SmallElectricMotorsEnergyConservationStandardsPreliminaryAnalysesPublicMeetingBuildingTechnologiesProgramOfficeofEnergyEfficiencyandRenewableEnergyU.S.DepartmentofEnergyJanuary30,2009http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.htmlWelcome•Introductions•RoleoftheFacilitator•GroundRules(norms)­Listenasanally­Useshort,succinctstatements/keeptothepoint­Holdsidebarconversationsoutsidetheroom­Onepersonspeaksatatime(raisehandtoberecognized;stateyournamefortherecord)­Setcellphonestosilent/vibrate•HousekeepingItems•AgendaReview•OpeningRemarks29:00–9:20am9:20–9:30am9:30–10:15am10:15–10:30am10:30–11:15am11:15–12:00pm12:00–1:00pm1:00–1:30pm1:30–2:00pm2:00–2:30pm3:00–3:30pm3:30pmAgendaWelcome,Introductions,OpeningStatementsStatuteandContextMarket&Tech;ScreeningAnalysisBreakEngineeringAnalysisEnergyUse&End­UseLoad;MarkupAnalysisLunchLife­CycleCostAndPaybackPeriodAnalysisNationalImpactAnalysisPreliminaryMIAandotherNOPRAnalysesFinalQuestions/DiscussionClosingRemarksandAdjourn3PurposeofthePublicMeeting•ReviewstatuteandDOEactionsforsmallelectricmotors•PresentDOE’spreliminaryanalysis•ClarifyanyquestionsaboutDOE’sapproach•Seekcommentfromparticipantsontheanalysistodate•Discussnextstepsfortherulemaking4IssuesforCommentIssueBoxDOEwelcomescomments,data,andinformationconcerningitspreliminaryanalysisonsmallelectricmotors.Throughoutthispresentation,issuesthatcorrespondtoissuesraisedinDOE’spublishedmaterialfromthispreliminaryanalysisareraisedfordiscussioninboxeslikethisone.Nonetheless,commentsarewelcomeonanypartofDOE’sanalysis.5234Background and Legal Authority5PublicMeetingAgendaMarket&Tech;Screening;Engineering2EnergyUse;MarkupAnalysis341StatuteandContext5Life­CycleCostandPaybackPeriodAnalysisNationalImpactAnalysis6PreliminaryMIA;NOPRAnalyses6StatuteandContextSmallElectricMotors•TheEnergyPolicyActof1992amendedtheEnergyPolicyandConservationActtodirectDOEtoprescribeenergyconservationstandardsforthosesmallelectricmotorsforwhichtheSecretarydeterminesthatstandards‘‘wouldbetechnologicallyfeasibleandeconomicallyjustified,andwouldresultinsignificantenergysavings.’’(42U.S.C.6317(b)(1)).•DOEconductedanalysisandpublishedapositivedeterminationonJuly10,2006.71FR38799.•DOEinitiateditsenergyconservationstandardsrulemakingbypublishingaframeworkdocumentsolicitingcommentonitsmethodologyonAugust10,2007.72FR44990.•DOEisconductingaseparaterulemakingtoestablishtestproceduresforsmallelectricmotors.•NOPRpublishedonDecember22,2008.73FR78220.•CommentperiodisopenuntilMarch9,2009.7StatuteandContextStakeholderParticipationintheRulemakingProcessFederalRegisternoticesFrameworkDocumentPreliminaryAnalysisNOPRFinalRule•Publicmeetingsandoralcomments•WrittencommentsonFederalRegisternotices,TechnicalSupportDocumentsandAnalyticalSpreadsheets•Datainputfrommanufacturersandotherinterestedparties.StakeholderparticipationToday8ANOPR NOPRFinalRuleStatuteandContextPreliminaryAnalysisRulemakingStageFrameworkDocumentNOPRPreliminaryAnalysisFinalRuleMarket&TechnologyScreeningAnalysisEngineeringAnalysisEnergyUse&EndUseLoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkupsforEquipmentPriceDeterminationLife­CycleCostandPaybackPeriodAnalysisPreliminaryManufacturerImpactAnalysis9ANOPR NOPRFinalRuleStatuteandContextAnalysesforNoticeofProposedRulemaking(NOPR)FrameworkDocumentEnvironmentalAssessmentLife­CycleCostSubgroupAnalysisManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisRegulatoryImpactAnalysisRevisePreliminaryAnalysisNOPRPreliminaryAnalysesFinalRule10ANOPR NOPRFinalRuleStatuteandContextAnalysesforFinalRuleFrameworkDocumentNOPRPreliminaryAnalysesFinalReviewReviseNOPRAnalysesFinalRule11F r a m e w o r k Do c u m e n t NO P M a n d P r e lim . T S D

NO P R F i n a l Ru l e E f f e c t iv e Da t eStatuteandContextSmallElectricMotorsRulemakingSchedule12February2010IssueFinalRuleFebruary2015EffectiveDate(5yearsminimum,42USC6317(b)(3))DateMilestone~July2009IssueNOPRDecember30,2008FederalRegisterNoticeofPublicMeetingandAvailabilityofthePreliminaryTechnicalSupportDocumentAugust10,2007FrameworkDocumentPublished2007200820092010201120122013201420152016234Background and Legal Authority5PublicMeetingAgendaMarket&Tech;Screening;Engineering2EnergyUse;MarkupAnalysis341StatuteandContext5Life­CycleCostandPaybackPeriodAnalysisNationalImpactAnalysis6PreliminaryMIA;NOPRAnalyses13FrameworkDocumentPreliminaryAnalysisNOPRFinalRuleMarket&TechnologyScreeningAnalysisEngineeringAnalysisEnergyUse&EndUseLoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkupsforEquipmentPriceDeterminationLife­CycleCostandPaybackPeriodAnalysisPreliminaryManufacturerImpactAnalysis14MarketandTechnologyAssessmentMarketAssessmentPurpose•Characterizethesmallelectricmotorsmarketandmanufacturers•DetermineappropriateequipmentclassesMethod•ClarifyscopeofcoveragebasedonNEMAMG1­1987•Identifyandcharacterizemanufacturersofsmallelectricmotors•Classifycoveredproductsintoappropriateequipmentclasses•UsehistoricalNEMAshipmentdataprovidedfortheDeterminationAnalysis,estimatecurrentsales15MarketandTechnologyAssessmentScopeofCoverage•StatutoryDefinitionofSmallElectricMotor•“aNEMA[NationalElectricalManufacturersAssociation]generalpurposealternating­currentsingle­speedinductionmotor,builtinatwo­digitframenumberseriesinaccordancewithNEMAStandardsPublicationMG1–1987.”(42U.S.C.6311(13)(G))•Inordertomoreclearlyunderstandscope,DOEsoughttoclarifythefollowingtermsinthisdefinition:•“general­purposealternating­current”•“inductionmotor”•“two­digitframenumberseries”16MarketandTechnologyAssessmentScopeofCoverage•“General­purposealternating­current”•aNEMAtermusedinMG1­1987foralternating­currentmotorsthatarenotdesignedwithaspecificapplicationinmind.•ParagraphMG1–1.05definesthistermas:–Ageneral­purposealternating­currentmotorisaninductionmotor,rated200horsepowerandless,whichincorporatesallofthefollowing:(1)openconstruction,(2)ratedcontinuousduty,(3)servicefactorinaccordancewithMG1­12.47,and(4)ClassAinsulationsystem withatemperatureriseasspecifiedinMG1­12.42forsmallmotorsorClassBinsulationsystem withatemperatureriseasspecifiedinMG1­12.43formedium motors.Itisdesignedinstandardratingswithstandardoperatingcharacteristicsandmechanicalconstructionforuseunderusualserviceconditionswithoutrestrictiontoaparticularapplicationortypeofapplication.17MarketandTechnologyAssessmentScopeofCoverage•“inductionmotor”•Convertselectricalpowerintorotationalmechanicalpowerusingelectromagneticinductionforitsoperationandhasoneormorecomponentmemberscapableofrotarymovement.•StatuterequiresthatsmallelectricmotorsarebuiltinaccordancewithNEMAMG1­1987,whichhasfivecategoriesofinductionmotors:split­phase,shaded­pole,capacitor­start(bothCSIRandCSCR),permanent­splitcapacitor(PSC),andpolyphasemotors.•DOEcomestoapreliminaryconclusionthattheCSIR,CSCR,andpolyphasemotorsaretheonlycategoriesthatmeetthestatutoryrequirements.–Split­phasemotorsaredesignedforspecificpurposesandapplications.DOEisunawareofanygeneral­purposesplit­phasemotors.–Shaded­poleandPSCmotorsfailtomeetthetorquerequirementsforgeneral­purposemotors,underNEMAMG1–1987(MG1­12.32).18MarketandTechnologyAssessmentScopeofCoverage•“two­digitframenumberseries”•Amotor’sstandardsystemofnumbersincombinationwithlettersfordesignatingthesizeandmountingdimensionsofamotor.•Forsmallelectricmotors,itisthe“D”dimensionininchesmultipliedby16.•The“D”dimensionismeasuredfromthecenterlineoftheshafttothebottomofthemountingfeet.•Forexample,a48framemotorwouldhavea“D”dimensionof3.00inches(16x3.00=48).Standarddimensionsenableeaseofreplacement.•Coveredmotorsare42,48and56framemotors–MG1­1987onlygivesstandarddimensionsforthesethreeframesizes–Othertwo­digitsizes,e.g.,66frame,arelikelytobedefinite­purposeorspecial­purposeandarenotusedingeneral­purposeapplications19MarketandTechnologyAssessmentRequestforComment:CoverageofSmallElectricMotorsIssue:Thescopeofsmallelectricmotorscoveredunderthecurrentrulemakingactivityisslightlynarrowerthanthatconsideredforthedeterminationanalysis.Inthedeterminationanalysis,coverageofsmallelectricmotorswasinterpretedtomeanopenandenclosedconstruction.DOEnowunderstandsthestatutorydefinitionof“smallelectricmotor”asbeingapplicableonlytomotorswithopenconstruction.DOEinvitesinterestedpartiestocommentonitsunderstandingofcoverageforthepreliminaryanalyses.Inparticular,DOErequestsspecificlegalbasesanddetailedsupportingevidenceforanalternativeviewpoint.Pleaserefertosection2.2.1ofchapter2ofthepreliminaryTSD.20MarketandTechnologyAssessmentManufacturersofSmallElectricMotors•Fourmanufacturersaccountformorethan90%ofthedomesticmarketshareofallcategoriesofcoveredequipment.•A.O.SmithElectricalProductsCompany•BaldorElectricCompany•EmersonMotorTechnologies•RegalBeloitCorporation•AllaremembersofNEMA•Allhavediverseportfoliosofproducts,includingmanyothercategoriesofelectricmotors,otherrelatedelectricalequipment,andswitchgear.21MarketandTechnologyAssessmentEquipmentClasses•DOEdividescoveredequipmentintoclassesby•(1)thetypeofenergyused;•(2)thecapacityoftheequipment;and•(3)anyotherperformance­relatedfeaturesthatrequiredifferentstandardlevels,suchasfeaturesaffectingconsumerutility.(42USC6295(q))•Differentenergyconservationstandardsmayapplytodifferentequipmentclasses•DOEdeterminedthatitwouldclassify:•CSIR,CSCR,andpolyphasesmallelectricmotorsseparately•Horsepower­ ratedpowercapacityofthemotor,hasadirectimpactonsmallmotorefficiency•Numberofpoles­ impactstheboththeratedspeedandtorquecharacteristicsofthemotor•72equipmentclasses–eachauniquecombinationofhorsepower,numberofpoles,andmotorcategory22MarketandTechnologyAssessmentEquipmentClasses•Proposedtableofequipmentclasses•Onetablelikethisforeachmotortype–polyphase,CSIR,CSCR23MarketandTechnologyAssessmentSmallElectricMotorsUnitShipments•Methodology:•ShipmentestimateswerepreparedusingtheshipmentdataNEMAhadprovidedtoDOEforthedeterminationanalysisin2006.•DOEusedpubliclyavailableshipmentdatafromtheU.S.CensusBureautocalculateanannualgrowthrateandprojecttheNEMAdatatoashipmentestimatefor2007.•Asdiscussedearlier,DOEonlyprojectedopenconstructionmotors.•Approximately6,286,000coveredsmallelectricmotorsshippedin2007.•Polyphase–approximately557,000or8.9%•CSIR–approximately5,443,000or86.6%•CSCR–approximately286,000or4.5%24MarketandTechnologyAssessmentTechnologyAssessment•Purpose:todevelopapreliminarylistoftechnologyoptionsthatcouldimprovetheefficiencyofsmallelectricmotors.•Method:DOEidentifiedtechnologyoptionsfrom:•Literaturereview,includingmanufacturermarketingbrochures•Determinationanalysisrulemakingtechnicalreports•Commentsandinputfromstakeholders,includingDOEtechnicalcontractors•DOEclassifiedlossesintofourdifferentgroups:•conductorlosses(I2R)•corelosses•frictionandwindagelosses•stray­loadlosses•DOEdidnotidentifyanytechnologyoptionsthatreducestray­loadlosses.25MarketandTechnologyAssessmentTechnologyOptions•Conductorlosses(I2R)­ measuresDOEconsideredtoreduce:•usingcopperdie­castrotorcages•removingskewontheconductorcage•increasingthecross­sectionalareaoftherotorconductorbars•increasingtheend­ringsize•changinggaugesofcopperwireinthestator•manipulatingslotsizegeometry•decreasingtheairgapbetweentherotorandstator26MarketandTechnologyAssessmentTechnologyOptions•Corelosses–measuresDOEconsideredtoreduce:•addingstacklengthtothemotor;•changinggradesofelectricalsteel(i.e.,improvedconventionalgradesandexoticsteeltypes)•annealinglaminations•thinninglaminations•usingplasticbondedironpowder(PBIP)asacorematerial•usingapermanentmagnetelectricmotor27MarketandTechnologyAssessmentTechnologyOptions•FrictionandWindagelosses–measuresDOEconsideredtoreduce:•improvingmechanicalcomponentsanddesign(e.g.,bearingsandbearinglubricant)•improvingtheefficiencyofthecoolingsystem28MarketandTechnologyAssessmentTechnologyOptions•DOEreceivedcommentthatimprovingefficiencycanimpacttheperformance/operationofanelectricmotor.DOEthereforekeptthefollowingmotorcharacteristicsinmind:•rotorforcesandstresses•barshapesandfits•aluminumversuscoppercagesandotheralloys•rotorskewandairgap•thecoolingcircuit•lengthtodiameterratios•speedtorquecharacteristicsandslip•endringforces•unbalancedmagneticforcesandnoise•applicationrequirements•statorcoredesignfactors•windingelements•statorandframeconstruction•rotordesignandconstruction29MarketandTechnologyAssessmentRequestforComment:TechnologyOptionsforSmallElectricMotorsIssue:DOEinvitescommentsonthelistoftechnologyoptionsdevelopedinthetechnologyassessment.DOEinvitescommentonthecompletenessanddescriptionofthesetechnologyoptions.Pleaserefertosection2.2.3ofchapter2ofthepreliminaryTSD.30ScreeningAnalysisScreeningAnalysis•Purpose•Toapplyscreeningcriteriatodeterminewhichtechnologyoptionstoevaluateandwhichtoscreenout•Technologyoptionsarescreenedusingthefollowingcriteria:•Technologicalfeasibility•Practicabilitytomanufacture,install,andservice•Adverseimpactsonproductutilityoravailabilitytocustomers•Adverseimpactsonhealthorsafety(10CFRPart430,subpartC,appendixAat4(a)(4)and5(b))31ScreeningAnalysisTechnologyOptionsScreenedOut•Threetechnologyoptionswerescreenedout:•radialairgapslessthan10thousandthsofaninch•plasticbondedironpowder•permanentmagnetelectricmotors•Thescreeningoftheseoptionsarediscussedonthefollowingslides•PreliminaryTSDChapter4providesdetailonthescreeninganalysis.32ScreeningAnalysisScreenedOut:RadialAirGap<10Thousandths•Reducingtheradialairgapbetweenrotorandstatorimprovesefficiency,butatsomepointexceedspracticabilitytomanufacture.•DOEscreenedoutradialairgapsbelowtenthousandthsofaninchbecauseitisnot“practicabletomanufacture,install,andservice.”•Problemsinmanufacturingandservice,becausetherotorcouldcomeintocontactwiththestator•Alsoscreenedoutduetoadverseimpactsonconsumerutilityandreliability•Mayexperiencehigherfailurerateswhenmanufacturedwithairgapsarelessthantenthousandthsofaninch,particularlyformotorswithtallerandheavierrotors.33ScreeningAnalysisScreenedOut:PlasticBondedIronPowder•Anironpowderalloysuspendedinplasticandshapedintomotorcomponents,eliminatinganumberofmanufacturingsteps.Further,researchersclaimthistechnologyoptioncouldcutcorelossesbyasmuchas50percent.•DOEscreenedoutPBIPbecauseithasneverbeenincorporatedintoaworkingprototypeofasmallelectricmotor•DOEisuncertainwhetherthematerialhasthestructuralintegritytobeformedintoasmallelectricmotor•DOEisalsouncertainwhetherPBIPwouldbepracticaltomanufacture,install,andservice•Insufficientinformationavailableontheabilitytomanufacturethistechnology34ScreeningAnalysisScreenedOut:PermanentMagnetElectricMotors•Arotatingmachinewhosestatorhassurface­mountedpermanentmagnets,thustheairgapmagneticfieldisproducedbypermanentmagnets.•DOEscreenedoutpermanentmagnetelectricmotorsbecausethesemotorscannotbemanufacturedassmallelectricmotors,asdefinedinEPCA.•Necessarycontrolstostartandoperatethemotormaymakeitimpracticaltoinstalltheelectricmotorincertainequipment35ScreeningAnalysisTechnologyOptionsSelectedforFurtherConsideration•Useacopperdie­castrotorcage•Removeskewonconductorcage•Increasecross­sectionalareaoftherotorconductorbars•Increaseendringsize•Manipulatestatorslotsize•Decreasetheairgapbetweenrotorandstator(nolessthan10thousandthsofaninch)•Useimprovedgradesofelectricalsteel•Usethinnersteellaminations•Annealsteellaminations•Addstackheight(i.e.moreelectricalsteel)•Usehigh­efficiencylaminationmaterials•Installbetterbearingsandlubricant•Installamoreefficientcoolingsystem36ScreeningAnalysisRequestforComment:ScreenedOutTechnologiesIssue:DOEinvitescommentsonthethreetechnologyoptionsthatwerescreenedoutoftheanalysis—radialairgapsbelowtenthousandthsofaninch,plasticbondedironpowder,andpermanentmagnetelectricmotors.Pleaserefertosection2.3ofchapter2ofthepreliminaryTSD.37EngineeringAnalysisPurposeoftheEngineeringAnalysis•Toevaluatedesignoptionsthatimproveefficiencyrelativetothebaselineunits•Tocharacterizemanufacturersellingpriceversusnominalfull­loadefficiencyrelationshipforhigherefficiencysmallelectricmotorsDownstreamAnalyses•Life­CycleCostandPaybackPeriod•NationalImpactAnalysisManufacturerSellingPrice–EfficiencyRelationship

Manufacturer Selling PriceNominalFull­loadEfficiency38EngineeringAnalysisSelectingRepresentativeUnitstoAnalyze•Selectingtherepresentativemotorstoanalyze•Reviewedthesmallelectricmotordeterminationanalysis•Reviewedmanufacturers'salescatalogs•Consideredthreevariables:–motorcategories(threecategories)–horsepowerrating(eightratingcategories)–numberofpoles(threeconfigurations)•MotorCategories­ ensureeachmotorcategorywasrepresented:CSIR,CSCR,andpolyphase.•Horsepower­ ratingscommonlyavailableinseveralmanufacturercatalogsandscalabletootherequipmentclasses.•Numberofpoles­ selectedfour­polemotorsbecause1)highest2007shipmentvolumeand2)fallsbetween2and6poles,minimizeanyerrorfromscalingfrom4to2and6poles.39EngineeringAnalysisEngineeringAnalysisRepresentativeUnits•DOEselectedfourmotorsfromthreeequipmentclassesforitsanalysis:•Polyphase,1hp,4pole,56framemotor•Capacitor­start,induction­run,1⁄2hp,4pole,56framemotor•Capacitor­start,induction­run,1⁄2hp,4pole,48framemotor•Capacitor­start,capacitor­run,3⁄4hp,4pole,56framemotor•Two­ProngedApproach•Efficiencycurvesforeachmotorlistedaboveusingasubcontractor’sproprietarydesignsoftware.•Softwareoutputsbillofmaterials,coupledwithlaborestimatesandmark­upstoarriveatamanufacturer’ssellingprice.40EngineeringAnalysisDevelopBaselineValidateManufacturerDataDesignRestrictionsImplementDesignOptionsMarkupProductionCostEngineeringAnalysisMethodology•Definedbaselinespecificationsforeachequipmentclassanalyzed.•Designcriteriasettoensurethattheresultingdesignswouldbebothreasonableandmanufacturable.•Designoptioncombinationsorderedfromshortestpaybacktolongestpayback.•Billofmaterials,laborestimatesandestimatedmanufacturermark­upstoconvertproductioncosttosellingprice(MSP).•Curvesandslopescomparedwithdataprovidedbyafewmanufacturersunderconfidentialityagreements.41EngineeringAnalysisSmallElectricMotorDesignAnalysis–Manufacturability(1of3)•Peakslotfill–themaximumvaluethisparametershouldreachis75percentforanassumedhighvolumesimultaneousinsertionprocess.(Note:DOEconsiders“slotfill”tobetheareaofthewire(includinginsulation)dividedbythetotalslotareaavailableforwinding.)•Airgapbetweenrotorandstator–theairgapbetweentherotorandstatorshouldnotbelessthan0.010inches.Havingairgapstighterthanthisminimumcouldbeproblematicandmaycausecontactbetweenthespinningrotorandthestator,especiallyasshaftlengthincreases.•Statorslotopening–theopeningincombinationwiththecopperwiregaugesusedshouldgraphtoapointinthe“LevelWindArea”ofthe“BladeGapChart”takenfromAllianceWinding.Withoutthisrestriction,DOEisconcernedtheremaybetoomanyissueswithwirebreakageandjammingofmanufacturers’windingtools.42EngineeringAnalysisSmallElectricMotorDesignAnalysis–Manufacturability(2of3)•Stackheight–thestackheight(orlength)maychangebyupto100percentrelativetothebaselineheight(i.e.,thestackheightmaydoubletheoriginalvalue).Thisdesignoptionenablesmotorstoregaininductionwhensteelgradesareimproved.•Lockedrotortorque–thetorquemustbekeptwithin10percentofthebaselinemotor,andbewithinthespecificationssetforthbyNEMAMG1­1987inSection12.32.2.(e.g.,fora0.5hp,four­polemotortheminimumis85oz­ft.,[7.2Newtonmeters]).Maintainingthelockedrotortorquewithin10percentofthebaselinemotorwillhelppreservetheutilityofthemoreefficientmotordesigns.•Lockedrotorcurrent–thecurrentshouldnotexceedthevaluesofNEMAMG1­1987Section12.33.2(DesignN)(e.g.,45amperesfora115­volt,0.5hpmotor).43EngineeringAnalysisSmallElectricMotorDesignAnalysis–Manufacturability(3of3)•Breakdowntorque–thebreakdowntorquemustfallwithinNEMAMG1­1987Table10­5limitsforallratings(e.g.,for0.5hp,four­polesmallelectricmotorgreaterthan40.5oz­ft,butnottoexceed58.0oz­ft[3.43­4.91Newtonmeters]).•Coolingsystem–theparametersdirectlyrelatedtothemotor’scoolingsystem,suchasventilationopeningsinthelaminations,shouldnotbemodifiedinamannerthatwillincreasetheoperatingtemperatureofthemotor.•Rotorskew–therotorskewmaybealtered,butitcannotberaisedorloweredtoapointthatwillintroduceharmonicsthatadverselyaffectmotorperformanceorintroducecuspsintheaccelerationcurve.(Note:thisdesignlimitationreliesontheexpertiseofthemotordesigner).44­EngineeringAnalysisCostModelInputs•Fullproductioncosts•Materialandcomponentcostsderivedfrom aBillofMaterialsgeneratedbythird­partydesignsoftwareandinputfrom industryexperts•Laborcostsestimated,basedonindustryexperts•Directmaterial•Directlabor•Factoryoverhead•DepreciationFullProductionCost+ManufacturerMarkups(NonProductionCosts)=•Sales&marketing•Research&development•Interest•ProfitManufacturerSellingPrice45EngineeringAnalysisCostModelInputs­ Material•Billofmaterialsiscalculatedfromthreetypesofmaterialcosts:fixedcosts,variablecostsandsemi­fixedcosts.•Fixedcostmaterialsarethosepartsandcomponentsthatareconstantacrossalldesignsanddonotvarywithefficiency,e.g.,switchesorball­bearings.•Variablecostsarethosebasedonthecostofthematerialandtheamountofthatmaterialusedinthedesign.E.g.,statorandrotorlaminationcostsarevariablebecausethematerialpriceforthedifferentsteelgradeschangesasdoesthevolumeofsteelneededineachdesign.•Semi­fixedcostsarethosewithaconstantpriceperpound,whichvaryincostfromdesigntodesignasafunctionoftheamountusedinthemotordesigns.E.g.,die­castaluminumorcopperusedintherotorbars.Thepriceperpoundforaluminumorcopperisthesamefromdesigntodesign;however,thecostperdesignisdifferentbecausetheamountvarieswitheachdesign.46CostModelInputs­ MaterialSteel$/lbM3624gage0.65M3629gage0.70M1924gage0.75M1929gage0.80M1529gage0.90Metal$/lbCopper3.49Aluminum1.11WireGauge$/lb193.8319.53.84203.8520.53.86213.8721.53.88223.9022.53.91233.92•Steelcosts,metalcosts,andcopperwiregaugecostsusedasinputstotheengineeringanalysis•PriceswereestimatedafterconversationswithindustryexpertsandDOEtechnicalconsultants,aswellascommentsreceivedatframeworkpublicmeeting47EngineeringAnalysisCostModelInputs­ Labor48­EngineeringAnalysisCostModelMarkups•DOEdevelopedmanufacturermarkups•Scrapfactor:2.5%–handlingofmaterialinthefactoryandscrapmaterialthatcannotbeused(i.e.,shortwirelengths)•Factoryoverhead:12.5%–indirectcostsassociatedwithproduction,indirectmaterials,energyuse,taxes&insurance.•Non­production:37%–salesandgeneraladministrativecosts,R&D,interestpaymentsandprofit.•Directmaterial•Directlabor•Factoryoverhead•DepreciationFullProductionCost+ManufacturerMarkups(NonProductionCosts)=ManufacturerSellingPrice•Sales&marketing•Research&development•Interest•Profit49EngineeringAnalysisResultsforPolyphase,1hp,4Pole,56FrameMotor

Manufacturer Selling Price ($)$2,000$1,800$1,600$1,400$1,200$1,000$800$600$400$200$01,785.4990.4221.3586.7131.5585.5105.2381.593.4675.8ManufacturerSellingPrice($)Efficiency(%)74.076.078.080.082.084.086.088.090.092.0FullLoadEfficiency(%)50EngineeringAnalysisResultsforPolyphase,1hp,4Pole,56FrameMotor51EngineeringAnalysisResultsforCapacitor­start,Induction­Run,1⁄2hp,4Pole,56FrameMotor$1,800

Manufacturer Selling Price ($)$1,600$1,400$1,200$1,000$800$600$400$2001,532.9479.3213.8279.3136.5175.2112.8668.7105.6163.3ManufacturerSellingPrice($)Efficiency(%)$062.064.066.068.070.072.074.076.078.080.0FullLoadEfficiency(%)52EngineeringAnalysisResultsforCSIR,1⁄2hp,4Pole,56FrameMotor53EngineeringAnalysisResultsforCapacitor­Start,Induction­Run,1⁄2hp,4Pole,48FrameMotor$1,800

Manufacturer Selling Price ($)$1,600$1,400$1,200$1,000$800$600$400$2001,547.1182.0212.4081.7120.0074.1105.7969.596.9762.3ManufacturerSellingPrice($)Efficiency(%)$060.062.064.066.068.070.072.074.076.078.080.082.084.0FullLoadEfficiency(%)54EngineeringAnalysisResultsforCSIR,1⁄2hp,4Pole,48FrameMotor55EngineeringAnalysis

Manufacturer Selling Price ($)ResultsforCapacitor­Start,Capacitor­Run,3⁄4hp,4Pole,56FrameMotor$2,200$2,000$1,800$1,600$1,400$1,200$1,000$800$600$400$200$02,024.8288.3259.7887.0149.5082.9124.3377.1116.1768.6ManufacturerSellingPrice($)Efficiency(%)66.068.070.072.074.076.078.080.082.084.086.088.090.0FullLoadEfficiency(%)56EngineeringAnalysisResultsforCSCR,3⁄4hp,4Pole,56FrameMotor57EngineeringAnalysisMoreInformationontheEngineeringAnalysis•TSDChapter5•Detailonbaselinemotorsanalyzed•Detailonmethodologyfollowedfortheengineeringanalysis•Detailonthecostmodel,includingmaterialpricesandassumedhourlyfullyloadedlaborrate•Resultsoftheengineeringanalysis,includingperformancecharacteristics•TSDAppendix5A•Designinformationononeelectricmotordesignfrom eachofthefourrepresentativeequipmentclassesanalyzedintheengineeringanalysis.58EngineeringAnalysisIssuesforDiscussionIssue:DOEinvitescommentsonthemethodologyfollowedforthepreliminaryTSD,namelyuseofengineeringsoftwaretodesignmoreefficientversionsofthefourrepresentativeunitsanalyzed.DOEisalsointerestedincommentonthebaselinemodelsselected,andwhetherthesearetheappropriatebaselinemodelsonwhichtobebasetheengineeringanalysis.Finally,DOEisalsointerestedincommentsontheestimatedmanufacturermarkupsandlaborratesthatenabletheconversionofinputcoststosellingprices.Pleaserefertosection2.4ofchapter2ofthepreliminaryTSD.Issue:DOEinvitescommentsonthefindingsoftheengineeringanalysis.DOEalsoinvitescommentonthedecisiontodroponeofthefourmotorsfromthepreliminaryTSDanalysisduetothesimilarfindingsbetweenthe48­ and56­framesizeCSIRmotors.59234Background and Legal Authority5PublicMeetingAgendaMarket&Tech;Screening;Engineering2EnergyUse;MarkupAnalysis341StatuteandContext5Life­CycleCostandPaybackPeriodAnalysisNationalImpactAnalysis6PreliminaryMIA;NOPRAnalyses60FrameworkDocumentPreliminaryAnalysisNOPRFinalRuleMarket&TechnologyScreeningAnalysisEngineeringAnalysisEnergyUse&EndUseLoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkupsforEquipmentPriceDeterminationLife­CycleCostandPaybackPeriodAnalysisPreliminaryManufacturerImpactAnalysis61MarkupsAnalysisMarkupstoDetermineEquipmentPricePurpose,Inputs,andOutput•Purpose•Determinecustomerpricesunderastandardsscenariobasedonmanufacturercosts.•Characterizeequipmentdistributionchannelsandmarketsegments.•DescribeSEMequipmentdistributor/wholesalerdirectcosts,expenses,andprofits.•Inputs•Firmbalancesheets.–Wholesalers:U.S.CensusBureauFinancialDataonOtherCommercialEquipmentMerchantWholesalersfromWholesaleTrade,MiscellaneousSubjects(2002).•Output•Baselineandincrementalmarkups.62MarkupstoDetermineEquipmentPriceSEMEquipmentDistributionChannels•EstimatedFraction(%)ofEquipmentShipmentsbyDistributionChannels*40%DirecttoOEMs25%viaDistributorstoOEMs35%viaDistributorstoEndUsers*DOEassumedthesamemarketsharesbydistributionchannelforallnewSEMs.63MarkupstoDetermineEquipmentPriceBaselineandIncrementalMarkups•Markupsrelatecustomerpricetocostofgoodssold(COGS)•Baselinemarkupsrelatepricetocostpriortoachangeinefficiency•Baselinemarkupsindicateacustomerpricethatcoversallofawholesaler’sorcontractor’sexpensesplusprofit.•Directlaborcosts(salaries,payroll,rentalandoccupancy)areincluded.•IncrementalmarkupsrelatetheincrementalchangeincustomerpricetotheincrementalchangeinCOGSbeyondbaseline•SomedistributioncostsremainconstantwithCOGSincreases.•IncrementalmarkupscoveronlyexpensesthatvarywithCOGS–inthiscase,expensesthatincreaseduetoanincreaseinequipmentefficiency.–Forexample,directlaborcosts(salaries,payroll,rentalandoccupancy)donotvarywithefficiency­inducedchangesinCOGS.•DOEassumesotheroperatingcostsandprofitwillscaleproportionallywithCOGS.64MarkupstoDetermineEquipmentPriceDistributionandInstallationMarkupsandSalesTax•Wholesaler,OEMandretailermarkupsestimatedfromCensusFinancialData65EnergyUseCharacterizationEnergyUseCharacterization•MotorlossesconsistofI2Rlosses(bothstatorandrotor),corelosses,straylossesandfrictionandwindagelosses•DOE’smathematicaldescriptionofenergyuseseparatesmotorlossesintoaconstantcomponentandacomponentthatdependsonthesquareofthemotorloading.•Annualenergy(E)consumedbywascalculatedas:Eann= Hop×(PNL+ PLL× L2)•Reactivepowermayormaynotcontributetoincreasedenergyuse66EnergyUseCharacterizationEnergyUseCharacterization(cont.)250y=67.025x+139.39R2=0.9874600500

Reactive Power (watts)y=413.73x+113.35R2=0.98120.000.200.400.600.801.001.20MotorLoading200400

Loss (watts)15030010020050100000.000.200.400.600.801.001.20SquareofMotorLoading67PreliminaryManufacturerImpactAnalysisRequestforComment:CostsandLossesfromReactivePowerIssue:Reactivepowercreatescostsfortheelectricalsupplysystembyrequiringeitherpowerfactorcorrectionorrequiringmorecurrentcapacitytodeliverthesameactualpower.Reactivepowermayalsoinduceconsumptivelossesbothontheconsumerelectricalcircuitandontheelectricalsystemingeneral.DOEinvitescommentonhowbesttoestimatethecostimplicationsofreactivepower.DOEalsoinvitescommentonthesizeandimportanceofreactivepowereffectsandonanalyticalapproachesanddatathatcanbeusedtocharacterizethefractionofmotorreactivepowerthatmayresultinconsumptivelosses.68234Background and Legal Authority5PublicMeetingAgendaMarket&Tech;Screening;Engineering2EnergyUse;MarkupAnalysis341StatuteandContext5Life­CycleCostAndPaybackPeriodAnalysisNationalImpactAnalysis6PreliminaryMIA;NOPRAnalyses69FrameworkDocumentPreliminaryAnalysisNOPRFinalRuleNationalImpactAnalysisEnergyUseCharacterizationMarketandTechnologyAssessmentScreeningAnalysisEngineeringAnalysisMarkupstoDetermineEquipmentPriceLife­CycleCostandPaybackPeriodAnalysisShipmentsAnalysisPreliminaryManufacturerImpactAnalysis70Life­CycleCostandPaybackPeriodAnalysesLife­CycleCostAnalysis•Economicevaluationfromthecustomerperspective.•Life­cyclecost(LCC)equalscustomerpriceplusthesumofannualoperatingcostsdiscountedtoaparticularbaseyear.•ResultsareexpressedasLCCdifferenceofthebaseline(Level1)minusthestandardlevel.•Simplepaybackperiod(PBP­ inyears)isalsocalculatedandreportedinthisanalysis.CombineChangesinCostsLCCResultsFirstCost(ConsumerPrice+InstallationCost)OperatingExpensesConverttoPresentValue71Life­CycleCostandPaybackPeriodAnalysesSelectionofEfficiencyLevelsforAnalysis•Fiveefficiencylevelswereexaminedforequipmentintheengineeringanalysis.•FiveadjustedefficiencylevelswereselectedfortheLCCanalysis.•Level0representsthecurrentmarketlevelSEMs.•Level1is1%belowNEMApremium fora1HPpolyphasemotor•Level2isequivalenttotheNEMApremium levelformedium motors•Level3is1%aboveNEMApremium fora1HPpolyphasemotor•Level4is2.5%aboveNEMApremium fora1HPpolyphasemotor•Level5isMaxTech•Efficiencylevelsarematchedbetweenproductclassesandpowerratingsusingengineeringscalinglawsandscalingfactors.72Life­CycleCostandPaybackPeriodAnalysesLCCCalculationFlowchartFromEngineeringAnalysisFromMarkupstoDetermineProductPriceFromEnergyUseCharacterization73PreliminaryManufacturerImpactAnalysisRequestforComment:BaselineEfficiencyIssue:DOEestimatedanaverageefficiencyinthebasecaseclosetotheengineeringbaselineefficiency,andassumednoefficiencytrendsinthebasecase.DOEinvitescommentsonthebaselineefficiencyestimateandinformationonthedistributionofefficienciescurrentlyinthemarketplacealongwithexpectedtrendsinthethesemarketefficiencies.74Life­CycleCostandPaybackPeriodAnalysesElectricityPrices•Electricitypricesaredistributionsofaveragepricesderivedfrom2006EIAform861dataandadjustedforinflation.•ElectricitypriceprojectionsbasedonEnergyInformationAdministration’sAnnualEnergyOutlook(AEO)2008referencecaseforthecommercialsector.•AEO2008highgrowthandlowgrowthcaseswillberunassensitivities.75Life­CycleCostandPaybackPeriodAnalysesOtherInputs•InstallationCosts•DOEassumeda$252.90installationcost(2007$)•CostswerebasedonRSMeanselectricalcostdata.•Installationcostsassumednottovarywithequipmentpriceorefficiencylevel.•DiscountRates•Derivedfrom estimatesofthecostofcapitalofcompaniesforcommercialandindustrialsectors.•Costofcapitaliscalculatedfromtheweighted­averagecostofcapital(WACC)tothecompanytoobtainequityanddebtfinancing.•Estimateismadeusing40­yearaveragesofcostofcapitalequationparameters.•Weighted­averagevalue(real)is:5.92%foragriculturalandindustrialownersand;5.89%forcommercialowners.76Life­CycleCostandPaybackPeriodAnalysesOtherInputs(cont.)•EquipmentLifetime•Usedaverageageof9yearsforpolyphasemotorsand7yearsforcapacitorstartmotorsbasedupontheliteraturesurveyandindustryinputduringtheanalysisanddiscussionperiodforthe“DeterminationConcerningthePotentialforEnergyConservationStandardsforSmallElectricMotors”publishedonJuly10,2006.77Life­CycleCostandPaybackPeriodAnalysesExampleofLife­CycleCostAnalysisResults(LCCSavings)0100200300400500­10040180320460600Life­cycleCostSavings($)

FrequencyMean=$29Polyphase,1HPmotor,CandidateStandardLevel2,85.5%78Life­CycleCostandPaybackPeriodAnalysesU.S.NationalAverageLife­CycleCostAnalysisResults$500$600$700$800$900$1,000$1,100

Life­Cycle CostPolyphase1HPCSCR0.75HPCSIR0.5HP60%65%70%75%80%85%90%95%Efficiency79Life­CycleCostandPaybackPeriodAnalysesExampleofPaybackPeriodAnalysisResultsCSIR,0.5HPmotor,CandidateStandardLevel3,75.4%80Life­CycleCostandPaybackPeriodAnalysesU.S.NationalAveragePaybackPeriodAnalysisResults051015202530

Payback Period (years)Polyphase1HPCSCR0.75HPCSIR0.5HP70%75%80%85%90%Efficiency81234Background and Legal Authority5PublicMeetingAgendaMarket&Tech;Screening;Engineering2EnergyUse;MarkupAnalysis341StatuteandContext5Life­CycleCostandPaybackPeriodAnalysisNationalImpactAnalysis6PreliminaryMIA;NOPRAnalyses82FrameworkDocumentPreliminaryAnalysisNOPRFinalRuleNationalImpactAnalysisEnergyUseCharacterizationMarketandTechnologyAssessmentScreeningAnalysisEngineeringAnalysisMarkupstoDetermineEquipmentPriceLife­CycleCostandPaybackPeriodAnalysisShipmentsAnalysisPreliminaryManufacturerImpactAnalysis83NationalImpactAnalysisPurpose•ShipmentsAnalysis•Estimatesmallelectricmotor(SEM)equipmentshipmentsovertime.•NationalImpactAnalysis•EstimatetheNationalEnergySavings(NES)from SEM equipmentatdifferentefficiencylevels.•Estimatethenationaleconomicimpactonthenation(ortheNetPresentValue(NPV))oftheSEM equipmentatdifferentefficiencylevels.84NationalImpactAnalysisNationalImpactAnalysisProcessShipmentsModelNationalEnergySavingsNationalEconomicImpactsLCCAnalysisResultsandOtherInputsNationalEnergySavings(Quads)NationalNetPresentValue(2007$,billion)•Nationalenergysavingscalculatedforperiodfrom2015­2045(30years).•NPVcalculatedforperiodfrom2015­2055(40years).85NationalImpactAnalysisRequestforComment:PurchasePriceElasticityIssue:AnincreaseintheinstalledcostofsmallelectricmotorscouldreducetheirpurchaseduetomigrationbyOEMstototallyenclosedmotors,whicharenotcoveredbyDOEstandards,orotherfactors.However,DOEhasnotfoundanydatathatwouldallowittoestimatetheelasticityofsmallelectricmotorshipmentswithrespecttochangeintheirpurchasepriceorotherfactors.DOErequestsinformationonthelevelofpricechangeforcoveredsmallelectricmotorsthatwouldbelikelytoinducemigrationtototallyenclosedmotors,aswellasdataonwhatwouldbeanappropriatevalueforpurchasepriceelasticity.86NationalImpactAnalysisShipmentsbyApplicationEquipmentClassNo.ApplicationPolyphaseCSIRCSCR**1 Air** **and gas** **compressors 9.2%** **8.1% 8.1%** **2 Commercial** **and industrial** **heating, ventilating,** **air­conditioning, and** **refrigeration equipment** **4.3% 8.4%** **8.4% 3** **Commercial laundry** **machinery 0.4%** **1.2% 1.2%** **4 Conveyors** **18.8% 11.8%** **11.8% 5** **Farm machinery** **3.0% 10.9%** **10.9% 6** **Food machinery** **8.2% 2.1%** **2.1% 7** **General industrial** **machinery 3.4%** **2.4% 2.4%** **8 Indus** **trial and** **commercial fans** **and blowers** **5.6% 5.9%** **5.9% 9** **Machine tools** **7.3% 1.9%** **1.9% 10** **Packaging machinery** **1.0% 0.3%** **0.3% 11** **Pum ps** **and pumping** **equipment 33.0%** **41.1% 41.1%** **12 Service** **industry machinery** **1.5% 3.0%** **3.0% 13** **Textile machinery** **1.2% 0.4%** **0.4% 14** **Woodworking machinery** **3.1% 2.4%** **2.4% TOTAL** **100% 100%** **100%**87NationalImpactAnalysisPolyphaseShipmentsbySizeandPolesEstimateforYear2007MotorHorsepower/StandardKilowattEquivalentSixPolesFourPolesTwoPolesTotal1/4hp/0.18kW**1,967 7,637** **1,967 11,571** 1/3hp/0.25kW**4,784 16,289** **3,264 24,338** 1/2hp/0.37kW**8,181 49,884** **3,607 61,671** 3/4hp/0.55kW**12,286 59,460** **82,596 154,342** 1hp/0.75kW**17,608 71,708** **17,608 106,925** 11⁄2hp/1.1kW**5,885 146,033** **5,885 157,804** 2­3hp/1.5­2.2kW**­ 28,268** **12,817 41,084** Total**50,711 379,279** **127,744 557,735** 88NationalImpactAnalysisProfileofAffectedStockCSIRMotorAffectedStock0.010.020.030.040.050.060.0

( M i l l i o n s )201020152020202520302035204020452050205589NationalImpactAnalysisAnnualSavingsandExpenses­$0.10­$0.05$0.00$0.05$0.10$0.15201520202025203020352040204520502055

Billions of 2007 DollarsEquipmentCostOperatingCostSavingsNetSavings90NationalEnergySavings2.52.01.51.00.50.070%75%80%85%EfficiencyNationalImpactAnalysis90%

National Energy Savings (quads)CSIR0.5HPy=11.1x­ 6.8y=2.4x­ 1.8Polyphase1HPy=0.72x­ 0.47CSCR0.75HP91NationalImpactAnalysisNationalNetPresentValueat3%RealDiscountRateEfficiency­101234570%75%80%85%90%

N e t P r e s e n t V a l u e ( b i l l i o n $ )Polyphase1HPCSCR0.75HPCSIR0.5HP92NationalImpactAnalysisNationalNetPresentValueat7%RealDiscountRateEfficiency­0.500.511.5270%75%80%85%90%

N e t P r e s e n t V a l u e ( b i l l i o n $ )Polyphase1HPCSCR0.75HPCSIR0.5HP93234Background and Legal Authority5PublicMeetingAgendaMarket&Tech;Screening;Engineering2EnergyUse;MarkupAnalysis341StatuteandContext5Life­CycleCostandPaybackPeriodAnalysisNationalImpactAnalysis6PreliminaryMIA;NOPRAnalyses94FrameworkDocumentPreliminaryAnalysisNOPRFinalRuleMarket&TechnologyScreeningAnalysisEngineeringAnalysisEnergyUse&EndUseLoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkupsforEquipmentPriceDeterminationLife­CycleCostandPaybackPeriodAnalysisPreliminaryManufacturerImpactAnalysis95PreliminaryManufacturerImpactAnalysisPreliminaryManufacturerImpactAnalysisOverview•DOEobtainedinformationfromNEMAmembers•Sentaninterviewguidetofourbigmanufacturers•Receivedwrittenresponses•Discussedresponsesonindividualtelephoneinterviews•Topicsdiscussed•Engineeringanalysis•Marketinformation(e.g.shipments)•Keyissues(asdefinedbythemanufacturers)•Companyniches•Capitalcostsandinvestments•Facilityimpacts•Impactsonconsumers96PreliminaryManufacturerImpactAnalysisSmallElectricMotorsKeyIssues•Productionandproductmix•Higherstandardsmeanshigherper­unitcosts•Consumersmayshifttolesscostlyproducts•Compliancecosts•Conversioncapitalexpenditures•Product­conversionexpenses•Exports,ForeignCompetition,andOutsourcing•Exportsales•Domesticmarketservedbyforeigncompetition•Domesticproductionlevels97PreliminaryManufacturerImpactAnalysisSmallElectricMotorsKeyIssues•MarketSharesandIndustryConsolidation•Newcompaniesentering•Companiesexiting•Companiesmerging•CumulativeBurden•Combinedeffectonmanufacturers,groupsofmanufacturers,orentireindustry•Levelandtimingofinvestmentsexpected•Whatcircumstancesallowmanufacturerstomakeexpenditurestocomply98PreliminaryManufacturerImpactAnalysisSummaryofMajorIssues•Capitalexpensestoproducestandardscompliantmotors•Smallelectricmotorsrepresentasmallportionofthemajormanufacturersbusiness•Smallmanufacturershavefewersourcesfromwhichtoraisemoney•Manufacturersmayleavethemarket•Maintainingproductavailabilityandfeatures•Motorsmayphysicallybecomelargerwhichcouldinhibituseincertainapplications•Horsepowerratingscouldconsolidate,eliminatingpartofthemarket•Enforcementofstandards•Concernaboutthefeasibilityofenforcement99PreliminaryManufacturerImpactAnalysisRequestforComment:EnforcementofimportedOEMequipmentIssue:DOEunderstandsthatenforcementofenergyefficiencyrequirementsforsmallelectricmotorsisunlikeotherconsumerproductsorcommercialequipment,wheresmallmotorsarecomponentsofdomesticandimportedOEMequipment.DOErequestsdataandinformationfrominterestedpartiesthatcanassistinevaluatingthepotentialimpactonexports,foreigncompetition,andoutsourcing.100ANOPR NOPRFinalRuleStatuteandContextAnalysesforNoticeofProposedRulemaking(NOPR)101FrameworkDocumentEnvironmentalAssessmentLife­CycleCostSubgroupAnalysisManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisRegulatoryImpactAnalysisRevisePreliminaryAnalysisNOPRPreliminaryAnalysisFinalRuleANOPR NOPRFinalRuleStatuteandContextAnalysesforNoticeofProposedRulemaking(NOPR)102FrameworkDocumentEnvironmentalAssessmentLife­CycleCostSubgroupAnalysisManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisRegulatoryImpactAnalysisRevisePreliminaryAnalysisNOPRPreliminaryAnalysisFinalRuleRevisePreliminaryAnalysisRevisePreliminaryAnalysis•Considercomments•ReviseusinglatestdataNationalImpactsAnalysis•Considercomments•Reviseusinglatestdata•ConductLCCsub­groupanalysisLife­CycleCostandPaybackPeriodAnalyses•Considercomments•ReviseusinglatestdataEngineeringAnalysisActionAnalysis103ANOPR NOPRFinalRuleStatuteandContextAnalysesforNoticeofProposedRulemaking(NOPR)104FrameworkDocumentEnvironmentalAssessmentLife­CycleCostSubgroupAnalysisManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisRegulatoryImpactAnalysisRevisePreliminaryAnalysisNOPRPreliminaryAnalysisFinalRuleLCCSubgroupAnalysisLife­CycleCostSubgroupAnalysis•Purpose•Evaluateimpactsonanyidentifiablegroupsorcustomerswhomaybedisproportionatelyaffectedbyanynationalenergyefficiencystandardlevel.•Method•AnalyzetheLCCandpaybackperiods(PBPs)forthosecustomersthatfallintoanyidentifiablegroups.LCCspreadsheetmodelallowsfordifferentinputstorepresentparticulargroups.•Possiblesubgroupsincludesmallbusinesses(i.e.thosewithsmallannualrevenues)andfarmers.•Output•Customersubgrouplife­cyclecostsandpaybackperiods.•Identificationofsubgroupsparticularlyaffectedbyanewstandard.105LCCSubgroupAnalysisPurchasePriceImpacts•DOEwillbeespeciallysensitivetoincreasesinthepurchasepriceoftheequipmentduetonewstandards,toavoidnegativeimpactsonidentifiablepopulationgroupsthatmaynotbeabletoaffordsignificantincreasesinequipmentprice.106ANOPR NOPRFinalRuleStatuteandContextAnalysesforNoticeofProposedRulemaking(NOPR)107FrameworkDocumentEnvironmentalAssessmentLife­CycleCostSubgroupAnalysisManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisRegulatoryImpactAnalysisRevisePreliminaryAnalysisNOPRPreliminaryAnalysisFinalRuleManufacturerImpactAnalysisManufacturerImpactAnalysis•Purpose•Assesstheimpactsofstandardsonsmallelectricmotormanufacturers.•Identifyandestimateimpactsonmanufacturersub­groupsthatmaybemoreseverelyimpactedthantheindustryasawhole.•Examinetheimpactofcumulativeregulatoryburdensontheindustry.•Method•AnalyzeindustrycashflowandnetpresentvaluethroughuseoftheGovernmentRegulatoryImpactModel(GRIM).•InterviewmanufacturerstorefineinputstotheGRIM,developsub­groupanalyses,andaddressqualitativeissues.•Output•Manufacturersub­groupnetpresentvalueimpacts.•Othersub­groupnetpresentvalueimpacts.•Otherimpacts.108ManufacturerImpactAnalysisManufacturerImpactAnalysis(MIA)Process•TheMIAprocessconsistsofthreephases:Phase1Phase2Phase3IndustryprofileDevelopstraw­manGRIMDevelopinterviewguideInterviews&industrywide/subgroupanalysesAssessdirectemployment,competition,cumulativeburdenFinalizeMIAresultsforNOPR109Screenin Anal sisEngineering AnalysisLCC AnalysisNational EnergyConsumer SubgroupUtility ImpactsEnvironmental ImpactIndirect EmploymentManufacturerImpactAnalysisTheMIAisbothconcurrentandcoordinatedwithactivitiesthroughouttherulemakingprocess.PhaseIIndustryProfilePhaseIIIManufacturerInterviewsRevisedIndustryCashFlowManufacturerSubgroupAnalysisQualitativeAssessmentPhaseII“Strawman”GRIMManufacturerImpactAnalysisOtherRulemakingAnalysesgyScreeningAnalysisEngineeringAnalysisLCCAnalysisSavingsAnalysisNationalEnergySavingsAnalysisConsumerSubgroupUtilityImpactssEnvironmentalImpactsImpactsIndirectEmploymentImpacts110ManufacturerImpactAnalysisPhaseI:IndustryProfile•Collectfinancialandmarketinformation:•Industryreports;•Companyannualreportsandwebsites;•Tradejournals;•U.S.CensusBureau;•SEC10­Kformfilings;•InformationfromthepreliminaryactivitiesprecedingtheNOPR:manufacturerproductioncosts,markups;andmanufacturersellingprices,shipments.111ManufacturerImpactAnalysisPhaseII:DevelopStraw­manGRIM•TheGovernmentRegulatoryImpactModel(GRIM)isanindustrycashflowanalysisthatestimatesthechangeinindustryvalueduetotheintroductionofnewefficiencystandards.ManufacturerPricesShipmentsManufacturingCostsFinancialInformationCashFlowImpacts,ChangesinIndustryNPVGRIM112ManufacturerImpactAnalysisPhaseII:DevelopInterviewGuide•AcriticalaspectoftheMIAinvolvesinterviewswithmanufacturers.AninterviewguideissenttomanufacturersinpreparationforPhaseIII.•Interviewtopicswillinclude:•Engineeringanalysis;•Import/Exportissues;•Shipmentsmodel;•Consolidation/competitiveimpacts;•Coststructureandfinancialparameters;•Replacementpartsorrefurbishments;•Conversioncosts(capitalexpenditures,tooling,R&D,•Impactofthestandard’stesting);effectivedate;and•Impactofotherregulations/•Othertopicsimportanttocumulativeburden;manufacturers•Directemploymentimpacts;113ManufacturerImpactAnalysisPhaseIII:ManufacturerInterviews•Expectedtimeframe.•Timeandpersonnelcommitmentformanufacturers(industry­wideGRIM,GRIMassumptions,subgroupanalysisdiscussion).•Confidentialityagreements.114ManufacturerImpactAnalysisPhaseIII:ManufacturerSubgroupAnalysis•Thesubgroupanalysisisamorefocusedversionoftheindustrywideanalysis.•WorkwithsubgrouprepresentativestotailoraGRIMincorporatinguniquefinancialcharacteristics.•Considerandfocusonissuesofimportancetothesubgroup,includingemployment,capacityutilizationandcumulativeburden.•Reviewdraftfindingswithsubgroupmembersduringdevelopment.115ANOPR NOPRFinalRuleStatuteandContextAnalysesforNoticeofProposedRulemaking(NOPR)116FrameworkDocumentEnvironmentalAssessmentLife­CycleCostSubgroupAnalysisManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisRegulatoryImpactAnalysisRevisePreliminaryAnalysisNOPRPreliminaryAnalysisFinalRuleUtilityImpactAnalysisUtilityImpactAnalysis•Purpose•Investigatetheeffectsonelectricutilitiesfromreducedenergyconsumptionandreducedpeakloaddemandduetonewenergyconservationstandards.•Method•Usesnationalenergysavingsresults.•UsestheEnergyInformationAdministration’sNationalEnergyModelingSystem(NEMS)tailoredforDOE’sBuildingTechnologiesProgram(NEMS­BT).•Output•Changeinelectricitysalesandpricebyregion.•Changeinthemixofelectricitygeneration.•Changeinnewcapacityconstruction.117ANOPR NOPRFinalRuleStatuteandContextAnalysesforNoticeofProposedRulemaking(NOPR)118FrameworkDocumentEnvironmentalAssessmentLife­CycleCostSubgroupAnalysisManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisRegulatoryImpactAnalysisRevisePreliminaryAnalysisNOPRPreliminaryAnalysisFinalRuleEmploymentImpactAnalysisEmploymentImpactAnalysis•Purpose•Reportnetjobscreatedoreliminatednationallyasaconsequenceofnewenergyconservationstandards.•Method•UsestheImSET(ImpactofSectorEnergyTechnologies)modelfortheevaluationofindirectemploymentimpacts.•ChangesinequipmentandenergyexpendituresaredevelopedintheNationalEnergySavingsAnalysis.•DirectemploymentimpactsaredevelopedintheManufacturerImpactAnalysis.•Output•Changeinthecommercialandenergysectoremploymentasaconsequenceofnewenergyconservationstandards.119ANOPR NOPRFinalRuleStatuteandContextAnalysesforNoticeofProposedRulemaking(NOPR)120FrameworkDocumentEnvironmentalAssessmentLife­CycleCostSubgroupAnalysisManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisRegulatoryImpactAnalysisRevisePreliminaryAnalysisNOPRPreliminaryAnalysisFinalRuleEnvironmentalAssessmentEnvironmentalAssessment•Purpose•Reportenvironmentalimpactsasaconsequenceofnewenergyconservationstandards,includingchangesinpowerplantemissions.•Method•EnergysavingsresultstakenfromtheNationalEnergySavingsAnalysis.•EnergyInformationAdministration’sNationalEnergyModelingSystem(NEMS)providespower­plantemissions.•Output•Estimateofnationalemissionreductionsofsulfurdioxide(SO2),oxidesofnitrogen(NOx),carbondioxide(CO2)andmercury(Hg).121EnvironmentalAssessmentRequestforComment:MonetaryValueofEmissionsIssue:DOEinvitescommentonthemonetaryvalueofGreenHouseGasemissionsreduction.DOEwillusemonetaryvaluestorepresentthepotentialvalueofsuchemissionsreductions.DOEinvitescommentonmethodsforestimatingthenetmonetaryvalueofGreenHouseGasemissionsreductions.DOEalsoinvitescommentonwhichdataandreportsprovideinformationregardingwidelyacceptedvaluesthatmaybeusedinDOE’sanalyses.122ANOPR NOPRFinalRuleStatuteandContextAnalysesforNoticeofProposedRulemaking(NOPR)123FrameworkDocumentEnvironmentalAssessmentLife­CycleCostSubgroupAnalysisManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisRegulatoryImpactAnalysisRevisePreliminaryAnalysisNOPRPreliminaryAnalysisFinalRuleRegulatoryImpactAnalysisRegulatoryImpactAnalysis•Purpose•Investigatethenationalimpactsdueofnon­regulatoryalternativescomparedwithmandatoryenergyconservationstandards.•Thenon­regulatoryalternativesthatmaybeconsideredinclude:–Nonewregulatoryaction;earlyreplacement;prescriptivestandards;customertaxcredits;manufacturertaxcredits;customerrebates;voluntaryefficiencytargets;bulkgovernmentprocurement.•Method•NESspreadsheetmodelismodifiedtoconsiderscenarios.Theseinclude:energypricesandescalationfactors;implicitmarketdiscountrates;customerpurchaseprice,operatingcost,andincomeelasticities;andequipmentstockdata.•Output•NationalEnergySavingsandNetPresentValueofthenon­regulatoryalternatives.•Impactofnon­regulatoryalternativesonpurchasepriceanduseofenergyefficientequipment.124ClosingConsensusRecommendations•DOEseekstoencouragedevelopmentofconsensusproposalsfornewstandardsbecausestandardswithsuchbroad­basedsupportarelikelytobalanceeffectivelytheeconomic,energy,andenvironmentalinterestsaffectedbystandards.•AnyrecommendationmustsatisfythesevenstatutorycriteriaprovidedbyEPCAfordeterminingwhetheranenergyconservationstandardistechnologicallyfeasibleandeconomicallyjustified,andwillresultinsignificantenergysavings.•AnyconsensusrecommendationshouldalsoincludeinformationthatDOEcanusetoassessthesevenstatutorycriteriathatdeterminewhetherthebenefitsofthestandardexceeditsburdenstothegreatestextentpracticable.125ClosingTheEnergyPolicyandConservationAct(EPCA)directsDOEtoconsidersevenfactorswhensettingenergyconservationstandardsEnvironmentalassessmentUtilityimpactanalysisEmploymentimpactanalysis7.OtherfactorstheSecretaryconsidersrelevantNationalimpactanalysis6.NeedfornationalenergyconservationManufacturerimpactsanalysis5.ImpactofanylesseningofcompetitionScreeninganalysisEngineeringanalysis4.ImpactonutilityorperformanceNationalimpactanalysis3.TotalprojectedenergysavingsLife­cyclecostanalysis2.LifetimeoperatingcostsavingsLife­cyclecostanalysisManufacturerimpactsanalysis1.EconomicimpactonconsumersandmanufacturersAnalysisFactor126ClosingRemarksDOESeeksCommentsonitsProposalInallcorrespondence,includeallofthefollowing:–EnergyConservationStandardsforSmallElectricMotors–DocketNumberEERE­2007–BT–STD–0007–RegulatoryIdentificationNumber(RIN)1904–AB70Email:Small_electric_motors_std.rulemaking@hq.doe.govPostalMail:Courier:Ms.BrendaEdwardsMs.BrendaEdwardsU.S.DepartmentofEnergyU.S.DepartmentofEnergyBuildingTechnologiesProgram,MailstopEE­2JBuildingTechnologiesProgram1000IndependenceAvenue,S.W.950L’EnfantPlaza,S.W.,6thFloorWashington,DC20585­0121Washington,DC20024Telephone:(202)586­2945Commentperiodcloses:March2,2009127