EE·RM·97·500 COMMENT OF

Summary Report

- Fluorescent Lamp Ballast Stakeholder Interviews On July IS, 1996, the Department ofEnergy (Department or DOE) published a final rule in the Federal RelUsterpresenting new guidelines for expediting and improving the rulemaking process for developing appliance efficiency standards. This process improvement effort included priority setting for various products, and the Department detennined that the fluorescent 1\UIlP ballastrulemaking be assigned a "high priority." The enhanced rulemaking process provides for greater public input and improved analytical approaches, with particular emphasis on earlier and more extensive infonnation gathering from stakeholders. This collection ofinterviews represents one part ofthe effort by the De{iartment to contact a cross-section of stakeholders, including both manufacturers and environmental groups, within the available time frame. The following stakeholders were interviewed: Advance Transformer Co., The Alliance to Save**Ene~gy,** American Council for an Energy Efficient Economy, Howard Iudustries, Inc., MagneTek, Inc., Motorola Lighting, Inc., Natural Resources Defense Council, and Valmont Electric. The interview questionnaire .was distributed in advance 

### iii. order to elicit the most comprehensive information, both qualitative and quantitative, in several areas: engineering issues, co:qsuJner and national issues, ballast industry characterization, 

### and impacts on costs, prices, and sales•. Respondents were asked to identify any confidential information, and those sections, so designated, have 

### been eliminated from public distnbution. Those interviewed were also given an opportunity to check and correct the reports ofthe meetings, as summarized by Department ofEnergy staff. The resulting swnmaries have been compiled alphabetically, accompanied byabriefoverview ofthe major comments included. The results will be discussed at the public meeting on March 18, 1997, and incorporated into new analytical studies performed in support ofthe Department's decisionmaking process on how to proceed with the required rulemaking on fluorescent lamp ballast standards. For those areas where there was no clear direction, the Department will be seeking a better understanding for the underlying reasons and gathering infonnation to help clarifY the issues. The Department seeks infonnation on the estimated rate ofconversions from magnetic to electronic

. ballasts, estimated future sales, the effect ofvoluntaryprograms,·and the cost breakdowns to use in

the analysis report that will be most representative ofthe ballast industry. The manufacturer interviews were also a preliminary activity in the development of a fonnal manufacturing impact analysis methodology, should the Department move forward with the rulemaking on fluorescent lamp ballasts. The interviews initiated an industry characterization and helped to identifYboth the substantive and procedural issues that should be considered in any future ballast manufacturing impact analysis. The general manufacturer impact analysis methodology will be presented at the DOE manufacturer impact workshop on March '11-12, 1997. The Department would like to thank those who participated for their time, cooperation, and support for this project. The information acquired has provided invaluable insights into the ballast industry,
IEE-RM-97-500 COMMENT OF

and promises to make a significant contribution to guiding the Department's effort to ,establish an accurate and fair approach to promoting ballast energy savings. PartA. Engineering Issues DOE is using 45,000 hours for ballast life for both electronic and magnetic ballasts. Most respondents said thatthis was acceptable. DOE is using a 150/" 

### lamp life reduction
. (from 19,000 hrs.) for cathode cutout ballasts
.. Most ofthe responses agreed with.this amount ofreduction but some indicated that there would be no 

### lamp life reduction ifthe lamps aretu,med on and offless frequently. There can be anincompattbilitybetween electronic ballasts and 34watt flU()rescent lamps, due to the tin coating. Some S\lggested that**~** ballast standardwo1.llcl reduce the use of the 34 

### watt lamp and

. thus resolve the incompatibility issue., There are mterference effects between electronic ballasts and

power we clllTier cOlj.trol syStems,securitysystems, and. with sCllneinfraredremote control devices. Estimates ofthe building stock affected by interference effects ranged from I% to 10%; Part B. Consumer and National Issues

. . , Most ofthOSe interviewedbelieVtl that electronic ballast prices are dropping; some agree with the Bureau of Census reduction. of 15%.**Manlifa~turers** liked, the LBNL uncertail:ltyana1ysis for the effects ofelectricityprices Vs.life cycle costs. Several,stakehQlders asked the Departmentto continue using the EIA priceprojections, DOE use the 1997 electricity prices and projectiOns from the EIA. The responses to market

## share~wCre divided between atIat market and a matJcetwlrlch increases slowly. Likewise for,the electrouic ballastmarket Estimates ofconversionsranged from 1.7% to 10%, while the effects ofvolUiltat)rprogrl\IllS seemed tobe**~'present"butnotpredictilble,** , ' -.' '. ' ..' "'- ,'-, ' ' ',-' ' '.-'- ",:' " -. All respondents agreed that the CathOde Cutoutballastis notthe techtiologyofchoice 

### in. the market because it cOsts, nearly as much as an electronic**ball~** but savesot!ly2W!ittspc,:r lamp.'
.

, ' Part C.BaJlast**Ind~$tty** Cllaracterization

## Characteriziilgtheil).d~trybya fum's

## prod~ct~~s the rectJrtm,gtheme

## inre~pciJIset~ the first
. industry characterization·qllCsti(lIL". TheindU$tryfimll; can

### be**segtegatedpriltiatilYil1to·l:W()segt'l1~ts:** manufacturers of electronic ballasts olllY,**orfulllinell1an~actllrersof** electronicandmaghetic**baIlas~,** Other**charac;teristics\o;ftheindustryinclllde<1firl:ri.siZe(teV!mues),plaiitloQ~tio~{foreign** or**dom~c),** 

### and to aless extentthe level ofverticalintegration

### it!.

# atitm's**~an\lfacturingop~tioiis.** All 

# firmS .eJtpressed a clear visi9n

### Mth~elves and howtheychatacteri#4t4eIIlSelves within the industrY.SpecIfically,some bollll?iIIrlescbaraclerized**theinS~lvesaslat&e.** f\lll

# line manufacturers and others identified themselves as USmaIiufactuters ofelectronic ballasts.
. Allparticipants commentedthat the most important changes in theballast industry stemmedfrom a majorshift to electronic ballasts. DOE concluded fromthese responsesthat the electronic ballast has had a significant impact On theindUgtry. The industry trend toward el.ectronic ballasts haS causedjob
2EE-RM-97-500 COMMENT OF

losses in the U.s., increased foreign competition, stranded assets in magnetic ballast manufacturing. fucilities, prompted new investment in electronic truinufacturing facilities, and.in**gen~al** stimulated competition in an otherwise relatively mature market. Based on these structured interviews, a clear characterization of the ballast industry emerges. Electronic ballasts currently have an important role in the market and will dominate the industry in the near future.
. Part D. Manufacturer Cost Impacts Mat),ufacturers generally considered·the cost information they provided as confidential. The information included both manufacturing costs and stranded assets (investment and tooling). Manufucturers generally believe that they have an understanding oftheir competitor's costs in relation to their own. Most manufacturers did not agree with the detailed breakdown ofmanufacturing costs. Specifically there is concern overthe use ofaverage data and many different methods ofreporting and allocating expenses. Several respondents disagreed with .the total estimated values (material, labor, shipping/packaging and tooling). Some stakeholders indicated that there is little to no variation in costs for different manufacturers since competition drives costs to be similar. In contrast, several stakeholders indicated that differences· in the level of· integration, labor rates, and SG&A (management) expenses could possibly leadto variations among firms especially ifindustry structure is changed. Estimates of the impact ofan electronic ballast 

### standard on current assets ranged from no impact to hundreds ofmillions ofdollars. Part E: Impacts on Product Sales and Price.s Several stakeholders disagreed with the four standard levels outlined in Section 3.6 ofthe Draft Report on Potential Impacts ofPossible Energy Efficiency Levels ofFluorescent Lamp Ballasts. The four levels proposed were: 1) Non-Electronic (Cathode Cutout or Energy Efficient Magnetic)·
. 2) Cathode Cutout and Electronic Rapid Start 3) Electronic Rapid 

### siart 4) Electronic Instant Start Some stakeholders indicated that there should be only two efficiency levels: Energy Efficient magnetic (level 1) and Electronic (levels 2,3,4) with no distinctions for cathode cutout, rapid start

. or instant start. The stakeholders reasoned that the cathode cutout was not a viable product in the

market and that rapid start and instant start electronic ballasts each have unique applications and both would need to be included in the standard. 3EE·RM·97·500 COMMENT ,OF



### Several manufacturers indicated that any new standard level would decrease the sales ofmagnetic ballasts. Manufacturers ofelectronic ballasts only would see a net increase in sales and full 

### line manufacturers ofmagnetic and electronic would see a net decrease in sales. Many believe that electronic ballast prices would decrease as a result of a new standard. This decrease would be the result ofcost savings in the design and manufacturing ofelectronic ballasts. Some believe that electronic ballast prices might increase in the short term due to a shortage of electronic components. Otherfuctors identifiedbythe stakeholders which would influence the price and shipments ofballasts included foreigncompetitioh, lower inventories, US exports ofelectronic ballasts, the status of electronic component supplies, and the added cost of reliability ofelectrOQic ballasts. Part F. Other Issues An 

### electronic ballast 

# sbmdaro would force closure or complete renovation ofmagnetic manufacturing fucilities which c;ouldJead to losses of jobs. However, the U.S. electronic ballastmanufac.turers with plants in the 

## US
..,claim that their employment will increase. The return on investment ranges from some loss to slightlyincreasing. Most manufacturers claim that

### th~ir competitive position Wob.'t change orperhaps would improve, ,but one manufacturer was very uncertain. Impacts from 

### other regulations could be caused by the lamp 

### reguia.tions and the-motor standards effective October 24, 1997.ASHRAE 90.1 could have a positive effecton electronic ballast'sales. There.also would be no negative in:Ipacts from the clean air standatdsbecause electronic ballastmanufacturing is environme!1Wly "clean."

4EE-RM-97-500 COMMENT OF

Interview with Adyance Transformer Co_

Regarding Fluorescent Lamp BaUasts December 12, 1996

On November 15, 1996 the Department of Energy (DOE) and its contractors interviewed the Advance Trnnsformer Company, having a place ofbusiness at O'Hare International Center, 10275 West Higgins Road, Rosemont, Illinois, 60018, to discuss various engineering, consumer, national, and manufactUrer issues relating to fluorescent lamp ballasts. The interview was conducted at Advance's Monroe, Wisconsin manufacturing facility. The responses recorded are in italics below each interview question. Attendees Adyance Transfonner Co. Robert Wisbey

- Vice President, Product Technology Norman Grimshaw -Vice President, Technical Relations Paul Thomann

- Plant Manager Patricia Franco" Legislative and Regulatory Counsel

- Philips Electronics DOE and Contractors Anthony Balducci

- DOE Eugene Margolis

- DOE Isaac Turiel

- Lawrence Berkeley National Laborntory Stephen Mariano

- Arthnr D. Little Michael Rivest

- Arthur D. Little PART A: ENGINEERING ISSUES A.I BaPast Life. At the ballast workshop, held on June 20, 1996, there was some agreement that the ballast life currently used (33,000 hours) is too low. Itwas suggested that a life of50,000 hours be used instead. The Illuminating Engineering Society (ffiS) Lighting Handbook, 8th edition, lists a life of45,000 hours for magnetic ballasts. DOE is prepared to use this value for both magnetic and electronic ballasts and is planning to conduct sensitivity studies on.unequal ballast lifetimes for magnetic and electronic ballasts where one type would have a 33,000 hoUr life and the other ballast would have a 45,000 hour life. What are your opinions on this approach? The 45,000 hour life is more appropriate than 33,000 hours. The life of 45,000 hours should be used for both the magnetic and electronic ballasts in the analysis. Sensitivity analysis should also use the same values for the life of the ballasts, ifnot, the lives shouldbe annualized. A.2 Lamp Life Reduction with the Cathode Cutout Ballast. DOE has received severnl comments to the effect that cathode cutout ballasts reduce lamp life by 10-25%. There seems to be
5EE·RM·97·500 COMMENT OF



### some agreement in the comments that a lamp life reduction of 15% is about average. There is also a June 1995 paper by Advance 

### that supports a lamp life reduction of 16% for TI2 ballasts and 8% ror T8 ballasts. DOE is considering the values reported by Advance. 

### Do you have any information to support these orthat would guide DOE 

### to use some other values? Would rather use the 25% 

### reduction, but comfortable withthe 15% 

### reduction in lamp life. There is not enough evid,ence to use the 8% 

### reductionfor T8lamps. Recommend using the 25% 

### reduction in lamp life, but 'Will not object to 15% 

### lamp life reduction. Also recommend using the same value for both the Ti2 and T8. ' A.3 Incompatibility ofElectronic Ballasts an!i 34 watt lamps. -Is there an Incompatibility of Electronic Ballasts and 

### 34 watt lamps? 

### Do you manufacture electronic ballasts for use with34watt lamps. Are there price premiums for these ballasts?
. Ifso, Can you provide pricing sheets? It

### appears that starting 

### problems have atechnical solution; therefore starting 

### problems should not be used to rule out all 

### electronic ballasts. Is this an accurate assessment? Yes, there is an incompatibility with the 34 

### 'Watt Ti2andelectronic ballasts. The tin coating acts .as a short circuitonhighfrequency (electronic) ballasts. Lamp manufacturers need to better control the thickness of the tin coating to reduce the problem. They (lamp manufacturers) are currently doing a better job control?ing the thickness of the coating. Ballast manufacturers can chalige the glow current in the ballasts, but this will compromise ihe design of the ballasts andwill result in a reduction of the lamp life. The Ti2 electronic ballastmarket is 

### backing off.

1, " .: • 

### Technically, the lamp manufacturers couldmake a lamP without the tin coati1ig, but commercially this 'Willnot 'lWrk. There is an installation Ilamp replacemf;!ntproblem even ift'heJamp is marked. The illStallermay notknow what type (magnetic orelectronic) of ballast is in 

### the fixture; A.4 Electronic Ballasts May Cause Interfereneewith Building Electronic Systems. Are you aware of published accounts ofretrafit situations where spme type ofinterference has 

### occurred with electmmc ballasts? Are you aware of any electronic ballasts'which dO.tlPtcause this type of interference? Is it possible,to design an electronic ballast using appropriate filters.or shields, for example, which will 

### not cause 

### this interference? Is

### there 

### Host premium for a**non·int~g** 

### electronic baUast?Do cathode cutout ballasts ca\ISC this type of interference?.'.Wbatdo you dQ when a customer complains that**~n** 

### electronic ballllSt interferes 'Yith one orJllore ofits building electronic**syst~?** 

### Do you provide guidelines to yoUr distnbl.ltors regardiilginterference effi:cts with electronic ballasts? What portion ofthe U.S. building stockis affected by these interference problems? .' " . 

### Yt',V, there are accounts ofinterference· in paging systems'.librar)i scanners, powerline carrier systems, etc. There are currently no electronic MI!aststhal

# will not causetnterference. Manufacturers can filter the 

### lfMIoutof the front of the ballasts (effeCts •• cost, size, efficii!1lcy), but the lamp radiates EMIduring operation causing interference,
.This radiated inteiference is directly proportional to thefrequency of the lamp operation. Electronic pallasts operate in afrequency that can anddoes coincide with l'1fra·redcontrols anddata communications.
6EE·RM·97·500 COMMENT OF

10% ofthe building stock would be affected (a guess). Recommend using a. different ballast (cathode cutout/ magnetic) inproblem areas. PART Bi CONSUMER AND NATIONAL ISSUES B.1 Ballast Prices: Current ballast pricing information was obtained from a 1993 survey conducted by the Lighting Research Institute. ACEEE beJieves the survey overstates the current price of electronic models. DOE intends to reduce electronic ballast prices used in the February 1996 draft report by 15%. This is based on an a comparative analysis ofshipments and value data from Bureau ofCensus (BoC)1993 and 1995 reports. Additionally, DOE will perform pricesensitivitx studies at +15% and -10% ofthenew price. Do you lfgree with DOE's approach? Suggest that DOE does 'not change the ballastprices in the analysis but continue to use theprices from the LRl study. The currentpricesfrom BoC are prices to OEM's, not to end users. ,The markups on ballasts do not trackdue to the various distribution channels. Thepricepressur.e is on the manufacturers, not the distributors. B.2 Energy Prices: The Energy Information Agency (EIA) energy price forecasts do not consider the possible impacts ofutility restructuring. The Gas Research Institute (ORl) has a future price scenario showing 29% lower commercial electricity prices by 2015. DOE will use the mostrecent EIA electricity price forecast for the year2001 in the engineering and life-cycle cost analysis. Forthe purpose ofcalculating national benefits the Department will perform life-cycle-cost sensitivity analyses at -12.5% and -25% of the EIA forecast. In an additional sensitivity analysis the Department will determine the rate of decrease in electricity price needed to reduce net present value ofthe reduced life-cycle-cost to zero. Do you a&ree with this approach? Do you have any suggestions for an alternative electricity price projection for the 30 year period? Advance would like to see the resultspresentedas apercent of people advantaged andpercent of people disadvantaged. Similar topresentation at the June 1996workshop. B.3 New Market Shares: DOE will graph the annual ballast installations according to three segments: new construction, conversions and replacements. Market share (electronic as a percent oftota! instal1ations) as a function oftime will also be disPlayed. The graphs will show the synergistic effects ofconversions, replacements and new construction to make the discussion easier to follow. The electronic share oftotal ballast sales is approximately the same for the first halfof 1996 as it was in 1995. Do you believe these shares should increase / decrease through 20007 Ifso, by how much7 Total sales will remain flat. Thepercent of electronic ballasts 

### will continue to increase. Estimate that 50% ofthe sales will be electronic by 1997·1998* (CBM numbers, *eliminates the non· regulatedballasts). B.4 Conversion Rates

- Retrofiti The current high efficiency base case assumes a constant
7EE-RM-97-500 COMMENT OF



### conversion rate of5.5% after 2000. ACEEE claimed that a conversion rate based on the 1992/1993 

### time period 

### is unrealistic for future years. The low I<fficiency base case assumed no conversions after 1995. Workshop participants suggested that sensitivity studies on conversion rates be performed. What conversion rates should be considered? Question not asked ordidn't apply. B.5Futilre Ballast.SaJes Levels: Stakeholders disagree with the current forecast oftotal future· ballast sales which is based on 1993 data. The ballast shipments for '93, '94 and '95 are nearly flat at 

### SO million petyear. What do you project the future ballast shipmentsto be? Total sales will remain flat. B.6 Incorporating Voluntary Programs: The current analysis assumes that utility DSM programs will diminish after 1995. DOE will review some DSM, FEMP, EPA, and EPRI data to develop an upper bound and best estimate ofthe effects ofvoluntary programs. Information 

## On these or other voluntary 

### programs would be appreciated.
. . Shares of electronic oallasts.will increase due to voluntaryprograms. The NEMA program is 

### large; they have $150k invested. B.7 Transition Technology

- Cathode Cutout: Whyhas this 

### technology captured only 1% market share? There are three basic reasons why Cathode Cutout ballastshaveasmallpercentage of the market: 1. Certain image in market. People jumpfrom lowestcostto highest efficiency. Cathode cutout is in the middle (also consideredamagneticballait.)
.. 2. No acceptedstandard for Cathode Cutout ballasts
... No consensus/Orlife, reliability, etc. 3. Availablefrom only three mam,ifacturers,<one of which half-heartedly sells them. PARI C: BAU.AST 

### IJSDUSTRY ClIABACTERJZAUON 

### C.I ·What are the televant characteristics that .colildbe usedtQ·divide ballast manufacturers 

## ittto meaningfu1subgroups for the purpose ofevaluating the impacts ofstandards? (i.e.•

### firm size,plant location,productmix, ete.)
.. Two groupings; , 1. Ske

- small, medium, large 2. Product

- magnetic, (!iec/ronic, both C.2 How would you characterize your firm 

### relative to the previous characteristics? Advance is 

### a large manufacturer of both types of ballasts
. . 8EE·RM·97·500 COMMENT OF

C.3 What changes have occurred in the ballast industry in recent years**(~ilch** as the shift to electronic ballasts), and how have these changes impacted your company? The shift to electronic ballasts has shifted jobs out of the U.S. to Asia. The profitability of the industry has decreased. There have been some stranded investments due to plant closures. Shipments are down 8·9% annually. The Monroe manufacturing facility will be the only U.S. magnetic ballast manufacturingfacility ownedbyAdvance. PART D: MANUFACTURER COST IMPACTS For each ofthe efficiency levels descnbed in Section 3.6 ofthe "Draft**R~port** on Potential Impact of Possible Energy Efficiency Levels for Fluorescent Lamp Ballasts", February 1996. (Included below): D.I Are the manufacturing costs descnbed in the LBNL engineering analysis -labor, materials/parts, shipping/packaging, and tooling/equipment

-**r~resentative** ofyour manufacturing costs? Please explain. The breakdowns are meaningless. They don'tprovide an estimated total cost of every ballast category. Each manufacturer allocates costs differently. Total cost equals sales revenue minus profit. D.2 Is there a large variation in costs between different ballast manufacturers? Ifso, how large, and what elements might account for these variations? The variation in total cost is not large. Allocation ofcost is very differentfor individual manufacturers.

- D.3 What would be the effect on the value ofY9ur current assets in such areas as plant, equipment, and tooling? Electronic Standard: impact wouldbe hundreds of millions Cathode Cutout: not as large an impact. secondary effect would be a greater shift to electronic ballasts.

- PART E: IMPACTS ON PRODUCT SAI.ES 

### AND PRICE For each ofthe efficiency levels described in Section 3.6: E.I Would the total number ofba11asts sold by your finn increase or decrease from current forecasts? Why?
. Any change in the standards would result in a minor change in number of total ballasts sold by Advance. Advance currently has the largest marketsharefor magnetic andelectronic ballasts.
9EE·RM·97·500 COMMENT OF



### Ifthe standard wasfor electronic ballasts, there would be a slight decrease in total number of ballasts sold.byAdvance. 

### If the standardwas for cathode cutout ballasts, in the short runAdvance wouldhave an increase in marketshare due to the currentpercentage of the. cathode cutoutmarket we have. Eventually the standardwould have the same impactas an electronic standard
.. E.2 Would the price on ballasts increase or decrease? Why? By how much? Theprice

### ofball~sts wouldgo up. Cathode Cutout andElectronic ballasts are more expensive. EJ Would the gross profitmargin on ballasts increase or decrease? Why? By how much? ElectroniC:: profit margin is less than magnetic, \""ouldbe lessprofitable. Cathode Cutout: due to the secondary effectmentionedabove, profits wouldgo down
. .. E.4 Are you aware ofother factors that c01lld influence the price and quantitY variables for your fnm?{changes in distribution channels, changes in suppliers, etc.)
. Increase inforeign competition influencesprice. There would be added cost to .the industry in reliabilityJorele9trOnic ballasts
.

. PARTF: O'rHERISSUES



### For each ofthe efficiency levels described in Section 3.6:

I

_ '. 

### F.I
. 

### What might be 

### the effect on current employmentlevels**atyourdom~stic** 

### mallufacturing plants? Please explain and quantifY ifpossible.
.

. Nothing in the currentmagneticplantthat couldbe usedto manufacfllre electronic'ballasts. Currently going./i'om three to twofacilities. One more will goawaydue to natural decrease in magnetic market. 75% 

### of the ballasts 'soldby2005 will b.e electronic. Employmentwouldmove, destination unknown.
.. F.2 What might be 

### the effeqt on

### yo~ company's

# rennn on investmentand

### overalleconomi~ value? Please elaborate.'
. Return on Investment (ROI) woulddecrease; FJ How might your competitive .position in the industry

# be affected?
.. Still would be competitive. Intend to be #1 

### no matter what happens. Would not be as stronga leaderas today. F.4 What other federal product**I~gulations** 

### are likely to impactyour firm 

### in the near future?

\ 10EE-RM-97-500 COMMENT OF

Impact from lamp regulation. Exact impact is still beingsortedout. 

### Shift of product to electronic ballasts and T8lamps. Afactorbutnota 'major one.

J1EE·RM·97'500 COMMENT OF

February 10, 1997 Interview with The Alliance to Save Enere:. Regarding Fluorescent Lamp Ballasts
On Janumy 13, 1997 the Department ofEnergy (DOE) interviewed The Alliimce to Save Energy, having a place ofbusiness at 1200 1 8thStreet, N.W., Washington, D.C. 20036, to disQuss various engineering, consumer, national, and manufacturer issues relating to fluorescent lamp ballasts. The responses recorded are in italics below each interview question. Attendees The Alliance to Save EneriY Eugene Foley· Program Manager DOE and Contractors A!tthony Balducci

- DOE Terry Logee

- DOE PART Ai
.ENGINEERING ISSUES A.I BaDast Life. At the ballast workshop, held 

### on June 20, .1996, there was some agreement that the blinast life currentlyused (33,000 hours) is too low. It was suggested that a life of50,000 hours be used

### instead. The ntuminating Engineering Society (IES) Ligh$g Handbook, 8th edition, lists a life of45,000 hours for magnetic ballasts. DOE is preparedtouse thisvalue for both magnetic 

### and electronic ballasts arid is pl!lDlling to conduct sensitivity studies 

### on unequal ballast lifetimes for

. magnetic 

### and electronic ballasts where one type would have a 33,000 hour life and the other ballast

would have a 45,000 hour life. What are your opinions,on thisllpproach?
. . , Use the same value/or both types a/ballasts. 45,000 hour life is a

### reason~ble number. A.2 Lamp Life Redul;tion with the Cathode Cutout Bllllast.. DOJ,i: luis .received several comments tothe effect that cathode cUtout ballasts reduce.lamp life by 10-25%. There. seelllS to be some agreement inthe comments that a lamp life reduction of15% isabi>utaverage. There is also a June 1995 paper by Advance that supports a lamp life reduction 

### of 16% for Tl2ballasts and 8% for T8 ballasts. DOE is considering the values reported by Advance. Doyou h8te any information to support these or that would guide DOE to use some other values? DOEshoulddo some research on the averageftxture "on time". 

### If the averageftxture is on/or:

. 3 hours or less

- reduce lamp life;
. 6 hours ormore - keep the lamp life the sameforallballast types. JES handbook is agood place to look.
.
12EE-RM-97-500 COMMENT OF

A.3 Incompatibility ofElectronic Ballasts and 34 watt lamps. ISthere an Incompatibility of Electronic BalIllsts and 34 watt lamps?
. Do you manufacture electronic ballasts for use with 34 watt lamps. Are there price premiums for these ballasts? Ifso, can you provide pricing sheets? It appears that starting problems have a technical solution; therefore starting problems should not be used to rule out all electronic ballasts. Is this an accurate assessment? There is an incompatibility 

### if you don't design the ballast correctly. Magnetic ballasts can have a hard time starting 34 wattlamps. A.4 Electronic Ballasts May Cause Interference with Building Electronic Systems. Are you aware of published accounts ofretrofit situations where some type ofinterference has occurred with electronic ballasts? Are you aware of any electronic ballasts which do not cause this type of interference? Is it possible to design an electronic ballast using appropriate filters or shields, for exampIe; which will not cause this interference? Is there a costpremimn for a non-interfering electronic ba1last? Do cathode cutout hallasts cause this type ofinterference? What do you do when a customer complains that an electronic ballast interferes with'one or more ofits building electronic systems? Do you provide guidelines to your distributors regarding interference effects with electronic ballasts? What portion ofthe U.S. building stock is affected by these interference problems?' Yes, interference occurs, but it is solvable. Interference with Simplex Clock systems is common. Simplex hasproduceda list of electronic ballasts that are compatible with their systems. Industry can buildballasts thatwill.not inteifere with different systems. For existing systems. manufacturers need to be aware of the "issues "
.. Less than 10% of the building stack is affected. PART B: CONSUMER 

### AND NATIONAL ISSUES B.I BaDast Prices:
. Current ,balliist pricing information 

### was obtained from a 1993 survey conducted by the Lighting Research Institute. ACEEE believes the survey overstates the current price of electronic models. DOE intends to reduce electronic balJastprices used in the February 1996 draft report by 15%. This is based on a comparative analysis ofshipments and value data from Bureau of Census 1993 and 1995 reports. Additionally, DOE will performprice sensitivity studies at +15% and -10% ofthe new price. Do you agree, with DOE's approach? BOC data gives nopricing data. For one source. DOEshould lookat ballasts bought by various ' levels of government an various goverilment contracts to get ballastprices. B.2 Energy Prices: The Energy Information Agency (EIA) energy price forecasts do not consider the possible impacts ofutility restructuring. The Gas Research Institute (GRI) has a future price scenario showing 29% lower commercial electricity prices by 2015. DOE will use the most recent EIA electricity price forecast for the year 2001 in the engineering and life-cycle cost analysis. Forthe purpose ofcalculating national benefits the Department will perform life-cycle-cost sensitivity analyses at -12.5% and -25% ofthe EIA forecast. In an additional sensitivity analysis the DepartJ.nent
13. EE-RM-97-500 COMMENT OF

will 

### determine the rate ofdecrease 

### iIi electricity price needed to reduce net present value ofthe reduced Jife-cycle-cost to zero. Do 

### you agree with this approach? Do you have any suggestions for an alternative electricity price projection for 

### the 30 yearperiod? 25% is 

### too Jarge of a deflated number. Depending on the sector, price couldactually increase. B.3 New Market Shares: DOE will 

### graph the annual ballast installations according to three segments: new construction, conversionS and replacements. Market share (electronj.c as a percent oftotalinstallations) as 

### afunction oftime 

### will also be displayed. The graphs will show the. synergistic effects ofcpnversions,repiacements and new construction to make the discussion easierto follow. The electn>nic share of total ballast sales is 

### approximately the same fOTthe first 

### halfof 1996 as it was in 1995. Do 

### you believe these shares should increaSel decrease t)lrough 2000? Ifso, by how much? Most conversions go to electronicballasts. In the short term. electronic ballastsales will be flat or decrease. This is primarily dUe to th£!end of Demand Side Management (DSM) programs. 

### If electronic ballastprices come down, magnetic ballasts may bepricedout of themarket
.

.BA 

### Conversion Rates

- Retrofit: The current high effiCiency base case assumes a constant conversion rate of5.5% after 2000. ACEEE claimed that a conversion rate based on the 199211993 time 

### period is 

### unrealistic fur futureyears. The

# low efficiency base case assumed no conversions after 1995. Workshop participants suggested that sensitivity studies on conversion rates be perfozmed. What conversion rates should be considered? Question not asked or didn't apply. 8.5 Future Ballast Sales Levels: Stakeholders disagree with the currentforecast oftotal future 

### ballastsaies wlrich is based on 1993 data
..The ballli$tshipments for '93, 

### '94 and '95 are nearly flat at 80 miJlion peryear. What.do youproject thefutute.ballast shipinentsto be? As newconstru.ction increases, ballastsales Will follow. 8.6 

### Inc9rporatingVoiuntaJ.y 

### :Programs: The curreDt aIIalysis assJUries ,that utility OSM programs will diminish after 1995. ODE will review some OSM, FEMP, EPA, 

### and EPRI data,

### to develop an upperbound and best estimate ofthe effects· ()f

### wluntary prograDls. Infozmation on these or other voluntary programs would be appreciated.

" " 

### Be carefulwhen looking atEPA projections. RebateprogrQnlsare going down, they hada huge impact.
. . . . B.7 Transition Technology

- Cathode Cutout:
.Why

### has this tecbnologycaptured'only 1 

### %market share? The cathode cutout ballastwas neverdesigned to. be a large item market item. Many reasons they 14EE-RM-97-500 COMMENT OF



### are not used: 1) reduced light output 2) reduced life o/the lamps It has never been seen as a mass market,just a stop gap solution.

PART Ci
.BAJJ.AST INDUSTRY CHARACTERIZATION C.l What are the relevant characteristics that could be used to divide ballast manufacturers into meaningful subgroups for the purpose ofevaluating the impacts ofstandards? (i.e. 

### firm size, plant location, prOduct mix, etc.) 

### There are basically two: Domestic versus Offshore , Full line versus Speciality C.2 How would you characterize your firm relative tothe previous characteristics?



### ,Question not asked ordidn't apply.

C.3 What changes have occurred in the ballast industry in recent years (such as the shift to electronic

. ballasts), and how have these changes impacted your company?



### There have been huge changes in the industry.

- the number of companies that manufacture electronic ballasts

- everyone manufacturermakes electronic ballasts

- more**~nd** 

### more resources are being invested in electronic ballasts

- magnetic ballasts sales have been stayingflat ordeclining, there are/ewer entrants in 

### the magnetic ballastmarket
. 

### PART Di MANUFACTURER COST IMPAcTS For each ofthe efficiency levels described in Section 3.6 ofthe "Draft Report on Potential Impact of Possible Energy Efficiency Levels for Fluorescent Lamp Ballasts", February 1996. (Included below): 0.1 Are the manufacturing costs descnbed in the LBNL**Cngine~g** analysis -labor, materials/parts, shipping/packaging, and tooling/equipment

- representative ofyour manufacturjng costs? Please explain. 

### Question not askedor didn't apply. 0.2 Is there a large variation in costs between different ballast manUfacturers? Ifso, how large, and what elements might.account for these'variations?

15EE·RM·97·500 COMMENT OF

Questionnoi askedor didrz 't apply. 

### D.3 What 

### would be the 

### effect on the value ofyour current assets in such areas as plant, Cquipment, and tooling? Question notaskedordidrz '/ apply. PARI Ei WPACTS ON PRODUCT 

### SALES 

## MID PRICE 

### For each ofthe efficiency levels described in Section 3.6: E.l Would the total number ofpaUasts sold by

### yourfirmincrease ordecrease from Current forecasts? Why? Question no/askedordidn't apply. 

### E.2 Would the price on ballasts increase or decrease? Why? By how much? For.an electronic ballaststandard, theprices of electronic ballasts wouldgo down. 

### E.3 Would the gross profit margin on.ballasts increase or decrease? Why? By'how much? CONFIDENTIAL 

### E.4 Are you aware ofother factors that could influence the price andql\llntity variables for your finn? (changes in distribution channels, changes in 

### suppliers; etc.) • The international markets. The U.S. has an advantage in the manufacture of electronic ballasts. U.S.firms couldsell more electronic ballasts andincreaseprofitability as worldmarkets**d~elop.** PAR,I Fi QTHER ISSIJES 

### For each ofthe efficiency levels described in 

### Section 3.6: V.I
.. What 

### might be the 

### effecton current employment levels .at,yourdomestic manufacturingplarits? Please C)!:plain and quantifY 

### If possible.
. QUestion notaskedordidn '(apply. 

### F.2 What might be 

### the effect on your company's retumon investment and overall economic value? Please elaborate.
. Question not askedor didn't apply.
16EE-RM-97-500 COMMENTOF



### F.3 How might your competitive position in 

### the indusUy be affected? Question not asked ordidn 'I apply. F.4 What other federal productregulations are likely to 

### impactyour firm in the near future? Question nol asked ordidn't apply.

17**~E-RM,97-500** COMMENT OF



### February 14, 1997 Interview with The American Council for an EneQlY-Effieient Economy Rellardinll Fluorescent Lamp Ballasts


### Oii February 5, 1997 the Department ofEnergy (DOE) interviewed The American Council for an Energy-Efficient Economy, having 

### aplace of business at 1001 ConnecticutAve., N.W., Washington, D.C. 20036, to discllSS various engineering, consumer, national, and manufacturer issues relating to



### ,.. fluorescent lamp ballasts. The responses recorded 

### are in 

### italics below each interview question. Attendees 

### The 

### American C(.ouncil fot 

### an EPew'-Efficien1 Economy Steven Nadel

- Deputy Director DOE and CoDtractors Anth()ny**B~lducci** 

### - DOE PARI A; ENGINEERING ISSUES A.l' Ballast 

### Life. At the ballast workshop, held on June 20, 1996, there was some agreement that the ballast life currently**~ed** 

### (33,000 hours) is too 

### l()w. Itwas suggested that alife ()f50,000 h()urs 

### be used-instead. TheIlluminating Engineering SQCiety (IES) Lighting,Handbook; Sthedition, lists a lifO()f45,000 hours f()r magnetic ballasts. DOE is prepared to 

### use this, value for b()th magnetic and

,**electronic~allastsand** 

### is plattiring,to 

### ,c()nduct sensitivjty studies ()n Uoequalballast lifetimes for

magnetic and electronic ballasts ",here ()ne type would have a 33;000 h()urlife and the CJtberballast' would have a45,000 houtlife. What are y()ur,()pinions ()n this appr()al;h?

. - \. 

### . -, \ ; ;'. 

### DOE should use the consensllS number of5Q,QQQ hours for the life :Of the**ballas~.** 

### DOEshould acknowledge that the 45,000 hourlife is conservative. /n,apaperbyFred Gordon etai, in the 1988 ACEEE SummerStudy Proceedings, there is a cite for 70,000 hour life for ballasts. Thisflgl,lre couldbe usedaspart ofasensitivity analysis. ' '. ' A.2 "',Lamp" Life. Reduction' \Vlththe Cathode Cutout Bailast. , DOE hasteceived ,several comments to 

### the effectthat cdth()de cUtout ballasts reduCe lamplife by**1O~2S%.Thereseems** 

### to be some agreementin the C<lIDIDelits thatalamp life reductiOn of 1 S% is about average. There is al,So a**~une** 

### 1995 paper**~y** 

### Advancetbat supports alamp Ufereciuction

## of 16% for TI2 ballasts and.S% " " " ,,', ' ,,', ' : ", ' - - ' ,'. - 

### fOr T8 ballasts. DOEis 

### COilsidering the 

### values reported by 

### Advaric!" Do

### you have. any information to support these or.that w()uldguide DOE to 

### use some other values? 

### The numbers being usedareflne. The TI2lamps are more critical in this area than the T8lamps. No argl,lment with what is being done.

18EE·RM·97·500 COMMENT OF 

### '. A.3 Incompatibility ofElectronic Ballasts and 34 watt lamps
.. ls there an Incompatibility of Electronic Ballasts and 34 watt lamps? 

### Do you manufacture electronic ballasts for use with 34 watt lamps
.. Axe there price premiums for these ballasts? Ifso, can you provide pricing sheets? It appears that starting problems have a technical solution; therefore starting problems should not be used to rule

.out all electronic ballasts. Is this an accurate assessment?

. Have heardaboutproblems when the lamp is near the end of its life. it may fail. but have. not heard of any significant incompatibilities. It maybe aproblem at coldtemperatures. It has to do with the coating on the lamps. A.4 Electronic Ballasts May Cause Interference with BuDding Electronic Systems., Are you aware of published accounts of retrofit situations where some type ofinterference has occurred with electronic ballasts? Are you aware of any electronic ballasts which do not cause this type of interference? Is it possible .to design an electronic ballast using appropriate filters or shields, for example, which will not cause this interference? Is there a cost premium for a non-interfering electronic ballast? Do cathode cutciut ballasts cause this type ofinterference? What do you do when a customer complains that an electronic ballast interferes with one or more ofits building electronic

..systems? Do you provide guidelines to your distributors regarding interference effects with electronic

ballasts? What portion ofthe U.S. building stock is affected by these interference problems? There are a couple of isolated incidents. One example 

### is the U.S. Congress andthe clocksystems andsome hospitals with older eqUipment. Theproblems are being workedoutwith adjustments in the equipment or the ballast. The frequency of problems are decreasing with time. The electronic ballasts may interfere with optical systems that use infraredcommunication. Less than 

### 1%of the buildingstock is affected. PARI B: CONSUMER AND NATIONAL ISSUES B.l Ballast Prices: Current ballast pricing information 

### was obtained from a 1993 survey conducted 

### by the Lighting Research Institute. ACEEE believes the survey overstates the current price of electronic 

### models. DOE intends to reduce electronic ballastprices used in the February 1996 draft

. report by 15%. This 

### is based on a comparative analysis ofshipments and value data from Bureau of

Census 1993 and 1995reports. Additionally, DOE willperformprice sensitivity studies lit +15% and -10% ofthe new price. Do you agree with DOE's approach? Have concerns with whatDOE

### is doing
. . DOEshoulduse the best data available. DOEshould take the oldLRI prices andreduce the difference between electronic andmagnetic ballasts by 35%. The BOG-numbers show that manufacturers costs are down 35%for electronic. ballasts. therefore the price difference shouldalso come down 35% This wouldgive aprice difference of $10 between the magnetic andelectronic T12 ballasts. This $10 costdifference is consistent with i'!formation on the averageprice differences in the New EnglandElectrics Incentive Program. 

### if the mid· point of the analysis is biased. the sensitivities will show an inaccurate number of winners and losers. The estimates shouldn't be overly conservative orgenerous, they shouldbe fair. The BOC numbers show 19EE-RM-97-500 COMMENT OF

thatmanufacturers costs are down 35%for electronic ballasts, therefore theprice difference**sho~ld.** also come down 

### 35%. DOE needs to do a sensitivity analysis shuwing the difference in price**b~tween** $5 and $15, where the $10 difference is the mid-point, DOE's Juwprice differential is higherthan ACEEE:SO averageprice differential. The $5price differential comes from a .1993 study byASE. 

### 13.2 Energy Prices: The Energy Information Agency (EIA) energy price forecasts do not consider
. the possible impacts ofutility restructuring. The Gas Research Instit\lte (GRJ) has a future price scenario showing 29% lower commercial electricity prices by 2015,DOE will use the mostrecent EIA electricity price forecast for the year 2001 in 

### theengineerlD.g andlife-cyCte costanalysis. Forthepmpose ofcalculatingruitionalbenefits the 

### Department willperi"orm life-eyc1ll-Cost sensitivitY analyses 

### at -12.5% and 

### -25% ofthe EIA 

### forecast. In

### an additional sensitivity analysis the Department will determine the rate of decrease in 

### electricity priceneedecito recJ:ttce net present vaJue ofthe
. reduced 1ife-cyc\e-costto zero. Do 

### you agree with.this approach? Do you have any· silggestions for an alternative electricity price projection for the 30yearperiod?
.

### DOE~hould lookat thepredictk,1/Sanddetermine a reaso1Uiblebounds of lAncertainty• . Use the 1997 EIAfo1Yt¢ast numbers. For the sensitivity analyses, -25%price reduqtionfor the 1997numbers is too 10lV, it

## is beluw the 

## OR!numbers. DOEshouldonly reduce the 1997 fON!Castnumbers by 13% for the s(!nsitivitiesfor the most extreme case. The 1997ElAforecast is·appr()ximately a 10% reduqti()nfrom lastyear's for(!cast.
.. . 

### B.3 .New Market Sha.res: DOE wiUgraph.the annual ballast installations according to three
·**~s:new**

### ConStruction. conversions**andrep~cemC!lts**

### ...**~~etsQare** 

### (electronic as a PercC!lt


### · oftQtal insWIations) as a

### function of

### time willalso .bedisplayCIL The graphs will show the synergistic

effects cifconversions, replacements andnew constructic>n to 

## milke,t4e**~cussif>!leasier** 

### to'f()l1ow. The electronic share oftotalballast sales isapproxin!atelythe sm:ne for the 

### f4'st halfof 1996 as it was in 

### 1995. Do

### youbelieve these Shares should 

### increaseIdegeaseUlrough 20007 IfBo,by how much?

", , . " . '''( The numberqfsharesshould remain stable. Through the thitdquarter 1995 electric ballastshares
· were siightly below 1995**$~ar(1S.** ASHR4E90,} willbejinalized-2000and incprporated into

building codes**-2003~** So there sh()uldbe a mod(!rategrmvthin elecirrJnic ballastsali!Spast 2.003. It**~illbe.a** longtime b(!fore electronic ballastsalespass magnetic sales (in terms Qf quantities). 

### B.4
. ConverSion lutes

- Retrofit: The current

## higbllffici~cy base ease

## ass~ell a constant conversion rateof5 ,5% 

### after 2000
... ACEEE claimed. thata 

### conversion fate based on

### the 1992/1993 time 

### period is 

# unrealistic fur 

### future yeats. The lOw efficiency base case.assumed no conversions after 1995. Workshop participants suggested that sensitivity stuciies on conversion rateS be performed. 

### What conversion rates should be 

### considered? Basedon a 

### 15year life, 

### 6.7% of the

### i~talli!dstock are

### repla~edeach year. A 

### 5.5% c()nversion rate is more than 80% 

## 0/the replacement market,
. 

### If an electronic standard were enacted, this 

### 20EE-RM-97-500 COMMENT OF

conversion rate of 5.5% would be fairly accurate, buta little low. 'i.fthere were no new standard, this conversion rate is too high.. The conversion rate should be approximately 1/4 of the total replacements, which equals 1.7%. B.5 Future Ballast Sales Levels: Stakeholders disagree with the current forecast oftotal future ballast sales which is based on 1993 data. The ballast shipments for '93, '94 and '95 are nearly flat at 80 million peryear. What do you project the future ballast shipments to be? The total ballastshipments have been increasing over thepastseveral decades andshouldcontinue due to a growingpopulation and economy. There were a fewyears in thepast decade thatshowed large increases in sales levels, butthe growth overtime has been modest andshouldcontinue. Look at the growth over 1989-1996 period. The average growth per year is 5.8% for the years 1989-1995. B.6 Incorporating Voluntary Programs: The current analysis assumes that utility DSM programs will diminish after 1995. DOE will review some DSM, FEMP, EPA, and EPRI data to develop an upper bound and best estimate ofthe effects ofvoluntary programs. Information on these or other voluntary programs would be appreciated. The voluntaryprograms have helped increase the market for electronic ballasts, butwe don't see them gaining much more. The FEMP, EPA andDSM programs are a significant marketshare of the 30million electronic ballasts soldannually, particularly in retrofit applications. There should ' a slight to moderate growth due to the EPA and FEMP programs. However, with the DSM programs diminishing, the other voluntary'program gains have to make up the difference to maintain the current marketshare. B.7 Transition Technology

- Cathode Cutout: Why bas this technology captured only 1 %market share?
. There are a few reasons why cathode cutout ballasts are not widely accepted in the market. The mostsignificant reason is that whenpeople make the jump to a higher efficient ballast, they tend to pass overthe cathode cutoutandgo straight to an electronic ballast. The economics are about the samefor both types ofballasts. Cathode cutout ballasts have not been marketed as much as electronic ballasts. Electronic ballasts arepushed by utilities, not cathode cutout ballasts. The cathode cutoutballast is seen as eighties technology, while the electronic ballast is seen as modern technology with big energy savings. The electronic ballast is better for most applications, but the CC may be best for the smallportion of applications where electronic ballasts cause inierference problems.

PART C: BALLAST INDUSTRY CHARACTERIZATION C. I What are the relevant characteristics that could be used to divide ballast manufacturers into 21EE·RM·97·500 COMMENT OF

meaningful subgroups for the purpose ofevaluating the impacts ofstandards? (i.e. fum size, plant location, product mix, etc.)



### · Size and productmix wouldbe theprimary characteristics. 

### C.2
..How would you characterize your ftrm relative to the previous characteristics? 

### Question not asked or didn't apply. 

### C.3 

### What changes have occurred in the balli!stindustry inrecent years (such as the shift 

### tc>'electronic ballasts), and howhave these changes impacted ypur company?
.



### . There have been.afewthings that have occurred in the industry in thepastfewyears: • there has been a major shift to electronitballasts due to building codes and DSM programs •problemspredicting juturedemand • the markethas become more international • costcuttinghas bec(Jme more important. • many mpnufacturers have movedtheir magneticmanufacturing out of the country • the electronic bailastm(lnufq.cturing is 

### highly automated • international companies are selling magnetic ballasts • in the absence of any standard, there is a trend towards overseasproduction PART Pi MANUFACTURER COST IMPACTS**For~h** of the efficiency levels descnbedln Section3.6 ofthe "DraftReport on Potential Impact of Possible Energy :gfficiencyLevels for FluoreSCent Lamp Bal.lasts" ,February 1996. (Included below):

. , '. , '

, " '. . -. " ",:

. . D.I Are the manufucturing costs descnbed in the LBNL engineering analysis**.labo~,** materials/parts, shipping/packaging, and tooling/equipment

- representauve ofyour 

### II1l!llufacturing costs? Please explain.
. .-\.. 

### · We muldtend tolookat theBureau**ofC~ilu~bersasa** 

### signifiCant check.on the costnumbers.

· D.2 Is. there a large variation in costs between different ballast manuf'acfQiers? Ifso,how large, and

,what elements might account for these variations? '

, ' 

### There is 

### not a lotofvariation because it isa competitive market FirmScannotsurvive if 

### their costs are significantly higher than the rest of the market. D.3 What would be the effect on the value ofyour current assets in such areas as plant, equipment, and tooling?

22EE-RM-97-500 COMMENT OF

Question not asked ordidn't apply. PARI E: IMPACTS ON PRODIJCT SALES 

### AND PRICE For each ofthe efficiency levels described in Section 3.6: E.I Would the total number of ballasts sold byyour fum increase or decrease from current forecasts? Why? Question not asked or didn't apply. 

### E.2 Would the price on ballasts increase or decrease? Why? By how much? For an electronic ballast standard, there would be some cost reduction due to the increase in production andautomation, but itwould not be dramatic. E.3 Would the gross profit margin on ballasts increase ordecrease? Why? By how much? Question not asked ordidn.'t apply. E.4 Are you aware ofother factors that could influence the price and quantity variables for your firm? (changes in distribution channels, changes in suppliers, etc.) Inventory costs wouldgo down because companies wouldonly stockone line of ballasts, not two. The overall quantities wouldnot be affected PART F: OTHER ISSIJES For each ofthe efficiency levels describedin Section 3.6: F.I What might 

### be the effect on current employmentlevels at your domestic manufacturing plants? Please explain and quantifY ifpossible. Question not askedor didn 't-apply. F2 What might 

### be the.effect on your company's return on investment and overall economic value? Please elaborate.
. Question not asked or didn't apply. F.3 How might your competitive position in the industry be affected? Question not askedor didn't apply.
23EE-RM-97-500 COMMENT OF



### F.4 What 

### other federal product regulations are likely to 

### impact your firm in

### the near future? 

### ASHRAE90.1 building codes.won '( affect the market untii- 2003 and lamp standards even later, since the standards are notpresently on DOE's agenda.

24EE-RM-97-500 COMMENT OF
February 6, 1997 Howard Industries Ballast Interview On February 4, 1997, the Department ofEnergy (DOE) and its contractors visited Howard Industries, Inc. to discuss various engineering, consumer, national, and manufacturer issues relating to fluorescent lamp ballasts. The interview was conducted at the Howard Industries offices in Laurel, Mississippi. The responses are recorded in italics below.each interview question. Attendees Howard Industries Billy Howard, Jr. Dr. Wayne Causey Mr. Michael Dodds DOE and Contractors Ms. Barbara Twigg

- DOE Mr. Terry Logee

- DOE Stephen Mariano

- Arthur D. Little PART Ai ENGINEERING ISSUES A.I Ballast Life. At the ballast workshop, held on June 20, 1996, there was some agreement

. that the ballast life currently used (33,000 hours) is

### too low. It was suggested that a life of

50,000 hours be used instead. The Illuminating Engineering Society (lES) Lighting Handbook, 8th edition, lists a life of45,000 hours for magnetic ballast. DOE is prepared to use this. Value for both magnetic and electronic ballasts.and is planning to conduct sensitivity studies on unequal ballast lifetimes for magnetic and electronic ballastswhere one type would have a 33,000 hour life and the other ballast would have a**45~000** hour life. What are your opinions on this approach? Motorola literature shows a guarantee of 135,000 hours to the time where'50% of'. ballasts have failed. HowardIndustries designs with 500,000 hours. They thought that 45,000 hours was much too short. Their information is basedon reliability statistics, Mil Std. 217. Discussed the effects of temperature and electricfield stresses. The industry uses a 5 to 7year' warranty, A.2 Lamp Life Reduction with the Cathode Cutout (CC) Ballast. DOE has received several comments to the effectthat cathode cutout ballasts reduce lamp life by 10-25%. There seems to be some.agreement in the comments that a lamp life reduction of 15% is about average. There is also a June 1995 paper by Advance thatsupports a lamp life redu.ction of 16% for T12 ballasts and 8% for TS ballasts. DOE is considering the values reported by Advance. Do you have any information to support these orthat would guide DOE to use some other values? 25EE-RM-97-500 COMMENT OF



### HowardIndustries has notworkedwith the CC 

### ballast but they didn't think that the CC


### ·ballastshouldcause shorter lamp life basedon thephysics of lamp operation. The CC

### b,allast starts a lamp like aRSballast and then runs a lamp like an IS ballast. A.3 Incompatibility ofElectronic Ballasts and 34 watt lamps. Is there an Incompatibility of Electronic BaUasts and 34 wattlamps? Do 

### you manufacture electronic ballasts for use 

### with 34 watt lamps. Are there price premiums for these ballasts? Ifso, canyou provide pricing sheets? It appears that starting problems have atechnical solution; therefore starting problems shouldnot be used to 

### rule out all electronic ballasts. Is this an accurate assessment?

·HowardIndustries doesn't manufacture any TIl, ballasts atpresent A.4 Electronic Ballasts May Cause lnterferencewlth BulldingElectr,onlc Systems. Are you aware ofpublished accounts ofretrofit situations where some type ofinterference has occurred with electronic ballasts? Are you aWare ofany electronic ballasts which do not cause this type of interference? Is itpossible to design aneleqtronic ballast using appropriate filters or shields.for tOxample. which Will not cause this interference? Is there a costpremi

## Ulll fora non-interfering electronic ballast? Do cathode'cutout ballasts cause this type ofinterference? ,What do you do when a customer complains that an electronic ballast interferes with one'ortll9re ofits building electronic systems? Do

### you provide guidelines to your lfistributors regar4ing interference effects with electronic ballasts? WhatportiOn ofthe U.S. 

### building stock is affected by 

### these interference probiems?
.. No, HowardJndustries hasn '( encounterei(anyproblems like these. A brief discussion of the three forms of fntfJrferencefollows.
. HowardIndustries electronic ballasts .use 24-25 

### kHz;Electroni(! baltaststYpicallxusea range from 22, "30 kHz
.. . '.They are aware of someproblems that comPfltitors,havltlladwilhremote TV
. controllers inahospital. The remote controlmanufacturers are.goingtouffe40kHz andas long as ballastmanufacturers avoid that frequency andmultiples of that frequency there shOuldbe no problem. There can beEMIinterjerencealso but the FCC regulates this very stringently.·
. 

### . '. ,'. 

### With.

## re~ardtopower line c(Jrriersigrlals lik/ii the Si,nplex clockcontriJlIersuse.Boward Industries. has the highest input impedance of any manufacturer in theirpassive electronic ballast desigrls.
.Simplex has apprQved th/iiHowardIndustriespassivi1 electronic ballast designs for use with Simplex systems. (High input impedance minimizes the intei:t'errtnce topower.line
·carriersignals.) With their active electronic ballast designs, perhaps only one desigrl will work

with the Simplex system. . ' ", They nole that a ballast manufacturerWillget the most cost**savin~s** 

### in ballast components at higher frequencies because with smallermagrleticcomponents, the costs go down. 26 

### ,EE-RM-97-500 COMMENT OF

PART B: CONSUMER 

### AND NATIONAL ISSUES B.! Ballast Prices: CUrrent ballast pricing infonnation was obtained from a 1993 survey conducted by the Lighting Research Institute. ACEEE believes the survey overstates the current price ofelectronic models. DOE intends toreduce eleptronic ballast prices used in the February 1996 draft report by 15%. This is based on an a comparative analysis ofshipments and value data from Bureau ofCensus 1993 and 1995 reports. Additionally, DOE will perfonnprice sensitivity studies at 

### +15% and -10% ofthe newprice. Do you agree with DOE's approach?

CONFIDENTIAL B.2 Energy Prices: The Energy Infonnation Agency (EIA)·energy price forecasts do not consider the possible impacts ofutility restructuring. The Gas Research Institute (GRI) has a future price scenario' showing 29% lower commercial electricity prices by 2015. DOE Will.use the most recent EIA electricity price forecast for .the year 2001 in the engineering and life-cycle cost analysis. Forthe purpose ofcalculating national benefits, the Department will perfunn life-cycle-cost sensitivity analyses at -12.5% and -25%ofthe EIA forecast. In an additional sensitivity analysis the Department will detennine the rate ofdecrease in electricity price needed to reduce net present value ofthe reduced Iife-CY,cle-cost to zero. Do you agree with this approach? Do you have any suggestions for an alternative electricity price projection for the 30 year period? HowardIndustries is not really expert enough to comment butthey believe that even where electric rates are lowest; mostpaybacks arestill within the time frame thatmost buyers would consider cost effective. For example, Mississippi Power •. which services HowardIndustries, has some of the lowest rates. Howard Industries retrofitted theiroffices which usedolderEEM ballasts with new T8 electronic ballasts and lamps. AtHowardIndustries' commercial rate of 4 centsperkWh, they have less than a 2yearpayback. This was without rebates. B.3 New Market Shares: DOE will graph the annual ballast installations according to three segments: new construction, conversions and replacements. Market share (electronic as a . percent oftotal installations) as a function oftime will also be displayed. The graphs will show 27EE·RM·97·500 COMMENT OF

the synergistic effects ofconversions, replacements and.new**constructi~n** 

### to make the discussion· easier 

### to follow. The electronic share oftotal ballast sales is approximately the same for the 

### first halfof 1996 as it was in 1995. Do you believe these shares should increase 

### 1decrease through 2000? Ifso, by how much?
.. 

### HowardIndustries belieVes that the marketshare of electronic ballasts should increase slowly through 2000. They discussed. this statement ill the context of the three majormarketsegments of ballastsales: new construction, conversions andreplacements. HowardIndustries believes that barring any unforseen economic downium, sales of e1i!ctronic ballasts in new construction will continue to grow

### Pa$/the 50% range that they were atby the endof 1996. 

### This is basedon theirdiscussions with the 

## sixmajor fixture manufacturers and with several smaller speciality fixture manufacturers. HowardIndustries believes that conversions areprobably flat ordownfrom apeakin 1994 

### when utility rebates were flowingfreely. There has been a dramatic decline in DSM jUnding butmany utilities are creating their own energy ser,vice companies (eSCO 's)as subsidiaries arid these Compalliesare buying ballasts and fixturesfor the conversion**mark~t.** 

### HowardIndustries claims this is a conseq/.lence of utility deregulation .andefforts byutility.companiesto lock in an existing customer under a lease buy backprogram at a flXedelectricpower rate. In the replacement market, HowardIndustries only knows aboul/he largestprojects
. . They believe that electronic ballasts accountfor less than 20% of the 71larket, sincepeople usually replace what is already there with similar ballasts,
. usually magfletic.

, ' . B.4 CODversloD.Rates

- Retrofit:· The curreiJ.t highefficiencybas.e case· assumes a constant conversion rate of5.5% after 2000, ACEEE claimed that a conversionrate based on the ' 1992/1993 time period is unrealisticror

### future years. Thelowefljciericybase case assumed no, conversions after 1995. Workshop participants suggested that seiJ.sitivity studies on conversion rates be performed
...What .conversionrates should be considered? '. 

### HowardIndustries disagrees with DOt's

### lowejJiciencybqsecase·~ihi~h asS/.l71ledno conversions after 1995. 

### See the answer 10

### B3. HowardIndustries suggestedthat conversions miiyrise someWhat in 1997 

### if/he econotnystaysstrong: ., . B.5 Future Bal!ast Sale.s Levels: Stakeholders disagree with the cuttent

### forec~t oftOtal future ballast saleswhichis based on 1993 data. The ballast**shipmentsfor'~3,** '94**~d'95** are nearly flat at"80 million peryear. What do you project the future ballast shipm.ents to .be?
. . 

### HowardIndustri(!S believesthat these will mcrease slightlYin the nextseveralyears due to new construction, assuming·a steady economy. New construction is 

### using inorethan the retrofit marketnow.


### 28EE-RM-97-500 COMMENT OF

B.6 Incorporating Voluntary Programs: The current analysis aSsilihes that utility DSM programs will diminish after 1995. DOE will review some DSM, FEMP, EPA, and EPR] data to develop an upper bound and best estimate ofthe effects ofvoluntary programs. Information on these or other voluntary programs would be appreciated. The utility ESCO 's. may fill the gap left by the vanishing DSM program, as utilities try toprotect their market from erosion due to deregulation. Howard Industries believes that the EPA Green Lightsprogram has been quite successfol. HowardIndustries also believes that the EPACT legislation has had apositive impact with regard to federal facilities. With a mandate to reduce electricity use by 30% by 1998,federal facility managers are relying heavily on lighting retrofits to get most of thejOlJ done. EPRImay have some informationfrom a certificationprogram that they run. HowardIndustries expects thatASH RAE 90,[ may have large impacts on electronic ballasts use in new and retrofit construction once theprogram becomes codified in state building codes. They thought that this effect wouldn't occur for about 5years. B.7 Transition Technology

- Cathode Cutout: Why has this technology captured only 1% market share?
. HowardIndustries doesn't manufacture this type of ballast but they do 1lf2I. view it as transition technology. They believe that the cost difference between an electronic ballastanda cathode cutout balldst is small andgrowing smaller. Since the energy savings with cathode cutout ballasts is small, thepayback isn'tgood. Furthermore, utility rebates didn't include cathode cutout technology because the total harmonic distortion with these ballasts is about 30%. PARI C: BALLAST INDUSTRY CHARACTERIZATION C.I What are the relevant characteristics that could be used to divide ballast manufacturers into meaningful subgroups for the purpose ofevaluating the impacts ofstandards? (i.e. firm size, plant location, product mix, etc.)

CONFIDENTIAL C.2 How would you.characterize your firm relative to the previous characteristics?
CONFIDENTIAL C.3 What changes have occurred in the ballast industry in recent years (such as the shift to electronic ballasts), and how have these changes impacted your company? 29 oEE-RM-97-500 COMMENT OF

CONFIDENTIAL PART D: MANUFACTURER COST IMPACTS

,For each ofthe' efficiency levels described in Section 3.6 ofthe 

### "Draft Report on Potential Impact

of Possible Energy Efficiency Levels for FhiorescentLattlP Ballasts", February 1996. (Included below): ' 

# . '. '.
.



### , D.l Are the manufacturing costs described in the LBNL engineering analysis -labor, materials/parts, shipping/packaging, and tooling/equipment

- representative ofyoUr manufacturing costs? :Please explain.

CONFIDENTIAL D.2 • Is there a large variation in costs between different ballasUnanufacturers? Ifso, how large, and what elements might account for these variations? '

, ' 

### There are no large differences in costs**~etweenballast** 

### manufachlrersdue to intense competition., There are two different design topologiesbutmostm,timgacturers make bothkinds, '

, active and passive. There are not many spf!!cial desi/PI.s/n-oteptedbypatents.!Also, aU the '

manufacturers are highly automated even in 

### the forei/PI.colintries. ,**D.~** What would b!) th!)!)ffect on the value ofyour cUIl'ent assets in such areas as plant, equipment, and toOling? 

### None. PART E: IMPACTS ON PRODUCT SALES AND PRICE For each ofthe'efficiency levels described in Section 3.6: 30EE-RM-97-500 COMMENT OF

E.l Would the total number ofballasts sold by your finn increasebr decrease from current forecasts? Why? Cathode cutout ballasts are a non-issue. However, DOE couldallow**manufactur~** of cathode cutout ballasts and itwould notaffect the industry because the savings is only 4watts. The largest selling electronic ballast isthe instantstart T8 ballast. It accounts for about 85% of the 4'fluorescent ballastsales
. . They suggestsimplifications such asputtingthe categories of instant-start and rapid-siart ballasts together, saying thatDOEhas createdartificial categories that don't really exist in the market. Then, DOEcould cover those situations like occupancy sensor controls where the rapid-start ballast is appropriate. Either level three or levei four would result in an increase in ballastsales for HowardIndustries. However. they commented that in 5years, 80% of the market willprobably be electronic ballasts anyway. They notedthat the instant-start ballast is slightly cheaperand there are more energy savings but a somewhat shorter lamp lifo. E.2 Would the price on ballasts increase or decrease? Why? By how much? Electronic ballast prices will go down due to competition regardless of any government standards! E.3 Would the gross profit margin on ballasts increase ordecrease? Why? By how much? Not now; the market has matured. E.4 Areyou aware ofother factors that could influence the price and quantity variables for your finn? (changes in distribution channels, changes in suppliers, etc.)
. Not really. A rulemaking wouldn't change distribution. Electronic ballasts are a smallpartof the electronic componentmarket so a rule wouldn't affect the electronic component supply capacity. It's a different situation today from J 993

- the industry has already done whatan earlier rulemaking would'have. PART F: OTHER ISSUES For each ofthe efficiency levels described in Section 3.6: F.l What might be the effect on current employment levels at your domestic manufacturing plants? Please explain and quantifY ifpossible. CONFIDENTIAL F.2 What might be the effect on your company's return on investment and overall economic
31EE-RM-97-500 COMMENT OF

value? Please elaborate.

- 

### Some increase with levels three or four. F.3 How might your competitive position in the indusJ:rr be affected? 

### A slight improvement. F.4 What otherfederal product regulations are likely to impact your fum in the near future? 

### No negative impacts. Since electronic ballastmamifacture is quite clean, they have no impact from the cleanair standards.' '

The AsHRAE90.1 standards will have apositive impact. OTHER COMMENTS NOT DIRECTLY ADDRESSED BY INTERVIEW QUESTIONS

, , ' 

### Electronic ballasts with active designs typically can only withstandsurge voltages of about 1,000 V. 

### Active designs a/so Jrave higher inrush current butcan be designed with total harmonic , distortion less than J 0%. They are higher pricedby$1-$1.50. All of theMotorola electronic , ballasts are active designs. Passive ballast.designs·can withstand,much highersurge voltage, typically greater than 5,000 volts. They have low inrush currentandthey are cheaper but typically have total harmonic distortion around20%.

CONFIDENTIAL


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# '"EE·RM·97·500 COMMENT OF

December 26, 1996 . . h MagneIek. Inc. IntervIew WIt 

# tLamp Ballasts. Regarding Fluorescen
On December 10, 1996 the Department ofEnergy (DOE) and its contractors interviewed MagneTek, inc., having a place ofbusiness at 26 Century Boulevard, Nashville,Teil1lessee, 37214, to discuss various'engineering, consumer, national,.and manufacturer issues relating to fluorescent lamp ballasts. The interview was conducted at MagneTek's headqulj.l'!ers**~** Nashville, Tennessee
.. The responses recorded are in 

### italics below each interview question. Attendees**Ma~.Inc.** Michael Stein, Director, Prodqct Development
.. William Bacon, Jr. " Vice President,Product Management Peter Caldwell· Vice President, Marketing Jim Hagar· Product Manager·.
. William Kirkland • Vice President, EaStern Region Lighting Products Group Robert Mmray, Vice President, Communications,**Inve~torRelations** DOE and Contractors Anthony Balducci" DOE Terence Logee

- DOE Michael Rivest

- Arthur D. Little PAATA:· ENGIlSEWNG ISSUES A.IBallast Life. Atthe ballast workshop, held on June 2Q, 1996, there was some agreement thatthe ballast life!curi:ently used (33,000 hours) is too low. Itwas suggested that a life of 50,000 hours be used instead. TheJlluminating Engineerinj! !;ociety 

### QES) Lighting Handbook, 8th edition, lists alife. of45,000hours for magnetic ballasm. DOEispteparedtousethis valUe for

,both magnetic and electronic ballasts and isp1anning to conduct sensitlvitystudies on unequal

ballast lifetimes for magnetica0gelectronic ballasts whereone,type wotddhavea 33,000 hour life and the other ballast would have a 45,000 hour life. What are your opinions.on this approach? 

### Comfortablewith the 45,000 hour life. Do sensitivity analysis with the life of the ballasts equal. Do not use unequal baliast lifetimes for electronic andmagnetic ballasts.
. . A.2 Lamp Life Reduction with the Cathode Cutout Ballast. nOE has received several comments to the effect that cathode cutoutballasts reduce lamP**life~y** 10-25%. :There,seems to be some agreement inthe comments that a lamp life reduction of 15% is about average. There is also a June 1995 paperby Advance that supports a lamp' life reduction 006% for TI2 ballasts 34EE·RM·97·500 COMMENT OF

and 8% for T8 ballasts. DOE is considering the values reported l:IyA.dvance. Do you have any', infonnation to support these or that would guide DOE to use some other values?
. 15% reduction in lamp life is reasonable compromisl;!. Perform sensitivity analysis down to IO% and \lP to 25%. Lamp manufacturerspublish 25% reduction in lamp life with cathode cutout ballasts. Give weight to lamp manufacturers for lamp life reduction. TheAdvancepaper just looks at a batch of lamps. It is the average for the test. Make lamp life reduction equal for both types of ballasts in the analysis. A.3 Incompatibility ofElectronic Ballasts and 34 watt lamps. Is there an incompatibility of Electronic Ballasts and 34 watt lamps? Do you manufacture electronic ballasts for use With 34 watt lamps. Are there price premiums for these ballasts? Ifso, can-you provide pricing sheets? It appears that starting problems have a technical solution; therefore starting problems should not be used to rule out all electronic ballasts. Is this an accurate assessment? Yes there is an incompatibility with electronic ballasts and 34 watt lamps. The 34 watt lamp uses a krypton gasfill which makes the lamps harder to start. Therefore, the lamp manufacturersput a metallic coating on the lamp to make them easier to startwith magnetic ballasts.
. Without the

.coating, magnetic ballasts cannot start the lamps. The coating acts as a capacitor with the

electronic ballasts. The lamp manufacturers don't have good control over the tin coating thickness on lamps. This causes vtlriability with operation on electronic ballasts. The 34 watt lamp does not dim well and industry will get away from the 34 watt TI2 lamp. A.4 Electronic Ballasts May Cause Interference with BuDding Electronic Systems. Are you aware ofpublished accounts ofretrofit situations where some type ofinterference has occurred with electronic ballasts? Are you aware ofany electronic ballasts which do not cause this type of interference? Is itpossible to design an electronic ballast using appropriate filters or shields, for example, which will not cause this interference? Is there a cost premium for a non·interfering electronic ballast? Do cathode'cutout ballasts cause this type ofinterference? What do you do when a customer complains that an electronic ballast interferes with one ormore ofits building electronic systems? Do you provide guidelines to your distributors regarding interference effects with electronic ballasts? What portion ofthe U.S. building stock is affected by these interference problems? Yes, we are aware of situations where some type of interference has occurredwith electronic ballasts. NEMA has apaperon it. See MagneTek technical notes 24 and25. There are options to avoid this· magnetic andcathode cutout ballasts. Retrofits very small-I%. Thisproblem is very diffiCUlt to overcome with equipment usingpower line carriers, i.e. Simplex. The industry needs to address the infra-red issues. There are someproblems with inrush currents and occupancy sensors. NEMA is working with manufacturers of this equipment.

35EE-RM-97-500 COMMENT OF

PART Bi
.CONSUMER AND NATIONAL ISSUES B.1 Ballast Prices; Current ballast pricing information was obtained from a 1993 survey conducted bythe Lighting Research Institute
..ACEEE believes t)1e survey overstates the current price ofelectronic models. DOE intends to reduce electronic ballast prices used inthe February
. 1996 draft report by 15%. This is based on an a comparative analysis of shipments and value data from Bureau ofCensus (DoC) 1993 and 1995 reports. Additionally, DOE wilI performprice sensitivity studies at 

### +15% and -10% ofthe new price. Do you agree with DOE's approach? 

### Suggest thatDOEdoes'not change the ballastsprices in the analysi;, use thepricesjr9m the LRi**s~dy.** 

### The BoC**~eflects** 

### pricespaidby ballast**Tflanufac~rerc!/Stomers,not** 

### the endusers. Change in mix afballasts has changedthe distribution. More ballasts to OEM's than
. distributors
.. The only way to get**updat~dprices** 

### is'todoanothersurvey. Agree with the LRi report and approach. Agree with sensitivityanalysis,but don 'tchange the numbers without properdata.
. 13.2 Energy Prices: The Energy Information Agency

### (EIA)~ergy price forecasts 

### do not consider the possible impacts Qfutility restructuring, The Gas ResearchInstitute (GRI) has a fu,tute price scenario shOwing 290/0'lower commercial electricity pricesby 2015. DOE will use the mo.strecent EIA electricity price forecast for the year2001 in the enginc:eringand life-cycle cost analysis;

- . , . For the purpose ofcalculating national benefits the Departmel1twilI perform life-cycle-cost**sensitivityanalys~s** at -125% and -25% ofthe EIAforecast.In an additional**s~sitivity** analysis, the**Departm~t** wiU determinethe**~ate** ofdecrease.in electricity Jlriceneeded tortlduce net present**V'ah~eofthe** reduced life-cyc)e,cost to zero.**D~youagreewitht)1is** approach?
.Doyou have any suggestions for analtefilativeelectricity price projection for the 10yearperi6d? 

### Look at

# sensiti~itYforthefour (4) 

### ballasts with 

### the

# Mghests.al~VQlumes, tikedthepresentation .by LBNL on electriCity**pric~** 

### vs. energy savings at theJuneworksliop•.D,o one s,cel/llrio with differentprice reductions, J:i,5%and 25%

### price redlfctionsare fine.
. B.3NewMarkd Shares:' DOE willgrllph

### theanp.u~·~aUast.inStal!atiotis accotd#1gto three segments: new coustruction, cOliversiousand replacetnen1:s.¥Brke1: share**(ele~o~c** 

## as a percent of

### total installations) as a function oftimewin.alsri.be**display~.** The graphs will sh()w the sYnergistic**~ffe~sof**conversions, replacements 

### arid newconS1:!'uction tomake1he discussion easier to follow. The e1ecti'onic share of

### total ballast sales isapProximatc:;ly.the Sam,eforthe first half.of 1996 as. it was in 1995.
. 

### Do you believe these shatesshoul4 mcrease Idecrease through 2000? Ifso, by how mUch?
. '
. 

### CONFIDENTIAL B.4 CI)Dvei'sionRates

- Retrofit: The current high efficiency base case assumes a constant 36EE-RM-97-500 COMMENT OF

conversion rate of5.5% after 2000. ACEEE claimed that a convetSidli rate based on the 199211993 time period is unrealistic for future years. The low efficiency base case assumed no conversions after 1995. Workshop participants suggested that sensitivity studies on conversion rates be perfonned
..What conversion rates should be considered? No conversion scenario is ridiculous. Conversions occur all the time, not just for efficiency reasons. Suggest 10% or greater. B.5 Future Ballast Sales Lev!lls: Stakeholders disagree with the current forecast oftotal future ballast sales which is based on 1993 data. The .ballast shipments for '93, '94 and '95 are nearly.flat at 80 million per year. What do you project the future ballast shipll}ents to be?
. Total shares will remain relatively flat. B.6 Incorporating Voluntary Programs: The current analysis assumes that utility DSM programs will diminish after 1995. DOE will review some DSM, FEMP, EPA, andEPRI data to develop an upper bound and best estimate ofthe effects ofvoluntary programs. Infonnation OD these or other voluntary programs would be appreciated. FEMPprogram and NEMA program are'hardto quantify. Federal government buildings may be a good check. ASHRAE 90.1 requires certain wattspersquare foot, perEPA CTthe states shouldadopt this. Have topromote to change the mind set. Will work together topromote voluntaryprograms to sell electronic ballasts. All for selling electronic ballasts, but don't want itforced on consumers or us. B.7 Transition Technology

- Cathode Cutout: Why has this technology captured only 1% market share? 

### If

someone is goingfor an efficiency gain they willpurchase the electronic ballasts. 

### If thij are looking atjirst cost, magnetic ballasts are the choice. Believe that theprice difference between electronic and cathode cutout is not a driver
.. PARI C; BALLAST INDUSTRY CHARACTERIZATION C.I What are the relevant characteristics that could be used to divide ballast manufacturers into meaningful subgroups for .the purpose ofevaluating the impacts ofstandards? (i.e. fum size, plant location, product mix, etc.) Three groupings; 1. Most meaningfUl

- Product Orientaiion

- magnetic, electronic, both 2. Serve market

- applications Iproduct mix Niche market vs. Fullproduct lines (serves all/ most markets, more diversity) 3. Vertical Integration

-fully integratedvs. assembler
37EE-RM-97-500 COMMENT OF.

C.2 How would you characterize your firmrelative to the previous characteristics? 

### MagneTek offers fullproduct lines for magnetic and electronic ballasts. Vertical integration is 

### different for differentproducts. Magnetic ballasts

- fully vertically integrated, electronic

- assembler, purchaseparts. C.3 .What changes have occurred in the ballast industry in recent years (such as the shift to electronic ballasts), and how have these changes impacted your company?
. 

### The shift to electronic ballasts has beef! the most dramatic change. It will change:

- how we.lookat competition
.

- how we have to manufacture ballasts

- .how we deploy assets
- different assets forthe two different types of ballasts PARTD: MAlSJJFACTJ1RER COST IMPACTS For each oftheefficfency levels described in Section 3.6 ()fthe "Draft Report on PotentialImpact ofPossible Energy Efficiency LevelsforFluorescel1t LaIllp Ballasts", February 1996. (Included below); DJ Are the manufacturing costs described inthe LBNL eI1gil:1eering analysis
.. labor, materials/parts, shipping/packaging, and tooling/equipment -representative ofyour manufacturing costs? Please explain.
. 

### Some made sense, some didn**'~.** 

### Fora conventionalmanufacturermaterial, labor andoverhead tire the manufacturing costs. Overhead is 

### done different**~ays ~**  

### labor hours, machine hours, production units. Capital investrnentshave to be acco.unt.ed far. The buckets in the reportdon't cover all the expenses, nqr does the report allocate**~pense**

### .the way·rnostdo 

## it. D.2 Is there a large variation' in costs

### betweel1differ~t ballastmanufacturers? Ifso, how large, and what elements might \,ccount for these variations? 

### Severalfactorsplay into it;'



### - volume
. .

- vertiqaUntegration ;. buy rolls of steel, not iaminatiollS

- labor costs
- offsetby equipment (automation). Equipmentgets depreciated

- G&A -managementstructure D.3 What would be the effect on the value ofyour current.assets in such areas as plant, equipment, and too1ing? 

### Would have topUrchase different assets to manufacture electronic ballasts anddispose of current assets. Would have stra1')ded costs due to lost assets.
38EE·RM·97·500 COMMENT OF

PART E; IMPACTS 

### 9N PRODUCT SALES 

### AND PRICE For each ofthe efficiency levels described in Section 3.6: E.l Would the total number ofballasts sold by your finn increase or decrease from current forecasts? Why? Cathode Cutout not Widely accepted, so a cathode cutoutstandardwould inCrease electronic ballast sales. Asyou go more towards electronics, the totalvolume of ballasts soldwill decrease because there are 3 and 4 lamp electronic ballasts. Cathode Cutout ballast sales would increase, but not as much as electronic ballasts. E.2 Would the price on ballasts increase or decrease? Why? By how much? For Cathode Cutout ballasts, don 't know what theprice increase wouldbe. You are asking the device to do something additional, which adds costs. . Electronic ballasts are very complex. Theprice may go up due to the shortage of reliable components. Problem is with the availability of ballast grade components. E.3 Would the gross profit margin on ballasts increase ordecrease? Why? By how much? Marketplace sets theprice. manypeople in the distribution chain
.. Anyone who has infrastructure (existing magnetic ballastmanufacturing assets) couldbeput out of business. Assets have everything to do with the business. E.4 Are you awareofother factors that could b;tfluence the price and quantity variables for your finn? (changes in distribution channels, changes in suppliers, etc.) Suppliers of steel, copper andtarwouldbe affected. Finding enough componentsuppliers to

. support electronic ballasts would influence theprice andquantity of electronic ballasts. The reliability of components in electronic ballasts is (and must continue to be) very high. For example, 

### if 4% of the ballasts (under warranty)fail, have to replace 100% of the installed ballastspluspay for the labor to do the change. There is ashortage of ballastgrade componentsfor electronic ballasts so any regulation wouldhave to be very carefolly timed. PART F; OTHER ISSIJES F.or each ofthe efficiency levels described in Section 3.6: F.I What might be the effect on current elnployment levels at your domestic manufacturing plants? Please explain and quantifY if possible. With a Cathode Cutout standard, the employment level maygo up 

### if there is a onefor one 39EE·RM·97·500 COMMENT OF



### replac.ement of magnetic with cathode cutout ballasts. As electronic ballastsales increase, there will be a reduction in employment. Magnetic ballastmanufacturing is 

### more labor intensive than manufacturing electronic ballasts. There wouldbe an impact on the suppliers as well. Electronic components are sourcedaroundthe world.
F.2 What might.be the effect on your company's return on investment and overall economic value? Please elaborate.
. 

### An electronic ballast

### standard~oulddecreaSe the retumon investment. Would have to write off strandedassets and purchase new assets to**man~facture** 

### electrOnic ballasts. F.3 How might your competitive position in the industry bi: affected?

, 

### Don'tknow how c011lpetitive we wouldbedue to the uncertainty in the marketand the other manufacturers. We know the currentcompetition; don't know who will enteror leave the market
. .Don'tknow how orwhat othermanufoclllrerswill do

. .

### It .allhas to do with the deplO)'T1ient and
. use of assets. 40% 

### of sales are from the Lightingpart of MagneTek, so anew regulation which outlaws half of theirassets .willhave a big impact. F.4 What other federal product regulations are likely to 

### impact your 

### firm in the near future? 

### The electric motors standard (EPAct) that becomes effective October24, 1.997. 

### Also the small m%rs coveredby EPActandany OSHA. regulations.

40EE-RM-97-500 COMMENT OF

Interyjew with Motorola L!&htin&_ Inc. Re&ardiDlI Fluorescent Lamp BaUasts January 6, 1997

On November 

### 14, 1996 the Department ofEnergy (DOE) and its contractors interviewed Motorola Lighting, Inc., having a place ofbusiness at 887 Deerfield Parkway, Buffalo Grove, Illinois 60089, to discuss various engineering, consumer, national, and manufacturerissues relating to fluorescent lamp ballasts. The responses recorded are in italics below each interview question. Attendees Motorola LilWtini. Inc. Marios Zenios

- Vice President, Motorola Inc., and President, Motorola Lighting, Inc. Howard Wolfman

- Manager, Industry Standards and Utilities Tim Callard

- Controller DOE and Contractors Anthony BalducCi- DOE Eugene Margolis

- DOE Isaac Turiel

- Lawrence Berkeley National Laboratory Stephen Mariano

- Arthur D. Little Michael Rivest

- Arthur D. Little PARI A; ENGINEERING ISSUES A,I Ballast 

### Life. At the ballast workshop, held on June 20, 1996, there was 

### some agreement that the ballast life currently used (33,000 hours) is too low. Itwas suggested that a life of 50,000 hours be used instead. The Illuminating Engineering Society (JES) Lighting Handbook, 8th edition, lists a life of45,000 hours for magnetic ballasts. DOE is prepared touse this value for both magnetic and electronic ballasts and is planning to conduct sensitivity studies on unequal ballast lifetimes for magnetic and electronic ballasts where one type would have a 33,000 hour life and the otherballast would have a45,OOO hour life. What are your opinions on this approach? For electronic ballastsyou get the quality thatyoupay for. The ballast life is highly dependent on the manufacturer. Motorola aims toproduce the ballast with longest life- electronic or magnetic. Motorola hasproducedsimilar electronicproducts that are used in harsher environments-sue/} as Caterpillar tractors- andachieved lives of 15120years. The better quality of Motorola ballasts does not command apremium cost. Do you have failure rate Data?

41EE-RM-97-500 COMMENT OF

Yes**~e** have accelerated-life-testing data. We have achieveda 

### wiry goodbalance of quality and first costs. Motorola hasafiveyear in-pkice guarantee which is also an industry standard. Our ,design life-time is 87,600 hours.

We believe that a 45,000 hour lifetimefor electronic ballasts is too low. DOEshouldbenchmark ballast lifetime with tlJe best available electronic ballasts since all manufacturers will improve their quality to be competitive. Recognize that we are notdealing with a mature technology that haS achieved its foilperformancepotential. We have no opinions (that can be substantiated)pn magnetic ballast lifetimes
.

.A.2 Lamp LifeReducU"n with the Cath"dEl Cutout Ballast. DOE has received several

com1ilents to the.'effect that cathode cutout b,alillsts reduc¢ lamp life by 10-25%. Ther,e seems to be some agre¢ment in the comments that a lamp life reduction of15%is aooutaverage. There is also a June 1995 paperby Advance thlltsupports a lamp life reductionof 16%forTI2 ballasts and 8%for T8 ballasts. DOE is considering the values reported'by Advance. Doyou have any information to support these or that would guide DOE to use some other values? Cathode cutout ballasts areprimarily.magnetic. We don it manufacture any but we.agree with the statement of reducedlamp life based on our engineering experience and understanding of thephenomena. A.3 Incompatibility:ofElectronic Ballast, and 34 watt lamps. Is there anIncompatibility of. Electronic Ballasts and 34 watt lamps? Do you manufactureelectroni'lballasts.for use with 34
. watt lamps. Are there price prennums. for these ballasts? Ifso,can you provide pricing sheets? It ' appears that starting problems have a technical solution; therefore .startingproblems·should not be used to rule out all electronic ballasts.b this an accurate assessment? ' ,'
.

. Yes, there

### areaq~ounis of incompatibility. The tin coafingon the lamps cah.actasa short circuit. Only 10% of the electronic marketgoes to T12 !lamps; this is decreasing. ,·One way of ' addressingthis issue wouldbe for the lamp companies toprovide a 

### .34 watt rampwithout the tin
. oxide coatingfor.operationwith. electronic ballaSts. Genel'alElectric didoffei' such a lamp type a number of years ago. ' ' AAEledr"nlcBalIasts

# ~aycause lnterference With BUilding

# E.ectl'l)nicSy~tems. Are you aware of**publish~accounts** ofretrofit situations**wh~ sometyp~ofintert'erencehas**  occurred with electronic balla.sts? Are you awllteofany electronicl);:Illastswhich 

### <10 nQtcaus.e this type of interference? Is itpossible to design ;:In electronic ballastusing appropriatefiiters or shields, for example, which willnot cause this interference? Isthere. a cost premiumfor a non-il;1terfering electronic ballast? Do cathode cutout ballasts cause this type ofinterference?' Whatdo you do when a customer complains that an electronic
. ballast interferes with one ormore ofits building electronic systems? Doyou provide guidelines toyour distributors 

### regarding interference effects with electronic ballasts? What portion ofthe U.S. building stock is affected by these interference
42EE-RM-97-500 COMMENT OF
problems? Problems do arise. Apossible solution wouldbe to allow the installation of magnetic ballasts in areas where interference issues arise. This is less than 5% of the electronic market. PARI B: CONSUMER AND NATIONAl, ISSUES B.I Banast Prices: Current ballast pricing information was obtained from a 1993 survey conducted by the Lighting Research Institute. ACEEE believes the survey overstates the current price ofelectronic models. DOE intends to reduce electronic ballast prices used in the February 1996 draft report by 15%. This is based on a comparative analysis ofshipments and value data from Bureau ofCensus 1993 and 1995 reports. Additionally, DOE will perform price sensitivity studies at + 15% and -10% ofthe new price. Do you agree with DOE's approach? Ballastprices have definitely decreased in the 1993-1995 timeframe. Our experie,!ce has been to observe an 8% annual reduction in theprice of electronic ballasts. Basedon our larger experience in the area of consumer electronicsproduction. 

## weproject that theprice of electronic ballasts will follow a 70% learning curve - a 30% reduction inprice for every doubling of the cumulativeproduction volume. (Not to be confosedwith a doubling of annual output). Example: if

cumulative total by 1996was 90 million andvolumes were 30 millionperyear. in 2000prices wouldbe 30% lower than today" In summaryMotorola agrees with the Department's use of Bureau,of Census data. This data, may infact underestimate theprice reduction since ballasts shipped in 1995 hadgreaterproduct features such as dimming capability. B.2 Energy Prices: The Energy Information Agency (EIA) energy price forecasts do not consider the possible impacts ofutility restructuring. The Gas Research Institute (GR!) has a future price scenario showing 29% lower commercial electricity prices by 2015. DOE will use the most recent EIA electricity price forecast for the,year 2001 inthe engineering and life-cycle cost analysis. For the purpose ofcalculating national benefits the Department will perform life-cycle-cost sensitivity analyses at -12.5% and -25% ofthe EIA forecast. In an additional sensitiVity analysis the Department will determine the rate ofdecrease in electricity price needed to reduce net present value ofthe reduced life-cycle-cost to zero. Do you agree with this approach? Do you have**an~** suggestions for an alternative electricity price projection for the 30 year period? Motorola is unconvinced that energypriceswillfall appreciatively with deregulation. The Department shouldseekEElprojections andconduct multiple sensitivity analyses: B.3 New Market Shares: DOE will graph the annnal ballast installations according to three segments: new construction, conversions 'and replacements. Market share(electronic as a 43EE-RM-97-500 COMMENT OF

percent oftotal installations) 

### as a function oftime will also be displayed. The graphs will show the synergistic effects ofconversions, replacements lIIld new construction to make the discussion easierto follow. The electrOl).ic share oftotal ballast sales is approximately the same for the first halfof 1996 as it was in 1995. Do you believe these sh!l\'es should increase / decrease through 2000? Ifso, by how much? 

### Motorola believes electrotonic ballasts will continue to increase in total marketshare but the

.ratt! of increase will be lower than experienced in recentyears. B.4 ConversionRates -. Retrofit: The current high efficiency.base case assumes a copstant conversion rate bf5.5% after 2000. ACEEEclaimed that .a conversion rate based on the 1992/1993time period is unrealistic f()r future years. The low efficiency base case assuined no conversions after 1995. Workshop participantssuggested.thatsensitivity studies on conversion rates be performed. What conversion rates shouldbeconsidered?
. 

### The installed base o/ballasts is estimatedto be '600, 000,000**linit~.** 

### A 5.5% 

### conversion rate represents 33,000,000 

### ballasts.in the retrofitmarketalone. ThiS figute seems high. B.5 Future Ballast Sales Levels: Stakeholders disagree with the current forecast of total future ballastsales which isbased on 1993. data. The ballast shipments for '93, '94l11li:! '95 are nearly flat· at 

### SO million peryear. What do you project the future billiast Shipmehts to be? 

### Motorola's industry salesforecastfor 1996 

### is 70 million ballastS. Longer forecasts trackgrowth figuresfor GNP (2.5'Yo to 3% 

### range).
. B.6lncorporating VoluntaryPrograms:

## ~e currentllll8lysis assumes that utilitY DSM programs will diminish after 1995. DOE willreview some DSM,.FEMP, EPA, lIIldEPRI data to develop an upper bOund lIIld best estimate ofthe effects ofvoluntary programs. InfOJ:mation on

.these

# or other voluntary programs would be appreciated. 

### DSM programs are dropping off. At best thejuture holdsfewerprograms ()jferings,;"aller subsidies. Lookat Green Lights. The ratio of squarefeetof space coil1!erti!d to number of partners, is drrjpping. There wil.l be more E8COactivity and continua(ion o/FEMPprograms.

, ' , , B.7**·TraQ$i~ion** Technology

- Ce,thode Cuttiut: Why has thistecbhology captured only·l% market share?
. . 

### Question notasked or didn 'I 

### apply .pART C; BAl,LASTTNDUSTRY CHARACTERIZATION C.I What are the relevllllt characteristics that could be used to divide ballastmllllufacturers into meaningful subgroups forthe purpose ofevaluating the impacts ofstandards? (i.e. firm size, pll11lt
44EE·RM·97·500 COMMENT OF

location, product mix, etc.) 

### Ballast manufacturers are divided into threeprimary groupings; manufacturers of electronic ballasts only, manufacturers of magnetic ballasts only, andmanufacturers of both technologies. I. Motorola, OSRAMISylvania (who brandoffihore ballasts), Solium andHowardproduce· only electronic ballasts. II. MagneTek, Advance and Valmontproduce both. III. Robertson and other small manufacturers buildprimarily magnetic. Small manufacturers will have a different coststructure from their larger c01!lpetitors. Small manufacturers will tend to usemore laborwhereas larger manufacturers will be more automated and thus incurproportionately higher[lXed costs. Manufacturers of magnetic ballasts may have large capital investments thathave already been folly depreciatedfor accountingpurposes. For this reason magnetic ballast sales may be more profitable than electronic sales for companies thatproduce both. Some manufacturers have stated that magnetic ballastplants cannot be cost tiffectively retrofittedto manufacture electronic ballasts. Motorola believes that theplants can be convertedgiven investment in theplant and employee retraining. C.2 How would you characterize your firm relative to the previous characteristics? 

### Motorola is 

### a large manufacturer of electronic ballasts. A distinguishing characteristic is the fact that allproduction is in the U.S. C.3 What changes have occurred in the ballast indusUy in recent years (such asthe shift to electronic ballasts), and how have these changes impacted your company? 

### The significant change has been the growing market share of electronic ballasts. Since Motorola has strong expertise in consumer electronics, it 

### identified the electronic ballast as a natural addition to itsproduct line. Motorola's startedproduction in 1991 

### and is today one of the tdp threeproducers of electronic ballasts for the U.S. market.**P~T** D; MANUFACTURER COST IMPACTS For each ofthe efficiency levels described in Section 3.6 ofthe "DraftReport on Potentiallnipact ofPossible Energy Efficiency Levels for Fluorescent Lamp Ballasts", February 1996. (Included below): D.I Are the manufacturing costs described in the LBNL engineering analysis

- labor, materials/parts, shipping/packaging, and tooling/equipment

- representative ofyour manufacturing costs? Please explain.
45EE·RM·97·500COMMENT OF

CONFIDEN11AL D.2 Is there a large variation in costs between different ballastmanufacturers? Ifso, how large, and what elements might account for these variations? CONFIDENTIAL D.3 

### What would be the effect on the value ofyour current assets in such areas as plant, equipment, and tooling? 

### A standard would not affict the value of currentmanufacturing assets since they 

### are already usedtoproduce both rapidand instantstart**el~ctronic** 

### ballasts
. PART E; IMPACTS ON PRODUCT SALES AND PRICE For each ofthe efficiency levels described in Section 3.6: E.I Would the total number ofballasts sold by your finn increase or decrease from current forecl\8ts? Why? 

### AssumingMotorola maintainedan equal marketshare•.its totalsales would increase in proportion to the total increase in electronic ballastsales. 1996 

### electronic ballasts sales are 39% 

### of the total 7'0 million ballasts sold. Motorola intentb to meet any increased U.S. demand with increased U.S. production.
. E.2 Would the price on ballasts·increase. or decrease? Why? By how much?
. 

### Not certain howprices wouldbe iinpactedin the short 

### run,. bu.t increased production levels woulddecreaseprice in the long run due topreviously describe,d/earning effect.
. E.3 Would the gross profit margin onballasts increase ordecrease? Why? By how much? 

### Not certain. E.4 Are you aware ofother factors that could influence tile price and qUantity variables for your firm? (changes indistribution channels, changes in suppliers, etc.) 

### No. PART F; OTHERISSUES For each ofthe efficiency levels described in Section 3.6:

46EE-RM-97-500 COMMENT OF

F.l What might be the effect on current employment levels at yoUr domestic manufacturing plants? Please explain and quantifY ifpossible
.

.The plant currently has some overcapacity built-in but additional investments and laborwould be needed to meet the demand resultingfrom an electronic ballaststandard. Thesejobs would compensate that might be lost in theproduction. of magnetic ballasts. All manufacturing operations are in the US andfoture capacity would be US based. 80% of world's magnetic ballasts are manufactured in Mexicofor consumption in US. Advance has movedaplant from Wisconsin to Mexico, Valmont hasplants in Mexico despite HQ in El Paso TX Magneticplants. would be folly depreciated F.2 What might be the effect on your company's return on investment and overall economic value? Please elaborate.
. Question not asked or didn't apply. F.3 How might your competitive position in the industry be affected? Motorola will be there andbe competitive. F.4 What other federal productregulations are likely to impact your firm in the near future? Motorolaplantwas designed as a 

## vac..freeplant (water basedsystems) and uses fluxless soldering.



### 47**EE~RM-97-500** COMMENT OF

Interview with The Natural Resour\=es Defense CouneD Regarding Fluorescent Lamp Ballasts February 6, 1997

On Februmy 4, 1997 the Department ofEnergy (DOE) interviewed The Natural Resources Defense Council byphone, to discuss various engineering, consumer, national, andmanufacturer issues relating to fluorescent lamp ballasts. The responses recorded are in italics below c.ach interview question. Attendees The

### Natura! ReSOllroes Defense Council David Goldstein DOE and Contractors Anthony Balducci

- DOE PARI A: ENGINEERING ISSUES 

### A.1 Ballast Life. At the ballast workshop, held on June 20, 1996, there wassome agreement that the ballast life currently used (33,000 hours) is too low, It was suggested that a life of 50,000 hours be used instead. The Illuminating Engineering Society (lES) Lighting Handbook, 8th edition, lists a life of45,000 hours for magnetic ballasts. DOE is prepared to use this. value for**~oth** magn.etic and electronic ballasts and is planning to conduct

### sensitivitystudies on JJilequal b.allast lifetimes formagnetic and electronic ballasts where one type wOllldbavea 33,000.hour life and the other ballast wOUld have a45,00Q hour life. What.are your opinions 

# on this approach? In general, iUs a goodidea to use45,000 hour life for botbtypes of ballasts. DOEshould examine whereIESgot .the lifefigures: the 50,000 hours that seemedacceptable to .everyone at . the workshop may be better.if the IESnumber is**notbased.pn.,anything~** A 13,000 hour lifefor electronic ballasts appears too low, Each manufacturerhas.a different Circuitry, butwouldnot, survive in the marketif the life were only 11,000 hOlU's.4, sensitivjtyanalysis using a 33,000 hour lifedoesn't make sense, it is too/r)w. DOEshouldbalance the life oftheb"llast with a

,stockand flow model and be able to duplicate realistic waltspersquare**f~ot**andkWhlyear values for fluorescent lighting.
. A.2 Lamp Life Reduction with the**Cathode~utoutBall~st.** OOE hasr,eceivedseveral comments to tile effect that cathode cutout ballasts reduce 181rip life by 10-25%. There seems to be some agreementin the comments that a lamp life reduction of 15% is about average. There is also a June 1995 paper by Advance that supports a lamp lifereduction of 16% for T12 ballasts and 8% for T8 ballasts. DOE 

### is considering the values reported by "Advance. Do you have any

.information to support these orthat would guide DOE to use some other values? 48 ,EE·RM·97·500 COMMENT OF

We have noproblem with what is being done. A.3 Incompatibility ofElectronic Ballasts and 34wattlamps. Is there an Incompatibility of Electronic Ballasts and 34 watt lamps?
.Do you manufacture electronic ballasts for use with 34 watt lamps. Are there price premiums for these ballasts? Ifso, can you provide pricing sheets? It appears that starting problems have a technical solution; therefore starting problems. should not be used to rule out all electronic ballasts. Is this an accurate assessment? We have not heard of anyproblem. 

### 1/ aproblem does exist, it is not an issue if DOEgoes forward with a standard, the 34 watt lamp has a limited life. By the time the new ballast standard would be effective, existing 34 watt lamps would begone from the buildings before ballasts needed replacement. A.4 Electronic Ballasts May Cause Interference with Building Electronic Systems. Are you aware ofpublished accounts ofretrofit situations where some type ofinterference has occurred with electronic ballasts? Are you aware ofany electronic ballasts which do not cause this type of interference? Is itpossible to design an electronic ballastusing appropriate filters or shields, for example, which will not cause this interference? Is there a cost premium for a non.interfering electronic ballast? Do cathode cutout ballasts cause this type ofinterference? What do you do

. when a customer complains that an electronic ballast interferes with one or more ofits building

electronic systems? Do you provide guidelines to your distributors regarding interference effects with electronic ballasts? What portion ofthe U.S. building stock is affected by these interference problems?
. Not aware of anypublished accounts, but have experienced aproblem. Theproblem occurred with electronic ballasts andcheap lighting controls. The lighting controls went from bad to non· fUnctioning. Theproblem was easily fixed. In Cali/ornia, electronic ballasts represent 90% of the ballast market. There have only been a fewproblems andthey are fixable. The market solves theproblems. Overall, theproblem of incompatibility is always solvable, not very prevalent, and needs to be addressedsooner or later. My guess is that the building stock affectedwouldbe approximately J%. PARI B: CONSUMER AND NATIONAL ISSUES B.l Ballast Prices: Current ballast pricing iuformation was obtained from 

### Ii 1993 survey conducted by the Lighting Research Institute. ACEEE believes the survey overstates the current price ofelectronic models
..DOE intends to reduce electronic ballast prices used in the February 1996 draft report by 15%. This is based on a comparative analysis ofshipments and value data from Bureau ofCensus 1993 and 1995 reports. Additionally, DOE will performprice sensitivity studies at +15% and ·10% ofthe new price. Do you agree with DOE's approach? Theprice of electronic ballasts is coming down consistent with a learning curve. Theprice should be extrapolated to the qrective date of the standard. Anothersource for ballastpn'ces is
49EE-RM-97-500 COMMENT OF

the "Utility Measurement andEvaluation Studies" coordinatedby San Diego Gas andElectric
.

. Other utility data shouldbe sought by DOE.



### B.2 Energy Prices: The Energy Information Agency (EIA) energy price forecasts do 

### not considerthe possible impacts ofutility restructuring. The Gas Research Institute (GRI) has a future price scenario showing 29% lower commercial electricity pJjces by 2015. DOE will uSe the most recent EIA electricity price forecast for the year 200linthe engineering and life-cycle cost analysis
.. For the 

### purpose ofcalculating national benefits the Departmentwill perform life-cycle-qost sensitivity analyses at -12.5% and -25% ofthe EIA forecast. In an additiopalsensitivityanalysis the Department wi!! deter:QJine t11e rate ofdecrease in electricity price needed·to reduce net present value ofthe reduced life-cycle-costto zero. Do .:Y6u agree with

# this approach? Doyou have any suggestions for an alternative electricity price projection for 

### the 30 yearperiod? You, DOE, have to use the EIAjorecast. For symmetry, theprice should

### beincr~ased. There will beaperiod in.the foture wh(f1'e electricitypriCes willgo up. The idea that there will be no global carbon tax in the.next30years appears implausible. Data on deregulatipn ofthe;electric industry in othercountries doesn't show competition drivingprices down. Electricityprice extremeswillconverge tp a mean value with competition
.



### . B.3NewMarket Shares:· DOE will graph the annnal ballast installatiOns w;cording to three

segments: new construction, conversions andreplacements
...Marketshare (electronic as a percentoftotal installations) as a function oftime will also be displayed
.. The graphs will show the**syn~istic** 

### effects of coilversions, replacements and \lew construcnon to make the discus.sion easiertofollow. The electronic share oftota:l ballast sales is 

### approXimately the same for the first halfof 1996 as itwas in 1995. Do you believe these sh\lres should increase I 

### decreasethrough 20001 Ifso,byhowmuch?

. " .,'.' - .

We don '(believe tha/one canaccuratelypreilictthe marketshares. Suggestthat

### y(J~ calau/ate the mean andstandard deviation of the stakeholders opiniOns and.use thqt in the analysis. The deviation couldbe large but**unpr~dictable.** Projectionsmaylwi/l bewrong,jobs.willbe lost and assets will be stranded. 

### If you invest in new capq.city, yOumajistilllose;!f)ioudon 'timiest, you may lose,
. We cannot**ac~rqtely**predict consUmer behaviOr.
.

### B.4Conv~rsion Rates

- Retrl)fit: 

### The cUrrent high 

### efficiency base cIlse IIssmrtes a constant conversionrate of5.5% after 2000. ACEEEclairited thatacoilversion**rateb~sedon** 

### the 1992/1993 

### fune period isunrllalistic for future years. The lowefficiency base case assUIiled no conversions· after 1995. 

# .w orkshopparticipantssuggested
.that sensitivity studies Oil 

### conversion rates be performed. What conversion rates should be considered?
. This is hard topredict. As apracticatmatter, 0% to 

### 7% couldrepresent the bpundsfor retrofits; but in theory, 0% shouldnot be thelower bound. The/ower boundshouldbe a 

### 50.

### " EE-RM-97-500 COMMENT OF

negative number because, 'in some instances, electronic ballasts may be converted to magnetic ballasts. B.5 Future Ballast Sales Levels: Stakeholders disagree with the current forecast oftotal future ballast sales which is based on 1993 data. The ballast shipments for '93, '94 and '95 are nearly flat at 80 million per year. What do you project the future ballast shipments to be? Total ballast shipments beingflat does notadversely affect the base case. Cannot see any reasonJar a significant change in the total number oJballasts sold. Should look at the stock and flaw model again.

B.6 Incorporating Voluntary Programs: The current analysis assumes that 

### utility DSM programs will diminish after 1995. DOE will review some DSM, FEMP, EPA, and EPR! data to develop an upper bound and best estimate ofthe effects ofvoluntary programs. Information on these or other voluntary programs would be appreciated. Premature to declare thatDSM programs are dead. Although difficult topredict, DSM programs maystill make a comeback. B.7 Transition Technology

- Cathode Cutout: Why has this technology captured only 1% market share? The cathode cutout ballast doesn't offer the same quality oJlighting as an electronic ballast. Electronic ballasts areflicker free andhave a better light color. While there maybe an economic value to better lighting, it is mostly a quality improvement issue. PART C; BALLAST INDUSTRY CHARACTERIZATION C.I What are the relevant characteristics thatcould be used to divide ballast manufacturers into meaningful subgroups for the purpose ofevaluating the impacts ofstandards? (i.e.**~** size, plant location, product mix, etc.) 1. ProductMix

- what extent does the company make both types oJbaliasts. 2. Don'tknow ifsize matters
- is there a minimum typicalsizeJor the global market. 3. Lookat the 1988 standard in retrospect to checksize. C.2 How would you characterize your firm relative to the previous characteristics? Question not askedor didn't apply. C.3 What changes have occurred in the ballast industry in recent years (such as the shiftto electronic ballasts), and how have these changes impacted your company? •
51EE-RM-97-500 COMMENT OF

The shift during a 2-3yearperiod in the market to electronic ballasts. That change was more disruptive than the standards because itmay not have beenpredicated. 

### PART D: MANUFACTURER COST IMPACTS 

### For each ofthe efficiency levels described in Section3.6 ofthe "DrafiReport oil Potential Impact ofPossible Energy Efficiency Levels for Fluorescent Lamp Ballasts", February 1996. (Included below): D.l Are the manufacturing costs described in the LBNL engineering analysis

- labor, .' materials/parts, Shipping/packaging, and tooling/equipment

- representative ofyourmanufacturing costs? Please explain. " '.
. Do nothave any insight into the costs. .suggestthatstrandedcosts shiJuldbe amortized in the same way as the capital costs. 

### D.2 Is there a large variation in costs between differentballastmanufacturers? Ifso, how large, and what elements might account for- 

### these variations? Question notasked or didn ;tapply.



### . 

## . D.3 What would be the effect on the value ofyour current assets in such areas as plant, equipment, and tooling? Question not.askedordidn 't apply. PARI EI IMPACTS 

### ON .PRODUCT SALES AND PRICE 

### For each bfthe effiCiency levels described in Section 3.6:
. E.1 Would the total 

### number ofballasts sold by 

### your 

### firm incr!)ase or decrease from current forecasts? Why?
. . . Question not asked or didn't apply. 

### E.2 Would the price on ballasts increase or decrease? Why? 

# By how much? For an electronic ballaststandard, logically theprice wouldap'pearto decrease because of fasterprow:eS$ along the learning curve. Manl,lfocturers.would nqthave the excess capacity problem c-ora shortageproblem-c that they wouldhave in an unpredictable market: Currently, electronic ballasts have a highermarkup because they are consideredapremiumproduct
. .

### If the
. electronic ballastwere the standard,. itwouldbecome a commodity item. A caihode.cutout ballaststandardprobably would notbe very different from an electronic ballaststandard. The
52

### , EE-RM-97-500 COMMENT OF

cathode cutout ballast wouldstill represent a smallpercentage ojthemarket. E.3 Would the gross profit margin on ballasts increase ordecrease? Why? By how much? Question not asked ordidn't apply. E.4 Meyou aware ofother factors that could influence the price and quantity variables for your fum? (changes in distribution channels, changes in suppliers, etc.) There is always thepossibility of a breakthrough in theproduction of electronic ballasfs, with or without a standard. Eithergradually or dbruptly, electronic ballasts may become less expensive than magnetic ballasts. If that happened, a standard, wouldbe essential topreserve jobs in the United States. An electronic ballast standard would force investment in newer technologies for manufacturing ballasts. PART F: OTHER ISSUES For each ofthe efficiency If;vels described in Section 3.6: F.l What might be the effect on current employment levels at your domestic manufacturing plants? Please explain and quantifY if possible. The decision would restwith individual companies on where to invest. Ifplaced under a time deadline to get electronic ballast manufacturingon line, companies are more likely to build outside the U.S. If a standardwere enacted, itwouldestablish a certainty regarding when the market wouldcompletely change over andmanufacturers wouldhave more time toplan and invest in the U.S. F.2 What might be the effect on your company's return on investment and overall economic value? Please elaborate. Question not asked or didn't apply. F.3 How might your competitive position in the industry be affected? Getting U.s.firms toproduce higher technologies is to their foture benefit. F.4 What other federal product regulations are likely to impact your fum inthe near future? Question not asked or didn't apply.



### 53EE-RM-97-500 COMMENT OF

January 2, 1997 Interview with YaImont Electric. 

### Regarding FluorescentLlinlll 

### Ballasts
On December 17, 1996 the Department ofEnergy (DOE) and its contractors interviewed Valmont Electric having a place ofbusiness at 

### 1770 Commerce Park Drive, El Paso, Texas 79912, to discuss various engineering, consumer, national, and manufacturer issues relating to fluorescent 

### lamp ballasts. The interview was conducted at Valmont's offices in El Paso"Texas. Thl; responses recorded are in 

### italics below each interview question. Attendees. Valmont Electric Jerry Prideaux

- Manager, Product DeveloPlIlent Howard Sachs

- President and C.O.D. Paul Royalty

- Vice President, Marketing and Sales W. T. (Bill) Busch

- Director, Product Planning & Technical Services DoE and Contractors Anthony Balducci

- DOE Barbara Twigg

- DOE Steve Mariano

- Arthur D. Little PARt Ai ENGINEERING ISSUES A.l Ballast Life. At the ballast workshop, held on June 20, 1996, there was sonie agreement that the \la11ast life currently used (33,000 hours) is.too low
.. Itwas suggested thata life of
. 50,000 hours be used instead. TheUiuminatingEngineerilig Society (JES) Lighting Handbook, 8th edition, lists a life of45,000 hours for magnetic ballast. DOE is 

## preparedto tisethis 

### vallie for both magnetic and electronic biitlaSts and is planning to conduct sensitivity studies onunequal ballastlifetimes for magnetic**aild~lectronic** bl\llasts where. one type wotildhave II 33,000 hOur life and the other ballast would have.a 45,000 hour lifil: What are youropinions on 

### this approach?

. " , , 

### .

CONFIDENI1AL
54EE-RM-97-500 COMMENT OF

A.2 Lamp Life Reduction with the Cathode Cutout Ballast. DOE has received several comments to the effect that cathode cutout ballasts redUce lamp life by 10-25%. There seems to be some agreement inthe comments that a lamp life reduction of 15% is about average. There is also a June 1995 paperby Advance that supports a lamp life reduction of16% for T12 ballasts arid 8% for T8 ballasts. DOE is considering the values reported by Advance. Do you have any infonnation to support these or that would guide DOE to use some othervalues? 

### Lamp life should come directly from lamp manufacturers. not Valmont (or any ballast manufacturer). Ballast manufacturers buildandoperate ballasts within specified parameters set by lamp manufacturers. The cathode cutoutballast was introduced by GE in 1982. 

### Lamp life is dependent on the application. The cathode cutout ballast treats the lamp as apreheat which publisheddata claims a 25% 

### reduction in lamp life for T12. A.3 Incompatibility ofElectronic Ballasts and 34 watt lamps. Is there an Incompatibility of , Electronic Ballasts and 34 wattlamps? Do you manufacture electronic ballasts for use with 34 watt lamps. Are there price premiums for these ballasts? Ifso, can you provide pricing sheets? It appears that starting problems have a technical solution; therefore starting problems should not be used to rule out all electronic ballasts. Is this an accurate assessment? 

### Yes. there is an incompatibility with the 34 

### watt TI2 andelectronic ballasts. For amagnetic

. ballast the lamp requires a tin coating (the more the better)for starting a 34 

### watt lamp. For an

electronic ballast the 'less tin coating the better for starting. One major issue is the lamp manufacturersprocess control for applying the tin coating. 

### If the tin coating is above orbelow a certain window. one or the other (magnetic or electronic) will have trouble sta.rting. Valmont electrOnic andmagnetic will start andoperate both 34 

### and40 watt lamps; Problems do exist (i.e. lamp may not operate) but there are not many cases of (!lectronic ballasts with Ti2

- 

### $4 watt lamps. Consumers usually use electronic ballasts and T8

- 32 

### watt lamps. (Insignificant issue). In the '82- '83 

### time frame, GE introduceda 34 

### watt lamp to 

### be usedwith electronic ballasts (no coating), competition didn'tfollow. GE discontinued the lamp due to fewpeople using TI2 lamps with electronic ballasts. The 34 

### watt incompatibility isa major issue in 

### the residential "Do it Yourself" market, A.4 Electronic BaUasts May Cause Interference with Building Electronic Systems. Are you aware ofpublished accounts ofretrofit situations where some type ofinterference has occurred with electronic ballasts? Are you aware ofany electronic ballasts which do not cause this type of interference? Is it possible to design an electronic ballast using appropriate filters or shields, for example, which will not cause this interference? Is there a costpremium for a non-interfering dectronic ballast? Do cathode cutout ballasts cause this type ofinterference? What do you do when a customer complains that an electronic ballast interferes with one ormore ofitsbuilding electronic systems? Do you provide guidelines to your distributors regarding interference effects with electronic ballasts? What portion ofthe U.S. building stock is affected by these interference problems?

55EE-RM-97-500 COMMENT OF

We are aware of numerous cases of interference causingproblems. Valmont has· "many" engineers fUll timeproviding support to OEM's, ins.tallers etc. Interference with infrared devices (TV. VCR remote controls) bar code readers, magnetic field interrupters, energy managementsystems, simplex clocks, andmedical equipmentin hospitals are frequent topics. Although all systems meetFCCstandards, this may not be enough topreventall interference. Magnetic ballasts operate at 60 Hz, while electronic ballasts operate above 20,000Hz; For retrofitapplicationsyou need to know what is in the building that is sensitive.toIR, Simplex clocks, etc;. There are cases where the inteiference is notacceptaQle atall. Forexample, the Pentagon used cathode cutout ballasts for the relighting, We can design aroundspecificproblems, but**the~e** is no one ballast that solves all theproblems. We estimate that 20% of electronics couldhave 0;problem, buttypically don't because the installer anticipatespotentialproblems and recoTilmJ!'3ds solutions (i.e. magnetic ballast)prior to specifYirig ballast type. We can'tdetermine how manypeople avoidelectronic ballasts because of inteiference issue. PART B: CONSIJMER ANDNATIONM, ISSUES B.l BaDast Prices: Cwrent ballastpricing

## info~ation was obtained from a 1993 survey conducteci by the Lighting Research Institute. ACEEE believes the survey overstates the current price ofelectronic mociCls. DOEintends to.reduce electronic ballastprices

## useq in the February 1996 draft rCJX?rt by .IS%.This is based on an a comparative analysis ofshipments and value data from Bureau ofCensus (BoC) 1993 and.1995 reports. Additionally, DOE will perform price sensitivity studies at 

### +15% and -10% ofthe new price. poyou agree with DOE's approach?**We;y~ggest** thatDOEnotchange the bal/astprices ill the anqlysis
.. Wesuggestusing theprices from theLRIslIIdy. The DoCnumbersrlfflecttheprict;S to OEM's; what theballast manufacturer sells themfor. Census data 

### is notstatisticallyac;curate ·(ValmontreportS acCUrate numbers butothers may not) Census data dqes notreflectwhatthe enduserispayingfor t1!e ballast. We suggest using the 199Jnumbers from the L!1lstudy. B.2 Energy Prices: The Energy Information Agency (EIA) energy price for.ecastsdo not consider the possible in)pacts ofutility restruct\lling;
. 

### The Gas ReSearchInstit\lte (GR!)bas a future price scenario showing 29% lower**cOm.tnercial~lectricity** prices by 2015•• DOE: will use the most recent EIAelectricity price forecast for the year 20(11 in.the engineering and life-cycle cost analysis.
. . .. Forthe PUlllose ofcalcUlating national benefits the**Dep~ent** wiUperform life-cycle-cost sensitivity analyses at -12.5% and ·25% ofthe EIA foreCast In an additional sensitivity analysis the Department will determine. the rate ofdecrel.lse in electricity price needed 

### to reduce net present value ofthe**r~uced** life-cycle-cost to zen;). Do you agree with this approach? Do you have any suggestions for an alternative electricity price projectionfor the 30 year period? DOe needs to talk to the NationalAssoCiation of Energy Service Companies (NAESCO). They, 56EE-RM-97-50DCOMMENT OF

NAESCO, do notbelieve that the deregulation of the electric industry will have significant impact on theprice of electricity. Contactperson is Terry Singer (202) 371-7812. We, Valmont, agree with the sensitivity'analysis. We sell our ballasts on how muchpeople can save, not what it costs them. B.3 New Market Shares: DOE will graph the annual ballast installations according to three segments: new construction, conversions and replacements. Mad:et share (electronic as a percent oftotal installations) as a function oftime will also be displayed. The graphs will show the synergistic effects ofconversions, replaCements and new construction to make the discussion

, easier to follow. The electronic share oftotal ballast sales is approximately the same for the first

halfof 1996 as it was in 1995. Do you believe these shares should increase 

### 1decrease through 2000? Ifso, by how much? "

CONFIDENTIAL B.4 Conversion Rates

- Retrofit: The cUITenthigh efficiency base case assumes a constant conversion rate qf5.5% after 2000. ACEEE claimed that a conversion rate based on the 1992/1993 time period is unrealistic for future years. The low efficiency base case assumed no conversions after 1995. Workshop participants suggested that sensitivity studies on conversion rates be performed. What conversion rates should be considered? CONFIDENTIAL B.5 Future Ballast Sales Levels: Stakeholders disagree with the CUITent forecast oftotal future ballast sales which is based on 1993 data. The ballast shipments for '93, '94 and '95 are nearly flat at 80 million peryear. What do you project the future ballast shipments to be? CONFIDENTIAL B.6 Incorporating Voluntary Programs: The cUITent analysis assumes that utility DSM. programs will diminish after 1995. DOE will review some DSM, FEMP, EPA, and EPRI data to develop an upper bound and best estimate ofthe effects ofvoluntary programs. Information on these or other voluntary programs would be appreciated. CONFIDENTIAL B.7 Transition Technology

- Cathode 'Cutout: Why has this technology captured only 1% market share?

57EE·RM·97·500 COMMENT OF

CONFIDENTIAL PART C: BALLAST INDUSTRY CHARACTERIZATION C.I What axe the relevant chaxacteristics that could be used to divide ballast manufacturers into meaningful subgroups for the purpose ofevaluating the impacts 

### ofstandards? (i.e. finn size, plant location,product mix, etc.) CONFIDENTIAL C.2 How wouldyou chaxacterize your finn relative to theprevious characteristics? CONFIDENTIAL C.3 What changes have occurred in the
..ballastindustry inrecent yeaxs (such as the shift to electronic ballasts), and how liave these changes impacted your company?
CONFIDENTIAL PART D: MANUFACTURER COST IMPACTS For each ofthe efficiency levels described in Section 3.6 

### of the "Draft 

### Report on Potential Impact ofPossible Energy Efficiency Levels for Fluorescent Lamp·Ballasts", Febhiary 1996. (Included below):
. 0.1 Are the manufacturing costs described i)l. the LBNL engineering analysis· labor, materials/paIts, shipping/p(ICkaging, andtooling/equipment· representative ofyour manufacturing costs? Please explain. CONFIDENTIAL 0.2 Is there a 18Igevariation in costs between different ballastmanm(ICturers? If**so,~ow** laxge, and what elements might account forthese variations?
. CONFIDENTIAL 0;3 What would be the effect on the value ofyour current assets in'such axeas as plant,
. equipment, and tooling? CONFIDENTIAL



### 58EE·RM·97·500 COMMENT OF

PART E: IMPACTS 

### ON PRODUCT SAJ,ES AND PRICE For each ofthe efficiency levels described in Section 3.6: E.l Would the total number ofballasts sold by your firm increase or decrease from current forecasts? Why? CONFIDENTIAL E.2 Would theprice.on ballasts increase or decrease? Why? By how much? CONFIDENTIAL E.3 Would the gross profit margin on ballasts increase ordecrease? Why? By how much? CONFIDENTIAL E.4 Are you aware ofother factors that could influence the price and quantity variables for your firm? (changes in distribution channels, changes in suppliers, etc.) CONFIDENTIAL PARI F: OTHER ISSUES For each ofthe efficiency levels described in Section 3.6: F.I What might be the effect on current employment

### lev~ls atyour domestic manufacturirig plants? Please explain and quantify if possible.
. CONFIDENTIAL F.2 What might be the effect on your company's return on investment and overall economic value? Please elaborate. CONFIDENTIAL F.3 How might your competitive position in the industry be affected? CONFIDENTIAL F.4 What other federal product regulations are likely to impactyour firm in the near future? CONFIDENTIAL 

### 59