11-i 

## CHAPTER

11. LIFE- CYCLE COST SU BGROUP

ANALYSIS
TABLE OF CONTENTS 11.1 INTRODUCTION
.................................................... 11-1 11.2 ANAL

YSIS A PPROACH
.............................................. 11-1 11.2.1 Adjustmen

t Factor s for Ana lys is Inp uts .............................. 11-1 11.2.2 How the Department Estimated the Adjustment Factors
................. 11-2 11.3 LI FE-CYCLE COST SUBGROUP RESULTS
.............................. 11-3 11.3.1 Municipa

l Utilities S ubgrou

p Lif e-Cy cle Cost Re sults
.................. 11-3 11.3.1.1 Design

Line 1 Lif e-Cy cle Cost Re sults
.................. 11-4 11.3.1.2 Design

Line 2 Lif e-Cy cle Cost Re sults
.................. 11-4 11.3.1.3 Design

Line 3 Lif e-Cy cle Cost Re sults
.................. 11-5 11.3.1.4 Design

Line 4 Lif e-Cy cle Cost Re sults
.................. 11-5 11.3.1.5 Design

Line 5 Lif e-Cy cle Cost Re sults
.................. 11-6 11.3.2 Rural Coop erative s Subgro up Lif e-Cy cle Cost Re sults
.................. 11-7 11.3.2.1 Design

Line 1 Lif e-Cy cle Cost Re sults
.................. 11-7 11.3.2.2 Design

Line 2 Lif e-Cy cle Cost Re sults
.................. 11-8 11.3.2.3 Design

Line 3 Lif e-Cy cle Cost Re sults
.................. 11-8 11.3.2.4 Design

Line 4 Lif e-Cy cle Cost Re sults
.................. 11-9 11.3.2.5 Design

Line 5 Lif e-Cy cle Cost Re sults
................. 11-10 11.4 PAYBACK PERIOD RESULTS
........................................ 11-11 11.4.1 Municipa

l Utilities S ubgrou

p Pay back Per iod Results
................. 11-11 11.4.1.1 Design

Line 1 Pay back Per iod Results
................. 11-11 11.4.1.2 Design

Line 2 Pay back Per iod Results
................. 11-12 11.4.1.3 Design

Line 3 Pay back Per iod Results
................. 11-13 11.4.1.4 Design

Line 4 Pay back Per iod Results
................. 11-13 11.4.1.5 Design

Line 5 Pay back Per iod Results
................. 11-14 11.4.2 Rural Coop erative s Subgro up Pay back Per iod Results
................. 11-15 11.4.2.1 Design

Line 1 Pay back Per iod Results
................. 11-15 11.4.2.2 Design

Line 2 Pay back Per iod Results
................. 11-16 11.4.2.3 Design

Line 3 Pay back Per iod Results
................. 11-16 11.4.2.4 Design

Line 4 Pay back Per iod Results
................. 11-17 11.4.2.5 Design

Line 5 Pay back Per iod Results
................. 11-18
LIST OF TABLE S Table 11.2.1 Consumer Subgroup Economic Adjustment Factors
.................... 11-2 Table 11.3.1 Municipal Utilities Subgroup Life-Cy cle Cost Results: Design Line 1
..... 11-4 Table 11.3.2 Municipal Utilities Subgroup Life-Cy cle Cost Results: Design Line 2
..... 11-5 Table 11.3.3 Municipal Utilities Subgroup Life-Cy cle Cost Results: Design Line 3
..... 11-511-ii



## Table 11.3.4 Municipal Utilities Subgroup Life-Cy cle Cost Results: Design Line 4
..... 11-6 Table 11.3.5 Municipal Utilities Subgroup Life-Cy cle Cost Results: Design Line 5
..... 11-7 Table 11.3.6 Rural Cooperatives Subgroup Life -Cycle Cost Results: Design L ine 1
..... 11-8 Table 11.3.7 Rural Cooperatives Subgroup Life -Cycle Cost Results: Design L ine 2
..... 11-8 Table 11.3.8 Rural Cooperatives Subgroup Life -Cycle Cost Results: Design L ine 3
..... 11-9 Table 11.3.9 Rural Cooperatives Subgroup Life -Cycle Cost Results: Design L ine 4
.... 11-10 Table 11.3.10 Rural Cooperatives Subgroup Life -Cycle Cost Results: Design L ine 5
.... 11-10 Table 11.4.1 Municipal Utilities Subgroup Payback Per iod Results: Design Line 1
.... 11-12 Table 11.4.2 Municipal Utilities Subgroup Payback Per iod Results: Design Line 2
.... 11-13 Table 11.4.3 Municipal Utilities Subgroup Payback Per iod Results: Design Line 3
.... 11-13 Table 11.4.4 Municipal Utilities Subgroup Payback Per iod Results: Design Line 4
.... 11-14 Table 11.4.5 Municipal Utilities Subgroup Payback Per iod Results: Design Line 5
.... 11-15 Table 11.4.6 Rural Cooperatives Subgroup Pay back Period Results: Design Line 1
.... 11-16 Table 11.4.7 Rural Cooperatives Subgroup Pay back Period Results: Design Line 2
.... 11-16 Table 11.4.8 Rural Cooperatives Subgroup Pay back Period Results: Design Line 3
.... 11-17 Table 11.4.9 Rural Cooperatives Subgroup Pay back Period Results: Design Line 4
.... 11-18 Table 11.4.10 Rural Cooperatives Subgroup Pay back Period Results: Design Line 5
.... 11-1811-1 

## CHAPTER

11. LIFE- CYCLE COST SU BGROUP

ANALYSIS
11.1 INTRODUC TION The life-cy

cle cost (LCC) subgroup a nalysis evaluates impacts on any identifiable g roups of customers who may , because of their particular socio-ec onomic characteristics, be disproportionately aff

ected by a ny national ener

gy- efficiency

standard level. This chapter of the technic al suppor

t documen

t (TSD) de scribes

how the De

partmen t perfor med its life -cy

cle cost consumer subgroup analy sis for the distribution transformer energy -efficiency

standard rulemaking. The Department conducted this evaluation for the notice of proposed rulemaking (NOPR), in

part, by analy zing the L

CC and pay

back pe riods for those customers tha

t fall into identifie d subgr

oups. For this rulemaking, the Depa rtment de fined consumer su bgroup s in terms of reta il utility ownersh ip ty pe. The s pecific consumer

subgro ups that the Depar

tment cho se to examine a

re rura l electr ic coope ratives a nd municip al utilitie s.
11.2 ANALYSIS APPROACH As part of the regular LCC analysis, the Department built sprea dsheet analysis tools that provide a consumer economic analy sis for a nationally re

presentative sample of utilities. The Dep art men t d eve lo ped a si mp li fie d ap pro ach to per for m t he c ons um er s ubg rou p ca lcu lat io ns: It adjusted the national data

distributi ons for ke

y a nalysis inputs by

an appro priate sc aling f

actor to produce an approximation of the input data for the consumer subgr oup analysis. To estimate the economic impacts f or the consumer su

bgroup s, the De

partmen t then re -calcu

lated the LCC wit h the adjusted input distributions. The subgroups examined are both subsets of the entire national electric utility sample and, he nce, the analysis was limited to liquid-immersed distribution transformers, represented by design lines 1–5. The Department did not include dry -type distribution transformers, represented by design lines 9–13, in the LCC subgroup ana lysis since electric utilities use few, if any, dry-ty pe transformers. 11.2.1 Adjustment Factors for Analysis Inputs The Department selected three key data inputs that it adjusted for the consumer subgroup analy sis: 1. Cost of ele ctricity 2. Transformer loading 3. Transformer selection A and B fa ctors11-2



## The Depa rtment imp lemented

these ad justment f

actors using an “LCC Subg roup” pulldown menu included as part of its LCC spreadshe et tool. Table 11.2.1 shows the adjustment factors for the

national sample a nd the subg

roups. Table 11.2.1 Consumer Subgroup Economic Adjustment Factors Subgroup Cost of Electricity Transformer

Loading A and B

Factors National sample 1.00 1.00 1.00 Rural cooperatives 0.98 0.75 0.90 Municipal utilities 0.93 1.20 1.00 11.2.2 How the Department Estimated the Adjustm ent Factors This section describes how the Department estimated the three a djustment factors for each of the two se lected c onsumer s ubgrou ps. For the c ost of ele ctricity , the Dep artment e

xamined the

distributi on of ave

rage electric ity revenues per kilowatt-hour (kWh) for all utilities using Energ y I nformation Administration (EIA) Form 861 data for different ownership c lasses (privately ow ned, cooperatives, and municipal utilities). 1 

## For the p

urposes o f this ana

lys is, the De

partmen t assumed that the EIA ow

nership classifi cation of

“Politica l Subdivision” corr

esponde d to a ty

pe of muni cipal utility. Its examination revea

led that the distribu

tion of uni

t revenu es for di ffere

nt retail utility ownersh ip classes is very similar. The Department then calculated the weig hted-average unit revenue s for the different ownership classes of retail utilities. I t found that the average unit revenue for rural cooperatives is 98 percent of that for the national sample, a nd that average unit revenue f or municipal utilities is 93 percent of that for the national sample. For transformer loading estimates, the da ta available to the Department consisted of rough loading estimates mentioned in stakeholder comments. The D epartment’s estimate of average root mean squar

e (RMS) loading for a 50 kilovolt-ampere (kVA) pa d-mounted transformer for the national sample is 35 percent. Stakeholde rs commented that rural coope rativ e trans forme rs ten d to h ave lo wer lo adings becaus e of ov ersiz ing to contr ol for volt age flicker and lack of load di

versity , while mun

icipal uti lity

transformers te

nd to have

more dive

rsity and, thus,higher

loading s. The ty

pical ru ral coop erative

transfo rmer will serve a single customer, while the typica l urban transformer will serve multiple customers. Thus, the Department estimated an adjustment factor of 0.75 for rur al cooperatives, and 1.20 for municipal utilities, which results in average RMS loading estimates of 26 perce nt and 42 percent for 50 kV A t ra ns fo rm er s f

or ru ra l c oo pe ra ti ve s a nd mu ni ci pa l u ti li ti es , r es pe ct iv el y. For customer evaluation A and B fac tors, the Department was given factors for rural cooperatives by

the National Rural Electric Cooperative Association (NRECA) in stakeholder comments; it compiled data from public sources for municipal utilities. The Department found the eval uation pa rameter s for rur al coope ratives t o be 10 pe

rcent lower than

the national samplea

In this chapte r of

th e TSD, LCC results are desc ribed in terms o f cand idate sta nda rd leve ls (CS Ls). In the NO PR itself, LCC res ult s ar e desc ribe d in t erms of trial stand ard le vels (TSLs ). The TSLs are th e ef fi cie ncyle vel s us ed i n pos t- LCC analy ses and they are al so us ed to de scri be the s tandard l evels considere d by the Depart ment for the proposed standard. TSLs are b ased on the CSL s selecte d for th e LC C. However, because of specialconsider ations concerni ng manufa cturer impa cts and design

lin es (DLs) co ntained within the same p roduc t class, eff ici encylev els — and ther efor e CSLs—do not change for som e stand ard le vel incre men ts for D L1 a nd D L4. S ee T SD chap ter 10 for a m ore d etailed expla nation
. The table below shows the mapping from the design line CSLs to the TSLs. The analysis reported in this chapter and i n the NOPR is the sam e, but is re por ted in sligh tly different fo rmats in th e two do cuments, according t o thi s CSL- to- TSL mapping. M app ing o f the C and idate Stan dar d Le vels to Tria l Stan dar d Le vels

DL1 DL2 DL3 DL4 DL5 DL9 DL10 DL11 DL12 DL13 TSL1 CSL1 CSL1 CSL1 CSL1 CSL1 CSL1 CSL1 CSL1 CSL1 CSL1 TSL2 CSL1 CSL2 CSL2 CSL2 CSL2 CSL2 CSL2 CSL2 CSL2 CSL2 TSL3 CSL1 CSL3 CSL3 CSL3 CSL3 CSL3 CSL3 CSL3 CSL3 CSL3 TSL4 CSL2 CSL4 CSL4 CSL3 CSL4 CSL4 CSL4 CSL4 CSL4 CSL4 TSL5 CSL3 CSL5 CSL5 CSL5 CSL5 CSL5 CSL5 CSL5 CSL5 CSL5 TSL6 CSL6 CSL6 CSL6 CSL6 CSL6 CSL6 CSL6 CSL6 CSL6 CSL6

11-3 

## average and the par

ameters for municipal utilities to be approximately the same as the national sample average for the a

vailable data.
11.3 LIFE-CYCLE COST SUBG ROUP RE SULTS This section presents the results of the LCC subgr oup analysis for municipal utilities and rural e lectric

coopera tives. The

results f or each subgro up and ea ch desig n line ar e prese nted in tables tha t report t he cand idate sta ndard le vel, a 

## the percentage of transf ormers that have net savings, no impact, and net LCC cost (i.e., ne gative savings); and the mean LCC savings. 11.3.1 Municipal Utilities Subgroup Life-Cycle Cost Results The LCC results for the municipal utilities subgroup are a reflection of a key

feature of this subgroup: Transformers purchased by municipal utilities tend to serve more diverse, urban loads than transformers that serve more rura l areas. The increased load diversity increases the load factor and the transformer loading , thus increasing the potential savings from reduc ed load losses. Because of the increase d savings from reduced load losses, the LCC savings for the municipa l utilities s

ubgrou p are slig htly higher than for the national sample . The extra LCC savings vary

as a function of both the design line and the standard leve l, since the relative im po rt an ce of

lo ad lo ss es va ri es wi th bo th de si gn li ne an d t ra ns fo rm er ef fi ci en cy.11-4



## 11.3.1.1 Design Line 1 Life-Cycle Cost Results Table 11.3.1 presents the summary of the LCC subgroup analy sis for municipal utilities for the r eprese ntative u nit from de sign line

1, a 50 kVA , liquid-im

mersed, single-

phase distribution transformer. For this unit, the Department forecasts that nea rly 65 perc ent of the transformers are not impacted by candidate standard level (CSL) 1, while more than 95 percent of transformers are impacted by a CSL 4 standard level or highe r. CSLs 3, 5, and 6 result in a majority of transfor

mers experiencing a net cost due to a standard. With CSL s 1, 2, and 4, a major ity of affe cted t ransfo rmers expe rience a net s avings . Ther e is a n et aver age LCC sa vings for CSLs 1 through 5, while there is a net average LCC cost for CSL 6. For CSLs 1 throug h 5, the net average LCC impact is less than 4 percent of the average baseline LCC of $4,842. Table 11.3.1 Municipal Utilities Subgroup Life-Cycle Cost Results: Design Line 1 Candidate Standard Level 1 2 3 4 5 6 Ef f i ci en cy ( %) 98.9 99.04 99.19 99.33 99.49 99.59 Tr an s f orme rs having LC C S av i ng s > $ 0 ( %) 30.60 34.34 36.22 65.04 41.88 12.65 Tr an s f orme rs having LC C S av i ng s = $ 0 ( %) 64.69 51.40 15.20 4.98 2.03 0.00 Tr an s f orme rs having LC C S av i ng s < $ 0 ( %) 4.71 14.26 48.58 29.98 56.09 87.35 Mean LCC Savin gs ( $) 95 120 64 177 57 -594


## 11.3.1.2 Design Line 2 Life-Cycle Cost Results Table 11.3.2 presents the summary of the LCC subgroup analy sis for municipal utilities for the r eprese ntative u nit from de sign line

2, a 25 kVA , liquid-im

mersed, single-

phase distribution transformer. For this unit, the Department forecasts that over 66 pe rcent of the transformers are not impacted by CSL 1, while 75 percent or more of tra nsformers are impacted by a CSL 5 standard level or higher. CSL s 5 and 6 result in a majority of tra nsformers experiencing a net cost due to a standard. With CSLs 1 throug h 4, the majority of aff

ected transformers experience a net saving s. There is a net average LCC savings for CSL s 1 through 5, while the re is a ne t avera ge L CC cost for

CSL 6. F or CSL s 1 throug h 5, the ne

t avera ge L CC impact is less than 3 percent of the average baseline LCC of $3,025.11-5



## Table 11.3.2 Municipal Utilities Subgroup Life-Cycle Cost Results: Design Line 2 Candidate Standard Level 1 2 3 4 5 6 Ef f i ci en cy ( %) 98.7 98.73 98.76 98.79 98.96 99.46 Tr an s f orme rs having LC C S av i ng s > $ 0 ( %) 32.6 31.7 34.1 35.4 32.1 1.4 Tr an s f orme rs having LC C S av i ng s = $ 0 ( %) 66.1 65.3 60.7 55.9 25.1 0.0 Tr an s f orme rs having LC C S av i ng s < $ 0 ( %) 1.4 3.0 5.2 8.7 42.8 98.6 Mean LCC Savin gs ( $) 69 66 70 73 17 -926


## 11.3.1.3 Design Line 3 Life-Cycle Cost Results Table 11.3.3 presents the summary of the LCC subgroup analy sis for municipal utilities for the r eprese ntative u nit from de sign line

3, a 500 kV

A, liquid- immersed, single -phase distribution transformer. For this unit, the Department forecasts that over 73 pe rcent of the transformers are not impacted by CSL 1, while 96 percent or more of tra nsformers are impacted by a CSL 4 standard level or higher. CSL s 5 and 6 result in a majority of tra nsformers experiencing a net cost due to a standard. With CSLs 1 throug h 4, a majority of af

fected transformers experience a net saving s. There is a net average LCC savings for all levels. For CSLs 2 t hrough 4, th e net av erage LCC s avings are great er than 10 per cent o f the av erage baseline LCC of $25,200. Table 11.3.3 Municipal Utilities Subgroup Life-Cycle Cost Results: Design Line 3 Candidate Standard Level 1 2 3 4 5 6 Ef f i ci en cy ( %) 99.3 99.38 99.46 99.54 99.74 99.75 Tr an s f orme rs having LC C S av i ng s > $ 0 ( %) 26.0 34.0 45.3 57.2 39.3 35.9 Tr an s f orme rs having LC C S av i ng s = $ 0 ( %) 73.9 64.8 49.6 4.0 0.1 0.0 Tr an s f orme rs having LC C S av i ng s < $ 0 ( %) 0.1 1.2 5.1 38.8 60.6 64.1 Mean LCC Savin gs ( $) 2,109 2,765 3,607 3,693 1,745 1,102


## 11.3.1.4 Design Line 4 Life-Cycle Cost Results Table 11.3.4 presents the summary of the LCC subgroup analy sis for municipal utilities for the r eprese ntative u nit from de sign line

4, a 150 kV

A, liquid- immersed, three- phase distribution transformer. For this unit, the Department forecasts that more than 64 pe rcent of the11-6



## transformers are not impacted by CSL 1, while more than 88 percent of tra nsformers are impacted by a CSL

3 standard level or higher. CSL 3 has similar fractions of affected transformers with net savings and net costs, while CSL s 5 and 6 result in a majority of transformers experiencing a net cost due to a standard. With CSLs 1, 2, and 4, the majority of affect ed tran sform ers ob tain a net sa vings from a stand ard. T here is a net av erage LCC s avings for CSLs 1 through 5, while there is a net average LCC cost for CSL 6. For CSLs 1 throug h 6, the net average LCC impact is less than 8 percent of the average baseline LCC of $12,501. Table 11.3.4 Municipal Utilities Subgroup Life-Cycle Cost Results: Design Line 4 Candidate Standard Level 1 2 3 4 5 6 Ef f i ci en cy ( %) 98.9 99.08 99.26 99.45 99.58 99.61 Tr an s f orme rs having LC C S av i ng s > $ 0 ( %) 32.9 45.9 46.4 57.6 41.6 30.7 Tr an s f orme rs having LC C S av i ng s = $ 0 ( %) 64.1 39.8 11.7 9.8 0.8 0.0 Tr an s f orme rs having LC C S av i ng s < $ 0 ( %) 3.0 14.4 41.9 32.6 57.7 69.3 Mean LCC Savin gs ( $) 608 808 512 905 435 -165


## 11.3.1.5 Design Line 5 Life-Cycle Cost Results Table 11.3.5 presents the summary of the LCC subgroup analy sis for municipal utilities for the r eprese ntative u nit from de sign line

5, a 1500 k

VA, liquid-immerse d, three -phase distribution transformer. For this unit, the Department forecasts that 72 perc ent of the transformers are not impacted by CSL 1, while more than 75 percent of tra nsformers are impacted by a CSL

5 standard level or higher. CSL s 5 and 6 have approximately e qual proportions of transformers incurring a ne t cost and a net savings as a result of a standar d, and CSLs 1 th rough 4 result in t

he major ity o f affe cted tra

nsforme rs obtain ing a ne t saving s from a standard. There is a net average LCC savings for all CSL s. For CSLs 3 through 6, the net average LCC savings are more than 10 percent of the a verage baseline LCC of $71,738.11-7



## Table 11.3.5 Municipal Utilities Subgroup Life-Cycle Cost Results: Design Line 5 Candidate Standard Level 1 2 3 4 5 6 Ef f i ci en cy ( %) 99.3 99.36 99.42 99.47 99.71 99.71 Tr an s f orme rs having LC C S av i ng s > $ 0 ( %) 27.6 34.8 50.4 61.4 50.1 49.9 Tr an s f orme rs having LC C S av i ng s = $ 0 ( %) 72.1 64.0 40.9 24.4 0.1 0.1 Tr an s f orme rs having LC C S av i ng s < $ 0 ( %) 0.3 1.2 8.8 14.1 49.8 50.0 Mean LCC Savin gs ( $) 4,853 6,649 8,128 9,013 7,680 7,453


## 11.3.2 Rural Cooperatives Subgroup Life-Cycle Cost Results The LCC results for the rural coope ratives subgroup are a ref lection of a key

feature of this subgroup: Distribution transformers purchased by rural cooperatives tend to serve smaller loads than t ransfo rmers that s erve ur ban are as. Th e lowe r load ing dec reases the po tenti al sav ings from reduced load losses and, thus, the benefits from eff iciency improveme

nts. Because of the reduced savings from reduce d load losses, the LCC savings for the rur al cooperatives subgroup are slightly

less than for the national sample. The diminished LCC savings va ry as a f unction of both the design line and the standard level, since the re lative importance of load losses varies with both design line and transformer efficienc y. The LCC savings for rural cooperatives are also, on average, less than for the municipa l utility case per af

fected transformer. 11.3.2.1 Design Line 1 Life-Cycle Cost Results Table 11.3.6 presents the summary of the LCC subgroup analy sis for rural cooperatives for the r eprese ntative u nit from de sign line

1, a 50 kVA , liquid-im

mersed, single-

phase distribution transformer. For this unit, the Department forecasts that 64 perc ent of transformers are impa cted by a CSL 1 standar

d level wh

ile 98 per cent of t ransfor mers are impacted by a CSL 4 standard level. There is a net avera ge LCC savings f

or CSLs 1, 2, and 4, while there is a net average LC C cost for CS Ls 3, 5, a nd 6. F or all stand ard lev els ex cept C SL 6, th e net av erage LCC impact is less than 3 percent of the ave rage baseline LCC of $4,431.11-8



## Table 11.3.6 Rural Cooperatives Subgroup Life-Cycle Cost Results: Design Line 1 Candidate Standard Level 1 2 3 4 5 6 Ef f i ci en cy ( %) 98.9 99.04 99.19 99.33 99.49 99.59 Tr an s f orme rs having LC C S av i ng s > $ 0 ( %) 29.62 29.80 25.86 67.91 32.40 3.87 Tr an s f orme rs having LC C S av i ng s = $ 0 ( %) 64.38 50.23 11.28 2.04 1.03 0.00 Tr an s f orme rs having LC C S av i ng s < $ 0 ( %) 6.00 19.97 62.86 30.05 66.57 96.13 Mean LCC Savin gs ( $) 79 58 -91 146 -106 -861


## 11.3.2.2 Design Line 2 Life-Cycle Cost Results Table 11.3.7 presents the summary of the LCC subgroup analy sis for rural cooperatives for the r eprese ntative u nit from de sign line

2, a 25 kVA , liquid-im

mersed, single-

phase distribution transformer. For this unit, the Department forecasts that 64 perc ent of rural cooperative transformers are not impacted by a CSL 1 standard level while more than 80 percent of transformers are impacted by a CSL 5 standard level or highe r. Transformers that incur a net LCC co st resulti

ng from a standa rd domina

te the af fected transformers for CSLs 5 and 6, whi le CSLs 1 th rough 4 have mor

e affe cted tra

nsforme rs with ne t saving s. There

are net average LCC savings for CSL s 1 throug

h 4, while there is a net aver age LCC cost for

CSLs 5 a nd 6. For all stand ard lev els ex cept C SL 6, th e net av erage LCC i mpact is les s than 3 perce nt of t he aver age baseline LCC of $2,849. Table 11.3.7 Rural Cooperatives Subgroup Life-Cycle Cost Results: Design Line 2 Candidate Standard Level 1 2 3 4 5 6 Ef f i ci en cy ( %) 98.7 98.73 98.76 98.79 98.96 99.46 Tr an s f orme rs having LC C S av i ng s > $ 0 ( %) 33.7 33.9 35.7 36.2 27.8 0.4 Tr an s f orme rs having LC C S av i ng s = $ 0 ( %) 64.4 62.0 57.2 51.9 18.9 0.0 Tr an s f orme rs having LC C S av i ng s < $ 0 ( %) 1.9 4.1 7.2 11.9 53.3 99.6 Mean LCC Savin gs ( $) 69 66 67 63 -25 -1, 04011-9



## 11.3.2.3 Design Line 3 Life-Cycle Cost Results Table 11.3.8 presents the summary of the LCC subgroup analy sis for rural cooperatives for the r eprese ntative u nit from de sign line

3, a 500 kV

A, liquid- immersed, single -phase distribution transformer. For this unit, the Department forecasts that 72 perc ent of transformers are not im pac ted by CS L 1, w hi le m ore th an 9 7 pe rce nt of t ran sfo rme rs a re i mp act ed b y a CS L 4 standar d level or higher . CSLs 5 and 6 res ult in a maj ority

of trans formers

with a net

cost as a resul t of a s tanda rd, an d CSLs 1 throu gh 3 hav e the m ajori ty of affect ed tran sform ers in curri ng a net savings. CSL 4 has approximately equal numbers of affected transfor mers with net costs and net savings. There are net ave rage L CC savings for CSLs 1 through 4, while there is a net average LCC c ost for CSL s 5 and 6. F or CSL s 1 throug h 5, the ne

t avera ge L CC impact is

less than 10 percent of the average baseline LCC of $19,109.
Table 11.3.8 Rural Cooperatives Subgroup Life-Cycle Cost Results: Design Line 3 Candidate Standard Level 1 2 3 4 5 6 Ef f i ci en cy ( %) 99.3 99.38 99.46 99.54 99.74 99.75 Tr an s f orme rs having LC C S av i ng s > $ 0 ( %) 27.5 33.0 41.0 49.5 21.7 17.6 Tr an s f orme rs having LC C S av i ng s = $ 0 ( %) 72.4 64.9 49.4 2.3 0.1 0.0 Tr an s f orme rs having LC C S av i ng s < $ 0 ( %) 0.1 2.2 9.6 48.3 78.3 82.4 Mean LCC Savin gs ( $) 1,288 1,525 1,669 1,579 -1, 630 -2, 573


## 11.3.2.4 Design Line 4 Life-Cycle Cost Results Table 11.3.9 presents the summary of the LCC subgroup analy sis for rural cooperatives for the r eprese ntative u nit from de sign line

4, a 150 kV

A, liquid- immersed, three- phase distribution transformer. For this unit, the Department forecasts that 63 perc ent of the transformers are not impacted by CSL 1, while more than 93 percent of tra nsformers are impacted by a CSL

3 standard level or higher. CSL s 3, 5, and 6 result in a majority of transformers expe

riencin g a net c ost as a r

esult of a standar d. CSLs 1, 2, and 4

have the majority of affe cted tra

nsforme rs obtain ing a ne t saving s from a st

andard. There is

a net ave rage L CC sav in gs f or C SLs 1 t hro ugh 4, w hi le t her e is a ne t av era ge LC C co st for CS Ls 5 a nd 6 . Fo r CS Ls 1 through 5, the net average LCC impact is less than 5 percent of the ave rage baseline LCC of $10,718.11-10



## Table 11.3.9 Rural Cooperatives Subgroup Life-Cycle Cost Results: Design Line 4
Candidate Standard Level 1 2 3 4 5 6 Ef f i ci en cy ( %) 98.9 99.08 99.26 99.45 99.58 99.61 Tr an s f orme rs having LC C S av i ng s > $ 0 ( %) 31.7 38.6 43.7 56.1 22.5 14.6 Tr an s f orme rs having LC C S av i ng s = $ 0 ( %) 63.1 38.5 5.7 6.1 0.6 0.0 Tr an s f orme rs having LC C S av i ng s < $ 0 ( %) 5.2 22.9 50.6 37.8 76.9 85.4 Mean LCC Savin gs ( $) 412 370 183 448 -599 -1, 320


## 11.3.2.5 Design Line 5 Life-Cycle Cost Results Table 11.3.10 presents the summary of the LCC subgroup analy sis for rural cooperatives for the r eprese ntative u nit from de sign line

5, a 1500 k

VA, liquid-immerse d, three -phase distribution transformer. For this unit, the Department forecasts that nea rly 71 perc ent of the transformers are not impacted by CSL 1, while more than 79 percent of tra nsformers are impacted by a CSL

4 standard level or higher. CSL s 5 and 6 result in a majority of tra nsformers incur ring a n et cos t, and CSLs 1 t hrough 4 have the ma jorit y of affecte d tran sform ers in curri ng a net savin gs from a standa rd. Ther e are ne t avera ge L CC saving s for CSL s 1 throug h 4. For a

ll CSLs, the net averag e LCC impact is less than 8 percent of the a verage baseline LCC of $49,040. Table 11.3.10 Rural Cooperatives Subgroup Life-Cycle Cost Results: Design Line 5
Candidate Standard Level 1 2 3 4 5 6 Ef f i ci en cy ( %) 99.3 99.36 99.42 99.47 99.71 99.71 Tr an s f orme rs having LC C S av i ng s > $ 0 ( %) 28.2 34.6 43.1 51.7 21.9 21.2 Tr an s f orme rs having LC C S av i ng s = $ 0 ( %) 70.9 62.4 39.6 20.8 0.1 0.0 Tr an s f orme rs having LC C S av i ng s < $ 0 ( %) 0.9 3.1 17.4 27.5 78.0 78.8 Mean LCC Savin gs ( $) 2,243 3,013 3,084 3,239 -3, 617 -3, 77511-11



## 11.4 PAYBAC K PERI OD RESULTS As described in more detail in section 8.6, a common technique for eva luating investment decision s is to perf

orm a pay back pe riod (PB P) analy

sis. A more

energ y- efficie nt device will usually cost more to purchase than a device of standard energ y effic iency, while the more efficient device will usually cost less to operate. Operating expenses decr ease due to a reduction in energy use. The pay

back period is the time (usually expressed in years) it takes to recover the additional first cost of the efficiency device with its energy

cost savings. Because the Department anal

yze d the economics of

a nationa lly r eprese ntative d istributio n of tran sformers, DOE provides results in terms of a distribution of pay back periods. There are several potential complications to perf orming an analysis of a distribution of PBP estima

tes (see section 8 .6). Spec ifically , a pay back pe riod is a r atio of inc

reased first cost and decreased operating

expenses. When there is a distribution of changes for both first cost and operating expense reductions, the average of the ratio does not equal the ratio of the avera ges. Theref ore, in the tables

below, the Depar

tment rep orts all qu

antities o f intere st: the mea n PBP, the mean incremental first cost, and the avera ge decrease in annua

l operating expenses (in the first year of operation). These quantities allow stakeholders to compare the average PBP to a ratio of the mean incremental first cost increase and the mean operating cost savings. The se two values are comparable, but not equal, beca use not all transformer purchase decision computations have well-defined PBPs. 11.4.1 Municipal Utilities Subgroup Payback Period Results The PBP results for the municipal utilities subgroup are a refle ction of a key f eature of this subgroup. This key f eature is that distribution transformers purchased by municipal utilities tend to serve more diverse, urban loads than transfor mers that serve more rural areas. The increased load diversity

increases the load factor and the tra nsformer loading, thus increasing the potential savings from reduced load losses. While the mean PBP for the municipal utilities subgroup is generally

shorter than the PBP for the national sample, it is often within a y ear of the national sample mean PBP. Compared to the rural cooperatives subg roup, the benefits from efficiency improvements are on average greater for municipal utilities, and the PBP tends to be slightly smaller than that for rural cooperatives. 11.4.1.1 Design Line 1 Payback Period Results Table 11.4.1 presents the summary of the PBP subgroup analysis for municipal utilities for the r eprese ntative u nit from de sign line

1, a 50 kVA , liquid-im

mersed, single-

phase distribution transformer. For this unit, the Department forecasts that nea rly 65 perc ent of the transformers are not impacted by CSL 1, while nearly

95 percent or more of transformers a rea

Undefined refers to allinvalid PBP com putations. See section 8.6 for a ful l discussi on. 11-12 

## impacted by a CSL

4 standard level or higher. Undefined a 

## PBPs remain below three percent for all CSLs. Mean distribution PBPs for this design line range from 11 to 43 years; CSL 1 has the minimum distr

ibution PB P. Table 11.4.1 Municipal Utilities Subgroup Payback Period Results: Design Line 1 Candidate Standard Level 1 2 3 4 5 6 M ean Pa yback (Y ears) 11.1 19.9 33.2 16.0 23.8 43.0 Tr an s f orme rs Not

I mp ac t ed bySt an da rd( %) 64.7 51.4 15.2 5.0 2.0 0.0 Tr an s f orme rs having Wel l
- De f i ne d P ay ba ck ( %) 34.7 47.5 82.1 94.6 97.9 99.7 Tr an s f orme rs having Un de f

i ne d P ay ba ck ( %) 0.7 1.1 2.7 0.4 0.1 0.3 Mean Incr ement al First Cost ( $) 165 312 492 508 879 1678 Mean Operating Cost

Savi ngs ( $) 22 26 25 35 44 50 

## 11.4.1.2 Design Line 2 Payback Period Results Table 11.4.2 presents the summary of the PBP subgroup analysis for municipal utilities for the r eprese ntative u nit from de sign line

2, a 25 kVA , liquid-im

mersed, single-

phase distribution transformer. For this unit, the Department forecasts that 66 perc ent of transformers are not im pac ted by CS L 1, w hi le 7 2 pe rce nt or m ore of t ran sfo rme rs a re i mp act ed b y a CS L 5 standard level or higher. Undefined PB Ps are five percent or less for all CSL s. Mean PBPs for this design line range from 5 to 65 y ears, with a monotonic (i.e., never reversing direction) in cre ase in mea n P BP w it h i ncr eas in g CS L.11-13



## Table 11.4.2 Municipal Utilities Subgroup Payback Period Results: Design Line 2 Candidate Standard Level 1 2 3 4 5 6 M ean Pa yback (Y ears) 4.8 7.0 8.8 12.0 30.6 65.4 Tr an s f orme rs Not

I mp ac t ed bySt an da rd( %) 66.1 65.3 60.7 55.9 25.1 0.0 Tr an s f orme rs having Wel l
- De f i ne d P ay ba ck ( %) 29.0 33.5 37.4 41.9 72.2 100 .0 Tr an s f orme rs having Un de f

i ne d P ay ba ck ( %) 5.0 1.2 1.8 2.2 2.7 0.0 Mean Incr ement al First Cost ( $) 32 49 59 76 241 1,472 Mean Operating Cost

Savi ngs ( $) 12 12 12 12 13 26


## 11.4.1.3 Design Line 3 Payback Period Results Table 11.4.3 presents the summary of the PBP subgroup analysis for municipal utilities for the r eprese ntative u nit from de sign line

3, a 500 kV

A, liquid- immersed, single -phase distribution transformer. For this unit, the Department forecasts that over 73 pe rcent of the transformers ar

e not impa

cted by CSL 1, w

hile 93 pe rcent of transformers ar

e impacte d by

a CSL 4 standar d level or higher . Undefi

ned PBPs r

emain be low 11 per

cent for all CSL s. For thi s design line, PBPs increase monotonically from 1 to 30 years with increasing CSL. Table 11.4.3 Municipal Utilities Subgroup Payback Period Results: Design Line 3 Candidate Standard Level 1 2 3 4 5 6 M ean Pa yback (Y ears) 1.2 3.8 8.7 19.2 27.4 29.9 Tr an s f orme rs Not

I mp ac t ed bySt an da rd( %) 73.9 64.8 49.6 4.0 0.1 0.0 Tr an s f orme rs having Wel l
- De f i ne d P ay ba ck ( %) 16.0 34.9 50.1 93.0 99.8 100 .0 Tr an s f orme rs having Un de f

i ne d P ay ba ck ( %) 10.1 0.3 0.3 3.0 0.0 0.0 Mean Incr ement al First Cost ( $) 125 622 1,315 1,862 8,260 9,356 Mean Operating Cost

Savi ngs ( $) 345 360 352 243 439 455


## 11.4.1.4 Design Line 4 Payback Period Results Table 11.4.4 presents the summary of the PBP subgroup analysis for municipal utilities for the r eprese ntative u nit from de sign line

4, a 150 kV

A, liquid- immersed, three- phase distribution transformer. For this unit, the Department forecasts that more than 64 pe rcent of the transformers are not impacted by CSL 1, while more than 88 percent of tra nsformers are11-14



## impacted by a CSL

3 standard level or higher. For this desig n line, transformers with undefined PBPs are 1 percent or fewer of all transformers. Mean distribution PBP ranges from 8 to 30 years, w ith a dip in mean PBP for CSL 4.
Table 11.4.4 Municipal Utilities Subgroup Payback Period Results: Design Line 4 Candidate Standard Level 1 2 3 4 5 6 M ean Pa yback (Y ears) 7.7 15.0 21.5 16.9 27.1 32.5 Tr an s f orme rs Not

I mp ac t ed bySt an da rd( %) 64.1 39.8 11.7 9.8 0.8 0.0 Tr an s f orme rs having Wel l
- De f i ne d P ay ba ck ( %) 34.8 59.5 87.7 90.1 99.1 100 .0 Tr an s f orme rs having Un de f

i ne d P ay ba ck ( %) 1.0 0.7 0.6 0.1 0.2 0.0 Mean Incr ement al First Cost ( $) 480 902 1,542 1,951 3,341 4,193 Mean Operating Cost

Savi ngs ( $) 99 99 104 142 172 181


## 11.4.1.5 Design Line 5 Payback Period Results Table 11.4.5 presents the summary of the PBP subgroup analysis for municipal utilities for the r eprese ntative u nit from de sign line

5, a 1500 k

VA, liquid-immerse d, three -phase distribution transformer. For this unit, the Department forecasts that 72 perc ent of the transformers are not impacted by CSL 1, while 75 percent or more of tra nsformers are impacted by a CSL 4 standard level or higher. Undefined PB Ps remain below 2 percent of transformers for all CSL s. Mean di stribution PBP ranges from 3 to 24 y ears an d increases monotonically with increasing CSL.11-15



## Table 11.4.5 Municipal Utilities Subgroup Payback Period Results: Design Line 5 Candidate Standard Level 1 2 3 4 5 6 M ean Pa yback (Y ears) 2.9 5.1 11.0 12.9 23.7 23.7 Tr an s f orme rs Not

I mp ac t ed bySt an da rd( %) 72.1 64.0 40.9 24.4 0.1 0.1 Tr an s f orme rs having Wel l
- De f i ne d P ay ba ck ( %) 27.9 35.9 58.1 74.7 99.9 99.9 Tr an s f orme rs having Un de f

i ne d P ay ba ck ( %) 0.0 0.1 1.1 0.9 0.0 0.0 Mean Incr ement al First Cost ( $) 1,468 2,552 3,041 4,430 19,660 19,607 Mean Operating Cost

Savi ngs ( $) 759 855 683 685 1,183 1,168


## 11.4.2 Rural Cooperatives Subgroup Payback Period Results The PBP results for the rural cooperatives subg roup are a reflection of a key feature of this subgroup: Distribution transformers purchased by rural cooperatives tend to serve smaller loads than t ransfo rmers that s erve ur ban are as. Th e lowe r load ing dec reases the po tenti al sav ings from red uced loa d losses, a

nd thus the

benefits from ef

ficienc y imp rovemen ts are on average less than the national average case per affected transforme r, and payba

ck times will be longer than the national average. 11.4.2.1 Design Line 1 Payback Period Results Table 11.4.6 presents the summary of the LCC subgroup analy sis for rural cooperatives for the r eprese ntative u nit from de sign line

1, a 50 kVA , liquid-im

mersed, single-

phase distribution transformer. For this unit, the Department forecasts that nea rly 65 perc ent of transformers are not impacted by a CSL 1 standard level, while 98 perc ent of transformers are impacted by a CSL 4 sta

ndard le vel. Unde fined pa

yba cks rema in below th

ree per cent for all CSLs except CSL

3. CSL 1 has the min

imum mean d

istribution PBP and CSL

4, at 16 y ears, also has relatively low PB P. The PBP ranges from 12 to 49 y ears over the range of

CSLs.11-16



## Table 11.4.6 Rural Cooperatives Subgroup Payback Period Results: Design Line 1 Candidate Standard Level 1 2 3 4 5 6 M ean Pa yback (Y ears) 12.4 25.2 41.2 16.0 25.6 49.3 Tr an s f orme rs Not

I mp ac t ed bySt an da rd( %) 64.4 50.2 11.3 2.0 1.0 0.0 Tr an s f orme rs having Wel l
- De f i ne d P ay ba ck ( %) 34.5 47.4 82.7 97.7 98.8 99.4 Tr an s f orme rs having Un de f

i ne d P ay ba ck ( %) 1.2 2.4 6.0 0.3 0.2 0.6 Mean Incr ement al First Cost ( $) 164 312 486 508 879 1687 Mean Operating Cost

Savi ngs ( $) 20 20 18 34 38 40


## 11.4.2.2 Design Line 2 Payback Period Results Table 11.4.7 presents the summary of the LCC subgroup analy sis for rural cooperatives for the r eprese ntative u nit from de sign line

2, a 25 kVA , liquid-im

mersed, single-

phase distribution transformer. For this unit, the Department forecasts that nea rly 65 perc ent of rural cooperative transformers are not impacted by a CSL 1 standard level, while over 76 percent of transformers are impacted by a CSL 5 standard level or highe r. Undefined PBPs remain below six percent for all CSLs. Mean PBPs for this design line ra nge from 5 to 72 y

ears, with a mo not oni c in cre ase in mea n P BP w it h i ncr eas in g CS L. Table 11.4.7 Rural Cooperatives Subgroup Payback Period Results: Design Line 2 Candidate Standard Level 1 2 3 4 5 6 M ean Pa yback (Y ears) 5.4 7.6 9.9 14.0 35.6 72.5 Tr an s f orme rs Not

I mp ac t ed bySt an da rd( %) 64.4 62.0 57.2 51.9 18.9 0.0 Tr an s f orme rs having Wel l
- De f i ne d P ay ba ck ( %) 29.9 36.4 39.5 44.2 76.7 100 .0 Tr an s f orme rs having Un de f

i ne d P ay ba ck ( %) 5.7 1.6 3.3 3.9 4.4 0.0 Mean Incr ement al First Cost ( $) 31 48 58 75 243 1,496 Mean Operating Cost

Savi ngs ( $) 12 12 11 10 11 23


## 11.4.2.3 Design Line 3 Payback Period Results Table 11.4.8 presents the summary of the LCC subgroup analy sis for rural cooperatives for the r eprese ntative u nit from de sign line

3, a 500 kV

A, liquid- immersed, single -phase distribution transformer. For this unit, the Department forecasts that nea rly 73 perc ent of the11-17



## transformers are not impacted by CSL 1, while more than 95 percent of tra nsformers are impacted by a CSL 4 sta

ndard le vel or hig her. Und efined PB Ps remain

below 10 p ercent

for all CSLs. For this design line, PBPs increase monotonically from 2 to 38 y ears with increasing CS L. Table 11.4.8 Rural Cooperatives Subgroup Payback Period Results: Design Line 3 Candidate Standard Level 1 2 3 4 5 6 M ean Pa yback (Y ears) 1.6 5.7 13.7 22.5 33.9 37.7 Tr an s f orme rs Not

I mp ac t ed bySt an da rd( %) 72.4 64.9 49.4 2.3 0.1 0.0 Tr an s f orme rs having Wel l
- De f i ne d P ay ba ck ( %) 17.5 34.7 49.8 95.8 99.9 100 .0 Tr an s f orme rs having Un de f

i ne d P ay ba ck ( %) 10.2 0.5 0.8 2.0 0.0 0.0 Mean Incr ement al First Cost ( $) 132 615 1,310 1,859 8,319 9,393 Mean Operating Cost

Savi ngs ( $) 219 220 204 157 315 318


## 11.4.2.4 Design Line 4 Payback Period Results Table 11.4.9 presents the summary of the LCC subgroup analy sis for rural cooperatives for the r eprese ntative u nit from de sign line

4, a 150 kV

A, liquid- immersed, three- phase distribution transformer. For this unit, the Department forecasts that more than 63 pe rcent of the transformers are not impacted by CSL 1, while more than 93 percent of tra nsformers are impacted by a CSL

3 standard level or higher. Undefined PB Ps remain below two percent of transformers for all CSLs. Mean distribution PBP ranges from 11 to 38 yea rs; the Department calculated the lowest mean PBP for CSL 1.11-18



## Table 11.4.9 Rural Cooperatives Subgroup Payback Period Results: Design Line 4 Candidate Standard Level 1 2 3 4 5 6 M ean Pa yback (Y ears) 10.8 22.2 25.4 18.0 31.4 37.7 Tr an s f orme rs Not

I mp ac t ed bySt an da rd( %) 63.1 38.5 5.7 6.1 0.6 0.0 Tr an s f orme rs having Wel l
- De f i ne d P ay ba ck ( %) 35.3 59.8 94.2 93.8 98.9 99.8 Tr an s f orme rs having Un de f

i ne d P ay ba ck ( %) 1.6 1.7 0.1 0.0 0.6 0.2 Mean Incr ement al First Cost ( $) 475 878 1,545 1,957 3,402 4,276 Mean Operating Cost

Savi ngs ( $) 75 69 88 123 135 141


## 11.4.2.5 Design Line 5 Payback Period Results Table 11.4.10 presents the summary of the LCC subgroup analy sis for rural cooperatives for the r eprese ntative u nit from de sign line

5, a 1500 k

VA, liquid-immerse d, three -phase distribution transformer. For this unit, the Department forecasts that nea rly 71 perc ent of the transformers are not impacted by CSL 1, while more than 79 percent of tra nsformers are impacted by a CSL

4 standard level or higher. Undefined PB Ps remain two percent or fewer of transformers for all CSLs. Mean distribution PBP ranges from 5 to 29 yea rs and increases monotonically with increasing CSL. Table 11.4.10 Rural Cooperatives Subgroup Payback Period Results: Design Line 5 Candidate Standard Level 1 2 3 4 5 6 M ean Pa yback (Y ears) 4.9 8.4 16.9 17.4 29.4 29.4 Tr an s f orme rs Not

I mp ac t ed bySt an da rd( %) 70.9 62.4 39.6 20.8 0.0 0.0 Tr an s f orme rs having Wel l
- De f i ne d P ay ba ck ( %) 29.0 37.4 58.5 78.7 99.8 99.9 Tr an s f orme rs having Un de f

i ne d P ay ba ck ( %) 0.1 0.2 2.0 0.5 0.1 0.1 Mean Incr ement al First Cost ( $) 1,486 2,576 3,014 4,400 20,006 19,934 Mean Operating Cost

Savi ngs ( $) 440 503 393 419 853 84511-19 

## REFEREN CES 1. U.S. Department of Energy - Energy Information Administration. Form EIA-861: Annual Electric Utility Data. 2003. (La st acce ssed Septe mber, 200 5.) This ma

terial is availab le in Do ck et #8 6. Co nt ac t M s. Br en da Ed wa rd s- Jo ne s, U. S. De pa rt me nt of En er gy, Buil ding Tech nolog ies Pr ogr am, Ma ilsto p EE- 2J, 100 0 I

ndep ende nce A venue, SW, Washington, DC, 20585-0121, telephone (202) 586-2945 for more information. <http://ww

w.eia.d oe.gov /cneaf /electr icity /page/ eia861.h tml>