2-i CHAPTER 2. ANALYTICAL FRAMEWORK

TABLE OF CONTENTS

2.1 INTRODUCTION ........................................................................................................... 2-1
2.2 BACKGROUND ............................................................................................................. 2-4
2.3 MARKET AND TECHNOLOGY ASSESSMEN T ...................................................... 2-11
2.4 SCREENING ANALYSIS ............................................................................................ 2-11
2.5 ENGINEERING ANALYSIS ........................................................................................ 2-12
2.6 MARKUPS AND INSTALLATION COST ANALYSIS ............................................ 2-13
2.7 ENERGY USE ANALYSIS .......................................................................................... 2-13
2.8 LIFE

- CYCLE COST AND PAYBACK PERIOD ANALYSIS ................................... 2-14
2.9 SHIPMENTS ANALYSIS ............................................................................................ 2-15
2.10 NATIONAL IMPACT ANAL YSIS .............................................................................. 2-16
2.10.1 National Energy Savings Analysis ..................................................................... 2-16
2.10.2 Net Present Value Analysis ............................................................................... 2-16
2.11 CUSTOMER SUBGROUP AN ALYSIS ....................................................................... 2-17
2.12 MANUFACTURER IMPACT ANALYSIS .................................................................. 2-17
2.13 EMPLOYMENT IMPACT AN ALYSIS ....................................................................... 2-18
2.14 UTILITY IMPACT ANALY SIS ................................................................................... 2-18
2.15 EMISSIONS ANALYSIS .............................................................................................. 2-19
2.15.1 Carbon Dioxide .................................................................................................. 2-19
2.15.2 Sulfur Dioxide .................................................................................................... 2-20
2.15.3 Nitrogen Oxides ................................................................................................. 2-21
2.15.4 M ercury .............................................................................................................. 2-21
2.15.5 Particulate Matter ............................................................................................... 2-21
2.16 MONETIZATION OF EMISSIONS REDUCTIONS ................................................... 2-22
2.17 REGULATORY IMPACT AN ALYSIS ....................................................................... 2-23

LIST OF FIGURES

Figure 2.1.1 Flow Diagram of Analyses for the Energy Conservation Standards Rulemaking Analysis Process

........................................................................ 2-22-1 CHAPTER 2. ANALYTICAL FRAMEWORK

2.1 INTRODUCTION

Section 6295(o)(2)(A) of 42 United States Code (U.S.C.) requires the U.S. Department of Energy (DOE) to set forth energy conservation standards that are technologically feasible and economically justified, and would achieve the maximum improvement in energy efficiency. This chapte r provides a description of the general analytical framework that DOE uses in developing such standards. The analytical framework is a description of the methodology, the analytical tools, and relationships among the various analyses that are part of this rulemaking. For example, the methodology that addresses the statutory requirement for economic justification includes analyses of life -cycle cost (LCC), economic impact on manufacturers and users, national benefits, impacts, if any, on utility companies, a nd impacts, if any, from lessening competition among manufacturers.

Figure 2.1.1 summarizes the stages and analytical components of the rulemaking process. The focus of this figure is the center column, which lists the analyses that DOE conducts. The figure shows how the analyses fit into the rulemaking process, and how they relate to each other. Key inputs are the types of data and information that the analyses require. Some key inputs exist in public databases; DOE co llects other inputs from stakeholders or persons with special knowledge. Key outputs are analytical results that feed directly into the standards- setting process. Arrows connecting analyses show types of information that feed from one analysis to
another.2-2 Figure 2.1.1 Flow Diagram of Analyses for the Energy Conservation Standards Rulemaking Analysis Process2-3 The analyses performed prior to the notice of proposed rulemaking (NOPR) stage as part of the preliminary analyses and described in the preliminary technical support document (TSD) are listed below. These analyses were revised for the NOPR based in part on comments received, and are reported in this NOPR TSD. The analyses were revised once again for the final rule based on any new comments or data received in response to the NOPR.

**•** A market and technology assessment to characterize the relevant equipment ma rkets and existing technology options, including prototype designs.

**•** A screening analysis to review each technology option and determine if it is technologically feasible; is practical to manufacture, install, and service; would adversely affect equipment utility or equipment availability; or would have adverse impacts on health and safety.

**•** An engineering analysis to develop cost- efficiency relationships that show the manufacturer’s cost of achieving increased efficiency.

**•** An energy use analysis to determ ine the annual energy use in the field of the considered equipment as a function of efficiency level.

**•** An LCC and payback period (PBP) analysis to calculate, at the consumer level, the relationship between savings in operating costs compared to any increas e in the installed cost for equipment at higher efficiency levels.

**•** A shipments analysis to forecast equipment shipments, which then are used to calculate the national impacts of standards and future manufacturer cash flows.

**•** A national impact analysis (NIA) to assess the impacts at the national level of potential energy conservation standards for each of the considered equipment, as measured by the net present value (NPV) of total consumer economic impacts and the national energy savings (NES).

**•** A prelimin ary manufacturer impact analysis to assess the potential impacts of energy conservation standards on manufacturers, such as impacts on capital conversion expenditures, marketing costs, shipments, and research and development costs.

The additional analyses DOE performed for the NOPR stage of the rulemaking analysis
include those listed below. DOE further revised the analyses for the final rule based on comments received in response to the NOPR.

**•** A consumer subgroup analysis to evaluate impacts of standards on particular consumer sub-populations, such as low-income households.2-4 **•** A manufacturer impact analysis to estimate the financial impact of standards on manufacturers and to calculate impacts on competition, employment, and manufacturing capacity.

**•** An emplo yment impact analysis to assess the indirect impacts of energy conservation standards on national employment.

**•** A utility impact analysis to estimate the effects of energy conservation standards on installed electricity generation capacity and electricity generation

.

**•** An emissions analysis to provide estimates of the effects of energy conservation standards on emissions of carbon dioxide (CO 2 ), nitrogen oxides (NOx), and mercury (Hg) and to evaluate the monetary benefits likely to result from the reduced emissions of
CO 2 and NO
x .

**•** A regulatory impact analysis to assess alternatives to energy conservation standards that could achieve substantially the same regulatory goal.

2.2 BACKGROUND

In a notice published on October 22, 1997 (62 FR 54809), DOE stated that it h ad determined that energy conservation standards were warranted for electric distribution transformers, relying in part on two reports by DOE’s Oak Ridge National Laboratory (ORNL). These reports

— Determination Analysis of Energy Conservation Standards for Distribution
Transformers , ORNL -6847 (1996) and Supplement to the “Determination Analysis ,” ORNL

6847 (1997)— are available on the DOE docket at: http://www.regulations.gov/# !docketDetail;D=EERE -2006- STD -0099 . I n 2000, DOE issued its Framework Document for Distribution Transformer Energy Conservation Standards Rulemaking, describing its proposed approach for developing standards for distribution transformers, and held a public meeting to discuss the Framework Document. The document is
available on the above- referenced DOE website. Stakeholders also submitted written comments on the document, addressing a range of issues.

Subsequently, DOE issued draft reports as to certain of the key analyses contemplated by
the Framework Document. a

a Copies of all the draft analyses published before the ANOPR are available on DOE’s website: It received comments from stakeholders on these draft reports and, on July 29, 2004, published an advance notice of proposed rulemaking (ANOPR) for distribution transformer standards. 69 FR 45376. DOE then held a webcast on material it had published relating to the ANOPR, followed by a public meeting on the ANOPR on September 28, 2004. In

http://www.regulations.gov/#!docketDetail;D=EERE

- 2006

- STD

- 0099

..2-5 August 2005, DOE issued a draft of certain of the analyses on which it planned to base the standards for liquid-immersed and medium-voltage, dry-type distribution transformers, along with documents that supported the draft analyses. b DOE did this to enable stakeholders to review the analyses and make recommendations as to standard levels.

On April 27, 2006, DOE published its Final Rule on Test Procedures for Distribution Transformers. The rule: (1) established the procedure for sampling and testing distribution transformers so that manufacturers can make representations as to their efficiency, as well as
establish that they comply with Federal standards; and (2) contained enforcement provisions, outlining the procedure the Department would follow should it initiate an enforcement action against a manufacturer. 71 FR 24972 (codified at 10 CFR 431.198).

On August 4, 2006, DOE published a NOPR in which it proposed energy conservation standards for distribution transformers (the 2006 NOPR). 71 FR 44355. Concurrently, DOE also issued a technical support document (TSD) that incorporated the analyses it had performed for

t he proposed rule, including several spreadsheets that remain available on DOE’s website. c

Some commenters asserted that DOE’s proposed standards might adversely affect replacement of distribution transformers in certain space-constrained (e.g., vault) installations. In response, DOE issued a notice of data availability and request for comments on this and another issue. 72 FR 6186 (Feb. 9, 2007) (the NODA). In the NODA, DOE sought comment on whether it should include in the LCC analysis potential costs related to size constraints of distribution transformers installed in vaults. DOE also outlined different approaches as to how it might account for additional installation costs for these space-constrained applications and requested comments on linking ene rgy efficiency levels for three -phase liquid- immersed units with those of single-phase units. Finally, DOE addressed how it was inclined to consider a final standard that is based on energy efficiency levels derived from trial standard level (TSL) 2 and TS L 3 for
three -phase units and TSLs 2, 3 and 4 for single-phase units. 72 FR 6189. Based on comments on the 2006 NOPR, and the NODA, DOE created new TSLs to address the treatment of three- phase units and single-phase units. In October 2007, DOE published a final rule that created the current energy conservation standards for liquid-immersed and medium-voltage dry-type distribution transformers. 72 FR 58190 (October 12, 2007) (the 2007 Final Rule) (codified at 10 CFR 431.196(b)- (c)).

b Copies of the four draft NOPR analyses published in August 2005 are available on DOE’s website: http://www.regulations.gov/#!docketDetail;D=EERE

- 2006

- STD

- 0099

.

c The spreadsheets developed for this rulemaking proceeding are available at: http://www.regulations.gov/#!docketDetail;D=EERE

- 2006

- STD

- 0099

.2-6 The above paragraphs summarize development of the 2007 Final Rule. The preamble to the rule included additional, detailed background information on the history of that rulemaking.
72 FR 58194-96.

After the publication of the 2007 Final Rule, certain parties filed petitions for r eview in the United States Courts of Appeals for the Second and Ninth Circuits, challenging the rule. Several additional parties were permitted to intervene in support of these petitions. (All of these parties are referred to below collectively as “petitio ners.”) The petitioners alleged that, in developing its energy conservation standards for distribution transformers, DOE did not comply with certain applicable provisions of EPCA and of the National Environmental Policy Act (NEPA), as amended (42 U.S.C. 4321 et seq.) DOE and the petitioners subsequently entered into a settlement agreement to resolve the petitions. The settlement agreement outlined an expedited timeline for the Department to determine whether to amend the energy conservation standards
for li quid-immersed and medium- voltage dry -type distribution transformers. Under the original settlement agreement, DOE was required to publish by October 1, 2011, either a determination
that the standards for these distribution transformers do not need to be amended or a NOPR that includes any new proposed standards and that meets all applicable requirements of EPCA and NEPA. Under an amended settlement agreement, the October 1, 2011, deadline for a DOE determination or proposed rule was extended to February 1, 2012. If DOE finds that amended standards are warranted, DOE agreed to publish a final rule containing such amended standards by October 1, 2012.

On March 2, 2011, DOE published in the Federal Register a notice of public meeting and availability of its pr eliminary TSD for the Distribution Transformer Energy Conservation Standards Rulemaking, wherein DOE discussed and received comments on issues such as equipment classes of distribution transformers that DOE would analyze in consideration of amending the en ergy conservation standards for distribution transformers, the analytical framework, models and tools it is using to evaluate potential standards, the results of its preliminary analysis, and potential standard levels. 76 FR 11396. The notice is available on the
above- referenced DOE website. To expedite the rulemaking process, DOE began at the preliminary analysis stage because it believes that many of the same methodologies and data
sources that were used during the 2007 rulemaking rule remain valid. On April 5, 2011, DOE held a public meeting to discuss the preliminary TSD. Representatives of manufacturers, trade associations, electric utilities, energy conservation organizations, Federal regulators, and other interested parties attended this meeting. In addition, other interested parties submitted written comments about the TSD addressing a range of issues. These comments are discussed in the
various sections of the NOPR and final rule.2-7 On July 29, 2011, DOE published in the Federal Register a notice of i ntent to establish a subcommittee under the Energy Efficiency and Renewable Energy Advisory Committee (ERAC), in accordance with the Federal Advisory Committee Act and the NegotiatedRulemaking Act, to negotiate proposed Federal standards for the energy efficiency of mediumvoltage dry -type and liquid immersed distribution transformers. 76 FR 45471. Stakeholders strongly supported a consensual rulemaking effort. DOE believed that, in this case, a negotiated rulemaking would result in a better informed NOPR and would minimize any potential negative impact of the NOPR. On August 12, 2011, DOE published in the Federal Register a similar notice of intent to negotiate proposed Federal standards for the energy efficiency of low-voltage dry-type distribution transformers. 76 FR 50148. The purpose of the subcommittee was to discuss and, if possible, reach consensus on a proposed rule for the energy efficiency of
distribution transformers.

The ERAC subcommittee for medium- voltage liquid -immersed and dry- type distrib ution transformers consisted of representatives of parties having a defined stake in the outcome of the proposed standards, listed below.

**•** ABB Inc.

**•** AK Steel Corporation

**•** American Council for an Energy

- Efficient Economy

**•** American Public Power Association

**•** Appli ance Standards Awareness Project

**•** ATI

- Allegheny Ludlum

**•** Baltimore Gas and Electric

**•** Cooper Power Systems

**•** Earthjustice

**•** Edison Electric Institute

**•** Fayetteville Public Works Commission

**•** Federal Pacific Company

**•** Howard Industries Inc.

**•** LakeView Metals

**•** Efficiency and Renewables Advisory Committee member

**•** Metglas, Inc.

**•** National Electrical Manufacturers Association

**•** National Resources Defense Council

**•** National Rural Electric Cooperative Association

**•** Northwest Power and Conservation Council

**•** Pacific Gas and Electric Company2-8 **•** P rogress Energy

**•** Prolec GE

**•** U.S. Department of Energy

The ERAC subcommittee for medium- voltage liquid -immersed and dry-type distribution transformers held meetings on September 15 through 16, 2011, October 12 through 13, 2011, November 8 through 9, 2011, and November 30 through December 1, 2011; the ERAC subcommittee also held public webinars on November 17 and December 14. During the course of the September 15, 2011, meeting, the subcommittee agreed to its rules of procedure, ratified
its schedule of the rem aining meetings, and defined the procedural meaning of consensus. The subcommittee defined consensus as unanimous agreement from all present subcommittee members. Subcommittee members were allowed to abstain from voting for an efficiency level; their votes counted neither toward nor against the consensus.

DOE presented its draft engineering, life

- cycle cost and national impacts analysis and
results during meetings held September 15 through 16, 2011. During the meetings of October 12 through 13, 2011, DOE p resented its revised analysis and heard from subcommittee members on a number of topics. During the meetings on November 8 through 9, 2011, DOE presented its revised analysis, including life -cycle cost sensitivities based on exclusion ZDMH and amorphous

st eel as core materials. During the meetings on November 30 through December 1, 2011, DOE presented its revised analysis based on 2011 core- material prices.

At the conclusion of the final meeting, subcommittee members presented their efficiency
level recom mendations. For medium-voltage, liquid

- immersed distribution transformers, the energy efficiency Advocates, represented by the Appliance Standards Awareness Project (ASAP), recommended efficiency level (also referred to as “EL”) 2 for all design lines (als o referred to as “DLs”). The National Electrical Manufacturers Association (NEMA) and AK Steel recommended EL 1 for all DLs except for DL 2, for which no change from the current standard was recommended. Edison Electric Institute (EEI) and ATI Allegheny Ludlum recommended EL1 for DLs 1, 3, and 4 and no change from the current standard or a proposed standard of less than EL 1 for DLs 2 and 5. Therefore, the subcommittee did not arrive at consensus regarding proposed standard levels for medium-voltage, liquid

- immersed distribution transformers.

For medium-voltage, dry -type distribution transformers, the subcommittee arrived at consensus and recommended a proposed standard of EL2 for DLs 11 and 12, from which the proposed standards for DLs 9, 10, 13A, and 13B would be scaled. Transcripts of the subcommittee meetings and all data and materials presented at the subcommittee meetings are available via a2-9 link under the DOE website at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/44

.

The ERAC subcommittee held meetings on September 28, 2011, October 13-14, 2011, November 9, 2011, and December 1- 2, 2011, for low -voltage distribution transformers. The ERAC subcommittee also held webinars on November 21, 2011, and December 20, 2011. During the course of the September 28, 2011, meeting, the subcommittee agreed to its rules of procedure, finalized the schedule of the remaining meetings, and defined the procedural meaning of consensus. The subcommittee defined consensus as unanimous agreement from all present subcommittee members. Subcommittee members were allowed to abstain from voting for an efficiency level; their votes counted neither toward nor against the consensus.

The ERAC subcommittee for low-voltage distribution transformers consisted of representatives of parties having a defined stake in the outcome of the proposed standards.

**•** AK Steel Corporation

**•** American Council for an Energy

- Efficient Economy

**•** Appliance Standards Awareness Project

**•** ATI

- Allegheny Ludlum

**•** EarthJustice

**•** Eaton Corporation

**•** Federal Pacific Company

**•** Lakeview Metals

**•** Efficiency and Renewables Advisory Committee member

**•** Metglas, Inc.

**•** National Electrical Manufacturers Association

**•** Natural Resources Defense Council

**•** ONYX Power

**•** Pacific Gas and Electric Company

**•** Schneider Electric

**•** U.S. Department of Energy

DOE presented its draft engineering, life

- cycle cost and national impacts analysis and
results on September 28, 2011. During the meetings of October 14, 2011, DOE presented its revised analysis and heard from subcommittee members on various topics. During the meetings of November 9, 2011, DOE presented its revised analysis. During the meetings of December 1, 2011, DOE presented its revised analysis based on 2011 core- material prices.2-10 At the conclusion of the final meeting, subcommittee members presented their energy efficiency level recommendations. For low-voltage, dry-type distribution transformers, the Advocates,

represen ted by ASAP, recommended EL4 for all DLs; NEMA recommended EL 2 for DLs 7 and 8, and no change from the current standard for DL 6. EEI; AK Steel and ATI Allegheny Ludlum recommended EL 1 for DLs 7 and 8, and no change from the current standard for DL 6. Th esubcommittee did not arrive at consensus regarding a proposed standard for low-voltage, drytype distribution transformers. Transcripts of the subcommittee meetings and all data and materials presented at the subcommittee meetings are available at the DO E website at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/44

.

DOE published a Notice of Proposed Rulemaking on February 10, 2012, which proposed amended standards for all three transformer types. 77 FR 7282. Medium- voltage, dry

- typedistribution transformers were proposed at the negotiating committee’s consensus level. Liquidimmersed distribution transformers were proposed at TSL 1. Low- voltage, dry -type distribution transformers were proposed at TSL 1. In the NOPR, DOE sought comment on a number of issues related to the rulemaking until April 10, 2012. In response to several comments suggesting DOE should analyze new TSLs and equipment classes, DOE published a Notice of Public Meeting announcing the availability of additional NOPR analysis a public meeting to be held to
discuss it. 77 FR 32916.

Following publication of the NOPR, DOE received several comments expressing a desire to see some of the NOPR suggestions extended and analyzed for liquid- immersed distribution
transformers. In response, DOE generated a supplementary NOPR analysis with three additional TSLs. The three TSLs presented were based on possible new equipment classes for polemounted distribution transformers, network/vault-based distribution transformers, and those with high basic impulse level (BIL) ratings. On June 4, 2012 DOE published a notice announcing the availability of this supplementary ana lysis d and of a public meeting to be held on June 20, 2012 to present and receive feedback on it. DOE also generated an additional TSL in a June 18, 2012 analysis published on DOE’s website.

Following the public meeting, DOE received comment from a number of stakeholders on the supplementary NOPR analysis for liquid-immersed transformers. Although comment varied, DOE concluded that many stakeholders believed the new equipment classes presented within the supplementary analysis were not warranted at the standard levels under consideration in the NOPR. As a result, DOE adopted the liquid-immersed energy conservation levels of the NOPR
in the final rule.

d 77 FR 329162-11 2.3 MARKET AND TECHNOLOG Y A SSESSMENT

When initiating a standards rulemaking, DOE develops information on the present and past industry structure and market characteristics for the equipment concerned. This activity assesses the industry and equipment both quantitatively and qualitatively based on publi cly available information and encompasses the following: (1) manufacturer market share and characteristics, (2) existing regulatory and non-regulatory equipment efficiency improvement initiatives, and (3) trends in equipment characteristics and retail mark ets. This information serves as resource material throughout the rulemaking.

DOE reviewed existing literature and interviewed manufacturers to get an overall picture of the industry serving the United States market. Industry publications and trade journals, government agencies, trade organizations, and equipment literature provided the bulk of the information, including: (1) manufacturers and their approximate market shares, (2) equipment characteristics, and (3) industry trends. The appropriate sections o f the NOPR describe the analysis and resulting information leading up to the proposed trial standard levels, while supporting documentation is provided in the TSD.

DOE categorizes covered equipment into separate equipment classes and formulates a
separate energy conservation standard for each equipment class. The criteria for separation into different classes are type of energy used, capacity, and other performance

- related features such as those that provide utility to the consumer or others deemed appropr iate by the Secretary that would justify the establishment of a separate energy conservation standard. (42 U.S.C. 6295(q) and 6316(a))

As part of the market and technology assessment, DOE developed a list of technologies for consideration for improving the efficiency of distribution transformers. DOE typically uses information about existing and past technology options and prototype designs to determine which technologies manufacturers use to attain higher performance levels. In consultation with
intereste d parties, DOE develops a list of technologies for consideration. Initially, these technologies encompass all those DOE believes are technologically feasible.

DOE developed its list of technologically feasible design options for distribution
transformers from trade publications, technical papers, research conducted in support of previous rulemakings concerning these equipment, and through consultation with manufacturers of components and systems. Since many options for improving equipment efficiency are av ailable in existing equipment, equipment literature and direct examination provided additional information. Chapter 3 of the TSD includes the detailed list of all technology options identified.

2.4 SCREENING ANALYSIS

After DOE identified the technologies that could potentially improve the energy efficiency of distribution transformers, DOE conducted the screening analysis. The purpose of2-12 the screening analysis is to evaluate these technologies to determine which options to consider further and which options to screen out.

The screening analysis examines whether various technologies (1) are technologically feasible; (2) are practicable to manufacture, install, and service; (3) have an adverse impact on equipment utility or availability; and (4) have adverse impacts on health and safety. In consultation with interested parties, DOE reviews the list to determine if the technologies described in chapter 3 of the TSD are practicable to manufacture, install, and service; would adversely affect equipment utility or ava ilability; or would have adverse impacts on health and safety. In the engineering analysis, DOE further considers the efficiency enhancement options (i.e., technologies) that it did not screen out in the screening analysis. Chapter 4 of the TSD
contains fu rther detail on the criteria that DOE uses.

2.5 ENGINEERING ANALYSIS

The engineering analysis establishes the relationship between the manufacturing production cost and the efficiency of distribution transformers. This relationship serves as the basis for cost/benefit calculations in terms of individual consumers, manufacturers, and the Nation. Chapter 5 discusses equipment classes DOE analyzed, the representative baseline units, the efficiency levels analyzed, the methodology DOE used to develop the manufactur ing production costs, and the cost- efficiency curves.

In the engineering analysis, DOE evaluates a range of equipment efficiency levels and their associated manufacturing costs. The purpose of the analysis is to estimate the incremental
manufacturer selli ng prices (MSPs) for equipment that would result from increasing efficiency levels above the level of the baseline model in each equipment class. The engineering analysis considers technologies not eliminated in the screening analysis. The LCC analysis and NIA use
the cost -efficiency relationships developed in the engineering analysis.

DOE typically structures its engineering analysis around one of three methodologies: (1) the design -option approach, which calculates the incremental costs of adding specifi c design options to a baseline model; (2) the efficiency- level approach, which calculates the relative costs of achieving increases in energy efficiency levels without regard to the particular design options used to achieve such increases; and/or (3) the reverse

- engineering or cost -assessment approach, which involves a “bottom-up” manufacturing cost assessment based on a detailed bill of materials derived from teardowns of the equipment being analyzed.

For the final rule analysis, DOE primarily used the de sign -option approach to develop its relationships for cost and efficiency for distribution transformers. DOE developed a manufacturing cost model for distribution transformers based on reverse engineering of purchased equipment. DOE estimated costs for the se efficiency improvements based on the manufacturing cost model, information from component vendors, and information obtained2-13 through discussions with manufacturers. Chapter 5 of the TSD describes the methodology that DOE used to perform the efficiency le vel analysis and derive the cost -efficiency relationship.

2.6 MARKUPS AND INSTALLATION COS T ANALYSIS

DOE uses markups to convert the manufacturer selling prices estimated in the engineering analysis to customer prices, which are used in the LCC, PBP, national impact, and manufacturer impact analyses. DOE calculates a separate markup for the baseline component of equipment cost (baseline markup) and for the incremental increase in cost due to standards (incremental markup).

To develop markups, DOE identifies how the equipment is distributed from the manufacturer to the customer. After establishing appropriate distribution channels, DOE used data from the financial filings of manufacturers and distributors and other sources to determine how prices are marked up as the equipment passes from the manufacturer to the end customer

.

To develop installation costs, DOE identifies how the increase in equipment weight results in increased installation costs. After identifying this rela tionship, DOE used data from manufactures and utilities to determine how installation costs change with equipment weight.
DOE also accounted for circumstances where installing a new transformer on an existing utility pole may not be possible due to increased transformer weight, and will require th e installation of a new utility pole.

See chapter 6 of the TSD for details on the development of markups and installation

costs

.

2.7 ENERGY USE ANALYSIS

The energy use analysis, which assesses the energy savings poten tial from higher efficiency levels, provides the basis for the energy savings values used in the LCC and subsequent analyses. The goal of the energy use analysis is to generate a range of energy use values that reflects actual equipment use in the field . The analysis uses information on use of actual equipment in the field to estimate the energy that would be used by new equipment at various efficiency levels.

Distribution transformers consume energy via both no-load losses and load losses. Noload losses, which are constant over time, occur whenever a transformer is energized by power lines. Load losses vary with the square of the load the transformer is serving. There are two types of distribution transformers: liquid

- immersed and dry

- type . Liquid

- immer sed transformers are owned primarily by electric utilities. Utilities pay marginal costs for the power used to generate electricity, costs that can vary by the hour. DOE therefore developed a statistical simulation model to estimate the hourly load charact eristics of liquid -immersed transformers and to develop2-14 a correlation between hourly loads and system loads. Dry- type transformers are owned by commercial and industrial (C&I) establishments , which are billed for electricity according to a tariff. For dry

- type distribution transformers, DOE used empirical estimates of load characteristics to estimate monthly average (root mean square) loads and peak coincident loads.

Chapter 7 of the TSD provides more detail about DOE’s approach for characterizing

energy use of distribution transformers.

2.8 LIFE

- CYCLE COST AND PAYBA CK PERIOD ANALYS IS

New or amended energy conservation standards affect equipment’s operating expenses

— usually decreasing them —and consumer prices for the equipment— usually increasing them.
DOE anal yzed the net effect of standards on consumers by evaluating the net change in LCC. To evaluate the net change in LCC, DOE used the cost -efficiency relationship derived in the engineering analysis along with the energy costs derived from the energy use anal ysis. Inputs to the LCC calculation include the installed cost of equipment to the consumer (consumer purchase price plus installation cost), operating expenses (energy expenses and maintenance costs), the lifetime of the unit, and a discount rate. These inputs are described in detail in chapter 8 of the
TSD.

Because the installed cost of equipment typically increases while operating cost typicallydecreases in response to new standards, there is a time in the life of equipment having higherthan

- baseline efficiency when the operating -cost benefit (in dollars) since the time of purchase is equal to the incremental first cost of purchasing the higher -efficiency equipment. The length of time required for equipment to reach this cost-equivalence point is known as the payback period (PBP).

Recognizing that several inputs used to determine consumer LCC and PBP are either variable or uncertain, DOE conducted the LCC and PBP analyses by modeling both the uncertainty and variability in the inputs using Monte Carlo simulation and probability distributions. DOE developed an LCC and PBP spreadsheet model that incorporates both Monte Carlo simulation and probability distributions by using Microsoft Excel spreadsheets combined with Crystal Ball, a commercially available add -in program.

For distribution transformers, it was necessary to determine the input values for a wide arrange of electricity costs that are seen by distribution transformer owners. DOE performed two electricity price analyses to determine the appropria te marginal prices for (1) liquid

- immersed distribution transformers owned primarily by utility companies and (2) dry-type distribution transformers owned primarily by C&I building owners. For utility companies, the appropriate marginal price is the hourl y system lambda or market -clearing price. For building owners, the electricity prices are derived from a tariff

- based analysis. The two approaches are described in
more detail below.2-15 For liquid- immersed transformers, DOE based its energy price analysis on hourly system load and system lambda data collected from FERC (for regions without wholesale markets) or on hourly system load and day- ahead market clearing price data. In both cases, these prices represent the operating cost to the utility of meeting the next increment of load at any given time. In any given hour, a utility’s marginal price can be higher or lower than its average price; in general the hourly price can be represented a s a function of the system load level.

In addition to the hourly energy cost, there is a capacity cost saving associated with improved transformer efficiency. If the efficiency of a utility’s transformers is increased, then the utility will require less generation and transmission capacity to serve its customers’ load. The size of the capacity savings is dependent on the total reduction in load over all the transformers owned by the utility during the hour of system peak. The reduction in system- coincident transformer peak load is determined by the joint probability distribution function between system and transformer loads. The cost of capacity is estimated using the 2010 annual auction clearing prices for regions with functioning capacity markets and u sing capacity cost factors from the Energy Information Agency's Updated Capital Estimates for Electricity Generating Plants , 2010, for the other regions.

For C&I building owners of dry- type transformers, DOE used marginal prices derived
from a detailed a nalysis of utility tariffs (Coughlin et al., 2006). The tariff data and calculation tools were first developed by DOE for use in the Commercial Unitary Air Conditioning rulemaking. (U.S. Department of Energy, July, 2004).

For each of the CBECS 1992 and 1995 records used in the building sample, DOE used the monthly energy consumption and demand data, along with tariff data, to calculate a baseline electricity bill. To obtain marginal prices, two additional calculations were done. Because the electricity b ill depends on both energy consumption and demand, separate marginal prices are needed to represent the effect of varying these two quantities independently. The monthly marginal energy consumption (or demand) price is calculated simply by decrementing the energy consumption (or demand) and recalculating the bill. The tariff data were collected in 2004. To update prices to the analysis year (2010), two other datasets were used: the report Average Regulated Retail Price of Electricity (Regulatory Research As sociates, 2008) was used to estimate price increases between 2004 and 2007; and the Typical Bill and Average Price Reports (Edison Electric Institute, 2007–2010) was used to estimate price increases from 2007 to 2010.

The LCC and PBP analys i s is described in more detail in chapter 8 of the TSD.

2.9 SHIPMENTS ANALYSIS

Forecasts of equipment shipments are needed to calculate the potential effects of standards on national energy use, NPV, and future manufacturer cash flows. DOE generated both shipments and effici ency forecasts for each equipment class. The shipments forecast calculates the total number of distribution transformers shipped each year over a 30 year period, beginning2-16 in 2016 and ending in 2045. To create this forecast, DOE combined current year shipments, discussed in the market assessment (chapter 3), with a compound annual growth rate for distribution transformers and generated unit shipment values through the analysis period. The efficiency forecast shows the distribution of shipments of distributi on transformers by trial standard level (TSL), which determines the percentage of shipments affected by a standard. To develop its efficiency forecast, DOE first assessed present

- day (201 2 ) efficiency and then considered how the efficiency of new units mig ht change by the first year of the analysis period (2016) and throughout the analysis period in the absence of new or amended Federal standards.

Chapter 9 of the TSD provides additional details on the shipments analysis.

2.10 NATIONAL IMPACT ANAL YSIS

The national impact analysis estimates energy savings and assesses the NPV of consumer
benefits at the national scale. The results can be used to identify the TSL that, for a given equipment class, yields the greatest energy savings while remaining cost effective. DOE
estimated both NES and NPV for all candidate standard levels for each distribution transformer equipment class. To make the analysis more accessible and transparent to all interested parties, it is documented in a Microsoft Excel spreadsheet model that can be downloaded from the EERE
website.

The NIA considers total installed cost (which includes manufacturer selling prices, distribution chain markups, sales taxes, and installation costs), operating expenses (energy, repair, and maintenance costs), equipment lifetime, and discount rate. However, where the LCC considers the savings and costs associated with standards for a set of representative units, the NIA considers the savings and costs associated with all units affected by standards during the
entir e analysis period. Chapter 10 provides additional details regarding the NIA.

2.10.1 National Energy Savings Analysis

The major inputs for determining the NES for equipment analyzed are annual unit energy consumption, shipments, lifetimes, and site- to

- source conversion factors. DOE calculated national energy consumption for each year by multiplying unit energy consumption by the number of units in the installed base in that year. NES for a given year, then, is the difference in national energy consumption between t he base case (without new efficiency standards) and each standards case. DOE estimated energy consumption and savings first in terms of site energy and then converted the savings into source energy. Cumulative energy savings are the sum of the
NES estimate s for each year.

2.10.2 Net Present Value Analysis

The inputs for determining net present value (NPV) of consumer benefits are: (1) total annual installed cost; (2) total annual savings in operating costs; (3) a discount factor; (4) present2-17 value of costs; and (5 ) present value of savings. DOE calculated net savings each year as the difference between the base case and each standards case in total savings in operating costs and total increases in installed costs. DOE calculated savings over the life of equipment, accounting for differences in yearly electricity rates. DOE calculated NPV as the difference between the present value of operating cost savings and the present value of total installed costs. DOE used a discount factor based on real discount rates of 3% and 7% to discount future costs and savings to present values.

DOE calculated increases in total installed costs as the difference in total installed cost between the base case and standards case ( i.e ., once the standards take effect). Because the more efficient equipment bought in the standards case usually cost more than equipment bought in the base case, cost increases appear as negative values in the NPV.

DOE expressed savings in operating costs as decreases associated with the lower energy consumption of equipment bought in the standards case compared to the base case. Total savings in operating costs are the product of savings per unit and the number of units of each vintage that survive in a given year.

2.11 CUSTOMER SUBGROUP ANALYSIS

The customer subgroup analysis evaluates economic impacts on selected groups of

customers who might be adversely affected by a change in the national energy conservation standards for the considered equipment. DOE performed LCC subgroup analyses for utilities that have underground distribution systems that use vault- installed transformers. DOE evaluated the potential LCC impacts and PBPs for these customers using the LCC spreadsheet model. Chapter 11 of the TSD provides more detail.

2.12 MANUFACTURER IMPACT ANALYSIS

DOE performed a manufacturer impact analysis (MIA) to estimate the financial impact of energy conservation standards on manufacturers of distribution transformers, and to calculate the impact of such standards on employment and manufacturing capacity. The MIA has both quantitative and qualitative aspects. The quantitative part of the MIA relies on the government regulatory impact model (GRIM), an industry- cash -flow model customized for this rulemaking. The GRIM inputs are information regarding the industry cost structure, shipments, and revenues. This includes information from many of the analyses described above, such as manufacturing costs and prices from the engineering analysis and shipments forecasts. The key GRIM output is the industry net present value (INPV). Different sets of assumptions (scenarios) will produce different results. The qualitative part of the MIA addresses factors such as equipment characteristics, characteristics of particular firms, and market and equipment trends, and includes

asse ssment of the impacts of standards on subgroups of manufacturers. The complete MIA is described in chapter 12 of the TSD.2-18 DOE conducted each MIA in this rulemaking in three phases. In Phase I, DOE created an industry profile to characterize the industry a nd identify important issues that require consideration. In Phase II, DOE prepared an industry cash-flow model and an interview questionnaire to guide subsequent discussions. In Phase III, DOE interviewed manufacturers and assessed the impacts of standards both quantitatively and qualitatively. DOE assessed industry and subgroup cash flow and NPV using the GRIM. DOE then assessed impacts on competition, manufacturing capacity, employment, and regulatory burden based on manufacturer interview
feedback and discussions.

2.13 EMPLOYMENT IMPACT AN ALYSIS

The adoption of energy conservation standards can affect employment both directly and indirectly

. Direct employment impacts are changes in the number of employees at the plants that produce the covered products, along with affiliated distribution and service companies

. DOE will evaluate direct employment impacts in the MIA.

Indirect employment impacts may result from expenditures shifting between goods (the substitution effect) and changes in income and overall expendit ure levels (the income effect) that occur due to standards. DOE defines indirect employment impacts from standards as net jobs eliminated or created in the general economy as a result of increased spending driven by increased product prices and reduced spending on energy.

The indirect employment impacts will be investigated in the employment impact analysis using the Pacific Northwest National Laboratory’s “Impact of Sector Energy Technologies” (ImSET) model. e

2.14 UTILITY IMPACT ANALY SIS The ImSET model was developed for DOE’s Office of Planning, Budget, and Analysis to estimate the employment and income effects of energy -saving technologies in buildings, industry, and transportation. Compared with simple economic multiplier approaches, ImSET allows for more complete and automated analysis of the economic impacts of energy conservation investments. Further detail is provided in chapter 13 of the TSD.

To estimate the impacts of potential energy conservation standards for furnace fans on the electric utility industry, DOE will use a variant of the EIA’s National Energy Modeling

e Roop, J. M., M. J. Scott, and R. W. Schultz, ‘‘ImSET: Impact of Sector Ener gy Technologies,’’ PNNL

– 15273. Pacific Northwest National Laboratory ( 2005 ).2-19 System called NEMS

- BT. f NEMS is a large, multi

- sectoral, partial -equilibrium model of the U.S. energy sector that EIA has developed over several years, primarily for the purpose of preparin g the AEO . NEMS produces a widely recognized forecast for the United States through 2035 and is available to the public.

The utility impact analysis is a comparison between the NEMS -BT model results for the
base case and standard cases . Outputs of the u tility impact analysis usually parallel results that appear in the latest AEO , with some additions. The utility impact analysis reports the changes in installed capacity and generation that result from each standard level by plant type

. DOE will
model the anticipated energy savings impacts from potential amended energy conservation standards using NEMS- BT to generate forecasts that deviate from the AEO R eference C ase. Further detail is provided in chapter 14 of the TSD.

2.15 EMISSIONS ANALYSIS

In the emissions analysis, DOE estimated the reduction in power sector emissions of carbon dioxide (CO 2 ), nitrogen oxides (NO X ), and mercury (Hg) using the NEMS-BT computer model. In the emissions analysis, NEMS- BT is run similarly to the AEO NEMS, except that distribution transformers energy use is reduced by the amount of energy saved (by fuel type) due to each considered standard level. The inputs of national energy savings come from the NIA spreadsheet model, while the output is the forecasted physical emissions. The net benefit of each considered standard level is the difference between the forecasted emissions estimated by
NEMS

- BT at that level and the AEO 2012 Reference Case.

2.15.1 Carbon Dioxide

In the absence of any Federal emissions control regulation of power plant emissions of
CO 2 , a DOE standard is likely to result in reductions of these emissions. The CO 2 emission reductions likely to result from a standard will be estimated using NEMS -BT and national energy savings estimates draw n from the NIA spreadsheet model. The net benefit of the standard is the difference between emissions estimated by NEMS

- BT at each standard level considered and the
AEO Reference Case. NEMS

- BT tracks CO 2 emissions using a detailed module that provides

resu lts with broad coverage of all sectors and inclusion of interactive effects.

f For more information on NEMS, please refer to the U.S. Department of Energy, Energy Information

Administration documentation. A useful summary is National Energy Modeling System: An Overview 2000

, DOE/EIA

- 0581 (March 2000), available at: http://tonto.eia.doe.gov/ftproot/forecasting/05812000.pdf . EIA approves

us e of the name NEMS to describe only an official version of the model without any modification to code or data. Because this analysis entails some minor code modifications and the model is run under various policy scenarios that are variations on EIA assump tions, DOE refers to the model by the name NEMS

- BT. (“BT” refers to DOE’s Building Technologies Program, under whose aegis this work is performed.)2-20 2.15.2 Sulfur Dioxide

SO 2 emissions from affected electric generating units (EGUs) are subject to nationwide and regional emissions cap and trading programs. Title IV of the Clean Air A ct sets an annual emissions cap on SO 2 for affected EGUs in the 48 contiguous states and the District of Columbia (D.C.). SO 2 emissions from 28 eastern states and D.C. were also limited under the Clean Air Interstate Rule (CAIR), which created an allowance

- based trading program that that operates along with the Title IV program. 70 FR 25162 (May 12, 2005). CAIR was remanded to EPA by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) but it remained in effect. On July 6, 2011 EPA issued a replacement for CAIR, the Cross- State Air Pollution Rule (CSAPR). 76 FR 48208 (August 8, 2011). The AEO 2012 NEMS used for this analysis assumes the implementation of CSAPR. g

The attainment of emissions caps is typically flexible among affected E lectric Generating Units (EGUs) and is enforced through the use of emissions allowances and tradable permits. Under existing EPA regulations, any excess SO 2 emissions allowances resulting from the lower electricity demand caused by the imposition of an eff iciency standard could be used to permit offsetting increases in SO 2 emissions by any regulated EGU. In past rulemakings, DOE recognized that there was uncertainty about the effects of efficiency standards on SO 2 emissions covered by the existing cap

- and -trade system, but it concluded that no reductions in power sector
emissions would occur for SO 2 as a result of standards.

Beginning in 2015, however, SO 2 emissions will fall as a result of the Mercury and Air Toxics Standards (MATS) for power plants, which were announced by EPA on December 21, 2011. 77 FR 9304 (Feb. 16, 2012). In the final MATS rule, EPA established a standard for hydrogen chloride as a surrogate for acid gas hazardous air pollutants (HAP), and also
established a standard for SO 2 (a non- HAP acid gas) as an alternative equivalent surrogate standard for acid gas HAP. The same controls are used to reduce HAP and non- HAP acid gas; thus, SO 2 emissions will be reduced as a result of the control technologies installed on coal- fired power plants to comply with the MATS requirements for acid gas. AEO 2012 assumes that, in order to continue operating, coal plants must have either flue gas desulfurization or dry sorbent injection systems installed by 2015. Both technologies, which are used to reduce acid gas emissions, also reduce SO 2 emissions. Under the MATS, NEMS shows a reduction in SO 2 emissions when electricity demand decreases ( e.g.

g On December 30, 2011, the D.C. Circuit stayed the new rules while a panel of judges reviews them, and told EPA

to continue administering CAIR . S ee EME Homer City Generation, LP v. EPA

, Order, No. 11

- 1302 , Slip Op. at *2 (D.C. Cir. Dec. 30

, 2011). On August 21, 2012, the D.C. Circuit vacated CSAPR. See EME Homer City Generation, LP v. EPA

, No. 11

- 1302

, 2012 WL 3570721 at *24 (D.C. Cir. Aug. 21, 2012). The court ordered EPA to continue administering CAIR. AEO 2012 had been finalized prior to both these decisions , however . DOE

understands that CAIR and CSAPR are similar with respect to their effect on emission s impacts of energy efficiency standards. , as a result of energy efficiency standards). Emissions will be far below the cap that would be established by CSAP R, so it is unlikely that
excess SO 2 emissions allowances resulting from the lower electricity demand would be needed2-21 or used to permit offsetting increases in SO 2 emissions by any regulated EGU. Therefore, DOE believes that efficiency standards will reduce SO 2 emissions in 2015 and beyond.

2.15.3 Nitrogen Oxides

Under CAIR, there is a cap on NO X emissions in 28 eastern states and the District of
Columbia. All these States and D.C. have elected to reduce their NO X emissions by participating in cap

- and -trade programs for EGUs. Therefore, energy conservation standards for distribution transformers may have little or no physical effect on these emissions in the 28 eastern states and
the D.C. for the same reasons that they may have little or no physical effect on NO X emissions.
DOE us ed the NEMS

- BT to estimate NO X emissions reductions from possible standards in the States where emissions are not capped.

2.15.4 Mercury

On February 16, 2012, EPA issued national emissions standards for hazardous air pollutants (NESHAPs) for mercury and certain other pollutants emitted from coal and oil- fired EGUs. 77 FR 9304. The NESHAPs do not include emissions caps and, as such, DOE’s energy conservation standards would likely reduce Hg emission s.

2.15.5 Particulate Matter

DOE acknowledges that particulate matter (PM) exposure can impact human health. Power plant emissions can have either direct or indirect impacts on PM. A portion of the pollutants emitted by a power plant are in the form of particul ates as they leave the smoke stack. These are direct, or primary, PM emissions. However, the great majority of PM emissions associated with power plants are in the form of secondary sulfates, which are produced at a significant distance from power plants b y complex atmospheric chemical reactions that often involve the gaseous (non-particulate) emissions of power plants, mainly SO 2 and NO X . The quantity of the secondary sulfates produced is determined by a very complex set of factors including the atmospheric quantities of SO 2 and NO X , and other atmospheric constituents and conditions. Because these highly complex chemical reactions produce PM comprised of different constituents from different sources, EPA does not distinguish direct PM emissions from power

p lants from the secondary sulfate particulates in its ambient air quality requirements, PM monitoring of ambient air quality, or PM emissions inventories. For these reasons, it is not currently possible to determine how the standards would impact either dir ect or indirect PM emissions. Therefore, DOE is not planning to assess the impact of these standards on PM emissions. Further, as described previously, it is uncertain whether efficiency standards will result in a net decrease in power plant emissions of SO 2 , which are now largely regulated by cap and trade systems.2-22 2.16 MONETIZATION OF EMIS SIONS REDUCTIONS

DOE plans to consider the estimated monetary benefits likely to result from the reduced
emissions of CO 2 and NO X that are expected to result from each of the standard levels
considered.

In order to estimate the monetary value of benefits resulting from reduced emissions of
CO 2 emissions, DOE used in its analysis the most current Social Cost of Carbon (SCC) values developed and/or agreed to by interagency reviews. The SCC is intended to be a monetary measure of the incremental damage resulting from greenhouse gas (GHG) emissions, including, but not limited to, net agricultural productivity loss, human health effects, property damage from sea level rise, and changes in ecosystem services. Any effort to quantify and to monetize the harms associated with climate change will raise serious questions of science, economics, and ethics. But with full regard for the limits of both quantification and monetization, the SC C can be used to provide estimates of the social benefits of reductions in GHG emissions.

At the time of this analysis , the most recent interagency estimates of the potential global benefits resulting from reduced CO 2 emissions in 201 1 were $4. 9, $22.3, $3 6.5, and $67.6 per

metric ton in 20 11 dollars. For emissions reductions that occur in later years, these values grow in real terms over time. Additionally, the interagency group determined that a range of values from 7 percent to 23 percent should be use d to adjust the global SCC to calculate domestic effects, although DOE will give preference to consideration of the global benefits of reducing
CO 2 emissions. To calculate a present value of the stream of monetary values, DOE will discount
the values in ea ch of the four cases using the discount rates that had been used to obtain the SCC
values in each case.

DOE recognizes that scientific and economic knowledge continues to evolve rapidly as to
the contribution of CO 2 and other GHG to changes in the future global climate and the potential resulting damages to the world economy. Thus, these values are subject to change.

DOE also estimates the potential monetary benefit of reduced NO X emissions resulting
from the stan dard levels it considers. For NO X emissions, available estimates suggest a very wide range of monetary values, ranging from $450 to $4,623 per ton in 2011 $). h In accordance with U.S. Office of Management and Budget (OMB) guidance, DOE conducts two calculat ions of the monetary benefits derived using each of the economic values used for NO
x , one using a real discount rate of 3 percent and another using a real discount rate of 7 percent. i

DOE did not monetize estimates of Hg reduction in this rulemaking. DOE has decided to await further guidance regarding consistent valuation and reporting of Hg emissions before it once again monetizes Hg in its rulemakings.

h F or additional information , refer to U.S. Office of Management and Budget , Office of Information and Regulatory Affairs, 2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Manda tes on State, Local, and Tribal Entities , Washington, DC

. i OMB, Circular A

- 4: Regulatory Analysis ( Sept. 17, 2003).2-23 Further detail on the emissions monetization is provided in chapter16 of the TSD.

2.17 REGULATORY IMPACT A NALYSIS

DOE prepared a regulatory impact analysis (RIA) pursuant to Executive Order 12866, Regulatory Planning and Review, 58 FR 51735, October 4, 1993, which is subject to review by the Office of Information and Regulatory Affairs at the Office of Managem ent and Budget. The RIA addresses the potential for non-regulatory approaches to supplant or augment energy conservation standards in order to improve the energy efficiency or reduce the energy consumption of the equipment covered under this rulemaking.

DOE recognizes that voluntary or other non- regulatory efforts by manufacturers, utilities, and other interested parties can substantially affect energy efficiency or reduce energy consumption. DOE bases its assessment on the actual impacts of any such initiatives to date, but also considers information presented by interested parties regarding the impacts existing initiatives might have in the future. Further detail is provided in chapter 17 of the TSD.