9d "

Wednesday,

March 15, 2000

Department of

Energy

Office of Energy Efficiency and

Renewable Energy

10 CFR Part 430

Energy Conservation Program for

Consumer Products; Fluorescent Lamp

Ballast Energy Conservation Standards;

Proposed Rule

EE-RM-97-500 COMMENT 98A

Wednesday, 

March 15, 2000 

Part V 

Department of 

Energy 

Office of Energy Efficiency and 

Renewable Energy 

10 CFR Part 430 

Energy Conservation Program for 

Consumer Products; Fluorescent Lamp 

Ballast Energy Conservation Standards; 

Proposed Rule 
14128 Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules

DEPARTMENT OF ENERGY

Office of Energy Efficiency and

Renewable Energy

10 CFR Part 430

[Docket Number EE-RM-97-500]

RIN 1904-AA75

Energy Conservation Program for

Consumer Products : Fluorescent

Lamp Ballasts Energy Conservation

Standards

AGENCY : Office of Energy Efficiency and

Renewable Energy, Department of

Energy

ACTION : Notice of proposed rulemaking

and public hearing.

SUMMARY : The Energy Policy and

Conservation Act, as amended,

prescribes energy conservation

standards for certain major household

appliances, and requires the Department

of Energy (DOE, Department, or we) to

administer an energy conservation

program for these products. The

National Appliance Energy

Conservation Amendments of 1988

require DOE to consider amending the

energy conservation standards for

fluorescent lamp ballasts. The

Department conducted several analyses

regarding the energy savings, benefits

and burdens of amended energy

conservation standards for fluorescent

lamp ballasts and has shared the results

of these analyses with all stakeholders.

Based on these analyses, several of the

major stakeholders, including

manufacturers and energy efficiency

advocates, submitted to the Department

a joint proposal for the highest standard

level which they believe to be

technically feasible and economically

justified. Based on our review of this

proposal and our analyses, we believe

the standards they proposed are

technically feasible and economically

justified. Therefore, today we propose to

amend the energy conservation standard

for fluorescent lamp ballasts for

commercial and industrial applications

as recommended in the joint proposal

and announce a public hearing.

DATES : Comments must be received on

or before May 29, 2000. The Department

requests 10 copies of the written

comments and, if possible, a computer

disk. Oral views, data, and arguments

may be presented at the public hearing

to be held in Washington, D.C.,

beginning at 9:00 a.m. on April 18,

2000.

Requests to speak at the hearing must

be received by the Department no later

than 4:00 p.m., April 3, 2000, Copies of

statements to be given at the public

hearing must be received by the

Department no later than 4:00 p.m.,

April 6, 2000. The DOE panel will read

the statements in advance of the hearing

and would appreciate the oral

presentations to be limited to a

summary of the statement. The length of

each oral presentation is limited to 15

minutes.

ADDRESSES : The hearing will be held at

the U.S. Department of Energy, Forrestal

Building, Room 1E-245, 1000

Independence Avenue, SW,

Washington, DC. Written comments,

oral statements, and requests to speak at

the hearing are to be submitted to

Brenda Edwards-Jones, U.S. Department

of Energy, Office of Energy Efficiency

and Renewable Energy, Energy

Conservation Program for Consumer

Products: Fluorescent Lamp Ballasts,

Docket No. EE-RM-97-500, 1000

Independence Avenue, S.W.,

Washington, D.C. 20585-0121.

Copies of the public comments

received, the Technical Support

Document (TSD) and the transcript of

the public hearing may be read at the

DOE Freedom of Information Reading

Room, U.S. Department of Energy,

Forrestal Building, Room 1E-190, 1000

Independence Avenue, SW,

Washington, DC 20585, (202) 586-3142,

between the hours of 9:00 a.m. and 4:00

p.m., Monday through Friday, except

Federal holidays. Copies of the TSD

may be obtained from: U.S. Department

of Energy, Office of Energy Efficiency

and Renewable Energy, Forrestal

Building, Mail Station EE-41, 1000

Independence Avenue, SW,

Washington, DC 20585. (202) 586-9127.

Copies of the analysis can also be found

on the Codes and Standards Internet site

at: http://www.eren.doe.gov/buildings/

codes-standards/applbrf/ballast.html.

For more information concerning

public participation in this rulemaking

proceeding see Section VII, "Public

Comment Procedures," of this Notice.

FOR FURTHER INFORMATION CONTACT: Carl

Adams, U.S. Department of Energy,

Office of Energy Efficiency and

Renewable Energy, EE-41, 1000

Independence Avenue, SW,

Washington, DC 20585-0121, (202) 586-

9127, or Eugene Margolis, U.S.

Department of Energy, Office of General

Counsel, GC-72, 1000 Independence

Avenue, SW, Washington, DC 20585,

(202) 586-9507.

SUPPLEMENTARY INFORMATION:

I. Introduction

a. Authority

b. Background

H. General Discussion

a. Test Procedures

b. Technological Feasibility

1. General

2. Maximum Technologically Feasible

Levels

c. Energy Savings

1. Determination of Savings

2. Significance of Savings

d. Rebuttable Presumption

e. Economic justification

1. Economic Impact on Manufacturers and

Consumers

2. Life-Cycle Costs

3. Energy Savings

4. Lessening of Utility or Performance of

Products

5. Impact of Lessening of Competition

6. Need of the Nation to Conserve Energy

7. Other Factors

III. Methodology

a. Life-Cycle-Cost Spreadsheet

b. National Energy Savings Spreadsheet

c. Manufacturer Impact Analysis and

Government Regulatory Impact Model

(GRIM)

d. NEMS Environmental Analysis

IV. Discussion of Comments

V. Analytical Results

a. Efficiency Levels Analyzed

b. Significance of Energy Savings

c. Payback Period

d. Economic justification

1. Economic Impact on Manufacturers and

Consumers

2. Life-Cycle Cost

3. Energy Savings, Net Present Value and

Net National Employment

4. Lessening of Utility or Performance of

Products

5. Impact of Lessening of Competition

6. Need of the Nation to Save Energy

7. Other Factors

e. Conclusion

VI. Procedural Issues and Regulatory Reviews

a. Review Under the National

Environmental Policy Act

b. Review Under Executive Order 12866,

"Regulatory Planning and Review"

c. Review Under the Regulatory Flexibility

Act

d. Review Under the Paperwork Reduction

Act

e. Review Under Executive Order 12988,

"Civil Justice Reform"

f. "Takings" Assessment Review

g. Review Under Executive Order 13132

h. Review Under the Unfunded Mandates

Reform Act

i. Review Under the Treasury and General

Government Appropriation Act of 1999

j. Review Under the Plain Language

Directives

VII. Public Comment Procedures

a. Participation in Rulemaking

b. Written Comment Procedures

c. Public Hearing

1. Procedure for Submitting Requests to

Speak

2. Conduct of Hearing

I. Introduction

a. Authority

Part B of Title III of the Energy Policy

and Conservation Act, Public Law 94-

163, as amended by the National Energy

Conservation Policy Act, Public Law

EE-RM-97-500 COMMENT 98A

14128 Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

DEPARTMENT OF ENERGY 

Office of Energy Efficiency and 

Renewable Energy 

10 CFR Part 430 

[Docket Number EE-RM-97-500] 

R1N 1904-AA75 

Energy Conservation Program for 

Consumer Products: Fluorescent 

lamp Ballasts Energy Conservation 

Standards 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy 

ACTION: Notice of proposed rulemaking 

and public hearing. 

SUMMARY: The Energy Policy and 

Conservation Act, as amended, 

prescribes energy conservation 

standards for certain major household 

appliances, and requires the Department 

of Energy (DOE. Department. or we) to 

administer an energy conservation 

program for these products. The 

National Appliance Energy 

Conservation Amendments of 1988 

require DOE to consider amending the 

energy conservation standards for 

fluorescent lamp ballasts. The 

Department conducted several analyses 

regarding the energy savings. benefits 

and burdens of amended energy 

conservation standards for fluorescent 

lamp ballasts and has shared the results 

of these analyses with all stakeholders. 

Based on these analyses. several of the 

major stakeholders. including 

manufacturers and energy efficiency 

advocates. submitted to the Department 

a joint proposal for the highest standard 

level which they believe to be 

technically feasible and economically 

justified. Based on our review of this 

proposal and our analyses. we believe 

the standards they proposed are 

technically feasible and economically 

justified. Therefore, today we propose to 

amend the energy conservation standard 

for fluorescent lamp ballasts for 

commercial and industrial applications 

as recommended in the joint proposal 

and announce a public hearing. 

DATES: Comments must be received on 

or before May 29. 2000. The Department 

requests 10 copies of the written 

comments and. if possible. a computer 

disk. Oral views. data. and arguments 

may be presented at the public hearing 

to be held in Washington. D.C .. 

beginning at 9:00 a.m. on April 18. 

2000. 

Requests to speak at the hearing must 

be received by the Department no later 

than 4:00 p.m .. April 3. 2000. Copies of 

statements to be given at the public 

hearing must be received by the 

Department no later than 4:00 p.m .. 

April 6. 2000. The DOE panel will read 

the statements in advance of the hearing 

and would appreciate the oral 

presentations to be limited to a 

summary of the statement. The length of 

each oral presentation is limited to 15 

minutes. 

ADDRESSES: The hearing will be held at 

the U.S. Department of Energy. Forrestal 

Building. Room lE-245. 1000 

Independence Avenue. SW. 

Washington. DC. Written comments. 

oral statements. and requests to speak at 

the hearing are to be submitted to 

Brenda Edwards-Jones. U.S. Department 

of Energy. Office of Energy Efficiency 

and Renewable Energy. Energy 

Conservation Program for Consumer 

Products: Fluorescent Lamp Ballasts. 

Docket No. EE-RM-97-500. 1000 

Independence Avenue. S.W .. 

Washington. D.C. 20585-0121. 

Copies of the public comments 

received. the Technical Support 

Document (TSD) and the transcript of 

the public hearing may be read at the 

DOE Freedom of Information Reading 

Room. U.S. Department of Energy. 

Forrestal Building. Room lE-190. 1000 

Independence Avenue. SW. 

Washington. DC 20585. (202) 586-3142. 

between the hours of 9:00 a.m. and 4:00 

p.m .. Monday through Friday. except 

Federal holidays. Copies of the TSD 

may be obtained from: U.S. Department 

of Energy. Office of Energy Effi ciency 

and Renewable Energy. Forrestal 

Building, Mail Station EE-41. 1000 

Independence Avenue. SW. 

Washington. DC 20585. (202) 586-9127. 

Copies of the analysis can also be found 

on the Codes and Standards Internet site 

at: http://www.eren.doe.govlbuildings/ 

codes_standards/applbrf/ballast.html. 

For more information concerning 

public participation in this rulemaking 

proceeding see Section VII. "Public 

Comment Procedures." of this Notice. 

FOR FURTHER INFORMATION CONTACT: Carl 

Adams. U.S. Department of Energy. 

Office of Energy Efficiency and 

Renewable Energy. EE-41, 1000 

Independence Avenue. SW. 

Washington. DC 20585-0121. (202) 586-

9127. or Eugene Margolis. U.S. 

Department of Energy. Office of General 

Counsel. GC-72. 1000 Independence 

Avenue. SW. Washington. DC 20585. 

(202) 586-9507. 

SUPPLEMENTARY INFORMATION: 

1. Introduction 

a. Authority 

b. Background 

n. General Discussion 

a. Test Procedures 

b. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible 

Levels 

c. Energy Savings 

1. Determination of Savings 

2. Significance of Savings 

d. Rebuttable Presumption 

e. Economic Justification 

1. Economic Impact on Manufacturers and 

Consumers 

2. Life-Cycle Costs 

3. Energy Savings 

4. Lessening of Utility or Performance of 

Products 

5. Impact of Lessening of Competition 

6. Need of the Nation to Conserve Energy 

7. Other Factors 

m. Methodology 

a. Life-Cycle-Cost Spreadsheet 

b. National Energy Savings Spreadsheet 

c. Manufacturer Impact Analysis and 

Government Regulatory Impact Model 

(GRIM) 

d. NEMS Environmental Analysis 

IV. Discussion of Comments 

V. Analytical Results 

a. Efficiency Levels Analyzed 

b. Significance of Energy Savings 

c. Payback Period 

d. Economic Justification 

1. Economic Impact on Manufacturers and 

Consumers 

2. Life-Cycle Cost 

3. Energy Savings. Net Present Value and 

Net National Employment 

4. Lessening of Utility or Performance of 

Products 

5. Impact of Lessening of Competition 

6. Need of the Nation to Save Energy 

7. Other Factors 

e. Conclusion 

VI. Procedural Issues and Regulatory Reviews 

a. Review Under the National 

Environmental Policy Act 

b. Review Under Executive Order 12866. 

"Regulatory Planning and Review" 

c. Review Under the Regulatory Flexibility 

Act 

d. Review Under the Paperwork Reduction 

Act 

e. Review Under Executive Order 12988. 

"Civil Justice Reform" 

f. "Takings" Assessment Review 

g. Review Under Executive Order 13132 

h. Review Under the Unfunded Mandates 

Reform Act 

i. Review Under the Treasury and General 

Government Appropriation Act of 1999 

j. Review Under the Plain Language 

Directives 

VII. Public Comment Procedures 

a. Participation in Rulemaking 

b. Written Comment Procedures 

c. Public Hearing 

1. Procedure for Submitting Requests to 

Speak 

2. Conduct of Hearing 

I. Introduction 

Q. Authority 

Part B of Title III of the Energy Policy 

and Conservation Act. Public Law 94-

163. as amended by the National Energy 

Conservation Policy Act. Public Law 
Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules 14129

95-619, by the National Appliance

Energy Conservation Act, Public Law

100-12, by the National Appliance

Energy Conservation Amendments of

1988, Public Law 100-357, and the

Energy Policy Act of 1992, Public Law

102-486 1 created the Energy

Conservation Program for Consumer

Products other than Automobiles. The

consumer products subject to this

program (often referred to hereafter as

"covered products") include fluorescent

lamp ballasts.

Under.the Act, the program consists

essentially of three parts: Testing,

labeling, and Federal energy

conservation standards, The

Department, in consultation with the

National Institute of Standards and

Technology, amends or establishes new

test procedures for each of the covered

products. Section 323. The test

procedures measure the energy

efficiency, energy use, or estimated

annual operating cost of a covered

product during a representative average

use cycle or period of use. They must

not be unduly burdensome to conduct.

Section 323 (b)(3). A test procedure is

not required if DOE determines by rule

that one cannot be developed. Section

323(d)(1). Test procedures appear at 10

CFR part 430, subpart B.

The Federal Trade Commission (FTC)

prescribes rules governing the labeling

of covered products after DOE publishes

test procedures. Section 324(a). The FTC

labels indicate the annual operating cost

for the particular model and the range

of estimated annual operating costs for

other models of that product. Section

324(c)(1). Disclosure of estimated

operating cost is not required if the FTC

determines that such disclosure is not

likely to assist consumers in making

purchasing decisions, or is not

economically feasible. In such a case,

the FTC must require a different useful

measure of energy consumption. Section

324(c). At the present time, there are

Federal Trade Commission rules

requiring labels for the following

products: Room air conditioners,

furnaces, clothes washers, dishwashers,

water heaters, refrigerators, refrigeratorfreezers and freezers, central air

conditioners and central air

I Part B of Title III of the Energy Policy and

Conservation Act, as amended by the National

Energy Conservation Policy Act, the National

Appliance Energy Conservation Act, the National

Appliance Energy Conservation Amendments of

1988, and the Energy Policy Act of 1992, is referred

to in this notice as the "Act." Part B of Title III is

codified at 42 U.S.C. 6291 et seq. Part B of Title III

of the Energy Policy and Conservation Act, as

amended by the National Energy Conservation

Policy Act only, is referred to in this notice as the

National Energy Conservation Policy Act.

conditioning heat pumps, and

fluorescent lamp ballasts.

The National Appliance Energy

Conservation Amendments of 1988

prescribed Federal energy conservation

standards for ballasts. Section 325(g).

The Act specifies that the standards are

to be reviewed by the Department no

later than January 1, 1992. Section

325(g)(7)(A).

Any new or amended standard must

be designed so as to achieve the

maximum improvement in energy

efficiency that is technologically

feasible and economically justified.

Section 325(o)(2)(A).

Section 325(o)(2)(B)(i) provides that

before DOE determines whether a

standard is economically justified, it

must first solicit comments on a

proposed standard. After reviewing

comments on the proposal, DOE must

then determine that the benefits of the

standard exceed its burdens, based, to

the greatest extent practicable, on a

weighing of the following seven factors:

(I) The economic impact of the standard on

the manufacturers and on the consumers of

the products subject to such standard;

(II) The savings in operating costs

throughout the estimated average life of the

covered product in the type ( or class)

compared to any increase in the price of, or

in the initial charges for, or maintenance

expenses of, the covered products which are

likely to-result from the imposition of the

standard;

(III) The total projected amount of energy

savings likely to result directly from the

imposition of the standard;

(IV) Any lessening of the utility or the

performance of the covered products likely to

result from the imposition of the standard;

(V) The impact of any lessening of

competition, as determined in writing by the

Attorney General, that is likely to result from

the imposition of the standard;

(VI) The need for national energy

conservation; and

(VII) Other factors the Secretary considers

relevant.

In addition, section 325(o)(2)(B)(iii)

establishes a rebuttable presumption of

economic justification in instances

where the Secretary determines that

"the additional cost to the consumer of

purchasing a product complying with

an energy conservation standard level

will be less than three times the value

of the energy * * * savings during the

first year that the consumer will receive

as a result of the standard, as calculated

under the applicable test procedure

* * "The rebuttable presumption test

is an alternative path to establishing

economic justification.

Section 327 of the Act addresses the

effect of Federal rules on State laws or

regulations concerning testing, labeling,

and standards. Generally, all such State

laws or regulations are superseded by

the Act. Section 327(a)-(c). Exemptions

to this general rule include: (1) State

standards prescribed or enacted before

January 8, 1987, and applicable to

appliances produced before January 3,

1988 (section 327(b)(1)); (2) State

procurement standards which are more

stringent than the applicable Federal

standard (Section 327(b)(3) and (f)(1)-

(4)); (3) State regulations banning

constant burning pilot lights in pool

heaters (Section 327(b)(4)); and (4) State

standards for television sets effective on

or after January 1, 1992, may remain in

effect in the absence of a Federal

standard for such product (Section

327(b)(6) and 327(c)).

b. Background

The National Energy Conservation

Policy Act,2 which amended the Energy

Policy and Conservation Act, required

DOE to establish mandatory energy

efficiency standards for each of the 13

covered products. These standards were

to be designed to achieve the maximum

improvement in energy efficiency that

was technologically feasible and

economically justified.

The National Energy Conservation

Policy Act provided, however, that no

standard for a product be established if

there were no test procedure for the

product, or if DOE determined by rule

either that a standard would not result

in significant conservation of energy, or

that a standard was not technologically

feasible or economically justified. In

determining whether a standard was

economically justified, the Department

was directed to determine whether the

benefits of the standard exceeded its

burdens by weighing the seven factors

discussed above.

The National Appliance Energy

Conservation Act, which became law on

March 17, 1987, amended the Energy

Policy and Conservation Act in part by:

Redefining "covered products"

(specifically, refrigerators, refrigeratorfreezers, and freezers were combined

into one product type from two;

humidifiers and dehumidifiers were

deleted; and pool heaters were added);

establishing Federal energy

conservation standards for 11 of the 12

covered products; and creating a

schedule, according to which each

standard is to be reviewed to determine

2 The consumer products covered by the National

Energy Conservation Policy Act included:

Refrigerators and refrigerator -freezers; freezers;

dishwashers; clothes dryers; water heaters; room air

conditioners; home heating equipment not

including furnaces; television sets; kitchen ranges

and ovens; clothes washers; humidifiers and

dehumidifiers; central air conditioners; and

furnaces.

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 14129 

95-619, by the National Appliance 

Energy Conservation Act, Public Law 

100-12, by the National Appliance 

Energy Conservation Amendments of 

1988, Public Law 100-357, and the 

Energy Policy Act of 1992, Public Law 

102-486 1 created the Energy 

Conservation Program for Consumer 

Products other than Automobiles. The 

consumer products subject to this 

program (often referred to hereafter as 

"covered products") include fluorescent 

lamp ballasts. 

Under.the Act, the program consists 

essentially of three parts: Testing, 

labeling, and Federal energy 

conservation standards. The 

Department, in consultation with the 

National Institute of Standards and 

Technology, amends or establishes new 

test procedures for each of the covered 

products. Section 323. The test 

procedures measure the energy 

efficiency, energy use, or estimated 

annual operating cost of a covered 

product during a representative average 

use cycle or period of use. They must 

not be unduly burdensome to conduct. 

Section 323 (b)(3). A test procedure is 

not required if DOE determines by rule 

that one cannot be developed. Section 

323(d)(1). Test procedures appear at 10 

CFR part 430, subpart B. 

The Federal Trade Commission (FTC) 

prescribes rules governing the labeling 

of covered products after DOE publishes 

test procedures. Section 324(a). The FTC 

labels indicate the annual operating cost 

for the particular model and the range 

of estimated annual operating costs for 

other models of that product. Section 

324(c)(1). Disclosure of estimated 

operating cost is not required if the FTC 

determines that such disclosure is not 

likely to assist consumers in making 

purchasing decisions, or is not 

economically feasible. In such a case, 

the FTC must require a different useful 

measure of energy consumption. Section 

324(c). At the present time, there are 

Federal Trade Commission rules 

requiring labels for the following 

products: Room air conditioners, 

furnaces, clothes washers, dishwashers, 

water heaters, refrigerators, refrigeratorfreezers and freezers, central air 

conditioners and central air 

1 Part B of Title III of ilie Energy Policy and 

Conservation Act. as amended by ilie National 

Energy Conservation Policy Act. ilie National 

Appliance Energy Conservation Act. ilie National 

Appliance Energy Conservation Amendments of 

1988, and ilie Energy Policy Act of 1992, is referred 

to in iliis notice as ilie "Act. " Part B of Title III is 

codified at 42 V.S.c. 6291 et seq. Part B of Title III 

of ilie Energy Policy and Conservation Act, as 

amended by ilie National Energy Conservation 

Policy Act only, is referred to in this notice as ilie 

National Energy Conservation Policy Act. 

conditioning heat pumps. and 

fluorescent lamp ballasts. 

The National Appliance Energy 

Conservation Amendments of 1988 

prescribed Federal energy conservation 

standards for ballasts, Section 325(g). 

The Act specifies that the standards are 

to be reviewed by the Department no 

later than January 1. 1992. Section 

325(g)(7)(A), 

Any new or amended standard must 

be designed so as to achieve the 

maximum improvement in energy 

efficiency that is technologically 

feasible and economically justified. 

Section 325(0)(2)(A). 

Section 325(0)(2)(B)(i) provides that 

before DOE determines whether a 

standard is economically justified. it 

must first solicit comments on a 

proposed standard. After reviewing 

comments on the proposal. DOE must 

then determine that the benefits of the 

standard exceed its burdens. based. to 

the greatest extent practicable. on a weighing of the following seven factors: 

(I) The economic impact of the standard on 

the manufacturers and on the consumers of 

the products subject to such standard; 

(II) The savings in operating costs 

throughout the estimated average life of the 

covered product in the type (or class) 

compared to any increase in the price of. or 

in the initial charges for. or maintenance 

expenses of. the covered products which are 

likely to·result from the imposition of the 

standard; 

(III) The total projected amount of energy 

savings likely to result directly from the 

imposition of the standard; 

(IV) Any lessening of the utility or the 

performance of the covered products likely to 

result from the imposition of the standard; 

(V) The impact of any lessening of 

competition. as determined in writing by the 

Attorney General. that is likely to result from 

the imposition of the standard; 

(VI) The need for national energy 

conservation; and 

(VII) Other factors the Secretary considers 

relevant. 

In addition. section 325(0)(2)(B)(iii) 

establishes a rebuttable presumption of 

economic justification in instances 

where the Secretary determines that 

"the additional cost to the consumer of 

purchasing a product complying with 

an energy conservation standard level 

will be less than three times the value 

of the energy * * * savings during the 

first year that the consumer will receive as a result of the standard. as calculated 

under the applicable test procedure 

* ., x" The rebuttable presumption test 

is an alternative path to establishing 

economic justification. 

Section 327 of the Act addresses the 

effect of Federal rules on State laws or 

regulations concerning testing. labeling. 

and standards. Generally. all such State 

laws or regulations'are superseded by 

the Act. Section 327(a)-(c). Exemptions 

to this general rule include: (1) State 

standards prescribed or enacted before 

January 8. 1987. and applicable to 

appliances produced before January 3. 

1988 (section 327(b)(1)); (2) State 

procurement standards which are more 

stringent than the applicable Federal 

standard (Section 327(b)(3) and (f)(1)-

(4)); (3) State regulations banning 

constant burning pilot lights in pool 

heaters (Section 327(b)(4)); and (4) State 

standards for television sets effective on 

or after January 1. 1992. may remain in 

effect in the absence of a Federal 

standard for such product (Section 

327(b)(6) and 327(c)). 

b. Background 

The National Energy Conservation 

Policy Act.2 which amended the Energy 

Policy and Conservation Act. required 

DOE to establish mandatory energy 

efficiency standards for each of the 13 

covered products. These standards were 

to be designed to achieve the maximum 

improvement in energy efficiency that 

was technologically feasible and 

economically justified. 

The National Energy Conservation 

Policy Act provided. however. that no 

standard for a product be established if 

there were no test procedure for the 

product. or if DOE determined by rule 

either that a standard would not result 

in significant conservation of energy. or 

that a standard was not technologically 

feasible or economically justified. In 

determining whether a standard was 

economically justified. the Department 

was directed to determine whether the 

benefits of the standard exceeded its 

burdens by weighing the seven factors 

discussed above. 

The National Appliance Energy 

Conservation Act. which became law on 

March 17. 1987. amended the Energy 

Policy and Conservation Act in part by: 

Redefining "covered products" 

(specifically. refrigerators. refrigeratorfreezers. and freezers were combined 

into one product type from two; 

humidifiers and dehumidifiers were 

deleted; and pool heaters were added); 

establishing Federal energy 

conservation standards for 11 of the 12 

covered products; and creating a 

schedule. according to which each 

standard is to be reviewed to determine 

2 The consumer products covered by ilie National 

Energy Conservation Policy Act included: 

Refrigerators and refrigerator-freezers; freezers; 

dishwashers; c10ilies dryers; water heaters; room air 

conditioners; home heating equipment not 

including furnaces; television sets; kitcl1en ranges 

and ovens; c10ilies washers; humidifiers and 

dehumidifiers; central air conditioners; and 

furnaces. 
14130 Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

if an amended standard is required. It

also established the rebuttable

presumption test of economic

justification.

The National Appliance Energy

Conservation Amendments of 1988,

which became law on June 28, 1988,

established Federal energy conservation

standards for fluorescent lamp ballasts.

These amendments also created a

review schedule for DOE to determine if

any amended standard for fluorescent

lamp ballasts is required.

The Energy Policy Act of 1992, which

became law on October 24, 1992,

addressed various commercial

appliances and equipment.

As directed by the Act, DOE

published an advance notice of

proposed rulemaking for fluorescent

lamp ballasts, as well as a variety of

other consumer products. (55 FR 39624,

September 28, 1990). The advance

notice presented the product classes

that DOE planned to analyze, and

provided a detailed discussion of the

analytical methodology and analytical

models that the Department expected to

use in performing the analysis to

support this rulemaking.

Pursuant to section 325 of the Act,

DOE proposed to revise the energy

conservation standards applicable to

fluorescent lamp ballasts, as well as a

variety of other consumer products. 59

FR 10464 (March 4, 1994). On January

31, 1995, the Department published a

Rulemaking Determination that, based

on comments received, it would issue a

revised notice of proposed rulemaking

for fluorescent lamp ballasts. 60 FR

5880 (January 31, 1995).

A moratorium was placed on

publication of proposed or final rules

for appliance efficiency standards as

part of the FY 1996 appropriations

legislation. Pub. L. 104-134. That

moratorium expired on September 30,

1996.

On July 15, 1996, the Department

published a Process Improvement Rule

establishing procedures, interpretations

and policies to guide the Department in

the consideration of new or revised

appliance efficiency standards

(Procedures for Consideration of New or

Revised Energy Conservation Standards

for Consumer Products). 61 FR 36974.

The Department conducted numerous

meetings, workshops and discussions

regarding energy efficiency standards

for fluorescent lamp ballasts resulting in

the publication of a Draft Report on

Potential Impact of Possible Energy

Efficiency Levels for Fluorescent Lamp

Ballasts, July, 1997; a Summary of

Inputs for the Technical Support

Document: Energy Efficiency Standards

for Fluorescent Lamp Ballasts, April 20,

1998; and a Ballast Manufacturer Impact

Analysis Analytical Approach, April 10,

1998. 62 FR 38222 (July 17, 1997) and

63 FR 16706 (April 6, 1998). A

workshop was conducted on these

analyses and documents on April 28,

1998. 63 FR 16706 (April 6, 1998).

Based on comments and the growing

popularity of electronic ballasts with T8

lamps, the Department solicited further

comments specifically on the issue of

whether market shifts (e.g., from T12 to

T8 lamps) should be considered in

determining the impact of an energy

conservation standard on commercial

and industrial consumers,

manufacturers and the nation. 63 FR

58330 (October 30, 1998). Further

comments on the above analyses, and

modifications resulting from those

comments, culminated in publishing a

revised analysis on the Codes and

Standards Internet site (http://

www.eren.doe.gov/buildings/

codes-standards/applbrf/ballast.html)

in April of 1999. We also conducted a

workshop reviewing this analysis on

June 1, 1999. 64 FR 24634 (May 7,

1999). On the basis of comments

received on these documents, DOE

reviewed its analysis and prepared a

TSD.

On October 12 and 13, 1999, the

National Electrical Manufacturers

Association convened a meeting where

its members negotiated with

representatives of the American Council

for an Energy Efficient Economy, the

Natural Resources Defense Council, the

Alliance to Save Energy and the Oregon

Energy Office to produce a joint

comment proposal for amended

fluorescent lamp ballast standards.

(Hereafter referred to as the joint

Comment.) We have evaluated the

impacts of the joint comment proposal

and those results are presented in

Appendix E of the TSD.

II. General Discussion

a. Test Procedures

The Act provides that no standard for

a product be established if there is no

test procedure for the product. The

Amendments of 1988 set forth test

procedures and energy conservation

standards for fluorescent lamp ballasts.

Based upon the Amendments of 1988,

the Department established Federal test

procedures for fluorescent lamp ballasts.

56 FR 18682 (April 24, 1991). As of the

effective date of the energy conservation

standards (ballasts manufactured on or

after January 1, 1990; sold by the

manufacturer on or after April 1, 1990;

or incorporated into a luminaire by a

luminaire manufacturer on or after April

1, 1991), all ballasts, be they energy

efficient magnetic, cathode cutout or

electronic, for use in connection with

F40T12, F96T12 or F96T12HO lamps,

are required to meet a ballast efficacy

factor as measured by the Federal test

procedures. No one has petitioned DOE

indicating the Department's test

procedures were inadequate for testing

fluorescent lamp ballasts using the

above technologies. Since these are the

same technologies considered in today's

proposed rule, the Department

considers the current Federal test

procedures applicable and appropriate

for today's proposed rule. Furthermore,

stakeholders commenting in the joint

Comments stated that they consider the

current Federal test procedures

applicable and appropriate for the new

recommended ballast standards. (Joint

Comment, No. 91 at 6).

b. Technological Feasibility

1. General

There are lamp ballasts in the market

at all of the efficiency levels analyzed in

today's notice. The Department,

therefore, believes all of the efficiency

levels discussed in today's notice are

technologically feasible.

2. Maximum Technologically Feasible

Levels

The Act requires the Department, in

considering any new or amended

standards, to consider those that "shall

be designed to achieve the maximum

improvement in energy efficiency

which the Secretary determines is

technologically feasible and

economically justified." (Section 325

(o)(2)(A)). Accordingly, for each class of

product under consideration in this

rulemaking, a maximum technologically

feasible (max tech) design option was

identified.

Ballast efficiency is expressed as a

ballast efficacy factor, BEF. It is equal to

BF/W, where BF is the ballast factor

expressed as a percentage (e.g., 90, not

0.90) and W is the input power to the

ballast in ANSI (American National

Standards Institute) C82.2-1984 in

Watts. The most efficient technology

presently available is a high frequency

electronic ballast; this is considered the

maximum technologically feasible

(MTF) design for this analysis. The

operation at high frequency (20

Kilohertz (kHz) or more) increases the

lamp efficacy and also allows for lower

ballast losses.

For each product class and technology

that we analyzed, there is a range of

efficiencies in the marketplace. In

consideration of this range, we used a

different approach to selecting BEF level

for the purposes of today's analysis than

EE-RM-97-500 COMMENT 98A

14130 Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

if an amended standard is required. It 

also established the rebuttable 

presumption test of economic 

justification. 

The National Appliance Energy 

Conservation Amendments of 1988, 

which became law on June 28, 1988, 

established Federal energy conservation 

standards for fluorescent lamp ballasts. 

These amendments also created a 

review schedule for DOE to determine if 

any amended standard for fluorescent 

lamp ballasts is required. 

The Energy Policy Act of 1992, which 

became law on October 24,1992, 

addressed various commercial 

appliances and equipment. 

As directed by the Act, DOE 

published an advance notice of 

proposed rulemaking for fluorescent 

lamp ballasts, as well as a variety of 

other consumer products. (55 FR 39624, 

September 28,1990). The advance 

notice presented the product classes 

that DOE planned to analyze, and 

provided a detailed discussion of the 

analytical methodology and analytical 

models that the Department expected to 

use in performing the analysis to 

support this rulemaking. 

Pursuant to section 325 of the Act, 

DOE proposed to revise the energy 

conservation standards applicable to 

fluorescent lamp ballasts, as well as a 

variety of other consumer products. 59 

FR 10464 (March 4,1994). On January 

31,1995, the Department published a 

Rulemaking Determination that, based 

on comments received, it would issue a 

revised notice of proposed rulemaking 

for fluorescent lamp ballasts. 60 FR 

5880 (January 31, 1995). 

A moratorium was placed on 

publication of proposed or final rules 

for appliance efficiency standards as 

part of the FY 1996 appropriations 

legislation. Pub. L. 104-134. That 

moratorium expired on September 30, 

1996. 

On July 15,1996, the Department 

published a Process Improvement Rule 

establishing procedures, interpretations 

and policies to guide the Department in 

the consideration of new or revised 

appliance efficiency standards 

(Procedures for Consideration of New or 

Revised Energy Conservation Standards 

for Consumer Products). 61 FR 36974. 

The Department conducted numerous 

meetings, workshops and discussions 

regarding energy efficiency standards 

for fluorescent lamp ballasts resulting in 

the publication of a Draft Report on 

Potential Impact of Possible Energy 

Efficiency Levels for Fluorescent Lamp 

Ballasts, July, 1997; a Summary of 

Inputs for the Technical Support 

Document: Energy Efficiency Standards 

for Fluorescent Lamp Ballasts, April 20, 

1998; and a Ballast Manufacturer Impact 

Analysis Analytical Approach, April 10, 

1998.62 FR 38222 (Julv 17, 1997) and 

63 FR 16706 (April 6, i998). A 

workshop was conducted on these 

analyses and documents on April 28, 

1998.63 FR 16706 (April 6, 1998). 

Based on comments and the growing 

popUlarity of electronic ballasts with T8 

lamps, the Department solicited further 

comments specifically on the issue of 

whether market shifts (e.g., from T12 to 

T8 lamps) should be considered in 

determining the impact of an energy 

conservation standard on commercial 

and industrial consumers, 

manufacturers and the nation. 63 FR 

58330 (October 30,1998). Further 

comments on the above analyses, and 

modifications resulting from those 

comments, culminated in publishing a 

revised analysis on the Codes and 

Standards Internet site (http:// 

www.eren.doe.gov/buildings/ 

codes_standards/applbrf/ballast.html) 

in April of 1999. We also conducted a 

workshop reviewing this analysis on 

June 1, 1999. 64 FR 24634 (May 7, 

1999). On the basis of comments 

received on these documents, DOE 

reviewed its analysis and prepared a 

TSD. 

On October 12 and 13, 1999, the 

National Electrical Manufacturers 

Association convened a meeting where 

its members negotiated with 

representatives of the American Council 

for an Energy Efficient Economy, the 

Natural Resources Defense Council, the 

Alliance to Save Energy and the Oregon 

Energy Office to produce a joint 

comment proposal for amended 

fluorescent lamp ballast standards. 

(Hereafter referred to as the Joint 

Comment.) We have evaluated the 

impacts of the joint comment proposal 

and those results are presented in 

Appendix E of the TSD. 

n. General Discussion 

a. Test Procedures 

The Act provides that no standard for a product be established if there is no 

test procedure for the product. The 

Amendments of 1988 set forth test 

procedures and energy conservation 

standards for fluorescent lamp ballasts. 

Based upon the Amendments of 1988, 

the Department established Federal test 

procedures for fluorescent lamp ballasts. 

56 FR 18682 (April 24, 1991). As of the 

effecti ve date of the energy conservation 

standards (ballasts manufactured on or 

after January 1, 1990; sold by the 

manufacturer on or after April 1, 1990; 

or incorporated into a lumina ire by a 

luminaire manufacturer on or after April 

1, 1991), all ballasts, be they energy 

efficient magnetic, cathode cutout or 

electronic, for use in connection with 

F40T12, F96T12 or F96T12HO lamps, 

are required to meet a ballast efficacy 

factor as measured by the Federal test 

procedures. No one has petitioned DOE 

indicating the Department's test 

procedures were inadequate for testing 

fluorescent lamp ballasts using the 

above technologies. Since these are the 

same technologies considered in today's 

proposed rule, the Department 

considers the current Federal test 

procedures applicable and appropriate 

for today's proposed rule. Furthermore, 

stakeholders commenting in the Joint 

Comments stated that they consider the 

current Federal test procedures 

applicable and appropriate for the new 

recommended ballast standards. (Joint 

Comment, No. 91 at 6). 

b. Technological Feasibility 

1. General 

There are lamp ballasts in the market 

at all of the efficiency levels anal yzed in 

today's notice. The Department, 

therefore, believes all of the efficiency 

levels discussed in today's notice are 

technologically feasible. 

2. Maximum Technologically Feasible 

Levels 

The Act requires the Department, in 

considering any new or amended 

standards, to consider those that "shall 

be designed to achieve the maximum 

improvement in energy efficiency * * * 

which the Secretary determines is 

technologically feasible and 

economically justified." (Section 325 

(0)(2)(A)). Accordingly, for each class of 

product under consideration in this 

rulemaking, a maximum technologically 

feasible (max tech) design option was 

identified. 

Ballast efficiency is expressed as a 

ballast efficacy factor, BEF. It is equal to 

BF/W, where BF is the ballast factor 

expressed as a percentage (e.g., 90, not 

0.90) and W is the input power to the 

ballast in ANSI (American National 

Standards Institute) C82.2-1984 in 

Watts. The most efficient technology 

presently available is a high frequency 

electronic ballast; this is considered the 

maximum technologically feasible 

(MTF) design for this analysis. The 

operation at high frequency (20 

Kilohertz (kHz) or more) increases the 

lamp efficacy and also allows for lower 

ballast losses. 

For each product class and technology 

that we analyzed, there is a range of 

efficiencies in the marketplace. In 

consideration of this range, we used a 

different approach to selecting BEF level 

for the purposes oftoday's analysis than 
Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules 14131

for the setting of the trial standard

levels. The analysis represents the

probable average savings from a

movement from the base case to the

MTF option (electronic ballast), which

itself has a range of BEFs. In contrast,

the proposed trial standards set BEF

levels that allow the large majority of

electronic ballasts to meet the standard.

The following paragraph explains the

two approaches in more detail.

For the analysis of electronic ballasts,

we chose the median (50 percentile)

BEF as the value to use from the

electronic ballast product data supplied

by the National Electrical Manufacturers

Association (NEMA). These data are

found in Appendix A of the TSD. For

each product class, about half of the

ballasts on the market have efficiencies

greater and half lower than the level

chosen for the analysis. Therefore, the

unit energy consumption calculated for

a ballast at the median efficiency will

result in an energy use close to the

average for that product class. The

Department believes this median

approach properly reflects the energy

savings impact from using electronic

ballasts rather than magnetic ballasts.

For the purpose of setting efficiency

standards, the Department chose not to

differentiate within a technology (such

as electronic high frequency ballasts)

and decided to choose BEF levels that

the vast majority of models would be

able to meet. Therefore, for electronic

ballasts in each product class, we chose

the 10 percentile BEF level of efficiency.

This means that 90 percent of the

existing electronic ballast models can

meet the standard being considered. In

order to clearly show the differences in

these BEFs, we report in the table below

both the proposed standard level BEF -

(10th percentile) and the corresponding

analysis level BEF (50th percentile) for

each product class analyzed.

ELECTRONIC FLUORESCENT LAMP BALLAST EFFICACY FACTORS 3

Application for operation of Analysis BEF

(50th percentile)

Standards BEF

(10th percentile)

One F40 T12/40-watt lamp ...................................................................................................................... 2.34 2.29

Two F40 T12/40-watt lamps .................................................................................................................... 1.19 1.17

Three F40 T12/40-watt lamps ................................................................................................................. 0.78 0.76

Two F96 T12140-watt lamps .................................................................................................................... 0.65 0.63

Two F96 T12HO/40-watt lamps .............................................................................................................. 0.43 0.39

Another consideration in choosing

MTF levels is that experience shows

that there is some variation in the BEFs

of "identically" manufactured

electronic ballasts of any product class.

As indicated in Table A.3, Appendix A

of the TSD, there is sometimes only a

small spread between the 10 and 50

percentile BEFs. By choosing the

standard level at the 10th percentile

rather than the 50 percentile level, the

Department is allowing manufacturing

tolerance to the ballast manufacturers.

c. Energy Savings

1. Determination of Savings

The Department forecasted energy

savings through the use of a national

energy savings (NES) spreadsheet,

which forecasted energy savings over

the period of analysis for candidate

standards relative to the base case. The

Department quantified the energy

savings that would be attributable to a

standard as the difference in energy

consumption between the candidate

standards case and the base case. The

base case represents the forecast of

energy consumption in the absence of

amended mandatory efficiency

standards.

The NES spreadsheet model is

described in section III.b of this notice,

infra, and also in Appendix B of the

TSD. One of the very important inputs

to the model is the forecast of magnetic

ballast shipments in the absence of

amended mandatory standards. Two

shipments scenarios (shipments of

magnetic ballasts decline until 2015 and

shipments decline until 2027) were

examined to attempt to cover the range

of possibilities for market shares of

electronic and magnetic ballasts (see

Chapter 5 of the TSD). Additionally, in

evaluating the joint comment proposal,

the Department used a third shipment

scenario (flat magnetic ballast shipment

forecast) as the upper bound as

described in Appendix E of the TSD.

The NES spreadsheet model first

calculates the energy savings in site

energy or kilowatt-hours (kWh). Site

energy is the energy directly consumed

at building sites by the lamp/ballast

systems of interest. The energy savings

to the nation is expressed in quads, that

is, quadrillions of British thermal units

(Btus). This is the source energy needed

to generate and transmit the electricity

consumed. A time series of conversion

factors is used to convert site energy

(kWh) to source energy (Btu). Chapter 5

of the TSD contains a table of these

conversion factors, which are derived

from DOE/ETA's Annual Energy Outlook

1999.

term "significant" has never been

defined in the Act, the U.S. Court of

Appeals, in Natural Resources Defense

Council v. Herrington, 768 F.2d 1355,

1373 (D.C. Cir. 1985), concluded that

Congressional intent in using the word

"significant" was to mean "non-trivial."

d. Rebuttable Presumption

The National Appliance Energy

Conservation Act established new

criteria for determining whether a

standard level is economically justified.

Section 325(o)(2)(B)(iii) states:

If the Secretary finds that the additional

cost to the consumer of purchasing a product

complying with an energy conservation

standard level will be less than three times

the value of the energy * * * savings during

the first year that the consumer will receive

as a result of the standard, as calculated

under the applicable test procedure, there

shall be a rebuttable presumption that such

standard level is economically justified. A

determination by the Secretary that such

criterion is not met shall not be taken into

consideration in the Secretary's

determination of whether a standard is

economically justified.

If the increase in initial price of an

appliance due to a conservation

standard would repay itself to the

consumer in energy savings in less than

three years, then we presume that such

standard is economically justified.4 This

3It should be noted the analyses were performed

assuming energy saver lamps and the values in the

table below are for full-wattage T12 lamps. Table

3.5 in the TSD contains both watts and BEF values

for various ballast types operating T12 energy saver

lamps.

2. Significance of Savings

Under section 325(o)(3)(B) of the Act,

the Department is prohibited from

adopting a standard for a product if that

standard would not result in

"significant" energy savings. While the

4 For this calculation, the Department calculated

cost-of-operation based on the DOE test procedures

with assumed usage shown in Table 3.5 of the TSD.

Commercial and industrial consumers that use the

ballasts less hours will experience a longer payback

Continued

EE-RM-97-500 COMMENT 98A

Federal Register I Vol. 65, No. 51 I Wednesday, March 15, ZOOO/Proposed Rules 14131 

for the setting of the trial standard 

levels. The analysis represents the 

probable average savings from a 

movement from the base case to the 

MTF option (electronic ballast), which 

itself has a range of BEFs. In contrast, 

the proposed trial standards set BEF 

levels that allow the large majority of 

electronic ballasts to meet the standard. 

The following paragraph explains the 

two approaches in more detail. 

For the analysis of electronic ballasts, 

we chose the median (50 percentile) 

BEF as the value to use from the 

electronic ballast product data supplied 

by the National Electrical Manufacturers 

Association (NEMA). These data are 

found in Appendix A of the TSD. For 

each product class, about half of the 

ballasts on the market have efficiencies 

greater and half lower than the level 

chosen for the analysis. Therefore, the 

unit energy consumption calculated for 

a ballast at the median efficiency will 

result in an energy use close to the 

average for that product class. The 

Department believes this median 

approach properly reflects the energy 

savings impact from using electronic 

ballasts rather than magnetic ballasts. 

For the purpose of setting efficiency 

standards, the Department chose not to 

differentiate within a technology (such 

as electronic high frequency ballasts) 

and decided to choose BEF levels that 

the vast majority of models would be 

able to meet. Therefore, for electronic 

ballasts in each product class, we chose 

the 10 percentile BEF level of efficiency. 

This means that 90 percent of the 

existing electronic ballast models can 

meet the standard being considered. In 

order to clearly show the differences in 

these BEFs, we report in the table below 

both the proposed standard level BEF . 

(10th percentile) and the corresponding 

analysis level BEF (50th percentile) for 

each product class analyzed. 

ELECTRONIC FLUORESCENT LAMP BALLAST EFFICACY FACTORS 3 

Application for operation of Analysis BEF Standards BEF 

(50th percentile) (10th percentile) 

One F40 T12140-watt lamp ..................................................................................................................... . 2.34 2.29 

Two F40 T12140-watt lamps ................................................................................................................... . 1.19 1.17 

Three F40 T12140-watt lamps ................................................................................................................ . 0.78 0.76 

Two F96 T12140-watt lamps ................................................................................................................... . 0.65 0.63 

Two F96 T12HO/40-watt lamps ............................................................................................................. . 0.43 0.39 

Another consideration in choosing 

MTF levels is that experience shows 

that there is some variation in the BEFs 

of "identically" manufactured 

electronic ballasts of any product class. 

As indicated in Table A.3, Appendix A 

of the TSD. there is sometimes only a small spread between the 10 and 50 

percentile BEFs. By choosing the 

standard level at the 10th percentile 

rather than the 50 percentile level. the 

Department is allowing manufacturing 

tolerance to the ballast manufacturers. 

c. Energy Savings 

1. Determination of Savings 

The Department forecasted energy 

savings through the use of a national 

energy savings (NES) spreadsheet. 

which forecasted energy savings over 

the period of analysis for candidate 

standards relative to the base case. The 

Department quantified the energy 

savings that would be attributable to a 

standard as the difference in energy 

consumption between the candidate 

standards case and the base case. The 

ba!le case represents the forecast of 

energy consumption in the absence of 

amended mandatory efficiency 

standards. 

The NES spreadsheet model is 

described in section III. b of this notice, 

infra. and also in Appendix B of the 

3 It should be noted the analyses were performed 

assuming energy saver lamps and the values in the 

table below are for full-wattage T12 lamps. Table 

3.5 in the TSD contains both watts and BEF values 

for various ballast types operating T12 energy saver 

lamps. 

TSD. One of the very important inputs 

to the model is the forecast of magnetic 

ballast shipments in the absence of 

amended mandatory standards. Two 

shipments scenarios (shipments of 

magnetic ballasts decline until 2015 and 

shipments decline until 2027) were 

examined to attempt to cover the range 

of possibilities for market shares of 

electronic and magnetic ballasts (see 

Chapter 5 of the TSD). Additionally, in 

evaluating the joint comment proposal. 

the Department used a third shipment 

scenario (flat magnetic ballast shipment 

forecast) as the upper bound as 

described in Appendix E of the TSD. 

The NES spreadsheet model first 

calculates the energy savings in site 

energy or kilowatt-hours (kWh). Site 

energy is the energy directly consumed 

at building sites by the lamplballast 

systems of interest. The energy savings 

to the nation is expressed in quads. that 

is, quadrillions of British thermal units 

(Btus). This is the source energy needed 

to generate and transmit the electricity 

consumed. A time series of conversion 

factors is used to convert site energy 

(kWh) to source energy (Btu). Chapter 5 

of the TSD contains a table of these 

conversion factors, which are derived 

from DOE/EIA's Annual Energy Outlook 

1999. 

2. Significance of Savings 

Under section 325(0)(3)(B) of the Act, 

the Department is prohibited from 

adopting a standard for a product if that 

standard would not result in 

"significant" energy savings. While the 

term "significant" has never been 

defined in the Act, the U.S. Court of 

Appeals, in Natural Resources Defense 

Council v. Herrington, 768 F.2d 1355. 

1373 (D.C. Cir. 1985). concluded that 

Congressional intent in using the word 

"significant" was to mean "non-trivial." 

d. Rebuttable Presumption 

The National Appliance Energy 

Conservation Act established new 

criteria for determining whether a 

standard level is economically justified. 

Section 325(0)(2)(B)(iii) states; 

If the Secretary finds that the additional 

cost to the consumer of purchasing a product 

complying with an energy conservation 

standard level will be less than three times 

the value of the energy * * * savings during 

the first year that the consumer will receive 

as a result of the standard. as calculated 

under the applicable test procedure, there 

shall be a rebuttable presumption that such 

standard level is economically justified. A 

determination by the Secretary that such 

cri terion is not met shall not be taken into 

consideration in the Secretary's 

determination of whether a standard is 

economically justified. 

If the increase in initial price of an 

appliance due to a conservation 

standard would repay itself to the 

consumer in energy savings in less than 

three years, then we presume that such 

standard is economically justified.4 This 

• For this calculation. the Department calculated 

cost-of-operation based on the DOE test procedures 

with assumed usage shown in Table 3.5 of the TSD. 

Commercial and industrial consumers that use the 

ballasts less hours will experience a longer payback 

Continued 
14132 Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

presumption of economic justification

can be rebutted upon a proper showing.

e. Economic Justification

As noted earlier, Section

325(o)(2)(B)(i) of the Act provides seven

factors to be evaluated in determining

whether a conservation standard is

economically justified.

1. Economic Impact on Manufacturers

and Consumers

The July 1996 Process Improvement

Rule established procedures,

interpretations and policies to guide the

Department in the consideration of new

or revised appliance efficiency

standards (Procedures for Consideration

of New or Revised Energy Conservation

Standards for Consumer products). 61

FR 36974 (July 15, 1996). Key objectives

of the rule have direct bearing on the

implementation of manufacturer impact

analyses. First, the Department will

utilize an annual cash flow approach in

determining the quantitative impacts on

manufacturers. This includes a shortterm assessment based on the cost and

capital requirements during the period

between the announcement of a

regulation and the time when the

regulation comes into effect, and a longterm assessment. Impacts analyzed

include industry net present value, cash

flows by year, changes in revenue and

income, and other measures of impact,

as appropriate. Secondly, the

Department will analyze and report the

impacts on different types of

manufacturers, with particular attention

to impacts on small manufacturers.

Thirdly, the Department will consider

the impact of standards on domestic

manufacturer employment,

manufacturing capacity, plant closures

and loss of capital investment. Finally,

the Department will take into account

cumulative impacts of different DOE

regulations on manufacturers.

For consumers, measures of economic

impact are the changes in purchase

price and annual energy expense. The

purchase price and annual energy

expense, i.e., life-cycle cost, of each

standard level are presented in Chapter

4 of the Technical Support Document

(TSD). Under section 325 of the Act, the

life-cycle cost analysis is a separate

factor to be considered in determining

economic justification. Additionally, the

Department has decided to consider,

under factor seven, "other factors the

Secretary considers relevant," the lifecycle cost impacts on those subgroups

of commercial and industrial consumers

who, if forced by standards to purchase

while those that use them more will have a shorter

payback.

electronic ballasts, would choose to

switch from T12 to T8 lighting systems.

2. Life-Cycle Costs

One measure of the effect of proposed

standards on consumers is the change in

operating expense as compared to the

change in purchase price, both resulting

from standards. This is quantified by the

difference in the life-cycle costs

between the baseline and the more

efficient technologies for the lamp/

ballast combinations analyzed. The lifecycle cost is the sum of the purchase

price and the operating expense,

including installation and maintenance

expenditures, discounted over the

lifetime of the appliance.

For each lamp/ballast combination,

we calculated the life-cycle costs for

three technologies: energy efficient

magnetic, cathode cutout and electronic

ballasts. We used real discount rates of

4, 8 and 15 percent for the calculations.

The assumption is that the consumer

purchases the ballast in 2003. Price

forecasts are taken from the 1999

Annual Energy Outlook of the Energy

Information Administration (DOE/EIA0383). For the probability-based lifecycle cost analysis, we used a

distribution of marginal electricity

prices for a data base of commercial

buildings (see Chapter 4 and Appendix

B of the TSD). The life-cycle cost

calculations include ballast and lamp

costs (purchase prices and installation

costs for both and replacement costs for

lamps only) and annual electricity costs

of the lamp/ballast system operation

over the lifetime of the ballast. Chapter

4 of the TSD contains the details of the

life-cycle cost calculations including

those considered under factor seven

below, infra.

3. Energy Savings

While significant conservation of

energy is a separate statutory

requirement for imposing an energy

conservation standard, the Act requires

DOE, in determining the economic

justification of a standard, to consider

the total projected energy savings that

are expected to result directly from

revised standards. The Department used

the NES spreadsheet results, discussed

earlier, in its consideration of total

projected savings. The savings are

provided in Section V of this notice.

4. Lessening of Utility or Performance of

Products

This factor cannot be quantified. In

establishing classes of products and

design options and by providing

exemptions, the Department tried to

eliminate any degradation of utility or

performance in the products under

consideration in this rulemaking.

An issue of utility that was

considered was the possibility of

interference with certain equipment,

such as medical monitoring equipment,

caused by the high frequency of

electronic ballasts. To prevent any

interference that cannot be solved by

electronic ballast designers, the

Department is not establishing a

standard for TO ballasts, thereby

allowing magnetic T8 ballasts for such

applications.

5. Impact of Lessening of Competition

It is important to note that this factor

has two parts; on the one hand, it

assumes that there could be some

lessening of competition as a result of

standards; and on the other hand, it

directs the Attorney General to gauge

the impact, if any, of that effect.

In order to assist the Attorney General

in making such a determination, the

Department has provided the Attorney

General with copies of this notice and

the Technical Support Document for

review.

6. Need of the Nation To Conserve

Energy

We report the environmental effects

from each standard level for each

product under this factor in Section V

of this notice.

7. Other Factors

This provision allows the Secretary of

Energy, in determining whether a

standard is economically justified, to

consider any other factors that the

Secretary deems to be relevant. Under

this factor, the Secretary has decided to

consider the life-cycle cost impacts on

those subgroups of consumers who, if

forced by standards to purchase

electronic ballasts, would choose to

switch from T12 to T8 lighting systems.

This analysis is part of the Department's

continuing effort to study the economic

impact of standards on consumers.

While the Department does not believe

it can set standard levels based on

consumer purchasing behavior given the

findings of the court in Natural

Resources Defense Council v.

Herrington, 768 F. 2d 1355, 1406-07

(D.C. Cir. 1985), where the court stated

that "the entire point of a mandatory

program was to change consumer

behavior" and "the fact that consumers

demand short payback periods was

itself a major cause of the market failure

that Congress hoped to correct," the

Department will consider and evaluate

the impact of likely consumer actions.

The Secretary has also decided to

consider the joint Comment. This

EE-RM-97-500 COMMENT 98A

14132 Federal Register/Vol. 65, No. 51/Wednesday, March 15, ZOOO/Proposed Rules 

presumption of economic justification 

can be rebutted upon a proper showing. 

e. Economic Justification 

As noted earlier, Section 

325(0)(2)(B)(i) of the Act provides seven 

factors to be evaluated in determining 

whether a conservation standard is 

economically justified. 

1. Economic Impact on Manufacturers 

and Consumers 

The July 1996 Process Improvement 

Rule established procedures, 

interpretations and policies to guide the 

Department in the consideration of new 

or revised appliance efficiency 

standards (Procedures for Consideration 

of New or Revised Energy Conservation 

Standards for Consumer products). 61 

FR 36974 (July 15, 1996). Key objectives 

of the rule have direct bearing on the 

implementation of manufacturer impact 

analyses. First, the Department will 

utilize an annual cash flow approach in 

determining the quantitative impacts on 

manufacturers. This includes a shortterm assessment based on the cost and 

capital requirements during the period 

between the announcement of a 

regulation and the time when the 

regulation comes into effect, and a longterm assessment. Impacts analyzed 

include industry net present value, cash 

flows by year, changes in revenue and 

income, and other measures of impact, 

as appropriate. Secondly. the 

Department will analyze and report the 

impacts on different types of 

manufacturers. with particular attention 

to impacts on small manufacturers. 

Thirdly. the Department will consider 

the impact of standards on domestic 

manufacturer employment. 

manufacturing capacity. plant closures 

and loss of capital investment. Finally. 

the Department will take into account 

cumulative impacts of different DOE 

regulations on manufacturers. 

For consumers. measures of economic 

impact are the changes in purchase 

price and annual energy expense. The 

purchase price and annual energy 

expense. i.e., life-cycle cost. of each 

standard level are presented in Chapter 

4 of the Technical Support Document 

(TSD). Under section 325 of the Act, the 

life-cycle cost analysis is a separate 

factor to be considered in determining 

economic justification. Additionally. the 

Department has decided to consider. 

under factor seven. "other factors the 

Secretary considers relevant." the lifecycle cost impacts on those subgroups 

of commercial and industrial consumers 

who. if forced by standards to purchase 

while those that use them more will have a shorter 

payback. 

electronic ballasts. would choose to 

switch from T12 to T8lighting systems. 

2. Life-Cycle Costs 

One measure of the effect of proposed 

standards on consumers is the change in 

operating expense as compared to the 

change in purchase price. both resulting 

from standards. This is quantified by the 

difference in the life-cycle costs 

between the baseline and the more 

efficient technologies for the lamp/ 

ballast combinations analyzed. The lifecycle cost is the sum of the purchase 

price and the operating expense, 

including installation and maintenance 

expenditures. discounted over the 

lifetime of the appliance. 

For each lamplballast combination. 

we calculated the life-cycle costs for 

three technologies: energy efficient 

magnetic. cathode cutout and electronic 

ballasts. We used real discount rates of 

4.8 and 15 percent for the calculations. 

The assumption is that the consumer 

purchases the ballast in 2003. Price 

forecasts are taken from the 1999 

Annual Energy Outlook of the Energy 

Information Administration (DOE/ElA0383). For the probability-based lifecycle cost analysis. we used a 

distribution of marginal electricity 

prices for a data base of commercial 

buildings (see Chapter 4 and Appendix 

B of the TSD). The life-cycle cost 

calculations include ballast and lamp 

costs (purchase prices and installation 

costs for both and replacement costs for 

lamps only) and annual electricity costs 

of the lamplballast system operation 

over the lifetime of the ballast. Chapter 

4 of the TSD contains the details of the 

life-cycle cost calculations including 

those considered under factor seven 

below. infra. 

3. Energy Savings 

While significant conservation of 

energy is a separate statutory 

requirement for imposing an energy 

conservation standard. the Act requires 

DOE. in determining the economic 

justification of a standard. to consider 

the total projected energy savings that 

are expected to result directly from 

revised standards. The Department used 

the NES spreadsheet results. discussed 

earlier, in its consideration of total 

projected savings. The savings are 

provided in Section V of this notice. 

4. Lessening of Utility or Performance of 

Products 

This factor cannot be quantified. In 

establishing classes of products and 

design options and by providing 

exemptions. the Department tried to 

eliminate any degradation of utility or 

performance in the products under 

consideration in this rulemaking. 

An issue of utility that was 

considered was the possibility of 

interference with certain equipment. 

such as medical monitoring equipment. 

caused by the high frequency of 

electronic ballasts. To prevent any 

interference that cannot be solved by 

electronic ballast designers. the 

Department is not establishing a 

standard for T8 ballasts. thereby _ 

allowing magnetic T8 ballasts for such 

applications. 

5. Impact of Lessening of Competition 

It is important to note that this factor 

has two parts; on the one hand. it 

assumes that there could be some 

lessening of competition as a result of 

standards; and on the other hand, it 

directs the Attorney General to gauge 

the impact. if any. of that effect. 

In order to assist the Attorney General 

in making such a determination. the 

Department has provided the Attorney 

General with copies of this notice and 

the Technical Support Document for -

review. 

6. Need of the Nation To Conserve 

Energy 

We report the environmental effects 

from each standard level for each 

product under this factor in Section V 

of this notice. 

7. Other Factors 

This provision allows the Secretary of 

Energy. in determining whether a 

standard is economically justified, to 

consider any other factors that the 

Secretary deems to be relevant. Under 

this factor. the Secretary has decided to 

consider the life-cycle cost impacts on 

those subgroups of consumers who. if 

forced by standards to purchase 

electronic ballasts. would choose to 

switch from T12 to T8 lighting systems. 

This analysis is part of the Department's 

continuing effort to study the economic 

impact of standards on consumers. While the Department does not believe 

it can set standard levels based on 

consumer purchasing behavior given the 

findings of the court in Natural 

Resources Defense Council v. 

Herrington, 768 F. 2d 1355, 1406-07 

(D.C. Cir. 1985), where the court stated 

that "the entire point of a mandatory 

program was to change consumer 

behavior" and "the fact that consumers 

demand short payback periods was 

itself a major cause of the market failure 

that Congress hoped to correct," the 

Department will consider and evaluate 

the impact of likely consumer actions. 

The Secretary has also decided to 

consider the Joint Comment. This 
Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules 14133

proposal segments the ballast market by

defining replacement ballasts and

proposes extended implementation

dates for all segments of the ballast

market to comply with the new

standards. The proposal also includes

certain exemptions. All of these

proposals are oriented toward mitigating

financial impacts on manufacturers and

ensuring a minimal level of disruption

to the ballast replacement marketplace.

III. Methodology

The Process Rule outlines the

procedural improvements identified by

the interested parties. 61 FR 36974. The

process improvement effort also

included a review of the: (1) Economic

models; (2) analytical tools; (3)

methodologies; (4) non-regulatory

approaches; and (5) prioritization of

future rules.

The Department developed two new

spreadsheet tools to meet the objectives

of the Process Rule. The first

spreadsheet calculates Life-Cycle-Cost

(LCC) and Payback. The second

calculates national energy savings

(NES). We tailored versions of these two

spreadsheets for the ballast analyses.

The Department also completely revised

the methodology used in assessing

manufacturer impacts including the

adoption of the Government Regulatory

Impact Model (GRIM).

Additionally, DOE has developed a

new approach using the National Energy

Modeling System (NEMS) to estimate

impacts of ballast energy efficiency

standards on electric utilities and the

environment. The Department used a

version of Energy Information

Administration's (EIA) NEMS for the

utility and environmental analyses.

NEMS simulates the energy economy of

the U.S. and has been developed over

several years by the EIA primarily for

the purpose of preparing the Annual

Energy Outlook (AEO). NEMS produces

a widely-known baseline forecast for the

U.S. through 2020 that is available in

the public domain. The version of

NEMS used for appliance standards

analysis is called NEMS-BRS 5, and is

based on the AE099 version with minor

modifications. NEMS offers a

sophisticated picture of the effect of

standards since its scope allows it to

measure the interactions between the

various energy supply and demand

sectors and the economy as a whole.

5EIA approves use of the name NEMS to describe

only an AEO version of the model without any

modification to code or data. Because our analysis

entails some minor code modifications and the

model is run under various policy scenarios that

deviate from AEO assumptions, the name NEMSBRS refers to the model as used here.

a. Life-Cycle-Cost Spreadsheet

This section describes the LCC

spreadsheet model used for analyzing

the economic impacts of possible

standards on individual commercial and

industrial consumers. Details of the

spreadsheet model can be found in

Appendix A. We conduct the LCC

analysis with a spreadsheet model

developed in Microsoft Excel for

Windows 95. When combined with

Crystal Ball (a commercially available

software program), the LCC model can

use a Monte Carlo simulation to perform

the analysis by incorporating

uncertainty and variability

considerations. The spreadsheet is

organized so that ranges (distributions)

can be entered for each input variable

needed to perform the calculations. The

LCC output can be either a point value

when we use the average value of the

inputs or a distribution when we use

distributions for some or all of the

inputs. In the analyses described in this

notice, we used distributions for the

most important input variables.

The life-cycle cost calculations

include ballast and lamp costs

(purchase price and installation cost for

both and replacement cost for lamps

only) and annual electricity costs of the

lamp/ballast system operation over the

lifetime of the ballast. The inputs to the

life-cycle cost analysis include: The year

standards take effect, the discount rate,

the electricity price projections, ballast

prices, annual lighting hours, ballast

life, ballast input power, and initial and

lamp replacement costs. Chapter 4 of

the TSD contains the details of the lifecycle cost calculations.

In certain cases (when a T8 lamp/

ballast system is considered as replacing

a T12 lamp/ballast system), an

additional input (mean lamp lumens)

was required. We used this input to

normalize the unequal light outputs for

the two lamp types.

b. National Energy Savings Spreadsheet

In order to make the analysis more

accessible and transparent to all

stakeholders, we developed a

spreadsheet model that uses Excel in

Windows 95 to calculate the national

energy savings (NES) and the national

economic costs and savings from new

standards. We can change input

quantities within the spreadsheet. For

example, one can easily change the

ballast prices. Unlike the LCC analysis,

the NES spreadsheet does not use

distributions for inputs or outputs. We

conduct sensitivities by running

different scenarios.

DOE uses the NES spreadsheet to

perform calculations of national energy

savings based on user inputs similar to

those for the LCC spreadsheet. The

national energy savings, energy cost

savings, equipment costs and net

present value of benefits for several

product classes are forecast from the

chosen start year through 2030. The

forecasts provide annual and

cumulative values for all four output

parameters.

The Department calculates the

national energy savings by subtracting

energy use under a standards scenario

from energy use in a base case (no

standards scenario). Energy use is

reduced when an energy efficient

magnetic (EEM) ballast is replaced by

either a cathode cutout (CC) or an

electronic ballast. For CC standards, the

user can specify what percent of EEM

ballasts are converted to electronic and

what percent to CC. For an electronic

standard, the user can specify what

percent of EEM ballasts are converted to

T12 or T8 electronic. Unit energy

savings for each product class are the

same as calculated in the LCC

spreadsheet. Additional information

about the NES spreadsheet can be found

in Chapter 5 and Appendix B of the

TSD.

User inputs include: (1) A choice from

among several electricity price

projections; (2) effective date of the

ballast standard; (3) discount rate and

discount year; (4) a shipments forecast;

and (5) ballast assumptions. Ballast

assumptions include inputs such as

annual lighting hours and ballast prices.

Additionally, we use a time series of

conversion factors to change from site to

source energy.

One of the more important

components of any estimate of future

impact is shipments. Forecasts of

shipments for the base case and

standards case were used as inputs to

the NES spreadsheet. The shipments

portion of the spreadsheet forecasts

EEM ballast shipments from 1997 to

2030. One base case scenario assumes

decreasing shipments of EEM ballasts

until the year 2015. Another base case

scenario assumes decreasing shipments

until the year 2027. The decreasing

shipments scenarios are determined by

one user input: The year by which EEM

ballast shipments decrease to 10 percent

of the 1997 value. The decrease in EEM

shipments is linear. Once that 10

percent value is reached, shipments

remain at that value through 2030.

Additional details on the various

shipments forecasts are provided in

Chapter 5 of the TSD.

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 14133 

proposal segments the ballast market by 

defining replacement ballasts and 

proposes extended implementation 

dates for all segments of the ballast 

market to comply with the new 

standards. The proposal also includes 

certain exemptions. All of these 

proposals are oriented toward mitigating 

financial impacts on manufacturers and 

ensuring a minimal level of disruption 

to the ballast replacement marketplace. 

m. Methodology 

The Process Rule outlines the 

procedural improvements identified by 

the interested parties. 61 FR 36974. The 

process improvement effort also 

included a review of the: (1) Economic 

models; (2) analytical tools; (3) 

methodologies; (4) non-regulatory 

approaches; and (5) prioritization of 

future rules. 

The Department developed two new 

spreadsheet tools to meet the objectives 

of the Process Rule. The first 

spreadsheet calculates Life-Cycle-Cost 

(LCC) and Payback. The second 

calculates national energy savings 

(NES). We tailored versions of these two 

spreadsheets for the ballast analyses. 

The Department also completely revised 

the methodology used in assessing 

manufacturer impacts including the 

adoption of the Government Regulatory 

Impact Model (GRIM). 

Additionally, DOE has developed a 

new approach using the National Energy 

Modeling System (NEMS) to estimate 

impacts of ballast energy efficiency 

standards on electric utilities and the 

environment. The Department used a 

version of Energy Information 

Administration's (EIA) NEMS for the 

utility and environmental analyses. 

NEMS simulates the energy economy of 

the U.S. and has been developed over 

several years by the EIA primarily for 

the purpose of preparing the Annual 

Energy Outlook (AEO). NEMS produces 

a widely-known baseline forecast for the 

U.S. through 2020 that is available in 

the public domain. The version of 

NEMS used for appliance standards 

analysis is called NEMS-BRS 5, and is 

based on the AE099 version with minor 

modifications. NEMS offers a 

sophisticated picture of the effect of 

standards since its scope allows it to 

measure the interactions between the 

various energy supply and demand 

sectors and the economy as a whole. 

5 EL'l. approves use of the name NEMS to describe 

only an AEO version of the model without any 

modification to code or data. Because our analysis 

entails some minOT code modifications and the 

model is run under various policy scenarios that 

deviate from AEO assumptions. the name NEMSBRS refers to the model as used here. 

a. Life-Cyc1e-Cost Spreadsheet 

This section describes the LCC 

spreadsheet model used for analyzing 

the economic impacts of possible 

standards on individual commercial and 

industrial consumers. Details of the 

spreadsheet model can be found in 

Appendix A. We conduct the LCC 

analysis with a spreadsheet model 

developed in Microsoft Excel for 

Windows 95. When combined with 

Crystal Ball (a commercially available 

software program), the LCC model can 

use a Monte Carlo simulation to perform 

the analysis by incorporating 

uncertainty and variability 

considerations. The spreadsheet is 

organized so that ranges (distributions) 

can be entered for each input variable 

needed to perform the calculations. The 

LCC output can be either a point value 

when we use the average value of the 

inputs or a distribution when we use 

distributions for some or all of the 

inputs. In the analyses described in this 

notice, we used distributi'ons for the 

most important input variables. 

The life-cycle cost calculations 

include ballast and lamp costs 

(purchase price and installation cost for 

both and replacement cost for lamps 

only) and annual electricity costs of the 

lamplballast system operation over the 

lifetime of the ballast. The inputs to the 

life-cycle cost analysis include: The year 

standards take effect, the discount rate, 

the electricity price projections, ballast 

prices, annual lighting hours, ballast 

life, ballast input power, and initial and 

lamp replacement costs. Chapter 4 of 

the TSD contains the details of the lifecycle cost calculations. 

In certain cases (when a T8 lamp/ 

ballast system is considered as replacing 

a T12 lamp/ballast system). an additional input (mean lamp lumens) 

was required. We used this input to 

normalize the unequal light outputs for 

the two lamp types. 

h. National Energy Savings Spreadsheet 

In order to make the analysis more 

accessible and transparent to all 

stakeholders, we developed a 

spreadsheet model that uses Excel in 

Windows 95 to calculate the national 

energy savings (NES) and the national 

economic costs and savings from new 

standards. We can change input 

quantities within the spreadsheet. For 

example, one can easily change the 

ballast prices. Unlike the LCC analysis, 

the NES spreadsheet does not use 

distributions for inputs or outputs. We 

conduct sensitivities by running 

different scenarios. 

DOE uses the NES spreadsheet to 

perform calculations of national energy 

savings based on user inputs similar to 

those for the LCC spreadsheet. The 

national energy savings, energy cost 

savings, equipment costs and net 

present value of benefits for several 

product classes are forecast from the 

chosen start year through 2030. The 

forecasts provide annual and 

cumulative values for all four output 

parameters. 

The Department calculates the 

national energy savings by subtracting 

energy use under a standards scenario 

from energy use in a base case (no 

standards scenario). Energy use is 

reduced when an energy efficient 

magnetic (EEM) ballast is replaced by 

either a cathode cutout (CC) or an 

electronic ballast. For CC standards, the 

user can specify what percent of EEM 

ballasts are converted to electronic and 

what percent to Cc. For an electronic 

standard, the user can specify what 

percent of EEM ballasts are converted to 

T12 or T8 electronic. Unit energy 

savings for each product class are the 

same as calculated in the LCC 

spreadsheet. Additional information 

about the NES spreadsheet can be found 

in Chapter 5 and Appendix B of the 

TSD. 

User inputs include: (1) A choice from 

among several electricity price 

projections; (2) effective date of the 

ballast standard; (3) discount rate and 

discount year; (4) a shipments forecast; 

and (5) ballast assumptions. Ballast 

assumptions include inputs such as 

annual lighting hours and ballast prices. 

Additionally, we use a time series of 

conversion factors to change from site to 

source energy. 

One of the more important 

components of any estimate of future 

impact is shipments. Forecasts of 

shipments for the base case and 

standards case were used as inputs to 

the NES spreadsheet. The shipments 

portion of the spreadsheet forecasts 

EEM ballast shipments from 1997 to 

2030. One base case scenario assumes 

decreasing shipments of EEM ballasts 

until the year 2015. Another base case 

scenario assumes decreasing shipments 

until the year 2027. The decreasing 

shipments scenarios are determined by 

one user input: The year by which EEM 

ballast shipments decrease to 10 percent 

of the 1997 value. The decrease in EEM 

shipments is linear. Once that 10 

percent value is reached, shipments 

remain at that value through 2030. 

Additional details on the various 

. shipments forecasts are provided in 

Chapter 5 of the TSD. 
14134 Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

c. Manufacturer Impact Analysis and

Government Regulatory Impact Model

(GRIM)

The manufacturer analysis estimates

the financial impact of standards on

manufacturers and calculates impacts

on employment and manufacturing

capacity.

Prior to initiating the detailed

manufacturing impact analysis for the

ballast rulemaking, the Department

prepared a document titled "Ballast

Manufacturer Impact Analysis

Analytical Approach." This document

was presented at a public workshop

held on April 28, 1998. We developed

the approach from the general

framework for Manufacturing Impact

Analyses presented by the Department

in March 1997 and modified for its

application to the ballast rule. The

document outlined procedural steps and

identified issues for consideration.

As proposed in the Approach

document, the manufacturer impact

analyses (MIA) was conducted in four

phases. Phase 1, Industry Profile and

Issue Definition, consisted of two

activities, namely, preparation of an

industry characterization and the

conduct of an issue identification

workshop. The second phase,

"Strawman" Industry Cash Flow, had as

its focus the larger industry. In this

phase, the GRIM was used to prepare a

"strawman" industry cash flow

analysis. Here the Department used

publicly available information

developed in Phase 1 to adapt the GRIM

model structure to facilitate the analysis

of new ballast standards. In the Phase 3,

Sub-Group Impact Analysis, individual

manufacturers used the strawman cash

flow as a template from which

individual company level cashflows

were developed from GRIM. Phase 3

also entailed the documentation of

additional impacts on employment and

manufacturing capacity through an

interview process. Finally in Phase 4,

Industry Cash Flow, individual cash

flows were aggregated into three groups,

one including all manufacturers, a

second including full line

manufacturers of magnetic and

electronic ballasts, and a third including

manufacturers producing only

electronic ballasts.

1. Phase 1, Industry Profile and Issue

Definition

Phase 1 of the Manufacturer Impact

Analysis consisted of two activities,

namely, preparation of an Industry

Characterization, and the conduct of an

issue analysis workshop. Prior to

initiating the detailed impact studies,

the Department received input on the

present and past structure and market

characteristics of the ballast industry.

This activity involved both quantitative

and qualitative efforts to assess the

industry and products to be analyzed.

Issues addressed included manufacturer

market shares and characteristics; trends

in number of firms; the financial

situation of manufacturers; and trends

in ballast characteristics and markets.

We presented publicly available

quantitative data published by U.S.

Bureau of Census with regards to the

ballast industry at the April 28, 1998,

workshop. These reports include such

statistics as the number of companies,

manufacturing establishments,

employment, payroll, value added, cost

of materials consumed, capital

expenditures, product shipments, and

concentration ratios.

To further assist in performing the

Industry Profile and to define key

issues, the Department conducted a

series of interviews with ballast

manufacturers in late 1996 and early

1997. DOE distributed summaries of

these interviews at the "Public

Workshop on the Revised Life Cycle

Cost and Engineering Analysis of

Fluorescent Lamp Ballasts," held on

March 18, 1997.

The interviews and review of public

literature suggested that the following

guidelines be followed to assess the

impacts of a new ballast standard. First,

the Manufacturer Impact Analysis

should be performed on a company-bycompany basis and the industry impact

constructed from an aggregation of

impacts on individual companies.

Second, the analysis should recognize

the increasingly global nature of the

ballast industry. Gains or losses in U.S.

sales will have consequences for

manufacturers regardless of where their

production facilities are located. Where

possible, the analysis should be

structured to assess impacts at U.S.

National, North American, and Global

levels. Finally, the Manufacturer Impact

Analysis should include consideration

of direct industry suppliers and

luminaire and lamp manufacturers. The

Department recognized that

manufacturers do not operate in

isolation and that changes in production

levels or economic health of a

manufacturer can have significant

impacts on its suppliers and other trade

allies.

2. Phase 2, "Strawman" Industry Cash

Flow

Phase 2 of the manufacturer analyses

has as its focus the "larger" industry. As

such, this phase resembles the

Department's past practice of modeling

a "prototypical" firm with average

industry values. The analytical tool

used for calculating the financial

impacts of standards on manufacturers

is the GRIM. In phase 2, we used GRIM

to perform a "strawman" industry cash

flow analysis. Section III.c below,

describes briefly the GRIM's operating

principles.

Given the relatively small number of

firms in the industry, the Department

proposed to create an Industry Cash

Flow Analysis using a "bottom-up"

approach. Essentially, each

manufacturer was asked to provide its

own cash flow analysis to be aggregated

with all other manufacturer submittals.

In order to facilitate individual

manufacturer analysis, the Department

prepared "strawman" scenarios for a

"prototypical" manufacturer from

publicly available financial information.

Manufacturers then performed their

individual cash flows by modifying

relevant parameters in the strawman to

meet their own situation (price, cost,

financial, shipments, etc.).

For the strawman, the Department

prepared a list of financial values to be

used in the GRIM industry analysis. We

estimated these by studying publicly

available financial statements of

fluorescent lamp ballast manufacturers.

A detailed definition of financial inputs

and their values for a "prototypical"

ballast manufacturer is contained in

Attachment C of the document, entitled

"Financial Inputs to GRIM for the

Ballast Rulemaking Analysis." We

derived strawman values for prices from

the Bureau of Census' Current Industrial

Reports (CIRs). The dollar value of

ballast shipments from factories is

divided by the quantity of ballasts

shipped to arrive at the per unit

manufacturer price. In order to estimate

manufacturing costs-labor, materials,

depreciation/tooling, etc.-from the

average manufacturer prices obtained

from CIRs, we developed a typical

ballast industry cost structure from

publicly available information from the

Census of Manufacturers (CMs) and

from transformer industry statistics

(SIC# 3612), and which we obtained

from Robert Morris Associates (RMA)

reports. Finally in preparing the draft

industry cash flow analysis, the

Department used the same ballast

shipment scenarios developed for the

NES spreadsheet.

3. Phase 3, Sub-Group Impact Analysis

The Department conducted detailed

interviews with ballast manufacturers

representing over 95 percent of

domestic ballast sales to gain insight

into the potential impacts of standards.

During these interviews, the Department

solicited the information necessary to

EE-RM-97-500 COMMENT 98A

14134 Federal Register/Vol. 65, No. 51 I Wednesday, March 15, 2000/Proposed Rules 

c. Manufacturer Impact Analysis and 

Government Regulatory Impact Model 

(GRIM) 

The manufacturer analysis estimates 

the financial impact of standards on 

manufacturers and calculates impacts 

on employment and manufacturing 

capacity. 

Prior to initiating the detailed 

manufacturing impact analysis for the 

ballast rulemaking, the Department 

prepared a document titled "Ballast 

Manufacturer Impact Analysis 

Analytical Approach." This document 

was presented at a public workshop 

held on April 28, 1998. We developed 

the approach from the general 

framework for Manufacturing Impact 

Analyses presented by the Department 

in March 1997 and modified for its 

application to the ballast rule. The 

document outlined procedural steps and 

identified issues for consideration. 

As proposed in the Approach 

document, the manufacturer impact 

analyses (MIA) was conducted in four 

phases. Phase 1, Industry Profile and 

Issue Definition, consisted of two 

activities, namely, preparation of an 

industry characterization and the 

conduct of an issue identification 

workshop. The second phase, 

"Strawman" Industry Cash Flow, had as 

its focus the larger industry. In this 

phase, the GRIM was used to prepare a 

"strawman" industry cash flow 

analysis. Here the Department used 

publicly available information 

developed in Phase 1 to adapt the GRIM 

model structure to facilitate the analysis 

of new ballast standards. In the Phase 3, 

Sub-Group Impact Analysis, individual 

manufacturers used the strawman cash 

flow as a template from which 

individual company level cashflows 

were developed from GRIM. Phase 3 

also entailed the documentation of 

additional impacts on employment and 

manufacturing capacity through an 

interview process. Finally in Phase 4, 

Industry Cash Flow, individual cash 

flows were aggregated into three groups, 

one including all manufacturers, a 

second including full line 

manufacturers of magnetic and 

electronic ballasts, and a third including 

manufacturers producing only 

electronic ballasts. 

1. Phase 1, Industry Profile and Issue 

Definition 

Phase 1 of the Manufacturer Impact 

Analysis consisted of two activities, 

namely, preparation of an Industry 

Characterization, and the conduct of an 

issue analysis workshop. Prior to 

initiating the detailed impact studies, 

the Department received input on the 

present and past structure and market 

characteristics of the ballast industry. 

This activity involved both quantitative 

and qualitative efforts to assess the 

industry and products to be analyzed. 

Issues addressed included manufacturer 

market shares and characteristics; trends 

in number of firms; the financial 

situation of manufacturers; and trends 

in ballast characteristics and markets. 

We presented publicly available 

quantitative data published by U.S. 

Bureau of Census with regards to the 

ballast industry at the April 28, 1998, 

workshop. These reports include such 

statistics as the number of companies, 

manufacturing establishments, 

employment, payroll, value added, cost 

of materials consumed, capital 

expenditures, product shipments, and 

concentration ratios. 

To further assist in performing the 

Industry Profile and to define key 

issues, the Department conducted a 

series of interviews with ballast 

manufacturers in late 1996 and early 

1997. DOE distributed summaries of 

these interviews at the "Public 

Workshop on the Revised Life Cycle 

Cost and Engineering Analysis of 

Fluorescent Lamp Ballasts," held on March 18, 1997. 

The interviews and review of public 

literature suggested that the following 

guidelines be followed to assess the 

impacts of a new ballast standard. First, 

the Manufacturer Impact Analysis 

should be performed on a company-bycompany basis and the industry impact 

constructed from an aggregation of 

impacts on individual companies. 

Second, the analysis should recognize 

the increasingly global nature of the 

ballast industry. Gains or losses in U.S. 

sales will have consequences for 

manufacturers regardless of where their 

production facilities are located. Where 

possible, the analysis should be 

structured to assess impacts at U.S. 

National, North American, and Global 

levels. Finally, the Manufacturer Impact 

Analysis should include consideration 

of direct industry suppliers and 

luminaire and lamp manufacturers. The 

Department rec:ognized that 

manufacturers do not operate in 

isolation and that changes in production 

levels or economic health of a 

manufacturer can have significant 

impacts on its suppliers and other trade 

allies. 

2. Phase 2, "Strawman" Industry Cash 

Flow 

Phase 2 of the manufacturer analyses 

has as its focus the "larger" industry. As 

such, this phase resembles the 

Department's past practice of modeling 

a "prototypical" firm with average 

industry values. The analytical tool 

used for calculating the financial 

impacts of standards on manufacturers 

is the GRIM. In phase 2, we used GRIM 

to perform a "strawman" industry cash 

flow analysis. Section m.c below, 

describes briefly the GRIM's operating 

principles. 

Given the relatively small number of 

firms in the industry, the Department 

proposed to create an Industry Cash 

Flow Analysis using a "bottom-up" 

approach. Essentially, each ~ 

manufacturer was asked to provide its 

own cash flow analysis to be aggregated 

with all other manufacturer submittals. 

In order to facilitate individual 

manufacturer analysis, the Department 

prepared "strawman" scenarios for a 

"prototypical" manufacturer from 

publicly available financial information. 

Manufacturers then performed their 

individual cash flows by modifying 

relevant parameters in the strawman to 

meet their own situation (price, cost, 

financial, shipments, etc.). 

For the strawman, the Department 

prepared a list of financial values to be 

used in the GRIM industry analysis. We 

estimated these by studying publicly 

available financial statements of 

fluorescent lamp ballast manufacturers. 

A detailed definition of financial inputs 

and their values for a "prototypical" 

ballast manufacturer is contained in 

Attachment C of the document, entitled 

"Financial Inputs to GRIM for the 

Ballast Rulemaking Analysis." We 

derived strawman values for prices from 

the Bureau of Census' Current Industrial 

Reports (CIRs). The dollar value of 

ballast shipments from factories is 

divided by the quantity of ballasts 

shipped to arrive at the per unit 

manufacturer price. In order to estimate 

manufacturing costs-labor, materials, 

depreciation/tooling, etc.-from the 

average manufacturer prices obtained 

from CIRs, we developed a typical 

ballast industry cost structure from 

publicly available information from the 

Census of Manufacturers (CMs) and 

from transformer industry statistics 

(SIC# 3612), and which we obtained 

from Robert Morris Associates (RMA) 

reports. Finally in preparing the draft 

industry cash flow analysis, the 

Department used the same ballast 

shipment scenarios developed for the 

NES spreadsheet. 

3. Phase 3, Sub-Group Impact Analysis 

The Department conducted detailed 

interviews with ballast manufacturers 

representing over 95 percent of 

domestic ballast sales to gain insight 

into the potential impacts of standards. 

During these interviews, the Department 

solicited the information necessary to 
Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules

evaluate cashflows and to assess

employment and capacity impacts.

The interview process had a key role

in the manufacturer impact analyses,

since it provided an opportunity for

manufacturers to express privately their

views on important issues and provide

confidential information needed to

assess financial, employment and other

business impacts. To support the

development of company cashflows, the

interview guide solicited information on

the possible impacts of new standards

on manufacturing costs, product prices,

and sales. The evaluation of the possible

impacts on direct employment, and

assets also drew heavily on the

information gathered during the

interviews. The interview guide

solicited both qualitative and

quantitative information. We requested

supporting information whenever

applicable.

DOE asked interview participants to

identify all confidential information

provided in writing or orally.

Approximately two weeks following the

interview, we provided an interview

summary to give manufacturers the

opportunity to confirm the accuracy and

protect the confidentiality of all

collected information.

4. Phase 4, Industry Cash Flow

As previously described, we used the

GRIM spreadsheet and an interview

guide to perform the ballast

Manufacturer Impact Analysis on a

company-by-company basis. This

process has the benefit of enabling the

impacts of standards to be evaluated at

multiple levels of aggregation. The total

industry impact was constructed from

an aggregation of impacts on individual

companies. The Department aggregated

the individual cash flows into three

groups, one including all manufacturers,

a second including full line

manufactures of magnetic and electronic

ballasts only, and a third group

including manufacturers producing only

electronic ballasts. This aggregation

scheme was selected as the most

representative of the range of impacts on

individual manufactures compared to

the industry aggregate values.

5. GRIM Spreadsheet

A change in standards affects a

manufacturer's cashflow in three

distinct ways. Increased levels of

standards will: (1) Require additional

investment; (2) raise production costs;

and (3) affect revenue through higher

prices and, possibly, lower quantities

sold. To quantify these changes, the

Department performs an industry and

manufacturer cashflow analyses using

the GRIM.

The GRIM analysis uses a number of

inputs-annual ballast shipments;

ballast prices; manufacturer costs such

as materials and labor, selling and

general administration costs, taxes, and

capital expenditures-to arrive at a

series of annual cash flows beginning

from before implementation of

standards and continuing explicitly for

several years after implementation. The

measure of industry net present values

are calculated by discounting the annual

cash flows from the period before

implementation of standards to some

future point in time. Additional

information about the GRIM spreadsheet

can be found in Chapter 6 of the TSD.

d. HEMS Environmental Analysis

The environmental analysis provides

estimates of changes in emissions of

nitrogen oxides (NOx) and carbon from

carbon dioxide (CO2). The Department

used NEMS-BRS for the fluorescent

ballast environmental analyses (as well

as the utility analyses). NEMS-BRS is

run similar to the AE099 NEMS except

that commercial lighting energy usage is

reduced by the amount of energy

(electricity) saved due to proposed

ballast standards. The input of energy

savings are obtained from the NES

spreadsheet. For the environmental

analysis, the output is the forecasted

physical emissions. The net benefits of

the standard is the difference between

emissions estimated by NEMS-BRS and

the AE099 Reference Case.

The environmental analysis is

relatively straightforward from NEMSBRS. Carbon emissions are tracked in

NEMS-BRS using a detailed carbon

module that provides robust results

because of its broad coverage of all

sectors and inclusion of interactive

effects. The only form of carbon tracked

by NEMS-BRS is CO2. However, in this

report the carbon savings are reported as

elemental carbon.

The two airborne pollutant emissions

that have been reported in past analyses,

SO2 and NOx, are reported by NEMSBRS. NOx results are based on forecasts

of compliance with existing legislation.

In the case of SO2, the Clean Air Act

Amendments of 1990 set an emissions

cap on all power generation. The

attainment of this target, however, is

flexible among generators and is

enforced by applying market forces,

through the use of emissions allowances

and tradable permits. As a result,

accurate simulation of SO2 trading tends

to imply that physical emissions effects

will be zero because emissions will

always be at, or near, the ceiling. This

fact has caused considerable confusion

in the past. There is virtually no real

possible SO2 environmental benefit

14135

from electricity savings as long as there

is enforcement of the emission ceilings.

Please see Appendix D of the TSD for

a discussion of this issue.

Alternative price forecasts

corresponding to the high and low

economic growth side cases found in

AEO99 have also been generated for use

by NES and will be explored in a similar

fashion with NEMS-BRS runs.

IV. Discussion of Comments

As noted above, the DOE proposed to

revise the energy conservation standards

applicable to fluorescent lamp ballasts

on March 4, 1994. On January 31, 1995,

the Department published a rulemaking

determination that, based on comments

received, it would issue a revised notice

of proposed rulemaking for fluorescent

lamp ballasts. Since that time, the

Department conducted numerous

meetings, workshops and discussions

regarding energy efficiency standards

for fluorescent lamp ballasts, resulting

in a Draft Report on Potential Impact of

Possible Energy Efficiency Levels for

Fluorescent Lamp Ballasts, July, 1997;

Summary of Inputs for the Technical

Support Document: Energy Efficiency

Standards for Fluorescent Lamp

Ballasts, April 20, 1998; and Ballast

Manufacturer Impact Analysis

Analytical Approach, April 10, 1998. 62

FR 38222 (July 17, 1997) and 63 FR

16706 (April 6, 1998). A workshop was

conducted on these analyses and

documents on April 28, 1998. 63 FR

16706 (April 6, 1998). Based on

comments and the growing popularity

of electronic ballasts with T8 lamps, the

Department solicited further comments

specifically on the issue of whether

market shifts (e.g., from T12 to T8

lamps) should be considered in

determining the impact of an energy

conservation standard on commercial

and industrial consumers,

manufacturers and the nation. 63 FR

58330 (October 30, 1998). Further

comments on the above analyses, and

modifications resulting from those

comments, culminated in publishing an

analysis on the Codes and Standards

Internet site (http://www.eren.doe.gov/

buildings/codes_standards/applbrf/

ballast.html) in April of 1999. We also

conducted a workshop on that analysis

on June 1, 1999. 64 FR 24634 (May 7,

1999). These analyses presented the

impacts of standards on consumers, the

nation and manufacturers. The

Department considers all comments

regarding this rulemaking made prior to

the three documents and posted revised

analyses listed above, to have been

resolved or contained within comments

pertaining to those documents.

Therefore, in today's notice of proposed

EE-RM-97-500 COMMENT 98A

Federal Register /VoI. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 14135 

evaluate cashflows and to assess 

employment and capacity impacts. 

The interview process had a key role 

in the manufacturer impact analyses, 

since it provided an opportunity for 

manufacturers to express privately their 

views on important issues and provide 

confidential information needed to 

assess financial, employment and other 

business impacts. To support the 

development of company cashflows, the 

interview guide solicited information on 

the possible impacts of new standards 

on manufacturing costs, product prices, 

and sales. The evaluation of the possible 

impacts on direct employment, and 

assets also drew heavily on the 

information gathered during the 

interviews. The interview guide 

solicited both qualitative and 

quantitative information. We requested 

supporting information whenever 

applicable. 

DOE asked interview participants to 

identify all confidential information 

provided in writing or orally. 

Approximately two weeks following the 

interview, we provided an interview 

summary to give manufacturers the 

opportunity to confirm the accuracy and 

protect the confidentiality of all 

collected information. 

4. Phase 4, Industry Cash Flow 

As previously described, we used the 

GRIM spreadsheet and an interview 

guide to perform the ballast 

Manufacturer Impact Analysis on a 

company-by-company basis. This 

process has the benefit of enabling the 

impacts of standards to be evaluated at 

multiple levels of aggregation. The total 

industry impact was constructed from 

an aggregation of impacts on individual 

companies. The Department aggregated 

the individual cash flows into three 

groups, one including all manufacturers, 

a second including full line 

manufactures of magnetic and electronic 

ballasts only, and a third group 

including manufacturers producing only 

electronic ballasts. This aggregation 

scheme was selected as the most 

representative of the range of impacts on 

individual manufactures compared to 

the industry aggregate values. 

5. GRIM Spreadsheet 

A change in standards affects a 

manufacturer's cashflow in three 

distinct ways. Increased levels of 

standards will: (1) Require additional 

investment; (2) raise production costs; 

and (3) affect revenue through higher 

prices and, possibly, lower quantities 

sold. To quantify these changes, the 

Department performs an industry and 

manufacturer cashflow analyses using 

the GRIM. 

The GRIM analysis uses a number of 

inputs-annual ballast shipments; 

ballast prices; manufacturer costs such 

as materials and labor, selling and 

general administration costs, taxes, and 

capital expenditures-to arrive at a 

series of annual cash flows beginning 

from before implementation of 

standards and continuing explicitly for 

several years after implementation. The 

measure of industry net present values 

are calculated by discounting the annual 

cash flows from the period before 

implementation of standards to some 

future point in time. Additional 

information about the GRIM spreadsheet 

can be found in Chapter 6 of the TSD. 

d. NEMS Environmental Analysis 

The environmental analysis provides 

estimates of changes in emissions of 

nitrogen oxides (NOx) and carbon from 

carbon dioxide (C02), The Department 

used NEM8-BRS for the fluorescent 

ballast environmental analyses (as well 

as the utility analyses). NEM8-BRS is 

run similar to the AE099 NEMS except 

that commercial lighting energy usage is 

reduced by the amount of energy 

(electricity) saved due to proposed 

ballast standards. The input of energy 

savings are obtained from the NES 

spreadsheet. For the environmental 

analysis, the output is the forecasted 

physical emissions. The net benefits of 

the standard is the difference between 

emissions estimated by NEM8-BRS and 

the AE099 Reference Case. 

The environmental analysis is 

relatively straightforward from NEMSBRS. Carbon emissions are tracked in 

NEM8-BRS using a detailed carbon 

module that provides robust results 

because of its broad coverage of all 

sectors and inclusion of interactive 

effects. The only form of carbon tracked 

by NEMS-BRS is CO2. However, in this 

report the carbon savings are reported as 

elemental carbon. 

The two airborne pollutant emissions 

that have been reported in past analyses, 

S02 and NOx, are reported by NEM8-

BRS. NOx results are based on forecasts 

of compliance with existing legislation. 

In the case of S02, the Clean Air Act 

Amendments of 1990 set an emissions 

cap on all power generation. The 

attainment of this target, however, is 

flexible among generators and is 

enforced by applying market forces, 

through the use of emissions allowances 

and tradable permits. As a result, 

accurate simulation of S02 trading tends 

to imply that physical emissions effects 

will be zero because emissions will 

always be at, or near, the ceiling. This 

fact has caused considerable confusion 

in the past. There is virtually no real 

possible S02 environmental benefit 

from electricity savings as long as there 

is enforcement of the emission ceilings. 

Please see Appendix D of the TSD for 

a discussion of this issue. 

Alternative price forecasts 

corresponding to the high and low 

economic growth side cases found in 

AE099 have also been generated for use 

by NES and will be explored in a similar 

fashion with NEMS-BRS runs. 

IV. Discussion of Comments 

As noted above, the DOE proposed to 

revise the energy conservation standards 

applicable to fluorescent lamp ballasts 

on March 4,1994. On January 31, 1995, 

the Department published a rulemaking 

determination that, based on comments 

received, it would issue a revised notice 

of proposed rulemaking for fluorescent 

lamp ballasts. Since that time, the 

Department conducted numerous 

meetings, workshops and discussions 

regarding energy efficiency standards 

for fluorescent lamp ballasts, resulting 

in a Draft Report on Potential Impact of 

Possible Energy Efficiency Levels for 

Fluorescent Lamp Ballasts, July, 1997; 

Summary of Inputs for the Technical 

Support Document: Energy Efficiency 

Standards for Fluorescent Lamp 

Ballasts, April 20, 1998; and Ballast 

Manufacturer Impact Analysis 

Analytical Approach, April 10, 1998. 62 

FR 38222 (July 17, 1997) and 63 FR 

16706 (April 6, 1998). A workshop was 

conducted on these analyses and 

documents on April 28, 1998. 63 FR 

16706 (April 6, 1998). Based on 

comments and the growing popUlarity 

of electronic ballasts with T8 lamps, the 

Department solicited further comments 

specifically on the issue of whether 

market shifts (e.g., from T12 to T8 

lamps) should be considered in 

determining the impact of an energy 

conservation standard on commercial 

and industrial consumers, 

manufacturers and the nation. 63 FR 

58330 (October 30, 1998). Further 

comments on the above analyses, and 

modifications resulting from those 

comments, culminated in publishing an 

analysis on the Codes and Standards 

Internet site (http://www.eren.doe.gov/ 

bUildings/codes_standards/applbrfl 

ballast.html) in April of 1999. We also 

conducted a workshop on that analysis 

on June 1, 1999. 64 FR 24634 (May 7, 

1999). These analyses presented the 

impacts of standards on consumers, the 

nation and manufacturers. The 

Department considers all comments 

regarding this rulemaking made prior to 

the three documents and posted revised 

analyses listed above, to have been 

resolved or contained within comments 

pertaining to those documents. 

Therefore, in today's notice of proposed 
14136 Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules

rulemaking, the Department is only

addressing comments made relative to

those documents. Additionally, the

National Electrical Manufacturers

Association (NEMA), the American

Council for an Energy Efficient

Economy (ACEEE), the Natural

Resources Defense Council (NRDC), the

Alliance to Save Energy (Alliance) and

the Oregon Energy Office (Oregon)

submitted a joint comment for amended

fluorescent lamp ballast standards.

(Joint Comment, No. 91). While these

stakeholders had previously commented

on the above three documents and the

web posting, the Department assumes,

based on their joint comment, that it

supercedes their previous comments.

Therefore, their previous comments are

not addressed in today's notice.

Life Cycle Cost Parameters

Electricity price: The Edison Electric

Institute and Mr. Glenn Schleede raised

questions about the electricity prices

used in the 1997 Report, particularly

about the possible effects of increased

competition in the utility industry on

prices. (EEI, No. 12 at 2-3 and Schleede,

No. 15 at 4-8 and 13-20 and No. 21 at

2-4).

To reflect increased competition in

the electricity industry due to

restructured markets, the AE099

reference case assumes a transition to

competitive retail pricing in five

regions-California, New York, New

England, the Mid-Atlantic Area Council

(consisting of Pennsylvania, Delaware,

New Jersey, and Maryland), and the

Mid-America Interconnected Network

(consisting of Illinois and parts of

Wisconsin and Missouri).6 The specific

restructuring plans differ from State to

State and utility to utility, but most call

for a transition period during which

customer access will be phased in.

The transition period reflects the time

needed for the establishment of

competitive market institutions and the

recovery of stranded costs as permitted

by regulators. The region-wide 10

percent rate reduction required in

California is represented. For the other

regions it is assumed that competition

will be phased in between 1999 and

2007, with fully competitive prices

beginning in 2008 . In all the

competitively priced regions, the

generation price (the price for the

energy alone) is set by the marginal cost

of generation. Transmission and

distribution prices are assumed to

remain regulated.

Several comments, including EEI and

Mr. Schleede suggested marginal

6 For more information on restructuring

assumptions, please see pp. 14-15 of the AE099.

electricity rates should be used instead

of average values. (EEI, No. 12 at 2,

Schleede, No. 15 at 6 and No. 21 at 3,

CDA, No. 25 at 2 and NEMA, No. 27 at

20-21). Mr. Schleede also suggested that

instead of using one electricity price for

all years of the analysis, a projection of

future electricity prices should be used.

(Schleede, No. 15 at 5).

In response to comments on marginal

energy prices, we performed a separate

analysis, whose goal was to generate

marginal electricity prices for the

commercial sector. Because of the large

number of electric utilities in the U.S.,

we chose a small subset of electric

utilities for this analysis. We analyzed

the electric bills (with and without

standards) of a large number of

commercial buildings in each of these

utility districts. In the TSD (see Chapter

4), we show how a distribution of

marginal electricity prices was obtained

from this analysis of rate schedules for

24 utilities for the year 1997. We

projected these marginal prices for each

future year of the analysis by using the

rate of decrease in the EIA Annual

Energy Outlook 1999, as shown in Table

4.2 in Chapter 4 of the TSD. Alternative

electricity price scenarios shown in

Table 4.2 are also available to users of

the Life Cycle Cost and National Energy

Savings spreadsheets.

Mr. Schleede indicated that the

sensitivity analysis, which considered

the full distribution of U.S. commercial

electricity prices, was an improvement

over the previous practice of just using

a point estimate. (Schleede, No. 21 at 1).

Additional comments on marginal

electricity prices were received after the

posting of analysis results on the DOE

web site in April of 1999.

Mr. Schleede stated DOE and its

contractors have continued their

ambivalence about removing fixed costs

from the life cycle cost calculations.

(Schleede, No. 76 at 1).

Mr. Schleede is incorrect. We have

used marginal electricity prices for all

life-cycle cost savings calculations and

there are no fixed costs in the marginal

electricity prices used as described in

Appendix B of the TSD.

EEI does not agree with the

calculations of "epsilon" values as

shown in the April 1999 text report

entitled Life Cycle Cost Results. EEI

would like to see how DOE handled the

issues of lighting load factors (e.g., the

amount of lighting actually used during

the day, such as 90 percent of the

fixtures) which affect kWh energy

reductions, and coincidence and

diversity factors which will affect the

kW demand reductions (and their

economic impact). (EEI, No.48 at 2).

The Department describes the method

in Appendix B of the TSD, Marginal

Energy Prices report: Demand

Decrement Due to Standards-The Role

of Lighting Coincidence and Diversity.

EEI commented that a line in the LCC

results writeup reads "the change in the

bill divided by the change in energy

usage yields the marginal electricity

price." EEI stated that this is not

analytically correct. For commercial

(and industrial) customers, there is a

marginal kWh price and a marginal kW

price that should not be "blended" for

a cost analysis. The change in the kWh

energy portion cost of the bill divided

by the change in energy usage yields the

marginal kWh energy price, and the

change in the kW demand cost of the

bill divided by the change in the peak

kW demand (monthly and/or on-peak)

yields the marginal kW demand price.

These two marginal costs are separate

and calculated differently. (EEI, No. 48

at 4).

The bill is a combination of the kWh

(energy) and kW (demand) components,

and the Department calculated them

separately in order to derive the

marginal electricity prices. The use of a

proportional demand decrement

(calculated as explained in Appendix B

of the TSD, Marginal Energy Prices)

enabled DOE to calculate each of the

contributions to bill savings associated

with kWh savings and kW savings.

Published sources for average

commercial prices (defined as revenues

from energy and demand charges

combined, divided by energy sales) are

expressed on a per kWh basis,

"blending" the energy and demand

charges. For consistency with those

sources of projected commercial energy

prices, the Department sees no practical

alternative to including the kW

(demand) savings component, expressed

on a per kWh basis, in the derivation of

marginal commercial prices.

EEI stated it is not sure how DOE

performed the calculation of epsilons

for industrial customers, as only the

procedure for commercial customers

was outlined in the text report (DOE

web posting of April, 1999). (EEI, No. 48

at 4).

The epsilon distribution calculated

for the commercial sector was also used

for calculating the industrial marginal

electricity prices from the industrial

average electricity prices.

EEI stated that DOE used the

"average" electric price, rather than the

marginal electricity price, on the

spreadsheet under the "Results" tab.

This has the result of showing more

favorable results for life cycle cost

savings, paybacks, and the globalized

EE-RM-97-500 COMMENT 98A

14136 Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

rulemaking, the Department is only 

addressing comments made relative to 

those documents. Additionally, the 

National Electrical Manufacturers 

Association (NEMA), the American 

Council for an Energy Efficient 

Economy (ACEEE), the Natural 

Resources Defense Council (NRDC), the 

Alliance to Save Energy (Alliance) and 

the Oregon Energy Office (Oregon) 

submitted a joint comment for amended 

fluorescent lamp ballast standards. 

(Joint Comment, No. 91). While these 

stakeholders had previously commented 

on the above three documents and the 

web posting, the Department assumes, 

based on their joint comment, that it 

supercedes their previous comments. 

Therefore, their previous comments are 

not addressed in today's notice. 

Life Cycle Cost Parameters 

Electricity price: The Edison Electric 

Institute and Mr. Glenn Schlee de raised 

questions about the electricity prices 

used in the 1997 Report, particularly 

about the possible effects of increased 

competition in the utility industry on 

prices. (EEl, No. 12 at 2-3 and Schleede, 

No. 15 at 4-8 and 13-20 and No. 21 at 

2-4). 

To reflect increased competition in 

the electricity industry due to . 

restructured markets, the AE099 

reference case assumes a transition to 

competitive retail pricing in five 

regions-{;alifornia. New York. New 

England. the Mid-Atlantic Area Council 

(consisting of Pennsylvania. Delaware. 

New Jersey. and Maryland), and the 

Mid-America Interconnected Network 

(consisting of Illinois and parts of 

Wisconsin and Missouri).6 The specific 

restructuring plans differ from State to 

State and utility to utility. but most call 

for a transition period during which 

customer access will be phased in. 

The transition period reflects the time 

needed for the establishment of 

competitive market institutions and the 

recovery of stranded costs as permitted 

by regulators. The region-wide 10 

percent rate reduction required in 

California is represented. For the other 

regions it is assumed that competition 

will be phased in between 1999 and 

2007. with fully competitive prices 

beginning in 2008. In all the 

competitively priced regions. the 

generation price (the price for the 

energy alone) is set by the marginal cost 

of generation. Transmission and 

distribution prices are assumed to 

remain regulated. 

Several comments. including EEl and 

Mr. Schleede suggested marginal 

6 For more infonnation on restructuring 

assumptions. please see pp. 14-15 of the AE099. 

electricity rates should be used instead 

of average values. (EEl. No. 12 at 2. 

Schleede. No. 15 at 6 and No. 21 at 3. 

CDA. No. 25 at 2 and NEMA. No. 27 at 

20-21). Mr. Schlee de also suggested that 

instead of using one electricity price for 

all years of the analysis. a projection of 

future electricity prices should be used. 

(Schleede, No. 15 at 5). 

In response to comments on marginal 

energy prices. we performed a separate 

analysis. whose goal was to generate 

marginal electricity prices for the 

commercial sector. Because of the large 

number of electric utilities in the U.S .. we chose a small subset of electric 

utilities for this analysis. We analyzed 

the electric bills (with and without 

standards) of a large number of 

commercial buildings in each of these 

utility districts. In the TSD (see Chapter 

4). we show how a distribution of 

marginal electricity prices was obtained 

from this analysis of rate schedules for 

24 utilities for the year 1997. We 

projected these marginal prices for each 

future year of the analysis by using the 

rate of decrease in the EIA Annual 

Energy Outlook 1999. as shown in Table 

4.2 in Chapter 4 of the TSD. Alternative 

electricity price scenarios shown in 

Table 4.2 are also available to users of 

the Life Cycle Cost and National Energy 

Savings spreadsheets. 

Mr. Schlee de indicated that the 

sensitivity analysis. which considered 

the full distribution of U.S. commercial 

electricity prices. was an improvement 

over the previous practice of just using 

a point estimate. (Schleede. No. 21 at 1). 

Additional comments on marginal 

electricity prices were received after the 

posting of analysis results on the DOE 

web site in April of 1999. 

Mr. Schleede stated DOE and its 

contractors have continued their 

ambivalence about removing fixed costs 

from the life cycle cost calculations. 

(Schleede. No. 76 at 1). 

Mr. Schleede is incorrect. We have 

used marginal electricity prices for all 

life-cycle cost savings calculations and 

there are no fixed costs in the marginal 

electricity prices used as described in 

Appendix B of the TSD. 

EEl does not agree with the 

calculations of "epsilon" values as 

shown in the April 1999 text report 

entitled Life Cycle Cost Results. EEl 

would like to see how DOE handled the 

issues of lighting load factors (e.g., the 

amount of lighting actually used during 

the day. such as 90 percent of the 

fixtures) which affect kWh energy 

reductions, and coincidence and 

diversity factors which will affect the 

kW demand reductions (and their 

economic impact). (EEl. No.48 at 2). 

The Department describes the method 

in Appendix B of the TSD. Marginal 

Energy Prices report: Demand 

Decrement Due to Standards-The Role 

of Lighting Coincidence and Diversity. 

EEl commented that a line in the LCC 

results writeup reads "the change in the 

bill divided by the change in energy 

usage yields the marginal electricity 

price." EEl stated that this is not 

analytically correct. For commercial 

(and industrial) customers. there is a 

marginal kWh price and a marginal kW 

price that should not be "blended" for 

a cost analysis. The change in the kWh 

energy portion cost of the bill divided 

by the change in energy usage yields the 

marginal kWh energy price. and the 

change in the kW demand cost of the 

bill divided by the change in the pe'ak 

kW demand (monthly and/or on-peak) 

yields the marginal kW demand price. 

These two marginal costs are separate 

and calculated differently. (EEL No. 48 

at 4). 

The bill is a combination of the kWh 

(energy) and kW (demand) components. 

and the Department calculated them 

separately in order to derive the 

marginal electricity prices. The use of a 

proportional demand decrement 

(calculated as explained in Appendix B 

of the TSD. Marginal Energy Prices) 

enabled DOE to calculate each of the 

contributions to bill savings associated 

with kWh savings and kW savings. 

Published sources for average 

commercial prices (defined as revenues 

from energy and demand charges 

combined. divided by energy sales) are 

expressed on a per kWh basis. 

"blending" the energy and demand 

charges. For consistency with those 

sources of projected commercial energy 

prices. the Department sees no practical 

alternative to including the kW 

(demand) savings component. expressed 

on a per kWh basis. in the derivation of 

marginal commercial prices. 

EEl stated it is not sure how DOE 

performed the calculation of epsilons 

for industrial customers. as only the 

procedure for commercial customers 

was outlined in the text report (DOE 

web posting of April. 1999). (EEL No. 48 

at 4). 

The epsilon distribution calculated 

for the commercial sector was also used 

for calculating the industrial marginal 

electricity prices from the industrial 

average electricity prices. 

EEl stated that DOE used the 

"average" electric price. rather than the 

marginal electricity price. on the 

spreadsheet under the "Results" tab. 

This has the result of showing more 

favorable results for life cycle cost 

savings. paybacks. and the globalized 
Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules 14137

percentage of winners and losers. (EEI,

No. 48 at 4).

The results (life-cycle cost savings,

payback and percent winners and

losers) are calculated using marginal

prices applied to electricity savings. The

sheet titled "Results" in the LCC version

4 spreadsheet does use average values

for the purpose of calculating a lifecycle cost for each technology.

However, this sheet was only provided

as a check to allow the user to estimate

LCC and payback periods using average

values and then compare them to the

results obtained with distributions (in

Crystal Ball) for the main inputs. We

will relabel the "Results" sheet to "LCC

and Payback Periods Using Average

Values for All Inputs" to avoid

confusion in any future analysis.

Mr. Schleede stated that electricity

prices are falling faster than the EIA

forecast in Annual Energy Outlook,

1998 and 1999 Reference cases.

(Schleede, No. 76 at 1).

DOE used the EIA forecast over the

period 2003-2030. The rate of decrease

over the last few years is influenced by

electricity deregulation and seems

unlikely to translate into a 27 year

trend.

Mr. Schleede stated that there is a

wide variation in electricity prices and

many people and organizations would

be forced to incur higher life cycle costs

if DOE proceeds with ballast standards.

(Schleede, No. 76 at 1).

The Department uses a distribution of

electricity prices as input to its LCC

analysis and reports the percentage of

end-users with higher and lower LCC

from ballast standards.

Annual Lighting Hours: The values

we used for annual lighting hours in the

1997 Report were based on average

values from energy audits performed by

Xenergy, Inc. on over 25,000 buildings

between 1990 and 1994, as described in

Section A.4 of the 1997 Report.

EEI asked that a +/ - range be given

for the average annual operating hours.

(EEI, No. 12 at 3).

We are using ranges of annual lighting

operation hours, as shown in Figures 4.4

through 4.9 of the TSD, in calculating

consumer life cycle costs. These

distributions range from less than 200

hours of use to over 8,000 hours.

Other LCC Inputs: EEI asked if U-tube

lamps were included. (EEI, No. 12 at 3).

U-tube lamps are driven by the same

ballasts as straight-tube lamps;

therefore, we did not conduct separate

LCC analyses for them (the wattages and

lamp prices are only slightly different).

Ballasts that drive U-tube lamps are

included in the NEMA data to generate

shipments data for the NES (see

National Energy Savings below).

EEI suggested that F96T8 lamp

ballasts be included in the analysis.

(EEI, No. 12 at 3). Other comments, on

the limited re-opening of the record,

also suggested including 8-foot T8

ballasts. (Osram Sylvania Inc, No. 34 at

3 and Motorola Lighting Inc., No. 33 at

2 and ACEEE, No. 77 at 3).

Since F96T8 lamp/ballast systems

have small market shares, the

Department did not collect data and

analyze them separately or include them

in today's proposed rule.

International Consulting Services

(ICS) asked that the faster lumen

depreciation of T8s be taken into

account. (ICS, No. 17 at 5).

The Lighting Upgrade Manual

published by EPA's Green Lights

Program (EPA-430-B-95-009),

February 1997 edition, Lighting

Maintenance section, page 3, has a

graph of lamp lumen depreciations. The

four-foot T8 lamps have a flatter lamp

lumen depreciation curve than do the

four-foot T12 lamps, showing that T8s

have slower lumen depreciation than

T12. The same is true for the eight-foot

T12 and T8 lamps. However, we did not

consider this effect in the LCC analysis,

as it does not generally impact lamp

lifetime or relamping times, and,

therefore, does not affect the result of

the analysis.

National Energy Impacts

In the 1997 Report, we used the

COMMEND model to project ballast

sales and National Energy Impacts. In

response to comments that COMMEND

was difficult to understand and use, we

developed a spreadsheet calculation

tool for use in the TSD analyses as was

previously discussed under

Methodology. We used the NES

spreadsheet to estimate national energy

savings and economic parameters.

We divided the comments received on

national energy impacts into five

categories: COMMEND-related

comments, the NES model and

approach, shipments and market shares,

lighting/HVAC (heating, ventilating, and

air conditioning) interactions, and nonregulatory programs.

COMMEND-Related Comments

Several issues on COMMEND (e.g.,

ballast sales) were raised by comments.

Since today's analysis uses the NES

spreadsheet model instead of

COMMEND, these issues are no longer

relevant and are not addressed.

Non-Regulatory Programs

EEI suggested that the impacts of

voluntary efficiency programs should be

more adequately taken into account. It

also observed that although the dollar

amount spent on Demand Side

Management (DSM) programs has

declined in recent years, the numbers of

ballasts installed because of DSM

programs may still have remained the

same or even increased, since the price

differential between magnetic and

electronic ballasts has gone down (EEI,

No. 12 at 1).

Since the NES spreadsheet that we

used to calculate energy savings

requires projections of future ballast

shipments as an input, we must makesome assumptions concerning the

annual shipments of energy efficient

magnetic (EEM) ballasts under a

scenario of no amended standards.

Since it is not possible to know how

these shipments will change in the

future, the Department decided to

analyze several possible future

scenarios. The influence of nonregulatory programs on magnetic ballast

shipments is implicitly accounted for in

these shipment scenarios (described in

Chapter 5 of the TSD and also later in

this proposed rule). Scenarios in which

magnetic ballast shipments continue to

decline over time, reflect some level of

continued impact of non-regulatory

incentive programs. See section V below

for a more detailed description of the

assumptions of these scenarios.

Since the release of the 1997 Report,

the Department has undertaken a more

detailed analysis of non-regulatory

program impacts on the ballast market

by studying utility DSM program

impacts, ASHRAE/IES building code

impacts, EPA Green Lights/EPA-DOE

Energy Star Buildings, and DOE FEMP

programs. We conducted a study 7 to

estimate the number of fluorescent

ballasts affected by DSM rebates from

1992 to 1997. We combined detailed

analysis of data on spending amounts

and units receiving rebates from several

major utilities, accounting for up to 30

percent of the national total, with EIA

estimates of national energy efficiency

spending to produce estimates of

ballasts rebated. Results indicate that

the number of rebates and the

percentage of the ballast market affected

by rebates have both declined since

1995, at the same time that the magnetic

ballast market began to level off. Under

EPACT, the states are upgrading their

building codes to match the lighting

provisions in ASHRAE/IES Standard

90.1-1989. When revised as Standard

90.1-1999, the code's lower lighting

power density limits will be an

incentive for increasing use of electronic

7 Busch, Chris, Turiel, I., Atkinson, B.A.,

McMahon, J.E., Eto, J.H. 1999. "DSM Rebates for

Electronic Ballasts: National Estimates (1992-1997)

and Assessment of Market Impact." Lawrence

Berkeley National Laboratory.

EE-RM-97-500 COMMENT 98A

Federal Register IVo!. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 14137 

percentage of winners and losers. (EEl, 

No. 48 at 4). 

The results (life-cycle cost savings, 

payback and percent winners and 

losers) are calculated using marginal 

prices applied to electricity savings. The 

sheet titled "Results" in the LCC version 

4 spreadsheet does use average values 

for the purpose of calculating a lifecycle cost for each technology. 

However, this sheet was only provided 

as a check to allow the user to estimate 

LCC and payback periods using average 

values and then compare them to the 

results obtained with distributions (in 

Crystal Ball) for the main inputs. We 

will relabel the "Results" sheet to "LCC 

and Payback Periods Using Average 

Values for All Inputs" to avoid 

confusion in any future analysis. 

Mr. Schleede stated that electricity 

prices are falling faster than the EIA 

forecast in Annual Energy Outlook, 

1998 and 1999 Reference cases. (Schleede, No. 76 at 1). 

DOE used the EIA forecast over the 

period 2003-2030. The rate of decrease 

over the last few years is influenced by 

electricity deregulation and seems 

unlikely to translate into a 27 year 

trend. 

Mr. Schleede stated that there is a 

wide variation in electricity prices and 

many people and organizations would 

be forced to incur higher life cycle costs 

if DOE proceeds with ballast standards. 

(Schleede, No. 76 at 1). 

The Department uses a distribution of 

electricity prices as input to its LeC 

analysis and reports the percentage of 

end-users with higher and lower LCC 

from ballast standards. 

Annual Lighting Hours: The values 

we used for annual lighting hours in the 

1997 Report were based on average 

values from energy audits performed by 

Xenergy, Inc. on over 25,000 buildings 

between 1990 and 1994, as described in 

Section A.4 of the 1997 Report. 

EEl asked that a +1 - range be given 

for the average annual operating hours. 

(EEl, No. 12 at 3). 

We are using ranges of annual lighting 

operation hours, as shown in Figures 4.4 

through 4.9 of the TSD, in calculating 

consumer life cycle costs. These 

distributions range from less than 200 

hours of use to over 8,000 hours. 

Other LCC Inputs: EEl asked if U-tube 

lamps were included. (EEl, No. 12 at 3). 

U-tube lamps are driven by the same 

ballasts as straight-tube lamps; 

therefore, we did not conduct separate 

LCC analyses for them (the wattages and 

lamp prices are only slightly different). 

Ballasts that drive U-tube lamps are 

included in the NEMA data to generate 

shipments data for the NES (see 

National Energy Savings below). 

EEl suggested that F96T8lamp 

ballasts be included in the analysis. 

(EEl, No. 12 at 3). Other comments, on 

the limited re-opening of the record, 

also suggested including 8-foot T8 

ballasts. (Osram Sylvania Inc, No. 34 at 

3 and Motorola Lighting Inc., No. 33 at 

2 and ACEEE, No. 77 at 3). 

Since F96T8 lamplballast systems 

have small market shares, the 

Department did not collect data and 

analyze them separately or include them 

in today's proposed rule. 

International Consulting Services 

(ICS) asked that the faster lumen 

depreciation of T8s be taken into 

account. (ICS, No. 17 at 5). 

The Lighting Upgrade Manual 

published by EPA's Green Lights 

Program (EPA-43D-B-95-D09), 

February 1997 edition, Lighting 

Maintenance section, page 3, has a 

graph of lamp lumen depreciations. Tl,le 

four-foot T8 lamps have a flatter lamp 

lumen depreciation curve than do the 

four-foot T12 lamps, showing that T8s 

have slower lumen depreciation than 

T12. The same is true for the eight-foot 

T12 and T8lamps. However, we did not 

consider this effect in the LCC analysis, 

as it does not generally impact lamp 

lifetime or relamping times, and, 

therefore, does not affect the result of 

the analysis. 

National Energy Impacts 

In the 1997 Report, we used the 

COMMEND model to project ballast 

sales and National Energy Impacts. In 

response to comments that COMMEND 

was difficult to understand and use, we 

developed a spreadsheet calculation 

tool for use in the TSD analyses as was 

previously discussed under 

Methodology. We used the NES 

spreadsheet to estimate national energy 

savings and economic parameters. 

We divided the comments received on 

national energy impacts into five 

categories: COMMEND-related 

comments, the NES model and 

approach, shipments and market shares, 

lighting/HV AC (heating, ventilating, and 

air conditioning) interactions, and nonregulatory programs. 

COMMEND-Related Comments 

Several issues on COMMEND (e.g., 

ballast sales) were raised by comments. 

Since today's analysis uses the NES 

spreadsheet model instead of 

COMMEND, these issues are no longer 

relevant and are not addressed. 

Non-Regulatory Programs 

EEl suggested that the impacts of 

voluntary efficiency programs should be 

more adequately taken into account. It 

also observed that although the dollar 

amount spent on Demand Side 

Management (DSM) programs has 

declined in recent years, the numbers of 

ballasts installed because of DSM 

programs may still have remained the 

same or even increased, since the price 

differential between magnetic and 

electronic ballasts has gone down (EEl, 

No. 12 at 1). 

Since the NES spreadsheet that we 

used to calculate energy savings 

requires projections of future ballast 

shipments as an input, we must makesome assumptions concerning the 

annual shipments of energy efficient 

magnetic (EEM) ballasts under a 

scenario of no amended standards. 

Since it is not possible to know how 

these shipments will change in the 

future, the Department decided to 

analyze several possible future 

scenarios. The influence of nonregulatory programs on magnetic ballast 

shipments is implicitly accounted for in 

these shipment scenarios (described in 

Chapter 5 of the TSD and also later in 

this proposed rule). Scenarios in which 

magnetic ballast shipments continue to 

decline over time, reflect some level of 

continued impact of non-regulatory 

incentive programs. See section V below 

for a more detailed description of the 

assumptions of these scenarios. 

Since the release of the 1997 Report, 

the Department has undertaken a more 

detailed analysis of non-regulatory 

program impacts on the ballast market 

by studying utility DSM program 

impacts, ASHRAE/lES building code 

impacts, EPA Green Lights/EPA-DOE 

Energy Star Buildings, and DOE FEMP 

programs. We conducted a study 7 to 

estimate the number of fluorescent 

ballasts affected by DSM rebates from 

1992 to 1997. We combined detailed 

analysis of data on spending amounts 

and units receiving rebates from several 

major utilities, accounting for up to 30 

percent of the national total, with ElA 

estimates of national energy efficiency 

spending to produce estimates of 

ballasts rebated. Results indicate that 

the number of rebates and the 

percentage of the ballast market affected 

by rebates have both declined since 

1995, at the same time that the magnetic 

ballast market began to level off. Under 

EPACT, the states are upgrading their 

building codes to match the lighting 

provisions in ASHRAE/IES Standard 

90.1-1989. When revised as Standard 

90.1-1999, the code's lower lighting 

power density limits will be an 

incentive for increasing use of electronic 

7 Busch, Chris. Turiel, I., Atkinson, B.A., 

McMahon, J.E., Eto, J.H. 1999. "DSM Rebates for 

Electronic Ballasts: National Estimates (1992-1997) 

and Assessment of Market impact. " Lawrence 

Berkeley National Laboratory. 
14138 Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

ballasts. DOE is preparing a new code

for Federal buildings that will also

encourage the use of electronic ballasts.

The EPA programs (first Green Lights

and now the EPA-DOE Energy Star

Buildings) provide voluntary incentives

for lighting upgrades that include

electronic ballasts. The DOE FEMP

Procurement Challenge and Federal

Relighting Initiative are having modest

but important impacts increasing the

market share for electronic ballasts

purchased for Federal buildings. Other

programs such as the Voluntary

Luminaire Program created by the

National Lighting Collaborative under

EPACT, NEMA's Energy Cost Savings

Council, DOE's Rebuild America, and

DOE's Lighting Technology Roadmap

also provide incentives to move the

market toward more efficient

fluorescent ballasts.

Utility and Environmental Analyses

The NEMS has been used to estimate

impacts of ballast energy efficiency

standards on electric utilities. The

Department used a version of EIA's

NEMS, called NEMS-BRS, for the utility

and environmental analyses. NEMS

simulates the energy economy of the

U.S. and has been developed over

several years by the EIA primarily for

the purpose of preparing the Annual

Energy Outlook (AEO). NEMS produces

a widely-known baseline forecast for the

U.S. through 2020 that is available in

the public domain. NEMS-BRS offers a

picture of the effect of standards since

its scope allows it to measure the

interactions between the various energy

supply and demand sectors and the

economy as a whole.

Fuels for Electricity Generation: EEI

pointed out that projections for oil and

gas generation after 1995 are available

from GRI, EPRI, and EIA, and DOE

could use them in its analysis (EEI, No.

12 at 3).

Most analyses use EIA data such as

electric utility fuel prices as a starting

point. The important result for

estimating the effect of standards on

utility costs is not the overall fuel mix,

but the marginal effect on fuel

consumption and power plant

construction.

EEI stated that the values used for the

heat rate (for conversion of electricity

from site to source energy) are

overstated. It indicated that the analysis

is using the total U.S. generation

capacity (not a marginal capacity type of

analysis) and is using EIA methodology.

EEI asserts the values are overstated for

the following reason: EIA assigns the

same heat rate of fossil-fuel power

plants to renewable power plants. This

assumption creates an artificial heat rate

for hydroelectric, wind, solar, biomass,

and other forms of renewable energy.

For the approximately 10 percent (and

growing) portion of renewable

electricity generation, EIA assigns a

value of over 10,000 Btu/kWh to

generation that has 0 Btu/kWh or 3,412

Btu/kWh. EEI states this factor alone

leads to an overstatement of primary

energy savings. In addition, EEI asserts

that with the advent of restructuring,

there are many new technologies that

could lower the overall heat rate at a

much quicker rate than shown in the

1999 Annual Energy Outlook (AEO). EEI

proposes that the lower end of the

ranges for national energy savings

should be significantly lower to account

for this possibility. (EEI, No. 48 at 3).

Table 5.3 in the TSD shows the siteto-source heat rates used in our analysis

for the period 2003-2030. They are

average rates for the commercial sector

obtained from AE099. We have

compared these values to marginal

values we obtained from a NEMS

analysis. The marginal heat rate is the

change in fuel delivered to generating

stations divided by the change in

electricity sales. For the NEMS analysis,

we only considered thermal generation.

For most years in the analysis period,

the marginal heat rate was lower than

the average heat rate. Overall, if we had

used a marginal heat rate rather than the

average heat rate, source quads would

be reduced by about 4 percent.

EEI is in agreement with the analysis

showing a declining heat rate over the

analysis period. However, it asserts the

values shown in AEO 1999 should be

considered to be the high end of the

range of inputs for the analysis period.

(EEI, No. 48 at 3).

Other scenarios will show a faster rate

of decline in heat rates over the next 20-

30 years. The Department executed its

analysis using the AEO99 Reference

Case. The average heat rate extracted

from AEO99 and used in the analysis

declines from 10,871 Btu/kWh in year

2001 to 9,196 Btu/kWh in year 2030.

This is equivalent to increasing the

energy conversion efficiency of thermal

power generation from 31 percent to

almost 37 percent. This is a major

assumed improvement, especially given

that many generating assets in place

today will still be serving marginal duty

cycles during most of the forecast

period.

Conservation Load Factor: EEI also

stated that it was not clear how the

Conservation Load Factor (CLF) was

calculated, and asked if it was

calculated on a regional level first and

then aggregated, or at the national level

only. (EEI, No. 12 at 3).

The CLF is not used in the NEMS

analysis so this question is no longer

relevant.

SO2 and NOx emissions: EEI

suggested that because SO2 and NOX

emissions have declined over the past

several years, marginal emissions due to

energy savings will be lower than

average emissions. (EEI, No. 12 at 3).

Total emissions of SO2 are unlikely to

be affected by any policy, such as

efficiency standards, because emissions

are capped by legislation. The actual

reduction in NOx emissions will be

determined by which marginal thermal

generation is reduced through lower

electricity sales. Most new capacity is

likely to be both efficient and clean, and

therefore operate at low marginal cost

high in the dispatch order (i.e., utilities

will dispatch the newer, cleaner sources

before going to the older, more

expensive sources). Generation from

these new resources is therefore

unlikely to be reduced by a reduction in

electricity sales. On the contrary, it is

likely that the displaced generation will

be from older, dirtier plants low in the

dispatch order.

Appliance Standards Environmental

and Utility Model (ASEUM): EEI and Mr.

Schleede concurred that the ASEUM

model's methodology may be outdated

in an era of deregulated utilities that are

unlikely to remain vertically integrated.

(EEI, No. 12 at 4 and Schleede, No. 15

at 7-8).

It is true that the electric utility

industry is undergoing a radical

restructuring, and the assumptions of

cost recovery underlying ASEUM are

becoming dated. We agree that we

needed other methodologies to carry out

the utility analysis, and we used the

NEMS-NAECA for this purpose.

Ballast Market Shift (From T12

Magnetic to T8 Electronic)

The 1997 Report, and all previous

analyses, analyzed the impact of an

electronic ballast standard by essentially

assuming that users of magnetic ballasts

with T12 lamps would switch to

electronic ballasts with T12 lamps if the

former ballast type became obsolete. As

described in the Notice of Limited

Reopening of the Record and

Opportunity for Public Comment, the

Department solicited comments on

consideration of consumers who might

choose electronic ballast T8 systems

over electronic ballast T12 systems and

consumers who might choose electronic

ballasts over cathode cutout ballasts. 63

FR 58330 (October 30, 1998). DOE asked

for comments on certain aspects of both

the electronic ballast and the cathode

cutout ballast standard levels: Whether

a market shift from magnetic T12

EE-RM-97-500 COMMENT 98A

14138 Federal Register I Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

ballasts. DOE is preparing a new code 

for Federal buildings that will also 

encourage the use of electronic ballasts. 

The EPA programs (first Green Lights 

and now the EPA-DOE Energy Star 

Buildings) provide voluntary incentives 

for lighting upgrades that include 

electronic ballasts. The DOE FEMP 

Procurement Challenge and Federal 

Relighting Initiative are having modest 

but important impacts increasing the 

market share for electronic ballasts 

purchased for Federal buildings. Other 

programs such as the Voluntary 

Luminaire Program created by the 

National Lighting Collaborative under 

EPACT. NEMA's Energy Cost Savings 

Council. DOE's Rebuild America. and 

DOE's Lighting Technology Roadmap 

also provide incentives to move the 

market toward more efficient 

fluorescent ballasts. 

Utility and Environmental Analyses 

The NEMS has been used to estimate 

impacts of ballast energy efficiency 

standards on electric utilities. The 

Department used a version of ElA's 

NEMS, called NEMS-BRS, for the utility 

and environmental analyses. NEMS 

simulates the energy economy of the 

U.S. and has been developed over 

several years by the ElA primarily for 

the purpose of preparing the Annual 

Energy Outlook (AEO). NEMS produces 

a widely-known baseline forecast for the 

U.S. through 2020 that is available in 

the public domain. NEMS-BRS offers a 

picture of the effect of standards since 

its scope allows it to measure the 

interactions between the various energy 

supply and demand sectors and the 

economy as a whole. 

Fuels for Electricity Generation: EEl 

pointed out that projections for oil and 

gas generation after 1995 are available 

from GR!. EPR!, and ElA. and DOE 

could use them in its analysis (EEl, No. 

12 at 3). 

Most analyses use ElA data such as 

electric utility fuel prices as a starting 

point. The important result for 

estimating the effect of standards on 

utility costs is not the overall fuel mix, 

but the marginal effect on fuel 

consumption and power plant 

construction. 

EEl stated that the values used for the 

heat rate (for conversion of electricity 

from site to source energy) are 

overstated. It indicated that the analysis 

is using the total U.S. generation 

capacity (not a marginal capacity type of 

analysis) and is using ElA methodology. 

EEl asserts the values are overstated for 

the following reason: EIA assigns the 

same heat rate of fossil-fuel power 

plants to renewable power plants. This 

assumption creates an artificial heat rate 

for hydroelectric, wind. solar, biomass. 

and other forms of renewable energy. 

For the approximately 10 percent (and 

growing) portion of renewable 

electricity generation, ElA assigns a 

value of over 10,000 Btu/kWh to 

generation that has 0 Btu/kWh or 3,412 

Btu/kWh. EEl states this factor alone 

leads to an overstatement of primary 

energy savings. In addition. EEl asserts 

that with the advent of restructuring, 

there are many new technologies that 

could lower the overall heat rate at a 

much quicker rate than shown in the 

1999 Annual Energy Outlook (AEO). EEl 

proposes that the lower end of the 

ranges for national energy savings 

should be significantly lower to account 

for this possibility. (EEl, No. 48 at 3). 

Table 5.3 in the TSD shows the siteto-source heat rates used in our analysis 

for the period 2003-2030. They are 

average rates for the commercial sector 

obtained from AE099. We have 

compared these values to marginal 

values we obtained from a NEMS 

analysis. The marginal heat rate is the 

change in fuel delivered to generating 

stations divided by the change in 

electricity sales. For the NEMS analysis. 

we only considered thermal generation. 

For most years in the analysis period, 

the marginal heat rate was lower than 

the average heat rate. Overall, if we had 

used a marginal heat rate rather than the 

average heat rate. source quads would 

be reduced by about 4 percent. 

EEl is in agreement with the analysis 

showing a declining heat rate over the 

analysis period. However. it asserts the 

values shown in AEO 1999 should be 

considered to be the high end of the 

range of inputs for the analysis period. 

(EEl, No. 48 at 3). 

Other scenarios will show a faster rate 

of decline in heat rates over the next 20-

30 years. The Department executed its 

analysis using the AE099 Reference 

Case. The average heat rate extracted 

from AE099 and used in the analysis 

declines from 10.871 Btu/kWh in year 

2001 to 9,196 Btu/kWh in year 2030. 

This is equivalent to increasing the 

energy conversion efficiency of thermal 

power generation from 31 percent to 

almost 37 percent. This is a major 

assumed improvement. especially given 

that many generating assets in place 

today will still be serving marginal duty 

cycles during most of the forecast 

period. 

Conservation Load Factor: EEl also 

stated that it was not clear how the 

Conservation Load Factor (CLF) was 

calculated. and asked if it was 

calculated on a regional level first and 

then aggregated. or at the national level 

only. (EEl, No. 12 at 3). 

The CLF is not used in the NEMS 

analysis so this question is no longer 

relevant. 

S(h and NOx emissions: EEl 

suggested that because S02 and NOX 

emissions have declined over the past 

several years. marginal emissions due to 

energy savings will be lower than 

average emissions. (EEl, No. 12 at 3). 

Total emissions of S02 are unlikely to 

be affected by any policy, such as 

efficiency standards, because emissions 

are capped by legislation. The actual 

reduction in NOx emissions will be ~ 

determined by which marginal thermal 

generation is reduced through lower 

electricity sales. Most new capacity is 

likely to be both efficient and clean, and 

therefore operate at low marginal cost 

high in the dispatch order (i.e., utilities 

will dispatch the newer, cleaner sources 

before going to the older. more 

expensive sources). Generation from 

these new resources is therefore 

unlikely to be reduced by a reduction in 

electricity sales. On the contrary. it is 

likely that the displaced generation will 

be from older, dirtier plants low in the 

dispatch order. 

Appliance Standards Environmental 

and Utility Model (ASEUMj: EEl and Mr. 

Schleede concurred that the ASEUM 

model's methodology may be outdated 

in an era of deregulated utilities that are 

unlikely to remain vertically integrated. 

(EEl. No. 12 at 4 and Schleede. No. 15 

at 7-8). 

It is true that the electric utility 

industry is undergoing a radical 

restructuring, and the assumptions of 

cost recovery underlying ASEUM are 

becoming dated. We agree that we 

needed other methodologies to carry out 

the utility analysis, and we used the 

NEMS-NAECA for this purpose. 

Ballast Market Shift (From T12 

Magnetic to T8 Electronic) 

The 1997 Report. and all previous 

analyses, analyzed the impact of an 

electronic ballast standard by essentially 

assuming that users of magnetic ballasts 

with T12 lamps would switch to 

electronic ballasts with T12lamps if the 

former ballast type became obsolete. As 

described in the Notice of Limited 

Reopening of the Record and 

Opportunity for Public Comment. the 

Department solicited comments on 

consideration of consumers who might 

choose electronic ballast T8 systems 

over electronic ballast T12 systems and 

consumers who might choose electronic 

ballasts over cathode cutout ballasts. 63 

FR 58330 (October 30, 1998). DOE asked 

for comments on certain aspects of both 

the electronic ballast and the cathode 

cutout ballast standard levels: Whether 

a market shift from magnetic T12 
Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules 14139

ballasts to electronic T8 ballasts is

likely, the extent of such a shift, and

whether the impacts of these shifts

should be considered.

In the Joint Comment, the

stakeholders stated that they assumed

95 percent of consumers of electronic

ballasts would switch from T12 to T8

lamps. (Joint Comment, No. 91 at 8).

Northwest Energy Efficiency Alliance

(NEEA) stated that in its region with a

mature market for electronic ballasts,

the standard practice in new

construction/renovation is a fixture with

an electronic T8 ballast; this results

partially from building codes as well as

from economics. Cathode cutout

systems are rare, with customers

selecting electronic ballasts instead

because of energy-efficiency, light

quality, and the ability to drive multiple

lamps. (NEEA, No. 38 at 1-2).

The Tennessee Valley Authority

(TVA) explained that its procedure is to

replace failed magnetic T12 ballasts

with electronic T12 ballasts because of

availability, cost (when the lighting

hours are too short for a good payback

with a T8 system); and maintenance (if

only part of the ballasts in a space need

replacement, the T12 lamps are

retained). For major system

replacement, electronic T8 systems were

considered the first option. (TVA, No.

36 at 1).

The statute requires the Department to

establish different classes where

appropriate, and today's proposed rule

would prescribe separate ballast efficacy

factors for each lamp-ballast

combination. To determine economic

impact on manufacturers and

consumers, DOE looks to reasonably

predict likely market impacts. That is,

some consumers with T12 lamps and

magnetic ballasts would switch to T8

lamps with electronic ballasts if the

magnetic T12 ballast was eliminated.

Furthermore, the Secretary has

determined to examine the impact of

this consumer sub-group under

economic factor 7.

Mr. Glenn Schleede comments that

DOE has continued its long-standing

practice of giving little consideration to

the interests of real consumers who end

up_ bearing the burden of energy

efficiency standards. (Schleede, No. 76

at 2).

The Department believes it has

considered the interests of real

consumers, and any burdens on them,

by including the full range of electric

prices, ballasts prices, operating life and

ballast life that consumers will

experience and calculating the full

range of impacts on consumers.

Furthermore, we studied the economic

impact of the standard on consumers by

considering and evaluating likely GRIM spreadsheet to the ballast

consumer actions. As a result, we are rulemaking, DOE developed a revised

presenting impacts on consumers questionnaire to capture all issues

moving from T12 lamps with magnetic relevant specifically to the ballast

ballasts to T12 lamps with electronic industry and its suppliers.

ballasts and also consumers moving Subsequent to the April 28 workshop,

from T12 lamps with magnetic ballasts the Department met with industry

to T8 lamps with electronic ballasts. representatives to discuss the rationale

Both of these likely occurrences arise for using the cash flow analysis

from the consumer not being able to buy methodology to measure financial

a T12 magnetic ballast under the impacts. The Department also reviewed

standard being proposed. However, details of the spreadsheet calculations at

while modeling and giving this meeting. The discounted cash flow

consideration to consumer actions, the approach is a widely used technique for

Department does not believe it can set evaluating a company's value (Net

standard levels based on consumer Present Value (NPV)), and is frequently

purchasing behavior given the used in capital budgeting decisions for

conclusions of the court in Natural evaluating capital spending proposals. It

Resources Defense Council v. is also used for evaluating financial

Herrington, 768 F. 2d 1355, 1406-07 impacts of plant closures and business

(D.C. Cir. 1985), where the court stated restructuring. The Department agreed to

that "the entire point of a mandatory revise GRIM to add features that

program was to change consumer explicitly provide the capability to

behavior" and "the fact that consumers include one-time charges such as plant

demand short payback periods was closures and asset write-offs.

itself a major cause of the market failure The Department believes that the

that Congress hoped to correct." modified GRIM accurately captured the

Manufacturer Impact Analysis financial impacts of a step change in

technology. In contrast to other

The general MIA methodology appliance rulemakings that make only

presented by the Department in March incremental changes to standard levels,

1997, was developed with substantive this rulemaking would result in

input from ballast manufacturers on standards based on a completely new

issues relevant to the ballast technology. To comply with final

rulemaking. Ballast manufacturers standards, manufacturers would be

provided very useful insights that required to make significantly higher

resulted in the incorporation of new capital investments (e.g., new plants,

factors for consideration in the analysis equipment and production processes),

of manufacturer impacts, namely The capital investment numbers input

impacts on domestic manufacturer into GRIM reflect this step change in

employment, manufacturing capacity, technology and produce negative

plant closures and loss of capital impacts on the manufacturer's cash

investment. Cooperation from ballast flows. Furthermore, the Subgroup

manufacturers also helped DOE in Impact Analysis proposed in the MIA

proposing the interview guide approach methodology and carried out in part

as a critical MIA tool for identifying through interviews with manufacturer

issues relevant to each individual representatives considered impacts on

manufacturer. The ballast rulemaking employment, manufacturing capacity

was the first for which DOE conducted and competitive effects due to an

one-on-one interviews with the electronic ballast standard.

manufacturers. This process helped To ensure that the manufacturer

DOE appreciate the usefulness of this impact analysis captured the potential

methodology for assessing qualitative impacts of a radically transformed

impacts. ballast market, the Department and

The Department of Energy held a NEMA members developed a scenario

public workshop on April 28, 1998, to analysis methodology to be included in

present information and invite comment the ballast MIA. In creating their

on several topics relating to energy- projections for future revenues and

efficiency standards for fluorescent profit margins, manufacturers were

lamp ballasts. One major topic for asked to consider two different

discussion was the Manufacturer Impact competition scenarios. In the first

Analysis (MIA). In developing the scenario, it was assumed that

Manufacturer Impact Analysis manufacturers would maintain their

document for the April 28, 1998, current market share. In the second

workshop, DOE tried to address the scenario, we asked manufacturers to

concerns that ballast manufacturers consider the impact of a new entrant in

raised with the Department in previous the industry which would capture a 15

meetings or through personal percent share, Under the new entrant

interviews. In addition to tailoring the scenario, we redistributed market shares

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 14139 

ballasts to electronic T8 ballasts is 

likely, the extent of such a shift, and 

whether the impacts of these shifts 

should be considered. 

In the Joint Comment, the 

stakeholders stated that they assumed 

95 percent of consumers of electronic 

ballasts would switch from T12 to T8 

lamps. (Joint Comment, No. 91 at 8). 

Northwest Energy Efficiency Alliance 

(NEEA) stated that in its region with a 

mature market for electronic ballasts, 

the standard practice in new 

construction/renovation is a fixture with 

an electronic T8 ballast; this results 

partially from building codes as well as 

from economics. Cathode cutout 

systems are rare, with customers 

selecting electronic ballasts instead 

because of energy-efficiency, light 

quality, and the ability to drive multiple 

lamps. (NEEA, No. 38 at 1-2). 

The Tennessee Valley Authority 

(TVA) explained that its procedure is to 

replace failed magnetic T12 ballasts 

with electronic T12 ballasts because of 

availability, cost (when the lighting 

hours are too short for a good payback 

with a T8 system); and maintenance (if 

only part of the ballasts in a space need 

replacement, the T12 lamps are 

retained). For major system 

replacement, electronic T8 systems were 

considered the first option. (TVA, No. 

36 at 1). 

The statute requires the Department to 

establish different classes where 

appropriate, and today's proposed rule 

would prescribe separate ballast efficacy 

factors for each lamp-ballast 

combination. To determine economic 

impact on manufacturers and 

consumers, DOE looks to reasonably 

predict likely market impacts. That is, 

some consumers with T12lamps and 

magnetic ballasts would switch to T8 

lamps with electronic ballasts if the 

magnetic T12 ballast was eliminated. 

Furthermore, the Secretary has 

determined to examine the impact of 

this consumer sub-group under 

economic factor 7. 

Mr. Glenn Schleede comments that 

DOE has continued its long-standing 

practice of giving little consideration to 

the interests of real consumers who end 

up bearing the burden of energy 

efficiency standards. (Schleede, No. 76 

at 2). 

The Department believes it has 

considered the interests of real 

consumers, and any burdens on them, 

by including the full range of electric 

prices, ballasts prices, operating life and 

ballast life that consumers will 

experience and calculating the full 

range of impacts on consumers. 

Furthermore, we studied the economic 

impact of the standard on consumers by 

considering and evaluating likely 

consumer actions. As a result, we are 

presenting impacts on consumers 

moving from T12 lamps with magnetic 

ballasts to T12 lamps with electronic 

ballasts and also consumers moving 

from T12lamps with magnetic ballasts 

to T8 lamps with electronic ballasts. 

Both of these likely occurrences arise 

from the consumer not being able to buy 

a T12 magnetic ballast under the 

standard being proposed. However, 

while modeling and giving 

consideration to consumer actions, the 

Department does not believe it can set 

standard levels based on consumer 

purchasing behavior given the 

conclusions of the court in Natural 

Resources Defense Council v. 

Herrington, 768 F. 2d 1355. 1406-07 

(D.C. Cir. 1985), where the court stated 

that "the entire point of a mandatory 

program was to change consumer 

behavior" and "the fact that consumers 

demand short payback periods was 

itself a major cause of the market failure 

that Congress hoped to correct." 

Manufacturer Impact Analysis 

The general MIA methodology 

presented by the Department in March 

1997, was developed with substantive 

input from ballast manufacturers on 

issues relevant to the ballast 

rulemaking. Ballast manufacturers 

provided very useful insights that 

resulted in the incorporation of new 

factors for consideration in the analysis 

of manufacturer impacts, namely 

impacts on domestic manufacturer 

employment, manufacturing capacity, 

plant closures and loss of capital 

investment. Cooperation from ballast 

manufacturers also helped DOE in 

proposing the interview guide approach 

as a critical MIA tool for identifying 

issues relevant to each individual 

manufacturer. The ballast rulemaking 

was the first for which DOE conducted 

one-on-one interviews with the 

manufacturers. This process helped 

DOE appreciate the usefulness of this 

methodology for assessing qualitative 

impacts. 

The Department of Energy held a 

public workshop on April 28, 1998, to 

present information and invite comment 

on several topics relating to energyefficiency standards for fluorescent 

lamp ballasts. One major topic for 

discussion was the Manufacturer Impact 

Analysis (MIA). In developing the 

Manufacturer Impact Analysis 

document for the April 28, 1998, 

workshop, DOE tried to address the 

concerns that ballast manufacturers 

raised with the Department in previous 

meetings or through personal 

interviews. In addition to tailoring the 

GRIM spreadsheet to the ballast 

rulemaking, DOE developed a revised 

questionnaire to capture all issues 

relevant specifically to the ballast 

industry and its suppliers. 

Subsequent to the April 28 workshop, 

the Department met with industry 

representatives to discuss the rationale 

for using the cash flow analysis 

methodology to measure financial 

impacts. The Department also reviewed 

details of the spreadsheet calculations at 

this meeting. The discounted cash flow 

approach is a widely used technique for 

evaluating a company's value (Net 

Present Value (NPV)), and is frequently 

used in capital budgeting decisions for 

evaluating capital spending proposals. It 

is also used for evaluating financial 

impacts of plant closures and business 

restructuring. The Department agreed to 

revise GRIM to add features that 

explicitly provide the capability to 

include one-time charges such as plant 

closures and asset write-offs. 

The Department believes that the 

modified GRIM accurately captured the 

financial impacts of a step change in 

technology. In contrast to other 

appliance rulemakings that make only 

incremental changes to standard levels, 

this rulemaking would result in 

standards based on a completely new 

technology. To comply with final 

standards, manufacturers would be 

required to make significantly higher 

capital investments (e.g .• new plants, 

equipment and production processes). 

The capital investment numbers input 

into GRIM reflect this step change in 

technology and produce negative 

impacts on the manufacturer's cash 

flows. Furthermore, the Subgroup 

Impact Analysis proposed in the MIA 

methodology and carried out in part 

through interviews with manufacturer 

representatives considered impacts on 

employment, manufacturing capacity 

and competitive effects due to an 

electronic ballast standard. 

To ensure that the manufacturer 

impact analysis captured the potential 

impacts of a radically transformed 

ballast market, the Department and 

NEMA members developed a scenario 

analysis methodology to be included in 

the ballast MIA. In creating their 

projections for future revenues and 

profit margins, manufacturers were 

asked to consider two different 

competition scenarios. In the first 

scenario, it was assumed that 

manufacturers would maintain their 

current market share. In the second 

scenario, we asked manufacturers to 

consider the impact of a new entrant in 

the industry which would capture a 15 

percent share. Under the new entrant 

scenario, we redistributed market shares 
14140 Federal Register /Vol. 65, No. 51/Wednesday, March 15, 2000 /Proposed Rules

and manufacturers were able to define

new prices and costs (gross margins).

The competition scenario analysis is

described in greater detail in the TSD.

Additional scenarios were constructed

assuming a status quo in profit margins,

the "existing dynamics" scenario, and a

new entrant in the magnetic ballast

market, or "magnetic new entrant"

scenario.

We conducted the GRIM analysis and

other elements of the MIA separately for

each manufacturer. To report a

representative variation in impacts

between manufacturer sub groups while

maintaining the confidentiality of

individual manufacturers, DOE

constructed three different cashflows:

One for manufacturers of both magnetic

and electronic ballasts, a second for

manufacturers producing electronic

ballasts only, and a third that combines

both sub groups of manufacturers.

Likewise, we evaluated employment

and manufacturing capacity effects from

an electronic ballast standard on a

company-by-company basis and

reported them for both subgroups. To

the extent consistent with the

confidentiality concerns of individual

manufacturers, we reported important

variations between manufacturers

within subgroups qualitatively. The

analysis results include a discussion of

the impacts of the cashflow results on

the business prospects of manufacturers

in each subgroup, with reference to

specific manufacturers where permitted

by these manufacturers.

For the participating manufacturers,

the GRIM analysis did not distinguish

plants located outside the United States

from United States' plants. We

calculated employment impacts for

these same firms and reported separate

results for domestic and Mexican plants.

We performed a detailed analysis of

the impacts of an electronic ballast

standard on ballast manufacturer

suppliers. This analysis included a

quantitative evaluation of manufacturer

cashflows and jobs. In total, 30 firms

were invited to participate in

interviews. Seventeen of these suppliers

served magnetic ballast production,

eleven electronic ballast production,

and six served both magnetic and

electronic markets. Nineteen

organizations that serve magnetic ballast

applications participated in interviews.

Eight organizations that serve electronic

ballast applications participated in

interviews. In total, nine plant tours

were held, five of which were at

suppliers of magnetic products and four

of which were tours of electronic

supplier plants. The analysis

demonstrated that the organizations

interviewed provided a representative

group of supplier industries, which we

used to evaluate the impacts on supplier

industries as a whole.

Additionally we visited one lamp

manufacturer's fluorescent lamp plant

and interviewed plant and corporate

representatives. The Department

decided to gather and analyze

information on manufacturer impacts

from other lamp manufacturers as well,

and an analysis of this information is

presented in Section V.

NEMA commented that the

manufacturer impacts reported for a

standard that began in the year 2003

were too severe and that standards that

produced such impacts could not be

economically justified. (NEMA, No. 85).

NEMA, as a part of the Joint Comment,

commented that their proposed

staggered implementation dates mitigate

such adverse impacts. (Joint Comment,

No. 91 at 7).

Standards Proposals

NEMA described new market data on

ballasts, as well as percentage of lamps

driven by magnetic and electronic

ballasts. This shows that electronic

ballast penetration of the total

commercial and industrial lighting

market has increased to 55 percent of

total ballast shipments in 1998.

Electronic ballast market penetration

has increased from 44 percent to 62

percent in 1998, when measured by the

more relevant criteria of the number of

lamps operated. For ballasts used only

in commercial and industrial new

construction, renovations and retrofits

in 1998, electronic ballast penetration

has increased to 63 percent, measured

by ballast shipments, and to 70 percent

measured by the number of lamps

operated. (NEMA, No. 50 at 26 and

Attachment B and NEMA, No. 85 at 44).

ACEEE agreed with NEMA that the

percentage of lamps ballasted

electronically is the most important

figure; however, the growth rate during

1993-1995 of 9 percent was larger than

the growth rate of 2.8 percent from 1995

to 1998, supporting the "Decreasing

Shipments to 2027" base case. (ACEEE,

No. 77 at 9-10). Oregon Office of Energy

noted that the magnetic ballast

shipments increased in 1997 and

remained stable in 1998, casting doubt

on the base case scenarios that show

steady decline of magnetic ballasts

(Oregon, No. 81 at 5 and 7). The CEC

also stated that a national standard

would complement California's Title 24

building code policies by ensuring that

savings are realized in retrofit

applications as well as new

construction. (CEC, No. 82 at 1).

Additionally, the Department

received comments from the Vermont

Residential Energy Efficiency Program,

Conservation and Renewable Energy

Systems, Broward County Florida, Alto

Manufacturing Company, Rocky

Mountain Chapter of the Sierra Club,

State of Vermont, California Energy

Commission, Northeast Energy

Efficiency Partnerships, Pacific Gas and

Electric, Northwest Energy Efficiency

Alliance, Sacramento Municipal Utility

District, Boston Edison, Eastern

Utilities, Green Mountain Power, New

York Power Authority, Eugene Water

and Electric Board and 35 private

citizens urging the Department to

establish standards requiring electronic

ballasts citing the delay in promulgating

this rulemaking, the phasing out of

utility incentive programs for ballasts,

the energy savings and environmental

and economic benefits.

In commenting on the possibility of a

market shift, Osram Sylvania (OSI)

proposed that the Department separately

consider each of the three major ballast

market segments: OEM (fixtures for new

construction/renovation), Retrofit (early

replacement of systems) and

Replacement (existing ballast

replacement at failure). The first two

markets are appropriate for electronic

T8 systems, while the third has existing

reduced-wattage lamps that are

incompatible with electronic ballasts.

OSI commented that 34-Watt lamps

are incompatible with electronic ballasts

because of their conductive coating that

facilitates starting with magnetic

ballasts. It stated that technical

solutions were possible but impractical:

"Smart" ballasts that overcome the

problem for the 34-Watt lamp would not

be compatible with 40-Watt high CRI

lamps that meet the EPACT lamp

standards and would be expensive;

design of 34-Watt lamps without the

conductive coating would be expensive;

controlling the resistance of the

conductive coating to allow

compatibility with both ballast types

would be unreliable over the range of

lamps and over their normal lives, since

the coating varies widely for any

manufacturer and between

manufacturers. The expenditure of

resources by lamp manufacturers to

design a lamp to meet this need would

promote an obsolete system when the

market should be moving toward TS

systems. OSI also stated that the lamp

industry has the capacity to handle a

market transition from a mixture of T12

to T8 lamps toward T8 lamps over a 3-

year period, but would require a multimillion dollar capital investment and

additional time to handle a more

widespread transition for all market

sectors. (OSI, No. 34 at 2-5).

EE-RM-97-500 COMMENT 98A

14140 Federal Register I Vol. 65, No. 51 I Wednesday, March 15, 2000/Proposed Rules 

and manufacturers were able to define 

new prices and costs (gross margins). 

The competition scenario analysis is 

described in greater detail in the TSD. 

Additional scenarios were constructed 

assuming a status quo in profit margins, 

the "existing dynamics" scenario, and a 

new entrant in the magnetic ballast 

market, or "magnetic new entrant" 

scenario. 

We conducted the GRIM analysis and 

other elements of the MIA separately for 

each manufacturer. To report a representative variation in impacts 

between manufacturer sub groups while 

maintaining ilie confidentiality of 

individual manufacturers, DOE 

constructed three different cashflows: 

One for manufacturers of both magnetic 

and electronic ballasts, a second for 

manufacturers producing electronic 

ballasts only, and a third that combines 

both sub groups of manufacturers. 

Likewise, we evaluated employment 

and manufacturing capacity effects from 

an electronic ballast standard on a 

company-by-company basis and 

reported them for both subgroups. To 

the extent consistent with the 

confidentiality concerns of individual 

manufacturers, we reported important 

variations between manufacturers 

within subgroups qualitatively. The 

analysis results include a discussion of 

the impacts of the cashflow results on 

the business prospects of manufacturers 

in each subgroup, with reference to 

specific manufacturers where permitted 

by these manufacturers. 

For the participating manufacturers, 

the GRIM analysis did not distinguish 

plants located outside the United States 

from United States' plants. We 

calculated employment impacts for 

these same firms and reported separate 

results for domestic and Mexican plants. 

We performed a detailed analysis of 

the impacts of an electronic ballast 

standard on ballast manufacturer -

suppliers. This analysis included a quantitative evaluation of manufacturer 

cashflows and jobs. In total, 30 firms 

were invited to participate in 

interviews. Seventeen of these suppliers 

served magnetic ballast production, 

eleven electronic ballast production, 

and six served both magnetic and 

electronic markets. Nineteen 

organizations that serve magnetic ballast 

applications participated in interviews. 

Eight organizations that serve electronic 

ballast applications participated in 

interviews. In total, nine plant tours 

were held, five of which were at 

suppliers of magnetic products and four 

of which were tours of electronic 

supplier plants. The analysis 

demonstrated that the organizations 

interviewed proVided a representative 

group of supplier industries, which we 

used to evaluate the impacts on supplier 

industries as a whole. 

Additionally we visited one lamp 

manufacturer's fluorescent lamp plant 

and interviewed plant and corporate 

representatives. The Department 

decided to gather and analyze 

information on manufacturer impacts 

from other lamp manufacturers as well, 

and an analysis of this information is 

presented in Section V. 

NEMA commented that the 

manufacturer impacts reported for a standard that began in the year 2003 

were too severe and that standards that 

produced such impacts could not be 

economically justified. (NEMA, No. 85). 

NEMA, as a part of the Joint Comment, 

commented that their proposed 

staggered implementation dates mitigate 

such adverse impacts. (Joint Comment, 

No. 91 at 7). 

Standards Proposals 

NEMA described new market data on 

ballasts, as well as percentage of lamps 

driven by magnetic and electronic 

ballasts. This shows that electronic 

ballast penetration of the total 

commercial and industrial lighting 

market has increased to 55 percent of 

total ballast shipments in 1998. 

Electronic ballast market penetration 

has increased from 44 percent to 62 

percent in 1998, when measured by the 

more relevant criteria of the number of 

lamps operated. For ballasts used only 

in commercial and industrial new 

construction, renovations and retrofits 

in 1998, electronic ballast penetration 

has increased to 63 percent, measured 

by ballast shipments, and to 70 percent 

measured by the number of lamps 

operated. (NEMA, No. 50 at 26 and 

Attachment Band NEMA, No. 85 at 44). 

ACEEE agreed with NEMA that the 

percentage of lamps ballasted 

electronically is the most important 

figure; however, the growth rate during 

1993-1995 of 9 percent was larger than 

the growth rate of 2.8 percent from 1995 

to 1998, supporting the "Decreasing 

Shipments to 2027" base case. (ACEEE, 

No. 77 at 9-10). Oregon Office of Energy 

noted that the magnetic ballast 

shipments increased in 1997 and 

remained stable in 1998, casting doubt 

on the base case scenarios that show 

steady decline of magnetic ballasts 

(Oregon, No. 81 at 5 and 7). The CEC 

also stated that a national standard 

would complement California's Title 24 

building code policies by ensuring that 

savings are realized in retrofit 

applications as well as new 

construction. (CEC, No. 82 at 1). 

Additionally, the Department 

received comments from the Vermont 

Residential Energy Efficiency Program, 

Conservation and Renewable Energy 

Systems, Broward County Florida, Alto 

Manufacturing Company, Rocky 

Mountain Chapter of the Sierra Club, 

State of Vermont, California Energy 

Commission, Northeast Energy 

Efficiency Partnerships, Pacific Gas and 

Electric, Northwest Energy Efficiency 

Alliance, Sacramento Municipal Utility 

District, Boston Edison, Eastern 

Utilities, Green Mountain Power, New 

York Power Authority, Eugene Water 

and Electric Board and 35 private 

citizens urging the Department to 

establish standards requiring electronic 

ballasts citing the delay in promUlgating 

this rulemaking, the phasing out of 

utility incentive programs for ballasts, 

the energy savings and environmental 

and economic benefits. 

In commenting on the possibility of a 

market shift, Osram Sylvania (OSI) 

proposed that the Department separately 

consider each of the three major ballast 

market segments: OEM (fixtures for new 

construction/renovation), Retrofit (early 

replacement of systems) and 

Replacement (existing ballast 

replacement at failure). The first two 

markets are appropriate for electronic 

T8 systems, while the third has existing 

reduced-wattage lamps that are 

incompatible with electronic ballasts. 

OS! commented that 34-Watt lamps 

are incompatible with electronic ballasts 

because of their conductive coating that 

facilitates starting with magnetic 

ballasts. It stated that technical 

solutions were possible but impractical: 

"Smart" ballasts that overcome the 

problem for the 34-Watt lamp would not 

be compatible with 40-Watt high CRI 

lamps that meet the EP ACT lamp 

standards and would be expensive; 

design of 34-Watt lamps without the 

conductive coating would be expensive; 

controlling the resistance of the 

conductive coating to allow 

compatibility with both ballast types 

would be unreliable over the range of 

lamps and over their normal lives, since 

the coating varies widely for any 

manufacturer and between 

manufacturers. The expenditure of 

resources by lamp manufacturers to 

design a lamp to meet this need would 

promote an obsolete system when the 

market should be moving toward T8 

systems. OSl also stated that the lamp 

industry has the capacity to handle a 

market transition from a mixture of T12 

to T8 lamps toward T8 lamps over a 3-

year period, but would require a multimillion dollar capital investment and 

additional time to handle a more 

widespread transition for all market 

sectors. (OSl, No. 34 at 2-5). 
Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules 14141

A rapid shift to electronic ballasts

would require lamp companies to make

special adjustments to the lamps, or

would drive end-users to purchase fullwattage T12 lamps. (OSI, No. 34 at 2

and OSI, No. 84 at 1). OSI recommended

that BEFs be developed for 4-foot and 8-

foot systems that disallow magnetic and

cathode cutout ballasts (with several

exemptions listed below) and that a

standard with these BEFs be applied to

OEM and retrofit ballasts 3 years after

the standards publication date.

Application of the standard BEFs to the

replacement market would be delayed

for 5 years beyond the effective date (a

total of 8 years from publication),

allowing development of retrofit

incentive programs for building owners

and allowing lamp manufacturers

greater transition time for T8 lamp

manufacture. Proposed exemptions

include residential luminaires for T8 or

smaller diameter lamps, dimming

ballasts, 8-foot High Output, lowtemperature, outdoor, magnetic ballasts,

non-lighting applications, and ballasts

with unresolved or unanticipated

interference issues per application to

the Department by a manufacturer or

trade association. (OSI, No. 34 at 1-3).

Five comments supported the

proposal by OSI to varying degrees.

(Motorola Lighting Inc (MLI), No.. 33 at

1-2, Holophane, No. 39 at 1-2,

Lightolier, No. 40 at 1, and ASE No. 41

at 3, and Peerless Lighting, No. 52 at 1-

3).

Motorola supported the proposal by

OSI and recommended the application

of new BEFs to the OEM and retrofit

market at the earliest possible date.

(MLI, No. 33 at 1). Motorola agreed with

delaying the application of BEFs to the

replacement market, but recommended

a delay of two years rather than five

years from the effective date. Further, it

urged that BEFs for T8 magnetic ballasts

be developed, and that all of the BEF

levels be achievable by major ballast

manufacturers. (MLI, No. 33 at 2).

Holophane supported the OSI proposal,

particularly the approach recognizing

systems rather than components. It

proposed that exemptions include

dimming ballasts, 8-foot High Output

outdoor ballasts, and special ballasts

addressing interference issues. The

luminaire manufacturers will be able to

incorporate electronic ballasts as long as

the ballast manufacturers can meet the

demand; the only impact on their

market will be the adjustment of

lighting levels from fixtures with the

new systems. Holophane recommended

a delay of application of BEFs for the

replacement market for "a reasonable

period of time." (Holophane, No. 39 at

1). Lightolier noted that 80 percent of its

fixtures use electronic ballasts for T8 or

T5 lamps; of the remainder, intended for

the distributor/contractor market, less

than half use electronic ballasts.

Lightolier recommended that the

Department give serious consideration

to the OSI proposal. (Lightolier, No. 40

at 1). Peerless agreed with the analysis

of the two market segments, stated that

disallowing magnetic ballasts would

have short-term repercussion including

the development of T12 electronic

ballasts for a short-term market, and that

a delay period would allow the lamp

manufacturing industry to adjust to the

increased T8 market. (Peerless, No. 53 at

1-3). ASE urged that the analysis

consider the separate effects on the 3

different market channels, and

supported OSI's proposal for a timelimited exemption for replacement

ballasts if such an approach is

administratively feasible. (ASE, No. 41

at 2-3).

The Department decided to analyze

the five and two year delay standards

proposal suggested above. The

description and results of this analysis

are shown in section V of this notice.

The Joint Comment presented the

Department with a proposal for

segmenting the market and extending

the implementation dates to mitigate the

burdens to acceptable levels while

maintaining most of the benefits of

standards. For example, the phase-in

period for the standards proposed in the

Joint Comment is approximately five

years, until April 1, 2005. This allows

the manufacturers and the marketplace

additional time to make an orderly

transition from energy efficient

magnetic ballasts to the more efficient

ballasts that would be required if

today's proposal were adopted. In

addition, the joint Comment proposed

an additional five-year phase in for

standards for ballasts intended for

replacement market. While it is

generally impossible to distinguish a

ballast for the replacement market from

one used in new construction or

renovation, the Joint Comment

recommends that replacement ballasts

be labeled for replacement use, have

output leads which, when fully

extended, are less than the length of the

lamp it is intended to operate and they

are shipped in packages of ten or less.

DOE agrees replacement ballasts, as

proposed by the joint Comment would

not likely be used other than to replace

an existing ballast. In addition to the

above, the joint Comment also proposed

limiting the exemptions relative to the

extant standards. For example, the

standards found in the National

Appliance Energy Conservation

Amendments of 1988 provided

exemptions for cold temperature and

dimming ballasts. The Joint Comment

proposed limiting the exemption for

cold temperature ballasts to those

capable of being dimmed to 50 percent

or less of its maximum output and the

cold temperature ballast exemption

would be limited to ballasts for use with

two F96T12HO lamps at an ambient

temperature of -20°F and which is for

use with outdoor signs. The

recommended changes to the dimming

and cold temperature exemptions will

result in the standards being applied to

products previously not subject to the

standards. The standard for two

F96T12HO lamps has not been

modified, however, since it would apply

to more products, the changes proposed

by the joint Comment will result in

higher energy savings for this product

class than if the standards were raised,

but applied with the extant exemption.

(Joint Comment, No. 91 at 5).

V. Analytical Results

a. Efficiency Levels Analyzed

The Department utilized two base

case forecasts of shipments of magnetic

ballasts without standards as follows:

Base Case: Decreasing Shipments to

2015 (5 percent reduction)

In this base case, we assumed

magnetic ballast shipments after 1997

decrease at the rate at which most

magnetic ballasts declined from 1993

through 1997, reaching a base level by

2015. This rate of decreasing magnetic

ballasts shipments represents a

reduction of approximately 5 percent

per year relative to 1997 shipments. The

base level represents 10 percent of the

magnetic ballast shipments in 1997 for

each ballast class, and is carried out to

2030. This base case assumes that nonregulatory programs as well as market

forces result in the same rate of

transition to electronic ballasts as

observed from 1993 through 1997.

Base Case: Decreasing Shipments to

2027 (3 percent reduction)

In this base case , we assumed

magnetic ballast shipments decrease at

a slower rate, reaching the same base

level by 2027. This rate of decreasing

magnetic ballasts shipments roughly

represents a reduction of 3 percent per

year relative to 1997 shipments. The

base level represents 10 percent of the

magnetic ballast shipments in 1997 for

each ballast class, and is carried out to

2030. This base case assumes that nonregulatory programs and market forces

affect a slower rate of transition to

electronic ballasts than observed in

recent years.

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65, No. 51/Wednesday, March 15, ZOOO/Proposed Rules 14141 

A rapid shift to electronic ballasts 

would require lamp companies to make 

special adjustments to the lamps, or would drive end-users to purchase fullwattage T12 lamps. (OSI, No. 34 at 2 

and OSI, No. 84 at 1). OSI recommended 

that BEFs be developed for 4-foot and 8-

foot systems that disallow magnetic and 

cathode cutout ballasts (with several 

exemptions listed below) and that a 

standard with these BEFs be applied to 

OEM and retrofit ballasts 3 years after 

the standards publication date. 

Application of the standard BEFs to the 

replacement market would be delayed 

for 5 years beyond the effective date (a 

total of 8 years from publication), 

allowing development of retrofit 

incentive programs for building owners 

and allowing lamp manufacturers 

greater transition time for T8 lamp 

manufacture. Proposed exemptions 

include residential luminaires for T8 or smaller diameter lamps, dimming 

ballasts, 8-foot High Output, lowtemperature, outdoor, magnetic ballasts, 

non-lighting applications, and ballasts 

with unresolved or unanticipated 

interference issues per application to 

the Department by a manufacturer or trade association. (OSI, No. 34 at 1-3). 

Five comments supported the 

proposal by OSI to varying degrees. 

(Motorola Lighting Inc (MLI), No. 33 at 

1-2. Holophane, No. 39 at 1-2, 

Lightolier, No. 40 at 1, and ASE No. 41 

at 3, and Peerless Lighting, No. 52 at 1-

3). 

Motorola supported the proposal by 

OS! and recommended the application 

of new BEFs to the OEM and retrofit 

market at the earliest possible date. 

(ML!, No. 33 at 1). Motorola agreed with 

delaying the application of BEFs to the 

replacement market, but recommended 

a delay of two years rather than five 

years from the effective date. Further, it 

urged that BEFs for T8 magnetic ballasts 

be developed. and that all of the BEF 

levels be achievable by major ballast 

manufacturers. (MLI, No. 33 at 2). 

Holophane supported the OSI proposal, 

particularly the approach recognizing 

systems rather than components. It 

proposed that exemptions include 

dimming ballasts, 8-foot High Output 

outdoor ballasts, and special ballasts 

addressing interference issues. The 

luminaire manufacturers will be able to 

incorporate electronic ballasts as long as the ballast manufacturers can meet the 

demand; the only impact on their 

market will be the adjustment of 

lighting levels from fixtures with the 

new systems. Holophane recommended 

a delay of application of BEFs for the 

replacement market for "a reasonable 

period of time." (Holophane, No. 39 at 

1). Lightolier noted that 80 percent of its 

fixtures use electronic ballasts for T8 or 

T51amps; of the remainder, intended for 

the distributor/contractor market, less 

than half use electronic ballasts. 

Lightolier recommended that the 

Department give serious consideration 

to the OS! proposal. (Lightolier, No. 40 

at 1). Peerless agreed with the analysis 

of the two market segments, stated that 

disallowing magnetic ballasts would 

have short-term repercussion including 

the development of T12 electronic 

ballasts for a short-term market, and that 

a delay period would allow the lamp 

manufacturing industry to adjust to the 

increased T8 market. (Peerless. No. 53 at 

1-3). ASE urged that the analysis 

consider the separate effects on the 3 

different market channels, and 

supported OS1's proposal for a timelimited exemption for replacement 

ballasts if such an approach is 

administratively feasible. (ASE, No. 41 

at 2-3). 

The Department decided to analyze 

the five and two year delay standards 

proposal suggested above. The 

description and results of this analysis 

are shown in section V of this notice. 

The Joint Comment presented the 

Department with a proposal for 

segmenting the market and extending 

the implementation dates to mitigate the 

burdens to acceptable levels while 

maintaining most of the benefits of 

standards. For example, the phase-in 

period for the standards proposed in the 

Joint Comment is approximately five 

years, until April 1, 2005. This allows 

the manufacturers and the marketplace 

additional time to make an orderly 

transition from energy efficient 

magnetic ballasts to the more efficient 

ballasts that would be required if 

today's proposal were adopted. In 

addition, the Joint Comment proposed 

an additional five-year phase in for 

standards for ballasts intended for 

replacement market. While it is 

generally impossible to distinguish a 

ballast for the replacement market from one used in new construction or 

renovation, the Joint Comment 

recommends that replacement ballasts 

be labeled for replacement use, have 

output leads which, when fully 

extended, are less than the length of the 

lamp it is intended to operate and they 

are shipped in packages of ten or less. 

DOE agrees replacement ballasts, as 

proposed by the Joint Comment would 

not likely be used other than to replace 

an existing ballast. In addition to the 

above, the Joint Comment also proposed 

limiting the exemptions relative to the 

extant standards. For example, the 

standards found in the National 

Appliance Energy Conservation 

Amendments of 1988 provided 

exemptions for cold temperature and 

dimming ballasts. The Joint Comment 

proposed limiting the exemption for 

cold temperature ballasts to those 

capable of being dimmed to 50 percent 

or less of its maximum output and the 

cold temperature ballast exemption 

would be limited to ballasts for use vvith 

two F96T12HO lamps at an ambient 

temperature of - 20°F and which is for 

use with outdoor signs. The 

recommended changes to the dimming 

and cold temperature exemptions will 

result in the standards being applied to 

products previously not subject to the 

standards. The standard for two 

F96T12HO lamps has not been 

modified, however, since it would apply 

to more products, the changes proposed 

by the Joint Comment will result in 

higher energy savings for this product 

class than if the standards were raised, 

but applied with the extant exemption. 

(Joint Comment, No. 91 at 5). 

V. Analytical Results 

a. Efficiency Levels Analyzed 

The Department utilized two base 

case forecasts of shipments of magnetic 

ballasts without standards as follows: 

Base Case: Decreasing Shipments to 

2015 (5 percent reduction) 

In this base case, we assumed 

magnetic ballast shipments after 1997 

decrease at the rate at which most 

magnetic ballasts declined from 1993 

through 1997, reaching a base level by 

2015. This rate of decreasing magnetic 

ballasts shipments represents a 

reduction of approximately 5 percent 

per year relative to 1997 shipments. The 

base level represents 10 percent of the 

magnetic ballast shipments in 1997 for 

each ballast class, and is carried out to 

2030. This base case assumes that nonregulatory programs as well as market 

forces result in the same rate of 

transition to electronic ballasts as 

observed from 1993 through 1997. 

Base Case: Decreasing Shipments to 

2027 (3 percent reduction) 

In this base case, we assumed 

magnetic ballast shipments decrease at 

a slower rate, reaching the same base 

level by 2027. This rate of decreasing 

magnetic ballasts shipments roughly 

represents a reduction of 3 percent per 

year relative to 1997 shipments. The 

base level represents 10 percent of the 

magnetic ballast shipments in 1997 for 

each ballast class, and is carried out to 

2030. This base case assumes that nonregulatory programs and market forces 

affect a slower rate. of transition to 

electronic ballasts than observed in 

recent years. 
14142 Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

The Department also analyzed the

impact of two trial standard levels; one

was for electronic ballasts and the other

for cathode cutout ballasts.

Electronic Ballast Standards Scenarios

We also evaluated the following

scenarios to capture the range of

national impacts from likely consumer

choices (scenarios 1 and 2) and to

evaluate suggested implementation

schemes presented in comments

(scenarios 3 and 4) for electronic ballast

standards:

Scenario 1. This scenario assumes

that 100 percent of magnetic T12

ballasts are converted to electronic T12

ballasts. This scenario is intended to

model the impacts of minimal

compliance with the standard in regard

to commercial and industrial consumer

choice.

Scenario 2. This scenario assumes

that all magnetic T12 ballasts are

converted to electronic ballasts, with 5

percent becoming T12 ballasts and 95

percent becoming T8 ERS ballasts. This

scenario is intended to model the trends

in the current market where nearly all

(95 percent) of electronic ballasts

purchased from 1993-1997 have been

T8 ballasts.

Scenario 3. This scenario assumes

that the new/renovation luminaire

market segment converts all magnetic

T12 ballasts to electronic T8 ballasts

starting on the effective date. We

assume that this segment comprises 70

percent of the total magnetic T12 ballast

market, based on the current luminaire

market. The remaining 30 percent

assumed replacement market has an

additional delay of 5 years, after which

these ballasts are converted to electronic

ballasts, with 5 percent becoming T12

ballasts and 95 percent becoming T8

ballasts. This scenario allows a differing

impact of the standards on these two

market segments by providing an

additional adjustment period for the

replacement market for users in existing

buildings and on lamp manufacturers to

prepare for the new ballast type and

market shift.

Scenario 4. This scenario has

identical assumptions to scenario 3,

except that the additional delay period

for the replacement market is 2 years.

We compared each of the above four

standard level forecasts with that of the

two different base cases. We denoted

forecasts under the "Decreasing

Shipments to 2015" base case as

scenarios 1A, 2A, 3A, and 4A. We called

forecasts runs with the "Decreasing

Shipments to 2027" base case scenarios

1B, 2B, 3B, and 4B.

Cathode Cutout Trial Standards

For cathode cutout standards, we also

evaluated the following scenarios to

capture the range of national impacts

from likely consumer choices for a

possible cathode cutout standard:

Scenario 5. This scenario assumes

that 100 percent of magnetic T12

ballasts are converted to cathode cutout

T12 ballasts. The exception is the

F96T12 ballast class, for which there is

no cathode cutout option. These ballasts

are assumed to remain as magnetic

ballasts under the standards. This

scenario is intended to model the

impacts of minimal compliance with the

standard in regard to commercial and

industrial consumer choice.

Scenario 6. This scenario assumes

that the 30 percent replacement market

T12 ballasts are converted to cathode

cutout T12 ballasts, and the 70 percent

new/renovation market T12 ballasts are

converted to electronic ballasts, with 5

percent of the electronic ballasts

becoming T12 ballasts and 95 percent

becoming T8 ballasts.

We denoted forecasts run with the

Decreasing Shipments to 2015 base case

as 5A and 6A. We called forecasts run

with the Decreasing Shipments to 2027

base case Scenario 5B and 6B.

joint Comment

In addition, we evaluated two

scenarios based on the standards

recommended by the joint Comment:

Decreasing magnetic ballast shipments

to 2015 and decreasing magnetic ballast

shipments to 2027. In evaluating the

joint comment proposal, the Department

also used a third shipment scenario (flat

magnetic ballast shipment forecast) as

the upper bound as described in

Appendix E of the TSD.

b. Significance of Energy Savings

To estimate the energy savings

through the year 2030 due to revised

standards, we compared the energy

consumption of ballasts under the base

case to the energy consumption of

ballasts complying with the standard.

As discussed above, there are eight

electronic ballast standards scenarios

and four cathode cutout standards

scenarios.

The results presented in Tables V.1a

and V.1b use the AEO Reference Case

forecast. (The TSD shows the results for

the AEO High and Low cases, with total

benefits respectively higher and lower

than those for the Reference Case.) The

tables show the energy savings for each

of the standards scenarios.

TABLE V.1A.-ENERGY SAVINGS FROM ELECTRONIC STANDARDS

Electronic standards for units sold from 2003 to 2030

Scan 1A Scen 1B Scen 2A Scen 2B Scen 3A Scen 3B Scen 4A Scen 4B Scenario T12 T12 T12178 T121T8 pecr2015 Decr2027 Decr2015 Decr2027 Decr2015 Decr2027 Decr2015 Decr2027

Total Quads Saved ........ 1.01 1 .79 1.66 2.93 1.43 2 . 66 1.57 2.84

Total Quads Saved w/

HVAC .......................... 1.08 1 .9 1.76 3 . 12 1.52 2.82 1 . 67 3.02

TABLE V. 1 B.-ENERGY SAVINGS FROM CATHODE CUTOUT STANDARDS

Cathode cutout standards for units sold from 2003 to 2030

Scen 5A Scen 5B Scen 6A Scen 6B

Scenario 100% CC 100% CC 37% CC 37% CC

Decr2015 Decr2027 Decr2015 Decr2027

Total Quads Saved .......................................................................................... 0.48 0.85 1.12 1.98

Total Quads Saved w/HVAC ........................................................................... 0.51 0. 91 1.19 2.11

EE-RM-97-500 COMMENT 98A

14142 Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

The Department also analyzed the 

impact of two trial standard levels; one 

was for electronic ballasts and the other 

for cathode cutout ballasts. 

Electronic Ballast Standards Scenarios 

We also evaluated the following 

scenarios to capture the range of 

national impacts from likely consumer 

choices (scenarios 1 and 2) and to 

evaluate suggested implementation 

schemes presented in comments 

(scenarios 3 and 4) for electronic ballast 

standards: 

Scenario 1. This scenario assumes 

that 100 percent of magnetic T12 

ballasts are converted to electronic T12 

ballasts. This scenario is intended to 

model the impacts of minimal 

compliance with the standard in regard 

to commercial and industrial consumer 

choice. 

Scenario 2. This scenario assumes 

that all magnetic T12 ballasts are 

converted to electronic ballasts, with 5 

percent becoming T12 ballasts and 95 

percent becoming T8 ERS ballasts. This 

scenario is intended to model the trends 

in the current market where nearly all 

(95 percent) of electronic ballasts 

purchased from 1993-1997 have been 

T8 ballasts. 

Scenario 3. This scenario assumes 

that the new/renovation luminaire 

market segment converts all magnetic 

T12 ballasts to electronic T8 ballasts 

starting on the effective date. We 

assume that this segment comprises 70 

percent of the total magnetic T12 ballast 

market, based on the current luminaire 

market. The remaining 30 percent 

assumed replacement market has an 

additional delay of 5 years, after which 

these ballasts are converted to electronic 

ballasts, with 5 percent becoming T12 

ballasts and 95 percent becoming T8 

ballasts. This scenario allows a differing 

impact of the standards on these two 

market segments by providing an 

additional adjustment period for the 

replacement market for users in existing 

buildings and on lamp manufacturers to 

prepare for the new ballast type and 

market shift. 

Scenario 4. This scenario has 

identical assumptions to scenario 3. 

except that the additional delay period 

for the replacement market is 2 years. 

We compared each of the above four 

standard level forecasts with that of the 

two different base cases. We denoted 

forecasts under the "Decreasing 

Shipments to 2015" base case as 

scenarios lA, 2A, 3A, and 4A. We called 

forecasts runs with the "Decreasing 

Shipments to 2027" base case scenarios 

IB, 2B, 3B, and 4B. 

Cathode Cutout Trial Standards 

For cathode cutout standards. we also 

evalua.ted the following scenarios to 

capture the range of national impacts 

from likely consumer choices for a 

possible cathode cutout standard: 

Scenario 5. This scenario assumes 

that 100 percent of magnetic T12 

ballasts are converted to cathode cutout 

T12 ballasts. The exception is the 

F96T12 ballast class, for which there is 

no cathode cutout option. These ballasts 

are assumed to remain as magnetic 

ballasts under the standards. This 

scenario is intended to model the 

impacts of minimal compliance with the 

standard in regard to commercial and 

industrial consumer choice. 

Scenario 6. This scenario assumes 

that the 30 percent replacement market 

T12 ballasts are converted to cathode 

cutout T12 ballasts, and the 70 percent 

new/renovation market T12 ballasts are 

converted to electronic ballasts, with 5 

percent of the electronic ballasts 

becoming T12 ballasts and 95 percent 

becoming T8 ballasts. 

We denoted forecasts run with the 

Decreasing Shipments to 2015 base case 

as 5A and 6A. We called forecasts run 

with the Decreasing Shipments to 2027 

base case Scenario 5B and 6B. 

Joint Comment 

In addition, we evaluated two 

scenarios based on the standards 

recommended by the Joint Comment: 

Decreasing magnetic ballast shipments 

to 2015 and decreasing magnetic ballast 

shipments to 2027. In evaluating the 

joint comment proposal. the Department 

also used a third shipment scenario (flat 

magnetic ballast shipment forecast) as 

the upper bound as described in 

Appendix E of the TSD. 

b. Significance of Energy Savings 

To estimate the energy savings 

through the year 2030 due to revised 

standards, we compared the energy 

consumption of ballasts under the base 

case to the energy consumption of 

ballasts complying with the standard. 

As discussed above, there are eight 

electronic ballast standards scenarios 

and four cathode cutout standards 

scenarios. 

The results presented in Tables V.la 

and V.lb use the AEO Reference Case 

forecast. (The TSD shows the results for 

the AEO High and Low cases, with total 

benefits respectively higher and lower 

than those for the Reference Case.) The 

tables show the energy savings for each 

of the standards scenarios. 

TABLE V.1A.-ENERGY SAVINGS FROM ELECTRONIC STANDARDS 

Seenario 

Total Quads Saved ........ Total Quads Saved wI 

HVAC .......................... 

Electronic standards for units sold from 2003 to 2030 

Seen 1A Seen 1B Seen 2A Seen 2B Seen 3A Seen 3B T12 T12 T121T8 T121T8 Decr2015 Decr2027 Decr2015 Decr2027 Decr2015 Decr2027 

1.01 1.79 1.66 2.93 1.43 2.66 

1.08 1.9 1.76 3.12 1.52 2.82 

TABLE V.1B.-ENERGY SAVINGS FROM CATHODE CUTOUT STANDARDS 

Seenario 

Cathode cutout standards for units sold from 2003 to 2030 

Seen 5A 

100% CC 

Decr2015 

Seen 5B 

100% CC 

Decr2027 

Total Quads Saved ........................................................................................ .. 0.48 

0.51 

0.85 

Total Quads Saved w/HVAC ..... : .................................................................... . 0.91 

Seen 4A 

Decr2015 

Seen 6A 

37% CC 

Decr2015 

1.57 

1.67 

1.12 

1.19 

Seen 4B 

Decr2027 

2.84 

3.02 

Seen 6B 

37% CC 

Decr2027 

1.98 

2.11 
Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules 14143

The Department finds that each of the

standards scenarios considered above

would result in a significant

conservation of energy. Energy savings

from the electronic ballast standards

scenarios range from 1.01 Quads to 2.93

Quads of source energy without

considering HVAC savings. The energy

savings are larger for the slower

decreasing shipments forecast to 2027

compared to those with the faster

decreasing shipments forecast to 2015.

Energy savings for scenario 2 with T8

electronic ballasts are almost 65 percent

greater than those for scenario 1 with

T12 electronic ballasts. For scenario 3,

the five-year phase-in period causes a

savings reduction of around 10 to 15

percent from that of scenario 2. For

scenario 4, the 2-year phase-in period

results in a savings reduction of about

5 percent from scenario 2. For the

cathode cutout standards scenarios,

energy savings range from 0.48 Quads to

1.98 Quads without considering HVAC

savings. The scenario 6 savings from

partial conversion to electronic ballasts

are about 2.3 times higher than those of

scenario 5. The additional HVAC

savings increase the total energy savings

for all levels by 6.25 percent.

In Table V.2, we present the energy

savings of the joint Comment. The

results use the AEO Reference Case

forecast with the energy savings from

2005 to 2030. The energy savings of the

Joint Comment range from 1.20 Quads

to 2.32 Quads without considering

HVAC savings.

TABLE V.2.-ENERGY SAVINGS, RESULTING FROM JOINT COMMENT

Energy savings, resulting from joint comment , for units sold from 2005 to 2030

Scenario Dec 2015 Dec 2027

Total Quads Saved .................................................................................................................................................. 1.20 2.32

Total Quads Saved w/ HVAC .................................................................................................................................. 1.27 2.46

c. Payback Period

The Act requires the Department to

examine payback periods to determine

if the three year rebuttable presumption

of economic justification applies. In

Table V.3, we list the median payback energy varies little between the two

periods for product classes and design years (2003 and 2005), we believe the

options. While we did not analyze the paybacks shown below are

effect of a two-year delay in the effective representative of a 2005-effective

date of the comments as found in the standard as well.

Joint Comment, because the cost of

TABLE V. 3.-SUMMARY OF PAYBACK PERIOD

Product class Design option Sector

Median

payback

(yrs)

1F40 ....................................................................... T12 CC ......................... .... Commercial ........................................ 24.8

T12 ERS ............................................ Commercial ........................................ 6.4

2F40 ....................................................................... T12 CC ............................................... Commercial ........................................ 10.7

T12 ERS ............................................ Commercial ........................................ 5.4

3F40 ....................................................................... T12 CC ............................................... Commercial ........................................ 9.9

Tandem-Wired ........................................................ T12 ERS ............................................ Commercial ........................................ 6.4

3F40 ....................................................................... T12 CC ............................................... Commercial ........................................ 11.5

Not Tandem-Wired ................................................. T12 ERS ............................................ Commercial ........................................ 3.3

4F40 ....................................................................... T12 CC ............................................... Commercial ........................................ 9.3

T12 ERS ............................................ Commercial ........................................ 4.8

2F96 ....................................................................... T12 EIS .............................................. Commercial ........................................ 5.9

T12 EIS .............................................. Industrial ............................................. 8.8

2F96HO .................................................................. T12 CC ............................................... Commercial ........................................ 2.1

T12 ERS ............................................ Commercial ........................................ 2.4

T12 CC ............................................... Industrial ............................................. 5.4

T12 ERS ............................................ Industrial ............................................. 3.1

d. Economic Justification

1. Economic Impact on Manufacturers

and Consumers

We performed a Manufacturer Impact

Analysis (MIA) to determine the impact

of standards on manufacturers. The

complete analysis is Chapter 6 of the

TSD. In general, manufacturers of

"affected" magnetic ballasts and their

suppliers would be negatively impacted.

Also, most ballast manufacturers

reported that they would add additional

electronic ballast capacity to meet a new

standard. None of the manufacturers

stated that they would leave the

industry or go out of business as a result

of an electronic ballast standard.

Commercial and industrial consumers

will also be affected by increased ballast

standards in that they will experience

higher purchase prices for ballasts and

lower operating costs for lighting

systems. These impacts are best

captured by changes in life cycle costs

which are discussed in section V.d.2.

Ballast Manufacturer Analysis

In conducting the analysis, we

conducted detailed interviews with

seven ballast manufacturers that

together supply more than 95 percent of

the domestic magnetic and electronic

ballast markets. The interviews

provided valuable information used to

evaluate the impacts of a new standard

on manufacturers' cash flows,

manufacturing capacities and

employment levels. The MIA was

performed on a company-by-company

basis. We elected to group

manufacturers exhibiting similar

product mix characteristics, as this

represents the most comprehensive way

of reporting the variation of impacts on

different manufacturers while ensuring

the confidentiality of individual

manufacturers' positions. Based on

EE-RM-97-500 COMMENT 98A

Federal Register IVoI. 65, No. 51 I Wednesday, March 15, 2000/Proposed Rules 14143 

The Department finds that each of the 

standards scenarios considered above 

would result in a significant 

conservation of energy. Energy savings 

from the electronic ballast standards 

scenarios range from 1.01 Quads to 2.93 

Quads of source energy without 

considering HV AC savings. The energy 

savings are larger for the slower 

decreasing shipments forecast to 2027 

compared to those with the faster 

decreasing shipments forecast to 2015. 

Energy savings for scenario 2 with T8 

electronic ballasts are almost 65 percent 

greater than those for scenario 1 with 

T12 electronic ballasts. For scenario 3, 

the five-year phase-in period causes a 

savings reduction of around 10 to 15 

percent from that of scenario 2. For 

scenario 4, the 2-year phase-in period 

results in a savings reduction of about 

5 percent from scenario 2. For the 

cathode cutout standards scenarios, 

energy savings range from 0.48 Quads to 

1.98 Quads without considering HVAC 

savings. The scenario 6 savings from 

partial conversion to electronic ballasts 

are about 2.3 times higher than those of 

scenario 5. The additional HV AC 

savings increase the total energy savings 

for all levels by 6.25 percent. 

In Table V.2, we present the energy 

savings of the Joint Comment. The 

results use the AEO Reference Case 

forecast with the energy savings from 

2005 to 2030. The energy savings of the 

Joint Comment range from 1.20 Quads 

to 2.32 Quads without considering 

HV AC savings. 

TABLE V.2.-ENERGY SAVINGS, RESULTING FROM JOINT COMMENT 

Energy savings, resulting from joint comment, for units sold from 2005 to 2030 

Scenario Dec 2015 Dec 2027 

Total Quads Saved ................................................................................................................................................ .. 1.20 

1.27 

2.32 

Total Quads Saved wI HVAC ................................................................................................................................ .. 2.46 

c. Payback Period 

The Act requires the Department to 

examine payback periods to determine 

if the three year rebuttable presumption 

of economic justification applies. In 

Table V.3, we list the median payback 

periods for product classes and design 

options. While we did not analyze the 

effect of a two-year delay in the effective 

date of the comments as found in the 

Joint Comment, because the cost of 

energy varies little between the two 

years (2003 and 2005), we believe the 

pay backs shown below are 

representative of a 2005-effective 

standard as well. 

TABLE V.3.-SUMMARY OF PAYBACK PERIOD 

1F40 

2F40 

3F40 

Product class Design option 

T12 CC .............................................. . T12 ERS .......................................... .. T12 CC ............................................. .. T12 ERS .......................................... .. T12 CC ............................................. .. 

Sector 

Commercial ...................................... .. Commercial ....................................... . Commercial ...................................... .. Commercial ...................................... .. Commercial ...................................... .. 

Median 

payback 

(yrs) 

24.8 

6.4 

Tandem-Wired ., ..................................................... . T12 ERS .......................................... .. Commercial ....................................... . 

10.7 

5.4 

9.9 

6.4 

3F40 ...................................................................... . T12 CC .............................................. . Commercial ...................................... .. 11.5 

3.3 

9.3 

4.8 

5.9 

8.8 

2.1 

2.4 

5.4 

3.1 

Not Tandem-Wired ................................................ . T12 ERS .......................................... .. Commercial ....................................... . 4F40 ..................................................................... .. T12 CC ............................................. .. Commercial ....................................... . T12 ERS .......................................... .. Commercial ....................................... . 2F96 ...................................................................... . T12 EIS ............................................ .. Commercial ....................................... . T12 EIS ............................................ .. Industrial ............................................ . 2F96HO ................................................................. . T12 CC .............................................. . Commercial ...................................... .. 

d. Economic Justification 

1. Economic Impact on Manufacturers 

and Consumers 

We performed a Manufacturer Impact 

Analysis (MIA) to determine the impact 

of standards on manufacturers. The 

complete analysis is Chapter 6 of the 

TSD. In general, manufacturers of 

"affected" magnetic ballasts and their 

suppliers would be negatively impacted. 

Also, most ballast manufacturers 

reported that they would add additional 

electronic ballast capacity to meet a new 

standard. None of the manufacturers 

stated that they would leave the 

T12 ERS ........................................... . Commercial ....................................... . T12 CC .............................................. . Industrial ........................................... .. T12 ERS .......................................... .. Industrial ............................................ . 

industry or go out of business as a result 

of an electronic ballast standard. 

Commercial and industrial consumers 

will also be affected by increased ballast 

standards in that they will experience 

higher purchase prices for ballasts and 

lower operating costs for lighting 

systems. These impacts are best 

captured by changes in life cycle costs 

which are discussed in section V.d.2. 

Ballast Manufacturer Analysis 

In conducting the analysis, we 

conducted detailed interviews with 

seven ballast manufacturers that 

together supply more than 95 percent of 

the domestic magnetic and electronic 

ballast markets. The interviews 

provided valuable information used to 

evaluate the impacts of a new standard 

on manufacturers' cash flows, 

manufacturing capacities and 

employment levels. The MIA was 

performed on a company-by-company 

basis. We elected to group 

manufacturers exhibiting similar 

product mix characteristics, as this 

represents the most comprehensive way 

of reporting the variation of impacts on 

different manufacturers while ensuring 

the confidentiality of individual 

manufacturers' positions. Based on 
14144 Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

information obtained from manufacturer interviews, we divided the

manufacturers into two sub-groups:

TABLE V.4.-BALLAST MANUFACTURER

Sub-group 1

Manufacturers of both magnetic and electronic ballasts

Advance Transformer Company

MagneTek, Inc.

Robertson Worldwide

SLi Lighting/PowerLighting Products

Impacts on the entire industry were

obtained by aggregating the impacts on

the two sub-groups.

Impacts on Ballast Manufacturer Cash

Flows

As summarized, four cash flows were

calculated for each shipment forecast.

Manufacturers worked with us to

develop their most likely cash flow

impacts for both the 2015 and 2027

Industry shipment scenarios. These cash

flows are identified by the name

"Manufacturer Submittal." In

developing cash flow estimates under

the Manufacturer Submittal scenario it

is assumed that manufacturers retain

their 1997 shares of the electronic

market in the new electronic market.

The "Electronic Ballast New Entrant"

scenario was devised in order to capture

the likely cash flow impacts resulting

from the redistribution of market shares

among the existing manufacturers as a

new entrant gains a 15 percent market

share of the new electronic market. A

"Magnetic Ballast New Entrant"

Scenario was also developed to analyze

the potential impact of a new entrant(s)

in the magnetic ballast industry. This

scenario captures possible cash flow

impacts resulting from the

redistribution of market shares among

the existing manufacturers as a new

entrant gains a 15 percent share of the

magnetic ballast market. Finally, in

order to evaluate how assumptions

concerning future market dynamics

Sufi-group 2

Manufacturers that produce only electronic ballasts

Howard Industries.

Motorola Lighting, Inc.

Osram Sylvania Products Inc.

contributed to the impacts reported in

the Manufacturer Submittal scenario,

we prepared a separate cash flow that

assumes no change in magnetic and

electronic ballast profit margins before

and after standard: the "Existing

Dynamics" scenario . The four scenarios

are summarized below:

Manufacturer Submittal: Cash flows

and net present value (NPV) were

calculated using manufacturer prices,

manufacturing costs, operating margins,

capital investment estimates, and other

financial parameters as provided by the

individual manufacturers. This scenario

reflects each manufacturer's expectation

of its "most likely" future profitability

under new standards with the constraint

that it assumes that its electronic ballast

market share remains at the 1997 level.

Electronic Ballast New Entrant: This

scenario assumes that one or more new

entrants will capture 15 percent of the

new electronic ballast market.

Manufacturer market shares in the 1997

electronic market are redistributed to

accommodate the new market entrant(s).

Magnetic Ballast New Entrant: This

scenario assumes that one or more new

entrants will capture 15 percent of the

magnetic ballast market beginning in the

year 2000, both in the Base Case and the

Standards Case. This assumption is

supported by the fact that a few of the

existing electronic ballast manufacturers

have publicly announced plans to

manufacture and/or source magnetic

ballasts in the U.S., irrespective of a

DOE standard. Existing manufacturer

market shares in the 1997 magnetic

ballast market are redistributed to

accommodate the new market entrant(s).

Furthermore, this scenario assumes that

the new entrant(s) will result in

increased competition, which will

reduce the profitability of the magnetic

ballast business from its current levels

to those seen in the more competitive

electronic ballast business poststandards.

Existing Dynamics: This scenario

assumes that there will be no change in

competitive dynamics when an

electronic ballast standard comes into

effect, and hence electronic ballast

manufacturer market shares and profit

margins in the case of a standard will

remain similar to their values in the

absence of a standard.

Tables V.5 and V.6 summarize the

financial impacts for the four scenarios

under the two base case forecasts of

shipments. The impacts reported are the

change in NPV and this change as a

percentage of the industry value

represented by the cash flow generated

by all (magnetic and electronic) ballast

shipments in the regulated product

classes. Note that for the industry

results, the Electronic Ballast New

Entrant scenario is the same as the

Manufacturer Submittal scenario

because the new entrant(s) cash flow

was modeled using shipment weighted

average financial parameters of all

existing electronic ballast

manufacturers.

TABLE V.5.-CASH FLOW IMPACTS OF AN ELECTRONIC BALLAST STANDARD UNDER THE 2015 (5% DECLINE) SHIPMENT

SCENARIO

Scenarios Base case

NPV ($mil)

Standard case

NPV ($mil)

Change in

NPV ($mil)

Change in

NPV (%)

Cash flow impacts on business represented by all regulated product classes-Magnetic and Electronic

Sub-group I (magnetic and electronic producers)

Manufacturer Submittal .................................................................................... 288.9 198.9 -90.0 -31

Electronic Ballast, New Entrant ....................................................................... 288.9 199.1 -89.8 -31

Magnetic Ballast, New Entrant ........................................................................ 216.2 161.6 -54.6 -25

Existing Dynamics ........................................................................................... 288.9 219.0 -69.9 -24

Sub-group 2 (electronic only producers)

Manufacturer Submittal .................................................................................... 131.7 152.0 20.3 15

Electronic Ballast, New Entrant ....................................................................... 131.7 145.8 14.1 I 11

EE-RM-97-500 COMMENT 98A

14144 Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

information obtained from manufacturer interviews, we divided the 

manufacturers into two sub-groups: 

TABLE VA.-BALLAST MANUFACTURER 

Sub-group 1 SUO-group 2 

Manufacturers of both magnetic and electronic ballasts Manufacturers that produce only electronic ballasts 

Advance Transformer Company 

MagneTek, Inc. 

Howard Industries. 

Motorola Lighting, Inc. 

Robertson Worldwide Osram Sylvania Products Inc. 

SLi Lighting/PowerLighting Products 

Impacts on the entire industry were 

obtained by aggregating the impacts on the two sub-groups .. 

Impacts on Ballast Manufacturer Cash 

Flows 

As summarized, four cash flows were 

calculated for each shipment forecast. 

Manufacturers worked with us to 

develop their most likely cash flow 

impacts for both the 2015 and 2027 

Industry shipment scenarios. These cash 

flows are identified by the name "Manufacturer Submittal." In 

developing cash flow estimates under 

the Manufacturer Submittal scenario it 

is assumed that manufacturers retain 

their 1997 shares of the electronic 

market in the new electronic market. 

The "Electronic Ballast New Entrant" 

scenario was devised in order to capture 

the likely cash flow impacts resulting 

from the redistribution of market shares 

among the existing manufacturers as a 

new entrant gains a 15 percent market 

share of the new electronic market. A 

"Magnetic Ballast New Entrant" 

Scenario was also developed to analyze 

the potential impa,ct of a new entrant(s) 

in the magnetic ballast industry. This 

scenario captures possible cash flow 

impacts resulting from the 

redistribution of market shares among 

the existing manufacturers as a new 

entrant gains a 15 percent share of the 

magnetic ballast market. Finally, in 

order to evaluate how assumptions 

concerning future market dynamics 

contributed to the impacts reported in 

the Manufacturer Submittal scenario, we prepared a separate cash flow that assumes no change in magnetic and 

electronic ballast profit margins before 

and after standard: the "Existing 

Dynamics" scenario. The four scenarios are summarized below: 

Manufacturer Submittal: Cash flows 

and net present value (NPV) were 

calculated using manufacturer prices, 

manufacturing costs, operating margins, 

capital investment estimates, and other 

financial parameters as provided by the 

individual manufacturers. This scenario 

reflects each manufacturer's expectation 

of its "most likely" future profitability 

under new standards with the constraint 

that it assumes that its electronic ballast 

market share remains at the 1997 level. 

Electronic Ballast New Entrant: This 

scenario assumes that one or more new 

entrants will capture 15 percent of the new electronic ballast market. 

Manufacturer market shares in the 1997 

electronic market are redistributed to 

accommodate the new market entrant(s). 

Magnetic Ballast New Entrant: This 

scenario assumes that one or more new entrants will capture 15 percent of the 

magnetic ballast market beginning in the 

year 2000, both in the Base Case and the 

Standards Case, This assumption is 

supported by the fact that a few of the 

existing electronic ballast manufacturers 

have publicly announced plans to 

manufacture andlor source magnetic 

ballasts in the U.S., irrespective of a 

DOE standard. Existing manufacturer 

market shares in the 1997 magnetic 

ballast market are redistributed to 

accommodate the new market entrant(s). 

Furthermore, this scenario assumes that 

the new entrant(s) will result in 

increased competition, which will 

reduce the profitability of the magnetic 

ballast business from its current levels 

to those seen in the more competitive 

electronic ballast business poststandards. 

Existing Dynamics: This scenario assumes that there will be no change in 

competitive dynamics when an electronic ballast standard comes into 

effect, and hence electronic ballast 

manufacturer market shares and profit 

margins in the case of a standard will 

remain similar to their values in the 

absence of a standard. 

Tables V,5 and V,6 summarize the 

financial impacts for the four scenarios 

under the two base case forecasts of 

shipments. The impacts reported are the 

change in NPV and this change as a percentage of the industry value 

represented by the cash flow generated 

by all (magnetic and electronic) ballast 

shipments in the regulated product 

classes. Note that for the industry 

results, the Electronic Ballast New 

Entrant scenario is the same as the 

Manufacturer Submittal scenario 

because the new entrant(s) cash flow 

was modeled using shipment weighted 

average financial parameters of all 

existing electronic ballast 

manufacturers. 

TABLE V.5.-CASH FLOW IMPACTS OF AN ELECTRONIC BALLAST STANDARD UNDER THE 2015 (5% DECLINE) SHIPMENT 

SCENARIO 

Scenarios Base case NPV ($mil) 

Standard case NPV ($mil) Change in 

NPV ($mil) 

Cash flow impacts on business represented by all regulated product classes-Magnetic and Electronic 

Sub-group 1 (magnetic and electronic producers) 

Manufacturer Submittal .................................................................................. .. 

Electronic Ballast, New Entrant ...................................................................... . 

Magnetic Ballast. New Entrant ....................................................................... . 

EXisting Dynamics ......................................................................................... .. 

288.9 

288.9 

216.2 

288.9 

Sub-group 2 (electronic only producers) 

Manufacturer Submittal .................................................................................. .. 

Electronic Ballast, New Entrant ..................................................................... .. 

131.7 

131.7 

198.9 -90.0 

199.1 -89.8 

161.6 -54.6 

219.0 -69.9 

152.0 20.3 

145.8 14.1 I 

Change in 

NPV(%) 

-31 

-31 

-25 

-24 

15 

11 
Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules 14145

TABLE V.5.-CASH FLOW IMPACTS OF AN ELECTRONIC BALLAST STANDARD UNDER THE 2015 (5% DECLINE ) SHIPMENT

SCENARIO-Continued

Base case Standard case Change in Change in

Scenarios NPV ($mil) NPV ($mil) NPV ($mil) NPV (%)

Magnetic Ballast, New Entrant ........................................................................ 131.7 152.0 20.3 15

Existing Dynamics ........................................................................................... 131.7 141.0 9.3 7

Electronic Ballast New Entrant

Electronic Ballast, New Entrant ....................................................................... 0.0 6.0 6.0

Magnetic Ballast New Entrant

Magnetic Ballast, New Entrant ........................................................................ 4.5 2.0 -2.5 -55

Industry

(Sub-group 1 + Sub-group 2)

Manufacturer Submittal ....................................................................................

Electronic Ballast, New Entrant .......................................................................

Magnetic Ballast, New Entrant ........................................................................

Existing Dynamics ...........................................................................................

420.6

420.6

352.4

420.6

350.9

350.9

315.6

359.9

-69.7

-69.7

-36.8

-60.7

-17

-17

-10

-14

TABLE V.6.-CASH FLOW IMPACTS OF AN ELECTRONIC BALLAST STANDARD UNDER THE 2027 (3% DECLINE) SHIPMENT

SCENARIO

Scenarios Base case

NPV ($mil)

Standard case

NPV ($mil)

Change in

NPV ($mil)

Change in

NPV(%)

Cash flow impacts on business represented by all regulated product classes-Magnetic and Electronic

Sub-group 1 (magnetic and electronic producers)

Manufacturer Submittal ....................................................................................

Electronic Ballast, New Entrant .......................................................................

Magnetic Ballast , New Entrant ........................................................................

Existing Dynamics ...........................................................................................

318.3

318.3

220.9

318.3

204.6

204.9

161.7

224.7

-113.7

-113.4

-59.2

-93.6

-36

-36

-27

-29

Sub-group 2 (electronic only producers)

Manufacturer Submittal ....................................................................................

Electronic Ballast, New Entrant .......................................................................

Magnetic Ballast, New Entrant ........................................................................

Existing Dynamics ...........................................................................................

123.0 150.5 27.5 22

123.0 144.3 21.3 17

123.0 150.5 27.5 22

123.E 139.5 16.5 13

Electronic Ballast New Entrant

Electronic Ballast, New Entrant ....................................................................... 0.0 6.0 6.0

Magnetic Ballast New Entrant

Magnetic Ballast, New Entrant ........................................................................ 6.2 2.2 -4.0 -65

Industry

(Sub-group I + Sub-group 2)

Manufacturer Submittal ....................................................................................

Electronic Ballast, New Entrant .......................................................................

Magnetic Ballast, New Entrant ........................................................................

Existing Dynamics ...........................................................................................

441.3

441.3

350.1

441.3

355.1

355.1

314.4

364.2

-86.2

-86.2

-35.7

-77.1

-20

-20

-10

-17

Uncertainty Analysis of Cash Flows

The NPV values presented in the

above tables incorporate significant

restructuring costs primarily associated

with plant closures in the U.S. and

Mexico. The large majority of these

costs are directly associated with the

closure of the remaining large U.S.-

based ballast plant. In consideration of

the past trend towards consolidation of

magnetic ballast production to Mexico,

a sensitivity analysis was conducted on

the cash flows assuming that the

restructuring costs associated with the

plant closures would occur in the base

case (in absence of standards). It was

found that these costs contribute

approximately $14 million to the

negative impacts under all scenarios.

A sensitivity analysis was also

conducted to analyze the impact of

certain business risks. Specifically, a

scenario was developed whereby

changes in market demand would cause

magnetic ballast shipments to decline at

twice the rate, i.e., 10 percent per year

between 1999 and 2002, remain

constant through 2005 and then

continue declining at 5 percent per year

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65, No. 51/Wednesday. March 15, 2000/Proposed Rules 14145 

TABLE V.5.-CASH FLOW IMPACTS OF AN ELECTRONIC BALLAST STANDARD UNDER THE 2015 (5% DECLINE) SHIPMENT 

SCENARlo-Continued 

Scenarios Base case Standard case Change in 

NPV ($mil) Change in NPV ($mil) NPV ($mil) NPV(%) 

Magnetic Ballast, New Entrant ....................................................................... . 131.7 152.0 20.3 

9.3 

15 

Existing Dynamics .......................................................................................... . 131.7 141.0 7 

Electronic Ballast New Entrant 

Electronic Ballast, New Entrant . ..... .... ............ ...... ............ .... ..... ....... .... ..... ...... I 0.0 I 

Magnetic Ballast New Entrant 

Magnetic Ballast, New Entrant ........................................................................ 1 4.51 

Industry 

(Sub-group 1 + Sub-group 2) 

Manufacturer Submittal ................................................................................... . 

Electronic Ballast, New Entrant ...................................................................... . 

Magnetic Ballast, New Entrant ....................................................................... . 

EXisting Dynamics .......................................................................................... . 

420.6 

420.6 

352.4 

420.6 

6.0 I 6.0 I 

2.0 I -2.51 -55 

350.9 -69.7 -17 

350.9 -69.7 -17 

315.6 -36.8 -10 

359.9 -60.7 -14 

TABLE V.6.-CASH FLOW IMPACTS OF AN ELECTRONIC BALLAST STANDARD UNDER THE 2027 (3% DECLINE) SHIPMENT 

SCENARIO 

Scenarios Base case NPV ($mil) 

Standard case NPV ($mil) Change in 

NPV ($mil) Change in NPV(%) 

Cash flow impacts on business represented by all regulated product classes-llllagnetic and Electronic 

Sub-group 1 (magnetic and electronic producers) 

Manufacturer Submittal ................................................................................... . 318.3 

318.3 

220.9 

318.3 

Electronic Ballast, New Entrant ...................................................................... . 

Magnetic B;;lIast, New Entrant ....................................................................... . 

Existing Dynamics .......................................................................................... . 

Sub-group 2 (electronic only producers) 

Manufacturer Submittal ................................................................................... . 123.0 I Electronic Ballast, New Entrant ...................................................................... . 123.0 

Magnetic Ballast, New Entrant ....................................................................... . 123.0 

Existing Dynamics ................................................ , ......................................... . 123.0 I 

Electronic Ballast New Entrant 

Electronic Ballast, New Entrant ................. ......... ......... ....... ..... .... .... ................ I 0.0 I 

Magnetic Ballast, New Entrant 

Magnetic Ballast New Entrant 

Industry 

(Sub-group 1 + Sub-group 2) 

6.2 

Manufacturer Submittal ................................................................................... . 441.3 

441.3 

350.1 

441.3 

Electronic Ballast, New Entrant ...................................................................... . 

Magnetic Ballast, New Entrant ....................................................................... . 

Existing Dynamics .......................................................................................... . 

Uncertainty Analysis of Cash Flows 

The NPV values presented in the 

above tables incorporate significant 

restructuring costs primarily associated 

with plant closures in the U.S. and 

Mexico. The large majority of these 

costs are directly associated with the 

closure of the remaining large U.S.-

based ballast plant. In consideration of 

the past trend towards consolidation of 

magnetic ballast production to Mexico, 

a sensitivity analysis was conducted on 

the cash flows assuming that the 

restructuring costs associated with the 

plant closures would occur in the base 

case (in absence of standards). It was 

found that these costs contribute 

approximately $14 million to the 

negative impacts under all scenarios. 

204.6 

204.9 

161.7 

224.7 

150.5 

144.3 

150.5, 

139.51 

6.0 I 

2.2 

355.1 

355.1 

314.4 

364.2 

-113.7 

-113.4 

-59.2 

-93.6 

27.51 

21.3 I 

27.51 

16.5 

6.0 I 

-4.0 

-86.2 

-86.2 

-35.7 

-77.1 

-36 

-36 

-27 

-29 

22 

17 

22 

13 

-65 

-20 

-20 

-10 

-17 

A sensitivity analysis was also 

conducted to analyze the impact of 

certain business risks. Specifically, a 

scenario was developed whereby 

changes in market demand would cause 

magnetic ballast shipments to decline at 

twice the rate, i.e., 10 percent per year 

between 1999 and 2002, remain 

constant through 2005 and then 

continue declining at 5 percent per year 
14146 Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

beginning 2006. It was further assumed

that these abrupt changes in shipments

impact the magnetic ballast industry

competitive dynamics by reducing

profit margins in the 2000 through 2005

time frame, to levels observed in the

electronic ballast market.

TABLE V.7.-CASH FLOW IMPACTS OF AN ELECTRONIC BALLAST STANDARD UNDER THE 2015 (5% DECLINE) SHIPMENT

SCENARIO WITH PLANT CLOSURES IN THE BASE CASE IN 2003

Scenarios Base case

NPV ($mil)

The cash flow impacts with the 2003

plant closure assumption and the

business risks as outlined above are

presented in the Table V.7.

Standard case

NPV ($mil)

Change in

NPV ($mil)

Change in

NPV (%)

Cash flow Impacts on business represented by all regulated product classes-Magnetic and Electronic

Sub-group 1

'Manufacturer Submittal .................................................................................... 288.9 198.9 -90.0 -31

Manufacturer Submittal with plant closure in 2003 ......................................... 275.2 198.9 -76.3 -28

Business risk: abrupt change in shipments ..................................................... 263.7 179.5 -84.2 -32

Sub-group 2

Manufacturer Submittal .................................................................................... 131.7 152.0 20.3 15

Manufacturer Submittal with plant closure in 2003 ......................................... 131.7 152.0 20.3 15

Business risk: abrupt change in shipments ..................................................... 131.7 152.0 20.3 15

Industry

(Sub-group I + Sub-group 2)

Manufacturer Submittal .................................................................................... 420.6 350.9 -69.7 -17

Manufacturer Submittal with plant closure in 2003 ......................................... 406.9 350.9 -56.0 -14

Business risk: abrupt change in shipments ..................................................... 395.4 331.5 -63.9 -16

Impacts on Ballast Manufacturer

Employment

Employment impacts are reported in

two categories:

Direct employment impacts: These

impacts consider jobs directly involved

with the production of "affected"

magnetic or electronic ballasts. In

facilities producing "affected" and other

types of ballasts, only direct and

overhead jobs related to "affected"

ballasts are considered in this category.

In situations where ballast companies

own component manufacturing

operations, such as capacitor plants or

magnet wire operations, job impacts on

these plants are reported within this

category. Impacts on other component

suppliers are presented in a separate

section titled "Impact on Suppliers to

the Fluorescent Lamp Ballast Industry."

Associated employment impacts:

These impacts consider jobs impacted

by business decisions driven by the

"direct" employment impacts. For

example, if in a manufacturing plant

with 100 employees, 50 are producing

"affected" magnetic ballasts and the

remaining 50 are producing

"unaffected" magnetic ballasts, such as

residential ballasts, then an electronic

ballast standard would result in the loss

of 50 direct jobs. Faced with this

situation the company might decide to

close operations in its plant due to the

dramatically reduced capacity

utilization. Such a decision would

result in the loss of the remaining 50

jobs. These 50 jobs would then be

reported as "associated" employment

impacts.

Manufacturers in Sub-group 1

anticipate that absent standards, direct

employment associated with

manufacturing "affected" magnetic

ballasts will decrease approximately in

the same proportion as shipments.

Faced with this decline, manufacturers

in Sub-group 1 intend to maintain high

plant capacity utilization by replacing

the loss in direct jobs with new

associated jobs. These new associated

jobs may be the result of new product

introductions, plant consolidations or

decisions to make in-house, parts

currently sourced from suppliers.

The uncertainty with regards to the

timing of any plant closures in the base

case-after the year 2003-results from

the difficulty in anticipating how many

associated jobs can be maintained in the

long run. Gains in associated jobs will

not necessarily maintain plant capacity

utilization in the long run and a

threshold may be reached that requires

the plant to be closed. For example, one

manufacturer suggested that for its

supplier plant a drop of 30 percent in

capacity could lead to closure.

Table V.8 summarizes the

employment impacts of an electronic

ballast standard under the two shipment

scenarios. The table assumes a

standards effective date of 2003.

TABLE V.8.-INDUSTRY-WIDE EMPLOYMENT IMPACTS OF AN ELECTRONIC BALLAST STANDARD (ORDERLY DECLINE IN U.S.

MANUFACTURING)

Country of manufacture

Direct jobs lost

in magnetic

ballast manufacturing

2015 (5% decline) shipment scenario

Associated

jobs at risk in

magnetic ballast manufacturing

Direct jobs 4 s

gained in electronic ballast

manufacturing

Net direct jobs

lost

USA .................................................................................................................. 1666 2406 500 166

Mexico .............................................................................................................. 1570 3190 700 870

EE-RM-97-500 COMMENT 98A

14146 Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

beginning 2006. It was further assumed 

that these abrupt changes in shipments 

impact the magnetic ballast industry 

competitive dynamics by reducing 

profit margins in the 2000 through 2005 

time frame, to levels observed in the 

electronic ballast market. 

The cash flow impacts with the 2003 

plant closure assumption and the 

business risks as outlined above are 

presented in the Table V.7. 

TABLE V.7.-CASH FLOW IMPACTS OF AN ELECTRONIC BALLAST STANDARD UNDER THE 2015 (5% DECLINE) SHIPMENT 

SCENARIO WITH PLANT CLOSURES IN THE BASE CASE IN 2003 

Scenarios Base case NPV ($mil) 

Standard case NPV ($mil) Change in 

NPV ($mil) Change in 

NPV(%) 

Cash flow impacts on business represented by all regulated product classes-Magnetic and Electronic 

Subllroup 1 

. Manufacturer Submittal ................................................................................... . 288.9 

Manufacturer Submittal with plant closure in 2003 ........................................ . 275.2 

Business risk: abrupt change in shipments .................................................... . 263.7 

SUbllroup 2 

Manufacturer Submittal ................................................................................... . 131.7 

Manufacturer Submittal with plant closure in 2003 ........................................ . 131.7 

Business risk: abrupt change in shipments .................................................... . 131.7 

Industry 

(Sub-group 1 + Sub-group 2) 

Manufacturer Submittal ................................................................................... . 420.6 

406.9 

395.4 

Manufacturer Submittal with plant closure in 2003 ........................................ . 

Business risk: abrupt change in shipments .................................................... . 

Impacts on Ballast Manufacturer 

Employment 

Employment impacts are reported in 

two categories: 

Direct employment impacts: These 

impacts consider jobs directly involved 

with the production of "affected" 

magnetic or electronic ballasts. In 

facilities producing "affected" and other 

types of ballasts, only direct and 

overhead jobs related to "affected" 

ballasts are considered in this category. 

In situations where ballast companies 

own component manufacturing 

operations, such as capacitor plants or 

magnet wire operations, job impacts on 

these plants are reported within this 

category. Impacts on other component 

suppliers are presented in a separate 

section titled "Impact on Suppliers to 

the Fluorescent Lamp Ballast Industry." 

Associated employment impacts: 

These impacts consider jobs impacted 

by business decisions driven by the 

"direct" employment impacts. For 

example, if in a manufacturing plant 

with 100 employees, 50 are producing 

"affected" magnetic ballasts and the 

remaining 50 are producing 

"unaffected" magnetic ballasts, such as 

residential ballasts, then an electronic 

ballast standard would result in the loss 

of 50 direct jobs. Faced with this 

situation the company might decide to 

close operations in its plant due to the 

dramatically reduced capacity 

utilization. Such a decision would 

result in the loss of the remaining 50 

jobs. These 50 jobs would then be 

reported as "associated" employment 

impacts. 

Manufacturers in Sub-group 1 

anticipate that absent standards, direct 

employment associated with 

manufacturing "affected" magnetic 

ballasts will decrease approximately in 

the same proportion as shipments. 

Faced with this decline. manufacturers 

in Sub-group 1 intend to maintain high 

plant capacity utilization by replacing 

198.9 

198.9 

179.5 

152.0 

152.0 

152.0 

350.9 

350.9 

331.5 

-90.0 

-76.3 

-84.2 

20.3 

20.3 

20.3 

-69.7 

-56.0 

-63.9 

-31 

-28 

-32 

15 

15 

15 

-17 

-14 

-16 

the loss in direct jobs with new 

associated jobs. These new associated 

jobs may be the result of new product 

introductions. plant consolidations or 

decisions to make in-house. parts 

currently sourced from suppliers. 

The uncertainty with regards to the 

timing of any plant closures in the base 

case-after the year 2003-results from 

the difficulty in anticipating how many 

associated jobs can be maintained in the 

long run. Gains in associated jobs will 

not necessarily maintain plant capacity 

utilization in the long run and a 

threshold may be reached that requires 

the plant to be closed. For example. one 

manufacturer suggested that for its 

supplier plant a drop of 30 percent in 

capacity could lead to closure. 

Table V.8 summarizes the 

employment impacts of an electronic 

ballast standard under the two shipment 

scenarios. The table assumes a 

standards effective date of 2003. 

TABLE V.B.-INDUSTRY-WIDE EMPLOYMENT IMPACTS OF AN ELECTRONIC BALLAST STANDARD (ORDERLY DECLINE IN U.S. 

MANUFACTURING) 

Direct jobs lost 

Country of manufacture in magnetic 

ballast manu- facturing 

2015 (5% decline) shipment scenario 

~:~~;.:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 1 ~~~~ 1 

Associated 

jobs at risk in 

magnetic ballast manufacturing 

2406

3190 1 

Direct jobs 4 5 

gained in electronic ballast 

manufacturing 

500 1 

700 

Net direct jobs 

lost 

166 

870 
Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

TABLE V.8.-INDUSTRY-WIDE EMPLOYMENT IMPACTS OF AN ELECTRONIC BALLAST STANDARD (ORDERLY DECLINE IN U.S.

MAN UFACTURING)-Continued

Country of manufacture

Direct jobs lost

in magnetic

ballast manufacturing

Associated

jobs at risk in

magnetic ballast manufacturing

Direct jobs 4 5

gained in electronic ballast

manufacturing

Net direct jobs

lost

USA .................................................................................................................. 717 2363 557 160

Mexico .............................................................................................................. 1727 3161 769 958

2027 (3% decline) shipment scenario

14147

I Includes both factory and non-factory jobs supporting magnetic ballast production.

2These "associated" jobs are assumed relocated to Mexico.

3These "associated" jobs will be relocated to other plants in Mexico or elsewhere.

4Includes jobs from Sub-groups 1 and 2.

5 Does not include potential associated jobs added in these plants.

Uncertainty in Ballast Manufacturer

Employment Impacts

As previously discussed, there exists

some uncertainty relative to the closure

date of current magnetic ballast

production facilities in the base case.

The employment impacts presented in

Table V.8 assume a base case with an

orderly decline in the U.S. magnetic

ballast employment until 2015 or 2027.

The large majority of these employment

impacts are directly associated with the

closure of the remaining large U.S.-

based magnetic ballast plant.

In consideration of the past trend

towards consolidation of magnetic

ballast production to Mexico, a

sensitivity analysis was conducted on

the employment impacts assuming that

the employment impacts associated

with the plant closures would occur in

the base case (in absence of standards).

These impacts are detailed in the Table

V.9. The scenario assumes that the lost

U.S. jobs would be picked up by

increased manufacturing activity in the

Mexican plants, thereby increasing the

employment impact of a standard on

Mexican jobs.

TABLE V.9.-INDUSTRY-WIDE EMPLOYMENT IMPACTS OF AN ELECTRONIC BALLAST STANDARD UNDER THE SCENARIO

WHERE (U.S. MAGNETIC BALLAST PLANTS CLOSE IN 2003 IN THE BASE CASE)

Country of manufacture

Direct jobs lost

in magnetic

ballast manufacturing

2015 (5% decline) shipment scenario

Associated

jobs at risk in

magnetic ballast manufacturing

Direct jobs 4 5

gained in electronic ballast

manufacturing

Net direct

jobs lost/

gained,

U.S.A .................................................................................................................. 10 20 500 500 jobs

gained

Mexico ................................................................................................................ 2236 3 596 700 1536 jobs

lost

2027 (3% decline) shipment scenario

U.S.A .................................................................................................................. 0 0 557 557 jobs

gained

Mexico ................................................................................................................ 2444' 3 524 769 1675 jobs

lost

I Includes both factory and non-factory jobs supporting magnetic ballast production.

2These "associated" jobs are assumed relocated to Mexico.

3These "associated" jobs will be relocated to other plants in Mexico or elsewhere.

4Includes jobs from Sub-groups 1 and 2.

5Does not include potential associated jobs added in these plants.

Impacts on Ballast Manufacturing

Capacity

It is likely that an electronic ballast

standard would negatively impact

magnetic ballast production capacity in

the U.S. and Mexico. As mentioned

previously, there is evidence to suggest

that magnetic ballast production

facilities in the U.S. may be closed

regardless of a standard, and a

sensitivity analysis was conducted to

examine the impacts of this scenario.

While there is a degree of uncertainty

over what will happen to domestic

magnetic ballast production facilities in

the absence of a standard, in all

likelihood, the imposition of a new

electronic ballast standard will result in

the closure of one magnetic ballast

production facility in the U.S., and in

the partial closure of another in Mexico.

Additionally two manufacturer-owned

(captive) ballast supplier facilities

would most likely be impacted: A

capacitor plant in Mexico could close

and a magnet wire plant, located in the

U.S., could also close.

Although the scenario whereby

magnetic ballast production facilities

are closed in 2003 in the base case was

examined, all manufacturers in Subgroup 1 suggested that in the absence of

a standard they would continue to

manufacture "affected" magnetic

ballasts in their current manufacturing

plants. They did not anticipate any

plant closures or shifting of production

EE-RM-97-500 COMMENT 98A

Federal R.egister / Vol. 65, No. 51/ Wednesday, March 15, 2000/ Proposed Rules 14147 

TABLE V.B.-INDUSTRY-WIDE EMPLOYMENT IMPACTS OF AN ELECTRONIC BALLAST STANDARD (ORDERLY DECLINE IN U.S. 

MANUFACTURING)-Continued 

Direct jobs lost 

Country of manufacture in magnetic ballast manu- facturing 

2027 (3% decline) shipment scenario 

USA ................................................................................................................. . 717 

Mexico ............................................................................................................. . 1727 

1 Includes both factory and non-factory jobs supporting magnetic ballast production. 2These "associated" jobs are assumed relocated to Mexico. 3 These "associated" jobs will be relocated to other plants in Mexico or elsewhere. 4 Includes jobs from Sub-groups 1 and 2. S Does not include potential associated jobs added in these plants. 

Uncertainty in Ballast Manufacturer 

Employment Impacts 

As previously discussed, there exists 

some uncertainty relative to the closure 

date of current magnetic ballast 

production facilities in the base case. 

The employment impacts presented in 

Table V.S assume a base case with an 

orderly decline in the U.S. magnetic 

ballast employment until 2015 or 2027. 

The large majority of these employment 

impacts are directly associated with the 

closure of the remaining large U.S.-

based magnetic ballast plant. 

In consideration of the past trend 

towards consolidation of magnetic 

ballast production to Mexico, a 

sensitivity analysis was conducted on 

the employment impacts assuming that 

Associated 

jobs at risk in 

magnetic ballast manufacturing 

2363 

3161 

Direct jobs 4 5 

gained in electronic ballast 

manufacturing 

557 

769 

Net direct jobs lost 

160 

958 

the employment impacts associated 

with the plant closures would occur in 

the base case (in absence of standards). 

These impacts are detailed in the Table 

v.g. The scenario assumes that the lost 

U.S. jobs would be picked up by 

increased manufacturing activity in the 

Mexican plants, thereby increasing the 

employment impact of a standard on 

Mexican jobs. 

TABLE V.9.-INDUSTRY-WIDE EMPLOYMENT IMPACTS OF AN ELECTRONIC BALLAST STANDARD UNDER THE SCENARIO 

WHERE (U.S. MAGNETIC BALLAST PLANTS CLOSE IN 2003 IN THE BASE CASE) 

Direct jobs lost 

Country of manufacture in magnetic ballast manu- facturing 

2015 (5% decline) shipment scenario 

U.S.A ....... , ............................. , ............................ , ............................................. .. 10 

Mexico .............................................................................................................. .. 2236 

2027 (3% decline) shipment scenario 

U,S.A ................................................................................................................ .. o 

Mexico ......................... , ..................................................................................... . 2444' 

1 Includes both factory and non-factory jobs supporting magnetic ballast production. 2These "associated" jobs are assumed relocated to Mexico, 3 These "associated" jobs will be relocated to other plants in Mexico or elsewhere. 4 Includes jobs from Sub-groups 1 and 2. 5 Does not include potential associated jobs added in these plants. 

Impacts on Ballast Manufacturing 

Capacity 

It is likely that an electronic ballast 

standard would negatively impact 

magnetic ballast production capacity in 

the U.S. and Mexico. As mentioned 

previously, there is evidence to suggest 

that magnetic ballast production 

facilities in the U.S. may be closed 

regardless of a standard, and a 

sensitivity analysis was conducted to 

examine the impacts of this scenario. 

While there is a degree of uncertainty 

over what will happen to domestic 

magnetic ballast production facilities in 

the absence of a standard, in all 

likelihood, the imposition of a new 

electronic ballast standard will result in 

the closure of one magnetic ballast 

production facility in the U.S., and in 

the partial closure of another in Mexico. 

Additionally two manufacturer-owned 

(captive) ballast supplier facilities 

would most likely be impacted: A 

capacitor plant in Mexico could close 

Associated Direct jobs 4 5 jobs at risk in Net direct 

magnetic bal- gained in elec- jobs lost! tronic ballast last manufac- manufacturing gained, turing 

20 500 500 jobs 

gained 

3596 700 1536 jobs 

lost 

o 557 557 jobs 

gained 

3524 769 1675 jobs 

lost 

and a magnet wire plant, located in the 

U.S., could also close. 

Although the scenario whereby 

magnetic ballast production facilities 

are closed in 2003 in the base case was 

examined, all manufacturers in Subgroup 1 suggested that in the absence of 

a standard they would continue to 

manufacture "affected" magnetic 

ballasts in their current manufacturing 

plants. They did not anticipate any 

plant closures or shifting of production 
14148 Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

of "affected" magnetic ballasts from one Table V.10 summarizes the possible plants in the U.S. and Mexico, assuming

plant to another before the year 2010. impact of a new electronic ballast plants remain open in the base case as

standard on existing manufacturing manufacturers predict.

TABLE V.10.-IMPACTS ON MANUFACTURING CAPACITY DUE TO AN ELECTRONIC BALLAST STANDARD

Plant Location Description Action

Plant 1 ..................... U.S.A .................................................... Magnetic ballast ................................... Closure.

Plant 2 ..:.................. U.S.A .................................................... Magnet Wire ..................................... Possible Closure.

Plant 3 ..................... Mexico .................................................. Magnetic ballast ................................... Partial Closure.

Plant 4 ..................... Mexico . ................................................. Capacitors ............................................ Closure.

Plant 5 ..................... U.S.A .................................................... Electronic ballast .................................. Expansion.

Plant 6 ..................... U.S.A .................................................... Electronic ballast . ................................. Expansion.

Plant 7 ..................... Mexico .................................................. Electronic ballast .................................. Expansion.

Plant 8 ..................... Mexico .................................................. Electronic ballast .................................. Expansion.

An electronic ballast standard would

lead to increased electronic ballast

manufacturing capacity in the U.S. and

Mexico. In order to meet increased sales

resulting from a new electronic ballast

standard, two of the four manufacturers

in Sub-group 1 plan to develop

additional electronic ballast

manufacturing capacities in Mexico.

The smaller manufacturers in Sub-group

1 plan no major plant closures or

expansions and will accommodate the

new product mix requirements within

their existing facilities. In Sub-group 2,

two manufacturers stated that they

would add significant electronic ballast

manufacturing capacity in the U.S. to

meet the new standard.

Impact on Small Ballast Manufacturers

Two relatively small manufacturers

currently produce both "affected"

magnetic and electronic ballasts. One of

these manufacturers would be a "small

business" as defined in the Regulatory

Flexibility Act (See discussion in the

Procedural Issues and Regulatory

Reviews section of this preamble). Both

the small manufacturers had their

respective electronic and magnetic

ballast manufacturing operations in the

same plants. It seems their smaller size

and less automated operations provides

them with the flexibility to adapt to a

new electronic ballast standard without

significant asset write-offs or plant

closures. However, the negative impacts

on the small manufacturers' cash flows

from operations were similar in

proportion to those reported by the two

large manufacturers in Sub-group 1. As

a result, in the 5% scenario , we estimate

that small manufacturers will

experience a 16 percent loss in their

NPV compared to a 34 percent loss in

NPV for the two large manufacturers.

As with other Sub-group 1

manufacturers, neither of these

manufacturers stated that an electronic

ballast standard would force them to

leave the industry or go out of business.

Impact on Ballast Industry Suppliers

New energy-efficiency standards for

fluorescent lamp ballasts will also affect

ballast industry suppliers. To estimate

this impact, we performed a detailed

analysis of the impacts of an electronic

ballast standard on suppliers to the

ballast industry. We invited 31 supplier

firms to participate in interviews. These

firms were identified by manufacturers

to represent the key components

contained in the bills of materials for

"affected" magnetic and electronic

ballasts. Eleven of these suppliers

served magnetic ballast production,

eleven electronic ballast production,

and nine supplier plants served both

magnetic and electronic production.

Sixteen of the 20 organizations serving

magnetic ballast production participated

in interviews and/or provided plant

tours, Eleven of the 20 organizations

serving electronic ballast production

participated in interviews and/or

provided plant tours.

Table V.11 shows an average

(weighted by shipment levels)

distribution of materials and

components cost for "affected"

magnetic ballasts. Interviews and

literature sources provided information

needed to estimate financial and

employment impacts of a new energy

efficiency standard for ballasts on

suppliers responsible for approximately

91 percent of the cost of materials.

TABLE V.11.-COST OF MATERIALS

FOR "AFFECTED" MAGNETIC BALLASTS

Material type

Contribution

to total cost

of materials

(%)

Magnet and Lead Wire .............

Steel case and CRML ..............

Capacitors .................................

Thermal protectors, clamps,

potting

Other .........................................

40

23

16

12

9

The industries analyzed and

represented are:

® Cold rolled steel finished for ballast

cases

® Cold rolled motor laminate (CRML)

steel for use primarily in transformers

® Magnet wire

® Lead wire

• Thermal protectors

® Clamps to secure the stack of CRML

stamped sections making up the ballast

transformer to the proper size

® Potting and impregnation

compounds

® Capacitors

With the exception of a very small

fraction of metallized film capacitors

produced outside the U.S. and materials

produced in plants owned and operated

by the ballast manufacturers themselves,

all of these components are produced

domestically in the United States.

Except for the clamps, all these

industries (not necessarily the same

plants) also serve the production of

electronic ballasts. The analyses for

financial and employment impacts

considered materials supplied to

magnetic and electronic ballasts

together for those industries which

serve both markets.

Table V.12 exhibits a similar

distribution of materials and

components costs for an electronic

ballast alternative to the "affected"

magnetic ballast. The table shows a

higher number of components for

electronic ballasts. The cost of materials

for electronic ballasts is approximately

30 percent higher than that for

"affected" magnetic ballasts.

TABLE V. 12.-BENCHMARK COSTS

FOR ELECTRONIC BALLASTS

Item

Film Capacitors .........................

PC Board, Thermal Protectors,

Potting ...................................

Contribution

to total cost

of materials

(%)

17

15

EE-RM-97-500 COMMENT 98A

14148 Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

of "affected" magnetic ballasts from one 

plant to another before the year 2010. 

Table V.l0 summarizes the possible 

impact of a new electronic ballast 

standard on existing manufacturing 

plants in the U.S. and Mexico, assuming 

plants remain open in the base case as manufacturers predict. 

TABLE V.10.-IMPACTS ON MANUFACTURING CAPACITY DUE TO AN ELECTRONIC BALLAST STANDARD 

Plant Location Description Action 

Plant 1 ..................... U.S.A .................................................... Magnetic ballast ................................... Closure. 

Plant 2 .. ;.................. U.S.A .................................................... Magnet Wire ......................................... Possible Closure. 

Plant 3 ..................... Mexico .......... ........................................ Magnetic ballast ................................... Partial Closure. 

Plant 4 ..................... Mexico .......... ........................................ Capacitors ............................................ Closure. 

Plant 5 ..................... U.S.A .................................................... Electronic ballast .................................. Expansion. 

Plant 6 ..................... U.S.A .................................................... Electronic ballast .................................. Expansion. 

Plant 7 ..................... Mexico ............................................ ...... Electronic ballast .................................. Expansion. 

Plant 8 ..................... Mexico .................................................. Electronic ballast .................................. Expansion. 

An electronic ballast standard would 

lead to increased electronic ballast 

manufacturing capacity in the U.S. and 

Mexico. In order to meet increased sales 

resulting from a new electronic ballast 

standard, two of the four manufacturers 

in Sub-group 1 plan to develop 

additional electronic ballast 

manufacturing capacities in Mexico. 

The smaller manufacturers in Sub-group 

1 plan no major plant closures or 

expansions and will accommodate the 

new product mix requirements within 

their existing facilities. In Sub-group 2, 

two manufacturers stated that they 

would add significant electronic ballast 

manufacturing capacity in the U.S. to 

meet the new standard. 

Impact on Small Ballast Manufacturers 

Two relatively small manufacturers 

currently produce both "affected" 

magnetic and electronic ballasts. One of 

these manufacturers would be a "small 

business" as defined in the Regulatory 

Flexibility Act (See discussion in the 

Procedural Issues and Regulatory 

Reviews section of this preamble). Both 

the small manufacturers had their 

respective electronic and magnetic 

ballast manufacturing operations in the 

same plants. It seems their smaller size 

and less automated operations provides 

them with the flexibility to adapt to a 

new electronic ballast standard without 

significant asset write-offs or plant 

closures. However, the negative impacts 

on the small manufacturers' cash flows 

from operations were similar in 

proportion to those reported by the two 

large manufacturers in Sub-group 1. As 

a result, in the 5 % scenario, we estimate 

that small manufacturers will 

experience a 16 percent loss in their 

NPV compared to a 34 percent loss in 

NPV for the two large manufacturers. 

As with other Sub-group 1 

manufacturers, neither of these 

manufacturers stated that an electronic 

ballast standard would force them to 

leave the industry or go out of business. 

Impact on Ballast Industry Suppliers 

New energy-efficiency standards for 

fluorescent lamp ballasts will also affect 

ballast industry suppliers. To estimate 

this impact, we performed a detailed 

analysis of the impacts of an electronic 

ballast standard on suppliers to the 

ballast industry. We invited 31 supplier 

firms to participate in interviews. These 

firms were identified by manufacturers 

to represent the key components 

contained in the bills of materials for 

"affected" magnetic and electronic 

ballasts. Eleven of these suppliers 

served magnetic ballast production, 

eleven electronic ballast production, 

and nine supplier plants served both 

magnetic and electronic production. 

Sixteen of the 20 organizations serving 

magnetic ballast production participated 

in interviews and/or provided plant 

tours, Eleven of the 20 organizations 

serving electronic ballast production 

participated in interviews and/or 

provided plant tours. 

Table V.ll shows an average 

(weighted by shipment levels) 

distribution of materials and 

components cost for "affected" 

magnetic ballasts. Interviews and 

literature sources provided information 

needed to estimate financial and 

employment impacts of a new energy 

efficiency standard for ballasts on 

suppliers responsible for approximately 

91 percent of the cost of materials. 

TABLE V.11.-COST OF MATERIALS 

FOR "AFFECTED" MAGNETIC BALLASTS 

Material type 

Magnet and Lead Wire ............ . 

Steel case and CRML ............. . 

Capacltors ................................ . 

Contribution 

to total cost 

of materials 

(%) 

40 

23 

16 

The industries analyzed and 

represented are: .. Cold rolled steel finished for ballast 

cases .. Cold rolled motor laminate (CRML) 

steel for use primarily in transformers .. Magnet wire • Lead wire .. Thermal protectors .. Clamps to secure the stack of CRML 

stamped sections making up the ballast 

transformer to the proper size .. Potting and impregnation 

compounds .. Capacitors 

With the exception of a very small 

fraction of metallized film capacitors 

produced outside the U.S. and materials 

produced in plants owned and operated 

by the ballast manufacturers themselves, 

all of these components are produced 

domestically in the United States. 

Except for the clamps, all these 

industries (not necessarily the same 

plants) also serve the production of 

electronic ballasts. The analyses for 

financial and employment impacts 

considered materials supplied to 

magnetic and electronic ballasts 

together for those industries which 

serve both markets. 

Table V.12 exhibits a similar 

distribution of materials and 

components costs for an electronic 

ballast alternative to the "affected" 

magnetic ballast. The table shows a 

higher number of components for 

electronic ballasts. The cost of materials 

for electronic ballasts is approximately 

30 percent higher than that for 

"affected" magnetic ballasts. 

TABLE V.12.-BENCHMARK COSTS 

FOR ELECTRONIC BALLASTS 

Item 

Contribution 

to total cost 

of materials 

(%) 

Thermal protectors, clamps, 

POtting 12 Film Capacitors ........................ . ................................... 9 PC Board, Thermal Protectors, 

17 

_Oth_e_r_._.. _ .. _ .._ ... _ .._ ... _ .. _ .._ ... _ .._ ... _ .._ ... _ .. _ .._ ... _. -'--____ Potting ................................. .. 15 
Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules 14149

TABLE V.12.-BENCHMARK COSTS

FOR ELECTRONIC BALLASTS-Continued

Item

Contribution

to total cost

of materials

(%)

Steel case and CRML ..............

Magnet and lead wire, connectors ........................................

Transistors ................................

Ceramic and Electrolytic capacitors ..................................

Bobbins .....................................

Diodes .......................................

Ferrite Cores .............................

Others .......................................

The analysis of supplier impacts

focuses on domestic (production

facilities within the United States)

suppliers. A substantial portion of the

components that go into producing

electronic ballasts is produced in

12

12

10

7

6

6

5

10

foreign plants. We estimated the fraction

of each component produced

domestically in 1997. To the extent that

domestic suppliers can maintain this

market share, they could recover some

of the "affected" magnetic ballast

revenue and associated employment

level that they would lose if an

electronic ballast energy efficiency

standard were to go into effect. The

industries analyzed were producers of

printed circuit boards and bobbins. No

first hand financial or employment

information was collected from industry

representatives for transistors, diodes, or

ferrite cores. We combined these three

industries with a half dozen other

smaller contributors to the cost of

materials and assumed pro-rated values

for net income, depreciation, and capital

expenditure levels to estimate cash flow

for this group. This "other" group of

suppliers represents approximately 27

percent of supplier revenue, meaning

about 73 percent of electronic ballast

supplier financial values is based on

direct contact with industry

representatives. The comparable figure

for the magnetic ballast supplier side is

9 percent "other" and 91 percent based

on interviews with suppliers.

The analysis considers a reference

case wherein domestic suppliers

maintain their 1997 market shares in the

electronic ballast component market.

Through discussions with supplier

industries it became apparent that there

existed some uncertainty as to the

probability that ballast manufacturers

would continue to source their

components domestically in the event of

an electronic standard. To bracket the

uncertainty, separate cash flows were

performed for the extreme case where

all components for electronic ballasts

were purchased from foreign sources.

The financial impacts associated with

the reference and "worst" cases are

summarized in the following Tables.

TABLE V.13.-ESTIMATED NPV IN $MILLIONS FOR SUPPLIER INDUSTRIES, ASSUMING DOMESTIC SUPPLIER INDUSTRIES

MAINTAIN THEIR 1997 MARKET SHARES (REFERENCE CASE)

Industry

Capacitor ..........................................................................

Magnet, Lead Wire, Connectors ......................................

TP, Metal Clamps, Potting & Impregnating .....................

Steel .................................................................................

Other Mag/Electronic Suppliers .......................................

PC Board, Bobbins ..........................................................

Other Electronic Suppliers ...............................................

Total ..........................................................................

0.31

-2.57

-1.51

-4.14

-1.23

0.94

0.65

-7.55

5% Scenario, 1998-2015

Base case Standard

case

Change

$mil

1.28

11.40

8.55

16.59

6.11

1.87

.79

46.59

1.59

8.83

7.05

12.45

4.87

2.81

1.44

39.04

3% Scenario,1998-

Base case Standard

case

1.34

12.39

10.24

18.74

6.81

1.45

1.04

52.01

TABLE V. 14.-ESTIMATED NPV IN $MILLIONS FOR SUPPLIER INDUSTRIES , ASSUMING FOREIGN SUPPLIERS CAPTURE ALL

THE NEW ELECTRONIC BALLAST MARKET (WORST CASE).

5% Scenario , 1998-2015

Industry

Base case Standard

case

Capacitor ........................................................................ 1.28 .89

Magnet, Lead Wire, Connectors .................................... 11.40 8.06

TP, Metal Clamps, Potting & Impregnating ................... 8.55 5.69

Steel ............................................................................... 16.59 11.05

Other .............................................................................. 6.11 4.13

PC Board, Bobbins ........................................................ 1.87 0.25

Other Electronic Suppliers . ............................................ 0.79 0.16

Total ........................................................................ 46.59 30.23

The financial impact ranges from a Impacts on Supplier Employment

reference case $7.55 million decline in

NPV cash flow under the 5% scenario

to a "worst" case $20.69 million decline

under the 3% scenario.

Change

$mil

-.39

-3.34

-2.86

-5.54

-1.97

-1.62

-0.64

-16.36

The reference-case employment

impacts under the 3% and 5% scenarios

are summarized in Table V.15 and

indicate a range of 313-340 jobs lost and

3% Scenario, 1998-2

Base case

1.34

12.39

10.24

18.74

6.81

1.45

1.04

52.01

1.74

9.27

7.59

14.21

5.18

2.69

1.88

42.56

Standard

case

.92

8.37

5.92

11.54

4.31

0.15

0.09

31.3

027

Change

$mil

0.41

-3.13

-2.65

-4.53

-1.63

1.24

0.84

-9.45

027

Change

$mil

-0.41

-4.03

-4.31

-7.20

-2.50

-1.3

-0.94

-20.69

potential for 129-144 to be gained back.

If all the new electronic ballast market

were to go to foreign firms, no jobs

would be gained back, and thus in the

worst case about 313-340 domestic jobs

would be lost.

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 14149 

TABLE V.12.-BENCHMARK COSTS foreign plants. We estimated the fraction 

of each component produced 

domestically in 1997. To the extent that 

domestic suppliers can maintain this 

market share, they could recover some 

of the "affected" magnetic ballast revenue and associated employment 

level that they would lose if an 

FOR ELECTRONIC BALLASTS-COntinued 

Item 

Steel case and CRML ............ .. 

Magnet and lead wire, connectors ....................................... . 

Transistors ............................... . 

Ceramic and Electrolytic capacitors ................................. . 

Bobbins .................................... . 

Diodes ...................................... . 

FerTite Cores ............................ . 

Others ...................................... . 

Contribution 

to total cost 

of materials 

(%) 

12 electronic ballast energy efficiency 

standard were to go into effect. The 

12 industries analyzed were producers of 

10 printed circuit boards and bobbins. No 

first hand financial or employment 

7 information was collected from industry 

6 representatives for transistors, diodes, or 6 ferrite cores. We combined these three 

5 industries with a half dozen other 

10 smaller contributors to the cost of ------------'----- materials and assumed pro-rated values 

The analysis of supplier impacts 

focuses on domestic (production 

facilities within the United States) 

suppliers. A substantial portion of the 

components that go into producing 

electronic ballasts is produced in 

for net income, depreciation, and capital 

expenditure levels to estimate cash flow 

for this group. This "other" group of 

suppliers represents approximately 27 

percent of supplier revenue, meaning 

about 73 percent of electronic ballast 

supplier financial values is based on 

direct contact with industry 

representatives. The comparable figure 

for the magnetic ballast supplier side is 

9 percent "other" and 91 percent based 

on interviews with suppliers. 

The analysis considers a reference 

case wherein domestic suppliers 

maintain their 1997 market shares in the 

electronic ballast component market. 

Through discussions with supplier 

industries it became apparent that there 

existed some uncertainty as to the 

probability that ballast manufacturers 

would continue to source their 

components domestically in the event of 

an electronic standard. To bracket the 

uncertainty, separate cash flows were 

performed for the extreme case where 

all components for electronic ballasts 

were purchased from foreign sources. 

The financial impacts associated with 

the reference and "worst" cases are 

summarized in the following Tables. 

TABLE V.13.-EsTIMATED NPV IN $MILLIONS FOR SUPPLIER INDUSTRIES, ASSUMING DOMESTIC SUPPLIER INDUSTRIES 

MAINTAIN THEIR 1997 MARKET SHARES (REFERENCE CASE) 

5% Scenario, 1998-2015 30/0 Scenario, 1998-2027 

Industry Standard Change Standard Change Base case case $mil Base case case $mil 

Capacitor .......................................................................... 1.28 1.59 0.31 1.34 1.74 0.41 

Magnet, Lead Wire, Connectors ...................................... 11.40 8.83 -2.57 12.39 9.27 -3.13 

TP, Metal Clamps, Potting & Impregnating ..................... 8.55 7.05 -1.51 10.24 7.59 -2.65 

Steel ................................................................................. 16.59 12.45 -4.14 18.74 14.21 -4.53 

Other Mag/Electronic Suppliers ....................................... 6.11 4.87 -1.23 6.81 5.18 -1.63 

PC Board, Bobbins .......................................................... 1.87 2.81 0.94 1.45 2.69 1.24 

Other Electronic Suppliers ............................................... .79 1.44 0.65 1.04 1.88 0.84 

Total .......................................................................... 46.59 39.04 -7.55 52.01 42.56 ! -9.45 

TABLE V.14.-EsTIMATED NPV IN $MILLIONS FOR SUPPLIER INDUSTRIES, ASSUMING FOREIGN SUPPLIERS CAPTURE ALL 

THE NEW ELECTRONIC BALLAST MARKET (WORST CASE). 

5% Scenario, 1998-2015 3% ScenariO, 1998-2027 

Industry Standard Change Standard Change Base case case $mil Base case case $mil 

Capacitor ........................................................................ 1.28 .89 -.39 1.34 .92 -0.41 

Magnet, Lead Wire, Connectors .................................... 11.40 8.06 -3.34 12.39 8.37 -4.03 

TP, Metal Clamps, Potting & Impregnating ................... 8.55 5.69 -2.86 10.24 5.92 -4.31 

Steel ............................................................................... 16.59 11.05 -5.54 18.74 11.54 -7.20 

Other .............................................................................. 6.11 4.13 -1.97 6.81 4.31 -2.50 

PC Board, Bobbins ........................................................ 1.87 0.25 -1.62 1.45 0.15 -1.3 

Other Electronic Suppliers ........................ -.................... 0.79 0.16 -0.64 1.04 0.09 -0.94 

Total ........................................................................ 46.59 30.23 -16.36 52.01 31.3 -20.69 

The financial impact ranges from a Impacts on Supplier Employment 

reference case $7.55 million decline in 

NPV cash flow under the 5% scenario 

to a "worst" case $20.69 million decline 

under the 3% scenario. 

The reference-case employment 

impacts under the 3% and 5% scenarios 

are summarized in Table V.15 and 

indicate a range of 313-340 jobs lost and 

potential for 129-144 to be gained back. 

If all the new electronic ballast market 

were to go to foreign firms. no jobs 

would be gained back, and thus in the 

worst case about 313-340 domestic jobs 

would be lost. 
14150 Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

TABLE V.15.-ESTIMATED EMPLOYMENT IMPACTS FOR SUPPLIER INDUSTRIES ASSUMING DOMESTIC SUPPLIERS MAINTAIN

THEIR 1997 MARKET SHARES.

Industry

Capacitor ..........................................................................

Magnet & Lead ................................................................

TP, Metal Clamp . .............................................................

Steel .................................................................................

Metallized Film .................................................................

Other Magnetic/Electronic ................................................

PC Board, Bobbins ..........................................................

Other Electronic ...............................................................

Associated Plant Closure .................................................

Total ..........................................................................

Impacts on Luminaire Manufacturers

The Department interviewed eight

luminaire manufactures with a

combined market share approaching 85

percent of the market segments affected

by a new ballast standard. The

Department specifically investigated

how a new energy efficiency standard

for ballasts might change luminaire

manufacturer profitability and cash

flow. Of the eight manufacturers

interviewed, two reported they will

suffer no impacts and two others believe

their impacts would be minimal. The

four other manufacturers believe they

will suffer varying levels of decreased

company value.

From the information obtained in the

interviews, estimates of reductions in

NPV were prepared for each of the four

manufacturers reporting negative

impacts. These projections incorporated

the financial figures and rationale

provided by the manufacturers. Three

different rationales were presented in

support of diminished profitability and

value.

One or more manufacturers are

experiencing greater profitability with

electronic ballasts. The NPV reduction

assumes that a standard which

eliminates magnetics as the commodity

5% Scenario, 1998-2015

Jobs lost

27

69

52

58

44

40

0

0

23

313

34

10

14

13

1

8

23

26

129

Net jobs lost

[gained]

corresponding reduction in profit

margin.

For both shipment scenarios, the

aggregated reduction in NPV for the four

firms totals approximately 13.5 million

dollars assuming the current difference

in margins for luminaires incorporating

magnetic or electronic ballasts would

continue absent standards. This appears

to be a very speculative assumption

given the trend towards convergence of

magnetic and electronic luminaire

margins reported by most luminaire

manufacturers. If in fact margins do

converge by the implementation date of

a new standard, the impacts attributed

to price margin differences disappear

and the total impacts are reduced to a

value of approximately 4.5 million

dollars.

In addition to the previous financial

impacts, manufacturers reported

significant other costs and business

disruptions associated with potential

new ballast standards. There were

concerns expressed that a standard

would divert resources from new

product and technology introduction

and result in lost opportunities. Large

efforts would also be needed to revise

product literature and perform

photometric tests. Further, many

product would render electronic ballasts business processes and information

the commodity product and competition systems relative to materials

would eliminate the premium for

electronic ballasts.

One or more manufacturers are

experiencing greater profitability with

magnetic ballasts. The NPV reduction is

a direct consequence of replacing sales

of higher margin products by lower

margin sales.

The third view presented concerns

the high price sensitivity of low-end

luminaires, particularly one and two

lamp strip lights. It was assumed for

that analysis that not all incremental

costs for electronic ballasts could be

passed on to consumers with a

management and other systems would

need to be revised. The costs associated

with these issues, not including lost

opportunities were reported to be

approximately one million dollars.

Impacts on Luminaire Manufacturer

Employment

Of the eight luminaire manufacturers

interviewed, six stated that employment

impacts from an electronic ballast

standard would be be minimal, if any,

within their companies. Two

manufacturers, however, believe a new

standard would probably reduce

Potential

jobs gained

[7]

59

38

45

43

32

[23]

[261

23

184

3% Scenario, 1998-2027

Jobs lost Potential

jobs gained

Net jobs lost

[gained]

29

76

57

63

48

44

0

0

23

340

37

11

15

14

1

9

27

30

144

[81

65

42

49

47

35

[27]

[30]

23

196

employment levels in their U.S.

facilities. This reduction is assumed to

be caused by reductions in export sales

and a loss of flourescent luminaire sales

in favor of incandescent luminaires.

Based on its analysis of these issues and

in agreement with the majority view of

interview participants, the Department

believes the employment impacts of a

ballast standard would be minimal.

Two manufacturers expressed a

concern that since their export markets

are primariliy magnetic, a drop in

domestic ballast manufacturing volumes

would cause upward pressure on

magnetic luminaire prices and compel

them to raise export prices for

luminaires. Local luminaire

manufacturers, they believe, could find

less costly sources for magnetic ballasts

resulting in decreased export sales for

U.S. companies. Furthermore, these

manufactures fear that given the

importance of linear flourscent fixtures

in most customer orders, winning or

losing a project can depend heavily on

price levels of the these luminaires. If

flourecscent luminaire sales are lost to

local competitors then, they believe,

U.S. companies could also lose sales of

HID luminaires, emergency lighting, exit

signs and various other products. The

Department believes these employment

impacts would be very small for two

reasons. First economic theory and real

world experience suggests that in

competitive markets, overcapacity leads

to increased-not decreased-price

competition. Second the export market

is concentrated in the Canadian and

Mexican markets where U.S. ballast

manufacturers are major participants

and could compete with local ballasts

manufacturers.

Another stated potential cause of

reduced U.S. luminaire manufacturing

jobs is the possible movement away

from flourescent luminaires in favor of

incandescent luminaires in the more

EE-RM-97-500 COMMENT 98A

14150 Federal Register/Vol. 65, No. 51/Wednesday, March 15, ZOOO/Proposed Rules 

TABLE V.iS.-EsTIMATED EMPLOYMENT IMPACTS FOR SUPPLIER INDUSTRIES ASSUMING DOMESTIC SUPPLIERS MAINTAIN 

THEIR 1997 MARKET SHARES. 

50/0 Scenario, 1998-2015 3% Scenario, 1998-2027 

Industry 

Jobs lost Potential Net jobs lost Jobs lost Potential Net jobs lost 

jobs gained [gained] jobs gained [gained] 

Capacitor ......................................................................... . 27 34 

Magnet & Lead ............................................................... . 69 10 

TP, Metal Clamp, ............................................................ . 52 14 

Steel ................................................................................ . 58 13 

Metallized Film ................................................................ . 44 1 

Other Magnetic/Electronic ............................................... . 40 8 

PC Board, Bobbins ......................................................... . 0 23 

Other Electronic .............................................................. . 0 26 

Associated Plant Closure ., '" ........................................... . 23 ·· ....... ·····n .... 

Total ......................................................................... . 313 129 

Impacts on Luminaire Manufacturers 

The Department interviewed eight 

luminaire manufactures with a 

combined market share approaching 85 

percent of the market segments affected 

by a new ballast standard. The 

Department specifically investigated 

how a new energy efficiency standard 

for ballasts might change lumina ire 

manufacturer profitability and cash 

flow. Of the eight manufacturers 

interviewed, two reported they will 

suffer no impacts and two others believe 

their impacts would be minimal. The 

four other manufacturers believe they 

will suffer varying levels of decreased 

company value. 

From the information obtained in the 

interviews, estimates of reductions in 

NPV were prepared for each of the four 

manufacturers reporting negative 

impacts. These projections incorporated 

the financial figures and rationale 

provided by the manufacturers. Three 

different rationales were presented in 

support of diminished profitability and 

value. 

One or more manufacturers are 

experiencing greater profitability with 

electronic ballasts. The NPV reduction 

assumes that a standard which 

eliminates magnetics as the commodity 

product would render electronic ballasts 

the commodity product and competition 

would eliminate the premium for 

electronic ballasts. 

One or more manufacturers are 

experiencing greater profitability with 

magnetic ballasts. The NPV reduction is 

a direct consequence of replacing sales 

of higher margin products by lower 

margin sales. 

The third view presented concerns 

the high price sensitivity of low-end 

luminaires, particularly one and two 

lamp strip lights. It was assumed for 

that analysis that not all incremental 

costs for electronic ballasts could be 

passed on to consumers with a 

corresponding reduction in profit 

margin. 

For both shipment scenarios, the 

aggregated reduction in NPV for the four 

firms totals approximately 13.5 million 

dollars assuming the current difference 

in margins for luminaires incorporating 

magnetic or electronic ballasts would 

continue absent standards. This appears 

to be a very speculative assumption 

given the trend towards convergence of 

magnetic and electronic luminaire 

margins reported by most luminaire 

manufacturers. If in fact margins do 

converge by the implementation date of 

a new standard, the impacts attributed 

to price margin differences disappear 

and the total impacts are reduced to a 

value of approximately 4.5 million 

dollars. 

In addition to the previous financial 

impacts, manufacturers reported 

significant other costs and business 

disruptions associated with potential 

new ballast standards. There were 

concerns expressed that a standard 

would divert resources from new 

product and technology introduction 

and result in lost opportunities. Large 

efforts would also be needed to revise 

product literature and perform 

photometric tests. Further, many 

business processes and information 

systems relative to materials 

management and other systems would 

need to be revised. The costs associated 

with these issues, not including lost 

opportunities were reported to be 

approximately one million dollars. 

Impacts on Luminaire Manufacturer 

Employment 

Of the eight luminaire manufacturers 

interviewed, six stated that employment 

impacts from an electronic ballast 

standard would be be minimal, if any, 

within their companies. Two 

manufacturers, however, believe a new 

standard would probably reduce 

[7] 29 37 [8] 

59 76 11 65 

38 57 15 42 

45 63 14 49 

43 48 1 47 

32 44 9 35 

[23] 0 27 [27] 

[26] 0 30 [30] 

23 23 . ................... 23 

184 340 144 196 

employment levels in their U.S. 

facilities. This reduction is assumed to 

be caused by reductions in export sales 

and a loss of flourescent luminaire sales 

in favor of incandescent luminaires. 

Based on its analysis of these issues and 

in agreement with the majority view of 

interview participants, the Department 

believes the employment impacts of a 

ballast standard would be minimal. 

Two manufacturers expressed a 

'concern that since their export markets 

are primariliy magnetic, a drop in 

domestic ballast manufacturing volumes 

would cause upward pressure on 

magnetic lumina ire prices and compel 

them to raise export prices for 

luminaires. Localluminaire 

manufacturers, they believe, could find 

less costly sources for magnetic ballasts 

resulting in decreased export sales for 

U.S. companies. Furthermore, these 

manufactures fear that given the 

importance of linear flourscent fixtures 

in most customer orders, winning or 

losing a project can depend heavily on 

price levels of the these luminaires. If 

flourecscent lumina ire sales are lost to 

local competitors then, they believe, 

U.S. companies could also lose sales of 

HID luminaires, emergency lighting. exit 

signs and various other products. The 

Department believes these employment 

impacts would be very small for two 

reasons. First economic theory and real 

world experience suggests that in 

competitive markets, overcapacity leads 

to increased-not decreased-price 

competition. Second the export market 

is concentrated in the Canadian and 

Mexican markets where U.S. ballast 

manufacturers are major participants 

and could compete with local ballasts 

manufacturers. 

Another stated potential cause of 

reduced U.S. luminaire manufacturing 

jobs is the possible movement away 

from flourescent luminaires in favor of 

incandescent luminaires in the more 
Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules 14151

first cost sensitive commercial market

segments. However, there was

considerable differences of opinion as to

the significance of any such movement

in lighting systems. The general view

was that there is already a significant

cost premium for fluorescent lighting

and this premium is not likely to greatly

increase given ballast pricing trends.

Therefore the Department has not

included any employment reductions

for luminaire manufacturers because of

this potential effect.

Impacts on Lamp Manufacturers

Three major manufacturers, GE

Lighting, OSI, and Philips Lighting

Company dominate the domestic market

for linear fluorescent lamps. Together

these three manufacturers serve

approximately 90 percent of the U.S.

market. As trade allies of the fluorescent

ballast manufacturing industry, they

may experience an impact from a new

energy-efficiency standard applied to

fluorescent lamp ballasts. Some ballast

and lamp industry sources and others

have speculated that a new energyefficiency standard for ballasts would

substantially accelerate the transition

from T12 lamps to T8, thus having an

impact on lamp manufacturers as well

as ballast manufacturers.

As discussed previously, OSI

commented that the lamp industry had

the capacity to handle the transition

from T12 lamps to T8 lamps in the OEM

market resulting from an electronic

ballast rule over a period of three years.

OSI believes, however, it doubtful the

lamp industry could handle, in

addition, any significant transition to T8

lamps of the installed base of T12 lamps

in less than 8 years following an

electronic ballast rule. OSI commented

that if magnetic ballasts were no longer

available, large resources would be

diverted to the development of energy

saving T12 lamps compatible with

electronic ballasts or electronic ballasts

compatible with energy saving T12

lamps.

The Department invited

representatives from each of the three

major lamp manufacturers to estimate

the impact that a new ballast standard

might have on them. One manufacturer

chose not to participate in the

discussions, so the following results are

based on talks with two major

manufacturers.

There was agreement that a new

standard would accelerate the shift in

market share from T12 to T8 lamps. The

manufacturers further agreed the current

transition to T8 lamps is being handled

well and that any acceleration in the

transition must be served while

retaining enough T12 capacity to serve

the replacement market. The

replacement market for T12 lamps is

large, over 85 percent of the 1998

market of 340 million lamps were T12

lamps. The lamp manufacturing

industry can gear up to serve the

increase in OEM demand for T8 lamps

with a 3-4 year lead-time. However, to

serve any increased replacement market

at the same time would require an

acceleration in capacity expansion for

T8 production and early retirement of

T12 capacity which would have

financial impacts.

The Department is uncertain as to

how the replacement market might

respond to today's proposed standard.

Consumers might make spot

replacements, as suggested by ACEEE

earlier, or ballast manufacturers may

develop electronic T12 ballasts

compatible with T12 energy saver lamps

or there could be an acceleration to T8

lamps in the replacement market. Given

this uncertainty, we did not attempt to

quantify the impact on lamp

manufacturers of an electronic ballast

standard applied to the replacement

ballast market before the 8 year

implementation date suggested by OSI.

2. Life-Cycle Cost

More efficient ballasts would affect

commercial and industrial consumers in

two ways: operating expense would

probably decrease and purchase price

would probably increase. We analyzed

the net effect by calculating the LCC.

Inputs required for calculating LCC

include end-user prices for ballasts and

lamps, electricity rates (cents/

kiloWatthour), energy savings, annual

lighting operating hours, labor rates,

installation times, period of the

analysis, ballast lifetimes, lamp

lifetimes, and discount rates. A detailed

discussion of the sources and methods

used for arriving at an estimate of these

parameters is in the TSD. Briefly, we

obtained end-user prices for ballasts

from a survey of ballast distributors

from various parts of the country; we

estimated marginal electricity rates as

described later in this section; we based

operating hours upon Xenergy building

energy audit data; we derived

installation costs from journeyman

wages listed in the National Electrical

Estimator 1995; the period of analysis is

the ratio of ballast life to the annual

operating hours; lamp life is the average

of lamp life under spot and group

replacement where spot replacement

lamp life is the lamp rated life from

manufacturer's catalog and group

replacement is 75 percent of the rated

life; and the discount rate is 8 percent.

We estimated the marginal electricity

rates by first calculating the marginal

rate faced by a sample of commercial

customers in buildings throughout the

U.S. This was compared with the

average electricity rates for the same

customers. The percent difference

between the average and marginal rates

(Epsilon) was calculated for each

customer. We then used this Epsilon

distribution to convert the average

electricity price from a specific United

States utility into marginal electricity

price by using the formula:

Marginal Electricity Price = Average

Electricity Price x (1 + Epsilon)

We performed a probability-based

LCC analysis with a computer program

called Crystal Ball. For each of four

inputs (ballast price, electricity price,

ballast lifetime, and annual lighting

hours) to the LCC model, we defined a

probability-based distribution of the

input to account for the variability of

the input. Instead of using a single

"average" value to represent the input

in its entirety, we used the whole

distribution to calculate the LCC. The

output of the LCC model is a mean LCC

savings for each product class as well as

a probability distribution or likelihood

of LCC reduction or increase.

We present a summary of the results

in Table V.16. The column titled "Delta

LCC" gives the change in LCC when

switching from the baseline option of

EEM ballast to the listed design option.

"% Winners" represents the probability

of the design option resulting in

reduced LCC. Table 4.4 of the TSD also

shows the life cycle cost impacts when

starting from an energy efficient

magnetic T8 ballast.

TABLE V. 16.-SUMMARY OF DELTA LCC* RESULTS

Product class % Market Design option Sector

Delt

Mean

(1997$)

a LCC

%Winners**

7

1F40 . ....................................................................... 1 5 1 T12 CC .......................... I Commercial .................... 1 -4

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65. No. 51/Wednesday. March 15. ZOOO/Proposed Rules 14151 

fIrst cost sensitive commercial market 

segments. However. there was 

considerable differences of opinion as to 

the signifIcance of any such movement 

in lighting systems. The general view 

was that there is already a signifIcant 

cost premium for fluorescent lighting 

and this premium is not likely to greatly 

increase given ballast pricing trends. 

Therefore the Department has not 

included any employment reductions 

for luminaire manufacturers because of 

this potential effect. 

Impacts on Lamp Manufacturers 

Three major manufacturers. GE 

Lighting. OSI. and Philips Lighting 

Company dominate the domestic market 

for linear fluorescent lamps. Together 

these three manufacturers serve 

approximately 90 percent of the U.S. 

market. As trade allies of the fluorescent 

ballast manufacturing industry. they 

may experience an impact from a new 

energy-efficiency standard applied to 

fluorescent lamp ballasts. Some ballast 

and lamp industry sources and others 

have speculated that a new energyefficiency standard for ballasts would 

substantially accelerate the transition 

from T12 lamps to T8. thus having an impact on lamp manufacturers as well 

as ballast manufacturers. 

As discussed previously. OSI 

commented that the lamp industry had 

the capacity to handle the transition 

from T12 lamps to T8 lamps in the OEM 

market resulting from an electronic 

ballast rule over a period of three years. 

OSI believes. however. it doubtful the 

lamp industry could handle. in 

addition. any significant transition to T8 

lamps of the installed base of T12 lamps 

in less than 8 years following an 

electronic ballast rule. aS! commented 

that if magnetic ballasts were no longer 

available. large resources would be 

diverted to the development of energy 

saving T12 lamps compatible with 

electronic ballasts or electronic ballasts 

compatible with energy saving T12 

lamps. 

The Department invited 

representatives from each of the three 

major lamp manufacturers to estimate 

the impact that a new ballast standard 

might have on them. One manufacturer 

chose not to participate in the 

discussions. so the following results are 

based on talks with two major 

manufacturers. 

There was agreement that a new 

standard would accelerate the shift in 

market share from T12 to T8 lamps. The 

manufacturers further agreed the current 

transition to T8 lamps is being handled 

well and that any acceleration in the 

transition must be served while 

retaining enough T12 capacity to serve 

the replacement market. The 

replacement market for T12 lamps is 

large. over 85 percent of the 1998 

market of 340 million lamps were T12 

lamps. The lamp manufacturing 

industry can gear up to serve the 

increase in OEM demand for T8 lamps 

with a 3-4 year lead-time. However. to 

serve any increased replacement market 

at the same time would require an 

acceleration in capacity expansion for 

T8 production and early retirement of 

T12 capacity which would have 

fInancial impacts. 

The Department is uncertain as to 

how the replacement market might 

respond to today's proposed standard. 

Consumers might make spot 

replacements. as suggested by ACEEE 

earlier. or ballast manufacturers may 

develop electronic T12 ballasts 

compatible with T12 energy saver lamps 

or there could be an acceleration to T8 

lamps in the replacement market. Given 

this uncertainty. we did not attempt to 

quantify the impact on lamp 

manufacturers of an electronic ballast 

standard applied to the replacement 

ballast market before the 8 year 

implementation date suggested by as!. 

2. Life-Cycle Cost 

More efficient ballasts would affect 

commercial and industrial consumers in 

two ways: operating expense would 

probably decrease and purchase price 

would probably increase. We analyzed 

the net effect by calculating the LCC. 

Inputs required for calculating LCC 

include end-user prices for ballasts and 

lamps. electricity rates (cents/ 

kiloWatthour). energy savings. annual 

lighting operating hours. labor rates. 

installation times. period of the 

analysis. ballast lifetimes. lamp 

lifetimes. and discount rates. A detailed 

discussion of the sources and methods 

used for arriving at an estimate of these 

parameters is in the TSD. Briefly. we obtained end-user prices for ballasts 

from a survey of ballast distributors 

from various parts of the country; we 

estimated marginal electricity rates as 

described later in this section; we based 

operating hours upon Xenergy bUilding 

energy audit data; we derived 

installation costs from journeyman 

wages listed in the National Electrical 

Estimator 1995; the period of analysis is 

the ratio of ballast life to the annual 

operating hours; lamp life is the average 

of lamp life under spot and group 

replacement where spot replacement 

lamp life is the lamp rated life from 

manufacturer's catalog and group 

replacement is 75 percent of the rated 

life; and the discount rate is 8 percent. 

We estimated the marginal electricity 

rates by first calculating the marginal 

rate faced by a sample of commercial 

customers in buildings throughout the 

U.S. This was compared with the 

average electricity rates for the same 

customers. The percent difference 

between the average and marginal rates 

(Epsilon) was calculated for each 

customer. We then used this Epsilon 

distribution to convert the average 

electricity price from a specific United 

States utility into marginal electricity 

price by using the formula: 

Marginal Electricity Price = Average 

Electricity Price x (1 + Epsilon) 

We performed a probability-based 

LCC analysis with a computer program 

called Crystal Ball. For each of four 

inputs (ballast price. electricity price. 

ballast lifetime. and annual lighting 

hours) to the LCC model. we defined a 

probability-based distribution of the 

input to account for the variability of 

the input. Instead of using a single 

"average" value to represent the input 

in its entirety. we used the whole 

distribution to calculate the LCe. The 

output of the LCC model is a mean LCC 

savings for each product class as well as 

a probability distribution or likelihood 

of LCC reduction or increase. 

We present a summary of the results 

in Table V.16. The column titled "Delta 

LCC" gives the change in LCC when 

switching from the baseline option of 

EEM ballast to the listed design option. 

"% Winners" represents the probability 

of the design option resulting in 

reduced LCe. Table 4.4 of the TSD also 

shows the life cycle cost impacts when 

starting from an energy efficient 

magnetic T8 ballast. 

TABLE V.16.-SUMMARY OF DELTA LCC* RESULTS 

Product class % Market Design option Sector 

1F40 ....................................................................... . 5 T12 CC .......................... Commercial ................... . 

Delta LCC 

Mean 

(1997$) 

-4 

%Winners** 

7 
14152 Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

TABLE V.16.-SUMMARY OF DELTA LCC* RESULTS-Continued

Delta LCC

Product Gass % Market Design option Sector Mean

(1997$) %Winners *

T12 ERS ........................ Commercial .................... 4 68

2F40 ........................................................................ 36 T12 CC .......................... Commercial .................... -2 31

T12 ERS ........................ Commercial .................... 6 80

3F40 ........................................................................ 1 T12 CC .......................... Commercial .................... -2 33

Tandem-Wired ........................................................ T12 ERS ........................ Commercial .................... 5 68

3F40 Not ................................................................. 10 T12 CC. .......................... Commercial .................... -4 23

Tandem-Wired ........................................................ T12 ERS ........................ Commercial ....... ........ 18 - 98

4F40 ........................................................................ 22 T12CC ............................ Commercial .................... -2 36

T12 ERS ........................ Commercial .................... 12 87

2F96 ........................................................................ 23 T12 EIS .......................... Commercial .................... 7 75

T12 EIS .......................... Industrial ........................ -2 35

2F96HO .................................................................. 2 T12 CC .......................... Commercial .................... 11 90

T12 ERS .......................

T12 CC ..........................

Commercial ....................

Industrial ........................

28

1

98

50

T12 ERS ........................ Industrial ........................ 151 94

'A positive Delta LCC implies a LCC savings whereas a negative number implies an increase in LCC

% ballasts with reduced life cycle cost (winners), noted as "certainty level" by Crystal Ball.

3. Energy Savings, Net Present Value

and Net National Employment

As indicated, we conclude that

standards will result in significant

savings of electricity by ballasts for each

standards scenario. These energy

savings have value to society, as

measured by the net present value

analysis. The net present value analysis

is a measure of the net savings to society

from standards and are summarized in

the following tables.

TABLE V.17A.-NET PRESENT VALUE FROM ELECTRONIC STANDARDS

Electronic standards for units sold from 2003 to 2030 discounted at 7% to 1997 (in billion 1997 $)*

Scen 1A Scen 1B Scen 2A Scen 2B Scen 3A Scen 3B Scen 4A Scen 4B Scenario T12 T12 T12/T8 T12/T8 Decr2015 Decr2027 Decr2015 Decr2027 Decr2015 Decr2027 Decr2015 Decr2027

Total Benefit .................. 1.97 3.13 3.22 5.13 2.68 4.46 2.98 4.85

Total Equipment Cost .... 1.01 1.62 0.8 1.27 0.64 1.08 0.72 1.18

Net Present Value .......... 0.96 1.51 2.43 3.86 2.03 3.38 2.26 3.68

'Total Benefit and Net Present Value do not include HVAC savings.

TABLE V.17B.-NET PRESENT VALUE FROM CATHODE CUTOUT STANDARDS

Cathode cutout standards for units sold from 2003 to 2030 discounted at 7% to 1997 (in billion 1997 $)

Scen 5A 100% Scen 5B 100% Scen 6A 37% Scen 6B 37% Scenario CC Decr2015 CC Decr2027 CC Decr2015 CC Decr2027

Total Benefit ..................................................................................................... 0.94 1 .49 2.18 3.47

Total Equipment Cost ...................................................................................... 0.78 1.26 0.58 0.93

Net Present Value ........................................................................................... 0.16 0.23 1.60 2.54

Since the covered lamp ballasts are

commercial products, these net savings

apply to American business and

industry. NPV is the difference between

additional equipment costs and

electricity cost savings. The NPV for the

electronic ballast standards scenarios

ranges from about 0.96 billion to 3.86

billion dollars (1997 dollars). NPV

increases under the slower decreasing

shipments forecast to 2027. NPVs for

scenario 2 with T8 electronic ballasts

are about 2.5 times those for scenario 1

with T12 electronic ballasts. For

scenario 3, the five-year phase-in period

causes an NPV reduction of around 15

percent over scenario 2. For scenario 4,

the 2-year phase-in period results in an

NPV reduction of about 5 percent over

Scenario 2.

For the cathode cutout standards

scenarios, NPV ranges from 0.16 to 2.54

billion dollars, For scenario 6, the NPV

is 10 to 11 times greater than that of

scenario 5. Note that we did not include

HVAC energy cost savings in any of the

NPV calculations.

The net present value analysis from

the standards in the Joint Comments is

summarized in Table V.18.

TABLE V.18.-NET PRESENT VALUE

RESULTING FROM JOINT COMMENT

Joint comment standards for units sold from

2005 to 2030 discounted at 7% to 1997 (in

billion 1997 $)

Scenario

1.95

0.53

1.42

3.51

0.91

Dec2015 Dec2027

Total Benefit .............

Total Equipment Cost

Net Present Value .... 2.60

The Department committed in its

1996 Process Improvement Rule to

develop estimates of the employment

EE-RM-97-500 COMMENT 98A

14152 Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

TABLE V.16.-SUMMARY OF DELTA LCC* RESULTs-Gontinued 

Product class % Market Design option Sector 

T12 ERS ........................ Commercial ................... . 2F40 ....................................................................... . 36 T12 CC .......................... Commercial ................... . T12 ERS ........................ Commercial ................... . 3F40 ....................................................................... . T12 CC .......................... Commercial ................... . Tandem-Wired ....................................................... . T12 ERS ........................ Commercial ................... . 3F40 Not ................................................................ . 10 T12 CC' .......................... Commercial ................... . 

Tandem-Wired ....................................................... . T12 ERS ........................ Commercial ................... . 4F40 ....................................................................... . 22 T12CC ............................ Commercial ................... . T12 ERS ........................ Commercial ................... . 2F96 ....................................................................... . 23 T12 EIS .......................... Commercial ................... . T12 EIS .......................... Industrial ...................... .. 

2F96HO ................................................................. . 2 T12 CC .......................... Commercial ................... . 

T12 ERS ........................ Commercial ................... . T12 CC .......................... Industrial ...................... .. T12 ERS ........................ Industrial ....................... . 

*A positive Delta LCC implies a LCC savings whereas a negative number implies an increase in LCC .. % ballasts with redueed life cycle cost (winners), noted as "certainty level" by Crystal Ball. 

Delta LCC 

Mean 

(1997$) 

4 

-2 

6 

-2 

5 

-4 

18 

-2 

12 

7 

-2 

11 

28 

1 

15 

%Winners·· 

68 

31 

80 

33 

68 

23 

98 

36 

87 

75 

35 

90 

98 

50 

94 

3. Energy Savings, Net Present Value 

and Net National Employment 

As indicated, we conclude that 

standards will result in significant 

savings of electricity by ballasts for each 

standards scenario. These energy 

savings have value to society, as 

measured by the net present value 

analysis. The net present value analysis 

is a measure of the net savings to society 

from standards and are summarized in 

the following tables. 

TABLE V.17A.-NET PRESENT VALUE FROM ELECTRONIC STANDARDS 

Electronic standards for units sold from 2003 to 2030 discounted at 7% to 1997 (in billion 1997 $)* 

Seen 1A Seen 1B Seen 2A Seen 2B Seen 3A Seen 3B Seen 4A Scen 4B Seenario T12 T12 T121T8 T12!T8 

Decr2015 Decr2027 Decr2015 Decr2027 Decr2015 Decr2027 Decr2015 Decr2027 

Total Benefit ................... 1.97 1 3.13 3.221 5.13 2.68 1 4.46 2.98 4.85 

Total Equipment Cost .... 1.01 1.62 0.81 1.27 0.64 1 1.08 0.72 1.18 

Net Present Value .......... 0.96 1 1.51 2.43 3.86 2.03 i 3.38 2.26 3.68 

*Total Benefit and Net Present Value do not include HVAC savings. 

TABLE V.17B.-NET PRESENT VALUE FROM CATHODE CUTOUT STANDARDS 

Cathode cutout standards for units sold from 2003 to 2030 discounted at 7% to 1997 (in billion 1997 $) 

Seenario Seen 5A 100% I Seen 5B 100% 

CC Decr2015 CC Decr2027 

Seen 6A 37% I Seen 6B 37% 

CC Decr2015 CC Decr2027 I 

Total Benefit ................................................................................................... .. 0.94 

0.78 

0.16 

Total Equipment Cost ..................................................................................... . 

Net Present Value ......................................................................................... .. 

Since the covered lamp ballasts are 

commercial products, these net savings 

apply to American business and 

industry. NPV is the difference between 

additional equipment costs and 

electricity cost savings. The NPV for the 

electronic ballast standards scenarios 

ranges from about 0.96 billion to 3.86 

billion dollars (1997 dollars). NPV 

increases under the slower decreasing 

shipments forecast to 2027. NPVs for 

scenario 2 with T8 electronic ballasts 

are about 2.5 times those for scenario 1 

with T12 electronic ballasts. For 

scenario 3, the five-year phase-in period 

causes an NPV reduction of around 15 

percent over scenario 2. For scenario 4, 

the 2-year phase-in period results in an 

NPV reduction of about 5 percent over 

Scenario 2. 

For the cathode cutout standards 

scenarios, NPV ranges from 0.16 to 2.54 

billion dollars. For scenario 6, the NPV 

is 10 to 11 times greater than that of 

scenario 5. Note that we did not include 

HV AC energy cost savings in any of the 

NPV calculations. 

The net present value analysis from 

the standards in the Joint Comments is 

summarized in Table V.1B. 

1.49 

1.26 

0.23 

2.181 3.47 

0.581 0.93 

1.60 2.54 

TABLE V.1B.-NET PRESENT VALUE 

RESULTING FROM JOINT COMMENT 

Joint comment standards for units sold from 

2005 to 2030 discounted at 7% to 1997 (in 

billion 1997 $) 

Seenario 

Total Benefit ............ . 

Total Equipment Cost 

Net Present Value .... 

Dec2015 Dec2027 

1.95 3.51 

0.53 0.91 

1.42 2.60 

The Department committed in its 

1996 Process Improvement Rule to 

develop estimates of the employment 
Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules 14153

impacts of proposed standards in the

economy in general. 61 FR 36983.

As discussed above, energy efficiency

standards for ballasts are expected to

reduce electricity bills for commercial

and industrial consumers, although

these savings are likely to be partially

offset by increased costs for lighting

equipment. The resulting net savings are

expected to be redirected to other forms

of economic activity. These shifts in

spending and economic activity are

expected to affect the demand for labor,

but there is no generally accepted

method for estimating these effects.

One method to assess the possible

effects on the demand for labor of such

shifts in economic activity is to compare

sectoral employment statistics

developed by the Labor Department's

Bureau of Labor Statistics (BLS). The

BLS regularly publishes its estimates of

the number of jobs per million dollars

of economic activity in different sectors

of the economy, as well as the jobs

created elsewhere in the economy by

this same economic activity. BLS data

indicate that expenditures in the electric

sector generally are associated with

fewer jobs (both directly and indirectly)

than expenditures in other sectors of the

economy. There are many reasons for

these differences, including the capitalintensity of the utility sector and wage

differences. Based on the BLS data

alone, we believe the increase in the

demand for labor resulting from shifts in

economic activity would offset any

reduced demand in the domestic ballast

industry as a result of a ballast standard.

In developing this proposed rule, the

Department attempted a more precise

analysis of the impacts on national labor

demand using an input/output model of

the U.S. economy. The model

characterizes the interconnections

among 35 economic sectors using the

data from the Bureau of Labor Statistics.

Since the electric utility sector is more

capital-intensive and less laborintensive than other sectors (see Bureau

of Economic Analysis, Regional

Multipliers: A User Handbook for the

Regional Input-Output Modeling System

(RIMS II), Washington, D.C., U.S.

Department of Commerce, 1992), a shift

in spending away from energy bills into

other sectors would be expected to

increase overall employment. The

results of the Department's analysis are

shown in Appendix E of the TSD. This

analysis also concluded that the shifts

in sectoral expenditures likely to result

from the proposed ballast standard

would likely increase the net national

demand for labor.

While both this input/output model

and the direct use of BLS employment

data suggest the proposed ballast

standards are likely to increase the net

demand for labor in the economy, the

gains would most likely be very small

relative to total national employment.

For several reasons, however, even these

modest benefits are in doubt:

o Unemployment is now at the lowest

rate in 30 years. If unemployment

remains very low during the period

when the proposed standards are put

into effect, it is unlikely that the

standards could result in any net

increase in national employment levels.

a Neither the BLS data nor the inputoutput model used by DOE include the

quality or wage level of the jobs. One

reason that the demand for labor

increases in the model may be that the

jobs expected to be created pay less than

the jobs being lost. The benefits from

any potential employment gains would

be reduced if job quality and pay are

reduced.

o The net benefits from potential

employment changes are a result of the

estimated net present value of benefits

or losses likely to result from the

proposed standards, it may not be

appropriate to separately identify and

consider any employment impacts

beyond the calculation of net present

value.

Taking into consideration these

legitimate concerns regarding the

interpretation and use of the

employment impacts analysis, the

Department concludes only that the

proposed ballast standards are likely to

produce employment benefits that are

sufficient to offset fully the expected

adverse impacts on employment in the

domestic ballast industry.

Because this is the first time DOE has

performed such an analysis for an

efficiency standards rulemakings, public

comments are solicited on the validity

of the analytical methods used and the

appropriate interpretation and use of the

results of this analysis.

4. Lessening of Utility or Performance of

Products

An issue of utility that was

considered was the possibility of

interference with certain equipment,

such as medical monitoring equipment,

caused by the high frequency of

electronic ballasts. To prevent any

interference that cannot be solved by

electronic ballast designers, the

Department is not establishing a

standard for T8 ballasts, thereby

allowing magnetic T8 ballasts for such

applications.

5. Impact of Lessening of Competition

The determination of this factor must

be made by the Attorney General.

6. Need of the Nation to Save Energy

Enhanced energy efficiency improves

the Nation's energy security, strengthens

the economy and reduces the

environmental impacts of energy

production. The energy savings from

ballast standards result in reduced

emissions of carbon and NOx.

Cumulative emissions savings over the

18-year period modeled are shown in

Table V.19.

TABLE V.19.-CUMULATIVE EMISSIONS REDUCTIONS (2003-2020)

Range for Range for

Electronic Cathode Cut- Range ResultEmission Standards out Standards ing from Joint

(standards (standards 5 Comments

1-4) and 6)

Carbon (Mt) .................................................................................................................................. 12-30 6-20 11-19

NOx (kt) ....................................................................................................................................... 41-97 20-65 34-60

The annual carbon emission 5.7 kt in 2015.8,9 Total carbon and NOx

reductions range up to 2.3 Mt in 2020 emissions for each of the 12 studied

and the NOx emissions reductions up to standards are reported in Tables D-1a

•million metric tons (Mt).

• thousand metric tons (kt).

and D-1b, Appendix D, of the TSD. In

addition, equivalent results for the high

and low economic growth cases for

standards level 2b are reported in Table

D-2 of the TSD. The outcome of the

analysis for each case is shown as both

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 14153 

impacts of proposed standards in the 

economy in general. 61 FR 36983. 

As discussed above, energy efficiency 

standards for ballasts are expected to 

reduce electricity bills for commercial 

and industrial consumers, although 

these savings are likely to be partially 

offset by increased costs for lighting 

equipment. The resulting net savings are 

expected to be redirected to other forms 

of economic activity. These shifts in 

spending and economic activity are 

expected to affect the demand for labor, 

but there is no generally accepted 

method for estimating these effects. 

One method to assess the possible 

effects on the demand for labor of such 

shifts in economic activity is to compare 

sectoral employment statistics 

developed by the Labor Department's 

Bureau of Labor Statistics (BLS). The 

BLS regularly publishes its estimates of 

the number of jobs per million dollars 

of economic activity in different sectors 

of the economy, as well as the jobs 

created elsewhere in the economy by 

this same economic activity. BLS data 

indicate that expenditures in the electric 

sector generally are associated with 

fewer jobs (both directly and indirectly) 

than expenditures in other sectors of the 

economy. There are many reasons for 

these differences, including the capitalintensity of the utility sector and wage 

differences. Based on the BLS data 

alone, we believe the increase in the 

demand for labor resulting from shifts in 

economic activity would offset any 

reduced demand in the domestic ballast 

industry as a result of a ballast standard. 

In developing this proposed rule, the 

Department attempted a more precise 

analysis of the impacts on national labor 

demand using an input/output model of 

the U.S. economy. The model 

characterizes the interconnections 

among 35 economic sectors using the 

data from the Bureau of Labor Statistics. 

Since the electric utility sector is more 

capital-intensive and less laborintensive than other sectors (see Bureau 

of Economic Analysis, Regional 

Multipliers: A User Handbook for the 

Regional Input-Output Modeling System 

(RIMS Ill, Washington, D.C., U.S. 

Department of Commerce, 1992), a shift 

in spending away from energy bills into 

other sectors would be expected to 

increase overall employment. The 

results of the Department's analysis are 

shown in Appendix E of the TSD. This 

analysis also concluded that the shifts 

in sectoral expenditures likely to result 

from the proposed ballast standard 

would likely increase the net national 

demand for labor. 

While both this input/output model 

and the direct use of BLS employment 

data suggest the proposed ballast 

standards are likely to increase the net 

demand for labor in the economy, the 

gains would most likely be very small 

relative to total national employment. 

For several reasons, however, even these 

modest benefits are in doubt: 

• Unemployment is now at the lowest 

rate in 30 years. If unemployment 

remains very low during the period 

when the proposed standards are put 

into effect, it is unlikely that the 

standards could result in any net 

increase in national employment levels. 

• Neither the BLS data nor the inputoutput model used by DOE include the 

quality or wage level of the jobs. One 

reason that the demand for labor 

increases in the model may be that the 

jobs expected to be created pay less than 

the jobs being lost. The benefits from 

any potential employment gains would 

be reduced if job quality and pay are 

reduced. 

• The net benefits from potential 

employment changes are a result of the 

estimated net present value of benefits 

or losses likely to result from the 

proposed standards, it may not be 

appropriate to separately identify and 

consider any employment impacts 

beyond the calculation of net present 

value. 

Taking into consideration these 

legitimate concerns regarding the 

interpretation and use of the 

employment impacts analysis, the 

Department concludes only that the 

proposed ballast standards are likely to 

produce employment benefits that are 

sufficient to offset fully the expected 

adverse impacts on employment in the 

domestic ballast industry. 

Because this is the first time DOE has 

performed such an analysis for an 

efficiency standards rulemakings, public 

comments are solicited on the validity 

of the analytical methods used and the 

appropriate interpretation and use of the 

results of this analysis. 

4. Lessening of Utility or Performance of 

Products 

An issue of utility that was 

considered was the possibility of 

interference with certain equipment, 

such as medical monitoring equipment, 

caused by the high frequency of 

electronic ballasts. To prevent any 

interference that cannot be solved by 

electronic ballast designers, the 

Department is not establishing a 

standard for T8 ballasts, thereby 

allowing magnetic T8 ballasts for such 

applications. 

5. Impact of Lessening of Competition 

The determination of this factor must 

be made by the Attorney General. 

6. Need of the Nation to Save Energy 

Enhanced energy efficiency improves 

the Nation's energy security, strengthens 

the economy and reduces the 

environmental impacts of energy 

production. The energy savings from 

ballast standards result in reduced 

emissions of carbon and NOx. 

Cumulative emissions savings over the 

18-year period modeled are shown in 

Table V.19. 

TABLE V.19.-CUMULATIVE EMISSIONS REDUCTIONS (2003-2020) 

Emission 

Carbon (Mt) ................................................................................................................................. . 

NOx (kt) ...................................................................................................................................... . 

The annual carbon emission 

reductions range up to 2.3 Mt in 2020 

and the NOx emissions reductions up to 

5.7 kt in 2015. 8 •

9 Total carbon and NOx emissions for each of the 12 studied 

standards are reported in Tables D-la 

B million metric tons (Mt). 

"thousand metric tons (kt). 

Range for Range for 

Electronic Cathode Cut- Ran~e ResultStandards out Standards ins om Joint 

(standards (standards 5 omments 

1-4) and 6) 

12-30 6-20 11-19 

41-97 20-65 3<H)0 

and D-lb, Appendix D, of the TSD. In 

addition, equivalent results for the high 

and low economic growth cases for 

standards level 2b are reported in Table 

D-2 of the TSD. The outcome of the 

analysis for each case is shown as both 
14154 Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules

emissions and deviations from the

AE099 Reference Case result. Emissions

for the Joint Comment are presented in

Appendix E of the TSD.

7. Other Factors

We present in Table V.20 a summary

of the life-cycle cost results for those

subgroups of commercial and industrial

consumers who, if forced by standards

to purchase electronic ballasts, would

choose to switch from T12 to T8 lighting

systems. The column titled "Delta LCC"

gives the change in LCC when switching

from the baseline option of EEM ballast

to the listed design option. "%

Winners" represents the probability of

the design option resulting in reduced

LCC.

TABLE V.20.-SUMMARY OF DELTA LCC* RESULTS

Delta LCC

Product Class Design Option Sector

Mean (1997$) %Winners**

1 F40 ............................................................................ T8 ERS ............................ Commercial ..................... 17 98

2F40 ............................................................................ T8 ERS ............................ Commercial ...................... 18 98

3F40 Tandem-Wired ................................................... T8 ERS ............................ Commercial ...................... 27 98

3F40 Not Tandem-Wired ............................................. T8 ERS ............................ Commercial ...................... 56 100

4F40 w/o Dual Switching ............................................ T8 ERS ............................ Commercial ...................... 54 100

4F40 Dual Switching ................................................... T8 ERS ............................ Commercial ...................... 44 99

*A positive Delta LCC implies a LCC savings whereas a negative number implies an increase in LCC

% ballasts with reduced life cycle cost (winners), noted as "certainty level" by Crystal Ball.

For commercial and industrial

consumers that choose four foot T8

lamps with their electronic ballasts,

who in the current market represent 95

percent of purchasers of electronic

ballasts, 98 to 100 percent will have life

cycle cost savings which average 17 to

54 dollars. We did not evaluate

commercial and industrial consumers of

eight foot lamps, but we expect them to

have similarly robust positive results.

As stated, the Department analyzed

the joint Comment in terms of national

energy savings, net present value,

national employment impacts and

emission reductions. These results are

also shown in Appendix E of the TSD.

For the common scenario between the

Department's analysis and the joint

Comment proposal of a market

transformation by 2027 and a shift to T8

lamps, the above benefits are

approximately 24 percent less than the

Department's analysis which started the

standards in the year 2003. However,

the burdens on the manufacturers are

also reduced to lower levels. The

manufacturers have commented that

their proposed staggered

implementation dates mitigate the

adverse impacts.

e. Conclusion

Section 325(1) of the Act specifies that

the Department must consider, for

amended standards, those standards

that "achieve the maximum

improvement in energy efficiency which

the Secretary determines is

technologically feasible and

economically justified" and which will

"result in significant conservation of

energy." Accordingly, the Department

first considered the benefits and

burdens of the max tech level of

efficiency, i.e., electronic ballast

standards. Furthermore, in considering

this standard level, the Department

considered the staggered

implementation scheme recommended

in the joint Comments.

Significant Conservation of Energy

The Department concludes that an

electronic ballast standard saves a

significant amount of energy. The

energy savings reported for an electronic

ballast standard in the Department's

analysis ranged between 1.20 to 2.32

Quads of energy, not including the

HVAC effects. The Department

considers energy savings within this

range to be significant.

Technological Feasibility

The Department concludes that an

electronic ballast standard is

technologically feasible as these

products are currently available and

comprise roughly half of the market.

Summary of Economic Impacts

In determining economic justification,

the Department considered the burdens

and benefits of an electronic ballast

standard. The burdens accrue to the

manufacturers of magnetic ballasts,

some of their suppliers and employees,

and to some commercial and industrial

consumers who, because of factors such

as lower than average electric costs or

hours of operation, will experience

increased life cycle costs. On the other

hand, most commercial and industrial

consumers will benefit from lower life

cycle costs due to energy savings. These

lower costs to the nation's businesses

and industries produce increased jobs in

the economy at large and the energy

savings result in reduced atmospheric

emissions. The Department gave

considerable weight to the

recommendations of the joint Comment

which attempts to balance these

burdens and benefits. The proposal

reduces energy savings by

approximately 24 percent compared to

the Department's analysis for the

common scenario of a market

transformation by 2027 and a shift to T8

lamps. These reductions come mainly

from delaying the effective dates of the

standards from the year 2003 to 2005

and later for replacement ballasts.

However, these same extensions also

reduce the impacts of the standards on

manufacturers from what the

Department estimated to levels which

the manufacturers state are mitigated.

While the Department did not revise the

MIA, we believe the manufacturers'

statement in the Joint Comment that the

impacts on them from the proposal are

mitigated is sufficient to conclude that,

given the benefits, today's proposed

standards are economically justified.

Economic Impact on Manufacturers

Over the range of cash flow scenarios

and shipment forecasts that the

Department studied for standards

starting for all classes in 2003, we

estimated that manufacturers that

produce both magnetic and electronic

ballasts would loose between 54.6 and

113.7 millions of dollars of NPV as a

result of electronic standards.

Manufacturers that currently produce

electronic ballasts only were estimated

to gain 9.3 to 27.5 millions of dollars of

NPV. Domestic suppliers to the ballast

industry were expected to loose

between 7.55 and 20.69 millions of

dollars of NPV. Luminaire

manufacturers were expected to loose

between 5.5 and 14.5 millions of dollars

EE-RM-97-500 COMMENT 98A

14154 Federal Register IVoI. 65, No. 51 I Wednesday, March 15, 2000/Proposed Rules 

emissions and deviations from the 

AE099 Reference Case result. Emissions 

for the Joint Comment are presented in 

Appendix E of the TSD. 

7. Other Factors 

We present in Table V.20 a summary 

of the life-cycle cost results for those 

subgroups of commercial and industrial consumers who, if forced by standards 

to purchase electronic ballasts, would 

choose to switch from T12 to T8lighting 

systems. The column titled "Delta LCC" 

gives the change in LCC when switching 

.from the baseline option of EEM ballast 

to the listed design option. "% 

Winners" represents the probability of 

the design option resulting in reduced 

LCe. 

TABLE V.20.-SUMMARY OF DELTA LCC· RESULTS 

Delta LCC 

Product Class Design Option Sector 

Mean (1997$) %WinnerS" 

1 F40 ..... ......................... .............................................. T8 ERS .. ..... ............... ...... Commercial .................... .. 17 

18 

27 

56 

54 

44 

98 

98 

98 

2F40 ................ ............................................................ T8 ERS ............................ Commercial .................... .. 

3F40 Tandem-Wired ......................... .......................... T8 ERS ............................ Commercial ..................... . 

3F40 Not Tandem-Wired ............................................. T8 ERS ............................ Commercial .................... .. 100 

100 

99 

4F40 wlo Dual Switching .................... ........................ T8 ERS ................ ............ Commercial ..................... . 

4F40 Dual Switching ................. .................................. T8 ERS ............................ Commercial ..................... . 

*A positive Delta LCC implies a LCC savings whereas a negative number implies an increase in LCC 

** % ballasts with reduced life cycle cost (winners), noted as "certainty level" by Crystal Ball. 

For commercial and industrial 

consumers that choose four foot T8 

lamps with their electronic ballasts, 

who in the current market represent 95 

percent of purchasers of electronic 

ballasts, 98 to 100 percent will have life 

cycle cost savings which average 17 to 

54 dollars. We did not evaluate 

commercial and industrial consumers of 

eight foot lamps, but we expect them to 

have similarly robust positive results. 

As stated, the Department analyzed 

the Joint Comment in terms of national 

energy savings, net present value, 

national employment impacts and 

emission reductions. These results are 

also shown in Appendix E of the TSD. 

For the common scenario between the 

Department's analysis and the Joint 

Comment proposal of a market . 

transformation by 2027 and a shift to T8 

lamps, the above benefits are 

approximately 24 percent less than the 

Department's analysis which started the 

standards in the year 2003. However, 

the burdens on the manufacturers are 

also reduced to lower levels. The 

manufacturers have commented that 

their proposed staggered 

implementation dates mitigate the 

adverse impacts. 

e. Conclusion 

Section 325 (I) of the Act specifies that 

the Department must consider, for 

amended standards, those standards 

that "achieve the maximum 

improvement in energy efficiency which 

the Secretary determines is 

technologically feasible and 

economically justified" and which will 

"result in significant conservation of 

energy." Accordingly, the Department 

first considered the benefits and 

burdens of the max tech level of 

efficiency, i.e., electronic ballast 

standards. Furthermore, in considering 

this standard level, the Department 

considered the staggered 

implementation scheme recommended 

in the Joint Comments. 

Significant Conservation of Energy 

The Department concludes that an 

electronic ballast standard saves a 

significant amount of energy. The 

energy savings reported for an electronic 

ballast standard in the Department's 

analysis ranged between 1.20 to 2.32 

Quads of energy, not including the 

HVAC effects. The Department 

considers energy savings within this 

range to be significant. 

Technological Feasibility 

The Department concludes that an 

electronic ballast standard is 

technologically feasible as these 

products are currently available and 

comprise roughly half of the market. 

Summary of Economic Impacts 

In determining economic justification, 

the Department considered the burdens 

and benefits of an electronic ballast 

standard. The burdens accrue to the 

manufacturers of magnetic ballasts, 

some of their suppliers and employees, 

and to some commercial and industrial 

consumers who, because of factors such 

as lower than average electric costs or 

hours of operation, will experience 

increased life cycle costs. On the other 

hand, most commercial and industrial 

consumers will benefit from lower life 

cycle costs due to energy savings. These 

lower costs to the nation's businesses 

and industries produce increased jobs in 

the economy at large and the energy 

savings result in reduced atmospheric 

emissions. The Department gave 

considerable weight to the 

recommendations of the Joint Comment 

which attempts to balance these 

burdens and benefits. The proposal 

reduces energy savings by 

approximately 24 percent compared to 

the Department's analysis for the 

common scenario of a market 

transformation by 2027 and a shift to T8 

lamps. These reductions come mainly 

from delaying the effective dates of the 

standards from the year 2003 to 2005 

and later for replacement ballasts. 

However, these same extensions also 

reduce the impacts of the standards on 

manufacturers from what the 

Department estimated to levels which 

the manufacturers state are mitigated. 

While the Department did not revise the 

MIA, we believe the manufacturers' 

statement in the Joint Comment that the 

impacts on them from the proposal are 

mitigated is sufficient to conclude that, 

given the benefits, today's proposed 

standards are economically justified. 

Economic Impact on Manufacturers 

Over the range of cash flow scenarios 

and shipment forecasts that the 

Department studied for standards 

starting for all classes in 2003, we 

estimated that manufacturers that 

produce both magnetic and electronic 

ballasts would loose between 54.6 and 

113.7 millions of dollars ofNPV as a 

result of electronic standards. 

Manufacturers that currently produce 

electronic ballasts only were estimated 

to gain 9.3 to 27.5 millions of dollars of 

NPV. Domestic suppliers to the ballast 

industry were expected to loose 

between 7.55 and 20.69 millions of 

dollars of NPV. Luminaire 

manufacturers were expected to loose 

between 5.5 and 14.5 millions of dollars 
Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules 14155

of NPV. Cumulatively, the Department

estimates that businesses involved in

the ballast industry would have net

losses of between 47.4 and 121.4

millions of dollars of NPV as a result of

electronic standards starting in the year

2003. This loss of value comes mainly

from the lower profitability of the

electronic ballast market compared to

the magnetic ballast market.

Additionally, restructuring costs

associated with plant closures and

expansions and changes in capacity

utilization make up the rest of the loss

in value.

Manufacturers report that a domestic

magnetic ballast manufacturing plant,

and possibly a domestic magnet wire

plant, would close if an electronic

ballast standard became effective in

2003. It was also reported that a

capacitor plant and part of a magnetic

ballast manufacturing plant, both

located in Mexico, would also close.

Additionally, it was reported that two

domestic electronic ballast

manufacturing plants, and two located

in Mexico, would expand. The

Department has included these

assumptions in the above NPV values.

However, given the downward trend

in magnetic ballast shipments,

statements by manufacturers that the

market is transitioning away from

magnetic ballasts and the movement of

domestic magnetic ballast

manufacturing facilities to Mexico in

recent years, it certainly seems possible

that the plants associated with magnetic

ballasts might be closed, or moved to

Mexico, even in the absence of

standards. Therefore, the Department

also considered a scenario where the

domestic magnetic ballast

manufacturing facilities close in the

base case. Under this assumption the

losses to manufacturers that produce

both magnetic and electronic ballasts,

and to the total industry, would be

reduced by 13.7 million dollars from the

previous figures to a range of 33.7 to

107.7 millions of dollars of NPV.

Employment Impacts

Given the manufacturer reported

plant closure and expansion

assumptions, the Department estimated

that between 666 and 717 direct

domestic magnetic ballast

manufacturing jobs, along with 313 to

340 domestic supplier jobs, would be

lost. The Department also estimated that

between 500 and 557 direct domestic

electronic ballast manufacturing jobs,

along with zero to 144 supplier jobs

would be created. Thus, the Department

estimated that the impact on direct

domestic employment in the ballast

industry would be a net loss of between

350 and 500 jobs.

However, given the movement of

domestic magnetic ballast

manufacturing facilities to Mexico in

recent years, it certainly seems possible

that many of these jobs would be moved

to Mexico in the absence of an

electronic ballast standard. Therefore,

the Department also considered a

scenario where the domestic magnetic

ballast manufacturing facility closes in

the base case. Under this scenario, no

direct domestic magnetic ballast

manufacturing jobs would be lost and

the impact on direct domestic

employment in the ballast industry

would be a net gain of between 500 and

557 jobs.

In addition to the direct domestic

jobs, the Department also estimated that

there are between 363 and 406

associated domestic jobs in the ballast

industry that, while not being

eliminated, are at risk of being moved to

Mexico as a result of business decisions.

Additionally, the Department estimated

that between 1,570 and 1,727 direct

magnetic ballast manufacturing jobs in

Mexico would be lost while 700 to 769

direct electronic ballast manufacturing

jobs would be created in Mexico. Under

the scenario where the domestic

magnetic ballast manufacturing facility

closes in the base case, no associated

domestic jobs are at risk of being moved

to Mexico as result of standards, while

the direct magnetic ballast

manufacturing jobs lost in Mexico grows

to between 2,236 and 2,444 jobs.

Consumer Impacts

As a result of the Department's

analysis, we believe most commercial

and industrial consumers will save

money. In total, we estimated the energy

savings to have a net present value to

American business and industry of 1.42

to 2.60 billion dollars, depending on the

forecast of switching from magnetic

ballasts to electronic ballasts in the

absence of standards, and the rate of

switching from T12 to T8 lamps in the

face of standards.

Commercial consumers will

experience lower life cycle costs which

range from an average savings of 4

dollars for a 1F40T12 ballast to an

average savings of 18 dollars for a

3F40T12 not tandem-wired ballast.

Within these respective averages, 68 to

98 percent of the consumers will have

lower life cycle costs while 32 to 2

percent will have higher life cycle costs.

Those commercial consumers who also

switch to T8 lamps will experience even

lower life cycle costs which range from

an average savings of 17 dollars for a

1F40T8 ballast to an average savings of

56 dollars for a 3F40T8 ballast. Within

these respective averages 98 to 100

percent of the consumers will have

lower life cycle costs. The Department

believes almost every commercial

consumer who switches to an electronic

ballast for T8 lamps will save money.

Industrial consumers using F96T12

lamps, who represent 26 percent of

F96T12 lamps, will experience higher

life cycle costs with average costs of 2

dollars per ballast. Within that average,

35 percent will have lower life cycle

costs while 65 percent will have higher

life cycle costs. The above industrial

consumer impacts are for T12 lamps

and, while we did not evaluate

industrial consumers of eight foot T8

lamps, we expect them to have a much

larger proportion with lower life cycle

costs as was the case for all consumers

of four foot lamps who switch from T12

to T8 lamps.

National Impacts

As stated earlier, the energy savings

reported for an electronic ballast

standard in the Department's analysis

ranged from 1.20 to 2.32 Quads of

energy. These energy savings would

result in carbon emission reductions of

11 to 19 million metric tons and NOx

emission reductions of 34 to 60

thousand metric tons.

Net Benefits of Proposed Standard

After carefully considering the

analysis, comments and benefits versus

burdens, the Department proposes to

amend the energy conservation

standards for fluorescent lamp ballasts

as proposed by the joint Comment. The

Department concludes this standard

saves a significant amount of energy and

is technologically feasible and

economically justified. In determining

economic justification, the Department

finds that the benefits of energy savings,

consumer life cycle cost savings,

national net present value increase, job

creation and emission reductions

resulting from the standard outweigh

the burdens of the loss of manufacturer

net present value, possible plant

closings and job loss and consumer life

cycle cost increases for some users of

fluorescent lamp ballasts covered by

today's notice.

VI. Procedural Issues and Regulatory

Review

a. Review Under the National

Environmental Policy Act

In issuing the March 4, 1994 Proposed

Rule for energy efficiency standards for

eight products, one of which was

fluorescent lamp ballasts, the

Department prepared an Environmental

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 14155 

of NPV. Cumulatively, the Department 

estimates that businesses involved in 

the ballast industry would have net 

losses of between 47.4 and 121.4 

millions of dollars of NPV as a result of 

electronic standards starting in the year 

2003. This loss of value comes mainly 

from the lower profitability of the 

electronic ballast market compared to 

the magnetic ballast market. 

Additionally, restructuring costs 

associated with plant closures and 

expansions and changes in capacity 

utilization make up the rest of the loss 

in value. 

Manufacturers report that a domestic 

magnetic ballast manufacturing plant, 

and possibly a domestic magnet wire 

plant, would close if an electronic 

ballast standard became effective in 

2003. It was also reported that a 

capacitor plant and part of a magnetic 

ballast manufacturing plant, both 

located in Mexico, would also close. 

Additionally, it was reported that two 

domestic electronic ballast 

manufacturing plants, and two located 

in Mexico. would expand. The 

Department has included these 

assumptions in the above NPV values. 

However. given the downward trend 

in magnetic ballast shipments. 

statements by manufacturers that the 

market is transitioning away from 

magnetic ballasts and the movement of 

domestic magnetic ballast 

manufacturing facilities to Mexico in 

recent years. it certainly seems possible 

that the plants associated with magnetic 

ballasts might be closed. or moved to 

Mexico. even in the absence of 

standards. Therefore. the Department 

also considered a scenario where the 

domestic magnetic ballast 

manufacturing facilities close in the 

base case. Under this assumption the 

losses to manufacturers that produce 

both magnetic and electronic ballasts. 

and to the total industry. would be 

reduced by 13.7 million dollars from the 

previous figures to a range of 33.7 to 

107.7 millions of dollars ofNPV. 

Employment Impacts 

Given the manufacturer reported 

plant closure and expansion 

assumptions. the Department estimated 

that between 666 and 717 direct 

domestic magnetic ballast 

manufacturing jobs. along with 313 to 

340 domestic supplier jobs. would be 

lost. The Department also estimated that 

between 500 and 557 direct domestic 

electronic ballast manufacturing jobs. 

along with zero to 144 supplier jobs 

would be created. Thus. the Department 

estimated that the impact on direct 

domestic employment in the ballast 

industry would be a net loss of between 

350 and 500 jobs. 

However. given the movement of 

domestic magnetic ballast 

manufacturing facilities to Mexico in 

recent years. it certainly seems possible 

that many of these jobs would be moved 

to Mexico in the absence of an 

electronic ballast standard. Therefore. 

the Department also considered a 

scenario where the domestic magnetic 

ballast manufacturing facility closes in 

the base case. Under this scenario. no direct domestic magnetic ballast 

manufacturing jobs would be lost and 

the impact on direct domestic 

employment in the ballast industry 

would be a net gain of between 500 and 

557 jobs. 

In addition to the direct domestic 

jobs. the Department also estimated that 

there are between 363 and 406 

associated domestic jobs in the ballast 

industry that. while not being 

eliminated. are at risk of being moved to 

Mexico as a result of business decisions. 

Additionally, the Department estimated 

that between 1.570 and 1,727 direct 

magnetic ballast manufacturing jobs in 

Mexico would be lost while 700 to 769 

direct electronic ballast manufacturing 

jobs would be created in Mexico. Under 

the scenario where the domestic 

magnetic ballast manufacturing facility 

closes in the base case. no associated 

domestic jobs are at risk of being moved 

to Mexico as result of standards. while 

the direct magnetic ballast 

manufacturing jobs lost in Mexico grows 

to between 2.236 and 2.444 jobs. 

Consumer Impacts 

As a result of the Department's 

analysis, we believe most commercial 

and industrial consumers will save 

money. In total, we estimated the energy 

savings to have a net present value to 

American business and industry of 1.42 

to 2.60 billion dollars. depending on the 

forecast of switching from magnetic 

ballasts to electronic ballasts in the 

absence of standards. and the rate of 

switching from T12 to T8 lamps in the 

face of standards. 

Commercial consumers will 

experience lower life cycle costs which 

range from an average savings of 4 

dollars for a IF40T12 ballast to an 

average savings of 18 dollars for a 

3F40T12 not tandem-wired ballast. 

Within these respective averages. 68 to 

98 percent of the consumers will have 

lower life cycle costs while 32 to 2 

percent will have higher life cycle costs. 

Those commercial consumers who also 

switch to T8 lamps will experience even 

lower life cycle costs which range from 

an average savings of 17 dollars for a 

IF40T8 ballast to an average savings of 

56 dollars for a 3F40T8 ballast. Within 

these respective averages 98 to 100 

percent of the consumers will have 

lower life cycle costs. The Department 

believes almost every commercial 

consumer who switches to an electronic 

ballast for T81amps will save money. 

Industrial consumers using F96T12 

lamps. who represent 26 percent of 

F96T12 lamps, will experience higher 

life cycle costs with average costs of 2 

dollars per ballast. Within that average, 

35 percent will have lower life cycle 

costs while 65 percent will have higher 

life cycle costs. The above industrial 

consumer impacts are for T121amps 

and .. while we did not evaluate 

industrial consumers of eight foot T8 

lamps. we expect them to have a much 

larger proportion with lower life cycle 

costs as was the case for all consumers 

of four foot lamps who switch from T12 

to T81amps. 

National Impacts 

As stated earlier. the energy savings 

reported for an electronic ballast 

standard in the Department's analysis 

ranged from 1.20 to 2.32 Quads of 

energy. These energy savings would 

result in carbon emission reductions of 

11 to 19 million metric tons and NOx emission reductions of 34 to 60 

thousand metric tons. 

Net Benefits of Proposed Standard 

After carefully considering the 

analysis. comments and benefits versus 

burdens. the Department proposes to 

amend the energy conservation 

standards for fluorescent lamp ballasts 

as proposed by the Joint Comment. The 

Department concludes this standard 

saves a significant amount of energy and 

is technologically feasible and 

economically justified. In determining 

economic justification. the Department 

finds that the benefits of energy savings. 

consumer life cycle cost savings. 

national net present value increase. job 

creation and emission reductions 

resulting from the standard outweigh 

the bUrdens of the loss of manufacturer 

net present value. possible plant 

closings and job loss and consumer life 

cycle cost increases for some users of 

fluorescent lamp ballasts covered by 

today's notice. 

VI. Procedural Issues and Regulatory 

Review 

a. Review Under the National 

Environmental Policy Act 

In issuing the March 4.1994 Proposed 

Rule for energy efficiency standards for 

eight products. one of which was 

fluorescent lamp ballasts. the 

Department prepared an Environmental 
14156 Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

Assessment (EA) (DOE/EA-0819) that

was published within the Technical

Support Document for that Proposed

Rule. (DOE/EE-0009, November 1993.)

We found the environmental effects

associated with various standard levels

for fluorescent lamp ballasts, as well as

the other seven products, to be not

significant, and we published a Finding

of No Significant Impact (FONSI). 59 FR

15868 (April 5, 1994).

In conducting the analysis for today's

Proposed Rule, the Department

evaluated design options as suggested in

comments. As a result, the energy

savings estimates and resulting

environmental effects from revised

energy efficiency standards for

fluorescent lamp ballasts in today's

proposal differ somewhat from those

that we presented for fluorescent lamp

ballasts in the 1994 Proposed Rule.

Nevertheless, the environmental effects

expected from today 's Proposed Rule

would fall within ranges of

environmental impacts from the revised

energy efficiency standards for

fluorescent lamp ballasts that DOE

found in the FONSI not to be

significant.

b. Review Under Executive Order 12866,

'Regulatory Planning and Review'

Today's regulatory action has been

determined to be an "economically

significant regulatory action" under

Executive Order 12866, "Regulatory

Planning and Review." (58 FR 51735,

October 4, 1993). Accordingly, today's

action was subject to review under the

Executive Order by the Office of

Information and Regulatory Affairs

(OIRA).

The draft submitted to OIRA and

other documents submitted to OIRA for

review have been made a part of the

rulemaking record and are available for

public review in the Department's

Freedom of Information Reading Room,

1000 Independence Avenue, SW,

Washington, DC 20585, between the

hours of 9: 00 a.m. and 4:00 p.m.,

Monday through Friday, telephone (202)

586-3142.

The following summary of the

Regulatory Analysis focuses on the

major alternatives considered in arriving

at the proposed approach to improving

the energy efficiency of consumer

products. The reader is referred to the

complete draft "Regulatory Impact

Analysis," which is contained in the

TSD, available as indicated at the

beginning of this NOPR. It consists of:

(1) A statement of the problem

addressed by this regulation, and the

mandate for government action; (2) a

description and analysis of the feasible

policy alternatives to this regulation; (3)

a quantitative comparison of the

impacts of the alternatives; and (4) the

national economic impacts of the

proposed standard.

DOE identified the following eight

major policy alternatives for achieving

consumer product energy efficiency.

These alternatives include:

® No New Regulatory Action

• Informational Action

-Product Labeling

-Consumer Education

m Financial Incentives

-Tax Credits

-Rebates

® Voluntary Energy Efficiency Targets

® Mass Government Purchases

• Lighting Research and Development

• Building Codes

® The Proposed Approach

(Performance Standards)

Each alternative has been evaluated in

terms of its ability to achieve significant

energy savings at reasonable costs, and

has been compared to the effectiveness

of the proposed rule. These alternatives

were analyzed with the NES model, as

explained in the RIA section and

Appendix B of the TSD. The results are

reported for lighting energy savings only

(HVAC interactive impacts would

increase the savings by 6.25 percent).

Many alternatives assume a conversion

rate, which means the percentage of

ballasts that would be magnetic for any

year in the base case that are T8

electronic in the alternative case; the

base case already assumes that some

ballasts would be electronic without

policy action. The performance

standards case has a 100 percent

conversion rate to electronic ballasts.

If no new regulatory action were

taken, then no new standards would be

implemented for these products. This is

essentially the "base case." For this

analysis, we considered two base cases

(the "Decreasing shipments to 2015"

case and the "Decreasing shipments to

2027" case). In this section, we report

two values for the base cases and policy

alternatives, corresponding to each base

case respectively . For the base cases,

between the years 2003 and 2030, there

would be expected energy use of 83.3-

90.6 Quads (87.9-96.6 EJ) of primary

energy, with no energy savings and a

zero net present value (see Appendix B

of the TSD for the derivation of these

estimates).

Several alternatives to the base cases

can be grouped under the heading of

informational action. They include

consumer product labeling and DOE

public education and information

programs. Both of these alternatives are

already mandated by, and are being

implemented under the Act. In addition,

there are other programs that promote

currently-efficient technologies. These

include the National Electrical

Manufacturers Association's Energy

Cost Savings Council, the

Environmental Protection Agency's

Energy Star Buildings/Green Lights

Program, and the Energy Policy Act's

Voluntary Luminaire Program. One base

case alternative would be to estimate the

energy conservation potential of

enhancing these programs . To model

this possibility , we assumed that the

market impacts of these programs

resulted in a 3 percent annual

conversion rate to electronic ballasts.

This resulted in energy savings equal to

0.05-0. 09 Quad (0.05-0.09 EJ), with net

present value estimated to be $0 . 08-0.12

billion.

Another base case alternative would

be to assume that enhanced labeling and

consumer education promote advanced

technologies, such as daylighting. To

model this possibility, we assumed that

some consumers influenced by the

policy would select electronic dimming

ballasts, while others would select

regular electronic ballasts. For those

using dimming ballasts, we assumed

that the fluorescent lamp ballast

kiloWatthour savings were 40 percent

higher for F40 and F96 fluorescent lamp

ballasts, that there was no daylighting

potential for industrial sector F96HO,

that incremental prices for dimming

fluorescent lamp ballasts were seven

dollars higher than for regular electronic

ballasts, and that there was an annual

0.6 percent conversion rate to dimming

fluorescent lamp ballasts. The annual

conversion rate for the remaining

consumers affected by the policy who

selected regular electronic ballasts was

2.4 percent. This possibility resulted in

energy savings of 0.05-0 .10 Quad (0.06-

0.10 EJ), with a net present value of

$0.08-0.13 billion.

Various financial incentive

alternatives were tested. These included

tax credits and rebates to consumers, as

well as tax credits to manufacturers.

Both the tax credits to consumers and

the consumer rebates were assumed to

reduce the incremental ballast expense

for electronic ballasts by 50 percent. We

assumed that the tax credits caused a

conversion rate to electronic ballasts of

7 percent. The tax credits to consumers

showed a change from the base case,

saving 0.12-0.21 Quad (0.12-0.22 EJ)

with a net present value of $0.20-0.31

billion. Consumer rebates were assumed

to result in a conversion rate of 12

percent. Consumer rebates showed

slightly higher energy savings; they

would save 0.20-0.36 Quad (0.21-0.38

EJ), with a net present value of $0.34-

0.53 billion.

EE-RM-97-500 COMMENT 98A

14156 Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

Assessment (EA) (DOE/EA-0819) that 

was published within the Technical 

Support Document for that Proposed 

Rule. (DOE/EE-0009, November 1993.) 

We found the environmental effects 

associated with various standard levels 

for fluorescent lamp ballasts, as well as 

the other seven products, to be not 

significant, and we published a Finding 

of No Significant Impact (FONSI). 59 FR 

15868 (April 5, 1994). 

In conducting the analysis for today's 

Proposed Rule, the Department 

evaluated design options as suggested in 

comments. As a result, the energy 

savings estimates and resulting 

environmental effects from revised 

energy efficiency standards for 

fluorescent lamp ballasts in today's 

proposal differ somewhat from those 

that we presented for fluorescent lamp 

ballasts in the 1994 Proposed Rule. 

Nevertheless, the environmental effects 

expected from today's Proposed Rule 

would fall within ranges of 

environmental impacts from the revised 

energy efficiency standards for 

fluorescent lamp ballasts that DOE 

found in the FONSI not to be 

significant. 

b. Review Under Executive Order 12866, 

'Regulatory Planning and Review' 

Today's regulatory action has been 

determined to be an "economically 

significant regulatory action" under 

Executive Order 12866, "Regulatory 

Planning and Review." (58 FR 51735, 

Odober 4,1993). Accordingly, today's 

action was subject to review under the 

Executive Order by the Office of 

Information and Regulatory Affairs 

(OIRA). 

The draft submitted to OIRA and 

other documents submitted to OIRA for 

review have been made a part of the 

rulemaking record and are available for 

public review in the Department's 

Freedom of Information Reading Room, 

1000 Independence Avenue, SW, 

Washington, DC 20585, between the 

hours of 9:00 a.m. and 4:00 p.m., 

Monday through Friday, telephone (202) 

586-3142. 

The following summary of the 

Regulatory Analysis focuses on the 

major alternatives considered in arriving 

at the proposed approach to improving 

the energy efficiency of consumer 

products. The reader is referred to the 

complete draft "Regulatory Impact 

Analysis," which is contained in the 

TSD, available as indicated at the 

beginning of this NOPR. It consists of: 

(1) A statement of the problem 

addressed by this regulation, and the 

mandate for government action; (2) a 

description and analysis of the feasible 

policy alternatives to this regulation; (3) 

a quantitative comparison of the 

impacts of the alternatives; and (4) the 

national economic impacts of the 

proposed standard. 

DOE identified the following eight 

major policy alternatives for achieving 

consumer product energy efficiency. 

These alternatives include: .. No New Regulatory Action .. Informational Action 

-Product Labeling 

-Consumer Education 

.. Financial Incentives 

-Tax Credits 

-Rebates 

.. Voluntary Energy Efficiency Targets .. Mass Government Purchases .. Lighting Research and Development .. Building Codes .. The Proposed Approach 

(Performance Standards) 

Each alternative has been evaluated in 

terms of its ability to achieve significant 

energy savings at reasonable costs, and 

has been compared to the effectiveness 

of the proposed rule. These alternatives 

were analyzed with the NES model, as 

explained in the RIA section and 

Appendix B of the TSD. The results are 

reported for lighting energy savings only 

(HY AC interactive impacts would 

increase the savings by 6.25 percent). 

Many alternatives assume a conversion 

rate, which means the percentage of 

ballasts that would be magnetic for any 

year in the base case that are T8 

electronic in the alternative case; the 

base case already assumes that some 

ballasts would be electronic without 

policy action. The performance 

standards case has a 100 percent 

conversion rate to electronic ballasts. 

If no new regulatory action were 

taken, then no new standards would be 

implemented for these products. This is 

essentially the "base case." For this 

analysis, we considered two base cases 

(the "Decreasing shipments to 2015" 

case and the "Decreasing shipments to 

2027" case). In this section, we report 

two values for the base cases and policy 

alternatives, corresponding to each base 

case respectively. For the base cases, 

between the years 2003 and 2030, there 

would be expected energy use of 83.3-

90.6 Quads (87.9-96.6 ED of primary 

energy, with no energy savings and a 

zero net present value (see Appendix B 

of the TSD for the derivation of these 

estimates). 

Several alternatives to the base cases 

can be grouped under the heading of 

informational action. They include 

consumer product labeling and DOE 

public education and information 

programs. Both of these alternatives are 

already mandated by, and are being 

implemented under the Act. In addition, 

there are other programs that promote 

currently-efficient technologies. These 

include the National Electrical 

Manufacturers Association's Energy 

Cost Savings Council, the 

Environmental Protection Agency's 

Energy Star Buildings/Green Lights 

Program, and the Energy Policy Act's 

Voluntary Luminaire Program. One base 

case alternative would be to estimate the 

energy conservation potential of 

enhancing these programs. To modeL 

this possibility, we assumed that the 

market impacts of these programs 

resulted in a 3 percent annual 

conversion rate to electronic ballasts . 

This resulted in energy savings equal to 

0.05-0.09 Quad (0.05-0.09 ED, with net 

present value estimated to be $0.08-0.12 

billion. 

Another base case alternative would 

be to assume that enhanced labeling and 

consumer education promote advanced 

technologies, such as daylighting. To 

model this possibility, we assumed that 

some consumers influenced by the 

policy would select electronic dimming 

ballasts, while others would select 

regular electronic ballasts. For those 

using dimming ballasts, we assumed 

that the fluorescent lamp ballast 

kiloWatthour savings were 40 percent 

higher for F40 and F96 fluorescent lamp 

ballasts, that there was no day lighting 

potential for industrial sector F96HO, 

that incremental prices for dimming 

fluorescent lamp ballasts were seven 

dollars higher than for regular electronic 

ballasts, and that there was an annual 

0.6 percent conversion rate to dimming 

fluorescent lamp ballasts. The annual 

conversion rate for the remaining 

consumers affected by the policy who 

selected regular electronic ballasts was 

2.4 percent. This possibility resulted in 

energy savings of 0.05-0.10 Quad (0.06-

0.10 ED, with a net present value of 

$0.08-0.13 billion. 

Various financial incentive 

alternatives were tested. These included 

tax credits and rebates to consumers, as well as tax credits to manufacturers. 

Both the tax credits to consumers and 

the consumer rebates were assumed to 

reduce the incremental ballast expense 

for electronic ballasts by 50 percent. We 

assumed that the tax credits caused a 

conversion rate to electronic ballasts of 

7 percent. The tax credits to consumers 

showed a change from the base case, 

saving 0.12-0.21 Quad (0.12-0.22 EJ) 

with a net present value of $0.20-0.31 

billion. Consumer rebates were assumed 

to result in a conversion rate of 12 

percent. Consumer rebates showed 

slightly higher energy savings; they 

would save 0.20-0.36 Quad (0.21-0.38 

En, with a net present value of $0.34-

0.53 billion. 
Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules 14157

Another financial incentive that was

considered was a tax credit to

manufacturers for the additional costs of

producing electronic ballasts. In this

scenario , we assumed a tax credit of 20

percent of the increased costs to

manufacturers for retooling in the years

2001-2003 (when these costs would be

incurred). 10 These costs depreciated

over a ballast lifetime resulted in a $0.04

reduction in the incremental purchase

price. The tax credits to manufacturers

had an insignificant effect, with no

energy savings and a zero net present

value.

Two scenarios of voluntary energyefficiency targets were examined. In the

first one, the proposed energy

conservation standards were assumed to

be voluntarily adopted by all the

relevant manufacturers 5 years later

than mandatory standards. In the

second scenario, the proposed standards

were assumed to be adopted 10 years

later. In these scenarios, voluntary

improvements having a 5-year delay,

compared to implementation of

mandatory standards, would result in

energy savings of 0.84-1.91 Quads

(0.88-2.02 EJ), and a net present value

of $0.96-2.04 billion; voluntary

improvements having a 10-year delay

would result in 0.34-1.05 Quads (0.36-

1.1 EJ) being saved, and a net present

value of $0.33-0.96 billion. These

scenarios assume that there would be

universal voluntary adoption of the

energy conservation standards by

fluorescent lamp ballast manufacturers,

an assumption for which there is no

reasonable assurance.

Another policy option that we

reviewed was that of massive purchases

of electronic ballasts by Federal, State,

and local governments. We modeled

this policy by assuming that all ballasts

purchased by these government entities

were electronic ballasts, which, coupled

with a modest impact on the remaining

market, resulted in a 10 percent national

conversion rate. This policy option

resulted in energy savings of 0.17-0.30

Quad (0.18-0.32 EJ) and a net present

value of $0.25-0.40 billion.

We also reviewed a policy of lighting

research that could [there is no cost

reduction in this policy] add more

efficient alternatives to fluorescent

electronic T-12 and T-8 ballasts. To

analyze this option, we assumed that

the conversion rate to controls, such as

dimming fluorescent lamp ballasts, was

1.6 percent, that there was a time delay

of 5 years for new technology options to

reach the market, that the incremental

kiloWatthour savings was 40 percent,

10 Manufacturer Impact Analysis, conversion

capital expenditures (see the TSD, chapter 6).

and the increase in the incremental

electronic ballast cost was seven dollars.

This resulted in energy savings of 0.01-

0.04 Quad (0.01-0.05 EJ), with a net

present value that we estimated to be

$0.01-0.04 billion.

Still another policy option that we

reviewed was one of aggressive

promotion of state adoption and

enforcement of commercial building

codes, including those for major lighting

system renovations. To analyze this

option, we assumed a one percent to

three percent electronic ballast

conversion, for each base case,

respectively. This resulted in energy

savings of 0.05-0 . 15 Quad (0.05-0.16

EJ), and a net present value of $0.06-

0.18 billion.

Lastly, all of these alternatives must

be gauged against the performance

standards that are being proposed in

this NOPR. Such performance standards

would result in energy savings of 1.20-

4.90 Quads (1.27-5.17 EJ) (without

HVAC savings) and the net present

value would be an expected $1.42-5.41

billion. (These estimates represent the

lower and upper bounds of the results

of all scenarios analyzed). As indicated

in the paragraphs above, none of the

alternatives that were examined for

these products saved as much energy as

the proposed rule. Also, most of the

alternatives would require that enabling

legislation be enacted, since authority to

carry out those alternatives does not

presently exist.

c. Review under the Regulatory

Flexibility Act

The Regulatory Flexibility Act, 5

U.S.C. 601 et seq., requires an

assessment of the impact of regulations

on small businesses. Small businesses

are defined as those firms within an

industry that are privately owned and

less dominant in the market.

The Standard Industrial Classification

(SIC) Code for fluorescent lamp ballast

manufacturers is 36124. To be

categorized as a "small" fluorescent

lamp ballast manufacturer , a firm must

employ no more than 750 employees.

In the fluorescent lamp ballast

industry, there is one "small"

manufacturer who produces both

"affected" magnetic and electronic

ballasts. The "small " manufacturer has

its electronic and magnetic ballast

manufacturing operations in the same

plant. Its smaller size and less

automated operations would seem to

provide it with the flexibility to adapt

to a new electronic ballast standard

without significant asset write-offs or

plant closures.

The negative impacts on the "small"

manufacturer's cash flows from

operations, however, would likely be

similar in proportion to those of the

larger manufacturers.

Since only one of the seven

manufacturers of fluorescent lamp

ballasts is "small," the Department

concludes that its proposed energyefficiency standards rulemaking would

not affect a "substantial" number of

"small" manufacturers. In addition, the

firm's flexible manufacturing

operations, along with the expected _

proportional financial impacts, strongly

suggests that the proposed energyefficiency standards would not produce

"significant" economic impacts on that

one manufacturer.

In view of the foregoing, the

Department has determined and hereby

certifies pursuant to section 605(b) of

the Regulatory Flexibility Act that, for

this particular industry, the proposed

standard levels in today's Proposed Rule

will not "have a significant economic

impact on a substantial number of small

entities," and it is not necessary to

prepare a regulatory flexibility analysis.

d. Review Under the Paperwork

Reduction Act

No new information or record keeping

requirements are imposed by this

rulemaking . Accordingly, no Office of

Management and Budget clearance is

required under the Paperwork

Reduction Act. 44 U.S.C. 3501 et seq.

e. Review Under Executive Order 12988,

"Civil Justice Reform"

With respect to the review of existing

regulations and the promulgation of

new regulations, Section 3(a) of

Executive Order 12988, "Civil Justice

Reform," 61 FR 4729 (February 7, 1996),

imposes on Executive agencies the

general duty to adhere to the following

requirements: (1) Eliminate drafting

errors and ambiguity; (2) write

regulations to minimize litigation; and

(3) provide a clear legal standard for

affected conduct rather than a general

standard and promote simplification

and burden reduction. With regard to

the review required by section 3(a),

section 3(b) of Executive Order 12988

specifically requires that Executive

agencies make every reasonable effort to

ensure that the regulation: (1) Clearly

specifies the preemptive effect, if any;

(2) clearly specifies any effect on

existing Federal law or regulation; (3)

provides a clear legal standard for

affected conduct while promoting

simplification and burden reduction; (4)

specifies the retroactive effect, if any; (5)

adequately defines key terms; and (6)

addresses other important issues

affecting clarity and general

draftsmanship under any guidelines

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 14157 

Another financial incentive that was 

considered was a tax credit to 

manufacturers for the additional costs of 

producing electronic ballasts. In this 

scenario, we assumed a tax credit of 20 

percent of the increased costs to 

manufacturers for retooling in the years 

2001-2003 (when these costs would be 

incurred). 10 These costs depreciated 

over a ballast lifetime resulted in a $0.04 

reduction in the incremental purchase 

price. The tax credits to manufacturers 

had an insignificant effect, with no 

energy savings and a zero net present 

value. 

Two scenarios of voluntary energyefficiency targets were examined. In the 

first one, the proposed energy 

conservation standards were assumed to 

be voluntarily adopted by all the 

relevant manufacturers 5 years later 

than mandatory standards. In the 

second scenario, the proposed standards 

were assumed to be adopted 10 years 

later. In these scenarios, voluntary 

improvements having a 5-year delay, 

compared to implementation of 

mandatory standards, would result in 

energy savings of 0.84-1. 91 Quads 

(0.88-2.02 EJ), and a net present value 

of $0.96-2.04 billion; voluntary 

improvements having a 10-year delay 

would result in 0.34-1.05 Quads (0.36-

1.1 En being saved, and a net present 

value of $0.33-0.96 billion. These 

scenarios assume that there would be 

universal voluntary adoption of the 

energy conservation standards by 

fluorescent lamp ballast manufacturers, 

an assumption for which there is no 

reasonable assurance. Another policy option that we 

reviewed was that of massive purchases· 

of electronic ballasts by Federal, State, 

and local governments. We modeled 

this policy by assuming that all ballasts 

purchased by these government entities 

were electronic ballasts, which, coupled 

with a modest impact on the remaining 

market, resulted in a 10 percent national 

conversion rate. This policy option 

resulted in energy savings of 0.17-0.30 

Quad (0.18-0.32 EJ) and a net present 

value of $0.25-0.40 billion. 

We also reviewed a policy of lighting 

research that could [there is no cost 

reduction in this policy] add more 

efficient alternatives to fluorescent 

electronic T-12 and T-8 ballasts. To 

analyze this option, we assumed that 

the conversion rate to controls, such as 

dimming fluorescent lamp ballasts, was 

1.6 percent, that there was a time delay 

of 5 years for new technology options to 

reach the market, that the incremental 

kiloWatthour savings was 40 percent, 

10 Manufacturer Impact Analysis. conversion 

capital expenditures (see the TSD. chapter 6). 

and the increase in the incremental 

electronic ballast cost was seven dollars. 

This resulted in energy savings of 0.01-

0.04 Quad (0.01-0.05 EJ), with a net 

present value that we estimated to be 

$0.01-0.04 billion. 

Still another policy option that we 

reviewed was one of aggressive 

promotion of state adoption and 

enforcement of commercial building 

codes, including those for major lighting 

system renovations. To analyze this 

option, we assumed a one percent to 

three percent electronic ballast 

conversion, for each base case, 

respectively. This resulted in energy 

savings of 0.05-0.15 Quad (0.05-0.16 

EJ), and a net present value of $0.06-

0.18 billion. 

Lastly, all of these alternatives must 

be gauged against the performance 

standards that are being proposed in 

this NOPR. Such performance standards 

would result in energy savings of 1.20-

4.90 Quads (1.27-5.17 EJ) (without 

HV AC savings) and the net present 

value would be an expected $1.42-5.41 

billion. (These estimates represent the 

lower and upper bounds of the results 

of all scenarios analyzed). As indicated 

in the paragraphs above, none of the 

alternatives that were examined for 

these products saved as much energy as 

the proposed rule. Also, most of the 

alternatives would require that enabling 

legislation be enacted, since authority to 

carry out those alternatives does not 

presently exist. 

c. Review under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act, 5 

U.S.C. 601 et seq., requires an 

assessment of the impact of regulations 

on small businesses. Small businesses 

are defined as those firms within an 

industry that are privately owned and 

less dominant in the market. 

The Standard Industrial Classification 

(SIC) Code for fluorescent lamp ballast 

manufacturers is 36124. To be 

categorized as a "small" fluorescent 

lamp ballast manufacturer, a firm must 

employ no more than 750 employees. 

In the fluorescent lamp ballast 

industry, there is one "small" 

manufacturer who produces both 

"affected" magnetic and electronic 

ballasts. The "small" manufacturer has 

its electronic and magnetic ballast 

manufacturing operations in the same 

plant. Its smaller size and less 

automated operations would seem to 

provide it with the flexibility to adapt 

to a new electronic ballast standard 

without significant asset write-offs or 

plant closures. 

The negative impacts on the "small" 

manufacturer's cash flows from 

operations, however, would likely be 

similar in proportion to those of the 

larger manufacturers. 

Since only one of the seven 

manufacturers of fluorescent lamp 

ballasts is "small," the Department 

concludes that its proposed energyefficiency standards rulemaking would 

not affect a "substantial" number of 

"small" manufacturers. In addition, the 

firm's flexible manufacturing 

operations, along with the expected 

proportional financial impacts, strongly 

suggests that the proposed energyefficiency standards would not produce 

"significant" economic impacts on that 

one manufacturer. 

In view of the foregoing, the 

Department has determined and hereby 

certifies pursuant to section 605(b) of 

the Regulatory Flexibility Act that, for 

this particular industry, the proposed 

standard levels in today's Proposed Rule 

will not "have a significant economic 

impact on a substantial number of small 

entities," and it is not necessary to 

prepare a regulatory flexibility analysis. 

d. Review Under the Paperwork 

Reduction Act 

No new information or record keeping 

requirements are imposed by this 

rulemaking. Accordingly, no Office of 

Management and Budget clearance is 

required under the Paperwork 

Reduction Act. 44 U.S.C. 3501 et seq. 

e. Review Under Executive Order 12988, 

"Civil Justice Reform" 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, Section 3(a) of 

Executive Order 12988, "Civil Justice 

Reform," 61 FR 4729 (February 7,1996). 

imposes on Executive agencies the 

general duty to adhere to the following 

requirements: (1) Eliminate drafting 

errors and ambiguity; (2) write 

regulations to minimize litigation; and 

(3) provide a clear legal standard for 

affected conduct rather than a general 

standard and promote simplification 

and burden reduction. With regard to 

the review required by section 3(a), 

section 3(b) of Executive Order 12988 

specifically requires that Executive 

agencies make every reasonable effort to 

ensure that the regulation: (1) Clearly 

specifies the preemptive effect, if any; 

(2) clearly specifies any effect on 

existing Federal law or regulation; (3) 

provides a clear legal standard for 

affected conduct while promoting 

simplification and burden reduction; (4) 

specifies the retroactive effect, if any; (5) 

adequately defines key terms; and (6) 

addresses other important issues 

affecting clarity and general 

draftsmanship under any guidelines 
14158 Federal Register / Vol. 65, No. 51 / Wednesday, March 15, 2000 / Proposed Rules

issued by the Attorney General. Section

3(c) of Executive Order 12988 requires

Executive agencies to review regulations

in light of applicable standards in

section 3(a) and section 3(b) to

determine whether they are met or it is

unreasonable to meet one or more of

them. DOE reviewed today's proposed

rule under the standards of section 3 of

the Executive Order and determined

that, to the extent permitted by law, the

final regulations meet the relevant

standards.

f. "Takings" Assessment Review

It has been determined pursuant to

Executive Order 12630, "Governmental

Actions and Interference with

Constitutionally Protected Property

Rights," 52 FR 8859 (March 18, 1988),

that this regulation would not result in

any takings that might require

compensation under the Fifth

Amendment to the United States

Constitution.

g. Review Under Executive Order 13132

Executive Order 13132 (64 FR 43255,

August 4, 1999) imposes certain

requirements on agencies formulating

and implementing policies or

regulations that preempt State law or

that have federalism implications.

Agencies are required to examine the

constitutional and statutory authority

supporting any action that would limit

the policymaking discretion of the

States and carefully assess the necessity

for such actions. DOE has examined

today's proposed rule and has

determined that it would not have a

substantial direct effect on the States, on

the relationship between the national

government and the States, or on the

distribution of power and

responsibilities among the various

levels of government. State regulations

that may have existed on the products

that are the subject of today's proposed

rule were preempted by the Federal

standards established in the NAECA

Amendments of 1988. States can

petition the Department for exemption

from such preemption based on criteria

set forth in EPCA.

h. Review Under the Unfunded

Mandates Reform Act

With respect to a proposed regulatory

action that may result in the

expenditure by the private sector of

$100 million or more (adjusted annually

for inflation), section 202 of the

Unfunded Mandates Reform Act of 1995

(UMRA) requires a Federal agency to

publish estimates of the resulting costs,

benefits and other effects on the

national economy. 2 U.S.C. 1532(a), (b).

Section 202 of UMRA authorizes an

agency to respond to the content

requirements of UMRA in any other

statement or analysis that accompanies

the proposed rule. 2 U.S.C. 1532(c).

The content requirements of section

202(b) of UMRA relevant to a private

sector mandate substantially overlap the

economic analysis requirements that

apply under section 325(o) of EPCA and

Executive Order 12866. The

Supplementary Information section of

the Notice of Proposed Rulemaking and

"Regulatory Impact Analysis" section of

the TSD for this Proposed Rule responds

to those requirements.

Under section 205 of UMRA, the

Department is obligated to identify and

consider a reasonable number of

regulatory alternatives before

promulgating a rule for which a written

statement under section 202 is required.

DOE is required to select from those

alternatives the most cost-effective and

least burdensome alternative that

achieves the objectives of the rule

unless DOE publishes an explanation

for doing otherwise or the selection of

such an alternative is inconsistent with

law. As required by section 325(0) of the

Energy Policy and Conservation Act (42

U.S.C. 6295(o)), this Proposed Rule

would establish energy conservation

standards for fluorescent lamp ballasts

that are designed to achieve the

maximum improvement in energy

efficiency that DOE has determined to

be both technologically feasible and

economically justified. A full discussion

of the alternatives considered by DOE is

presented in the "Regulatory Impact

Analysis" section of the TSD for this

Proposed Rule.

i. Review Under the Treasury and

General Government Appropriations

Act of 1999

Section 654 of the Treasury and

General Government Appropriations

Act, 1999 (Pub. L. 105-277) requires

Federal agencies to issue a Family

Policymaking Assessment for any

proposed rule or policy that may affect

family well-being. Today's proposal

would not have any impact on the

autonomy or integrity of the family as

an institution. Accordingly, DOE has

concluded that it is not necessary to

prepare a Family Policymaking

Assessment.

j. Review Under the Plain Language

Directives

Section 1(b)(12) of Executive Order

12866 requires that each agency shall

draft its regulations to be simple and

easy to understand, with the goal of

minimizing the potential for uncertainty

and litigation arising from such

uncertainty. Similarly, the Presidential

memorandum of June 1, 1998 (63 FR

31883) directs the heads of executive

departments and agencies to use, by

January 1, 1999, plain language in all

proposed and final rulemaking

documents published in the Federal

Register, unless the rule was proposed

before that date.

Today's proposed rule uses the

following general techniques to abide by

Section 1(b)(12) of Executive Order

12866 and the Presidential

memorandum of June 1, 1998 (63 FR

31883):

® Organization of the material to

serve the needs of the readers

(stakeholders).

® Use of common, everyday words in

short sentences.

® Shorter sentences and sections.

We invite your comments on how to

make this proposed rule easier to

understand.

VII. Public Comment Procedures

a. Participation in Rulemaking

The Department encourages the

maximum level of public participation

possible in this rulemaking. Individual

commercial and industrial consumers,

representatives of consumer groups,

manufacturers, associations, States or

other governmental entities, utilities,

retailers, distributors, manufacturers,

and others are urged to submit written

statements on the proposal. The

Department also encourages interested

persons to participate in the public

hearing to be held in Washington, DC,

at the time and place indicated at the

beginning of this notice.

The DOE has established a comment

period of 75 days following publication

of this notice for persons to comment on

this proposal. We will make available

for review in the DOE Freedom of

Information Reading Room all public

comments received and the transcript of

the public hearing.

b. Written Comment Procedures

Interested persons are invited to

participate in this proceeding by

submitting written data, views or

arguments with respect to the subjects

set forth in this notice. We provided

instructions for submitting written

comments at the beginning of this notice

and below.

You should label comments both on

the envelope and on the documents,

"Fluorescent Lamp Ballast Rulemaking

(Docket No. EE-RM-97-500)," and

submit them for DOE receipt by the date

specified at the beginning of this notice.

Please submit one signed copy and a

computer diskette (WordPerfect 8) or

ten (10) copies (no telefacsimiles) to:

EE-RM-97-500 COMMENT 98A

14158 Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

issued by the Attorney General. Section 

3(c) of Executive Order 12988 requires 

Executive agencies to review regulations 

in light of applicable standards in 

section 3(a) and section 3(b) to 

determine whether they are met or it is 

unreasonable to meet one or more of 

them. DOE reviewed today's proposed 

rule under the standards of section 3 of 

the Executive Order and determined 

that, to the extent permitted by law, the 

final regulations meet the relevant 

standards. 

f. "Takings" Assessment Review 

It has been determined pursuant to 

Executive Order 12630, "Governmental 

Actions and Interference with 

Constitutionally Protected Property 

Rights," 52 FR 8859 (March 18, 1988), 

that this regulation would not result in 

any takings that might require 

compensation under the Fifth 

Amendment to the United States 

Constitution. 

g. Review Under Executive Order 13132 

Executive Order 13132 (64 FR 43255, 

August 4,1999) imposes certain 

requirements on agencies formulating 

and implementing policies or 

regulations that preempt State law or 

that have federalism implications. 

Agencies are required to examine the 

constitutional and statutory authority 

supporting any action that would limit 

the policymaking discretion of the 

States and carefully assess the necessity 

for such actions. DOE has examined 

today's proposed rule and has 

determined that it would not have a 

substantial direct effect on the States, on 

the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. State regulations 

that may have existed on the products 

that are the subject of today's proposed 

rule were preempted by the Federal 

standards established in the NAECA 

Amendments of 1988. States can 

petition the Department for exemption 

from such preemption based on criteria 

set forth in EPCA. 

h. Review Under the Unfunded 

Mandates Reform Act 

With respect to a proposed regulatory 

action that may result in the 

expenditure by the private sector of 

$100 million or more (adjusted annually 

for inflation), section 202 of the 

Unfunded Mandates Reform Act of 1995 

(UMRA) requires a Federal agency to 

publish estimates of the resulting costs, 

benefits and other effects on the 

national economy. 2 U.S.C. 1532(a), (b). 

Section 202 of UMRA authorizes an 

agency to respond to the content 

requirements of UMRA in any other 

statement or analysis that accompanies 

the proposed rule. 2 U.S.C. 1532(c). 

The content requirements of section 

202(b) of UMRA relevant to a private 

sector mandate substantially overlap the 

economic analysis requirements that 

apply under section 325(0) ofEPCA and 

Executive Order 12866. The 

Supplementary Information section of 

the Notice of Proposed Rulemaking and 

"Regulatory Impact Analysis" section of 

the TSD for this Proposed Rule responds 

to those requirements. 

Under section 205 of UMRA, the 

Department is obligated to identify and 

consider a reasonable number of 

regulatory alternatives before 

promulgating a rule for which a written 

statement under section 202 is required. 

DOE is required to select from those 

alternatives the most cost-effective and 

least burdensome alternative that 

achieves the objectives of the rule 

unless DOE publishes an explanation 

for doing otherwise or the selection of 

such an alternative is inconsistent with 

law. As required by section 325(0) of the 

Energy Policy and Conservation Act (42 

U.S.C. 6295(0)), this Proposed Rule 

would establish energy conservation 

standards for fluorescent lamp ballasts 

that are designed to achieve the 

maximum improvement in energy 

efficiency that DOE has determined to 

be both technologically feasible and 

economically justified. A full discussion 

of the alternatives considered by DOE is 

presented in the "Regulatory Impact 

Analysis" section of the TSD for this 

Proposed Rule. 

i. Review Under the Treasury and 

General Government Appropriations 

Act of 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act, 1999 (Pub. L. 105-277) requires 

Federal agenCies to issue a Family 

Policymaking Assessment for any 

proposed rule or policy that may affect 

family well-being. Today's proposal 

would not have any impact on the 

autonomy or integrity of the family as 

an institution. Accordingly, DOE has 

concluded that it is not necessary to 

prepare a Family Policymaking 

Assessment. 

j. Review Under the Plain Language 

Directives 

Section 1 (b)(12) of Executive Order 

12866 requires that each agency shall 

draft its regulations to be simple and 

easy to understand, with the goal of 

minimizing the potential for uncertainty 

and litigation arising from such 

uncertainty. Similarly, the Presidential 

memorandum oOune 1, 1998 (63 FR 

31883) directs the heads of executive 

departments and agencies to use, by 

January 1,1999, plain language in all 

proposed and final rulemaking 

documents published in the Federal 

Register, unless the rule was proposed 

before that date. 

Today's proposed rule uses the 

following general techniques to abide by 

Section 1(b)(12) of Executive Order 

12866 and the Presidential 

memorandum oOune 1, 1998 (63 FR ~ 

31883): 

.. Organization of the material to 

serve the needs of the readers 

(stakeholders). 

.. Use of common, everyday words in 

short sentences. 

.. Shorter sentences and sections. 

We invite your comments on how to 

make this proposed rule easier to 

understand. 

VIT. Public Comment Procedures 

a. Participation in Rulemaking 

The Department encourages the 

maximum level of public participation 

possible in this rulemaking. Individual 

commercial and industrial consumers, 

representatives of consumer groups, 

manufacturers, associations, States or 

other governmental entities, utilities, 

retailers, distributors, manufacturers, 

and others are urged to submit written 

statements on the proposal. The 

Department also encourages interested 

persons to participate in the public 

hearing to be held in Washington, DC, 

at the time and place indicated at the 

beginning of this notice. 

The DOE has established a comment 

period of 75 days following publication 

of this notice for persons to comment on 

this proposal. We will make available 

for review in the DOE Freedom of 

Information Reading Room all public 

comments received and the transcript of 

the public hearing. 

b. Written Comment Procedures 

Interested persons are invited to 

participate in this proceeding by 

submitting written data, views or 

arguments with respect to the subjects 

set forth in this notice. We provided 

instructions for submitting written 

comments at the beginning of this notice 

and below. 

You should label comments both on 

the envelope and on the documents, 

"Fluorescent Lamp Ballast Rulemaking 

(Docket No. EE-RM-97-500)." and 

submit them for DOE receipt by the date 

specified at the beginning of this notice. 

Please submit one signed copy and a 

computer diskette (WordPerfect 8) or 

ten (10) copies (no telefacsimiles) to: 
Federal Register /Vol. 65, No. 51 /Wednesday, March 15, 2000/Proposed Rules

U.S. Department of Energy, Attn: Brenda

Edwards-Jones, Office of Energy

Efficiency and Renewable Energy, EE41, 1000 Independence Avenue, SW,

Washington, DC 20585-0121, (202) 586-

2945, e-mail: Brenda.EdwardsJones@ee.doe.gov.

The Department will also accept

electronically-mailed comments, but

you must supplement such comments

with a signed hard copy.

All comments received by the date

specified at the beginning of this notice

and other relevant information will be

considered by DOE before final action is

taken on the proposed regulation.

All written comments received on the

proposed rule will be available for

public inspection at the DOE Freedom

of Information Reading Room, as

provided at the beginning of this notice.

If you submit information or data that

you believe is confidential, and should

not be publicly disclosed, you should

submit one complete copy of your

document and ten (10) copies or one

electronic copy from which the

information believed to be confidential

has been deleted. We will make our own

determination regarding the

confidentiality of the information or

data according to our regulations at 10

CFR 1004.11.

Factors of interest to DOE, when

evaluating requests to treat information

as confidential, include: (1) A

description of the item; (2) an indication

as to whether and why such items of

information have been treated by the

submitting party as confidential, and

whether and why such items are

customarily treated as confidential

within the industry; (3) whether the

information is generally known or

available from other sources; (4)

whether the information has previously

been available to others without

obligation concerning its

confidentiality; (5) an explanation of the

competitive injury to the submitting

person that would result from public

disclosure; (6) an indication as to when

such information might lose its

confidential character due to the

passage of time; and (7) whether

disclosure of the information would be

in the public interest.

c. Public Hearing

1. Procedure for Submitting Requests to

Speak

The time and place of the public

hearing are indicated at the beginning of

this notice. The Department invites any

person who has an interest in these

proceedings, or who is a representative

of a group or class of persons having an

interest, to make a written request for an

opportunity to make an oral

presentation at the public hearing. Such

requests should be labeled both on the

letter and the envelope, "Fluorescent

Lamp Ballast Rulemaking (Docket No.

EE-RM-97-500)," and should be sent to

the address, and must be received by the

time specified, at the beginning of this

notice. Requests may be hand-delivered

or telephoned between the hours of 8:30

a.m. and 4:30 p.m., Monday through

Friday, except Federal holidays.

The person making the request should

briefly describe the interest concerned

and, if appropriate, state why he or she

is a proper representative of the group

or class of persons that has such an

interest, and give a telephone number

where he or she may be contacted. Each

person selected to be heard will be so

notified by DOE as to the approximate

time they will be speaking.

Each person selected to be heard is

requested to submit an advance copy of

his or her statement prior to the hearing

as indicated at the beginning of this

notice. In the event any persons wishing

to testify cannot meet this requirement,

that person may make alternative

arrangements in advance by so

indicating in the letter requesting to

make an oral presentation.

2. Conduct of Hearing

The Department reserves the right to

select the persons to be heard at the

hearing, to schedule the respective

presentations, and to establish the

procedures governing the conduct of the

hearing. The length of each presentation

is limited to 15 minutes.

A DOE official will be designated to

preside at the hearing. The hearing will

not be a judicial or an evidentiary-type

hearing, but will be conducted in

accordance with 5 U.S.C. 533 and

section 336 of the Act. At the

conclusion of all initial oral statements

at each day of the hearing, each person

who has made an oral statement will be

given the opportunity to make a rebuttal

statement, subject to time limitations.

The rebuttal statement will be given in

the order in which the initial statements

were made. The official conducting the

hearing will accept additional

comments or questions from those

attending, as time permits. Any

interested person may submit, to the

presiding official, written questions to

be asked of any person making a

statement at the hearing. The presiding

official will determine whether the

question is relevant, and whether time

limitations permit it to be presented for

answer.

Further questioning of speakers will

be permitted by DOE. The presiding

official will afford any interested person

14159

an opportunity to question other

interested persons who made oral

presentations, and employees of the

United States who have made written or

oral presentations with respect to

disputed issues of material fact relating

to the proposed rule. This opportunity

will be afforded after any rebuttal

statements, to the extent that the

presiding official determines that such

questioning is likely to result in a more

timely and effective resolution of such

issues. If the time provided is

insufficient, DOE will consider

affording an additional opportunity for

questioning at a mutually convenient

time. Persons interested in making use

of this opportunity must submit their

request to the presiding official no later

than shortly after the completion of any

rebuttal statements and be prepared to

state specific justification, including

why the issue is one of disputed fact

and how the proposed questions would

expedite their resolution.

Any further procedural rules

regarding proper conduct of the hearing

will be announced by the presiding

official.

A transcript of the hearing will be

made, and the entire record of this

rulemaking, including the transcript,

will be retained by DOE and made

available for inspection at the DOE

Freedom of Information Reading Room

as provided at the beginning of this

notice. Any person may purchase a copy

of the transcript from the transcribing

reporter.

List of Subjects in 10 CFR Part 430

Administrative practice and

procedure, Energy conservation,

Household appliances.

Issued in Washington, D.C., on January 18,

2000.

Dan W. Reicher,

Assistant Secretary, Energy Efficiency and

Renewable Energy.

For the reasons set forth in the

preamble Part 430 of Chapter II of Title

10, Code of Federal Regulations, is

proposed to be amended as set forth

below.

PART 430-ENERGY CONSERVATION

PROGRAM FOR CONSUMER

PRODUCTS

1. The authority citation for Part 430

continues to read as follows:

Authority: 42 U.S.C. 6291-6309; 28 U.S.C.

2461 note.

2. Section 430.32 of subpart C is

amended by revising paragraph (m) to

read as follows:

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 14159 

U.S. Department of Energy, Attn: Brenda 

Edwards-Jones, Office of Energy 

Efficiency and Renewable Energy. EE41.1000 Independence Avenue. SW. 

Washington. DC 20585-0121. (202) 586-

2945. e-mail: Brenda.EdwardsJones@ee.doe.gov. 

The Department will also accept 

electronically-mailed comments, but 

you must supplement such comments 

with a signed hard copy. 

All comments received by the date 

specified at the beginning of this notice 

and other relevant information will be 

considered by DOE before final action is 

taken on the proposed regulation. 

All written comments received on the 

proposed rule will be available for 

public inspection at the DOE Freedom 

of Information Reading Room, as 

provided at the beginning of this notice. 

If you submit information or data that 

you believe is confidential. and should 

not be publicly disclosed. you should 

submit one complete copy of your 

document and ten (10) copies or one 

electronic copy from which the 

information believed to be confidential 

has been deleted. We will make our own 

determination regarding the 

confidentiality of the information or 

data according to our regulations at 10 

CFR 1004.11. 

Factors of interest to DOE. when 

evaluating requests to treat information as confidential, include: (1) A 

description of the item; (2) an indication 

as to whether and why such items of 

information have been treated by the 

submitting party as confidential. and 

whether and why such items are 

customarily treated as confidential 

within the industry; (3) whether the 

information is generally known or 

available from other sources; (4) 

whether the information has previously 

been available to others without 

obligation concerning its 

confidentiality; (5) an explanation of the 

competitive injury to the submitting 

person that would result from public 

disclosure; (6) an indication as to when 

such information might lose its 

confidential character due to the 

passage of time; and (7) whether 

disclosure of the information would be 

in the public interest. 

c. Public Hearing 

1. Procedure for Submitting Requests to 

Speak 

The time and place of the public 

hearing are indicated at the beginning of 

this notice. The Department invites any 

person who has an interest in these 

proceedings. or who is a representative 

of a group or class of persons having an 

interest, to make a written request for an 

opportunity to make an oral 

presentation at the public hearing. Such 

requests should be labeled both on the 

letter and the envelope. "Fluorescent 

Lamp Ballast Rulemaking (Docket No. 

EE-RM-97-500)." and should be sent to 

the address, and must be received by the 

time specified. at the beginning of this 

notice. Requests may be hand-delivered 

or telephoned between the hours of 8:30 

a.m. and 4:30 p.m .. Monday through 

Friday. except Federal holidays. 

The person making the request should 

briefly describe the interest concerned 

and. if appropriate. state why he or she 

is a proper representative of the group or class of persons that has such an 

interest. and give a telephone number 

where he or she may be contacted. Each 

person selected to be heard will be so 

notified by DOE as to the approximate 

time they will be speaking. 

Each person selected to be heard is 

requested to submit an advance copy of 

his or her statement prior to the hearing 

as indicated at the beginning of this 

notice. In the event any persons wishing 

to testify cannot meet this requirement. 

that person may make alternative 

arrangements in advance by so 

indicating in the letter requesting to 

make an oral presentation. 

2. Conduct of Hearing 

The Department reserves the right to 

select the persons to be heard at the 

hearing. to schedule the respective 

presentations. and to establish the 

procedures governing the conduct of the 

hearing. The length of each presentation 

is limited to 15 minutes. 

A DOE official will be designated to 

preside at the hearing. The hearing will 

not be a judicial or an evidentiary-type 

hearing. but will be conducted in 

accordance with 5 U.S.C. 533 and 

section 336 of the Act. At the 

conclusion of all initial oral statements 

at each day of the hearing. each person 

who has made an oral statement will be 

given the opportunity to make a rebuttal 

statement. subject to time limitations. 

The rebuttal statement will be given in 

the order in which the initial statements 

were made. The official conducting the 

hearing will accept additional 

comments or questions from those 

attending, as time permits. Any 

interested person may submit. to the 

presiding official. written questions to 

be asked of any person making a 

statement at the hearing. The presiding 

official will determine whether the 

question is relevant, and whether time 

limitations permit it to be presented for answer. 

Further questioning of speakers will 

be permitted by DOE. The presiding . 

official will afford any interested person 

an opportunity to question other 

interested persons who made oral 

presentations, and employees of the 

United States who have made written or 

oral presentations with respect to 

disputed issues of material fact relating 

to the proposed rule. This opportunity 

will be afforded after any rebuttal 

statements. to the extent that the 

presiding official determines that such 

questioning is likely to result in a more 

timely and effective resolution of such 

issues. If the time provided is 

insufficient. DOE will consider 

affording an additional opportunity for 

questioning at a mutually convenient 

time. Persons interested in making use 

of this opportunity must submit their 

request to the presiding official no later 

than shortly after the completion of any 

rebuttal statements and be prepared to 

state specific justification, including 

why the issue is one of disputed fact 

and how the proposed questions would 

expedite their resolution. 

Any further procedural rules 

regarding proper conduct of the hearing 

will be announced by the presiding 

official. 

A transcript of the hearing will be 

made. and the entire record of this 

rulemaking. including the transcript. 

will be retained by DOE and made 

available for inspection at the DOE 

Freedom of Information Reading Room 

as provided at the beginning of this 

notice. Any person may purchase a copy 

of the transcript from the transcribing 

reporter. 

List of Subjects in 10 CFR Part 430 

Administrative practice and 

procedure. Energy conservation. 

Household appliances. 

Issued in Washington. D.C., on January 18, 

2000. 

Dan W. Reicher, 

Assistant Secretary, Energy Efficiency and 

Renewable Energy. 

For the reasons set forth in the 

preamble Part 430 of Chapter II of Title 

10, Code of Federal Regulations, is 

proposed to be amended as set forth 

below. 

PART 430-ENERGY CONSERVATION 

PROGRAM FOR CONSUMER 

PRODUCTS 

1. The authority citation for Part 430 

continues to read as follows: 

Authority: 42 U.S.C. 6291-6309; 28 U.S.c. 

2461 note. 

2. Section 430.32 of subpart C is 

amended by revising paragraph (m) to 

read as follows: 
14160 Federal Register/Vol. 65, No. 51 /Wednesday, March 15, 2000 /Proposed Rules

§430.32 Energy conservation standards (B) Sold by the manufacturer on or (B) To operate with an input current

and effective dates. after April 1, 1990; or frequency of 60 Hertz; and

(C) Incorporated into a luminaire by a (C) For use in connection with an

(m) Fluorescent lamp ballasts. luminaire manufacturer on or after April F40T12, F96T12, or F96T12HO lamps

(1) Except as provided in paragraphs 1, 1991; and shall have a power factor of 0.90 or (m)(2), (m)(3), and (m)(4) of this section, reater and shall have a ballast efficac

each fluorescent lamp ballast- (ii) Designed - g y

(i) (A) Manufactured on or after (A) To operate at nominal input factor not less than the following:

January 1, 1990; voltages of 120 or 277 volts;

Application for operation of Ballast input

voltage

Total nominal

lamp wafts

Ballast efficacy

factor

One F40 T12 lamp ...................................................................................................................... 120 40 1.805

277 40 1.805

Two F40 T12 lamps ..................................................................................................................... 120 80 1.060

277 80 1.050

Two F96T12 lamps ...................................................................................................................... 120 150 0.570

277 150 0.570

Two F96T12HO lamps ................................................................................................................ 120 220 0.390

277 220 0.390

(2) The standards described in

paragraph (m)(1) of this section do not

apply to:

(i) a ballast that is designed for

dimming or for use in ambient

temperatures of 0° F or less, or

(ii) A ballast that has a power factor

of less than 0.90 and is designed for use

only in residential building

applications.

(3) Except as provided in paragraph

(m)(4) of this section, each fluorescent

lamp ballast-

(i) (A) Manufactured on or after April

1, 2005;

(B) Sold by the manufacturer on or

after July 1, 2005; or

(C) Incorporated into a luminaire by a

luminaire manufacturer on or after April

1, 2006; and

(ii) Designed-

(A) To operate at nominal input

voltages of 120 or 277 volts;

(B) To operate with an input current

frequency of 60 Hertz; and

(C) For use in connection with an

F40T12, F96T12, or F96T12HO lamps;

shall have a power factor of 0.90 or

greater and shall have a ballast efficacy

factor not less than the following:

Application for operation of Ballast Input

voltage

Total nominal

lamp wafts

Ballast efficacy

factor

One F40 T12 lamp ...................................................................................................................... 120 40 2.29

277 40 2.29

Two F40 T12 lamps ..................................................................................................................... 120 80 1.17

277 80 1.17

Two F96T12 lamps ...................................................................................................................... 120 150 0.63

277 150 0.63

Two F96T12HO lamps ................................................................................................................ 120 220 0.39

277 220 0.39

(4) (i) The standards described in labeled for use only in residential (C) Is marked "FOR REPLACEMENT

paragraph (m)(3) of this section do not building applications; or USE ONLY";

apply to: (D) A replacement ballast as defined (D) Is shipped by the manufacturer in

(A) A ballast that is designed for in subparagraph (ii). packages containing not more than 10

dimming to 50 percent or less of its (ii) For purposes of this paragraph ballasts;

maximum output; (m), a replacement ballast is defined as (E) Has output leads that when fully

(B) A ballast that is designed for use a ballast that: extended are a total length that is less

with two F96T12HO lamps at ambient (A) Is manufactured on or before June than the length of the lamp with which

temperatures of - 20° F or less and for 30, 2010; it is intended to be operated; and

use in an outdoor sign; (B) Is designed for use to replace an (F) Meets or exceeds the ballast

(C) A ballast that has a power factor existing ballast in a previously installed efficacy factor in the following table:

of less than 0.90 and is designed and luminaire;

EE-RM-97-500 COMMENT 98A

14160 Federal Register IVoI. 65, No. 51 I Wednesday, March 15, 2000/Proposed Rules 

§430.32 Energy conservation standards 

and effective dates. 

* * * * * 

(m) Fluorescent lamp ballasts. 

(1) Except as provided in paragraphs 

(m)(2), (m)(3), and (m)(4) of this section, 

each fluorescent lamp ballast-

(il (A) Manufactured on or after 

January 1, 1990; 

(B) Sold by the manufacturer on or 

after April 1, 1990; or 

(C) Incorporated into a luminaire by a 

luminaire manufacturer on or after April 

1.1991; and 

(ii) Designed -

(A) To operate at nominal input 

voltages of 120 or 277 volts; 

Application for operation of 

One F40 T12 lamp 

Two F40 T12 lamps .................................................................................................................... . 

Two F96T12 lamps .................................................................................................................... .. 

Two F96T12HO lamps ................ .............. ......... ......... ........... ......................... ........... ................. I 

(2) The standards described in 

paragraph (m)(l) of this section do not 

apply to: 

(il a ballast that is designed for 

dimming or for use in ambient 

temperatures of 0° F or less, or 

(ii) A ballast that has a power factor 

ofless than 0.90 and is designed for use 

only in residential building 

applications. 

(3) Except as provided in paragraph 

(m)(4) of this section, each fluorescent 

lamp ballast-

(il (A) Manufactured on or after April 

1,2005; 

(B) Sold by the manufacturer on or 

after July I, 2005; or 

(C) Incorporated into a luminaire by a 

luminaire manufacturer on or after April 

1,2006; and 

Application for operation of 

One F40 T12 lamp 

Two F40 T12 lamps .................................................................................................................... . 

Two F96T12 lamps ..................................................................................................................... . 

Two F96T12HO lamps 

(4) (il The standards described in 

paragraph (m)(3) of this section do not 

apply to: 

(A) A ballast that is designed for 

dimming to 50 percent or less of its 

maximum output; 

(B) A ballast that is designed for use 

with two F96T12HO lamps at ambient 

temperatures of - 20° F or less and for 

use in an outdoor sign; 

tC) A ballast that has a power factor 

ofless than 0.90 and is designed and 

labeled for use only in residential 

building applications; or 

(D) A replacement ballast as defined 

in subparagraph (ii). 

(ii) For purposes of this paragraph 

(m), a replacement ballast is defined as 

a ballast that: 

(A) Is manufactured on or before June 

30,2010; 

(B) Is designed for use to replace an 

existing ballast in a previously installed 

luminaire; 

(B) To operate with an input current 

frequency of 60 Hertz; and 

(C) For use in connection with an 

F40T12, F96T12, or F96T12HO lamps 

shall have a power factor of 0.90 or 

greater and shall have a ballast efficacy 

factor not less than the following: 

Ballast input Total nominal Ballast efficacy voltage lamp watts factor 

120 40 1.S05 

277 40 1.S05 

120 SO 1.060 

277 SO 1.050 

120 150 0.570 

277 150 0.570 

120 220 0.390 

277 220 0.390 

(ii) Designed-

(A) To operate at nominal input 

voltages of 120 or 277 volts; 

(B) To operate with an input current 

frequency of 60 Hertz; and 

(C) For use in connection with an 

F40T12. F96T12, or F96T12HO lamps; 

shall have a power factor of 0.90 or 

greater and shall have a ballast efficacy 

factor not less than the following: 

Ballast Input Total nominal Ballast efficacy voltage lamp watts factor 

120 40 2.29 

277 40 2.29 

120 SO 1.17 

277 SO 1.17 

120 150 0.63 

277 150 0.63 

120 220 0.39 

277 220 0.39 

(C) Is marked "FOR REPLACEMENT 

USE ONLY"; 

(D) Is shipped by the manufacturer in 

packages containing not more than 10 

ballasts; 

(E) Has output leads that when fully 

extended are a total length that is less 

than the length of the lamp with which 

it is intended to be operated; and 

(F) Meets or exceeds the ballast 

efficacy factor in the following table: 
Federal Register /Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 14161

Application for operation of Ballast input

voltage

Total nominal

lamp watts

Ballast efficacy

factor

One F40 T12 lamp ...................................................................................................................... 120 40 1.805

277 40 1.805

Two F40 T12 lamps ..................................................................................................................... 120 80 1.060

277 80 1.050

Two F96T12 lamps ...................................................................................................................... 120 150 0.570

277 150 0.570

Two F96T12HO lamps .. .............................................................................................................. 120 220 0.390

277 220 0.390

[FR Doc. 00-6106 Filed 3-14-00; 8:45 am]

BILLING CODE 8450-01-P

EE-RM-97-500 COMMENT 98A

Federal Register/Vol. 65, No. 51/Wednesday, March 15, 2000/Proposed Rules 

Application for operation of 

One F40 Ti2 lamp 

Two F40 T12 lamps .................................................................................................................... . 

Two F96Ti2 lamps ..................................................................................................................... . 

Two F96Ti2HO lamps ............................................................................................................... . 

* * * * * 

[FR Doc. ()(}-fj106 Filed 3-14-00; 8:45 am] 

BlLUNG CODE ~1-P 

Ballast input Total nominal 

voltage lamp watts 

120 40 

277 40 

120 80 

277 80 

120 150 

277 150 

120 220 

277 220 

14161 

Ballast efficacy 

factor 

1.805 

1.805 

1.060 

1.050 

0.570 

0.570 

0.390 

0.390