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CHAPTER 11. LIFE-CYCLE COST SUBGROUP ANALYSIS

TABLE OF CONTENTS

11.1 INTRODUCTION ......................................................................................................... 11-1

11.2 ANALYSIS APPROACH FOR MUNICIPAL UTILITIES AND RURAL 

ELECTRIC COOPERATIVES ..................................................................................... 11-1

11.2.1 Adjustment Factors for Analysis Inputs ........................................................................ 11-1

11.2.2 How the Department Estimated the Adjustment Factors............................................... 11-2

11.3 ANALYSIS APPROACH FOR PURCHASERS OF VAULT INTALLED 

TRANSFORMERS........................................................................................................ 11-2

11.4 LIFE-CYCLE COST SUBGROUP RESULTS............................................................. 11-3

11.4.1 Municipal Electric Utilities Subgroup Results .............................................................. 11-3

11.4.2 Rural Cooperatives Subgroup Results........................................................................... 11-5

11.4.3 Vault Installation Results............................................................................................... 11-6

11.4.4 Space-Constrained Installation Results.......................................................................... 11-7

11.5 PAYBACK PERIOD RESULTS................................................................................... 11-8

11.5.1 Municipal Utilities Subgroup Results............................................................................ 11-8

11.5.2 Rural Cooperatives Subgroup Results......................................................................... 11-10

11.5.3 Vault Installation Results............................................................................................. 11-12

11.5.4 Space-Constrained Installation Results........................................................................ 11-12

LIST OF TABLES

Table 11.2.1 Consumer Subgroup Economic Adjustment Factors......................................... 11-2

Table 11.4.1 Design Line 1 Municipal Utilities Subgroup Life-Cycle Cost Results.............. 11-3

Table 11.4.2 Design Line 2 Municipal Utilities Subgroup Life-Cycle Cost Results.............. 11-3

Table 11.4.3 Design Line 3 Municipal Utilities Subgroup Life-Cycle Cost Results.............. 11-4

Table 11.4.4 Design Line 4 Municipal Utilities Subgroup Life-Cycle Cost Results.............. 11-4

Table 11.4.5 Design Line 5 Municipal Utilities Subgroup Life-Cycle Cost Results.............. 11-4

Table 11.4.6 Design Line 1 Rural Cooperatives Subgroup Life-Cycle Cost Results............. 11-5

Table 11.4.7 Design Line 2 Rural Cooperatives Subgroup Life-Cycle Cost Results............. 11-5

Table 11.4.8 Design Line 3 Rural Cooperatives Subgroup Life-Cycle Cost Results............. 11-5

Table 11.4.9 Design Line 4 Rural Cooperatives Subgroup Life-Cycle Cost Results............. 11-6

Table 11.4.10 Design Line 5 Rural Cooperatives Subgroup Life-Cycle Cost Results............. 11-6

Table 11.4.11 Design Line 4, Medium Vault Modification Costs Life-Cycle Cost Results.... 11-6

Table 11.4.12 Design Line 5, Medium Vault Modification Costs Life-Cycle Cost Results.... 11-7

Table 11.4.13 Design Line 4, No Vault Modification Life-Cycle Cost Results....................... 11-7

Table 11.4.14 Design Line 5, No Vault Modification Life-Cycle Cost Results....................... 11-8

Table 11.5.1 Design Line 1 Municipal Utilities Subgroup Payback-Period Results.............. 11-9

Table 11.5.2 Design Line 2 Municipal Utilities Subgroup Payback-Period Results.............. 11-9

Table 11.5.3 Design Line 3 Municipal Utilities Subgroup Payback-Period Results.............. 11-9

Table 11.5.4 Design Line 4 Municipal Utilities Subgroup Payback-Period Results.............. 11-9
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Table 11.5.5 Design Line 5 Municipal Utilities Subgroup Payback-Period Results............ 11-10

Table 11.5.6 Design Line 1 Rural Cooperatives Subgroup Payback-Period Results........... 11-10

Table 11.5.7 Design Line 2 Rural Cooperatives Subgroup Payback-Period Results........... 11-11

Table 11.5.8 Design Line 3 Rural Cooperatives Subgroup Payback-Period Results........... 11-11

Table 11.5.9 Design Line 4 Rural Cooperatives Subgroup Payback-Period Results........... 11-11

Table 11.5.10 Design Line 5 Rural Cooperatives Subgroup Payback-Period Results........... 11-11

Table 11.5.11 Design Line 4, Medium Vault Modification Costs Payback-Period Results... 11-12

Table 11.5.12 Design Line 5, Medium Vault Modification Costs Payback-Period Results... 11-12

Table 11.5.13 Design Line 4, No Vault Modification Payback-Period Results..................... 11-13

Table 11.5.14 Design Line 5, No Vault Modification Payback-Period Results..................... 11-13

LIST OF FIGURE

No table of figures entries found.
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CHAPTER 11. LIFE-CYCLE COST SUBGROUP ANALYSIS

11.1 INTRODUCTION

The life-cycle cost (LCC) subgroup analysis evaluates impacts on any identifiable groups 

of customers who may, because of their particular socio-economic characteristics, be 

disproportionately affected by any national energy-efficiency standard level. This chapter of the 

TSD describes how the Department performed its life-cycle cost consumer subgroup analysis for 

the distribution transformer energy-efficiency standard rulemaking. 

The Department conducted this evaluation for the Notice of Proposed Rulemaking 

(NOPR), in part, by analyzing the LCC and payback periods for those customers that fall into 

identified subgroups. For this rulemaking, the Department defined consumer subgroups in terms 

of retail utility ownership type. The specific consumer subgroups that the Department chose to 

examine are rural electric cooperative, municipal utilities.

The Department also identified examined the impact on utilities that install distribution 

transformers in vaults or other space-constrained sites.

11.2 ANALYSIS APPROACH FOR MUNICIPAL UTILITIES AND RURAL 

ELECTRIC COOPERATIVES

As part of the regular life-cycle cost analysis, the Department built spreadsheet analysis 

tools that provide a consumer economic analysis for a nationally representative sample of 

utilities. The Department developed a simplified approach to perform the consumer subgroup 

calculations. This approach adjusts the national data distributions for key analysis inputs by an 

appropriate scaling factor to produce an approximation of the input data for the consumer 

subgroup analysis. To estimate the economic impacts for the consumer subgroups, the 

Department then re-calculates the LCC with the adjusted input distributions. The subgroups 

examined are both subsets of the entire national electric utility sample and hence the analysis is 

limited to liquid-immersed distribution transformers, represented by design lines 1-5. The drytype distribution transformers, represented by design lines 6-13, were not included in the LCC 

subgroup analysis since electric utilities use few, if any, dry-type transformers. 

11.2.1 Adjustment Factors for Analysis Inputs

The Department selected two key data inputs that it adjusted for the consumer subgroup 

analysis:

1. Transformer loading

2. Transformer selection A and B factors
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The Department implemented these adjustment factors with an “LCC Subgroup” pulldown menu included as part of its LCC spreadsheet tool. Table 11.2.1 shows the adjustment 

factors for the national sample and the subgroups.

Table 11.2.1 Consumer Subgroup Economic Adjustment Factors

Subgroup Transformer Loading A and B Factors

National sample 1.00 1.00

Rural cooperatives 0.75 0.75

Municipal utilities 1.20 1.00

11.2.2 How the Department Estimated the Adjustment Factors

This section describes how the Department estimated the four adjustment factors for each 

of the two selected consumer subgroups.

For transformer loading estimates, the data available to the Department consisted of 

rough loading estimates mentioned in stakeholder comments. The Department’s estimate of 

average root mean square (RMS) loading for a 50 kVA pad-mounted transformer for the national 

sample is approximately 35 percent. Stakeholders commented that rural cooperative 

transformers tend to be loaded less because of oversizing for voltage flicker and lack of load 

diversity, while municipal utility transformers tend to have more diversity and subsequently 

higher loading. The typical rural cooperative transformer will serve a single customer while the 

typical urban transformer will serve multiple customers. Thus the Department estimated an 

adjustment factor of 0.75 for rural cooperatives, and 1.20 for municipal utilities, which results in 

average RMS loading estimates of 26 percent and 42 percent for 50 kVA transformers for rural 

cooperatives and municipal utilities, respectively.

For customer evaluation A and B factors, for the 2007 final rule the Department was 

given factors for rural cooperatives by the National Rural Electric Cooperative Association 

(NRECA) in stakeholder comments and compiled data from public sources for both municipal 

utilities and other entities. The Department found the evaluation parameters for rural 

cooperatives to be lower than the national sample average and the parameters for municipal 

utilities to be slightly higher as the national sample average for the available data. 

11.3 ANALYSIS APPROACH FOR PURCHASERS OF VAULT INTALLED 

TRANSFORMERS

DOE calculated the volumes of those transformers selected by the LCC spreadsheets, as a 

function of dEL, for the two design lines (DLs) for which transformer vault constraints are most 

likely to be an issue: DL4 and DL5. DOE examined the impacts of increasing transformer 

volume with regard to costs for vault enlargement. DOE assumed that if the volume of a 

transformer in a standard case is larger than the volume of the unit in the base case, a vault 

modification would be warranted. DOE also considered the instances where it would not be 
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practical to modify the existing vault to overcome the space-constrained issues through vault 

modification and that a selected transformer must be of equal or lower volume then the initial 

baseline unit.

To estimate the cost of vault modification, DOE compared the difference in volume 

between the unit selected in the base case against the unit selected in the standard case, and 

applied fixed and variable costs. In the 2007 notice of data availability2, DOE estimated the fixed 

cost as $1,740 per transformer and the variable cost as $26 per transformer cubic foot, in this

TSD, these costs were adjusted to 2010$ using the chained price index for non-residential 

construction for power and communications to $1854 per transformer and $28 per transformer 

cubic foot. DOE considered instances where it may be extremely difficult to modify existing 

vaults by adding a Very High Vault Replacement Cost option to the LCC spreadsheet. Under this 

option, the fixed cost is $30,000 and the variable cost is $733 per transformer cubic foot. 

11.4 LIFE-CYCLE COST SUBGROUP RESULTS

This section presents the results of the LCC subgroups analysis for municipal utilities and 

rural electric cooperatives. The section presents the results for each subgroup and each design 

line in the form of tables that report the efficiency level, the mean LCC savings, and the fraction 

of transformers that have net savings, no impact, and net LCC cost (i.e., negative savings).

11.4.1 Municipal Electric Utilities Subgroup Results

Table 11.4.1 Design Line 1 Municipal Utilities Subgroup Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.16% 99.22% 99.25% 99.31% 99.42% 99.50% 99.50%

Transformers with Net LCC Cost 

(%) 30.25% 0.95% 0.88% 3.27% 8.81% 30.00% 30.00%

Transformers with No Change in 

LCC (%) 17.94% 15.54% 15.54% 11.66% 8.44% 0.08% 0.08%

Transformers with Net LCC 

Benefit (%) 51.81% 83.51% 83.58% 85.07% 82.75% 69.92% 69.92%

Mean LCC Savings ($) 217 845 846 905 963 683 683

Median LCC Savings ($) 21 902 903 938 894 482 482

Table 11.4.2 Design Line 2 Municipal Utilities Subgroup Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.00% 99.07% 99.11% 99.18% 99.31% 99.41% 99.46%

Transformers with Net LCC Cost 

(%) 14.98% 5.50% 6.44% 10.35% 29.64% 48.46% 66.73%
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Transformers with No Change in 

LCC (%) 11.87% 11.34% 10.41% 6.88% 2.13% 0.18% 0.00%

Transformers with Net LCC 

Benefit (%) 73.15% 83.16% 83.15% 82.77% 68.23% 51.36% 33.27%

Mean LCC Savings ($) 467 574 562 528 215 11 -214

Median LCC Savings ($) 525 621 607 575 230 18 -219

Table 11.4.3 Design Line 3 Municipal Utilities Subgroup Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.48% 99.51% 99.54% 99.57% 99.61% 99.69% 99.73%

Transformers with Net LCC Cost 

(%) 7.10% 7.37% 2.48% 1.84% 1.05% 5.55% 18.54%

Transformers with No Change in 

LCC (%) 48.48% 43.30% 28.70% 27.83% 24.68% 10.16% 0.00%

Transformers with Net LCC 

Benefit (%) 44.42% 49.33% 68.82% 70.33% 74.27% 84.29% 81.46%

Mean LCC Savings ($) 1951 2313 5152 5614 7272 11007 11241

Median LCC Savings ($) 0 0 5215 5834 7282 9204 8040

Table 11.4.4 Design Line 4 Municipal Utilities Subgroup Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.16% 99.22% 99.25% 99.31% 99.42% 99.50% 99.60%

Transformers with Net LCC Cost 

(%) 6.80% 0.05% 0.05% 0.05% 0.41% 13.50% 35.01%

Transformers with No Change in 

LCC (%) 35.55% 35.55% 35.55% 35.55% 33.48% 8.67% 0.00%

Transformers with Net LCC 

Benefit (%) 57.65% 64.40% 64.40% 64.40% 66.11% 77.83% 64.99%

Mean LCC Savings ($) 1351 2782.2 2782.2 2782.9 2879.2 3495 2262

Median LCC Savings ($) 254 3307.2 3307.2 3312.6 3397.8 3270 1600

Table 11.4.5 Design Line 5 Municipal Utilities Subgroup Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.48% 99.51% 99.54% 99.57% 99.61% 99.69% 99.69%

Transformers with Net LCC Cost 

(%) 26.49% 28.99% 18.89% 15.53% 4.44% 14.72% 14.72%

Transformers with No Change in 

LCC (%) 14.02% 6.36% 4.51% 3.63% 0.59% 0.00% 0.00%

Transformers with Net LCC 

Benefit (%) 59.49% 64.65% 76.60% 80.84% 94.97% 85.28% 85.28%

Mean LCC Savings ($) 1263 3121 7003 8345 16520 19203 19203

Median LCC Savings ($) 2793 4500 8792 10004 15959 15055 15055
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11.4.2 Rural Cooperatives Subgroup Results

The LCC results for the rural cooperatives subgroup are a reflection of two key features 

of this subgroup. The first key feature is that virtually all rural cooperatives perform some type 

of economic evaluation of transformer losses when they make a purchase. This means that for 

those purchases, efficiency levels associated with the lower candidate standards are already 

economic for most transformers and there will be little or no impact from an efficiency standard. 

The second key feature is that distribution transformers purchased by rural cooperatives tend to 

serve smaller loads than transformers that serve urban areas. The lower loading decreases the 

potential savings from reduced load losses and thus the benefits from efficiency improvements 

are on average less than the national average case per affected transformer. 

Table 11.4.6 Design Line 1 Rural Cooperatives Subgroup Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.16% 99.22% 99.25% 99.31% 99.42% 99.50% 99.50%

Transformers with Net LCC Cost 

(%) 58.82% 0.83% 0.68% 4.89% 17.31% 57.21% 57.21%

Transformers with No Change in 

LCC (%) 16.03% 13.82% 13.82% 10.38% 7.48% 0.05% 0.05%

Transformers with Net LCC 

Benefit (%) 25.15% 85.35% 85.50% 84.73% 75.21% 42.74% 42.74%

Mean LCC Savings ($) -41 925 927 821 530 -62 -62

Median LCC Savings ($) -111 972 973 854 499 -127 -127

Table 11.4.7 Design Line 2 Rural Cooperatives Subgroup Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.00% 99.07% 99.11% 99.18% 99.31% 99.41% 99.46%

Transformers with Net LCC Cost 

(%) 16.62% 6.80% 7.87% 12.07% 36.10% 59.76% 80.76%

Transformers with No Change in 

LCC (%) 11.27% 10.76% 9.85% 6.47% 2.03% 0.18% 0.00%

Transformers with Net LCC 

Benefit (%) 72.11% 82.44% 82.28% 81.46% 61.87% 40.06% 19.24%

Mean LCC Savings ($) 519 619 595 535 107 -142 -396

Median LCC Savings ($) 617 688 659 594 140 -108 -369

Table 11.4.8 Design Line 3 Rural Cooperatives Subgroup Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.48% 99.51% 99.54% 99.57% 99.61% 99.69% 99.73%

Transformers with Net LCC Cost 5.61% 6.36% 3.99% 3.47% 5.07% 19.79% 43.17%
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(%)

Transformers with No Change in 

LCC (%) 46.89% 41.83% 27.55% 26.71% 23.66% 9.75% 0.00%

Transformers with Net LCC 

Benefit (%) 47.50% 51.81% 68.46% 69.82% 71.27% 70.46% 56.83%

Mean LCC Savings ($) 2360 3104 5307 5538 5824 5281 2101

Median LCC Savings ($) 0 520 5816 6169 6346 5124 1383

Table 11.4.9 Design Line 4 Rural Cooperatives Subgroup Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.16% 99.22% 99.25% 99.31% 99.42% 99.50% 99.60%

Transformers with Net LCC Cost 

(%) 7.50% 0.03% 0.03% 0.03% 0.69% 25.92% 53.92%

Transformers with No Change in 

LCC (%) 34.24% 34.24% 34.24% 34.24% 32.23% 8.26% 0.00%

Transformers with Net LCC 

Benefit (%) 58.26% 65.73% 65.73% 65.73% 67.08% 65.82% 46.08%

Mean LCC Savings ($) 1359 2972.6 2972.6 2972.7 3010.3 2000 -235

Median LCC Savings ($) 246 3539.8 3539.8 3539.9 3577.0 2152 -356

Table 11.4.10 Design Line 5 Rural Cooperatives Subgroup Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.48% 99.51% 99.54% 99.57% 99.61% 99.69% 99.69%

Transformers with Net LCC Cost 

(%) 14.05% 8.59% 1.39% 1.81% 4.47% 31.19% 31.19%

Transformers with No Change in 

LCC (%) 13.27% 5.93% 4.20% 3.37% 0.54% 0.00% 0.00%

Transformers with Net LCC 

Benefit (%) 72.68% 85.48% 94.41% 94.82% 94.99% 68.81% 68.81%

Mean LCC Savings ($) 7688 12378 15952 16073 16172 6059 6059

Median LCC Savings ($) 5373 13073 16360 16415 16555 5547 5547

11.4.3 Vault Installation Results

The LCC results for the vault installed subgroup are a reflection of the increased costs 

associated with vault enlargement. Vault enlargement decreases the potential savings due to

increased installation costs that are required to install the new transformer. 

Table 11.4.11 Design Line 4, Medium Vault Modification Costs Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.16% 99.22% 99.25% 99.31% 99.42% 99.50% 99.60%
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Transformers with Net LCC Cost 

(%) 42.49% 25.34% 25.34% 25.36% 25.54% 61.56% 80.96%

Transformers with No Change in 

LCC (%) 35.55% 35.55% 35.55% 35.55% 33.48% 8.67% 0.00%

Transformers with Net LCC 

Benefit (%) 21.96% 39.11% 39.11% 39.09% 40.98% 29.77% 19.04%

Mean LCC Savings ($) -980 236.7 236.7 235.0 238.2 -1230 -2496

Median LCC Savings ($) 0 0.0 0.0 0.0 0.0 -913 -2549

Table 11.4.12 Design Line 5, Medium Vault Modification Costs Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.48% 99.51% 99.54% 99.57% 99.61% 99.69% 99.69%

Transformers with Net LCC Cost 

(%) 31.91% 29.19% 18.26% 16.41% 11.38% 22.75% 22.75%

Transformers with No Change in 

LCC (%) 14.02% 6.36% 4.51% 3.63% 0.59% 0.00% 0.00%

Transformers with Net LCC 

Benefit (%) 54.07% 64.45% 77.23% 79.96% 88.03% 77.25% 77.25%

Mean LCC Savings ($) 1557 4407 7354 7902 11967 12374 12374

Median LCC Savings ($) 1061 4123 7047 7656 11695 10487 10487

11.4.4 Space-Constrained Installation Results

The LCC results for the space-constrained subgroup are a reflection of the increased costs 

associated with installing a transformer that meets each dEL that is the same, or of less volume 

then the transformer selected in the basecase. Vault enlargement generally decreases the 

potential savings due to increased first cost for the new transformer. 

Table 11.4.13 Design Line 4, No Vault Modification Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.16% 99.22% 99.25% 99.31% 99.42% 99.50% 99.60%

Transformers with Net LCC Cost 

(%) 50.30% 32.34% 32.31% 31.26% 31.49% 31.78% NA*

Transformers with No Change in 

LCC (%) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% NA*

Transformers with Net LCC 

Benefit (%) 49.70% 67.66% 67.69% 68.74% 68.51% 68.22% NA*

Mean LCC Savings ($) -208 1703.4 1710.2 1861.1 2414.5 2384 NA*

Median LCC Savings ($) -8 1933.2 1935.8 2159.2 2954.0 2517 NA*

*No units at dEL 7 as suitable replacements
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Table 11.4.14 Design Line 5, No Vault Modification Life-Cycle Cost Results

Draft Efficiency Level

1 2 3 4 5 6 7

Efficiency (%) 99.48% 99.51% 99.54% 99.57% 99.61% 99.69% 99.69%

Transformers with Net LCC Cost 

(%) 21.44% 20.21% 10.97% 9.26% 5.63% 19.14% 19.14%

Transformers with No Change in 

LCC (%) 9.87% 3.70% 1.93% 1.30% 0.00% 0.00% 0.00%

Transformers with Net LCC 

Benefit (%) 68.69% 76.09% 87.10% 89.44% 94.37% 80.86% 80.86%

Mean LCC Savings ($) 4417 7428 11226 12070 15041 13932 13932

Median LCC Savings ($) 4114 7682 12339 13103 15378 11728 11728

11.5 PAYBACK PERIOD RESULTS

As described in more detail in section 8.6, a common technique for evaluating investment 

decisions is to perform a payback period (PBP) analysis. A more energy-efficient device will 

usually cost more to purchase than a device of standard energy efficiency, while the more 

efficient device will usually cost less to operate. Operating expenses decrease due to a reduction 

in energy use. The payback period is the time (usually expressed in years) it takes to recover the 

additional first cost of the efficiency device with its energy cost savings. Because the Department 

analyzes the economics of a nationally representative distribution of transformers, DOE provides 

results in terms of a distribution of payback periods. 

There are several potential complications to performing an analysis of a distribution of 

PBP estimates that are discussed in more detail in section 8.6. Specifically, a payback period is a 

ratio of increased first cost and decreased operating expenses. When there is a distribution of 

changes for both first cost and operating expense reductions, the average of the ratio does not 

equal the ratio of the averages. Therefore, in the tables below, the Department reports all 

quantities of interest: the mean PBP, the average increase in first cost, and the average decrease 

in annual operating expenses (in the first year of operation). These quantities allow stakeholders 

to compare the average PBP to a ratio of the average first cost increase and the average operating 

cost decrease. These two values are comparable, but not equal because not all transformer 

purchase decision computations have well-defined PBPs. 

11.5.1 Municipal Utilities Subgroup Results

The PBP results for the municipal utilities subgroup are a reflection of two key features 

of this subgroup. The first key feature is that virtually all municipal utilities perform some type 

of economic evaluation of transformer losses when they make a purchase. This means that for 

those purchases, efficiency levels associated with the lower candidate standards are already 

economic for most transformers and there will be little or no impact from an efficiency standard. 

The second key feature is that distribution transformers purchased by municipal utilities tend to 
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serve more diverse, urban loads than transformers that serve more rural areas. The increased 

load diversity increases the load factor and the transformer loading, thus increasing the potential 

savings from reduced load losses. Compared to the rural cooperatives subgroup, the benefits 

from efficiency improvements are on average greater and the PBP tends to be slightly smaller 

than that for rural cooperatives. 

Table 11.5.1 Design Line 1 Municipal Utilities Subgroup Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 25.1 9.4 9.3 11.4 14.9 23.4 23.4

Median Payback (Years) 15.4 8.9 8.9 10.0 12.5 18.2 18.2

Transformers having Well Defined 

Payback (%) 76.53% 84.42% 84.42% 88.05% 91.07% 98.29% 98.29%

Transformers having Undefined 

Payback (%) 23.47% 15.58% 15.58% 11.95% 8.93% 1.71% 1.71%

Mean Incremental First Cost ($) 2,253 2,313 2,314 2,360 2,449 2,591 2,591

Mean Operating Cost Savings ($) 199 165 165 156 140 127 127

Table 11.5.2 Design Line 2 Municipal Utilities Subgroup Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 17.4 12.6 13.3 16.6 25.9 31.3 35.6

Median Payback (Years) 9.7 9.7 10.1 11.7 19.2 23.5 27.6

Transformers having Well Defined 

Payback (%) 86.19% 88.33% 88.95% 92.68% 95.78% 98.65% 99.63%

Transformers having Undefined 

Payback (%) 13.81% 11.67% 11.05% 7.32% 4.22% 1.35% 0.37%

Mean Incremental First Cost ($) 1,768 1,795 1,804 1,845 2,017 2,051 1,946

Mean Operating Cost Savings ($) 87 80 80 78 72 68 65

Table 11.5.3 Design Line 3 Municipal Utilities Subgroup Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 7.0 8.3 6.3 6.0 5.8 10.0 18.2

Median Payback (Years) 4.5 4.8 5.1 5.1 5.1 7.2 11.9

Transformers having Well Defined 

Payback (%) 46.30% 51.96% 70.00% 71.25% 74.94% 89.74% 99.51%

Transformers having Undefined 

Payback (%) 53.70% 48.04% 30.00% 28.75% 25.06% 10.26% 0.49%

Mean Incremental First Cost ($) 4,395 4,434 4,538 4,554 4,612 4,994 5,608

Mean Operating Cost Savings ($) 1,504 1,481 1,337 1,314 1,231 987 819

Table 11.5.4 Design Line 4 Municipal Utilities Subgroup Payback-Period Results

Draft Efficiency Level
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1 2 3 4 5 6 7

Mean Payback (Years) 13.3 6.8 6.8 6.8 7.0 16.3 27.3

Median Payback (Years) 12.1 6.5 6.5 6.5 6.5 10.5 18.7

Transformers having Well Defined 

Payback (%) 64.25% 64.45% 64.45% 64.45% 66.51% 90.35% 99.99%

Transformers having Undefined 

Payback (%) 35.75% 35.55% 35.55% 35.55% 33.49% 9.65% 0.01%

Mean Incremental First Cost ($) 4,160 4,222 4,222 4,222 4,232 4,570 4,664

Mean Operating Cost Savings ($) 582 512 512 512 507 426 347

Table 11.5.5 Design Line 5 Municipal Utilities Subgroup Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 13.6 16.5 14.7 14.3 11.3 17.3 17.3

Median Payback (Years) 8.8 10.4 10.2 10.1 10.0 16.4 16.4

Transformers having Well Defined 

Payback (%) 67.16% 76.58% 86.35% 89.81% 98.77% 100.00% 100.00%

Transformers having Undefined 

Payback (%) 32.84% 23.42% 13.65% 10.19% 1.23% 0.00% 0.00%

Mean Incremental First Cost ($) 8,222 8,639 8,957 9,018 9,425 9,716 9,716

Mean Operating Cost Savings ($) 5,444 5,287 5,071 4,997 4,509 3,534 3,534

11.5.2 Rural Cooperatives Subgroup Results

The PBP results for the rural cooperatives subgroup are a reflection of two key features 

of this subgroup. The first key feature is that virtually all rural cooperatives perform some type 

of economic evaluation of transformer losses when they make a purchase. This means that for 

those purchases, efficiency levels associated with the lower candidate standards are already 

economic for most transformers and there will be little or no impact from an efficiency standard. 

The second key feature is that distribution transformers purchased by rural cooperatives tend to 

serve smaller loads than transformers that serve urban areas. The lower loading decreases the 

potential savings from reduced load losses, and thus the benefits from efficiency improvements 

are on average less than the national average case per affected transformer, and payback times 

will be longer than the national average.

Table 11.5.6 Design Line 1 Rural Cooperatives Subgroup Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 41.5 9.0 8.9 12.3 18.5 29.5 29.5

Median Payback (Years) 29.3 8.6 8.6 10.7 15.7 24.9 24.9

Transformers having Well Defined 

Payback (%) 57.83% 86.15% 86.18% 88.28% 89.75% 92.33% 92.33%

Transformers having Undefined 

Payback (%) 42.17% 13.85% 13.82% 11.72% 10.25% 7.67% 7.67%

Mean Incremental First Cost ($) 2,248 2,310 2,310 2,358 2,448 2,591 2,591

Mean Operating Cost Savings ($) 151 103 103 101 98 99 99
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Table 11.5.7 Design Line 2 Rural Cooperatives Subgroup Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 18.1 12.7 13.5 17.7 27.0 33.8 39.5

Median Payback (Years) 8.8 9.1 9.6 11.5 20.4 25.6 30.5

Transformers having Well Defined 

Payback (%) 84.57% 87.66% 87.94% 91.60% 92.07% 95.25% 97.40%

Transformers having Undefined 

Payback (%) 15.43% 12.34% 12.06% 8.40% 7.93% 4.75% 2.60%

Mean Incremental First Cost ($) 1,767 1,793 1,803 1,845 2,017 2,050 1,946

Mean Operating Cost Savings ($) 70 64 64 63 61 59 57

Table 11.5.8 Design Line 3 Rural Cooperatives Subgroup Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 7.7 8.9 7.9 7.7 9.4 19.7 31.6

Median Payback (Years) 3.9 3.9 4.9 5.1 5.8 10.6 18.9

Transformers having Well Defined 

Payback (%) 50.25% 56.34% 72.21% 73.24% 76.09% 87.15% 91.20%

Transformers having Undefined 

Payback (%) 49.75% 43.66% 27.79% 26.76% 23.91% 12.85% 8.80%

Mean Incremental First Cost ($) 4,387 4,426 4,531 4,547 4,607 4,993 5,608

Mean Operating Cost Savings ($) 840 801 682 669 642 574 546

Table 11.5.9 Design Line 4 Rural Cooperatives Subgroup Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 13.6 6.6 6.6 6.6 7.1 23.0 41.7

Median Payback (Years) 12.7 6.3 6.3 6.3 6.4 12.6 24.4

Transformers having Well Defined 

Payback (%) 65.76% 65.76% 65.76% 65.76% 67.65% 82.46% 98.72%

Transformers having Undefined 

Payback (%) 34.24% 34.24% 34.24% 34.24% 32.35% 17.54% 1.28%

Mean Incremental First Cost ($) 4,154 4,219 4,219 4,220 4,229 4,570 4,664

Mean Operating Cost Savings ($) 378 300 300 300 297 283 246

Table 11.5.10 Design Line 5 Rural Cooperatives Subgroup Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 14.0 11.3 8.3 8.7 11.7 23.0 23.0

Median Payback (Years) 8.0 7.5 7.6 7.9 9.9 20.6 20.6

Transformers having Well Defined 

Payback (%) 83.52% 92.63% 95.70% 96.40% 99.26% 100.00% 100.00%
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Transformers having Undefined 

Payback (%) 16.48% 7.37% 4.30% 3.60% 0.74% 0.00% 0.00%

Mean Incremental First Cost ($) 8,226 8,639 8,953 9,015 9,424 9,716 9,716

Mean Operating Cost Savings ($) 2,919 2,646 2,441 2,416 2,261 1,814 1,814

11.5.3 Vault Installation Results

The PBP results for the vault installed subgroup are a reflection of the increased costs 

associated with vault enlargement. Vault enlargement decreases the potential savings due to

increased installation costs that are required to install the new transformer. 

Table 11.5.11 Design Line 4, Medium Vault Modification Costs Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 22.2 20.8 17.4 17.3 15.8 19.8 19.8

Median Payback (Years) 14.7 15.4 15.3 15.4 14.3 18.4 18.4

Transformers having Well Defined 

Payback (%) 75.90% 86.47% 92.98% 94.63% 99.22% 100.00% 100.00%

Transformers having Undefined 

Payback (%) 24.10% 13.53% 7.02% 5.37% 0.78% 0.00% 0.00%

Mean Incremental First Cost ($) 11,235 12,214 13,480 13,768 14,531 11,274 11,274

Mean Operating Cost Savings ($) 4,318 4,097 3,880 3,829 3,496 2,761 2,761

Table 11.5.12 Design Line 5, Medium Vault Modification Costs Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 54.0 23.7 23.7 23.7 24.8 41.9 45.6

Median Payback (Years) 38.6 22.8 22.8 22.8 22.6 28.1 34.6

Transformers having Well Defined 

Payback (%) 64.45% 64.45% 64.45% 64.45% 66.50% 88.58% 99.91%

Transformers having Undefined 

Payback (%) 35.55% 35.55% 35.55% 35.55% 33.50% 11.42% 0.09%

Mean Incremental First Cost ($) 6,569 6,939 6,939 6,941 7,017 8,674 8,347

Mean Operating Cost Savings ($) 492 419 419 419 415 365 305

11.5.4 Space-Constrained Installation Results

The PBP results for the space-constrained subgroup are a reflection of the increased costs 

associated with installing a transformer that meets each dEL that is the same, or of less volume 

then the transformer selected in the basecase. Vault enlargement generally decreases the 

potential savings due to increased first cost for the new transformer. 
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Table 11.5.13 Design Line 4, No Vault Modification Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 21.4 12.5 12.5 12.1 24.8 23.7 NA

Median Payback (Years) 17.7 7.2 7.2 7.3 9.8 13.0 NA

Transformers having Well Defined 

Payback (%) 66.89% 70.36% 70.37% 70.80% 87.16% 95.12% 0.00%

Transformers having Undefined 

Payback (%) 33.11% 29.64% 29.63% 29.20% 12.84% 4.88% 0.00%

Mean Incremental First Cost ($) 3,922 3,842 3,842 3,834 3,979 4,131 NA

Mean Operating Cost Savings ($) 565 476 476 467 410 368 NA

Table 11.5.14 Design Line 5, No Vault Modification Payback-Period Results

Draft Efficiency Level

1 2 3 4 5 6 7

Mean Payback (Years) 13.6 14.2 11.3 11.1 12.0 19.0 19.0

Median Payback (Years) 8.8 9.1 8.7 8.8 10.3 17.7 17.7

Transformers having Well Defined 

Payback (%) 76.96% 86.49% 92.59% 94.28% 99.14% 100.00% 100.00%

Transformers having Undefined 

Payback (%) 23.04% 13.51% 7.41% 5.72% 0.86% 0.00% 0.00%

Mean Incremental First Cost ($) 8,198 8,592 8,916 8,981 9,336 9,716 9,716

Mean Operating Cost Savings ($) 4,329 4,129 3,921 3,864 3,571 2,761 2,761
dt_nopr_tsd_chap11_092211 DRAFT

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REFERENCES

1. U.S. Department of Energy-Energy Information Administration Form EIA-861: Annual 

Electric Power Industry Database. (2008). 

<http://www.eia.doe.gov/cneaf/electricity/page/eia861.html>

2. Energy Conservation Program for Commercial Equipment: Distribution Transformers 

Energy Conservation Standard; Notice of data availability and request for comment. Federal 

Register 72 No. 27, (2007). 

<http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/dt_noda_0209

07.pdf>