CHAPTER 13. UTILITY IMPACT ANALYSIS
 

TABLE OF CONTENTS
 

13.1 INTRODUCTION ............................................................................................................ 13-1 

13.2 METHODOLOGY ........................................................................................................... 13-1 

13.3 RESULTS ......................................................................................................................... 13-2 

REFERENCES .......................................................................................................................... 13-3 

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CHAPTER 13. UTILITY IMPACT ANALYSIS
 

13.1 INTRODUCTION 

The U.S. Department of Energy (DOE) will analyze the effects on the electric utility 

industry of proposed fluorescent lamp ballast energy conservation standards as part of the notice 

of proposed rulemaking. This analysis will be conducted using the Energy Information 

Administration’s (EIA’s) National Energy Modeling System (NEMS),1

 a large, multi-sectoral, 

partial-equilibrium model of the U.S. energy sector. EIA uses NEMS to produce the Annual 

Energy Outlook 2009 (AEO2009).2

 NEMS produces a widely recognized publicly available 

baseline energy forecast for the United States through 2030. 

13.2 METHODOLOGY 

To estimate the effects of the proposed standards on the electric utility industry, DOE 

will use a variant of the EIA’s NEMS known as NEMS-Building Technologies (BT) to provide 

key inputs to the analysis. EIA approves the use of the name NEMS only to describe an official 

version of the model without modifying the modeling code or data. Because this analysis entails 

some minor code modifications and the model is run under multiple policy scenarios that are 

variations on EIA assumptions, DOE refers to it as NEMS-BT. 

For fluorescent lamp ballasts, the analysis will consist of forecasted differences between 

the base and standards cases for electricity generation, installed capacity, sales, and prices. The 

NEMS-BT model provides reference case load shapes for several end uses, including lighting 

applications. 

For electrical end uses, NEMS-BT uses predicted growth in demand for each end use to 

project the total electric system load growth for each region, which in turn predicts the necessary 

additions to electrical generation capacity. NEMS-BT also accounts for the implementation of 

energy conservation standards by decrementing the appropriate reference case load shape. DOE 

will determine the size of the decrement using data for the per-unit energy savings developed in 

the life-cycle cost (LCC) and payback period (PBP) analyses (chapter 8 of the preliminary 

technical support document) and the forecast of shipments developed for the national impact 

analysis (chapter 9). 

The use of NEMS-BT for the utility impact analysis offers several advantages. As the 

official DOE energy forecasting model, NEMS-BT relies on a set of transparent assumptions that 

have received wide exposure and commentary. NEMS-BT allows an estimate of the interactions 

between the various energy supply and demand sectors and the economy as a whole. The utility 

impact analysis will determine the changes for electric utilities in installed electrical generation 

capacity and in generation by fuel type produced for each trial standard level (TSL) as well as 

changes in electricity sales. 

DOE plans to conduct the utility impact analysis as a variant of the AEO2009, applying 

the same basic set of assumptions. For example, the utility analysis uses the operating 

characteristics (e.g., energy conversion efficacy, emissions rates) of future electricity generating 

plants. 

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The model uses predicted growth in demand for each end use to project total electric 

system load growth for each region, which in turn is used to predict necessary additions to 

electrical generation capacity. Two alternative scenarios use the high- and low-economic growth 

cases of AEO2009. (The reference case corresponds to medium growth.) The high-economic 

growth case assumes higher projected growth rates for population, labor force, and labor 

productivity, resulting in lower predicted inflation and interest rates relative to the reference 

case. The opposite is true for the low-growth case. The NEMS-BT model accounts for the 

implementation of energy conservation standards by decrementing the appropriate reference-case 

load shape. DOE determines the size of the decrement using data for the per-unit energy savings 

developed in the LCC and PBP analyses (chapter 8) and the shipments analysis (chapter 9) 

developed for the NIA (chapter 10). 

The predicted reduction in electrical generation capacity additions is sensitive to the peak 

load impacts of the standard. DOE will investigate the need to adjust the hourly load profiles that 

include fluorescent lamp ballast use in NEMS-BT. 

The terminal year of the NEMS-BT model is 2030, impacts beyond which are typically 

extrapolated based on the pattern of electricity savings (in kilowatt hours) expected for a 

particular standard. The extrapolation will be based on a comparison of the change in the NEMSBT variable (e.g., coal-fired generation) to the change in electricity savings over 2025–2030. As 

with the AEO reference case in general, the implicit premise is that the regulatory environment 

does not deviate from the current known situation during the extrapolation period. Only changes 

that have been announced with date-certain introduction are included in NEMS-BT. 

13.3 RESULTS 

Results of the utility impact analysis will include changes in electricity sales, installed 

capacity, and generation for each TSL in five-year forecasted increments extrapolated to 2044. 

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REFERENCES 

1. U.S. Department of Energy–Energy Information Administration. The National Energy 

Modeling System: An Overview 2000. March 2000. Report No. DOE/EIA-0581 (2000). (Last 

accessed June 30, 2009.) <http://tonto.eia.doe.gov/ftproot/forecasting/05812000.pdf> 

2. U.S. Department of Energy–Energy Information Administration. Annual Energy Outlook 

2009: With Projections to 2030. March 2009. Report No. DOE/EIA-0383 (2009). (Last 

accessed March 11, 2010.) <http://www.eia.doe.gov/oiaf/archive/aeo09/pdf/0383(2009).pdf> 

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