
approximately $50,000 in molding equipment per ESEM housing; $37,330 in
engineering design effort per ESEM housing; \104\ and $10,000 in
testing costs per ESEM housing. Based on these estimates, each ESEM
housing that will need to be redesigned would cost a small business
approximately $97,330.
---------------------------------------------------------------------------
\104\ DOE estimated that it would take approximately three
months of engineering time to redesign each ESEM housing. Based on
data from BLS, the mean hourly wage of an electrical engineer is
$54.83 (www.bls.gov/oes/current/oes172071.htm) and wages comprise
70.5 percent of an employee's total compensation (www.bls.gov/news.release/archives/ecec_06162023.pdf).
$54.83 (hourly wage) / 0.705 (wage as a percentage of total
compensation) = $77.77 (fully burdened hourly labor rate).
$77.77 x 8 (hours in a workday) x 20 (working days in a month) x
3 (months) = $37,330
---------------------------------------------------------------------------
DOE displays in Table VI-1 the estimated average conversion costs
per small business compared to the annual revenue for each small
business. DOE used D&B Hoovers \105\ to estimate the annual revenue for
each small business. Manufacturers will have 4 years between the
expected publication of the final rule and the date of compliance with
the proposed energy conservation standards. Therefore, DOE presents the
estimated conversion costs and testing costs as a percent of the
estimated 4 years of annual revenue for each small business.
---------------------------------------------------------------------------
\105\ app.avention.com.
Table VI-1--Estimated Conversion Costs and Annual Revenue for Each Small Business
----------------------------------------------------------------------------------------------------------------
Number of ESEM Conversion
housing that Total Estimated 4 Years of costs as a % of
Manufacturer need to be conversion annual annual 4 years of
redesigned costs revenue revenue annual revenue
----------------------------------------------------------------------------------------------------------------
Small Business 1....................... 27 $2,627,910 $6,270,000 $25,080,000 10.5
Small Business 2....................... 19 1,849,270 10,120,00 40,480,000 4.6
Small Business 3....................... 24 2,335,920 28,210,000 112,840,000 2.1
------------------------------------------------------------------------
Average Small Business............. 23 2,271,033 14,866,667 59,466,667 3.8
----------------------------------------------------------------------------------------------------------------
5. Duplication, Overlap, and Conflict With Other Rules and Regulations
As described in section IV.A. of this document, DOE believes the
standards proposed in this NOPR would not impact manufacturers of
consumer products. In commercial equipment, DOE identified the
following equipment as potentially incorporating ESEMs: walk-in coolers
and freezers, circulator pumps, air circulating fans, and commercial
unitary air conditioning equipment. If the proposed energy conservation
standards for these rules finalize as proposed, DOE has identified that
these rules would all: (1) have a compliance year that is at or before
the ESEM standard compliance year (2029) and/or (2) require a motor
that is either outside of the scope of this rule (e.g., an ECM) or an
ESEM with an efficiency above the proposed ESEM standards, and
therefore not be impacted by the proposed ESEM rule (i.e., the ESEM
rule would not trigger a redesign of these equipment).
6. Significant Alternatives to the Rule
The discussion in the previous section analyzes impacts on small
businesses that would result from DOE's proposal to adopt standards
represented by TSL 2. In reviewing alternatives to the proposed rule,
DOE examined energy conservation standards set at lower efficiency
levels. While TSL 1 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 65 percent lower energy
savings and 69 percent lower consumer NPV compared to the energy
savings at TSL 2.
Based on the presented discussion, proposing standards at TSL 2
balances the benefits of the energy savings at TSL 2 with the potential
burdens placed on ESEM manufacturers, including small business
manufacturers. Accordingly, DOE does not propose 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 NOPR TSD.
Additional compliance flexibilities may be available through other
means. Manufacturers subject to DOE's energy efficiency standards may
apply to DOE's Office of Hearings and Appeals for exception relief
under certain circumstances. Manufacturers should refer to 10 CFR part
1003 for additional details.
C. Review Under the Paperwork Reduction Act
Manufacturers of expanded scope electric motors must test their
equipment according to the DOE test procedures for ESEMs, including any
amendments adopted for those test procedures, and use the results of
the test procedure and applicable sampling plan if they choose to make
representations of the energy efficiency or energy use of ESEMs. DOE
has established regulations for recordkeeping requirements for all
covered consumer products and commercial equipment, including ESEMs.
(See generally 10 CFR part 429). The collection-of-information
requirement for the testing 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
and is in the process of being renewed. Public reporting burden is
estimated to average 35 hours per response,
[[Page 87139]]
including the time for reviewing instructions, searching existing data
sources, gathering and maintaining the data needed, and completing and
reviewing the collection of information. DOE does not currently have
certification or labeling requirements for ESEMs and is not proposing
to establish either of those as part of this proposed rule. Thus, DOE
expects the recordkeeping requirements associated with testing and
maintaining test data would be less than the average estimate per
response for this paperwork package.
Currently, DOE is seeking comment on DOE's renewal of its paperwork
reduction approval under OMB control number 1910-1400. See 88 FR 65994
(Sept. 26, 2023).
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
DOE is analyzing this proposed regulation in accordance with the
National Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA
implementing regulations (10 CFR part 1021). DOE's regulations include
a categorical exclusion for rulemakings that establish energy
conservation standards for consumer products or industrial equipment.
10 CFR part 1021, subpart D, appendix B5.1. DOE anticipates that this
proposed rulemaking qualifies for categorical exclusion B5.1 because it
is a rulemaking that establishes energy conservation standards for
consumer products or industrial equipment, none of the exceptions
identified in categorical exclusion B5.1(b) apply, no extraordinary
circumstances exist that require further environmental analysis, and it
otherwise meets the requirements for application of a categorical
exclusion. See 10 CFR 1021.410. DOE will complete its NEPA review
before issuing the final rule.
E. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt state law or that have federalism
implications. The Executive order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the states and to carefully assess
the necessity for such actions. The Executive order also requires
agencies to have an accountable process to ensure meaningful and timely
input by state and local officials in the development of regulatory
policies that have federalism implications. On March 14, 2000, DOE
published a statement of policy describing the intergovernmental
consultation process it will follow in the development of such
regulations. 65 FR 13735. DOE has examined this proposed rule and has
tentatively determined that it would not have a substantial direct
effect on the states, on the relationship between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government. EPCA governs
and prescribes Federal preemption of state regulations as to energy
conservation for the equipment that are the subject of this proposed
rule. States can petition DOE for exemption from such preemption to the
extent, and based on criteria, set forth in EPCA. (See 42 U.S.C.
6316(a) and (b); 42 U.S.C. 6297) Therefore, no further action is
required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation:
(1) clearly specifies the preemptive effect, if any, (2) clearly
specifies any effect on existing Federal law or regulation, (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction, (4) specifies the retroactive
effect, if any, (5) adequately defines key terms, and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General. Section 3(c) of
Executive Order 12988 requires Executive agencies to review regulations
in light of applicable standards in section 3(a) and section 3(b) to
determine whether they are met or it is unreasonable to meet one or
more of them. DOE has completed the required review and determined
that, to the extent permitted by law, this proposed rule meets the
relevant standards of E.O. 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
requires each Federal agency to assess the effects of Federal
regulatory actions on state, local, and Tribal governments and the
private sector. Public Law 104-4, section 201 (codified at 2 U.S.C.
1531). For a proposed regulatory action likely to result in a rule that
may cause the expenditure by state, local, and Tribal governments, in
the aggregate, or by the private sector of $100 million or more in any
one year (adjusted annually for inflation), section 202 of UMRA
requires a Federal agency to publish a written statement that estimates
the resulting costs, benefits, and other effects on the national
economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal
agency to develop an effective process to permit timely input by
elected officers of state, local, and Tribal governments on a proposed
``significant intergovernmental mandate,'' and requires an agency plan
for giving notice and opportunity for timely input to potentially
affected small governments before establishing any requirements that
might significantly or uniquely affect 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.
Although this proposed rule does not contain a Federal
intergovernmental mandate, it 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 ESEM 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
ESEMs, 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 proposed rule. (2 U.S.C. 1532(c)) The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap the economic analysis requirements that
apply under section 325(o) of EPCA and
[[Page 87140]]
Executive Order 12866. The SUPPLEMENTARY INFORMATION section of this
NOPR and the TSD for this proposed rule respond to those requirements.
Under section 205 of UMRA, DOE is obligated to identify and
consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. (2 U.S.C. 1535(a)) DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives of the proposed 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. 6316(a)
and 42 U.S.C. 6295(o), this proposed rule would establish new energy
conservation standards for 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 proposed 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 proposed rule would not have any impact on the autonomy or
integrity of the family as an institution. Accordingly, DOE has
concluded that it is not necessary to prepare a Family Policymaking
Assessment.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15,
1988), DOE has determined that this proposed rule would not result in
any takings that might require compensation under the Fifth Amendment
to the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review
most disseminations of information to the public under information
quality guidelines established by each agency pursuant to general
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving
Implementation of the Information Quality Act (April 24, 2019), DOE
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has
reviewed this NOPR under the OMB and DOE guidelines and has concluded
that it is consistent with applicable policies in those guidelines.
K. Review Under Executive Order 13211
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 proposed significant energy
action. A ``significant energy action'' is defined as any action by an
agency that promulgates or is expected to lead to promulgation of a
final rule, and that (1) is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
DOE has tentatively concluded that this proposed regulatory action,
which proposes new energy conservation standards for ESEMs, is not a
significant energy action because the proposed standards are not likely
to have a significant adverse effect on the supply, distribution, or
use of energy, nor has it been designated as such by the Administrator
at OIRA. Accordingly, DOE has not prepared a Statement of Energy
Effects on this proposed rule.
L. Information Quality
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (``OSTP''), issued its Final Information
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan.
14, 2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
the agency reasonably can determine will have, or does have, a clear
and substantial impact on important public policies or private sector
decisions.'' 70 FR 2664, 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and the analyses
that are typically used and has prepared a report describing that peer
review.\106\ Generation of this report involved a rigorous, formal, and
documented evaluation using objective criteria and qualified and
independent reviewers to make a judgment as to the technical/
scientific/business merit, the actual or anticipated results, and the
productivity and management effectiveness of programs and/or projects.
Because available data, models, and technological understanding have
changed since 2007, DOE has engaged with the National Academy of
Sciences to review DOE's analytical methodologies to ascertain whether
modifications are needed to improve DOE's analyses. DOE is in the
process of evaluating the resulting report.\107\
---------------------------------------------------------------------------
\106\ The 2007 ``Energy Conservation Standards Rulemaking Peer
Review Report'' is available at the following website: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last accessed October 10, 2023).
\107\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------
VII. Public Participation
A. Attendance at the Public Meeting
The time, date, and location of the public meeting are listed in
the DATES and ADDRESSES sections at the beginning of this document. If
you plan to attend the public meeting, please notify the Appliance and
Equipment Standards staff at (202) 287-1445 or
[email protected].
Please note that foreign nationals visiting DOE Headquarters are
subject to advance security screening procedures which require advance
notice prior to attendance at the public meeting. If a foreign national
wishes to participate in the public meeting, please inform DOE of this
fact as soon as possible by contacting Ms. Regina Washington at
[[Page 87141]]
(202) 586-1214 or by email ([email protected]) so that the
necessary procedures can be completed.
DOE requires visitors to have laptops and other devices, such as
tablets, checked upon entry into the Forrestal Building. Any person
wishing to bring these devices into the building will be required to
obtain a property pass. Visitors should avoid bringing these devices,
or allow an extra 45 minutes to check in. Please report to the
visitor's desk to have devices checked before proceeding through
security.
Due to the REAL ID Act implemented by the Department of Homeland
Security (``DHS''), there have been recent changes regarding ID
requirements for individuals wishing to enter Federal buildings from
specific states and U.S. territories. DHS maintains an updated website
identifying the state and territory driver's licenses that currently
are acceptable for entry into DOE facilities at www.dhs.gov/real-id-enforcement-brief. A driver's licenses from a state or territory
identified as not compliant by DHS will not be accepted for building
entry and one of the alternate forms of ID listed below will be
required. Acceptable alternate forms of Photo-ID include U.S. Passport
or Passport Card; an Enhanced Driver's License or Enhanced ID-Card
issued by states and territories as identified on the DHS website
(Enhanced licenses issued by these states and territories are clearly
marked Enhanced or Enhanced Driver's License); a military ID or other
Federal Government-issued Photo-ID card.
In addition, you can attend the public meeting via webinar. Webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants will be
published on DOE's website at www.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/50. Participants are
responsible for ensuring their systems are compatible with the webinar
software.
B. Procedure for Submitting Prepared General Statements for
Distribution
Any person who has plans to present a prepared general statement
may request that copies of his or her statement be made available at
the public meeting. Such persons may submit requests, along with an
advance electronic copy of their statement in PDF (preferred),
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to
the appropriate address shown in the ADDRESSES section at the beginning
of this document. The request and advance copy of statements must be
received at least one week before the public meeting and are to be
emailed. Please include a telephone number to enable DOE staff to make
follow-up contact, if needed.
C. Conduct of the Public Meeting
DOE will designate a DOE official to preside at the public meeting
and may also use a professional facilitator to aid discussion. The
meeting will not be a judicial or evidentiary-type public hearing, but
DOE will conduct it in accordance with section 336 of EPCA. (42 U.S.C.
6306) A court reporter will be present to record the proceedings and
prepare a transcript. DOE reserves the right to schedule the order of
presentations and to establish the procedures governing the conduct of
the public meeting. There shall not be discussion of proprietary
information, costs or prices, market share, or other commercial matters
regulated by U.S. anti-trust laws. After the public meeting, interested
parties may submit further comments on the proceedings, as well as on
any aspect of the proposed rulemaking, until the end of the comment
period.
The public meeting will be conducted in an informal, conference
style. DOE will present a general overview of the topics addressed in
this rulemaking, allow time for prepared general statements by
participants, and encourage all interested parties to share their views
on issues affecting this proposed rulemaking. Each participant will be
allowed to make a general statement (within time limits determined by
DOE), before the discussion of specific topics. DOE will allow, as time
permits, other participants to comment briefly on any general
statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly. Participants should
be prepared to answer questions by DOE and by other participants
concerning these issues. DOE representatives may also ask questions of
participants concerning other matters relevant to this proposed
rulemaking. The official conducting the public meeting will accept
additional comments or questions from those attending, as time permits.
The presiding official will announce any further procedural rules or
modification of the previous procedures that may be needed for the
proper conduct of the public meeting.
A transcript of the public meeting will be included in the docket,
which can be viewed as described in the Docket section at the beginning
of this document and will be accessible on the DOE website. In
addition, any person may buy a copy of the transcript from the
transcribing reporter.
D. Submission of Comments
DOE will accept comments, data, and information regarding this
proposed rule before or after the public meeting, but no later than the
date provided in the DATES section at the beginning of this proposed
rule. Interested parties may submit comments, data, and other
information using any of the methods described in the ADDRESSES section
at the beginning of this document.
Submitting comments via www.regulations.gov. The
www.regulations.gov web page will require you to provide your name and
contact information. Your contact information will be viewable to DOE
Building Technologies staff only. Your contact information will not be
publicly viewable except for your first and last names, organization
name (if any), and submitter representative name (if any). If your
comment is not processed properly because of technical difficulties,
DOE will use this information to contact you. If DOE cannot read your
comment due to technical difficulties and cannot contact you for
clarification, DOE may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to www.regulations.gov information for which
disclosure is restricted by statute, such as trade secrets and
commercial or financial information (hereinafter referred to as
Confidential Business Information (``CBI'')). Comments submitted
through www.regulations.gov cannot be claimed as CBI. Comments received
through the website will waive any CBI claims for the information
submitted. For information on submitting CBI, see the Confidential
Business Information section.
DOE processes submissions made through www.regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
[[Page 87142]]
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that www.regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery/courier, or postal
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to www.regulations.gov. If
you do not want your personal contact information to be publicly
viewable, do not include it in your comment or any accompanying
documents. Instead, provide your contact information in a cover letter.
Include your first and last names, email address, telephone number, and
optional mailing address. The cover letter will not be publicly
viewable as long as it does not include any comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. If you submit via postal mail
or hand delivery/courier, please provide all items on a CD, if
feasible, in which case it is not necessary to submit printed copies.
No telefacsimiles (``faxes'') will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, that are written in English, and that are free of any
defects or viruses. Documents should not contain special characters or
any form of encryption and, if possible, they should carry the
electronic signature of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email two well-marked copies: one copy of the document marked
``confidential'' including all the information believed to be
confidential, and one copy of the document marked ``non-confidential''
with the information believed to be confidential deleted. DOE will make
its own determination about the confidential status of the information
and treat it according to its determination.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).
E. Issues on Which DOE Seeks Comment
Although DOE welcomes comments on any aspect of this proposal, DOE
is particularly interested in receiving comments and views of
interested parties concerning the following issues:
(1) DOE requests comments on the proposal to use a represented
value of average full-load efficiency for ESEMs and proposed revisions
to 10 CFR 429.64 and 429.70(j).
(2) DOE requests comment on the proposed equipment classes for this
NOPR.
(3) DOE requests comment on the remaining technology options
considered in this NOPR.
(4) DOE requests comment on the representative units used in this
NOPR.
(5) DOE requests comment on the baseline efficiencies used in this
NOPR.
(6) DOE requests comment on the proposal to constrain the frame
size of all efficiency levels to that of the baseline unit.
(7) DOE requests comment on the assumption that higher ELs
(particularly ELs 3 and 4) can be reached without significant increase
in size.
(8) DOE requests comment on the potential for market disruption at
higher ELs and if manufacturers could design motors at ELs 3 and 4 that
do not increase in size, or if for the final rule, DOE should model
motors larger than what is considered in this NOPR.
(9) DOE requests data and information to characterize the
distribution channels for ESEMs and associated market shares.
(10) DOE requests data and information to characterize the
distribution of ESEMs by sector (commercial, industrial, and
residential sectors) as well as the distribution of ESEMs by
application in each sector.
(11) DOE seeks data and additional information to characterize ESEM
operating loads.
(12) DOE requests comment on the distribution of average annual
operating hours by application and sector used to characterize the
variability in energy use for ESEMs
(13) DOE seeks data and additional information to support the
analysis of projected energy use impacts related to any increases in
motor nominal speed.
(14) DOE requests data and information regarding the most
appropriate price trend to use to project ESEM prices.
(15) DOE requests comment on whether any of the efficiency levels
considered in this NOPR might lead to an increase in installation
costs, and if so, DOE seeks supporting data regarding the magnitude of
the increased cost per unit for each relevant efficiency level and the
reasons for those differences.
(16) DOE requests comment on whether any of the efficiency levels
considered in this NOPR might lead to an increase in maintenance and
repair costs, and if so, DOE seeks supporting data regarding the
magnitude of the increased cost per unit for each relevant efficiency
level and the reasons for those differences.
(17) DOE requests comment on the equipment lifetimes (both in years
and in mechanical hours) used for each representative unit considered
in the LCC and PBP analyses
(18) DOE seeks information and data to help establish efficiency
distribution in the no-new standards case for ESEMs. DOE requests data
and information on any trends in the electric motor market that could
be used to forecast expected trends in market share by efficiency
levels for each equipment class.
(19) DOE requests comment and additional data on its 2020 shipments
estimates for ESEMs. DOE seeks comment on the methodology used to
project future shipments of ESEMs. DOE seeks information on other data
sources that can be used to estimate future shipments.
(20) DOE requests comment and data regarding the potential increase
in utilization of electric motors due to any increase in efficiency
(``rebound effect'').
(21) DOE requests comment and data on the overall methodology used
for the consumer subgroup analysis. DOE requests comment on whether
additional consumer subgroups may be disproportionately affected by a
new standard and warrant additional analysis in the final rule.
(22) DOE requests comment on how to address the climate benefits
and non-monetized effects of the proposal.
(23) DOE requests comment on if manufacturers would have the
engineering capacity to conduct design efforts to be able to offer a
full portfolio of complaint ESEM at TSL 4. If not, please provide any
data or information on the potential impacts that could arise due to
these market gaps in equipment offerings.
(24) DOE requests comment on if manufacturers would have the
engineering capacity to conduct design efforts to be able to offer a
full portfolio of compliant ESEMs at TSL 3. If not, please provide any
data or information
[[Page 87143]]
on the potential impacts that could arise due to these market gaps in
equipment offerings.
(25) DOE seeks comment on these alternative proposed standard
levels. DOE requests comment on the unintended market consequences and
the changes industry would make as a result of standards that require
the use of different motor technologies for non-air over and AO-ESEMs.
In addition, if DOE were to consider a TSL that would require TSL 2 for
all equipment classes except TSL3 efficiency levels for low torque
ESEMs, DOE seeks information related to potential ESEM size increase
and impact on OEM markets at TSL 3 and above.
Additionally, DOE welcomes comments on other issues relevant to the
conduct of this proposed rulemaking that may not specifically be
identified in this document.
VIII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this notice of
proposed rulemaking and announcement of public meeting.
List of Subjects
10 CFR Part 429
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Reporting and
recordkeeping requirements.
10 CFR Part 431
Administrative practice and procedure, Confidential business
information, Energy conservation test procedures, and Reporting and
recordkeeping requirements.
Signing Authority
This document of the Department of Energy was signed on November
21, 2023, by Jeffrey Marootian, Principal Deputy Assistant Secretary
for Energy Efficiency and Renewable Energy, pursuant to delegated
authority from the Secretary of Energy. That document with the original
signature and date is maintained by DOE. For administrative purposes
only, and in compliance with requirements of the Office of the Federal
Register, the undersigned DOE Federal Register Liaison Officer has been
authorized to sign and submit the document in electronic format for
publication, as an official document of the Department of Energy. This
administrative process in no way alters the legal effect of this
document upon publication in the Federal Register.
Signed in Washington, DC, on November 29, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons set forth in the preamble, DOE is proposing to
amend 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
0
1. The authority citation for part 429 continues to read as follows:
Authority: 2 U.S.C. 6291-6317; 28 U.S.C. 2461 note.
0
2. Amend Sec. 429.64 by:
0
a. Revising paragraphs (a)(3) and (d)(2);
0
b. Revising paragraphs (e) introductory text and (e)(1)(iii);
0
c. Redesignating paragraph (e)(1)(iv) as paragraph (e)(1)(v);
0
d. Adding paragraph (e)(1)(iv); and
0
e. Revising paragraphs (e)(2) introductory text and (e)(2)(ii).
The revisions and addition read as follows:
Sec. 429.64 Electric motors.
(a) * * *
(3) On or after April 17, 2023, manufacturers of electric motors
that are subject to the test procedures in appendix B of subpart B of
part 431 but are not subject to the energy conservation standards in
subpart B of part 431 of this subchapter, must, if they chose to
voluntarily make representations of energy efficiency, follow the
provisions in paragraph (e) of this section.
* * * * *
(d) * * *
(2) Testing was conducted using a laboratory other than an
accredited laboratory that meets the requirements of paragraph (f) of
this section, or the represented value of the electric motor basic
model was determined through the application of an AEDM pursuant to the
requirements of Sec. 429.70(j), and a third-party certification
organization that is nationally recognized in the United States under
Sec. 429.73 has certified the represented value of the electric motor
basic model through issuance of a certificate of conformity for the
basic model.
(e) Determination of represented value. Manufacturers of electric
motors that are subject to energy conservation standards in subpart B
of part 431 of this subchapter, and for which minimum values of nominal
full-load efficiency are prescribed, must determine the represented
value of nominal full-load efficiency (inclusive of the inverter for
inverter-only electric motors) for each basic model of electric motor
either by testing in conjunction with the applicable sampling
provisions or by applying an AEDM as set forth in this section and in
Sec. 429.70(j). Manufacturers of electric motors that are subject to
energy conservation standards in subpart B of part 431 of this
subchapter, and for which minimum values of average full-load
efficiency are prescribed, must determine the represented value of
average full-load efficiency (inclusive of the inverter for inverter-
only electric motors) for each basic model of electric motor either by
testing in conjunction with the applicable sampling provisions or by
applying an AEDM as set forth in this section and in Sec. 429.70(j).
(1) * * *
(iii) Nominal Full-load Efficiency. Manufacturers of electric
motors that are subject to energy conservation standards in subpart B
of part 431 of this subchapter, and for which minimum values of nominal
full-load efficiency are prescribed, must determine the nominal full-
load efficiency by selecting an efficiency from the ``Nominal Full-load
Efficiency'' table in appendix B that is no greater than the average
full-load efficiency of the basic model as calculated in paragraph
(e)(1)(ii) of this section.
(iv) Represented value. For electric motors subject to energy
conservation standards in subpart B of part 431 of this subchapter and
for which minimum values of nominal full-load efficiency are prescribed
the represented value is the nominal full-load efficiency of a basic
model of electric motor and is to be used in marketing materials and
all public representations, as the certified value of efficiency, and
on the nameplate. (See Sec. 431.31(a) of this subchapter.) For
electric motors subject to energy conservation standards in subpart B
of part 431 of this subchapter and for which minimum values of average
full-load efficiency are prescribed the represented value is the
average full-load efficiency of a basic model of electric motor and is
to be used in marketing materials and all public representations, as
the certified value of efficiency, and on the nameplate. (See Sec.
431.31(a) of this subchapter.)
* * * * *
(2) Alternative efficiency determination methods. In lieu of
[[Page 87144]]
testing, the represented value of a basic model of electric motor must
be determined through the application of an AEDM pursuant to the
requirements of Sec. 429.70(j) and the provisions of this section,
where:
* * * * *
(ii) For electric motors subject to energy conservation standards
in subpart B of part 431 of this subchapter and for which minimum
values of nominal full-load efficiency are prescribed the represented
value is the nominal full-load efficiency of a basic model of electric
motor and is to be used in marketing materials and all public
representations, as the certified value of efficiency, and on the
nameplate. (See Sec. 431.31(a) of this subchapter) Determine the
nominal full-load efficiency by selecting a value from the ``Nominal
Full-Load Efficiency'' table in appendix B to subpart B of this part,
that is no greater than the simulated full-load efficiency predicted by
the AEDM for the basic model. For electric motors subject to energy
conservation standards in subpart B of part 431 of this subchapter and
for which minimum values of average full-load efficiency are prescribed
the represented value is the average full-load efficiency of a basic
model of electric motor and is to be used in marketing materials and
all public representations, as the certified value of efficiency, and
on the nameplate. (See Sec. 431.31(a) of this subchapter.)
* * * * *
0
3. Amend Sec. 429.70 by revising paragraph (j)(2)(i)(D) to read as
follows:
Sec. 429.70 Alternative methods for determining energy efficiency and
energy use.
* * * * *
(j) * * *
(2) * * *
(i) * * *
(D) Each basic model must have the lowest represented value of
nominal full-load efficiency or represented value of average full-load
efficiency, as applicable, among the basic models within the same
equipment class.
* * * * *
PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND
INDUSTRIAL EQUIPMENT
0
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.
0
5. Amend Sec. 431.12 by adding in alphabetical order definitions for
``Capacitor start capacitor run motor'', ``Capacitor start induction
run motor'', ``Permanent split capacitor motor'', ``Polyphase motor'',
``Shaded pole motor'', and ``Split-phase motor'' to read as follows:
Sec. 431.12 Definitions.
* * * * *
Capacitor start capacitor run motor means a single-phase induction
electric motor equipped with a start capacitor to provide the starting
torque, as well as a run capacitor to maintain a running torque while
the motor is loaded.
Capacitor start induction run motor means a single-phase induction
electric motor equipped with a start capacitor to provide the starting
torque, which is capable of operating without a run capacitor.
* * * * *
Permanent split capacitor motor means a single-phase induction
electric motor that has a capacitor permanently connected in series
with the starting winding of the motor and is permanently connected in
the circuit both at starting and running conditions of the motor.
* * * * *
Polyphase motor means an electric motor that has a stator
containing multiple distinct windings per motor pole, driven by
corresponding time-shifted sine waves.
* * * * *
Shaded pole motor means a self-starting single-phase induction
electric motor with a copper ring shading one of the poles.
* * * * *
Split-phase motor means a single-phase induction electric motor
that possesses two windings: a main/running winding, and a starting/
auxiliary winding.
* * * * *
0
6. Revise Sec. 431.25 to read as follows:
Sec. 431.25 Energy conservation standards and effective dates.
(a) For purposes of determining the required minimum nominal full-
load efficiency or minimum average full-load efficiency of an electric
motor that has a horsepower or kilowatt rating between two horsepower
or two kilowatt ratings listed in any table of energy conservation
standards in paragraphs (b) through (d) of this section, each such
electric motor shall be deemed to have a listed horsepower or kilowatt
rating, determined as follows:
(1) A horsepower at or above the midpoint between the two
consecutive horsepowers shall be rounded up to the higher of the two
horsepowers;
(2) A horsepower below the midpoint between the two consecutive
horsepowers shall be rounded down to the lower of the two horsepowers;
or
(3) A kilowatt rating shall be directly converted from kilowatts to
horsepower using the formula 1 kilowatt = (\1/0.746\) horsepower. The
conversion should be calculated to three significant decimal places,
and the resulting horsepower shall be rounded in accordance with
paragraph (a)(1) or (a)(2) of this section, whichever applies.
(b) This section applies to electric motors manufactured (alone or
as a component of another piece of equipment) on or after June 1, 2016,
but before June 1, 2027, that satisfy the criteria in paragraph
(b)(1)(i) of this section, with the exclusion listed in paragraph
(b)(1)(ii) of this section.
(1) Scope. (i) The standards in paragraph (b)(2) of this section
apply only to electric motors, including partial electric motors, that
satisfy the following criteria:
(A) Are single-speed, induction motors;
(B) Are rated for continuous duty (MG 1) operation or for duty type
S1 (IEC);
(C) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
(D) Operate on polyphase alternating current 60-hertz sinusoidal
line power;
(E) Are rated 600 volts or less;
(F) Have a 2-, 4-, 6-, or 8-pole configuration,
(G) Are built in a three-digit or four-digit NEMA frame size (or
IEC metric equivalent), including those designs between two consecutive
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA
frame size (or IEC metric equivalent),
(H) Produce at least one horsepower (0.746 kW) but not greater than
500 horsepower (373 kW); and
(I) Meet all of the performance requirements of one of the
following motor types: A NEMA Design A, B, or C motor or an IEC Design
N, NE, NEY, NY or H, HE, HEY, HY motor.
(ii) The standards in paragraph (b)(2) of this section do not apply
to the following electric motors exempted by the Secretary, or any
additional electric motors that the Secretary may exempt:
(A) Air-over electric motors;
(B) Component sets of an electric motor;
(C) Liquid-cooled electric motors;
(D) Submersible electric motors; and
(E) Inverter-only electric motors.
(2) Standards. (i) Each NEMA Design A motor, NEMA Design B motor,
and IEC Design N (including NE, NEY, or NY variants) motor that is an
electric motor meeting the criteria in paragraph (b)(1) of this section
and with a power
[[Page 87145]]
rating from 1 horsepower through 500 horsepower, but excluding fire
pump electric motors, shall have a nominal full-load efficiency of not
less than the following:
Table 1 to Paragraph (b)(2)(i)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding Fire
Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 94.1 93.6 95.4 95.4 95.0 95.0 93.6 94.1
125/90.......................................................... 95.0 94.1 95.4 95.4 95.0 95.0 94.1 94.1
150/110......................................................... 95.0 94.1 95.8 95.8 95.8 95.4 94.1 94.1
200/150......................................................... 95.4 95.0 96.2 95.8 95.8 95.4 94.5 94.1
250/186......................................................... 95.8 95.0 96.2 95.8 95.8 95.8 95.0 95.0
300/224......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
350/261......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
400/298......................................................... 95.8 95.8 96.2 95.8 ......... ......... ......... .........
450/336......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
500/373......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) Each NEMA Design C motor and IEC Design H (including HE, HEY,
or HY variants) electric motor meeting the criteria in paragraph (b)(1)
of this section and with a power rating from 1 horsepower through 200
horsepower, shall have a nominal full-load efficiency that is not less
than the following:
Table 2 to Paragraph (b)(2)(ii)--Nominal Full-Load Efficiencies of NEMA Design C and IEC Design H, HE, HEY or HY
Motors at 60 Hz
----------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
-----------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 4 Pole 6 Pole 8 Pole
-----------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open
----------------------------------------------------------------------------------------------------------------
1/.75......................................... 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1....................................... 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5......................................... 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2......................................... 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7......................................... 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5....................................... 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5........................................ 91.7 91.7 91.0 91.7 89.5 90.2
15/11......................................... 92.4 93.0 91.7 91.7 89.5 90.2
20/15......................................... 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5....................................... 93.6 93.6 93.0 93.0 90.2 91.0
30/22......................................... 93.6 94.1 93.0 93.6 91.7 91.7
40/30......................................... 94.1 94.1 94.1 94.1 91.7 91.7
50/37......................................... 94.5 94.5 94.1 94.1 92.4 92.4
60/45......................................... 95.0 95.0 94.5 94.5 92.4 93.0
75/55......................................... 95.4 95.0 94.5 94.5 93.6 94.1
100/75........................................ 95.4 95.4 95.0 95.0 93.6 94.1
125/90........................................ 95.4 95.4 95.0 95.0 94.1 94.1
150/110....................................... 95.8 95.8 95.8 95.4 94.1 94.1
200/150....................................... 96.2 95.8 95.8 95.4 94.5 94.1
----------------------------------------------------------------------------------------------------------------
[[Page 87146]]
(iii) Each fire pump electric motor meeting the criteria in
paragraph (b)(1) of this section and with a power rating of 1
horsepower through 500 horsepower, shall have a nominal full-load
efficiency that is not less than the following:
Table 3 to Paragraph (b)(2)(iii)--Nominal Full-Load Efficiencies of Fire Pump Electric Motors at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 75.5 ......... 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1......................................................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5........................................................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2........................................................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7........................................................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5......................................................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5.......................................................... 89.5 88.5 89.5 89.5 89.5 90.2 88.5 89.5
15/11........................................................... 90.2 89.5 91.0 91.0 90.2 90.2 88.5 89.5
20/15........................................................... 90.2 90.2 91.0 91.0 90.2 91.0 89.5 90.2
25/18.5......................................................... 91.0 91.0 92.4 91.7 91.7 91.7 89.5 90.2
30/22........................................................... 91.0 91.0 92.4 92.4 91.7 92.4 91.0 91.0
40/30........................................................... 91.7 91.7 93.0 93.0 93.0 93.0 91.0 91.0
50/37........................................................... 92.4 92.4 93.0 93.0 93.0 93.0 91.7 91.7
60/45........................................................... 93.0 93.0 93.6 93.6 93.6 93.6 91.7 92.4
75/55........................................................... 93.0 93.0 94.1 94.1 93.6 93.6 93.0 93.6
100/75.......................................................... 93.6 93.0 94.5 94.1 94.1 94.1 93.0 93.6
125/90.......................................................... 94.5 93.6 94.5 94.5 94.1 94.1 93.6 93.6
150/110......................................................... 94.5 93.6 95.0 95.0 95.0 94.5 93.6 93.6
200/150......................................................... 95.0 94.5 95.0 95.0 95.0 94.5 94.1 93.6
250/186......................................................... 95.4 94.5 95.0 95.4 95.0 95.4 94.5 94.5
300/224......................................................... 95.4 95.0 95.4 95.4 95.0 95.4 ......... .........
350/261......................................................... 95.4 95.0 95.4 95.4 95.0 95.4 ......... .........
400/298......................................................... 95.4 95.4 95.4 95.4 ......... ......... ......... .........
450/336......................................................... 95.4 95.8 95.4 95.8 ......... ......... ......... .........
500/373......................................................... 95.4 95.8 95.8 95.8 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(c) This section applies to electric motors manufactured (alone or
as a component of another piece of equipment) on or after June 1, 2027,
but before January 1, 2029, that satisfy the criteria in paragraph
(c)(1)(i) of this section, with the exclusion listed in paragraph
(c)(1)(ii) of this section.
(1) Scope. (i) The standards in paragraph (c)(2) of this section
apply only to electric motors, including partial electric motors, that
satisfy the following criteria:
(A) Are single-speed, induction motors;
(B) Are rated for continuous duty (MG 1) operation or for duty type
S1 (IEC);
(C) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
(D) Operate on polyphase alternating current 60-hertz sinusoidal
line power;
(E) Are rated 600 volts or less;
(F) Have a 2-, 4-, 6-, or 8-pole configuration,
(G) Are built in a three-digit or four-digit NEMA frame size (or
IEC metric equivalent), including those designs between two consecutive
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA
frame size (or IEC metric equivalent), or have an air-over enclosure
and a specialized frame size,
(H) Produce at least one horsepower (0.746 kW) but not greater than
750 horsepower (559 kW); and
(I) Meet all of the performance requirements of one of the
following motor types: A NEMA Design A, B, or C motor or an IEC Design
N, NE, NEY, NY or H, HE, HEY, HY motor.
(ii) The standards in paragraph (c)(2) of this section do not apply
to the following electric motors exempted by the Secretary, or any
additional electric motors that the Secretary may exempt:
(A) Component sets of an electric motor;
(B) Liquid-cooled electric motors;
(C) Submersible electric motors; and
(D) Inverter-only electric motors.
(2) Standards. (i) Each NEMA Design A motor, NEMA Design B motor,
and IEC Design N (including NE, NEY, or NY variants) motor that is an
electric motor meeting the criteria in paragraph (c)(1) of this section
but excluding fire pump electric motors and air-over electric motors,
and with a power rating from 1 horsepower through 750 horsepower, shall
have a nominal full-load efficiency of not less than the following:
Table 4 to Paragraph (c)(2)(i)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding Fire
Pump Electric Motors and Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
[[Page 87147]]
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
300/224......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
350/261......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
400/298......................................................... 95.8 95.8 96.2 95.8 ......... ......... ......... .........
450/336......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
500/373......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
550/410......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
600/447......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
650/485......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
700/522......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
750/559......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) Each NEMA Design A motor, NEMA Design B motor, and IEC Design
N (including NE, NEY, or NY variants) motor that is an air-over
electric motor meeting the criteria in paragraph (c)(1) of this
section, but excluding fire pump electric motors, and with a power
rating from 1 horsepower through 250 horsepower, built in a standard
frame size, shall have a nominal full-load efficiency of not less than
the following:
Table 5 to Paragraph (c)(2)(ii)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Standard Frame Size Air-
Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
[[Page 87148]]
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
(iii) Each NEMA Design A motor, NEMA Design B motor, and IEC Design
N (including NE, NEY, or NY variants) motor that is an air-over
electric motor meeting the criteria in paragraph (c)(1) of this
section, but excluding fire pump electric motors, and with a power
rating from 1 horsepower through 20 horsepower, built in a specialized
frame size, shall have a nominal full-load efficiency of not less than
the following:
Table 6 to Paragraph (c)(2)(iii)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Specialized Frame Size
Air-Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 74.0 ......... 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1......................................................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5........................................................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2........................................................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7........................................................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5......................................................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5.......................................................... 89.5 88.5 89.5 89.5 89.5 90.2 ......... .........
15/11........................................................... 90.2 89.5 91.0 91.0 ......... ......... ......... .........
20/15........................................................... 90.2 90.2 91.0 91.0 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(iv) Each NEMA Design C motor and IEC Design H (including HE, HEY,
or HY variants) electric motor meeting the criteria in paragraph (c)(1)
of this section but excluding air-over electric motors and with a power
rating from 1 horsepower through 200 horsepower, shall have a nominal
full-load efficiency that is not less than the following:
Table 7 to Paragraph (c)(2)(iv)--Nominal Full-Load Efficiencies of NEMA Design C and IEC Design H, HE, HEY or HY
Motors (Excluding Air-Over Electric Motors) at 60 Hz
----------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
-----------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 4 Pole 6 Pole 8 Pole
-----------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open
----------------------------------------------------------------------------------------------------------------
1/.75......................................... 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1....................................... 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5......................................... 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2......................................... 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7......................................... 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5....................................... 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5........................................ 91.7 91.7 91.0 91.7 89.5 90.2
15/11......................................... 92.4 93.0 91.7 91.7 89.5 90.2
20/15......................................... 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5....................................... 93.6 93.6 93.0 93.0 90.2 91.0
30/22......................................... 93.6 94.1 93.0 93.6 91.7 91.7
40/30......................................... 94.1 94.1 94.1 94.1 91.7 91.7
50/37......................................... 94.5 94.5 94.1 94.1 92.4 92.4
60/45......................................... 95.0 95.0 94.5 94.5 92.4 93.0
75/55......................................... 95.4 95.0 94.5 94.5 93.6 94.1
100/75........................................ 95.4 95.4 95.0 95.0 93.6 94.1
125/90........................................ 95.4 95.4 95.0 95.0 94.1 94.1
150/110....................................... 95.8 95.8 95.8 95.4 94.1 94.1
200/150....................................... 96.2 95.8 95.8 95.4 94.5 94.1
----------------------------------------------------------------------------------------------------------------
[[Page 87149]]
(v) Each fire pump electric motor meeting the criteria in paragraph
(c)(1) of this section, but excluding air-over electric motors, and
with a power rating of 1 horsepower through 500 horsepower, shall have
a nominal full-load efficiency that is not less than the following:
Table 8 to Paragraph (c)(2)(v)--Nominal Full-Load Efficiencies of Fire Pump Electric Motors (Excluding Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 75.5 ......... 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1......................................................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5........................................................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2........................................................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7........................................................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5......................................................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5.......................................................... 89.5 88.5 89.5 89.5 89.5 90.2 88.5 89.5
15/11........................................................... 90.2 89.5 91.0 91.0 90.2 90.2 88.5 89.5
20/15........................................................... 90.2 90.2 91.0 91.0 90.2 91.0 89.5 90.2
25/18.5......................................................... 91.0 91.0 92.4 91.7 91.7 91.7 89.5 90.2
30/22........................................................... 91.0 91.0 92.4 92.4 91.7 92.4 91.0 91.0
40/30........................................................... 91.7 91.7 93.0 93.0 93.0 93.0 91.0 91.0
50/37........................................................... 92.4 92.4 93.0 93.0 93.0 93.0 91.7 91.7
60/45........................................................... 93.0 93.0 93.6 93.6 93.6 93.6 91.7 92.4
75/55........................................................... 93.0 93.0 94.1 94.1 93.6 93.6 93.0 93.6
100/75.......................................................... 93.6 93.0 94.5 94.1 94.1 94.1 93.0 93.6
125/90.......................................................... 94.5 93.6 94.5 94.5 94.1 94.1 93.6 93.6
150/110......................................................... 94.5 93.6 95.0 95.0 95.0 94.5 93.6 93.6
200/150......................................................... 95.0 94.5 95.0 95.0 95.0 94.5 94.1 93.6
250/186......................................................... 95.4 94.5 95.0 95.4 95.0 95.4 94.5 94.5
300/224......................................................... 95.4 95.0 95.4 95.4 95.0 95.4 ......... .........
350/261......................................................... 95.4 95.0 95.4 95.4 95.0 95.4 ......... .........
400/298......................................................... 95.4 95.4 95.4 95.4 ......... ......... ......... .........
450/336......................................................... 95.4 95.8 95.4 95.8 ......... ......... ......... .........
500/373......................................................... 95.4 95.8 95.8 95.8 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(d) This section applies to electric motors manufactured (alone or
as a component of another piece of equipment) on or after January 1,
2029.
(1) The standards in paragraph (d)(1)(ii) of this section apply
only to electric motors that satisfy the criteria in paragraph
(d)(1)(i)(A) of this section and with the exclusion listed in paragraph
(d)(1)(i)(B) of this section.
(i) Scope. (A) The standards in paragraph (d)(1)(ii) of this
section apply only to electric motors, including partial electric
motors, that satisfy the following criteria:
(1) Are single-speed, induction motors;
(2) Are rated for continuous duty (MG 1) operation or for duty type
S1 (IEC);
(3) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
(4) Operate on polyphase alternating current 60-hertz sinusoidal
line power;
(5) Are rated 600 volts or less;
(6) Have a 2-, 4-, 6-, or 8-pole configuration,
(7) Are built in a three-digit or four-digit NEMA frame size (or
IEC metric equivalent), including those designs between two consecutive
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA
frame size (or IEC metric equivalent), or have an air-over enclosure
and a specialized frame size,
(8) Produce at least one horsepower (0.746 kW) but not greater than
750 horsepower (559 kW); and
(9) Meet all of the performance requirements of one of the
following motor types: A NEMA Design A, B, or C motor or an IEC Design
N, NE, NEY, NY or H, HE, HEY, HY motor.
(B) The standards in paragraph (d)(1)(ii) of this section do not
apply to the following electric motors exempted by the Secretary, or
any additional electric motors that the Secretary may exempt:
(1) Component sets of an electric motor;
(2) Liquid-cooled electric motors;
(3) Submersible electric motors; and
(4) Inverter-only electric motors.
(ii) Standards. (A) Each NEMA Design A motor, NEMA Design B motor,
and IEC Design N (including NE, NEY, or NY variants) motor that is an
electric motor meeting the criteria in paragraph (d)(1)(i) of this
section but excluding fire pump electric motors and air-over electric
motors, and with a power rating from 1 horsepower through 750
horsepower, shall have a nominal full-load efficiency of not less than
the following:
[[Page 87150]]
Table 9 to Paragraph (d)(1)(ii)(A)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding
Fire Pump Electric Motors and Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
300/224......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
350/261......................................................... 95.8 95.4 96.2 95.8 95.8 95.8 ......... .........
400/298......................................................... 95.8 95.8 96.2 95.8 ......... ......... ......... .........
450/336......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
500/373......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
550/410......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
600/447......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
650/485......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
700/522......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
750/559......................................................... 95.8 96.2 96.2 96.2 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(B) Each NEMA Design A motor, NEMA Design B motor, and IEC Design N
(including NE, NEY, or NY variants) motor that is an air-over electric
motor meeting the criteria in paragraph (d)(1)(i) of this section, but
excluding fire pump electric motors, and with a power rating from 1
horsepower through 250 horsepower, built in a standard frame size,
shall have a nominal full-load efficiency of not less than the
following:
Table 10 to Paragraph (d)(1)(ii)(B)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Standard Frame Size
Air-Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 77.0 77.0 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5........................................................... 85.5 85.5 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2........................................................... 86.5 85.5 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7........................................................... 88.5 86.5 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5......................................................... 89.5 88.5 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5.......................................................... 90.2 89.5 91.7 91.7 91.0 91.7 89.5 90.2
15/11........................................................... 91.0 90.2 92.4 93.0 91.7 91.7 89.5 90.2
20/15........................................................... 91.0 91.0 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5......................................................... 91.7 91.7 93.6 93.6 93.0 93.0 90.2 91.0
30/22........................................................... 91.7 91.7 93.6 94.1 93.0 93.6 91.7 91.7
40/30........................................................... 92.4 92.4 94.1 94.1 94.1 94.1 91.7 91.7
50/37........................................................... 93.0 93.0 94.5 94.5 94.1 94.1 92.4 92.4
60/45........................................................... 93.6 93.6 95.0 95.0 94.5 94.5 92.4 93.0
75/55........................................................... 93.6 93.6 95.4 95.0 94.5 94.5 93.6 94.1
100/75.......................................................... 95.0 94.5 96.2 96.2 95.8 95.8 94.5 95.0
125/90.......................................................... 95.4 94.5 96.2 96.2 95.8 95.8 95.0 95.0
[[Page 87151]]
150/110......................................................... 95.4 94.5 96.2 96.2 96.2 95.8 95.0 95.0
200/150......................................................... 95.8 95.4 96.5 96.2 96.2 95.8 95.4 95.0
250/186......................................................... 96.2 95.4 96.5 96.2 96.2 96.2 95.4 95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
(C) Each NEMA Design A motor, NEMA Design B motor, and IEC Design N
(including NE, NEY, or NY variants) motor that is an air-over electric
motor meeting the criteria in paragraph (d)(1)(i) of this section, but
excluding fire pump electric motors, and with a power rating from 1
horsepower through 20 horsepower, built in a specialized frame size,
shall have a nominal full-load efficiency of not less than the
following:
Table 11 to Paragraph (d)(1)(ii)(C)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Specialized Frame
Size Air-Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 74.0 ......... 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1......................................................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5........................................................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2........................................................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7........................................................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5......................................................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5.......................................................... 89.5 88.5 89.5 89.5 89.5 90.2 ......... .........
15/11........................................................... 90.2 89.5 91.0 91.0 ......... ......... ......... .........
20/15........................................................... 90.2 90.2 91.0 91.0 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(D) Each NEMA Design C motor and IEC Design H (including HE, HEY,
or HY variants) electric motor meeting the criteria in paragraph
(d)(1)(i) of this section but excluding air-over electric motors and
with a power rating from 1 horsepower through 200 horsepower, shall
have a nominal full-load efficiency that is not less than the
following:
Table 12 to Paragraph (d)(1)(ii)(D)--Nominal Full-Load Efficiencies of NEMA Design C and IEC Design H, HE, HEY
or HY Motors (Excluding Air-Over Electric Motors) at 60 Hz
----------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
-----------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 4 Pole 6 Pole 8 Pole
-----------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open
----------------------------------------------------------------------------------------------------------------
1/.75......................................... 85.5 85.5 82.5 82.5 75.5 75.5
1.5/1.1....................................... 86.5 86.5 87.5 86.5 78.5 77.0
2/1.5......................................... 86.5 86.5 88.5 87.5 84.0 86.5
3/2.2......................................... 89.5 89.5 89.5 88.5 85.5 87.5
5/3.7......................................... 89.5 89.5 89.5 89.5 86.5 88.5
7.5/5.5....................................... 91.7 91.0 91.0 90.2 86.5 89.5
10/7.5........................................ 91.7 91.7 91.0 91.7 89.5 90.2
15/11......................................... 92.4 93.0 91.7 91.7 89.5 90.2
20/15......................................... 93.0 93.0 91.7 92.4 90.2 91.0
25/18.5....................................... 93.6 93.6 93.0 93.0 90.2 91.0
30/22......................................... 93.6 94.1 93.0 93.6 91.7 91.7
40/30......................................... 94.1 94.1 94.1 94.1 91.7 91.7
50/37......................................... 94.5 94.5 94.1 94.1 92.4 92.4
60/45......................................... 95.0 95.0 94.5 94.5 92.4 93.0
75/55......................................... 95.4 95.0 94.5 94.5 93.6 94.1
100/75........................................ 95.4 95.4 95.0 95.0 93.6 94.1
125/90........................................ 95.4 95.4 95.0 95.0 94.1 94.1
150/110....................................... 95.8 95.8 95.8 95.4 94.1 94.1
200/150....................................... 96.2 95.8 95.8 95.4 94.5 94.1
----------------------------------------------------------------------------------------------------------------
[[Page 87152]]
(E) Each fire pump electric motor meeting the criteria in paragraph
(d)(1)(i) of this section, but excluding air-over electric motors, and
with a power rating of 1 horsepower through 500 horsepower, shall have
a nominal full-load efficiency that is not less than the following:
Table 13 to Paragraph (d)(1)(ii)(E)--Nominal Full-Load Efficiencies of Fire Pump Electric Motors (Excluding Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75........................................................... 75.5 ......... 82.5 82.5 80.0 80.0 74.0 74.0
1.5/1.1......................................................... 82.5 82.5 84.0 84.0 85.5 84.0 77.0 75.5
2/1.5........................................................... 84.0 84.0 84.0 84.0 86.5 85.5 82.5 85.5
3/2.2........................................................... 85.5 84.0 87.5 86.5 87.5 86.5 84.0 86.5
5/3.7........................................................... 87.5 85.5 87.5 87.5 87.5 87.5 85.5 87.5
7.5/5.5......................................................... 88.5 87.5 89.5 88.5 89.5 88.5 85.5 88.5
10/7.5.......................................................... 89.5 88.5 89.5 89.5 89.5 90.2 88.5 89.5
15/11........................................................... 90.2 89.5 91.0 91.0 90.2 90.2 88.5 89.5
20/15........................................................... 90.2 90.2 91.0 91.0 90.2 91.0 89.5 90.2
25/18.5......................................................... 91.0 91.0 92.4 91.7 91.7 91.7 89.5 90.2
30/22........................................................... 91.0 91.0 92.4 92.4 91.7 92.4 91.0 91.0
40/30........................................................... 91.7 91.7 93.0 93.0 93.0 93.0 91.0 91.0
50/37........................................................... 92.4 92.4 93.0 93.0 93.0 93.0 91.7 91.7
60/45........................................................... 93.0 93.0 93.6 93.6 93.6 93.6 91.7 92.4
75/55........................................................... 93.0 93.0 94.1 94.1 93.6 93.6 93.0 93.6
100/75.......................................................... 93.6 93.0 94.5 94.1 94.1 94.1 93.0 93.6
125/90.......................................................... 94.5 93.6 94.5 94.5 94.1 94.1 93.6 93.6
150/110......................................................... 94.5 93.6 95.0 95.0 95.0 94.5 93.6 93.6
200/150......................................................... 95.0 94.5 95.0 95.0 95.0 94.5 94.1 93.6
250/186......................................................... 95.4 94.5 95.0 95.4 95.0 95.4 94.5 94.5
300/224......................................................... 95.4 95.0 95.4 95.4 95.0 95.4 ......... .........
350/261......................................................... 95.4 95.0 95.4 95.4 95.0 95.4 ......... .........
400/298......................................................... 95.4 95.4 95.4 95.4 ......... ......... ......... .........
450/336......................................................... 95.4 95.8 95.4 95.8 ......... ......... ......... .........
500/373......................................................... 95.4 95.8 95.8 95.8 ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(2) The standards in paragraph (d)(2)(ii) of this section apply
only to electric motors that satisfy the criteria in paragraph
(d)(2)(i)(A) of this section and with the exclusion listed in paragraph
(d)(2)(i)(B) of this section
(i) Scope. (A) The standards in paragraph (d)(2)(ii) of this
section apply only to electric motors, including partial electric
motors, that satisfy the following criteria:
(1) Are not small electric motors, as defined at Sec. 431.442 and
are not a dedicated pool pump motors as defined at Sec. 431.483; and
do not have an air-over enclosure and a specialized frame size if the
motor operates on polyphase power;
(2) Are rated for continuous duty (MG 1) operation or for duty type
S1 (IEC);
(3) Operate on polyphase or single-phase alternating current 60-
hertz (Hz) sinusoidal line power; or are used with an inverter that
operates on polyphase or single-phase alternating current 60-hertz (Hz)
sinusoidal line power;
(4) Are rated for 600 volts or less;
(5) Are single-speed induction motors capable of operating without
an inverter or are inverter-only electric motors;
(6) Produce a rated motor horsepower greater than or equal to 0.25
horsepower (0.18 kW); and
(7) Are built in the following frame sizes: any two-, or three-
digit NEMA frame size (or IEC equivalent) if the motor operates on
single-phase power; any two-, or three-digit NEMA frame size (or IEC
equivalent) if the motor operates on polyphase power, and has a rated
motor horsepower less than 1 horsepower (0.75 kW); or a two-digit NEMA
frame size (or IEC metric equivalent), if the motor operates on
polyphase power, has a rated motor horsepower equal to or greater than
1 horsepower (0.75 kW), and is not an enclosed 56 NEMA frame size (or
IEC metric equivalent).
(B) The standards in paragraph (d)(2)(ii) of this section do not
apply to the following electric motors exempted by the Secretary, or
any additional electric motors that the Secretary may exempt:
(1) Component sets of an electric motor;
(2) Liquid-cooled electric motors;
(3) Submersible electric motors; and
(4) Inverter-only electric motors.
(ii) Standards. (A) Each high-torque and medium-torque electric
motor (i.e., capacitor-start-induction-run (``CSIR''), capacitor-start-
capacitor-run (``CSCR''), and split-phase motor) meeting the criteria
in paragraph (d)(2)(i) of this section and with a power rating of
greater than or equal to 0.25 horsepower and less than or equal to 3
horsepower, shall have an average full-load efficiency that is not less
than the following:
[[Page 87153]]
Table 14 to Paragraph (d)(2)(ii)(A)--Average Full-Load Efficiencies of High and Medium-Torque Electric Motor (CSIR, CSCR, and Split-Phase Motors) at 60
Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
.25/.19......................................................... 59.5 59.5 59.5 59.5 57.5 57.5 ......... .........
.33/.25......................................................... 64.0 64.0 64.0 64.0 62.0 62.0 50.5 50.5
.5/.37.......................................................... 68.0 68.0 67.4 69.2 68.0 68.0 52.5 52.5
.75/.56......................................................... 75.5 76.2 75.5 81.8 75.5 80.2 72.0 72.0
1/.75........................................................... 77.0 80.4 80.0 82.6 77.0 81.1 74.0 74.0
1.5/1.1......................................................... 81.5 81.5 81.5 83.8 80.0 ......... ......... .........
2/1.5........................................................... 82.5 82.9 82.5 84.5 ......... ......... ......... .........
3/2.2........................................................... 84.0 84.1 ......... ......... ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
(B) Each low-torque electric motor (i.e., shaded pole and permanent
split capacitor motor) meeting the criteria in paragraph (d)(2)(i) of
this section and with a power rating of greater than or equal to 0.25
horsepower and less than or equal to 3 horsepower, shall have an
average full-load efficiency of not less than the following:
Table 15 to Paragraph (d)(2)(ii)(B)--Average Full-Load Efficiencies of Low-Torque Electric Motor (Shaded Pole and Permanent Split Capacitor Motors) at
60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
.25/.19......................................................... 60.9 63.9 64.1 66.1 59.2 60.2 52.5 52.5
.33/.25......................................................... 63.9 66.9 67.7 69.7 64.0 65.0 56.6 56.6
.5/.37.......................................................... 65.8 68.8 68.1 70.1 65.8 66.8 57.1 57.1
.75/.56......................................................... 67.5 70.5 72.8 74.8 72.1 73.1 62.8 62.8
1/.75........................................................... 71.3 74.3 75.1 77.1 76.3 77.3 65.7 65.7
1.5/1.1......................................................... 76.9 79.9 80.1 82.1 79.5 80.5 72.2 72.2
2/1.5........................................................... 78.0 81.0 80.9 82.9 80.4 81.4 73.3 73.3
3/2.2........................................................... 79.4 82.4 82.0 84.0 81.5 82.5 74.9 74.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
(C) Each polyphase electric motor meeting the criteria in paragraph
(d)(2)(i) of this section and with a power rating of greater than or
equal to 0.25 horsepower and less than or equal to 3 horsepower, shall
have an average full-load efficiency of not less than the following:
Table 16 to Paragraph (d)(2)(ii)(C)--Average Full-Load Efficiencies of Polyphase Electric Motor at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average full-load efficiency (%)
---------------------------------------------------------------------------------------
Motor horsepower/standard kilowatt equivalent 2 Pole 4 Pole 6 Pole 8 Pole
---------------------------------------------------------------------------------------
Enclosed Open Enclosed Open Enclosed Open Enclosed Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
.25/.19......................................................... 66.0 65.6 68.0 69.5 66.0 67.5 62.0 62.0
.33/.25......................................................... 70.0 69.5 72.0 73.4 70.0 71.4 64.0 64.0
.5/.37.......................................................... 72.0 73.4 75.5 78.2 72.0 75.3 66.0 66.0
.75/.56......................................................... 75.5 76.8 77.0 81.1 74.0 81.7 70.0 70.0
1/.75........................................................... 75.5 77.0 77.0 83.5 74.0 82.5 75.5 75.5
1.5/1.1......................................................... 84.0 84.0 82.5 86.5 87.5 83.8 78.5 77.0
2/1.5........................................................... 85.5 85.5 85.5 86.5 88.5 ......... 84.0 86.5
3/2.2........................................................... 86.5 85.5 86.5 86.9 89.5 ......... 85.5 87.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Appendix B to Subpart B of Part 431 [Amended]
0
7. Appendix B to subpart B of part 431 is amended by:
0
a. In sections 1 and 1.2., removing the words ``Small, non-small-
electric-motor electric motor'' wherever it appears, and adding in its
place the words ``Expanded scope electric motor''.
0
b. In section 1.2, removing the term ``SNEM'' wherever it appears, and
adding in its place ``ESEM''.
0
c. In sections 2.3, 2.3.1, and 2.3.3, removing the term ``SNEMs''
wherever it appears, and adding in its place ``ESEMs''.
[FR Doc. 2023-26531 Filed 12-14-23; 8:45 am]
BILLING CODE 6450-01-P
