```

[Federal Register Volume 78, Number 235 (Friday, December 6, 2013)]
[Proposed Rules]
[Pages 73589-73681]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28776]

[[Page 73589]]

Vol. 78

Friday,

No. 235

December 6, 2013

Part II

Department of Energy

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

10 CFR Part 431

Energy Conservation Program: Energy Conservation Standards for 
Commercial and Industrial Electric Motors; Proposed Rule

Federal Register / Vol. 78, No. 235 / Friday, December 6, 2013 / 
Proposed Rules

[[Page 73590]]

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

DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket Number EERE-2010-BT-STD-0027]
RIN 1904-AC28

Energy Conservation Program: Energy Conservation Standards for 
Commercial and Industrial Electric Motors

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

ACTION: Notice of proposed rulemaking (NOPR) and public meeting.

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

SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as 
amended, prescribes energy conservation standards for various consumer 
products and certain commercial and industrial equipment, including 
commercial and industrial electric motors. EPCA also requires the U.S. 
Department of Energy (DOE) to determine whether more-stringent, amended 
standards would be technologically feasible and economically justified, 
and would save a significant amount of energy. In this notice, DOE 
proposes energy conservation standards for a number of different groups 
of electric motors that DOE has not previously regulated. For those 
groups of electric motors currently regulated, the proposed standards 
would maintain the current energy conservation standards for some 
electric motor types and amend the energy conservation standards for 
other electric motor types. The document also announces a public 
meeting to receive comment on these proposed standards and associated 
analyses and results.

DATES: DOE will hold a public meeting on Wednesday, December 11, 2013, 
from 9 a.m. to 4 p.m., in Washington, DC. The meeting will also be 
broadcast as a webinar. See section VII Public Participation for 
webinar registration information, participant instructions, and 
information about the capabilities available to webinar participants.
    DOE will accept comments, data, and information regarding this NOPR 
before and after the public meeting, but no later than February 4, 
2014. See section VII Public Participation for details.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW., 
Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at 
(202) 586-2945. Please note that foreign nationals visiting DOE 
Headquarters are subject to advance security screening procedures. Any 
foreign national wishing to participate in the meeting should advise 
DOE as soon as possible by contacting Ms. Edwards to initiate the 
necessary procedures. Please also note that those wishing to bring 
laptops into the Forrestal Building will be required to obtain a 
property pass. Visitors should avoid bringing laptops, or allow an 
extra 45 minutes. Persons can attend the public meeting via webinar. 
For more information, refer to the Public Participation section near 
the end of this notice.
    Any comments submitted must identify the NOPR for Energy 
Conservation Standards for electric motors, and provide docket number 
EE-2010-BT-STD-2027 and/or regulatory information number (RIN) number 
1904-AC28. Comments may be submitted using any of the following 
methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: ElecMotors-2010-STD-0027@ee.doe.gov. Include the docket 
number and/or RIN in the subject line of the message.
    3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building 
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW., 
Washington, DC 20585-0121. If possible, please submit all items on a 
CD. It is not necessary to include printed copies.
    4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Program, 950 L'Enfant Plaza SW., Suite 
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, 
please submit all items on a CD, in which case it is not necessary to 
include printed copies.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
proposed rule may be submitted to Office of Energy Efficiency and 
Renewable Energy through the methods listed above and by email to 
Chad_S_Whiteman@omb.eop.gov.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section VII of this document 
(Public Participation).
    Docket: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at regulations.gov. All 
documents in the docket are listed in the regulations.gov index. 
However, some documents listed in the index, such as those containing 
information that is exempt from public disclosure, may not be publicly 
available.
    A link to the docket Web page can be found at http://www.regulations.gov/#!docketDetail;D=EERE-2010-BT-STD-0027. This Web 
page will contain a link to the docket for this notice on the 
regulations.gov site. The regulations.gov Web page will contain simple 
instructions on how to access all documents, including public comments, 
in the docket. See section VII for further information on how to submit 
comments through www.regulations.gov.
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting, 
contact Ms. Brenda Edwards at (202) 586-2945 or by email: 
Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT: James Raba, U.S. Department of Energy, 
Office of Energy Efficiency and Renewable Energy, Building Technologies 
Program, EE-2J, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-8654. Email: Jim.Raba@ee.doe.gov.
    Ms. Ami Grace-Tardy, U.S. Department of Energy, Office of the 
General Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 
20585-0121. Telephone: (202) 586-5709. Email: Ami.Grace-Tardy@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of the Proposed Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Electric Motors
    3. Process for Setting Energy Conservation Standards
III. General Discussion
    A. Test Procedure
    B. Equipment Classes and Current Scope of Coverage
    C. Expanded Scope of Coverage
    D. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    E. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    F. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers

[[Page 73591]]

    b. Life-Cycle Costs
    c. Energy Savings
    d. Lessening of Utility or Performance
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Current Scope of Electric Motors Energy Conservation 
Standards
    2. Expanded Scope of Electric Motor Energy Conservation 
Standards
    3. Advanced Electric Motors
    4. Equipment Class Groups and Equipment Classes
    a. Electric Motor Design Letter
    b. Fire Pump Electric Motors
    c. Brake Motors
    d. Horsepower Rating
    e. Pole Configuration
    f. Enclosure Type
    g. Other Motor Characteristics
    5. Technology Assessment
    a. Decrease the Length of Coil Extensions
    b. Increase Cross-Sectional Area of Rotor Conductor Bars
    c. Increase Cross-Sectional Area of End Rings
    d. Increase the Number of Stator Slots
    e. Electrical Steel With Lower Losses
    f. Thinner Steel Laminations
    g. Increase Stack Length
    h. More Efficient Cooling System
    i. Reduce Skew on Conductor Cage
    B. Screening Analysis
    1. Technology Options Not Screened Out of the Analysis
    a. Copper Die-Cast Rotors
    b. Increase the Cross-Sectional Area of Copper in the Stator 
Slots
    2. Technology Options Screened Out of the Analysis
    C. Engineering Analysis
    1. Engineering Analysis Methodology
    2. Representative Units
    a. Electric Motor Design Type
    b. Horsepower Rating
    c. Pole-Configuration
    d. Enclosure Type
    3. Efficiency Levels Analyzed
    4. Test and Teardowns
    5. Software Modeling
    6. Cost Model
    a. Copper Pricing
    b. Labor Rate and Non-Production Markup
    c. Catalog Prices
    d. Product Development Cost
    7. Engineering Analysis Results
    8. Scaling Methodology
    D. Markups Analysis
    E. Energy Use Analysis
    1. Comments on Operating Hours
    2. Comments on Other Issues
    F. Life-Cycle Cost and Payback Period Analysis
    1. Equipment Costs
    2. Installation Costs
    3. Maintenance Costs
    4. Repair Costs
    5. Unit Energy Consumption
    6. Electricity Prices and Electricity Price Trends
    7. Lifetime
    8. Discount Rate
    9. Base Case Market Efficiency Distributions
    10. Compliance Date
    11. Payback Period Inputs
    12. Rebuttable-Presumption Payback Period
    G. Shipments Analysis
    H. National Impact Analysis
    1. Efficiency Trends
    2. National Energy Savings
    3. Equipment Price Forecast
    4. Net Present Value of Customer Benefit
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. GRIM Analysis and Key Inputs
    a. Product and Capital Conversion Costs
    b. Manufacturer Production Costs
    c. Shipment Forecast
    d. Markup Scenarios
    3. Discussion of Comments
    a. Scope of Coverage
    b. Conversion Costs
    c. Enforcement of Standards
    d. Motor Refurbishment
    4. Manufacturer Interviews
    a. Efficiency Levels above NEMA Premium
    b. Increase in Equipment Repairs
    c. Enforcement
    K. Emissions Analysis
    L. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
    M. Utility Impact Analysis
    N. Employment Impact Analysis
    O. Other Comments Received
V. Analytical Results
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Customers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash-Flow Analysis Results
    b. Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Sub-Group of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value of Customer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance
    5. Impact of Any Lessening of Competition
    6. Need of the Nation to Conserve Energy
    7. Summary of National Economic Impacts
    8. Other Factors
    C. Proposed Standards
    1. Benefits and Burdens of Trial Standard Levels Considered for 
Electric Motors
    2. Summary of Benefits and Costs (Annualized) of the Proposed 
Standards
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Description and Estimated Number of Small Entities Regulated
    a. Methodology for Estimating the Number of Small Entities
    b. Manufacturer Participation
    c. Electric Motor Industry Structure and Nature of Competition
    d. Comparison Between Large and Small Entities
    2. Description and Estimate of Compliance Requirements
    3. Duplication, Overlap, and Conflict with Other Rules and 
Regulations
    4. Significant Alternatives to the Proposed Rule
    5. Significant Issues Raised by Public Comments
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
VII. Public Participation
    A. Attendance at the Public Meeting
    B. Procedure for Submitting Prepared General Statements For 
Distribution
    C. Conduct of the Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary
    1. The authority citation for part 431 continues to read as 
follows:
    2. Revise Sec.  431.25 to read as follows:

I. Summary of the Proposed Rule

    Title III, Part B of the Energy Policy and Conservation Act of 1975 
(EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as 
codified), established the Energy Conservation Program for Consumer 
Products Other Than Automobiles. Part C of Title III of EPCA (42 U.S.C. 
6311-6317) established a similar program for ``Certain Industrial 
Equipment,'' including certain electric motors.\1\ (Within this 
preamble, DOE will use the terms ``electric motors'' and ``motors'' 
interchangeably.) Pursuant to EPCA, any new or amended energy 
conservation standard that DOE may prescribe for certain equipment, 
such as electric motors, shall be designed to achieve the maximum 
improvement in energy efficiency that DOE determines is technologically 
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and 
6316(a)). Furthermore, any new or amended standard must result in a 
significant

[[Page 73592]]

conservation of energy. (42 U.S.C. 6295(o)(3)(B) and 6316(a)).
---------------------------------------------------------------------------

    \1\ For editorial reasons, upon codification in the U.S. Code, 
Parts B and C were redesignated as Parts A and A-1, respectively.
---------------------------------------------------------------------------

    In accordance with these and other statutory provisions discussed 
in this notice, the U.S. Department of Energy (DOE) proposes amending 
the energy conservation standards for electric motors by applying the 
standards currently in place to a wider scope of electric motors for 
which DOE does not currently regulate. In setting these standards, DOE 
is proposing to address a number of different groups of electric motors 
that have, to date, not been required to satisfy the energy 
conservation standards currently set out in 10 CFR part 431. In 
addition, with the exception of fire pump electric motors, the proposal 
would require all currently regulated motors to satisfy the efficiency 
levels prescribed in Table 12-12 and Table 20-B \2\ of MG1-2011, 
published by the National Electrical Manufacturers Association; fire 
pump motors would continue to meet the current standards that apply. 
All other electric motors that DOE is proposing to regulate would also 
need to meet these efficiency levels (i.e. Tables 12-12 and 20-B). As a 
practical matter, the many currently regulated motors would continue to 
be required to meet the standards that they already meet, but certain 
motors, such as those that satisfy the general purpose electric motors 
(subtype II) (``subtype II'') or that are NEMA Design B motors from 201 
through 500 horsepower, would need to meet the more stringent levels 
prescribed by MG1-2011 Tables 12-12 and 20-B. These proposed efficiency 
levels are shown in Table I.1. If adopted, the proposed standards would 
apply to all covered motor types listed in Table I.1 that are 
manufactured in, or imported into, the United States starting on 
December 19, 2015. DOE may, however, depending on the nature of the 
comments it receives, revisit this proposed compliance date.
---------------------------------------------------------------------------

    \2\ Table 20-B of MG1-2011 provides nominal full-load 
efficiencies for ratings without nominal full-load efficiencies in 
Table 12-12 of MG1-2011.

                      Table I.1--Proposed Energy Conservation Standards for Electric Motors
                                     [Compliance starting December 19, 2015]
----------------------------------------------------------------------------------------------------------------
                         Electric motor      Horsepower           Pole
 Equipment class group     design type         rating         configuration       Enclosure       Proposed TSL
----------------------------------------------------------------------------------------------------------------
1.....................  NEMA Design A &              1-500        2, 4, 6, 8  Open............                 2
                         B *.                                                 Enclosed........                 2
2.....................  NEMA Design C *.             1-200           4, 6, 8  Open............                 2
                                                                              Enclosed........                 2
3.....................  Fire Pump *.....             1-500        2, 4, 6, 8  Open............                 2
                                                                              Enclosed........                 2
4.....................  Brake Motors *..              1-30           4, 6, 8  Open............                 2
                                                                              Enclosed........                 2
----------------------------------------------------------------------------------------------------------------
* Indicates IEC equivalent electric motors are included.

    The following tables (Tables I.2 to I.5) detail the various 
proposed standard levels that comprise TSL 2 and that DOE would apply 
to each group of motors. In determining where a particular motor with a 
certain horsepower (hp) or kilowatt rating would fall within the 
requirements, as in DOE's current regulations, DOE would apply the 
following approach in determining which rating would apply for 
compliance purposes:
    (1) A horsepower at or above the midpoint between the two 
consecutive horsepowers shall be rounded up to the higher of the two 
horsepowers;
    (2) A horsepower below the midpoint between the two consecutive 
horsepowers shall be rounded down to the lower of the two horsepowers; 
or
    (3) A kilowatt rating shall be directly converted from kilowatts to 
horsepower using the formula 1 kilowatt = (1/0.746) horsepower. The 
conversion should be calculated to three significant decimal places, 
and the resulting horsepower shall be rounded in accordance with the 
rules listed in (1) and (2).

  Table I.2--Proposed Energy Conservation Standards for NEMA Design A and NEMA Design B Electric Motors (Excluding Fire Pump Electric Motors, Integral
                                             Brake Electric Motors, and Non-Integral Brake Electric Motors)
                                                         [Compliance starting December 19, 2015]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Nominal full load efficiency (%)
                                         ---------------------------------------------------------------------------------------------------------------
   Motor horsepower/standard kilowatt               2 Pole                      4 Pole                      6 Pole                      8 Pole
               equivalent                ---------------------------------------------------------------------------------------------------------------
                                            Enclosed        Open        Enclosed        Open        Enclosed        Open        Enclosed        Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...................................          77.0          77.0          85.5          85.5          82.5          82.5          75.5          75.5
1.5/1.1.................................          84.0          84.0          86.5          86.5          87.5          86.5          78.5          77.0
2/1.5...................................          85.5          85.5          86.5          86.5          88.5          87.5          84.0          86.5
3/2.2...................................          86.5          85.5          89.5          89.5          89.5          88.5          85.5          87.5
5/3.7...................................          88.5          86.5          89.5          89.5          89.5          89.5          86.5          88.5
7.5/5.5.................................          89.5          88.5          91.7          91.0          91.0          90.2          86.5          89.5
10/7.5..................................          90.2          89.5          91.7          91.7          91.0          91.7          89.5          90.2
15/11...................................          91.0          90.2          92.4          93.0          91.7          91.7          89.5          90.2
20/15...................................          91.0          91.0          93.0          93.0          91.7          92.4          90.2          91.0
25/18.5.................................          91.7          91.7          93.6          93.6          93.0          93.0          90.2          91.0
30/22...................................          91.7          91.7          93.6          94.1          93.0          93.6          91.7          91.7

[[Page 73593]]

 
40/30...................................          92.4          92.4          94.1          94.1          94.1          94.1          91.7          91.7
50/37...................................          93.0          93.0          94.5          94.5          94.1          94.1          92.4          92.4
60/45...................................          93.6          93.6          95.0          95.0          94.5          94.5          92.4          93.0
75/55...................................          93.6          93.6          95.4          95.0          94.5          94.5          93.6          94.1
100/75..................................          94.1          93.6          95.4          95.4          95.0          95.0          93.6          94.1
125/90..................................          95.0          94.1          95.4          95.4          95.0          95.0          94.1          94.1
150/110.................................          95.0          94.1          95.8          95.8          95.8          95.4          94.1          94.1
200/150.................................          95.4          95.0          96.2          95.8          95.8          95.4          94.5          94.1
250/186.................................          95.8          95.0          96.2          95.8          95.8          95.8          95.0          95.0
300/224.................................          95.8          95.4          96.2          95.8          95.8          95.8          95.0          95.0
350/261.................................          95.8          95.4          96.2          95.8          95.8          95.8          95.0          95.0
400/298.................................          95.8          95.8          96.2          95.8          95.8          95.8          95.0          95.0
450/336.................................          95.8          96.2          96.2          96.2          95.8          96.2          95.0          95.0
500/373.................................          95.8          96.2          96.2          96.2          95.8          96.2          95.0          95.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

   Table I.3--Proposed Energy Conservation Standards for NEMA Design C Electric Motors (Excluding Non-Integral
                            Brake Electric Motors and Integral Brake Electric Motors)
                                     [Compliance starting December 19, 2015]
----------------------------------------------------------------------------------------------------------------
                                                       Nominal full load efficiency (%)
                             -----------------------------------------------------------------------------------
  Motor horsepower/standard             4 Pole                      6 Pole                      8 Pole
     kilowatt equivalent     -----------------------------------------------------------------------------------
                                Enclosed        Open        Enclosed        Open        Enclosed        Open
----------------------------------------------------------------------------------------------------------------
1/.75.......................          85.5          85.5          82.5          82.5          75.5          75.5
1.5/1.1.....................          86.5          86.5          87.5          86.5          78.5          77.0
2/1.5.......................          86.5          86.5          88.5          87.5          84.0          86.5
3/2.2.......................          89.5          89.5          89.5          88.5          85.5          87.5
5/3.7.......................          89.5          89.5          89.5          89.5          86.5          88.5
7.5/5.5.....................          91.7          91.0          91.0          90.2          86.5          89.5
10/7.5......................          91.7          91.7          91.0          91.7          89.5          90.2
15/11.......................          92.4          93.0          91.7          91.7          89.5          90.2
20/15.......................          93.0          93.0          91.7          92.4          90.2          91.0
25/18.5.....................          93.6          93.6          93.0          93.0          90.2          91.0
30/22.......................          93.6          94.1          93.0          93.6          91.7          91.7
40/30.......................          94.1          94.1          94.1          94.1          91.7          91.7
50/37.......................          94.5          94.5          94.1          94.1          92.4          92.4
60/45.......................          95.0          95.0          94.5          94.5          92.4          93.0
75/55.......................          95.4          95.0          94.5          94.5          93.6          94.1
100/75......................          95.4          95.4          95.0          95.0          93.6          94.1
125/90......................          95.4          95.4          95.0          95.0          94.1          94.1
150/110.....................          95.8          95.8          95.8          95.4          94.1          94.1
200/150.....................          96.2          95.8          95.8          95.4          94.5          94.1
----------------------------------------------------------------------------------------------------------------

                                     Table I.4--Proposed Energy Conservation Standards for Fire Pump Electric Motors
                                                         [Compliance starting December 19, 2015]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Nominal full load efficiency (%)
                                         ---------------------------------------------------------------------------------------------------------------
   Motor horsepower/standard kilowatt               2 Pole                      4 Pole                      6 Pole                      8 Pole
               equivalent                ---------------------------------------------------------------------------------------------------------------
                                            Enclosed        Open        Enclosed        Open        Enclosed        Open        Enclosed        Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...................................          75.5          75.5          82.5          82.5          80.0          80.0          74.0          74.0
1.5/1.1.................................          82.5          82.5          84.0          84.0          85.5          84.0          77.0          75.5
2/1.5...................................          84.0          84.0          84.0          84.0          86.5          85.5          82.5          85.5
3/2.2...................................          85.5          84.0          87.5          86.5          87.5          86.5          84.0          86.5
5/3.7...................................          87.5          85.5          87.5          87.5          87.5          87.5          85.5          87.5
7.5/5.5.................................          88.5          87.5          89.5          88.5          89.5          88.5          85.5          88.5
10/7.5..................................          89.5          88.5          89.5          89.5          89.5          90.2          88.5          89.5
15/11...................................          90.2          89.5          91.0          91.0          90.2          90.2          88.5          89.5
20/15...................................          90.2          90.2          91.0          91.0          90.2          91.0          89.5          90.2

[[Page 73594]]

 
25/18.5.................................          91.0          91.0          92.4          91.7          91.7          91.7          89.5          90.2
30/22...................................          91.0          91.0          92.4          92.4          91.7          92.4          91.0          91.0
40/30...................................          91.7          91.7          93.0          93.0          93.0          93.0          91.0          91.0
50/37...................................          92.4          92.4          93.0          93.0          93.0          93.0          91.7          91.7
60/45...................................          93.0          93.0          93.6          93.6          93.6          93.6          91.7          92.4
75/55...................................          93.0          93.0          94.1          94.1          93.6          93.6          93.0          93.6
100/75..................................          93.6          93.0          94.5          94.1          94.1          94.1          93.0          93.6
125/90..................................          94.5          93.6          94.5          94.5          94.1          94.1          93.6          93.6
150/110.................................          94.5          93.6          95.0          95.0          95.0          94.5          93.6          93.6
200/150.................................          95.0          94.5          95.0          95.0          95.0          94.5          94.1          93.6
250/186.................................          95.4          94.5          95.0          95.4          95.0          95.4          94.5          94.5
300/224.................................          95.4          95.0          95.4          95.4          95.0          95.4          94.5          94.5
350/261.................................          95.4          95.0          95.4          95.4          95.0          95.4          94.5          94.5
400/298.................................          95.4          95.4          95.4          95.4          95.0          95.4          94.5          94.5
450/336.................................          95.4          95.8          95.4          95.8          95.0          95.4          94.5          94.5
500/373.................................          95.4          95.8          95.8          95.8          95.0          95.4          94.5          94.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

               Table I.5--Proposed Energy Conservation Standards for Integral Brake Electric Motors and Non-Integral Brake Electric Motors
                                                         [Compliance starting December 19, 2015]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         Nominal full load efficiency (%)
                                                         -----------------------------------------------------------------------------------------------
      Motor horsepower/standard kilowatt equivalent           4 Pole          6 Pole                                  8 Pole
                                                         -----------------------------------------------------------------------------------------------
                                                             Enclosed          Open          Enclosed          Open          Enclosed          Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...................................................            85.5            85.5            82.5            82.5            75.5            75.5
1.5/1.1.................................................            86.5            86.5            87.5            86.5            78.5            77.0
2/1.5...................................................            86.5            86.5            88.5            87.5            84.0            86.5
3/2.2...................................................            89.5            89.5            89.5            88.5            85.5            87.5
5/3.7...................................................            89.5            89.5            89.5            89.5            86.5            88.5
7.5/5.5.................................................            91.7            91.0            91.0            90.2            86.5            89.5
10/7.5..................................................            91.7            91.7            91.0            91.7            89.5            90.2
15/11...................................................            92.4            93.0            91.7            91.7            89.5            90.2
20/15...................................................            93.0            93.0            91.7            92.4            90.2            91.0
25/18.5.................................................            93.6            93.6            93.0            93.0            90.2            91.0
30/22...................................................            93.6            94.1            93.0            93.6            91.7            91.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

A. Benefits and Costs to Consumers

    Table I.6 presents DOE's evaluation of the economic impacts of the 
proposed standards on consumers of electric motors, as measured by the 
weighted average life-cycle cost (LCC) savings and the weighted average 
median payback period.

[[Page 73595]]

Table I.6--Impacts of Proposed Standards on Consumers of Electric Motors
------------------------------------------------------------------------
                                   Weighted average    Weighted average
                                     LCC savings *      median payback
                                        (2012$)        period * (years)
------------------------------------------------------------------------
Equipment Class Group 1.........  132...............  3.3
Equipment Class Group 2.........  38................  5.0
Equipment Class Group 3.........  N/A **............  N/A **
Equipment Class Group 4.........  259...............  1.9
------------------------------------------------------------------------
* The results for each equipment class group (ECG) are a shipment
  weighted average of results for the representative units in the group.
  ECG 1: Representative units 1, 2, and 3; ECG 2: Representative units 4
  and 5; ECG 3: Representative units 6, 7, and 8; ECG 4: Representative
  units 9 and 10. The weighted average lifetime in each equipment
  classes is 15 years and ranges from 8 to 29 years depending on the
  motor horsepower and application.
** For equipment class group 3, the proposed standard level is the same
  as the baseline; thus, no customers are affected.

B. Impact on Manufacturers

    The industry net present value (INPV) is the sum of the discounted 
cash flows to the industry from the base year through the end of the 
analysis period (2013 to 2044). Using a real discount rate of 9.1 
percent, DOE estimates that the industry net present value (INPV) for 
manufacturers of electric motors is $3,371.2 million in 2012$. Under 
the proposed standards, DOE expects that manufacturers may lose up to 
8.4 percent of their INPV, which corresponds to approximately $283.5 
million. Additionally, based on DOE's interviews with the manufacturers 
of electric motors, DOE does not expect any plant closings or 
significant loss of employment based on the energy conservation 
standards chosen in today's Notice of Proposed Rulemaking (NOPR).

C. National Benefits and Costs \3\
---------------------------------------------------------------------------

    \3\ All monetary values in this section are expressed in 2012 
dollars and are discounted to 2013.
---------------------------------------------------------------------------

    DOE's analyses indicate that the proposed standards would save a 
significant amount of energy. Estimated lifetime savings for electric 
motors purchased over the 30-year period that begins in the year of 
compliance with new and amended standards (2015-2044) would amount to 
7.0 quads (full-fuel-cycle energy).\4\ The annualized energy savings 
(0.23 quads) are equivalent to one percent of total U.S. industrial 
primary energy consumption in 2011.\5\
---------------------------------------------------------------------------

    \4\ One quad (quadrillion Btu) is the equivalent of 293.1 
billion kilowatt hours (kWh) or 172.3 million barrels of oil.
    \5\ Based on U.S. Department of Energy, Energy Information 
Administration, Annual Energy Outlook (AEO) 2013 data.
---------------------------------------------------------------------------

    The estimated cumulative net present value (NPV) of total consumer 
costs and savings attributed to the proposed standards for electric 
motors ranges from $8.7 billion (at a 7-percent discount rate) to $23.3 
billion (at a 3-percent discount rate). This NPV expresses the 
estimated total value of future operating-cost savings minus the 
estimated increased equipment costs for equipment purchased in 2015-
2044.
    In addition, the proposed standards would have significant 
environmental benefits. Estimated energy savings would result in 
cumulative emission reductions of 396 million metric tons (Mt) \6\ of 
carbon dioxide (CO2), 674 thousand tons of sulfur dioxide 
(SO2), 499 thousand tons of nitrogen oxides (NOX) 
and 0.8 tons of mercury (Hg).\7\ Through 2030, the estimated energy 
savings would result in cumulative emissions reductions of 96 Mt of 
CO2.
---------------------------------------------------------------------------

    \6\ A metric ton is equivalent to 1.1 short tons. Results for 
NOX and Hg are presented in short tons.
    \7\ DOE calculates emissions reductions relative to the AEO2013 
reference case, which generally represents current legislation and 
environmental regulations for which implementing regulations were 
available as of December 31, 2012.
---------------------------------------------------------------------------

    The value of the CO2 reductions is calculated using a 
range of values per metric ton of CO2 (otherwise known as 
the Social Cost of Carbon (SCC) developed by an interagency 
process).\8\ The derivation of the SCC values is discussed in section 
IV.M. DOE estimates the present monetary value of the CO2 
emissions reduction is between $2.5 and $36.6 billion. DOE also 
estimates the present monetary value of the NOX emissions 
reduction is $0.3 billion at a 7-percent discount rate and $0.6 billion 
at a 3-percent discount rate.\9\
---------------------------------------------------------------------------

    \8\ Technical Update of the Social Cost of Carbon for Regulatory 
Impact Analysis Under Executive Order 12866. Interagency Working 
Group on Social Cost of Carbon, United States Government. May 2013; 
revised November 2013. http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
    \9\ DOE is currently investigating valuation of avoided Hg and 
SO2 emissions.
---------------------------------------------------------------------------

    Table I.7 summarizes the national economic costs and benefits 
expected to result from the proposed standards for electric motors.

 Table I.7--Summary of National Economic Benefits and Costs of Electric
 Motors Energy Conservation Standards, Present Value for Motors Shipped
                      in 2015-2044 in Billion 2012$
------------------------------------------------------------------------
                                      Present value
             Category                 billion 2012$    Discount rate (%)
------------------------------------------------------------------------
Benefits:
    Consumer Operating Cost                      14.8                  7
     Savings......................               34.9                  3
    CO2 Reduction Monetized Value                 2.5                  5
     ($11.8/t case) *.............
    CO2 Reduction Monetized Value                11.8                  3
     ($39.7/t case) *.............
    CO2 Reduction Monetized Value                18.9                2.5
     ($61.2/t case) *.............
    CO2 Reduction Monetized Value                36.6                  3
     ($117.0/t case) *............
    NOX Reduction Monetized Value                 0.3                  7
     (at $2,639/ton) **...........                0.6                  3
                                   -------------------------------------
      Total Benefits [dagger].....               26.9                  7
                                                 47.4                  3
------------------------------------------------------------------------
Costs:
    Consumer Incremental Installed                6.1                  7
     Costs........................               11.7                  3
------------------------------------------------------------------------
Net Benefits:

[[Page 73596]]

 
    Including CO2 and NOX                        20.8                  7
     Reduction Monetized Value....               35.7                 3
------------------------------------------------------------------------
* The interagency group selected four sets of SCC values for use in
  regulatory analyses. Three sets of values are based on the average SCC
  from the three integrated assessment models, at discount rates of 2.5,
  3, and 5 percent. The fourth set, which represents the 95th percentile
  SCC estimate across all three models at a 3-percent discount rate, is
  included to represent higher-than-expected impacts from temperature
  change further out in the tails of the SCC distribution. The values in
  parentheses represent the SCC in 2015. The SCC time series incorporate
  an escalation factor.
** The value represents the average of the low and high NOX values used
  in DOE's analysis.
[dagger] Total Benefits for both the 3% and 7% cases are derived using
  the series corresponding to SCC value of $39.7/t in 2015.

    The benefits and costs of today's proposed standards for electric 
motors, sold in years 2015-2044, can also be expressed in terms of 
annualized values. The annualized monetary values are the sum of (1) 
the annualized national economic value of the benefits from operation 
of the commercial and industrial equipment that meet the proposed 
standards (consisting primarily of operating cost savings from using 
less energy, minus increases in equipment purchase and installation 
costs, which is another way of representing consumer NPV), and (2) the 
annualized monetary value of the benefits of emission reductions, 
including CO2 emission reductions.\10\
---------------------------------------------------------------------------

    \10\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2013, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of three and seven percent 
for all costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.3. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2015 through 2044) that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined is a steady stream of 
payments.
---------------------------------------------------------------------------

    Although combining the values of operating savings and 
CO2 emission reductions provides a useful perspective, two 
issues should be considered. First, the national operating savings are 
domestic U.S. consumer monetary savings that occur as a result of 
market transactions while the value of CO2 reductions is 
based on a global value. Second, the assessments of operating cost 
savings and CO2 savings are performed with different methods 
that use different time frames for analysis. The national operating 
cost savings is measured over the lifetime of electric motors shipped 
in years 2015-2044. The SCC values, on the other hand, reflect the 
present value of some future climate-related impacts resulting from the 
emission of one ton of carbon dioxide in each year. These impacts 
continue well beyond 2100.
    Estimates of annualized benefits and costs of the proposed 
standards for electric motors are shown in Table I.8. The results under 
the primary estimate are as follows. Using a 7-percent discount rate 
for benefits and costs other than CO2 reduction, for which 
DOE used a 3-percent discount rate along with the average SCC series 
that uses a 3-percent discount rate, the cost of the standards proposed 
in today's rule is $462 million per year in increased equipment costs; 
while the estimated benefits are $1,114 million per year in reduced 
equipment operating costs, $586 million in CO2 reductions, 
and $21.5 million in reduced NOX emissions. In this case, 
the net benefit would amount to $957 million per year. Using a 3-
percent discount rate for all benefits and costs and the average SCC 
series, the estimated cost of the standards proposed in today's rule is 
$577 million per year in increased equipment costs; while the estimated 
benefits are $1,730 million per year in reduced operating costs, $586 
million in CO2 reductions, and $31.5 million in reduced 
NOX emissions. In this case, the net benefit would amount to 
approximately $1,354 million per year.

   Table I.8--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Electric Motors, in
                                                  Million 2012$
----------------------------------------------------------------------------------------------------------------
                                                          Primary estimate   Low net benefits  High net benefits
                                       Discount rate             *              estimate *         estimate *
----------------------------------------------------------------------------------------------------------------
                                                                            million 2012$/year
----------------------------------------------------------------------------------------------------------------
Benefits:
    Consumer Operating Cost        7%..................              1,114                924              1,358
     Savings.                      3%..................              1,730              1,421              2,134
    CO2 Reduction Monetized Value  5%..................                155                134                179
     ($11.8/t case) *.
    CO2 Reduction Monetized Value  3%..................                586                506                679
     ($39.7/t case) *.
    CO2 Reduction Monetized Value  2.5%................                882                762               1022
     ($61.2/t case) *.
    CO2 Reduction Monetized Value  3%..................              1,811              1,565              2,098
     ($117.0/t case) *.
    NOX Reduction Monetized Value  7%..................              21.46              18.55              24.68
     (at $2,639/ton) **.           3%..................              31.48              27.20              36.39
                                  ------------------------------------------------------------------------------
      Total Benefits [dagger]....  7% plus CO2 range...     1,290 to 2,947     1,077 to 2,507     1,562 to 3,481
                                   7%..................              1,721              1,449              2,061
                                   3% plus CO2 range...     1,916 to 3,572     1,583 to 3,014     2,350 to 4,268
                                   3%..................              2,347              1,955              2,849
----------------------------------------------------------------------------------------------------------------
Costs:

[[Page 73597]]

 
    Incremental Installed Costs..  7%..................                462                492                447
                                   3%..................                577                601                569
----------------------------------------------------------------------------------------------------------------
Net Benefits:
    Total [dagger]...............  7% plus CO2 range...       585 to 2,016     1,115 to 3,033     1,353 to 3,438
                                   7%..................                957              1,614              1,887
                                   3% plus CO2 range...       982 to 2,413     1,781 to 3,700     1,957 to 4,043
                                   3%..................              1,354              2,280              2,492
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with electric motors shipped in 2015-2044.
  These results include benefits to consumers which accrue after 2044 from the equipment purchased in years 2015-
  2044. Costs incurred by manufacturers, some of which may be incurred in preparation for the rule, are not
  directly included, but are indirectly included as part of incremental equipment costs. The Primary, Low
  Benefits, and High Benefits Estimates are in view of projections of energy prices from the Annual Energy
  Outlook (AEO) 2013 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental
  equipment costs reflect a medium constant projected equipment price in the Primary Estimate, a declining rate
  for projected equipment price trends in the Low Benefits Estimate, and an increasing rate for projected
  equipment price trends in the High Benefits Estimate. The methods used to derive projected price trends are
  explained in section IV.F.1.
** The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values
  are based on the average SCC from the three integrated assessment models, at discount rates of 2.5, 3, and 5
  percent. The fourth set, which represents the 95th percentile SCC estimate across all three models at a 3-
  percent discount rate, is included to represent higher-than-expected impacts from temperature change further
  out in the tails of the SCC distribution. The values in parentheses represent the SCC in 2015. The SCC time
  series incorporate an escalation factor. The value for NOX is the average of the low and high values used in
  DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to
  average SCC with 3-percent discount rate. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,''
  the operating cost and NOX benefits are calculated using the labeled discount rate, and those values are added
  to the full range of CO2 values.

    DOE has tentatively concluded that the proposed standards represent 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified, and would result in the 
significant conservation of energy. DOE further notes that equipment 
achieving these standard levels are already commercially available for 
most equipment classes covered by today's proposal. Based on the 
analyses described above, DOE has tentatively concluded that the 
benefits of the proposed standards to the Nation (energy savings, 
positive NPV of consumer benefits, consumer LCC savings, and emission 
reductions) would outweigh the burdens (loss of INPV for manufacturers 
and LCC increases for some consumers).
    DOE also considered more-stringent energy efficiency levels as 
trial standard levels, and is still considering them in this 
rulemaking. However, DOE has tentatively concluded that the potential 
burdens of the more-stringent energy efficiency levels would outweigh 
the projected benefits. Depending on the comments that DOE receives in 
response to this notice and related information collected and analyzed 
during the course of this rulemaking, DOE may adopt energy efficiency 
levels presented in this notice that are either higher or lower than 
the proposed standards, or some combination of level(s) that 
incorporate the proposed standards in part.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying today's proposed rule, as well as some relevant historical 
background related to the establishment of standards for electric 
motors.

A. Authority

    Title III, Part B of the Energy Policy and Conservation Act of 1975 
(EPCA or the Act), Public Law 94-163, as amended (42 U.S.C. 6291-6309) 
established the ``Energy Conservation Program for Consumer Products 
Other Than Automobiles.'' Part C of Title III of EPCA (42 U.S.C. 6311-
6317) established a similar program for ``Certain Industrial 
Equipment,'' including electric motors.\11\ The Energy Policy Act of 
1992 (EPACT 1992) (Pub. L. 102-486) amended EPCA by establishing energy 
conservation standards and test procedures for certain commercial and 
industrial electric motors (in context, ``motors'') manufactured (alone 
or as a component of another piece of equipment) after October 24, 
1997. In December 2007, Congress passed into law the Energy 
Independence and Security Act of 2007 (EISA 2007) (Pub. L. 110-140). 
Section 313(b)(1) of EISA 2007 updated the energy conservation 
standards for those electric motors already covered by EPCA and 
established energy conservation standards for a larger scope of motors 
not previously covered by standards. (42 U.S.C. 6313(b)(2)) EPCA 
directs the Secretary of Energy to publish a final rule no later than 
24 months after the effective date of the previous final rule to 
determine whether to amend the standards already in effect. Any such 
amendment shall apply to electric motors manufactured after a date 
which is five years after either: (1) The effective date of the 
previous amendment or (2) if the previous final rule did not amend the 
standards, the earliest date by which a previous amendment could have 
been effective. (42 U.S.C. 6313(b)(4)(B))
---------------------------------------------------------------------------

    \11\ For editorial reasons, upon codification in the U.S. Code, 
Parts B and C were redesignated as Parts A and A-1, respectively.
---------------------------------------------------------------------------

    DOE is issuing today's proposal pursuant to Part C of Title III, 
which establishes an energy conservation program for covered equipment 
that consists essentially of four parts: (1) Testing; (2) labeling; (3) 
the establishment of Federal energy conservation standards; and (4) 
certification and enforcement procedures. For those electric motors for 
which Congress established standards, or for which DOE amends or 
establishes standards, the DOE test procedure must be the prescribed 
procedures that currently appear at 10 CFR part 431 that apply to 
electric motors. The test procedure is subject to review and revision 
by the Secretary in accordance with certain criteria and conditions. 
(See 42 U.S.C. 6314(a))
    Section 343(a)(5)(B)-(C) of EPCA, 42 U.S.C. 6314(a)(5)(B)-(C), 
provides in part that if the NEMA- and IEEE-developed test procedures 
are amended, DOE shall so amend the test procedures

[[Page 73598]]

under 10 CFR part 431, unless the Secretary determines, by rule, that 
the amended industry procedures would not meet the requirements for 
test procedures to produce results that reflect energy efficiency, 
energy use, and estimated operating costs of the tested motor, or, 
would be unduly burdensome to conduct. (42 U.S.C. 6314(a)(2)-(3), 
(a)(5)(B)) As newer versions of the NEMA and IEEE test procedures for 
electric motors were developed, DOE updated 10 CFR part 431 to reflect 
these changes. Manufacturers of covered equipment must use the 
prescribed DOE test procedure as the basis for certifying to DOE that 
their equipment complies with the applicable energy conservation 
standards adopted under EPCA and when making representations to the 
public regarding the energy use or efficiency of such equipment. (42 
U.S.C. 6314(d)) Similarly, DOE must use these test procedures to 
determine whether the equipment comply with standards adopted pursuant 
to EPCA. Id.
    DOE must follow specific statutory criteria for prescribing new and 
amended standards for covered equipment. In the case of electric 
motors, the criteria set out in relevant subsections of 42 U.S.C. 6295, 
which normally applies to standards related to consumer products, also 
apply to the setting of energy conservation standards for motors via 42 
U.S.C. 6316(a). As indicated above, new and amended standards must be 
designed to achieve the maximum improvement in energy efficiency that 
is technologically feasible and economically justified. (42 U.S.C. 
6295(o)(2)(A) and 6316(a)) Furthermore, DOE may not adopt any standard 
that would not result in the significant conservation of energy. (42 
U.S.C. 6295(o)(3) and 6316(a)) Moreover, DOE may not prescribe a 
standard: (1) For certain equipment, including electric motors, if no 
test procedure has been established for the product, or (2) if DOE 
determines by rule that the proposed standard is not technologically 
feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-6316(a)) 
In deciding whether a proposed standard is economically justified, DOE 
must determine whether the benefits of the standard exceed its burdens. 
(42 U.S.C. 6295(o)(2)(B)(i) and 6316(a)) DOE must make this 
determination after receiving comments on the proposed standard, and by 
considering, to the greatest extent practicable, the following seven 
factors:
    1. The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    2. The savings in operating costs throughout the estimated average 
life of the covered products in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered products that are likely to result from the imposition of the 
standard;
    3. The total projected amount of energy, or as applicable, water, 
savings likely to result directly from the imposition of the standard;
    4. Any lessening of the utility or the performance of the covered 
products likely to result from the imposition of the standard;
    5. The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
imposition of the standard;
    6. The need for national energy and water conservation; and
    7. Other factors the Secretary of Energy (Secretary) considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII) and 6316(a))
    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any new or amended standards that either increase the maximum allowable 
energy use or decrease the minimum required energy efficiency of a 
covered product. (42 U.S.C. 6295(o)(1) and 6316(a)) Also, the Secretary 
may not prescribe an amended or new standard if interested persons have 
established by a preponderance of the evidence that the standard is 
likely to result in the unavailability in the United States of any 
covered product type (or class) of performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States. (42 U.S.C. 6295(o)(4) and 6316(a))
    Further, EPCA, as codified, establishes a rebuttable presumption 
that a standard is economically justified if the Secretary finds that 
the additional cost to the consumer of purchasing a product complying 
with an energy conservation standard level will be less than three 
times the value of the energy savings during the first year that the 
consumer will receive as a result of the standard, as calculated under 
the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii) and 
6316(a))
    Additionally, 42 U.S.C. 6295(q)(1), as applied to covered equipment 
via 42 U.S.C. 6316(a), specifies requirements when promulgating a 
standard for a type or class of covered product that has two or more 
subcategories. DOE must specify a different standard level than that 
which applies generally to such type or class of equipment for any 
group of covered equipment that have the same function or intended use 
if DOE determines that equipment within such group: (A) Consume a 
different kind of energy from that consumed by other covered equipment 
within such type (or class); or (B) have a capacity or other 
performance-related feature which other equipment within such type (or 
class) do not have and such feature justifies a higher or lower 
standard. (42 U.S.C. 6294(q)(1) and 6316(a)). In determining whether a 
performance-related feature justifies a different standard for a group 
of products, DOE must consider such factors as the utility to the 
consumer of the feature and other factors DOE deems appropriate. Id. 
Any rule prescribing such a standard must include an explanation of the 
basis on which such higher or lower level was established. (42 U.S.C. 
6295(q)(2) and 6316(a))
    Federal energy conservation requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a)-(c) and 6316(a)) DOE may, however, 
grant waivers of Federal preemption for particular State laws or 
regulations, in accordance with the procedures and other provisions set 
forth under 42 U.S.C. 6297(d)).

B. Background

1. Current Standards
    An electric motor is a device that converts electrical power into 
rotational mechanical power. The outside structure of the motor is 
called the frame, which houses a rotor (the spinning part of the motor) 
and the stator (the stationary part that creates a magnetic field to 
drive the rotor). Although many different technologies exist, DOE's 
rulemaking is concerned with squirrel-cage induction motors, which 
represent the majority of electric motor energy use. In squirrel-cage 
induction motors, the stator drives the rotor by inducing an electric 
current in the squirrel-cage, which then reacts with the rotating 
magnetic field to propel the rotor in the same way a person can repel 
one handheld magnet with another. The squirrel-cage used in the rotor 
of induction motors consists of longitudinal conductive bars (rotor 
bars) connected at both ends by rings (end rings) forming a cage-like 
shape. Among other design parameters, motors can vary in horsepower, 
number of ``poles'' (which determines how quickly the motor rotates), 
and torque characteristics. Most motors have ``open'' frames that allow 
cooling airflow through the motor body, though

[[Page 73599]]

some have enclosed frames that offer added protection from foreign 
substances and bodies. DOE regulates various motor types from between 1 
and 500 horsepower, with 2, 4, 6, and 8 poles, and with both open and 
enclosed frames.
    EPACT 1992 amended EPCA by establishing energy conservation 
standards and test procedures for certain commercial and industrial 
electric motors manufactured either alone or as a component of another 
piece of equipment after October 24, 1997. Section 313 of EISA 2007 
amended EPCA by: (1) Striking the definition of ``electric motor'' 
provided under EPACT 1992, (2) setting forth definitions for ``general 
purpose electric motor (subtype I)'' and ``general purpose electric 
motor (subtype II),'' and (3) prescribing energy conservation standards 
for ``general purpose electric motors (subtype I),'' ``general purpose 
electric motors (subtype II), ``fire pump electric motors,'' and ``NEMA 
Design B general purpose electric motors'' with a power rating of more 
than 200 horsepower but not greater than 500 horsepower. (42 U.S.C. 
6311(13), 6313(b)). The current standards for these motors, which are 
reproduced in the proposed regulatory text at the end of this notice, 
are divided into four tables that prescribe specific efficiency levels 
for each of those groups of motors.
2. History of Standards Rulemaking for Electric Motors
    On October 5, 1999, DOE published in the Federal Register, a final 
rule to implement the EPACT 1992 electric motor requirements. 64 FR 
54114. In response to EISA 2007, on March 23, 2009, DOE updated, among 
other things, the corresponding electric motor regulations at 10 CFR 
part 431 with the new definitions and energy conservation standards. 74 
FR 12058. On December 22, 2008, DOE proposed to update the test 
procedures under 10 CFR part 431 both for electric motors and small 
electric motors. 73 FR 78220. DOE finalized key provisions related to 
small electric motor testing in a 2009 final rule at 74 FR 32059 (July 
7, 2009), and further updated the test procedures for electric motors 
and small electric motors at 77 FR 26608 (May 4, 2012). The May 2012 
final rule primarily focused on updating various definitions and 
incorporations by reference related to the current test procedure. In 
that rule, DOE promulgated a regulatory definition of ``electric 
motor'' to account for EISA 2007's removal of the previous statutory 
definition of ``electric motor.'' DOE also clarified definitions 
related to those motors that EISA 2007 laid out as part of EPCA's 
statutory framework, including motor types that DOE had not previously 
regulated. See generally, id. at 26613-26619. DOE published a new 
proposed test procedure rulemaking on June 26, 2013, that proposes to 
further refine some existing electric motor definitions and add certain 
definitions and test procedure preparatory steps to address a wider 
variety of electric motor types than are currently regulated. 78 FR 
38456.
    Regarding the compliance date that would apply to the requirements 
of today's proposed rule, EPCA directs the Secretary of Energy to 
publish a final rule no later than 24 months after the effective date 
of the previous final rule to determine whether to amend the standards 
in effect for such equipment. Any such amendment shall apply to 
electric motors manufactured after a date which is five years after: 
(i) The effective date of the previous amendment; or (ii) if the 
previous final rule did not amend the standards, the earliest date by 
which a previous amendment could have been effective. (42 U.S.C. 
6313(b)(4))
    As described previously, EISA 2007 constitutes the most recent 
amendment to EPCA and energy conservation standards for electric 
motors. Because these amendments required compliance on December 19, 
2010, DOE had indicated during the course of public meetings held in 
advance of today's proposal that motors manufactured after December 19, 
2015, would need to comply with any applicable new standards that DOE 
may set as part of this rulemaking. Today's proposed standards would 
apply to motors manufactured starting on December 19, 2015. As noted in 
detail later in this notice, however, DOE is interested in receiving 
comments on the ability of manufacturers to meet this deadline.
    DOE received numerous comments from interested parties who provided 
significant input to DOE in response to the framework document and 
preliminary analysis that the agency had issued. See 75 FR 59657 (Sept. 
28, 2010) (framework document notice of availability) and 77 FR 43015 
(July 23, 2012) (preliminary analysis notice of availability). During 
the framework document comment period for this rulemaking, several 
interested parties urged DOE to consider including additional motor 
types currently without energy conservation standards in DOE's analyses 
and establishing standards for such motor types. In the commenters' 
view, this approach would more effectively increase energy savings than 
setting more stringent standards for currently regulated electric 
motors. In response, DOE published a Request for Information (RFI) 
seeking public comments from interested parties regarding establishment 
of energy conservation standards for several types of definite and 
special purpose motors for which EISA 2007 did not provide energy 
conservation standards. 76 FR 17577 (March 30, 2011). DOE received 
comments responding to the RFI advocating that DOE regulate many of the 
electric motors discussed in the RFI, as well as many additional motor 
types.
    Then, on August 15, 2012, a group of interested parties (the 
``Motor Coalition'' \12\) submitted a Petition to DOE asking the agency 
to adopt a consensus stakeholder proposal that would amend the energy 
conservation standards for electric motors. The Motor Coalition's 
proposal advocated expanding the scope of coverage to a broader range 
of motors than what DOE currently regulates and it recommended that 
energy conservation standards for all covered electric motors be set at 
levels that are largely equivalent to what DOE proposes in today's NOPR 
(i.e., efficiency levels in NEMA MG1-2011 Tables 12-12 and 20-B).\13\
---------------------------------------------------------------------------

    \12\ The members of the Motor Coalition include: National 
Electrical Manufacturers Association, American Council for an 
Energy[hyphen]Efficient Economy, Appliance Standards Awareness 
Project, Alliance to Save Energy, Earthjustice, Natural Resources 
Defense Council, Northwest Energy Efficiency Alliance, Northeast 
Energy Efficiency Partnerships, and Northwest Power and Conservation 
Council.
    \13\ DOE's proposal differs from that of the Motor Coalition in 
that DOE's proposal covers brake motors and does not set separate 
standards for U-frame motors. It also seeks supplemental information 
regarding certain 56-frame motors. See section IV.A.2 for details.
---------------------------------------------------------------------------

    DOE received several comments from NEMA regarding the December 19, 
2015, compliance date. First, NEMA pointed out that all publications 
and presentations prior to that preliminary analysis public meeting on 
August 21, 2012, indicated that DOE's statutory deadline for any final 
rule was December 19, 2012, but at the public meeting DOE showed a 
final rule completion date as the end of 2013. (NEMA, No. 54 at pp. 2, 
6-7) NEMA questioned the authority by which DOE has decided to delay 
the Final Rule beyond the date of December 19, 2012, as stipulated in 
EPCA. (NEMA, No. 54 at p. 2)
    Second, NEMA commented that shortening the time to comply with any 
new standards from three years to two years would place additional 
burdens on manufacturers considering all of the electric motors types 
that DOE is considering in the preliminary TSD, the burdensome 
candidate standard levels that DOE is considering, and the

[[Page 73600]]

possibility of expanding the scope of energy conservation standards. 
(NEMA, No. 54 at pp. 2, 7; NEMA, Public Meeting Transcript, No. 60 at 
p. 30)
    Third, NEMA also noted that when EPACT 1992 first added electric 
motors as covered equipment, motor manufacturers were allowed five 
years to modify motor designs and certify compliance to the new 
standards. (NEMA, No. 54 at p. 7) It further noted that NEMA MG 1-1998 
subsequently introduced NEMA Premium efficiency standards, and between 
1998 and 2007 manufacturers voluntarily increased the number of NEMA 
Premium efficiency motor models available. (NEMA, No. 54 at p. 7) NEMA 
commented that this transition period eased the burden of satisfying 
the added stringency of the standards set by EISA 2007, which allowed 
three years to update energy conservation standards to mandatory NEMA 
Premium levels for certain motor ratings. (NEMA, No. 54 at p. 7) NEMA 
added that adhering to the statutory deadline for setting any new and 
amended standards would minimize any disruption in the electric motor 
market. (NEMA, No. 54 at p. 8) NEMA also commented that since the EISA 
2007 standards were enacted, only a limited number of motor ratings 
above NEMA Premium have been offered because there is not sufficient 
space available in most frame ratings to increase the efficiency. 
(NEMA, No. 54 at p. 7) NEMA added that any standards above NEMA Premium 
would force manufacturers to redesign entire product lines and go 
through the process of certification and compliance, all of which would 
be expected to take longer than three years. (NEMA, No. 54 at pp. 7, 8)
    Finally, NEMA also attempted to illustrate the difficulty of 
reaching NEMA Premium levels in IEC frame motors, noting that a 
comparison of certificates of compliance before and after EISA 2007 
standards went into effect would demonstrate that some manufacturers 
were forced to abandon the U.S. electric motor market for some period 
of time before they could update their IEC frame motor product line. 
(NEMA, No. 54 at p. 8) NEMA added that increasing the efficiency of 
subtype II motors to NEMA Premium efficiency and expanding the scope of 
motors subject to energy conservation standards (many of which 
currently have efficiency levels below EPACT 1992 energy conservation 
levels) will also require extensive redesign, and manufacturers would 
be forced to comply in only three years. (NEMA, No. 54 at p. 8)
    During the course of preparing for the electric motors energy 
conservation standards rulemaking, information was submitted to DOE by 
NEMA, ASAP, and CDA in response to DOE's RFI and then later in the 
Petition from the Motors Coalition \14\ that caused DOE to reevaluate 
the scope of electric motors it was considering in this rulemaking. 
That Petition, and related supporting information, suggested that DOE 
apply the NEMA Premium efficiency levels (``NEMA Premium'') to a much 
broader swath of electric motors than are currently regulated by DOE, 
rather than increase the stringency of the standards that had only 
recently come into effect (i.e., EISA 2007 standards). As part of its 
routine practice, DOE reviewed the information and the merits of the 
Petition. With the potential prospect of expanding the types of motors 
that would be regulated by standards, DOE recognized the need to amend 
its test procedures to add the necessary testing preparatory steps 
(i.e. test set-up procedures) to DOE's regulations. The inclusion of 
these steps would help ensure that manufacturers of these new motor 
types would be performing the same steps as are performed when testing 
currently regulated motors.
---------------------------------------------------------------------------

    \14\ The Petition is available at: http://www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0027-0035.
---------------------------------------------------------------------------

    The compliance date prescribed by statute would require 
manufacturers to begin manufacturing compliant motors by December 19, 
2015. Accordingly, DOE is proposing a December 19, 2015, compliance 
date. DOE, however, recognizes that the statute also contemplated a 
three-year lead time for manufacturers in order to account for the 
potential logistical and production hurdles that manufacturers may face 
when transitioning to the new standards. Accordingly, while DOE is 
proposing a December 19, 2015 compliance deadline, it is also 
interested in comments that detail any hurdles with meeting this 
compliance deadline along with the merits of receiving the three-year 
lead-time also set out in the statute.
3. Process for Setting Energy Conservation Standards
    Section 325(o) provides criteria for prescribing new or amended 
standards which are designed to achieve the maximum improvement in 
energy efficiency and for which the Secretary of Energy determines are 
technologically feasible and economically justified. Consequently, DOE 
must consider, to the greatest extent practicable, the following seven 
factors: (1) The economic impact of the standard on the manufacturers 
and consumers of the products subject to the standard; (2) the savings 
in operating costs throughout the estimated average life of the 
products compared to any increase in the prices, initial costs, or 
maintenance expenses for the products that are likely to result from 
the imposition of the standard; (3) the total projected amount of 
energy savings likely to result directly from the imposition of the 
standard; (4) any lessening of the utility or the performance of the 
covered products likely to result from the imposition of the standard; 
(5) the impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
imposition of the standard; (6) the need for national energy 
conservation; and (7) other factors the Secretary considers relevant. 
(42 U.S.C. 6295(o)(2)(B)(i) and 6316(a))
    Other statutory requirements are set forth in 42 U.S.C. 6295(o)(1)-
(2)(A), (2)(B)(ii)-(iii), and (3)-(4). These criteria apply to the 
setting of standards for electric motors through 42 U.S.C. 6316(a).

III. General Discussion

    DOE developed today's proposed rule after considering input, 
including verbal and written comments, data, and information from 
interested parties that represent a variety of interests. All 
commenters, along with their corresponding abbreviations and 
affiliations, are listed in Table III.1 below. The issues raised by 
these commenters are addressed in the discussions that follow.

                   Table III.1--Summary of Commenters
------------------------------------------------------------------------
    Company or organization         Abbreviation         Affiliation
------------------------------------------------------------------------
Air Movement and Control         AMCAI.............  Trade Association.
 Association International, Inc.

[[Page 73601]]

 
Alliance to Save Energy........  ASE...............  Energy Efficiency
                                                      Advocates.
American Council for an          ACEEE.............  Energy Efficiency
 Energy-Efficient Economy......                       Advocates.
Appliance Standards Awareness    ASAP..............  Energy Efficiency
 Project.                                             Advocates.
Baldor Electric Co.............  Baldor............  Manufacturers.
BBF & Associates...............  BBF...............  Representative for
                                                      Trade Association.
California Investor Owned        CA IOUs...........  Utilities.
 Utilities.
Copper Development Association.  CDA...............  Trade Association.
Earthjustice...................  Earthjustice......  Energy Efficiency
                                                      Advocates.
Electric Apparatus Service       EASA..............  Trade Association.
 Association.
Flolo Corporation..............  Flolo.............  Other.
Industrial Energy Consumers of   IECA..............  Trade Association.
 America.
Motor Coalition *..............  MC................  Energy Efficiency
                                                      Advocates, Trade
                                                      Associations,
                                                      Manufacturers,
                                                      Utilities.
National Electrical              NEMA..............  Trade Association.
 Manufacturers Association.
Northwest Energy Efficiency      NEEA..............  Energy Efficiency
 Alliance.                                            Advocates.
Northwest Power & Conservation   NPCC..............  Utilities.
 Council.
SEW-Eurodrive, Inc.............  SEWE..............  Manufacturer.
UL LLC.........................  UL................  Testing Laboratory.
------------------------------------------------------------------------
* The members of the Motor Coalition include: National Electrical
  Manufacturers Association (NEMA), American Council for an
  Energy[hyphen]Efficient Economy (ACEEE), Appliance Standards Awareness
  Project (ASAP), Alliance to Save Energy (ASE), Earthjustice, Natural
  Resources Defense Council (NRDC), Northwest Energy Efficiency Alliance
  (NEEA), Northeast Energy Efficiency Partnerships (NEEP), and Northwest
  Power and Conservation Council (NPCC).

    Subsequent to DOE's preliminary analysis public meeting, several 
other interested parties submitted comments supporting the Petition. 
Those supporters included: BBF and Associates, the Air Movement and 
Control Association International, Inc., U.S. Senators Lisa Murkowski 
and Jeff Bingaman, the Hydraulic Institute, the Arkansas Economic 
Development and Commission-Energy Office, and the Power Transmission 
Distributors Association.

A. Test Procedure

    On June 26, 2013, DOE published a notice that proposed to 
incorporate definitions for certain motor types not currently subject 
to energy conservation standards (78 FR 38456). The notice also 
proposed to clarify several definitions for motor types currently 
regulated by energy conservation standards and adding some necessary 
steps to facilitate the testing of certain motor types that DOE does 
not currently require to meet standards. During its preliminary 
analysis stage, DOE received comments concerning definitions and test 
procedure set-up steps suggested for testing motors under an expanded 
scope approach. DOE addressed the comments as part of the test 
procedure NOPR. For additional details, see 78 FR 38456 (June 26, 
2013).

B. Equipment Classes and Current Scope of Coverage

    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 would 
justify a different standard. In making a determination whether a 
performance-related feature would justify a different standard, DOE 
must consider factors such as the utility to the consumer of the 
feature and other factors that DOE determines are appropriate. (42 
U.S.C. 6295(q) and 6316(a))
    Existing energy conservation standards cover electric motors that 
fall into four categories based on physical design features of the 
motor. These four categories are: General purpose electric motors 
(subtype I), general purpose electric motors (subtype II), fire pump 
electric motors, and NEMA Design B motors (with a horsepower rating 
from 201 through 500). Definitions for each of these terms can be found 
at 10 CFR 431.12.

C. Expanded Scope of Coverage

    DOE has the authority to set energy conservation standards for a 
wider range of electric motors than those classified as general purpose 
electric motors (e.g., definite or special purpose motors). EPACT 1992 
amended EPCA to include, among other things, a definition for the term 
``electric motor''--which the statute defined as including certain 
``general purpose'' motors. (42 U.S.C. 6311(13)(A) (1992)) The 
amendments also defined the terms ``definite purpose motors'' and 
``special purpose motor.'' (42 U.S.C. 6311(13)(C) and (D)) (1992)) 
EPACT 1992 initially prescribed energy conservation standards for 
``electric motors'' (i.e., subtype I general purpose electric motors) 
and explicitly stated that these standards did not apply to definite 
purpose or special purpose motors. (42 U.S.C. 6313(b)(1) (1992)) 
However, EISA 2007 struck the narrow EPACT 1992 definition of 
``electric motor.'' With the removal of this definition, the term 
``electric motor'' became broader in scope. As a result of these 
changes, both definite and special purpose motors fell under the broad 
heading of ``electric motors'' that previously only applied to 
``general purpose'' motors. While EISA 2007 prescribed standards for 
general purpose motors, the Act did not apply those standards to 
definite or special purpose motors. (42 U.S.C. 6313(b) (2012))
    Although DOE believes that EPCA, as amended through EISA 2007, 
provides sufficient statutory authority for the regulation of special 
purpose and definite purpose motors as ``electric motors,'' DOE notes 
it has additional authority under section 10 of the American Energy 
Manufacturing Technical Corrections Act, Public Law 112-210, which 
amended DOE's authority to regulate commercial and industrial equipment 
under section 340(2)(B) of EPCA to include ``other motors,'' in 
addition to ``electric motors''. (42 U.S.C. 6311(2)(B)(xiii)). 
Therefore, even if special and definite purpose motors were not 
``electric motors,'' special and definite purpose motors would be 
considered as ``other

[[Page 73602]]

motors'' that EPCA already treats as covered industrial equipment.\15\
---------------------------------------------------------------------------

    \15\ EPCA specifies the types of industrial equipment that can 
be classified as covered in addition to the equipment enumerated in 
42 U.S.C. 6311(1). This equipment includes ``other motors'' (to be 
codified at 42 U.S.C. 6311(2)(B)). Industrial equipment must also, 
without regard to whether such equipment is in fact distributed in 
commerce for industrial or commercial use, be of a type that: (1) In 
operation consumes, or is designed to consume, energy in operation; 
(2) to any significant extent, is distributed in commerce for 
industrial or commercial use; and (3) is not a covered product as 
defined in 42 U.S.C. 6291(a)(2) of EPCA, other than a component of a 
covered product with respect to which there is in effect a 
determination under 42 U.S.C. 6312(c). (42 U.S.C. 6311 (2)(A)). Data 
from the 2002 United States Industrial Electric Motor Systems Market 
Opportunities Assessment estimated total energy use from industrial 
motor systems to be 747 billion kWh. Based on the expansion of 
industrial activity, it is likely that current annual electric motor 
energy use is higher than this figure. Electric motors are 
distributed in commerce for both the industrial and commercial 
sectors. According to data provided by the Motor Coalition, the 
number of electric motors manufactured in, or imported into, the 
United States is over five million electric motors annually, 
including special and definite purpose motors. Finally, special and 
definite purpose motors are not currently regulated under Title 10 
of the Code of Federal Regulations, part 430 (10 CFR part 430).
    To classify equipment as covered commercial or industrial 
equipment, the Secretary must also determine that classifying the 
equipment as covered equipment is necessary for the purposes of Part 
A-1 of EPCA. The purpose of Part A-1 is to improve the efficiency of 
electric motors, pumps and certain other industrial equipment to 
conserve the energy resources of the nation. (42 U.S.C. 6312(a)-(b)) 
In today's proposal, DOE has tentatively determined that the 
regulation of special and definite purpose motors is necessary to 
carry out the purposes of part A-1 of EPCA because regulating these 
motors will promote the conservation of energy supplies. Efficiency 
standards that may result from coverage would help to capture some 
portion of the potential for improving the efficiency of special and 
definite purpose motors.
---------------------------------------------------------------------------

    Consistent with EISA 2007's reworking of the definition, the 2012 
test procedure final rule broadly defined the term ``electric motor.'' 
at 10 CFR 431.12. (77 FR 26608 (May 4, 2012)). That definition covers 
``general purpose,'' ``special purpose'' and ``definite purpose'' 
electric motors (as defined by EPCA). As noted above, EPCA did not 
require either ``special purpose'' or ``definite purpose'' motor types 
to meet energy conservation standards because they were not considered 
``general purpose'' under the EPCA definition of ``general purpose 
motor''--a necessary element to meet the pre-EISA 2007 ``electric 
motor'' definition. See 77 FR 26612. Because of the restrictive nature 
of the prior electric motor definition, along with the restrictive 
definition of the term ``industrial equipment,'' DOE would have been 
unable to set standards for such motors without this change. (See 42 
U.S.C. 6311(2)(B) (2006) (limiting the scope of equipment covered under 
EPCA)) In view of the changes introduced by EISA 2007 and the absence 
of energy conservation standards for special purpose and definite 
purpose motors, as noted in chapter 2 of DOE's July 2012 electric 
motors preliminary analysis technical support document (TSD),\16\ it is 
DOE's view that both of these motors are categories of ``electric 
motors'' covered under EPCA, as currently amended. Accordingly, DOE is 
proposing standards for certain definite purpose and special purpose 
motors. To this end, DOE is considering setting energy conservation 
standards for those motors that exhibit all of the following nine 
characteristics:
---------------------------------------------------------------------------

    \16\ The preliminary TSD published in July 2012 is available at: 
http://www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0027-
0023.
---------------------------------------------------------------------------

     Is a single-speed, induction motor,
     Is rated for continuous duty (MG 1) operation or for duty 
type S1 (IEC),
     Contains a squirrel-cage (MG 1) or cage (IEC) rotor,
     Operates on polyphase alternating current 60-hertz 
sinusoidal line power,
     Is rated 600 volts or less,
     Has a 2-, 4-, 6-, or 8-pole configuration,
     Has a three-digit NEMA frame size (or IEC metric 
equivalent) or an enclosed 56 NEMA frame size (or IEC metric 
equivalent),
     Has no more than 500 horsepower, but greater than or equal 
to 1 horsepower (or kilowatt equivalent), and
     Meets all of the performance requirements of a NEMA Design 
A, B, or C electric motor or an IEC design N or H electric motor.
    However, motor types that exhibit all of the characteristics listed 
above, but that DOE does not believe should be subject to energy 
conservation standards at this time because of the current absence of a 
reliable and repeatable method to test them for efficiency, would be 
listed as motors that would not at this time be subject to energy 
conservation standards. Once a test procedure becomes available, DOE 
may consider setting standards for these motors at that time. See 
generally, 78 FR 38456 (June 26, 2013). DOE requests comment on these 
nine characteristics and their appropriateness for outlining scope of 
coverage.
    To facilitate the potential application of energy conservation 
standards to special and definite purpose motors, DOE proposed to 
define such motors and provide certain preparatory test procedure 
steps. 78 FR 38456 (June 26, 2013). The definitions under consideration 
would address motors currently subject to standards, specific motors 
DOE is considering requiring to meet standards, and some motors that 
will continue to not be required to meet particular energy conservation 
standards. Some of the clarifying definitions, such as the definitions 
for NEMA Design A and C electric motors, come from NEMA Standards 
Publication MG 1-2009, ``Motors and Generators.'' DOE understands that 
some of the motors addressed, such as partial motors and integral brake 
motors, do not have standard industry-accepted definitions. For such 
motor types, DOE worked with subject-matter experts (SMEs), 
manufacturers, and the Motor Coalition to create the working 
definitions that are proposed in the test procedure NOPR. (8 FR 38456 
(June 26, 2013).

D. Technological Feasibility

1. General
    EPCA requires that any new or amended energy conservation standard 
that DOE prescribes shall be designed to achieve the maximum 
improvement in energy efficiency that DOE determines is technologically 
feasible. (42 U.S.C. 6295(o)(2)(A) and 6316(a)). In each standards 
rulemaking, DOE conducts a screening analysis based on information 
gathered on all current technology options and prototype designs that 
could improve the efficiency of the products or equipment that are the 
subject of the rulemaking. 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.
    Where DOE determines that particular technology options are 
technologically feasible, it further evaluates each technology option 
in view of the following additional screening criteria: (1) 
Practicability to manufacture, install, or service; (2) adverse impacts 
on product utility or availability; and (3) adverse impacts on health 
or safety. Section IV.B of this notice addresses the results of the 
screening analysis for electric motors, particularly the designs DOE 
considered--those it screened out, and those that are the basis for the 
trial standard levels (TSLs) in this rulemaking. For further details on 
the screening analysis for this rulemaking, see chapter 4 of the NOPR 
TSD.

[[Page 73603]]

2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt a new or amended standard for a type or 
class of covered product, it must determine the maximum improvement in 
energy efficiency or maximum reduction in energy use that is 
technologically feasible for such product. (42 U.S.C. 6295(p)(1)) This 
requirement also applies to DOE proposals to amend the standards for 
electric motors. See 42 U.S.C. 6316(a). Accordingly, in its engineering 
analysis, DOE determined the maximum technologically feasible (``max-
tech'') improvements in energy efficiency for electric motors, using 
the design parameters for the most efficient motors available on the 
market or in working prototypes. (See chapter 5 of the NOPR TSD.) The 
max-tech levels that DOE determined for this rulemaking are described 
in section IV.C.3 of this proposed rule.

E. Energy Savings

1. Determination of Savings
    Section 325(o) of EPCA also provides that any new or amended energy 
conservation standard that DOE prescribes shall be designed to achieve 
the maximum improvement in energy efficiency that DOE determines is 
economically justified. (42 U.S.C. 6295(o)(2)(A)-(B) and 6316(a)). In 
addition, in determining whether such standard is technologically 
feasible and economically justified, DOE may not prescribe standards 
for certain types or classes of electric motors if such standards would 
not result in significant energy savings. (42 U.S.C. 6295(o)(3)(B) and 
6316(a)). For each TSL, DOE projected energy savings from the motors 
that would be covered under this rulemaking and that would be purchased 
in the 30-year period that begins in the year of compliance with the 
new and amended standards (2015-2044). The savings are measured over 
the entire lifetime of equipment purchased in the 30-year period.\17\ 
DOE quantified the energy savings attributable to each TSL as the 
difference in energy consumption between each standards case and the 
base case. The base case represents a projection of energy consumption 
in the absence of new or amended mandatory efficiency standards, and 
considers market forces and policies that affect demand for more 
efficient equipment.
---------------------------------------------------------------------------

    \17\ In the past DOE, presented energy savings results for only 
the 30-year period that begins in the year of compliance. In the 
calculation of economic impacts, however, DOE considered operating 
cost savings measured over the entire lifetime of equipment 
purchased in the 30-year period. DOE has chosen to modify its 
presentation of national energy savings to be consistent with the 
approach used for its national economic analysis.
---------------------------------------------------------------------------

    DOE used its national impact analysis (NIA) spreadsheet model to 
estimate the energy savings from new and amended standards for the 
equipment that would be subject to this rulemaking. The NIA spreadsheet 
model (described in section IV.H of this notice) calculates energy 
savings in site energy, which is the energy directly consumed by motors 
at the locations where they are used. For electricity, DOE reports 
national energy savings in terms of the savings in the energy that is 
used to generate and transmit the site electricity. To calculate source 
energy, DOE derives annual conversion factors from the model used to 
prepare the Energy Information Administration's (EIA) Annual Energy 
Outlook (AEO).
    DOE has begun to also estimate full-fuel-cycle energy savings. 76 
FR 51282 (August 18, 2011), as amended at 77 FR 49701 (August 17, 
2012). The full-fuel-cycle (FFC) metric includes the energy consumed in 
extracting, processing, and transporting primary fuels, and thus 
presents a more complete picture of the impacts of energy efficiency 
standards. DOE's evaluation of FFC savings is driven in part by the 
National Academy of Science's (NAS) report on FFC measurement 
approaches for DOE's Appliance Standards Program.\18\ The NAS report 
discusses that FFC was primarily intended for energy efficiency 
standards rulemakings where multiple fuels may be used by a particular 
product. In the case of this rulemaking pertaining to electric motors, 
only a single fuel--electricity--is consumed by the equipment. DOE's 
approach is based on the calculation of an FFC multiplier for each of 
the energy types used by covered equipment. The methodology for 
estimating FFC does not project how fuel markets would respond to this 
particular standard rulemaking. The FFC methodology simply estimates 
how much additional energy, and in turn how many tons of emissions, may 
be displaced if the estimated fuel were not consumed by the equipment 
covered in this rulemaking. It is also important to note that inclusion 
of FFC savings does not affect DOE's choice of proposed standards.
---------------------------------------------------------------------------

    \18\ ``Review of Site (Point-of-Use) and Full-Fuel-Cycle 
Measurement Approaches to DOE/EERE Building Appliance Energy-
Efficiency Standards,'' (Academy report) was completed in May 2009 
and included five recommendations. A copy of the study can be 
downloaded at: http://www.nap.edu/catalog.php?record_id=12670.
---------------------------------------------------------------------------

2. Significance of Savings
    As noted above, 42 U.S.C. 6295(o)(3)(B) prevents DOE from adopting 
a standard for a covered product unless such standard would result in 
``significant'' energy savings. Although the term ``significant'' is 
not explicitly defined in EPCA, the U.S. Court of Appeals, in Natural 
Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 
1985), indicated that Congress intended ``significant'' energy savings 
in this context to be savings that were not ``genuinely trivial.'' DOE 
believes that the energy savings for all of the TSLs considered in this 
rulemaking (presented in section V.A) are nontrivial, and, therefore, 
DOE considers them ``significant'' within the meaning of section 325 of 
EPCA.

F. Economic Justification

1. Specific Criteria
    EPCA provides seven factors to be evaluated in determining whether 
a potential energy conservation standard is economically justified. (42 
U.S.C. 6295(o)(2)(B)(i)) The following sections detail how DOE 
addresses each of those factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a new or amended standard on 
manufacturers, DOE first uses an annual cash-flow approach to determine 
the quantitative impacts. This step includes both a short-term 
assessment--based on the cost and capital requirements during the 
period between when a regulation is issued and when entities must 
comply with the regulation--and a long-term assessment over a 30-year 
period.\19\ The industry-wide impacts analyzed include industry net 
present value (INPV), which values the industry on the basis of 
expected future cash flows; cash flows by year; changes in revenue and 
income; and other measures of impact, as appropriate. Second, DOE 
analyzes and reports the impacts on different types of manufacturers, 
including impacts on small manufacturers. Third, DOE considers the 
impact of standards on domestic manufacturer employment and 
manufacturing capacity, as well as the potential for standards to 
result in plant closures and loss of capital investment. Finally, DOE 
takes into account cumulative impacts of various DOE regulations and 
other regulatory requirements on manufacturers.
---------------------------------------------------------------------------

    \19\ DOE also presents a sensitivity analysis that considers 
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

    For individual consumers, measures of economic impact include the 
changes in life-cycle cost (LCC) and payback period (PBP) associated 
with new or amended standards. The LCC, addressed

[[Page 73604]]

as ``savings in operating costs'' at 42 U.S.C. 6295(o)(2)(B)(i)(II), is 
one of seven factors considered in determining the economic 
justification for a new or amended standard and is discussed in the 
following section. For consumers in the aggregate, DOE also calculates 
the national net present value of the economic impacts applicable to a 
particular rulemaking.
b. Life-Cycle Costs
    The LCC is the sum of the purchase price of a piece of equipment 
(including its installation) and the operating expense (including 
energy, maintenance, and repair expenditures) discounted over the 
lifetime of that equipment. The LCC savings for the considered 
efficiency levels are calculated relative to a base case that reflects 
projected market trends in the absence of new or amended standards. The 
LCC analysis requires a variety of inputs, such as equipment prices, 
equipment energy consumption, energy prices, maintenance and repair 
costs, equipment lifetime, and consumer discount rates. For its 
analysis, DOE assumes that consumers, as users of electric motors, will 
purchase the considered equipment in the first year of compliance with 
new or amended standards.
    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. DOE identifies the 
percentage of consumers estimated to receive LCC savings or experience 
an LCC increase, in addition to the average LCC savings associated with 
a particular standard level. DOE also evaluates the LCC impacts of 
potential standards on identifiable subgroups of consumers that may be 
affected disproportionately by a national standard.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for imposing an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As 
discussed in section IV.H, DOE uses the NIA spreadsheet to project 
national energy savings.
d. Lessening of Utility or Performance
    In establishing classes of products, and in evaluating design 
options and the impact of potential standard levels, DOE evaluates 
standards that would not lessen the utility or performance of the 
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) As noted earlier, 
the substance of this provision applies to the equipment at issue in 
today's proposal as well. DOE has determined that the standards 
proposed in today's notice will not reduce the utility or performance 
of the equipment under consideration in this rulemaking. One piece of 
evidence for this claim includes the fact that many motors are already 
commonly being sold at the proposed levels (NEMA's ``Premium'' 
designation). A second piece of evidence is that the proposed standards 
closely track the recommendations of NEMA, which represents 
manufacturers who understand deeply the design compromises entailed in 
reaching higher efficiencies and who would be acting against the 
interest of their customers in recommending standards that would harm 
performance or utility.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from the imposition of a standard. (42 U.S.C. 
6295(o)(2)(B)(i)(V). It also directs the Attorney General to determine 
the impact, if any, of any lessening of competition likely to result 
from a proposed standard and to transmit such determination to the 
Secretary of Energy within 60 days of the publication of a proposed 
rule, together with an analysis of the nature and extent of the impact. 
(42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of today's 
proposed rule to the Attorney General with a request that the 
Department of Justice (DOJ) provide its determination on this issue. 
DOE will address the Attorney General's determination in the final 
rule.
f. Need for National Energy Conservation
    The energy savings from the proposed standards are likely to 
provide improvements to the security and reliability of the Nation's 
energy system. Reductions in the demand for electricity also may result 
in reduced costs for maintaining the reliability of the Nation's 
electricity system. DOE conducts a utility impact analysis to estimate 
how standards may affect the Nation's needed power generation capacity.
    The proposed standards also are likely to result in environmental 
benefits in the form of reduced emissions of air pollutants and 
greenhouse gases associated with energy production. DOE reports the 
emissions impacts from today's standards, and from each TSL it 
considered, in section V.B.4 of this notice. DOE also reports estimates 
of the economic value of emissions reductions resulting from the 
considered TSLs.
g. Other Factors
    EPCA allows the Secretary of Energy, in determining whether a 
standard is economically justified, to consider any other factors that 
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII))
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a 
rebuttable presumption that an energy conservation standard is 
economically justified if the additional cost to the consumer of a 
product that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. DOE's LCC and PBP 
analyses generate values used to calculate the effects that proposed 
energy conservation standards would have on the payback period for 
consumers. These analyses include, but are not limited to, the three-
year payback period contemplated under the rebuttable-presumption test. 
In addition, DOE routinely conducts an economic analysis that considers 
the full range of impacts to consumers, manufacturers, the Nation, and 
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The 
results of this analysis serve as the basis for DOE's evaluation of the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). The rebuttable presumption payback calculation 
is discussed in section IV.F.12 of this proposed rule.

IV. Methodology and Discussion of Related Comments

    DOE used four spreadsheet tools to estimate the impact of today's 
proposed standards. The first spreadsheet calculates LCCs and PBPs of 
potential new energy conservation standards. The second provides 
shipments forecasts and the third calculates national energy savings 
and net present value impacts of potential new energy conservation 
standards. The fourth tool helps assess manufacturer impacts, largely 
through use of the Government Regulatory Impact Model (GRIM).
    Additionally, DOE estimated the impacts of energy conservation 
standards for electric motors on utilities

[[Page 73605]]

and the environment. DOE used a version of EIA's National Energy 
Modeling System (NEMS) for the utility and environmental analyses. The 
NEMS model simulates the energy sector of the U.S. economy. EIA uses 
NEMS to prepare its Annual Energy Outlook (AEO), a widely known energy 
forecast for the United States. The version of NEMS used for appliance 
standards analysis is called NEMS-BT \20\ and is based on the AEO 
version with minor modifications.\21\ The NEMS-BT model offers a 
sophisticated picture of the effect of standards because it accounts 
for the interactions between the various energy supply and demand 
sectors and the economy as a whole.
---------------------------------------------------------------------------

    \20\ BT stands for DOE's Building Technologies Program.
    \21\ The EIA allows the use of the name ``NEMS'' to describe 
only an AEO version of the model without any modification to code or 
data. Because the present analysis entails some minor code 
modifications and runs the model under various policy scenarios that 
deviate from AEO assumptions, the name ``NEMS-BT'' refers to the 
model as used here. For more information on NEMS, refer to The 
National Energy Modeling System: An Overview, DOE/EIA-0581 (98) 
(Feb. 1998), available at: http://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf.
---------------------------------------------------------------------------

A. Market and Technology Assessment

    For the market and technology assessment, DOE develops information 
that provides an overall picture of the market for the equipment 
concerned, including the purpose of the equipment, the industry 
structure, and market characteristics. 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 rulemaking include scope of coverage, 
equipment classes, types of equipment sold and offered for sale, and 
technology options that could improve the energy efficiency of the 
equipment under examination. Chapter 3 of the TSD contains additional 
discussion of the market and technology assessment.
1. Current Scope of Electric Motors Energy Conservation Standards
    EISA 2007 amended EPCA to prescribe energy conservation standards 
for four categories of electric motors: General purpose electric motors 
(subtype I) (hereinafter, ``subtype I''), general purpose electric 
motors (subtype II) (hereinafter, ``subtype II''), fire pump electric 
motors, and NEMA Design B, general purpose electric motors that also 
meet the subtype I or subtype II definitions and are rated above 200 
horsepower through 500 horsepower. DOE's most recent test procedure 
final rule added clarity to the definitions for each of these motor 
categories, which are now codified at 10 CFR 431.12. 77 FR 26608.
    Although DOE is not proposing to modify these definitions, 
commenters sought additional clarifications. During the preliminary 
analysis public meeting, NEMA expressed confusion regarding whether IEC 
frame motors would fall under the subtype I or subtype II designation, 
as DOE defined them to be related to both definitions. NEMA added that 
because subtype I and subtype II electric motors are subject to 
different efficiency standards, manufacturers producing IEC frame 
motors are confused as to whether IEC frame motors are subject to NEMA 
MG 1 Table 12-11 or Table 12-12 efficiency standards.\22\ (NEMA, Public 
Meeting Transcript, No. 60 at pp. 36, 37)
---------------------------------------------------------------------------

    \22\ The efficiency levels found in Table 12-12 are the more 
stringent of the two sets of efficiency tables.
---------------------------------------------------------------------------

    DOE understands that an IEC frame motor could be treated as either 
a subtype I or subtype II motor depending on its other characteristics. 
Having an IEC frame alone does not dictate whether a motor is a general 
purpose subtype I or subtype II motor; rather, other physical 
characteristics, such as equivalency to a NEMA Design A, B, or C 
electric motor, and whether it has mounting feet could determine the 
subtype designation and associated energy efficiency standard level. 
All of these elements flow directly from the statutory changes enacted 
by EISA 2007. (See EISA 2007, sec. 313(a)(3), codified at 42 U.S.C. 
6311(13)) Currently, electric motors are required to meet energy 
conservation standards as follows:

                      Table IV.1--Current Electric Motor Energy Conservation Standards \23\
----------------------------------------------------------------------------------------------------------------
        Electric motor category               Horsepower range            Energy conservation standard level
----------------------------------------------------------------------------------------------------------------
General Purpose Electric Motors          1 to 200 (inclusive)......  MG 1-2011 Table 12-12.
 (Subtype I).
General Purpose Electric Motors          1 to 200 (inclusive)......  MG 1-2011 Table 12-11.
 (Subtype II).
NEMA Design B and......................  201 to 500 (inclusive)....  MG 1-2011 Table 12-11.
IEC Design N Motors....................
Fire Pump Electric Motors..............  1 to 500 (inclusive)......  MG 1-2011 Table 12-11.
----------------------------------------------------------------------------------------------------------------

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

    \23\ For the purposes of determining compliance, DOE assesses a 
motors horsepower rating according to the provisions of 10 CFR 
431.25(e).
---------------------------------------------------------------------------

    Additionally, NEMA requested clarification on the terminology DOE 
intends to use for NEMA Design B motors, namely whether the term is 
``NEMA Design B motor'' or ``NEMA Design B electric motor'' and what, 
if any, differences there are between the two terms. (NEMA, No. 54 at 
p. 14) DOE understands that the terms ``motor'' and ``electric motor'' 
may refer to a variety of machines outside of its regulatory context. 
However, because there are no NEMA Design B motors that are not 
electrically-driven, in DOE's view, the potential for ambiguity is 
minimal. DOE clarifies that it is using the term ``NEMA Design B 
motor,'' as is currently codified in 10 CFR 431.12. Additionally, DOE 
does not consider there to be any meaningful difference between the two 
terms and notes that all motors currently regulated under 10 CFR part 
431, subpart B, are electric motors.
    DOE requests comment on whether the proposed standards help resolve 
the potential issue on which it had previously issued clarification of 
whether a [IEC] motor may be considered to be subject to two standards.
2. Expanded Scope of Electric Motor Energy Conservation Standards
    As referenced above, on August 15, 2012, the Motor Coalition 
petitioned DOE to adopt the Coalition's consensus agreement, which, in 
part, formed the basis for today's proposal.\24\ The Motor Coalition 
petitioned DOE to simplify coverage to address a broad array of 
electric motors with a few clearly identified exceptions. The Motor 
Coalition advocated this approach to

[[Page 73606]]

simplify manufacturer compliance and to help facilitate DOE's 
enforcement efforts. The Petition highlighted potential energy savings 
that would result from expanding the scope of covered electric motors. 
(Motor Coalition, No 35 at pp. 1-30) Subsequent to DOE's preliminary 
analysis public meeting, several other interested parties submitted 
comments supporting the Petition. Those supporters included: BBF and 
Associates, the Air Movement and Control Association International, 
Inc., U.S. Senators Lisa Murkowski and Jeff Bingaman, the Hydraulic 
Institute, the Arkansas Economic Development and Commission-Energy 
Office, and the Power Transmission Distributors Association.
---------------------------------------------------------------------------

    \24\ The Petition is available at: http://www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0027-0035.
---------------------------------------------------------------------------

    The California Investor Owned Utilities (CA IOUs), represented by 
the Pacific Gas and Electric Company (PG&E), Southern California Gas 
Company (SCGC), San Diego Gas and Electric (SDG&E), and Southern 
California Edison (SCE) commented that they supported the Petition's 
intent to expand the scope of coverage to the vast majority of single 
speed, polyphase, and integral horsepower induction motors between 1 
and 500 horsepower, as well as increasing energy conservation standards 
for some covered products. (CA IOUs, No. 57 at p. 2)
    The Air Movement and Control Association International, Inc. (AMCA 
International) endorsed the Petition. AMCA International encouraged DOE 
to adopt the Petition to save energy as soon as possible. (AMCA 
International, No. 59 at p. 1)
    The CDA and BBF supported DOE's preliminary analysis and the 
Petition, indicating that the Petition sets minimum efficiency levels 
that represent a challenge to the industry and can have a great impact 
on U.S. energy use. (BBF & Associates, No. 51 at pp. 1, 2; CDA, No. 55 
at p. 1) BBF also urged DOE to investigate energy conservation 
standards for motors over 500 horsepower because preliminary 
indications suggest that as much as 27 percent of total motor power 
consumed in the U.S. is from motors over 500 horsepower, and higher 
efficiencies can provide substantial savings. (BBF, No. 51 at p. 4)
    EASA supported the Motor Coalition's Petition, asserting that it is 
in the best interests of saving energy, U.S. jobs, and the economy 
overall to adopt that Petition's approach. EASA strongly encouraged the 
DOE to adopt the recommendations of the Motor Coalition, citing large 
and economically justified energy savings. (EASA, No. 47 at p. 1)
    ACEEE commented on behalf of the Motor Coalition, stating that 
expanding the scope of energy conservation standards and only excluding 
a small group of motor types will enhance enforcement efforts by the 
government, by simplifying the standards to only include explicit 
exclusions. (ACEEE, Public Meeting Transcript, No. 60 at p. 19)
    After reviewing the Petition, DOE is proposing to require electric 
motor types beyond those currently covered (and discussed in section 
IV.A.1) to meet energy conservation standards. DOE's proposed expansion 
is similar to the approach recommended by the Motor Coalition in its 
Petition (Motor Coalition, No. 35 at pp. 1-3). DOE's proposal would 
establish energy conservation standards for electric motors that 
exhibit all of the characteristics listed in Table IV.2, with a limited 
number of exceptions.

 Table IV.2--Characteristics of Motors Regulated Under Expanded Scope of
                                Coverage
------------------------------------------------------------------------
                          Motor characteristic
-------------------------------------------------------------------------
Is a single-speed, induction motor,
Is rated for continuous duty (MG 1) operation or for duty type S1 (IEC),
Contains a squirrel-cage (MG 1) or cage (IEC) rotor,
Operates on polyphase alternating current 60-hertz sinusoidal power,
Is rated for 600 volts or less,
Is built with a 2-, 4-, 6-, or 8-pole configuration,
Is a NEMA Design A, B, or C motor (or IEC Design N or H)
Is built in a three-digit NEMA frame size or an enclosed 56-frame (or
 any IEC equivalent), and
Is rated from 1 to 500 horsepower (inclusive).
------------------------------------------------------------------------

    In response to its preliminary analysis, DOE received several 
comments about the characteristics that DOE should use to define the 
broad scope of electric motors potentially subject to energy 
conservation standards. First, NEMA suggested that DOE define motor 
types exhibiting the nine characteristics listed in Table IV.2. (NEMA, 
No. 54 at p. 32) NEMA also requested that DOE clarify the range of 
horsepower ratings included and the scope of 56- and IEC-frame motors 
covered. The Energy Advocates (NPCC, NEEA, ACEEE, ASAP, Earthjustice, 
ASE) also suggested that DOE include IEC-equivalents and NEMA 56-frame 
sizes in the scope of coverage. (NPCC, No. 56 at p. 2)
    Additionally, DOE is proposing to clarify the design, construction, 
and performance characteristics of covered electric motors. 
Specifically, DOE is proposing to clarify that only motors rated from 1 
to 500 horsepower (inclusive), or their IEC equivalents, would be 
covered by the standards being proposed in today's rulemaking. Finally, 
with regard to IEC-frame motors, DOE would not cover IEC motors on the 
singular basis of frame size, but would consider covering such motors 
when they meet the criteria of Table IV.2. In other words, an IEC-frame 
motor would need to satisfy these nine criteria for the proposed 
standards to apply.
    In its submitted Petition, the Coalition requested that DOE cover 
all single-speed, polyphase, 56-frame induction motors rated at one 
horsepower or greater that do not meet the regulatory definition for 
``small electric motor'' in 10 CFR part 431, subpart X. This definition 
applies to both single-phase and polyphase open-frame general purpose 
AC induction motors built in a two-digit frame size. The proposal put 
forth by the Coalition would expand energy conservation standards to 
polyphase, enclosed 56-frame motors rated at one or more horsepower 
along with polyphase, special and definite purpose open 56-frame motors 
of horsepower greater than or equal to one that are not covered by 
DOE's small electric motor regulations.
    Regarding 56-frame motors at 1-hp or greater, DOE is proposing 
standards for polyphase, enclosed 56-frame motors that are rated at 1-
hp or greater. DOE is also tentatively proposing TSL 2 for polyphase, 
open 56-frame special and definite purpose motors that are rated at 1-
hp or greater as advocated by the Motor Coalition. With respect to 
these motors (i.e. 56-frame, open, special and definite purpose), DOE 
seeks additional data related to these motors, including, but not 
limited to the following categories: Motor efficiency distributions; 
shipment breakdowns between horsepower ratings, open and enclosed 
motors, and between general and special and definite purpose electric 
motors; and information regarding the typical applications that use 
these motors. If this proposal is adopted in the final rule, DOE will 
account for a substantial majority of 56-frame motors that are not 
already regulated by efficiency standards and ensure coverage for all 
general purpose motors along with a substantial number of special and 
definite purpose motors.
    Based on currently available data, DOE estimates that approximately 
270,000 polyphase, open 56-frame special and definite purpose motors 
(1-hp or greater) were shipped in 2011 and at least 70% of these motors 
have

[[Page 73607]]

efficiency levels below NEMA Premium.\25\ In addition, based on this 
data, DOE believes that establishing TSL 2 for this subset of 56-frame 
motors would result in national energy savings of 0.58 quads (full-
fuel-cycle) and net present value savings of $1.11 billion (2012$), 
with a 7 percent discount rate.\26\ DOE has not merged its data and 
analyses related to this subset of 56-frame motors with the other 
analyses in today's NOPR. As described above, DOE seeks additional 
information that can be incorporated into its final analysis.
---------------------------------------------------------------------------

    \25\ Shipments for these 56-open frame motors were estimated 
from data provided by the Motor Coalition. DOE assumed 56-frame open 
motors are distributed across 2-, 4-, and 6-pole configurations and 
1 to 5 horsepower ratings. With this assumption, DOE used the 
shipments distributions from ECG 1 motors across these motor 
configurations and ratings to establish shipments data for open 56-
frame motors by motor configuration and horsepower rating. 
Efficiency distributions were based on a limited survey of electric 
motor models from six major manufacturer catalogs.
    \26\ DOE used the same NIA model and inputs described in section 
IV.H to estimate these values of NES and NPV, but adjusted the 
shipments and efficiency distributions to match the data specific to 
these 56-frame open motors.
---------------------------------------------------------------------------

    DOE notes that enclosed 56-frame motors with horsepower ratings 
below 1 horsepower would not, however, be covered as part of today's 
proposal. DOE is not proposing to cover 56-frame size fractional motors 
because EPCA, as amended, establishes energy conservation standards for 
electric motors at 1-hp or greater and DOE requires the use of 
different test procedures for motors above and below 1-hp. In 
particular, DOE's regulations prescribe, consistent with industry 
practice, the use of the Institute of Electrical and Electronics 
Engineers (IEEE) Standard 112 (Test Method A) to test motors rated 
below 1-hp, and IEEE Standard 112 (Test Method B) to test motor rated 
at or above 1-hp. To ensure consistent testing results, DOE requires 
application of the same test procedure to all electric motors. 
Therefore, DOE is not proposing to regulate enclosed 56-frame size 
motors rated under 1-hp.\27\ This tentative decision, however, does not 
foreclose the possibility that DOE may regulate the efficiency of these 
motors and may change depending on the nature of the feedback provided 
by commenters with respect to this issue. DOE requests comment on its 
tentative decision to not address fractional horsepower enclosed 56-
frame motors as part of today's proposal, along with any relevant 
information and data.
---------------------------------------------------------------------------

    \27\ DOE notes that general purpose, open 56-frame motors are 
already addressed by the standards for small electric motors.
---------------------------------------------------------------------------

    In view of Table IV.2, Table IV.3 lists the various electric motor 
types that would be covered by DOE's proposed approach. Further details 
and definitions for the motor types can be found in DOE's electric 
motors test procedure NOPR, which was published on June 26, 2013 (78 FR 
38456).

   Table IV.3--Currently Unregulated Motor Types DOE Proposes To Cover
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                           Electric Motor Type
------------------------------------------------------------------------
NEMA Design A from 201 to 500        Electric motors with non-standard
 horsepower.                          endshields or flanges.
Electric motors with moisture        Electric motors with non-standard
 resistant windings.                  bases.
Electric motors with sealed          Electric motors with special
 windings.                            shafts.
Partial electric motors.             Vertical hollow-shaft electric
                                      motors.
Totally enclosed non-ventilated      Electric motors with sleeve
 (TENV) electric motors.              bearings.
Immersible electric motors.          Electric motors with thrust
                                      bearings.
Integral brake electric motors.      Non-integral brake electric motors.
------------------------------------------------------------------------

    In view of DOE's proposed approach described in Table IV.3, DOE is 
proposing to include certain motor types that some interested parties 
have suggested that DOE continue to exclude from any energy efficiency 
requirements. For example, the Motor Coalition would exclude integral 
brake motors from coverage, as DOE once did through policy guidance, 
see 62 FR 59978 (November 5, 1997), but which was subsequently removed. 
See 77 FR 26638 (May 4, 2012). (Motor Coalition, No. 35 at p. 3) SEW-
Eurodrive also commented that there are two basic types of integral 
gearmotor: (1) One that meets the definition in DOE's preliminary 
analysis, and (2) another having a special shaft or mounting 
configuration. SEW-Eurodrive contended that the second type of integral 
gearmotor would require replacement of the entire rotor shaft and rotor 
cage to be tested. (SEWE, No. 53, p. 3)
    In view of the foregoing, DOE continues to believe that consistent 
and repeatable test procedures can be prescribed for integral brake 
motors, integral gearmotors, integral partial motors, and partial 
[frac34] motors. See 78 FR 38456 (June 26, 2013). In particular, DOE 
believes that an integral brake motor that meets the nine criteria in 
Table IV.2, could be readily tested and satisfy the proposed standards. 
In addition, DOE believes that the definition for ``partial electric 
motor'' and ``component set'' proposed in its June test procedure NOPR 
will clarify what types of items would meet these definitions, which 
should help manufacturers determine whether the equipment they 
manufacture fall under these terms. See 78 FR 38456 (June 26, 2013). 
Furthermore, DOE believes that the type of integral gearmotor addressed 
by SEW-Eurodrive (i.e., with a special shaft or mounting configuration) 
would likely satisfy DOE's proposed definition of component set, 
because it would require more than the addition of end shields and a 
bearing to create an operable motor. (Component sets would not be 
required to meet standards under today's proposal)
    ACEEE supported the Motor Coalition's Petition in its approach to 
expand the scope of covered motors to comply with the energy efficiency 
levels found in Table 12-12 of NEMA Standards Publication MG 1-2011. 
According to ACEEE, such approach could be easily accomplished by 
manufacturers and, at the same time, allow them to refocus resources on 
designing and building the next generation of electric motor. (ACEEE, 
Public Meeting Transcript, No. 60 at pp. 18, 19) UL agreed with the 
ACEEE approach and suggested that DOE clarify the scope of coverage 
with a statement whereby all electric motors are subject to standards, 
except for those specifically mentioned as excluded. (UL, Public 
Meeting Transcript, No. 60 at pp. 60, 61) Finally, the California 
Independently Owned Utilities (CA IOUs) submitted similar comments, 
suggesting that DOE expand the scope of coverage and explicitly define 
those motor types excluded from standards. The CA IOUs stressed that 
this approach would provide clarity both to

[[Page 73608]]

compliance and enforcement efforts by government agencies and 
manufacturers. (CA IOUs, No. 57 at p. 1)
    After considering these comments, and further analyzing available 
relevant information, DOE believes that a simplified approach to 
determining coverage would help ensure consistency to the extent 
possible when applying the proposed standards. Therefore, in today's 
notice, DOE is proposing that an electric motor that meets the nine 
characteristics in Table IV-3 would be covered and required to meet the 
applicable energy conservation standards, either in NEMA MG 1 Table 12-
11 or 12-12. Additionally, DOE is proposing not to set standards at 
this time for the following motors: component sets, liquid-cooled 
motors, submersible motors, and definite-purpose inverter-fed motors. 
DOE is not proposing to set standards for these motors in light of the 
substantial difficulties and complexities that would be involved in 
testing these motors at this time. In addition, DOE is proposing not to 
set standards at this time for air-over motors, but intends to address 
these types of motors in a separate rulemaking. Definitions for the 
motor types and additional details about these issues are addressed at 
78 FR 38456 (June 26, 2013).
3. Advanced Electric Motors
    In its preliminary analysis, DOE addressed various ``advanced 
electric motor,'' which included those listed in Table IV.4. While DOE 
recognized that such motors could offer improved efficiency, regulating 
them would represent a significant shift for DOE, which has primarily 
focused on the efficiency of polyphase, single-speed induction motors. 
Seeking more information, DOE solicited public comments about these 
types of motors and how they would be tested for energy efficiency.

                  Table IV.4--Advanced Electric Motors
------------------------------------------------------------------------
                            Motor description
-------------------------------------------------------------------------
Inverter drives.
Permanent magnet motors.
Electrically commutated motors.
Switched-reluctance motors.
------------------------------------------------------------------------

    DOE received comments about advanced motors from various interested 
parties. NEMA asserted that, in certain applications, inverter drives, 
permanent-magnet motors, electronically commutated motors, and 
switched-reluctance motors, could offer improved efficiency. However, 
NEMA also noted that these motors may include technologies where 
standard test procedures are still being developed, making it unable to 
comment. (NEMA, No. 54 at pp. 18-19) DOE understands that a test 
procedure would be necessary before it contemplates setting energy 
conservation standards for these types of motors. Additionally, during 
the preliminary analysis public meeting, ACEEE commented that advanced 
motor designs present the largest opportunity for future energy savings 
within the motor marketplace and NEMA member manufacturers are already 
exploring the standards-setting process for advanced motor designs in 
the NEMA MG 1 standards publication. (ACEEE, Public Meeting Transcript, 
No. 60 at p. 19)
    Other interested parties submitted comments regarding the 
efficiency of ``advanced motor systems'' and, in general, motor-driven 
systems. Danfoss commented that system efficiency improvements would 
provide significant energy savings, and cited variable frequency drives 
(VFDs) as an example of a way to improve system efficiency. VFDs, or 
inverter drives, are external components used in motor-driven systems 
to control motor speed and torque by varying motor input frequency and 
voltage Danfoss elaborated that VFDs could save 20 to 30 percent of the 
energy that typical, non-VFD-motors consume and urged that DOE consider 
this approach, instead of seeking minimal energy conservation 
improvements in across-the-line start polyphase electric motors.\28\ 
(Danfoss, Public Meeting Transcript, No. 60 at pp. 21-23, 174, 175) UL 
submitted similar comments during the preliminary analysis public 
meeting, indicating that DOE and the industry should focus on improving 
system-level efficiency. UL added that if a motor is not properly 
matched to its load then the system efficiency could be 20 or 30 
percent less efficient than possible. (UL, Public Meeting Transcript, 
No. 60 at pp. 69, 70) BBF and the CDA commented that the overall 
evaluation of system efficiency is very important, and the evaluation 
of VFDs and the motor system represents many major opportunities for 
improved efficiency. (BBF, No. 51, p. 4; CDA, No. 55, p. 2)
---------------------------------------------------------------------------

    \28\ For this rulemaking, ``across-the-line start'' indicates 
the electric motor is run directly on polyphase, alternating current 
(AC) sinusoidal power, without any devices or controllers 
manipulating the power signal fed to the motor.
---------------------------------------------------------------------------

    DOE understands the concerns from interested parties regarding 
advanced motor efficiency and its connection with the possible 
regulation of advanced electric motors. At this time, however, DOE has 
chosen not to regulate advanced motors and knows of no established 
definitions or test procedures that could be applied to them. Because 
DOE agrees that significant energy savings may be possible for some 
advanced motors, DOE plans to keep abreast of changes to these 
technologies and their use within industry, and may consider regulating 
them in the future. DOE invites comment on the topic of advanced 
motors, including any related definitions or test procedures that it 
should consider applying as part of today's rulemaking.
4. Equipment Class Groups and Equipment Classes
    When DOE prescribes or amends an energy conservation standard for a 
type (or class) of covered equipment, it considers (1) the type of 
energy used; (2) the capacity of the equipment; or (3) any other 
performance-related feature that justifies different standard levels, 
such as features affecting consumer utility. (42 U.S.C. 6295(q)) Due to 
the large number of characteristics involved in electric motor design, 
DOE has used two constructs to help develop its energy conservation 
standards proposals for electric motors: ``equipment class groups'' and 
``equipment classes.'' An equipment class represents a unique 
combination of motor characteristics for which DOE is proposing a 
specific energy conservation standard. There are 580 potential 
equipment classes that consist of all permutations of electric motor 
design types (i.e., NEMA Design A & B, NEMA Design C, fire pump 
electric motor, or brake electric motor), standard horsepower ratings 
(i.e., standard ratings from 1 to 500 horsepower), pole configurations 
(i.e., 2-, 4-, 6-, or 8-pole), and enclosure types (i.e., open or 
enclosed). An equipment class group is a collection of equipment 
classes that share a common design type. For example, given a 
combination of motor design type, horsepower rating, pole-
configuration, and enclosure type, the motor's design type dictates its 
equipment class group, while the combination of the remaining 
characteristics dictates its specific equipment class.\29\
---------------------------------------------------------------------------

    \29\ At its core, the equipment class concept, which is being 
applied only as a structural tool for purposes of this rulemaking, 
is equivalent to a ``basic model.'' See 10 CFR 431.12. The 
fundamental difference between these concepts is that a ``basic 
model'' pertains to an individual manufacturer's equipment class. 
Each equipment class for a given manufacturer would comprise a basic 
model for that manufacturer.

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

[[Page 73609]]

    In the preliminary analysis, DOE divided electric motors into three 
groups based on two main characteristics: NEMA (or IEC) design letter 
and whether the motor met the definition of a fire pump electric motor. 
For the NOPR, DOE is keeping these three groups and adding a fourth 
equipment class group for electric motors with brakes (integral and 
non-integral). DOE's four resulting equipment class groups are: NEMA 
Design A and B motors (ECG 1), NEMA Design C motors (ECG 2), fire pump 
electric motors (ECG 3), and electric motors with brakes (ECG 4). 
Within each of these groups, DOE would use combinations of other 
pertinent motor characteristics to enumerate individual equipment 
classes. To illustrate the differences between the two terms, consider 
the following example. A NEMA Design B, 50 horsepower, two-pole 
enclosed electric motor and a NEMA Design B, 100 horsepower, six-pole 
open electric motor would be in the same equipment class group (ECG 1), 
but each would represent a unique equipment class that will ultimately 
have its own efficiency standard. Table IV.5 outlines the relationships 
between equipment class groups and the characteristics used to define 
equipment classes.

                     Table IV.5--Electric Motor Equipment Class Groups for the NOPR Analysis
----------------------------------------------------------------------------------------------------------------
      Equipment class group         Electric motor design    Horsepower         Poles            Enclosure
----------------------------------------------------------------------------------------------------------------
1................................  NEMA Design A & B *...           1-500      2, 4, 6, 8  Open.
                                                                                           Enclosed.
2................................  NEMA Design C *.......           1-200         4, 6, 8  Open.
                                                                                           Enclosed.
3................................  Fire Pump *...........           1-500      2, 4, 6, 8  Open.
                                                                                           Enclosed.
4................................  Brake Motors *........            1-30         4, 6, 8  Open.
                                                                                           Enclosed.
----------------------------------------------------------------------------------------------------------------
* Including IEC equivalents.

    NEMA submitted multiple comments about DOE's equipment class groups 
and equipment classes. First, NEMA argued that such expansive groups 
could make it difficult to properly determine efficiency standards, 
particularly given the large expansion of scope being contemplated by 
DOE. (NEMA, No. 54 at p. 40) NEMA recommended that ``for `electric 
motors' the term `equipment class' be identified as those electric 
motors which are of the polyphase squirrel-cage induction type.'' It 
added that:

    ``An `equipment class group' can be defined as a particular 
`group' of such `electric motor' having a particular set of common 
characteristics, such as NEMA Design A and B electric motors or NEMA 
Design C electric motors, or fire pump electric motors. Each 
`equipment class group' can be organized according to `rating' where 
`rating' is as it is presently defined in Sec.  431.12 [of 10 CFR 
Part 431]. When appropriate, an AEDM [alternative efficiency 
determination method] can then be substantiated for the complete 
`equipment class' of polyphase squirrel-cage induction electric 
motors as is permitted and done today.''

    Additionally, NEMA suggested that DOE separate U-frame motors from 
T-frame motors during the analysis because any proposed increase in 
efficiency standards for the low volume production of U-frame motors 
would likely result in a reduction in the availability of U-frame 
motors, which they assert, is not permitted under 42 U.S.C. 6295(o)(4). 
(NEMA, No. 54 at pp. 20, 26) Citing the high cost of redesigning these 
motors relative to the potential savings, the Motor Coalition predicted 
manufacturers would exit the U-frame market leaving only one or two 
manufacturers. (Motor Coalition, No. 35 at p. 13) NEMA also stated that 
the demand for this type of motor has been declining since the 1960's 
and U-frame motors have not been included in the NEMA MG 1 standard 
since U-frame motors were replaced by T-frame motors as the NEMA 
standard in the 1960s. (NEMA, No. 54 at pp. 19, 20) NEMA added that the 
challenge created by substituting a U-frame motor with a T-frame motor 
must be accounted for in the manufacturer and national impact analyses.
    EISA 2007 prescribed energy conservation standards for electric 
motors built with a U-frame, whereas previously only electric motors 
built with a T-frame were covered.\30\ (Compare 42 U.S.C. 
6311(13)(A)(1992) with 42 U.S.C. 6311(13)(B)(2011)) In general, for the 
same combination of horsepower rating and pole configuration, an 
electric motor built in a U-frame is built with a larger ``D'' 
dimension than an electric motor built in a T-frame. The ``D'' 
dimension is a measurement of the distance from the centerline of the 
shaft to the bottom of the mounting feet. Consequently, U-frame motors 
should be able to reach efficiencies as high, or higher, than T-frame 
motors with similar ratings (i.e., horsepower, pole-configuration, and 
enclosure) because the larger frame size allows for more active 
materials, such as copper wiring and electrical steel, which help 
reduce I\2\R (i.e., losses arising from the resistivity of the current-
carrying material) and core losses (losses that result from magnetic 
field stability changes). Furthermore, U-frame motors do not have any 
unique utility relative to comparable T-frame motors. In general, a T-
frame design could replace an equivalent U-frame design with minor 
modification of the mounting configuration for the driven equipment. By 
comparison, a U-frame design that is equivalent to a T-frame design 
could require substantial modification to the mounting configuration 
for the same piece of driven equipment because of its larger size. 
DOE's research indicated that manufacturers sell conversion brackets 
for installing T-frame motors into applications where a U-frame motor 
had previously been used.\31\
---------------------------------------------------------------------------

    \30\ The terms ``U-frame'' and ``T-frame'' refer to lines of 
frame size dimensions, with a T-frame motor having a smaller frame 
size for the same horsepower rating as a comparable U-frame motor. 
In general, ``T'' frame became the preferred motor design around 
1964 because it provided more horsepower output in a smaller 
package.
    \31\ See, for example, http://www.overlyhautz.com/adaptomounts1.html.
---------------------------------------------------------------------------

    Regarding NEMA's contention that U-frame motors will become 
unavailable if DOE does not separate these motors from T-frame motors 
when developing efficiency standards, DOE understands NEMA's concerns 
regarding the diminishing market size of U-frame motors and the 
potential for them to disappear. However, DOE believes that such an 
occurrence would not be the

[[Page 73610]]

result of an efficiency standard that is technologically infeasible for 
U-frame motors, but because U-frame motors offer no unique utility 
relative to T-frame motors. Furthermore, DOE believes that the proposed 
standards are unlikely to result in the unavailability of U-frame 
motors. Based on catalog data from several large electric motor 
manufacturers, DOE observed that 70 percent of currently available U-
frame models meet the proposed standard (TSL 2). With much of the U-
frame market already at the proposed standard, DOE sees no technical 
reason that U-frame manufacturers would not be able to comply with TSL 
2.
    DOE also notes that under 42 U.S.C. 6295(o)(4), EPCA proscribes the 
promulgation of standards that would result in the ``unavailability in 
the United States in any covered product type (or class) of performance 
characteristics (including reliability), features, sizes, capacities, 
and volumes that are substantially the same as those generally 
available in the United States at the time of the Secretary's 
finding.'' The provision does not require the continued protection of 
particular classes or types of product--or in this case, electric 
motors--if the same utility continues to be available for the consumers 
who are purchasing the given product. Consequently, based on available 
information, DOE has not separated U-frame motors into a unique 
equipment class group. DOE welcomes any additional data relevant to 
this finding, including data that would suggest the need for an 
alternate approach. DOE also requests additional information from 
manufacturers on whether covering U-frame motors would cause them to be 
unavailable in the U.S. and whether U-frame motors have any particular 
performance characteristics, features, sizes, capacities, or volumes.
    Finally, NEMA questioned DOE's use of the term ``equipment class'' 
to describe a combination of horsepower rating, pole configuration, and 
enclosure type instead of using the term ``rating,'' which is defined 
in 10 CFR 431.12, as part of the definition of a ``basic model.'' 
(NEMA, No. 54 at p. 25) NEMA believes that this could cause confusion 
because of proposals regarding certification, alternative efficiency 
determination methods (AEDMs), and enforcement in a separate 
rulemaking, which are all centered around ``equipment classes.'' (NEMA, 
No. 54 at p. 25) NEMA stated that DOE's definition in this rulemaking 
has the adverse impact of requiring substantiation of an AEDM 
separately for every rating for which it is to be used and would 
constitute a significant increase in compliance burden. (NEMA, No. 54 
at p. 25) DOE understands NEMA's concerns regarding the potential of 
undue compliance burden. DOE notes that it has not proposed a 
regulatory definition for the term ``equipment class.'' It is merely a 
construct for use in the various analyses in today's rulemaking. The 
term ``equipment class'' as described in this rulemaking should not be 
misconstrued as having any regulatory meaning as it relates to the 
definition of ``basic model.'' In today's rulemaking, DOE is continuing 
to use the terminology as described in the preliminary analysis and 
above. DOE intends to address NEMA's concerns regarding the potential 
compliance burden in a separate rulemaking that will address 
compliance, certification and enforcement-related issues.
a. Electric Motor Design Letter
    The first criterion that DOE considered when disaggregating 
equipment class groups was based on the NEMA (and IEC) design letter. 
The NEMA Standards Publication MG 1-2011, ``Motors and Generators,'' 
defines a series of standard electric motor designs that are 
differentiated by variations in performance requirements. These designs 
are designated by letter--Designs A, B, and C. (See NEMA MG 1-2011, 
paragraph 1.19.1). These designs are categorized by performance 
requirements for full-voltage starting and developing locked-rotor 
torque, breakdown torque, and locked-rotor current, all of which affect 
an electric motor's utility and efficiency. DOE is proposing to 
regulate the efficiency of each of these design types.
    The primary difference between a NEMA Design A and NEMA Design B 
electric motor is that they have different locked-rotor current 
requirements. NEMA Design B motors must not exceed the applicable 
locked-rotor current level specified in NEMA MG 1-2011, paragraph 
12.35.1. NEMA Design A motors, on the other hand, do not have a maximum 
locked-rotor current limit. In most applications, NEMA Design B motors 
are generally preferred because locked-rotor current is constrained to 
established industry standards, making it easier to select suitable 
motor-starting devices. However, certain applications have special load 
torque or inertia requirements, which result in a design with high 
locked-rotor current (NEMA Design A). When selecting starting devices 
for NEMA Design A motors, extra care must be taken in properly sizing 
electrical protective devices to avoid nuisance tripping during motor 
startup. The distinction between NEMA Design A and NEMA Design B motors 
is important to users who are sensitive to high locked-rotor current; 
however, both NEMA Design A and Design B motors have identical 
performance requirements in all other metrics, which indicates that 
they offer similar levels and types of utility. Given these 
similarities, DOE is proposing to group these motors together into a 
single equipment class grouping for the purposes of this rulemaking.
    In contrast, DOE believes that the different torque requirements 
for NEMA Design C electric motors represent a change in utility that 
can affect efficiency performance. NEMA Design C motors are 
characterized by high starting torques. Applications that are hard to 
start, such as heavily loaded conveyors and rock crushers, require this 
higher starting torque. The difference in torque requirements will 
restrict which applications can use which NEMA Design types. As a 
result, NEMA Design C motors cannot always be replaced with NEMA Design 
A or B motors, or vice versa. Therefore, as in the preliminary 
analysis, DOE has analyzed NEMA Design C motors in an equipment class 
group separate from NEMA Design A and B motors.
    In chapter two, ``Analytical Framework,'' of the preliminary 
technical support document, DOE noted numerous instances where 
manufacturers were marketing electric motors rated greater than 200 
horsepower as NEMA Design C motors. DOE understands that NEMA MG 1-2011 
specifies Design C performance requirements for motors rated 1-200 hp 
in four-, six-, and eight-pole configurations--a motor rated above 200 
hp or using a two-pole configuration would not meet the Design C 
specifications. DOE requested public comment about whether motors that 
are name-plated as NEMA Design C, but that fall outside the ratings for 
which NEMA Design C is defined, can be considered to be NEMA Design C 
motors. In its comments, NEMA asserted it did not support marking a 
motor as NEMA Design C where no standard exists for two-pole designs, 
or four-, six- or eight-pole motors over 200 horsepower. NEMA 
recommended that any such improperly marked motor be examined for 
determination of its proper Design letter relative to the applicable 
standards in NEMA MG 1. Furthermore, NEMA recommended that DOE not 
include efficiency standards for motors of any design type for which 
NEMA or IEC standards do not exist. (NEMA, No. 54 at p. 19)
    DOE understands that without established performance standards that 
form the basis for a two-pole NEMA

[[Page 73611]]

Design C motor or a NEMA Design C motor with a horsepower rating above 
200, motors labeled as such would not meet the proposed regulatory 
definition for ``NEMA Design C motor.'' 78 FR 38456 (June 26, 2013). 
DOE considers motors at these ratings to be improperly labeled if they 
are name-plated as NEMA Design C. Mislabeled NEMA Design C motors, 
however, are still subject to energy conservation standards if they 
meet the definitions and performance standards for a regulated motor--
e.g. NEMA Design A or B. And since these motors either need to meet the 
same efficiency levels or would be required by customers to meet 
specific performance criteria expected of a given design letter (i.e. 
Design A, B, or C), DOE does not foresee at this time any incentive 
that would encourage a manufacturer to identify a Design A or B motor 
as a Design C motor for standards compliance purposes. DOE understands, 
however, that NEMA Design C motors as a whole constitute an extremely 
small percentage of motor shipments--less than two percent of 
shipments--covered by this rulemaking, which would appear to create an 
unlikely risk that mislabeling motors as NEMA Design C will be used as 
an avenue to circumvent standards. Nevertheless, DOE will monitor the 
potential presence of such motors and may reconsider standards for them 
provided such practice becomes prevalent.
b. Fire Pump Electric Motors
    In addition to considering the NEMA design type when establishing 
equipment class groups, DOE considered whether an electric motor is a 
fire pump electric motor. EISA 2007 prescribed energy conservation 
standards for fire pump electric motors (42 U.S.C. 6313(b)(2)(B)) and, 
subsequently, DOE adopted a definition for the term ``fire pump 
electric motor,'' which incorporated portions of National Fire 
Protection Association Standard (NFPA) 20, ``Standard for the 
Installation of Stationary Pumps for Fire Protection'' (2010). Pursuant 
to NFPA 20, a fire pump electric motor must comply with NEMA Design B 
performance standards and must continue to run in spite of any risk of 
damage stemming from overheating or continuous operation. The 
additional requirements for a fire pump electric motor constitutes a 
change in utility that DOE believes could also affect its performance 
and efficiency. Therefore, DOE established a separate equipment class 
group for such motors in the preliminary analysis to account for the 
special utility offered by these motors. In its comments, NEMA agreed 
with DOE's decision to separate fire pump electrical motors as a 
separate equipment class group. (NEMA, No. 54 at p. 20) Consequently, 
DOE is proposing to continue using a separate equipment class group for 
fire pump electric motors.
c. Brake Motors
    In its NOPR analyses, DOE considered whether the term ``electric 
motor'' should include an integral brake electric motor or a non-
integral brake electric motor (collectively, ``brake motors''). In the 
test procedure NOPR, DOE proposed definitions both for integral and 
non-integral brake electric motors. 78 FR 38456 (June 26, 2013). Both 
of these electric motor types are contained in one equipment class 
group as separate from the equipment class groups established for NEMA 
Design A and B motors, NEMA Design C motors, and fire pump electric 
motors.
    DOE understands that brake motors contain multiple features that 
can affect both utility and efficiency. In most applications, electric 
motors are not required to stop immediately. Instead, electric motors 
typically slow down and gradually stop after power is removed from the 
motor due to a buildup of friction and windage from the internal 
components of the motor. However, some applications require electric 
motors to stop quickly. Such motors may employ a brake component that, 
when engaged, abruptly slows or stops shaft rotation. The brake 
component attaches to one end of the motor and surrounds a section of 
the motor's shaft. During normal operation of the motor, the brake is 
disengaged from the motor's shaft--it neither touches nor interferes 
with the motor's operation. However, under normal operating conditions, 
the brake is drawing power from the electric motor's power source and 
may also be contributing to windage losses, because the brake is an 
additional rotating component on the motor's shaft. When power is 
removed from the electric motor (and therefore the brake component), 
the brake component de-energizes and engages the motor shaft, quickly 
slowing or stopping rotation of the rotor and shaft components. Because 
of these utility related features that affect efficiency, DOE has 
preliminarily established a separate equipment class group for electric 
motors with an integral or non-integral brake.
d. Horsepower Rating
    In its preliminary analysis, DOE considered three criteria when 
differentiating equipment classes. The first criterion was horsepower, 
a critical performance attribute of an electric motor that is directly 
related to the capacity of an electric motor to perform useful work and 
that generally scales with efficiency. For example, a 50-horsepower 
electric motor would generally be considered more efficient than a 10-
horsepower electric motor. In view of the direct correlation between 
horsepower and efficiency, DOE preliminarily used horsepower rating as 
a criterion for distinguishing equipment classes in the framework 
document and continued with that approach for the preliminary analysis.
    NEMA agreed with DOE's view that horsepower is a performance 
attribute that must be considered when evaluating efficiency and urged 
that this long-established and workable concept not be abandoned. 
(NEMA, No. 54 at p. 40) In today's proposal, DOE continues to use 
horsepower as an equipment class-setting criterion.
e. Pole Configuration
    The number of poles in an induction motor determines the 
synchronous speed (i.e., revolutions per minute) of that motor. There 
is an inverse relationship between the number of poles and a motor's 
speed. As the number of poles increases from two to four to six to 
eight, the synchronous speed drops from 3,600 to 1,800 to 1,200 to 900 
revolutions per minute, respectively. In addition, manufacturer 
comments and independent analysis performed on behalf of DOE indicate 
that the number of poles has a direct impact on the electric motor's 
performance and achievable efficiency because some pole configurations 
utilize the space inside of an electric motor enclosure more 
efficiently than other pole configurations. DOE used the number of 
poles as a means of differentiating equipment classes in the 
preliminary analysis.
    In response to the preliminary analysis, NEMA agreed that the 
number of poles of an electric motor has impacts a motor's achievable 
efficiency and supported DOE's decision to take this characteristic 
into consideration. (NEMA, No. 54 at p. 41) In today's proposal, DOE 
continues to use pole-configuration as an equipment class-setting 
criterion.
f. Enclosure Type
    EISA 2007 prescribes separate energy conservation standards for 
open and enclosed electric motors. (42 U.S.C. 6313(b)(1)) Electric 
motors manufactured with open construction allow a free interchange of 
air between the electric motor's interior and exterior. Electric motors 
with enclosed

[[Page 73612]]

construction have no direct air interchange between the motor's 
interior and exterior (but are not necessarily air-tight) and may be 
equipped with an internal fan for cooling (see NEMA MG 1-2011, 
paragraph 1.26). Whether an electric motor is open or enclosed affects 
its utility; open motors are generally not used in harsh operating 
environments, whereas totally enclosed electric motors often are. The 
enclosure type also affects an electric motor's ability to dissipate 
heat, which directly affects efficiency. For these reasons, DOE used an 
electric motor's enclosure type (open or enclosed) as an equipment 
class setting criterion in the preliminary analysis.
    NEMA acknowledged in its comments that the enclosure type is an 
important characteristic that affects the achievable efficiency for any 
particular electric motor. NEMA added that it may become necessary to 
consider separate groups for various enclosures as DOE continues to 
expand the scope of electric motors subject to energy conservation 
standards, but did not make any specific suggestions regarding which 
enclosures could be considered separately. (NEMA, No. 54 at p. 42)
    At this time, DOE is continuing to use separate equipment class 
groups for open and enclosed electric motors but is declining to 
further break out separate equipment classes for different types of 
open or enclosed enclosures because DOE does not have data supporting 
such separation.
g. Other Motor Characteristics
    In the preliminary analysis, DOE addressed various other motor 
characteristics, but did not use them to disaggregate equipment 
classes. In the preliminary analysis TSD, DOE provided its rationale 
for not disaggregating equipment classes for vertical electric motors, 
electric motors with thrust or sleeve bearings, close-coupled pump 
motors, or by rated voltage or mounting feet. DOE believes that none of 
these electric motor characteristics provide any special utility that 
would impact efficiency and justify separate equipment classes.
    In response to the preliminary analysis, DOE received comments 
about how it should treat other motor characteristics. NEMA agreed with 
DOE's decision that vertical motors, motors with thrust or sleeve 
bearings, and close-coupled pump motors do not merit separate equipment 
classes. (NEMA, No. 54 at p. 20) With no comments suggesting that DOE 
use any one of the alternative characteristics as a criterion for 
equipment class, DOE is using the approach it laid out in its 
preliminary analysis.
    DOE also requests additional information from manufacturers on 
whether covering any of these technology options would reduce consumer 
utility or performance or cause any of the covered electric motors to 
be unavailable in the U.S. and whether U-frame motors have any 
particular performance characteristics, features, sizes, capacities, or 
volumes. In particular, DOE requests any information or data if these 
technology options would lead to increases in the size of the motors 
such that it would no longer work in a particular space constricted 
application, to decreases in power thereby affecting their usability of 
these motors, or to changes in any other characteristics that would 
affect the performance or utility of the motor.
5. Technology Assessment
    The technology assessment provides information about existing 
technology options and designs used to construct more energy-efficient 
electric motors. Electric motors have four main types of losses that 
can be reduced to improve efficiency: Losses due to the resistance of 
conductive materials (stator and rotor I\2\R losses), core losses, 
friction and windage losses, and stray load losses. These losses are 
interrelated such that measures taken to reduce one type of loss can 
result in an increase in another type of losses. In consultation with 
interested parties, DOE identified several technology options that 
could be used to reduce such losses and improve motor efficiency. These 
technology options are presented in Table IV.6. (See chapter 3 of the 
TSD for details).

                                          Table IV.6--Technology Options To Increase Electric Motor Efficiency
--------------------------------------------------------------------------------------------------------------------------------------------------------
             Type of loss to reduce                                                         Technology option
--------------------------------------------------------------------------------------------------------------------------------------------------------
Stator I\2\R Losses............................  Increase cross-sectional area of copper in stator slots.
                                                 Decrease the length of coil extensions.
Rotor I\2\R Losses.............................  Use a die-cast copper rotor cage.
                                                 Increase cross-sectional area of rotor conductor bars.
                                                 Increase cross-sectional area of end rings.
Core Losses....................................  Use electrical steel laminations with lower losses (watts/lb).
                                                 Use thinner steel laminations.
                                                 Increase stack length (i.e., add electrical steel laminations).
Friction and Windage Losses....................  Optimize bearing and lubrication selection.
                                                 Improve cooling system design.
Stray-Load Losses..............................  Reduce skew on rotor cage.
                                                 Improve rotor bar insulation.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In response to the preliminary analysis, DOE received multiple 
comments about these options.
    At the preliminary analysis public meeting, NEMA requested 
clarification on what was meant by the technology option listed as 
``improving rotor bar insulation.'' (NEMA, Public Meeting Transcript, 
No. 60 at p. 158) NEMA commented on the option of increasing the cross 
sectional area of the stator windings and clarified that this is one 
way to decrease stator resistance, but not necessarily a separate 
technology option. (NEMA, No. 54 at p. 44) NEMA also clarified that 
reducing rotor resistance through a change in volume is synonymous with 
an increase in rotor slot size, unless DOE intends to include 
variations in the volume of the end rings. (NEMA, No. 54 at p. 45)
    NEMA also noted that chapter 3 of DOE's preliminary TSD did not 
discuss the option of increasing the flux density in the air gap, while 
chapter 4 did. (NEMA, No. 54 at p. 46) NEMA added that the air gap flux 
density is not a design option that can be independently adjusted and 
that for a given core length the only option available for changing the 
air gap flux density is to change the number of effective turns in the 
stator winding. (NEMA, No. 54 at pp. 62, 63) NEMA also commented on the 
limitations associated with reducing a motor's air gap by noting that 
manufacturers must ensure that the motor is still functional and that 
the air gap is not so small such that the rotor

[[Page 73613]]

and stator may strike each other during operation. (NEMA, No. 54 at pp. 
44-45)
    Lastly, during the preliminary analysis public meeting, Danfoss 
commented that the term ``technology options'' is a bit misleading 
because of the design tradeoffs that must be made in order to maintain 
motor performance (other than efficiency). (Danfoss, Public Meeting 
Transcript, No. 60 at pp. 98, 99)
    Regarding the requested clarifications, DOE notes the listed option 
of ``improved rotor insulation'' refers to increasing the resistance 
between the rotor squirrel-cage and the rotor laminations. 
Manufacturers use different methods to insulate rotor cages, such as 
applying an insulating coating on the rotor slot prior to die-casting 
or heating and quenching \32\ the rotor to separate rotor bars from 
rotor laminations after die-casting. DOE has updated the discussion in 
the TSD chapter to clarify that there are multiple ways to implement 
this technology option.
---------------------------------------------------------------------------

    \32\ Quenching is rapid cooling, generally by immersion in a 
fluid instead of allowing the rotor temperature to equalize to 
ambient
---------------------------------------------------------------------------

    DOE agrees with NEMA that increasing the cross-sectional area of 
copper in the stator is synonymous with reducing the stator resistance, 
and has updated the discussion in TSD chapter 3 for clarity. 
Furthermore, DOE agrees with NEMA that increasing rotor slot size is a 
technique that reduces rotor resistivity. DOE also considered other 
techniques to reduce rotor resistivity such as increasing the volume of 
the rotor end rings and using die-cast copper rotors. For the sake of 
clarity, DOE has replaced the technology option ``reduce rotor 
resistance'' in the TSD discussion with the specific techniques that 
DOE considered in its analysis: Increasing the cross-sectional area of 
the rotor conductor bars, increasing the cross-sectional area of the 
end rings, and using a die-cast copper rotor cage.
    With regard to increasing the flux density in the air gap, DOE 
consulted with its subject matter expert and acknowledges that this 
approach is not necessarily an independently adjustable design 
parameter used to increase motor efficiency and has removed it from its 
discussion in chapters 3 and 4 of the TSD. DOE notes that it 
understands that the technology options that it discusses do have 
limits, both practical limits in terms of manufacturing and design 
limits in terms of their effectiveness. DOE also understands that a 
manufacturer must balance any options to improve efficiency against the 
possible impacts on the performance attributes of its motor designs.
a. Decrease the Length of Coil Extensions
    One method of reducing resistance losses in the stator is 
decreasing the length of the coil extensions at the end turns. Reducing 
the length of copper wire outside the stator slots not only reduces the 
resistive losses, but also reduces the material cost of the electric 
motor because less copper is being used.
    NEMA submitted comments acknowledging decreased coil extension as 
an option to increase efficiency, but did not see the practicability. 
NEMA asserted that decreasing the length of a coil extension has been a 
common industry practice for over 50 years and it would be difficult to 
achieve any further reductions in motor losses under this option. NEMA 
added that any design changes that would decrease the length of a coil 
extension must be carefully considered to ensure that the coil heads 
meet all applicable creep and strike distance requirements.\33\ (NEMA, 
No. 54 at p. 57)
---------------------------------------------------------------------------

    \33\ Creep distance is the shortest path between two conductive 
parts. An adequate creep distance protects against tracking, a 
process that can lead to insulation deterioration and eventual short 
circuit. Strike distance is the shortest distance through air from 
one conductor to another conductor or to ground. Adequate strike 
distance is required to prevent electrical discharge between two 
conductors or between conductors and ground.
---------------------------------------------------------------------------

    DOE understands that there may be limited efficiency gains, if any, 
for most electric motors using this technology option. DOE also 
understands that electric motors have been produced for many decades 
and that many manufacturers have improved their production techniques 
to the point where certain design parameters may already be fully 
optimized. However, DOE maintains that this is a design parameter that 
affects efficiency and should be considered when designing an electric 
motor.
b. Increase Cross-Sectional Area of Rotor Conductor Bars
    Increasing the cross-sectional area of the rotor bars, by changing 
the cross-sectional geometry of the rotor, can improve motor 
efficiency. Increasing the cross-sectional area of the rotor bars 
reduces the resistance and thus lowers the I\2\R losses. However, 
changing the shape of the rotor bars may affect the size of the end 
rings and can also change the torque characteristics of the motor.
    NEMA acknowledged that increasing the cross-sectional area of rotor 
bars is an option to increase efficiency, but doubted whether any 
additional reductions in motor losses were possible by using this 
method. After 50 years of increasing efficiency through this technique, 
NEMA questioned whether manufacturers could further increase the cross-
sectional area of the rotor bars, adding that the increase in rotor 
current cannot exceed the square of the decrease in the rotor 
resistance in order for the rotor losses to decrease. NEMA added that 
any design changes using this option must be carefully considered to 
ensure that the motor will meet the applicable NEMA MG 1 performance 
requirements (i.e., stall time, temperature rise, overspeed) and, for 
certain applications, any other industry standards (i.e., IEEE 841 
\34\) to maintain the same level of utility. (NEMA, No. 54 at pp. 57, 
58)
---------------------------------------------------------------------------

    \34\ IEEE 841-2009, ``IEEE Standard for Petroleum and Chemical 
Industry--Premium-Efficiency, Severe-Duty, Totally Enclosed Fan-
Cooled (TEFC) Squirrel Cage Induction Motors--Up to and Including 
370 kW (500 hp),'' identifies the recommended practice for petroleum 
and chemical industry severe duty squirrel-cage induction motors.
---------------------------------------------------------------------------

    DOE recognizes that increasing the cross-sectional area of a 
conductor rotor bar may yield limited efficiency gains for most 
electric motors. However, DOE maintains that this is a design parameter 
that affects efficiency and must be considered when designing an 
electric motor. Additionally, when creating its software models, DOE 
considered rotor slot design, including cross sectional areas, such 
that any software model produced was designed to meet the appropriate 
NEMA performance requirements for torque and locked rotor current.
c. Increase Cross-Sectional Area of End Rings
    End rings are the components of a squirrel-cage rotor that create 
electrical connections between the rotor bars. Increasing the cross-
sectional area of the end rings reduces the resistance and thus lowers 
the I\2\R losses in the end rings. A reduction in I\2\R losses will 
occur only when any proportional increase in current as a result of an 
increase in the size of the end ring is less than the square of the 
proportional reduction in the end ring resistance.
    NEMA commented that increasing the end ring size increases the 
rotor weight, and consideration must be given to the effects a heavier 
end ring will have on the life of the rotor. NEMA added that any design 
changes using this option must be carefully considered to ensure that 
the applicable design requirements are met and intended utility 
retained. (NEMA, No. 54 at p. 58)
    When developing its software models, DOE relied on the expertise of 
its subject matter expert. Generally,

[[Page 73614]]

increases to end ring area were limited to 10-20% are unlikely to have 
significant impacts on the mechanical aspects of the rotor. 
Furthermore, DOE ensured that the appropriate NEMA performance 
requirements for torque and locked-rotor current were maintained with 
its software modeled motors.
d. Increase the Number of Stator Slots
    Increasing the number of stator slots associated with a given motor 
design can, in some cases, improve motor efficiency. Similar to 
increasing the amount of copper wire in a particular slot, increasing 
the number of slots may in some cases permit the manufacturer to 
incorporate more copper into the stator slots. This option would 
decrease the losses in the windings, but can also affect motor 
performance. Torque, speed and current can vary depending on the 
combination of stator and rotor slots used.
    NEMA indicated that increasing the number of slots to allow the 
motor design engineer to incorporate additional copper into the stator 
slots is contrary to any practical analysis. NEMA elaborated that the 
stator core holds the stator winding in the slots and carries the 
magnetic flux in the electrical steel. As stator slots increase, 
insulating material will increase, reducing the total amount of cross-
sectional area for stator winding. Additionally, too large of an 
increase in the number of stator slots may make it impractical to wind 
the stator on automated equipment and the same may be true for a low 
number of stator slots. NEMA also commented that while it agrees with 
DOE that the number of stator slots can affect motor torque and 
efficiency, there is a relationship between the number of rotor slots 
and stator slots, and the combination of the two can have significant 
effects on starting torque, sound levels, and stray load losses. NEMA 
concluded that all of these effects must be considered to ensure the 
practicability of manufacturing the affected motors. Other factors NEMA 
noted included winding and potential sound levels--all of which could 
impact utility along with health and safety concerns. (NEMA, No. 54 at 
p. 61)
    With respect to stator slot numbers, DOE understands that a motor 
manufacturer would not add stator slots without any appreciation of the 
impacts on the motor's performance. DOE also understands that there is 
an optimum combination of stator and rotor slots for any particular 
frame size and horsepower combination. DOE consulted with its subject 
matter expert and understands that optimum stator and rotor slot 
combinations have been determined by manufacturers and are in use on 
existing production lines.'' Consequently, DOE has removed this 
technology option from chapter 4 of the TSD.
e. Electrical Steel with Lower Losses
    Losses generated in the electrical steel in the core of an 
induction motor can be significant and are classified as either 
hysteresis or eddy current losses. Hysteresis losses are caused by 
magnetic domains resisting reorientation to the alternating magnetic 
field. Eddy currents are physical currents that are induced in the 
steel laminations by the magnetic flux produced by the current in the 
windings. Both of these losses generate heat in the electrical steel.
    In studying the techniques used to reduce steel losses, DOE 
considered two types of materials: Conventional silicon steels, and 
``exotic'' steels, which contain a relatively high percentage of boron 
or cobalt. Conventional steels are commonly used in electric motors 
manufactured today. There are three types of steel that DOE considers 
``conventional:'' cold-rolled magnetic laminations, fully processed 
non-oriented electrical steel, and semi-processed non-oriented 
electrical steel.
    One way to reduce core losses is to incorporate a higher grade of 
core steel into the electric motor design (e.g., switching from an M56 
to an M19 grade). In general, higher grades of electrical steel exhibit 
lower core losses. Lower core losses can be achieved by adding silicon 
and other elements to the steel, thereby increasing its electrical 
resistivity. Lower core losses can also be achieved by subjecting the 
steel to special heat treatments during processing.
    The exotic steels are not generally manufactured for use 
specifically in the electric motors covered in this rulemaking. These 
steels include vanadium permendur and other alloyed steels containing a 
high percentage of boron or cobalt. These steels offer a lower loss 
level than the best electrical steels, but are more expensive per 
pound. In addition, these steels can present manufacturing challenges 
because they come in nonstandard thicknesses that are difficult to 
manufacture.
    NEMA and Baldor submitted multiple comments concerning DOE's 
discussion during the preliminary analysis regarding the use of Epstein 
testing to determine an electrical steel grade that would improve the 
efficiency of an electric motor. (NEMA, No. 54 at pp. 21-23, 62; NEMA, 
Public Meeting Transcript, No. 60 at pp. 100, 102, 103) The grading of 
electrical steel is made through a standardized test known worldwide as 
the Epstein Test.\35\ This test provides a standardized method of 
measuring the core losses of different types of electrical steels. NEMA 
commented that relying solely on Epstein test results to select grades 
of steel could result in a motor designer inadvertently selecting a 
steel grade that performs poorly in a motor design. NEMA supplied data 
on two different samples of steel supplied by different manufacturers, 
but consisting of the same steel grade. The data illustrated how the 
lower loss steel (as determined by Epstein test results) resulted in a 
less efficient motor when used in a prototype. NEMA noted that this 
situation poses a problem for computer software modeling because a 
model that represents only the general class of electrical steel and 
not the steel source (manufacturer) would not be able to calculate the 
difference in the results between the supposedly equivalent grades of 
steels from separate manufacturers.
---------------------------------------------------------------------------

    \35\ ASTM Standard A343/A343M, 2003 (2008), ``Standard Test 
Method for Alternating-Current Magnetic Properties of Materials at 
Power Frequencies Using Wattmeter-Ammeter-Voltmeter Method and 25-cm 
Epstein Test Frame,'' ASTM International, West Conshohocken, PA 
2008.
---------------------------------------------------------------------------

    DOE clarifies that its computer software did not model general 
classes of electrical steel, but instead modeled vendor-specific 
electrical steel. DOE's software utilized core loss vs. flux density 
curves supplied by an electrical steel vendor as one component of the 
core loss calculated by the program. A second component was also added 
to account for high frequency losses. DOE agrees with NEMA's claim that 
relative performance derived from Epstein testing might not be 
indicative of relative performance in actual motor prototypes. DOE did 
not solely rely on relative steel grade when selecting electrical 
steels for its designs. To illustrate this point, DOE notes that almost 
all of its software modeled designs utilized M36 grade steel, even 
though it was not the highest grade of electrical steel considered in 
the analysis. When higher grade M15 steel was evaluated in DOE's 
software modeled designs, the resulting efficiencies were actually 
lower than the efficiencies when using M36 grade steel for several 
reasons including the reasons cited by NEMA. The Epstein test results 
for various grades of steel provided in chapter 3 of the preliminary 
analysis TSD were purely informational and intended to give an 
indication of the relative performance of a sample of

[[Page 73615]]

electrical steels considered. That information has been removed from 
chapter 3 of the TSD to avoid any further confusion.
f. Thinner Steel Laminations
    As addressed earlier, there are two types of core losses that 
develop in the electrical steel of induction motors--hysteresis losses 
and losses due to eddy current. Electric motors can use thinner 
laminations of core steel to reduce eddy currents. The magnitude of the 
eddy currents induced by the magnetic field become smaller in thinner 
laminations, making the motor more energy efficient. In the preliminary 
analysis, DOE only considered conventional steels with standard gauges 
available in the market.
    NEMA agreed with DOE's initial decision to consider only lamination 
thicknesses that are currently used in motor manufacturing, as there is 
a practical limit on how thick the laminations can be in electric 
motors before additional losses may become significant. (NEMA, No. 54 
at p. 62) DOE continues to consider this as a viable technology option 
in the NOPR analysis.
g. Increase Stack Length
    Adding electrical steel to the rotor and stator to lengthen the 
motor can also reduce the core losses in an electric motor. Lengthening 
the motor by increasing stack length reduces the magnetic flux density, 
which reduces core losses. However, increasing the stack length affects 
other performance attributes of the motor, such as starting torque. 
Issues can arise when installing a more efficient motor with additional 
stack length because the motor becomes longer and may not fit into 
applications with dimensional constraints.
    NEMA requested clarification of the phrase ``add stack height,'' 
which DOE included in its summary of technology options for improving 
efficiency in chapter 3 of the preliminary TSD. NEMA was unsure if this 
meant increasing the length of the core or increasing the outer 
diameter of the stator core laminations. (NEMA, no. 54 at p. 45)
    DOE clarifies that it was referring to increasing the length of the 
stator and rotor. However, increasing the outside diameter of the 
stator core is another way in which manufacturers could add active 
material to their electric motor designs and potentially increase 
efficiency.
    NEMA agreed that changing the stack length of an electric motor can 
improve core losses (i.e. reduce them), but may also change other 
performance characteristics such as torque, speed and current. However, 
NEMA stressed that there are limits to this technology option because 
too much additional stack could cause the motor to increase in size 
(i.e., frame length), which might introduce utility problems in space-
constrained applications (NEMA, No. 54 at p. 62) NEMA also commented 
that since the EISA 2007 standards were enacted, only a limited number 
of motor ratings above NEMA Premium have been offered because there is 
not sufficient space available in most frame ratings to increase the 
efficiency. (NEMA, No. 54 at p. 7) DOE understands that there are 
limits to increased stack length and, as discussed in IV.C, DOE 
established criterion to limit the length of the stack considered in 
the engineering analysis. DOE also understands that stack length 
affects consumer utility, which is a factor that DOE considers in its 
selection of a standard.
h. More Efficient Cooling System
    Optimizing a motor's cooling system that circulates air through the 
motor is another technology option to improve the efficiency of 
electric motors. Improving the cooling system reduces air resistance 
and associated frictional losses and decreases the operating 
temperature (and associated electrical resistance) by cooling the motor 
during operation. This can be accomplished by changing the fan or 
adding baffles to the current fan to help redirect airflow through the 
motor.
    NEMA agreed that changes in the cooling system may reduce the total 
losses of a motor, but did not agree that this is equivalent to a more 
efficient cooling system, as DOE described. NEMA elaborated that when 
the design of an electric motor is changed, losses associated with the 
cooling system may increase in order to provide a decrease in losses 
associated with some other part of the design. (NEMA, No. 54 at p. 63) 
DOE appreciates NEMA's comments and has clarified its phrasing of this 
technology option to reflect the fact that it is the motor that becomes 
more efficient, not necessarily the cooling system.
i. Reduce Skew on Conductor Cage
    In the rotor, the conductor bars are not straight from one end to 
the other, but skewed or twisted slightly around the axis of the rotor. 
Decreasing the degree of skew can improve a motor's efficiency. The 
conductor bars are skewed to help eliminate harmonics that add cusps, 
losses, and noise to the motor's speed-torque characteristics. Reducing 
the degree of skew can help reduce the rotor resistance and reactance, 
which helps improve efficiency. However, overly reducing the skew also 
may have adverse effects on starting, noise, and the speed-torque 
characteristics.
    NEMA inquired if this design option was considered for any of the 
designs used in the engineering analysis, as the preliminary TSD did 
not indicate if any rotors were skewed. (NEMA, No. 54 at p. 63) NEMA 
also inquired why the option to reduce skew on the conductor cage, was 
associated with I\2\R losses in chapter 3 of the preliminary TSD, but 
in chapter 4 of the preliminary TSD this option was associated with 
reducing stray load losses. (NEMA, No. 54 at p. 46)
    DOE notes that all software designs used in the analysis had skewed 
rotor designs and, in general, the skews used were approximately 100 
percent of a stator or rotor slot pitch, whichever had the smaller 
number of slots. Additionally, DOE intended for the option of reducing 
the skew on the conductor cage to be an option associated with reducing 
stray load losses and has made the appropriate adjustments to its text 
and tables.

B. Screening Analysis

    After DOE identified the technologies that might improve the energy 
efficiency of electric motors, DOE conducted a screening analysis. The 
purpose of the screening analysis is to determine which options to 
consider further and which to screen out. DOE consulted with industry, 
technical experts, and other interested parties in developing a list of 
design options. DOE then applied the following set of screening 
criteria, under sections 4(a)(4) and 5(b) of appendix A to subpart C of 
10 CFR Part 430, ``Procedures, Interpretations and Policies for 
Consideration of New or Revised Energy Conservation Standards for 
Consumer Products,'' to determine which design options are unsuitable 
for further consideration in the rulemaking:
     Technological Feasibility: DOE will consider only those 
technologies incorporated in commercial equipment or in working 
prototypes to be technologically feasible.
     Practicability to Manufacture, Install, and Service: If 
mass production of a technology in commercial equipment and reliable 
installation and servicing of the technology could be achieved on the 
scale necessary to serve the relevant market at the time of the 
effective date of the standard, then DOE will consider that technology 
practicable to manufacture, install, and service.
     Adverse Impacts on Equipment Utility or Equipment 
Availability: DOE

[[Page 73616]]

will not further consider a technology if DOE determines it will have a 
significant adverse impact on the utility of the equipment to 
significant subgroups of customers. DOE will also not further consider 
a technology that will result in the unavailability of any covered 
equipment type with performance characteristics (including 
reliability), features, sizes, capacities, and volumes that are 
substantially the same as equipment generally available in the United 
States at the time.
     Adverse Impacts on Health or Safety: DOE will not further 
consider a technology if DOE determines that the technology will have 
significant adverse impacts on health or safety.
    Table IV.7 below presents a general summary of the methods that a 
manufacturer may use to reduce losses in electric motors. The 
approaches presented in this table refer either to specific 
technologies (e.g., aluminum versus copper die-cast rotor cages, 
different grades of electrical steel) or physical changes to the motor 
geometries (e.g., cross-sectional area of rotor conductor bars, 
additional stack height). For additional details on the screening 
analysis, please refer to chapter 4 of the preliminary TSD.

                                             Table IV.7--Summary List of Options From Technology Assessment
--------------------------------------------------------------------------------------------------------------------------------------------------------
             Type of loss to reduce                                                         Technology option
--------------------------------------------------------------------------------------------------------------------------------------------------------
Stator I\2\R Losses............................  Increase cross-sectional area of copper in stator slots.
                                                 Decrease the length of coil extensions.
Rotor I\2\R Losses.............................  Use a die-cast copper rotor cage.
                                                 Increase cross-sectional area of rotor conductor bars.
                                                 Increase cross-sectional area of end rings.
Core Losses....................................  Use electrical steel laminations with lower losses (watts/lb).
                                                 Use thinner steel laminations.
                                                 Increase stack length (i.e., add electrical steel laminations).
Friction and Windage Losses....................  Optimize bearing and lubrication selection.
                                                 Improve cooling system design.
Stray-Load Losses..............................  Reduce skew on rotor cage.
                                                 Improve rotor bar insulation.
--------------------------------------------------------------------------------------------------------------------------------------------------------

1. Technology Options Not Screened Out of the Analysis
    The technology options in this section are options that passed the 
screening criteria of the analysis. DOE considers the technology 
options in this section to be viable means of improving the efficiency 
of electric motors. In NEMA's view, DOE's screening analysis lacked 
sufficient supporting information regarding whether a particular 
technology is included or screened out of the analysis. NEMA agreed 
that it is necessary to look at new technologies, but added that DOE 
did not provide adequate supporting information in its analysis and the 
group asserted that commenters were left without adequate material upon 
which to base comments in support of or in opposition to statements 
made in the preliminary TSD. NEMA suggested that a form clearly 
identifying the issues pertinent to the topic be provided for each 
option analyzed. NEMA stated that providing these forms for each 
technology option would supply adequate material on which commenters 
can develop public comments. (NEMA, No. 54 at p. 45) Additionally, when 
discussing the seven criteria that DOE must consider in its analysis, 
NEMA expressed that there are more criteria that should be considered. 
NEMA stated that DOE must consider 4(d)(7) of 10 CFR part 430, subpart 
C, appendix A which lists under sections 4.(d)(7)(viii) impacts of non-
regulatory approaches and (ix) new information relating to the factors 
used for screening design options. (NEMA, No. 54 at p. 13)
    Regarding NEMA's request for a form for each technology option 
considered, today's NOPR provides detailed information about each 
technology option considered and DOE is requesting comment on each 
option. DOE understands NEMA's concerns about the technology options 
not screened out of the DOE analysis. With the exception of copper 
rotor motors, DOE understands that each technology option that it has 
not screened out is a design option that a manufacturer would consider 
in each motor designed and built. DOE recognizes that manufacturers 
design their motors to balance a number of competing factors that all 
inter-relate with each other, including performance, reliability, and 
energy efficiency. Because the options DOE has identified can be 
modified to improve efficiency while maintaining performance, it is 
DOE's tentative view that at least some significant level of energy 
efficiency improvement is possible with each technology option not 
screened out by DOE.
    Furthermore, DOE notes that it did not explicitly use each of the 
technology options that passed the screening criteria in the 
engineering analysis. As discussed in section IV.C, DOE's engineering 
analysis was a mixture of two approaches that DOE routinely uses in its 
engineering analysis methodology: The reverse-engineering approach (in 
which DOE has no control over the design parameters) and the 
efficiency-level approach (in which DOE tried to achieve a certain 
level of efficiency, rather than applying specific design options). 
This hybrid of methods did not allow for DOE to fully control which 
design parameters were ultimately used for each representative unit in 
the analysis. Without the ability to apply specific design options, DOE 
could not include every option that was not screened out of the 
analysis. Finally, DOE appreciates NEMA's comments regarding Appendix A 
to Subpart U of part 430. DOE has considered all comments related to 
the two factors identified by NEMA in its rule.
    In addition, DOE notes that its analysis neither assumes nor 
requires manufacturers to use identical technology for all motor types, 
horsepower ratings, or equipment classes. In other words, DOE's 
standards are technology-neutral and permit manufacturers design 
flexibility.
a. Copper Die-Cast Rotors
    Aluminum is the most common material used today to create die-cast 
rotor bars for electric motors. Some manufacturers that focus on 
producing high-efficiency designs have started to offer electric motors 
with die-cast rotor bars made of copper. Copper offers better 
performance than aluminum because it has better electrical conductivity 
(i.e., a lower electrical resistance). However, because copper also has 
a higher melting point than aluminum, the casting process becomes

[[Page 73617]]

more difficult and is likely to increase both production time and cost.
    NEMA commented that performance is a relative term, and that the 
NEMA MG 1-2011 standard specifies performance characteristics and 
specifications for various types of motors. NEMA added that tradeoffs 
among various performance characteristics related to the conductivity 
of copper are required when designing a NEMA Design B electric motor 
that is in full conformance with the NEMA MG 1-2011 standards. NEMA 
commented that DOE did not address all aspects of motor performance 
specified in the NEMA MG 1-2011 standard, especially some of the 
performance requirements related to the choice of conductive material 
in the rotor. (NEMA, No. 54 at p. 46)
    DOE acknowledges that using copper in rotors may require different 
design approaches and considerations. In its own modeling and testing 
of copper rotor motors, DOE ensured that performance parameters stayed 
within MG 1-2011 limits (i.e., met NEMA Design B criteria). DOE seeks 
comment on any particular aspects of copper rotor design, especially 
those on parameters widely viewed as challenging to meet, and requests 
explanation of why such parameters are especially challenging when 
using copper.
    The Advocates (NEEA, NPCC, ACEEE, ASAP, Earthjustice, and ASE) 
disagreed with DOE's tentative decision during the preliminary analysis 
phase to include copper die-cast rotors. It urged DOE to exclude this 
option in order to avoid analyzing a technology that is not ready for 
use across all motor types, configurations, and horsepower ratings that 
DOE would cover as part of its rulemaking. (Advocates, No. 56 at pp. 3-
4)
    On a related note, NEMA commented that DOE has not publicly 
established what determines a ``mass quantity.'' NEMA elaborated that a 
``mass quantity'' should mean the ability to be produced in significant 
volume for the entire industry. NEMA commented that DOE screened out 
certain electrical steels because they could not be produced in 
significant volume for the entire industry, and this same logic should 
apply to copper rotor technology. (NEMA, No. 54 at p. 24)
    DOE did not screen out copper as a die-cast rotor conductor 
material because copper die-cast rotors passed the four screening 
criteria. Because copper is in commercial use today, DOE concluded that 
this material is technologically feasible and practicable to 
manufacture, install, and service. Additionally, manufacturers are 
already producing such equipment, which suggests that such equipment 
can be safely produced in mass quantities. For example, Siemens 
produces copper rotor motors for 1-20 hp and SEW-Eurodrive manufactures 
a full line of motors from 1-30 hp. In addition, DOE notes that its 
analysis neither assumes nor requires manufacturers to use identical 
technology for all motor types, horsepower ratings, or equipment 
classes.
    DOE received considerable feedback concerning copper rotor 
technology. Consequently, DOE has organized those comments into 
sections below as they pertain to the four screening criteria.
Technological Feasibility
    As part of its analysis, DOE intends to ensure that utility, which 
includes frame size considerations, is maintained. Increased shipping 
costs are also taken into account in the national impact analysis (NIA) 
and the life-cycle cost (LCC) analysis portions of DOE's analytical 
procedures.
    NEMA commented that the use of a technology in a limited subclass 
of electric motors does not imply that the technology can be applied to 
every equipment class covered in this rulemaking. NEMA is not aware of 
any available complete product line of NEMA Design A, B, or C copper 
die-cast rotor electric motors manufactured in the United States, and 
stated that further investigation is required to prove this technology 
is valid for an entire range of designs. (NEMA, No. 54 at pp. 2, 48, 
49) NEMA was able to find two manufacturers currently producing copper 
rotor motors in a total of only 33 out of over 600 equipment classes 
covered in this rulemaking.\36\ NEMA and Baldor added that none of 
those motors are produced in the United States, and only about half of 
those ratings met NEMA Design B performance requirements. (NEMA, No. 54 
at pp. 48, 49; Baldor, Public Meeting Transcript, No. 60 at pp. 109, 
110)
---------------------------------------------------------------------------

    \36\ The equipment classes NEMA found included NEMA Design A 
motors from 1 to 30 hp, 4-pole configurations, and NEMA Design B 
motors from 1.5 to 20 hp in a 2-pole configuration, 1 to 20 hp in a 
4-pole configuration, and 1 hp and 3-10 hp in a 6-pole 
configuration. All motor configurations NEMA mentioned were enclosed 
frame motors.
---------------------------------------------------------------------------

    NEMA commented that the die-casting process for copper rotors can 
increase core or stray load losses in the motor, and this is a problem 
with copper die-casting that has not been solved in all rotor sizes. 
(NEMA, No. 54 at p. 46)
    NEMA cited recently conducted U.S. Army studies involving die-cast 
copper rotor motors. It explained that the first study evaluated the 
advantages of a die-cast copper rotor versus an aluminum rotor. The 
study also attempted to optimize the process and estimate manufacturing 
costs for die-cast copper rotors. NEMA commented that the results of 
the study showed that the die-cast copper rotor motor was unable to 
stay within the NEMA Design B locked-rotor current limits, and that 
efficiency increased by less than one full NEMA band over the 
comparable NEMA Design B aluminum cast-copper rotor motor. The study 
reported that continued investment in cast copper rotor motor 
technology development is needed to improve design optimization 
methods, improve the casting process, and to investigate utilization of 
cast copper in larger motor sizes. NEMA commented that the number of 
die-cast copper rotors manufactured in the study was insufficient to 
make any determination that die-casting could be performed on a high 
and consistent quality basis necessary for general production. (NEMA, 
No. 54 at p. 50, 51)
    NEMA also described a different U.S. Army study where a 75-hp 
aluminum rotor motor driving a pump was to be replaced with a 75-hp 
copper rotor motor. NEMA explained that in the study the die-cast 
copper rotor motor's optimization study indicated the motor would have 
a one NEMA band increase in efficiency over the aluminum die-cast rotor 
motor it was replacing. However, once built, the 75-hp die-cast copper 
rotor motor had an actual efficiency of more than 1 NEMA band below the 
aluminum die-cast rotor motor, with core and stray load losses of the 
physical motor being higher than the computer model had predicted. NEMA 
concluded that neither study was successful in demonstrating that 
copper rotor die-casting technology is possible or feasible in its 
current state in the U.S., and that continued investment in die-cast 
copper rotor technology development is necessary to improve the copper 
die-casting process and reduce stray load losses. (NEMA, No. 54 at pp. 
51-53)
    BBF, a consulting company working on behalf of the Copper 
Development Association (CDA), commented that test data of multiple 
die-cast copper rotor motors resulted in an average tested efficiency 
above the motors' nameplate efficiency, whereas the test results from a 
similar model aluminum rotor motor tested below its nameplate 
efficiency. In its view, these results fall within the allowable 
variances prescribed by NEMA with respect to measuring electric motor 
energy efficiency and demonstrate the higher energy

[[Page 73618]]

efficiency potential of die-cast copper rotor motors. (BBF, No. 51 at 
p. 3)
    NEMA summarized that it is not aware of any prototypes or 
commercially available products that have demonstrated the technical 
feasibility of utilizing die-cast copper rotors sufficient to cover all 
equipment classes covered in this rulemaking. NEMA disagreed with DOE's 
conclusion that die-cast copper rotors successfully passed the 
screening criteria for technological feasibility relative to the class 
of all covered electric motors, including the 75-hp copper rotor motor 
which DOE used as a representative unit in the engineering analysis. 
NEMA added that DOE has not provided any evidence that die-casting 
copper can successfully be applied to all electric motors covered in 
this rulemaking by December 19, 2015. NEMA added that the recent 
studies conducted by the United States Army noted above showed that, in 
the U.S. at present or in any foreseeable future time, this technology 
is not currently feasible over the range of motor ratings regulated 
under this rulemaking. (NEMA, No. 54 at pp. 3, 53, 56; NEMA, Public 
Meeting Transcript, No. 60 at p. 111)
    The CDA disagreed with NEMA, and stated that die-cast copper rotor 
motors are a feasible technology because manufacturers have already 
successfully entered the copper rotor motor market. The CDA added that 
a range of development issues have been overcome, again suggesting that 
it is technologically feasible, but copper die-cast rotors require 
redesign and optimization to take advantage of copper's different 
electrical properties compared to aluminum, and many motor 
manufacturers have undertaken this redesign and optimization to take 
advantage of the properties of copper. (BBF, No. 51 at p. 3) The CDA 
agreed, however, that current manufacturing capacity would be unable to 
produce motors on the scale of five million units yearly. (CDA, Public 
Meeting Transcript, No. 60 at p. 119)
    DOE acknowledges that the industry is not equipped to produce all 
motors with copper rotors, but has estimated the costs of both capital 
and product development through interviews with manufacturers of motors 
and included these costs in its engineering analysis. DOE welcomes 
comment on the methodology, and on the resulting motor prices. As noted 
earlier, EPCA, as amended, does not require manufacturers to use 
identical technology for all motor types, horsepower ratings, or 
equipment classes.
    DOE recognizes that assessing the technological feasibility of 
high-horsepower copper die-cast rotors is made more complex by the fact 
that manufacturers do not offer them commercially. That could be for a 
variety of reasons, among them:
    1. Large copper die-cast rotors are physically impossible to 
construct;
    2. They are possible to construct, but impossible to construct to 
required specifications;
    3. They are possible to construct to required specifications, but 
would require manufacturing capital investment to do so and be so 
costly that few (if any) consumers would choose them.
    Some exploratory research suggests that different organizations 
have developed and used copper rotors in high-horsepower traction 
(i.e., vehicle propulsion) motors. For example, Tesla Motors powers its 
Roadster \37\ and Model S \38\ vehicles with copper induction motors 
generating 300 \39\ or more peak horsepower and Oshkosh die-cast copper 
rotor induction motors rated at 140 peak hp.\40\ Remy International, 
Inc. (Remy) also builds high-horsepower copper motors that are claimed 
to exceed 300 horsepower at 600V.\41\ DOE seeks comment on these, and 
on other high-horsepower motors that use copper rotors.
---------------------------------------------------------------------------

    \37\ http://www.teslamotors.com/roadster/technology/motor.
    \38\ http://www.teslamotors.com/models/specs.
    \39\ http://www.teslamotors.com/roadster/specs.
    \40\ See http://www.coppermotor.com/wp-content/uploads/2012/04/casestudy_army-truck.pdf.
    \41\ http://www.remyinc.com/docs/hybrid/REM-12_HVH410_DataSht.pdf.
---------------------------------------------------------------------------

    DOE recognizes that these motors are designed for a different 
purpose than most motors in the current scope of this rulemaking. Their 
existence suggests that copper has been successfully used at high power 
levels in an application where efficiency is critical and casts doubt 
on the idea that copper die-cast rotors can be screened out with 
certainty.
    Another reason to be cautious about screening out copper die-cast 
rotors comes from an analogous product: Distribution transformers. DOE 
conducted a recent rulemaking on distribution transformers,\42\ which 
(as with motors) have two sets of conductors that surround electrical 
steel to transfer power. Although distribution transformers do not 
rotate, many of the ways that they lose energy (e.g., conductor losses) 
are the same as electric motors. They also face constraints (as motors 
do) on performance aspects unrelated to efficiency; inrush current and 
overall volume are two examples. At current prices, copper is generally 
not viewed as economical for most efficiency levels but, if properly 
designed, copper windings almost always result in smaller, cooler, and 
more efficient transformers.
---------------------------------------------------------------------------

    \42\ Available at: http://www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0048-0762.
---------------------------------------------------------------------------

    In general, copper may improve efficiency relative to aluminum 
because it carries an inherently higher level of electrical 
conductivity. Several organizations have conducted research and built 
prototype \43\ motors that use materials even more conductive than 
copper, such as ``superconductive'' materials that have no conductive 
losses to achieve even greater electric motor efficiency. While DOE is 
not considering the use of these more conductive materials at this 
time, DOE notes their existence for purposes of demonstrating the 
potential advantages of using materials that lower conductive losses.
---------------------------------------------------------------------------

    \43\ See General Atomics marine propulsion motor at: http://www.ga.com/electric-drive-motors.
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    While recognizing that motors are not transformers, the parallels 
that can be drawn leave DOE hesitant to screen out copper die-cast 
rotors on the basis of technological feasibility. Relative to the above 
list of possible reasons for their absence from the high-horsepower 
market, DOE's analysis does not conclude copper die-cast rotors are 
either: (1) Physically impossible to construct or (2) possible to 
construct, but impossible to construct to required specifications.
Practicability To Manufacture, Install, and Service
    Regarding DOE's projections that the annual sales of electric 
motors, as defined by EISA 2007 will have grown to 5,089,000 units by 
2015, including over 24,000 possible motor configurations, NEMA 
commented that only a single manufacturer is currently producing die-
cast copper rotor motors, and in a very limited range. In its view, 
without sufficient data and analysis to support DOE's conclusion that 
``mass production'' of die-cast copper rotors is possible, NEMA asserts 
that this technology would not pass the screening criterion of 
practicability to manufacture, install, and service. It argues that, 
based on the limited advances of the technology from 1995 to present 
day in the United States, this technology is unlikely to be mature 
enough by the compliance date for this rulemaking to meet the required 
production of over 5 million motors in

[[Page 73619]]

the U.S., even if all manufacturing were shifted overseas. (NEMA, No. 
54 at pp. 3, 47, 53, 54, 56; NEMA, Public Meeting Transcript, No. 60 at 
p. 114) NEMA noted that mandating this technology may also have the 
indirect effect of establishing a monopoly market in the U.S. for those 
manufacturers who can produce copper rotor motors, or to push 
production jobs overseas and penalize motor manufacturers that do not 
have the capability to produce copper rotor motors. (NEMA, No. 54 at p. 
24)
    DOE recognizes the importance of maintaining a competitive market. 
However, because there are at least two domestic manufacturers of 
motors with copper rotors and because several more are manufacturing 
internationally, DOE believes the opportunity for price manipulation is 
limited. Furthermore, DOE has seen no evidence to suggest that a 
monopoly would be likely to occur. DOE requests comment and further 
information that would demonstrate the likelihood of a future monopoly.
    BBF and the CDA commented that there are copper die-casting 
facilities in the U.S.--specifically in Colorado and Ohio--as well as 
in Mexico. They added that die-cast rotor motors have been produced for 
North American service since 2005, and some of these motors meet NEMA 
Design B requirements. The CDA and BBF added that multiple high-volume 
manufacturers in Europe and Asia have produced tens of thousands of 
die-cast copper rotor motors that satisfy the NEMA-specified 
performance requirements that meet or exceed the NEMA Premium levels. 
These motors have been sold to North American users. (BBF, No. 51 at 
pp. 2, 3) DOE was able to purchase and tear down a 5-hp copper rotor 
motor from an Asian manufacturer that performed at DOE's max-tech 
efficiency level, as well as the performance requirements for NEMA 
Design B.
    SEW Eurodrive stated that it offers only three models of cast-
copper rotor motors and cited the expenses and difficulty of casting 
copper rotors as the reason why it does not offer more die-cast copper 
rotor motor models. (SEWE, Public Meeting Transcript, No. 60 at p. 121) 
The company did not elaborate why it manufactures die-cast copper rotor 
motors in the configurations it offers for sale.
    Based on these comments, DOE does not believe it has grounds to 
screen out copper die-cast rotors on the basis of practicability to 
manufacture, install, and service. The available facts indicate that 
manufacturers are already producing smaller motors with die-cast copper 
rotors, leaving the question of whether larger motors are being 
manufactured with die-cast copper rotors. DOE recognizes that as 
technology scales upward in size, it can require different equipment 
and processes. Nonetheless, Tesla's \44\ and Remy's \45\ 300+ 
horsepower motors with copper rotors cast doubt on the assertion that 
copper is impracticable in this size range.
---------------------------------------------------------------------------

    \44\ http://www.teslamotors.com/roadster/technology/motor.
    \45\ http://www.remyinc.com/docs/hybrid/REM-12_HVH410_DataSht.pdf.
---------------------------------------------------------------------------

    DOE understands that full-scale deployment of copper would likely 
require considerable capital investment (see detailed discussion in 
SectionIV.J.2.a) and that such investment could increase the production 
cost of large copper rotor motors considerably. DOE believes that its 
current engineering analysis reflects this likelihood, and welcomes 
comment on this issue.
Adverse Impacts on Equipment Utility or Equipment Availability
    NEMA commented that DOE failed to address the adverse impacts on 
equipment utility or availability caused by die-cast copper rotors. It 
asserted that the process for manufacturing die-cast copper rotors is 
underdeveloped, and energy conservation standards based on this 
technology, and implemented in 2015, would result in product 
unavailability of over 99 percent of the electric motors that would be 
impacted if DOE were to set a standard that would require the use of 
die-cast copper. NEMA reiterated that there is no justification as to 
how motors that are not available today, made from a technology that is 
not practiced in the U.S. today, will become available within three 
years, especially when taking into account the time needed for 
prototyping, testing, and AEDM certification. (NEMA, No. 54 at pp. 3, 
47, 48, 54, 55, 56; NEMA, Public Meeting Transcript, No. 60 at pp. 114, 
115)
    NEMA also commented that it is difficult for die-cast copper rotor 
motors to stay under the maximum locked-rotor current limit for NEMA 
Design B motors. If this technology were adopted, in its view, many 
current NEMA Design B motors would become NEMA Design A motors. This 
would reduce the utility of a motor, because a NEMA Design A motor is 
not a direct drop-in place replacement for a NEMA Design B motor. 
(NEMA, No. 54 at p. 3)
    DOE agrees that, in some cases, redesigning product lines to use 
copper would entail substantial cost. DOE's engineering analysis 
reflects its estimates of these costs and discusses them in detail in 
section IV.C. DOE was able to model copper rotor motors adhering to the 
specifications of NEMA Design B \46\, including the reduced (relative 
to Design A) locked-rotor current.
---------------------------------------------------------------------------

    \46\ The parameters DOE believed to present the largest risk of 
rendering a motor noncompliant with NEMA MG 1-2011 standards were 
those related to NEMA design letter, which were adhered to in DOE's 
modeling efforts.
---------------------------------------------------------------------------

    Finally, based on DOE's own shipments analysis (see TSD Chapter 9) 
and estimates of worldwide annual copper production,\47\ DOE estimates 
that .01-.02% of worldwide copper supply would be required to use 
copper rotors for every single motor within DOE's scope of coverage. At 
the present, DOE does not believe there is sufficient evidence to 
screen copper die-cast rotors from the analysis on the basis of adverse 
impacts to equipment utility or availability.
---------------------------------------------------------------------------

    \47\ http://minerals.usgs.gov/minerals/pubs/commodity/copper/mcs-2012-coppe.pdf.
---------------------------------------------------------------------------

Adverse Impacts on Health or Safety
    NEMA commented that the preliminary TSD does not sufficiently 
explain how DOE concluded that mandating performance levels that would 
require copper rotor die-casting would not have an adverse impact on 
health or safety, with the implication being on occupational health and 
safety. NEMA commented that the preliminary TSD mentioned potential 
impacts on the health or safety caused by the higher melting point of 
copper, but DOE did not elaborate on what these potential impacts were. 
NEMA disagreed with DOE's conclusion not to screen out die-cast copper 
rotor technology on the premise that handling molten copper is similar 
to handling molten aluminum. NEMA noted that copper has a pouring 
temperature of 2100 degrees Fahrenheit and a 150 percent higher casting 
pressure than aluminum, and that, combined, these two characteristics 
would increase the severity of any potential accidents. NEMA mentions 
an incident involving the two U.S. Army die-cast copper rotor studies 
previously mentioned, which resulted in injuries during the die-casting 
of aluminum \48\ [sic] cage rotors and caused the only U.S. 
manufacturer of copper die-casting equipment to withdraw that equipment 
from the market. NEMA added that the equipment currently remains 
unavailable for purchase. (NEMA, No. 54 at pp. 10, 55, 56; NEMA, Public

[[Page 73620]]

Meeting Transcript, No. 60 at p. 115) NEMA added that, especially 
regarding die-casting copper on larger motor sizes, DOE cannot 
justifiably claim that there are no adverse impacts on health or safety 
until they conduct a thorough investigation or feasibility study 
regarding this topic. (NEMA, No. 54 at p. 3)
---------------------------------------------------------------------------

    \48\ From the context of NEMA's comment, DOE believes the use of 
the word ``aluminum'' was a typographical error and that NEMA had 
intended this passage to use the word ``copper'' instead.
---------------------------------------------------------------------------

    However, BBF also commented that copper die-cast rotors can be 
safely manufactured, as one major manufacturer indicated that they have 
had no worker injuries in volume production over multiple years. (BBF, 
No. 51 at p. 3)
    BBF commented that, with the extensive capabilities of copper die-
cast rotors and commercial availability of copper die-cast rotors with 
efficiencies higher than NEMA MG 1-2011 Table 12-12 efficiencies, DOE 
should include in its evaluations copper die-cast rotor motors. BBF 
also added that they strongly disagree with the NEMA representatives' 
contrary verbal suggestions towards copper rotor motor technology 
presented during the public meeting. (BBF, No. 51 at p. 4)
    DOE is aware of the higher melting point of copper (1084 degrees 
Celsius versus 660 degrees Celsius for aluminum) and the potential 
impacts this may have on the health or safety of plant workers. 
However, DOE does not believe at this time that this potential impact 
is sufficiently adverse to screen out copper as a die cast material for 
rotor conductors. The process for die casting copper rotors involves 
risks similar to those of die casting aluminum. DOE believes that 
manufacturers who die-cast metal at 660 Celsius or 1085 Celsius (the 
respective temperatures required for aluminum and copper) would need to 
observe strict protocols to operate safely. DOE understands that many 
plants already work with molten aluminum die casting processes and 
believes that similar processes could be adopted for copper. DOE has 
not received any supporting data about the increased risks associated 
with copper die casting, and could not locate any studies suggesting 
that the die-casting of copper inherently represented incrementally 
more risks to worker safety and health. DOE notes that several OSHA 
standards relate to the safety of ``Nonferrous Die-Castings, Except 
Aluminum,'' of which die-cast copper is part. DOE seeks comment on any 
adverse safety or health impacts and on these OSHA standards,\49\ and 
on any other specific information document the safety of die-casting 
for both copper and aluminum.
---------------------------------------------------------------------------

    \49\ For a list, see: http://www.osha.gov/pls/imis/citedstandard.sic?p_esize=&p_state=FEFederal&p_sic=3364.
---------------------------------------------------------------------------

b. Increase the Cross-Sectional Area of Copper in the Stator Slots
    Increasing the slot fill by either adding windings or changing the 
gauge of wire used in the stator winding can also increase motor 
efficiency. Motor design engineers can achieve this by manipulating the 
wire gauges to allow for a greater total cross-sectional area of wire 
to be incorporated into the stator slots. This could mean either an 
increase or decrease in wire gauge, depending on the dimensions of the 
stator slots and insulation thicknesses. As with the benefits 
associated with larger cross-sectional area of rotor conductor bars, 
using more total cross-sectional area in the stator windings decreases 
the winding resistance and associated losses. However, this change 
could affect the slot fill factor of the stator. The stator slot 
openings must be able to fit the wires so that automated machinery or 
manual labor can pull (or push) the wire into the stator slots. In the 
preliminary analysis, DOE increased the cross-sectional area of copper 
in the stator slots of the representative units by employing a 
combination of additional windings, thinner gauges of copper wire, and 
larger slots.
    In response to the preliminary analysis, NEMA commented that a 
majority of stator windings are manufactured on automated equipment. 
NEMA and Baldor noted that there is a practical limit of 82 percent 
slot fill for automated winding equipment for motors with four or more 
poles; motors with two poles have a limit of 78 percent. (NEMA, No. 54 
at p. 58; Baldor, Public Meeting Transcript, No. 60 at p. 146) NEMA 
commented that the values for maximum slot fill for the automated 
winding models was approximately 82 percent and those based on hand 
winding were 85 percent. NEMA noted that this is not a practical change 
based on a change in conductor size alone because conductors are sized 
in a larger increment than this difference would suggest. Therefore, it 
would appear that the size of the stator slot in each case was selected 
to purposely result in the corresponding level of slot fill. (NEMA, No. 
54 at p. 59) In other words, instead of only adjusting the conductor 
gauge to the slot size, the slot size could be adjusted to the 
conductor gauge.\50\ (NEMA, No. 54 at p. 59) Baldor added that slot 
fills above 85 percent would be very difficult to do in current 
production volumes (5 million motors annually) and noted that this slot 
fill percentage was based on a DOE-presented software model and has not 
been proven in a prototype. (Baldor, Public Meeting Transcript, No. 60 
at pp. 146, 147) NEMA requested that DOE clarify the method it used for 
calculating slot fill to avoid confusion among other interested parties 
who may have used a different calculation method. (NEMA, No. 54 at p. 
58)
---------------------------------------------------------------------------

    \50\ In practice, of course, a manufacturer may opt to do either 
or both.
---------------------------------------------------------------------------

    DOE calculated the slot fill by measuring the total area of the 
stator slot and then subtracting the cross sectional area for the slot 
insulation. This method gave DOE a net area of the slot available to 
house copper winding. DOE then identified the slot with the most 
windings and found the cross sectional area of the insulated copper 
wires to get the total copper cross sectional area per slot. DOE then 
divided the total copper cross sectional area by the total slot area to 
derive the slot fill. DOE's estimated slot fills for its teardowns and 
software models are all provided in chapter 5 of the TSD.
    NEMA commented that several of DOE's designs presented maximum 
values of slot fill at 85 percent, whereas the closest automated 
winding slot fill was 82-percent. NEMA questioned the significant 
benefit DOE projected in designing the stator slot such that a hand 
winding would be required to gain a 3-percent change in slot fill. In 
NEMA's view, the change in core loss that might result from increasing 
the stator slot area by 3 percent would not be significant enough to 
warrant hand-winding the stator. (NEMA, No. 54 at p. 59) DOE notes that 
the software designs exhibiting these changes in slot fill were used 
when switching from aluminum to a copper rotor design. Therefore, 
changing slot geometries impacted the design's slot fill and the slot 
fill changes resulted from different motor designs. Consequently, a 3 
percent increase in slot fill does not imply that this change was made 
to increase the efficiency of another design, but could have been made 
to change other performance criteria of the motor, such as locked-rotor 
current.
    In the preliminary analysis, DOE indicated that motor design 
engineers can adjust slot fill by changing the gauge of wire used in 
fractions of half a gauge. NEMA commented that it did not understand 
DOE's statement, and indicated that manufacturers limit the number of 
gauges used at any particular manufacturing plant, and few of those 
gauges are ``fractions of a half a gauge.'' NEMA added that 
manufacturers may use multiple wire gauges in a particular winding, but 
DOE's examples in chapter 5 gave no indication that any sizes other

[[Page 73621]]

than a single conductor size was used in each winding. (NEMA, No. 54 at 
pp. 58, 59) DOE clarifies that all the modeled motors utilized standard 
AWG wire sizes, either whole- or half-gauge sizes (i.e., 18 or 18\1/
2\). DOE clarifies that the statement of ``fractions of a half gauge'' 
referred to sizes in between a whole gauge (i.e. 18\1/2\ of a gauge is 
a fraction of 18 gauge wire). DOE did not end up using fractions 
consisting of a half gauge of wire sizes to conduct its modeling, but 
did indicate that this was a design option used by the motor industry.
    NEMA also commented that it is not uncommon for a manufacturer to 
use the same stator lamination design for all horsepower ratings built 
in the same NEMA MG 1-2011 Standard frame series. NEMA indicated that a 
high slot fill may require hand winding for one of the ratings and 
automated winding for the other rating, and that a good design practice 
for stator laminations will take into consideration more than just one 
motor rating to determine the best design for all ratings in that frame 
series. (NEMA, No. 54 at p. 59)
    NEMA and Baldor questioned DOE's decision not to screen out hand-
wound stators, and both parties commented that moving to hand-wound 
technology would be a reversal of the trend to automate manufacturing 
practices whenever possible. (NEMA, No. 54 at p. 59; Baldor, Public 
Meeting Transcript, No. 60 at pp. 122, 123) NEMA noted that none of the 
teardown motors in DOE's analysis appeared to use hand winding 
technology. (NEMA, No. 54 at p. 59)
    While NEMA agrees that hand winding cannot be ruled out on the 
grounds of technological feasibility, it does believe that hand winding 
would not be practicable to use in mass production. A NEMA member 
survey indicated that hand winding can take up to 25 times longer than 
machine winding. NEMA added that the manpower required to replace 
automated winding would require an increase in manpower in excess of 20 
times the number of automated machines. (NEMA, No. 54 at p. 60) NEMA 
and Baldor commented that moving to an energy conservation level based 
on hand-wound technology would not be achievable on the scale necessary 
to serve the relevant market at the time of the effective date of the 
standard. (NEMA, No. 54 at p. 60; Baldor, Public Meeting Transcript, 
No. 60 at p. 123) NEMA added that it would not be aware if such an 
expansion of the infrastructure would be required until after any 
amended or new standards are announced. (NEMA, No. 54 at p. 60) DOE is 
aware of the extra time involved with hand winding and has attempted to 
incorporate this time into efficiency levels (ELs) that it believes 
would require hand winding. DOE reiterates that should the increase in 
infrastructure, manpower, or motor cost increase beyond a reasonable 
means, then ELs utilizing this technology will be screened out during 
the downstream analysis.
    NEMA also expressed concern that standards based on hand winding 
would shift U.S. manufacturing jobs to locations outside of the U.S. 
which have lower labor rates, and Nidec added that most U.S. 
manufacturers are currently globally positioned to move labor-intensive 
work into low-cost labor countries if energy conservation requirements 
force them to do so. (Nidec, Public Meeting Transcript, No. 60 at p. 
124) DOE intends to fully capture this impact during the manufacturer 
impact analysis (MIA) portion of DOE's analysis. Please see section 
IV.J for a discussion of the manufacturer impact analysis.
    NEMA also commented that hand-wound technology would have an 
adverse impact on product utility or product availability, saying that 
the infrastructure would not be in place in sufficient time to support 
the hand winding of all of the stators, and there will be an adverse 
impact on the availability of various ratings of electric motors at the 
time of effective standards. (NEMA, No. 54 at p. 60)
    NEMA commented that hand winding would have adverse impacts on 
worker health or safety, as both hand winding and hand insertion of 
stator coils require operations performed by hand with repetitive 
motions, and such hand winding of stators also involves the moving and 
lifting of various stator and winding components, which may be of 
substantial size in larger horsepower rated electric motors. NEMA added 
that any increase in personnel performing the repetitive tasks required 
by hand winding can have an adverse effect on the overall health and 
safety record of any facility. (NEMA, No. 54 at p. 60; NEMA, Public 
Meeting Transcript, No. 60 at p. 123)
    DOE disagrees with NEMA's assertion concerning the adverse impacts 
on health or safety, and notes that hand winding is currently practiced 
by industry. Furthermore, DOE is not aware of any data or studies 
suggesting hand-winding leads to negative health consequences. DOE 
acknowledges that, were hand-winding to become widespread, 
manufacturers would need to hire more workers to perform hand-winding 
to maintain person-winding-hour equivalence, and has accounted for the 
added costs of hand-winding in its engineering analysis. DOE requests 
comment on its cost estimates for hand-wound motors, as well as on the 
matter of hand-winding in general and on studies suggesting negative 
health impacts in particular.
    NEMA summarized its concerns, saying that hand winding is not a 
viable technology option, especially for a slot fill increase of less 
than 5 percent. NEMA believes that the engineering analysis should not 
be based on stator slot fill levels which require hand winding, which 
are generally slot fills above 78 percent for 2-pole motor and 82 
percent for 4-, 6-, and 8-pole motors. (NEMA, No. 54 at p. 60)
    DOE acknowledges that the industry is moving towards increased 
automation. However, hand winding is currently practiced by 
manufacturers, making it a viable option for DOE to consider as part of 
its engineering analysis. Considering the four screening criteria for 
this technology option, DOE did not screen out the possibility of 
changing gauges of copper wire in the stator as a means of improving 
efficiency. Motor design engineers adjust this option by using 
different wire gauges when manufacturing an electric motor to achieve 
desired performance and efficiency targets. Because this design 
technique is in commercial use today, DOE considers this technology 
option both technologically feasible and practicable to manufacture, 
install, and service. DOE is not aware of any adverse impacts on 
consumer utility, reliability, health, or safety associated with 
changing the wire gauges in the stator to obtain increased efficiency. 
Should the technology option prove to not be economical on a scale 
necessary to supply the entire industry, then this technology option 
would be likely not be selected for in the analysis, either in the LCC 
or MIA.
    DOE seeks comment generally on the process of increasing the cross-
section of copper in the stator, and in particular on the costs and 
reliability of the hand winding process.
2. Technology Options Screened Out of the Analysis
    DOE developed an initial list of design options from the 
technologies identified in the technology assessment. DOE reviewed the 
list to determine if the design options are practicable to manufacture, 
install, and service; would adversely affect equipment utility or 
equipment availability; or would have adverse impacts on health and 
safety. In the engineering analysis, DOE did not consider any of those 
options that failed

[[Page 73622]]

to satisfy one or more of the screening criterion. The design options 
screened out are summarized in Table IV.8.

         Table IV.8--Design Options Screened Out of the Analysis
------------------------------------------------------------------------
                                                Eliminating screening
          Design option  excluded                     criterion
------------------------------------------------------------------------
Plastic Bonded Iron Powder (PBIP).........  Technological Feasibility.
Amorphous Steels..........................  Technological Feasibility.
------------------------------------------------------------------------

    NEMA agreed with DOE in that plastic bonded iron powder has not 
been proven to be a technologically feasible method of construction of 
stator and rotor cores in induction motors. (NEMA, No. 54 at p. 64) 
NEMA also agreed that amorphous metal laminations are not a type of 
material that lends itself to use in electric motors in the foreseeable 
future. However, NEMA expressed concern that this technology was only 
screened out on the basis of technological feasibility because it had 
not been used in a prototype. (NEMA, No. 54 at p. 63)
    Baldor and NPCC also agreed with DOE's decision to exclude PBIP and 
amorphous steels from the engineering analysis. (Baldor, Public Meeting 
Transcript, No. 60 at p. 108; Advocates, No. 56 at p. 3)
    DOE is continuing to screen out both of these technology options 
from further consideration in the engineering analysis. Additionally, 
DOE understands the concerns expressed by NEMA regarding technological 
feasibility, but DOE maintains that if a working prototype exists, 
which implies that the motor has performance characteristics consistent 
with other motors using a different technology, then that technology 
would be deemed technologically feasible. However, that fact would not 
necessarily mean that a technology option would pass all three of the 
remaining screening criteria.
    Chapter 4 of this preliminary TSD discusses each of these screened 
out design options in more detail, as well as the design options that 
DOE considered in the electric motor engineering analysis.

C. Engineering Analysis

    The engineering analysis develops cost-efficiency relationships for 
the equipment that are the subject of a rulemaking by estimating 
manufacturer costs of achieving increased efficiency levels. DOE uses 
manufacturing costs to determine retail prices for use in the LCC 
analysis and MIA. In general, the engineering analysis estimates the 
efficiency improvement potential of individual design options or 
combinations of design options that pass the four criteria in the 
screening analysis. The engineering analysis also determines the 
maximum technologically feasible energy efficiency level.
    When DOE proposes to adopt a new or amended standard for a type or 
class of covered product, it must determine the maximum improvement in 
energy efficiency or maximum reduction in energy use that is 
technologically feasible for such product. (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 electric motors, using the design parameters for the 
most efficient products available on the market or in working 
prototypes. (See chapter 5 of the NOPR TSD.) The max-tech levels that 
DOE determined for this rulemaking are described in IV.C.3 of this 
proposed rule.
    In general, DOE can use three methodologies to generate the 
manufacturing costs needed for the engineering analysis. These methods 
are:
    (1) The design-option approach--reporting the incremental costs of 
adding design options to a baseline model;
    (2) the efficiency-level approach--reporting relative costs of 
achieving improvements in energy efficiency; and
    (3) the reverse engineering or cost assessment approach--involving 
a ``bottoms up'' manufacturing cost assessment based on a detailed bill 
of materials derived from electric motor teardowns.
1. Engineering Analysis Methodology
    DOE's analysis for the electric motor rulemaking is based on a 
combination of the efficiency-level approach and the reverse 
engineering approach. Primarily, DOE elected to derive its production 
costs by tearing down electric motors and recording detailed 
information regarding individual components and designs. DOE used the 
costs derived from the engineering teardowns and the corresponding 
nameplate nominal efficiency of the torn down motors to report the 
relative costs of achieving improvements in energy efficiency. DOE 
derived material prices from current, publicly available data as well 
as input from subject matter experts and manufacturers. For most 
representative units analyzed, DOE was not able to test and teardown a 
max-tech unit because such units are generally cost-prohibitive and are 
not readily available. Therefore, DOE supplemented the results of its 
test and teardown analysis with software modeling.
    When developing its engineering analysis for electric motors, DOE 
divided covered equipment into equipment class groups. As discussed, 
there are four electric motor equipment class groups: NEMA Design A and 
B motors (ECG 1), NEMA Design C motors (ECG 2), fire pump electric 
motors (ECG 3), and brake motors (ECG 4). The motors within these ECGs 
are further divided into equipment classes based on pole-configuration, 
enclosure type, and horsepower rating. For DOE's rulemaking, there are 
580 equipment classes.
2. Representative Units
    Due to the high number of equipment classes for electric motors, 
DOE selected and analyzed only a few representative units from each ECG 
and based its overall analysis for all equipment classes within that 
ECG on those representative units. During the NOPR analysis, DOE 
selected three units to represent ECG 1 and two units to represent ECG 
2. DOE based the analysis of ECG 3 on the representative units for ECG 
1 because of the low shipment volume and run time of fire pump electric 
motors. DOE also based the analysis of ECG 4 on the analysis of ECG 1 
because the vast majority of brake motors are NEMA Design B motors. 
When selecting representative units for each ECG, DOE considered NEMA 
design type, horsepower rating, pole-configuration, and enclosure.
a. Electric Motor Design Type
    For ECG 1, which includes all NEMA Design A and B motors that are 
not fire pump or brake motors, DOE only selected NEMA Design B motors 
as representative units to analyze in the preliminary analysis 
engineering analysis. DOE chose NEMA Design B motors because NEMA 
Design B motors have slightly more stringent performance requirements, 
namely their locked-rotor current has a maximum allowable level for a 
given rating. Consequently, NEMA Design B motors are slightly more 
restricted in terms of their maximum efficiency levels. Therefore, by 
analyzing a NEMA Design B motor, DOE could ensure technological 
feasibility for all designs covered in ECG 1. Additionally, NEMA Design 
B units have much higher shipment volumes than NEMA Design A motors 
because most motor driven equipment is designed (and UL listed) to run 
with NEMA Design B motors.
    NEMA agreed with DOE's decision to base any amended or new 
standards for ECG 1 motors on NEMA Design B motor

[[Page 73623]]

types because consumers generally prefer NEMA Design B motors due to 
the fact that locked-rotor current is constrained to established 
industry standards in these motors, making it easier to select suitable 
motor-starting devices. NEMA pointed out that, on the other hand, the 
use of a NEMA Design A motor may require the purchaser of the motor to 
expend a significant amount of time and expense in selecting suitable 
motor-starting devices to operate the motor in an appropriate and safe 
manner. NEMA elaborated that it is important to base the analysis on 
NEMA Design B motors in order to minimize any disruption to consumers 
based on their preference for NEMA Design B. (NEMA, No. 54 at p. 64) 
DOE appreciates NEMA's feedback. For its NOPR engineering analysis, DOE 
has continued to select NEMA Design B motors as its representative 
units in ECG 1.
    As mentioned for ECG 2, DOE selected two representative units to 
analyze. Because NEMA Design C is the only NEMA design type covered by 
this ECG, DOE only selected NEMA Design C motors as its representative 
units.
    For ECG 3, which consists of fire pump electric motors, DOE based 
its engineering analysis on the NEMA Design B units analyzed for ECG 1 
in the preliminary analysis. As noted, in order to be in compliance 
with section 9.5 of National Fire Protection Association (NFPA) 
``Standard for the Installation of Stationary Pumps for Fire 
Protection'' Standard 20-2010, which is a requirement for a motor to 
meet DOE's current definition of a fire pump electric motor, the motor 
must comply with NEMA Design B (or IEC Design N) requirements.\51\ 
Although DOE understands that fire pump electric motors have additional 
performance requirements, DOE believed that analysis of the ECG 1 
motors would serve as a sufficient approximation for the cost-
efficiency relationship for fire pump electric motors. The design 
differences between a NEMA Design B motor (or IEC-equivalent) and fire 
pump electric motor are small and unlikely to greatly affect 
incremental cost behavior.
---------------------------------------------------------------------------

    \51\ With the exception of having a thermal shutoff switch, 
which could prevent a fire pump motor from performing its duty in 
hot conditions, NFPA 20 also excludes several motor types not 
considered in this rulemaking from the NEMA Design B requirement. 
They are direct current, high-voltage (over 600 V), large-horsepower 
(over 500 hp), single-phase, universal-type, and wound-rotor motors.
---------------------------------------------------------------------------

    NEMA disagreed with DOE's assertion that fire pump electric motors 
are required to meet NEMA Design B standards, and commented that, as 
defined in 10 CFR 431.12, fire pump electric motors are not limited to 
NEMA Design B performance standards. NEMA requested that DOE clarify 
DOE's statement in the preliminary analysis that currently, efficiency 
standards have only been established for fire pump electric motors that 
are NEMA Design B. (NEMA, No. 54 at p. 25) NEMA also commented that the 
additional performance requirements for fire pump electric motors 
(e.g., the ability to withstand stall conditions for longer periods of 
time) mean they are usually designed with lower locked-rotor current 
limits. Therefore, NEMA stated that fire pump electric motors may have 
a maximum efficiency potential slightly lower than typical, general 
purpose NEMA Design B motors. (NEMA, No. 54 at pp. 24-25, 40, 64, 70; 
NEMA, Public Meeting Transcript, No. 60 at pp. 135, 136) NEMA added 
that they support DOE's decision to analyze fire pump motors in a 
separate equipment class group because of the short run time of fire 
pump electric motors. (NEMA, No. 54 at p. 71)
    Regarding DOE's fire pump electric motor definition, as detailed in 
the final electric motors test procedure, DOE intends its fire pump 
electric motor definition to cover both NEMA Design B motors and IEC-
equivalents that meet the requirements of section 9.5 of NFPA 20. See 
77 FR 26617-18. As stated in the final electric motors test procedure, 
DOE agrees with stakeholders that IEC-equivalent motors should be 
included within the scope of the definition of ``fire pump electric 
motor,'' although NFPA 20 does not explicitly recognize the use of IEC 
motors with fire pumps. 77 FR 26617. DOE realizes that section 9.5 of 
NFPA 20 specifically requires that fire pump motors shall be marked as 
complying with NEMA Design B. The fire pump electric motor definition 
that DOE created focuses on ensuring that compliance with the energy 
efficiency requirements are applied in a consistent manner. DOE 
believes that there are IEC motors that can be used in fire pump 
applications that meet both NEMA Design B and IEC Design N criteria, as 
well as NEMA MG1 service factors. DOE's definition encompasses both 
NEMA Design B motors and IEC-equivalents. To the extent that there is 
any ambiguity as to how DOE would apply this definition, in DOE's view, 
any Design B or IEC-equivalent motor that otherwise satisfies the 
relevant NFPA requirements would meet the fire pump electric motor 
definition in 10 CFR 431.12. To the extent that there is confusion 
regarding this view, DOE invites comments on this issue, along with any 
data demonstrating whether any IEC-equivalent motors are listed for 
fire pump service either under the NFPA 20 or another relevant industry 
standard.
    Regarding NEMA's other fire pump electric motor comment, DOE agrees 
that some fire pump electric motors may not be required to meet the 
NEMA Design B performance requirements (or IEC-equivalent comments). 
However, those motors that are not required to meet the NEMA Design B 
performance requirements are direct-current motors, motors with high 
voltages (i.e., greater than 600 V), motors with high horsepower 
ratings (i.e., greater than 500 horsepower), single-phase motors, 
universal-type motors, or wound-rotor motors. Any motor with such 
attributes would not meet the nine motor characteristics that define 
the scope of electric motors covered in this rulemaking. Additionally, 
any fire pump electric motor that is not rated for continuous duty is 
not, and would not be, covered by the scope of today's rulemaking. 
Therefore, DOE clarifies that any fire pump electric motor currently 
subject to, or potentially subject to, energy conservation standards as 
a result of this rulemaking, would have to meet the NEMA Design B (or 
IEC-equivalent) performance requirements. As indicated above, DOE seeks 
comment on whether its current regulatory definition requires further 
clarification.
    Additionally, DOE understands NEMA's comments regarding the 
potential limitations of fire pump electric motors. However, DOE 
believes that its approximation, by using the NEMA Design B electric 
motors from ECG 1 is sufficient, at this time. In DOE's preliminary 
analysis, DOE found that all efficiency levels analyzed for fire pump 
electric motors resulted in negative life-cycle cost savings for 
consumers and a negative net present values for the Nation. This was 
the result of extremely low operating hours and therefore, limited 
energy cost savings potential. DOE notes that there are minimal 
shipments and no efficiency levels are likely to be deemed economically 
justifiable.
    Additionally, DOE understands that fire pump motors are similar in 
both performance and architecture to NEMA Design B motors, the chief 
difference being the absence of thermal cutoff capability that would 
render a fire pump motor unable to perform its function in a hot 
environment. For compliance purposes, however, the distinction is less 
important. DOE welcomes comment on the similarity

[[Page 73624]]

between fire pump and NEMA Design B motors.
    Equipment class group 4, consisting of brake motors, is also based 
on ECG 1 because DOE is only aware of brake motors being built to NEMA 
Design B specifications. Furthermore, DOE understands that there is no 
fundamental difference in design between brake and non-brake electric 
motors, other than the presence of the brake. Therefore, the same 
design options could be used on both sets of electric motors and both 
motor types are likely to exhibit similar cost versus efficiency 
relationships.
    For the final rule, DOE may consider combining ECGs 1 and 4 again, 
as was done for the preliminary analysis, but such a decision depends, 
in part, on the outcome of its concurrent electric motors test 
procedure rulemaking. Currently, DOE believes that its proposed 
approach to testing brake motors will mitigate the impact of the brake 
component's contributions to motor losses such that the demonstrated 
efficiency would be the same as if the motor had been tested with the 
brake completely removed (essentially making it no different from the 
motors covered by ECG 1). (See 78 FR 38467) With this approach, a 
separate ECG would not be necessary.
b. Horsepower Rating
    Horsepower rating is an important equipment class setting 
criterion. When DOE selected its preliminary analysis representative 
units, DOE chose those horsepower ratings that constitute a high volume 
of shipments in the market and provide a wide range upon which DOE 
could reasonably base a scaling methodology. For NEMA Design B motors, 
for example, DOE chose 5-, 30-, and 75-horsepower-rated electric motors 
to analyze as representative units. DOE selected the 5-horsepower 
rating because these motors have the highest shipment volume of all 
motors. DOE selected the 30-horsepower rating as an intermediary 
between the small and large frame number series electric motors. 
Finally, DOE selected a 75-horsepower unit because there is minimal 
variation in efficiency for motors with horsepower ratings above 75-
horsepower. Based on this fact, DOE determined it was unnecessary to 
analyze a higher horsepower motor. Additionally, as horsepower levels 
increase, shipments typically decrease. Therefore, DOE believed there 
would be minimal gains to its analysis had it examined a higher 
horsepower representative unit.
    During the public meeting, Baldor commented that the representative 
units should have been selected based on energy consumption and not 
shipment numbers. Baldor indicated that using this approach, the 10-
horspower motor would have been designated as a representative unit 
rather than the 5-horsepower motors. (Baldor, Public Meeting 
Transcript, No. 58 at p. 132, 133) NEMA reiterated Baldor's stance in 
its submitted comments, saying that the 5-horsepower motor would not 
appear to be the only choice for the representative unit. (NEMA, No. 54 
at p. 65) NEMA and Baldor also commented that there are motors built in 
frame series larger than the standard 75-horsepower frame series and 
DOE should select a motor built in the largest NEMA MG 1 frame series 
as a representative unit. (NEMA, No. 54 at p. 65; Baldor, Public 
Meeting Transcript, No. 60 at p. 133) NEMA added that efficiency 
ratings start to level off once horsepower ratings exceed 150-
horsepower, not above 75-horsepower. Therefore, they argued that 
selecting a horsepower rating above 150-horsepower would have been a 
better indicator if the perceived increase in efficiency calculated for 
lower horsepower ratings would be achievable by larger horsepower 
ranges. (NEMA, No. 54 at pp. 27, 65) Baldor reiterated this comment in 
the preliminary analysis public meeting. (Baldor, Public Meeting 
Transcript, No. 60 at pp. 133-134)
    While DOE agrees with NEMA that the 5-horsepower electric motor was 
not the only choice for the representative unit, it selected the 5-
horsepower motor for multiple reasons. The 5-horsepower unit had the 
highest percentage of shipments for all covered electric motors, which 
ensured that there would be multiple efficiency levels from multiple 
manufacturers available for comparison during the teardown analysis. In 
addition, because DOE later employed scaling, it attempted to find a 
frame series and D-dimension \52\ that could serve as a strong basis 
from which to scale to a relatively small set of unanalyzed frame 
series. The standard NEMA MG 1-2011 frame series for the 5-horsepower 
enclosed motor was a midpoint between the standard frame series for 1 
horsepower and 10-horsepower motors, which was the group of ratings 
covered by the 5- horsepower representative unit. A larger 
representative unit would have meant a larger range of frame series on 
which to apply the scaling methodology.
---------------------------------------------------------------------------

    \52\ ``D'' dimension is the length from the centerline of the 
shaft to the mounting feet of the motor, and impacts how large the 
motor's laminations can be, impacting the achievable efficiency of 
the motor. ``D'' dimensions are designated in NEMA MG 1-2011 Section 
4.2.1, Table 4-2.
---------------------------------------------------------------------------

    As to DOE's selection of the 75-horsepower representative unit as a 
maximum, DOE understands that the 75-horsepower motor is not built in 
the largest NEMA MG 1-2011 frame series covered, but maintains that its 
selection is appropriate for this analysis. As stated previously, 
efficiency changes slowly when approaching the highest horsepower 
ratings, and choosing a higher horsepower rating would not have 
provided any appreciable improvement over the data DOE already 
developed for its analysis. DOE has found minimal variation in 
efficiency for motors above 75-horsepower. Because the change in 
efficiency diminishes with increasing horsepower, one may achieve a 
similar level of analytical accuracy with fewer data points at higher 
horsepower. Stated inversely, one needs more data points to accurately 
characterize a curve where it has a greater rate of change, such as 
lower horsepower. Finally, DOE notes that its scaling methodology 
mirrors the scaling methodology used in NEMA's MG 1-2011 tables of 
efficiencies, including the rate of change in efficiency with 
horsepower.
    DOE also notes that section 13 of NEMA MG 1-2011 does not 
standardize frame series for NEMA Design B motors at the highest 
horsepower levels covered in today's proposal. Therefore, motors with 
the highest capacity have variability in their frame series. This added 
flexibility would give manufacturers more options to improve the 
efficiency of their largest motors covered by this rulemaking. Although 
altering the frame size of a motor may be costly, DOE believes that its 
selection of a 75-hp representative unit for higher horsepower motors 
is appropriate for scaling higher horsepower efficiency levels and the 
efficiency levels examined are technologically feasible for the largest 
capacity motors.
    For NEMA Design C electric motors, DOE again selected the 5-
horsepower rating because of its prevalence. In addition, DOE selected 
a 50-horsepower rating as an incrementally higher representative unit. 
DOE only selected two horsepower ratings for these electric motors 
because of their low shipment volumes. For more information on how DOE 
selected these horsepower ratings see chapter 5 of the TSD.
    In submitted comments, NEMA expressed confusion over DOE's 
selection of the 50-horsepower representative unit for the NEMA Design 
C equipment class group. NEMA stated that the NEMA T-frame size for 
such a rating is 326T, which is three

[[Page 73625]]

NEMA T-frame number series below the largest frame number series of 
440. NEMA requested that DOE clarify why it limited its NEMA Design C 
representative unit to such a low value in its engineering analysis. 
(NEMA, No. 54 at p. 66) Finally, NEMA commented that the 2011 shipment 
data that DOE used to select its representative units was not broken 
down by NEMA design type. NEMA believed that using such data to select 
representative units for ECGs 1 and 2 was not appropriate and requested 
clarification. (NEMA, No. 54 at p. 66)
    As with ECG 1, DOE selected representative units that fell in the 
middle of the range of ratings covered in this rulemaking and not 
necessarily the largest frame size covered in the rulemaking. 
Furthermore, as discussed earlier, NEMA Design C motors are produced in 
a smaller range of horsepower ratings than NEMA Design B motors (1 to 
200 rather than 1 to 500). With this smaller horsepower range, a 
correspondingly smaller range of representative units is needed. 
Therefore, DOE selected a slightly lower rating as its maximum for ECG 
2. As for the shipments data used to select the 5-hp representative 
unit, DOE acknowledges that it did not separate the data by design 
type, and has revised the text for the NOPR's TSD to add clarity. 
However, DOE still maintains that the prevalence of 5-hp units make it 
an appropriate selection as a representative unit.
c. Pole-Configuration
    Pole-configuration is another important equipment class setting 
criterion that DOE had to consider when selecting its representative 
units. For the preliminary analysis, DOE selected 4-pole motors for all 
of its representative units. DOE chose 4-pole motors because they 
represent the highest shipment volume of motors compared to other pole 
configurations. DOE chose not to alternate between pole configurations 
for its representative units because it wanted to keep as many design 
characteristics constant as possible. By doing so, it would allow DOE 
to more accurately identify how design changes affect efficiency across 
horsepower ratings. Additionally, DOE believed that the horsepower 
rating-versus-efficiency relationship is the most important (rather 
than pole-configuration and enclosure type-versus-efficiency) because 
there are significantly more horsepower ratings to consider.
    NEMA noted that efficiency gains based on a 4-pole configuration do 
not confirm that those same gains are achievable in other pole 
configurations, and there is no foundation for scaling across different 
pole configurations. NEMA added that it is necessary to know how 
designs change with respect to pole-configuration, and analyzing 
samples of one pole configuration limits the ability to make decisions 
based on other pole-configurations. NEMA commented that designs 
significantly vary across pole-configurations, especially regarding 
torque characteristics. (NEMA, No. 54 at pp. 26, 66-67) NEMA also 
stated that the purpose of the engineering analysis is not necessarily 
to determine the ``reasons for efficiency improvements,'' but to 
determine if efficiency can be improved in accordance with meeting the 
requirements of being technologically feasible and economically 
justified per 42 U.S.C. 6295(o)(A) and (B). (NEMA, No. 54 at p. 26) 
Baldor also commented on scaling across pole configurations, saying 
that the rotor diameter grows as the pole number increases, which may 
cause higher losses in 2-pole motors compared to other pole 
configurations covered in this rulemaking. (Baldor, Public Meeting 
Transcript, No. 60 at pp. 130, 131)
    As mentioned earlier, DOE is assessing energy conservation 
standards for 580 equipment classes. Analyzing each of the classes 
individually is not feasible, which requires DOE to select 
representative units on which to base its analysis. DOE understands 
that different pole-configurations have different design constraints. 
Originally, DOE selected only 4-pole motors to analyze because they 
were the most common, allowing DOE to most accurately characterize 
motor behavior at the pole configuration consuming the majority of 
motor energy. Additionally, by holding pole-configuration constant 
across its representative units, DOE would be able to develop a 
baseline from which to scale. By maintaining this baseline and holding 
all other variables constant, DOE is able to modify the horsepower of 
the various representative units and isolate which efficiency effects 
are due to size.
    As discussed in section IV.C.8, DOE has used the simpler of two 
scaling approaches presented in the preliminary analysis because both 
methods had similar results. This simpler approach does not require DOE 
to develop a relationship for 4-pole motors from which to scale. 
Furthermore, DOE notes that the scaling approach it selected mirrors 
the scaling laid out in NEMA's MG 1-2011 tables, in which at least a 
subset of the motors industry has already presented a possible 
relationship between efficiency and pole count. DOE has continued to 
analyze 4-pole electric motors because they are the most common and DOE 
believes that all of the efficiency levels it has developed are 
technologically feasible.
d. Enclosure Type
    The final equipment class setting criterion that DOE considered 
when selecting its representative units was enclosure type. For the 
preliminary analysis, DOE elected to analyze electric motors with 
enclosed designs rather than open designs for all of its representative 
units. DOE selected enclosed motors because, as with pole-
configurations, these motors have higher shipments than open motors. 
Again, DOE did not alternate between the two design possibilities for 
its representative units because it sought to keep design 
characteristics as constant as possible in an attempt to more 
accurately identify the reasons for efficiency improvements.
    NEMA commented that DOE's analysis did not consider the 
significance of enclosure type as it relates to efficiency, and that 
the NEMA MG 1 frame designations for open frame motors are often in a 
smaller frame series than an enclosed-frame motor of the same 
horsepower rating. NEMA and Baldor commented that there is generally a 
lower efficiency level designated for open-frame motors, and that there 
is no direct scaling relationship between the efficiency standards for 
open motors relative to enclosed frame motors in the scope of this 
rulemaking. (NEMA, No. 54 at p. 68; Baldor, Public Meeting Transcript, 
No. 60 at p. 131) Baldor recommended that DOE analyze motors of 
different enclosures in order to understand the difference between 
achievable efficiency levels in open and enclosed electric motors. 
(Baldor, Public Meeting Transcript, No. 60 at pp. 131-132) NEMA 
commented that the engineering analysis should be supported by the 
testing and analysis of both open and enclosed frame motors. (NEMA, No. 
54 at p. 68) Finally, NEMA commented that by not selecting 
representative units with different enclosure types, DOE fails to meet 
the statutory requirement that any prescribed amended or new efficiency 
standards are in fact technically feasible, practical to manufacture, 
and have no adverse impacts on product utility or product availability. 
(NEMA, No. 54 at pp. 68-69)
    DOE acknowledges the comments from interested parties regarding 
enclosure type and its selection of representative units. The final 
equipment class setting criterion that DOE had to consider when 
selecting its

[[Page 73626]]

representative units was enclosure type. For the preliminary analysis, 
DOE analyzed only electric motors with totally enclosed, fan-cooled 
(TEFC) designs rather than open designs for all of its representative 
units. DOE selected TEFC motors because, as with pole configurations, 
DOE wanted as many design characteristics to remain constant as 
possible. DOE believed that such an approach would allow it to more 
accurately pinpoint the factors that affect efficiency. While DOE only 
analyzed one enclosure type, it notes that its scaling follows NEMA's 
efficiency tables (Table 12-11 and Table 12-12), which already map how 
efficiency changes with enclosure type. Finally, TEFC electric motors 
represented more than three times the shipment volume of open motors. 
DOE chose ELs that correspond to the tables of standards published in 
NEMA's MG 1-2011 and to efficiency bands derived from those tables, 
preserving the relationship between NEMA's standards for open and 
enclosed motors.
    In the preliminary analysis, DOE stated that, given the same frame 
size, open motors are more efficient than enclosed motors. NEMA 
commented that DOE should not compare open and enclosed motors in the 
same frame size because NEMA MG 1 specifies larger frame sizes and a 
higher service factor for enclosed motors of a given rating than it 
does for open motors. NEMA added that TEFC motors have a fan which adds 
to the friction and windage losses, and even with this fan the TEFC 
motors can have higher efficiencies than open frame motors of the same 
horsepower and pole configuration. (NEMA, No. 54 at p. 41) DOE 
appreciates the clarification and has altered its discussion in chapter 
3 of the TSD.
3. Efficiency Levels Analyzed
    After selecting its representative units for each electric motor 
equipment class group, DOE examined the impacts on the cost of 
improving the efficiency of each of the representative units to 
evaluate the impact and assess the viability of potential energy 
conservation standards. As described in the technology assessment and 
screening analysis, there are numerous design options available for 
improving efficiency and each incremental improvement increases the 
electric motor efficiency along a continuum. The engineering analysis 
develops cost estimates for several efficiency levels (ELs) \53\ along 
that continuum.
---------------------------------------------------------------------------

    \53\ For the purposes of the NOPR analysis, the term 
``efficiency level'' (EL) is equivalent to that of Candidate 
Standard Level (CSL) in the preliminary analysis.
---------------------------------------------------------------------------

    ELs are often based on: (1) Efficiencies available in the market; 
(2) voluntary specifications or mandatory standards that cause 
manufacturers to develop equipment at particular efficiency levels; and 
(3) the max-tech level.
    Currently, there are two energy conservation standard levels that 
apply to various types of electric motors. In ECG 1, some motors 
currently must meet efficiency standards that correspond to NEMA MG 1-
2011 Table 12-11 (i.e., EPACT 1992 levels \54\), others must meet 
efficiency standards that correspond to NEMA MG 1-2011 Table 12-12 
(i.e., NEMA Premium levels), and some are not currently required to 
meet any energy conservation standard levels. Because DOE cannot 
establish energy conservation standards that are less efficient than 
current standards (i.e., the ``anti-backsliding'' provision at 42 
U.S.C. 6295(o)(1) as applied via 42 U.S.C. 6316(a)) but ECG 1 includes 
both currently regulated and unregulated electric motors, DOE's 
analysis assumed the respective EPACT 1992 or NEMA Premium standard as 
the baseline for ELs 1 and 2. For ECG 1, DOE established an EL that 
corresponded to each of these levels, with EL 0 as the baseline (i.e., 
the lowest efficiency level available for unregulated motors and EPACT 
1992 or NEMA Premium, as applicable, for currently regulated motors), 
EL 1 as equivalent to EPACT 1992 levels (or NEMA Premium, as 
applicable, for currently regulated motors), and EL 2 as equivalent to 
NEMA Premium levels. Additionally, DOE analyzed two ELs above EL 2. One 
of these levels was the max-tech level, denoted as EL 4 and one was an 
incremental level that approximated a best-in-market efficiency level 
(EL 3). For all equipment classes within ECG 1, EL 3 was a one ``band'' 
increase in NEMA nominal efficiency relative to NEMA Premium and EL 4 
was a two ``band'' increase.\55\ For ECG 3 and 4, DOE used the same ELs 
with one exception for ECG 3. Because fire pump electric motors are 
required to meet EPACT 1992 efficiency levels and those are the only 
motors in that equipment class group, EPACT 1992 levels were used as 
the baseline efficiency level, which means that fire pump electric 
motors have one fewer EL than ECGs 1 and 4 for purposes of DOE's 
analysis. Following the preliminary analysis, DOE adjusted one max-tech 
Design B representative unit level (5 hp) after receiving additional 
data. This allowed this unit to be based more on physical models for 
the NOPR analysis, thereby reducing exposure to modeling errors. Table 
IV.9 and Table IV.10 show the ELs for ECGs 1, 3, and 4.
---------------------------------------------------------------------------

    \54\ EPACT 1992 only established efficiency standards for motors 
up to and including 200 hp. Eventually, NEMA MG 1-2011 added a 
table, 20-A, which functioned as an extension of Table 12-11. So, 
although EPACT 1992 is a slight misnomer, DOE is using it to refer 
to those ELs that were based on Table 12-11.
    \55\ Because motor efficiency varies from unit to unit, even 
within a specific model, NEMA has established a list of standardized 
efficiency values that manufacturers use when labeling their motors. 
Each incremental step, or ``band,'' constitutes a 10 percent change 
in motor losses. NEMA MG 1-2011 Table 12-10 contains the list of 
NEMA nominal efficiencies.

                        Table IV.9--Efficiency Levels for Equipment Class Groups 1 and 4
----------------------------------------------------------------------------------------------------------------
                                       EL 0         EL 1 (EPACT     EL 2 (NEMA    EL 3 (best-in-    EL 4 (max-
       Representative unit          (baseline)         1992)         premium)        market) *         tech)
                                     (percent)       (percent)       (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
5 hp (ECG 1 and 4)..............            82.5            87.5            89.5            90.2            91.0
30 hp (ECG 1 and 4).............            89.5            92.4            93.6            94.1            94.5
75 hp (ECG 1 only **)...........            93.0            94.1            95.4            95.8            96.2
----------------------------------------------------------------------------------------------------------------
* Best-in-market represents the best or near best efficiency level at which current manufacturers are producing
  electric motors. Although these efficiencies represent the best-in-market values found for the representative
  units, but when efficiency was scaled to the remaining equipment classes, the scaled efficiency was sometimes
  above and sometimes below the best-in-market value for a particular rating.
** ECG 4 does not have a 75-horsepower representative unit because DOE was unable to find brake motors built
  with such a high horsepower rating. The maximum horsepower rating for ECG 4 is 30-horsepower.

[[Page 73627]]

                           Table IV.10--Efficiency Levels for Equipment Class Group 3
----------------------------------------------------------------------------------------------------------------
                                                    EL 0 (EPACT     EL 1 (NEMA    EL 2 (best-in-    EL 3 (max-
          Representative unit (percent)                1992)         premium)        market) *         tech)
                                                     (percent)       (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
5 hp............................................            87.5            89.5            90.2            91.0
30 hp...........................................            92.4            93.6            94.1            94.5
75 hp...........................................            94.1            95.4            95.8            96.2
----------------------------------------------------------------------------------------------------------------

    For ECG 2, DOE took a similar approach in developing its ELs as it 
did for ECG 1, but with two primary differences. First, when DOE 
examined catalog data, it found that no NEMA Design C electric motors 
had efficiencies below EPACT 1992 levels, which is the current standard 
for all covered NEMA Design C electric motors. For DOE's representative 
units, it also found no catalog listings above the required EPACT 1992 
levels. Additionally, when DOE's subject matter expert modeled NEMA 
Design C motors, the model would only generate designs at NEMA Premium 
levels and one incremental level above that while maintaining proper 
performance standards. Therefore, ECG 2 only contains three ELs: EPACT 
1992 (EL 0), NEMA Premium (EL 1), and a max-tech level (EL 2).
    These ELs differed slightly from the CSLs presented in the 
preliminary analysis for ECG2. In the preliminary analysis, a CSL for 
the 50 hp unit existed between two industry standard levels in order to 
provide greater resolution in selection of a standard (NEMA MG-1 Table 
12-11 and Table 12-12). For the NOPR analysis, this level was removed 
so that the ELs analyzed would align with Tables 12-11 and 12-12. For 
the 5 hp rep unit, DOE also removed one preliminary analysis CSL, which 
was intended to represent the ``best in market'' level in the 
preliminary analysis. After further market research, DOE found that few 
Design C motors are offered above the baseline, and those that were 
mainly met the NEMA premium level, without going higher in efficiency. 
It determined that for the NOPR analysis, the previously designated 
``max in market'' level was not applicable. The ELs analyzed for ECG2 
in the NOPR are shown in Table IV.11.

                           Table IV.11--Efficiency Levels for Equipment Class Group 2
----------------------------------------------------------------------------------------------------------------
                                                                    EL 1 (EPACT     EL 2 (NEMA      EL 3 (max-
                  Representative unit (percent)                        1992)         premium)          tech)
                                                                     (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
5 hp............................................................            87.5            89.5            91.0
50 hp...........................................................            92.4            93.6            94.5
----------------------------------------------------------------------------------------------------------------

    In response to its preliminary analysis, DOE received multiple 
comments regarding CSLs. NEMA and Baldor expressed confusion over the 
fact that the CSLs for ECG 2 do not align with the CSLs from ECG 1, and 
requested that DOE line up CSLs across different ECGs in an effort to 
avoid confusion when discussing the CSLs. (NEMA, No. 54 at p. 73; 
Baldor, Public Meeting Transcript, No. 60 at pp. 171, 172) DOE 
understands NEMA's concerns regarding the nomenclature of its ELs, 
however, it has maintained its approach for the NOPR analysis. DOE 
examines each ECG independently, and because different motor types have 
different baselines, the EL numbers do not always align.
    NEMA also asked if the baseline CSL developed for ECG 1, which was 
developed based on an analysis of vertical, hollow-shaft motors, 
included losses related to testing those motors with thrust bearings. 
NEMA inquired because, at the time of its comment, DOE had not yet 
published the test procedure NOPR, indicating how these motor types 
might be tested. (NEMA, No. 54 at pp. 71-72, 77)
    DOE clarifies that the vertical hollow-shaft motors purchased and 
used to determine the baseline efficiency level for ECG 1 contained 
bearings capable of horizontal operation. Therefore, DOE tested these 
motors in a horizontal configuration without any modifications to the 
bearings. Additionally, when tested, solid-shafts were welded inside 
the hollow-shaft to permit the motor to be attached to a dynamometer 
for testing. These modifications are in line with the proposals for 
vertical hollow shaft motors as described in DOE's electric motors test 
procedure NOPR. 78 FR 38456 (June 26, 2013).
    During the preliminary analysis public meeting, NEMA noted that the 
CSL 5 software-modeled efficiency was 96.4 percent and should have been 
assigned a NEMA nominal efficiency level of 96.2 percent rather than 
96.5. (NEMA, No. 54 at p. 80) NEMA and Baldor added that CSL 5 should 
not be included in any engineering analysis because of the 
infeasibility of cast-copper rotors, and that CSL 4 is the proper max-
tech level when CSL 5 is eliminated from consideration. (NEMA, No. 54 
at p. 73; Baldor, Public Meeting Transcript, No. 60 at p. 171) The 
Efficiency Advocates also expressed concern about some of the CSLs 
analyzed by DOE and questioned the viability of CSL 3. The Efficiency 
Advocates noted that some of the CSL 3 designs were at the very limits 
of critical motor performance parameters, such as locked-rotor torque 
and current. The Efficiency Advocates added that DOE has not tested 
motors that perform at the levels that would be required by CSL 3, 4, 
and 5. Without having done so, DOE cannot verify the predicted 
performance of its representative units. (NPCC, No. 56 at pp. 4, 5)
    As discussed, DOE has removed EL 5 from consideration in the NOPR 
analysis, but it has not eliminated the use of copper-die cast rotor 
technology (see I.A.1). With regards to the comments from the 
Efficiency Advocates, DOE notes that EL 3 for ECG 1 is based on 
teardown data from commercially available motors, as it was for the 
preliminary analysis. Additionally, for the NOPR, DOE has tested a unit 
at EL 4 for one of its representative units. Furthermore, DOE has found 
many instances of electric

[[Page 73628]]

motors being sold and marketed one or two NEMA bands of efficiency 
above NEMA Premium, which suggests that manufacturers have extended 
technological performance where they perceived market demand for higher 
efficiencies. In other words, DOE has seen no evidence suggesting that 
the absence of products on the market at any given EL implies that such 
products could not be developed, were there sufficient demand. DOE 
contends that all of the ELs analyzed in its engineering analysis are 
viable because equipment is currently commercially available at such 
levels \56\ and, to the extent possible, has been included in DOE's 
analysis. DOE welcomes comment on the limits of technology, especially 
as it varies by equipment class.
---------------------------------------------------------------------------

    \56\ DOE understands that this is not true for every equipment 
classes covered by this rulemaking, but has not seen evidence to 
suggest that the absence of equipment in any particular classes is 
not due to lack of market demand instead of technological 
limitations.
---------------------------------------------------------------------------

    Additionally, NEMA and Baldor commented on the design options 
analyzed for the various CSLs. NEMA and Baldor stressed that not using 
a common design option across all CSLs may result in a reduction of 
available product. (NEMA, No. 54 at pp. 3, 27, 73; Baldor, Public 
Meeting Transcript, No. 60 at pp. 169-171, 176-178) NEMA indicated that 
it is a standard practice of manufacturers to minimize the number of 
types of electrical steel used at a manufacturing facility and that 
typically a single type of electrical steel may be used for all 
electric motors manufactured at the facility. NEMA added that DOE 
should account for this situation when performing engineering analyses 
such that a common type of electrical steel is used for the different 
NEMA design types covered by a common CSL. (NEMA, No. 54 at p. 62) NEMA 
added that although NEMA Design C motors constitute less than 1 percent 
of total motor shipments, the electrical steel and die-cast rotor 
material used for manufacturing NEMA Design C electric motors is taken 
from the same inventory as used for NEMA Design B electric motors. 
Therefore, they contended that DOE should select the same material 
types for NEMA Design C motors as it does for NEMA Design B motors. 
(NEMA, No. 54 at p. 65, 74) Finally, NEMA stated that it did not 
understand why DOE used different steels and rotor conductors for CSLs 
4 and 5 in some of the ECG 1 representative units but not in others. 
(NEMA, No. 54 at pp. 3, 72; Baldor, Public Meeting Transcript, No. 60 
at p. 120)
    As noted earlier, DOE has restructured its ELs for the NOPR 
analysis. One consequence of this restructuring is that DOE no longer 
mixes rotor casting technologies for a given EL. However, DOE does not 
limit the number of electrical steels used at a given EL to one. DOE 
understands that manufacturers try to limit the number of electrical 
steels at a given manufacturing facility, but most manufacturers have 
more than one manufacturing facility. Therefore, manufacturers could 
produce motors with multiple grades of electrical steel. Additionally, 
DOE believes that this approach is in line with current industry 
practice. For its analysis, DOE obtained multiple units for teardowns 
from the same manufacturer. After a steel analysis was conducted on its 
teardowns, DOE found that one manufacturer utilized multiple grades of 
steel, both across ELs within a representative unit and across 
representative units within an EL. Finally, DOE believes that the 
restructuring of the ELs should also address concerns over the 
technology differences between preliminary analysis ELs 4 and 5 because 
in the NOPR analysis there is no EL 5. DOE has updated chapter 5 of the 
TSD to include as pertinent design data.
    During the preliminary analysis public meeting, ACEEE commented 
that new energy conservation levels would have to be raised by at least 
two NEMA bands because an increase of only one NEMA band is not 
statistically significant. (ACEEE, Public Meeting Transcript, No. 60 at 
p. 168) DOE disagrees with this assessment. Although the unit-to-unit 
efficiency of a specific electric motor design may vary by multiple 
NEMA bands of efficiency, an increase in the required efficiency level 
by one band would be significant. If efficiency standards are raised by 
one NEMA band, there is no evidence to suggest that manufacturing 
practices would change such that the distribution of unit-to-unit 
efficiencies for a given motor design would change. Therefore, if the 
required efficiency standard were changed by one band of efficiency, 
one would assume that the entire population of motors of a given design 
would shift by one band of efficiency as manufacturers begin to produce 
motors around a higher mean value.
    Finally, NEMA commented that another important factor for defining 
CSLs is the ability for CSLs to provide efficiency values to be used in 
the scaling process and that it is important that the relative 
difference between the efficiency values for CSLs is selected such that 
the relativity is maintained across all of the representative units if 
it is to be applied by scaling to all electric motors included in an 
ECG. In other words, NEMA argues that CSLs must be chosen carefully to 
correspond with similar technologies and materials across the range of 
scaling (i.e., the entire equipment class) and that they should not be 
chosen to merely to align with NEMA's own tables and efficiency bands. 
(NEMA, No. 54 at p. 73) Responding to this concern, for each EL above 
the established NEMA Premium levels, DOE has incremented efficiency by 
one nominal band for all equipment classes. This equates to, roughly, a 
10 percent decrease in motor losses for all equipment classes for each 
jump in EL.
4. Test and Teardowns
    Whenever possible, DOE attempted to base its engineering analysis 
on actual electric motors being produced and sold in the market today. 
First, DOE identified electric motors in manufacturer catalogs that 
represented a range of efficiencies corresponding to the ELs discussed 
in the previous sections. Next, DOE had the electric motors shipped to 
a certified testing laboratory where each was tested in accordance with 
IEEE Standard 112 (Test Method B) to verify its nameplate-rated 
efficiency. After testing, DOE derived production and material costs by 
having a professional motor laboratory \57\ disassemble and inventory 
the purchased electric motors. For ECG 1, DOE obtained tear-down 
results for all of the 5-horsepower ELs and all of the 30- and 75-
horsepower ELs except the max-tech levels. For ECG 2, DOE obtained 
tear-down results only for the baseline EL, which corresponds to EPACT 
1992 efficiency levels.
---------------------------------------------------------------------------

    \57\ The Center for Electromechanics at the University of Texas 
at Austin, a 140,000 sq. ft. lab with 40 years of operating 
experience, performed the teardowns, which were overseen by Dr. 
Angelo Gattozzi, an electric motor expert with previous industry 
experience. DOE also used Advanced Energy Corporation of North 
Carolina to perform some of the teardowns.
---------------------------------------------------------------------------

    These tear-downs provided DOE with the necessary data to construct 
a bill of materials (BOM), which, along with a standardized cost model 
and markup structure, DOE could use to estimate a manufacturer selling 
price (MSP). DOE paired the MSP derived from the tear-down with the 
corresponding nameplate nominal efficiency to report the relative costs 
of achieving improvements in energy efficiency. DOE's estimates of 
material prices came from a combination of current, publicly available 
data, manufacturer feedback, and conversations with its subject matter 
experts. DOE supplemented the

[[Page 73629]]

findings from its tests and tear-downs through: (1) A review of data 
collected from manufacturers about prices, efficiencies, and other 
features of various models of electric motors, and (2) interviews with 
manufacturers about the techniques and associated costs used to improve 
efficiency.
    As discussed earlier, DOE's engineering analysis documents the 
design changes and associated costs when improving electric motor 
efficiency from the baseline level up to a max-tech level. This 
includes considering improved electrical steel for the stator and 
rotor, interchanging aluminum and copper rotor bar material, increasing 
stack length, and any other applicable design options remaining after 
the screening analysis. As each of these design options are added, the 
manufacturer's cost increases and the electric motor's efficiency 
improves. DOE received multiple comments regarding its test and tear-
down analysis.
    NEMA commented that the cost for manufacturing an electric motor 
can increase as the efficiency level is increased even when the 
material and technology is not changed. It added that an increase in 
core length, without any change in the material used, will result in a 
higher cost not only due to the increase in the amount of steel, but 
also due to the increase in the amount of wire for the stator winding 
and aluminum for the rotor core. (NEMA, No. 54 at p. 74) 
Notwithstanding, DOE believes that it has accurately captured such 
changes. When each electric motor was torn down, components such as 
electrical steel and copper wiring were weighed. Therefore, any 
increase in stack length would result in increased costs associated 
with the increased amount of electrical steel and copper wiring.
    NEMA also commented that the best known value of efficiency for a 
tested and torn down motor is the tested efficiency and the accuracy of 
this value improves as sample size increases. Because DOE only used a 
sample size of one, NEMA recommended that DOE should increase its 
sample size to something more statistically significant. (NEMA, No. 54 
at p. 75) NEMA also referred to the small electric motors rulemaking 
and said that a sufficient sample size for testing was proven to be 
necessary. (NEMA, No. 54 at p. 27) NEMA also commented that Appendix A 
to Subpart U designates the appropriate sample size to support the 
conclusion that the name-plated efficiency of a motor is correctly 
stated. (NEMA, No. 54 at p. 79) NEMA and Baldor added that Appendix A 
to Subpart U requires the determination of a standard deviation from 
the sample, and it is not possible to determine a standard deviation 
when testing a sample of one motor, which was the sample size of DOE's 
motor testing. (NEMA, No. 54 at p. 79; Baldor, Public Meeting 
Transcript, No. 60 at p. 154)
    DOE agrees that an increased sample size would improve the value of 
efficiency used in its analysis, but only if DOE were using an average 
full-load efficiency value, as it did for the small electric motors 
rulemaking engineering analysis, which did not have the benefit of 
NEMA-developed nominal efficiency values. For today's analysis, DOE did 
not use the tested efficiency value and believes that to do so would be 
erroneous precisely because it only tested and tore down one unit for a 
given representative unit and EL. Rather than using an average 
efficiency of a sample of multiple units that is likely to change with 
each additional motor tested, DOE elected to use the nameplate NEMA 
nominal efficiency given. DOE understands that this value, short of 
testing data, is the most accurate value to use to describe a 
statistically valid population of motors of a given design; that is, in 
part, why manufacturers use NEMA nominal efficiencies on their motors' 
nameplates.
    Furthermore, when DOE conducts its tear-downs, the bill of 
materials generated is most representative of the tested value of 
efficiency, not necessarily the NEMA nominal value. However, DOE 
believes that the variance from unit-to-unit, in terms of materials, is 
likely to be insignificant because manufacturers have an incentive to 
produce equipment with consistent performance (i.e., characteristics 
other than efficiency) as possible. Changes in the tested efficiency 
are likely to occur because of variations in production that motor 
manufacturers have less control over (e.g., the quality of the 
electrical steel). DOE does not believe that the amount of material (in 
particular, electrical steel, copper wiring, and die-cast material) 
from unit-to-unit for a given design is likely to change significantly, 
if at all, because manufacturers have much greater control of those 
production variables. Therefore, additional tests and tear-downs are 
unlikely to change the MSP estimated for a given motor design and DOE 
believes that its sample size of one is appropriate.
    In the preliminary engineering analysis, DOE replaced a tear-down 
result with a software model for CSL 2 of its 30-horsepower 
representative unit because it believed that it had inadvertently 
tested and torn down a motor with an efficiency equivalent to CSL 3. 
DOE noted that it removed the tear-down because there was conflicting 
efficiency information on the Web site, in the catalog, and on the 
physical nameplate. Subsequently, NEMA and Baldor commented that the 
30-horsepower, CSL 2 motor should not have been replaced with a 
software-modeled motor, stating that the test result was statistically 
viable. (NEMA, No. 54 at pp. 76-79; Baldor, Public Meeting Transcript, 
No. 60 at pp. 150-155) NEMA and Baldor also asserted that DOE had 
placed emphasis on the use of purchased motors in its analysis only 
when the tested value of efficiency was less than or not significantly 
greater than the marked value of NEMA efficiency. (NEMA, No. 54 at p. 
80; Baldor, Public Meeting Transcript, No. 60 at pp. 156, 157)
    DOE understands that the test result may have been viable for 
either of the efficiency ratings that the manufacturer had assigned. 
Given the uncertainty, however, DOE elected to replace the motor. DOE 
did not discard the unit simply because it tested significantly above 
its nameplate efficiency. Rather, the motor was listed with different 
values of efficiency depending upon the source and when torn down, the 
resulting MSP was higher than the MSP for the next CSL. These facts 
suggested that the calculated results were erroneous because it is 
unlikely (based on available data) that it would be cheaper to build a 
more efficient motor than a less efficient one of comparable 
specifications. If DOE had included these data in its analysis, it 
would likely have resulted in a projection that even higher CSLs would 
be economically justified. The combination of these factors resulted in 
DOE eliminating that motor from the analysis. For its updated NOPR 
engineering analysis, DOE has tested and torn down a new 30-horsepower 
motor to describe CSL 2. As stated previously, DOE always prefers to 
base its analysis using motors purchased in the market when possible.
    NEMA commented that the disproportionate variation in frame weights 
between the CSLs suggests that the CSLs of some representative units 
were not of similar construction. (NEMA, No. 54 at p. 78) When 
selecting motors for tear-down, DOE selected motors with increasing 
efficiencies. These motors may not have used the same frame material. 
For example, the CSL 0 for the 30-horsepower representative units was 
made out of cast aluminum, but CSL 1 unit used cast iron. This material 
change accounts for the large difference in frame weight.

[[Page 73630]]

    During the preliminary analysis public meeting, Nidec requested 
clarification for the increase in stator copper weight for the 75-
horsepower, ECG 1 representative unit between CSL 2 and CSL 3 since the 
reported slot fills were the same and the motors had similar stack 
lengths. (Nidec, Public Meeting Transcript, No. 60 at pp. 164, 165) 
After DOE's tear-down lab determined that the torn-down motors were 
machine-wound a precise measurement of the slot fill was not taken. 
Although the actual measurement of slot fill has no bearing on the 
estimates of the MSP, because the actual copper weights were measured 
and not calculated, DOE did ask its lab to provide actual measurements 
of slot fill on any subsequent tear-downs and has included the data in 
chapter 5 of the TSD.
5. Software Modeling
    In the preliminary analysis, DOE worked with technical experts to 
develop certain CSLs, in particular, the max-tech efficiency levels for 
each representative unit analyzed. DOE retained an electric motors 
subject matter expert (SME) \58\ with design experience and software, 
who prepared a set of designs with increasing efficiency. The SME also 
checked his designs against tear-down data and calibrated his software 
using the relevant test results. As new designs were created, DOE's SME 
ensured that the critical performance characteristics that define a 
NEMA design letter, such as locked-rotor torque, breakdown torque, 
pull-up torque and locked-rotor currents were maintained. For a given 
representative unit, DOE ensured that the modeled electric motors met 
the same set of torque and locked-rotor current requirements as the 
purchased electric motors. This was done to ensure that the utility of 
the baseline unit was maintained as efficiency improved. Additionally, 
DOE limited its modeled stack length increases based on teardown data 
and maximum ``C'' dimensions found in manufacturer's catalogs.\59\
---------------------------------------------------------------------------

    \58\ Dr. Howard Jordan, Ph.D., an electric motor design expert 
with over 40 years of industry experience, served as DOE's subject 
matter expert.
    \59\ The ``C'' dimension of an electric motor is the length of 
the electric motor from the end of the shaft to the end of the 
opposite side's fan cover guard. Essentially, the ``C'' dimension is 
the overall length of an electric motor including its shaft 
extension.
---------------------------------------------------------------------------

    In response to the preliminary analysis, Baldor and NEMA requested 
clarification on how DOE compared its software modeled results to the 
electric motors that it had tested and torn down. (NEMA, No. 54 at p. 
74; Baldor, Public Meeting Transcript, No. 60 at p. 148) NEMA requested 
that more details regarding that comparison and the name of the 
software program used to be included in an updated technical support 
document. (NEMA, No. 54 at p. 12) Per the request of NEMA and Baldor, 
DOE has provided comparisons of software estimates and tested 
efficiencies in appendix 5C of the TSD. Additionally, the software 
program that DOE used for its analysis is a proprietary software 
program called VICA.\60\
---------------------------------------------------------------------------

    \60\ VICA stands for ``Veinott Interactive Computer Aid.''
---------------------------------------------------------------------------

    NEMA expressed concern over efficiency standards based on the 
software platform DOE used and stated that DOE should build working 
prototypes of its software modeled motors to prove the designs work. 
(NEMA, No. 54 at pp. 24-25 and 74-75) Baldor reiterated this point in 
verbal comments and suggested that this was particularly important for 
CSLs with copper rotor designs given their concerns with copper rotor 
motors. (NEMA, No. 54 at pp. 76-77; Baldor Public Meeting Transcript, 
No. 60 at pp. 160, 161) During the preliminary analysis, DOE approached 
motor laboratories in an attempt to prototype its software models. DOE 
was unable to identify a laboratory that could prototype its software 
modeled motors in a manner that would exactly replicate the designs 
produced (i.e., they could not die-cast copper). Consequently, at this 
time, DOE has not built a prototype of its software models. However, 
DOE was able to procure a 5-horsepower NEMA Design B die-cast copper 
rotor motor with an efficiency two NEMA bands above the NEMA Premium 
level. Therefore, DOE elected to use this design to represent the max-
tech EL for the 5-horsepower representative unit in equipment class 
group 1, rather than the software-modeled design used in the 
preliminary analysis. DOE's SME used information gained from testing 
and tearing down this motor to help corroborate the software modeling.
    In the preliminary analysis, DOE indicated that its software 
modeling expert made changes to his software designs based on data 
collected during the motor teardowns. NEMA commented on this and asked 
why DOE's software modeling expert made changes to some of his designs 
based on teardown data. (NEMA, No. 54 at p. 75) DOE clarifies that the 
software program was updated using additional teardown data (e.g., more 
accurate dimensions and material types) to maintain as many 
consistencies in design as possible. For example, DOE's software 
modeling expert used lamination diameters measured during the teardowns 
as limits for the software models.
    In submitted comments, NEMA noted that the NEMA nominal efficiency 
for the software-modeled motors was derived by selecting the value that 
was lower than the calculated efficiency. NEMA questioned this approach 
and added that assigning a value of NEMA nominal efficiency based on a 
calculated value of efficiency requires more knowledge than merely 
selecting the closest NEMA nominal value that is lower than the 
calculated value. (NEMA, No. 54 at p. 76) DOE notes that it selected 
the closest NEMA nominal efficiency that is less than or equal to the 
predicted efficiency of the software for multiple reasons. First, DOE 
wanted to maintain the use of nominal efficiency values to remain 
consistent with past electric motor efficiency standards. Second, DOE 
chose a value below its software estimate because this method would 
provide a more conservative approach. DOE believes its approach was 
appropriate given the various concerns raised with copper rotor motor 
technologies.
    During the preliminary analysis public meeting, Regal-Beloit 
commented that calibration of the software-modeled motors is extremely 
important. Regal-Beloit added that the calibration of select models is 
very important due to the amount of interpolation that DOE is basing on 
these models. (Regal-Beloit, Public Meeting Transcript, No. 60 at pp. 
159-160) Alluding to copper rotor motors, NEMA commented on DOE's 
software modeling, claiming that verifying the accuracy of a software 
program with respect to performance obtained from testing purchased 
motors does not verify the accuracy of the software program when it is 
used for a technology which has not been verified by tests. (NEMA, No. 
54 at p. 76; Baldor, Public Meeting Transcript, No. 60 at pp. 160, 161) 
DOE appreciates these comments and, as stated, has conducted 
calibration of its software program using data obtained from motor 
teardowns. DOE has provided comparisons of software estimates and 
tested efficiencies for both aluminum and copper rotor motors in 
appendix 5C of the TSD.
    NEMA commented that the preliminary TSD did not show that the 
software platform DOE used had been substantiated as being sufficiently 
accurate for motors incorporating existing and new technologies. (NEMA, 
No. 54 at p. 12) NEMA asserted that it is necessary to substantiate the 
software platform used for modeling as an

[[Page 73631]]

alternate efficiency determination method (AEDM) such that the 
calculated efficiencies can be verified as accurate for the types of 
technologies included in a motor design. NEMA urged that DOE 
substantiate the software platform used by its SME as an AEDM. (NEMA, 
No. 54 at p. 76) Baldor added that DOE expects manufacturers to 
prototype five motors to certify a program, but DOE has not designed 
and built any of the motors designed in its own program. (Baldor, 
Public Meeting Transcript, No. 60 at p. 162) Nidec commented during the 
public meeting, asking if the software modeling suite DOE used has gone 
through the same scrutiny that manufacturers are subject to when they 
must submit their 25 samples to correlate their estimated computer data 
with actual testing data. (Nidec, Public Meeting Transcript, No. 60 at 
p. 147)
    DOE understands the comments received regarding its software 
program, but maintains that substantiation of an AEDM is a concept 
intended for certifying compliance with energy efficiency standards. It 
is a tool that manufacturers use to help ensure that the equipment they 
manufacture comply with a Federal standard (which is the manufacturers' 
duty). It is not a tool for assessing whether a particular energy 
efficiency level under consideration by DOE satisfies the EPCA 
criteria. Accordingly, the use of the AEDM in the manner suggested by 
industry would not be relevant for the purposes of this engineering 
analysis, which is geared toward DOE's standards rulemaking.
    NEMA also commented that to properly determine the impact of 
increased efficiency on motor utility, DOE must recognize the 
consequences of how motor performance, including parameters such as 
acceleration, safe stall time, overspeed, service factor, thermal 
performance, and in-rush current will be affected by more stringent 
energy conservation standards. NEMA also specifically referred to 
performance characteristics found in NEMA MG 1 sections 12.44, 12.45, 
12.48, 12.49, 12.53, 12.54, and 12.56. (NEMA, No. 54 at pp. 5, 77) NEMA 
added that the narrow margin between the NEMA MG 1-2011 limits for 
locked-rotor current and the calculated locked-rotor current for some 
of the software-modeled designs in the preliminary analysis suggest 
that there will be problems with these motors meeting the NEMA MG 1 
limits if they were prototyped. (NEMA, No. 54 at p. 77) Finally, NEMA 
indicated that two of the DOE software-modeled motors in the 
preliminary analysis, representing the 75-horsepower CSLs 4 and 5 for 
ECG 1, had torque ratings twice that of a U.S. Army 75-horsepower 
electric motor software model, and suggested that the software models 
used in DOE's analysis are not accurate in modeling copper rotor motor 
performance. (NEMA, No. 54 at p. 77)
    DOE has carefully considered NEMA's comments in its updated NOPR 
analysis. As noted, DOE has eliminated designs from its preliminary 
analysis because of concerns regarding the feasibility of those 
efficiency levels. Regarding the additional performance parameters, DOE 
agrees that these characteristics must be maintained when improving an 
electric motor's efficiency. However, the performance parameters DOE 
believed to present the largest risk of rendering a motor noncompliant 
with NEMA MG 1-2011 standards were those related to NEMA design letter, 
which were adhered to in DOE's modeling efforts. Based on comparisons 
of motor teardowns and software estimates, DOE has no reason at this 
time to believe that its modeled designs would violate the additional 
performance parameters mentioned by NEMA.
    DOE believes that its subject matter expert, who has been designing 
electric motors for several decades, is well qualified to understand 
the design tradeoffs that must be considered. Although the SME's 
primary task was to design a more efficient motor using various 
technologies, it was of critical importance that the designs be 
feasible. Even though DOE was unable to prototype its modeled designs, 
DOE has conducted comparisons of software estimates and tested 
efficiencies for both aluminum and copper rotor motors and believes 
this corroborates the modeled designs. Based on this work and its total 
analysis, which included input from its SME, DOE believes it developed 
a sufficiently robust set of technically feasible efficiency levels for 
its engineering analysis.
    NEMA asked how DOE intended to take into consideration motor 
utility as motor size increases. (NEMA, No. 54 at pp. 23, 24) During 
the preliminary analysis public meeting, Baldor asked if the higher 
CSLs would fit into existing frame sizes, or if those motors would have 
to be redesigned to allow for the increased stack length. Baldor added 
that if the frame size increases, the motor may no longer fit current 
applications, which would cause additional burden for end-users or 
original equipment manufacturers. (Baldor, Public Meeting Transcript, 
No. 60 at pp. 164, 245) Baldor added that IEC frame motors are more 
constrained in terms of size and space than NEMA frame motors, and it 
is more difficult to increase the efficiency on IEC frame motors 
without changing frame size designations, which would lead to space 
constraint issues. (Baldor and ABB, Public Meeting Transcript, No. 60 
at pp. 245, 246) Flolo Corporation also commented on motor length 
during the public meeting, insisting that it is important that DOE 
recognize the difference in ``C'' dimension that any new energy 
conservation standard would mandate, as increasing the ``C'' dimension 
will make it difficult for a motor to fit into its originally intended 
machine. (Flolo, Public Meeting Transcript, No. 60 at pp. 243, 244) The 
Efficiency Advocates also commented on motor length, indicating that 
DOE should be aware of absolute motor length limits when considering 
increased stack length, and that these changes could greatly increase 
the installed cost of many of the higher CSLs, impacting field and 
original equipment manufacturer (OEM) installation. (Advocates, No. 56 
at p. 4)
    In the preliminary TSD, DOE stipulated that any increase in stack 
length would fit into the existing frame designation for that 
particular motor rating. DOE noted that the frame designation does not 
limit frame length, but rather frame diameter. DOE also understands 
that manufacturers have fixed-length frames that they use when 
manufacturing motors. In addition to generating per unit costs 
associated with redesigning motors with new frames at all ELs above the 
NEMA Premium levels (see IV.C.6), DOE sought to maintain motor length 
by limiting how much it would modify stack dimensions to improve 
efficiency. First, the software models created by DOE used lamination 
diameters observed during teardowns, which ensured that the software-
modeled designs would fit into existing frame designations. However, 
for some designs DOE increased the number of laminations (i.e., length 
of the stack of laminations, or stack length) beyond the stack lengths 
observed during the motor teardowns in order to achieve the desired 
efficiency gains.
    DOE limited the amount by which it would increase the stack length 
of its software-modeled electric motors in order to preserve the 
motor's utility. The maximum stack lengths used in the software-modeled 
ELs were determined by first analyzing the stack lengths and ``C'' 
dimensions of torn-down electric motors. Then, DOE analyzed the ``C'' 
dimensions of various electric motors in the marketplace conforming to 
the same design constraints as the representative units (same 
horsepower rating, NEMA

[[Page 73632]]

frame size, enclosure type, and pole configuration). For each 
representative unit, DOE found the largest ``C'' dimension currently 
available on the marketplace and estimated a maximum stack length based 
on the stack length to ``C'' dimension ratios of motors it tore down. 
The resulting product was the value that DOE chose to use as the 
maximum stack length considered in its software modeled designs, 
although DOE notes that it did not always model a motor with that 
maximum stack length. In most instances, the SME was able to achieve 
the desired improvement in efficiency with a stack length shorter than 
DOE's estimated maximum. Table IV.12 shows the estimated maximum stack 
length, the maximum stack length found during tear-downs, and the 
maximum stack length modeled for a given representative unit. DOE 
welcomes additional comments on software modeling in general, and on 
specific data that could be used to calibrate its software designs.

                                     Table IV.12--Maximum Stack Length Data
----------------------------------------------------------------------------------------------------------------
                                      Estimated maximum stack   Maximum stack length     Maximum  stack length
         Representative unit                   length           of a torn down motor            modeled
----------------------------------------------------------------------------------------------------------------
30 Horsepower
    Design B........................  8.87 in................  8.02 in. (EL 2).......  7.00 in.
75 Horsepower
    Design B........................  13.06 in...............  11.33 in. (EL 3)......  12.00 in.
5 Horsepower
    Design C........................  5.80 in................  4.75 in. (EL 0).......  5.32 in.
50 Horsepower
    Design C........................  9.55 in................  8.67 in. (EL 0).......  9.55 in.
----------------------------------------------------------------------------------------------------------------

6. Cost Model
    When developing manufacturer selling prices (MSPs) for the motor 
designs obtained from DOE's tear-downs and software models, DOE used a 
consistent approach to generate a more accurate approximation of the 
costs necessary to improve electric motor efficiency. DOE derived the 
manufacturer's selling price for each design in the engineering 
analysis by considering the full range of production and non-production 
costs. The full production cost is a combination of direct labor, 
direct materials, and overhead. The overhead contributing to full 
production cost includes indirect labor, indirect material, 
maintenance, depreciation, taxes, and insurance related to company 
assets. Non-production cost includes the cost of selling, general and 
administrative items (market research, advertising, sales 
representatives, logistics), research and development (R&D), interest 
payments, warranty and risk provisions, shipping, and profit factor. 
Because profit factor is included in the non-production cost, the sum 
of production and non-production costs is an estimate of the MSP. DOE 
utilized various markups to arrive at the total cost for each component 
of the electric motor and these markups are detailed in chapter 5 of 
the TSD.
a. Copper Pricing
    DOE conducted the engineering analysis using material prices based 
on manufacturer feedback, industry experts, and publicly available 
data. In the preliminary analysis, most material prices were based on 
2011 prices, with the exception of cast copper and copper wire pricing, 
which were based on a five-year (2007-2011) average price.
    DOE received comments regarding its copper price development. NPCC 
supported DOE's decision to use a five-year price average for copper 
materials and suggested that this method should be used whenever a 
commodity price shows a pattern of irregular spikes or valleys. 
(Advocates, No. 56 at p. 4) Conversely, the Industrial Energy Consumers 
of America (IECA) stated that material costs for high efficiency motors 
are very volatile and cannot be reliably projected from a simple five-
year average, as DOE did with copper prices during the preliminary 
analysis. IECA added that as a result of using a five-year average, the 
high efficiency motor material costs may be highly underestimated in 
DOE's engineering analysis, and IECA suggested that a range of material 
costs rather than averages could better inform a range of life-cycle 
costs and payback periods for each CSL. (IECA, No. 52 at p. 3)
    Based on these comments, DOE has slightly modified its approach. 
First, DOE added updated data for 2012 pricing. Second, rather than a 
five-year average, DOE changed to a three-year average price for copper 
materials. DOE made this modification based on feedback received during 
manufacturer interviews. By reducing to a three-year average, DOE 
eliminated data from 2008 and 2009, which manufacturers believed were 
unrepresentative data points due to the recession. Data from those two 
years had the effect of depressing the five-year average calculated.
b. Labor Rate and Non-Production Markup
    In the preliminary analysis, DOE looked at the percentage of 
electric motors imported into the U.S. and the percentage of electric 
motors built domestically and based the balance of foreign and domestic 
labor rates on these percentages. During the preliminary analysis 
public meeting, Nidec commented that the labor rate DOE used in its 
analysis seems high if that number is weighted towards offshore labor. 
Nidec also agreed with DOE's smaller markup on the lower-horsepower 
motors, but commented that the overall markups DOE used seem to be 
high. (Nidec, Public Meeting Transcript, No. 60 at p. 184) WEG added to 
these comments, indicating that they believed DOE was adequately 
addressing the cost structure variations among the different motor 
manufacturers. Additionally, WEG believed that basing a labor rate on 
both foreign and domestic labor rates increases accuracy of the 
analysis, but warned that DOE should be careful not encourage 
production moving outside the United States. (WEG, Public Meeting 
Transcript, No. 60 at pp. 184-186)
    At this time, DOE has elected to keep the same labor rates and 
markups as were used in the preliminary analysis. DOE is basing this 
decision on additional feedback received during interviews with 
manufacturers and the absence of any alternative labor rate or markups 
to apply.
    Finally, DOE is aware of potential cost increases caused by 
increased slot fill, including the transition to hand-wound stators in 
motors requiring higher slot

[[Page 73633]]

fills. In the preliminary analysis, DOE assigned a higher labor hour to 
any tear-down motor which it determined to be hand-wound. NEMA 
commented that DOE did not assign a hand-wound labor-hour assumption to 
any of the tear-down motors, and requested clarification about whether 
there were instances of hand winding in these motors. (NEMA, No. 54 at 
p. 23) DOE found that none of the tear-down motors were hand-wound, and 
therefore no hand-winding labor-hour amounts were assigned. This has 
been clarified in the NOPR analysis. Additionally, DOE has assumed that 
all of its max-tech software models require hand-winding, which is 
reflected in its increased labor time assumptions for those motors. For 
additional details please see chapter 5 of the TSD.
    In response to DOE's request for comment on the possibility of 
higher labor costs for lower-volume electric motors, NEMA indicated 
that plants with few manufacturing setup changes, because they may 
focus on standard motor designs with no special motors, have the 
ability to produce more motors per employee, and that this is the case 
with many offshore companies that build designs for import to the U.S. 
(NEMA, No. 54 at pp. 27, 28). For other companies that cater to OEMs 
that require special designs and small lot production, setup changes 
eat into the capacity of these plants, particularly in the 56/140T 
through 250T frame series where there is high volume. A plant where the 
lot (i.e., batch) size per order is smaller has less impact from setup.
    DOE acknowledges that lower-volume products will often realize 
higher per unit costs, and believes this reality is common to most or 
all manufacturing processes in general. Because DOE's analysis focuses 
on the differential impacts on cost due to standards, and because DOE 
has no evidence to suggest a significant market shift to lower 
production volume in a post-standards scenario, DOE expects that the 
relative mix of high- and low-volume production would be preserved. 
Indeed, because DOE is proposing to expand scope of coverage and bring 
many previously-excluded motor types to NEMA Premium levels, DOE sees 
the possibility that standardization may increase and average 
production volume may, in fact, rise.\61\ DOE welcomes additional 
comment on how standards may cause average production run volume to 
rise or fall, and how labor costs may vary as a result.
---------------------------------------------------------------------------

    \61\ Labor costs may rise starkly at max-tech levels, where 
hand-winding is employed in order to maximize slot fill. DOE's 
engineering analysis reflects this fact.
---------------------------------------------------------------------------

c. Catalog Prices
    NEMA also requested that DOE publish the purchase price for its 
torn down motors, so that they could be compared to the MSPs DOE 
derived from its motor tear-downs. (NEMA, No. 54 at p. 27; Baldor, 
Public Meeting Transcript, No. 60 at pp. 181, 182) At this time, DOE is 
electing not to include the purchase price for its torn down motors. 
DOE believes that such information is not relevant and could lead to 
erroneous conclusions. Some of the purchased motors were more expensive 
to purchase based on certain features that do not affect efficiency, 
which could skew the price curves incorrectly and indicate incorrect 
trends. For these reasons, in the engineering analysis, DOE develops 
its own cost model so that a consistent cost structure can be applied 
to similar equipment. The details of this model are available in 
appendix 5A. Because DOE purchased electric motors that were built by 
different manufacturers and sold by different distributors, who all 
have different costs structures, DOE does not believe that such a 
comparison is a meaningful evaluation.
d. Product Development Cost
    In response to the preliminary analysis, NEMA commented that DOE 
presumes that the incremental cost between motors of different designs 
and different technologies is based solely on the difference in 
material costs and markups. NEMA also commented that there is a higher 
cost of manufacturing a die-cast copper rotor compared to an aluminum 
die-cast rotor motor that is not captured in material costs. (NEMA, No. 
54 at p. 12, 74) During the preliminary analysis public meeting, ACEEE 
commented that the Motor Coalition has concerns about CSL 3 for ECG 1, 
stating that DOE's analysis may not have captured the full cost of an 
industry-transition to that efficiency level. (ACEEE, Public Meeting 
Transcript, No. 60 at p. 20)
    DOE has made some additions to its cost model for the NOPR analysis 
based on NEMA's comments. However, DOE clarifies that its cost model 
for the preliminary analysis did include an incremental markup used to 
account for higher production costs associated with manufacturing 
copper die-cast rotors. Although DOE used this incremental markup in 
the preliminary analysis, after conducting manufacturer interviews for 
the NOPR analysis, it believed that additional costs were warranted for 
the examined ELs that exceeded the NEMA Premium level. NEMA commented 
that the manufacturer production costs (MPCs) and subsequent LCCs must 
take into account the large additional conversion costs, since 
manufacturers would likely attempt to recover the costs of meeting a 
higher efficiency standard. (NEMA, No. 54 at p. 4) Therefore, DOE 
developed a per-unit adder \62\ for the MPCs intended to capture one-
time increased product development and capital conversion costs that 
would likely result if an efficiency level above NEMA Premium were 
established.
---------------------------------------------------------------------------

    \62\ The ``per-unit adder'' discussed in this section refers to 
a fixed adder for each motor that varies based on horsepower and 
NEMA design letter. Each representative unit has their own unique 
``per-unit adder'' that is fixed for the analysis.
---------------------------------------------------------------------------

    DOE's per-unit adder reflects the additional cost passed along to 
the consumer by manufacturers attempting to recover the costs incurred 
from having to redevelop their equipment lines as a result of higher 
energy conservation standards. The conversion costs incurred by 
manufacturers include capital investment (e.g., new tooling and 
machinery), equipment development (e.g., reengineering each motor 
design offered), plus testing and compliance certification costs.
    The conversion cost adder was only applied to ELs above NEMA 
Premium based on manufacturer feedback. Most manufacturers now offer 
NEMA Premium motors for a significant portion of their equipment lines 
as a result of EISA 2007, which required manufacturers to meet this 
level. Many manufacturers also offer certain ratings with efficiency 
levels higher than NEMA Premium. However, DOE is not aware of any 
manufacturer with a complete line of motors above NEMA Premium. 
Consequently, DOE believes that energy conservation standards above 
NEMA Premium would result in manufacturers incurring significant 
conversion costs to bring offerings of electric motors up to the higher 
standard.
    DOE developed the various conversion costs from data collected 
during manufacturer interviews that were conducted for the Manufacturer 
Impact Analysis (MIA). For more information on the MIA, see TSD chapter 
12. DOE used the manufacturer-supplied data to estimate industry-wide 
capital conversion costs and product conversion costs for each EL above 
NEMA Premium. DOE then assumed that manufacturers would mark up their 
motors to recover the total conversion costs over a seven year period. 
By dividing industry-wide conversion costs by seven years of expected 
industry-

[[Page 73634]]

wide revenue, DOE obtained a percentage estimate of how much each motor 
would be marked up by manufacturers. The conversion costs as a 
percentage of 7-year revenue that DOE derived for each NEMA band above 
NEMA premium are shown below. Details on these calculations are shown 
in Chapter 5 of the TSD.

 Table IV.13--Product Conversion Costs as a Percentage of 7-Year Revenue
------------------------------------------------------------------------
                                                        Conversion costs
                                                        as a percentage
            NEMA bands above NEMA premium              of 7-year revenue
                                                           (percent)
------------------------------------------------------------------------
1....................................................                4.1
2....................................................                6.5
------------------------------------------------------------------------

    The percentage markup was then applied to the full production cost 
(direct material + direct labor + overhead) at the NEMA Premium levels 
to derive the per unit adder for levels above NEMA Premium (see Table 
IV.14).

 Table IV.14--Product Conversion Costs for Efficiency Levels Above NEMA
                                 Premium
------------------------------------------------------------------------
                                                         Per unit adder
                                       Per unit adder      for 2 bands
         Representative unit          for 1 band above     above NEMA
                                        NEMA premium         premium
------------------------------------------------------------------------
5 HP, Design B......................            $11.06            $17.36
30 HP, Design B.....................             32.89              1.61
75 HP, Design B.....................             66.18            103.86
5 HP, Design C......................             10.68             16.75
50 HP, Design C.....................             60.59             95.08
------------------------------------------------------------------------

7. Engineering Analysis Results
    The results of the engineering analysis are reported as cost versus 
efficiency data in the form of MSP (in dollars) versus nominal full-
load efficiency (in percentage). These data form the basis for 
subsequent analyses in today's NOPR. Table IV.15 through Table IV.19 
show the results of DOE's updated NOPR engineering analysis.

Results for Equipment Class Group 1 (NEMA Design A and B Electric 
Motors)

 Table IV.15--Manufacturer Selling Price and Efficiency for 5-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                               ($)
------------------------------------------------------------------------
EL 0 (Baseline).....................              82.5               330
EL 1 (EPACT 1992)...................              87.5               341
EL 2 (NEMA Premium).................              89.5               367
EL 3 (Best-in-Market)...............              90.2               402
EL 4 (Max-Tech).....................              91.0               670
------------------------------------------------------------------------

Table IV.16--Manufacturer Selling Price and Efficiency for 30-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                               ($)
------------------------------------------------------------------------
EL 0 (Baseline).....................              89.5               848
EL 1 (EPACT 1992)...................              92.4             1,085
EL 2 (NEMA Premium).................              93.6             1,156
EL 3 (Best-in-Market)...............              94.1             1,295
EL 4 (Max-Tech).....................              94.5             2,056
------------------------------------------------------------------------

Table IV.17--Manufacturer Selling Price and Efficiency for 75-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                               ($)
------------------------------------------------------------------------
EL 0 (Baseline).....................              93.0             1,891
EL 1 (EPACT 1992)...................              94.1             2,048
EL 2 (NEMA Premium).................              95.4             2,327
EL 3 (Best-in-Market)...............              95.8             2,776
EL 4 (Max-Tech).....................              96.2             3,620
------------------------------------------------------------------------

Results for Equipment Class Group 2 (NEMA Design C Electric Motors)

[[Page 73635]]

 Table IV.18--Manufacturer Selling Price and Efficiency for 5-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                               ($)
------------------------------------------------------------------------
EL 0 (Baseline/EPACT 1992)..........              87.5               331
EL 1 (NEMA Premium).................              89.5               355
EL 2 (Max-Tech).....................              91.0               621
------------------------------------------------------------------------

Table IV.19--Manufacturer Selling Price and Efficiency for 50-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                               ($)
------------------------------------------------------------------------
EL 0 (Baseline/EPACT 1992)..........              93.0             1,537
EL 1 (NEMA Premium).................              94.5             2,130
EL 2 (Max-Tech).....................              95.0             2,586
------------------------------------------------------------------------

Results for Equipment Class Group 3 (Fire Pump Electric Motors)

 Table IV.20--Manufacturer Selling Price and Efficiency for 5-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturing
          Efficiency level             Efficiency (%)     selling price
                                                               ($)
------------------------------------------------------------------------
EL 0 (Baseline/EPACT 1992)..........              87.5               341
EL 1 (NEMA Premium).................              89.5               367
EL 2 (Best-in-Market)...............              90.2               402
EL 3 (Max-Tech).....................              91.0               670
------------------------------------------------------------------------

Table IV.21--Manufacturer Selling Price and Efficiency for 30-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                               ($)
------------------------------------------------------------------------
EL 0 (Baseline/EPACT 1992)..........              92.4             1,085
EL 1 (NEMA Premium).................              93.6             1,156
EL 2 (Best-in-Market)...............              94.1             1,295
EL 3 (Max-Tech).....................              94.5             2,056
------------------------------------------------------------------------

Table IV.22--Manufacturer Selling Price and Efficiency for 75-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                               ($)
------------------------------------------------------------------------
EL 0 (Baseline/EPACT 1992)..........              94.1             2,048
EL 1 (NEMA Premium).................              95.4             2,327
EL 2 (Best-in-Market)...............              95.8             2,776
EL 3 (Max-Tech).....................              96.2             3,620
------------------------------------------------------------------------

Results for Equipment Class Group 4 (Brake Electric Motors)

 Table IV.23--Manufacturer Selling Price and Efficiency for 5-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                               ($)
------------------------------------------------------------------------
EL 0 (Baseline).....................              82.5               330
EL 1 (EPACT 1992)...................              87.5               341
EL 2 (NEMA Premium).................              89.5               367
EL 3 (Best-in-Market)...............              90.2               402
EL 4 (Max-Tech).....................              91.0               670
------------------------------------------------------------------------

[[Page 73636]]

Table IV.24--Manufacturer Selling Price and Efficiency for 30-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                               ($)
------------------------------------------------------------------------
EL 0 (Baseline).....................              89.5               848
EL 1 (EPACT 1992)...................              92.4             1,085
EL 2 (NEMA Premium).................              93.6             1,156
EL 3 (Best-in-Market)...............              94.1             1,295
EL 4 (Max-Tech).....................              94.5             2,056
------------------------------------------------------------------------

8. Scaling Methodology
    Once DOE has identified cost-efficiency relationships for its 
representative units, it must appropriately scale the efficiencies 
analyzed for its representative units to those equipment classes not 
directly analyzed. DOE recognizes that scaling motor efficiencies is a 
complicated proposition that has the potential to result in efficiency 
standards that are not evenly stringent across all equipment classes. 
However, between DOE's four ECGs, there are 580 combinations of 
horsepower rating, pole configuration, and enclosure. Within these 
combinations there are a large number of standardized frame number 
series. Given the sizable number of frame number series and equipment 
classes, DOE cannot feasibly analyze all of these variants, hence, the 
need for scaling. Scaling across horsepower ratings, pole 
configurations, enclosures, and frame number series is a necessity. For 
the preliminary analysis, DOE considered two methods to scaling, one 
that develops a set of power law equations based on the relationships 
found in the EPACT 1992 and NEMA Premium tables of efficiency in NEMA 
Standard Publication MG 1, and one based on the incremental improvement 
of motor losses. As discussed in the preliminary analysis, DOE did not 
find a large discrepancy between the results of the two approaches and, 
therefore, used the simpler, incremental improvement of motor losses 
approach in its NOPR analysis.
    As discussed in IV.C.3, some of the ELs analyzed by DOE were based 
on existing efficiency standards (i.e., EPACT 1992 and NEMA Premium). 
Additionally, the baseline EL is based on the lowest efficiency levels 
found for each horsepower rating, pole configuration, and enclosure 
type observed in motor catalog data. Therefore, DOE only required the 
use of scaling when developing the two ELs above NEMA Premium (only one 
EL above NEMA Premium for ECG 2).
    For the higher ELs in ECG 1, DOE's scaling approach relies on NEMA 
MG 1-2011 Table 12-10 of nominal efficiencies and the relative 
improvement in motor losses of the representative units. As has been 
discussed, each incremental improvement in NEMA nominal efficiency (or 
NEMA band) corresponds to roughly a 10 percent reduction in motor 
losses. After ELs 3 and 4 were developed for each representative unit, 
DOE applied the same reduction in motor losses (or the same number of 
NEMA band improvements) to various segments of the market based on its 
representative units. DOE assigned a segment of the electric motors 
market, based on horsepower ratings, to each representative unit 
analyzed. DOE's assignments of these segments of the markets were in 
part based on the standardized NEMA frame number series that NEMA MG 1-
2011 assigns to horsepower and pole combinations. In the end, EL 3 
corresponded to a one band improvement relative to NEMA Premium and EL 
4 corresponded to a two-band improvement relative to NEMA Premium. In 
response to the preliminary analysis, DOE received multiple comments 
regarding scaling.
    NEMA commented that DOE states that scaling is necessary for the 
national impacts analysis, but NEMA contends that the foremost reason 
for the scaling is that the scaling is used to establish the values of 
any amended or new efficiency standards. (NEMA, No. 54 at p. 68) NEMA 
also expressed its belief that the scaling method used in the 
preliminary analysis does not adequately take into consideration 
numbers of poles, stack length, and frame enclosures and that scaling 
based on changes in efficiency for lower horsepower motor models, as 
interpreted by software, does not accurately reflect what is achievable 
for higher horsepower ratings. (NEMA, No. 54 at p. 5)
    During the preliminary analysis public meeting, Baldor commented 
that because some energy conservation levels could not be reached 
without using a different technology option, at least 30 percent of the 
ratings in an equipment classes could not achieve energy conservation 
levels above CSL 2. Because of this, a scaling method based on any 
particular set of technology is not scalable across all equipment 
classes. Baldor suggested that DOE could use software modeling to check 
some of the motor configurations not directly analyzed. (Baldor, Public 
Meeting Transcript, No. 60 at pp. 196, 197, 200)
    Nidec commented during the public meeting that scaling has too many 
variables, and that manufacturers do not use scaling because it is not 
possible. (Nidec, Public Meeting Transcript, No. 60 at pp. 198-199) 
ACEEE added that there is no underlying fundamental physical theory 
associated with the efficiencies listed in NEMA MG 1-2011 Table 12-11 
or Table 12-12. (ACEEE, Public Meeting Transcript, No. 60 at pp. 198-
199)
    DOE appreciates the comments received regarding scaling; however, 
it maintains that scaling is a tool necessary to analyze the potential 
effects of energy conservation standards above NEMA Premium levels. As 
stated earlier, DOE is evaluating energy conservation standards for 580 
equipment classes. DOE acknowledges that analyzing every one of these 
classes individually is not feasible, which requires DOE to choose 
representative units on which to base its analysis. DOE agrees with 
Baldor that the primary reason for scaling is to establish efficiency 
levels for any potential new or amended standards for electric motors.
    However, DOE notes that its analysis neither assumes nor requires 
manufacturers to use identical technology for all motor types and 
horsepower ratings. In other words, although DOE may choose a certain 
set of technologies to estimate cost behavior across efficiency, DOE's 
standards are technology-neutral and permit manufacturers design 
flexibility. DOE clarifies that the national impacts analysis is one of 
the primary ways in which DOE analyses those potential efficiency 
levels and determines if they would be economically justified. As DOE 
has stated, it is also important that the levels be technically 
feasible. In

[[Page 73637]]

order to maintain technical feasibility, DOE has maintained the scaling 
approach that it developed for the preliminary analysis. DOE believes 
that this approach, which is as conservative as possible while 
maintaining the use of NEMA nominal efficiencies, accomplishes that. 
For each incremental EL above the NEMA Premium level, DOE has 
incremented possible efficiency levels by just one band of efficiency. 
Through the use of this conservative approach to scaling, DOE believes 
that it has helped conserve the technological feasibility of each of 
its ELs to the greatest extent practicable.

D. Markups Analysis

    The markups analysis develops appropriate markups in the 
distribution chain to convert the estimates of manufacturer selling 
price derived in the engineering analysis to customer prices. 
(``Customer'' refers to purchasers of the equipment being regulated). 
In the preliminary analysis, DOE determined the distribution channels 
for electric motors, their shares of the market, and the markups 
associated with the main parties in the distribution chain, 
distributors and contractors. For the NOPR, DOE retained these 
distribution channels.
    DOE developed average distributor and contractor markups by 
examining the contractor cost estimates provided by RS Means Electrical 
Cost Data 2013.\63\ DOE calculates baseline and overall incremental 
markups based on the equipment markups at each step in the distribution 
chain. The incremental markup relates the change in the manufacturer 
sales price of higher efficiency models (the incremental cost increase) 
to the change in the customer price. Chapter 6 of the NOPR TSD 
addresses estimating markups.
---------------------------------------------------------------------------

    \63\ RS Means (2013), Electrical Cost Data, 36th Annual Edition, 
Kingston, MA.
---------------------------------------------------------------------------

E. Energy Use Analysis

    The energy use analysis provides estimates of the annual energy 
consumption of commercial and industrial electric motors at the 
considered efficiency levels. DOE uses these values in the LCC and PBP 
analyses and in the NIA. DOE developed energy consumption estimates for 
all equipment analyzed in the engineering analysis.
    The annual energy consumption of an electric motor that has a given 
nominal full-load efficiency depends on the electric motor's sector 
(industry, agriculture, or commercial) and application (compressor, 
fans, pumps, material handling, fire pumps, and others), which in turn 
determine the electric motor's annual operating hours and load.
    To calculate the annual kilowatt-hours (kWh) consumed at each 
efficiency level in each equipment class, DOE used the nominal 
efficiencies at various loads from the engineering analysis, along with 
estimates of operating hours and electric motor load for electric 
motors in various sectors and applications.
    In the preliminary analysis, DOE used statistical information on 
annual electric motor operating hours and load derived from a database 
of more than 15,000 individual motor field assessments obtained through 
the Washington State University and the New York State Energy Research 
and Development Authority to determine the variation in field energy 
use in the industrial sector. For the agricultural and the commercial 
sector, DOE relied on data found in the literature.
    As part of its NOPR analysis, for the industrial sector, DOE re-
examined its initial usage profiles and recalculated motor distribution 
across applications, operating hours, and load information based on 
additional motor field data compiled by the Industrial Assessment 
Center at the University of Oregon, which includes over 20,000 
individual motor records. For the agricultural sector, DOE revised its 
average annual operating hours assumptions based on additional data 
found in the literature. No changes were made to the commercial sector 
average annual operating hours.
    Chapter 7 of the NOPR TSD describes the energy use analysis.
1. Comments on Operating Hours
    Several interested parties commented on the annual operating hours 
assumptions. NEMA and UL commented that fire pumps typically operate 
when being tested on a monthly basis and that the annual operating-hour 
assumption for fire pump electric motors in the industrial sector 
seemed high but did not provide data to support their comment. NEMA 
agreed with the fire pump electric motor annual operating-hour 
assumptions in the commercial and agricultural sectors. (NEMA, No. 54 
at p. 83) (UL, No. 46 at p. 1)
    For the NOPR, DOE reviewed the field data for fire pump electric 
motors used in the preliminary analysis and noticed some values were 
associated with motors driving jockey pumps, which are pressure 
maintenance pumps used to maintain pressure in fire sprinkler systems. 
After filtering out the motors driving jockey pumps, DOE derived an 
average value of annual operating hours similar to the fire pump 
electric motor annual operating hours for the commercial and 
agricultural sectors. Therefore, DOE revised its fire pumps operating 
hour assumption accordingly.
    NEMA submitted data regarding annual operating hour assumptions in 
the industrial sector based on its expert knowledge. These assumptions 
were lower than those used in the preliminary analysis. (NEMA, No. 54 
at p. 10)
    As previously mentioned, DOE revised the average operating hours 
associated with applications in the industrial sector (compressor, 
fans, pump, material handling, and others) based on additional 
individual motor nameplate and field data compiled by the Industrial 
Assessment Center at the University of Oregon.\64\ The revised average 
operating hour values are generally lower than the estimates from the 
preliminary analysis and differ from what NEMA provided. DOE could not 
verify the estimates provided by NEMA and it is not clear that these 
estimates represent an accurate picture of the entire industrial 
sector. In contrast, the average operating hours by motor application 
that DOE used in the NOPR were based on an analysis of annual operating 
hours for over 35,000 individual motors. DOE notes that it analyzed a 
sensitivity case that reflects the NEMA estimates.
---------------------------------------------------------------------------

    \64\ Strategic Energy Group (January, 2008), Northwest 
Industrial Motor Database Summary from Regional Technical Forum. 
http://rtf.nwcouncil.org/subcommittees/osumotor/Default.htm. This 
database provides information on motors collected by the Industrial 
Assessment Center (IAC) at Oregon State University (OSU). The 
database includes more than 22,000 records, each with detailed motor 
application and field usage data.
---------------------------------------------------------------------------

    IECA commented that the database of plant assessments is based on 
surveys conducted between 2005 and 2011 and there is no explanation of 
the effects of the recession on these surveys. (IECA, No. 52 at p. 2) 
DOE could not estimate the impact of the recession on the average 
operating hour values derived from the database of field assessment 
from the Washington State University and the New York State Energy 
Research and Development Authority, as the year of the assessment was 
not specified for all of the entries. The additional data from the 
Industrial Assessment Center cover a longer time period (1987-2007). 
Thus, DOE believes that its estimates of operating hours are not unduly 
affected by lower industrial activity during the recession.

[[Page 73638]]

2. Comments on Other Issues
    In response to DOE's energy use discussion from the preliminary 
analysis, NEMA commented that NEMA Design C motors are not typically 
found in pump applications. (NEMA, No. 54 at p. 83) For NEMA Design C 
motors, DOE re-examined its distribution by application and agrees with 
NEMA that NEMA Design C motors are not typically found in pump 
applications. These motors are characterized by high torque and 
generally found in compressors and other applications such as 
conveyors. Consistent with this review, DOE adjusted its analyses.
    NEMA commented that the curve fit for the polynomial equations 
modeling the load versus losses relationships for NEMA Design B motors 
did not seem to represent the test data accurately. (NEMA, No. 54 at p. 
81)
    For each representative unit, DOE based its energy use calculation 
on nominal values of efficiency. DOE obtained data on part load losses 
from test data developed in the engineering analysis and fitted these 
data to derive load versus losses relationships in the form of a third 
degree polynomial equation. The representative units showed tested 
efficiencies which were not equal to the nominal efficiencies and DOE 
adjusted the coefficients of the polynomial equations to match the full 
load losses expected at nominal efficiency. The adjusted equation, 
therefore, calculates losses for a motor with full load efficiency 
equal to the full load nominal efficiency. For the NOPR, DOE followed 
the same approach and revised the polynomial equations to reflect the 
NOPR engineering outputs.
    NEMA commented that the installation of a more efficient motor in 
variable torque applications could lead to less energy savings than 
anticipated. Because a more efficient motor usually has less slip \65\ 
than a less efficient one does, this attribute can result in a higher 
operating speed and a potential overloading of the motor. NEMA 
recommended that DOE include the consequence of a more efficient motor 
operating at an increased speed in any determination of energy savings. 
(NEMA, No. 54 at p. 28)
---------------------------------------------------------------------------

    \65\ The slip is the difference between the synchronous speed of 
the magnetic field (as defined by the number of poles), and the 
actual rotating speed of the motor shaft.
---------------------------------------------------------------------------

    DOE acknowledges that the arithmetic cubic relation between speed 
and power requirement in many variable torque applications can affect 
the benefits gained by using efficient electric motors, which have a 
lower slip. DOE agrees that it is possible to quantify this impact for 
one individual motor. However, DOE was not able to extend this analysis 
to the national level. DOE does not have robust data related to the 
overall share of motors that would be negatively impacted by higher 
speeds in order to incorporate this effect in the main analysis. 
Further, in the engineering analysis, DOE could not extend the 
synchronous speed information from the representative units to the full 
range of electric motor configurations. Instead, DOE developed 
assumptions \66\ and estimated the effects of higher operating speeds 
as a sensitivity analysis in the LCC spreadsheet. For the 
representative units analyzed in the LCC analysis, the LCC spreadsheet 
allows one to consider this effect as a sensitivity analysis according 
to a scenario described in appendix 7-A of the NOPR TSD.
---------------------------------------------------------------------------

    \66\ DOE assumed that 60 percent of pumps, fans and compressor 
applications are variable torque applications. Of these 60 percent, 
DOE assumed that all fans and a majority (70 percent) of compressors 
and pumps would be negatively impacted by higher operating speeds; 
and that 30 percent of compressors and pumps would not be negatively 
impacted from higher operating speeds as their time of use would 
decrease as the flow increases with the speed (e.g. a pump filling a 
reservoir).
---------------------------------------------------------------------------

    IECA commented that estimates of regional shares of motors should 
be based on current inventories of motors rather than sector-specific 
indicators and that the data from the 2006 Manufacturer Energy 
Consumption Survey (MECS) is outdated. (IECA, No. 52 at p. 2) DOE did 
not find any information regarding motor inventory and instead used 
indirect indicators to derive motor distribution. For the NOPR, DOE 
updated its regional shares of motors based on industrial electricity 
consumption by region from AEO 2013.

F. Life-Cycle Cost and Payback Period Analysis

    For each representative unit analyzed in the engineering analysis, 
DOE conducts LCC and PBP analyses to evaluate the economic impacts on 
individual customers of potential energy conservation standards for 
electric motors. The LCC is the total customer expense over the life of 
the motor, consisting of equipment and installation costs plus 
operating costs over the lifetime of the equipment (expenses for energy 
use, maintenance and repair). DOE discounts future operating costs to 
the time of purchase using customer discount rates. The PBP is the 
estimated amount of time (in years) it takes customers to recover the 
increased total installed cost (including equipment and installation 
costs) of a more efficient type of equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in total installed 
cost (normally higher) due to a standard by the change in annual 
operating cost (normally lower) which results from the standard.
    For any given efficiency level, DOE measures the PBP and the change 
in LCC relative to an estimate of the base-case efficiency levels. The 
base-case estimate reflects the market in the absence of new or amended 
energy conservation standards, including the market for equipment that 
exceeds the current energy conservation standards.
    For each representative unit, DOE calculated the LCC and PBP for a 
distribution of individual electric motors across a range of operating 
conditions. DOE used Monte Carlo simulations to model the distributions 
of inputs. The Monte Carlo process statistically captures input 
variability and distribution without testing all possible input 
combinations. Therefore, while some atypical situations may not be 
captured in the analysis, DOE believes the analysis captures an 
adequate range of situations in which electric motors operate.
    The following sections contain brief discussions of comments on the 
inputs and key assumptions of DOE's LCC and PBP analysis and explain 
how DOE took these comments into consideration.
1. Equipment Costs
    In the LCC and PBP analysis, the equipment costs faced by electric 
motor purchasers are derived from the MSPs estimated in the engineering 
analysis and the overall markups estimated in the markups analysis.
    To forecast a price trend for the preliminary analysis, DOE derived 
an inflation-adjusted index of the producer price index (PPI) for 
integral horsepower motors and generators manufacturing from 1969 to 
2011. These data show a long-term decline from 1985 to 2003, and then a 
steep increase since then. DOE also examined a forecast based on the 
``chained price index--industrial equipment'' that was forecasted for 
AEO2012 out to 2040. This index is the most disaggregated category that 
includes electric motors. These data show a short-term increase from 
2011 to 2015, and then a steep decrease since then. DOE believes that 
there is considerable uncertainty as to whether the recent trend has 
peaked, and would be followed by a return to the previous long-term 
declining trend, or whether the recent trend represents the beginning 
of a long-term rising trend due to global demand for electric motors 
and rising commodity costs for key motor components. Given the 
uncertainty, DOE chose to use constant

[[Page 73639]]

prices (2010 levels) for both its LCC and PBP analysis and the NIA. For 
the NIA, DOE also analyzed the sensitivity of results to alternative 
electric motor price forecasts.
    DOE did not receive comments on the trend it used for electric 
motor prices, and it retained the approach used in the preliminary 
analysis for the NOPR.
2. Installation Costs
    In the preliminary analysis, the engineering analysis showed that 
for some representative units, increased efficiency led to increased 
stack length. However, the electric motor frame remained in the same 
NEMA frame size requirements as the baseline electric motor, and the 
motor's ``C'' dimension remained fairly constant across efficiency 
levels. In addition, electric motor installation cost data from RS 
Means Electrical Cost Data 2013 showed a variation in installation 
costs by horsepower (for three-phase electric motors), but not by 
efficiency. Therefore, in the preliminary analysis, DOE assumed there 
is no variation in installation costs between a baseline efficiency 
electric motor and a higher efficiency electric motor.
    Two interested parties commented that DOE might have to consider 
increased installation costs related to larger diameter motors in 
comparison to baseline motors. (CA IOUs, No. 57 at p. 2; NEMA, No. 54 
at p. 83) NEMA added that the size of a motor may need to be increased 
to provide the necessary material to obtain higher levels of energy 
efficiency, such as CSL 3 examined for Design B electric motors. (NEMA, 
No. 54 at p. 83)
    DOE's engineering data show that the motor's ``C'' dimension 
remained fairly constant across efficiency levels. For equipment class 
Group 1, the stack length of higher efficiency motors (EL 3 and above) 
did not show significant increases in size in comparison to NEMA 
Premium level motors (EL 2). In addition, the frame size remained the 
same and the ``C'' dimension data did not significantly vary. 
Therefore, for the NOPR, DOE retained the same approach as in the 
preliminary analysis and did not incorporate changes in installation 
costs for electric motors that are more efficient than baseline 
equipment.
    NEMA stated that when a user replaces a baseline NEMA Design B 
motor with a higher efficiency NEMA Design A motor, the user might 
experience additional installation costs compared to replacing the 
motor with a baseline NEMA Design B motor due to, for example, 
potential needs for new motor controller or motor protection devices. 
(NEMA, No. 54 at p. 29) In the engineering analysis, for equipment 
class Group 1, all representative units selected were NEMA Design B 
motors and the NEMA Design B requirements are maintained across all 
efficiency levels. Therefore, DOE did not account for additional 
installation costs related to the replacement of NEMA Design B motors 
with NEMA Design A motors.
3. Maintenance Costs
    In the preliminary analysis, DOE did not find data indicating a 
variation in maintenance costs between a baseline efficiency and higher 
efficiency electric motor. According to data from Vaughen's Price 
Publishing Company,\67\ which publishes an industry reference guide on 
motor repair pricing, the price of replacing bearings, which is the 
most common maintenance practice, is the same at all efficiency levels. 
Therefore, DOE did not consider maintenance costs for electric motors. 
DOE did not receive comments on this issue and retained the approach 
used for the preliminary analysis for the NOPR.
---------------------------------------------------------------------------

    \67\ Vaughen's (2011, 2013), Vaughen's Motor & Pump Repair Price 
Guide, 2011, 2013 Edition. http://www.vaughens.com/.
---------------------------------------------------------------------------

4. Repair Costs
    In the preliminary analysis, DOE accounted for the differences in 
repair costs of a higher efficiency motor compared to a baseline 
efficiency motor and defined a repair as including a rewind and 
reconditioning. Based on data from Vaughen's, DOE derived a model to 
estimate repair costs by horsepower, enclosure and pole, for each EL.
    The Electrical Apparatus Service Association (EASA), which 
represents the electric motor repair service sector, noted that DOE 
should clarify the definition of repair as including rewinding and 
reconditioning. (EASA, No. 47 at p. 1) DOE agrees with this suggestion 
and has modified its terminology in chapter 7 of the NOPR TSD.
    One interested party, Flolo Corporation, noted that since the 
1990's, increased windings protection has led to longer repair cycles 
and the repair frequency values used in the preliminary analysis were 
too low. (Pub. Mtg. Tr., No. 58 at p. 234)
    For the preliminary analysis, DOE estimated that NEMA Design A, B 
and C electric motors were repaired on average after 32,000 hours of 
operation based on data for the industrial sector. This estimate 
reflected a situation where electric motors from 1 to 20-horsepower, 
with an average lifetime of 5 years, are not repaired; motors from 25- 
to 75-horsepower, with an average lifetime of 10 years, are repaired at 
half their lifetime; and motors from 100- to 500-horsepower, with an 
average lifetime of 15 years, are repaired at a third of their 
lifetime. In the NOPR analysis, DOE retained a similar approach for the 
industrial and commercial sectors. For the agricultural sector, DOE did 
not find sufficient data to distinguish by horsepower range and assumed 
that motors are repaired on average at half of their lifetime. With the 
revised NOPR mechanical lifetime and operating hour estimates, the 
repair frequency in hours increased to 48,600 hours in the industrial 
sector compared to DOE's earlier estimate of 32,000 hours.
5. Unit Energy Consumption
    The NOPR analysis uses the same approach for determining unit 
energy consumptions (UECs) as the preliminary analysis. The UEC was 
determined for each application and sector based on estimated load 
points and annual operating hours. For the NOPR, DOE refined the 
average annual operating hours, average load, and shares of motors by 
application and sector.
    In the preliminary analysis, DOE assumed that one-third of repairs 
are done following industry recommended practice as defined by EASA. 
(EASA Standard AR100-2010, Recommended Practice for the Repair of 
Rotating Electrical Apparatus) and do not impact the efficiency of the 
electric motor (i.e., no degradation of efficiency after repair). DOE 
assumed that two-thirds of repairs do not follow good practice and that 
a slight decrease in efficiency occurs when the electric motor is 
repaired. DOE assumed the efficiency decreases by 1 percent in the case 
of electric motors of less than 40 horsepower, and by 0.5 percent in 
the case of larger electric motors.
    NEMA and EASA asked DOE to clarify its assumption regarding the 
share of repairs performed following industry recommended practices. 
(NEMA, No. 54 at p. 29) (EASA, No. 47 at p. 1) For the NOPR, DOE 
reviewed data from the U.S. Economic Census \68\ and EASA \69\ and 
estimated that the majority of motor repair shops are EASA members and 
follow industry recommended practices. DOE revised its assumption for 
the NOPR analysis and estimated that 90 percent of repairs are done 
following industry recommended practice and would not impact the

[[Page 73640]]

efficiency of the motor (i.e. no degradation of efficiency after 
repair).
---------------------------------------------------------------------------

    \68\ U.S. Economic Census 1997 and 2007 data on the number of 
motor repair establishments (based on NAICS 811, 811310, and SIC 
7694).
    \69\ Members of EASA available at: http://www.easa.com/.
---------------------------------------------------------------------------

    NEMA also requested clarification on whether the LCC is based on 
site energy or full fuel cycle energy. (NEMA, No. 54 at p. 31) In the 
LCC, DOE considers site energy use only.
6. Electricity Prices and Electricity Price Trends
    In the preliminary analysis, DOE derived sector-specific weighted 
average electricity prices for four different U.S. Bureau of the Census 
(Census) regions (Northeast, Midwest, South, and West) using data from 
the Energy Information Administration (EIA Form 861). For each utility 
in a region, DOE used the average industrial or commercial price, and 
then weighted the price by the number of customers in each sector for 
each utility.
    For each representative motor, DOE assigned electricity prices 
using a Monte Carlo approach that incorporated weightings based on the 
estimated share of electric motors in each region. The regional shares 
were derived based on indicators specific to each sector (e.g., 
commercial floor space from the Commercial Building Energy Consumption 
Survey for the commercial sector \70\) and assumed to remain constant 
over time. To estimate future trends in energy prices, DOE used 
projections from the EIA's Annual Energy Outlook 2011 (AEO 2011). The 
NOPR retains the same approach for determining electricity prices, and 
used AEO 2013 to project electricity price trends.
---------------------------------------------------------------------------

    \70\ U.S. Department of Energy Information Administration 
(2003), Commercial Buildings Energy Consumption Survey, http://www.eia.gov/consumption/commercial/data/2003/pdf/a4.pdf.
---------------------------------------------------------------------------

    IECA commented that the sector specific average electricity prices 
do not account for differences across census regions where industrial 
activity is concentrated. (IECA, No. 52 at p. 2) As noted above, the 
industrial electricity price for each region is a weighted average 
based on the number of industrial customers of each utility. Thus, the 
prices reasonably account for concentration of industrial activity.
7. Lifetime
    In the preliminary analysis, DOE estimated the mechanical lifetime 
of electric motors in hours (i.e., the total number of hours an 
electric motor operates throughout its lifetime), depending on its 
horsepower size. DOE then developed Weibull distributions of mechanical 
lifetimes. The lifetime in years for a sampled electric motor was then 
calculated by dividing the sampled mechanical lifetime by the sampled 
annual operating hours of the electric motor. This model produces a 
negative correlation between annual hours of operation and electric 
motor lifetime: Electric motors operated many hours per year are likely 
to be retired sooner than electric motors that are used for only a few 
hundred hours per year. DOE considered that electric motors of less 
than 75-hp are most likely to be embedded in a piece of equipment 
(i.e., an application). For such applications, DOE developed Weibull 
distributions of application lifetimes expressed in years and compared 
the sampled motor mechanical lifetime (in years) with the sampled 
application lifetime. DOE assumed that the electric motor would be 
retired at the earlier of the two ages. For the NOPR analysis, DOE 
retained the same approach and revised some of the lifetime assumptions 
based on additional information collected.
    NEMA and WEG commented that the mechanical lifetime of agricultural 
motors should be lower than in the commercial or industrial sectors due 
to lower levels of maintenance performed in the field and the lighter 
duty steel frame constructions of these motors. (Pub. Mtg. Tr., No. 58 
at p. 253) The NOPR analysis estimates that the average motor lifetime 
(across all sizes) for the agricultural sector to be 20 years.\71\ This 
revised estimate translates into average mechanical lifetimes between 
24,000 and 30,000 hours depending on the horsepower range, which is 
lower than in the industrial sector.
---------------------------------------------------------------------------

    \71\ Gallaher, M., Delhotal, K., & Petrusa, J. (2009). 
Estimating the potential CO2 mitigation from agricultural 
energy efficiency in the United States. Energy Efficiency, 2 
(2):207-220.
---------------------------------------------------------------------------

    For the NOPR, DOE collected sector-specific mechanical motor 
lifetime information where available and revised the lifetime 
assumptions where appropriate. For the industrial sector, DOE estimated 
average mechanical lifetimes of 5, 15, and 20 years, depending on the 
horsepower range (the values correspond to 43,800, 87,600, and 131,400 
hours respectively). These values are higher than those used in the 
preliminary analysis.
8. Discount Rate
    The discount rate is the rate at which future expenditures are 
discounted to estimate their present value. The cost of capital 
commonly is used 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. DOE uses the capital asset pricing model (CAPM) to calculate 
the equity capital component, and financial data sources to calculate 
the cost of debt financing.
    For the NOPR, DOE estimated a statistical distribution of 
industrial and commercial customer discount rates by calculating the 
average cost of capital for the different types of electric motor 
owners (e.g., chemical industry, food processing, and paper industry). 
For the agricultural sector, DOE assumed similar discount rates as in 
industry. More details regarding DOE's estimates of motor customer 
discount rates are provided in chapter 8 of the NOPR TSD.
9. Base Case Market Efficiency Distributions
    For the LCC analysis, DOE analyzed the considered motor efficiency 
levels relative to a base case (i.e., the case without new or amended 
energy efficiency standards). This requires an estimate of the 
distribution of product efficiencies in the base case (i.e., what 
consumers would have purchased in the compliance year in the absence of 
new standards). DOE refers to this distribution of product energy 
efficiencies as the base case efficiency distribution.
    Data on motor sales by efficiency are not available. In the 
preliminary analysis, DOE used the number of models meeting the 
requirements of each efficiency level from six major manufacturers and 
one distributor's catalog data to develop the base-case efficiency 
distributions. The distribution is estimated separately for each 
equipment class group and horsepower range and was assumed constant and 
equal to 2012 throughout the analysis period (2015-2044).
    For the NOPR, DOE retained the same approach to estimate the base 
case efficiency distribution in 2012, but it updated the base case 
efficiency distributions to account for the NOPR engineering analysis 
(revised ELs) and for the update in the scope of electric motors 
considered in the analysis. Beyond 2012, DOE assumed the efficiency 
distributions for equipment class group 1 and 4 vary over time based on 
historical data \72\ for the market penetration of NEMA Premium motors 
within the market for integral alternating current induction motors. 
The assumed trend is shown in chapter 10 of the NOPR TSD. For equipment 
class group 2 and 3, which represent a very minor share of the market 
(less

[[Page 73641]]

than 0.2 percent), DOE believes the overall trend in efficiency 
improvement for the total integral AC induction motors may not be 
representative, so DOE kept the base case efficiency distributions in 
the compliance year equal to 2012 levels.
---------------------------------------------------------------------------

    \72\ Robert Boteler, USA Motor Update 2009, Energy Efficient 
Motor Driven Systems Conference (EEMODS) 2009.
---------------------------------------------------------------------------

    Two interested parties commented on the base case efficiency 
distributions. Regal-Beloit stated that the share of 1- to 5-horsepower 
motors in equipment class 1 at CSL 0 in the base case distribution was 
too low by at least one percentage point. (Pub. Mtg. Tr., No. 58 at p. 
263) NEMA requested clarifications on how DOE derived its base case 
efficiency distributions and commented that it would expect CSL 0 to 
represent 60 percent of total units shipped when considering the 
expanded scope as proposed by NEMA. (NEMA, No. 54 at p. 84) Neither 
stakeholder, however, provided supporting data.
    As mentioned previously, DOE developed the 2012 base case 
efficiency distributions based on catalog information on the number of 
models meeting the requirements of each efficiency level. For the NOPR, 
DOE retained the same methodology and revised the catalog information 
to account for the addition of brake motors and NEMA 56-frame size 
enclosed electric motors in the analysis. DOE has no data to assess the 
stakeholders' input on the base case efficiency distributions.
10. Compliance Date
    Any amended standard for electric motors shall apply to electric 
motors manufactured on or after a date which is five years after the 
effective date of the previous amendment. (42 U.S.C. 6313(b)(4)) In 
this case, the effective date of the previous amendment (established by 
EISA in 2007) is December 19, 2010, and the compliance date of any 
amended energy conservation standards for electric motors would be 
December 19, 2015. In light of the proposal's attempt to establish 
amended or new standards for currently regulated and unregulated 
electric motor types, DOE has chosen to retain the same compliance date 
for both the amended and new energy conservation standards to simplify 
the requirements and to avoid any potential confusion from 
manufacturers. The final rule for this rulemaking is scheduled to be 
published in early 2014. DOE calculated the LCC and PBP for all end-
users as if each would purchase a new piece of equipment in the year 
that compliance is required. As DOE notes elsewhere, DOE is interested 
in comments regarding the feasibility of achieving compliance with this 
proposed date.
11. Payback Period Inputs
    The payback period 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. Payback 
periods are expressed in years. Payback periods that exceed the life of 
the product mean that the increased total installed cost is not 
recovered in reduced operating expenses.
    The inputs to the PBP calculation are the total installed cost of 
the product to the customer for each efficiency level and the average 
annual operating expenditures for each efficiency level. The PBP 
calculation uses the same inputs as the LCC analysis, except that 
discount rates are not needed.
12. Rebuttable-Presumption Payback Period
    EPCA establishes a rebuttable presumption that a standard is 
economically justified if the Secretary finds that the additional cost 
to the consumer of purchasing a product complying with an energy 
conservation standard level will be less than three times the value of 
the energy (and, as applicable, water) savings during the first year 
that the consumer will receive as a result of the standard, as 
calculated under the test procedure in place for that standard. (42 
U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency level, DOE 
determines the value of the first year's energy savings by calculating 
the quantity of those savings in accordance with the applicable DOE 
test procedure, and multiplying that amount by the average energy price 
forecast for the year in which compliance with the new or amended 
standards would be required.

G. Shipments Analysis

    DOE uses projections of product shipments to calculate the national 
impacts of standards on energy use, NPV, and future manufacturer cash 
flows. DOE develops shipment projections based on historical data and 
an analysis of key market drivers for each product.
    To populate the model with current data, DOE used data from a 
market research report,\73\ confidential inputs from manufacturers, 
trade associations, and other interested parties' responses to the 
Request for Information (RFI) published in the Federal Register. 76 FR 
17577 (March 30, 2011). DOE then used estimates of market distributions 
to redistribute the shipments across pole configurations, horsepower, 
and enclosures within each electric motor equipment class and also by 
sector.
---------------------------------------------------------------------------

    \73\ IMS Research (February 2012), The World Market for Low 
Voltage Motors, 2012 Edition, Austin.
---------------------------------------------------------------------------

    DOE's shipments projection assumes that electric motor sales are 
driven by machinery production growth for equipment including motors. 
DOE estimated that growth rates for total motor shipments correlate to 
growth rates in fixed investment in equipment and structures including 
motors, which is provided by the U.S. Bureau of Economic Analysis 
(BEA).\74\ Projections of real gross domestic product (GDP) from AEO 
2013 for 2015-2040 were used to project fixed investments in the 
equipment and structures including motors. The current market 
distributions are maintained over the forecast period.
---------------------------------------------------------------------------

    \74\ Bureau of Economic Analysis (March 01, 2012), Private Fixed 
Investment in Equipment and Software by Type and Private Fixed 
Investment in Structures by Type. http://www.bea.gov/iTable/iTable.cfm?ReqID=12&step=1.
---------------------------------------------------------------------------

    For the NOPR, with the expanded scope by horsepower, DOE estimates 
total shipments in scope were 5.43 million units in 2011. This estimate 
represents an increase compared to the shipments estimated in the 
preliminary analysis because of the inclusion of integral brake motors 
and of NEMA integral enclosed 56-frame motors.
    For the preliminary analysis, DOE collected data on historical 
series of shipment quantities and value for the 1990-2003 period, but 
concluded that the data were not sufficient to estimate motor price 
elasticity.\75\ Consequently, DOE assumed zero price elasticity for all 
efficiency standards cases and did not estimate any impact of potential 
standards levels on shipments. DOE requested stakeholder 
recommendations on data sources to help better estimate the impacts of 
increased efficiency levels on shipments.
---------------------------------------------------------------------------

    \75\ Business Trend Analysts, The Motor and Generator Industry, 
2002; U.S. Census Bureau (November 2004), Motors and Generators--
2003.MA335H(03)-1. http://www.census.gov/manufacturing/cir/historical_data/discontinued/ma335h/index.html; and U.S. Census 
Bureau (August 2003), Motors and Generators--2002.MA335H(02)-1. 
http://www.census.gov/manufacturing/cir/historical_data/discontinued/ma335h/ma335h02.xls.
---------------------------------------------------------------------------

    The Motor Coalition commented that higher equipment costs required 
to achieve efficiency levels above CSL 2 (NEMA Premium) would encourage 
the refurbishment of existing motors rather than their replacement by 
new, more efficient motors, leading to reduced cost effective energy 
savings at CSL 3. (Motor Coalition, No. 35 at p. 7)
    DOE acknowledges that increased electric motor prices could affect 
the

[[Page 73642]]

``repair versus replace'' decision, leading to the increased longevity 
of existing electric motors and a decrease in shipments of newly-
manufactured energy-efficient electric motors. Considering the minimal 
cost increase between EL 2 and EL 3 in the preliminary analysis 
(approximately 3 percent for representative unit 1), DOE does not 
believe it is reasonable to consider non-zero price elasticity when 
calculating the standards-case shipments for levels above EL 2 and zero 
price elasticity when calculating shipments for the standards case at 
EL 2 of the preliminary analysis. For the above reasons, DOE retained 
its shipments projections, which do not incorporate price elasticities, 
for the NOPR. However, DOE also performed a sensitivity analysis that 
demonstrates the impact of possible price elasticities on projected 
shipments and the NIA results. See TSD appendix 10-C for more details 
and results.
    NEMA commented that shipments of imported motors might decrease if 
higher efficiency levels are mandated. (NEMA, No. 54 at p. 29) NEMA, 
however, provided no data in support of its view. DOE has reviewed 
shipments information from market reports, the U.S. Census, as well as 
market information provided by the Motor Coalition and has been unable 
to obtain any data to assess the potential reduction in quantity of 
imported motors due to standards and whether this would impact the 
total number of motors shipped in the U.S.\76\ DOE's shipments 
projection assumes that electric motor sales are driven by machinery 
production growth for equipment including motors without distinction 
between imported and domestic motors.
---------------------------------------------------------------------------

    \76\ IMS Research (February 2012), The World Market for Low 
Voltage Motors, 2012 Edition, Austin; Business Trend Analysts, The 
Motor and Generator Industry, 2002; U.S. Census Bureau (November 
2004), Motors and Generators--2003.MA335H(03)-1. http://www.census.gov/manufacturing/cir/historical_data/discontinued/ma335h/index.html; and U.S. Census Bureau (August 2003), Motors and 
Generators--2002.MA335H(02)-1. http://www.census.gov/manufacturing/cir/historical_data/discontinued/ma335h/ma335h02.xls.
---------------------------------------------------------------------------

H. National Impact Analysis

    The NIA assesses the national energy savings (NES) and the national 
NPV of total customer costs and savings that would be expected to 
result from new and amended standards at specific efficiency levels.
    To make the analysis more accessible and transparent to all 
interested parties, DOE used an MS Excel spreadsheet model to calculate 
the energy savings and the national customer costs and savings from 
each TSL.\77\ DOE used the NIA spreadsheet to calculate the NES and 
NPV, based on the annual energy consumption and total installed cost 
data from the energy use analysis and the LCC analysis. DOE forecasted 
the lifetime energy savings, energy cost savings, equipment costs, and 
NPV of customer benefits for each product class for equipment sold from 
2015 through 2044. In addition, DOE analyzed scenarios that used inputs 
from the AEO 2013 Low Economic Growth and High Economic Growth cases. 
These cases have higher and lower energy price trends compared to the 
reference case.
---------------------------------------------------------------------------

    \77\ DOE understands that MS Excel is the most widely used 
spreadsheet calculation tool in the United States and there is 
general familiarity with its basic features. Thus, DOE's use of MS 
Excel as the basis for the spreadsheet models provides interested 
parties with access to the models within a familiar context. In 
addition, the TSD and other documentation that DOE provides during 
the rulemaking help explain the models and how to use them, and 
interested parties can review DOE's analyses by changing various 
input quantities within the spreadsheet.
---------------------------------------------------------------------------

    DOE evaluated the impacts of potential new and amended standards 
for electric motors by comparing base-case projections with standards-
case projections. The base-case projections characterize energy use and 
customer costs for each equipment class in the absence of new and 
amended energy conservation standards. DOE compared these projections 
with projections characterizing the market for each equipment class if 
DOE were to adopt new or amended standards at specific energy 
efficiency levels (i.e., the standards cases) for that class.
    Table IV.25 summarizes all the major preliminary analysis inputs to 
the NIA and whether those inputs were revised for the NOPR.

                              Table IV.25--Inputs for the National Impact Analysis
----------------------------------------------------------------------------------------------------------------
             Input                Preliminary analysis description                Changes for NOPR
----------------------------------------------------------------------------------------------------------------
Shipments......................  Annual shipments from shipments    No change.
                                  model.
Compliance date of standard....  Modeled used January 1, 2015.....  December 19, 2015 (modeled as January 1,
                                                                     2016).
Equipment Classes..............  Three separate equipment class     Added one equipment class group for brake
                                  groups for NEMA Design A and B     motors.
                                  motors, NEMA Design C motors,
                                  and Fire Electric Pump Motors.
Base case efficiencies.........  Constant efficiency from 2015      No change for Equipment Class 2 and 3. Added
                                  through 2044.                      a trend for the efficiency distribution of
                                                                     equipment class groups 1 and 4.
Standards case efficiencies....  Constant efficiency at the         No change.
                                  specified standard level from
                                  2015 to 2044.
Annual energy consumption per    Average unit energy use data are   No change.
 unit.                            calculated for each horsepower
                                  rating and equipment class based
                                  on inputs from the Energy use
                                  analysis.
Total installed cost per unit..  Based on the MSP and weight data   No change.
                                  from the engineering, and then
                                  scaled for different hp and
                                  enclosure categories.
Electricity expense per unit...  Annual energy use for each         No change.
                                  equipment class is multiplied by
                                  the corresponding average energy
                                  price.
Escalation of electricity        AEO 2011 forecasts (to 2035) and   Updated to AEO 2013.
 prices.                          extrapolation for 2044 and
                                  beyond.
Electricity site-to-source       A time series conversion factor;   No change.
 conversion.                      includes electric generation,
                                  transmission, and distribution
                                  losses.
Discount rates.................  3% and 7% real...................  No change.
Present year...................  2012.............................  2013.
----------------------------------------------------------------------------------------------------------------

[[Page 73643]]

1. Efficiency Trends
    In the preliminary analysis, DOE did not include any change in base 
case efficiency in its shipments and national energy savings models. As 
explained in section IV.F, for equipment class groups 1 and 4, for the 
NOPR, DOE presumed that the efficiency distributions in the base case 
change over time. The projected share of 1 to 5 horsepower NEMA Premium 
motors (EL 2) for equipment class group 1 grows from 36.6 percent to 
45.5 percent over the analysis period, and for equipment class group 4, 
it grows from 30.0 percent to 38.9 percent. For equipment class group 2 
and 3, DOE assumed that the efficiency remains constant from 2015 to 
2044.
    In the standards cases, equipment with efficiency below the 
standard levels ``roll up'' to the standard level in the compliance 
year. Thereafter, for equipment class groups 1 and 4, DOE assumed that 
the level immediately above the standard would show a similar increase 
in market penetration as the NEMA Premium motors in the base case.
    The presumed efficiency trends in the base case and standards cases 
are described in chapter 10 of the NOPR TSD.
2. National Energy Savings
    For each year in the forecast period, DOE calculates the lifetime 
national energy savings for each standard level by multiplying the 
shipments of electric motors affected by the energy conservation 
standards by the per-unit lifetime annual energy savings. Cumulative 
energy savings are the sum of the NES for all motors shipped during the 
analysis period, 2015-2044.
    DOE estimated energy consumption and savings based on site energy 
and converted the electricity consumption and savings to primary energy 
using annual conversion factors derived from the AEO 2013 version of 
the NEMS. Cumulative energy savings are the sum of the NES for each 
year over the timeframe of the analysis.
    DOE has historically presented NES in terms of primary energy 
savings. In response to the recommendations of a committee on ``Point-
of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency 
Standards'' appointed by the National Academy of Science, DOE announced 
its intention to use full-fuel-cycle (FFC) measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (August 18, 2011). While DOE stated in that 
notice that it intended to use the Greenhouse Gases, Regulated 
Emissions, and Energy Use in Transportation (GREET) model to conduct 
the analysis, it also said it would review alternative methods, 
including the use of EIA's National Energy Modeling System (NEMS). 
After evaluating both models and the approaches discussed in the August 
18, 2011 notice, DOE published a statement of amended policy in the 
Federal Register in which DOE explained its determination that NEMS is 
a more appropriate tool for this specific use. 77 FR 49701 (August 17, 
2012). Therefore, DOE is using NEMS to conduct FFC analyses. The 
approach used for today's NOPR, and the FFC multipliers that were 
applied, are described in appendix 10-C of the TSD.
3. Equipment Price Forecast
    As noted in section IV.F.2, DOE assumed no change in electric motor 
prices over the 2015-2044 period. In addition, DOE conducted a 
sensitivity analysis using alternative price trends. DOE developed one 
forecast in which prices decline after 2011, and one in which prices 
rise. These price trends, and the NPV results from the associated 
sensitivity cases, are described in appendix 10-B of the NOPR TSD.
4. Net Present Value of Customer Benefit
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers of considered equipment are: (1) Total annual 
installed cost; (2) total annual savings in operating costs; and (3) a 
discount factor. DOE calculates the lifetime net savings for motors 
shipped each year as the difference between the base case and each 
standards case in total lifetime savings in lifetime operating costs 
and total lifetime increases in installed costs. DOE calculates 
lifetime operating cost savings over the life of each motor shipped 
during the forecast period.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. DOE 
estimates the NPV using both a 3-percent and a 7-percent real discount 
rate, in accordance with guidance provided by the Office of Management 
and Budget (OMB) to Federal agencies on the development of regulatory 
analysis.\78\ The discount rates for the determination of NPV are in 
contrast to the discount rates used in the LCC analysis, which are 
designed to reflect a consumer's perspective. The 7-percent real value 
is an estimate of the average before-tax rate of return to private 
capital in the U.S. economy. The 3-percent real value represents the 
``social rate of time preference,'' which is the rate at which society 
discounts future consumption flows to their present value.
---------------------------------------------------------------------------

    \78\ OMB Circular A-4, section E (Sept. 17, 2003). http://www.whitehouse.gov/omb/circulars_a004_a-4.
---------------------------------------------------------------------------

I. Consumer Subgroup Analysis

    In analyzing the potential impacts of new or amended standards, DOE 
evaluates impacts on identifiable groups (i.e., subgroups) of customers 
that may be disproportionately affected by a national standard. For the 
NOPR, DOE evaluated impacts on various subgroups using the LCC 
spreadsheet model.
    The customer subgroup analysis is discussed in detail in chapter 11 
of the TSD.

J. Manufacturer Impact Analysis

1. Overview
    DOE conducted an MIA for electric motors to estimate the financial 
impact of proposed new and amended energy conservation standards on 
manufacturers of covered electric motors. The MIA has both quantitative 
and qualitative aspects. The quantitative part of the MIA primarily 
relies on the GRIM, an industry cash flow model customized for electric 
motors covered in this rulemaking. The key GRIM inputs are data on the 
industry cost structure, equipment costs, shipments, and assumptions 
about markups and conversion expenditures. The key MIA output is INPV. 
DOE used the GRIM to calculate cash flows using standard accounting 
principles and to compare changes in INPV between a base case and 
various TSLs (the standards case). The difference in INPV between the 
base and standards cases represents the financial impact of new and 
amended standards on manufacturers of covered electric motors. 
Different sets of assumptions (scenarios) produce different INPV 
results. The qualitative part of the MIA addresses factors such as 
manufacturing capacity; characteristics of, and impacts on, any 
particular sub-group of manufacturers; and impacts on competition.
    DOE conducted the MIA for this rulemaking in three phases. In the 
first phase DOE prepared an industry characterization based on the 
market and technology assessment, preliminary manufacturer interviews, 
and publicly available information. In the second phase, DOE estimated 
industry cash flows in the GRIM using industry financial parameters 
derived in the first

[[Page 73644]]

phase and the shipment scenario used in the NIA. In the third phase, 
DOE conducted structured, detailed interviews with a variety of 
manufacturers that represent more than 75-percent of domestic electric 
motors sales covered by this rulemaking. During these interviews, DOE 
discussed engineering, manufacturing, procurement, and financial topics 
specific to each company, and obtained each manufacturer's view of the 
electric motor industry as a whole. The interviews provided valuable 
information that DOE used to evaluate the impacts of new and amended 
standards on manufacturers' cash flows, manufacturing capacities, and 
employment levels. See section IV.J.4 of this NOPR for a description of 
the key issues manufacturers raised during the interviews.
    During the third phase, DOE also used the results of the industry 
characterization analysis in the first phase and feedback from 
manufacturer interviews to group manufacturers that exhibit similar 
production and cost structure characteristics. DOE identified one sub-
group for a separate impact analysis--small business manufacturers--
using the small business employee threshold published by the Small 
Business Administration (SBA). This threshold includes all employees in 
a business' parent company and any other subsidiaries. Based on this 
classification, DOE identified 13 electric motor manufacturers that 
qualify as small businesses.
    The complete MIA is presented in chapter 12 of the NOPR TSD.
2. GRIM Analysis and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow over time 
due to a standard. These changes in cash flow result in either a higher 
or lower INPV for the standards case compared to the base case, the 
case where a standard is not set. The GRIM analysis uses a standard 
annual cash flow analysis that incorporates manufacturer costs, 
markups, shipments, and industry financial information as inputs. It 
then models changes in costs, investments, and manufacturer margins 
that result from new and amended energy conservation standards. The 
GRIM spreadsheet uses the inputs to calculate a series of annual cash 
flows beginning with the base year of the analysis, 2013, and 
continuing to 2044. DOE computes INPVs by summing the stream of annual 
discounted cash flows during this analysis period. DOE used a real 
discount rate of 9.1 percent for electric motor manufacturers. The 
discount rate estimates were derived from industry corporate annual 
reports to the Securities and Exchange Commission (SEC 10-Ks) and then 
modified according to feedback during manufacturer interviews. Many 
inputs into the GRIM come from the engineering analysis, the NIA, 
manufacturer interviews, and other research conducted during the MIA. 
The major GRIM inputs are described in detail in the sections below.
a. Product and Capital Conversion Costs
    DOE expects new and amended energy conservation standards to cause 
manufacturers to incur one-time conversion costs to bring their 
production facilities and product designs into compliance with new and 
amended standards. For the MIA, DOE classified these one-time 
conversion costs into two major groups: (1) Product conversion costs 
and (2) capital conversion costs. Product conversion costs are one-time 
investments in research, development, testing, marketing, and other 
non-capitalized costs necessary to make product designs comply with new 
and amended standards. Capital conversion costs are one-time 
investments in property, plant, and equipment necessary to adapt or 
change existing production facilities such that new product designs can 
be fabricated and assembled.
    DOE calculated the product and capital conversion costs using both 
a top-down approach and a bottom-up approach based on feedback from 
manufacturers during manufacturer interviews and manufacturer submitted 
comments. DOE then adjusted these conversion costs if there were any 
discrepancies in the final costs using the two methods to arrive at a 
final product and capital conversion cost estimate for each 
representative unit at each EL.
    During manufacturer interviews, DOE asked manufacturers for their 
estimated total product and capital conversion costs needed to produce 
electric motors at specific ELs. To arrive at top-down industry wide 
product and capital conversion cost estimates for each representative 
unit at each EL, DOE calculated a market share weighted average value 
for product and capital conversion costs based on the data submitted 
during interviews and the market share of the interviewed 
manufacturers.
    DOE also calculated bottom-up conversion costs based on 
manufacturer input on the types of costs and the dollar amounts 
necessary to convert a single electric motor frame size to each EL. 
Some of the types of capital conversion costs manufacturers identified 
were the purchase of lamination die sets, winding machines, frame 
casts, and assembly equipment as well as other retooling costs. The two 
main types of product conversion costs manufacturers shared with DOE 
during interviews were number of engineer hours necessary to re-
engineer frames to meet higher efficiency standards and the testing and 
certification costs to comply with higher efficiency standards. DOE 
then took average values (i.e. costs or number of hours) based on the 
range of responses given by manufacturers for each product and capital 
conversion costs necessary for a manufacturer to increase the 
efficiency of one frame size to a specific EL. DOE multiplied the 
conversion costs associated with manufacturing a single frame size at 
each EL by the number of frames each interviewed manufacturer produces. 
DOE finally scaled this number based on the market share of the 
manufacturers DOE interviewed, to arrive at industry wide bottom-up 
product and capital conversion cost estimates for each representative 
unit at each EL. The bottom-up conversion costs estimates DOE created 
were consistent with the manufacturer top down estimates provided, so 
DOE used the bottom-up conversion cost estimates as the final values 
for each representative unit in the MIA.
    In written comments and during manufacturer interviews, electric 
motor manufacturers stated there would be very large product and 
capital conversion costs associated with ELs above NEMA Premium, 
especially for any ELs that require manufacturers to switch to die-cast 
copper rotors. Manufacturers addressed the difficulties associated with 
using copper die-cast rotors and the uncertainty of a standard that 
requires manufacturers to produce electric motors on a commercial level 
for all horsepower ranges using this technology. NEMA stated that 
switching to die-cast copper rotors would cost each manufacturer 
approximately $80 million in retooling costs and approximately $68 
million to redesign, test and certify electric motors at these ELs. 
(NEMA, No. 54 at p. 11) NEMA stated that significant conversion costs 
associated with any EL above NEMA Premium exist even if die-cast copper 
rotors are not used. Several manufacturers during interviews and in 
comments stated they would need to devote significant engineering time 
to redesign their entire production line to comply with ELs that are 
just one NEMA band higher than NEMA Premium. NEMA also stated that 
testing and certifying electric motors to ELs

[[Page 73645]]

above NEMA Premium would be a significant cost to each manufacturer, 
since each manufacturer could have thousands or hundreds of thousands 
of unique electric motor specifications they would need to certify. 
(NEMA, No. 54 at p. 4) DOE took these submitted comments into account 
when developing the industry product and capital conversion costs. The 
final product and capital conversion cost estimates were in the range 
of estimates submitted by NEMA.
    See chapter 12 of the TSD for a complete description of DOE's 
assumptions for the product and capital conversion costs.
b. Manufacturer Production Costs
    Manufacturing a more efficient electric motor is typically more 
expensive than manufacturing a baseline product due to the use of more 
costly materials and components. The higher MPCs for these more 
efficient equipment can affect the revenue, gross margin, and cash 
flows of electric motor manufacturers.
    DOE developed the MPCs for the representative units at each EL 
analyzed in one of two ways: (1) DOE purchased, tested and then tore 
down a motor to create a bill of materials (BOM) for the motor; and (2) 
DOE created a BOM based on a computer software model for a specific 
motor that complies with the associated efficiency level. This second 
approach was used when DOE was unable to find and purchase a motor that 
matched the efficiency criteria for a specific representative unit. 
Once DOE created a BOM for a specific motor, either by tear downs or 
software modeling, DOE then estimated the labor hours and the 
associated scrap and overhead costs necessary to produce a motor with 
that BOM. DOE was then able to create an aggregated MPC based on the 
material costs from the BOM and the associated scrap costs, the labor 
costs based on an average labor rate and the labor hours necessary to 
manufacture the motor, and the overhead costs, including depreciation, 
based on a markup applied to the material, labor, and scrap costs based 
on the materials used.
    DOE created a BOM from tear downs for 15 of the 21 analyzed 
representative unit ELs and applied these BOM data to create ELs for 
certain representative units. The representative unit ELs based on tear 
downs include: All five ELs for the Design B, 5-horsepower 
representative unit; the baseline and ELs 1, 2, and 3 for the Design B, 
30-horsepower and 75-horsepower representative units; and the baseline 
for the Design C, 5-horsepower and 50-horsepower representative units. 
DOE created a BOM based on a computer software model for the remaining 
six analyzed representative unit ELs: EL 4 for the Design B, 30-
horsepower and 75-horsepower representative units; and ELs 1 and 2 for 
the Design C, 5-horsepower and 50-horsepower representative units.
    Due to the very large product and capital conversion costs 
manufacturers would face if standards forced manufacturers to produce 
motors above NEMA Premium ELs, DOE decided to include the product and 
capital conversion costs as a portion of the MPCs for all ELs above 
NEMA Premium. DOE applied a per unit adder, which was a flat percentage 
of the MPC at NEMA Premium, for all MPCs above NEMA Premium. For a 
complete description of MPCs and the inclusion of manufacturer 
conversion costs into the MPC see the engineering analysis discussion 
in section IV.C of this NOPR.
c. Shipment Forecast
    INPV, the key GRIM output, depends on industry revenue, which in 
turn, depends on the quantity and prices of electric motors shipped in 
each year of the analysis period. Industry revenue calculations require 
forecasts of: (1) Total annual shipment volume; (2) the distribution of 
shipments across analyzed representative units (because prices vary by 
representative unit); and, (3) the distribution of shipments across 
efficiencies (because prices vary with efficiency).
    In the NIA, DOE estimated the total number of electric motor 
shipments by year for the analysis period. The NIA projects electric 
motor shipments to generally increase over time. This is consistent 
with the estimates manufacturers revealed to DOE during manufacturer 
interviews. The NIA then estimated the percentage of shipments assigned 
to each ECG. DOE further estimated the percentage of shipments by 
horsepower rating, pole configuration, and enclosure type within each 
ECG. For the NIA, the shipment distribution across ECG and the shipment 
distribution across horsepower rating, pole configuration, and 
enclosure type do not change on a percentage basis over time. Nor does 
the shipment distribution across ECGs or across horsepower rating, pole 
configuration, and enclosure type change on a percentage basis due to 
an energy conservation standard (e.g. the number of shipments of Design 
C, 1 horsepower, 4 pole, open motor are the same in the base case as in 
the standards case). Finally, the NIA estimated a distribution of 
shipments across ELs (an efficiency distribution), for each horsepower 
range within each ECG. As described in further detail below, the 
efficiency distributions for ECG 1 and ECG 4 motors become more energy 
efficient over time in the base case, while the efficiency 
distributions for ECG 2 and ECG 3 do not change on a percentage basis 
over time (i.e., for ECG 2 and ECG 3 motors, the efficiency 
distributions at the beginning of the analysis period are the same as 
the efficiency distributions at the end of the analysis period). DOE 
also assumed the total volume of shipments does not decrease due to 
energy conservation standards, so total shipments are the same in the 
base case as in the standards case.
    For the NIA, DOE modeled a ``shift'' shipment scenario for ECG 1 
and ECG 4 motors and a ``roll-up'' shipment scenario for ECG 2 and ECG 
3 motors. In the standards case of the ``shift'' shipment scenario, 
shipments continue to become more efficient after a standard is set--in 
this case, immediately after the standards go into effect, all 
shipments below the selected TSL are brought up to meet that TSL. 
However, motors at or above the selected TSL migrate to even higher 
efficiency levels and continue to do so over time. In contrast, in the 
standards case of the ``roll-up'' shipment scenario, when a TSL is 
selected to become the new energy conservation standard, all shipments 
that fall below that selected TSL roll-up to the selected TSL. 
Therefore, the shipments that are at or above the selected TSL remain 
unchanged in the standards case of the ``roll-up'' shipment scenario 
compared to the base case. For the ``roll-up'' shipment scenario, the 
only difference in the efficiency distribution between the standards 
case and the base case is that in the standards case all shipments 
falling below the selected TSL in the base case are now at the selected 
TSL in the standards case.
    While the shipments from the NIA are broken out into a total number 
of motor shipments for each ECG, horsepower rating, pole configuration, 
and enclosure type, the MIA consolidates the number of motor shipments 
into the representative units for each ECG. For example, the Design B, 
5-horsepower, 4-pole, enclosed motor was the representative unit for 
all Design A and B motors between 1 and 10-horsepower regardless of the 
number of poles or enclosure type. So in the MIA DOE treated all ECG 1 
(Design A and B) motor shipments between 1 and 10-horsepower as 
shipments of the Design B, 5-horsepower representative unit; all ECG 1 
motor shipments between 15-

[[Page 73646]]

and 50-horsepower as shipments of the Design B, 30-horsepower 
representative unit; and all ECG 1 motor shipments between 60- and 500-
horsepower as shipments of the Design B, 75-horsepower representative 
unit. For ECG 2 (Design C) motors, ECG 3 (fire pump) motors, and ECG 4 
(brake) motors the MIA consolidated shipments in a similar manner, 
treating all shipments in the representative units' horsepower range as 
shipments of that representative unit.
    See the shipment analysis, chapter 9, of this NOPR TSD for 
additional details.
d. Markup Scenarios
    As discussed in the MPC section above, the MPCs for the 
representative units are the factory costs of electric motor 
manufacturers; these costs include material, direct labor, overhead, 
depreciation, and any extraordinary conversion cost recovery. The MSP 
is the price received by electric motor manufacturers from their direct 
customer, typically either an OEM or a distributor. The MSP is not the 
cost the end-user pays for the electric motor since there are typically 
multiple sales along the distribution chain and various markups applied 
to each sale. The MSP equals the MPC multiplied by the manufacturer 
markup. The manufacturer markup covers all the electric motor 
manufacturer's non-production costs (i.e., selling, general and 
administrative expenses (SG&A), normal R&D, and interest, etc.) and 
profit. Total industry revenue for electric motor manufacturers equals 
the MSPs at each EL for each representative unit multiplied by the 
number of shipments at that EL.
    Modifying these manufacturer markups in the standards case yields a 
different set of impacts on manufacturers than in the base case. For 
the MIA, DOE modeled three standards case markup scenarios to represent 
the uncertainty regarding the potential impacts on prices and 
profitability for manufacturers following the implementation of new and 
amended energy conservation standards: (1) A flat markup scenario, (2) 
a preservation of operating profit scenario, and (3) a two-tiered 
markup scenario. These scenarios lead to different markup values, 
which, when applied to the inputted MPCs, result in varying revenue and 
cash flow impacts on manufacturers.
    The flat markup scenario assumed that the cost of goods sold for 
each product is marked up by a flat percentage to cover SG&A expenses, 
R&D expenses, interest expenses, and profit. There were two values used 
for the flat markup, a 1.37 markup for high volume representative units 
and a 1.45 markup for low volume representative units. The 1.37 markup 
was used for the Design B, 5-horsepower representative unit; the Design 
C, 5-horsepower representative unit; the fire pump, 5-horsepower 
representative unit; and the brake, 5-horsepower representative unit. 
The 1.45 markup is used for the Design B, 30-horsepower and 75-
horsepower representative units; the Design C, 50 horsepower 
representative unit; the fire pump, 30-horsepower and 75-horsepower 
representative units; and the brake, 30-horsepower and 75-horsepower 
representative units. This scenario represents the upper bound of 
industry profitability in the standards case because manufacturers are 
able to fully pass through additional costs due to standards to their 
customers. To derive the flat markup percentages, DOE examined the SEC 
10-Ks of publicly traded electric motor manufacturers to estimate the 
industry average gross margin percentage. DOE then used that estimate 
along with the flat manufacturer markups used in the small electric 
motors rulemaking at 75 FR 10874 (March 9, 2010), since several of the 
small electric motor manufacturers are also manufacturers of electric 
motors covered in this rulemaking, to create a final estimate of the 
flat markups used for electric motors covered in this rulemaking.
    DOE included an alternative markup scenario, the preservation of 
operating profit markup, because manufacturers stated that they do not 
expect to be able to markup the full cost of production given the 
highly competitive market, in the standards case. The preservation of 
operating profit markup scenario assumes that manufacturers are able to 
maintain only the base case total operating profit in absolute dollars 
in the standards case, despite higher product costs and investment. The 
base case total operating profit is derived from marking up the cost of 
goods sold for each product by the flat markup described above. In the 
standards case for the preservation of operating profit markup 
scenario, DOE adjusted the manufacturer markups in the GRIM at each TSL 
to yield approximately the same earnings before interest and taxes in 
the standards case in the year after the compliance date of the new and 
amended standards as in the base case. Under this scenario, while 
manufacturers are not able to yield additional operating profit from 
higher production costs and the investments that are required to comply 
with new and amended energy conservation standards, they are able to 
maintain the same operating profit in the standards case that was 
earned in the base case.
    DOE modeled a third profitability scenario, a two-tiered markup 
scenario. During interviews, several manufacturers stated they offer 
two tiers of motor lines that are differentiated, in part, by 
efficiency level. For example, several manufacturers offer Design B 
motors that meet, and in some cases exceed, NEMA Premium levels. Motors 
that exceed these levels typically command higher prices over NEMA 
Premium level motors at identical horsepower levels. These 
manufacturers suggested that the premium currently earned by the higher 
efficiency tiers would erode as new and amended standards are set at 
higher efficiency levels, which would harm profitability. To model this 
effect, DOE used information from manufacturers to estimate the higher 
and lower markups for electric motors under a two-tier pricing strategy 
in the base case. In the standards case, DOE modeled the situation in 
which product efficiencies offered by a manufacturer are altered due to 
standards. This change reduces the markup of higher efficiency 
equipment as they become the new baseline caused by the energy 
conservation standard. The change in markup is based on manufacturer 
statements made during interviews and on DOE's understanding of 
industry pricing.
    The preservation of operating profit and two-tiered markup 
scenarios represent the lower bound of industry profitability in the 
standards case because manufacturers are not able to fully pass through 
the additional costs due to standards, as manufacturers are able to do 
in the flat markup scenario. Therefore, manufacturers earn less revenue 
in the preservation of operating profit and two-tiered markup scenarios 
than they do in the flat markup scenario.
3. Discussion of Comments
    During the August 2012 preliminary analysis public meeting, 
interested parties commented on the assumptions and results of the 
preliminary analysis TSD. Oral and written comments addressed several 
topics, including the scope of coverage, conversion costs, enforcement 
of standards, and the potential increase in the motor refurbishment 
market. DOE addresses these comments below.
a. Scope of Coverage
    SEW-Eurodrive expressed concern about establishing energy 
conservation standards for integral gearmotors. SEW-Eurodrive stated 
that manufacturers

[[Page 73647]]

would have to review and ensure the compatibility between the motor and 
the gearbox for all new integral gearmotor designs. Setting standards 
for these motors, in its view, may cause manufacturers to review 
potentially millions of motor-gear box combinations. SEW-Eurodrive also 
stated that since integral gearmotors comprise a system whose overall 
efficiency is limited by the low efficiency of the mating gearing, an 
increase in the efficiency of the motor alone would have a very small 
effect on the overall system efficiency. (SEW-Eurodrive, No. 53 at p. 
3) DOE believes that these integral gearmotors can be tested by 
removing the gearbox and simply testing the partial motor in accordance 
with the partial motor test procedure proposed at 78 FR 38455 (June 26, 
2013). This approach would allow integral gearmotor motor manufacturers 
to test and certify the electric motors and not every combination of 
electric motor and gearbox.
b. Conversion Costs
    NEMA made a few comments regarding the potential difficulties and 
costs associated with increasing energy conservation standards to 
efficiency levels above NEMA Premium. First, NEMA stated that DOE 
should consider the current difficulties that manufacturers from IEC 
countries are having when meeting the efficiency levels under NEMA MG 1 
Table 12-12. NEMA stated these manufacturers already face difficulties 
due to the limits of an electric motor frame size and stack length, as 
these limits pose physical constraints to higher efficiency levels. 
Moreover, such limits to IEC frame size and stack length are comparable 
to what manufacturers of NEMA frame motors would face if required 
efficiency levels were increased above current NEMA Premium efficiency 
levels. (NEMA, No. 54 at p. 84) NEMA did not provide any cost data, in 
engineering time or dollars, that these manufacturers were faced with 
regarding their compliance with NEMA MG 1 Table 12-12 efficiency 
levels.
    NEMA went on to give estimates for the conversion costs associated 
with manufacturers producing motors above NEMA Premium efficiency 
levels. NEMA stated that it would cost each manufacturer approximately 
$80 million in retooling and $68 million in reengineering, testing and 
prototyping to switch from currently used materials to die-cast copper 
rotor production. NEMA also stated there are other costs not directly 
related to the die-casting process manufacturers would incur, if 
standards required copper rotor technology. For example, NEMA noted 
that there are additional costs associated with redesigning the rotor 
and stator to maintain compliance with NEMA MG 1 performance 
requirements. NEMA also provided DOE with a few of the major costs 
placed on the manufacturers if energy conservation standards exceeded 
NEMA Premium efficiency levels. NEMA said manufacturers would incur 
significant costs due to retooling slot insulators, automatic winding 
machines, and progressive lamination stamping dies--the last of which 
can cost between $500,000 and $750,000 per set. Manufacturers would 
also need to reengineer potentially 100,000 to 200,000 specifications 
per manufacturer to comply with standards above NEMA Premium levels. 
(NEMA, No. 54 at p. 11)
    DOE took these difficulties and costs that could be placed on 
manufacturers into consideration when creating the conversion costs of 
standards above NEMA Premium efficiency levels. DOE also recognizes the 
magnitude of the conversion costs on the industry at efficiency levels 
above NEMA Premium and this was one of the main reasons DOE included a 
portion of the conversion costs in the MPC for efficiency levels above 
NEMA Premium. DOE believes it is likely that motor manufacturers would 
attempt to recover these large one-time extraordinary conversion costs 
at standards above NEMA Premium through a variable cost increase in the 
MPCs of electric motors sold by manufacturers.
c. Enforcement of Standards
    NEMA stated that large domestic manufacturers could be adversely 
impacted by higher energy conservation standards if DOE does not 
strictly enforce those new and amended standards, especially on 
imported machinery with embedded motors. NEMA commented that domestic 
manufacturers are currently competing with imported goods containing 
electric motors that are below current motor standards. This practice 
puts compliant motor manufacturers at a disadvantage because the 
machinery containing a non-compliant motor is often sold at a lower 
cost than machinery with a compliant motor. (NEMA, No. 54 at p. 11) DOE 
recognizes the need to enforce any energy conservation standard 
established for motors manufactured alone or as a component of another 
piece of equipment to ensure that all manufacturers are operating on a 
level playing field and to realize the actual reduction in energy 
consumption from these standards.
d. Motor Refurbishment
    NEMA commented that if electric motors had to be redesigned to 
achieve higher energy conservation standards potential new motor 
customers may be forced to rewind older, less efficient motors because 
the longer or larger frame sizes that could be required to satisfy more 
stringent efficiency standards might not fit as drop-in replacements 
for existing equipment. (NEMA, No. 54 at p. 10) DOE agrees that 
adopting higher energy conservation standards for electric motors may 
force motor manufacturers to increase the length and/or the diameter of 
the frame. Such increase in motor frame size may cause some machinery 
using electric motors to be incompatible with previous electric motor 
designs. DOE requested comment on the quantitative impacts this could 
have on the electric motor and OEM markets but did not receive any 
quantitative responses regarding this issue. DOE is aware this could be 
a possible issue at the ELs above NEMA Premium, but does not consider 
this to be an issue at ELs that meet or are below NEMA Premium, since 
the majority of the electric motors used in existing equipment should 
already be at NEMA Premium efficiency levels. Therefore, based on data 
available at this time, DOE does not believe that motor refurbishment 
is likely to act as a barrier to the efficiency levels proposed in 
today's NOPR.
4. Manufacturer Interviews
    DOE conducted additional interviews with manufacturers following 
the preliminary analysis in preparation for the NOPR analysis. In these 
interviews, DOE asked manufacturers to describe their major concerns 
with this rulemaking. The following section describes the key issues 
identified by manufacturers during these interviews.
a. Efficiency Levels above NEMA Premium
    During these interviews, several manufacturers were concerned with 
the difficulties associated with increasing motor efficiency levels 
above NEMA Premium. Manufacturers stated that even increasing the 
efficiency of motors to one band above NEMA Premium would require each 
manufacturer to make a significant capital investment to retool their 
entire production line. It would also require manufacturers to 
completely redesign almost every motor configuration offered, which 
could take several years of engineering time.
    According to manufacturers, another potential problem with setting 
standards above NEMA Premium is that this

[[Page 73648]]

would misalign U.S. electric motor standards with global motor 
standards (e.g., IEC motor standards). They noted that over the past 
few decades, there has been an effort to harmonize global motor 
standards that setting new U.S. electric motor standards at a level 
exceeding the NEMA Premium level would cause U.S. electric motor 
markets to be out of synchronization with the rest of the world's 
efficiency standards.
    Several manufacturers also commented they believe any standard 
requiring die-casting copper rotors is infeasible. One main concern 
manufacturers have regarding copper is that not only has the price of 
copper significantly increased over the past several years, there has 
been tremendous volatility in the price as well. Manufacturers worry 
that if standards required manufacturers to use copper rotors, they 
would be subject to this volatile copper market. Manufacturers also 
noted that motor efficiency standards requiring copper rotors for all 
electric motors would likely increase the price of copper due to the 
increase in demand from the motors industry.
    Another key concern that manufacturers have regarding standards 
that require using copper rotors is that copper has a much higher 
melting temperature than aluminum, and the pressure required to die-
cast copper is much higher than aluminum. They contend that there is a 
much greater chance that a significant accident or injury to their 
employees could occur if manufacturers were required to produce copper 
rotors rather than aluminum rotors.
    Lastly, several manufacturers stated they would not be able to 
produce copper die-cast rotors in-house and would have to outsource 
this production. Manufacturers stated that if the entire motor industry 
had to outsource their rotor production as a result of standards that 
required the use of die-cast copper rotors, there would be significant 
supply chain problems in the motor manufacturing process. Manufacturers 
emphasized during interviews that the capacity to produce copper rotors 
on a large commercial scale does not exist and would be very difficult 
to implement in even a three-year time period.
    Overall, manufacturers are very concerned if any electric motor 
standard required motor efficiency levels beyond NEMA Premium, 
especially if those efficiency levels required the use of copper rotor 
technology. According to manufacturers, efficiency levels beyond NEMA 
Premium would require a significant level of investment from all 
electric motor manufacturers and would cause the U.S. to be out of sync 
with the electric motor standards around the world. If standards 
required the use of copper rotors, manufacturers would experience 
further difficulties due to the potential increase in copper prices and 
the volatility of the copper market, as well as the potential safety 
concerns regarding the higher melting temperature of copper than 
aluminum.
b. Increase in Equipment Repairs
    Manufacturers have stated that as energy conservation standards 
increase customers are more likely to rewind old, less efficient 
motors, as opposed to purchasing newer more efficient and compliant 
motors. Therefore, if motor standards significantly increase the price 
of motors, manufacturers believe rewinding older motors might become a 
more attractive option for some customers. These customers would in 
turn be using more energy than if they simply purchased a currently 
compliant motor, since rewound motors typically do not operate at their 
original efficiency level after being rewound. Manufacturers believe 
that DOE must take the potential consumer rewinding decision into 
account when deciding on an electric motors standard.
c. Enforcement
    Manufacturers have stated that one of their biggest concerns with 
additional energy conservation standards is the lack of enforcement of 
current electric motor standards. In general, domestic manufacturers 
have stated they comply with the current electric motor regulations and 
will continue to comply with any future standards. However, these 
manufacturers believe that there are several foreign motor 
manufacturers that do not comply with the current electric motor 
regulations and will not comply with any future standards if the 
efficiency standards are increased. This would cause compliant 
manufacturers to be placed at a competitive disadvantage, since 
complying with any increased efficiency standards will be very costly. 
Some domestic manufacturers believe the most cost effective way to 
reduce energy consumption of electric motors is to more strictly 
enforce the existing electric motor standards rather than increase the 
efficiency standards of electric motors.

K. Emissions Analysis

    In the emissions analysis, DOE estimated the reduction in power 
sector emissions of carbon dioxide (CO2), nitrogen oxides 
(NOX), sulfur dioxide (SO2), and mercury (Hg) 
from potential energy conservation standards for electric motors. In 
addition, DOE estimates emissions impacts in production activities 
(extracting, processing, and transporting fuels) that provide the 
energy inputs to power plants. These are referred to as ``upstream'' 
emissions. Together, these emissions account for the full-fuel-cycle 
(FFC). In accordance with DOE's FFC Statement of Policy (76 FR 51282 
(August 18, 2011) as amended at 77 FR 49701 (August 17, 2012)), the FFC 
analysis includes impacts on emissions of methane (CH4) and 
nitrous oxide (N2O, both of which are recognized as 
greenhouse gases.
    DOE conducted the emissions analysis using emissions factors that 
were derived from data in the Energy Information Agency's (EIA's) 
Annual Energy Outlook 2013 (AEO 2013), supplemented by data from other 
sources. DOE developed separate emissions factors for power sector 
emissions and upstream emissions. The method that DOE used to derive 
emissions factors is described in chapter 13 of the NOPR TSD.
    EIA prepares the Annual Energy Outlook using the National Energy 
Modeling System (NEMS). Each annual version of NEMS incorporates the 
projected impacts of existing air quality regulations on emissions. AEO 
2013 generally represents current legislation and environmental 
regulations, including recent government actions, for which 
implementing regulations were available as of December 31, 2012.
    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap-and-trade 
programs. Title IV of the Clean Air Act sets an annual emissions cap on 
SO2 for affected EGUs in the 48 contiguous States and the 
District of Columbia (DC). SO2 emissions from 28 eastern 
states and DC were also limited under the Clean Air Interstate Rule 
(CAIR; 70 FR 25162 (May 12, 2005)), which created an allowance-based 
trading program that operates along with the Title IV program. CAIR was 
remanded to the U.S. Environmental Protection Agency (EPA) by the U.S. 
Court of Appeals for the District of Columbia Circuit but it remained 
in effect. See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); 
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008). On July 6, 2011 
EPA issued a replacement for CAIR, the Cross-State Air Pollution Rule 
(CSAPR). 76 FR 48208 (August 8, 2011). On August 21, 2012, the DC 
Circuit issued a decision to vacate CSAPR. See EME Homer City 
Generation, LP v. EPA, No. 11-1302, 2012 WL 3570721 at *24 (D.C. Cir. 
Aug.

[[Page 73649]]

21, 2012). The court ordered EPA to continue administering CAIR. The 
AEO 2013 emissions factors used for today's NOPR assumes that CAIR 
remains a binding regulation through 2040.
    The attainment of emissions caps is typically flexible among EGUs 
and is enforced through the use of emissions allowances and tradable 
permits. Under existing EPA regulations, any excess SO2 
emissions allowances resulting from the lower electricity demand caused 
by the adoption of an efficiency standard could be used to permit 
offsetting increases in SO2 emissions by any regulated EGU. 
In past rulemakings, DOE recognized that there was uncertainty about 
the effects of efficiency standards on SO2 emissions covered 
by the existing cap-and-trade system, but it concluded that negligible 
reductions in power sector SO2 emissions would occur as a 
result of standards.
    Beginning in 2015, however, SO2 emissions will fall as a 
result of the Mercury and Air Toxics Standards (MATS) for power plants. 
77 FR 9304 (Feb. 16, 2012). In the final MATS rule, EPA established a 
standard for hydrogen chloride as a surrogate for acid gas hazardous 
air pollutants (HAP), and also established a standard for 
SO2 (a non-HAP acid gas) as an alternative equivalent 
surrogate standard for acid gas HAP. The same controls are used to 
reduce HAP and non-HAP acid gas; thus, SO2 emissions will be 
reduced as a result of the control technologies installed on coal-fired 
power plants to comply with the MATS requirements for acid gas. AEO 
2013 assumes that, in order to continue operating, coal plants must 
have either flue gas desulfurization or dry sorbent injection systems 
installed by 2015. Both technologies, which are used to reduce acid gas 
emissions, also reduce SO2 emissions. Under the MATS, NEMS 
shows a reduction in SO2 emissions when electricity demand 
decreases (e.g., as a result of energy efficiency standards). Emissions 
will be far below the cap established by CAIR, so it is unlikely that 
excess SO2 emissions allowances resulting from the lower 
electricity demand would be needed or used to permit offsetting 
increases in SO2 emissions by any regulated EGU. Therefore, 
DOE believes that efficiency standards will reduce SO2 
emissions in 2015 and beyond.
    CAIR established a cap on NOX emissions in 28 eastern 
States and the District of Columbia. Energy conservation standards are 
expected to have little effect on NOX emissions in those 
States covered by CAIR because excess NOX emissions 
allowances resulting from the lower electricity demand could be used to 
permit offsetting increases in NOX emissions. However, 
standards would be expected to reduce NOX emissions in the 
States not affected by the caps, so DOE estimated NOX 
emissions reductions from the standards considered in today's NOPR for 
these States.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would likely reduce Hg emissions. DOE estimated mercury 
emissions reduction using emissions factors based on AEO 2013, which 
incorporates the MATS.
    NEMA commented that DOE should consider emissions related to all 
aspects involved in the production of higher efficiency motors. (NEMA, 
No. 54 at p. 31) In response, DOE notes that EPCA directs DOE to 
consider the total projected amount of energy, or as applicable, water, 
savings likely to result directly from the imposition of the standard 
when determining whether a standard is economically justified. (42 
U.S.C. 6295(o)(2)(B)(i)(III) and 6316(a)) DOE interprets this to 
include energy used in the generation, transmission, and distribution 
of fuels used by appliances or equipment. In addition, DOE is using the 
full-fuel-cycle measure, which includes the energy consumed in 
extracting, processing, and transporting primary fuels. DOE's current 
accounting of primary energy savings and the full-fuel-cycle measure 
are directly linked to the energy used by appliances or equipment. DOE 
believes that energy used in manufacturing of appliances or equipment 
falls outside the boundaries of ``directly'' as intended by EPCA. Thus, 
DOE did not consider such energy use and air emissions in the NIA or in 
the emissions analysis.

L. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of this proposed rule, DOE considered 
the estimated monetary benefits from the reduced emissions of 
CO2 and NOX that are expected to result from each 
of the TSLs considered. In order to make this calculation similar to 
the calculation of the NPV of consumer benefit, DOE considered the 
reduced emissions expected to result over the lifetime of equipment 
shipped in the forecast period for each TSL. This section summarizes 
the basis for the monetary values used for each of these emissions and 
presents the values considered in this rulemaking.
    For today's NOPR, DOE is relying on a set of values for the social 
cost of carbon (SCC) that was developed by an interagency process. A 
summary of the basis for these values is provided below, and a more 
detailed description of the methodologies used is provided as an 
appendix to chapter 14 of the NOPR TSD.
1. Social Cost of Carbon
    The SCC is an estimate of the monetized damages associated with an 
incremental increase in carbon emissions in a given year. It is 
intended to include (but is not limited to) changes in net agricultural 
productivity, human health, property damages from increased flood risk, 
and the value of ecosystem services. Estimates of the SCC are provided 
in dollars per metric ton of carbon dioxide. A domestic SCC value is 
meant to reflect the value of damages in the United States resulting 
from a unit change in carbon dioxide emissions, while a global SCC 
value is meant to reflect the value of damages worldwide.
    Under section 1(b)(6) of Executive Order 12866, ``Regulatory 
Planning and Review,'' 58 FR 51735 (Oct. 4, 1993), agencies must, to 
the extent permitted by law, assess both the costs and the benefits of 
the intended regulation and, recognizing that some costs and benefits 
are difficult to quantify, propose or adopt a regulation only upon a 
reasoned determination that the benefits of the intended regulation 
justify its costs. The purpose of the SCC estimates presented here is 
to allow agencies to incorporate the monetized social benefits of 
reducing CO2 emissions into cost-benefit analyses of 
regulatory actions that have small, or ``marginal,'' impacts on 
cumulative global emissions. The estimates are presented with an 
acknowledgement of the many uncertainties involved and with a clear 
understanding that they should be updated over time to reflect 
increasing knowledge of the science and economics of climate impacts.
    As part of the interagency process that developed the SCC 
estimates, technical experts from numerous agencies met on a regular 
basis to consider public comments, explore the technical literature in 
relevant fields, and discuss key model inputs and assumptions. The main 
objective of this process was to develop a range of SCC values using a 
defensible set of input assumptions grounded in the existing scientific 
and economic literatures. In this way, key uncertainties and model 
differences transparently and consistently inform the range of SCC 
estimates used in the rulemaking process.

[[Page 73650]]

a. Monetizing Carbon Dioxide Emissions
    When attempting to assess the incremental economic impacts of 
carbon dioxide emissions, the analyst faces a number of serious 
challenges. A recent report from the National Research Council points 
out that any assessment will suffer from uncertainty, speculation, and 
lack of information about: (1) Future emissions of greenhouse gases; 
(2) the effects of past and future emissions on the climate system; (3) 
the impact of changes in climate on the physical and biological 
environment; and (4) the translation of these environmental impacts 
into economic damages. As a result, any effort to quantify and monetize 
the harms associated with climate change will raise serious questions 
of science, economics, and ethics and should be viewed as provisional.
    Despite the serious limits of both quantification and monetization, 
SCC estimates can be useful in estimating the social benefits of 
reducing carbon dioxide emissions. Most Federal regulatory actions can 
be expected to have marginal impacts on global emissions. For such 
policies, the agency can estimate the benefits from reduced emissions 
in any future year by multiplying the change in emissions in that year 
by the SCC value appropriate for that year. The net present value of 
the benefits can then be calculated by multiplying the future benefits 
by an appropriate discount factor and summing across all affected 
years. This approach assumes that the marginal damages from increased 
emissions are constant for small departures from the baseline emissions 
path, an approximation that is reasonable for policies that have 
effects on emissions that are small relative to cumulative global 
carbon dioxide emissions. For policies that have a large (non-marginal) 
impact on global cumulative emissions, there is a separate question of 
whether the SCC is an appropriate tool for calculating the benefits of 
reduced emissions. This concern is not applicable to this rulemaking, 
however.
    It is important to emphasize that the interagency process is 
committed to updating these estimates as the science and economic 
understanding of climate change and its impacts on society improves 
over time. In the meantime, the interagency group will continue to 
explore the issues raised by this analysis and consider public comments 
as part of the ongoing interagency process.
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    Economic analyses for Federal regulations have used a wide range of 
values to estimate the benefits associated with reducing carbon dioxide 
emissions. In the final model year 2011 CAFE rule, the U.S. Department 
of Transportation (DOT) used both a ``domestic'' SCC value of $2 per 
metric ton of CO2 and a ``global'' SCC value of $33 per 
metric ton of CO2 for 2007 emission reductions (in 2007$), 
increasing both values at 2.4 percent per year. DOT also included a 
sensitivity analysis at $80 per metric ton of CO2.\79\ A 
2008 regulation proposed by DOT assumed a domestic SCC value of $7 per 
metric ton of CO2 (in 2006$) for 2011 emission reductions 
(with a range of $0-$14 for sensitivity analysis), also increasing at 
2.4 percent per year.\80\ A regulation for packaged terminal air 
conditioners and packaged terminal heat pumps finalized by DOE in 
October of 2008 used a domestic SCC range of $0 to $20 per metric ton 
CO2 for 2007 emission reductions (in 2007$). 73 FR 58772, 
58814 (Oct. 7, 2008). In addition, EPA's 2008 Advance Notice of 
Proposed Rulemaking on Regulating Greenhouse Gas Emissions Under the 
Clean Air Act identified what it described as ``very preliminary'' SCC 
estimates subject to revision. 73 FR 44354 (July 30, 2008). EPA's 
global mean values were $68 and $40 per metric ton CO2 for 
discount rates of approximately 2 percent and 3 percent, respectively 
(in 2006$ for 2007 emissions).
---------------------------------------------------------------------------

    \79\ See Average Fuel Economy Standards Passenger Cars and Light 
Trucks Model Year 2011, 74 FR 14196 (March 30, 2009) (Final Rule); 
Final Environmental Impact Statement Corporate Average Fuel Economy 
Standards, Passenger Cars and Light Trucks, Model Years 2011-2015 at 
3-90 (Oct. 2008) (Available at: http://www.nhtsa.gov/fuel-economy) 
(Last accessed December 2012).
    \80\ See Average Fuel Economy Standards, Passenger Cars and 
Light Trucks, Model Years 2011-2015, 73 FR 24352 (May 2, 2008) 
(Proposed Rule); Draft Environmental Impact Statement Corporate 
Average Fuel Economy Standards, Passenger Cars and Light Trucks, 
Model Years 2011-2015 at 3-58 (June 2008) (Available at: http://www.nhtsa.gov/fuel-economy) (Last accessed December 2012).
---------------------------------------------------------------------------

    In 2009, an interagency process was initiated to offer a 
preliminary assessment of how best to quantify the benefits from 
reducing carbon dioxide emissions. To ensure consistency in how 
benefits are evaluated across agencies, the Administration sought to 
develop a transparent and defensible method, specifically designed for 
the rulemaking process, to quantify avoided climate change damages from 
reduced CO2 emissions. The interagency group did not 
undertake any original analysis. Instead, it combined SCC estimates 
from the existing literature to use as interim values until a more 
comprehensive analysis could be conducted. The outcome of the 
preliminary assessment by the interagency group was a set of five 
interim values: Global SCC estimates for 2007 (in 2006$) of $55, $33, 
$19, $10, and $5 per metric ton of CO2. These interim values 
represented the first sustained interagency effort within the U.S. 
government to develop an SCC for use in regulatory analysis. The 
results of this preliminary effort were presented in several proposed 
and final rules.
c. Current Approach and Key Assumptions
    Since the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates. 
Specifically, the group considered public comments and further explored 
the technical literature in relevant fields. The interagency group 
relied on three integrated assessment models commonly used to estimate 
the SCC: The FUND, DICE, and PAGE models. These models are frequently 
cited in the peer-reviewed literature and were used in the last 
assessment of the Intergovernmental Panel on Climate Change. Each model 
was given equal weight in the SCC values that were developed.
    Each model takes a slightly different approach to model how changes 
in emissions result in changes in economic damages. A key objective of 
the interagency process was to enable a consistent exploration of the 
three models while respecting the different approaches to quantifying 
damages taken by the key modelers in the field. An extensive review of 
the literature was conducted to select three sets of input parameters 
for these models: climate sensitivity, socio-economic and emissions 
trajectories, and discount rates. A probability distribution for 
climate sensitivity was specified as an input into all three models. In 
addition, the interagency group used a range of scenarios for the 
socio-economic parameters and a range of values for the discount rate. 
All other model features were left unchanged, relying on the model 
developers' best estimates and judgments.
    In 2010, the interagency group selected four sets of SCC values for 
use in regulatory analyses.\81\ Three sets of

[[Page 73651]]

values are based on the average SCC from three integrated assessment 
models, at discount rates of 2.5 percent, 3 percent, and 5 percent. The 
fourth set, which represents the 95th-percentile SCC estimate across 
all three models at a 3-percent discount rate, is included to represent 
higher-than-expected impacts from climate change further out in the 
tails of the SCC distribution. The values grow in real terms over time. 
Additionally, the interagency group determined that a range of values 
from 7 percent to 23 percent should be used to adjust the global SCC to 
calculate domestic effects, although preference is given to 
consideration of the global benefits of reducing CO2 
emissions. Table IV.26 presents the values in the 2010 interagency 
group report, which is reproduced in appendix 14-A of the NOPR TSD.
---------------------------------------------------------------------------

    \81\ Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866. Interagency Working Group on Social Cost of 
Carbon, United States Government, February 2010. http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf.

                     Table IV.26--Annual SCC Values From 2010 Interagency Report, 2010-2050
                                   [In 2007 dollars per metric ton CO[ihel2]]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate %
                                     ---------------------------------------------------------------------------
                Year                          5                  3                 2.5                 3
                                     ---------------------------------------------------------------------------
                                           Average            Average            Average        95th Percentile
----------------------------------------------------------------------------------------------------------------
2010................................                4.7               21.4               35.1               64.9
2015................................                5.7               23.8               38.4               72.8
2020................................                6.8               26.3               41.7               80.7
2025................................                8.2               29.6               45.9               90.4
2030................................                9.7               32.8               50.0              100.0
2035................................               11.2               36.0               54.2              109.7
2040................................               12.7               39.2               58.4              119.3
2045................................               14.2               42.1               61.7              127.8
2050................................               15.7               44.9               65.0              136.2
----------------------------------------------------------------------------------------------------------------

    The SCC values used for today's notice were generated using the 
most recent versions of the three integrated assessment models that 
have been published in the peer-reviewed literature.\82\ Table 
IV.27shows the updated sets of SCC estimates from the 2013 interagency 
update in five-year increments from 2010 to 2050. Appendix 14A of the 
NOPR TSD provides the full set of values. The central value that 
emerges is the average SCC across models at 3-percent discount rate. 
However, for purposes of capturing the uncertainties involved in 
regulatory impact analysis, the interagency group emphasizes the 
importance of including all four sets of SCC values.
---------------------------------------------------------------------------

    \82\ Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866. Interagency 
Working Group on Social Cost of Carbon, United States Government. 
May 2013; revised November 2013.http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.

                     Table IV.27--Annual SCC Values From 2013 Interagency Update, 2010-2050
                                   [In 2007 dollars per metric ton CO[ihel2]]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate %
                                     ---------------------------------------------------------------------------
                Year                          5                  3                 2.5                 3
                                     ---------------------------------------------------------------------------
                                           Average            Average            Average        95th Percentile
----------------------------------------------------------------------------------------------------------------
2010................................                 11                 32                 51                 89
2015................................                 11                 37                 57                109
2020................................                 12                 43                 64                128
2025................................                 14                 47                 69                143
2030................................                 16                 52                 75                159
2035................................                 19                 56                 80                175
2040................................                 21                 61                 86                191
2045................................                 24                 66                 92                206
2050................................                 26                 71                 97                220
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding. The interagency group also recognizes that the 
existing models are imperfect and incomplete. The National Research 
Council report mentioned above points out that there is tension between 
the goal of producing quantified estimates of the economic damages from 
an incremental ton of carbon and the limits of existing efforts to 
model these effects. There are a number of concerns and problems that 
should be addressed by the research community, including research 
programs housed in many of the Federal agencies participating in the 
interagency process to estimate the SCC. The interagency group intends 
to periodically review and reconsider those estimates to reflect 
increasing knowledge of the science and economics of climate impacts, 
as well as improvements in modeling.
    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions resulting from today's rule, DOE 
used the values from the 2013 interagency report, adjusted to 2012$ 
using the Gross Domestic Product

[[Page 73652]]

price deflator. For each of the four cases specified, the values used 
for emissions in 2015 were $11.8, $39.7, $61.2, and $117 per metric ton 
avoided (values expressed in 2012$). DOE derived values after 2050 
using the relevant growth rate for the 2040-2050 period in the 
interagency update.
    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SCC value for that year in each of the four cases. To 
calculate a present value of the stream of monetary values, DOE 
discounted the values in each of the four cases using the specific 
discount rate that had been used to obtain the SCC values in each case.
2. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NOX emissions from the TSLs it considered. As noted above, 
DOE has taken into account how new or amended energy conservation 
standards would reduce NOX emissions in those 22 states not 
affected by the CAIR. DOE estimated the monetized value of 
NOX emissions reductions resulting from each of the TSLs 
considered for today's NOPR based on estimates found in the relevant 
scientific literature. Available estimates suggest a very wide range of 
monetary values per ton of NOX from stationary sources, 
ranging from $468 to $4,809 per ton in 2012$).\83\ In accordance with 
OMB guidance,\84\ DOE calculated a range of monetary benefits using 
each of the economic values for NOX and real discount rates 
of 3-percent and 7-percent.
---------------------------------------------------------------------------

    \83\ For additional information, refer to U.S. Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
2006 Report to Congress on the Costs and Benefits of Federal 
Regulations and Unfunded Mandates on State, Local, and Tribal 
Entities, Washington, DC.
    \84\ OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
---------------------------------------------------------------------------

    DOE is evaluating appropriate monetization of avoided 
SO2 and Hg emissions in energy conservation standards 
rulemakings. It has not included monetization in the current analysis.

M. Utility Impact Analysis

    The utility impact analysis estimates several effects on the power 
generation industry that would result from the adoption of new or 
amended energy conservation standards. In the utility impact analysis, 
DOE analyzes the changes in installed electricity capacity and 
generation that would result for each trial standard level. The utility 
impact analysis uses a variant of NEMS,\85\ which is a public domain, 
multi-sectored, partial equilibrium model of the U.S. energy sector. 
DOE uses a variant of this model, referred to as NEMS-BT,\86\ to 
account for selected utility impacts of new or amended energy 
conservation standards. DOE's analysis consists of a comparison between 
model results for the most recent AEO Reference Case and for cases in 
which energy use is decremented to reflect the impact of potential 
standards. The energy savings inputs associated with each TSL come from 
the NIA. Chapter 15 of the NOPR TSD describes the utility impact 
analysis in further detail.
---------------------------------------------------------------------------

    \85\ For more information on NEMS, refer to the U.S. Department 
of Energy, Energy Information Administration documentation. A useful 
summary is National Energy Modeling System: An Overview 2003, DOE/
EIA-0581(2003) (March, 2003).
    \86\ DOE/EIA approves use of the name NEMS to describe only an 
official version of the model without any modification to code or 
data. Because this analysis entails some minor code modifications 
and the model is run under various policy scenarios that are 
variations on DOE/EIA assumptions, DOE refers to it by the name 
``NEMS-BT'' (``BT'' is DOE's Building Technologies Program, under 
whose aegis this work has been performed).
---------------------------------------------------------------------------

N. Employment Impact Analysis

    Employment impacts from new or amended energy conservation 
standards include direct and indirect impacts. Direct employment 
impacts are any changes in the number of employees of manufacturers of 
the equipment subject to standards; the MIA addresses those impacts. 
Indirect employment impacts are changes in national employment that 
occur due to the shift in expenditures and capital investment caused by 
the purchase and operation of more efficient equipment. Indirect 
employment impacts from standards consist of the jobs created or 
eliminated in the national economy, other than in the manufacturing 
sector being regulated, due to: (1) Reduced spending by end users on 
energy; (2) reduced spending on new energy supply by the utility 
industry; (3) increased consumer spending on the purchase of new 
equipment; and (4) the effects of those three factors throughout the 
economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (BLS). BLS regularly publishes its estimates of the 
number of jobs per million dollars of economic activity in different 
sectors of the economy, as well as the jobs created elsewhere in the 
economy by this same economic activity. Data from BLS indicate that 
expenditures in the utility sector generally create fewer jobs (both 
directly and indirectly) than expenditures in other sectors of the 
economy. There are many reasons for these differences, including wage 
differences and the fact that the utility sector is more capital-
intensive and less labor-intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic activity from a 
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, based 
on the BLS data alone, DOE believes net national employment may 
increase because of shifts in economic activity resulting from new and 
amended standards.
    For the standard levels considered in the NOPR, DOE estimated 
indirect national employment impacts using an input/output model of the 
U.S. economy called Impact of Sector Energy Technologies, Version 3.1.1 
(ImSET). ImSET is a special purpose version of the ``U.S. Benchmark 
National Input-Output'' (I-O) model, which was designed to estimate the 
national employment and income effects of energy-saving technologies. 
The ImSET software includes a computer-based I-O model having 
structural coefficients that characterize economic flows among the 187 
sectors. ImSET's national economic I-O structure is based on a 2002 
U.S. benchmark table, specially aggregated to the 187 sectors most 
relevant to industrial, commercial, and residential building energy 
use. DOE notes that ImSET is not a general equilibrium forecasting 
model, and understands the uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Because ImSET does not incorporate price changes, the 
employment effects predicted by ImSET may over-estimate actual job 
impacts over the long run. For the NOPR, DOE used ImSET only to 
estimate short-term employment impacts.
    For more details on the employment impact analysis, see chapter 16 
of the NOPR TSD.

O. Other Comments Received

    IECA commented that motor end-users have not participated in DOE's 
electric motor standards process, and they urge DOE to provide an 
outreach effort to include those who buy motors. (IECA, No. 52 at p. 3) 
Throughout the rulemaking process, DOE makes a

[[Page 73653]]

considerable effort to understand rulemaking impacts to consumers, most 
specifically in the life-cycle cost analysis. It encourages various 
interested parties, including end-users of electric motors, to attend 
public meetings and submit comments. DOE recognizes the central 
importance of the consumer perspective, and welcomes comment from IECA 
and any other organizations serving consumer interest, as well as from 
individual consumers, themselves.

V. Analytical Results

A. Trial Standard Levels

    DOE ordinarily considers several Trial Standard Levels (TSLs) in 
its analytical process. TSLs are formed by grouping different 
Efficiency Levels (ELs), which are standard levels for each Equipment 
Class Grouping (ECG) of motors. DOE analyzed the benefits and burdens 
of the TSLs developed for today's proposed rule. DOE examined four TSLs 
for electric motors. Table V.1 presents the TSLs analyzed and the 
corresponding efficiency level for each equipment class group.
    The efficiency levels in each TSL can be characterized as follows: 
TSL 1 represents each equipment class group moving up one efficiency 
level from the current baseline, with the exception of fire-pump 
motors, which remain at their baseline level; TSL 2 represents NEMA 
Premium levels for all equipment class groups with the exception of 
fire-pump motors, which remain at the baseline; TSL 3 represents 1 NEMA 
band above NEMA Premium for all groups except fire-pump motors, which 
move up to NEMA Premium; and TSL 4 represents the maximum 
technologically feasible level (max tech) for all equipment class 
groups. Because today's proposal includes equipment class groups 
containing both currently regulated motors and those proposed to be 
regulated, at certain TSLs, an equipment class group may encompass 
different standard levels, some of which may be above one EL above the 
baseline. For example, at TSL1, EL1 is being proposed for equipment 
class group 1. However, a large number of motors in equipment class 
group 1 already have to meet EL2. If TSL1 was selected, these motors 
would continue to be required to meet the standards at TSL2, while 
currently un-regulated motors would be regulated to TSL1.

                                       Table V.1--Summary of Proposed TSLs
----------------------------------------------------------------------------------------------------------------
      Equipment class group                TSL 1                 TSL 2                TSL 3             TSL 4
----------------------------------------------------------------------------------------------------------------
1................................  EL 1................  EL 2................  EL 3...............  EL 4
2................................  EL 1................  EL 1................  EL 2...............  EL 2
3................................  EL 0................  EL 0................  EL 1...............  EL 3
4................................  EL 1................  EL 2................  EL 3...............  EL 4
----------------------------------------------------------------------------------------------------------------

B. Economic Justification and Energy Savings

    As discussed in section II.A, EPCA provides seven factors to be 
evaluated in determining whether a potential energy conservation 
standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)) The 
following sections generally discuss how DOE is addressing each of 
those seven factors in this rulemaking.
1. Economic Impacts on Individual Customers
    DOE analyzed the economic impacts on electric motor customers by 
looking at the effects standards would have on the LCC and PBP. DOE 
also examined the rebuttable presumption payback periods for each 
equipment class, and the impacts of potential standards on customer 
subgroups. These analyses are discussed below.
a. Life-Cycle Cost and Payback Period
    To evaluate the net economic impact of standards on electric motor 
customers, DOE conducted LCC and PBP analyses for each TSL. In general, 
higher-efficiency equipment would affect customers in two ways: (1) 
Annual operating expense would decrease, and (2) purchase price would 
increase. Section IV.F of this notice discusses the inputs DOE used for 
calculating the LCC and PBP. The LCC and PBP results are calculated 
from electric motor cost and efficiency data that are modeled in the 
engineering analysis (section IV.C).
    For each representative unit, the key outputs of the LCC analysis 
are a mean LCC savings and a median PBP relative to the base case, as 
well as the fraction of customers for which the LCC will decrease (net 
benefit), increase (net cost), or exhibit no change (no impact) 
relative to the base-case product forecast. No impacts occur when the 
base-case efficiency equals or exceeds the efficiency at a given TSL. 
Table V.2 through Table V.5 show the key shipment weighted average of 
results for the representative units in each equipment class group.

    Table V.2--Summary Life-Cycle Cost and Payback Period Results for
                         Equipment Class Group 1
------------------------------------------------------------------------
         Trial standard level *              1       2       3       4
------------------------------------------------------------------------
            Efficiency level                 1       2       3       4
------------------------------------------------------------------------
Customers with Net LCC Cost (%) **......     0.3     8.4    38.0    84.6
Customers with Net LCC Benefit (%) **...     9.7    32.0    40.4     7.6
Customers with No Change in LCC (%) **..    90.0    59.6    21.5     7.7
Mean LCC Savings ($)....................      43     132      68    -417
Median PBP (Years)......................     1.1     3.3     6.7    29.9
------------------------------------------------------------------------
* The results for equipment class group 1 are the shipment weighted
  averages of the results for representative units 1, 2, and 3.
** Rounding may cause some items to not total 100 percent.

[[Page 73654]]

    Table V.3--Summary Life-Cycle Cost and Payback Period Results for
                         Equipment Class Group 2
------------------------------------------------------------------------
         Trial Standard level *              1       2       3       4
------------------------------------------------------------------------
            Efficiency level                 1       1       2       2
------------------------------------------------------------------------
Customers with Net LCC Cost (%) **......    21.5    21.5    94.7    94.7
Customers with Net LCC Benefit (%) **...    68.6    68.6     5.3     5.3
Customers with No Change in LCC (%) **..     9.9     9.9     0.0     0.0
Mean LCC Savings ($)....................      38      38    -285    -285
Median PBP (Years)......................     5.0     5.0    22.8    22.8
------------------------------------------------------------------------
* The results for equipment class group 2 are the shipment weighted
  averages of the results for representative units 4 and 5.
** Rounding may cause some items to not total 100 percent.

    Table V.4--Summary Life-Cycle Cost and Payback Period Results for
                         Equipment Class Group 3
------------------------------------------------------------------------
     Trial standard level *          1          2         3        4
------------------------------------------------------------------------
        Efficiency level             0          0         1        3
------------------------------------------------------------------------
Customers with Net LCC Cost (%)        0.0        0.0    81.7      100.0
 **............................
Customers with Net LCC Benefit         0.0        0.0     0.0        0.0
 (%) **........................
Customers with No Change in LCC        0.0        0.0    18.3        0.0
 (%) **........................
Mean LCC Savings ($)...........    N/A ***    N/A ***     -61       -763
Median PBP (Years).............    N/A ***    N/A ***   3,299     11,957
------------------------------------------------------------------------
* The results for equipment class group 3 are the shipment weighted
  averages of the results for representative units 6, 7, and 8.
** Rounding may cause some items to not total 100 percent.
*** For equipment class group 3, TSL 1 and 2 are the same as the
  baseline; thus, no customers are affected.

    Table V.5--Summary Life-Cycle Cost and Payback Period Results for
                         Equipment Class Group 4
------------------------------------------------------------------------
         Trial standard level *              1       2       3       4
------------------------------------------------------------------------
            Efficiency level                 1       2       3       4
------------------------------------------------------------------------
Customers with Net LCC Cost (%) **......     1.0    10.8    33.1    79.6
Customers with Net LCC Benefit (%) **...    31.8    60.8    65.8    19.9
Customers with No Change in LCC (%) **..    67.3    28.4     1.1     0.3
Mean LCC Savings ($)....................     137     259     210    -291
Median PBP (Years)......................     1.2     1.9     3.7    16.0
------------------------------------------------------------------------
* The results for equipment class group 4 are the shipment weighted
  averages of the results for representative units 9 and 10.
** Rounding may cause some items to not total 100 percent.

b. Consumer Subgroup Analysis
    In the customer subgroup analysis, DOE estimated the LCC impacts of 
the electric motor TSLs on various groups of customers. Table V.6 and 
Table V.7 compare the weighted average mean LCC savings and median 
payback periods for ECG 1 at each TSL for different customer subgroups.
    Chapter 11 of the TSD presents the detailed results of the customer 
subgroup analysis and results for the other equipment class groups.

    Table V.6--Summary Life-Cycle Cost Results for Subgroups for Equipment Class Group 1: Average LCC Savings
----------------------------------------------------------------------------------------------------------------
                                                   Average LCC savings (2012$) *
                 -----------------------------------------------------------------------------------------------
   EL      TSL                      Low  energy        Small        Industrial      Commercial     Agricultural
                      Default          price         business      sector  only    sector  only    sector  only
----------------------------------------------------------------------------------------------------------------
      1        1              43              38              37              53              40              16
      2        2             132             115             111             169             118               5
      3        3              68              46              45             111              53            -103
      4        4            -417            -447            -448            -356            -440            -675
----------------------------------------------------------------------------------------------------------------
* The results for equipment class group 1 are the shipment weighted averages of the results for representative
  units 1, 2, and 3.

[[Page 73655]]

   Table V.7--Summary Life-Cycle Cost Results for Subgroups for Equipment Class Group 1: Median Payback Period
----------------------------------------------------------------------------------------------------------------
                                                  Median payback period (Years) *
                 -----------------------------------------------------------------------------------------------
   EL      TSL                      Low  energy        Small        Industrial      Commercial     Agricultural
                      Default          price         business      sector  only    sector  only    sector  only
----------------------------------------------------------------------------------------------------------------
      1        1             1.1             1.3             1.1             0.8             1.3             3.5
      2        2             3.3             3.7             3.3             2.1             3.9             7.0
      3        3             6.7             7.6             6.7             4.2             7.9            22.7
      4        4            29.9            33.7            29.9            18.8            34.7           123.5
----------------------------------------------------------------------------------------------------------------
* The results for equipment class group 1 are the shipment weighted averages of the results for representative
  units 1, 2, and 3.

c. Rebuttable Presumption Payback
    As discussed in section IV.F.12, EPCA establishes a rebuttable 
presumption that an energy conservation standard is economically 
justified if the increased purchase cost for equipment that meets the 
standard is less than three times the value of the first-year energy 
savings resulting from the standard. (42 U.S.C. 6295(o)(2)(B)(iii) and 
6316(a)) DOE calculated a rebuttable-presumption PBP for each TSL to 
determine whether DOE could presume that a standard at that level is 
economically justified. DOE based the calculations on average usage 
profiles. As a result, DOE calculated a single rebuttable-presumption 
payback value, and not a distribution of PBPs, for each TSL. Table V.8 
shows the rebuttable-presumption PBPs for the considered TSLs. The 
rebuttable presumption is fulfilled in those cases where the PBP is 
three years or less. However, DOE routinely conducts an economic 
analysis that considers the full range of impacts to the customer, 
manufacturer, Nation, and environment, as required under 42 U.S.C. 
6295(o)(2)(B)(i) as applied to equipment via 42 U.S.C. 6316(a). The 
results of that analysis serve as the basis for DOE to definitively 
evaluate the economic justification for a potential standard level 
(thereby supporting or rebutting the results of any three-year PBP 
analysis). Section V.C addresses how DOE considered the range of 
impacts to select today's NOPR.

        Table V.8--Rebuttable-Presumption Payback Periods (Years)
------------------------------------------------------------------------
                                           Trial standard level
                                 ---------------------------------------
                                      1         2         3         4
------------------------------------------------------------------------
Equipment Class Group 1 *.......       0.6       0.8       1.2       4.3
Equipment Class Group 2 *.......       1.8       1.8       8.0       8.0
Equipment Class Group 3 *.......       0.0       0.0       900     5,464
Equipment Class Group 4 *.......       0.6       0.9       1.3       4.5
------------------------------------------------------------------------
* The results for each equipment class group (ECG) are a shipment
  weighted average of results for the representative units in the group.
  ECG 1: Representative units 1, 2, and 3; ECG 2: Representative units 4
  and 5; ECG 3: Representative units 6, 7, and 8; ECG 4: Representative
  units 9 and10.

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of new and amended 
energy conservation standards on manufacturers of electric motors. The 
section below describes the expected impacts on manufacturers at each 
TSL. Chapter 12 of the TSD explains the analysis in further detail.
    The tables below depict the financial impacts (represented by 
changes in INPV) of new and amended energy conservation standards on 
manufacturers as well as the conversion costs that DOE estimates 
manufacturers would incur at each TSL. DOE displays the INPV impacts by 
TSL for each ECG in accordance with the grouping described in detail in 
section V.A. To evaluate the range of cash flow impacts on the electric 
motor industry, DOE modeled three markup scenarios that correspond to 
the range of anticipated market responses to new and amended standards. 
Each markup scenario results in a unique set of cash flows and 
corresponding industry value at each TSL. All three markup scenarios 
are presented below. In the following discussion, the INPV results 
refer to the difference in industry value between the base case and the 
standards case that result from the sum of discounted cash flows from 
the base year (2013) through the end of the analysis period. The 
results also discuss the difference in cash flow between the base case 
and the standards case in the year before the compliance date for new 
and amended energy conservation standards. This figure represents how 
large the required conversion costs are relative to the cash flow 
generated by the industry in the absence of new and amended energy 
conservation standards. In the engineering analysis, DOE enumerates 
common technology options that achieve the efficiencies for each of the 
representative units within an ECG. For descriptions of these 
technology options and the required efficiencies at each TSL, see 
section IV.C of today's notice.
a. Industry Cash-Flow Analysis Results
    The results below show three INPV tables representing the three 
markup scenarios used for the analysis. The first table reflects the 
flat markup scenario, which is the upper (less severe) bound of 
impacts. To assess the lower end of the range of potential impacts, DOE 
modeled two potential markup scenarios, a two-tiered markup scenario 
and a preservation of operating profit markup scenario. As discussed in 
section IV.J.2.d, the two-tiered markup scenario assumes manufacturers 
offer two different tiers of markups--one for lower efficiency levels 
and one for higher efficiency levels. Meanwhile the preservation of 
operating profit markup scenario assumes that in the standards case, 
manufacturers would be able to earn the same operating margin in

[[Page 73656]]

absolute dollars in the standards case as in the base case. In general, 
the larger the product price increases, the less likely manufacturers 
are able to fully pass through additional costs due to standards 
calculated in the flat markup scenario.
    Table V.9, Table V.10, and Table V.11 present the projected results 
for all electric motors under the flat, two-tiered and preservation of 
operating profit markup scenarios. DOE examined all four ECGs (Design A 
and B motors, Design C motors, fire pump motors, and brake motors) 
together. The INPV results follow in the tables below.

                Table V.9--Manufacturer Impact Analysis for Electric Motors--Flat Markup Scenario
----------------------------------------------------------------------------------------------------------------
                                                                             Trial standard level
                                     Units        Base case  ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
INPV.........................  (2012$ millions)     $3,371.2     $3,378.7     $3,759.2     $4,443.7     $5,241.3
Change in INPV...............  (2012$ millions)  ...........         $7.5       $388.0     $1,072.5     $1,870.1
                               (%).............  ...........         0.2%        11.5%        31.8%        55.5%
Product Conversion Costs.....  (2012$ millions)  ...........         $6.1        $57.4       $611.7       $620.6
Capital Conversion Costs.....  (2012$ millions)  ...........         $0.0        $26.4       $220.5       $699.8
    Total Conversion Costs...  (2012$ millions)  ...........         $6.2        $83.7       $832.3     $1,320.4
----------------------------------------------------------------------------------------------------------------

            Table V.10--Manufacturer Impact Analysis for Electric Motors--Two-Tiered Markup Scenario
----------------------------------------------------------------------------------------------------------------
                                                                             Trial standard level
                                     Units        Base case  ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
INPV.........................  (2012$ millions)     $3,371.2     $3,374.3     $3,087.6     $2,979.6     $3,335.7
Change in INPV...............  (2012$ millions)  ...........         $3.2     $(283.5)     $(391.6)      $(35.5)
                               (%).............  ...........         0.1%        -8.4%       -11.6%        -1.1%
Product Conversion Costs.....  (2012$ millions)  ...........         $6.1        $57.4       $611.7       $620.6
Capital Conversion Costs.....  (2012$ millions)  ...........         $0.0        $26.4       $220.5       $699.8
    Total Conversion Costs...  (2012$ millions)  ...........         $6.2        $83.7       $832.3     $1,320.4
----------------------------------------------------------------------------------------------------------------

 Table V.11--Manufacturer Impact Analysis for Electric Motors--Preservation of Operating Profit Markup Scenario
----------------------------------------------------------------------------------------------------------------
                                                                             Trial standard level
                                     Units        Base case  ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
INPV.........................  (2012$ millions)     $3,371.2     $3,019.5     $3,089.7     $2,356.8     $1,383.1
Change in INPV...............  (2012$ millions)  ...........     $(351.7)     $(281.5)   $(1,014.4)   $(1,988.1)
                               (%).............  ...........       -10.4%        -8.4%       -30.1%       -59.0%
Product Conversion Costs.....  (2012$ millions)  ...........         $6.1        $57.4       $611.7       $620.6
Capital Conversion Costs.....  (2012$ millions)  ...........         $0.0        $26.4       $220.5       $699.8
    Total Conversion Costs...  (2012$ millions)  ...........         $6.2        $83.7       $832.3     $1,320.4
----------------------------------------------------------------------------------------------------------------

    TSL 1 represents EL 1 for ECG 1, ECG 2 and ECG 4 motors and 
baseline for ECG 2 motors. At TSL 1, DOE estimates impacts on INPV to 
range from $7.5 million to -$351.7 million, or a change in INPV of 0.2 
percent to -10.4 percent. At this proposed level, industry free cash 
flow is estimated to decrease by approximately 1.1 percent to $164.9 
million, compared to the base case value of $166.7 million in the year 
leading up to the proposed energy conservation standards.
    The INPV impacts at TSL 1 range from slightly positive to 
moderately negative, however DOE does not anticipate that manufacturers 
would lose a significant portion of their INPV at this TSL. This is 
because the vast majority of shipments already meets or exceeds the 
efficiency levels prescribed at TSL 1. DOE estimates that in the year 
of compliance, 90 percent of all electric motor shipments (90 percent 
of ECG 1, eight percent of ECG 2, 100 percent of ECG 3, and 67 percent 
of ECG 4 shipments) would meet the efficiency levels at TSL 1 or higher 
in the base case. Since ECG 1 shipments account for over 97 percent of 
all electric motor shipments the effects on those motors are the 
primary driver for the impacts at this TSL. Only a few ECG 1 shipments 
not currently covered by the existing electric motors rule and a small 
amount of ECG 2 and ECG 4 shipments would need to be converted at TSL 1 
to meet this efficiency standard.
    DOE expects conversion costs to be small compared to the industry 
value because most of the electric motor shipments, on a volume basis, 
already meet the efficiency levels analyzed at this TSL. DOE estimates 
product conversion costs of $6.1 million due to the proposed expanded 
scope of this rulemaking which includes motors previously not covered 
by the current electric motor energy conservation standards. DOE 
believes that at this TSL, there will be some engineering costs as well 
as testing and certification costs associated with this proposed scope 
expansion. DOE estimates the capital conversion costs to be minimal at 
TSL 1. This is mainly because almost all manufacturers currently 
produce some motors that are compliant at TSL 1 efficiency levels and 
it would not be much of a capital investment to bring all motor 
production to this efficiency level.
    TSL 2 represents EL 2 for ECG 1 and ECG 4 motors; EL 1 for ECG 2 
motors; and baseline for ECG 3 motors. At TSL 2, DOE estimates impacts 
on INPV to range from $388 million to -$283.5 million, or a change in 
INPV of 11.5 percent to -8.4 percent. At this

[[Page 73657]]

proposed level, industry free cash flow is estimated to decrease by 
approximately 17.2 percent to $138 million, compared to the base case 
value of $166.7 million in the year leading up to the proposed energy 
conservation standards.
    The INPV impacts at TSL 2 range from moderately positive to 
moderately negative. DOE estimates that in the year of compliance, 59 
percent of all electric motor shipments (60 percent of ECG 1, eight 
percent of ECG 2, 100 percent of ECG 3, and 30 percent of ECG 4 
shipments) would meet the efficiency levels at TSL 2 or higher in the 
base case. The majority of shipments are currently covered by an 
electric motors standard that requires general purpose Design A and B 
motors to meet this TSL. Therefore, only previously non-covered Design 
A and B motors and a few ECG 2 and ECG 4 motors would have to be 
converted at TSL 2 to meet this efficiency standard.
    DOE expects conversion costs to increase significantly from TSL 1, 
however, these conversion costs do not represent a large portion of the 
base case INPV, since again the majority of electric motor shipments 
already meet the efficiency levels analyzed at this TSL. DOE estimates 
product conversion costs of $57.4 million due to the proposed expanded 
scope of this rulemaking, which includes motors previously not covered 
by the current electric motor energy conservation standards and the 
inclusion of ECG 2 and ECG 4 motors. DOE believes there will be sizable 
engineering costs as well as testing and certification costs at this 
TSL associated with this proposed scope expansion. DOE estimates the 
capital conversion costs to be approximately $26.4 million at TSL 2. 
While most manufacturers already produce at least some motors that are 
compliant at TSL 2, these manufacturers would likely have to invest in 
expensive machinery to bring all motor production to these efficiency 
levels.
    TSL 3 represents EL 3 for ECG 1 and ECG 4 motors, EL 2 for ECG 2 
motors and EL 1 for ECG 3 motors. At TSL 3, DOE estimates impacts on 
INPV to range from $1,072.5 million to -$1,014.4 million, or a change 
in INPV of 31.8 percent to -30.1 percent. At this proposed level, 
industry free cash flow is estimated to decrease by approximately 167.5 
percent to -$112.5 million, compared to the base case value of $166.7 
million in the year leading up to the proposed energy conservation 
standards.
    The INPV impacts at TSL 3 range from significantly positive to 
significantly negative. DOE estimates that in the year of compliance, 
23 percent of all electric motor shipments (24 percent of ECG 1, less 
than one percent of ECG 2, 19 percent of ECG 3, and four percent of ECG 
4 shipments) would meet the efficiency levels at TSL 3 or higher in the 
base case. The majority of shipments would need to be converted to meet 
energy conservation standards at this TSL.
    DOE expects conversion costs to increase significantly at TSL 3 and 
become a substantial investment for manufacturers. DOE estimates 
product conversion costs of $611.7 million at TSL 3, since most 
electric motors in the base case do not exceed the current motor 
standards set at NEMA Premium for Design A and B motors, which 
represent EL 2 for ECG 1. DOE believes there would be a massive 
reengineering effort that manufacturers would have to undergo to have 
all motors meet this TSL. Additionally, motor manufacturers would have 
to increase the efficiency levels for ECG 2, ECG 3, and ECG 4 motors. 
DOE estimates the capital conversion costs to be approximately $220.5 
million at TSL 3. Most manufacturers would have to make significant 
investments to their production facilities in order to convert all 
their motors to be compliant at TSL 3.
    TSL 4 represents EL 4 for ECG 1 and ECG 4 motors, EL 3 for ECG 3 
motors and EL 2 for ECG 2 motors. At TSL 4, DOE estimates impacts on 
INPV to range from $1,870.1 million to -$1,988.1 million, or a change 
in INPV of 55.5 percent to -59.0 percent. At this proposed level, 
industry free cash flow is estimated to decrease by approximately 298.4 
percent to -$330.8 million, compared to the base case value of $166.7 
million in the year leading up to the proposed energy conservation 
standards.
    The INPV impacts at TSL 4 range from significantly positive to 
significantly negative. DOE estimates that in the year of compliance 
only eight percent of all electric motor shipments (nine percent of ECG 
1, less than one percent of ECG 2, zero percent of ECG 3, and less than 
one percent of ECG 4 shipments) would meet the efficiency levels at TSL 
2 or higher in the base case. Almost all shipments would need to be 
converted to meet energy conservation standards at this TSL.
    DOE expects conversion costs again to increase significantly from 
TSL 3 to TSL 4. Conversion costs at this TSL now represent a massive 
investment for electric motor manufacturers. DOE estimates product 
conversion costs of $620.6 million at TSL 4, which are the same 
conversion costs at TSL 3. DOE believes that manufacturers would need 
to completely reengineer almost all electric motors sold as well as 
test and certify those motors. DOE estimates capital conversion costs 
of $699.8 million at TSL 4. This is a significant increase in capital 
conversion costs from TSL 3 since manufacturers would need to adopt 
copper die-casting at this TSL. This technology requires a significant 
level of investment because the majority of the machinery would need to 
be replaced or significantly modified.
b. Impacts on Employment
    DOE quantitatively assessed the impact of potential new and amended 
energy conservation standards on direct employment. DOE used the GRIM 
to estimate the domestic labor expenditures and number of domestic 
production workers in the base case and at each TSL from the 
announcement of any potential new and amended energy conservation 
standards in 2013 to the end of the analysis period in 2044. DOE used 
statistical data from the U.S. Census Bureau's 2011 Annual Survey of 
Manufacturers (ASM), the results of the engineering analysis, and 
interviews with manufacturers to determine the inputs necessary to 
calculate industry-wide labor expenditures and domestic employment 
levels. Labor expenditures involved with the manufacturing of electric 
motors are a function of the labor intensity of the product, the sales 
volume, and an assumption that wages remain fixed in real terms over 
time.
    In the GRIM, DOE used the labor content of each product and the 
manufacturing production costs to estimate the annual labor 
expenditures of the industry. DOE used Census data and interviews with 
manufacturers to estimate the portion of the total labor expenditures 
attributable to domestic labor.
    The production worker estimates in this employment section cover 
only workers up to the line-supervisor level who are directly involved 
in fabricating and assembling an electric motor within a motor 
facility. Workers performing services that are closely associated with 
production operations, such as material handling with a forklift, are 
also included as production labor. DOE's estimates account for only 
production workers who manufacture the specific equipment covered by 
this rulemaking. For example, a worker on an electric motor line 
manufacturing a fractional horsepower motor (i.e. a motor with less 
than one horsepower) would not be included with this estimate of the 
number of electric motor workers, since

[[Page 73658]]

fractional motors are not covered by this rulemaking.
    The employment impacts shown in the tables below represent the 
potential production employment impact resulting from new and amended 
energy conservation standards. The upper bound of the results estimates 
the maximum change in the number of production workers that could occur 
after compliance with new and amended energy conservation standards 
when assuming that manufacturers continue to produce the same scope of 
covered equipment in the same production facilities. It also assumes 
that domestic production does not shift to lower-labor-cost countries. 
Because there is a real risk of manufacturers evaluating sourcing 
decisions in response to new and amended energy conservation standards, 
the lower bound of the employment results includes the estimated total 
number of U.S. production workers in the industry who could lose their 
jobs if all existing production were moved outside of the U.S. While 
the results present a range of employment impacts following 2015, the 
sections below also include qualitative discussions of the likelihood 
of negative employment impacts at the various TSLs. Finally, the 
employment impacts shown are independent of the indirect employment 
impacts from the broader U.S. economy, which are documented in chapter 
16 of the NOPR TSD.
    Based on 2011 ASM data and interviews with manufacturers, DOE 
estimates approximately 60 percent of electric motors sold in the U.S. 
are manufactured domestically. Using this assumption, DOE estimates 
that in the absence of new and amended energy conservation standards, 
there would be approximately 7,237 domestic production workers involved 
in manufacturing all electric motors covered by this rulemaking in 
2015. The table below shows the range of potential impacts of new and 
amended energy conservation standards for all ECGs on U.S. production 
workers in the electric motor industry. However, because ECG 1 motors 
comprise more than 97 percent of the electric motors covered by this 
rulemaking, DOE believes that potential changes in domestic employment 
will be driven primarily by the standards that are selected for ECG 1, 
Design A and B electric motors.

   Table V.12--Potential Changes in the Total Number of All Domestic Electric Motor Production Workers in 2015
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
            Base case                           ----------------------------------------------------------------
                                                       1              2                3                4
----------------------------------------------------------------------------------------------------------------
Total Number of Domestic                  7,237         7,270            7,420            8,287           15,883
 Production Workers in 2015
 (without changes in production
 locations)......................
Potential Changes in Domestic      ............          33-0        183-(362)    1,050-(3,619)    8,646-(7,237)
 Production Workers in 2015 *....
----------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employment impacts. Numbers in parentheses indicate negative numbers.

    Most manufacturers agree that any standards that involve expanding 
the scope of equipment required to meet NEMA Premium would not 
significantly change domestic employment levels. At this efficiency 
level (TSL 2), manufacturers would not be required to make major 
modifications to their production lines nor would they have to 
undertake new manufacturing processes. A few small business 
manufacturers who primarily make electric motors currently out of the 
scope of coverage, but whose equipment would be covered by new electric 
motor standards, could be impacted by efficiency standards at TSL 2. 
These impacts, including employment impacts, are discussed in section 
VI.B of today's NOPR. Overall, DOE believes there would not be a 
significant decrease in domestic employment levels at TSL 2. DOE 
created a lower bound of the potential loss of domestic employment at 
362 employees for TSL 2. DOE estimated only five percent of the 
electric motors market is comprised of manufacturers that do not 
currently produce any motors at NEMA Premium efficiency levels. DOE 
estimated that at most five percent of domestic electric motor 
manufacturing could potentially move abroad or exit the market 
entirely. DOE similarly estimated that all electric motor manufacturers 
produce some electric motors at or above TSL 1 efficiency levels. 
Therefore, DOE does not believe that any potential loss of domestic 
employment would occur at TSL 1.
    Manufacturers, however, cautioned that any standard set above NEMA 
Premium would require major changes to production lines, large 
investments in capital and labor, and would result in extensive 
stranded assets. This is largely because manufacturers would have to 
design and build motors with larger frame sizes and could potentially 
have to use copper, rather than aluminum rotors. Several manufacturers 
pointed out that this would require extensive retooling, vast 
engineering resources, and would ultimately result in a more labor-
intensive production process. Manufacturers generally agreed that a 
shift toward copper rotors would have uncertain impacts on energy 
efficiency and would cause companies to incur higher labor costs. These 
factors could cause manufacturers to consider moving production 
offshore to reduce labor costs or they may choose to exit the market 
entirely. Therefore, DOE believes it is more likely that efficiency 
standards set above NEMA Premium could result in a decrease of labor. 
Accordingly, DOE set the lower bound on the potential loss of domestic 
employment at 50 percent of the existing domestic labor market for TSL 
3 and 100 percent of the domestic labor market for TSL 4. However, 
these values represent the worst case scenario DOE modeled. 
Manufacturers also stated that larger motor manufacturing (that is for 
motors above 200 horsepower) would be very unlikely to move abroad 
since the shipping costs associated with those motors are very large. 
Consequently, DOE does not currently believe standards set at TSL 3 and 
TSL 4 would likely result in a large loss of domestic employment.
c. Impacts on Manufacturing Capacity
    Most manufacturers agreed that any standard expanding the scope of 
equipment required to meet NEMA Premium would not have a significant 
impact on manufacturing capacity. Manufacturers pointed out, however, 
that a standard that required them to use copper rotors would severely 
disrupt manufacturing capacity. Most manufacturers emphasized they do 
not currently have the machinery, technology, or engineering resources 
to produce copper rotors in-house. Some

[[Page 73659]]

manufacturers claim that the few manufacturers that do have the 
capability of producing copper rotors are not able to produce these 
motors in volumes sufficient to meet the demands of their customers. 
For manufacturers to either completely redesign their motor production 
lines or significantly expand their fairly limited copper rotor 
production line would require a massive retooling and engineering 
effort, which could take several years to complete. Most manufacturers 
stated they would have to outsource copper rotor production because 
they would not be able to modify their facilities and production 
processes to produce copper rotors in-house within a three year time 
period. Most manufacturers agreed that outsourcing rotor die casting 
would constrain capacity by creating a bottleneck in rotor production, 
as there are very few companies that produce copper rotors.
    Manufacturers also pointed out that there is substantial 
uncertainty surrounding the global availability and price of copper, 
which has the potential to constrain capacity. Several manufacturers 
expressed concern that the combination of all of these factors would 
make it difficult to support existing business while redesigning 
product lines and retooling. The need to support existing business 
would also cause the redesign effort to take several years.
    In summary, for those TSLs that require copper rotors, DOE believes 
there is a likelihood of capacity constraints in the near term due to 
fluctuations in the copper market and limited copper die casting 
machinery and expertise. However, for the levels proposed in this rule, 
DOE does not foresee any capacity constraints.
d. Impacts on Sub-Group of Manufacturers
    Using average cost assumptions to develop an industry cash-flow 
estimate may not be adequate for assessing differential impacts among 
manufacturer subgroups. Small manufacturers, niche equipment 
manufacturers, and manufacturers exhibiting cost structures 
substantially different from the industry average could be affected 
disproportionately. DOE analyzed the impacts to small businesses in 
section VI.B and did not identify any other adversely impacted electric 
motor-related subgroups for this rulemaking based on the results of the 
industry characterization.
e. Cumulative Regulatory Burden
    While any one regulation may not impose a significant burden on 
manufacturers, the combined effects of recent or impending regulations 
may have serious consequences for some manufacturers, groups of 
manufacturers, or an entire industry. Assessing the impact of a single 
regulation may overlook this cumulative regulatory burden. In addition 
to energy conservation standards, other regulations can significantly 
affect manufacturers' financial operations. Multiple regulations 
affecting the same manufacturer can strain profits and lead companies 
to abandon product lines or markets with lower expected future returns 
than competing equipment. For these reasons, DOE conducts an analysis 
of cumulative regulatory burden as part of its rulemakings pertaining 
to appliance efficiency.
    During previous stages of this rulemaking, DOE identified a number 
of requirements, in addition to new and amended energy conservation 
standards for electric motors, that manufacturers will face for 
equipment they manufacture approximately three years prior to and three 
years after the compliance date of the new and amended standards. The 
following section briefly addresses comments DOE received with respect 
to cumulative regulatory burden and summarizes other key related 
concerns that manufacturers raised during interviews.
    Several manufacturers expressed concern about the compliance date 
of this rulemaking to the proximity of the 2015 compliance date for the 
small electric motors rulemaking at 75 FR 10874 (March 9, 2010). Most 
manufacturers of electric motors covered by this rulemaking also 
produce electric motors that are covered by the small electric motors 
rulemaking. Manufacturers stated that adopting these two regulations in 
a potentially short timeframe could strain R&D and capital expenditure 
budgets for motor manufacturers. Some manufacturers also raised 
concerns about other existing regulations separate from DOE's energy 
conservation standards that electric motors must meet: the National 
Fire Protection Association (NFPA) 70, National Electric Code; the NFPA 
20, Standard for the Installation of Stationary Pumps for Fire 
Protection; and Occupational Safety and Health Administration (OSHA) 
regulations. DOE discusses these and other requirements in chapter 12 
of the NOPR TSD. DOE takes into account the cost of compliance with 
other published Federal energy conservation standards in weighing the 
benefits and burdens of today's proposed rulemaking. In the 2010 small 
motors final rule, DOE estimated that manufacturers may lose up to 11.3 
percent of their INPV, which was approximately $39.5 million, in 2009$. 
To see the range of impacts DOE estimated for the small motors rule, 
see chapter 12 of the NOPR TSD. DOE does not describe the quantitative 
impacts of standards that have not yet been finalized because any 
impacts would be highly speculative. DOE also notes that certain 
standards are optional for manufacturers and takes that into account 
when creating the cumulative regulatory burden analysis.
3. National Impact Analysis
a. Significance of Energy Savings
    For each TSL, DOE projected energy savings for electric motors 
purchased in the 30-year period that begins in the year of compliance 
with new and amended standards (2015-2044). The savings are measured 
over the entire lifetime of equipment purchased in the 30-year period. 
DOE quantified the energy savings attributable to each TSL as the 
difference in energy consumption between each standards case and the 
base case. Table V.13 presents the estimated primary energy savings for 
each considered TSL, and Table V.14 presents the estimated FFC energy 
savings for each considered TSL. The approach for estimating national 
energy savings is further described in section IV.H.

 Table V.13--Cumulative Primary Energy Savings for Electric Motors Trial
               Standard Levels for Units Sold in 2015-2044
------------------------------------------------------------------------
                                           Trial standard level
         Equipment class         ---------------------------------------
                                      1         2         3         4
------------------------------------------------------------------------
                                                   quads
------------------------------------------------------------------------
Group 1 (NEMA Design A and B)...      0.82      6.27      9.86     12.64

[[Page 73660]]

 
Group 2 (NEMA Design C).........      0.02      0.02      0.03      0.03
Group 3 (Fire Pump Electric           0.00      0.00      0.00      0.00
 Motors)........................
Group 4 (Brake Motors)..........      0.26      0.58      0.71      0.81
    Total All Classes...........      1.10      6.87     10.60     13.49
------------------------------------------------------------------------

   Table V.14--Cumulative Full-Fuel-Cycle Energy Savings for Electric
        Motors Trial Standard Levels for Units Sold in 2015-2044
------------------------------------------------------------------------
                                           Trial standard level
         Equipment class         ---------------------------------------
                                      1         2         3         4
------------------------------------------------------------------------
                                                   quads
------------------------------------------------------------------------
Group 1 (NEMA Design A and B)...      0.83      6.38     10.02     12.85
Group 2 (NEMA Design C).........      0.02      0.02      0.03      0.03
Group 3 (Fire Pump Electric           0.00      0.00      0.00      0.00
 Motors)........................
Group 4 (Brake Motors)..........      0.26      0.59      0.73      0.83
    Total All Classes...........      1.11      6.98     10.78     13.71
------------------------------------------------------------------------

    Circular A-4 requires agencies to present analytical results, 
including separate schedules of the monetized benefits and costs that 
show the type and timing of benefits and costs. Circular A-4 also 
directs agencies to consider the variability of key elements underlying 
the estimates of benefits and costs. For this rulemaking, DOE undertook 
a sensitivity analysis using nine rather than 30 years of equipment 
shipments. The choice of a nine-year period is a proxy for the timeline 
in EPCA for the review of certain energy conservation standards and 
potential revision of and compliance with such revised standards.\87\ 
We would note that the review timeframe established in EPCA generally 
does not overlap with the equipment lifetime, equipment manufacturing 
cycles or other factors specific to electric motors. Thus, this 
information is presented for informational purposes only and is not 
indicative of any change in DOE's analytical methodology. The NES 
results based on a 9-year analytical period are presented in Table 
V.15. The impacts are counted over the lifetime of electric motors 
purchased in 2015-2023.
---------------------------------------------------------------------------

    \87\ EPCA requires DOE to review its standards at least once 
every 6 years, and requires, for certain products, a 3-year period 
after any new standard is promulgated before compliance is required, 
except that in no case may any new standards be required within 6 
years of the compliance date of the previous standards. While adding 
a 6-year review to the 3-year compliance period adds up to 9 years, 
DOE notes that it may undertake reviews at any time within the 6 
year period and that the 3-year compliance date may yield to the 6-
year backstop. A 9-year analysis period may not be appropriate given 
the variability that occurs in the timing of standards reviews and 
the fact that for some consumer products, the compliance period is 5 
years rather than 3 years.

Table V.15--Cumulative National Energy Savings for Electric Motors Trial
               Standard Levels for Units Sold in 2015-2023
------------------------------------------------------------------------
                                           Trial standard level
         Equipment class         ---------------------------------------
                                      1         2         3         4
------------------------------------------------------------------------
                                                   quads
------------------------------------------------------------------------
Group 1 (NEMA Design A and B)...     0.355     1.440     2.168     2.833
Group 2 (NEMA Design C).........     0.004     0.004     0.006     0.006
Group 3 (Fire Pump Electric          0.000     0.000     0.000     0.000
 Motors)........................
Group 4 (Brake Motors)..........     0.060     0.125     0.152     0.176
    Total All Classes...........     0.420     1,569     2.326     3.015
------------------------------------------------------------------------

b. Net Present Value of Customer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
customers that would result from the TSLs considered for electric 
motors. In accordance with OMB's guidelines on regulatory analysis,\88\ 
DOE calculated the NPV using both a 7-percent and a 3-percent real 
discount rate. The 7-percent rate is an estimate of the average before-
tax rate of return on private capital in the U.S. economy, and reflects 
the returns on real estate and small business capital as well as 
corporate capital. This discount rate approximates the opportunity cost 
of capital in the private sector (OMB analysis has found the average 
rate of return on capital to be near this rate). The 3-percent rate 
reflects the potential effects of standards on private consumption 
(e.g., through higher prices for equipment and reduced purchases of 
energy). This rate represents the rate at which society discounts 
future consumption flows to

[[Page 73661]]

their present value. It can be approximated by the real rate of return 
on long-term government debt (i.e., yield on United States Treasury 
notes), which has averaged about 3 percent for the past 30 years.
---------------------------------------------------------------------------

    \88\ OMB Circular A-4, section E (Sept. 17, 2003). http://www.whitehouse.gov/omb/circulars_a004_a-4.
---------------------------------------------------------------------------

    Table V.16 shows the customer NPV results for each TSL considered 
for electric motors. In each case, the impacts cover the lifetime of 
equipment purchased in 2015-2044.

 Table V.16--Net Present Value of Customer Benefits for Electric Motors Trial Standard Levels for Units Sold in
                                                    2015-2044
                                                 [Billion 2012$]
----------------------------------------------------------------------------------------------------------------
                                                                               Trial standard level
                   Equipment class                     Discount  -----------------------------------------------
                                                        rate %         1           2           3           4
----------------------------------------------------------------------------------------------------------------
Group 1 (NEMA Design A and B).......................  ..........         4.5        20.7         1.5       -41.2
Group 2 (NEMA Design C).............................  ..........         0.0         0.0         0.0         0.0
Group 3 (Fire Pump Electric Motors).................           3         0.0         0.0         0.0         0.0
Group 4 (Brake Motors)..............................  ..........         1.3         2.5         1.5        -1.2
    Total All Classes...............................  ..........         5.8        23.3         3.0       -42.4
----------------------------------------------------------------------------------------------------------------
Group 1 (NEMA Design A and B).......................  ..........         2.2         7.7        -3.7       -29.1
Group 2 (NEMA Design C).............................  ..........         0.0         0.0         0.0         0.0
Group 3 (Fire Pump Electric Motors).................           7         0.0         0.0         0.0         0.0
Group 4 (Brake Motors)..............................  ..........         0.5         1.0         0.3        -1.2
    Total All Classes...............................  ..........         2.7         8.7        -3.4       -30.3
----------------------------------------------------------------------------------------------------------------

    The NPV results based on the afore-mentioned 9-year analytical 
period are presented in Table V.17. The impacts are counted over the 
lifetime of equipment purchased in 2015-2023. As mentioned previously, 
this information is presented for informational purposes only and is 
not indicative of any change in DOE's analytical methodology or 
decision criteria.

 Table V.17--Net Present Value of Customer Benefits for Electric Motors Trial Standard Levels for Units Sold in
                                                    2015-2023
                                                 [Billion 2012$]
----------------------------------------------------------------------------------------------------------------
                                                                               Trial standard level
                   Equipment class                     Discount  -----------------------------------------------
                                                        rate %         1           2           3           4
----------------------------------------------------------------------------------------------------------------
Group 1 (NEMA Design A and B).......................  ..........       2.253       6.473       2.541     -12.055
Group 2 (NEMA Design C).............................  ..........       0.011       0.011      -0.012      -0.012
Group 3 (Fire Pump Electric Motors).................           3       0.000       0.000      -0.001      -0.009
Group 4 (Brake Motors)..............................  ..........       0.389       0.706       0.495      -0.372
    Total All Classes...............................  ..........       2.654       7.190       3.023     -12.448
----------------------------------------------------------------------------------------------------------------
Group 1 (NEMA Design A and B).......................  ..........       1.344       3.492      -0.102     -12.017
Group 2 (NEMA Design C).............................  ..........       0.005       0.005      -0.016      -0.016
Group 3 (Fire Pump Electric Motors).................           7       0.000       0.000      -0.001      -0.007
Group 4 (Brake Motors)..............................  ..........       0.225       0.391       0.201      -0.498
    Total All Classes...............................  ..........       1.574       3.887       0.083     -12.537
----------------------------------------------------------------------------------------------------------------

c. Indirect Impacts on Employment
    DOE expects energy conservation standards for electric motors to 
reduce energy costs for equipment owners, and the resulting net savings 
to be redirected to other forms of economic activity. Those shifts in 
spending and economic activity could affect the demand for labor. As 
described in section IV.N, DOE used an input/output model of the U.S. 
economy to estimate indirect employment impacts of the TSLs that DOE 
considered in this rulemaking. DOE understands that there are 
uncertainties involved in projecting employment impacts, especially 
changes in the later years of the analysis. Therefore, DOE generated 
results for near-term time frames (2015-2019), where these 
uncertainties are reduced.
    The results suggest that today's standards are likely to have 
negligible impact on the net demand for labor in the economy. The net 
change in jobs is so small that it would be imperceptible in national 
labor statistics and might be offset by other, unanticipated effects on 
employment. Chapter 16 of the NOPR TSD presents detailed results.
4. Impact on Utility or Performance
    DOE believes that the standards it is proposing today will not 
lessen the utility or performance of electric motors.
5. Impact of Any Lessening of Competition
    DOE has also considered any lessening of competition that is likely 
to result from new and amended standards. The Attorney General 
determines the impact, if any, of any lessening of competition likely 
to result from a proposed standard, and transmits such determination to 
the Secretary, together with an analysis of the nature and extent of 
such impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii))
    To assist the Attorney General in making such determination, DOE 
will provide DOJ with copies of this NOPR and the TSD for review. DOE 
will consider DOJ's comments on the proposed rule in preparing the 
final rule, and DOE will publish and respond to DOJ's comments in that 
document.

[[Page 73662]]

6. Need of the Nation To Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts or costs of energy production. Reduced 
electricity demand due to energy conservation standards is also likely 
to reduce the cost of maintaining the reliability of the electricity 
system, particularly during peak-load periods. As a measure of this 
reduced demand, chapter 15 in the NOPR TSD presents the estimated 
reduction in generating capacity in 2044 for the TSLs that DOE 
considered in this rulemaking.
    Energy savings from standards for electric motors could also 
produce environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases associated with electricity production. 
Table V.18 provides DOE's estimate of cumulative emissions reductions 
projected to result from the TSLs considered in this rulemaking. DOE 
reports annual emissions reductions for each TSL in chapter 13 of the 
NOPR TSD.

         Table V.18--Cumulative Emissions Reduction Estimated for Electric Motors Trial Standard Levels
----------------------------------------------------------------------------------------------------------------
                                                                               Trial standard level
                                                                 -----------------------------------------------
                                                                       1           2           3           4
----------------------------------------------------------------------------------------------------------------
                                            Primary Energy Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................................        62.4       374.1       576.0       733.3
NOX (thousand tons).............................................       105.3       669.7     1,034.7     1,315.5
SO2 (thousand tons).............................................        33.5       196.3       301.9       384.5
Hg (tons).......................................................         0.1         0.8         1.3         1.6
N2O (thousand tons).............................................         1.2         8.3        12.9        16.4
CH4 (thousand tons).............................................         7.3        46.3        71.6        91.0
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................................         3.5        22.0        34.0        43.2
NOX (thousand tons).............................................         0.8         4.7         7.3         9.3
SO2 (thousand tons).............................................        48.6       303.1       467.8       595.0
Hg (tons).......................................................         0.0         0.0         0.0         0.0
N2O (thousand tons).............................................         0.0         0.2         0.3         0.4
CH4 (thousand tons).............................................       294.8     1,841.4     2,841.9     3,614.6
----------------------------------------------------------------------------------------------------------------
                                                 Total Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................................        65.9       396.1       610.0       776.5
NOX (thousand tons).............................................       106.0       674.4     1,042.0     1,324.8
SO2 (thousand tons).............................................        82.1       499.4       769.6       979.5
Hg (tons).......................................................         0.1         0.8         1.3         1.6
N2O (thousand tons).............................................         1.3         8.5        13.2        16.8
CH4 (thousand tons).............................................       302.2     1,887.7     2,913.5     3,705.5
----------------------------------------------------------------------------------------------------------------

    As part of the analysis for this rule, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
and NOX that DOE estimated for each of the TSLs considered. 
As discussed in section IV.L, DOE used values for the SCC developed by 
an interagency process. The four sets of SCC values resulting from that 
process (expressed in 2012$) are represented by $12.9/metric ton (the 
average value from a distribution that uses a 5-percent discount rate), 
$40.8/metric ton (the average value from a distribution that uses a 3-
percent discount rate), $62.2/metric ton (the average value from a 
distribution that uses a 2.5-percent discount rate), and $117.0/metric 
ton (the 95th-percentile value from a distribution that uses a 3-
percent discount rate). These values correspond to the value of 
emission reductions in 2015; the values for later years are higher due 
to increasing damages as the projected magnitude of climate change 
increases.
    Table V.19 presents the global value of CO2 emissions 
reductions at each TSL. For each of the four cases, DOE calculated a 
present value of the stream of annual values using the same discount 
rate as was used in the studies upon which the dollar-per-ton values 
are based. DOE calculated domestic values as a range from 7 percent to 
23 percent of the global values, and these results are presented in 
chapter 14 of the NOPR TSD.

[[Page 73663]]

  Table V.19--Estimates of Global Present Value of CO2 Emissions Reduction Under Electric Motors Trial Standard
                                                     Levels
                                                 [Million 2012$]
----------------------------------------------------------------------------------------------------------------
                                                                            SCC Case *
                                                 ---------------------------------------------------------------
                       TSL                          5% discount     3% discount    2.5% discount    3% discount
                                                   rate, average   rate, average   rate, average    rate, 95th
                                                         *               *               *         percentile *
----------------------------------------------------------------------------------------------------------------
                                            Primary Energy Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................             433           1,961           3,113           6,040
2...............................................           2,366          11,179          17,876          34,552
3...............................................           3,622          17,159          27,452          53,047
4...............................................           4,622          21,871          34,985          67,609
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................              24             110             174             338
2...............................................             136             650           1,042           2,012
3...............................................             209           1,001           1,604           3,097
4...............................................             266           1,274           2,042           3,943
----------------------------------------------------------------------------------------------------------------
                                                 Total Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................             457           2,071           3,287           6,378
2...............................................           2,502          11,829          18,918          36,564
3...............................................           3,831          18,159          29,056          56,143
4...............................................           4,888          23,145          37,027          71,552
----------------------------------------------------------------------------------------------------------------
\*\ For each of the four cases, the corresponding SCC value for emissions in 2015 is $11.8, $39.7, $61.2, and
  $117.0 per metric ton (2012$).

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other greenhouse gas (GHG) emissions 
to changes in the future global climate and the potential resulting 
damages to the world economy continues to evolve rapidly. Thus, any 
value placed on reducing CO2 emissions in this rulemaking is 
subject to change. DOE, together with other Federal agencies, will 
continue to review various methodologies for estimating the monetary 
value of reductions in CO2 and other GHG emissions. This 
ongoing review will consider the comments on this subject that are part 
of the public record for this and other rulemakings, as well as other 
methodological assumptions and issues. However, consistent with DOE's 
legal obligations, and taking into account the uncertainty involved 
with this particular issue, DOE has included in this proposed rule the 
most recent values and analyses resulting from the ongoing interagency 
review process.
    DOE also estimated a range for the cumulative monetary value of the 
economic benefits associated with NOX emissions reductions 
anticipated to result from new and amended standards for electric 
motors. The low and high dollar-per-ton values that DOE used are 
discussed in section IV.L present the cumulative present values for 
each TSL calculated using seven-percent and three-percent discount 
rates.

 Table V.20--Estimates of Present Value of NOX Emissions Reduction Under
                  Electric Motors Trial Standard Levels
                             [Million 2012$]
------------------------------------------------------------------------
                                            3% discount     7% discount
                   TSL                         rate            rate
------------------------------------------------------------------------
                         Power Sector Emissions
------------------------------------------------------------------------
1.......................................            49.5            26.4
2.......................................           257.1           120.2
3.......................................           392.2           181.6
4.......................................           501.3           233.2
------------------------------------------------------------------------
                           Upstream Emissions
------------------------------------------------------------------------
1.......................................            68.0            33.8
2.......................................           378.4           164.8
3.......................................           579.9           250.3
4.......................................           739.7           320.6
------------------------------------------------------------------------
                             Total Emissions
------------------------------------------------------------------------
1.......................................           117.5            60.2
2.......................................           635.4           285.0
3.......................................           972.2           432.0
4.......................................         1,241.0           553.8
------------------------------------------------------------------------

7. Summary of National Economic Impacts
    The NPV of the monetized benefits associated with emissions 
reductions can be viewed as a complement to the NPV of the customer 
savings calculated for each TSL considered in this rulemaking. Table 
V.21 presents the NPV values that result from adding the estimates of 
the potential economic benefits resulting from reduced CO2 
and NOX emissions in each of four valuation scenarios to the 
NPV of customer savings calculated for each TSL considered in this 
rulemaking, at both a seven-percent and three-percent discount rate. 
The CO2 values used in the columns of each table correspond 
to the four sets of SCC values discussed above.

[[Page 73664]]

Table V.21--Net Present Value of Customer Savings Combined With Net Present Value of Monetized Benefits From CO2
                                          and NOX Emissions Reductions
                                                 [Billion 2012$]
----------------------------------------------------------------------------------------------------------------
                                          SCC Case  $11.8/  SCC Case  $39.7/  SCC Case  $61.2/  SCC Case  $117.0/
                                          metric  ton CO2*  metric  ton CO2*  metric  ton CO2*  metric  ton CO2*
                   TSL                     and  low value      and  medium       and  medium     and  high value
                                              for NOX**     value  for NOX**  value  for NOX**      for NOX**
----------------------------------------------------------------------------------------------------------------
                                                       Customer NPV at 3% discount rate added with:
                                         -----------------------------------------------------------------------
1.......................................               6.3               8.0               9.2              12.4
2.......................................              25.9              35.7              42.8              61.0
3.......................................               7.0              22.1              33.0              60.9
4.......................................             -37.3             -18.0              -4.1              31.4
----------------------------------------------------------------------------------------------------------------
                                                       Customer NPV at 7% discount rate added with:
                                         -----------------------------------------------------------------------
1.......................................               3.2               4.8               6.1               9.2
2.......................................              11.2              20.8              27.9              45.7
3.......................................               0.5              15.2              26.1              53.5
4.......................................             -25.3              -6.6               7.3              42.3
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2015, in 2012$.
** Low Value corresponds to $468 per ton of NOX emissions. Medium Value corresponds to $2,639 per ton, and High
  Value corresponds to $4,809 per ton.

    Although adding the value of customer savings to the values of 
emission reductions provides a valuable perspective, two issues should 
be considered. First, the national operating cost savings are domestic 
U.S. customer monetary savings that occur as a result of market 
transactions, while the value of CO2 reductions is based on 
a global value. Second, the assessments of operating cost savings and 
the SCC are performed with different methods that use quite different 
time frames for analysis. The national operating cost savings is 
measured for the lifetime of equipment shipped in 2015-2044. The SCC 
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one metric ton of 
CO2 in each year. These impacts continue well beyond 2100.
8. Other Factors
    The Secretary of Energy, in determining whether a standard is 
economically justified, may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) No 
other factors were considered in this analysis.

C. Proposed Standards

    When considering proposed standards, the new or amended energy 
conservation standard that DOE adopts for any type (or class) of 
covered equipment shall be designed to achieve the maximum improvement 
in energy efficiency that the Secretary of Energy determines is 
technologically feasible and economically justified. (42 U.S.C. 
6295(o)(2)(A) and 6316(a)) In determining whether a standard is 
economically justified, the Secretary must determine whether the 
benefits of the standard exceed its burdens to the greatest extent 
practicable, considering the seven statutory factors discussed 
previously. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(a)) The new or amended 
standard must also ``result in significant conservation of energy.'' 
(42 U.S.C. 6295(o)(3)(B) and 6316(a))
    For today's NOPR, DOE considered the impacts of standards at each 
TSL, beginning with the max-tech level, to determine whether that level 
was economically justified. Where the max-tech level was not justified, 
DOE then considered the next most efficient level and undertook the 
same evaluation until it reached the highest efficiency level that is 
technologically feasible, economically justified and saves a 
significant amount of energy. Throughout this process DOE also 
considered the recommendations made by the Motors Coalition and other 
stakeholders in their submitted comments. For more details on the 
Motors Coalition see Section II.B.2.
    To aid the reader in understanding the benefits and/or burdens of 
each TSL, tables in this section summarize the quantitative analytical 
results for each TSL, based on the assumptions and methodology 
discussed herein. The efficiency levels contained in each TSL are 
described in section V.A. In addition to the quantitative results 
presented in the tables, DOE also considers other burdens and benefits 
that affect economic justification. These include the impacts on 
identifiable subgroups of customers who may be disproportionately 
affected by a national standard, and impacts on employment. Section 
V.B.1.b presents the estimated impacts of each TSL for the considered 
subgroup. DOE discusses the impacts on employment in electric motor 
manufacturing in section V.B.2.b, and discusses the indirect employment 
impacts in section V.B.3.c.
1. Benefits and Burdens of Trial Standard Levels Considered for 
Electric Motors
    Table V.22 and Table V.23 summarize the quantitative impacts 
estimated for each TSL for electric motors.

                 Table V.22--Summary of Analytical Results for Electric Motors: National Impacts
----------------------------------------------------------------------------------------------------------------
            Category                     TSL 1               TSL 2               TSL 3               TSL 4
----------------------------------------------------------------------------------------------------------------
National Full-Fuel-Cycle Energy
 Savings quads:
                                  1.1...............  7.0...............  10.8..............  13.7
NPV of Consumer Benefits 2012$
 billion:

[[Page 73665]]

 
    3% discount rate............  5.8...............  23.3..............  3.0...............  -42.4
    7% discount rate............  2.7...............  8.7...............  -3.4..............  -30.3
Cumulative Emissions Reduction
 (Total FFC Emissions):
    CO2 million metric tons.....  65.9..............  396.1.............  610.0.............  776.5
    SO2 thousand tons...........  106.0.............  674.4.............  1,042.0...........  1,324.8
    NOX thousand tons...........  82.1..............  499.4.............  769.6.............  979.5
    Hg tons.....................  0.1...............  0.8...............  1.3...............  1.6
    N2O thousand tons...........  1.3...............  8.5...............  13.2..............  16.8
    CH4 thousand tons...........  302.2.............  1,887.7...........  2,913.5...........  3,705.5
Value of Emissions Reduction
 (Total FFC Emissions):
    CO2 2012$ million*..........  457 to 6,378......  2,502 to 36,564...  3,831 to 56,143...  4,888 to 71,552
    NOX--3% discount rate 2012$   117.5.............  635.4.............  972.2.............  1,241.0
     million.
NOX--7% discount rate 2012$       60.2..............  285.0.............  432.0.............  553.8
 million.
----------------------------------------------------------------------------------------------------------------
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2
  emissions.

        Table V.23--Summary of Analytical Results for Electric Motors: Manufacturer and Consumer Impacts
----------------------------------------------------------------------------------------------------------------
                    Category                           TSL 1           TSL 2           TSL 3           TSL 4
----------------------------------------------------------------------------------------------------------------
Manufacturer Impacts:
    Industry NPV 2012$ million..................        3,378.7-        3,759.2-        4,443.7-        5,241.3-
                                                         3,019.5         3,087.6         2,356.8         1,383.1
    Industry NPV % change.......................      0.2-(10.4)      11.5-(8.4)     31.8-(30.1)     55.5-(59.0)
Consumer Mean LCC Savings * 2012$:
    Equipment Class Group 1.....................              43             132              68            -417
    Equipment Class Group 2.....................              38              38            -285            -285
    Equipment Class Group 3.....................          N/A **          N/A **             -61            -763
    Equipment Class Group 4.....................             137             259             210            -291
Consumer Median PBP * years:
    Equipment Class Group 1.....................             1.1             3.3             6.7            29.9
    Equipment Class Group 2.....................             5.0             5.0            22.8            22.8
    Equipment Class Group 3.....................          N/A **          N/A **           3,299          11,957
    Equipment Class Group 4.....................             1.2             1.9             3.7            16.0
Equipment Class Group 1:
    Net Cost %..................................             0.3             8.4            38.0            84.6
    Net Benefit %...............................             9.7            32.0            40.4             7.6
    No Impact %.................................            90.0            59.6            21.5             7.7
Equipment Class Group 2:
    Net Cost %..................................            21.5            21.5            94.7            94.7
    Net Benefit %...............................            68.6            68.6             5.3             5.3
    No Impact %.................................             9.9             9.9             0.0             0.0
Equipment Class Group 3:
    Net Cost (%)................................             0.0             0.0            81.7           100.0
    Net Benefit (%).............................             0.0             0.0             0.0             0.0
    No Impact (%)...............................             0.0             0.0            18.3             0.0
Equipment Class Group 4:
    Net Cost (%)................................             1.0            10.8            33.1            79.6
    Net Benefit (%).............................            31.8            60.8            65.8            19.9
    No Impact (%)...............................            67.3            28.4             1.1             0.3
----------------------------------------------------------------------------------------------------------------
** The results for each equipment class group (ECG) are a shipment weighted average of results for the
  representative units in the group. ECG 1: Representative units 1, 2, and 3; ECG 2: Representative units 4 and
  5; ECG 3: Representative units 6, 7, and 8; ECG 4: Representative units 9 and 10.
** For equipment class group 3, TSL 1 and 2 are the same as the baseline; thus, no customers are affected.

    First, DOE considered TSL 4, the most efficient level (max tech), 
which would save an estimated total of 13.7 quads of energy, an amount 
DOE considers significant. TSL 4 has an estimated NPV of customer 
benefit of -30.3 billion using a 7 percent discount rate, and -42.4 
billion using a 3 percent discount rate.
    The cumulative emissions reductions at TSL 4 are 776.5 million 
metric tons of CO2, 979.5 thousand tons of NOX, 
1,324.8 thousand tons of SO2, and 1.6 tons of Hg. The 
estimated monetary value of the CO2 emissions reductions at 
TSL 4 ranges from $4,888 million to $71,552 million.
    At TSL 4, the weighted average LCC impact ranges from $-763 for ECG 
3 to $-285 for ECG 2. The weighted average median PBP ranges from 16 
years for ECG 4 to 11,957 years for ECG 3. The weighted average share 
of customers experiencing a net LCC benefit ranges from 0 percent for 
ECG 3 to 19.9 percent for ECG 4.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$1,988.1 million to an increase of $1,870.1 million. If the decrease of 
$1,988.1 million were to occur, TSL 4 could result in a net loss of 59 
percent in INPV to manufacturers of covered electric motors.
    In view of the foregoing, DOE concludes that, at TSL 4 for electric

[[Page 73666]]

motors, the benefits of energy savings, emission reductions, and the 
estimated monetary value of the emissions reductions would be 
outweighed by the potential multi-billion dollar negative net economic 
cost; the economic burden on customers as indicated by the increase in 
customer LCC (negative savings), large PBPs, the large percentage of 
customers who would experience LCC increases; the increase in the 
cumulative regulatory burden on manufacturers; and the capital and 
engineering costs that could result in a large reduction in INPV for 
manufacturers at TSL 4. Additionally, DOE believes that efficiency 
standards at this level, could result in significant impacts on OEMs 
due to larger and faster motors. Although DOE has not quantified these 
potential impacts, DOE believes that it is possible that these impacts 
could be significant and further reduce any potential benefits of 
standards established at this TSL. Consequently, DOE has concluded that 
TSL 4 is not economically justified.
    Next, DOE considered TSL 3, which would save an estimated total of 
10.6 quads of energy, an amount DOE considers significant. TSL 3 has an 
estimated NPV of customer benefit of $-3.4 billion using a 7 percent 
discount rate, and $3.0 billion using a 3 percent discount rate.
    The cumulative emissions reductions at TSL 3 are 610.0 million 
metric tons of CO2, 769.6 thousand tons of NOX, 
1,042.0 thousand tons of SO2, and 1.3 tons of Hg. The 
estimated monetary value of the CO2 emissions reductions at 
TSL 4 ranges from $3,831 million to $ 56,143 million.
    At TSL 3, the weighted average LCC impact ranges from $-285 for ECG 
2 to $210 for ECG 4. The weighted average median PBP ranges from 3.7 
years for ECG 4 to 3,299 years for ECG 3. The share of customers 
experiencing a net LCC benefit ranges from 0 percent for ECG 3 to 65.8 
percent for ECG 4.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$1,014,4 million to an increase of $1,072.5 million. If the decrease of 
$1,014.4 million were to occur, TSL 3 could result in a net loss of 
30.1 percent in INPV to manufacturers of covered electric motors.
    In view of the foregoing, DOE concludes that, at TSL 3 for electric 
motors, the benefits of energy savings, positive weighted average 
customer LCC savings for some ECGs, generating capacity reductions, 
emission reductions, and the estimated monetary value of the emissions 
reductions would be outweighed by the potential negative net economic 
cost; the economic burden on customers as indicated by the increase in 
weighted average LCC for some ECGs (negative savings), large PBPs, the 
large percentage of customers who would experience LCC increases; the 
increase in the cumulative regulatory burden on manufacturers; and the 
capital and engineering costs that could result in a large reduction in 
INPV for manufacturers at TSL 3. Additionally, DOE believes that 
efficiency standards at this level could result in significant impacts 
on OEMs due to larger and faster motors. Although DOE has not 
quantified these potential impacts, DOE believes that it is possible 
that these impacts could be significant and further reduce any 
potential benefits of standards established at this TSL. Consequently, 
DOE has concluded that TSL 3 is not economically justified.
    Next, DOE considered TSL 2, which would save an estimated total of 
7.0 quads of energy, an amount DOE considers significant. TSL 2 has an 
estimated NPV of customer benefit of $8.7 billion using a 7 percent 
discount rate, and $23.3 billion using a 3 percent discount rate.
    The cumulative emissions reductions at TSL 2 are 396.1 million 
metric tons of CO2, 674.4 thousand tons of NOX, 
499.4 thousand tons of SO2, and 0.8 tons of Hg. The 
estimated monetary value of the CO2 emissions reductions at 
TSL 4 ranges from $2,502 million to $36,564 million.
    At TSL 2, the weighted average LCC impact ranges from no impacts 
for ECG 3 to $259 for ECG 4. The weighted average median PBP ranges 
from 0 years for ECG 3 to 5 years for ECG 2. The share of customers 
experiencing a net LCC benefit ranges from 0 percent for ECG 3 to 68.6 
percent for ECG 2. The share of motors already at TSL 2 efficiency 
levels varies by equipment class group and by horsepower range (from 0 
to 62 percent). For ECG 1, which represents the most significant share 
of the market, about 30 percent of motors meet the TSL 2 levels.
    At TSL 2, the projected change in INPV ranges from a decrease of 
$283.5 million to an increase of $388 million. If the decrease of 
$283.5 million were to occur, TSL 2 could result in a net loss of 8.4 
percent in INPV to manufacturers of covered electric motors.
    After considering the analysis and weighing the benefits and the 
burdens, DOE has tentatively concluded that at TSL 2 for electric 
motors, the benefits of energy savings, positive NPV of customer 
benefit, positive impacts on consumers (as indicated by positive 
weighted average LCC savings for all ECGs impacted at TSL 2, favorable 
PBPs, and the large percentage of customers who would experience LCC 
benefits, emission reductions, and the estimated monetary value of the 
emissions reductions would outweigh the slight increase in the 
cumulative regulatory burden on manufacturers and the risk of small 
negative impacts if manufacturers are unable to recoup investments made 
to meet the standard. In particular, the Secretary of Energy has 
concluded that TSL 2 would save a significant amount of energy and is 
technologically feasible and economically justified.
    In addition, DOE notes that TSL 2 most closely corresponds to the 
standards that were proposed by the Motor Coalition, as described in 
section II.B.2. Based on the above considerations, DOE today proposes 
to adopt the energy conservation standards for electric motors at TSL 
2. Table V.24 through Table V.27 present the proposed energy 
conservation standards for electric motors.

                         Table V.24--Proposed Energy Conservation Standards for NEMA Design A and NEMA Design B Electric Motors
                                                         [Compliance starting December 19, 2015]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Nominal full load efficiency (%)
                                                 -------------------------------------------------------------------------------------------------------
  Motor horsepower/standard kilowatt equivalent            2 Pole                    4 Pole                    6 Pole                    8 Pole
                                                 -------------------------------------------------------------------------------------------------------
                                                    Enclosed       Open       Enclosed       Open       Enclosed       Open       Enclosed       Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................         77.0         77.0         85.5         85.5         82.5         82.5         75.5         75.5
1.5/1.1.........................................         84.0         84.0         86.5         86.5         87.5         86.5         78.5         77.0
2/1.5...........................................         85.5         85.5         86.5         86.5         88.5         87.5         84.0         86.5

[[Page 73667]]

 
3/2.2...........................................         86.5         85.5         89.5         89.5         89.5         88.5         85.5         87.5
5/3.7...........................................         88.5         86.5         89.5         89.5         89.5         89.5         86.5         88.5
7.5/5.5.........................................         89.5         88.5         91.7         91.0         91.0         90.2         86.5         89.5
10/7.5..........................................         90.2         89.5         91.7         91.7         91.0         91.7         89.5         90.2
15/11...........................................         91.0         90.2         92.4         93.0         91.7         91.7         89.5         90.2
20/15...........................................         91.0         91.0         93.0         93.0         91.7         92.4         90.2         91.0
25/18.5.........................................         91.7         91.7         93.6         93.6         93.0         93.0         90.2         91.0
30/22...........................................         91.7         91.7         93.6         94.1         93.0         93.6         91.7         91.7
40/30...........................................         92.4         92.4         94.1         94.1         94.1         94.1         91.7         91.7
50/37...........................................         93.0         93.0         94.5         94.5         94.1         94.1         92.4         92.4
60/45...........................................         93.6         93.6         95.0         95.0         94.5         94.5         92.4         93.0
75/55...........................................         93.6         93.6         95.4         95.0         94.5         94.5         93.6         94.1
100/75..........................................         94.1         93.6         95.4         95.4         95.0         95.0         93.6         94.1
125/90..........................................         95.0         94.1         95.4         95.4         95.0         95.0         94.1         94.1
150/110.........................................         95.0         94.1         95.8         95.8         95.8         95.4         94.1         94.1
200/150.........................................         95.4         95.0         96.2         95.8         95.8         95.4         94.5         94.1
250/186.........................................         95.8         95.0         96.2         95.8         95.8         95.8         95.0         95.0
300/224.........................................         95.8         95.4         96.2         95.8         95.8         95.8         95.0         95.0
350/261.........................................         95.8         95.4         96.2         95.8         95.8         95.8         95.0         95.0
400/298.........................................         95.8         95.8         96.2         95.8         95.8         95.8         95.0         95.0
450/336.........................................         95.8         96.2         96.2         96.2         95.8         96.2         95.0         95.0
500/373.........................................         95.8         96.2         96.2         96.2         95.8         96.2         95.0         95.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

              Table V.25--Proposed Energy Conservation Standards for NEMA Design C Electric Motors
                                     [Compliance starting December 19, 2015]
----------------------------------------------------------------------------------------------------------------
                                                          Nominal full load efficiency (%)
                                   -----------------------------------------------------------------------------
Motor horsepower/standard kilowatt           4 Pole                    6 Pole                    8 Pole
            equivalent             -----------------------------------------------------------------------------
                                      Enclosed       Open       Enclosed       Open       Enclosed       Open
----------------------------------------------------------------------------------------------------------------
1/.75.............................         85.5         85.5         82.5         82.5         75.5         75.5
1.5/1.1...........................         86.5         86.5         87.5         86.5         78.5         77.0
2/1.5.............................         86.5         86.5         88.5         87.5         84.0         86.5
3/2.2.............................         89.5         89.5         89.5         88.5         85.5         87.5
5/3.7.............................         89.5         89.5         89.5         89.5         86.5         88.5
7.5/5.5...........................         91.7         91.0         91.0         90.2         86.5         89.5
10/7.5............................         91.7         91.7         91.0         91.7         89.5         90.2
15/11.............................         92.4         93.0         91.7         91.7         89.5         90.2
20/15.............................         93.0         93.0         91.7         92.4         90.2         91.0
25/18.5...........................         93.6         93.6         93.0         93.0         90.2         91.0
30/22.............................         93.6         94.1         93.0         93.6         91.7         91.7
40/30.............................         94.1         94.1         94.1         94.1         91.7         91.7
50/37.............................         94.5         94.5         94.1         94.1         92.4         92.4
60/45.............................         95.0         95.0         94.5         94.5         92.4         93.0
75/55.............................         95.4         95.0         94.5         94.5         93.6         94.1
100/75............................         95.4         95.4         95.0         95.0         93.6         94.1
125/90............................         95.4         95.4         95.0         95.0         94.1         94.1
150/110...........................         95.8         95.8         95.8         95.4         94.1         94.1
200/150...........................         96.2         95.8         95.8         95.4         94.5         94.1
----------------------------------------------------------------------------------------------------------------

                                    Table V.26--Proposed Energy Conservation Standards for Fire Pump Electric Motors
                                                         [Compliance starting December 19, 2015]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Nominal full load efficiency (%)
                                                 -------------------------------------------------------------------------------------------------------
  Motor horsepower/standard kilowatt equivalent            2 Pole                    4 Pole                    6 Pole                    8 Pole
                                                 -------------------------------------------------------------------------------------------------------
                                                    Enclosed       Open       Enclosed       Open       Enclosed       Open       Enclosed       Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................         75.5         75.5         82.5         82.5         80.0         80.0         74.0         74.0
1.5/1.1.........................................         82.5         82.5         84.0         84.0         85.5         84.0         77.0         75.5
2/1.5...........................................         84.0         84.0         84.0         84.0         86.5         85.5         82.5         85.5

[[Page 73668]]

 
3/2.2...........................................         85.5         84.0         87.5         86.5         87.5         86.5         84.0         86.5
5/3.7...........................................         87.5         85.5         87.5         87.5         87.5         87.5         85.5         87.5
7.5/5.5.........................................         88.5         87.5         89.5         88.5         89.5         88.5         85.5         88.5
10/7.5..........................................         89.5         88.5         89.5         89.5         89.5         90.2         88.5         89.5
15/11...........................................         90.2         89.5         91.0         91.0         90.2         90.2         88.5         89.5
20/15...........................................         90.2         90.2         91.0         91.0         90.2         91.0         89.5         90.2
25/18.5.........................................         91.0         91.0         92.4         91.7         91.7         91.7         89.5         90.2
30/22...........................................         91.0         91.0         92.4         92.4         91.7         92.4         91.0         91.0
40/30...........................................         91.7         91.7         93.0         93.0         93.0         93.0         91.0         91.0
50/37...........................................         92.4         92.4         93.0         93.0         93.0         93.0         91.7         91.7
60/45...........................................         93.0         93.0         93.6         93.6         93.6         93.6         91.7         92.4
75/55...........................................         93.0         93.0         94.1         94.1         93.6         93.6         93.0         93.6
100/75..........................................         93.6         93.0         94.5         94.1         94.1         94.1         93.0         93.6
125/90..........................................         94.5         93.6         94.5         94.5         94.1         94.1         93.6         93.6
150/110.........................................         94.5         93.6         95.0         95.0         95.0         94.5         93.6         93.6
200/150.........................................         95.0         94.5         95.0         95.0         95.0         94.5         94.1         93.6
250/186.........................................         95.4         94.5         95.0         95.4         95.0         95.4         94.5         94.5
300/224.........................................         95.4         95.0         95.4         95.4         95.0         95.4         94.5         94.5
350/261.........................................         95.4         95.0         95.4         95.4         95.0         95.4         94.5         94.5
400/298.........................................         95.4         95.4         95.4         95.4         95.0         95.4         94.5         94.5
450/336.........................................         95.4         95.8         95.4         95.8         95.0         95.4         94.5         94.5
500/373.........................................         95.4         95.8         95.8         95.8         95.0         95.4         94.5         94.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                           Table V.27--Proposed Energy Conservation Standards for Brake Motors
                                                         [Compliance starting December 19, 2015]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Nominal full load efficiency (%)
                                             -----------------------------------------------------------------------------------------------------------
     Motor horsepower/standard kilowatt                     4 Pole                              6 Pole                              8 Pole
                 equivalent                  -----------------------------------------------------------------------------------------------------------
                                                  Enclosed            Open            Enclosed            Open            Enclosed            Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75.......................................              85.5              85.5              82.5              82.5              75.5              75.5
1.5/1.1.....................................              86.5              86.5              87.5              86.5              78.5              77.0
2/1.5.......................................              86.5              86.5              88.5              87.5              84.0              86.5
3/2.2.......................................              89.5              89.5              89.5              88.5              85.5              87.5
5/3.7.......................................              89.5              89.5              89.5              89.5              86.5              88.5
7.5/5.5.....................................              91.7              91.0              91.0              90.2              86.5              89.5
10/7.5......................................              91.7              91.7              91.0              91.7              89.5              90.2
15/11.......................................              92.4              93.0              91.7              91.7              89.5              90.2
20/15.......................................              93.0              93.0              91.7              92.4              90.2              91.0
25/18.5.....................................              93.6              93.6              93.0              93.0              90.2              91.0
30/22.......................................              93.6              94.1              93.0              93.6              91.7              91.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Summary of Benefits and Costs (Annualized) of the Proposed Standards
    The benefits and costs of today's proposed standards, for equipment 
sold in 2015-2044, can also be expressed in terms of annualized values. 
The annualized monetary values are the sum of: (1) The annualized 
national economic value of the benefits from consumer operation of 
equipment that meet the proposed standards (consisting primarily of 
operating cost savings from using less energy, minus increases in 
equipment purchase and installation costs, which is another way of 
representing consumer NPV), and (2) the annualized monetary value of 
the benefits of emission reductions, including CO2 emission 
reductions.\89\
---------------------------------------------------------------------------

    \89\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2013, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of three and seven percent 
for all costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.3. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2015 through 2044) that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined is a steady stream of 
payments.
---------------------------------------------------------------------------

    Although combining the values of operating savings and 
CO2 emission reductions provides a useful perspective, two 
issues should be considered. First, the national operating savings are 
domestic U.S. consumer monetary savings that occur as a result of 
market transactions while the value of CO2 reductions is 
based on a global value. Second, the assessments of operating cost 
savings and CO2 savings are performed with different methods 
that use different time frames for analysis. The national operating 
cost savings is measured for the lifetime of electric motors shipped in 
2015 -2044. The SCC values, on the other hand, reflect the present 
value of some future

[[Page 73669]]

climate-related impacts resulting from the emission of one ton of 
carbon dioxide in each year. These impacts continue well beyond 2100.
    Estimates of annualized benefits and costs of the proposed 
standards for electric motors are shown in Table V.28. The results 
under the primary estimate are as follows. Using a 7-percent discount 
rate for benefits and costs other than CO2 reduction, for 
which DOE used a 3-percent discount rate along with the average SCC 
series that uses a 3-percent discount rate, the cost of the standards 
proposed in today's rule is $462 million per year in increased 
equipment costs; while the estimated benefits are $1,114 million per 
year in reduced equipment operating costs, $586 million in 
CO2 reductions, and $21.5 million in reduced NOX 
emissions. In this case, the net benefit would amount to $957 million 
per year. Using a 3-percent discount rate for all benefits and costs 
and the average SCC series, the estimated cost of the standards 
proposed in today's rule is $577 million per year in increased 
equipment costs; while the estimated benefits are $1,730 million per 
year in reduced operating costs, $586 million in CO2 
reductions, and $31.5 million in reduced NOX emissions. In 
this case, the net benefit would amount to approximately $1,354 million 
per year.

               Table V.28--Annualized Benefits and Costs of Proposed Standards for Electric Motors
                                              [million 2012$/year]
----------------------------------------------------------------------------------------------------------------
                                                     Primary estimate   Low Net benefits     High Net benefits
                                   Discount rate            *              estimate *           estimate *
----------------------------------------------------------------------------------------------------------------
Benefits:
    Consumer Operating Cost      7%...............  1,114............  924..............  1,358.
     Savings.
                                 3%...............  1,730............  1,421............  2,134.
    CO2 Reduction Monetized      5%...............  155..............  134..............  179.
     Value ($11.8/t case) *.
    CO2 Reduction Monetized      3%...............  586..............  506..............  679.
     Value ($39.7/t case) *.
    CO2 Reduction Monetized      2.5%.............  882..............  762..............  1022.
     Value ($61.2/t case) *.
    CO2 Reduction Monetized      3%...............  1,811............  1,565............  2,098.
     Value $117.0/t case) *.
    NOX Reduction Monetized      7%...............  21.46............  18.55............  24.68.
     Value (at $2,639/ton) **.
                                 3%...............  31.48............  27.20............  36.39.
                                 7% plus CO2 range  1,290 to 2,947...  1,077 to 2,507...  1,562 to 3,481.
        Total Benefits [dagger]  7%...............  1,721............  1,449............  2,061.
                                 3% plus CO2 range  1,916 to 3,572...  1,583 to 3,014...  2,350 to 4,268.
                                 3%...............  2,347............  1,955............  2,849.
Costs:
    Consumer Incremental         7%...............  462..............  492..............  447.
     Equipment Costs.
                                 3%...............  577..............  601..............  569.
Net Benefits:
                                 7% plus CO2 range  585 to 2,016.....  1,115 to 3,033...  1,353 to 3,438.
                                 7%...............  957..............  1,614............  1,887.
        Total [dagger].........  3% plus CO2 range  982 to 2,413.....  1,781 to 3,700...  1,957 to 4,043.
                                 3%...............  1,354............  2,280............  2,492.
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with electric motors shipped in 2015-2044.
  These results include benefits to consumers which accrue after 2044 from the equipment purchased in years 2015-
  2044. Costs incurred by manufacturers, some of which may be incurred in preparation for the rule, are not
  directly included, but are indirectly included as part of incremental equipment costs. The Primary, Low
  Benefits, and High Benefits Estimates are in view of projections of energy prices from the Annual Energy
  Outlook (AEO) 2013 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental
  equipment costs reflect a medium constant projected equipment price in the Primary Estimate, a decline rate
  for projected equipment price trends in the Low Benefits Estimate, and an increasing rate for projected
  equipment price trends in the High Benefits Estimate. The methods used to derive projected price trends are
  explained in section IV.F.1.
** The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values
  are based on the average SCC from the three integrated assessment models, at discount rates of 2.5, 3, and 5
  percent. The fourth set, which represents the 95th percentile SCC estimate across all three models at a 3-
  percent discount rate, is included to represent higher-than-expected impacts from temperature change further
  out in the tails of the SCC distribution. The values in parentheses represent the SCC in 2015. The SCC time
  series incorporate an escalation factor. The value for NOX is the average of the low and high values used in
  DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to
  average SCC with 3-percent discount rate. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,''
  the operating cost and NOX benefits are calculated using the labeled discount rate, and those values are added
  to the full range of CO2 values.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify 
the problem that it intends to address, including, where applicable, 
the failures of private markets or public institutions that warrant new 
agency action, as well as to assess the significance of that problem. 
The problems that today's standards address are as follows:
    (1) There are external benefits resulting from improved energy 
efficiency of covered electric motors which are not captured by the 
users of such equipment. These benefits include externalities related 
to environmental protection and energy security that are not reflected 
in energy prices, such as emissions of greenhouse gases. DOE attempts 
to quantify some of the external benefits through use of Social Cost of 
Carbon values.
    In addition, DOE has determined that today's regulatory action is 
an ``economically significant regulatory action'' under section 3(f)(1) 
of Executive Order 12866. Accordingly,

[[Page 73670]]

section 6(a)(3) of the Executive Order requires that DOE prepare a 
regulatory impact analysis (RIA) on today's rule and that the Office of 
Information and Regulatory Affairs (OIRA) in the Office of Management 
and Budget (OMB) review this rule. DOE presented to OIRA for review the 
draft rule and other documents prepared for this rulemaking, including 
the RIA, and has included these documents in the rulemaking record. The 
assessments prepared pursuant to Executive Order 12866 can be found in 
the technical support document for this rulemaking.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 2011). EO 13563 
is supplemental to and explicitly reaffirms the principles, structures, 
and definitions governing regulatory review established in Executive 
Order 12866. To the extent permitted by law, agencies are required by 
Executive Order 13563 to: (1) Propose or adopt a regulation only upon a 
reasoned determination that its benefits justify its costs (recognizing 
that some benefits and costs are difficult to quantify); (2) tailor 
regulations to impose the least burden on society, consistent with 
obtaining regulatory objectives, taking into account, among other 
things, and to the extent practicable, the costs of cumulative 
regulations; (3) select, in choosing among alternative regulatory 
approaches, those approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity); (4) to the extent 
feasible, specify performance objectives, rather than specifying the 
behavior or manner of compliance that regulated entities must adopt; 
and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, the Office of Information and Regulatory Affairs has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from technological innovation or 
anticipated behavioral changes. For the reasons stated in the preamble, 
DOE believes that today's NOPR is consistent with these principles, 
including the requirement that, to the extent permitted by law, 
benefits justify costs and that net benefits are maximized.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (IRFA) 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 (August 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 Web site (http://energy.gov/gc/office-general-counsel).
    DOE has prepared an IRFA for this rulemaking, a copy of which DOE 
will transmit to the Chief Counsel for Advocacy of the SBA for review 
under 5 U.S.C. 605(b). As presented and discussed below, the IFRA 
describes potential impacts on electric motors manufacturers associated 
with capital and product conversion costs and discusses alternatives 
that could minimize these impacts.
    A statement of the objectives of, and reasons and legal basis for, 
the proposed rule are set forth elsewhere in the preamble and not 
repeated here.
1. Description and Estimated Number of Small Entities Regulated
a. Methodology for Estimating the Number of Small Entities
    For manufacturers of electric motors, the Small Business 
Administration (SBA) has set a size threshold, which defines those 
entities classified as ``small businesses'' for the purposes of the 
statute. DOE used the SBA's small business size standards to determine 
whether any small entities would be subject to the requirements of the 
rule. The size standards are listed by North American Industry 
Classification System (NAICS) code and industry description available 
at: http://www.sba.gov/content/table-small-business-size-standards. 
Electric motor manufacturing is classified under NAICS 335312, ``Motor 
and Generator Manufacturing.'' The SBA sets a threshold of 1,000 
employees or less for an entity to be considered as a small business 
for this category.
    To estimate the number of companies that could be small business 
manufacturers of equipment covered by this rulemaking, DOE conducted a 
market survey using publicly available information. DOE's research 
involved industry trade association membership directories (including 
NEMA), information from previous rulemakings, UL qualification 
directories, individual company Web sites, and market research tools 
(e.g., Hoover's reports). DOE also asked stakeholders and industry 
representatives if they were aware of any other small manufacturers 
during manufacturer interviews and DOE public meetings. DOE used 
information from these sources to create a list of companies that 
potentially manufacture electric motors covered by this rulemaking. As 
necessary, DOE contacted companies to determine whether they met the 
SBA's definition of a small business manufacturer. DOE screened out 
companies that do not offer equipment covered by this rulemaking, do 
not meet the definition of a ``small business,'' or are foreign owned 
and operated.
    DOE initially identified 60 potential manufacturers of electric 
motors sold in the U.S. After reviewing publicly available information 
DOE contacted 27 of the companies that DOE suspected were small 
business manufacturers to determine whether they met the SBA definition 
of a small business and whether they manufactured the equipment that 
would be affected by today's proposal. Based on these efforts, DOE 
estimates that there are 13 small business manufacturers of electric 
motors.
b. Manufacturer Participation
    DOE contacted the 13 identified small businesses to invite them to 
take part in a small business manufacturer impact analysis interview. 
Of the electric motor manufacturers DOE contacted, 10 responded and 
three did not. Eight of the 10 responding manufacturers declined to be 
interviewed. Therefore, DOE was able to reach and discuss potential 
standards with two of the 13 small business manufacturers. DOE also 
obtained information about small business manufacturers and potential 
impacts while interviewing large manufacturers.
c. Electric Motor Industry Structure and Nature of Competition
    Eight major manufacturers supply approximately 90 percent of the 
market for electric motors. None of the major manufacturers of electric 
motors

[[Page 73671]]

covered in this rulemaking is a small business. DOE estimates that 
approximately 50 percent of the market is served by imports. Many of 
the small businesses that compete in the electric motor market produce 
specialized motors, many of which have not been regulated under 
previous standards. Most of these low-volume manufacturers do not 
compete directly with large manufacturers and tend to occupy niche 
markets for their equipment. There are a few small business 
manufacturers that produce general purpose motors; however, these 
motors currently meet NEMA Premium efficiency levels, the efficiency 
levels being proposed in today's notice.
d. Comparison Between Large and Small Entities
    For electric motors, small manufacturers differ from large 
manufacturers in several ways that affect the extent to which a 
manufacturer would be impacted by proposed standards. Characteristics 
of small manufacturers include: lower production volumes, fewer 
engineering resources, less technical expertise, and less access to 
capital.
    Lower production volumes lie at the heart of most small business 
disadvantages, particularly for a small manufacturer that is vertically 
integrated. A lower-volume manufacturer's conversion costs would need 
to be spread over fewer units than a larger competitor. Thus, unless 
the small business can differentiate its product in some way that earns 
a price premium, the small business is a `price taker' and experiences 
a reduction in profit per unit relative to the large manufacturer. 
Therefore, because much of the same equipment would need to be 
purchased by both large and small manufacturers in order to produce 
electric motors at higher TSLs, undifferentiated small manufacturers 
would face a greater variable cost penalty because they must depreciate 
the one-time conversion expenditures over fewer units.
    Smaller companies are also more likely to have more limited 
engineering resources and they often operate with lower levels of 
design and manufacturing sophistication. Smaller companies typically 
also have less experience and expertise in working with more advanced 
technologies. Standards that required these technologies could strain 
the engineering resources of these small manufacturers if they chose to 
maintain a vertically integrated business model. Small business 
electric motor manufacturers can also be at a disadvantage due to their 
lack of purchasing power for high performance materials. For example, 
more expensive low-loss steels are needed to meet higher efficiency 
standards and steel cost grows as a percentage of the overall product 
cost. Small manufacturers who pay higher per pound prices would be 
disproportionately impacted by these prices.
    Lastly, small manufacturers typically have less access to capital, 
which may be needed by some to cover the conversion costs associated 
with new technologies.
2. Description and Estimate of Compliance Requirements
    In its market survey, DOE identified three categories of small 
business electric motor manufacturers that may be impacted differently 
by today's proposed rule. The first group, which includes approximately 
five of the 13 small businesses, consists of manufacturers that produce 
specialty motors that were not required to meet previous Federal 
standards, but would need to do so under the expanded scope of today's 
proposed rule. DOE believes that this group would likely be the most 
impacted by expanding the scope of equipment required to meet NEMA 
Premium efficiency levels. The second group, which includes 
approximately five different small businesses, consists of 
manufacturers that produce a small amount of covered equipment and 
primarily focus on other types of motors not covered in this 
rulemaking, such as single-phase or direct-current motors. Because 
generally less than 10 percent of these manufacturers' revenue comes 
from covered equipment, DOE does not believe new standards will 
substantially impact their business. The third group, which includes 
approximately three small businesses, consists of manufacturers that 
already offer NEMA Premium general purpose and specialty motors. DOE 
expects these manufacturers to face similar conversion costs as large 
manufacturers, in that they will not experience high capital conversion 
costs as they already have the design and production experience 
necessary to bring their motors up to NEMA Premium efficiency levels. 
It is likely, however, that some of the specialty equipment these 
manufacturers produce will be included in the expanded scope of this 
proposed rule and is likely to result in these small businesses 
incurring additional certification and testing costs. These 
manufacturers could also face product development costs if they have to 
redesign any motors that are not currently meeting the NEMA Premium 
level.
    At TSL 2, the level proposed in today's notice, DOE estimates 
capital conversion costs of $1.88 million and product conversion costs 
of $3.75 million for a typical small manufacturer in the first group 
(manufacturers that produce specialized motors previously not covered 
by Federal standards). Meanwhile, DOE estimates a typical large 
manufacturer would incur capital and product conversion costs of $3.29 
million and $7.25 million, respectively, at the same TSL. Small 
manufacturers that predominately produce specialty motors would face 
higher relative capital conversion costs at TSL 2 than large 
manufacturers because large manufacturers have been independently 
pursuing higher efficiency motors as a result of the efficiency 
standards prescribed by EISA 2007 (10 CFR part 431.25) and consequently 
have built up more design and production experience. Large 
manufacturers have also been innovating as a result of the small 
electric motors rulemaking at 75 FR 10874 (March 9, 2010), which 
exempted many of the specialized equipment that these small business 
manufacturers produce. Many large manufacturers of general purpose 
motors offer equipment that was covered by the 2010 small electric 
motors rule, as well as equipment that falls under this proposed rule. 
Small manufactures pointed out that this would give large manufacturers 
an advantage in that they already have experience with the technology 
necessary to redesign their equipment and are familiar with the steps 
they will have to take to upgrade their manufacturing equipment and 
processes. Small manufactures, whose specialized motors were not 
required to meet the standards prescribed by the small electric motors 
rule and EISA 2007 have not undergone these processes and, therefore, 
would have to put more time and resources into redesign efforts.
    The small businesses whose product lines consist of a high 
percentage of equipment that are not currently required to meet 
efficiency standards would need to make significant capital investments 
relative to large manufacturers to upgrade their production lines with 
equipment necessary to produce NEMA Premium motors. As Table VI.1 
illustrates, these manufacturers would have to drastically increase 
their capital expenditures to purchase new lamination die sets, and new 
winding and stacking equipment.

[[Page 73672]]

  Table VI.1--Estimated Capital and Product Conversion Costs as a Percentage of Annual Capital Expenditures and
                                                   R&D Expense
----------------------------------------------------------------------------------------------------------------
                                                              Capital            Product        Total conversion
                                                          conversion cost    conversion cost       cost as a
                                                          as a percentage    as a percentage     percentage of
                                                         of annual capital    of annual R&D      annual revenue
                                                          expenditures (%)     expense (%)            (%)
----------------------------------------------------------------------------------------------------------------
Typical Large Manufacturer.............................                 14                 31                  2
Typical Small Manufacturer.............................                188                490                 75
----------------------------------------------------------------------------------------------------------------

    Table VI.1 also illustrates that small manufacturers whose product 
lines contain many motors that are not currently required to meet 
Federal standards face high relative product conversion costs compared 
to large manufacturers, despite the lower dollar value. In interviews, 
these small manufacturers expressed concern that they would face a 
large learning curve relative to large manufacturers, due to the fact 
that many of the equipment they produce has not had to meet Federal 
standards. In its market survey, DOE learned that for some 
manufacturers, the expanded scope of specialized motors that would have 
to meet NEMA Premium could affect nearly half the equipment they offer. 
They would need to hire additional engineers and would have to spend 
considerable time and resources redesigning their equipment and 
production processes. DOE does not expect the small businesses that 
already manufacture NEMA Premium equipment or those that offer very few 
alternating-current motors to incur these high costs.
    Manufacturers also expressed concern about testing and 
certification costs associated with new standards. They pointed out 
that these costs are particularly burdensome on small businesses that 
produce a wide variety of specialized equipment. As a result of the 
wide variety of equipment they produce and their relatively low output, 
small manufacturers are forced to certify multiple small batches of 
motors, the costs of which need to be spread out over far fewer units 
than large manufacturers.
    Small manufacturers that produce equipment not currently required 
to meet efficiency standards also pointed out that they would face 
significant challenges supporting current business while making changes 
to their production lines. While large manufacturers could shift 
production of certain equipment to different plants or product lines 
while they made updates, small businesses would have limited options. 
Most of these small businesses have only one plant and would have to 
find a way to continue to fulfill customer needs while redesigning 
production lines and installing new equipment. In interviews with DOE, 
small manufacturers said that it would be difficult to quantify the 
impacts that downtime and the possible need for external support could 
have on their businesses.
3. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the rule being considered today.
4. Significant Alternatives to the Proposed Rule
    The discussion above analyzes impacts on small businesses that 
would result from the TSL DOE is proposing in today's notice. Though 
TSLs lower than the proposed TSL are expected to reduce the impacts on 
small entities, DOE is required by EPCA to establish standards that 
achieve the maximum improvement in energy efficiency that are 
technically feasible and economically justified, and result in a 
significant conservation of energy. Therefore, DOE rejected the lower 
TSLs.
    In addition to the other TSLs being considered, the NOPR TSD 
includes a regulatory impact analysis in chapter 17. For electric 
motors, this report discusses the following policy alternatives: (1) 
Consumer rebates, (2) consumer tax credits, and (3) manufacturer tax 
credits. DOE does not intend to consider these alternatives further 
because they either are not feasible to implement or are not expected 
to result in energy savings as large as those that would be achieved by 
the standard levels under consideration.
    DOE continues to seek input from businesses that would be affected 
by this rulemaking and will consider comments received in the 
development of any final rule.
5. Significant Issues Raised by Public Comments
    DOE's MIA suggests that, while TSL 2 presents greater difficulties 
for small businesses than lower efficiency levels, the business impacts 
at higher TSLs would be greater. DOE expects that most small businesses 
will generally be able to maintain profitability at the TSL proposed in 
today's rulemaking. It is possible, however, that the small 
manufacturers whose product lines consist of a high percentage of 
previously exempted motors could incur significant costs as a result of 
this proposed rule, and those high costs could endanger their business. 
DOE's MIA is based on its interviews of both small and large 
manufacturers, and consideration of small business impacts explicitly 
enters into DOE's choice of the TSLs proposed in this NOPR.
    DOE did not receive any public comments suggesting that small 
businesses would not be able to achieve the efficiency levels at TSL 2.

C. Review Under the Paperwork Reduction Act

    Manufacturers of electric motors that are currently subject to 
energy conservation standards 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 for electric motors, including any amendments 
adopted for those test procedures. 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 20 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. DOE intends to address revised certification 
requirements for electric motors in a separate rulemaking.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be

[[Page 73673]]

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.

D. Review Under the National Environmental Policy Act of 1969

    Pursuant to the National Environmental Policy Act (NEPA) of 1969, 
DOE has determined that the proposed rule fits within the category of 
actions included in Categorical Exclusion (CX) B5.1 and otherwise meets 
the requirements for application of a CX. See 10 CFR Part 1021, App. B, 
B5.1(b); 1021.410(b) and Appendix B, B(1)-(5). The proposed rule fits 
within the category of actions because it is a rulemaking that 
establishes energy conservation standards for consumer products or 
industrial equipment, and for which none of the exceptions identified 
in CX B5.1(b) apply. Therefore, DOE has made a CX determination for 
this rulemaking, and DOE does not need to prepare an Environmental 
Assessment or Environmental Impact Statement for this proposed rule. 
DOE's CX determination for this proposed rule is available at http://cxnepa.energy.gov/.

E. 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. EPCA governs and 
prescribes Federal preemption of State regulations as to energy 
conservation for the equipment that are the subject of today's proposed 
rule. States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No 
further action is required by Executive Order 13132.

F. 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; and (3) 
provide a clear legal standard for affected conduct rather than a 
general standard and promote simplification and burden reduction. 61 FR 
4729 (Feb. 7, 1996). 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 proposed rule 
meets the relevant standards of Executive Order 12988.

G. 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 proposed 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 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 proposed ``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 small governments. 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/gc/downloads/unfunded-mandates-reform-act-intergovernmental-consultation.
    Although today's proposed rule does not contain a Federal 
intergovernmental mandate, it may require expenditures of $100 million 
or more on the private sector. Specifically, the proposed rule will 
likely result in a final rule that could require expenditures of $100 
million or more. Such expenditures may include: (1) Investment in 
research and development and in capital expenditures by electric motor 
manufacturers in the years between the final rule and the compliance 
date for the new standards, and (2) incremental additional expenditures 
by consumers to purchase higher-efficiency electric motors, starting at 
the compliance date for the applicable standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the proposed rule. 2 U.S.C. 1532(c). The content 
requirements of section 202(b) of UMRA relevant to a private sector 
mandate substantially overlap the economic analysis requirements that 
apply under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of the NOPR and the ``Regulatory 
Impact Analysis'' section of the TSD for this proposed rule respond to 
those requirements.
    Under section 205 of UMRA, the Department is obligated to identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. 2 U.S.C. 1535(a). DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the proposed rule unless DOE publishes 
an explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 6295(d), 
(f), and (o) and 6316(a), today's proposed rule would establish energy 
conservation standards for electric motors that are designed to achieve 
the maximum improvement in energy efficiency that DOE has determined to 
be both

[[Page 73674]]

technologically feasible and economically justified. A full discussion 
of the alternatives considered by DOE is presented in the ``Regulatory 
Impact Analysis'' section of the TSD for today's proposed rule.

H. 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 proposed rule would 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.

I. Review Under Executive Order 12630

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

J. 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 
guidelines established by each agency pursuant to general guidelines 
issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 
2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 
2002). DOE has reviewed today's NOPR under the OMB and DOE guidelines 
and has concluded that it is consistent with applicable policies in 
those guidelines.

K. 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 OIRA 
at OMB, a Statement of Energy Effects for any proposed 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 proposed 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.
    DOE has tentatively concluded that today's proposed regulatory 
action, which sets forth potential energy conservation standards for 
commercial and industrial electric motors, is not a significant energy 
action because the proposed standards are not likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy, nor has it been designated as such by the Administrator at 
OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects 
on the proposed rule.

L. 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 the following Web site: 
www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.

VII. Public Participation

A. Attendance at the Public Meeting

    The time, date, and location of the public meeting are listed in 
the DATES and ADDRESSES sections at the beginning of this notice. If 
you plan to attend the public meeting, please notify Ms. Brenda Edwards 
at (202) 586-2945 or Brenda.Edwards@ee.doe.gov. As explained in the 
ADDRESSES section, foreign nationals visiting DOE Headquarters are 
subject to advance security screening procedures.
    In addition, you can attend the public meeting via webinar. Webinar 
registration information, participant instructions, and information 
about the capabilities available to webinar participants will be 
published on DOE's Web site at: https://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/42. Participants are 
responsible for ensuring their systems are compatible with the webinar 
software.

B. Procedure for Submitting Prepared General Statements For 
Distribution

    Any person who has plans to present a prepared general statement 
may request that copies of his or her statement be made available at 
the public meeting. Such persons may submit requests, along with an 
advance electronic copy of their statement in PDF (preferred), 
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to 
the appropriate address shown in the ADDRESSES section at the beginning 
of this notice. The request and advance copy of statements must be 
received at least one week before the public meeting and may be 
emailed, hand-delivered, or sent by mail. DOE prefers to receive 
requests and advance copies via email. Please include a telephone 
number to enable DOE staff to make follow-up contact, if needed.

C. Conduct of the Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. The 
meeting will not be a judicial or evidentiary-type public hearing, but 
DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 
6306). A court reporter will be present to record the proceedings and

[[Page 73675]]

prepare a transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the public meeting. After the public meeting, interested parties may 
submit further comments on the proceedings as well as on any aspect of 
the rulemaking until the end of the comment period.
    The public meeting will be conducted in an informal, conference 
style. DOE will present summaries of comments received before the 
public meeting, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this rulemaking. Each participant will be allowed 
to make a general statement (within time limits determined by DOE), 
before the discussion of specific topics. DOE will allow, as time 
permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to this rulemaking. The official conducting the public 
meeting will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for the proper conduct of the public meeting.
    A transcript of the public meeting will be included in the docket, 
which can be viewed as described in the Docket section at the beginning 
of this notice. In addition, any person may buy a copy of the 
transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments, data, and other 
information using any of the methods described in the ADDRESSES section 
at the beginning of this notice.
    Submitting comments via regulations.gov. The regulations.gov Web 
page will require you to provide your name and contact information. 
Your contact information will be viewable to DOE Building Technologies 
staff only. Your contact information will not be publicly viewable 
except for your first and last names, organization name (if any), and 
submitter representative name (if any). If your comment is not 
processed properly because of technical difficulties, DOE will use this 
information to contact you. If DOE cannot read your comment due to 
technical difficulties and cannot contact you for clarification, DOE 
may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to regulations.gov information for which disclosure 
is restricted by statute, such as trade secrets and commercial or 
financial information (hereinafter referred to as Confidential Business 
Information (CBI)). Comments submitted through regulations.gov cannot 
be claimed as CBI. Comments received through the Web site will waive 
any CBI claims for the information submitted. For information on 
submitting CBI, see the Confidential Business Information section 
below.
    DOE processes submissions made through regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or mail. 
Comments and documents submitted via email, hand delivery, or mail also 
will be posted to regulations.gov. If you do not want your personal 
contact information to be publicly viewable, do not include it in your 
comment or any accompanying documents. Instead, provide your contact 
information in a cover letter. Include your first and last names, email 
address, telephone number, and optional mailing address. The cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via mail or hand 
delivery/courier, please provide all items on a CD, if feasible. It is 
not necessary to submit printed copies. No facsimiles (faxes) will be 
accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free of any 
defects or viruses. Documents should not contain special characters or 
any form of encryption and, if possible, they should carry the 
electronic signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. According to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email, postal mail, or hand delivery/courier two well-marked copies: 
One copy of the document marked confidential including all the 
information believed to be confidential, and one copy of the document 
marked non-confidential with the information believed to be 
confidential deleted. Submit these documents via email or on a CD, if 
feasible. DOE will make its own determination about the confidential 
status of the information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known by or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time; and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except

[[Page 73676]]

information deemed to be exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues:
    1. DOE requests comment on the potential impacts of new and amended 
standards on small electric motor manufacturers, especially regarding 
DOE's proposed expansion of scope of covered electric motors.
    2. DOE requests comment on whether the proposed standards help 
resolve the potential issue on which it had previously issued 
clarification of whether a [IEC] motor may be considered to be subject 
to two standards.
    3. DOE seeks comment on any additional sources of data that could 
be used to establish the distribution of electric motors across 
equipment class groups.
    4. DOE seeks comment on any additional sources of data that could 
be used to establish the distribution of electric motors across sectors 
by horsepower range and within each equipment class group.
    5. DOE seeks comment on any additional sources for determining the 
frequency of motor repair depending on equipment class group and 
sector.
    6. DOE seeks comment on any additional sources of data on motor 
lifetime that could be used to validate DOE's estimates of motor 
mechanical lifetime and its method of estimating lifetimes. DOE defines 
equipment lifetime as the lesser of the age at which electric motors 
are retired from service or the equipment in which they are embedded is 
retired. For the NIA, DOE uses motor average lifetime in years derived 
from motor mechanical lifetime in hours (see Chapter 8, Section 8.2.3) 
and from annual operating hours (see Section 10.2.2.2). DOE based 
expected equipment lifetime on discussions with industry experts and 
developed a distribution of typical lifetimes for several categories of 
electric motors. DOE welcomes further input on the average equipment 
lifetimes for the LCC and NIA analyses.
    7. DOE seeks comment on the estimated base case distribution of 
product efficiencies and on any additional sources of data.
    8. DOE seeks comments on its decision to use efficiency trends for 
equipment class groups 1 and 4 and constant efficiencies for equipment 
class groups 2 and 3 over the analysis period. Specifically, DOE would 
like comments on additional sources of data on trends in efficiency 
improvement.
    9. DOE seeks comment on any sources of data that could be used to 
establish the elasticity of electric motor shipments with respect to 
changes in purchase price.
    10. DOE seeks comment on its scaled values for MSPs. In particular, 
DOE seeks comments on its methodology for scaling MSP data from the 
representative equipment classes to the remaining equipment classes.
    11. DOE seeks comment on the scaled values for motor weights. In 
particular, DOE seeks comments on its methodology for scaling weight 
data from the representative equipment classes to the remaining 
equipment classes.
    12. DOE seeks comment on the trial standard levels (TSLs) developed 
for the NOPR.
    13. DOE seeks comment on its proposed compliance date of December 
19, 2015.
    14. DOE seeks comment on its decision to analyze brake motors in a 
separate equipment class group.
    15. DOE seeks comment on its decision to limit standards for brake 
motors to 1-30 hp, and 4, 6, and 8 pole configurations. DOE selected 
these ratings after reviewing manufacturer catalogs and only finding 
brake motors in these configurations.
    16. DOE seeks comment on its decision to not screen out copper die-
cast copper rotor motors.
    17. DOE seeks comment on the availability of copper in the market 
to manufacture die-cast copper rotor motors on a ``mass quantity'' 
scale.
    18. DOE seeks comment on its decision to not screen out hand 
winding in its analysis.
    19. DOE seeks comment on its estimation for labor hours for each 
representative unit.
    20. DOE seeks comments on the cost to manufacturers to change their 
product lines to meet EL3.
    21. DOE seeks comments on the cost to manufacturers to change their 
product lines to meet EL4.
    22. DOE is aware that motors used in fire pump applications may 
carry various definitions, including, but not limited to, NEMA, IEC, 
and NFPA designations. DOE requests comment on its current definition 
of fire pump motors, the suitability of that definition for the United 
States market, and on its advantages or disadvantages relative to other 
potential definitions.
    23. In DOE's view any Design B or IEC-equivalent motor that 
otherwise satisfies the relevant NFPA requirements would meet the fire 
pump electric motor definition in 10 CFR 431.12. To the extent that 
there is confusion regarding this view, DOE invites comments on this 
issue, along with any data demonstrating whether any IEC-equivalent 
motors are listed for fire pump service either under the NFPA 20 or 
another relevant industry standard.
    24. DOE seeks data on any other subsets of 56-frame motors, 
particularly those motors that are: (1) Enclosed general purpose 
electric motors that have a rating of under 1 horsepower and (2) open, 
special or definite purpose (inclusive) electric motors. The types of 
data that DOE seeks include, but are not limited to, the following 
categories: Efficiency distribution; shipment breakdown between 
horsepower ratings, open and enclosed motors, and between general and 
special and definite purpose electric motors; and typical applications 
that use these motors.
    25. Currently, DOE's reference case projects that prices for future 
shipments of motors will remain constant. DOE is seeking input on the 
appropriateness of this assumption.
    26. DOE requests comment on whether there are features or 
attributes of the more energy-efficient electric motors that 
manufacturers would produce to meet the standards in this proposed rule 
that might affect how they would be used by consumers. DOE requests 
comment specifically on how any such effects should be weighed in the 
choice of standards for the electric motors for the final rule.
    27. For this rulemaking, DOE analyzed the effects of this proposal 
assuming that the electric motors would be available to purchase for 30 
years and undertook a sensitivity analysis using 9 years rather than 30 
years of product shipments. The choice of a 30-year period of shipments 
is consistent with the DOE analysis for other products and commercial 
equipment. The choice of a 9-year period is a proxy for the timeline in 
EPCA for the review of certain energy conservation standards and 
potential revision of and compliance with such revised standards. We 
are seeking input, information and data on whether there are ways to 
further refine the analytic timeline.
    28. DOE solicits comment on the application of the new SCC values 
used to determine the social benefits of CO2 emissions 
reductions over the rulemaking analysis period. (The rulemaking 
analysis period covers from 2015 to 2044 plus the appropriated number 
of years to account for the lifetime of the equipment purchased between 
2015 and 2044.) In particular, the agency solicits comment on the

[[Page 73677]]

agency's derivation of SCC values after 2050 where the agency applied 
the average annual growth rate of the SCC estimates in 2040-2050 
associated with each of the four sets of values.
    29. DOE solicits comment on whether its proposal presents a 
sufficiently broad scope of regulatory coverage to help ensure that 
significant energy savings would be met or whether further adjustments 
to the proposed scope--whether to exclude certain categories or to 
include others--are necessary.
    30. DOE requests comment on the nine characteristics listed in 
section III.C and their appropriateness for outlining scope of 
coverage.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's 
proposed rule.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Commercial and industrial equipment, 
Imports, Intergovernmental relations, Reporting and recordkeeping 
requirements, and Small businesses.

    Issued in Washington, DC, on November 25, 2013.
David T. Danielson,
Assistant Secretary, Energy Efficiency and Renewable Energy.

    For the reasons set forth in the preamble, DOE proposes to amend 
part 431 of chapter II of title 10 of the Code of Federal Regulations, 
as set forth below:

PART 431--ENERGY CONSERVATION PROGRAM FOR CERTAIN COMMERCIAL AND 
INDUSTRIAL EQUIPMENT

0
1. The authority citation for part 431 continues to read as follows:

    Authority:  42 U.S.C. 6291-6317

0
2. Revise Sec.  431.25 to read as follows:

Sec.  431.25  Energy conservation standards and effective dates.

    (a) Except as provided for fire pump electric motors in paragraph 
(b) of this section, each general purpose electric motor (subtype I) 
with a power rating of 1 horsepower or greater, but not greater than 
200 horsepower, including a NEMA Design B or an equivalent IEC Design N 
motor that is a general purpose electric motor (subtype I), 
manufactured (alone or as a component of another piece of equipment) on 
or after December 19, 2010, but before December 19, 2015, shall have a 
nominal full-load efficiency that is not less than the following:

                Table 1--Nominal Full-Load Efficiencies of General Purpose Electric Motors (Subtype I), Except Fire Pump Electric Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Nominal full-load efficiency
  Motor horsepower/  -----------------------------------------------------------------------------------------------------------------------------------
  standard kilowatt                     Open motors (number of poles)                                   Enclosed motors (number of poles)
     equivalent      -----------------------------------------------------------------------------------------------------------------------------------
                                6                     4                     2                     6                     4                     2
--------------------------------------------------------------------------------------------------------------------------------------------------------
         1/.75                     82.5                  85.5                  77.0                  82.5                  85.5                  77.0
       1.5/1.1                     86.5                  86.5                  84.0                  87.5                  86.5                  84.0
         2/1.5                     87.5                  86.5                  85.5                  88.5                  86.5                  85.5
         3/2.2                     88.5                  89.5                  85.5                  89.5                  89.5                  86.5
         5/3.7                     89.5                  89.5                  86.5                  89.5                  89.5                  88.5
       7.5/5.5                     90.2                  91.0                  88.5                  91.0                  91.7                  89.5
        10/7.5                     91.7                  91.7                  89.5                  91.0                  91.7                  90.2
        15/11                      91.7                  93.0                  90.2                  91.7                  92.4                  91.0
        20/15                      92.4                  93.0                  91.0                  91.7                  93.0                  91.0
        25/18.5                    93.0                  93.6                  91.7                  93.0                  93.6                  91.7
        30/22                      93.6                  94.1                  91.7                  93.0                  93.6                  91.7
        40/30                      94.1                  94.1                  92.4                  94.1                  94.1                  92.4
        50/37                      94.1                  94.5                  93.0                  94.1                  94.5                  93.0
        60/45                      94.5                  95.0                  93.6                  94.5                  95.0                  93.6
        75/55                      94.5                  95.0                  93.6                  94.5                  95.4                  93.6
       100/75                      95.0                  95.4                  93.6                  95.0                  95.4                  94.1
       125/90                      95.0                  95.4                  94.1                  95.0                  95.4                  95.0
       150/110                     95.4                  95.8                  94.1                  95.8                  95.8                  95.0
       200/150                     95.4                  95.8                  95.0                  95.8                  96.2                  95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (b) Each fire pump electric motor that is a general purpose 
electric motor (subtype I) or general purpose electric motor (subtype 
II) manufactured (alone or as a component of another piece of 
equipment) on or after December 19, 2010, but before December 19, 2015, 
shall have a nominal full-load efficiency that is not less than the 
following:

                                          Table 2--Nominal Full-Load Efficiencies of Fire Pump Electric Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Nominal full-load efficiency
Motor horsepower/ --------------------------------------------------------------------------------------------------------------------------------------
standard kilowatt                     Open motors (number of poles)                                    Enclosed motors (number of poles)
    equivalent    --------------------------------------------------------------------------------------------------------------------------------------
                          8                6                4                2                8                6                4                2
--------------------------------------------------------------------------------------------------------------------------------------------------------
        1/.75               74.0             80.0             82.5               --             74.0             80.0             82.5            75.5
      1.5/1.1               75.5             84.0             84.0             82.5             77.0             85.5             84.0            82.5

[[Page 73678]]

 
        2/1.5               85.5             85.5             84.0             84.0             82.5             86.5             84.0            84.0
        3/2.2               86.5             86.5             86.5             84.0             84.0             87.5             87.5            85.5
        5/3.7               87.5             87.5             87.5             85.5             85.5             87.5             87.5            87.5
      7.5/5.5               88.5             88.5             88.5             87.5             85.5             89.5             89.5            88.5
       10/7.5               89.5             90.2             89.5             88.5             88.5             89.5             89.5            89.5
       15/11                89.5             90.2             91.0             89.5             88.5             90.2             91.0            90.2
       20/15                90.2             91.0             91.0             90.2             89.5             90.2             91.0            90.2
       25/18.5              90.2             91.7             91.7             91.0             89.5             91.7             92.4            91.0
       30/22                91.0             92.4             92.4             91.0             91.0             91.7             92.4            91.0
       40/30                91.0             93.0             93.0             91.7             91.0             93.0             93.0            91.7
       50/37                91.7             93.0             93.0             92.4             91.7             93.0             93.0            92.4
       60/45                92.4             93.6             93.6             93.0             91.7             93.6             93.6            93.0
       75/55                93.6             93.6             94.1             93.0             93.0             93.6             94.1            93.0
      100/75                93.6             94.1             94.1             93.0             93.0             94.1             94.5            93.6
      125/90                93.6             94.1             94.5             93.6             93.6             94.1             94.5            94.5
      150/110               93.6             94.5             95.0             93.6             93.6             95.0             95.0            94.5
      200/150               93.6             94.5             95.0             94.5             94.1             95.0             95.0            95.0
      250/186               94.5             95.4             95.4             94.5             94.5             95.0             95.0            95.4
      300/224                 --             95.4             95.4             95.0               --             95.0             95.4            95.4
      350/261                 --             95.4             95.4             95.0               --             95.0             95.4            95.4
      400/298                 --               --             95.4             95.4               --               --             95.4            95.4
      450/336                 --               --             95.8             95.8               --               --             95.4            95.4
      500/373                 --               --             95.8             95.8               --               --             95.8            95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (c) Except as provided for fire pump electric motors in paragraph 
(b) of this section, each general purpose electric motor (subtype II) 
with a power rating of 1 horsepower or greater, but not greater than 
200 horsepower, including a NEMA Design B or an equivalent IEC Design N 
motor that is a general purpose electric motor (subtype II), 
manufactured (alone or as a component of another piece of equipment) on 
or after December 19, 2010, but before December 19, 2015, shall have a 
nominal full-load efficiency that is not less than the following:

                Table 3--Nominal Full-Load Efficiencies of General Purpose Electric Motors (Subtype II), Except Fire Pump Electric Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Nominal full-load efficiency
Motor horsepower/ --------------------------------------------------------------------------------------------------------------------------------------
standard kilowatt                     Open motors (number of poles)                                    Enclosed motors (number of poles)
    equivalent    --------------------------------------------------------------------------------------------------------------------------------------
                          8                6                4                2                8                6                4                2
--------------------------------------------------------------------------------------------------------------------------------------------------------
        1/.75               74.0             80.0             82.5               --             74.0             80.0             82.5            75.5
      1.5/1.1               75.5             84.0             84.0             82.5             77.0             85.5             84.0            82.5
        2/1.5               85.5             85.5             84.0             84.0             82.5             86.5             84.0            84.0
        3/2.2               86.5             86.5             86.5             84.0             84.0             87.5             87.5            85.5
        5/3.7               87.5             87.5             87.5             85.5             85.5             87.5             87.5            87.5
      7.5/5.5               88.5             88.5             88.5             87.5             85.5             89.5             89.5            88.5
       10/7.5               89.5             90.2             89.5             88.5             88.5             89.5             89.5            89.5
       15/11                89.5             90.2             91.0             89.5             88.5             90.2             91.0            90.2
       20/15                90.2             91.0             91.0             90.2             89.5             90.2             91.0            90.2
       25/18.5              90.2             91.7             91.7             91.0             89.5             91.7             92.4            91.0
       30/22                91.0             92.4             92.4             91.0             91.0             91.7             92.4            91.0
       40/30                91.0             93.0             93.0             91.7             91.0             93.0             93.0            91.7
       50/37                91.7             93.0             93.0             92.4             91.7             93.0             93.0            92.4
       60/45                92.4             93.6             93.6             93.0             91.7             93.6             93.6            93.0
       75/55                93.6             93.6             94.1             93.0             93.0             93.6             94.1            93.0
      100/75                93.6             94.1             94.1             93.0             93.0             94.1             94.5            93.6
      125/90                93.6             94.1             94.5             93.6             93.6             94.1             94.5            94.5
      150/110               93.6             94.5             95.0             93.6             93.6             95.0             95.0            94.5
      200/150               93.6             94.5             95.0             94.5             94.1             95.0             95.0            95.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (d) Each NEMA Design B or an equivalent IEC Design N motor that is 
a general purpose electric motor (subtype I) or general purpose 
electric motor (subtype II), excluding fire pump electric motors, with 
a power rating of more than 200 horsepower, but not greater than 500 
horsepower, manufactured (alone or as a component

[[Page 73679]]

of another piece of equipment) on or after December 19, 2010, but 
before December 19, 2015 shall have a nominal full-load efficiency that 
is not less than the following:

      Table 4--Nominal Full-Load Efficiencies of NEMA Design B General Purpose Electric Motors (Subtype I and II), Except Fire Pump Electric Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Nominal full-load efficiency
Motor horsepower/ -------------------------------------------------------------------------------------------------------------------------------------------
standard kilowatt    Open motors                                                Enclosed motors (number of poles)
    equivalent        (number of   --------------------------------------------------------------------------------------------------------------------------
                        poles)             8                6                4                2                8                6               4
-------------------------------------------------------------------------------------------------------------------------------------------------------
  250/186                   94.5             95.4             95.4             94.5             94.5             95.0            95.0            95.4
  300/224                     --             95.4             95.4             95.0               --             95.0            95.4            95.4
  350/261                     --             95.4             95.4             95.0               --             95.0            95.4            95.4
  400/298                     --               --             95.4             95.4               --               --            95.4            95.4
  450/336                     --               --             95.8             95.8               --               --            95.4            95.4
  500/373                     --               --             95.8             95.8               --               --            95.8            95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (e) For purposes of determining the required minimum nominal full-
load efficiency of an electric motor that has a horsepower or kilowatt 
rating between two horsepower or two kilowatt ratings listed in any 
table of energy conservation standards in paragraphs (a) through (d) of 
this section, each such motor shall be deemed to have a listed 
horsepower or kilowatt rating, determined as follows:
    (1) A horsepower at or above the midpoint between the two 
consecutive horsepowers shall be rounded up to the higher of the two 
horsepowers;
    (2) A horsepower below the midpoint between the two consecutive 
horsepowers shall be rounded down to the lower of the two horsepowers; 
or
    (3) A kilowatt rating shall be directly converted from kilowatts to 
horsepower using the formula 1 kilowatt = (\1\/0.746) 
horsepower. The conversion should be calculated to three significant 
decimal places, and the resulting horsepower shall be rounded in 
accordance with paragraph (e)(1) or (2) of this section, whichever 
applies.
    (f) The standards in Table 1 through Table 4 of this section do not 
apply to definite purpose motors, special purpose motors, or those 
motors exempted by the Secretary.
    (g) The standards in Table 5 through Table 8 of this section apply 
to electric motors that satisfy the following criteria:
    (1) Are single-speed, induction motors;
    (2) Are rated for continuous duty (MG 1) operation or for duty type 
S1 (IEC);
    (3) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
    (4) Operate on polyphase alternating current 60-hertz sinusoidal 
line power;
    (5) Are rated 600 volts or less;
    (6) Have a 2-, 4-, 6-, or 8-pole configuration,
    (7) Have a three-digit NEMA frame size (or IEC metric equivalent) 
or an enclosed 56 NEMA frame size (or IEC metric equivalent),
    (8) Are rated no more than 500 horsepower, but greater than or 
equal to 1 horsepower (or kilowatt equivalent), and
    (9) Meet all of the performance requirements of one of the 
following motor types: a NEMA Design A, B, or C motor or an IEC design 
N or H motor.
    (h) Starting on December 19, 2015, each NEMA Design A and NEMA 
Design B motor that is an electric motor meeting the criteria in 
paragraph (g) of this section and with a power rating from 1 horsepower 
through 500 horsepower, but excluding fire pump electric motors, 
integral-brake electric motors, and non-integral brake electric motors, 
manufactured (alone or as a component of another piece of equipment) 
shall have a nominal full-load efficiency of not less than the 
following:

                               Table 5--Nominal Full Load Efficiencies of NEMA Design A and NEMA Design B Electric Motors
                      [Excluding fire pump electric motors, integral-brake electric motors, and non-integral brake electric motors]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Nominal full load efficiency (%)
Motor horsepower/ --------------------------------------------------------------------------------------------------------------------------------------
standard kilowatt               2 Pole                            4 Pole                            6 Pole                            8 Pole
    equivalent    --------------------------------------------------------------------------------------------------------------------------------------
                       Enclosed           Open           Enclosed           Open           Enclosed           Open           Enclosed          Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
        1/.75               77.0             77.0             85.5             85.5             82.5             82.5             75.5            75.5
      1.5/1.1               84.0             84.0             86.5             86.5             87.5             86.5             78.5            77.0
        2/1.5               85.5             85.5             86.5             86.5             88.5             87.5             84.0            86.5
        3/2.2               86.5             85.5             89.5             89.5             89.5             88.5             85.5            87.5
        5/3.7               88.5             86.5             89.5             89.5             89.5             89.5             86.5            88.5
      7.5/5.5               89.5             88.5             91.7             91.0             91.0             90.2             86.5            89.5
       10/7.5               90.2             89.5             91.7             91.7             91.0             91.7             89.5            90.2
       15/11                91.0             90.2             92.4             93.0             91.7             91.7             89.5            90.2
       20/15                91.0             91.0             93.0             93.0             91.7             92.4             90.2            91.0
       25/18.5              91.7             91.7             93.6             93.6             93.0             93.0             90.2            91.0
       30/22                91.7             91.7             93.6             94.1             93.0             93.6             91.7            91.7
       40/30                92.4             92.4             94.1             94.1             94.1             94.1             91.7            91.7
       50/37                93.0             93.0             94.5             94.5             94.1             94.1             92.4            92.4
       60/45                93.6             93.6             95.0             95.0             94.5             94.5             92.4            93.0
       75/55                93.6             93.6             95.4             95.0             94.5             94.5             93.6            94.1
      100/75                94.1             93.6             95.4             95.4             95.0             95.0             93.6            94.1

[[Page 73680]]

 
      125/90                95.0             94.1             95.4             95.4             95.0             95.0             94.1            94.1
      150/110               95.0             94.1             95.8             95.8             95.8             95.4             94.1            94.1
      200/150               95.4             95.0             96.2             95.8             95.8             95.4             94.5            94.1
      250/186               95.8             95.0             96.2             95.8             95.8             95.8             95.0            95.0
      300/224               95.8             95.4             96.2             95.8             95.8             95.8             95.0            95.0
      350/261               95.8             95.4             96.2             95.8             95.8             95.8             95.0            95.0
      400/298               95.8             95.8             96.2             95.8             95.8             95.8             95.0            95.0
      450/336               95.8             96.2             96.2             96.2             95.8             96.2             95.0            95.0
      500/373               95.8             96.2             96.2             96.2             95.8             96.2             95.0            95.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (i) Starting on December 19, 2015, each NEMA Design C electric 
motor that is an electric motor meeting the criteria in paragraph (g) 
of this section and with a power rating from 1 horsepower through 200 
horsepower, but excluding non-integral brake electric motors and 
integral brake electric motors, manufactured (alone or as a component 
of another piece of equipment) shall have a nominal full-load 
efficiency that is not less than the following:

                    Table 6--Nominal Full Load Efficiencies of NEMA Design C electric motors
                [excluding non-integral brake electric motors and integral brake electric motors]
----------------------------------------------------------------------------------------------------------------
                                                          Nominal Full Load Efficiency (%)
                                   -----------------------------------------------------------------------------
Motor horsepower/standard kilowatt           4 Pole                    6 Pole                    8 Pole
            equivalent             -----------------------------------------------------------------------------
                                      Enclosed       Open       Enclosed       Open       Enclosed       Open
----------------------------------------------------------------------------------------------------------------
1/.75.............................         85.5         85.5         82.5         82.5         75.5         75.5
1.5/1.1...........................         86.5         86.5         87.5         86.5         78.5         77.0
2/1.5.............................         86.5         86.5         88.5         87.5         84.0         86.5
3/2.2.............................         89.5         89.5         89.5         88.5         85.5         87.5
5/3.7.............................         89.5         89.5         89.5         89.5         86.5         88.5
7.5/5.5...........................         91.7         91.0         91.0         90.2         86.5         89.5
10/7.5............................         91.7         91.7         91.0         91.7         89.5         90.2
15/11.............................         92.4         93.0         91.7         91.7         89.5         90.2
20/15.............................         93.0         93.0         91.7         92.4         90.2         91.0
25/18.5...........................         93.6         93.6         93.0         93.0         90.2         91.0
30/22.............................         93.6         94.1         93.0         93.6         91.7         91.7
40/30.............................         94.1         94.1         94.1         94.1         91.7         91.7
50/37.............................         94.5         94.5         94.1         94.1         92.4         92.4
60/45.............................         95.0         95.0         94.5         94.5         92.4         93.0
75/55.............................         95.4         95.0         94.5         94.5         93.6         94.1
100/75............................         95.4         95.4         95.0         95.0         93.6         94.1
125/90............................         95.4         95.4         95.0         95.0         94.1         94.1
150/110...........................         95.8         95.8         95.8         95.4         94.1         94.1
200/150...........................         96.2         95.8         95.8         95.4         94.5         94.1
----------------------------------------------------------------------------------------------------------------

    (j) Starting on December 19, 2015, each fire pump electric motor 
meeting the criteria in paragraph (g) of this section and with a power 
rating of 1 horsepower through 500 horsepower, manufactured (alone or 
as a component of another piece of equipment) shall have a nominal 
full-load efficiency that is not less than the following:

                                          Table 7--Nominal Full Load Efficiencies of Fire Pump Electric Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Nominal full load efficiency (%)
                                                 -------------------------------------------------------------------------------------------------------
 Motor horsepower/ standard kilowatt equivalent            2 Pole                    4 Pole                    6 Pole                    8 Pole
                                                 -------------------------------------------------------------------------------------------------------
                                                    Enclosed       Open       Enclosed       Open       Enclosed       Open       Enclosed       Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................         75.5         75.5         82.5         82.5         80.0         80.0         74.0         74.0
1.5/1.1.........................................         82.5         82.5         84.0         84.0         85.5         84.0         77.0         75.5
2/1.5...........................................         84.0         84.0         84.0         84.0         86.5         85.5         82.5         85.5
3/2.2...........................................         85.5         84.0         87.5         86.5         87.5         86.5         84.0         86.5
5/3.7...........................................         87.5         85.5         87.5         87.5         87.5         87.5         85.5         87.5
7.5/5.5.........................................         88.5         87.5         89.5         88.5         89.5         88.5         85.5         88.5

[[Page 73681]]

 
10/7.5..........................................         89.5         88.5         89.5         89.5         89.5         90.2         88.5         89.5
15/11...........................................         90.2         89.5         91.0         91.0         90.2         90.2         88.5         89.5
20/15...........................................         90.2         90.2         91.0         91.0         90.2         91.0         89.5         90.2
25/18.5.........................................         91.0         91.0         92.4         91.7         91.7         91.7         89.5         90.2
30/22...........................................         91.0         91.0         92.4         92.4         91.7         92.4         91.0         91.0
40/30...........................................         91.7         91.7         93.0         93.0         93.0         93.0         91.0         91.0
50/37...........................................         92.4         92.4         93.0         93.0         93.0         93.0         91.7         91.7
60/45...........................................         93.0         93.0         93.6         93.6         93.6         93.6         91.7         92.4
75/55...........................................         93.0         93.0         94.1         94.1         93.6         93.6         93.0         93.6
100/75..........................................         93.6         93.0         94.5         94.1         94.1         94.1         93.0         93.6
125/90..........................................         94.5         93.6         94.5         94.5         94.1         94.1         93.6         93.6
150/110.........................................         94.5         93.6         95.0         95.0         95.0         94.5         93.6         93.6
200/150.........................................         95.0         94.5         95.0         95.0         95.0         94.5         94.1         93.6
250/186.........................................         95.4         94.5         95.0         95.4         95.0         95.4         94.5         94.5
300/224.........................................         95.4         95.0         95.4         95.4         95.0         95.4         94.5         94.5
350/261.........................................         95.4         95.0         95.4         95.4         95.0         95.4         94.5         94.5
400/298.........................................         95.4         95.4         95.4         95.4         95.0         95.4         94.5         94.5
450/336.........................................         95.4         95.8         95.4         95.8         95.0         95.4         94.5         94.5
500/373.........................................         95.4         95.8         95.8         95.8         95.0         95.4         94.5         94.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (k) Starting on December 19, 2015, each integral brake electric 
motor and non-integral brake electric motor meeting the criteria in 
paragraph (g) of this section, and with a power rating of 1 horsepower 
through 30 horsepower, manufactured (alone or as a component of another 
piece of equipment) shall have a nominal full-load efficiency that is 
not less than the following:

Table 8--Nominal Full Load Efficiencies of Integral Brake Electric Motors and Non-Integral Brake Electric Motors
----------------------------------------------------------------------------------------------------------------
                                                          Nominal full load efficiency (%)
                                   -----------------------------------------------------------------------------
Motor horsepower/standard kilowatt           4 Pole                    6 Pole                    8 Pole
            equivalent             -----------------------------------------------------------------------------
                                      Enclosed       Open       Enclosed       Open       Enclosed       Open
----------------------------------------------------------------------------------------------------------------
1/.75.............................         85.5         85.5         82.5         82.5         75.5         75.5
1.5/1.1...........................         86.5         86.5         87.5         86.5         78.5         77.0
2/1.5.............................         86.5         86.5         88.5         87.5         84.0         86.5
3/2.2.............................         89.5         89.5         89.5         88.5         85.5         87.5
5/3.7.............................         89.5         89.5         89.5         89.5         86.5         88.5
7.5/5.5...........................         91.7         91.0         91.0         90.2         86.5         89.5
10/7.5............................         91.7         91.7         91.0         91.7         89.5         90.2
15/11.............................         92.4         93.0         91.7         91.7         89.5         90.2
20/15.............................         93.0         93.0         91.7         92.4         90.2         91.0
25/18.5...........................         93.6         93.6         93.0         93.0         90.2         91.0
30/22.............................         93.6         94.1         93.0         93.6         91.7         91.7
----------------------------------------------------------------------------------------------------------------

    (l) For purposes of determining the required minimum nominal full-
load efficiency of an electric motor that has a horsepower or kilowatt 
rating between two horsepower or two kilowatt ratings listed in any 
table of energy conservation standards in paragraphs (h) through (k) of 
this section, each such motor shall be deemed to have a listed 
horsepower or kilowatt rating, determined as follows:
    (1) A horsepower at or above the midpoint between the two 
consecutive horsepowers shall be rounded up to the higher of the two 
horsepowers;
    (2) A horsepower below the midpoint between the two consecutive 
horsepowers shall be rounded down to the lower of the two horsepowers; 
or
    (3) A kilowatt rating shall be directly converted from kilowatts to 
horsepower using the formula 1 kilowatt = (1/0.746) horsepower. The 
conversion should be calculated to three significant decimal places, 
and the resulting horsepower shall be rounded in accordance with 
paragraph (l)(1) or (2) of this section, whichever applies.
    (m) The standards in Table 5 through Table 8 of this section do not 
apply to the following electric motors exempted by the Secretary, or 
any additional electric motors that the Secretary may exempt:
    (1) Air-over electric motors;
    (2) Component sets of an electric motor;
    (3) Liquid-cooled electric motors;
    (4) Submersible electric motors; and
    (5) Definite-purpose, inverter-fed electric motors.

[FR Doc. 2013-28776 Filed 12-5-13; 8:45 am]
BILLING CODE 6450-01-P
```