1

- i CHAPTER 1. INTRODUCTION

TABLE OF CONTENTS

1.1 PURPOSE OF THE DOCUMENT ................................................................................. 1-1 1.2 OVERVIEW OF THE APPLIANCES AND COMMERCIA L EQUIPMENT STANDARDS PROGRAM ............................................................................................. 1-1 1.3 OVERVIEW OF FLUORESC ENT LAMP BALLAST STA NDARDS ......................... 1-2 1.4 PROCESS FOR SETTING ENERGY CONERVATION STANDARDS ...................... 1-4 1.5 STRUCTURE OF THE DOCUMENT ............................................................................ 1-7

LIST OF TABLES

Table 1.4.1 Analyses Under the Process Rule ............................................................................ 1-51

- 1 CHAPTER 1. INTRODUCTION

1.1 PURPOSE OF THE DOCUM ENT

This technical support document (TSD) is a stand -alone report that provides the technical analyses sup porting the information in the notice of proposed rulemaking (NOPR) for fluorescent lamp ballasts.

1.2 OVERVIEW OF THE APPLIANCES AND COMMERCIA L EQUIPMENT STANDARDS PROGRAM

Part B of Title III of the Energy Policy and Conservation Act (EPCA) of 1975 (42 U.S.C. 6291–6309) established the energy conservation prog ram for consumer products other than automobiles, covering major household appliances. Additional amendments to EPCA have given the U.S. Department of Energy (DOE) the authority to regulate the energy efficiency of several products, including certain fluo rescent lamp ballasts , the products that are the focus of this document.

DOE designs any new or amended standard to achieve the maximum improvement in energy efficiency that is technologically feasible and economically just ified. (42 U.S.C. 6295(o)(2)(A) ) To determine whether economic justification exists, DOE must review comments on the proposal and determine that the benefits of the proposed standard exceed its burdens to the greatest extent practicable, weighing the following seven factors:

(1) the e conomic impact of the standard on the manufacturers and consumers of the products subject to the standard;

(2) the savings in operating costs throughout the estimated average life of the products compared to any increases in the price, initial charges, or maintenance expenses for the products that are likely to result from the imposition of the standard;

(3) the total projected amount of energy savings likely to result directly from imposition of the standard;

(4) any lessening of the utility or the p erformance of the products likely to result from imposition of the standard;

(5) the impact of any lessening of competition, as determined in writing by the Attorney General, likely to result from imposition of the standard;

(6) the need for national energy conservation; and

(7) other factors the Secretary considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i))1

- 2 1.3 OVERVIEW OF FLUORESCENT LAMP BAL LAST STANDARDS

Amendments to EPCA in the National Appliance Energy Conservation Amendments of 1988 (NAECA 1988), Pub. L.100 -357, established energy conservation standards for fluorescent lamp ballasts. a (42 U.S.C. 6295(g)(5)) These same amendments also required that DOE: (1) conduct two rulemaking cycles to determin e whether these standards should be amended ; and (2) for each rulemaking cycle, determine whether the standar ds in effect for fluorescent lamp ballasts should be amended so that they would be applicable to additional fluorescent lamp ballasts . (42 U.S.C. 6295(g)(7) (A)

- (B))

On September 19, 2000, DOE published a final rule in the Federal Register which completed the first of the two rulemaking cycles to evaluate and amend the energy conservation standards for fluorescent lamp ballasts (hereafter “the 2000 Ballast Rule”). 65 FR 56740. This rulemaking e stablished a consensus standard, representing an agreement between the fluorescent lamp ballast industry and energy-efficiency advocacy organizations. The standard levels adopted replaced the ballast efficacy factors that were promulgated in NAECA 1988 fo r certain fluorescent lamp ballasts. A table of the standards codified by DOE can be found in Appendix 3A under 10 CFR 430.32(m)(3).

Congress promulgated new energy conservation standards for certain fluorescent lamp ballasts under the Energy Policy Act of 2005 (EPACT 2005), Pub. L. 109-58. (EPACT section 135(c)(2); codified at 42 U.S.C. 6295(g)(8)(A)) On October 18, 2005, DOE published a final rule in the Federal Register codifying those new fluorescent lamp ballast standards into the Code of Federal Re gulations at 10 CFR 430.32(m). 70 FR 60407. These standards established minimum ballast efficacy requirements for “energy saver” versions of full

- wattage ballasts, such as the F34T12 ballast. A table of the standards promulgated by EPACT 2005 can be found in Appendix 3A under 10 CFR 430.32(m )(5).

In summary, fluorescent lamp ballasts that are currently regulated under EPCA, as amended, include fluorescent lamp ballasts that are designed to operate one and two nominally 40 watt (W) and 34W 4-foot T12 medium bipin lamps (F40T12 and F34T12), two nominally 75W and 60W 8-foot T12 single pin slimline lamps (F96T12 and F96T12/ES), and two nominally 110W and 95W 8-foot T12 recessed double contact high output lamps (F96T12 and F96T12/ES) at nominal input voltages of 120 or 277 volts with an input current frequency of 60 hertz. 10 CFR 430.32(m). Ballasts that were excluded from regulation in the 2000 Ballast Rule

a Although fluorescent lamp ballasts are typically understood to be a product used in the commercial and industrial sectors, it is the “c onsumer products” section of the statute which grants authority to DOE to cover and regulate this product. In the United States Code, Title 42 “The Public Health and Welfare,” Chapter 77 “Energy Conservation,” Subchapter III “Improving Energy Efficiency,” there are two parts which cluster together the group of products which DOE regulates. First, there is “Part A – Energy Conservation Program for Consumer Products Other than Automobiles” which includes a range of consumer products, some which may be classified as being used primarily in the residential sector, such as refrigerators, dishwashers and clothes washers. However, Part A also includes consumer products that might also be used primarily in the commercial sector, such as fluorescent lamps, fluores cent lamp ballasts and urinals. Second, Subchapter III has “Part A

- 1 – Certain Industrial Equipment,” which includes products that are primarily used in the commercial and industrial sectors, such as electric motors and pumps, and packaged terminal air co nditioners and heat pumps.1

- 3 include: (1) ballasts designed for dimming to 50 percent or less of its maximum output; (2) ballasts designed for use with two F96T12HO lamps at ambient temperatures of -20 degrees Fahrenheit ( F) or less and for use in an outdoor sign or ballasts designed for use with two F96T12HO/ES lamps at ambient temperatures of 20 ° F or less and for use in an outdoor sign ; (3) ballasts with a power factor of less than 0.90 and designed and labeled for use only in residential building applications ; and (4) replacement ballasts as defined in paragraph (m)(4)(ii). b 10 CFR 430.32(m)(2), (m)(4).

The standards promulgated by EPACT 2005 included similar exemptions, but the se exemptions expired for ballasts manufactured after July 1, 2010 and sold by the manufacturer on or after October 1, 2010. 10 CFR 430.32(m)(6) and (m)(7). Thus, the following ballasts that operate certai n “energy saver” lamps are currently subject to standards: (1) ballasts designed for dimming to 50 percent or less of its maximum output; (2) ballasts designed for use with two F96T12HO lamps at ambient temperatures of - 20 degrees F or less and for use in an outdoor sign or ballasts designed for use with two F96T12HO/ES lamps at ambient temperatures of 20 degrees F or less and for use in an outdoor sign; c (3) ballasts with a power factor of less than 0.90 and designed and labeled for use only in residential building applications; and (4) replacement ballasts. 10 CFR 430.32(m)(7).

On December 19, 2007, the President signed the Energy Independence and Security Act of 2007 (EISA 2007) (Pub. L. 110-140) which makes numerous amendments to EPCA and directs DOE to undertake several new rulemakings for appliance energy efficiency standards. EISA 2007 did not amend standards for fluorescent lamp ballasts, but instead directed DOE to consider standby mode and off mode energy use for these ballasts. More specifically

, EISA 2007 directed DOE to amend its test procedure for fluorescent lamp ballasts to incorporate a measure of standby mode and off mode energy consumption. (42 U.S.C. 6295(gg)(2)(B)(ii)) DOE published a final rule for the standby and off mode test proce dure on October 22 , 2009. 74 FR 54445. In addition, pursuant to 42 U.S.C. 6295(o), DOE is directed to incorporate standby mode and off mode energy use in any amended (or new) standard adopted after July 1, 2010. Because this energy conservation standards rulemaking for fluorescent lamp ballasts will be completed in 2011, the requirement to incorporate standby mode energy use into the energy conservation standards analysis is applicable.

This rulemaking encompasses DOE’s second cycle of review to determine whether the standards in effect for fluorescent lamp ballasts should be amended and whether standards

b The exclusion provided for replacement ballasts requires that they meet certain criteria in order to be considered a replacement ballast, such as being designed to replace an existing ballast in a previously installed luminaire and being marked “FOR REPLACEMENT USE ONLY.” This exclusion only applies to replacement ballasts manufactured on or before June 30, 2010. After that date, replacement ballasts will no longer be excluded. (10 CFR 430.32(m)(4)(ii)(A)) See Appendix A for the exact language of the exclusion for replacement ballasts.

c Note that in 10 CFR 430.32(m)(7), the temperature exemption granted under EPACT 2005 is slightly different than that contained in sections (m)(2) and (m)(4). In subsection (m)(7), ballast s designed for use with two F96T12HO /ES lamps at ambient temperatures “ of 20 degrees F or less ” an d designated for use in an outdoor sign are exempt from the standards in paragraph (m)(5). The other sections require the ballast to be for ambient temperature s of negative 20 degrees F or less.1

- 4 should be made applicable to additiona l fluorescent lamp ballasts as stated under section 325(g)(7)(B) of EPCA . This rulemaking also addresses 42 U.S.C. 6295(o) in which DOE is directed to incorporate standby mode and off mode energy use in any amended (or new) standard adopted after July 1, 2010.

1.4 PROCESS FOR SETTING ENERGY CONERVATION STANDARDS

DOE considers the participation of interested parties to be a very important part of the standards- setting process. DOE encourages the participation of all interested partie s during the comment period of each rulemaking stage. Beginning with the rul emaking framework d ocument for fluorescent lamp ballasts ( the fr amework d ocument ) and during subsequent comment periods, interactions among interested partie s provide a balanced discussion of the information that is required for the standards rulemaking.

In conducting the active mode test procedure and t he energy conse rvation standard rulemakings, DOE involves interested partie s through formal public notifications (i.e., Federal Register n otices). For this fluorescent lamp ballast energy conservation standards rulemaking, DOE will employ the procedures set forth in DOE ’s Process Rule (Procedures for Consideration of New or Revised Energy Conservation Standards for Consumer Products, 61 FR 36974, July 15, 1996, 10 CFR Part 430, Subpart C, Appendix A) to the extent they are appropriate for developing energy conservation standards for the ballasts covered under this rulemaking.

Before DOE determines whether to establish or amend energy conservation standard s for fluorescent lamp ballasts, it must first solicit comments on a proposed standard. (42 U.S.C. 6295(o )( 2 )(B)(i)). DOE must design each new or amended standard for these products to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified , and would result in significant energy savings. (42 U.S.C. 6295(o) (2)(A) and (3)) To determine whether a proposed standard complies with these requirements , DOE must, after receiving comments on the proposed standard, determine whether the benefits of the standard exceed its burdens to the greatest extent practicable, weighing the seven factors described above.

Subsequent to the publication of the framework document, the standards rulemaking process involves preliminary analyses followed by two additional formal, major public notices, which are published in the Federal Register . The preliminary analyses are designed to publicly vet the models and tools used in the rulemaking and to facilitate public participation before the proposed rule stage. After the preliminary analyses are vetted, DOE issues the first major notice, the notice of proposed rulemaking ( NOPR ), which presents a discussion of comments received in response to the preliminary analyses of the impacts of standards on consumers, manufacturers, and the nation; DOE’s weighing of the impacts; and the proposed stand ards . The second notice is the final r ule, which presents a discussion of comments received in response to the NOPR; the revised analysis of the impacts of standards; DOE’s weighing of the impacts; the standards adopted by DOE; and the compliance dates of the standards.1

- 5 Table 1.4.1 Analyses Under the Process Rule Preliminary Analysi s NOPR Final Rule * Market and technology assessment Revised ANOPR analyses Revised analyses Screening analysis Life

- cycle cost s ub

- group analysis Engineering analysis Manufacturer impact analysis Energy use characterization Utility impact analysis Product price determination Employment impact analysis

Life

- cycle cost and payback period analys e s Environmental assessment

Sh ipments analysis Regulatory impact analysis National impact analysis Preliminary manufacturer impact analysis * During the final r ule phase, DOE considers the comments submitted by the U.S. Department of Justice concerning the impact of any lesseni ng of competition that is likely to result from the imposition of the standard. (42 U.S.C. 6295(o)(2)(B)(v))

In January 2008, DOE published a rulemaking framework d ocument for f luorescent lamp b allasts

, which describes the procedural and analytical approac hes DOE anticipated using to evaluate the establishment of energy conservation standards for fluorescent lamp ballasts

. A PDF copy of the framework d ocument is available at http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/ballast _framework_ 011408.pdf

DOE held a public meeting on February 6 , 2008 (hereafter “ framework p ublic m eeting”)

, to discuss procedural and analytical approaches to the rulemaking, and to inform and facilitate the involvement of interested parties in the rulemak ing process. The analytical framework presented at the framework public meeting described rulemaking analyses, such as the engineering analysis and the LCC and PBP analys es, the methods proposed for conducting them, and the relationships among the various analyses. See Table 1.4.1 for all the analyses discussed at the framework public meeting to be undertaken in each of the formal public rulemaking documents. PDF copies of the slides and other material associated with the framew ork public meeting are available at http://www1.eere.energy.gov/buildings/appliance_standards/residential/ballast_framework_mtg. html

During the framework p ublic meeting and the framework document comment period, interested partie s, including manufacturers, trade associations, and environmental advocates submitted several comments about the fluorescent lamp ballast rulemaking. The major issues discussed were : (1) the rulemaking’s scope of coverage; (2) the development of product classes; (3) investigating the use a of a new energy efficiency metric for ballasts ; ( 4 ) updating the active mode test procedure and developing a standby mode and off mode test procedure ; ( 5 ) the methodology for the engineering analyses ; (6) the lifetime of the ballast and lamp; (7) the methodology for developing shipment estimates; and (8) the use of marginal versus average electricity rates. Written comments submitted during the framework document comment period1

- 6 elaborated upon the issues raised at the public meeting. A d etailed discussion of comments from interested parties is available in chapter 2 of the preliminary TSD

. d

As part of the information gathering and sharing process, DOE organized and held preliminary interviews with fluorescent lamp ballast manufacturer s and fixtur e manufacturer s who operate in the U.S. ballast market. DOE had five objectives for these interviews: (1) solicit feedback on the scope of coverage for the rulemaking; (2) solicit feedback on the engineering analysis (including methodology, prices, and ba llast technologies); (3) solicit feedback on topics related to the preliminary manufacturer impact analysis; ( 4) provide an opportunity early in the rulemaking process to express specific concerns to DOE; and (5) foster cooperation between manufacturers an d DOE. During the manufacturer interviews, DOE discussed these and other issues regarding market data, distribution channels, anticipated consumer responses to standards, production and product mix, conversion costs, and cumulative regulatory burden.

DOE published a notice announcing the availability of the preliminary analysis in March 2010 and held a public meeting on April 26, 2010. At this meeting, DOE presented the methodologies and results of the analyses set forth in the preliminary TSD. Interested parties discussed the following major issues at the public meeting: the pros and cons of various efficiency metrics; how test procedure variation might affect efficiency measurements; special requirements for EMI -sensitive environments; product class divi sions; manufacturer selling prices and overall pricing methodology; markups; the maximum technologically feasible ballast efficiency; regulatory burden; and shipments. Written c omments received since publication of the March 2010 notice, including those received at the April 2010 public meeting

, have contributed to DOE’s proposed resolution of the issues in this rulemaking . A detailed discussion of comments from interested parties is available in the NOPR Federal Register notice for this rulemaking.

Following the publication of the preliminary analysis and the preliminary analysis public meeting , DOE held additional meetings with manufacturers as part of the consultative process for the manufacturer impact analysis conducted during the NOPR phase. The interviews covered several key issues, including : (1) test procedure follow-up; (2) preliminary TSD follow-up; (3 ) key issues to this rulemaking; (4 ) a company overview and organizational characteristics; (5) manufactur er markups and profitability; (6) shipment projections; (7 ) financial parameters ; (8) conversion costs; (9 ) cumulative reg ulatory burden ; (10) direct employment impact assessment; (11) manufacturing capacity and non-US sales; (12) impact on competition; and (13) impacts on small business.

For the LCC, PBP and national impact analyses (NIA), DOE developed spreadsheets using Microsoft Excel® . The LCC and PBP spreadsheets calculate the economic impacts of replacing products with standard- compliant ones. The NIA spreadsheets calculate the national energy savings (NES) and national net present values (NPVs) at various energy efficiency levels and include a model that forecasts the impacts of energy conservation standards at various levels on product shipments. These spreadsheets are available on the DO E website at

d http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_lamp_ballasts_ecs_prelim_tsd. html1

- 7 http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_lamp_ballast s.html

1.5 STRUCTURE OF THE DOC UME NT

This NOPR TSD outlines the analytical approaches used in this rulemaking. The TSD consists of 17 c hapters and appendices.

Chapter 1 Introduction: provides an overview of the appliance standards program and how it applies to the rulemaking for fluoresc ent lamp ballasts , and outlines the structure of the document

Chapter 2 Analytical Framework: d escribes the rulemaking process, provides an overview of each analysis, and discusses comments received during the framework document public meeting comment period.

Chapter 3 Market and Technology Assessment: characterizes the fluorescent lamp ballast market and the technologies available for increasing ballast luminous efficiency and outlines product classes

Chapter 4 Screening Analysis: determines which techn ology design options are viable for consideration in the engineering analysis

Chapter 5 Engineering Analysis: describes DOE’s approach to the engineering analysis and discusses how manufacturer costs and selling prices relate to ballast luminous efficiency

Chapter 6 Energy Use Characterization : discusses the sources and methods for developing energy use estimates for fluorescent lamp ballasts

Chapter 7 Markups Analysis : discusses the methods DOE used for establishing markups manufacturer selling pri ce to installed customer prices

Chapter 8 LCC and PBP Analys e s: discusses the economic effects of standards and compares the LCC and PBP of fluorescent lamp ballasts with and without higher energy conservation standards

Chapter 9 Trial Standard Levels: discusses the efficiency levels for each analyzed product class as they pertain to the trial standard levels chosen for fluorescent lamp ballasts1

- 8 Chapter 10 Shipments Analysis: discusses the methods used for forecasting shipments with and without higher energy conservation standards

Chapter 11 National Impact Analysis: describes the national forecast of energy consumption, efficiency of new ballasts , and annual fluorescent lamp ballast sales in the absence or presence of new standards

Chapter 12 Life

- Cycle Cos t Sub- Group Analysis: discusses the effect s of standards on a subgroup of fluorescent lamp ballast consumers and compares the LCC and PBP of product with and without higher efficiency standards for these consumers

Chapter 13 Manufacturer Impact Analysis: discusses the effects of standards on the finances and profitability of fluorescent lamp ballasts , and presents preliminary manufacturer impact analysis results

Chapter 14 Utility Impact Analysis: discusses the effects of standards on electric utilities

Chapter 15 Employment Impact Analysis: discusses the effects of standards on national employment

Chapter 16 Environmental Assessment: discusses the effects of standards on two pollutants, sulfur dioxide (SO 2 ) and nitrogen oxides (NOx), as well as carbon em issions

Chapter 17 Regulatory Impact Analysis: discusses the impact of non

regulatory alternatives to energy conservation standards

Appendix AA Acronyms and Abbreviations: provides a set of acronyms and abbreviations used throughout the TSD.

Appendix 3A Fluorescent Lamp Ballasts in the United States Code and Code of Federal Regulations: provides a set of existing statutory and regulatory definitions and requirements for fluorescent lamp ballasts

Appendix 5A Material Prices : analyzes how commodity price c hanges affect the manufacturer selling price of ballasts

Appendix 5B T5 Miniature Bipin Baseline Ballasts: describes the methodology behind developing low efficiency T5 baseline ballast s
Appendix 5C Test Data: lists the test data used for the fluorescent lamp ballast engineering analysis1

- 9 Appendix 5D Analysis of Potential Efficiency Improvements : presents details of an analysis of efficiency improvements for commercially available ballasts

Appendix 5E Electromagnetic Interference: presents research regardin g EMI generated by electronic ballasts

Appendix 5F Advanced Technology Scenario: explores the possibility of a higher efficiency level for instant start ballasts

Appendix 8A Manufacturer Price Projections

Appendix 8B User Instructions for Life

- Cycle Cost and Payback Period Spreadsheet

Appendix 8C Advanced Technology Scenario: reports life- cycle costs and payback periods for the advanced technology scenario.

Appendix 11A User Instructions for Shipments and NIA Spreadsheet

Appendix 11B Advanced Technology Scenario: reports NIA results for the advanced technology scenario

Appendix 13A Preliminary Manufacturer Interview Guide

Appendix 13B Government Regulatory Impact Model Overview

Appendix 13C Advanced Technology Scenario: reports MIA results for the advanced technology scenario

Appendix 16A Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866