[Federal Register Volume 86, Number 11 (Tuesday, January 19, 2021)]
[Rules and Regulations]
[Pages 4885-4908]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00336]


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DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2019-BT-STD-0008]
RIN 1904-AD29


Energy Conservation Program: Energy Conservation Standards for 
Small Electric Motors

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Final determination.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including small 
electric motors (``SEMs''). EPCA also requires the U.S. Department of 
Energy (``DOE'') to periodically determine whether more-stringent 
standards would be technologically feasible and

[[Page 4886]]

economically justified, and would result in significant conservation of 
energy. In this final determination, DOE has determined that more 
stringent SEMs standards would not be cost effective, and thus has 
determined that standards for SEMs should not be amended.

DATES: The effective date of this final determination is January 19, 
2021.

ADDRESSES: The docket for this rulemaking, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at http://www.regulations.gov. All documents in 
the docket are listed in the http://www.regulations.gov index. However, 
not all documents listed in the index may be publicly available, such 
as information that is exempt from public disclosure.
    The docket web page can be found at: https://www.regulations.gov/docket?D=EERE-2019-BT-STD-0008. The docket web page contains 
instructions on how to access all documents, including public comments, 
in the docket.

FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Dommu, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Email: <a href="/cdn-cgi/l/email-protection#0f4e7f7f63666e616c6a5c7b6e616b6e7d6b7c5e7a6a7c7b6660617c4f6a6a216b606a21686079"><span class="__cf_email__" data-cfemail="175667677b7e7679747244637679737665736446627264637e7879645772723973787239707861">[email protected]</span></a>.
    Mr. Michael Kido, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. 
Telephone: (202) 586-8145. Email: <a href="/cdn-cgi/l/email-protection#da97b3b9b2bbbfb6f491b3beb59ab2abf4beb5bff4bdb5ac"><span class="__cf_email__" data-cfemail="b3fedad0dbd2d6df9df8dad7dcf3dbc29dd7dcd69dd4dcc5">[email protected]</span></a>.
    For further information on how to review the docket, contact the 
Appliance and Equipment Standards Program staff at (202) 287-1445 or by 
email: <a href="/cdn-cgi/l/email-protection#3b7a4b4b57525a55585e684f5a555f5a495f486a4e5e484f525455487b5e5e155f545e155c544d"><span class="__cf_email__" data-cfemail="fbba8b8b97929a95989ea88f9a959f9a899f88aa8e9e888f92949588bb9e9ed59f949ed59c948d">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Final Determination
II. Introduction
    A. Authority and Background
    1. Current Standards
    2. History of Standards Rulemakings for Small Electric Motors
III. General Discussion
    A. Scope of Coverage and Equipment Classes
    B. Test Procedure
    C. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    D. Significance of Energy Savings
    E. Cost Effectiveness
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Scope of Coverage
    2. Equipment Classes
    3. Technology Options for Efficiency Improvement
    B. Screening Analysis
    C. Engineering Analysis
    1. Summary of Significant Data Sources
    2. Representative Equipment Classes
    3. Efficiency Analysis
    4. Cost Analysis
    5. Scaling Relationships
    D. Markups Analysis
    E. Energy Use Analysis
    1. Consumer Sample
    2. Motor Input Power
    3. Annual Operating Hours
    F. Life-Cycle Cost and Payback Period Analysis
    1. Equipment Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Maintenance and Repair Costs
    6. Motor Lifetime
    7. Discount Rates
    8. Efficiency Distribution in the No-New-Standards Case
    9. Payback Period Analysis
V. Analytical Results and Conclusions
    A. Energy Savings
    B. Cost Effectiveness
    C. Final Determination
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866
    B. Review Under Executive Orders 13771 and 13777
    C. Review Under the Regulatory Flexibility Act
    D. Review Under the Paperwork Reduction Act
    E. Review Under the National Environmental Policy Act of 1969
    F. Review Under Executive Order 13132
    G. Review Under Executive Order 12988
    H. Review Under the Unfunded Mandates Reform Act of 1995
    I. Review Under the Treasury and General Government 
Appropriations Act, 1999
    J. Review Under Executive Order 12630
    K. Review Under the Treasury and General Government 
Appropriations Act, 2001
    L. Review Under Executive Order 13211
    M. Review Under the Information Quality Bulletin for Peer Review
VII. Approval of the Office of the Secretary

I. Synopsis of the Final Determination

    Title III, Part C \1\ of the Energy Policy and Conservation Act, as 
amended (``EPCA''),\2\ established the Energy Conservation Program for 
Certain Industrial Equipment, (42 U.S.C. 6311-6317), which includes 
small electric motors (``SEMs''), the subject of this final 
determination.
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
    \2\ All references to EPCA in this document refer to the statute 
as amended through America's Water Infrastructure Act of 2018, 
Public Law 115-270 (October 23, 2018).
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    Pursuant to the EPCA requirement that not later than 6 years after 
issuance of any final rule establishing or amending an energy 
conservation standard for covered equipment, DOE must publish either a 
notice of determination that standards for the equipment do not need to 
be amended, or a notice of proposed rulemaking (``NOPR'') including new 
proposed energy conservation standards. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(m))
    DOE analyzed the SEMs currently subject to the standards found at 
title 10 of the Code of Federal Regulations (``CFR'') part 431. See 10 
CFR 431.446. Of these motors, DOE first analyzed the technological 
feasibility of more efficient SEMs. For currently available SEMs with 
efficiencies exceeding the levels of the current energy conservation 
standards, DOE determined that more stringent standards would be 
technologically feasible. For these SEMs, DOE evaluated whether more 
stringent standards would also be cost effective by conducting 
preliminary life-cycle cost (``LCC'') and payback period (``PBP'') 
analyses.
    Based on these analyses, as summarized in section V of this 
document, DOE has determined that more stringent energy conservation 
standards would not be cost effective. Therefore, DOE has determined 
that the current standards for SEMs do not need to be amended.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this final determination, as well as some of the relevant 
historical background related to the establishment of standards for 
SEMs.

A. Authority and Background

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
C of EPCA includes the small electric motors that are the subject of 
this final determination. (42 U.S.C. 6311(13)(G)) As discussed in the 
following paragraphs, EPCA directed DOE to establish test procedures 
and prescribe energy conservation standards for SEMs. (42 U.S.C. 
6317(b))
    The energy conservation program under EPCA consists essentially of 
four parts: (1) Testing, (2) labeling, (3) Federal energy conservation 
standards, and (4) certification and enforcement procedures. Relevant 
provisions of the Act specifically include definitions (42 U.S.C. 
6311), energy conservation standards (42 U.S.C. 6313), test procedures 
(42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), and the 
authority to require information and

[[Page 4887]]

reports from manufacturers (42 U.S.C. 6316).
    EPCA directed DOE to establish a test procedure for those SEMs for 
which DOE determined that energy conservation standards would (1) be 
technologically feasible and economically justified and (2) result in 
significant energy savings. (42 U.S.C. 6317(b)(1)) Manufacturers of 
covered equipment must use the Federal test procedures as the basis 
for: (1) Certifying to DOE that their equipment complies with the 
applicable energy conservation standards adopted pursuant to EPCA (42 
U.S.C. 6316(a); 42 U.S.C. 6295(s)), and (2) making representations 
about the efficiency of that equipment (42 U.S.C. 6314(d)). The DOE 
test procedures for SEMs appear at 10 CFR part 431, subpart X.
    EPCA further directed DOE to prescribe energy conservation 
standards for those SEMs for which test procedures were established. 
(42 U.S.C. 6317(b)(2)) Additionally, EPCA prescribed that any such 
standards shall not apply to any SEM which is a component of a covered 
product under 42 U.S.C. 6292(a) or covered equipment under 42 U.S.C. 
6311 of EPCA. (42 U.S.C. 6317(b)(3)) Federal energy efficiency 
requirements for covered equipment established under EPCA generally 
supersede State laws and regulations concerning energy conservation 
testing, labeling, and standards. (See 42 U.S.C. 6316(a) and (b); 42 
U.S.C. 6297(a)-(c)).
    EPCA requires that, not later than 6 years after the issuance of 
any final rule establishing or amending a standard, DOE evaluate the 
energy conservation standards for each type of covered equipment, 
including those at issue here, and publish either a notice of 
determination that the standards do not need to be amended, or a NOPR 
that includes new proposed energy conservation standards (proceeding to 
a final rule, as appropriate). (42 U.S.C. 6316(a); 42 U.S.C. 
6295(m)(1)). EPCA further provides that, not later than 3 years after 
the issuance of a final determination not to amend standards, DOE must 
make a new determination not to amend the standards or issue a NOPR 
including new proposed energy conservation standards. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(m)(3)(B)) DOE must make the analysis on which a 
determination is based publicly available and provide an opportunity 
for written comment. (42 U.S.C. 6316(a); 42 U.S.C. 6295(m)(2))
    In making a determination that the standards do not need to be 
amended, DOE must evaluate under the criteria of 42 U.S.C. 6295(n)(2) 
whether amended standards (1) will result in significant conservation 
of energy, (2) are technologically feasible, and (3) are cost effective 
as described under 42 U.S.C. 6295(o)(2)(B)(i)(II). (42 U.S.C. 6316(a); 
42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 6295(n)(2)) Under 42 U.S.C. 
6295(o)(2)(B)(i)(II), an evaluation of cost effectiveness requires DOE 
to consider savings in operating costs throughout the estimated average 
life of the covered product in the type (or class) compared to any 
increase in the price of, or in the initial charges for, or maintenance 
expenses of, the covered products which are likely to result from the 
imposition of the standard.
    DOE is publishing this document in accordance with its authority 
under EPCA, and in satisfaction of its statutory requirement under 
EPCA.
1. Current Standards
    The current energy conservation standards for SEMs are located in 
title 10 CFR 431.446, and are presented in Table II-1 and Table II-2.

              Table II-1--Federal Energy Conservation Standards for Polyphase Small Electric Motors
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                                                                           Average full load efficiency
                                                                 -----------------------------------------------
         Motor horsepower/ standard kilowatt equivalent                    Open motors (number of poles)
                                                                 -----------------------------------------------
                                                                         6               4               2
----------------------------------------------------------------------------------------------------------------
0.25/0.18.......................................................            67.5            69.5            65.6
0.33/0.25.......................................................            71.4            73.4            69.5
0.5/0.37........................................................            75.3            78.2            73.4
0.75/0.55.......................................................            81.7            81.1            76.8
1/0.75..........................................................            82.5            83.5            77.0
1.5/1.1.........................................................            83.8            86.5            84.0
2/1.5...........................................................             N/A            86.5            85.5
3/2.2...........................................................             N/A            86.9            85.5
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     Table II-2--Federal Energy Conservation Standards for Capacitor-Start Induction-Run and Capacitor-Start
                                       Capacitor-Run Small Electric Motors
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                                                                           Average full load efficiency
                                                                 -----------------------------------------------
         Motor horsepower/ standard kilowatt equivalent                    Open motors (number of poles)
                                                                 -----------------------------------------------
                                                                         6               4               2
----------------------------------------------------------------------------------------------------------------
0.25/0.18.......................................................            62.2            68.5            66.6
0.33/0.25.......................................................            66.6            72.4            70.5
0.5/0.37........................................................            76.2            76.2            72.4
0.75/0.55.......................................................            80.2            81.8            76.2
1/0.75..........................................................            81.1            82.6            80.4
1.5/1.1.........................................................             N/A            83.8            81.5
2/1.5...........................................................             N/A            84.5            82.9
3/2.2...........................................................             N/A             N/A            84.1
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[[Page 4888]]

2. History of Standards Rulemakings for Small Electric Motors
    In 2006, DOE determined that energy conservation standards for 
certain single-phase, capacitor-start, induction-run, SEMs are 
technologically feasible and economically justified, and would result 
in significant energy savings. 71 FR 38799 (July 10, 2006). Later, in 
2010, DOE issued a final rule (the ``March 2010 Final Rule'') 
establishing energy conservation standards for SEMs manufactured 
starting on March 9, 2015.\3\ 75 FR 10874 (March 9, 2010).
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    \3\ In a technical correction, DOE revised the compliance date 
for energy conservation standards to March 9, 2015, for each small 
electric motor manufactured (alone or as a component of another 
piece of non-covered equipment), or March 9, 2017, in the case of a 
small electric motor which requires listing or certification by a 
nationally recognized safety testing laboratory. 75 FR 17036 (April 
5, 2010).
---------------------------------------------------------------------------

    In April 2019, DOE published a request for information (``April 
2019 ECS RFI'') to solicit input and data from interested parties to 
aid in the development of the technical analyses for the determination 
of whether new and/or amended standards for SEMs are warranted. 84 FR 
14027 (April 9, 2019). The comment period was re-opened in response to 
a request from an interested party, see NEMA, No. 4 at p. 1, until June 
7, 2019. See 84 FR 25203 (May 31, 2019).
    In April 2020, DOE published a notice of proposed determination 
(``April 2020 NOPD'') with the tentative determination that energy 
conservation standards for SEMs do not need to be amended. 85 FR 24146 
(April 30, 2020). The comment period for this notice closed on June 29, 
2020. On September 18, 2020, DOE published a notification of webinar 
public meeting and a limited reopening of the comment period 
(``September 2020 Notice''), which extended the comment period to 
October 20, 2020. 85 FR 58299. On October 6, 2020, DOE held a webinar 
to present the results from the April 2020 NOPD.
    DOE received nine relevant comments from interested parties in 
response to the April 2020 NOPD and the September 2020 Notice. These 
comments are listed in Table II-3.\4\ NEMA and CA IOUs each had two 
separate comment submissions: One in response to the April 2020 NOPD 
and another as a follow up to the September 2020 Notice.
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    \4\ DOE received two comments unrelated to the issues raised by 
the Notice of Proposed Determination (See Crosby, No. 30 and Crosby, 
No. 31).

 Table II-3--April 2020 NOPD and September 2020 Notice Written Comments
------------------------------------------------------------------------
                                   Reference in this
    Commenter/organization(s)            NOPD          Organization type
------------------------------------------------------------------------
Air-Conditioning, Heating, and    AHRI and AHAM.....  Trade
 Refrigeration Institute                               Associations.
 (``AHRI'') and Association of
 Home Appliance Manufacturers
 (``AHAM'').
Appliance Standards Awareness     ASAP, et al.......  Advocacy Groups
 Project (``ASAP''), Alliance to                       and State
 Save Energy, American Council                         Governmental
 for an Energy-Efficient                               Agency.
 Economy, the California Energy
 Commission, and Northwest
 Energy Efficiency Alliance.
California Investor-Owned         CA IOUs...........  Utilities.
 Utilities (``CA IOUs'')--
 Pacific Gas and Electric
 Company, San Diego Gas and
 Electric, and Southern
 California Edison.
General Electric Appliances       GEA...............  Manufacturer.
 (``GEA'').
Lennox International Inc........  Lennox............  Manufacturer.
National Electrical               NEMA..............  Trade Association.
 Manufacturers Association
 (``NEMA'').
------------------------------------------------------------------------

    DOE also notes that NEMA submitted a comment related to 
certification, compliance and enforcement issues, but this comment fell 
outside the scope of this rulemaking and is not addressed in this 
document. Additionally, DOE received a comment from an individual 
commenter (Tyler Crosby) who noted the potential impact of small 
electric motors standards to increase the number electric bicycle 
users--an outcome that the commenter supported. While DOE appreciates 
this feedback, it also falls outside of the specific issues raised in 
the NOPD. The remaining relevant comments and DOE's responses are 
provided in the appropriate sections of this document.

III. General Discussion

A. Scope of Coverage and Equipment Classes

    This document covers equipment meeting the definition of ``small 
electric motor,'' as codified in 10 CFR 431.442 and consistent with the 
statutory definition set by Congress for this term. ``Small electric 
motor'' means a ``NEMA general purpose alternating current single-speed 
induction motor, built in a two-digit frame number series in accordance 
with NEMA Standards Publication MG1-1987, including IEC metric 
equivalent motors.'' 10 CFR 431.442.\5\ The scope of coverage for these 
motors is discussed in further detail in section IV.A.1 of this 
document.
---------------------------------------------------------------------------

    \5\ The term ``IEC'' refers to the International 
Electrotechnical Commission.
---------------------------------------------------------------------------

    When evaluating and establishing energy conservation standards, DOE 
divides covered equipment into equipment classes by the type of energy 
used, or by capacity or other performance-related features that justify 
a different standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)) In 
determining whether capacity or another performance-related feature 
justifies a different standard, DOE must consider such factors as the 
utility of the feature to the consumer and other factors DOE deems 
appropriate. (Id.) The equipment classes for this final determination 
are discussed further in section IV.A.2 of this document.

B. Test Procedure

    As noted, EPCA directed DOE to establish a test procedure for those 
SEMs for which DOE determined that energy conservation standards would 
(1) be technologically feasible and economically justified and (2) 
result in significant energy savings. (42 U.S.C. 6317(b)(1))
    In April 2019, DOE proposed amending its test procedure for SEMs 
(``April 2019 NOPR''). 84 FR 17004 (April 23, 2019). In the April 2019 
NOPR, DOE proposed to harmonize its procedure with industry practice by 
incorporating a new industry standard that manufacturers would be 
permitted to use in addition to the three industry standards currently 
incorporated by reference as options for use when testing SEM 
efficiency. 84 FR 17004, 17012-17014. The proposed industry standards 
from the Institute of Electrical

[[Page 4889]]

and Electronics Engineers (``IEEE''), Canadian Standards Association 
(``CSA''), and the International Electrotechnical Commission (``IEC'') 
are listed in Table III-1. In addition, DOE proposed to adopt industry 
provisions related to the test conditions used to ensure the 
comparability of test results for SEMs. 84 FR 17004, 17014-17018.

   Table III-1--April 2019 NOPR Proposed Industry Standards for Small
                             Electric Motors
------------------------------------------------------------------------
            Equipment description               Industry test procedure
------------------------------------------------------------------------
Single-phase small electric motors...........  IEEE 114-2010.
                                               CSA C747-09.
                                               IEC 60034-2-1:2014 Method
                                                2-1-1A.
Polyphase small electric motors less than or   IEEE 112-2017 Test Method
 equal to 1 horsepower.                         A.
                                               CSA C747-09.
                                               IEC 60034-2-1:2014 Method
                                                2-1-1A.
Polyphase small electric motors greater than   IEEE 112-2017 Test Method
 1 horsepower.                                  B.
                                               CSA C390-10.
                                               IEC 60034-2-1:2014 Method
                                                2-1-1B.
------------------------------------------------------------------------

C. Technological Feasibility

1. General
    In evaluating potential amendments to energy conservation 
standards, DOE conducts a screening analysis based on information 
gathered on all current technology options and prototype designs that 
could improve the efficiency of the product or equipment at issue. As 
the first step in such an analysis, DOE develops a list of technology 
options for consideration in consultation with manufacturers, design 
engineers, and other interested parties. DOE then determines which of 
those means for improving efficiency are technologically feasible. DOE 
considers technologies incorporated in commercially available equipment 
or in working prototypes to be technologically feasible. See 10 CFR 
part 430, subpart C, appendix A, sections 6(c)(3)(i) and 7(b)(1); 10 
CFR 431.4.
    After DOE has determined that particular options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
Practicability to manufacture, install, and service; (2) adverse 
impacts on equipment utility or availability; (3) adverse impacts on 
health or safety; and (4) unique-pathway proprietary technologies. 10 
CFR part 430, subpart C, appendix A, sections 6(c)(3)(ii)-(v) and 
7(b)(2)-(5); 10 CFR 431.4.
    Section IV.B of this final determination discusses the results of 
the screening analysis for SEMs, particularly the designs DOE 
considered, those it screened out, and those that are the basis for the 
final determination. In this final determination, based on its review 
of the market and comments received in response to the April 2020 NOPD 
and September 2020 Notice, DOE has determined that no significant 
technical advancements in induction motor technology within the scope 
of SEMs have been made since publication of the March 2010 Final Rule.
2. Maximum Technologically Feasible Levels
    When DOE evaluates the potential for new or amended standards, DOE 
must determine the maximum improvement in energy efficiency or maximum 
reduction in energy use that is technologically feasible for such 
equipment. (42 U.S.C. 6316(a); 42 U.S.C. 6295(p)(1)) Accordingly, in 
the engineering analysis, DOE determined the maximum technologically 
feasible (``max tech'') improvements in energy efficiency for SEMs 
using the design parameters for the most efficient equipment available 
on the market or in working prototypes. The max-tech levels that DOE 
has determined are described in section IV.C of this final 
determination.

D. Significance of Energy Savings

    In determining whether to amend the current energy conservation 
standards for SEMs, DOE must assess whether amended standards will 
result in significant conservation of energy. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(m)(1)(A). See also 42 U.S.C. 6295(n)(2).) While the term 
``significant'' is not defined in EPCA, DOE has established a 
significance threshold for energy savings. See 10 CFR part 430, subpart 
C, appendix A, section 6(b); 10 CFR 431.4. In evaluating the 
significance of energy savings, DOE conducts a two-step approach that 
considers both an absolute site energy savings threshold and a 
threshold that is percent reduction in the covered equipment energy 
use. Id. DOE first evaluates the projected energy savings from a 
potential maximum technologically feasible (``max-tech'') standard over 
a 30-year period against a 0.3 quads of site energy threshold. 10 CFR 
431.4; 10 CFR part 430, subpart C, appendix A, section 6(b)(2). If the 
0.3 quad-threshold is not met, DOE then compares the max-tech savings 
to the total energy usage of the covered equipment to calculate a 
percentage reduction in energy usage. 10 CFR 431.4; 10 CFR part 430, 
subpart C, appendix A, section 6(b)(3). If this comparison does not 
yield a reduction in site energy use of at least 10 percent over a 30-
year period, the analysis ends and DOE proposes that no significant 
energy savings would likely result from setting new or amended 
standards. 10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, 
section 6(b)(3). The two-step approach allows DOE to ascertain whether 
a potential standard satisfies EPCA's significant energy savings 
requirements in EPCA to ensure that DOE avoids setting a standard that 
``will not result in significant conservation of energy.''
    EPCA defines ``energy efficiency'' as the ratio of the useful 
output of services from an article of industrial equipment to the 
energy use of such article, measured according to the Federal test 
procedures. (42 U.S.C. 6311(3)) EPCA defines ``energy use'' as the 
quantity of energy directly consumed by an article of industrial 
equipment at the point of use, as measured by the Federal test 
procedures. (42 U.S.C. 6311(4))
    As discussed in section V.B of this document, DOE has determined 
that amended standards would not satisfy the cost-effectiveness 
criterion as required by EPCA when determining whether to amend its 
standards for a given covered product or equipment. (42 U.S.C. 6316(a); 
42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 6295(n)(2)(C)) See also sections 
IV.F and V.B (discussing in greater detail DOE's analysis of the 
available data in reaching this determination). Consequently, DOE did 
not separately determine whether

[[Page 4890]]

the potential energy savings would be significant for the purpose of 42 
U.S.C. 6295(n)(2).

E. Cost Effectiveness

    In making a determination of whether amended energy conservation 
standards are needed, EPCA requires DOE to consider the cost 
effectiveness of amended standards in the context of the savings in 
operating costs throughout the estimated average life of the covered 
equipment class compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered equipment 
that are likely to result from a standard. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(m)(1)(A); 42 U.S.C. 6295(n)(2))
    In determining cost effectiveness, DOE conducted LCC and PBP 
analyses that estimate the costs and benefits to users from standards. 
The LCC is the sum of the initial price of equipment (including its 
installation) and the operating expense (including energy, maintenance, 
and repair expenditures) discounted over the lifetime of the equipment. 
The LCC analysis requires a variety of inputs, such as equipment 
prices, equipment energy consumption, energy prices, maintenance and 
repair costs, equipment lifetime, and discount rates appropriate for 
consumers. To account for uncertainty and variability in specific 
inputs, such as equipment lifetime and discount rate, DOE uses a 
distribution of values, with probabilities attached to each value.
    The PBP is the estimated amount of time (in years) it takes 
consumers to recover the increased purchase cost (including 
installation) of more-efficient equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analyses, DOE assumes that consumers would 
purchase the covered equipment in the first year of compliance with any 
amended standards. The LCC savings for the considered efficiency levels 
are calculated relative to the case that reflects projected market 
trends in the absence of amended standards. DOE's LCC and PBP analysis 
is discussed in further detail in section IV.F of this final 
determination.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE performed for this final 
determination regarding SEMs. Separate subsections address each 
component of DOE's analyses and responses to related comments. DOE used 
a spreadsheet tool that calculates the LCC savings and PBP of potential 
energy conservation standards. This spreadsheet tool is available on 
the website: https://www.regulations.gov/docket?EERE-2019-BT-STD-0008.
    Lennox supported DOE's proposed determination not to amend energy 
conservation standards for SEMs. (Lennox, No. 21 at p. 1) NEMA 
concurred with DOE that it is not cost effective to increase the 
stringency of SEM energy conservation standards. (NEMA, No. 22 at p. 5; 
NEMA, No. 32 at p. 2-3) CA IOUs also concurred with DOE that there is 
limited opportunity for additional energy efficiency in the current 
scope of regulation for SEMs. (CA IOUs, No. 24 at p. 2; CA IOUs, No. 33 
at p. 2) As discussed previously, based on the analyses summarized in 
section V of this document, DOE has determined that more stringent 
energy conservation standards would not be cost effective. Therefore, 
DOE has determined that the current standards for SEMs do not need to 
be amended under the relevant criteria in 42 U.S.C. 6295(m)(1)(A) and 
42 U.S.C. 6295(n)(2). See also 42 U.S.C. 6316(a) (applying 42 U.S.C. 
6295(m) and 42 U.S.C. 6295(n) to small electric motors).

A. Market and Technology Assessment

    DOE has conducted a market and technology assessment in support of 
the final determination for SEMs. DOE develops information in the 
market and technology assessment that provides an overall picture of 
the market for the equipment concerned, including the purpose of the 
equipment, the industry structure, manufacturers, market 
characteristics, and technologies used in the equipment. This activity 
includes both quantitative and qualitative assessments, based primarily 
on publicly available information. The subjects addressed in the market 
and technology assessment for this final determination include (1) a 
determination of the scope and equipment classes, (2) manufacturers and 
industry structure, (3) existing efficiency programs, (4) shipments 
information, (5) market and industry trends, and (6) technologies or 
design options that could improve the energy efficiency of SEMs. The 
key findings of DOE's market assessment are summarized in the following 
sections. See chapter 3 of the final determination technical support 
document (``TSD'') for further discussion of the market and technology 
assessment.
1. Scope of Coverage
    By statute, a ``small electric motor'' is ``a NEMA general purpose 
alternating-current single-speed induction motor, built in a two-digit 
frame number series in accordance with NEMA Standards Publication MG 1-
1987.'' (42 U.S.C. 6311(13)(G)) DOE later clarified by regulation that 
this definition also includes IEC metric equivalent motors--i.e., those 
motors that otherwise satisfy the statutory definition of ``small 
electric motor'' but that happen to be built in accordance with metric 
units. See 10 CFR 431.442. Equipment meeting this definition are within 
DOE's scope of coverage but not all may be subject to DOE's current 
standards.
    DOE's standards regulate the energy efficiency of those SEMs that 
fall within three topologies (i.e., arrangements of component parts): 
Capacitor-start induction-run (``CSIR''), capacitor-start capacitor-run 
(``CSCR''), and polyphase motors. See 10 CFR 431.446. EPCA prescribes 
that standards for SEMs do not apply to any SEM which is a component of 
a covered product or covered equipment under EPCA. (42 U.S.C. 
6317(b)(3)) DOE's current energy conservation standards only apply to 
SEMs manufactured alone or as a component of another piece of non-
covered equipment. 10 CFR 431.446(a).
    Subpart X of part 431 includes energy conservation standards and 
test procedures for the SEMs listed in Table IV-1. In the April 2020 
NOPD, DOE did not propose any changes to the scope of SEMs subject to 
energy conservation standards (i.e., ``scope of applicability'').

      Table IV-1--Small Electric Motors Currently Subject to Energy
                         Conservation Standards
  [Manufactured alone or as a component of another piece of non-covered
                               equipment]
------------------------------------------------------------------------
                                                          Motor output
        Motor topology           Pole  configuration          power
------------------------------------------------------------------------
Single-phase:
    CSIR.....................                  2, 4, 6  0.25-3 hp. (0.18-
                                                         2.2 kW).*

[[Page 4891]]

 
    CSCR.....................                  2, 4, 6  0.25-3 hp. (0.18-
                                                         2.2 kW).
Polyphase....................                  2, 4, 6  0.25-3 hp. (0.18-
                                                         2.2 kW).
------------------------------------------------------------------------
Certain motor categories are not currently subject to standards. These
  include:
<bullet> Polyphase, 6-pole, 2 and 3 hp motors;
<bullet> CSCR and CSIR, 6-pole, 1.5, 2, and 3 hp motors;
<bullet> CSCR and CSIR, 4-pole, 3 hp motors.
* The values in parentheses are the equivalent metric ratings.

    In response to the April 2020 NOPD and September 2020 Notice, DOE 
received a number of comments relevant to the scope of applicability of 
energy conservation standards for SEMs. Lennox, AHRI and AHAM supported 
maintaining the existing standards scope for SEMs. (Lennox, No. 21 at 
p. 2; AHRI and AHAM, No. 25 at p. 2) In addition, NEMA stated that 
motor efficiency has reached its peak of practicality, and that system 
efficiency in applications must be the focus. NEMA commented in support 
of DOE's efforts investigating or already establishing Extended Product 
Rulemakings (e.g., pumps) which set a system efficiency, rather than 
continue to focus on components (i.e,. the motor). (NEMA, No. 32 at p. 
2)
    The Efficiency Advocates asserted that given DOE's mandate to carry 
out the energy conservation purposes of the Energy Policy and 
Conservation Act, DOE must consider expanding the scope of its motor 
standards, either in this docket or the electric motors docket. 
(Efficiency Advocates, No. 23 at p. 2) Similarly, the CA IOUs commented 
that there is limited opportunity for additional energy efficiency 
gains in the current scope of regulation for SEMs and added that the 
industry technical standards on which the current SEM definition is 
based--NEMA MG1-1987--is no longer representative of the market. (CA 
IOUs, No. 24 at p. 2; No. 33 at p. 2)
    In the view of the CA IOUs, DOE should expand the scope of the SEM 
rulemaking to consider advances in motor technology and incorporate 
brushless direct current (DC) and synchronous permanent magnet AC 
(``PMAC'') motors, irrespective of the limits already defined by 
Congress. See 42 U.S.C. 6311(13)(G) (defining the term ``small electric 
motor'') and 10 CFR 431.442 (incorporating motors meeting the statutory 
definition that are built in metric units). The CA IOUs provided an 
analysis and market data and technical information as to the energy 
savings potential, cost, and technical feasibility of brushless DC 
motors such as electronically commutated motors (``ECMs'') and PMAC 
motors compared to other available motor technologies such as 
permanent-split capacitor (``PSC'') motors. The CA IOUs further 
commented that motor consumers and regulators in other markets are 
already considering advanced motor technologies as substitutes for SEMs 
within the current scope of DOE's energy conservation standards. (CA 
IOUs, No. 24 at p. 2-7; No. 33 at p. 2-8)
    In addition, the CA IOUs recommended that DOE consider expanding 
the definition of SEMs beyond the ``general purpose motor'' definition 
included in NEMA MG1-1987 (and as specified in the statute) to include 
additional motors used in general purpose applications such as split-
phase, shaded pole, and PSC motors. In cases where the application 
requirements rely on part-load operation, the CA IOUs recommended that 
these motors be compared in a technology-neutral manner against other 
motor designs optimized for part load operation (i.e., brushless DC, 
synchronous PMAC/Q-Sync). (CA IOUs, No. 24 at p. 7; No. 33 at p. 8-9)
    Regarding the potential coverage of ECMs, NEMA commented that ECMs 
were not squirrel cage induction motors but instead are permanent 
magnet synchronous motors with electronic controls/drives integral to 
the machine and were not included in the scope of SEMs (NEMA, No. 32 at 
p. 2).\6\ In addition, NEMA commented that ECMs tend to be more 
expensive than single-speed SEMs, and typically installed as components 
in appliances that DOE already regulates. In these instances, strict 
energy efficiency requirements on those appliances and the use of 
better motor controls outweigh the increased expense of using ECMs. 
NEMA added that making ECMs more efficient would not make regulated 
appliances more efficient because of component efficiency tradeoffs in 
satisfying efficiency requirements and protections from double-
regulation. (NEMA, No. 32 at p. 2-3) NEMA commented that bringing ECMs 
into scope could have significant impacts on Original Equipment 
Manufacturers (``OEMs''). NEMA added that ECMs are not drop-in fit 
replacements for SEMs and that DOE has not sufficiently examined the 
downstream impacts of adding such motors in scope on OEMs. (NEMA, No. 
32 at p. 2) Regarding PMAC/Q-sync designs, NEMA noted that such PMAC/Q-
sync motors did not meet NEMA MG-1-1987 torque requirements and were 
not effective substitutes for SEMs, as indicated by their small market 
share. (NEMA, No. 32 at p. 3)
---------------------------------------------------------------------------

    \6\ DOE notes that the definition of a SEM only includes single 
speed induction motors.
---------------------------------------------------------------------------

    As previously stated in section III.A, this document pertains only 
to equipment meeting the definition of small electric motor, as 
codified in 10 CFR 431.442, which includes general purpose single speed 
induction motors. See 42 U.S.C. 6311(13)(G) and 10 CFR 431.442. Single-
speed induction motors, as delineated and described in MG1-1987, fall 
into five categories: Split-phase, shaded-pole, capacitor-start (both 
CSIR and CSCR), PSC, and polyphase. Of these five motor categories, DOE 
determined in the March 2010 Final Rule that only CSIR, CSCR, and 
polyphase motors were able to meet the relevant performance 
requirements in NEMA MG1-1987 and fell within the general purpose 
alternating current motor category, as indicated by the listings found 
in manufacturers' catalogs. 75 FR 10874, 10882-10883. Therefore, for 
this determination, DOE only considered the regulated SEMs currently 
subject to energy conservation standards.\7\
---------------------------------------------------------------------------

    \7\ DOE also notes that were it to determine that expansion of 
the scope is warranted and permissible, it would first need to 
establish test methods for any such motors. See 10 CFR 431.4; 10 CFR 
part 430 subpart C appendix A section 8(d). Nothing DOE has 
reviewed--or that commenters have submitted--suggests that the 
existing test procedures for SEM are appropriate for motors that 
fall outside of the already prescribed small electric motor scope 
set by Congress and the definition of small electric motor. Comments 
related to the scope of applicability of the DOE test procedure for 
small electric motors were discussed as part of DOE's test procedure 
NOPR. 84 FR 17004, 17009 (April 23, 2019).

---------------------------------------------------------------------------

[[Page 4892]]

    AHAM and AHRI referenced the statutory exemption regarding the 
application of energy conservation standards for SEMs that are 
components of covered products (42 U.S.C. 6317(b)(3)) and requested 
that DOE interpret the exemption to apply to all SEMs destined for or 
used in covered products or equipment. (AHAM and AHRI, No. 25 at p. 4) 
Lennox commented that it opposes regulating components used in products 
and equipment already regulated by DOE, instead it supports a finished-
product approach to energy efficiency regulation. (Lennox, No. 21 at p. 
2) GEA commented that any regulation of individual components in 
products whose energy consumption is regulated on a product level will 
provide little to no energy savings for consumers, will disrupt the 
complex balance of component selection and design, and will likely 
increase cost for consumers for no benefit to consumers. (GEA, No. 26 
at p. 2) NEMA commented that because SEMs are always used as a 
component in larger product systems that consume electricity, there 
already exist dozens of appliance- and device-level regulations that 
address energy consumption of those end-use products. NEMA suggested 
examining and measuring energy savings at the end-use device makes the 
most sense, as system dynamics can vary for designs within each product 
class and from class to class. (NEMA, No. 22 at p. 2)
    As noted, EPCA directs DOE to establish test procedures and energy 
conservation standards for SEMs, see 42 U.S.C. 6317(b), both of which 
DOE has already done. EPCA further provides that standards shall not 
apply to any SEM which is a component of a covered product or covered 
equipment. (42 U.S.C. 6317(b)(3)) DOE has evaluated the scope of the 
SEM standards in this final determination in accordance with EPCA.
2. Equipment Classes
    When evaluating and establishing energy conservation standards, DOE 
divides covered equipment into equipment classes by the type of energy 
used, or by capacity or other performance-related features that justify 
a different standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)) In 
determining whether capacity or another performance-related feature 
justifies a different standard, DOE must consider such factors as the 
utility of the feature to the consumer and other factors DOE deems 
appropriate. (Id.) For the April 2020 NOPD, DOE assessed the 62 
equipment classes currently established based on phase count (i.e., 
single-phase versus polyphase), topology of single-phase motors, number 
of poles, and horsepower. This section reviews the motor 
characteristics used to delineate equipment classes for SEMs.
    The first characteristic used to establish equipment classes is 
phase count. Polyphase and single-phase equipment classes are used to 
differentiate motors based on the fundamental differences in how the 
two types of motors operate. 10 CFR 431.446(a). For a rotor to move, 
the stator (i.e., the stationary part of the motor) must produce a 
rotating magnetic field. To operate on single-phase alternating current 
(``AC'') power, the single-phase motor uses an auxiliary winding (or 
start winding) with current and voltage out of phase with the original 
(main) winding to produce a net rotating magnetic field. To operate on 
three-phase power, the polyphase motor uses windings arranged such that 
when supplied by three-phase alternating current, a rotating magnetic 
field is produced. In short, three-phase power in a polyphase motor 
naturally produces rotation, whereas a single-phase motor requires the 
auxiliary winding to ``engineer'' the conditions for rotation. Due to 
these differences, polyphase motors are inherently more efficient but 
require use of a three-phase power source. Based on the differences in 
efficiency and consumer utility, DOE separated equipment classes based 
on phase count in the March 2010 Final Rule. 75 FR 10874, 10886. DOE 
relied on the same approach for the proposed determination. See 85 FR 
24146, 24153.
    In addition to differentiating equipment classes by phase count, 
equipment classes are differentiated by the topology of single-phase 
motors. 10 CFR 431.446(a). DOE identified two topologies of single-
phase motors meeting the statutory definition of SEMs: CSIR and CSCR. 
CSIR and CSCR motors both utilize a capacitor (``start-capacitor'') and 
two windings (``start-winding'' and ``run-winding''). The difference 
between the two motors occurs when reaching operating speed; while CSIR 
motors run on the run-winding alone with no capacitor, CSCR motors run 
using an additional ``run-capacitor'' and both windings. While this 
additional capacitor can boost CSCR motor efficiency to levels higher 
than those exhibited by CSIR motor designs, it usually constitutes 
dimensional changes due to the need to mount the run-capacitor 
externally on the motor housing. This additional spatial requirement 
could potentially limit the use of CSCR motors in space-constrained 
applications, and would cause motor topology to directly impact 
consumer utility. Given that motor topology can affect motor 
performance and consumer utility, DOE differentiated single-phase 
equipment classes by topology in the March 2010 Final Rule. 75 FR 
10886. DOE proposed to use the same approach in the April 2020 NOPD. 
See 85 FR 24146, 24153.
    The current energy conservation standards also differentiate 
classes based on the number of poles in a motor. 10 CFR 431.446(a). The 
number of poles in an induction motor determines the synchronous speed 
(i.e., revolutions per minute). There is an inverse relationship 
between the number of poles and speed: As a motor design increases from 
two to eight poles, the synchronous speed drops from 3,600 to 900 
revolutions per minute. The desired synchronous speed varies by end use 
application, making the number of poles in a motor a factor directly 
impacting consumer utility. By examining the efficiency ratings for 1-
200 horsepower polyphase electric motors (10 CFR 431.25),\8\ motors 
meeting the NEMA Premium Motor standard, and manufacturer catalogs, DOE 
observed that full-load efficiency percentages tend to decrease with 
the number of poles. Therefore, DOE determined that the number of poles 
has a direct impact on the motor's performance and consumer utility, 
and consequently, the number of poles is a further means of 
differentiating among equipment classes. 75 FR 10886. DOE relied on the 
same approach for the proposed determination. See 85 FR 24146, 24153.
---------------------------------------------------------------------------

    \8\ While there is no overlap between the scope of applicability 
for electric motor standards at 10 CFR 431.25 and small electric 
motors standards at 10 CFR 431.446, the pole-efficiency 
relationships observed in the electric motor standards from 1 to 3 
horsepower can be considered when determining appropriate pole-
efficiency relationships for small electric motors in this 
horsepower range.
---------------------------------------------------------------------------

    Finally, DOE employs motor horsepower as an equipment class setting 
factor under the current energy conservation standards. 10 CFR 
431.446(a). Average full load efficiency generally correlates with 
motor horsepower (e.g., a 3-horsepower motor is usually more efficient 
than a \1/4\-horsepower motor). DOE found that motor efficiency varies 
with motor horsepower by evaluating manufacturers' catalog data, the 
efficiency ratings of the established SEM energy conservation standards 
(10 CFR 431.446), and the efficiency

[[Page 4893]]

requirements of the NEMA Premium Motor program. Additionally, motor 
horsepower dictates the maximum load that a motor can drive, which 
means that a motor's rated horsepower can influence and limit the end 
use applications where that motor can be used. Horsepower is a critical 
performance attribute of a small electric motor, and since horsepower 
has a direct relationship with average full load efficiency and 
consumer utility, DOE used this element as a criterion for 
distinguishing among equipment classes in the March 2010 Final Rule. 75 
FR 10886. DOE relied on the same approach for the proposed 
determination. See 85 FR 24146, 24153.
    DOE did not receive any comments on the current structure of the 
equipment classes as assessed in the April 2020 NOPD. Accordingly, in 
this final determination DOE continues to assess the SEM equipment 
classes as currently established. Table IV-2 summarizes the structure 
of the equipment classes identified for this final determination and as 
designated by the current standards at 10 CFR 431.446.

                          Table IV-2--Summary of Small Electric Motor Equipment Classes
----------------------------------------------------------------------------------------------------------------
                        Motor topology                             Pole configuration     Motor output power hp
----------------------------------------------------------------------------------------------------------------
Single-phase:
    CSIR......................................................                  2, 4, 6                   0.25-3
    CSCR......................................................                  2, 4, 6                   0.25-3
Polyphase.....................................................                  2, 4, 6                   0.25-3
----------------------------------------------------------------------------------------------------------------

    See chapter 3 of the final determination TSD for further discussion 
of the equipment classes.
3. Technology Options for Efficiency Improvement
    The purpose of the technology assessment is to develop a list of 
technology options that could improve the efficiency of SEMs. For the 
motors covered in this determination, energy efficiency losses are 
grouped into four main categories: I\2\R losses,\9\ core losses, 
friction and windage losses, and stray load losses. The technology 
options considered in this section are categorized by these four 
categories of losses.
---------------------------------------------------------------------------

    \9\ I\2\R losses refer to conductor losses. In AC circuits, 
these losses are computed as the square of the current (``I'') 
multiplied by the conductor resistance (``R'').
---------------------------------------------------------------------------

    The SEMs evaluated in this determination are all AC induction 
motors. Induction motors have two core components: A stator and a 
rotor. The components work together to convert electrical energy into 
rotational mechanical energy. This is done by creating a rotating 
magnetic field in the stator, which induces a current flow in the 
rotor. This current flow creates an opposing magnetic field in the 
rotor, which creates rotational forces. Because of the orientation of 
these fields, the rotor field follows the stator field. The rotor is 
connected to a shaft that also rotates and provides the mechanical 
energy output.
    Table IV-3 summarizes the technology options identified in the 
April 2020 NOPD.

   Table IV-3--Summary of Technology Options for Improving Efficiency
------------------------------------------------------------------------
    Type of loss to reduce             Technology option applied
------------------------------------------------------------------------
I2R Losses...................  Use a copper die-cast rotor cage.
                               Reduce skew on conductor cage.
                               Increase cross-sectional area of rotor
                                conductor bars.
                               Increase end ring size.
                               Changing gauges of copper wire in stator.
                               Manipulate stator slot size.
                               Decrease radial air gap.
                               Change run-capacitor rating.
Core Losses..................  Improve grades of electrical steel.
                               Use thinner steel laminations.
                               Anneal steel laminations.
                               Add stack height (i.e., add electrical
                                steel laminations).
                               Use high-efficiency lamination materials.
                               Use plastic bonded iron powder.
Friction and Windage Losses..  Use better bearings and lubricant.
                               Install a more efficient cooling system.
------------------------------------------------------------------------

    85 FR 24146, 24155.
    DOE did not receive comments on the technology options identified 
in the April 2020 NOPD. Accordingly, DOE continued to consider the 
technology options identified in the April 2020 NOPD in developing this 
final determination. Chapter 3 of the TSD provides details on the DOE's 
market and technology assessment for SEMs.

B. Screening Analysis

    DOE uses the following five screening criteria to determine which 
technology options are suitable \10\ for further consideration of new 
or amended energy conservation standards:
---------------------------------------------------------------------------

    \10\ DOE refers to the technology options that pass the 
screening criteria as ``design options.''
---------------------------------------------------------------------------

    (1) Technological feasibility. Technologies that are not 
incorporated in commercial products or in working prototypes will not 
be considered further.
    (2) Practicability to manufacture, install, and service. If it is 
determined that mass production and reliable installation and servicing 
of a technology in commercial products could not be achieved on the 
scale necessary to serve the relevant market at the time of the 
projected compliance date of the standard, then that

[[Page 4894]]

technology will not be considered further.
    (3) Impacts on product utility or product availability. If it is 
determined that a technology would have a significant adverse impact on 
the utility of the product to significant subgroups of consumers or 
would result in the unavailability of any covered product type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as products 
generally available in the United States at the time, it will not be 
considered further.
    (4) Adverse impacts on health or safety. If it is determined that a 
technology would have significant adverse impacts on health or safety, 
it will not be considered further.
    (5) Unique-Pathway Proprietary Technologies. If a design option 
utilizes proprietary technology that represents a unique pathway to 
achieving a given efficiency level, that technology will not be 
considered further due to the potential for monopolistic concerns.
    10 CFR part 430, subpart C, appendix A, 6(c)(3) and 7(b); 10 CFR 
431.4.
    In summary, if DOE determines that a technology, or a combination 
of technologies, fails to meet one or more of the above five criteria, 
it will be excluded from further consideration in the engineering 
analysis.
    Table IV-3 provides a summary of all the technology options DOE 
considered for improving SEM efficiency. For a description of how each 
of these technology options improves SEM efficiency, see final 
determination TSD chapter 3. For the April 2020 NOPD, DOE initially 
screened out three of the identified technology options: Reducing the 
air gap below .0125 inches, amorphous metal laminations, and plastic 
bonded iron powder (``PBIP'').
    Reducing the air gap between the rotor and stator can improve motor 
efficiency. For SEMs, the air gap is commonly set at 15 thousandths of 
an inch. A reduction in air gaps is technologically feasible and DOE is 
unaware of any adverse impacts on health or safety associated with 
reducing the radial air gap below 12.5 thousandths of an inch. However, 
this technology option fails the screening criterion of being 
practicable to manufacture, install, and service. Such a tight air gap 
may cause problems in manufacturing and service, with the rotor 
potentially coming into contact with the stator. This technology option 
also fails the screening criterion of avoiding adverse impacts on 
consumer utility and reliability, because the motor may experience 
higher failure rates in service when the manufactured air gaps are less 
than 12.5 thousandths of an inch.
    Using amorphous metals in the rotor laminations is another 
potential technology option to improve the efficiency of SEMs. 
Amorphous metal is extremely thin, has high electrical resistivity, and 
has little or no magnetic domain definition. Because of amorphous 
steel's high resistance, it exhibits a reduction in hysteresis and eddy 
current losses, which in turn reduces overall losses in SEMs. However, 
amorphous steel is a very brittle material which makes it difficult to 
punch into motor laminations.\11\
---------------------------------------------------------------------------

    \11\ 1 S.R. Ning, J. Gao, and Y.G. Wang. Review on Applications 
of Low Loss Amorphous Metals in Motors. 2010. ShanDong University. 
Weihai, China.
---------------------------------------------------------------------------

    Although amorphous metals have the potential to improve efficiency, 
DOE does not consider this technology option technologically feasible, 
because it has not been incorporated into a working prototype of a 
small electric motor. Furthermore, DOE is uncertain whether amorphous 
metals are practicable to manufacture, install, and service, because a 
prototype amorphous metal-based SEM has not been made and little 
information is available on the feasibility of adapting this technology 
for manufacturing SEMs to reach any conclusions regarding the 
practicability of using this option. DOE is not aware of any adverse 
impacts on consumer utility, reliability, health, or safety associated 
with amorphous metal laminations.
    Using PBIP to manufacture SEMs could cut production costs while 
increasing production output. Although other researchers may be working 
on this technology option, DOE notes that a research team at Lund 
University in Sweden published a paper in 2007 about using PBIP in 
manufacturing, which is the most recent applicable paper on the 
subject. This technology option is based on an iron powder alloy that 
is suspended in plastic, and is used in certain motor applications such 
as fans, pumps, and household appliances.\12\ The compound is then 
shaped into motor components using a centrifugal mold, reducing the 
number of manufacturing steps. Researchers claim that this technology 
option could cut losses by as much as 50 percent. The Lund University 
study, which is the most recent research paper to address the use of 
PBIP in the production context, indicated that its study team already 
produced inductors, transformers, and induction heating coils using 
PBIP, but had not yet produced a small electric motor. In addition, it 
appears that PBIP technology is aimed at torus, claw-pole, and 
transversal flux motors, none of which are with in the regulatory 
definition of SEMs at 10 CFR 431.442. DOE has found no evidence of any 
significant research or technical advancement in PBIP methodologies 
that could be applied to SEMs since publication of the March 2010 Final 
Rule or the April 2020 NOPD.
---------------------------------------------------------------------------

    \12\ Horrdin, H., and E. Olsson. Technology Shifts in Power 
Electronics and Electric Motors for Hybrid Electric Vehicles: A 
Study of Silicon Carbide and Iron Powder Materials. 2007. Chalmers 
University of Technology. G[ouml]teborg, Sweden.
---------------------------------------------------------------------------

    Although PBIP has the potential to improve efficiency while 
reducing manufacturing costs, DOE does not consider this technology 
option technologically feasible because it has not been incorporated 
into a working prototype of a small electric motor. Also, DOE is 
uncertain whether the material has the structural integrity to form 
into the necessary shape of a SEM steel frame. Specifically, properties 
of PBIP can differ depending on the processing. If the metal particles 
are too closely compacted and begin to touch, the material will gain 
electrical conductivity, counteracting one of its most important 
features of preventing electric current from developing, which is 
critical because this essentially eliminates losses in the core due to 
eddy currents. If the metal particles are not compacted closely enough, 
its structural integrity could be compromised because the resulting 
material will be very porous.
    Furthermore, DOE is uncertain whether PBIP is practicable to 
manufacture, install, and service, because a prototype PBIP SEM has not 
yet been made and little information is available on the feasibility of 
adapting this option for manufacturing SEMs. DOE continues to be 
unaware of any adverse impacts on product utility, product 
availability, health, or safety that may arise from the use of PBIP in 
SEMs.
    In the April 2020 NOPD, DOE tentatively determined that the 
remaining technology options listed in Table IV-2 are technologically 
feasible. The evaluated technologies all have been used (or are being 
used) in commercially available products or working prototypes. These 
technologies all incorporate materials and components that are 
commercially available in today's supply markets for the SEMs that are 
the subject of this document.
    DOE did not receive comments on the screening analysis in the April 
2020 NOPD. Accordingly, DOE considered the same screening analysis from 
the

[[Page 4895]]

April 2020 NOPD in this final determination and is screening out the 
following technology options: Reducing the air gap below .0125 inches, 
amorphous metal laminations, and plastic bonded iron powder (``PBIP''). 
DOE also finds that all of the remaining technology options meet the 
other screening criteria (i.e., practicable to manufacture, install, 
and service and do not result in adverse impacts on consumer utility, 
product availability, health, or safety, and do not represent unique 
pathway proprietary technologies). Chapter 4 of the TSD provides 
details on the DOE's screening analysis for SEMs.

C. Engineering Analysis

    The engineering analysis establishes the relationship between the 
efficiency and cost of an SEM. There are two elements to consider in 
the engineering analysis; the selection of efficiency levels to analyze 
(i.e., the ``efficiency analysis'') and the determination of product 
cost at each efficiency level (i.e., the ``cost analysis''). In 
determining the performance of higher-efficiency equipment, DOE 
considers technologies and design option combinations not eliminated by 
the screening analysis. For each equipment class, DOE estimates the 
baseline cost, as well as the incremental cost for the equipment at 
efficiency levels above the baseline. The output of the engineering 
analysis is a set of cost-efficiency ``curves'' that are used in 
downstream analyses (i.e., the LCC and PBP analyses). The following 
sections provide further details on the engineering analysis 
methodology.
1. Summary of Significant Data Sources
    DOE utilized two principal data sources for the engineering 
analysis: (1) The database of SEM manufacturer suggested retail price 
(``MSRP'') and performance data based on the current market (as 
evaluated in the April 2020 NOPD), and (2) motor modeling data, test 
data, and performance specifications from the March 2010 Final Rule. 
DOE determined that relying on the data from the March 2010 Final Rule 
was reasonable because a review of the catalog data suggested that 
there were no significant technological advancements in the motor 
industry that could lead to more efficient or lower cost motor designs 
relative to the motors modeled for the March 2010 Final Rule. In 
response to the April 2020 NOPD, NEMA also commented that the motor 
designs and associated efficiency levels adopted from the March 2010 
Final Rule analysis are appropriate. (NEMA, No. 22 at p. 3) 
Accordingly, in preparing this determination, DOE continued to evaluate 
the motor designs that were modeled for the March 2010 Final Rule 
analysis.
    DOE collected MSRP and performance data from product literature and 
catalogs distributed by four major motor manufacturers: ABB (which 
includes the manufacturer formerly known as Baldor Electric Company), 
Nidec Motor Corporation (which includes the US Motors brand), Regal-
Beloit Corporation (which includes the Marathon and Leeson brands), and 
WEG Electric Motors Corporation.\13\ Based on market information from 
the Low-Voltage Motors World Market Report,\14\ DOE estimates that the 
four major motor manufacturers noted comprise the majority of the U.S. 
SEM market and are consistent with the motor brands considered in the 
March 2010 Final Rule. (Throughout this document this data will be 
referred to as the ``manufacturer catalog data.'')
---------------------------------------------------------------------------

    \13\ ABB (Baldor-Reliance): Online Manufacturer Catalog, 
accessed January 3, 2019. Available at https://www.baldor.com/catalog#category=2; Nidec: Online Manufacturer Catalog, accessed 
December 26, 2018. Available at ecatalog.motorboss.com/Catalog/Motors/ALL; Regal (Marathon and Leeson): Online Manufacturer 
Catalog, accessed December 27, 2018. Available at https://www.regalbeloit.com/Products/Faceted-Search?category=Motors&brand=Leeson,Marathon%20Motors; WEG: Online 
Manufacturer Catalog, accessed December 24, 2018. Available at 
http://catalog.wegelectric.com/.
    \14\ Based on the Low-Voltage Motors, World Market Report (IHS 
Markit Report September 2017, Edition 2017-2018) Table 5.15: Market 
Share Estimates for Low-voltage Motors: Americas; Suppliers `share 
of the Market in 2015 and 2016.
---------------------------------------------------------------------------

2. Representative Equipment Classes
    Due to the large number of equipment classes, DOE did not directly 
analyze all 62 equipment classes of SEMs considered under this final 
determination. Instead, DOE selected representative classes based on 
two factors: (1) The quantity of motor models available within an 
equipment class and (2) the ability to scale to other equipment 
classes.
    DOE notes that the minimum energy conservation standards adopted in 
the March 2010 Final Rule correspond to the efficiency level that 
represented the maximum technologically feasible efficiency for CSIR 
motors. As discussed previously, DOE was unable to identify any 
additional design options that passed the screening criteria that would 
indicate that a motor design meeting a higher efficiency level is 
technologically feasible and commercially viable. In addition, DOE was 
unable to identify any CSIR motors in the manufacturer catalog data 
that exhibited efficiency levels exceeding the current energy 
conservation standards for CSIR motors. From this information, DOE 
proposed in the April 2020 NOPD that more stringent energy conservation 
standards for CSIR motors do not appear to be technologically feasible. 
Consequently, DOE did not include a representative CSIR equipment class 
as part of the engineering analysis.
    The minimum energy conservation standards adopted in the March 2010 
Final Rule corresponded to efficiency levels below the maximum 
technologically feasible levels for the CSCR and polyphase topologies, 
and therefore DOE elected to analyze one representative equipment class 
for each of these motor topologies. Equipment classes in both the 
polyphase and CSCR topologies were directly analyzed due to the 
fundamental differences in their starting and running electrical 
characteristics. These differences in operation have a direct impact on 
performance and indicate that polyphase motors are typically more 
efficient than single-phase motors. In addition, the efficiency 
relationships across horsepower and pole configuration are different 
between single-phase and polyphase motors.
    DOE did not vary the pole configuration of the representative 
classes it analyzed because analyzing the same pole configuration 
provided the strongest relationship upon which to base its scaling. See 
section IV.C.5 of this document for details on DOE's scaling 
methodology. Keeping as many design characteristics constant as 
possible enabled DOE to more accurately identify how design changes 
affect efficiency across horsepower ratings. For each motor topology, 
DOE directly analyzed the most common pole-configuration. For both 
motor topologies analyzed, 4-pole motors constitute the largest 
fraction of motor models on the market.
    When DOE selected its representative equipment classes, DOE chose 
the horsepower ratings that constitute a high volume of motor models 
and approximate the middle of the range of covered horsepower ratings 
so that DOE could develop a reasonable scaling methodology. DOE notes 
that the representative equipment classes for polyphase and CSCR motors 
that were selected for the engineering analysis align with the 
representative classes that were directly analyzed in the March

[[Page 4896]]

2010 Final Rule. 75 FR 10874, 10888. The proposed representative 
equipment classes from the April 2020 NOPD are outlined in Table IV-4.

                                  Table IV-4--Representative Equipment Classes
----------------------------------------------------------------------------------------------------------------
                        Motor topology                             Pole configuration     Motor output power hp
----------------------------------------------------------------------------------------------------------------
Polyphase.....................................................                        4                     1.00
Single-phase CSCR.............................................                        4                     0.75
----------------------------------------------------------------------------------------------------------------

    NEMA commented that the selected representative equipment classes 
are appropriate because there have not been any significant changes to 
design practices which might warrant modification. (NEMA, No. 22 at p. 
2) DOE did not receive any other comments regarding the representative 
equipment classes. Accordingly, DOE continued to analyze the same 
representative equipment classes from the April 2020 NOPD in preparing 
this final determination.
3. Efficiency Analysis
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) Relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing products (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). Using the design option approach, the 
efficiency levels established for the analysis are determined through 
detailed engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options that 
have been identified in the technology assessment. DOE may also rely on 
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended 
using the design option approach to interpolate to define ``gap fill'' 
levels (to bridge large gaps between other identified efficiency 
levels) and/or to extrapolate to the ``max-tech'' level (particularly 
in cases where the ``max tech'' level exceeds the maximum efficiency 
level currently available on the market).
    In the March 2010 Final Rule DOE and in the April 2020 NOPD, DOE 
relied on the design option approach. DOE maintained the design option 
approach for this final determination. In this design option approach, 
DOE considers efficiency levels corresponding to motor designs that 
meet or exceed the efficiency requirements of the current energy 
conservation standards at 10 CFR 431.446. DOE has determined that there 
are no additional technology options that pass the screening criteria 
that would enable the consideration of any additional efficiency levels 
representing higher efficiency levels than the maximum technologically 
feasible level analyzed in the March 2010 Final Rule.
    For each equipment class, DOE generally selects a baseline model as 
a reference point, and measures changes resulting from potential energy 
conservation standards against the baseline. The baseline model in each 
equipment class represents the characteristics of a product/equipment 
typical of that class (e.g., capacity, physical size). Generally, a 
baseline model is one that just meets current energy conservation 
standards, or, if no standards are in place, the baseline is typically 
the most common or least efficient unit on the market.
    DOE considered the current minimum energy conservation standards to 
establish the baseline efficiency levels for each representative 
equipment class. As discussed previously, DOE selected representative 
equipment classes that align with the classes analyzed in the March 
2010 Final Rule. See March 2010 Final Rule TSD, sec. 5.2.1. DOE 
identified specific motor designs from the March 2010 Final Rule 
engineering analysis that exhibit full-load efficiency ratings that are 
representative of the minimum energy conservation standards for SEMs. 
DOE used these motor designs to form the baseline against which to 
compare improved efficiency design options in DOE's analysis. Each 
increase in efficiency over the baseline level that DOE analyzed was 
assigned an efficiency level (``EL'') number.
    For the March 2010 Final Rule engineering analysis, DOE purchased 
and tested motors with the lowest catalog efficiency rating available 
in the market for each representative equipment class. DOE's technical 
expert tore down each motor to obtain dimensions, a BOM, and other 
pertinent design information. DOE worked with a subcontractor to 
reproduce these motor designs using modeling software and then applied 
design options to a modeled motor that would increase that motor's 
efficiency to develop a series of motor designs spanning a range of 
efficiency levels. For the current evaluation, DOE continued to base 
its analysis on the modeled motor designs. In light of its catalog 
review, DOE discerned no significant technological advancements in the 
motor industry that could lead to more efficient or lower cost motor 
designs relative to the motors modeled for the March 2010 Final Rule. 
In addition, DOE did not receive any contrasting comments suggesting 
any significant technological advancements for small electric motors 
within current scope.
    In developing the modeled motor designs and associated costs, DOE 
also considered both space-constrained and non-space-constrained 
scenarios. DOE prepared designs of increased efficiency covering both 
scenarios for each representative equipment class. The design levels 
prepared for the space-constrained scenario included baseline and 
intermediate levels, a level for a design using a copper rotor, and a 
max-tech level with a design using a copper rotor and exotic core 
steel. The high-efficiency space-constrained designs incorporate copper 
rotors and exotic core steel in order to meet comparable levels of 
efficiency to the high-efficiency non-space-constrained designs while 
meeting the parameters for minimally increased stack length. The design 
levels created for the non-space-constrained scenario corresponded to 
the same efficiency levels created for the space-constrained scenario. 
Further information on the development of modeled motor designs is 
available in section 5.3 of the March 2010 Final Rule TSD.

[[Page 4897]]

    NEMA commented that improving efficiency in SEMs may not always 
result in overall equipment-level efficiency improvements. It noted 
that any modification to energy conservation standards or scope of 
regulated SEMs would require a revised analysis of the downstream 
impact of SEM design changes on OEM devices and appliances. NEMA 
asserted that changes in motor size, weight, rotational speed, 
slip,\15\ and other factors due to more stringent energy conservation 
standards have not been sufficiently evaluated. It added that because 
of the potential increase in the speed of the motor due to increases in 
efficiency, more stringent energy conservation standards could have 
significant downstream impacts in OEM devices which use these motors 
and would not always guarantee higher efficiency or better performance 
by that end-use device. (NEMA, No. 22 at pp. 1-2, 5; No. 32 at p. 2)
---------------------------------------------------------------------------

    \15\ ``Motor slip'' is the difference between the speed of the 
rotor (operating speed) and the speed of the rotating magnetic field 
of the stator (synchronous speed). When net rotor resistance of a 
motor design is reduced, efficiency of the motor increases but slip 
decreases, resulting in higher operating speeds.
---------------------------------------------------------------------------

    DOE continued to use the designs analyzed for the March 2010 Final 
Rule in preparing this final determination. The designs analyzed in the 
engineering analysis did not show a significant (less than 2 percent) 
and consistent increase in speed with increasing efficiency (some more 
efficient designs had slightly lower speeds) across all ELs (See Final 
Determination TSD Chapter 5). In addition, as discussed previously, to 
account for motor size and weight limitations, DOE also analyzed both 
space-constrained and non-space-constrained scenarios. However, in this 
final determination, DOE is not considering amending the current energy 
conservation standards for this equipment.
    Given that DOE was unable to identify any additional design options 
for improving efficiency that passed the screening criteria and were 
not already considered in the March 2010 Final Rule engineering 
analysis, DOE analyzed the same motor designs that were developed for 
the March 2010 Final Rule except for CSIR motors (which, as indicated 
earlier, did not appear to have any technologically-feasible options 
available to improve their efficiency). For each representative 
equipment class, DOE established an efficiency level for each motor 
design that exhibited improved efficiency over the baseline design. As 
discussed previously, DOE considered the current minimum energy 
conservation standards as the baseline efficiency levels for each 
representative equipment class. These April 2020 NOPD efficiency levels 
are summarized in Table IV-5.

                Table IV-5--Summary of Efficiency Levels
------------------------------------------------------------------------
     Representative equipment class             EL        Efficiency (%)
------------------------------------------------------------------------
Single-phase CSCR, 4-pole, 0.75-hp......               0            81.8
                                                       1            82.8
                                                       2            84.0
                                                       3            84.6
                                                       4            86.7
                                                       5            87.9
Polyphase, 4-pole, 1-hp.................               0            83.5
                                                       1            85.2
                                                       2            86.3
                                                       3            87.8
------------------------------------------------------------------------

    As mentioned previously, NEMA commented that the motor designs and 
associated efficiency levels adopted into this analysis from the March 
2010 Final Rule analysis are appropriate. (NEMA, No. 22 at p. 3) 
Accordingly, similar to the April 2020 NOPD, DOE adopted the motor 
modeling approach used in support of the March 2010 Final Rule to 
analyze and establish efficiency levels and incremental motor MSPs. DOE 
did not identify any additional design options in the market for 
improving efficiency that were not already considered in the March 2010 
Final Rule.
4. Cost Analysis
    The cost analysis portion of the Engineering Analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
product and the availability and timeliness of purchasing the equipment 
on the market. The cost approaches are summarized as follows:
    <bullet> Physical teardowns: Under this approach, DOE physically 
dismantles a commercially available product, component-by-component, to 
develop a detailed bill of materials for the product.
    <bullet> Catalog teardowns: In lieu of physically deconstructing a 
product, DOE identifies each component using parts diagrams (available 
from manufacturer websites or appliance repair websites, for example) 
to develop the bill of materials (``BOM'') for the product.
    <bullet> Price surveys: If neither a physical nor catalog teardown 
is feasible (for example, for tightly integrated products such as 
fluorescent lamps, which are infeasible to disassemble and for which 
parts diagrams are unavailable) or cost-prohibitive and otherwise 
impractical (e.g. large commercial boilers), DOE conducts price surveys 
using publicly available pricing data published on major online 
retailer websites and/or by soliciting prices from distributors and 
other commercial channels.
    In the present case, a standard BOM was constructed for each motor 
design that includes direct material costs and labor time estimates 
along with costs. DOE notes that the costs established for direct 
material costs and labor time were initially determined in terms of 
$2009 for the March 2010 Final Rule. For the April 2020 NOPD, DOE 
updated these material and labor costs to be representative of the 
market in 2018. DOE adjusted historical material prices to $2018 using 
the historical Bureau of Labor Statistics Producer Price Indices 
(``PPI'') \16\ for each commodity's industry. In addition, DOE updated 
labor costs and markups based on the most recent and complete version 
(i.e.

[[Page 4898]]

2012) of the Economic Census of Industry by the U.S. Census Bureau.\17\
---------------------------------------------------------------------------

    \16\ www.bls.gov/ppi/.
    \17\ U.S. Census Bureau, 2012 Economic Census of Industry Series 
Reports for Industry, U.S. Department of Commerce, 2012; NAICS code 
3353121 ``Fractional Horsepower Motors'' Production workers hours 
and wages. Although some summary statistics of the 2017 Economic 
Census for Manufacturing is currently available, the detailed 
statistics for the U.S. is estimated to be released in the time 
frame of November 2020-September 2021. https://www.census.gov/programs-surveys/economic-census/about/release-schedules.html.
---------------------------------------------------------------------------

    DOE did not receive comments on the cost analysis presented in the 
April 2020 NOPD. Accordingly, using the same methodology presented in 
the April 2020 NOPD, in this final determination DOE updated the 
material and labor costs to be representative of the market in 2019$.
5. Scaling Relationships
    In analyzing the equipment classes, DOE developed a systematic 
approach to scaling efficiency across horsepower ratings and pole 
configurations, while retaining reasonable levels of accuracy, in a 
manner similar to the March 2010 Final Rule. DOE's current energy 
conservation standards for SEMs found at 10 CFR 431.446 list minimum 
required efficiencies over a range of horsepower and pole 
configurations, providing a basis for scaling efficiency across 
horsepower and pole configurations for polyphase and single-phase 
motors. The efficiency relationships in the established standards are 
based on a combination of NEMA recommended efficiency standards, NEMA 
premium designations, catalog data, and test data for individual 
manufacturer motor product lines.
    In the April 2020 NOPD, DOE proposed to apply the same scaling 
methodologies used to support the March 2010 Final Rule to the 
engineering analysis. This includes scaling to two additional 
representative units needed in the energy use and life-cycle cost 
analyses to separately analyze consumers of integral (i.e., with 
horsepower greater than or equal to 1 hp) single-phase CSCR SEMs and 
fractional (i.e., with horsepower less than 1 hp) polyphase SEMs. This 
scaling approach has been presented previously to stakeholders and has 
been updated based on stakeholder input. Additionally, the approach has 
the added advantage of reducing the analytical complexity associated 
with conducting a detailed engineering analysis of the cost-efficiency 
relationship on all 62 equipment classes. 75 FR 10874, 10894-10895.
    NEMA commented that the previously developed scaling methodologies 
remain effective and appropriate. (NEMA, No. 22 at p. 3) DOE did not 
receive any other comments on the scaling analysis methodology proposed 
in the April 2020 NOPD. DOE continues to apply the scaling analysis 
methodology from the April 2020 NOPD in this final determination. 
Chapter 5 of the TSD provides details on the DOE's engineering analysis 
for SEMs.

D. Markups Analysis

    To account for manufacturers' non-production costs and profit 
margin, DOE applies a non-production cost multiplier (the manufacturer 
markup) to the MPC. The resulting manufacturer selling price (``MSP'') 
is the price at which the manufacturer distributes a unit into 
commerce. DOE developed an average manufacturer markup by examining the 
annual Securities and Exchange Commission 10-K reports filed by 
publicly-traded manufacturers primarily engaged in appliance 
manufacturing and whose combined product range includes SEM.
    The markups analysis develops appropriate markups (e.g., retailer 
markups, distributor markups, contractor markups) in the distribution 
chain to convert the MSP estimates derived in the engineering analysis 
to consumer prices, which are then used in the LCC and PBP analysis. At 
each step in the distribution channel, companies mark up the price of 
the equipment to cover business costs and profit margin. For SEMs, the 
main parties in the distribution chain are manufacturers, distributors, 
contractors or installers, OEMs of equipment incorporating SEMs, and 
consumers.
    DOE relied on estimates provided by NEMA during the March 2010 
Final Rule to establish the proportion of shipments through each 
distribution channel.\18\ In response to the April 2020 NOPD, DOE did 
not receive any comments or data to support alternative distribution 
channels for SEMs. In this final determination, DOE relied on the same 
distributions of shipments by distribution channels as in the April 
2020 NOPD. Further, DOE did not receive any comments on the approach 
used to develop markups. DOE continued to rely on the same methodology 
for developing markups and updated relevant data sources to the most 
recent information available in preparation of this final 
determination. DOE used data from the U.S. Census Bureau and US 
Economic Census \19\ and the Sales Tax Clearinghouse \20\ to develop 
distribution channel markups and sales tax estimates.
---------------------------------------------------------------------------

    \18\ For more details see chapter 7 of the 2010 small electric 
motors final rule TSD, at https://www.regulations.gov/document?D=EERE-2007-BT-STD-0007-0036.
    \19\ U.S. Census Bureau. 2017 Annual Wholesale Trade Report. 
2017. Washington, DC (Last accessed June 19, 2019.) https://www.census.gov/wholesale/index.html; U.S. Census Bureau. 2017 Annual 
Retail Trade Survey, 2017. (Last accessed June 19, 2019.) https://www.census.gov/programs-surveys/arts/data/tables.2017.html.; 2017 
Economic Census: Manufacturing: Summary Statistics for the U.S., 
States, and Selected Geographies: 2017. 2020. U.S. Census Bureau. 
(Last accessed October 21, 2020.) https://www.census.gov/data/tables/2017/econ/economic-census/naics-sector-31-33.html.
    \20\ Sales Tax Clearinghouse Inc. State Sales Tax Rates Along 
with Combined Average City and County Rates. October 21, 2020. (Last 
accessed October 21, 2020.) http://thestc.com/STrates.stm.
---------------------------------------------------------------------------

    DOE used the same approach as in the April 2020 NOPD and developed 
baseline and incremental markups for each actor in the distribution 
chain. Baseline markups are applied to the price of equipment with 
baseline efficiency, while incremental markups are applied to the 
difference in price between baseline and higher-efficiency models (the 
incremental cost increase). The incremental markup is typically less 
than the baseline markup and is designed to maintain similar per-unit 
operating profit before and after new or amended standards.\21\ DOE 
relied on economic data from the U.S. Census Bureau to estimate average 
baseline and incremental markups.
---------------------------------------------------------------------------

    \21\ Because the projected price of standards-compliant products 
(and equipment) is typically higher than the price of baseline 
products (and equipment), using the same markup for the incremental 
cost and the baseline cost would result in higher per-unit operating 
profit. While such an outcome is possible, DOE maintains that in 
markets that are reasonably competitive it is unlikely that imposing 
more stringent standards would lead to a sustainable increase in 
profitability in the long run.
---------------------------------------------------------------------------

    Further, in the space-constrained scenario, DOE developed a 
modified OEM markup to account for the costs faced by those OEMs of 
equipment incorporating SEMs needing to redesign their products in 
order to incorporate SEMs of different, including larger, sizes. 
Nationally, businesses spend about 2.7 percent of U.S. gross domestic 
product on research and development (``R&D'').\22\ DOE estimates that 
R&D by equipment OEMs, including the design of new products, 
approximately represents at most 2.7 percent of company revenue. DOE 
followed the same approach used in the March 2010

[[Page 4899]]

Final Rule and accounted for the additional costs to redesign products 
and incorporate differently-shaped motors by adding 2.7 percent to the 
OEM markups.\23\
---------------------------------------------------------------------------

    \22\ National Science Board. January 15, 2020. Science and 
Engineering Indicators 2020. Research and Development: U.S Trends 
and International Comparisons. Figure 4-3, Ratio of U.S. R&D to 
gross domestic product, by roles of federal, business, and other 
nonfederal funding for R&D: 1953-2017. 2020. National Science Board: 
Arlington, VA: National Science Foundation (NSB-2020-3).
    \23\ Fore more details see chapter 7 of the 2010 small electric 
motors final rule TSD, at https://www.regulations.gov/document?D=EERE-2007-BT-STD-0007-0036.
---------------------------------------------------------------------------

    Table IV-6 summarizes the overall baseline and incremental markups 
for each distribution channel considered for SEMs. These markups were 
updated since the April 2020 NOPD to reflect updates to relevant data 
sources to the most recent information available.

                                             Table IV-6--Small Electric Motors Distribution Channel Markups
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Distribution channel (from manufacturer)               Direct to OEMs (65%)        Via wholesalers to OEMs (30%)   Via wholesalers to end-users
-------------------------------------------------------------------------------------------------------------------------              (5%)
                                                                                                                         -------------------------------
                       Main party                            Baseline       Incremental      Baseline       Incremental      Baseline       Incremental
--------------------------------------------------------------------------------------------------------------------------------------------------------
Motor Wholesaler........................................  ..............  ..............            1.35            1.20            1.35            1.20
Original Equipment Manufacturer (OEM) *.................       1.45/1.48       1.20/1.23       1.45/1.48       1.20/1.23  ..............  ..............
Equipment Wholesaler....................................            1.41            1.20            1.41            1.20  ..............  ..............
Retailer................................................  ..............  ..............  ..............  ..............            1.53            1.27
Contractor..............................................             1.1             1.1             1.1             1.1             1.1             1.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sales Tax...............................................              1.0727
                                                                      1.0727
                                                                      1.0727
--------------------------------------------------------------------------------------------------------------------------------------------------------
Overall.................................................       2.42/2.47       1.69/1.73       3.26/3.33       2.04/2.08            2.44            1.80
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Non-space-constrained scenario/space-constrained scenario.

    Chapter 6 of the TSD provides details on the DOE's markup analysis 
for SEMs.

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of SEMs at different efficiency levels and to assess 
the energy savings potential of increased efficiency. The analysis 
estimates the range of energy use of SEMs in the field (i.e., as they 
are actually used by consumers). The energy use analysis provides the 
basis for other analyses DOE performed, particularly assessments of the 
energy savings and the savings in consumer operating costs that could 
result from adoption of amended or new standards.
    The analysis focuses on the two representative units identified in 
the engineering analysis (see section IV.C) for which engineering 
analysis results were obtained at levels at and above the baseline. Two 
additional representative units were included to separately analyze 
consumers of integral (i.e., with horsepower greater than or equal to 1 
hp) single-phase CSCR SEMs and fractional (i.e., with horsepower less 
than 1 hp) polyphase SEMs (see Table IV-7).\24\ For each representative 
unit, DOE determined the annual energy consumption value by multiplying 
the motor input power by the annual operating hours for a 
representative sample of motor consumers.
---------------------------------------------------------------------------

    \24\ Similar to the approach used in the engineering analysis 
when selecting representative units, DOE reviewed model counts from 
the manufacturer online catalog data to identify these additional 
units. DOE reviewed counts of CSCR, 4-poles small electric motors 
and polyphase, 4-poles, small electric motors models. For CSCR 
motors, the 1 horsepower value had the most counts and DOE selected 
a unit at 1 horsepower. For polyphase motors, the 0.33, 0.5, and 
0.75 horsepower values had the most counts (and similar counts) and 
DOE selected a unit at 0.5 horsepower (i.e. the mid-range of these 
horsepower values).

            Table IV-7--Representative Units Analyzed in the Energy Use and Life-Cycle Cost Analyses
----------------------------------------------------------------------------------------------------------------
                                                                                                       Rated
           Representative unit               Equipment class group        Pole configuration        horsepower
----------------------------------------------------------------------------------------------------------------
1.......................................  Single-phase, CSCR........  4-pole....................            0.75
2.......................................  Polyphase.................  4-pole....................               1
3.......................................  Single-phase, CSCR........  4-pole....................               1
4.......................................  Polyphase.................  4-pole....................             0.5
----------------------------------------------------------------------------------------------------------------

    In response to the April 2020 NOPD, NEMA commented that the inputs 
used to characterize the energy use of SEMs were appropriate. (NEMA, 
No. 22 at p. 3) Additionally, NEMA commented that improving SEM 
efficiency may not always result in overall equipment-level efficiency 
improvements. NEMA commented that any modification to energy 
conservation standards or scope of regulated SEMs would require a 
revised analysis of the downstream impact of SEM design changes on OEM 
devices and appliances, before proceeding to modify energy savings 
methodology and estimates. (NEMA, No. 22 at p. 5)
    As discussed previously, to account for motor size and weight 
limitations (including in OEM devices and appliances), DOE analyzed 
both space-constrained and non-space-constrained scenarios. DOE did not 
modify the scope or amend the current energy conservation standards for 
this equipment. Chapter 7 of the TSD provides details on the DOE's 
energy use analysis for SEMs.
1. Consumer Sample
    DOE used the same approach as in the April 2020 NOPD and created 
consumer samples for each representative unit, including three 
individual sectors: Residential, commercial, and industrial. DOE used 
the samples to determine SEM annual energy consumption as well as for 
conducting the LCC and PBP analyses. Each consumer in the sample was 
assigned a sector and an application. DOE used data from the March 2010 
Final Rule to establish distributions of SEMs by sector. Five

[[Page 4900]]

main motor applications were selected as representative applications 
(compressors, fans, pumps, material handling, and others). In order to 
characterize the distributions of SEMs across applications in the 
industrial sector, DOE used data from hundreds of field assessments 
aggregated in two databases: (1) A database of motor nameplate and 
field data and; \25\ (2) a database of motor nameplate and field data 
compiled by the Industrial Assessment Center at Oregon University 
(``field assessment data'').\26\ For the commercial and residential 
sectors, DOE used data from a previous DOE publication to estimate 
distribution of SEMs by application.\27\ DOE also assumed that 20 
percent of consumers had space-constraints and 80 percent were non-
space-constrained based on data from the March 2010 Final Rule. In 
response to the April 2020 NOPD, NEMA commented that the inputs used to 
characterize the distributions of consumers across sectors and 
applications were appropriate. (NEMA, No. 22 at p. 3) DOE used the same 
consumer sample as in the April 2020 NOPD for this final determination.
---------------------------------------------------------------------------

    \25\ Database of motor nameplate and field measurement data 
compiled by the Washington State University Extension Energy Program 
(WSU) and Applied Proactive Technologies (APT) under contract with 
the New York State Energy Research and Development Authority 
(NYSERDA).
    \26\ Strategic Energy Group (January 2008), Northwest Industrial 
Motor Database Summary. Regional Technical Forum. Available at 
http://rtf.nwcouncil.org/subcommittees/osumotor/Default.htm.
    \27\ W. Goetzler, T. Sutherland, C. Reis. ``Energy Savings 
Potential and Opportunities for High-Efficiency Electric Motors in 
Residential and Commercial Equipment'' U.S. Department of Energy, 
December 4, 2013. Available at https://energy.gov/sites/prod/files/2014/02/f8/Motor%20Energy%20Savings%20Potential%20Report%202013-12-4.pdf.
---------------------------------------------------------------------------

    See Chapter 7 of the TSD for more details on the resulting 
distribution of consumers by sector and applications.
2. Motor Input Power
    DOE used the same approach as in the April 2020 NOPD and calculated 
the motor input power as the sum of the motor rated horsepower 
multiplied by the motor operating load (i.e., the motor output power) 
and of the losses at the operating load (i.e., part-load losses). DOE 
determined the part-load losses using outputs from the engineering 
analysis (full-load efficiency at each efficiency level) and published 
part-load efficiency information from manufacturer catalogs to model 
motor part-load losses as a function of the motor's operating load. DOE 
estimated the operating load using operating load data specific to 
motors in the 0.25-3 hp range, which was based on additional field 
assessments data collected since the publication of the March 2010 
Final Rule.\28\
---------------------------------------------------------------------------

    \28\ This horsepower range was selected as it corresponds to the 
motor horsepower of small electric motors that are currently subject 
to standards (see section IV.A.1).
---------------------------------------------------------------------------

    In response to the April 2020 NOPD, NEMA commented that an upcoming 
publication from DOE's Advanced Manufacturing Office ``Motor System 
Market Assessment'' may provide additional information regarding load. 
(NEMA, No. 22 at p. 4) DOE is aware of this upcoming report but notes 
that it is not yet available. Accordingly, DOE used the same load 
distributions as in the April 2020 NOPD for this final determination.
    See chapter 7 of the TSD for the resulting distribution of load for 
each application.
3. Annual Operating Hours
    DOE used the same approach as in the April 2020 NOPD and DOE 
developed distributions of operating hours by application and sector. 
For the industrial sector, DOE used data specific to motors in the 
0.25-3 hp range from the field assessment data to establish 
distributions of annual operating hours by application.\29\ For the 
commercial and residential sectors, DOE used operating hours data from 
the March 2010 Final Rule.\30\ In response to the April 2020 NOPD, NEMA 
commented in support of the annual operating hours values used in the 
NOPD. NEMA commented that if DOE were to consider standards for a 
different scope, these assumptions would no longer be adequate. (NEMA, 
No. 22 at p. 4) As discussed previously, DOE is not modifying the scope 
of the energy conservation standards for SEMs. Accordingly, DOE used 
the same operating hour distributions as in the April 2020 NOPD for 
this final determination. Table IV-8 shows the estimated average annual 
energy use at each efficiency level analyzed.
---------------------------------------------------------------------------

    \29\ Database of motor nameplate and field measurement data 
compiled by the Washington State University Extension Energy Program 
(WSU) and Applied Proactive Technologies (APT) under contract with 
the New York State Energy Research and Development Authority 
(NYSERDA).
    \30\ For more details see chapter 6 of the 2010 small electric 
motors final rule TSD, at https://www.regulations.gov/document?D=EERE-2007-BT-STD-0007-0036.
---------------------------------------------------------------------------

    The annual energy use values are calculated as an intermediate 
result in the LCC and PBP analysis. As further discussed section IV.F, 
the computer model DOE uses to calculate the LCC and PBP relies on a 
Monte Carlo simulation to incorporate uncertainty and variability into 
the analysis. Although the energy use calculation performed in 
preparation of this final rule relied on the same probability 
distributions as used in the April 2020 NOPD, each Monte Carlo 
simulation run randomly samples input values from the probability 
distributions and consumer samples, which resulted in updated annual 
energy use results.

                           Table IV-8--Small Electric Motors Annual Energy Use Results
----------------------------------------------------------------------------------------------------------------
                                                                     Kilowatt-hours per year
        Rep. Unit              Description     -----------------------------------------------------------------
                                                   EL 0       EL 1       EL 2       EL 3       EL 4       EL 5
----------------------------------------------------------------------------------------------------------------
1.......................  Single-phase, CSCR,     1,653.6    1,628.2    1,598.5    1,583.8    1,536.0    1,509.0
                           4-pole, 0.75 hp.
2.......................  Polyphase, 4-pole, 1    2,092.8    2,047.7    2,020.8    1,983.8  .........  .........
                           hp.
3.......................  Single-phase, CSCR,     2,191.9    2,159.1    2,122.7    2,103.9    2,043.2    2,008.0
                           4-pole, 1 hp.
4.......................  Polyphase, 4-pole,      1,152.6    1,117.9    1,096.7    1,068.1  .........  .........
                           0.5 hp.
----------------------------------------------------------------------------------------------------------------

    See Chapter 7 of the TSD for more details on the distributions of 
annual operating hours by application and sector.

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
SEMs. The effect of new or amended energy conservation standards on 
individual consumers usually involves a reduction in operating cost and 
an increase in purchase price. DOE used

[[Page 4901]]

the following two metrics to measure consumer impacts:
    <bullet> The LCC is the total consumer expense of equipment over 
the life of that equipment, consisting of total installed cost (MSP, 
distribution chain markups, sales tax, and installation costs) plus 
operating costs (expenses for energy use, maintenance, and repair). To 
compute the operating costs, DOE discounts future operating costs to 
the time of purchase and sums them over the lifetime of the equipment.
    <bullet> The simple PBP is the estimated amount of time (in years) 
it takes consumers to recover the increased purchase cost (including 
installation) of more-efficient equipment through lower operating 
costs. DOE calculates the simple PBP by dividing the change in purchase 
cost at higher efficiency levels by the change in annual operating cost 
for the year that amended or new standards are assumed to take effect.
    For any given efficiency level, DOE measures the change in LCC 
relative to the LCC in the no-new-standards case, which reflects the 
estimated efficiency distribution of SEMs in the absence of new or 
amended energy conservation standards. In contrast, the simple PBP for 
a given efficiency level is measured relative to the baseline 
equipment. The analysis focuses on the four representative units 
identified in Table IV-7.
    For each considered efficiency level in each equipment class, DOE 
calculated the LCC and PBP for a nationally representative set of 
consumers. As stated previously, DOE developed a sample based on 
distributions of consumers across sectors and applications, as well as 
across efficiency levels. For each sample consumer, DOE determined the 
unit energy consumption and appropriate energy price. By developing a 
representative sample of consumers, the analysis captured the 
variability in energy consumption and energy prices associated with the 
use of SEMs.
    Inputs to the calculation of total installed cost include the cost 
of the equipment--which includes MSPs, retailer markups, and sales 
taxes--and installation costs. Inputs to the calculation of operating 
expenses include annual energy consumption, energy prices and price 
projections, repair and maintenance costs, equipment lifetimes, and 
discount rates. DOE created distributions of values for equipment 
lifetime, discount rates, and sales taxes, with probabilities attached 
to each value, to account for their uncertainty and variability.
    The computer model DOE uses to calculate the LCC and PBP relies on 
a Monte Carlo simulation to incorporate uncertainty and variability 
into the analysis. The Monte Carlo simulations randomly sample input 
values from the probability distributions and consumer samples. The 
model calculated the LCC and PBP for equipment at each efficiency level 
for 10,000 consumers per representative unit per simulation run. The 
analytical results include a distribution of 10,000 data points showing 
the range of LCC savings for a given efficiency level relative to the 
no-new-standards case efficiency distribution. In performing an 
iteration of the Monte Carlo simulation for a given consumer, equipment 
efficiency is chosen based on its probability. If the chosen equipment 
efficiency is greater than or equal to the efficiency of the standard 
level under consideration, the LCC and PBP calculation reveals that a 
consumer is not impacted by the standard level. By accounting for 
consumers who already purchase more-efficient equipment, DOE avoids 
overstating the potential benefits from increasing equipment 
efficiency.
    DOE calculated the LCC and PBP for all consumers as if each were to 
purchase a new motor in the expected year of compliance with amended 
standards. For purposes of its analysis, DOE estimated that any amended 
standards would apply to SEMs manufactured 5 years after the date on 
which the amended standard is published. DOE estimated publication of a 
final rule in the first half of 2023. Therefore, for purposes of its 
analysis, DOE used 2028 as the first full year of compliance.
    Table IV-9 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. DOE updated relevant data 
sources to the most recent information available in preparation of this 
final determination. The subsections that follow provide further 
discussion.

Table IV-9--Summary of Inputs and Methods for the LCC and PBP Analysis *
------------------------------------------------------------------------
            Inputs                           Source/method
------------------------------------------------------------------------
Equipment Cost...............  Derived by multiplying MSPs by
                                distribution channel markups and sales
                                tax, as appropriate.
Installation Costs...........  Assumed no change with efficiency level
                                other than shipping costs.
Annual Energy Use............  Motor input power multiplied by annual
                                operating hours per year. Variability:
                                Based on plant surveys and previous DOE
                                study.
Energy Prices................  Electricity: Used average and marginal
                                prices methodology from (Coughlin and
                                Beraki) and updated data from Edison
                                Electric Institute Typical Bill and
                                Average Rates Reports Winter 2019,
                                Summer 2019.
Energy Price Trends..........  Based on AEO 2020 price projections.
Repair and Maintenance Costs.  Assumed no change with efficiency level.
Equipment Lifetime...........  Estimated using information from March
                                2010 Final Rule and from DOE's Advanced
                                Manufacturing Office.
Discount Rates...............  Residential: Approach involves
                                identifying all possible debt or asset
                                classes that might be used to purchase
                                the considered appliances, or might be
                                affected indirectly. Primary data source
                                was the Federal Reserve Board's Survey
                                of Consumer Finances.
                               Commercial: Calculated as the weighted
                                average cost of capital for entities
                                purchasing small electric motors.
                                Primary data source was Damodaran
                                Online.
Compliance Date..............  2028.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
  in the sections following the table.

1. Equipment Cost
    To calculate consumer equipment costs, DOE multiplied the MSPs 
developed in the engineering analysis by the distribution channel 
markups described in section IV.D (along with sales taxes). DOE used 
different markups for baseline motors and higher-efficiency motors, 
because DOE applies an incremental markup to the increase in MSP 
associated with higher-efficiency equipment. Further, in this final 
determination, DOE assumed the prices of SEMs would remain constant 
over time (no decrease in price).

[[Page 4902]]

2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment. In response to the 
April 2020 NOPD, DOE did not receive any information on SEM consumer 
installation costs and has relied on the same approach to estimate 
installations costs for this final determination. Based on information 
from the March 2010 Final Rule and installation cost data from RS Means 
Electrical Cost Data 2020,\31\ DOE estimated that installation costs do 
not increase with equipment efficiency except in terms of shipping 
costs depending on the weight of the more efficient motor.\32\ To 
arrive at total installed costs, DOE included shipping costs as part of 
the installation costs. These were based on weight data from the 
engineering analysis, which accounted for updated manufacturer catalog 
data collected by DOE.
---------------------------------------------------------------------------

    \31\ RS Means. Electrical Cost Data, 43rd Annual Edition, 2020. 
Rockland, MA. p. 315.
    \32\ For more details see chapter 8 of the 2010 small electric 
motors final rule TSD, at https://www.regulations.gov/document?D=EERE-2007-BT-STD-0007-0036.
---------------------------------------------------------------------------

    See Chapter 8 of the TSD for more information on the installation 
costs for SEMs.
3. Annual Energy Consumption
    For each sampled consumer, DOE determined the energy consumption 
for SEMs in each standards case analyzed using the approach described 
in section IV.E of this final determination.
4. Energy Prices
    In response to the April 2020 NOPD, DOE did not receive any 
comments on electricity prices and relied on the same approach to 
develop national annual marginal and average prices and estimate energy 
prices in future years. DOE updated data sources to the most recent 
information available. For electricity prices, DOE used average and 
marginal electricity prices. As in the April 2020 NOPD, DOE estimated 
these prices using the methodology provided in two Lawrence Berkeley 
National Laboratory reports (Coughlin and Beraki).\33\ In addition, in 
preparation for this final determination, DOE used updated data 
published from the Edison Electric Institute Typical Bills and Average 
Rates reports for summer and winter 2019 to reflect the latest 
electricity price information available. To estimate energy prices in 
future years, DOE multiplied the energy prices by a projection of 
annual change in average price consistent with the projections in the 
Energy Information Administration's (EIA's) Annual Energy Outlook 2020 
(AEO 2020),\34\ which has an end year of 2050. To estimate price trends 
after 2050, DOE used the average annual rate of change in prices from 
2028 to 2050.
---------------------------------------------------------------------------

    \33\ See Coughlin, K. and B. Beraki. Residential Electricity 
Prices: A Review of Data Sources and Estimation Methods. 2018. 
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United 
States). Report No. LBNL-2001169. (Last accessed May 21, 2019.) 
https://ees.lbl.gov/publications/residential-electricity-prices-review. See also Coughlin, K. and B. Beraki. Non-residential 
Electricity Prices: A Review of Data Sources and Estimation Methods. 
2019. Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United 
States). Report No. LBNL-2001203. (Last accessed May 21, 2019.) 
https://ees.lbl.gov/publications/non-residential-electricity-prices.
    \34\ U.S. Energy Information Administration, Office of Energy 
Analysis, U.S. Department of Energy. U.S. Energy Information 
Administration. Annual Energy Outlook 2020 with projections to 2050. 
2020. Washington DC. 20585 (Last accessed August 11, 2020). https://www.eia.gov/outlooks/AEO/pdf/AEO2020.pdf.
---------------------------------------------------------------------------

5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing SEM 
components that have failed; maintenance costs are associated with 
maintaining the operation of the equipment. SEMs are usually not 
repaired. Most small motors are mass produced and are not constructed 
or designed to be repaired because the manufacturing process uses spot 
welding welds and rivets to fasten or secure the frame and assembled 
components, not nuts and bolts--meaning that the SEM cannot be readily 
disassembled and reassembled. In addition, during the rulemaking for 
the March 2010 Final Rule, DOE found no evidence that repair or 
maintenance costs, if any, would increase with higher motor energy 
efficiency.\35\ DOE reviewed more recent motor repair cost data for 
SEMs and found no evidence that maintenance and repair costs increase 
with efficiency for SEMs in scope.\36\ In response to the April 2020 
NOPD, NEMA supported DOE's finding that SEMs are generally not 
repaired. (NEMA, No. 22 at p. 4)
---------------------------------------------------------------------------

    \35\ For more details see chapter 8 of the 2010 small electric 
motors final rule TSD, at https://www.regulations.gov/document?D=EERE-2007-BT-STD-0007-0036.
    \36\ Vaughen's (2013), Vaughen's Motor & Pump Repair Price 
Guide, 2013 Edition. Available at www.vaughens.com.
---------------------------------------------------------------------------

    Accordingly, similar to what was done in the April 2020 NOPD, DOE 
did not account for any repair costs in the LCC calculation.
    See Chapter 8 of the TSD for more information on the repair and 
maintenance costs for SEMs.
6. Motor Lifetime
    To characterize lifetimes in a manner to reflect that this factor 
depends on an SEM's application, DOE used two Weibull 
distributions.\37\ One characterizes the motor lifetime in total 
operating hours (i.e., mechanical lifetime), while the other 
characterizes the lifetime in years of use in the application (e.g., a 
pump).
---------------------------------------------------------------------------

    \37\ The Weibull distribution is one of the most commonly used 
distributions in reliability. It is commonly used to model time to 
fail, time to repair and material strength.
---------------------------------------------------------------------------

    In response to the April 2020 NOPD, NEMA commented in support of 
the lifetime distributions developed by DOE. (NEMA, No. 22 at pp. 4-5) 
Consistent with the approach used in the April 2020 NOPD, DOE used 
mechanical lifetime data from the March 2010 Final Rule analysis and 
from a 2012 report from DOE's Advanced Manufacturing Office \38\ to 
derive an estimated average mechanical lifetime of 30,000 hours for 
CSCR motors and 40,000 hours for polyphase motors. The Weibull 
parameters from the March 2010 Final Rule were used to derive these 
lifetime distributions.\39\ In the course of the LCC analysis, DOE's 
current analysis further combines these two distributions with OEM 
application lifetimes to estimate the distribution of SEM lifetimes. 
DOE determined the mechanical lifetime of each motor in years by 
dividing its mechanical lifetime in hours by its annual hours of 
operation. DOE then compared this mechanical lifetime (in years) with 
the sampled application lifetime (also in years), and assumed that the 
motor would be retired at the younger of these two ages. In the March 
2010 Final Rule, this approach resulted in projected average lifetimes 
of 7 years for single-phase CSCR motors and 9 years for polyphase 
motors. Because of updates made to the annual operating hours (see 
section IV.E.3) and calculation rounding, the updated analysis for this 
final determination yielded average lifetimes of 7.0 years for single-
phase CSCR motors and 8.7 years for polyphase motors.
---------------------------------------------------------------------------

    \38\ U.S. Department of Energy. Advanced Manufacturing Office. 
Motors Systems Tip Sheet #3. Energy Tips: Motor Systems. Extending 
the Operating Life of Your Motor. 2012. https://www.energy.gov/sites/prod/files/2014/04/f15/extend_motor_operlife_motor_systemts3.pdf.
    \39\ For more details see chapter 8 of the 2010 small electric 
motors final rule TSD, at https://www.regulations.gov/document?D=EERE-2007-BT-STD-0007-0036.
---------------------------------------------------------------------------

    See Chapter 8 of the TSD for more information on the lifetime of 
SEMs.
7. Discount Rates
    In calculating LCC, DOE applies discount rates appropriate to 
commercial, industrial, and residential consumers to estimate the 
present value

[[Page 4903]]

of future operating costs. DOE estimated a distribution of discount 
rates for SEMs based on the cost of capital of publicly traded firms in 
the sectors that purchase SEMs.
    As part of its analysis, DOE also applies weighted average discount 
rates calculated from consumer debt and asset data, rather than 
marginal or implicit discount rates.\40\ DOE notes that the LCC does 
not analyze the equipment purchase decision, so the implicit discount 
rate is not relevant in this model. The LCC estimates net present value 
over the lifetime of the equipment, so the appropriate discount rate 
will reflect the general opportunity cost of household funds, taking 
this time scale into account. Given the long time horizon modeled in 
the LCC, the application of a marginal interest rate associated with an 
initial source of funds is inaccurate. Regardless of the method of 
purchase, consumers are expected to continue to rebalance their debt 
and asset holdings over the LCC analysis period, based on the 
restrictions consumers face in their debt payment requirements and the 
relative size of the interest rates available on debts and assets. DOE 
estimates the aggregate impact of this rebalancing using the historical 
distribution of debts and assets.
---------------------------------------------------------------------------

    \40\ The implicit discount rate is inferred from a consumer 
purchase decision between two otherwise identical goods with 
different first cost and operating cost. It is the interest rate 
that equates the increment of first cost to the difference in net 
present value of lifetime operating cost, incorporating the 
influence of several factors: Transaction costs; risk premiums and 
response to uncertainty; time preferences; interest rates at which a 
consumer is able to borrow or lend.
---------------------------------------------------------------------------

    To establish residential discount rates for the LCC analysis, DOE 
identified all relevant household debt or asset classes in order to 
approximate a consumer's opportunity cost of funds related to appliance 
energy cost savings. It estimated the average percentage shares of the 
various types of debt and equity by household income group using data 
from the Federal Reserve Board's Survey of Consumer Finances \41\ 
(``SCF'') for 1995, 1998, 2001, 2004, 2007, 2010, 2013, and 2016. Using 
the SCF and other sources, DOE developed a distribution of rates for 
each type of debt and asset by income group to represent the rates that 
may apply in the year in which amended standards would take effect.
---------------------------------------------------------------------------

    \41\ Board of Governors of the Federal Reserve System. Survey of 
Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 2013, and 
2016. Available at: http://www.federalreserve.gov/econresdata/scf/scfindex.htm.
---------------------------------------------------------------------------

    For commercial and industrial consumers, DOE used the cost of 
capital to estimate the present value of cash flows to be derived from 
a typical company project or investment. Most companies use both debt 
and equity capital to fund investments, so the cost of capital is the 
weighted-average cost to the firm of equity and debt financing. This 
corporate finance approach is referred to as the weighted-average cost 
of capital. DOE used currently available economic data in developing 
discount rates. In response to the April 2020 NOPD, DOE did not receive 
any comments on discount rates. DOE used the same approach for 
developing discount rates as in the April 2020 NOPD for this final 
determination. DOE updated data sources to the most recent information 
available. See chapter 8 of the TSD for details on the development of 
end-user discount rates.
8. Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of equipment efficiencies in the ``no-new-
standards'' case (i.e., the case without amended or new energy 
conservation standards) in the compliance year. In its analysis for the 
March 2010 Final Rule, DOE developed no-new standards case efficiency 
distributions based on the distributions of then currently available 
models for which SEM efficiency is included in catalog listings. In 
preparation for the April 2020 NOPD, DOE collected updated catalog data 
and analyzed the distribution of SEMs in the manufacturer catalog data 
for CSCR and polyphase SEMs.\42\ DOE projected that these efficiency 
distributions would remain constant throughout 2028. In response to the 
April 2020 NOPD, DOE did not receive any comments related to efficiency 
distributions and efficiency trends. Accordingly, DOE retained the same 
efficiency distributions used in the April 2020 NOPD in preparing this 
final determination. See chapter 8 of the TSD for the estimated 
efficiency distributions.
---------------------------------------------------------------------------

    \42\ DOE relied on 140 models of CSCR small electric motors and 
229 models of polyphase small electric motors identified in the 
manufacturer catalog data. More details on the distributions of 
currently available models for which motor catalog list efficiency 
is available in Chapter 8 of the TSD.
---------------------------------------------------------------------------

9. Payback Period Analysis
    The PBP is the amount of time it takes the consumer to recover the 
additional installed cost of more-efficient equipment, compared to 
baseline equipment, through energy cost savings. PBPs are expressed in 
years. PBPs that exceed the life of the equipment mean that the 
increased total installed cost is not recovered in reduced operating 
expenses.
    The inputs to the simple PBP calculation for each efficiency level 
are the change in total installed cost of the equipment and the change 
in the first-year annual operating expenditures relative to the 
baseline. The simple PBP calculation uses the same inputs as the LCC 
analysis, except that discount rates are not needed.

V. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for SEMs 
examined by DOE. It addresses the ELs examined by DOE and the projected 
impacts of each of these levels. Additional details regarding DOE's 
analyses are contained in the NOPD TSD supporting this document.

A. Energy Savings

    For each standards case considered, DOE estimated the per unit 
lifetime energy savings for SEMs purchased in the expected compliance 
year of any potential standards. The per unit energy savings were used 
in the calculation of the LCC and PBP values. DOE did not separately 
evaluate the significance of the potential energy conservation under 
the considered amended standards because it has determined that the 
potential standards would not be cost-effective as defined in EPCA.\43\ 
(42 U.S.C. 6316(a); 42 U.S.C. 6295(m)(1)(A); 42 U.S.C. 6295(n)(2))
---------------------------------------------------------------------------

    \43\ The March 2010 Final Rule estimated the national energy 
savings achieved by the current energy conservation standards to be 
2.2 quads of primary energy savings (i.e., 0.29 quad at TSL 4b for 
polyphase SEMs and 1.91 quad at TSL 7 for single phase SEMs). The 
March 2010 Final Rule also estimated that the TSL resulting in the 
maximum national energy savings would provide a total of 2.7 quads 
of primary energy savings (i.e., 0.37 quad at TSL 7 for polyphase 
SEMs and 2.33 quad at TSL 8 for single phase SEMs). 75 FR 10874, 
10916 (March 9, 2010) Although DOE did not separately evaluate the 
significance of the potential energy conservation under the 
considered amended standards, this previous analysis indicates an 
upper limit of 0.5 quad of primary energy savings (2.7 - 2.2 = 0.5) 
which corresponds to 0.2 quad site national energy savings and is 
below the 0.3 quad threshold for determining whether energy savings 
would be significant.
---------------------------------------------------------------------------

B. Cost Effectiveness

    In general, higher-efficiency equipment affects consumers in two 
ways: (1) Purchase price increases and (2) annual operating cost 
decreases. Inputs used for calculating the LCC and PBP include total 
installed costs (i.e., equipment price plus installation costs),

[[Page 4904]]

and operating costs (i.e., annual energy and water use, energy and 
water prices, energy and water price trends, repair costs, and 
maintenance costs). The LCC calculation also uses equipment lifetime 
and a discount rate. Chapter 8 of the final determination TSD provides 
detailed information on the LCC and PBP analyses.
    Table V-1 through Table V-7 show the LCC and PBP results for the 
ELs considered for each equipment class. These results were updated 
since the April 2020 NOPD to reflect updates of relevant data sources 
to the most recent information available. Results for each 
representative unit are presented by two tables: In the first of each 
pair of tables, the simple payback is measured relative to the baseline 
equipment. In the second table, the impacts are measured relative to 
the efficiency distribution in the no-new-standards case in the 
expected compliance year for the potential standards considered. 
Because some consumers purchase equipment with higher efficiency in the 
no-new-standards case, the average savings are greater than the 
difference between the average LCC of the baseline equipment and the 
average LCC at each EL. The savings refer only to consumers who are 
affected by a standard at a given EL. Those who already purchase SEMs 
with an efficiency at or above a given EL are not affected. Consumers 
for whom the LCC-increases at a given EL experience a net cost.

                Table V-1--Average LCC and PBP Results by Efficiency Level for Representative Unit 1: Single-Phase, CSCR, 4-Pole, 0.75 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Average costs 2019$                           Simple          Average
                                                         ----------------------------------------------------------------  payback years  lifetime years
                    Efficiency level                           Total       First year's      Lifetime                          total       first year's
                                                          installed cost  operating cost  operating cost        LCC       installed cost  operating cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................................           488.1           156.8           631.5         1,119.5  ..............            6.97
1.......................................................           504.4           154.4           621.8         1,126.2             6.8            6.97
2.......................................................           525.7           151.6           610.6         1,136.3             7.3            6.97
3.......................................................           567.1           150.3           605.0         1,172.0            12.0            6.97
4.......................................................           594.7           145.8           586.8         1,181.5             9.6            6.97
5.......................................................         1,411.4           143.2           576.6         1,988.0            67.9            6.97
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


 Table V-2--LCC Savings Relative to the No-New Standards Case Efficiency Distribution for Representative Unit 1:
                                       Single-Phase, CSCR, 4-Pole, 0.75 hp
----------------------------------------------------------------------------------------------------------------
                                                                        Life-cycle cost savings
                                                     -----------------------------------------------------------
                                                        Percent of customers that         Average savings *
                  Efficiency level                             experience          -----------------------------
                                                     ------------------------------
                                                           Net cost (percent)                   2019$
----------------------------------------------------------------------------------------------------------------
1...................................................                          81.4                          -6.4
2...................................................                          83.3                         -16.2
3...................................................                          91.7                         -51.4
4...................................................                          88.8                         -59.9
5...................................................                         100.0                        -855.0
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                      Table V-3--Average LCC and PBP Results by Efficiency Level for Representative Unit 2: Polyphase, 4-Pole, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Average costs 2019$                                           Average
                                                         ---------------------------------------------------------------- Simple payback  lifetime years
                    Efficiency level                           Total       First year's      Lifetime                       years total    first year's
                                                          installed cost  operating cost  operating cost        LCC       installed cost  operating cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................................           451.0           193.1           969.5         1,420.5  ..............            8.73
1.......................................................           520.7           189.0           948.8         1,469.5            16.9            8.73
2.......................................................           580.0           186.5           936.4         1,516.3            19.5            8.73
3.......................................................         1,395.5           183.1           919.3         2,314.8            94.5            8.73
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


[[Page 4905]]


 Table V-4--LCC Savings Relative to the No-New Standards Case Efficiency Distribution for Representative Unit 2:
                                             Polyphase, 4-Pole, 1 hp
----------------------------------------------------------------------------------------------------------------
                                                                        Life-cycle cost savings
                                                     -----------------------------------------------------------
                                                        Percent of customers that         Average savings *
                  Efficiency level                             experience          -----------------------------
                                                     ------------------------------
                                                           Net cost (percent)                   2019$
----------------------------------------------------------------------------------------------------------------
1...................................................                          89.5                         -48.1
2...................................................                          99.1                         -92.3
3...................................................                         100.0                        -878.7
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                 Table V-5--Average LCC and PBP Results by Efficiency Level for Representative Unit 3: Single-Phase, CSCR, 4-Pole, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Average costs 2019$                           Simple          Average
                                                         ----------------------------------------------------------------  payback years  lifetime years
                    Efficiency level                           Total       First year's      Lifetime                          total       first year's
                                                          installed cost  operating cost  operating cost        LCC       installed cost  operating cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................................           554.8           208.4           831.5         1,386.4  ..............            6.95
1.......................................................           573.5           205.3           819.2         1,392.6             6.0            6.95
2.......................................................           597.8           201.9           805.4         1,403.2             6.6            6.95
3.......................................................           643.6           200.1           798.3         1,441.9            10.7            6.95
4.......................................................           675.1           194.4           775.4         1,450.5             8.6            6.95
5.......................................................         1,581.3           191.0           762.1         2,343.4            59.2            6.95
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


 Table V-6--LCC Savings Relative to the No-New Standards Case Efficiency Distribution for Representative Unit 3:
                                        Single-Phase, CSCR, 4-Pole, 1 hp
----------------------------------------------------------------------------------------------------------------
                                                                        Life-cycle cost savings
                                                     -----------------------------------------------------------
                                                        Percent of customers that         Average savings *
                  Efficiency level                             experience          -----------------------------
                                                     ------------------------------
                                                           Net cost (percent)                   2019$
----------------------------------------------------------------------------------------------------------------
1...................................................                          76.9                          -6.0
2...................................................                          79.7                         -16.2
3...................................................                          88.5                         -54.3
4...................................................                          85.6                         -61.8
5...................................................                         100.0                        -942.1
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                     Table V-7--Average LCC and PBP Results by Efficiency Level for Representative Unit 4: Polyphase, 4-Pole, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Average costs 2019$                           Simple          Average
                                                         ----------------------------------------------------------------  payback years  lifetime years
                    Efficiency level                           Total       First year's      Lifetime                          total       first year's
                                                          installed cost  operating cost  operating cost        LCC       installed cost  operating cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................................           375.7           106.6           535.2           910.9  ..............            8.70
1.......................................................           433.1           103.5           519.2           952.2            18.0            8.70
2.......................................................           482.6           101.5           509.3           991.9            20.8            8.70
3.......................................................         1,148.6            98.9           496.1         1,644.7            99.6            8.70
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


[[Page 4906]]


 Table V-8--LCC Savings Relative to the No-New Standards Case Efficiency Distribution for Representative Unit 4:
                                            Polyphase, 4-Pole, 0.5 hp
----------------------------------------------------------------------------------------------------------------
                                                                        Life-cycle cost savings
                                                     -----------------------------------------------------------
                                                        Percent of customers that         Average savings *
                  Efficiency level                             experience          -----------------------------
                                                     ------------------------------
                                                           Net cost (percent)                   2019$
----------------------------------------------------------------------------------------------------------------
1...................................................                          91.7                         -40.5
2...................................................                          99.6                         -77.9
3...................................................                         100.0                        -721.4
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.

C. Final Determination

    For this final determination, DOE analyzed whether amended 
standards for SEMs would be technological feasible and cost effective. 
(42 U.S.C. 6316(a); 42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 6295(n)(2)) 
EPCA mandates that DOE consider whether amended energy conservation 
standards for SEMs would be technologically feasible. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 6295(n)(2)(B)) DOE has 
determined that there are technology options that would improve the 
efficiency of SEMs. These technology options are being used in 
commercially available SEMs and therefore are technologically feasible. 
(See section IV.B for further information.) Hence, DOE has determined 
that amended energy conservation standards for SEMs are technologically 
feasible.
    EPCA requires DOE to consider whether energy conservation standards 
for SEMs would be cost effective through an evaluation of the savings 
in operating costs throughout the estimated average life of the covered 
product/equipment compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered products/
equipment which are/is likely to result from the imposition of an 
amended standard. (42 U.S.C. 63136(a); 42 U.S.C. 6295(m)(1)(A), 42 
U.S.C. 6295(n)(2)(C), and 42 U.S.C. 6295(o)(2)(B)(i)(II)) As presented 
in the prior section, the average customer purchasing a representative 
SEM would experience an increase in LCC at each evaluated standards 
case as compared to the no new standards case. The simple PBP for the 
average of a representative SEM customer at each EL is projected to be 
generally longer than the mean lifetime of the equipment. Based on the 
above considerations, DOE has determined that more stringent amended 
energy conservation standards for SEMs cannot satisfy the relevant 
statutory requirements because such standards would not be cost 
effective as required under EPCA. (See 42 U.S.C. 6295(n)(2); 42 U.S.C. 
6295(o)(2)(B)(II); 42 U.S.C. 6316(a))
    Having determined that amended energy conservation standards for 
SEMs would not be cost-effective, DOE did not separately evaluate the 
significance of the amount of energy conservation under the considered 
amended standards because it has determined that the potential 
standards would not be cost-effective (and by extension, would not be 
economically justified) as required under EPCA. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(m)(1)(A); 42 U.S.C. 6295(n)(2); 42 U.S.C. 6295(o)(2)(B))

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866

    This final determination has been determined to be not significant 
for purposes of Executive Order (``E.O.'') 12866, ``Regulatory Planning 
and Review.'' 58 FR 51735 (Oct. 4, 1993). As a result, the Office of 
Management and Budget (``OMB'') did not review this final 
determination.

B. Review Under Executive Orders 13771 and 13777

    On January 30, 2017, the President issued E.O. 13771, ``Reducing 
Regulation and Controlling Regulatory Costs.'' E.O. 13771 stated the 
policy of the executive branch is to be prudent and financially 
responsible in the expenditure of funds, from both public and private 
sources. E.O. 13771 stated it is essential to manage the costs 
associated with the governmental imposition of private expenditures 
required to comply with Federal regulations.
    Additionally, on February 24, 2017, the President issued E.O. 
13777, ``Enforcing the Regulatory Reform Agenda.'' See 82 FR 12285 
(March 1, 2017). E.O. 13777 required the head of each agency to 
designate an agency official as its Regulatory Reform Officer 
(``RRO''). Each RRO oversees the implementation of regulatory reform 
initiatives and policies to ensure that agencies effectively carry out 
regulatory reforms, consistent with applicable law. Further, E.O. 13777 
requires the establishment of a regulatory task force at each agency. 
The regulatory task force is required to make recommendations to the 
agency head regarding the repeal, replacement, or modification of 
existing regulations, consistent with applicable law. At a minimum, 
each regulatory reform task force must attempt to identify regulations 
that:
    (1) Eliminate jobs, or inhibit job creation;
    (2) Are outdated, unnecessary, or ineffective;
    (3) Impose costs that exceed benefits;
    (4) Create a serious inconsistency or otherwise interfere with 
regulatory reform initiatives and policies;
    (5) Are inconsistent with the requirements of the Information 
Quality Act, or the guidance issued pursuant to that Act, particularly 
those regulations that rely in whole or in part on data, information, 
or methods that are not publicly available or that are insufficiently 
transparent to meet the standard for reproducibility; or
    (6) Derive from or implement Executive Orders or other Presidential 
directives that have been subsequently rescinded or substantially 
modified.
    DOE concludes that this final determination is consistent with the 
directives set forth in these executive orders. As discussed in this 
document, DOE is not amending the current energy conservation standards 
for SEMs and will not have any cost impact on manufacturers of SEMs. 
Therefore, this determination is an E.O. 13771 Other Action.

C. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility

[[Page 4907]]

analysis (``IRFA'') and a final regulatory flexibility analysis 
(``FRFA'') for any rule that by law must be proposed for public 
comment, unless the agency certifies that the rule, if promulgated, 
will not have a significant economic impact on a substantial number of 
small entities. As required by Executive Order 13272, ``Proper 
Consideration of Small Entities in Agency Rulemaking,'' 67 FR 53461 
(Aug. 16, 2002), DOE published procedures and policies on February 19, 
2003, to ensure that the potential impacts of its rules on small 
entities are properly considered during the rulemaking process. 68 FR 
7990. DOE has made its procedures and policies available on the Office 
of the General Counsel's website (http://energy.gov/gc/office-general-counsel).
    DOE reviewed this final determination pursuant to the Regulatory 
Flexibility Act and the procedures and policies discussed above. DOE 
has concluded that, based on the data and available information it has 
been able to review, amended energy conservation standards for SEMs 
would not be cost-effective. Therefore, DOE is not amending the current 
energy conservation standards for SEMs. On the basis of the foregoing, 
DOE certifies that this final determination will not have a significant 
economic impact on a substantial number of small entities. Accordingly, 
DOE has not prepared an FRFA for this final determination. DOE has 
transmitted its certification and supporting statement of factual basis 
to the Chief Counsel for Advocacy of the Small Business Administration 
for review under 5 U.S.C. 605(b).

D. Review Under the Paperwork Reduction Act

    Manufacturers of SEMs must certify to DOE that their equipment 
comply with any applicable energy conservation standards. In certifying 
compliance, manufacturers must test their equipment according to the 
DOE test procedures, including any amendments adopted for those test 
procedures. DOE has established regulations for the certification and 
recordkeeping requirements for all covered consumer products and 
commercial equipment, including SEMs. 76 FR 12422 (March 7, 2011); 80 
FR 5099 (Jan. 30, 2015). The collection-of-information requirement for 
the certification and recordkeeping is subject to review and approval 
by OMB under the Paperwork Reduction Act (``PRA''). This requirement 
has been approved by OMB under OMB control number 1910-1400. Public 
reporting burden for the certification is estimated to average 30 hours 
per response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number. This final determination, which 
concludes that amended energy conservation standards for SEMs would not 
be cost effective (and by extension, not economically justified) as 
required under the relevant statute, imposes no new information or 
recordkeeping requirements. Accordingly, clearance from the OMB is not 
required under the Paperwork Reduction Act. (44 U.S.C. 3501 et seq.)

E. Review Under the National Environmental Policy Act of 1969

    DOE analyzed this final determination in accordance with the 
National Environmental Policy Act (``NEPA'') and DOE's NEPA 
implementing regulations (10 CFR part 1021). DOE's regulations include 
a categorical exclusion for actions which are interpretations or 
rulings with respect to existing regulations. 10 CFR part 1021, subpart 
D, Appendix A4. DOE has determined that this action qualifies for 
categorical exclusion A4 because it is an interpretation or ruling in 
regards to an existing regulation and otherwise meets the requirements 
for application of a categorical exclusion. See 10 CFR 1021.410.

F. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), 
imposes certain requirements on Federal agencies formulating and 
implementing policies or regulations that preempt State law or that 
have Federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. As this final 
determination does not amend the standards for SEMs, there is no impact 
on the policymaking discretion of the States. Therefore, no action is 
required by Executive Order 13132.

G. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' imposes on Federal agencies the general duty 
to adhere to the following requirements: (1) Eliminate drafting errors 
and ambiguity, (2) write regulations to minimize litigation, (3) 
provide a clear legal standard for affected conduct rather than a 
general standard, and (4) promote simplification and burden reduction. 
61 FR 4729 (Feb. 7, 1996). Regarding the review required by section 
3(a), section 3(b) of Executive Order 12988 specifically requires that 
Executive agencies make every reasonable effort to ensure that the 
regulation (1) clearly specifies the preemptive effect, if any, (2) 
clearly specifies any effect on existing Federal law or regulation, (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction, (4) specifies the retroactive 
effect, if any, (5) adequately defines key terms, and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
Executive Order 12988 requires Executive agencies to review regulations 
in light of applicable standards in section 3(a) and section 3(b) to 
determine whether they are met or it is unreasonable to meet one or 
more of them. DOE has completed the required review and determined 
that, to the extent permitted by law, this final determination meets 
the relevant standards of Executive Order 12988.

H. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'') 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For a regulatory action likely to result in a rule that may cause the 
expenditure by State, local, and Tribal governments, in the aggregate, 
or by the private sector of $100 million or more in any one year 
(adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The

[[Page 4908]]

UMRA also requires a Federal agency to develop an effective process to 
permit timely input by elected officers of State, local, and Tribal 
governments on a ``significant intergovernmental mandate,'' and 
requires an agency plan for giving notice and opportunity for timely 
input to potentially affected small governments before establishing any 
requirements that might significantly or uniquely affect them. On March 
18, 1997, DOE published a statement of policy on its process for 
intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy 
statement is also available at http://energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf. This final determination does not contain 
a Federal intergovernmental mandate, nor is it expected to require 
expenditures of $100 million or more in any one year by State, local, 
and Tribal governments, in the aggregate, or by the private sector. As 
a result, the analytical requirements of UMRA do not apply.

I. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This final determination will not have any impact on the autonomy or 
integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

J. Review Under Executive Order 12630

    Pursuant to Executive Order 12630, ``Governmental Actions and 
Interference with Constitutionally Protected Property Rights,'' 53 FR 
8859 (March 18, 1988), DOE has determined that this final determination 
will not result in any takings that might require compensation under 
the Fifth Amendment to the U.S. Constitution.

K. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to 
review most disseminations of information to the public under 
information quality guidelines established by each agency pursuant to 
general guidelines issued by OMB. OMB's guidelines were published at 67 
FR 8452 (Feb. 22, 2002). Pursuant to OMB Memorandum M-19-15, Improving 
Implementation of the Information Quality Act (April 24, 2019), DOE 
published updated guidelines which are available at https://www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has 
reviewed this final determination under the OMB and DOE guidelines and 
has concluded that it is consistent with applicable policies in those 
guidelines.

L. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to the 
Office of Information and Regulatory Affairs (``OIRA'') at OMB, a 
Statement of Energy Effects for any significant energy action. A 
``significant energy action'' is defined as any action by an agency 
that promulgates or is expected to lead to promulgation of a final 
rule, and that (1) is a significant regulatory action under Executive 
Order 12866, or any successor order; and (2) is likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any significant energy action, the 
agency must give a detailed statement of any adverse effects on energy 
supply, distribution, or use should the proposal be implemented, and of 
reasonable alternatives to the action and their expected benefits on 
energy supply, distribution, and use.
    Because this final determination does not amend the current 
standards for SEMs, it is not a significant energy action, nor has it 
been designated as such by the Administrator at OIRA. Accordingly, DOE 
has not prepared a Statement of Energy Effects.

M. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (``OSTP''), issued its Final Information 
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan. 
14, 2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions.'' 70 FR 2667.
    In response to OMB's Bulletin, DOE conducted formal in-progress 
peer reviews of the energy conservation standards development process 
and analyses and has prepared a Peer Review Report pertaining to the 
energy conservation standards rulemaking analyses. Generation of this 
report involved a rigorous, formal, and documented evaluation using 
objective criteria and qualified and independent reviewers to make a 
judgment as to the technical/scientific/business merit, the actual or 
anticipated results, and the productivity and management effectiveness 
of programs and/or projects. The ``Energy Conservation Standards 
Rulemaking Peer Review Report'' dated February 2007 has been 
disseminated and is available at: http://www.energy.gov/eere/buildings/peer-review.

VII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this final 
determination.

Signing Authority

    This document of the Department of Energy was signed on January 5, 
2021, by Daniel R Simmons, Assistant Secretary for Energy Efficiency 
and Renewable Energy, pursuant to delegated authority from the 
Secretary of Energy. That document with the original signature and date 
is maintained by DOE. For administrative purposes only, and in 
compliance with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on January 6, 2021.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2021-00336 Filed 1-15-21; 8:45 am]
BILLING CODE 6450-01-P


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