CHAPTER 2. ANALYTICAL FRAMEWORK 

TABLE OF CONTENTS 

2.1 INTRODUCTION ........................................................................................................... 2-1
 

2.2 BACKGROUND ............................................................................................................. 2-4
 

2.3 MARKET AND TECHNOLOGY ASSESSMENT ........................................................ 2-5
 

2.3.1 Market Assessment .............................................................................................. 2-5
 

2.3.2 Technology Assessment....................................................................................... 2-5
 

2.4 SCREENING ANALYSIS .............................................................................................. 2-5
 

2.5 ENGINEERING ANALYSIS.......................................................................................... 2-6
 

2.5.1 Modified Design Option Approach ..................................................................... 2-6
 

2.5.2 Manufacturing Cost Model.................................................................................. 2-6
 

2.6 ENERGY USE CHARACTERIZATION ....................................................................... 2-6
 

2.7 MARKUPS TO DETERMINE EQUIPMENT PRICE ................................................... 2-7
 

2.8 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSES .................................... 2-7
 

2.9 SHIPMENTS ANALYSIS .............................................................................................. 2-8
 

2.10 NATIONAL IMPACT ANALYSIS................................................................................ 2-8
 

2.10.1 National Energy Savings Analysis....................................................................... 2-9
 

2.10.2 Net Present Value Analysis ................................................................................. 2-9
 

2.10.3 Efficiency Scenarios and Trends ......................................................................... 2-9
 

2.11 LIFE-CYCLE COST SUB-GROUP ANALYSIS......................................................... 2-10
 

2.12 MANUFACTURER IMPACT ANALYSIS.................................................................. 2-10
 

2.13 UTILITY IMPACT ANALYSIS................................................................................... 2-11
 

2.14 EMPLOYMENT IMPACT ANALYSIS....................................................................... 2-11
 

2.15 ENVIRONMENTAL ASSESSMENT .......................................................................... 2-11
 

2.16 REGULATORY IMPACT ANALYSIS ....................................................................... 2-12
 

2.17 DEPARTMENT OF JUSTICE REVIEW ..................................................................... 2-12
 

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CHAPTER 2. ANALYTICAL FRAMEWORK
 

2.1 INTRODUCTION 

Section 6317(b)(1) of Title 42, United States Code (42 U.S.C.), as directed by 346(b)(1) 

of the Energy Policy and Conservation Act (EPCA), requires the U.S. Department of Energy 

(DOE) to set forth energy conservation standards that are technologically feasible and 

economically justified, and would achieve the maximum improvement in energy efficiency. 

This chapter describes the general analytical framework that DOE uses in developing such 

standards and, in particular, standards for small electric motors (SEMs). The analytical 

framework is a description of the methodology, analytical tools, and relationships among the 

various analyses that are part of this rulemaking. For example, the methodology that addresses 

the statutory requirement for economic justification includes analyses of life-cycle cost (LCC); 

economic impact on manufacturers and users; national benefits; impacts, if any, on utility 

companies; and impacts, if any, from lessening competition among manufacturers. DOE will 

also solicit the views of the Department of Justice (DOJ) on any lessening of competition likely 

to result from the imposition of a proposed standard. 

Figure 2.1.1 summarizes the analytical components of the standards-setting process. The 

columns labeled “Key Inputs” and “Key Outputs” show how the analyses fit into the rulemaking 

process, and how they relate to each other. Key inputs are the types of data and information that 

the analyses require. Some key inputs exist in public databases; DOE also collects other inputs 

from interested parties and persons with special knowledge. Key outputs are analytical results 

that feed directly into the standards-setting process. Arrows connecting analyses show types of 

information that feed from one analysis to another. 

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Figure 2.1.1 Flow Diagram of Analyses for the Small Electric Motor Rulemaking 

Process 

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The analyses performed prior to the notice of proposed rulemaking (NOPR) stage as part 

of the preliminary analyses and described in the preliminary technical support document 

(preliminary TSD) are listed below. These analyses were revised for the NOPR based on new 

information from comments received, and are now included as part of the accompanying notice 

and are reported in this TSD. 

•	 A market and technology assessment is conducted to characterize the relevant equipment 

markets and existing technology options, including prototype designs. 

•	 A screening analysis is conducted to review each technology option and determine if it is 

technologically feasible; is practical to manufacture, install, and service; would adversely 

affect equipment utility or equipment availability; or would have adverse impacts on 

health and safety. 

•	 An engineering analysis is conducted to develop the cost-efficiency relationship, which is 

the increased manufacturer selling prices (material, labor, factory overhead, selling, 

general and administrative expenses, research and development costs, and profit) of more 

efficient equipment. 

•	 An equipment price markup analysis is conducted to convert the manufacturer’s sellingprice estimates from the engineering analysis to customer prices, which are then used in 

the LCC and payback period (PBP) analyses and the manufacturer impact analysis 

(MIA). 

•	 An energy use analysis is conducted to determine the annual energy use characteristics of 

small electric motors. 

•	 LCC and PBP analyses are conducted to calculate, at the customer level, the discounted 

savings in operating costs (less maintenance and repair costs) throughout the estimated 

average life of the covered equipment compared to any increase in the installed cost for 

the equipment likely to result directly from the imposition of the standard. 

•	 A shipments analysis is conducted which forecasts equipment shipments. This analysis is 

then used to calculate the national impacts of standards on energy consumption and costs, 

net present value (NPV), and future manufacturer cash flows. 

•	 A national impact analysis is conducted to assess the aggregate impacts at the national 

level of NPV of total customer LCC and national energy savings (NES). 

•	 A preliminary MIA is conducted to assess the potential impacts of energy conservation 

standards on manufacturers such as capital conversion expenditures, marketing costs, 

shipments, and research and development costs. 

The additional analyses performed for the NOPR stage include those listed below. In 

addition, DOE re-analyzes the work done in the preliminary stage based on comments and new 

information received.. 

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•	 An LCC sub-group analysis is conducted to evaluate variations in commercial business 

type characteristics (e.g., energy prices, equipment use patterns, and installation and 

maintenance costs) that might cause a standard to affect particular customer subpopulations. 

•	 A manufacturer impact analysis is conducted to estimate the financial impact of standards 

on manufacturers and to calculate impacts on competition, employment, and 

manufacturing capacity. 

•	 A utility impact analysis is conducted to estimate the effects of proposed standards on 

electric utilities. 

•	 An employment impact analysis is conducted to assess the aggregate impacts on national 

employment. 

•	 An environmental assessment is conducted to provide estimates of changes in emissions 

of pollutants from electricity generation (i.e., carbon dioxide (CO2), oxides of nitrogen 

(NOx), and mercury (Hg).. 

•	 A regulatory impact analysis is conducted to present major alternatives to proposed 

standards that could achieve substantially the same regulatory goal at a lower cost. 

2.2 BACKGROUND 

DOE conducted a formal effort to consider further improvements to the process used to 

develop appliance efficiency standards. DOE called on energy efficiency groups, manufacturers, 

trade associations, state agencies utilities, and other interested parties to provide input to this 

effort. As a result of this combined effort, DOE published Procedures, Interpretations and 

Policies for Consideration of New or Revised Energy Conservation Standards for Customer 

Products (the “Process Rule”), 10 CFR 430, Subpart C, Appendix A. The Process Rule outlined 

the procedural improvements identified by the interested parties, and included a review of the: 1) 

economic models, 2) analytical tools, 3) methodologies, 4) non-regulatory approaches, and 5) 

prioritization of future rules. 

DOE developed an analytical framework for the SEM rulemaking under the Process 

Rule. DOE documented this analytical framework in the Energy Conservation Standards 

Rulemaking Framework Document for Small Electric Motors and presented the analytical 

approach to interested parties during a public meeting on September 13, 2007. This document is 

available at: 

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.h 

tml. 

The following sections describe the different analytical components of the rulemaking 

framework. 

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2.3 MARKET AND TECHNOLOGY ASSESSMENT 

The market and technology assessment characterizes the relevant product markets and 

existing technology options. 

2.3.1 Market Assessment 

When initiating a standards rulemaking, DOE develops information on the present and 

past industry structure and market characteristics for the equipment concerned. This activity 

assesses the industry and equipment both quantitatively and qualitatively, based on publicly 

available information. DOE addresses the following: (1) manufacturer market share and 

characteristics, (2) existing regulatory and non-regulatory equipment efficiency improvement 

initiatives, and (3) trends in product characteristics and retail markets. This information serves 

as resource material throughout the rulemaking. 

For this rulemaking, DOE reviewed existing literature and interviewed manufacturers to 

get an overall picture of the SEM market in the United States. Product catalogs, third-party 

experts, and SEM manufacturers provided the bulk of the information. The appropriate sections 

of the NOPR describe the analysis and resulting information as reported in the TSD. 

DOE uses the most reliable and accurate data available at the time of each analysis in its 

rulemakings. All data is available for public review. 

2.3.2 Technology Assessment 

DOE typically uses information about existing and past technology options and prototype 

designs to help determine which technologies manufacturers use to attain higher energy 

performance levels. In consultation with interested parties, DOE develops a list of technologies 

for consideration. Initially, these technologies encompass all those it believes are 

technologically feasible. 

For this rulemaking, DOE developed a list of technologically feasible design options after 

consultation with manufacturers and third-party experts. 

2.4 SCREENING ANALYSIS 

In the screening analysis, DOE screens out technologies that are not technologically 

feasible; not practicable to manufacture, install, or service; have an adverse impact on equipment 

utility or availability; or have adverse impacts on health and safety. In the engineering analysis, 

DOE further considers design options that remain after the screening process. 

As described in chapter 4 of the TSD, DOE grouped technologies into the following 

categories: (1) technology options not screened out that decrease SEM losses and the type of 

motor losses they reduce and (2) technology options screened out and the type of motor losses 

they reduce. 

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2.5 ENGINEERING ANALYSIS 

As presented in chapter 5, the engineering analysis establishes the relationship between 

the manufacturer selling price and efficiency of small electric motors. This relationship serves as 

the basis for cost/benefit calculations for individual customers, manufacturers, and the Nation. 

The engineering analysis discusses cost-efficiency curves, product classes analyzed, 

representative baseline units, the methodology used to develop manufacturing selling prices, and 

the methodology used to develop the energy consumption model. 

2.5.1 Modified Design Option Approach 

In this rulemaking, DOE conducted the engineering analysis using a modified designoption approach where DOE employed a technical expert with motor design software to develop 

motor designs at several efficiency levels for each analyzed product class. Based on these 

simulated designs and manufacturer and component supplier data, DOE calculated 

manufacturing costs and selling prices associated with each efficiency level. DOE decided on 

this approach after receiving insufficient response to its request for the manufacturer data needed 

to execute an efficiency-level approach for the preliminary analyses. The design-option approach 

allows DOE to make its engineering analysis methodologies, assumptions, and results publicly 

available, thereby permitting all interested parties the opportunity to review and comment on this 

information. The design options considered in the engineering analysis include: copper die-cast 

rotor, reduce skew on stack, increase cross-sectional area of rotor conductor bars, increase endring size, change gauge of copper wire in stator, manipulate stator slot size, decrease air gap 

between rotor and stator to 12.5 thousandths of an inch, improve grades of electrical steel, use 

thinner steel laminations, anneal steel laminations, add stack height, use high efficiency 

lamination materials, change capacitors ratings, install better ball bearings and lubricant, and 

install a more efficient cooling system. Chapter 5 of the TSD contains a detailed description of 

the product classes analyzed and the analytical models DOE used to conduct the small electric 

motors engineering analysis and chapter 3 of the TSD contains a detailed description of how all 

the design options increase motor efficiency 

2.5.2 Manufacturing Cost Model 

DOE used a cost model to estimate the core production cost of small electric motors. 

This cost model was developed using motor teardowns performed by a third-part expert. The 

approach for the teardowns involved the disassembly of three representative small electric 

motors on the market today, an analysis of the materials and manufacturing processes, and the 

development of a spreadsheet model. DOE obtained input from interested parties on the small 

electric motor manufacturer selling prices estimates and assumptions to confirm their accuracy. 

2.6 ENERGY USE CHARACTERIZATION 

The energy use and end-use load characterization analysis (Chapter 6) produces energy 

use estimates and end-use load shapes for small electric motors. The energy use estimates enable 

evaluation of energy savings from the operation of small electric motors equipment at various 

efficiency levels, while the end-use load characterization allows evaluation of the impact on 

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electricity monthly and peak demand from the operation of motors. The analysis produces a 

distribution of results for a variety of building types and uses covering a range of climate 

locations in order to represent the diversity of use, and performance, of small electric motors. 

2.7 MARKUPS TO DETERMINE EQUIPMENT PRICE 

DOE used manufacturer-to-customer markups to convert the manufacturer selling-price 

estimates from the engineering analysis to customer prices, which were then used in the LCC, 

PBP, and manufacturer impact analyses. Because retail prices are required for the baseline 

performance level and all other performance levels under consideration, DOE obtained these 

retail prices by applying manufacturer-to-customer markups to the manufacturer selling-price 

estimates. 

Before it can develop markups, DOE must identify distribution channels (i.e., how the 

equipment is distributed from the manufacturer to the customer). Once it established proper 

distribution channels for each of the product classes, DOE relied on economic data from the U.S. 

Census Bureau and input from the industry to determine how much product prices are increased 

as they pass from the manufacturer to the customer (see chapter 7 of the TSD). 

2.8 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSES 

New energy conservation standards on equipment usually reduce operating expenses and 

increase customer prices. DOE analyzed the net effect of new standards on customers by 

evaluating the net LCC using the cost-efficiency relationship derived in the engineering analysis, 

as well as the energy costs derived from the energy use characterization analysis. Inputs to the 

LCC calculation include the installed cost to the customer (customer price plus installation cost), 

operating expenses (energy expenses and maintenance costs), the lifetime of the motor, and a 

discount rate. These inputs are described in detail in chapter 8 of the TSD. 

The installed cost typically increases and operating cost typically decreases in response to 

new standards. Thus, there is a specific time in the life of higher-than-baseline efficiency 

equipment when the net operating-cost benefit (in dollars) from the time of purchase is equal to 

the incremental first cost of purchasing the more efficient equipment. The length of time 

required for equipment to reach this cost-equivalence point is known as the payback period. 

For the NOPR, DOE conducted the LCC and PBP analyses using distributions of values 

to reflect the conditions in the field for motor life, motor retail price, national or regional energy 

costs, energy consumption, and discount rates. The life-cycle cost sub-group analysis includes 

an assessment of impacts on customer sub-groups. 

For small electric motors, it was necessary to determine several of the input values for the 

LCC estimation, including retail prices; electricity prices; discount rate; maintenance, service, 

and installation costs; and motor lifetimes. 

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DOE developed discount rates by estimating the cost of capital to companies that 

manufacture small electric motors covered under this rulemaking. DOE commonly uses the cost 

of capital to estimate the present value of cash flows to be derived from a typical company 

project or investment. Most companies use both debt and equity capital to fund investments, so 

the cost of capital is the weighted-average cost to the firm of equity and debt financing. This 

corporate finance approach is referred to as the weighted-average cost of capital. 

DOE considered expected changes to maintenance, repair, and installation costs for the 

motors covered in this rulemaking. Typically, small incremental changes in motor efficiency 

incur no, or only very small, changes in repair and maintenance costs over baseline efficiency 

products. There is a greater probability that motors with efficiencies that are significantly greater 

than the baseline will incur increased repair and maintenance costs since such motors are more 

likely to incorporate technologies that are new to the industry and not widely available. DOE 

relied on input from manufacturers and other interested parties to develop appropriate repair and 

maintenance costs. 

2.9 SHIPMENTS ANALYSIS 

One of the more important components of any estimate of future impacts from energy 

efficiency standards is small electric motor shipments (Chapter 9). Forecasts of shipments for 

the base case and each potential standard case are used as an input to the national energy savings 

(NES) model. DOE developed these shipment forecasts for each of the three covered small 

motor categories (polyphase, capacitor-start induction-run, and capacitor-start capacitor-run 

motors). Within each motor category, shipments are comprised of products in a number of 

horsepower ratings and three rotation speeds (corresponding to 2-pole, 4-pole, and 6-pole 

motors). 

The core of the shipments analysis is an accounting model that the DOE developed to 

simulate how future purchases are incorporated into an in-service stock of aging motors that are 

gradually replaced. The model keeps track of the aging and replacement of small electric motor 

capacity given a projection of future motor sales growth. Small electric motor shipments and a 

retirement function influence how the motors in service and the supply of motor capacity 

changes over time. DOE also developed a cross-elasticity model to forecast the effect of 

standards on the market shares of CSIR and CSCR motors within each combination of motor 

size and speed; this model is described in chapter 9. 

2.10 NATIONAL IMPACT ANALYSIS 

The national impact analysis assesses the NPV of total customer LCC and NES. DOE 

determined both the NPV and NES for the performance levels considered for the product classes 

analyzed. To make the analysis more accessible and transparent to all interested parties, DOE 

prepared a NES spreadsheet model in Microsoft Excel to forecast energy savings and the 

national economic costs and savings resulting from new standards. The NES spreadsheet model 

does not use probability distributions for inputs or outputs. To assess the impact of input 

uncertainty on the NES and NPV results, DOE can conduct sensitivity analyses for future 

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analyses by running scenarios on input variables of concern for interested parties. DOE 

conducted an assessment of the aggregate economic impacts at the national level for this NOPR 

as described in chapter 10 of the TSD. 

2.10.1 National Energy Savings Analysis 

The inputs for determining NES are (1) annual energy consumption per unit, (2) 

shipments, (3) equipment stock, (4) national energy consumption, and (5) site-to-source 

conversion factors. DOE calculated the national energy consumption by multiplying the number 

of units, or stock, of small electric motors by the unit energy consumption. Then, DOE 

calculated national annual energy savings from the difference between national energy 

consumption in the base case (without new efficiency standards) and in each higher efficiency 

standard case. The analysis included estimated energy savings by fuel type used for generating 

electricity. DOE estimated energy consumption and savings based on site energy, and converted 

the electricity consumption and savings to source energy. Cumulative energy savings are the 

sum of the annual NES, which DOE determined over specific time periods. 

2.10.2 Net Present Value Analysis 

The inputs for determining NPV are (1) total annual installed cost, (2) total annual 

operating cost savings, (3) discount factor, (4) present value of costs, and (5) present value of 

savings. DOE calculated net savings each year as the difference between total operating-cost 

savings (including electricity, repair, and maintenance cost savings) and increases in total 

installed costs (including equipment price and installation cost). DOE calculated savings over 

the life of the motor, accounting for differences in yearly energy rates. DOE calculated NPV as 

the difference between the present value of operating cost savings and the present value of 

increased total installed costs. DOE discounted future costs and savings to the present with a 

discount factor. 

DOE calculated increases in total installed costs as the product of the difference in the 

total installed cost between the base case and standards case and the annual shipments in the 

standards case. Because costs of more efficient equipment bought in the standards case are 

higher than the costs of equipment bought in the base case, price increases appear as negative 

values in the NPV. 

DOE expressed operating cost savings as decreases in operating costs associated with the 

lower energy consumption of motors bought in the standards case compared to the base 

efficiency case. Total operating-cost savings are the product of savings per motor and the 

number of motors. 

2.10.3 Efficiency Scenarios and Trends 

Several of the inputs for determining NES (e.g., the annual energy consumption per unit) 

and NPV (e.g., the total annual installed cost and the total annual operating-cost savings) depend 

on the efficiency of the equipment. Thus, DOE developed base case and standards case 

efficiency trends. The efficiency trends specify the annual historical and forecasted shipmentweighted average equipment efficiencies. 

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DOE based historical shipment-weighted average efficiency trends for small electric 

motors on limited SEM catalog efficiency data and test results from representative motor lines. 

DOE found no evidence of trends toward greater efficiency within the class of covered motors, 

and therefore did not use an efficiency trend in either the base or standards cases. 

DOE based its standards case forecasts (i.e., forecasts of efficiency trends after standards 

take effect) on the use of a roll-up efficiency scenario and parallel growth trend. Under a roll-up 

scenario, all motors at performance levels below a prospective standard are moved or rolled up to 

the minimum performance level allowed under the new standard. The distribution of motors at 

higher efficiency standard levels is unaffected (i.e., the motor remains at its pre-standard 

performance levels). The roll-up efficiency scenario dictates how DOE determined efficiency 

distributions in the first year a new standard takes effect, but does not define how motor 

efficiency will be distributed in the future. Under the parallel growth trend, DOE assumes that 

the standards case efficiency trend parallels the base case efficiency trend; in the case of small 

electric motors this means there was no trend toward higher efficiency in the standards case. In 

other words, the initial jump in shipment-weighted efficiency that occurs when the standard first 

becomes effective is maintained throughout the forecast. 

2.11 LIFE-CYCLE COST SUB-GROUP ANALYSIS 

The LCC sub-group analysis evaluates economic impacts on virtually any group of 

customers. In analyzing the potential impact of new or amended standards on customers, DOE 

evaluates the impact on identifiable groups of customers (i.e., sub-groups), such as small 

businesses, that may not be equally affected by a national standard level. In this rulemaking, this 

analysis examined the economic impacts on different groups of customers by estimating the 

average change in LCC and by calculating the fraction of customers that would benefit. DOE 

analyzed the potential effect of standards for small businesses and customers with spaceconstrained applications, two consumer sub-groups of interest identified by DOE. For small 

businesses, DOE analyzed the potential impacts of standards by conducting the analysis with 

different discount rates, as small businesses do not have the same access to capital as larger 

businesses. 

2.12 MANUFACTURER IMPACT ANALYSIS 

DOE performed an MIA to estimate the financial impact of higher energy conservation 

standards on SEM manufacturers, and to calculate the impact of such standards on domestic 

manufacturing employment and plant capacity. The MIA has both quantitative and qualitative 

aspects. The quantitative part of the MIA primarily relies on the Government Regulatory Impact 

Model (GRIM) - an industry-cash-flow model customized for this rulemaking. The GRIM 

inputs are data characterizing the industry cost structure, shipments, and revenues. The key 

output is the industry net present value (INPV). Different sets of assumptions (scenarios) 

produce different results. The qualitative part of the MIA addresses factors such as motor 

characteristics, characteristics of particular firms, and market and equipment trends, and includes 

an assessment of the impacts of standards on sub-groups of manufacturers. 

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DOE conducted the MIA in three phases. Phase one consisted of preparing an industry 

characterization and identifying key issues. Phase two addressed the broader industry where 

DOE would use the GRIM to perform an industry cash flow analysis. DOE also developed a 

questionnaire for interviewing SEM manufacturers about the potential impacts of new energy 

conservation standards on their business during phase two. Phase three involved interviewing 

manufacturers and adjusting the industry cash flow analysis as needed. Phase three also 

examined any additional impacts on competition, manufacturing capacity, direct employment, 

and the cumulative burden of other regulations on manufacturers. The complete MIA is outlined 

in Chapter 12 of the TSD. 

2.13 UTILITY IMPACT ANALYSIS 

The utility impact analysis estimates the effects of reduced energy consumption due to 

improved appliance efficiency on the utility industry. This utility analysis compares forecast 

results for a case comparable to the AEO2009 Reference Case and forecasts for policy cases 

incorporating each of the small motors trial standard levels. 

The utility impact analysis reports the changes in installed capacity and generation by 

plant type that result for each trial standard level, as well as changes in electricity sales to the 

residential, commercial and industrial sectors. The estimated impacts of the standard are the 

difference between the valued forecasted by a variant of EIA’s National Energy Modeling 

System (currently termed NEMS-BT, BT referring to the DOE’s Building Technologies 

Program), and the AEO 2009 Reference Case. 

2.14 EMPLOYMENT IMPACT ANALYSIS 

The imposition of standards can affect employment both directly and indirectly. Direct 

employment impacts are changes in the number of employees at the plants that produce the 

covered motors and at affiliated distribution and service companies. DOE evaluates the direct 

employment impacts in the manufacturer impact analysis. Indirect employment impacts may 

result from expenditures shifting between goods (the substitution effect) and changes in income 

and overall expenditure levels (the income effect). The combined direct and indirect 

employment impacts are investigated in the employment impact analysis using the “Impact of 

Sector Energy Technologies” (ImSET) model. The ImSET model was developed for DOE’s 

Office of Planning, Budget, and Analysis to estimate the employment and income effects of 

energy-saving technologies on buildings, industry, and transportation. Compared to simple 

economic multiplier approaches, ImSET allows for more complete and automated analysis of the 

economic impacts of energy conservation investments. 

2.15 ENVIRONMENTAL ASSESSMENT 

The primary environmental effects of energy conservation standards for the small electric 

motors covered under this rulemaking will be decreased emissions resulting from reduced 

electrical energy consumption. The environmental assessment tracks the impact of possible 

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standards on CO2, NOx, and Hg. DOE bases these calculations on the NEMS-BT modeling work 

proposed for the utility impact analysis. This approach has the advantage of examining the 

marginal impact of higher efficiency standards for the covered motors on the utility generation 

mix and the subsequent environmental emissions. 

CO2 emissions are tracked in NEMS-BT by a detailed module that produces robust results 

because of its broad coverage of all sectors and inclusion of interactive effects. NEMS-BT also 

has an algorithm for estimating Hg and NOx emissions from power generation. 

2.16 REGULATORY IMPACT ANALYSIS 

In the NOPR stage, DOE prepared a regulatory impact analysis (RIA) pursuant to 

Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993), 

which is subject to review under the Executive Order by the Office of Information and 

Regulatory Affairs at the Office of Management and Budget. The RIA addressed the potential 

for non-regulatory approaches to supplant or augment energy conservation standards to improve 

the energy efficiency or reduce the energy consumption of the small electric motors covered 

under this rulemaking. 

2.17 DEPARTMENT OF JUSTICE REVIEW 

Section 325(o)(2)(B)(i)(V) of the Energy Policy and Conservation Act states that before 

the Secretary of Energy may prescribe a new or amended energy conservation standard, the 

Secretary shall ask the Attorney General to make a determination of “the impact of any lessening 

of competition...that is likely to result from the imposition of the standard.” (42 U.S.C. 6295) 

Pursuant to this requirement, DOE will solicit the views of the DOJ on any lessening of 

competition that is likely to result from the imposition of a proposed standard and will give the 

views provided full consideration in assessing the economic justification of a proposed standard. 

DOE may consult with DOJ at earlier stages in the standards development process to seek to 

obtain preliminary views on competitive impacts. 

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