[Federal Register Volume 65, Number 113 (Monday, June 12, 2000)]
[Rules and Regulations]
[Pages 36986-36992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14446]



[[Page 36985]]

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

Part V





Department of Energy





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



Office of Energy Efficiency and Renewable Energy



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



10 CFR Part 474



Electric and Hybrid Vehicle Research, Development, and Demonstration 
Program; Petroleum-Equivalent Fuel Economy Calculation; Final Rule

Federal Register / Vol. 65, No. 113 / Monday, June 12, 2000 / Rules 
and Regulations

[[Page 36986]]


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

DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 474

[Docket No. EE-RM-99-PEF]
RIN 1904-AA40


Electric and Hybrid Vehicle Research, Development, and 
Demonstration Program; Petroleum-Equivalent Fuel Economy Calculation

AGENCY: Department of Energy.

ACTION: Final rule.

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

SUMMARY: The Department of Energy (DOE) is revising its regulations on 
electric vehicles to provide a petroleum-equivalency factor (PEF) and 
procedures for calculating the petroleum-equivalent fuel economy of 
electric vehicles. The petroleum-equivalent fuel economy values of an 
automobile manufacturer's electric vehicles may be included in the 
calculation of that manufacturer's corporate average fuel economy 
(CAFE), according to regulations prescribed by the Environmental 
Protection Agency and the Department of Transportation.

EFFECTIVE DATE: This final rule is effective July 12, 2000.

ADDRESSES: Written comments received in response to the notice of 
proposed rulemaking, a transcript of oral comments presented at the 
public hearing on August 17, 1999, and supporting technical information 
described in the notice of proposed rulemaking are filed at the DOE 
Freedom of Information Reading Room under docket number EE-RM-99-PEF. 
You may read and copy any of this docket material at: DOE Freedom of 
Information Reading Room, Room 1E-190, U.S. Department of Energy, 1000 
Independence Avenue, SW, Washington, DC 20585, (202) 586-3142. Hours: 9 
a.m.-4 p.m., Monday through Friday except Federal holidays.
    Additional background materials are also available at the DOE 
Freedom of Information Reading Room. Copies of the hearing transcript 
and written comments received regarding the withdrawn February 4, 1994, 
proposed rule are filed under Docket No. EE-RM-94-101. Earlier 
materials related to the calculation of the PEF are contained in Docket 
No. EE-RM-93-301.

FOR FURTHER INFORMATION CONTACT:
Technical Information: Mr. Rogelio Sullivan, U.S. Department of Energy, 
Office of Transportation Technologies, EE-32, Rm 5G-046, 1000 
Independence Avenue SW, Washington, DC 20585, (202) 586-8042.
Legal Information: Mr. Eugene Margolis, U.S. Department of Energy, 
Office of General Counsel, GC-72, Rm 6B-256, 1000 Independence Avenue 
SW, Washington, DC 20585, (202) 586-9526.

SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion
    A. Requirements of the Motor Vehicle Information and Cost 
Savings Act, as amended
    B. PEF Development Process
    C. PEF Calculation Procedures
    1. General Form of the PEF Equation
    2. Gasoline-Equivalent Energy Content of Electricity Factor
    3. ``Fuel Content'' Factor
    4. Petroleum-Powered Accessory Factor
    5. Driving Pattern Factor
    6. Use of the PEF
    7. Sample Calculations
III. Public Comments Received on the Notice of Proposed Rulemaking 
and DOE's Responses
IV. Procedural Requirements

I. Background

    In 1975, Congress mandated fuel economy standards for automobiles 
produced in or imported into the United States in an effort to conserve 
energy through improvements in the efficiency of motor vehicles. The 
new law required that every manufacturer or importer of automobiles in 
the United States meet a corporate average fuel economy standard for 
the fleet of vehicles produced or imported in any model year. Although 
certain classes of electric vehicles qualify as ``automobiles'' under 
the law, they do not consume ``fuel'' as defined in the law. Therefore, 
inclusion of electric vehicles in a manufacturer's corporate average 
fuel economy is impossible without a method for expressing the 
electrical energy consumption rate as an equivalent consumption rate of 
gasoline. Congress directed the Secretary of Energy to establish a 
method for determining the petroleum-equivalent fuel economy of 
electric vehicles.
    Congress anticipated that allowing manufacturers to include the 
expected high equivalent ``fuel economy'' of electric vehicles in 
corporate average fuel economy calculations would provide an incentive 
for vehicle manufacturers to produce and sell electric vehicles. 
Congress anticipated that the existence of such an incentive would help 
to accelerate the commercialization of electric vehicles.
    DOE published a notice of proposed rulemaking (NOPR) on July 14, 
1999 (64 FR 37905), describing a revised petroleum-equivalency factor 
(PEF) and supporting rationale. DOE solicited public comments on the 
proposed rule and received comments from five organizations 
representing a cross section of stakeholders. DOE considered these 
comments carefully before preparing today's final rule. A summary of 
the comments and DOE's responses are provided in section III of this 
document. DOE believes that the final rule presented today is 
responsive to Congressional intent, addresses stakeholder comments and 
concerns with the proposed rule, is consistent with the regulatory 
treatment of other types of alternative fuel vehicles, and is 
straightforward to understand and implement.
    Administrative responsibilities for the corporate average fuel 
economy program are assigned to the Department of Transportation and 
the Environmental Protection Agency under the Motor Vehicle Information 
and Cost Savings Act (49 U.S.C., Subtitle VI, Part C). The Secretary of 
Transportation is responsible for prescribing the corporate average 
fuel economy standard and enforcing the penalties for failure to meet 
these standards. The Administrator of the Environmental Protection 
Agency is responsible for establishing test procedures, for testing the 
efficiency of vehicles subject to corporate average fuel economy 
standards, and for calculating a manufacturer's corporate average fuel 
economy value. DOE is responsible for developing and promulgating the 
petroleum-equivalency factor, the key component in the calculation of 
petroleum-equivalent fuel economy values for electric vehicles.

II. Discussion

A. Requirements of the Motor Vehicle Information and Cost Savings Act, 
as Amended

    Section 503(a)(3) of the Motor Vehicle Information and Cost Savings 
Act (49 U.S.C. 32904(a)(2)) requires DOE to determine the petroleum-
equivalent fuel economy values for electric vehicles, taking into 
account the following parameters:
    (i) The approximate electric energy efficiency of the vehicles 
considering the vehicle type, mission, and weight;
    (ii) The national average electricity generation and transmission 
efficiencies;
    (iii) The need of the Nation to conserve all forms of energy, and 
the relative scarcity and value to the Nation of all fuel used to 
generate electricity; and

[[Page 36987]]

    (iv) The specific driving patterns of electric vehicles as compared 
with those of petroleum-fueled vehicles.
    Section 503(a)(3) also provides for revision of such values if 
necessary.

B. PEF Development Process

    The development process of the PEF and the rationale were presented 
in detail in the notice of proposed rulemaking, and are not repeated in 
full here. Section C provides a brief description of each of the terms 
in the PEF equation. Section III also provides an abbreviated 
discussion of several of the key issues underlying DOE's rationale.

C. PEF Calculation Procedures

    The PEF is based on the existing regulatory approach at 49 U.S.C. 
32905 for determining the petroleum-equivalent fuel economy of 
alternative fueled vehicles. The calculation procedure converts the 
measured electrical energy consumption of an electric vehicle into a 
raw gasoline-equivalent fuel economy value, and then divides this value 
by 0.15 to arrive at a final petroleum-equivalent fuel economy value 
which may then be included in the calculation of the manufacturer's 
corporate average fuel economy. Two additional factors are present in 
the equation, but these will usually have a value of unity and thus 
will not influence the value of the PEF. The terms comprising the PEF 
and the procedure for applying the PEF are described in greater detail 
below.
1. General Form of the PEF Equation
    The general form of the PEF equation is:

PEF = E<INF>g</INF> * 1/0.15 * AF * DPF

where:

E<INF>g</INF> = Gasoline-equivalent energy content of electricity 
factor
1/0.15 = ``Fuel content'' factor
AF = Petroleum-fueled accessory factor
DPF = Driving pattern factor

The development of these factors is described below.
2. Gasoline-Equivalent Energy Content of Electricity Factor
    When comparing gasoline vehicles with electric vehicles, it is 
essential to consider the efficiency of the respective ``upstream'' 
processes in the two fuel cycles. A full description of the differences 
in the processes is beyond the scope of this rulemaking, but the 
critical difference is that a gasoline vehicle burns its fuel on-board 
the vehicle, and an electric vehicle burns its fuel (the majority of 
electricity in the U.S. is generated at fossil fuel burning 
powerplants) off-board the vehicle. In both cases, the burning of fuels 
to produce work is the least efficient step of the respective energy 
cycles.
    Therefore, the PEF includes a term for expressing the relative 
energy efficiency of the full energy cycles of gasoline and 
electricity. This term, the gasoline-equivalent energy content of 
electricity factor, abbreviated as E<INF>g</INF>, is defined as:

E<INF>g</INF> = gasoline-equivalent energy content of electricity = 
(T<INF>g</INF> * T<INF>t</INF> * C) T<INF>p</INF>
where:
T<INF>g</INF> = U.S. average fossil-fuel electricity generation 
efficiency = 0.328
T<INF>t</INF> = U.S. average electricity transmission efficiency = 
0.924
T<INF>p</INF> = Petroleum refining and distribution efficiency = 0.830
C = Watt-hours of energy per gallon of gasoline conversion factor = 
33,705 Wh/gal
E<INF>g</INF> = (0.328 * 0.924 * 33705)/0.830 = 12,307 Wh/gal

    The derivation of these values is straightforward but lengthy and 
is therefore not discussed in this notice. Details on the assumptions, 
calculations, and data sources used to derive these values are 
described in materials contained in Docket No. EE-RM-99-PEF, which may 
be reviewed at the DOE Freedom of Information Reading Room, at the 
address and times stated above.
3. ``Fuel Content'' Factor
    The fuel content factor has a value of 1/0.15 and is included in 
the PEF for the reasons described in the notice of proposed rulemaking 
and the responses to comments section of this notice. Briefly, these 
reasons are:
    (i) Consistency with existing regulatory and statutory procedures;
    (ii) Provision of similar treatment to manufacturers of all types 
of alternative fuel vehicles; and
    (iii) Simplicity and ease of use.
    The fuel content factor value of 1/0.15 is equivalent to a multiple 
of 6.67.
4. Petroleum-Powered Accessory Factor
    A minority of electric vehicles, primarily those that may be 
operated in colder climates, may be equipped with auxiliary petroleum-
powered accessories, such as cabin heater/defroster systems. DOE 
addresses the possible use of such petroleum-powered accessories in the 
PEF calculations by incorporating an Accessory Factor (AF). This factor 
reduces the PEF by ten percent when an electric vehicle is equipped 
with any petroleum-powered accessories. This results in two possible 
accessory factor values:

------------------------------------------------------------------------
                                                             Accessory
        Petroleum-powered accessories installed?            factor (AF)
                                                               value
------------------------------------------------------------------------
No......................................................            1.00
Yes.....................................................            0.90
------------------------------------------------------------------------

    DOE recognizes that there are many variables affecting the actual 
energy efficiency penalty of petroleum-powered accessories, but 
believes that the ten percent penalty is a reasonable representative 
value. DOE has prepared a supporting technical analysis of the 
magnitude of the actual energy efficiency penalty of petroleum-powered 
accessories, and placed this analysis in the docket. Because this 
approach penalizes electric vehicles equipped with petroleum-powered 
accessories, it provides an incentive for manufacturers to develop 
vehicles with electrically-powered accessories.
5. Driving Pattern Factor
    Congress required that DOE consider the potential that electric 
vehicles may be used differently than gasoline vehicles, primarily due 
to its shorter range and longer ``refueling'' times. However, to meet 
the definition of an ``automobile'' at 40 CFR part 600 and be eligible 
for inclusion in the calculation of a manufacturer's corporate average 
fuel economy, a vehicle must be ``manufactured primarily for use on 
public streets, roads, or highways.'' Thus, DOE believes that electric 
vehicles eligible for inclusion in CAFE will offer capabilities 
(perhaps excepting driving range) similar to those of conventional 
vehicles. For these reasons, DOE is setting the value of the Driving 
Pattern Factor (DPF) at unity (1.00).
6. Use of the PEF
    The value of the PEF is equal to the product of the values of the 
gasoline-equivalent energy content of electricity (E<INF>g</INF>), the 
fuel content factor of 1/0.15, the petroleum-fueled accessory factor 
(AF), and the driving pattern factor (DPF):

PEF = E<INF>g</INF> * 1/0.15 * AF * DPF
substituting values,
PEF = (12,307 Wh/gal)*(1/0.15)*(1.00 or 0.90)*(1.00)
or,

PEF = 82,049 Wh/gal (if no petroleum-powered accessories are installed)
PEF = 73,844 Wh/gal (if any petroleum-powered accessories are 
installed)

    Dividing the PEF by the combined (city and highway) energy 
consumption of an electric vehicle yields the petroleum-equivalent fuel 
economy of that electric vehicle in miles per gallon:

mpg = PEF (Wh/gal) <divide> combined [electrical] energy consumption 
(Wh/mile)

[[Page 36988]]

7. Sample Calculations
    Sample calculations of the petroleum-equivalent fuel economy of 
hypothetical electric vehicles are presented in the Appendix of the 
rule.

III. Public Comments Received on the Notice of Proposed Rulemaking 
and DOE's Responses

    The Department encouraged public participation in this rulemaking. 
DOE, in the NOPR, urged individual vehicle manufacturers, fuel 
producers and providers, trade associations, vehicle owners and 
operators, States or other governmental entities, and other affected or 
interested parties to submit written comments on the proposal and/or to 
testify at a hearing held on August 17, 1999, in Washington, DC.
    You may review the written comments and the hearing transcript, as 
well as other docket material in the DOE Freedom of Information Reading 
Room at the address shown at the beginning of this rulemaking. The 
materials are filed under docket number EE-RM-99-PEF.
    DOE received written comments on the proposed rule from five 
organizations:
    1. Alliance of Automobile Manufacturers (AAM--representing BMW, 
DaimlerChrysler, Fiat, Ford, General Motors, Isuzu, Mazda, Nissan, 
Toyota, Volkswagen, and Volvo);
    2. California Air Resources Board (CARB);
    3. Electric Vehicle Association of the Americas (EVAA);
    4. Georgia Power; and
    5. Virginia Power
    EVAA also testified at the public hearing. The common thread 
through most of the comments was the strong desire to have the final 
rule in place as soon as possible. Commentors also suggested that DOE 
only consider changes to the proposed rule if such changes would not 
delay issuance of the final rule.
    Following are summaries of the comments received and DOE's 
responses. In most cases, similar comments have been grouped together 
and given a single response. Additional supporting analyses may be 
found in the docket.
    Comment 1: EVAA, Georgia Power, and Virginia Power generally 
support DOE's revised approach. The PEF value of 81,407 Wh/gal [in the 
proposed rule] is acceptable, with the modifications described in the 
provided comments. EVAA specifically believes that the proposed PEF 
aligns EVs with other alternative fuel vehicles for fuel economy 
purposes. (EVAA, Georgia Power, Virginia Power)
    Response: DOE acknowledges the general support for the revised 
approach and consistent treatment of Alternative Fuel Vehicles. DOE 
values the opinions of these informed stakeholders. The suggested 
modifications are discussed below.
    Comment 2: Publishing a final rule should be the top priority--
don't delay publication of the final rule.
    <bullet> The Alliance supports the proposal as is and urges that it 
be finalized at the earliest possible time. (AAM)
    <bullet> DOE should make the simple corrections suggested before 
publication of the final rule. (EVAA, Georgia Power, Virginia Power)
    <bullet> DOE should attempt to address the larger issues (such as 
explicitly quantifying the relative scarcity of fuels), but only if it 
will not delay the publication of a final rule. (EVAA, Georgia Power, 
Virginia Power)
    Response: DOE agrees that under present conditions, timely 
publication of a final rule is a higher priority than technical hair 
splitting. DOE will still make several adjustments to the final rule, 
as described below.
    Comment 3: Publish the final rule rapidly; fine-tune it later. DOE 
should establish a schedule in the final rule for addressing items that 
could not be quickly resolved at this time. (Georgia Power, Virginia 
Power)
    Response: The NOPR explicitly states (Sec. 474.5) that DOE will 
perform a review five years after publication of the final rule to 
determine whether any updates and/or revisions are necessary. DOE 
anticipates that better data on many aspects of EV use will be 
available by that time.
    Comment 4: Incorporate a scarcity factor in the equation as 
required by law. DOE's own analysis shows scarcity and energy security 
advantages for electricity and that fuels used to produce electricity 
are abundant, and that reserves of nuclear and renewables are 
essentially unlimited. By not including a scarcity factor, DOE is not 
being responsive to this requirement of the Act and is failing to 
credit electricity for use of these abundant resources. (EVAA, Georgia 
Power, Virginia Power)
    Response: The final rule is based on the relevant factors in 
Section 503 (a)(3) of the Motor Vehicle Information and Cost Saving 
Act, including the relevant scarcity of fuel used to generate 
electricity. As described in the NOPR, DOE performed a careful and 
thorough analysis of the present and projected availability of energy 
resources. This analysis showed that fuels (raw resources) used to 
produce electricity are abundant, as are the raw resources used to 
produce gasoline and diesel fuel (in fact, ``proved reserves'' of all 
of these energy resources tend to increase over time as new resources 
are discovered and better recovery techniques are developed). Since all 
of these fuels are abundant, the concept of ``relative scarcity'' is 
difficult to quantify objectively, and in DOE's judgement, should not 
be an appropriate guiding factor in the rulemaking at this time.
    The commentors' claim that electricity is the only vehicle fuel 
that can be produced from nuclear or renewable sources is incorrect. 
For example, both hydrogen and ethanol can be produced totally from 
nuclear and/or renewable sources.
    The 1/0.15 factor used in the equation is not intended to be a 
scarcity factor per se, but it does result in a very substantial 
adjustment to the raw calculated energy efficiency of electric 
vehicles. It is included to reward electric vehicles' benefits to the 
Nation relative to petroleum-fueled vehicles, in a manner consistent 
with the regulatory treatment of other types of alternative fueled 
vehicles and the authorizing legislation.
    Comment 5: Georgia Power and Virginia Power support the use of the 
1/0.15 factor in simplifying the calculation, but DOE should provide a 
technical basis for its application to EVs, or else modify the factor 
accordingly. (Georgia Power, Virginia Power)
    Response: DOE agrees that the replacement of the previously 
proposed ``scarcity factor'' with the 1/0.15 factor does make the 
calculation considerably simpler, but this was not the only reason DOE 
replaced the scarcity factor with the 1/0.15 factor approach.
    In the NOPR, DOE describes its assessment of the technical basis 
for the application of a factor of 1/0.15 to the measured fuel economy 
of liquid-alternative fueled vehicles (e.g., M85 fueled vehicles) under 
existing law (64 F.R. 37907). The NOPR also observes that the law 
applies the same 1/0.15 factor to gaseous-alternative fueled vehicles, 
even though there is not an obvious technical basis for doing so.
    DOE determined that the most equitable and viable approach would be 
to apply the same 1/0.15 factor to electric vehicles in order to 
maintain consistency with the existing regulatory treatment of other 
types of alternative fueled vehicles.
    All alternative fuels offer the intrinsic benefit of being 
substitutes for petroleum, on which nearly 100 percent of the Nation's 
transportation depends. In other words, any alternative fuel helps the 
Nation avoid having all of its transportation ``eggs'' in the petroleum

[[Page 36989]]

``basket.'' Each mile driven in an alternative fuel vehicle offsets 
approximately one mile driven in a petroleum-fueled vehicle.
    Comment 6: Assigning one fuel content factor (1/0.15) to all 
alternative fuel vehicles is inappropriate since ``the fuel efficiency 
benefits of electric vehicles far exceed those of other alternative 
fuel vehicles.'' DOE should use a fuel content factor that more 
accurately represents electric vehicle benefits in comparison to other 
alternative fuels. (CARB)
    Response: The efficiency of EVs varies widely as a function of 
motor and drivetrain efficiency, driving cycle, and the round-trip 
efficiency of the battery. The energy source which offers the greatest 
benefits depends on many factors, and the energy source that offers the 
greatest benefit to one set of users may not be the most beneficial for 
a different set of users or the general public. These benefits may vary 
by geography, fuel and generating method.
    As noted in the NOPR, DOE invested considerable time and effort in 
attempting to develop a method that could rigorously account for the 
advantages to the Nation offered by electric vehicles compared to 
conventional vehicles, but was unable to identify a method that was 
sufficiently objective, robust, and consistent with established policy 
directions.
    Thus, DOE stands by its proposal to provide electric vehicles the 
same reported-fuel-efficiency incentive (the 1/0.15 factor) that other 
alternative fuel vehicles currently enjoy.
    Although electric vehicles and other alternative fuel vehicles will 
have its energy-equivalent fuel economy adjusted by the same incentive 
factor, electric vehicles will still enjoy favorable regulatory 
treatment under DOE's proposal. This is because EVs are specifically 
exempt from caps on the amount that alternative fuel vehicles are 
allowed to contribute to raising a manufacturer's overall CAFE (49 
U.S.C. 32906(a)).
    Comment 7: The U.S. Average Electricity Generation factor 
(T<INF>g</INF> = 0.328) is based only on fossil fuel generation, and 
does not account for the efficiencies of nuclear or renewable energy 
generation. Counting the efficiency of these sources relative to fossil 
fuel generation as 100 percent, the E<INF>g</INF> factor should be 
equal to about 0.53. (EVAA says 0.40 to 0.53 depending on treatment of 
the nuclear component). (EVAA, Georgia Power, Virginia Power)
    Response: DOE reminds the commentors that the E<INF>g</INF> factor 
represents relative efficiency, not resource abundance. There are two 
reasons why DOE chose to use conversion efficiencies for electricity 
that reflect the typical efficiencies of fossil fuel-fired powerplants. 
First, existing nuclear and hydroelectric plants are now operated at 
essentially full capacity. Since no significant additions to U.S. 
nuclear or hydro-electric capacity are planned, any increase in 
electricity demand that results from expanded production and use of 
electric vehicles is very likely to be met by fossil fuel-fired 
powerplants. Second, although the fuel supply for nuclear, hydro, and 
renewable generated electricity is plentiful, the process for 
converting the raw fuel or physical energy to electricity is, in most 
cases, less efficient than fossil fuel plants. Further, no energy 
conversion process is 100 percent efficient.
    Since several comments were provided on this issue, DOE took a 
closer look at the relative efficiency of nuclear vs. fossil fuel 
generation. Nuclear power plants generate steam at lower temperatures 
than fossil power plants, reducing their relative thermodynamic 
efficiency. Typically, nuclear plants generate steam at a maximum cycle 
temperature of about 575 Kelvin (<difference>575  deg.F), while fossil 
plants generate steam at temperatures of about 825 Kelvin 
(<difference>1025  deg.F). Thus, assuming both cycles reject heat to 
the surroundings at 294 Kelvin (70  deg.F), their respective 
theoretical limiting Carnot efficiencies (1--(T<INF>L</INF>/
T<INF>H</INF>)) is 49 percent for nuclear and 64 percent fossil. The 
E<INF>g</INF> factor uses the actual average fossil fuel-to-electricity 
conversion efficiency, which is 32.8 percent. Scaling the nuclear 
Carnot efficiency by the same ratio suggests that nuclear plants 
achieve conversion efficiencies on the order of 25 percent. While this 
is a very crude analysis, it is likely that a more rigorous analysis 
would yield qualitatively similar results.
    Therefore, including the nuclear component in the calculation of 
the E<INF>g</INF> factor would likely cause the factor to change 
downward, not upward as suggested by the commentors.
    Data on the ``efficiency'' of hydroelectric generation are somewhat 
difficult to obtain, though hydroelectric generation efficiency may be 
higher than typical fossil fuel-fired powerplants. This is because 
hydroelectric power generation is based on principles of momentum and/
or pressure transfer and not combustion and heat transfer. Without 
suitable data, and without taking a significant amount of additional 
time for detailed analysis, DOE notes that the relatively small amount 
of relatively high-efficiency hydroelectric generation tends to offset 
the larger amount of relatively less-efficient nuclear power 
generation. Thus, the two trends tend to cancel each other and the 
efficiency of fossil generation would continue to dominate.
    Therefore, DOE has continued to use the value of E<INF>g</INF> = 
0.328 in light of: (1) the commentors' clear desire to place a higher 
priority on timely publication of a final rule, than on performing 
additional technical analyses; and (2) since the fossil generation 
component will dominate the marginal electrical generation efficiency 
for many years.
    Comment 8: The U.S. Average Electricity Transmission and 
Distribution Efficiency factor T<INF>t</INF> places a unique and unfair 
additional penalty on electric vehicles since fuel distribution 
efficiency is not included in the mileage calculations for any other 
vehicle energy source. DOE should assign a value of unity to the 
T<INF>t</INF> factor. (Georgia Power, Virginia Power)
    Response: As the commentors note, the T<INF>t</INF> factor is 
required by the authorizing legislation. DOE is aware of the potential 
for such a factor to unfairly penalize EVs; this is the reason why DOE 
added the U.S. Petroleum Refining and Distribution factor T<INF>p</INF> 
(= 0.830) in the denominator of the E<INF>g</INF> factor equation to 
offset the T<INF>t</INF> (= 0.924) factor in the numerator.
    Note that T<INF>p</INF> includes refining as well as distribution 
in order to include most of the corresponding steps in the energy 
chain--just as the equation attempts to do with the electric energy 
chain. Note that raw resource extraction (mining, drilling, etc.) is 
not counted. Data that can be used to measure the ``efficiency'' of 
these processes is difficult to obtain, and varies widely depending on 
the characteristics of the individual site. DOE believes that the 
relative difference in ``efficiency'' of resource extraction (i.e., 
energy expended in recovery relative to the energy content of the 
resource recovered) between individual sites of one type (e.g., coal 
mines) is probably greater than the difference in the average 
efficiency of different extraction processes (e.g., mining vs. 
pumping).
    Together, the ratio of the factor's T<INF>t</INF> / T<INF>p</INF> 
(= 1.113) increases the assigned petroleum-equivalent fuel economy of 
EVs. Therefore, the T<INF>t</INF> factor is not an ``unfair penalty'' 
on EVs, but is in fact a benefit for EVs.
    Comment 9: The energy content of a gasoline factor, C = 33,440 Wh/
gal, is inconsistent with the ``accepted actual value'' [``physical 
constant'' in EVAA's oral comments] used by other DOE programs. DOE 
should use the value of 33,705 Wh/gal (115,000 Btu/gal <divide> 3.412 
Btu/Wh) that is reported by the

[[Page 36990]]

Alternative Fuels Data Center. (EVAA, Georgia Power, Virginia Power)
    Response: DOE disagrees that a single ``actual'' value for the 
energy content of gasoline exists. Gasoline is a varying blend of 
hundreds of components, and thus the energy content of individual 
batches of gasoline varies by several percentage points from grade-to-
grade and from brand-to-brand. The energy content also varies 
regionally, seasonally, and over the long-term in response to changes 
in available feedstock, regulatory requirements, and economic 
pressures.
    DOE agrees, however, that a consistent ``average'' value should be 
used across government programs. Since the PEF is attempting to compare 
the energy efficiency of electric vehicles to the fuel economy of 
conventional vehicles as measured by the EPA, the energy content of 
gasoline value used in the PEF should match the energy content of the 
gasoline used by EPA in testing the fuel economy of gasoline vehicles.
    However, EPA has not provided a value for the energy content of its 
testing gasolines. Therefore, DOE will use the value of 33,705 Wh/gal, 
obtained by dividing the 115,000 Btu/gal value reported by the 
Alternative Fuel Data Center, by the (rounded) conversion factor of 
3.412 Btu/Wh.
    Comment 10: Develop a technical basis for the accessory factors 
used when the vehicle has petroleum-fueled accessories installed. 
(CARB, Georgia Power, Virginia Power)
    Response: On the basis of the comments received and DOE's 
additional analysis of the impact of petroleum-fueled accessories, DOE 
has decided to replace the two accessory factors with a single 
accessory factor that would be applied if an electric vehicle includes 
any petroleum-powered accessories. The value of this single accessory 
factor will be 0.9, i.e., a 10 percent penalty.
    A technical analysis of the magnitude of this penalty is now 
included in the docket. DOE notes that many variables affect the actual 
energy efficiency impact of petroleum-powered accessories on EVs, 
including accessory sizing (e.g., heater capacity) and the efficiency 
of both the vehicle and the accessory. To be truly accurate, it would 
be necessary to measure the actual consumption of the accessories 
installed in each vehicle and project this consumption over a suitable 
duty cycle for the vehicle. This process would add significant 
complexity, would place a substantial burden on automobile 
manufacturers and the EPA, and would provide few policy benefits not 
obtainable with the fixed accessory factor.
    DOE expects that very few electric vehicles will be equipped with 
petroleum-powered accessories, as such accessories contradict many of 
the motivations and attractions that lead customers to purchase 
electric vehicles.
    Comment 11: DOE should encourage the Environmental Protection 
Agency (EPA) to rely on the test procedures established by CARB for the 
testing and certification of EVs (these procedures are based on SAE 
J1634). The CARB procedures are consistent with current industry 
practice. (AAM, EVAA)
    Response: As the comments suggest, EPA rather than DOE is 
responsible for selecting and implementing the EV test procedures. DOE 
suggests that EVAA and AAM offer their recommendations on test 
procedures directly to EPA.
    Comment 12: The 55 percent urban and 45 percent highway weighting 
factors proposed do not represent the way that electric vehicles are 
used, particularly, those EVs that are designed for non-highway and/or 
neighborhood use. (CARB)
    Response: There are actually two issues raised by this comment. The 
first is that the weightings do not reflect the usage patterns of at 
least a portion of EVs. The second issue, which is not stated but is 
implied, is that DOE should adjust the factors to accommodate limited 
performance EVs.
    DOE agrees that there are some EVs that perform differently and 
will be used differently from conventional automobiles. DOE also 
anticipates that a limited number of customers with suitable ``mission 
requirements'' will purchase and operate limited performance EVs as 
replacements for conventional automobiles. However, DOE notes that to 
be included in CAFE calculations, a vehicle must meet the definition of 
an automobile at 40 CFR part 600, which states that such a vehicle must 
be ``manufactured primarily for use on public streets, roads, or 
highways.'' Limited performance EVs (such as neighborhood electric 
vehicles) that cannot keep up with highway traffic clearly do not meet 
this requirement and are categorically ineligible for inclusion in CAFE 
unless 40 CFR part 600 is appropriately amended.
    DOE believes that Congress intended the PEF to be an incentive for 
manufacturers to produce roadworthy electric vehicles that provide an 
alternative to conventional petroleum-powered automobiles.
    As for the weightings themselves, EPA defines these weightings. DOE 
used the 55 percent urban and 45 percent highway weighting factors in 
the sample calculations because these are the factors used by EPA for 
conventional vehicles. The paragraph in the NOPR that describes the 
``city'' and ``highway'' test procedures and the 55/45 percent 
apportioning of energy consumption values is intended only as an 
example of how to apply the PEF to determine the petroleum-equivalent 
fuel economy of an electric vehicle. The 55/45 percent weightings could 
change if EPA's CAFE calculation procedures are changed in the future.
    DOE also notes that the preceding arguments provide a compelling 
justification for setting the value of the Driving Pattern Factor in 
the PEF to unity (1.00).
    Comment 13: Review how changes in EV driving range and 
infrastructure availability might affect driving patterns of EVs in the 
future. (CARB)
    Response: As noted in the preceding response, electric vehicles 
eligible for inclusion in a manufacturer's CAFE calculation must be 
competitive with conventional vehicles. This strongly suggests that the 
Driving Pattern Factor should be equal to unity.
    DOE intends to monitor developments related to EVs and their use 
closely. Consideration of modifications to the Driving Pattern Factor 
and/or the PEF, in general, will be made at the 5-year review specified 
in the Sec. 474.5.

IV. Procedural Requirements

A. Environmental Protection Agency Review

    Pursuant to section 7(a) of the Federal Energy Administration Act 
of 1974 (15 U.S.C. 766(a)), DOE submitted a copy of this rulemaking to 
the Administrator of the Environmental Protection Agency for the 
Administrator's concurrence. The Administrator has concurred.

B. National Environmental Policy Act Review

    This rulemaking has been reviewed in accordance with the 
requirements of the DOE National Environmental Policy Act (NEPA) of 
1969 (42 U.S.C. 4321 et seq.), and the DOE regulations in 10 CFR part 
1021. This rulemaking amends 10 CFR part 474 so that electric vehicles 
receive similar treatment to what Congress has required for other 
alternative fuel vehicles under 49 U.S.C. 32905. The Department has 
determined that this rule is covered by Categorical Exclusion in 
paragraph A5 to subpart D, 10 CFR part 1021 (rulemaking, interpreting 
or amending an existing regulation, no change in environmental effect). 
Accordingly, neither an environmental assessment nor an environmental 
impact statement is required.

[[Page 36991]]

C. Regulatory Review

    Today's final rule has been determined not to be a ``significant 
regulatory action,'' as defined in section 3(f) of Executive Order 
12866, ``Regulatory Planning and Review.'' 58 FR 51735 (October 4, 
1993). Accordingly, this action was not subject to review under the 
Executive Order by the Office of Information and Regulatory Affairs in 
the Office of Management and Budget.

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires that an 
agency prepare an initial regulatory flexibility analysis to be 
published at the time the final rule is published. This requirement 
(which appears in section 603) does not apply if the agency certifies 
that the rule will not, if promulgated, have a ``significant economic 
impact on a substantial number of small entities.''
    DOE certifies that this action will not have a significant economic 
impact on a substantial number of small entities. It is directed at 
vehicle manufacturers that will be concerned with a mix of petroleum 
and electric fueled vehicles in their annual production. None of these 
manufacturers is a small entity.

E. Federalism Review

    Executive Order 13132 (64 FR 43255, August 4, 1999) requires that 
regulations or rules be reviewed for any substantial direct effects on 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among 
various levels of government. If there are sufficient substantial 
direct effects, then Executive Order 13132 requires agencies to engage 
in intergovernmental consultation and take other steps before 
promulgating such a regulation or rule. This action and 10 CFR part 474 
serve only to provide a method of interpreting 40 CFR part 600 (Fuel 
Economy of Motor Vehicles) for electric vehicles. The action does not 
involve any substantial direct effects on States or other 
considerations stated in Executive Order 13132.

F. ``Takings'' Assessment Review

    It has been determined that pursuant to Executive Order 12630 (52 
FR 8859, March 18, 1988) this final rule would not result in any 
takings which might require compensation under the Fifth Amendment to 
the United States Constitution.

G. 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,'' 61 FR 4729 (February 7, 1996), imposes on 
executive 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. With regard to the review 
required by section 3(a), 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 a 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 final rule meets the relevant standards of Executive Order 12988.

H. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to prepare a written assessment of the 
effects of any Federal mandate in a proposed or final agency rule that 
may result in the expenditure by State, local, and tribal governments, 
in the aggregate, or by the private sector, of $100 million in any one 
year. The Act 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 to timely input to potentially affected small governments 
before establishing any requirements that might significantly or 
uniquely affect small governments. The final rule published today does 
not contain any Federal mandate, so these requirements do not apply.

I. 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 proposed rule or policy that may affect 
family well-being. Today's final 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.

J. Congressional Notification

    Consistent with the Small Business Regulatory Enforcement Fairness 
Act of 1996, DOE will submit to Congress a report regarding the 
issuance of today's final rule prior to the effective date set forth at 
the outset of this notice. The report will note the Office of 
Management and Budget's determination that this rule does not 
constitute a ``major rule'' under that Act 5 U.S.C. 801, 804.

K. Review under the Paperwork Reduction Act

    DOE has determined that this rule does not contain any new or 
amended record keeping, reporting, or other type of collection of 
information subject to clearance by the Office of Management and Budget 
under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

List of Subjects in 10 CFR Part 474

    Corporate average fuel economy, Electric (motor) vehicle, Electric 
power, Energy conservation, Fuel Economy, Motor vehicles, Research.

    Issued in Washington, DC, on May 25, 2000.
Dan W. Reicher,
Assistant Secretary, Energy Efficiency and Renewable Energy.

    For the reasons set forth in the preamble, DOE revises Part 474 of 
Chapter II of Title 10 of the Code of Federal Regulations as set forth 
below:

PART 474--ELECTRIC AND HYBRID VEHICLE RESEARCH, DEVELOPMENT, AND 
DEMONSTRATION PROGRAM; PETROLEUM-EQUIVALENT FUEL ECONOMY 
CALCULATION

Sec.
474.1   Purpose and scope.
474.2   Definitions.
474.3   Petroleum-equivalent fuel economy calculation.
474.4   Test procedures.
474.5   Review and update.
Appendix to Part 474--Sample Petroleum-Equivalent Fuel Economy 
Calculations


[[Page 36992]]


    Authority: 49 U.S.C. 32901 et seq.


Sec. 474.1  Purpose and Scope.

    This part contains procedures for calculating a value for the 
petroleum-equivalent fuel economy of electric vehicles, as required by 
49 U.S.C. 32904(a)(2). The petroleum-equivalent fuel economy value is 
intended to be used by the Environmental Protection Agency in 
calculating corporate average fuel economy values pursuant to 
regulations at 40 CFR Part 600--Fuel Economy of Motor Vehicles.


Sec. 474.2  Definitions.

    For the purposes of this part, the term:
    Combined energy consumption value means the weighted average of the 
Urban Dynamometer Driving Schedule and the Highway Fuel Economy Driving 
Schedule energy consumption values (weighted 55/45 percent, 
respectively), as determined by the Environmental Protection Agency in 
accordance with 40 CFR parts 86 and 600.
    Electric vehicle means a vehicle that is powered by an electric 
motor drawing current from rechargeable storage batteries or other 
portable electrical energy storage devices, provided that:
    (1) Recharge energy must be drawn from a source off the vehicle, 
such as residential electric service; and
    (2) The vehicle must comply with all provisions of the Zero 
Emission Vehicle definition found in 40 CFR 88.104-94(g).
    Highway Fuel Economy Driving Schedule energy consumption value 
means the average number of watt-hours of electrical energy required 
for an electric vehicle to travel one mile of the Highway Fuel Economy 
Driving Schedule, as determined by the Environmental Protection Agency.
    Petroleum equivalency factor means the value specified in 
Sec. 474.3(b) of this part, which incorporates the parameters listed in 
49 U.S.C. 32904(a)(2)(B) and is used to calculate petroleum-equivalent 
fuel economy.
    Petroleum-equivalent fuel economy means the value, expressed in 
miles per gallon, that is calculated for an electric vehicle in 
accordance with Sec. 474.3(a) of this part, and reported to the 
Administrator of the Environmental Protection Agency for use in 
determining the vehicle manufacturer's corporate average fuel economy.
    Petroleum-powered accessory means a vehicle accessory (e.g., a 
cabin heater, defroster, and/or air conditioner) that:
    (1) Uses gasoline or diesel fuel as its primary energy source; and
    (2) Meets the requirements for fuel, operation, and emissions in 40 
CFR part 88.104-94(g).
    Urban Dynamometer Driving Schedule energy consumption value means 
the average number of Watt-hours of electrical energy required for an 
electric vehicle to travel one mile of the Urban Dynamometer Driving 
Schedule, as determined by the Environmental Protection Agency.


Sec. 474.3  Petroleum-equivalent fuel economy calculation.

    (a) The petroleum-equivalent fuel economy for an electric vehicle 
is calculated as follows:
    (1) Determine the electric vehicle's Urban Dynamometer Driving 
Schedule energy consumption value and the Highway Fuel Economy Driving 
Schedule energy consumption value in units of Watt-hours per mile;
    (2) Determine the combined energy consumption value by averaging 
the Urban Dynamometer Driving Schedule energy consumption value and the 
Highway Fuel Economy Driving Schedule energy consumption value using a 
weighting of 55 percent urban/45 percent highway; and
    (3) Calculate the petroleum-equivalent fuel economy by dividing the 
appropriate petroleum-equivalency factor (depending on whether any 
petroleum-powered accessories are installed; see paragraph (b) of this 
section) by the combined energy consumption value, and round to the 
nearest 0.01 miles per gallon.
    (b) The petroleum-equivalency factors for electric vehicles are as 
follows:
    (1) If the electric vehicle does not have any petroleum-powered 
accessories installed, the value of the petroleum equivalency factor is 
82,049 Watt-hours per gallon.
    (2) If the electric vehicle has any petroleum-powered accessories 
installed, the value of the petroleum-equivalency factor is 73,844 
Watt-hours per gallon.


Sec. 474.4  Test procedures.

    (a) The electric vehicle energy consumption values used in the 
calculation of petroleum-equivalent fuel economy under Sec. 474.3 of 
this part will be determined by the Environmental Protection Agency 
using the Highway Fuel Economy Driving Schedule and Urban Dynamometer 
Driving Schedule test cycles at 40 CFR parts 86 and 600.
    (b) The ``Special Test Procedures'' provisions of 40 CFR 86.090-27 
may be used to accommodate any special test procedures required for 
testing the energy consumption of electric vehicles.


Sec. 474.5  Review and Update

    The Department will review Part 474 five years after the date of 
publication as a final rule to determine whether any updates and/or 
revisions are necessary. DOE will publish a notice in the Federal 
Register soliciting stakeholder input in this review. The Department 
will publish the findings of the review and any resulting adjustments 
to Part 474 in the Federal Register.

Appendix to Part 474--Sample Petroleum-Equivalent Fuel Economy 
Calculations

    Example 1: An electric vehicle is tested in accordance with 
Environmental Protection Agency procedures and is found to have an 
Urban Dynamometer Driving Schedule energy consumption value of 265 
Watt-hours per mile and a Highway Fuel Economy Driving Schedule 
energy consumption value of 220 Watt-hours per mile. The vehicle is 
not equipped with any petroleum-powered accessories. The combined 
electrical energy consumption value is determined by averaging the 
Urban Dynamometer Driving Schedule energy consumption value and the 
Highway Fuel Economy Driving Schedule energy consumption value using 
weighting factors of 55 percent urban, and 45 percent highway:

combined electrical energy consumption value = (0.55 * urban) + 
(0.45 * highway) = (0.55 * 265) + (0.45 * 220) = 244.75 Wh/mile

    Since the vehicle does not have any petroleum-powered 
accessories installed, the value of the petroleum equivalency factor 
is 82,049 Watt-hours per gallon, and the petroleum-equivalent fuel 
economy is:

(82,049 Wh/gal) (244.75 Wh/mile) = 335.24 mpg
    Example 2: The vehicle from Example 1 is equipped with an 
optional diesel-fired cabin heater/defroster. For the purposes of 
this example, it is assumed that the electrical efficiency of the 
vehicle is unaffected.
    Since the vehicle has a petroleum-powered accessory installed, 
the value of the petroleum equivalency factor is 73,844 Watt-hours 
per gallon, and the petroleum-equivalent fuel economy is:

(73,844 Wh/gal) (244.75 Wh/mile) = 301.71 mpg

[FR Doc. 00-14446 Filed 6-9-00; 8:45 am]
BILLING CODE 6450-01-P