17-i CHAPTER 17. REGULATORY IMPACT ANALYSIS

TABLE OF CONTENTS

17.1 INTRODUCTION ......................................................................................................... 17-1
17.2 METHODOLOGY ........................................................................................................ 17-1

LIST OF TABLES

Table 17.1.1 Non -regulatory Alternatives to Standards ......................................................... 17-117-1 CHAPTER 17. REGULATORY IMPACT ANALYSIS FOR ENERGY CONSERVATION
STANDARDS FOR GSFL

- IRL

17.1 INTRODUCTION

Under appendix A to subpart C of Title 10 of the Code of Federal Regulations, Part 430, Procedures for Consideration of New or Revised Energy Conservation Standards for Consumer
Products (Process Rule) the U.S. Department of Energy (DOE) is committed to explore nonregulatory alternatives to energy conservation standards. Accordingly, DOE will prepare a draft regulatory impact analysis pursuant to Executive Order 12866, “Regulator y Planning and Review,” which will be subject to review by the Office of Management and Budget’s Office of
Information and Regulatory Affairs. Pursuant to the Process Rule, DOE has identified six major
alternatives to standards that represent feasible policy options to reduce the energy consumption
of general service fluorescent lamps and incandescent reflector lamps ( GSFL

- IRL ) . It will evaluate each alternative in terms of its ability to achieve significant energy savings at a reasonable cost, and will com pare the effectiveness of each alternative to the effectiveness of
each trial standard

.

Table 17.1.1 lists th e non- regulatory means of achieving energy savings th at DOE proposes to analyze. The technical support document (TSD) prepared in support of DOE’s notice of proposed rulemaking will include a complete quantitative analysis of each alternative, the methodology for which is briefly addressed below.

Table 17.1.1 Non -regulatory Alternatives to Standards

No New Regulatory A ction

Consumer Rebates
Consumer Tax C redits

Manufacturer Tax C redits Voluntary Energy E fficiency Targets Early R eplacement

Bulk Government P urchases

17.2 METHODOLOGY

DOE will use the n ational i mpact a nalysis (NIA) s preadsheet model for GSFL

- IRL to calculate the national energy savings and the net present value (NPV) corresponding to each alternative to proposed standards. The NIA m odel for GSFL

- IRL is discussed in chapter 10 of the TSD. To compare each alternative quantitatively to the proposed energy conservation standards, DOE will need to quantify the effect of each alternative on the purchase and use of energy efficient GSFL

- IRL . DOE will create an integrated NIA -RIA model, built on the NIA model, in which to make the appropriate revisions to the inputs in the NIA models. Key inputs that DOE may revise in the NIA

- RIA model are:17-2 • GSFL

- IRL market shares of products meeting target efficiency levels (identical to the trial standard levels for the mandatory standards)

• Replacement rates of equipment in the stock

The following a re the key measures of the impact of each alternative.

• Energy use : Cumu lative energy use of GSFL

- IRL from the compliance date of the new
standar d to 2046. DOE will report electricity consumption as primary energy.

• National energy savings : Cumulative national energy use from the base- case projection
minus the alternative -policy- case projection.

• Net present value : The value of future operating cost savings from the equipment bought during the period from the required compliance date of the ne w standard (201 7) to 2046. DOE will calculate the NPV as the difference between the present value of equipment and operating expenditures (including energy) in the base case, and the present value of expenditures under each alternative

- policy case. DO E will discount future operating and equipment expenditures to 2013 using a 7- percent and 3- percent real discount r ate. It will calculate operating expenses (including energy costs) for the life of the equipment.