16-i 

CHAPTER 16. REGULATORY IMPACT ANALYSIS

TABLE OF CONTENTS

16.1 INTRODUCTION ............................................................................................................ 16-1

16.2 METHODOLOGY ........................................................................................................... 16-1
16-1 

CHAPTER 16. REGULATORY IMPACT ANALYSIS

16.1 INTRODUCTION

As part of the notice of proposed rulemaking (NOPR) for metal halide lamp fixtures, the 

U.S Department of Energy (DOE) will draft a 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 (ORIA). 

58 FR 51735 (Sept. 30, 1993). 

16.2 METHODOLOGY

As part of the regulatory impact analysis, and as discussed in preliminary technical 

support document (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 metal halide lamp fixtures.

The regulatory impact analysis will also address the potential for non-regulatory 

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

metal halide lamp fixtures. The NOPR analysis will include a complete quantitative analysis of 

alternatives to the proposed conservation standards. DOE will use the national energy savings 

(NES) spreadsheet model (as discussed in preliminary TSD chapter 10, National Impact 

Analysis) to calculate the NES and net present value (NPV) for the alternatives to the proposed 

conservation standards. Listed below are some of the alternative ways to achieve energy 

efficiency improvements that DOE has used in prior rulemakings. The TSD in support of DOE’s 

NOPR will include a complete analysis of each alternative. Some possible non-regulatory 

alternatives include: 

• no new regulatory action, 

• consumer tax incentives, 

• manufacturer tax incentives, 

• performance standards, 

• consumer rebates, 

• manufacturer rebates, 

• voluntary energy efficiency targets, 

• early replacement (i.e., retrofit), and 

• 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 

efficient metal halide lamp fixtures. Once DOE estimates the effects of alternatives on the 

standard, DOE will run these non-regulatory alternative scenarios in the NIA spreadsheet model. 

Key inputs that DOE may adjust in the NIA spreadsheet model for this analysis include: 
16-2 

• 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 NIA spreadsheet model for each alternative considered will be as 

follows: 

• Energy use (in quadrillion British thermal units) is the cumulative energy use of the 

equipment from the effective date of the new standard to 2044. DOE will report 

electricity use as source 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 metal halide lamp 

fixtures 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 usage) in the base case, and 

the present value of equipment and operating expenditures in the various non-regulatory 

alternative cases. These differences will be discounted to 2011 using two discount rates: 7 

and 3 percent. DOE will also calculate operating expenses (including energy 

consumption) over the life of the equipment.