REGULATORY IMPACT ANALYSIS FOR GENERAL SERVICE FLUORESCENT

LAMPS AND INCANDESCENT REFLECTOR LAMPS

TABLE OF CONTENTS

RIA.1 INTRODUCTION

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RIA.2 METHODOLOGY

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RIA­iREGULATORY IMPACT ANALYSIS FOR GENERAL SERVICE FLUORESCENT

LAMPS AND INCANDESCENT REFLECTOR LAMPS

RIA.1 INTRODUCTION

DOE will prepare a draft regulatory impact analysis in compliance with Executive Order

12866, “Regulatory Planning and Review,” which will be subject to review by the Office of

Management and Budget’s Office of Information and Regulatory Affairs (OIRA). 58 FR 51735,

September 30, 1993. DOE will conduct this analysis as part of the Notice of Public Rulemaking

(NOPR).

RIA.2 METHODOLOGY

As part of the regulatory impact analysis, and as discussed in TSD Chapter 12,

“Manufacturer Impact Analysis,” DOE will identify and seek to mitigate the overlapping effects

on manufacturers of new or revised DOE standards and other regulatory actions affecting the

same products. Through manufacturer interviews and literature searches, DOE will compile

information on burdens from existing and impending regulations affecting the GSFL and IRL.

The regulatory impact analysis also will address the potential for non­regulatory

approaches to supplant or augment energy conservation standards to improve the efficacy of

GSFL and IRL. The NOPR will include a complete quantitative analysis of alternatives to the

proposed conservation standards. DOE will use the NES spreadsheet model (as discussed in

TSD Chapter 10, “National Impact Analysis”) to calculate the NES and NPV for the alternatives

to the proposed conservation standards. Listed below are some of the alternative means of

achieving energy efficiency improvements that DOE has used in prior rulemakings. The

Technical Support Document (TSD) in support of DOE’s NOPR will include a complete analysis

of each alternative, the methodology for which is discussed briefly below.

• no new regulatory action

• consumer tax incentives

• manufacturer tax incentives

• performance standards

• rebates

• voluntary energy efficiency targets

• early replacement (i.e., retrofit)

• bulk government purchases

To compare each alternative quantitatively to proposed energy conservation standards,

DOE will need to quantify the effect of each alternative on the purchase and use of more

efficacious general service fluorescent lamps and incandescent reflector lamps. Once DOE

estimates the impacts of alternatives to the standard, DOE will run these standard­alternative

scenarios in the NES spreadsheet model. Key inputs that DOE may adjust in the NES

spreadsheet model for this analysis include:

RIA­1• energy prices and escalation factors;

• implicit market discount rates for trading off purchase price against operating expense

when choosing equipment efficiency;

• customer purchase price, operating cost, and shipment scenarios

• customer price versus efficiency relationships; and

• equipment stock data (purchase of new equipment or turnover rates for inventories).

The output from the NES spreadsheet model for each alternative considered will be as

follows:

• Energy use (EJ

= 10 18 joule) is the cumulative energy use of the equipment from the

effective date of the new standard to 2042. DOE will report electricity consumption

as primary energy.

• National energy savings is the cumulative national energy use from the base case projection less the alternative policy case projection.

• Net present value is the value of future operating cost savings from general service

fluorescent lamps and incandescent reflector lamps bought in the period between the

effective date of the new standard and the close of the analysis period. DOE

calculates the NPV as the difference between the present value of equipment and

operating expenditures (e.g., energy) in the base case, and the present value of

expenditures in each alternative policy case. DOE will discount future operating and

equipment expenditures to its analysis year using two discount rates: seven and three

percent. DOE will also calculate operating expenses (including energy consumption)

over the life of the equipment.

RIA­2