10-i CHAPTER 10: NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

10.1 INTRODUCTION ......................................................................................................... 10-1 10.2 BASE AND STANDARDS CASE EFFICIENCY DISTRIBUTIONS ........................ 10-2 10.2.1 Base Case Efficiency Distribution ..................................................................... 10-2 10.2.2 Standards Case Efficiency Distributions ........................................................... 10-3 10.3 NATIONAL ENERGY SAVINGS

............................................................................... 10-4 10-4 10-5 10-5 10-6 10-7 10-7 10-9 10-9 10-10 10-11 10-11 10-12 10-12 10-12 10-13 10-13 10-13 10-14 10-14 10-15 10-16 10-17 10-18 10-19 10-23 10-26

10-4 10.3.1 National Energy Savings Definition

.................................................................. 10.3.2 National Energy Savings Inputs

......................................................................... 10.3.2.1 Annual Energy Consumption per Unit

........................................................ 10.3.2.2 Shipments and Equipment Stock

................................................................. 10.3.2.3 National Annual Energy Consumption

........................................................ 10.3.2.4 Energy Site-to-Source Conversion Factors

.................................................. 10.4 NET PRESENT VALUE

............................................................................................... 10.4.1 Net Present Value Definition

............................................................................. 10.4.2 Net Present Value Inputs

................................................................................. 10.4.2.1 Total Installed Cost per Unit

...................................................................... 10.4.2.2 Annual Operating Cost Savings per Unit

................................................... 10.4.2.3 Total Annual Installed Cost Increases ....................................................... 10.4.2.4 Total Annual Operating Cost Savings

....................................................... 10.4.2.5 Discount Factors

........................................................................................ 10.4.2.6 Present Value of Costs

............................................................................... 10.4.2.7 Present Value of Savings

........................................................................... 10.5 TRIAL STANDARD LEVELS

................................................................................... 10.5.1 Polyphase Small Electric Motors

..................................................................... 10.5.2 Capacitor-Start Small Electric Motors

............................................................. 10.6 NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE RESULTS

........ 10.6.2 National Energy Savings Results

..................................................................... 10.6.3 Annual Costs and Savings

............................................................................... 10.6.4 Net Present Value Results

................................................................................ 10.6.5 Sensitivity of NES and NPV to Model Inputs

................................................. 10.6.6 Capacitor-Start National Impact Summary

...................................................... 10.6.7 Annualized National Impacts

...........................................................................

LIST OF TABLES

Table 10.2.1 Base Case Efficiency Distributions ................................................................... 10-2 Table 10.2.2 Polyphase Motor Efficiency Market Shares in the Base and Standards Cases .................................................................................................................. 10-3 Table 10.2.3 CSIR Motor Efficiency Market Shares in the Base and Standards Cases ......... 10-3 Table 10.2.4 CSCR Motor Efficiency Market Shares in the Base and Standards Cases

........10-ii Table 10.3.1 National Energy Saving Inputs

.......................................................................... 10-5

10-6 10-10

10-11 10-14 10-14 10-16 10-17 10-17 10-19 10-19

10-20

10-21

10-21

10-22

10-22

10-23

10-23

10-24 Table 10.6.14 LCC and National Impact Summary fo r All Combinations of CapacitorStart Efficiency Levels, Part One* ................................................................... 10-24

10-25 10-26 10-26

10-8

10-18 Table 10.3.2 Small Electric Motors: Shipment-W eighted Average Per-Unit Annual Energy Consumption in 2015 for Re presentative Product classes

.................... Table 10.4.1 Net Present Value Inputs

................................................................................. Table 10.4.2 Small Electric Motors: Shipment-Weighted Average Per-Unit Total Installed Cost in 2015 for Re presentative Product Classes

............................. Table 10.5.1 Trial Standard Levels for Po lyphase Small Electric Motors

........................... Table 10.5.2 Trial Standard Levels for Capacitor-Start Small Electric Motors

................... Table 10.6.1 Inputs to the Net Present Value Calculation

.................................................... Table 10.6.2 Polyphase Motors: Cumulative National Energy Savings Results

.................. Table 10.6.3 Capacitor-Start Motors: Cumulative National Energy Savings Results

.......... Table 10.6.4 Polyphase Motors: Cumulative Net Present Value Results

............................. Table 10.6.5 Capacitor-Start Motors: Cumulative Net Present Value Results

..................... Table 10.6.6 Undiscounted Cumulative National Energy Savings for Capacitor-Start Small Electric Motors Under Diffe rent CSIR/CSCR Market Share Scenarios (Energy Savings between 2015 and 2045)

...................................... Table 10.6.7 Capacitor-Start Motors: Cumulative Ne t Present Value Results in the Low CSCR Scenario

................................................................................................ Table 10.6.8 Capacitor-Start Motors: Cumulative Net Present Value Results in the High CSCR Scenario

................................................................................................ Table 10.6.9 Capacitor-Start Motors: Cumulative National Energy Savings Results in the Segmented Market Scenario (Market Share Shift Complete by 2015)

...... Table 10.6.10 Capacitor-Start Motors: Cumulative Net Present Value Results in the Segmented Market Scenario (Mar ket Share Shift Complete by 2015)

............ Table 10.6.11 Cumulative Net Present Value for Pol yphase Small Electric Motors in a Carbon Cap and Trade Electricity Pri ce Scenario (For Equipment Sold from 2015 to 2045)

.......................................................................................... Table 10.6.12 Cumulative Net Present Value for Capacitor-Start Small Electric Motors in a Carbon Cap and Trade Electricity Price Scenario (For Equipment Sold from 2015 to 2045)

.......................................................................................... Table 10.6.13 Location and Identification of Data for Each EL Combination in Tables 10.5.12 and 10.5.13

..........................................................................................

Table 10.6.15 LCC and National Impact Summary fo r All Combinations of CapacitorStart Efficiency Levels, Part Two*

.................................................................. Table 10.6.16 Annualized Costs and Benefits for Polyphase Small Electric Motors

............. Table 10.6.17 Annualized Costs and Benefits for Ca pacitor-Start Small Electric Motors

.....

LIST OF FIGURES

Figure 10.3.1 Site-to-Source Conversion Factors for Electricity

............................................. Figure 10.6.1 Non-Discounted Annual Installed Cost Increases and Annual Operating Cost Savings for Polyphase Small Elect ric Motors, Trial Standard Level 4

...10-iii10-1 CHAPTER 10. NATIONAL IMPACT ANALYSIS

10.1 INTRODUCTION
This chapter describes the U.S. Departme nt of Energy (DOE)’s estimation of certain national impacts of potential ener gy conservation standards for sm all electric motors. Results described here include: (1) national energy savi ngs (NES) from possible candidate standard levels (CSLs), (2) monetary value of the operating cost savings, (3) increased total installed costs of the considered products due to energy conser vation standards, and (4) the net present value (NPV) of the difference between th e value of operating cost savings and increased total installed
costs.

DOE determined the NES and NPV for all of the energy efficiency levels considered for the three equipment categories of small electric motors considered for this rulemaking: (1) polyphase motors, (2) capacitor-start induction-ru n (CSIR), and (3) capacitor-start capacitor-run (CSCR) motors. DOE built a combined NES and NPV model for CSIR and CSCR motors, reflecting the fact that these motors may be us ed interchangeably in many applications. This model incorporates the shipments market share model for these motors detailed in Section 9.4. DOE performed all calculations for each of th e considered equipment categories using a Microsoft Excel spreadsheet model, which is accessible on the Internet (<http://www1.eere.energy.gov/buildi ngs/appliance_standards/>). Th e spreadsheet models that contain the national impact analysis (NIA) co mbine the calculations for determining the NES and NPV with the relevant shipments models. Th e shipments analysis (see chapter 9) provides a detailed description of the shipments models that DOE used to forecast future purchases of the considered equipment.

The small electric motors covered by this ru lemaking and analysis constitute a fraction of all small electric motors in use throughout th e United States. In residential and commercial contexts, most motor energy is used by app liances or systems covered by other existing efficiency standards (such as refrigerators and air conditioners). DOE drew upon analysis conducted in 1999 1 to conclude that small electric motors less than or equal to 2 horsepower use approximately 300 TWh per year in the reside ntial sector and 150 TWh per year in the commercial sector. This energy consumption incl udes the useful work conducted by the motors in addition to losses. DOE assumed that energy us e by small motors in industrial and agricultural applications totals approximately half the use in commercial applications , or roughly 75 TWh per year. This analysis implies that total annual electricity use by small electric motors is approximately 525 TWh. Of this, DOE’s 1999 analysis indicates that roughl y 12% of residential small motor energy use and 25% of commercial small motor energy use are due to motors in applications not covered by other efficiency standards. DOE assumed that 95% of industrial and agricultural small motor energy use is due to moto rs not covered by other efficiency standards. This implies that motor energy use (including usef ul work and losses) by small electric motors not covered by other efficiency standards is approximately 145 TWh per year. DOE’s national energy savings analysis indicates that electric ity use by motors covered by this rulemaking is10-2 approximately 40 TWh per year (including useful work and losses). This is approximately 27% of the energy use by small electric motors not covered by other standards, and approximately 7% of the energy use by al l small electric motors.

10.2 BASE AND STANDARDS CASE EFFICIENCY DISTRIBUTIONS

This section describes the method DOE used to forecast the energy efficiencies of considered equipment under the base case and each of the potential standards cases. It provides efficiency distributions for the three equipment cat egories of small electric motors considered for this rulemaking.

10.2.1 Base Case Efficiency Distribution
DOE did not have access to motor shipment data as a function of efficiency for any product classes. DOE studied manufacturer catalogs to determine the current distribution of motor efficiency among the levels considered in this analysis. Not all motors listed in manufacturer catalogs included in formation regarding the motor’s full-load or nominal (NEMA) efficiency. Therefore, the Department used the number of models with a published efficiency rating as a proxy for the number of shipments. DOE did not develop separate efficiency distributions for each product class. Instead, it us ed a single efficiency distribution for each motor category (polyphase, CSIR, and CSCR), deri ved from the distribution of models within each category.

Table 10.2.1 shows DOE’s estimated current efficiency distribution for polyphase, CSIR, and CSCR motors. DOE assumed that, in the abse nce of standards (the base case), this distribution would remain fi xed over the analysis period.

Table 10.2.1 Base Case Efficiency Distributions Market Share (%) Efficiency Level Polyphase CSIR CSCR Baseline 82.0 40.0 67.0 1 4.0 7.0 10.0 2 4.0 20.0 2.0 3 4.0 30.0 2.0 4 6.0 2.0 11.0 5 0.0 1.0 3.0 6 0.0 0.0 5.0 7 0.0 0.0 0.0 8 - - 0.010-3 10.2.2 Standards Case Efficiency Distributions
DOE used a simple “roll up” approach to for ecast efficiency distributions in the case of standards. That is, DOE assumed that motor cust omers who would have purchased motors with a rated efficiency below that of the minimum ef ficiency required by the standard would instead purchase motors which exactly met the standar d. Customers who would have purchased motors above the minimum required by the standard ar e unaffected, so the market shares in those efficiency levels remain unchanged.

Tables 10.2.2, 10.2.3, and 10.2.4 show the resu lting efficiency distributions the Department used for each standard s case. For example, in the case of a standard for polyphase motors at efficiency level 1, the 82 percent of pur chases at the baseline efficiency level would roll up to level 1, yielding a tota l share of 86 percent, while the shares above level 1 are unaffected.

Table 10.2.2 Polyphase Motor Efficiency Market Shares in the Base and Standards Cases Market Share (%) Standard Case Efficiency Level Baseline Effic. Level 1 Effic. Level 2 Effic. Level 3 Effic. Level 4 Effic. Level 5 Effic. Level 6 Effic. Level 7

Baseline 82.0 4.0 4.0 4.0 6.0 0.0 0.0 0.0 1 0.0 86.0 4.0 4.0 6.0 0.0 0.0 0.0 2 0.0 0.0 90.0 4.0 6.0 0.0 0.0 0.0 3 0.0 0.0 0.0 94.0 6.0 0.0 0.0 0.0 4 0.0 0.0 0.0 0.0 100.0 0.0 0.0 0.0 5 0.0 0.0 0.0 0.0 0.0 100.0 0.0 0.0 6 0.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0

Table 10.2.3 CSIR Motor Efficiency Market Shares in the Base and Standards Cases Market Share (%) Standard Case Efficiency Level Baseline Effic. Level 1 Effic. Level 2 Effic. Level 3 Effic. Level 4 Effic. Level 5 Effic. Level 6 Effic. Level 7

Baseline 40.0 7.0 20.0 30.0 2.0 1.0 0.0 0.0 1 0.0 47.0 20.0 30.0 2.0 1.0 0.0 0.0 2 0.0 0.0 67.0 30.0 2.0 1.0 0.0 0.0 3 0.0 0.0 0.0 97.0 2.0 1.0 0.0 0.0 4 0.0 0.0 0.0 0.0 99.0 1.0 0.0 0.0 5 0.0 0.0 0.0 0.0 0.0 100.0 0.0 0.0 6 0.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0Table 10.2.4 CSCR Motor Efficiency Market Shares in the Base and Standards Cases Market Share (%) Standard Case Efficiency Level Baseline Effic. Level 1 Effic. Level 2 Effic. Level 3 Effic. Level 4 Effic. Level 5 Effic. Level 6 Effic. Level 7 Effic. Level 8 Baseline 67.0 10.0 2.0 2.0 11.0 3.0 5.0 0.0 0.0 1 0.0 77.0 2.0 2.0 11.0 3.0 5.0 0.0 0.0 2 0.0 0.0 79.0 2.0 11.0 3.0 5.0 0.0 0.0 3 0.0 0.0 0.0 81.0 11.0 3.0 5.0 0.0 0.0 4 0.0 0.0 0.0 0.0 92.0 3.0 5.0 0.0 0.0 5 0.0 0.0 0.0 0.0 0.0 95.0 5.0 0.0 0.0 6 0.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 0.0 7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0

10.3 NATIONAL ENERGY SAVINGS

10.3.1 National Energy Savings Definition
DOE calculates annual NES in each year as the difference between energy consumption of the equipment stock using the average unit energy consumption ( UEC ) of the stock in the base case (without new standards) compared with a case with new standards. 

## ( ) ( ) 

# ( )
classstd classbase class class yUEC yUEC yAffStock yNES

, , )( )(

− × =

Where:

AffStock(y) class = the stock of equipment sold after the year of the standard that is still in operation in year y (the “affected stock”),

UEC(y) base class = the unit energy consumption in the base case in year y , and

UEC(y) std. class = the unit energy consumption in the standard case in year y

. The affected stock in year y is given by



## ( ) () ( ) class y

stdyri class class iySurviS yAffStock −× = 

## ∑

=
The stock in year y is dependent on the number of shipments S(y) class in past years, multiplied by the survival function Surv(v) , the fraction of shipments surviving until age v

10-4(vintage). Only shipments occurring afte r the effective year of the standard ( stdyr ) are considered for the calculation of NES, since shipments before this date will not be affected by the standard, and thus will produce no savings.

Cumulative energy savings are the sum of the annual national energy savings over a defined time period (in this case, from 2015 until 2045):


## ( ) 

## ∑

= = 2045

stdyry cum yNES NES

10.3.2 National Energy Savings Inputs
Table 10.2.1 lists the inputs for the determination of national energy savings. The following sections discuss each input.

Table 10.3.1 National Energy Saving Inputs Annual Energy Consumption per Unit ( UEC ) Shipments Equipment Stock ( STOCK V ) National Annual Energy Consumption ( AEC ) Site-to-Source Conversion Factor ( src_conv )

10.3.2.1 Annual Energy Consumption per Unit
For each of the representative product classe s, DOE presented the per-unit annual energy consumption as a function of equipment energy e fficiency in the energy use determination (see chapter 7). Because the per-uni t annual energy consumption is directly dependent on energy efficiency, DOE used the base case and standa rds case shipment-weighted energy efficiencies presented above in section 10.2, in combination w ith the annual energy use data presented in the energy use determination (see chapter 7), to es timate the shipment-weight ed average annual perunit energy consumption under the base case an d standards cases for each of the three representative product classe s (4-pole 1 hp polyphase, 3⁄4 hp CSCR, and 1⁄2 hp CSIR).

DOE also used the power factor of its moto r designs in the representative product classes to determine the shipment-weighted reactive power requirements of motors of varying efficiency. Reactive power is measured in Ki lovolt Amperes-reactive (kVAr). Table 10.3.2 shows the shipment-weighted annual energy use and reactive power for each of these product classes.

10-510-6 Table 10.3.2 Small Electric Motors: Shipment-We ighted Average Per-Unit Annual Energy Consumption in 2015 for Rep resentative Product classes Efficiency Level Product class Base Case 1 2 3 4 5 6 7 8 Efficiency (%) 77.2 78.7 80.0 81.6 82.5 85.2 86.4 88.3

- Annual Energy Use (kWh/yr)* 442 418 387 339 324 244 225 189

- Polyphase 1 HP, 4 poles Reactive Power (kVAr) 0.90 0.90 0.87 0.78 0.79 0.76 0.75 0.77

- Efficiency (%) 57.7 59.5 62.0 64.2 68.5 71.2 73.0 77.0

- Annual Energy Use (kWh/yr)* 557 536 507 471 383 334 304 238

- Single Phase – CSIR, 1⁄2 HP, 4 poles Reactive Power (kVAr) 0.81 0.80 0.78 0.73 0.61 0.69 0.63 0.53

-
Efficiency (%) 71.0 74.3 78.3 80.3 81.6 82.7 83.5 85.4 87.3 Annual Energy Use (kWh/yr)* 438 396 310 274 278 267 260 216 184 Single Phase – CSCR, 3⁄4 HP, 4 poles Reactive Power (kVAr) 0.65 0.50 0.40 0.38 0.17 0.16 0.04 0.10 0.08
* Kilowatt hours per year, losses only.
DOE used the loss scaling relations detailed in chapter 5 to scale the losses from the representative product cla ss within each motor cate gory to each of the ot her product classes. In this way, the Department was able to devel op a shipment-weighted su m of all annual motor losses across each motor category (see section 10.3.2.3).
For some types of equipment, a “rebound effect” can occur when more efficient equipment is used more intensely in response to the economic savings from energy efficiency. Accounting for a rebound effect w ill decrease energy savings comp ared to a scenario with no rebound effect. Small electric motors are pre dominantly components of larger pieces of equipment or an integrated production proce ss. Typically, energy losses from inefficient operation of the larger equipment or process that contains a small electric motor are much greater than losses due to inefficiencies of the individual motor. In addition, cust omers rarely have direct control over the intensity of motor operation. Gi ven these considerations and a lack of data indicating a rebound effect for small electric motors, DOE assumed that there is no significant rebound effect for this equipment.

10.3.2.2 Shipments and Equipment Stock
An extensive description of the me thodology for conducting and generating the shipments forecasts for each of the considered product classes can be found in chapter 9. The equipment stock in a given year is the number of motors shipped from earlier years that survive in the given year. The NIA models keep track of the number of units shipped each year. DOE assumes that the motors have an increasing probabili ty of retiring as they age. The probability of survival as a function of years- since-purchase is the survival f unction. Please refer to the lifecycle cost analysis (see chapter 8) for further de tails on the motor lifetimes that DOE used in its analysis. In the NIA, DOE used shipment-wei ghted average energy use, corresponding roughly to average hours of operation. Therefore, in the NIA there is no corre lation between annual hours of operation and motor lifetime, as there is in the life-cycle cost analysis.

The survival function used in the NIA for each motor category is the aggregate survival function for motors within that category. Becau se DOE’s forecasts of shipments are based on economic drivers, rather than explicit replacemen ts and growth within a particular customer base, motors with shorter lifetimes constitute a larger fraction of motor shipments than they constitute of the installed motor stock. DOE uses the shipment-weighted annual energy consumption, which accounts for the fact that th ese motors use a larger fraction of the energy than they constitute of the installed motor stock.

10.3.2.3 National Annual Energy Consumption
The national annual energy consumption (AEC ) is calculated in the base case and standards cases and is the produc t of the annual energy consumpti on per unit and the number of units of each vintage:



## ( ) ( ) class class class yStock UEC yAEC × = Where:

UEC class = the unit energy consumption for a given class

Stock(y) class = the stock of equipment in year y
The Department summed the UEC for each pr oduct class within each motor category to determine the total energy used for each category of motors in each year during the analysis period.

10.3.2.4 Energy Site-to-Source Conversion Factors
In determining national annual energy sa vings, DOE initially calculated the annual energy consumption at the site (e.g., for elect ricity, the energy in kWh consumed at the household, commercial building, farm, or industrial faci lity). It then calcu lated primary (source) energy savings from site energy consumption by applying a conversion factor to account for losses associated with the generation, transmissi on, and distribution of electricity. The site-tosource conversion factor is the multiplicative fact or used for converting site energy consumption into primary or source energy consumption, expressed in quads.

DOE used annual site-to-source conversion fa ctors based on the ve rsion of the National Energy Modeling System (NEMS) that corresponds to the American Recovery and Reinvestment

10-7Act scenario of the U.S. DOE/Energy Information Administration (EIA)’s Annual Energy Outlook 2009 (AEO2009). 2 The factors used are marginal va lues, which represent the response of the system to an incremental decrease in cons umption. For electricity, the conversion factors vary over time, due to projected changes in generation sources (i.e., the power plant types projected to provide electricity to the country). NEMS outputs stop in 2030; DOE assumed that conversion factors remain constant at 2030 values throughout the remainder of the forecast period. Figure 10.2.1 shows the site-to-s ource conversion factors between 2005 and 2030 for electricity.

0 2000 4000 6000 8000 10000 12000 14000

2005 2010 2015 2020 2025 2030 YearBtu/kWh

Figure 10.3.1 Site-to-Source Conversion Factors for Electricity

DOE also developed an estimate of the ener gy losses in the transmission and distribution system due to the reactive power needed by sm all electric motors. Reactive power is not consumed within the motor, but the necessary power must be generated by utilities and is manifested as larger currents in the transmissi on and distribution system than would be required if every load required only activ e power (that is, had a power f actor of 1.0). The conversion factor between the reactive power (in giga-VAr) required by motors and the site requirements (primary energy) for that reactive power is:

10-8

## ( )

mid trans active reactive LossAdj AvgHours LossSSRP PE × × ×

= 2

Where: PE reactive = annual primary energy, in quads, requ ired to meet the reactive power load, RP = reactive load, in GVAr, required by motors, S2S active = the site-to-source convers ion factor for active power, Loss trans = 6.33%, the national average energy loss in transmission and distribution, AvgHours = the average annual hours of motor operation, and LossAdj mid = a conversion factor, equal to trans Loss + 1 , which accounts for the assignment of
transmission and distribution losses to th e midpoint of the route between site and

source.

10.4 NET PRESENT VALUE

10.4.1 Net Present Value Definition
The NPV is the value in the present of a time series of costs and savings. The NPV is described by the equation: 

## ( ) 

# ∑ ×−=

y yDFyCyS NPV )()() (

Where: S(y) = value of operating cost savings (includi ng energy, repair, and maintenance costs) in year y , and C(y) = value of increased total installed co sts (including equipment purchase cost and installation). DF(y) = discount factor in each year,

DOE calculated the total annual operating cost savings by multiplying the number or stock of the given product class ( by vintage) by its per-unit operati ng cost (also by vintage) in the base case and standards case, a nd subtracting to calculate the savings. DOE calculated the total annual installed cost increases by multiplying the number or stock of th e given product class (by vintage) by its per-unit total insta lled cost (also by vintage) in th e base case and standards case, and subtracting to calculate the increase. The calculation of th e annual operating costs savings and total annual installed cost increases is represented with the following equations: 

# ∑ )( )( )( yAffStock yUOCS yOCS × =

10-9

# ∑ )()( )( yxSyUTIC yTIC =Δ
Where:

OCS = total annual operating co st savings each year summed over vintages of the affected equipment stock, AffStock(y)
, Δ TIC = total annual installed cost increases e ach year summed over vintages of the affected equipment stock, AffStock(y)
, S(y) = stock of motors of vintage V surviving in the year for which DOE calculated annual energy consumption, UOCS(y) = annual operating cost savings per unit in year y, UTIC(y) = annual total installed cost increase per unit in year y, and
y = year in the forecast.

DOE calculated a discount factor from the di scount rate and the num ber of years between the “present” (i.e., year to which the sum is being discounted

─ 2009 for all NPV quantities presented in this TSD) and the year in which the costs and savings occur. The NPV is the sum over time of the discounted net savings.

10.4.2 Net Present Value Inputs
Table 10.3.1 summarizes the inputs to the net present value calculation.

Table 10.4.1 Net Present Value Inputs Total Installed Cost per Unit Annual Operating Cost Savings per Unit
Total Annual Installed Cost Increases Total Annual Operating Costs
Discount Factor
Present Value of Costs Present Value of Savings

The increase in the total annual installed cost is equal to the annual change in the per-unit total installed cost (difference between each standards case and base case) multiplied by the shipments forecasted in the standards case.

The total annual operating cost savings are equal to the di fference in the annual operating costs between the base case and each st andards case, calculated by multiplying the cost to operate each unit by the shipments forecaste d in the base and standards cases. The annual operating cost includes energy, repair, and maintenance costs.

10-1010-11 10.4.2.1 Total Installed Cost per Unit
For each of the representative product classes, DOE presented the per-unit total installed cost as a function of equipment energy effici ency in the life-cycle cost and payback period analysis (see chapter 8.) Because the per-unit total annual installed cost is directly dependent on energy efficiency, DOE used the base case a nd standards case shipment-weighted energy efficiencies presented above in section 10.2, in combination with the total installed costs presented in the life-cycle cost and payback pe riod analysis, to estimate the shipment-weighted average annual per-unit total in stalled cost under the base case and standards cases for each of the three representative product classes. These averages are shown in Table 10.4.2 . As in the lifecycle cost analysis, DOE assumed that 20% of the motors were space-constrained.

Table 10.4.2 Small Electric Motors: Shipment-Weighted Average Per-Unit Total Installed Cost in 2015 for Representative Product Classes Efficiency Level Product class Base Case 1 2 3 4 5 6 7 8 Efficiency (%) 77.2 78.7 80.0 81.6 82.5 85.2 86.4 88.3

- Polyphase 1 HP, 4 poles Total Installed Cost (2008$) $516 $526 $532 $543 $550 $643 $697 $1,446

- Efficiency (%) 57.7 59.5 62.0 64.2 68.5 71.2 73.0 77.0

- Single Phase – CSIR, 1⁄2 HP, 4 poles Total Installed Cost (2008$) $500 $504 $506 $508 $525 $543 $587 $977

-
Efficiency (%) 71.0 74.3 78.3 80.3 81.6 82.7 83.5 85.4 87.3 Single Phase –, CSCR, 3⁄4 HP, 4 poles Total Installed Cost (2008$) $560 $567 $589 $597 $610 $622 $668 $686 $1,496

DOE used the price scaling relations derived in its life-cycle cost analysis (see chapter 8) to develop shipment-weighted average motor instal led costs for each product class. This allowed the Department to weight the total installed cost increases by the distribution of motor shipments across product classes.

As noted in section 10.2, DOE assumed that fo recasted energy efficiencies in the base case and standards cases remain constant at the energy efficiency levels in the effective year. Therefore, because the per-unit to tal installed costs are a function of energy efficiency, DOE held the installed cost constant over the forecast period.

10.4.2.2 Annual Operating Cost Savings per Unit
The per-unit annual operating cost includ es the energy, reactive power, repair, andmaintenance costs. DOE determined the per-unit annual operating cost savings by taking the perunit annual energy consumption savings develo ped for each product class and multiplying it by the appropriate energy and reactive power prices.DOE forecasted the per-unit annual energy consumption for the base case and each standards case by fixing the consumption at levels estimated for the effective year.

DOE forecasted energy prices based on the American Recovery and Reinvestment Act scenario of EIA’s AEO2009 . The energy prices and energy price trends are described in chapter 8.

10.4.2.3 Total Annual Installed Cost Increases

The total annual installed cost increase for any given standa rds case is the product of the total installed cost increase per unit due to the standard and the number of units shipped each year. The equation for determining the total annual installed cost increase for a given standards case was shown in section 10.4.1 and is repeated here: 

# ∑ )()( )( yxSyUTIC yTIC =

10.4.2.4 Total Annual Operating Cost Savings
The total annual operating cost savings for any given standards case is the product of the annual operating cost savings per unit due to the standard and the number of units of each vintage. The equation for determining the total annual operating cost savings for a given standards case was shown in secti on 10.4.1 and is repeated here: 

# ∑ )( )( )( yAffStock yUOCS yOCS × =

10.4.2.5 Discount Factors
DOE multiplies monetary values in future ye ars by a discount factor to determine the present value. The discount factor (DF) is described by the equation:

)ypy(

_ )r( DF +1 1
=

Where:

r

= discount rate,
y = year of the monetary value, and
y

P

= year in which the present value is being determined.

DOE estimated national impacts with both a three-percent and a seven-percent real discount rate. It used these discount rates in accordance with the Office of Management and Budget (OMB)’s guidance to Federa l agencies on the development of regulatory analysis (OMB

10-1210-13 Circular A-4, September 17, 2003), and section E., “Identifying and Measuring Benefits and Costs,” therein. DOE defines the present year as 2009.

10.4.2.6 Present Value of Costs
The present value of increased installed costs is the annual installed cost increase in each year (i.e., the difference between the standards ca se and base case), discounted to the present, and summed for the time period over which DOE is considering the installation of equipment (i.e., from the effective date of energy conservation standards through 30 years later).

The increase in total installed cost refers to both equipment purchase cost and installation cost associated with the higher energy efficiency of products purchased in the standards case compared to the base case. DOE calculated annual increases in in stalled costs as the difference between the total installed cost for all new produc ts purchased each year in the base case and in the standards case. (DOE assumed that total moto r sales were inelastic – see section 9.4.1 – so that total shipments are unchanged be tween the base and standards cases.)

10.4.2.7 Present Value of Savings
The present value of operating cost savings is the annual operating cost savings (i.e., the difference between the base case and standards case) discounted to the present, and summed over the period from the effective date to the time when the last unit installed is retired from service.

Savings are decreases in ope rating costs (including energy, repair, and maintenance costs) associated with the highe r energy efficiency of equipmen t purchased in a standards case compared to the base case. Total annual operating cost savings are the savings per unit multiplied by the number of units of each vintage surviving in a particular year. Equipment consumes energy over its entire lifetime, a nd for units purchased in the last year, the consumption includes energy consumed until the unit is retired from service.

10.5 TRIAL STANDARD LEVELS
DOE generated NES and NPV results based on tr ial standard levels (TSLs). The TSLs are based on the following: (1) efficiency levels corresponding to designs of motors in representative product classes, characterized in the engineering analysis, (2) the efficiency level identified with the maximum efficiency, and (3) a combination of efficiency levels for different product categories that have potentially positive impacts on consumers and the Nation. The efficiency levels considered were those analyzed in the engineering analysis (chapter 5), for which the Department designed motors utilizing technologically feasible desi gn options. The Department analyzed the national impacts of a set of trial standa rd levels (TSLs) for polyphase motors and a set of TSLs for capacitor-start motors.10-14 10.5.1 Polyphase Small Electric Motors
The polyphase TSLs, listed in Table 10.5.1 , correspond to the efficiency levels described in the engineering analysis (chapter 5) and life -cycle cost analysis (chapter 8). DOE used the price and energy use relations de veloped in the engineering and LCC analyses to assign costs and efficiencies to motors in pr oduct classes other than the representative product class (4 poles, 1 horsepower).

Table 10.5.1 Trial Standard Levels for Polyphase Small Electric Motors

Trial Standard Level Efficiency Level 4 pole, 1 Hp Full Load Efficiency % 1 1 78.7 2 2 80.0 3 3 81.6 4 4 82.5 5 5 85.2 6 6 86.4 7** 7 88.3 *Standard levels are expressed in terms of full-load efficiency. ** Maximum technologically feasible efficiency level

10.5.2 Capacitor-Start Small Electric Motors
Trial standard levels for capacitor-start motors are composed of efficiency level standards for both CSIR and CSCR motors. The Department chose to analyze a subset of all possible combinations of CSIR and CSCR efficiency le vels as its TSLs for capacitor-start motors. Table 10.5.2 shows the combinations the Department selected.

Table 10.5.2 Trial Standard Levels for Capacitor-Start Small Electric Motors Trial Standard

Level CSIR Efficiency Level CSIR 4 pole 0.50 Hp Full Load Efficiency % CSCR Efficiency Level CSCR 4 pole 0.75 Hp Full Load Efficiency % 1 4 68.5 2 78.3 2 4 68.5 3 80.3 3 5 71.2 3 80.3 4 6 73.0 4 81.6 5 6 73.0 3 80.3 6** 7 77.0 8 87.3

7 7 77.0 3 80.3 8 7 77.0 7 85.4 *Standard Levels are expressed in terms of full-load efficiency. ** Maximum technologically feasible efficiency levels

Trial standard level 1 corresponds to an effi ciency level combination considered by motor manufacturers to be comparable to the EPACT 1992 efficiencies for polyphase medium motors. It consists of the combination of efficiency le vel 4 for CSIR motors and efficiency level 2 for CSCR motors.10-15 TSL 2 consists of the combination of EL 4 for CSIR motors and EL 3 for CSCR motors. This combination has the highest energy savings and net present value of any level combination utilizing CSIR EL 4.

TSL 3 consists of the combination of EL 5 for CSIR motors and EL 3 for CSCR motors. This combination has the highest energy savings and net present value of any level combination utilizing CSIR EL 5.

TSL 4 consists of the combination of EL 6 for CSIR motors and EL 4 for CSCR motors. In the “High CSCR” sensitivity case, TSL 4 has the highest energy savings of any level combination utilizing CSIR EL 6.

TSL 5 consists of the combination of EL 6 for CSIR motors and EL 3 for CSCR motors. In the Departments’ reference scenarios, TSL 5 has the highest energy savings and net present value of any level combination utilizing CSIR EL 6. This combination is considered by motor manufacturers to be comparable to NEMA Pr emium efficiency levels for polyphase medium
motors.

TSL 6 consists of the combination of EL 7 for CSIR motors and EL 8 for CSCR motors. These levels are the maximum technologically feasible levels for both motor categories.

TSL 7 consists of the combination of EL 7 for CSIR motors and EL 3 for CSCR motors. TSL 7 has the highest net present value of any level combination utilizing CSIR EL 7. Under some sensitivity scenarios, as well as the Depa rtment’s reference scenario with a 3% discount rate, this level has the highest NPV of any comb ination of CSIR and CSCR efficiency levels.

TSL 8 consists of the combination of EL 7 for CSIR motors and EL 7 for CSCR motors. This combination exhibits the greatest energy savings of any combination of CSIR and CSCR efficiency levels.

Section 10.6.6 discusses national impact resu lts for all possible combinations of CSIR and CSCR efficiency levels, includi ng those not selected as TSLs.

10.6 NATIONAL ENERGY SA VINGS AND NET PRES ENT VALUE RESULTS
The NIA model provides estimates of the NES and NPV for standards set at various efficiency levels. The inputs to the NIA mode l have been discussed earlier in sections 10.3.2 (NES Inputs) and 10.4.2 (NPV Inputs). DOE generated th e NES and NPV results using a Microsoft Excel spreadsheet, which is accessible on the Internet ( http://www1.eere.energy.gov/build ings/appliance_standards/commercial/small_electric_motors.html ). Details and instructions for using the spread sheet are provided in Appendix 10-A, User Instructions for National Impact Analysis Spreadsheet.10-16 Table 10.6.1 summarizes the inputs to the NIA model.

Table 10.6.1 Inputs to the Net Present Value Calculation Input Data Description Shipments Annual shipments for each product class from shipments model. (See chapter 9.)
Effective Date of Standard 2015 Base Case Forecasted Energy Consumption Shipment- weighted unit energy consum ption (UEC), based on efficiency and hours of operation Standards Case Energy Consumption The UEC for each standards case, based on efficiency and hours of operation. Annual Energy Consumption per Unit Annual weighted-average values for each product class are a function of shipment-weighted UEC. Total Installed Cost per Unit Annual weighted-average values for each product class are a function of efficiency level. Energy Cost per Unit Annual weighted-average values are a function of the annual UEC and energy prices. (See chapters 7 and 8.) Repair Cost and Maintenance Cost per Unit Annual values are constant, and not a function of efficiency level. (See chapter 8.) Trend in Energy Prices Based on EIA AEO2009 forecasts (to 2030) and extrapolation to 2065. (See chapter 8.)
Energy Site-to-Source Conversion Factor Conversion varies yearly and is generated by DOE/EIA’s NEMS* program (a time series conversion factor; includes electric generation, transmission, and distribution losses).
Discount Rate 3 percent and 7 percent real.
Present Year Future expenses are discounted to year 2009. * Chapter 13 on the Utility Impact Analysis and the Environmental Assessment Report provide more detail on

NEMS.

10.6.2 National Energy Savings Results
The following sections provide NES result s for the standards cases analyzed for polyphase and capacitor-start motors. NES resu lts are cumulative to 2045 and are shown as primary energy savings. DOE based the inputs to the NIA model on weighted-average values, yielding results that are discrete point values, rath er than a distribution of values as in the lifecycle cost and payback period analysis.

Table 10.6.2 and Table 10.6.3 show the NES results for the trial standard levels (TSLs) analyzed for small electric motors. For polyphase motors, the TSLs correspond to the efficiency levels analyzed in the engineering and LCC analyses. For capacitor-start motors, the TSLs consist of combinations of efficiency leve ls for CSIR and CSCR motors, as shown in Table 10.6.3 . The capacitor-start values are presented as ra nges, indicating the eff ects of the rate and timing of market share shifts (s ee section 9.4.4). The two values in the range correspond to (1) a10-17 ten-year market share shift beginning in 2015 and (2) a market share shift complete by the start of the analysis period in 2015.

Table 10.6.2 Polyphase Motors: Cumulative National Energy Savings Results National Energy Savings (quads)* Trial standard level Discounted at 3% Discounted at 7% 1 0.04 0.02 0.01 2 0.09 0.05 0.02 3 0.18 0.09 0.04 4 0.21 0.10 0.05 5 0.33 0.17 0.08 6 0.36 0.19 0.09 7 0.41 0.21 0.10 * Quadrillion British thermal units.

Table 10.6.3 Capacitor-Start Motors: Cumulative National Energy Savings Results National Energy Savings (quads) Trial standard level CSIR Efficiency Level CSCR Efficiency Level Discounted at 3% Discounted at 7% 1 4 2 1.08 0.56 – 0.57 0.26 – 0.27 2 4 3 1.10 0.57 0.27 3 5 3 1.28 – 1.29 0.67 0.32 4 6 4 1.53 0.80 0.37 5 6 3 1.53 0.80 0.37 – 0.38 6 7 8 1.91 – 1.92 1.00 0.47 7 7 3 2.10 – 2.13 1.09 – 1.11 0.51 – 0.52 8 7 7 2.51 – 2.61 1.29 – 1.37 0.59 – 0.64

10.6.3 Annual Costs and Savings
To illustrate the basic inputs to the NPV calculations, Figure 10.6.1 presents the nondiscounted annual installed cost in creases and annual operating cost savings at the national level for TSL 4 for polyphase small electric motors. Th e figure also shows the net savings, which is the difference between the savings and costs for e ach year. The annual equipment cost is the sum of the increase in the total installed cost fo r equipment purchased each year over the forecast period. The annual operating cost savings is the savings in operating costs for equipment operating in each year. The NPV is the difference between the cumulative annual discounted savings and the cumulative annual discounted co sts. DOE could create figures like the one shown below for each of the considered standards cases for each product class.-0.05 -0.025 0 0.025

0.05 0.075 0.1 0.125

0.15

2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065Billions of 2008$ Operating Cost Savings Equipment Cost Net Savings

Figure 10.6.1 Non-Discounted Annual Installed Cost Increases and Annual Operating Cost Savings for Polyphase Small Electric Motors, Trial Standard Level 4

10.6.4 Net Present Value Results
The following sections provide NPV results for the TSLs analyzed for small electric motors. Results are cumulative and are shown as the discounted value of the net savings in dollar terms. DOE based the inputs to th e NIA model on weighted-average values, yielding results that are discrete point values, rather than a distribution of values as in the life-cycle cost and payback period analysis.

The present value of increased total installed costs is th e total annual installed cost increase (i.e., the difference between the standard s case and base case), discounted to the present, and summed over the time period in which DOE evaluates the impact of energy conservation standards. Savings are decreases in operating cost s associated with the higher energy efficiency of equipment purchased in the standards cases co mpared to the base case. Total operating cost savings are the savings per unit multiplied by the numb er of units of each vintage (i.e., the year of manufacture) surviving in a particular year. For units purchased up through the final year (2045), the operating cost includes energy consumed until the last unit is retired from service.

10-1810-19 Table 10.6.4 and Table 10.6.5 show the NPV results for the trial standard levels analyzed for small electric motors. The highest TSL that has a positive NPV for bot h discount rates is TSL 5 for polyphase motors and TSL 8 for capacitor-start motors. The capacitor-start values are presented as ranges, indicating the effects of th e rate and timing of market share shifts (see section 9.4.4).

Table 10.6.4 Polyphase Motors: Cumulative Net Present Value Results Net Present Value (billion 2008$) Trial Standard

Level 3% Discount Rate 7% Discount Rate 1 0.15 0.05 2 0.48 0.18 3 1.01 0.39 4 1.07 0.40 5 0.56 0.06 6 -0.09 -0.29 7 -12.21 -6.38

Table 10.6.5 Capacitor-Start Motors: Cumulati ve Net Present Value Results Net Present Value (billion 2008$) Trial Standard

Level CSIR Efficiency Level CSCR Efficiency Level 3% Discount Rate 7% Discount Rate 1 4 2 6.47 – 6.52 2.66 – 2.69 2 4 3 6.62 – 6.66 2.72 – 2.75 3 5 3 7.24 – 7.28 2.90 – 2.93 4 6 4 6.00 – 6.05 2.15 – 2.18 5 6 3 6.28 – 6.38 2.27 – 2.34 6 7 8 -22.62 – -22.47 -12.40 – -12.28 7 7 3 7.75 – 13.59 1.47 – 5.67 8 7 7 5.51 – 10.84 0.29 – 4.09

10.6.5 Sensitivity of NES and NPV to Model Inputs
The Department analyzed the effects of va riation in many inputs to its NIA model. For both polyphase and capacitor-start mo tors, DOE analyzed four shipment growth scenarios, four electricity price forecasts, three shipment elastic ity scenarios (see section 9.4.1), and three ways of accounting for reactive power charges. For ca pacitor-start motors, the Department also analyzed the impact of varia tion in the parameters of its CSIR-CSCR market share model (described in chapter 9). Appendix 10C shows the sensitivity of NES and NPV results (as well as each of their constituent parts) to these differe nt inputs. The appendix includes capacitor-start sensitivity results with a market share transiti on complete by 2015. The spreadsheet tool allows the user to choose any combination of the scenar ios whose results are in cluded in the appendix, including a longer market share transition time.10-20 Tables 10.6.6-10.6.9 show the results of the NES and NPV calculations in the Low CSCR and High CSCR alternative scenarios. The High CSCR and Low CSCR scenarios have significant differences from the reference case on the magnitude (and in some cases the sign) of the NES and NPV results. The High CSCR and Lo w CSCR scenarios correspond to changing the “unfamiliarity cost” associated with CS CR motors; this cost is the parameter δ in the market share model described in section 9.4.4. The Depa rtment’s reference case is based on the value for this parameter which best fits the current ma rket share of CSCR motors in different product classes, $186. The Low CSCR scenario is based on a value for this parameter which is higher by one standard deviation ($278), and the High CSCR scenario is based on a value for this parameter which is lower by one standard devi ation ($94). All three s cenarios use the same values for the installed costs and motor losses, but their forecasts regarding resulting customer behavior in response to standards differ. CSCR motors are commonly more efficient than CSIR motors, particularly for larger motors. The High CSCR scenario, which models a market in which more customers switch from CSIR to CSCR motors than in the reference case, has higher energy savings. The Low CSCR scenario, in contrast, shows smaller energy savings.

DOE’s uncertainty in this model is the larg est uncertainty in its modeling of the NES and NPV for capacitor-start motors, so the results of these alternative scenarios are presented here (Tables 10.6.6-10.6.8) to demonstrate the effect of this uncertainty on the national results of the analysis.

Table 10.6.6 Undiscounted Cumulative National Energy Savings for Capacitor-Start Small Electric Motors Under Different CSIR/CSCR Market Share Scenarios (Energy Savings between 2015 and 2045) National Energy Savings (quads)

Trial Standard Level Low CSCR Scenario Reference Scenario High CSCR Scenario 1 1.05 – 1.06 1.08 1.30 – 1.33 2 1.05 – 1.06 1.10 1.40 – 1.45 3 1.25 – 1.26 1.28 – 1.29 1.51 – 1.54 4 1.47 – 1.48 1.53 1.77 – 1.82 5 1.47 – 1.48 1.53 1.76 – 1.80 6 1.91 – 1.92 1.91 – 1.92 1.91 – 1.92 7 2.09 – 2.12 2.10 – 2.13 2.10 – 2.13 8 2.45 – 2.53 2.51 – 2.61 2.51 – 2.61

For many customers, particularly those us ing more powerful motors, CSCR motors are not only more efficient but also more cost eff ective. The High CSCR scenario models a market in which motor customers feel smaller barriers to switch to CSCR motors, and it has a higher NPV for each trial standard level than the reference case, whereas the Low CSCR scenario has a lower NPV.10-21 Table 10.6.7 Capacitor-Start Motors: Cumulative Net Present Value Results in the Low CSCR Scenario Net Present Value (billion 2008$) Trial Standard Level 7% discount rate 3% discount rate 1 2.53 – 2.59 6.18 – 6.28 2 2.55 – 2.61 6.23 – 6.33 3 2.75 – 2.82 6.91 – 7.01 4 1.76 – 1.83 5.15 – 5.26 5 1.79 – 1.86 5.23 – 5.32 6 -12.40 – -12.12 -22.62 – -22.47 7 0.88 – 4.88 6.44 – 12.00 8 -0.86 – 2.56 2.93 – 7.73

Table 10.6.8 Capacitor-Start Motors: Cumulative Net Present Value Results in the High CSCR Scenario Net Present Value (billion 2008$) Trial Standard Level 7% discount rate 3% discount rate 1 3.42 – 3.62 8.35 – 8.66 2 3.67 – 3.93 8.99 – 9.40 3 3.73 – 3.96 9.27 – 9.61 4 3.28 – 3.68 8.69 – 9.28 5 3.56 – 4.05 9.33 – 10.04 6 -12.40 – -12.28 -22.62 – -22.46 7 1.51 – 5.73 7.85 – 13.71 8 0.43 – 4.28 5.82 – 11.22

DOE also calculated the energy savings and NP V of standards in the case of a segmented market model. This model treats space-c onstrained and non-space-constrained customers separately when determining the market share of CSIR and CSCR motors. This model predicts a strong market response in which space constr ained CSIR motor customers in TSLs 7 and 8 switch to CSCR motors, while predicting smalle r impacts on non-space-con strained customers. The shipments which result from this model are described in chapter 9. Table 10.6.9 and Table 10.6.10 show the energy savings and net present value for capacitor-start motors in the segmented market model. The values presented here correspond to a mark et share shift which occurs entirely before 2015, in anticipation of the standard.10-22 Table 10.6.9 Capacitor-Start Motors: Cumulative National Energy Savings Results in the Segmented Market Scenario (M arket Share Shift Complete by 2015) National Energy Savings (quads) Trial standard level Discounted at 3% Discounted at 7% 1 1.08 0.56 0.26 2 1.10 0.57 0.27 3 1.29 0.67 0.32 4 1.53 0.80 0.38 5 1.53 0.80 0.38 6 1.91 1.00 0.47 7 1.92 1.00 0.47 8 2.04 1.06 0.50

Table 10.6.10 Capacitor-Start Motors: Cumulative Net Present Value Results in the Segmented Market Scenario (Mar ket Share Shift Complete by 2015) Net Present Value (billion 2008$) Trial Standard Level 7% discount rate 3% discount rate 1 2.66 6.48 2 2.73 6.64 3 2.94 7.32 4 2.32 6.33 5 2.45 6.58 6 -12.21 -22.31 7 3.34 8.78 8 2.22 6.64

Electricity prices have an impact on th e national net present value of an energy conservation standard. The Department considered four electricity price forecasts. Its reference scenario is based on the electricity price foreca st in the American Recovery and Reinvestment Act case of AEO 2009 . However, the Department also c onsidered the possible impacts of regulation of greenhouse gas emissions on electricit y prices, and developed an electricity price scenario based on AEO calculations of the impact of legislation similar to “Lieberman-Warner” climate change legislation. Electricity prices rise more quickly under this scenario. Table 10.6.11 and Table 10.6.12 show the NPV of each TSL under this el ectricity price forecast. The NPV is higher using this forecast than in the reference scenario.10-23 Table 10.6.11 Cumulative Net Present Value for Polyphase Small Electric Motors in a Carbon Cap and Trade Electricity Pr ice Scenario (For Equipment Sold from 2015 to 2045) Net Present Value (billion 2008$) Trial Standard Level 7% discount rate 3% discount rate
1 0.08 0.24 2 0.25 0.70 3 0.54 1.44 4 0.57 1.56 5 0.34 1.36 6 0.02 0.79 7 -6.03 -11.20

Table 10.6.12 Cumulative Net Present Value for Ca pacitor-Start Small Electric Motors in a Carbon Cap and Trade Electricity Price Scenario (For Equipment Sold from 2015 to 2045) Net Present Value (billion 2008$) Trial Standard Level 7% discount rate 3% discount rate 1 3.52 – 3.56 8.86 – 8.91 2 3.60 – 3.63 9.05 – 9.09 3 3.97 – 4.01 10.21 – 10.26 4 3.41 – 3.44 9.47 – 9.51 5 3.54 – 3.61 9.76 – 9.87 6 -10.82 – -10.71 -18.28 – -18.14 7 3.13 – 7.35 12.34 – 18.20 8 2.23 – 6.08 10.92 – 16.33

10.6.6 Capacitor-Start National Impact Summary
DOE analyzed 8 TSLs for capacitor-start motors in detail, each made up of efficiency level requirements for both CSIR and CSCR motors. Table 10.6.14 and Table 10.6.15 show the national impacts, along with the life-cycle cost results, for each possible pair of CSIR and CSCR efficiency levels (a total of 63 combinations). For each combination, the tables show: (1) the National Energy Savings, (2) the average LCC savi ngs for the CSIR and CSCR level, and (3) the Net Present Value of a standard at that combinat ion of efficiency levels , at both a 3% and 7% discount rate. Table 10.6.13 acts as a key to Table 10.6.14 and Table 10.6.15 . These tables are provided only for the shipments forecast scenario with a 10-year market sh are shift, taking place from 2015 to 2025. This table may be generated fo r any user-selected scenario in the national impact spreadsheet model.10-24Table 10.6.13Location and Identification of Data for Each EL Combination in Tables 10.5.12 and 10.5.13NPV at 3%Discount Rate(Billions of2008$)NPV at 7%Discount Rate(Billions of2008$)Average CSCR LCC Savings (2008$)Average CSIR LCC Savings (2008$)National Energy Savings (Quads)Table 10.6.14LCC and National Impact Summary for All Combinationsof Capacitor-Start Efficiency Levels, Part One*CSCRBaselineEL 1EL 2EL 3EL 40.000.00$0.000.830.33$11.622.120.83$22.852.771.08$27.992.050.80$10.49Baseline$0.000.00$0.000.11$0.000.30$0.000.40$0.000.330.700.29$0.001.280.52$11.622.340.93$22.853.011.19$27.992.370.94$10.49EL 1$9.150.11$9.150.19$9.150.35$9.150.45$9.150.391.650.69$0.001.990.83$11.622.951.20$22.853.421.39$27.992.981.21$10.49EL 2$24.910.26$24.910.30$24.910.44$24.910.51$24.910.483.211.35$0.003.401.43$11.624.071.70$22.854.401.83$27.994.051.69$10.49EL 3$41.320.48$41.320.51$41.320.60$41.320.65$41.320.626.232.56$0.006.302.60$11.626.522.69$22.856.662.75$27.996.552.70$10.49EL 4$54.981.04$54.981.05$54.981.08$54.981.10$54.981.106.952.78$0.007.002.81$11.627.172.88$22.857.282.93$27.997.182.88$10.49EL 5$54.231.25$54.231.25$54.231.27$54.231.29$54.231.285.461.92$0.005.652.01$11.626.052.18$22.856.282.27$27.996.002.15$10.49EL 6$20.651.44$20.651.46$20.651.50$20.651.53$20.651.533.31(0.18)$0.004.790.38$11.626.911.16$22.857.751.47$27.997.431.30$10.49

CSIREL 7$(346.37)1.27$(346.37)1.53$(346.37)1.94$(346.37)2.10$(346.37)2.22* Levels selected by the Department as Trial Standard Levels are shown with light gray backgrounds and bold text. Negative numbers are shown in parentheses.10-25Table 10.6.15LCC and National Impact Summary for All Combinationsof Capacitor-Start Efficiency Levels, Part Two*CSCREL 5EL 6EL 7EL 81.850.71$1.680.610.21$(44.11)0.890.32$(47.10)(1.28)(0.70)$(846.01)Baseline$0.000.31$0.000.16$0.000.21$0.00(0.06)2.190.86$1.681.100.42$(44.11)1.350.51$(47.10)(0.54)(0.40)$(846.01)EL 1$9.150.37$9.150.24$9.150.28$9.150.062.781.13$1.681.860.76$(44.11)2.200.88$(47.10)0.690.11$(846.01)EL 2$24.910.45$24.910.33$24.910.39$24.910.243.971.65$1.683.391.41$(44.11)3.501.46$(47.10)2.460.86$(846.01)EL 3$41.320.62$41.320.54$41.320.56$41.320.486.512.68$1.686.312.59$(44.11)6.372.62$(47.10)5.632.13$(846.01)EL 4$54.981.09$54.981.08$54.981.08$54.981.067.152.87$1.686.992.79$(44.11)7.042.81$(47.10)6.352.35$(846.01)EL 5$54.231.28$54.231.27$54.231.28$54.231.275.872.09$1.685.301.84$(44.11)5.371.86$(47.10)4.531.34$(846.01)EL 6$20.651.52$20.651.49$20.651.50$20.651.477.171.16$1.685.090.18$(44.11)5.510.29$(47.10)(22.62)(12.40)$(846.01)

CSIREL 7$(346.37)2.26$(346.37)2.37$(346.37)2.51$(346.37)1.92* Levels selected by the Department as Trial Standard Levels are shown with light gray backgrounds and bold text. Negative numbers are shown in parentheses.10-26 10.6.7 Annualized National Impacts
DOE calculated an annualized summary of natio nal impacts for each trial standard level. These annualized values were calculated by determ ining the annual values of future equipment cost increases and operating cost savings di stributed evenly among the years 2015 to 2045 (31 years total) which would have the same NPVs as the increases in costs a nd decrease in operating expenses caused by the trial standard levels.

Table 10.6.16 shows the annualized costs, benefits , and net benefit for each of the 7 polyphase trial standard levels. Table 10.6.17 shows the annualized national impacts for capacitor-start motors. These values are shown as a range between the lowest and highest value for each amount across three shipments scenarios: the Department’s reference case with a CSIRCSCR market share shift over the period 2015-2025, the same case with a market share shift complete by 2015, and the Department’s “seg mented market” case (w hich treats spaceconstrained and non-space-constr ained customers separately), with shift complete by 2015.

Table 10.6.16 Annualized Costs and Benefits for Polyphase Small Electric Motors Ann. Equip. Cost Increase (million $2008) Ann. Op. Cost Savings (million $2008) Annualized Net Benefit (million $2008) Trial Standard Level 7% disc. rate 3% disc. rate 7% disc. rate 3% disc. rate 7% disc. rate 3% disc. rate 1 10.2 10.2 16.0 19.0 5.8 8.9 2 16.3 16.2 37.4 44.6 21.2 28.4 3 26.6 26.6 73.0 87.0 46.3 60.4 4 34.5 34.4 82.6 98.5 48.1 64.1 5 129.1 128.7 136.2 162.3 7.2 33.6 6 183.9 183.4 149.5 178.1 -34.4 -5.3 7 936.5 933.8 171.9 204.8 -764.6 -729.0

Table 10.6.17 Annualized Costs and Benefits for Ca pacitor-Start Small Electric Motors Ann. Equip. Cost Increase (million $2008) Ann. Op. Cost Savings (million $2008) Annualized Net Benefit (million $2008) Trial Standard Level 7% disc. rate 3% disc. rate 7% disc. rate 3% disc. rate 7% disc. rate 3% disc. rate

1 117 – 118 117 – 118 436 – 440 504 – 507 318 – 322 387 – 389 2 118 118 444 – 447 513 – 515 326 – 329 395 – 398 3 194 – 197 194 – 196 543 – 546 628 – 631 347 – 352 432 – 437 4 357 – 377 356 – 375 634 – 635 733 – 734 257 – 278 358 – 378 5 345 – 364 344 – 361 637 – 638 736 – 737 272 – 293 375 – 393 6 2254 – 2281 2248 – 2269 791 – 797 914 – 918 -1485 – -1462 -1332 – -1350 7 164 – 657 164 – 503 787 – 843 909 – 975 175 – 679 462 – 811 8 513 – 923 511 – 794 826 – 1003 954 – 1159 34 – 490 329 – 64710-27 REFERENCES

1. U.S. Department of Energy. Opportunities for Energy Savings in the Residential and Commercial Sectors with High-Efficiency Electric Motor , December, 1999. Washngton, DC.

2. U.S. Department of Energy- Energy Information Administration. An Updated Annual Energy Outlook 2009 Reference Case Reflect ing Provisions of the American Recovery and Reinvestment Act and Recent Changes in the Economic Outlook , April, 2009. Washington, DC. SR/OIAF/2009-03.

< http://www.eia.doe.gov/oiaf/servic erpt/stimulus/pdf/sroiaf(2009)03.pdf >