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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.

E. Issues on Which DOE Seeks Comment

The Department is interested in

receiving comments on all aspects of

this ANOPR. DOE especially invites

comments or data to improve the

Departments' analysis, including data or

information that will respond to the

following questions or concerns that

were addressed in this ANOPR:

1. Definition and Coverage

The Department seeks to clarify

coverage under this proposed activity.

This ANOPR proposes a definition that

more closely parallels NEMA's TP 1,

outlining a broad scope of coverage and

then identifying exemptions. The

Department invites stakeholders to

comment on the new distribution

transformer definition, including the

revised scope, the exemptions list, and

the exemptions list definitions (see

section II.A for details).

2. Product Classes

The Department proposes product

classes that are in keeping with those in

NEMA's TP 1-2002 document,

specifically by breaking down the

population of distribution transformers

by type of insulation (liquid-immersed

or dry-type), number of phases (single or

three), voltage (low or medium), and BIL

rating (for medium-voltage dry-types).

The Department is proposing a greater

degree of specificity by BIL rating than

that provided in NEMA's TP 1-2002

document. The Department requests

feedback from stakeholders on its BIL

classification system for mediumvoltage, dry-type transformers (see

section II.A for details).

3. Engineering Analysis Inputs

In Chapter 5 of the TSD, the

Department presents all the costs of

material used as design inputs to the

modeling software. The Department

asks that stakeholders, particularly

manufacturers, review the material

prices and comment on whether they

represent reasonable input costs for the

engineering analysis.

4. Design Option Combinations

For each representative unit analyzed,

the Department selected several

methods of construction, by varying

core steels and winding material. These

combinations represent the most

common types of transformers made, as

well as the lowest first-cost and the

maximum technologically feasible

design. The complete breakdown of the

design option combinations is presented

in Chapter 5 of the TSD. The

Department requests that stakeholders

review these design option

combinations and comment on whether

they are the best ones to use for a given

representative unit. Also, the

Department requests comments on the

screening analysis, regarding both

technologies and materials that were

included and those screened out from

further consideration. (See section II.B

for details.)

5. The 0.75 Scaling Rule

The Department applied a 0.75 power

law scaling rule to two key components

of the transformer efficiency analysis:

(a) In simplifying the engineering

analysis by taking 115 different kVA

ratings and turning them into 13

engineering design lines with 13

representative units, the Department

committed to using the 0.75 scaling rule

to scale losses from the representative

unit to other kVA ratings within a

design line. The Department requests

comments on this practice, discussed in

section II.C.2 and outlined in Chapter 5

of the TSD.

(b) To simplify the economic analysis,

the Department extrapolated economic

costs and benefits for a particular design

line to each of the kVA ratings using the

0.75 rule. Not all economic costs and

benefits of transformer efficiency scale

according to the 0.75 rule, although the

rule may be a reasonable approximation

for ranges of kVA ratings. The

Department requests comment on the

desirability of having a simple scaling

for transformer efficiency economics

versus using more detailed scaling

methods that may result in a more

complicated relationship between kVA

rating and efficiency level.

6. Modeling of Transformer Load

Profiles

Lacking sufficient empirical

transformer loading data, the

Department developed models of

transformer loads specific to each type

of transformer. The Department requests

comments on the methods it employed

as well as sources of specific loading

data that it could use in the NOPR

analyses. (See section II.F for details.)

7. Distribution Chain Markups

The Department used cost data from

RS Means combined with manufacturer

price estimates and U.S. economic

census data to estimate markups and

installation costs for transformers from

the factory door through completed

installation. The Department requests

stakeholder feedback on markup factors,

methods, and data used by the

Department. (See section II.E for

details.)

8. Discount Rate Selection and Use

The Department used a weighted

average cost of capital as the discount

rate for the LCC and the OMB-mandated

discounted rates for the NPV

calculation. The Department requests

stakeholder feedback on the

appropriateness of these discount rates.

(See sections ILF and II.H for details.)

9. Baseline Determination Through

Purchase Evaluation Formulae

The Department characterized current

market conditions for both liquidimmersed and dry-type transformers

using a distribution of load and no-load

loss values, and assumed percentages of

customers that evaluate their

transformer purchases by considering

the value of load and no-load losses.

The Department invites further

comment on the purchase decision

model and transformer evaluation

behavior for both liquid-immersed and

dry-type transformers, especially:

• Actual A and B values used in the

current market,

• Actual efficiency of the low firstcost designs currently on the market

since the efficiency of the low first-cost

designs has a large impact on overall

energy savings estimates,

• Applicability of the approach to

characterize both medium- and lowvoltage, dry-type transformer market

behavior, and

• The stability over time of the

transformer market, especially the

percent of evaluators and levels of A

and B values.

(See section II.F for details.)

10. Electricity Prices

The Department requests stakeholder

feedback on the two methods it used for

this rulemaking to determine the cost of

electricity consumed by transformers.

For dry-type transformers used

predominately by commercial and

industrial firms, the Department

calculated estimated bills based on a

sample of electricity tariffs. For liquidimmersed transformers, the Department

used market and FERC Form 714 data to

estimate the marginal cost of electricity

to utilities. (See section II.F for details.)

11. Load Growth Over Time

Since the Department lacks specific

information on transformer load growth

over time, it assumed for its default

ANOPR scenario a 1-percent annual

growth rate for liquid-immersed

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transformers and zero-percent load

growth for dry-type transformers. The

Department requests stakeholders

comments on these assumptions. (See

section II.F for details.)

12. Life-Cycle Cost Sub-Groups

The Department has identified

various categories of utilities, such as

municipal utilities and rural electric

cooperatives, as possible sub-groups for

which to conduct a separate LCC

analysis. The Department seeks

stakeholder feedback regarding the most

appropriate sub-groups to include in the

NOPR analysis. (See section 11.1 for

details.)

13. Utility Deregulation Impacts

The Department is aware of ongoing

wholesale and retail deregulation

activities in the electric utility industry,

but is uncertain how this deregulation

will affect transformer purchase

decisions in the long term. The

Department requests comments from

stakeholders with specific information

regarding the impact of deregulation.

Utility deregulation will likely have the

most significant impacts on LCC results,

through changes in electricity prices.

LCC Details are found in TSD Chapter

8.

V. Regulatory Review and Procedural

Requirements

This advance notice of proposed

rulemaking was submitted for review to

OIRA in the Office of Management and

Budget under Executive Order 12866,

"Regulatory Planning and Review." 58

FR 51735. If DOE later proposes energy

conservation standards for certain

distribution transformers, the

rulemaking would likely constitute a

significant regulatory action, and DOE

would prepare and submit to OIRA for

review the assessment of costs and

benefits required by section 6(a)(3) of

45417

the Executive Order. In addition,

various other analyses and procedures

may apply to such future rulemaking

action, including those required by the

National Environmental Policy Act, 42

U.S.C. 4321 et seq.; the Unfunded

Mandates Act of 1995, Pub. L. 104-4;

the Paperwork Reduction Act, 44 U.S.C.

3501 et seq.; the Regulatory Flexibility

Act, 5 U.S.C. 601 et seq.; and certain

Executive Orders.

VI. Approval of the Office of the

Secretary

The Secretary of Energy has approved

publication of today's Advance Notice

of Proposed Rulemaking.

Issued in Washington, DC, on July 13,

2004.

David K. Garman,

Assistant Secretary, Energy Efficiency and

Renewable Energy.

[FR Doc. 04-16573 Filed 7-28-04; 8:45 am]

BILLING CODE 6450-01-P

 EE-RM/STD-00-550 COMMENT 56.4