CHAPTER 1. INTRODUCTION

TABLE OF CONTENTS

**1. 1**  **PURPOSE OF**  **DOCUMENT**

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**1. 2**  **OVE RVIEW**  **OF APPLIANCE**  **STANDARDS**

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**1. 3**  **OVE RVIEW**  **OF SMALL**  **ELECTRIC MOTOR**  **STANDARDS**

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**1. 4**  **ST RUCTURE**  **OF THE**  **DOCUMENT**

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LIST OF TABLES

**Table 1.3.1**  **Small Electric**  **Motors Analyses** 

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**i**CHAPTER 1. INTRODUCTION

1. 1 PURPOSE OF DOCUMENT

**This preliminary**  **Technical Support**  **Document (TSD)**  **provides the**  **analytical approaches,** 

**inputs and**  **results associated**  **with DOE’s**  **study of**  **energy conservation**  **standards for**  **small**

**electric motors.**  **This preliminary**  **TSD also**  **serves to**  **provide technical**  **detail and**  **is a** 

**compendium to**  **the life­cycle**  **cost (LCC)**  **and payback**  **period (PBP)**  **and national**  **impact analysis** 

**1 spreadsheets**  **that are**  **posted on**  **the DOE’s**  **website for**  **the preliminary**  **analyses.**

1. 2 OVERVIEW OF APPLIANCE STANDARDS

**Part C**  **of title**  **III of**  **the Energy**  **Policy and**  **Conservation Act**  **(EPCA) provides**  **for an** 

**energy conservation**  **program for**  **certain commercial**  **and industrial**  **equipment. (42**  **U.S.C. 6311­** 

**6317) In**  **particular, section**  **346(b) of**  **EPCA states**  **that the**  **Secretary of**  **Energy must**  **prescribe**

**testing requirements**  **and energy**  **conservation standards**  **for those**  **small electric**  **motors for**  **which**

**the Secretary**  **determines that**  **standards would**  **be technologically**  **feasible and**  **economically**

**justified, and**  **would result**  **in significant**  **energy savings.**  **(42 U.S.C.**  **6317(b))**

**Before DOE**  **determines whether**  **to adopt**  **a proposed**  **energy conservation**  **standard, it** 

**first solicits**  **comments on**  **the proposed**  **standard. DOE**  **designs any**  **new or**  **amended standard**  **to**

**achieve the**  **maximum improvement**  **in energy**  **efficiency that**  **is technologically**  **feasible and** 

**economically justified.**  **(42 U.S.C.**  **6295(o)(2)(A), 42**  **U.S.C. 6313(a)(6)(B)(i)**  **and (b)(3)(A),**  **and**

**42 U.S.C.**  **6317(a)(1) and**  **(c)) To**  **determine whether**  **economic justification**  **exists, DOE**  **must**

**review comments**  **on the**  **proposal and**  **determine that**  **the benefits**  **of the**  **proposed standard** 

**exceed its**  **burdens to**  **the greatest**  **extent practicable,**  **weighing the**  **following seven**  **factors:**

**1. the**  **economic impact**  **of the**  **standard on**  **manufacturers and**  **consumers of**  **products**

**subject to**  **the standard;** 

**2. the**  **savings in**  **operating costs**  **throughout the**  **estimated average**  **life of**  **the covered** 

**products in**  **the type**  **(or class)**  **compared to**  **any increase**  **in the**  **price, initial** 

**charges, or**  **maintenance expenses**  **for the**  **covered products**  **likely to**  **result from** 

**imposition of**  **the standard;** 

**3. the**  **total projected**  **amount of**  **energy savings**  **likely to**  **result directly**  **from**

**imposition of**  **the standard;** 

**4. any**  **lessening of**  **utility or**  **performance of**  **the covered**  **products likely**  **to result** 

**from imposition**  **of the**  **standard;**

**1 DOE**  **website:**

**http://www.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html.**

**1 5.**  **the impact**  **of any**  **lessening of**  **competition, as**  **determined in**  **writing by**  **the**

**Attorney General,**  **likely to**  **result from**  **imposition of**  **the standard;** 

**6. the**  **need for**  **national energy**  **conservation; and** 

**7. other**  **factors the**  **Secretary considers**  **relevant.**

**(42 U.S.C.**  **6295(o)(2)(B))**

1. 3 OVERVIEW OF SMALL ELECTRIC MOTOR STANDARDS

**On July**  **10, 2006,**  **the Secretary**  **of Energy**  **issued a**  **determination stating**  **“...the**

**Department believes**  **that standards**  **for considered**  **small motors**  **appear economically**  **justified**

**based on**  **balanced consideration**  **of the**  **information and**  **analysis available**  **to the**  **Department at** 

**this time.”**  **71 FR**  **38807. DOE**  **defines “considered**  **small motors”**  **as capacitor­start**  **motors,**

**including both**  **induction­run and**  **capacitor­run, and**  **non­servo three­phase**  **motors.**

**The Secretary’s**  **determination was**  **based partly**  **on analyses**  **conducted by**  **Lawrence**

**Berkley National**  **Laboratory (LBNL).**  **In February**  **2002, LBNL**  **published a**  **report entitled** 

Determination Analysis of Energy Conservation Standards for Small Electric Motors

**, which** 

**assessed options**  **for setting**  **energy conservation**  **standards. That**  **report was**  **based on** 

**information from**  **annual sales**  **data, average**  **load data,**  **and research**  **on existing**  **and potential** 

**small motor**  **efficiencies obtained**  **from several**  **organizations.**

**DOE reviewed**  **the comments**  **it received**  **from stakeholders**  **on this**  **draft analysis** 

**published in**  **2002 and**  **then prepared**  **its final,**  **positive, determination**  **for small**  **electric motors**  **on**

**July 10,**  **2006. In**  **that notice,**  **DOE indicated**  **that it**  **found energy**  **conservation standards**  **for**

**small electric**  **motors appeared**  **to be**  **technologically feasible,**  **economically justified**  **and would** 

**result in**  **significant energy**  **savings. 71**  **FR 38799.**  **As a**  **result of**  **this positive**  **determination,**

**DOE published**  **an** Energy Conservation Standards Rulemaking Framework Document for Small

Electric Motors **in 2007.**  **This document**  **describes the**  **procedural and**  **analytical approaches**  **that**

**DOE anticipated**  **that it**  **would use**  **to evaluate**  **the establishment**  **of energy**  **conservation standards** 

**2 for**  **small electric**  **motors. 72 FR**  **44990 (August**  **10, 2007).** 

**On September**  **13, 2007,**  **DOE held**  **a public**  **meeting to**  **discuss the**  **proposed analytical** 

**framework. The**  **analytical framework**  **presented at**  **the public**  **meeting described**  **different**

**analyses, such**  **as life­cycle**  **cost and**  **payback, the**  **methods proposed**  **for conducting**  **them, and** 

**the relationships**  **among the**  **various analyses.**  **Table 1.3.1**  **below provides**  **a list**  **of all**  **the**

**rulemaking analyses**  **conducted, and**  **a which**  **stage of**  **the rulemaking**  **DOE publishes**  **those**

**analyses.**

**2 The**  **document is**  **available at**  **the DOE**  **website:**

**http://www.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html.**

**2**Table 1.3.1 Small Electric Motors Analyses

Preliminary Analyses NOPR Final Rule

**Market and**  **technology**

**assessment Revised**  **preliminary analyses**  **Revised analyses** 

**Screening analysis**  **Life­cycle cost**  **subgroup**

**analysis**

**Engineering analysis**  **Manufacturer impact**  **analysis**

**Energy use**  **and end­use**  **load**

**characterization Utility**  **impact analysis** 

**Marku ps**  **for equipment**  **price**

**determination Employment**  **impact analysis** 

**Life­cycle cost**  **and payback** 

**period analyses**  **Environmental assessment** 

**Shipments analysis**  **Regulatory impact**  **analysis**

**National impact**  **analysis**

**Preliminary manufacturer** 

**impact analysis** 

**Representatives of**  **small motor**  **manufacturers, a**  **nationally recognized**  **trade association,** 

**and a**  **prominent energy**  **efficiency advocacy**  **group attended**  **the framework**  **document public** 

**meeting and**  **indicated their**  **willingness to**  **work with**  **DOE in**  **its analysis**  **of potential**  **energy**

**conservation standards.**  **The major**  **items discussed**  **at the**  **public meeting**  **included definitions**  **for**

**covered small**  **electric motors**  **and equipment**  **classes; matters**  **of proprietary**  **designs; ties**  **between**

**efficiency improvements**  **and incremental**  **manufacturing costs;**  **baseline and**  **potential efficiency** 

**levels; base­case**  **trends under**  **different regulatory**  **scenarios; analyses**  **of costs**  **to manufacture** 

**energy efficient**  **small electric**  **motors and**  **the relationship**  **to selling**  **prices; LCC**  **analyses and** 

**methods; LCC**  **subgroups that**  **may be**  **more impacted**  **by efficiency**  **standards over**  **other groups;** 

**motor rating,**  **loading, and**  **operating hours;**  **the impacts**  **of a**  **standard on**  **domestic energy** 

**supplies; and**  **the scope**  **of an**  **environmental assessment.** 

**One interested**  **party submitted**  **written comments,**  **during the**  **framework document** 

**comment period,**  **which addressed**  **options for**  **the screening**  **analysis, approaches**  **for the** 

**engineering analysis,**  **discount rates,**  **the number**  **and basis**  **for the**  **efficiency levels**  **to analyze,**  **the**

**national energy**  **savings and**  **net present**  **value analyses,**  **impacts on**  **national employment,**  **and the** 

**manufacturer impact**  **analysis. DOE**  **worked with**  **its contractors**  **in preparing**  **the preliminary** 

**analyses to**  **address the**  **issues interested**  **parties raised**  **in response**  **to the**  **framework document.** 

**As part**  **of information**  **gathering and**  **sharing, DOE**  **prepared and**  **circulated three** 

**interview guides**  **to small**  **motor manufacturers**  **in 2007**  **and early**  **2008 (see**  **preliminary TSD** 

**appendices 12A,**  **12B, and**  **12C). DOE**  **issued these**  **interview guides**  **to small**  **electric motor** 

**manufacturers with**  **the following**  **objectives: (1)**  **to obtain**  **the manufacturer**  **selling price**  **(MSP)**

**versus efficiency**  **curves for**  **the engineering**  **analysis; (2)**  **to obtain**  **market­related information**  **for**

**the covered**  **motors, including**  **an estimate**  **of shipments;**  **(3) to**  **assess any**  **preliminary impacts**  **on**

**manufacturers that**  **may be**  **associated with**  **higher efficiency**  **designs; and**  **(4) to**  **foster**

**cooperation between**  **DOE and**  **these interested**  **parties, who**  **may choose**  **to participate**  **in the** 

**manufacturer impact**  **analysis following**  **the public**  **meeting comment**  **period. The**  **interview**

**3 guides**  **requested input**  **on (1)**  **the relationship**  **between manufacturing**  **selling price**  **and efficiency** 

**for four**  **representative units**  **selected by**  **DOE; (2)**  **market data**  **such as**  **distribution channels**  **and**

**end­use operating**  **profiles for**  **small motors;**  **(3) preliminary**  **manufacturer’s impacts;**  **and (4)** 

**national shipment**  **estimates (to**  **be aggregated**  **by the**  **Business Information**  **Service of**  **the**

**National Electrical**  **Manufacturers Association).** 

**DOE used,**  **in its**  **engineering analysis,**  **some of**  **the information**  **gathered in**  **response to** 

**the interview**  **guides and**  **follow­up conversations**  **with manufacturers,**  **but because**  **only two** 

**companies responded**  **to the**  **interview guides,**  **DOE could**  **not use**  **this input**  **as part**  **of its** 

**preliminary analysis**  **published today.**  **Following completion**  **of the**  **review of**  **the preliminary** 

**analysis published**  **today, DOE**  **will confer**  **with manufacturers**  **to schedule**  **interviews in**  **order to** 

**develop the**  **manufacturer impact**  **analysis for**  **the NOPR**  **(see preliminary**  **TSD chapter**  **12).**

1. 4 STRUCTURE OF THE DOCUMENT

**This preliminary**  **TSD consists**  **of 14**  **chapters and**  **two reports.** 

**Chapter 1**  **Introduction: Provides**  **an overview**  **of the**  **appliance standards**  **program and**  **how**

**it applies**  **to the**  **small electric**  **motors rulemaking,**  **provides a**  **history of**  **DOE’s**

**actions to**  **date, and**  **outlines the**  **structure of**  **the preliminary**  **TSD.**

**Chapter 2**  **Analytical Framework:**  **Describes the**  **rulemaking process,**  **provides an**  **overview**

**of each**  **analysis, and**  **discusses comments**  **received during**  **the framework** 

**document public**  **meeting comment**  **period.**

**Chapter 3**  **Market and**  **Technology Assessment:**  **Provides DOE’s**  **definition of**  **a small** 

**electric motor,**  **the proposed**  **equipment classes,**  **and names**  **of the**  **major industry** 

**players. This**  **chapter also**  **provides an**  **overview of**  **small electric**  **motor**

**technology, including**  **techniques employed**  **to improve**  **small electric**  **motor**

**efficiency.**

**Chapter 4**  **Screening Analysis:**  **Discusses the**  **design options**  **identified in**  **chapter 3**  **that**

**improve small**  **motor efficiency,**  **and determines**  **which of**  **these will**  **be evaluated** 

**further and**  **which will**  **be screened**  **out using**  **four screening**  **criteria.**

**Chapter 5**  **Engineering Analysis:**  **Presents detailed**  **cost and**  **efficiency information**  **for the** 

**motors that**  **constitute the**  **representative units**  **for analysis.**  **This chapter**  **describes**

**DOE’s approach**  **to the**  **engineering analysis**  **for determining**  **manufacturer costs** 

**and selling**  **prices.**

**Chapter 6**  **Energy Use**  **and End­Use**  **Load Characterization:**  **Discusses the**  **process DOE** 

**used for**  **generating energy**  **use estimates**  **and end­use**  **load profiles**  **for small** 

**electric motors.** 

**4 Chapter**  **7 Marku**  **ps for**  **Equipment Price**  **Determination: Discusses**  **the methods**  **DOE used** 

**for establishing**  **markups to**  **convert manufacturer**  **selling prices**  **to installed** 

**customer equipment**  **prices.**

**Chapter 8**  **Life­Cycle Cost**  **and Payback**  **Period Analyses:**  **Describes the**  **impact of**  **potential**

**candidate standards**  **on consumers**  **of small**  **electric motors.**  **This chapter** 

**compares the**  **life­cycle cost**  **of small**  **motors and**  **other measures**  **of consumer** 

**impact with**  **and without**  **candidate standard**  **levels.**

**Chapter 9**  **Shipments Analysis:**  **Provides a**  **shipments estimate**  **for 2007**  **and the**  **methods**

**DOE used**  **for forecasting**  **shipments with**  **and without**  **candidate standards**  **levels.**

**Chapter 10**  **National Impact**  **Analysis: Describes**  **the national**  **forecast of**  **energy**

**consumption, efficiency**  **of new**  **units, and**  **annual equipment**  **sales with**  **and**

**without new**  **regulations.**

**Chapter 11**  **Life­Cycle Cost**  **Subgroup Analysis:**  **Evaluates impacts**  **on any**  **identifiable**

**groups or**  **customers who**  **may be**  **disproportionately affected**  **by any**  **proposed**

**national energy**  **efficiency standard**  **level. (This**  **analysis is**  **conducted at**  **the**

**NOPR stage).** 

**Chapter 12**  **Manufacturer Impact**  **Analysis: Assesses**  **the impacts**  **on small**  **motor**

**manufacturers of**  **any proposed**  **energy efficiency**  **standard. In**  **addition to** 

**financial impacts,**  **a wide**  **range of**  **quantitative and**  **qualitative effects**  **may occur** 

**following adoption**  **of a**  **standard that**  **may require**  **changes to**  **the manufacturing** 

**practices for**  **these products.**  **(This analysis**  **is conducted**  **fully at**  **the NOPR**  **stage;**

**at this**  **time, a**  **preliminary manufacturer**  **impact analysis**  **is presented**  **in this**  **TSD).**

**Chapter 13**  **Utility Impact**  **Analysis: Analyzes**  **the effects**  **of proposed**  **small electric**  **motor**

**standard levels**  **on electricity**  **sales. The**  **utility impact**  **analysis compares**  **model**

**results for**  **the base**  **case and**  **policy cases**  **in which**  **proposed standards**  **are in** 

**place. (This**  **analysis is**  **conducted at**  **the NOPR**  **stage).**

**Chapter 14**  **Employment Impact**  **Analysis: Estimates**  **national job**  **creation or**  **elimination**

**(direct and**  **indirect effects)**  **resulting from**  **possible standards**  **due to**  **reallocation**

**of the**  **associated commercial**  **expenditures for**  **purchasing and**  **operating**

**equipment. (This**  **analysis is**  **conducted at**  **the NOPR**  **stage).**

**Environmental Assessment**  **Report: Assesses**  **the impacts**  **of proposed**  **small electric**  **motor**

**standard levels**  **on certain**  **environmental indicators.**  **(This report**  **is developed**  **during the**  **NOPR**

**stage).**

**Regulatory Impact**  **Analysis Report:**  **Evaluates major**  **alternatives to**  **standards to**  **achieve**

**customer product**  **energy efficiency.**  **(This report**  **is developed**  **during the**  **NOPR stage).** 

**5**