APPENDIX 12A. MANUFACTURER IMPACT ANALYSIS INTERVIEW GUIDE 

Table of Contents 

12A.1. KEY ISSUES ...................................................................................................................... 2
 

12A.2. COMPANY OVERVIEW AND ORGANIZATIONAL CHARACTERISTICS .............. 3
 

12A.3. MANUFACTURER PRODUCTION COSTS AND SELLING PRICES ......................... 4
 

12A.4. MARKUPS AND PROFITABILITY................................................................................. 9
 

12A.5. SHIPMENT PROJECTIONS AND MARKET SHARES ............................................... 11
 

12A.6. EQUIPMENT MIX........................................................................................................... 12
 

12A.7. FINANCIAL PARAMETERS.......................................................................................... 14
 

12A.8. CONVERSION COSTS ................................................................................................... 15
 

12A.9. CUMULATIVE REGULATORY BURDEN................................................................... 19
 

12A.10. DIRECT EMPLOYMENT IMPACT ASSESSMENT................................................... 20
 

12A.11. EXPORTS / FOREIGN COMPETITION / OUTSOURCING....................................... 20
 

12A.12. CONSOLIDATION........................................................................................................ 21
 

12A.13. IMPACTS ON SMALL BUSINESS .............................................................................. 21
 

12A.14. SUPPLEMENTAL ENGINEERING ............................................................................. 22
 

12A-i 

EERE-2007-BT-STD-0007 COMMENT 17
APPENDIX 12A. MANUFACTURER IMPACT ANALYSIS INTERVIEW GUIDE
 

Small Electric Motors Rulemaking
 

Manufacturer Analysis Interview Guide 

April 22, 2009 

12A-1 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

As part of the rulemaking process for new energy conservation standards for small electric 

motors (SEMs), the Department of Energy (DOE) conducts the manufacturer impact analysis 

(MIA). In this analysis, DOE uses publicly available information and information provided by 

manufacturers during interviews to assess possible impacts on manufacturers due to new energy 

conservation standards. DOE is currently considering 8 efficiency levels (EL) for polyphase and 

capacitor-start, induction-run motors and 9 ELs for capacitor-start, capacitor-run motors, 

including a baseline efficiency level. In responding to this questionnaire, please refer to the 

efficiency levels in the table below. DOE analyzed one representative combination of 

horsepower (hp) and number of poles for each SEM motor category (e.g. Polyphase, CSIR, or 

CSCR) and extrapolated the results to other horsepowers, and number of poles. 

Efficiency Levels under Consideration for Small Electric Motors 

Equipment Class Efficiency 

Metric 

Baseline 

Efficiency 

Level 

EL 1 EL 2 EL 3 EL 4 EL 5 EL 6 EL 7 EL 8 

Polyphase, 1 hp, 4­

pole 

Full Load 

Efficiency 77.0% 78.5% 80.0% 81.5% 82.5% 85.0% 86.5% 88.0% 

Capacitor-Start, 

Induction-Run 

(CSIR), 1⁄2 hp, 4-pole 

Full Load 

Efficiency 57.5% 59.5% 62.0% 64.0% 68.5% 71.0% 73.0% 77.0% 

Capacitor-Start, 

Capacitor-Run 

(CSCR), 3⁄4 hp, 4­

pole 

Full Load 

Efficiency 71.0% 74.5% 78.5% 80.5% 81.5% 82.5% 83.5% 85.5% 87.0% 

12A.1. KEY ISSUES 

1.1	 In general, what are the key issues for your company regarding new energy conservation 

standards for SEMs and this rulemaking? 

1.2	 For the issues identified, how significant are they at each listed efficiency level? 

1.3	 How can we most effectively incorporate these issues in the MIA? 

12A-2 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

12A.2. COMPANY OVERVIEW AND ORGANIZATIONAL CHARACTERISTICS 

DOE is interested in understanding manufacturer impacts at the plant or profit center level 

directly pertinent to SEMs. However, the context within which the plant operates and the details 

of plant production and costs are not readily available from the published literature. Therefore, 

DOE invites you to provide these details confidentially in your own words to the extent possible 

and practical. Understanding the organizational setting around the SEM industry profit center 

will help DOE understand the probable future of the manufacturing activity with and without 

new energy conservation standards. 

2.1	 Do you have a parent company, and/or any subsidiaries relevant to the SEM industry? 

2.2	 Do you manufacture any equipment other than SEMs? If so, what other equipment do 

you manufacture? 

2.3	 What percentage of your total manufacturing corresponds to Polyphase motors, CSIR 

motors, and CSCR motors covered by this rulemaking? 

2.4	 Where are your production facilities located, and what type of equipment is manufactured 

at each location? Could you provide figures for your company’s manufacturing at each 

location by equipment type (i.e. Polyphase motors, CSIR motors, and CSCR motors), 

horsepower, number of poles and efficiency? 

2.5	 At your manufacturing facilities, would potential SEM redesigns be difficult to 

implement? If so, would your company modify the existing facility or develop a new 

facility? 

2.6	 What are your employment levels at each of these facilities? 

2.7	 What are your product lines, niches, and relative strengths in the SEMs market? 

12A-3 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

2.8	 What is your company’s approximate market share for Polyphase motors, CSIR motors, 

and CSCR motors? 

2.9	 Would you expect your market share to change once new energy conservation standards 

become effective? 

12A.3. MANUFACTURER PRODUCTION COSTS AND SELLING PRICES 

For the MIA, DOE defines manufacturer production cost as all direct costs associated with 

manufacturing a piece of equipment. It includes direct labor, direct materials,1 and overhead 

(which includes depreciation costs). The breakdown of manufacturer production cost has 

implications for the quantitative impacts on SEMs manufacturers. The per unit production costs 

are necessary for DOE to estimate labor expenditures and other cash flow calculations. 

Manufacturer selling price is the average cost manufacturers charge their first consumers, but 

does not include costs along distribution channels. The manufacturer selling price includes a per 

unit research and development cost; selling, general, and administrative expense; shipping cost; 

and profit. The manufacturer markup is a multiplier applied to manufacturer production cost to 

cover the per-unit research and development, selling, general, and administrative expense, 

shipping, and profit. 

In the engineering analysis, DOE developed manufacturer production costs for one 

representative motor in each motor category. By multiplying the manufacturer production costs 

by the manufacturer markup, DOE calculated the manufacturer selling prices for these motors at 

each efficiency level. In order to determine manufacturer selling prices for all other equipment 

classes (72 total), DOE is planning to scale the manufacturer selling prices to all covered 

equipment classes (i.e., scale the prices developed using the motors analyzed in the engineering 

analysis by horsepower and the number of poles). For scaling, DOE is using catalog prices as a 

basis for examining how prices vary by horsepower, and the number of poles. 

To calculate manufacturer production costs for all other covered equipment (i.e., all equipment 

classes other than the three representative motors), DOE will divide the scaled manufacturer 

selling prices by the manufacturer markup. As shown in Equation 12-1 below, the manufacturer 

selling price divided by the baseline manufacturer markup would convert the scaled 

manufacturer selling price to manufacturer production costs. 

1

 Included in direct materials are the costs associated with the handling of material (loading into assembly or 

winding equipment) and the scrap material that cannot be used in the production of a finished small electric motor 

(e.g., lengths of wire too short to wind). 

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EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

 

 

Equation 12-1. Calculation of Manufacturer Production Costs and Manufacturer Selling 

Price 

3.1	 Table 12-1 through Table 12-3 provide DOE’s estimates of the manufacturer production 

costs and manufacturer selling prices for SEMs at the representative horsepower, number 

of poles, and each efficiency level being considered. Could you please provide any 

comments on the estimated values? 

Table 12-1 Estimated Manufacturer Production Costs and Manufacturer Selling Prices for 

Polyphase, 1 hp, 4-pole Motors 

Efficiency Level 

(Full Load 

Efficiency) 

DOE’s 

Manufacturer 

Production Cost 

Estimates* 

(2009$) 

DOE’s 

Manufacturer 

Selling Price 

Estimates 

(2009$) 

Manufacturer 

Comments or 

Revised Estimates 

Baseline Level 

( 77.0% ) $64.33 $93.27 

EL 1 

( 78.5% ) $68.25 $98.96 

EL 2 

( 80.0% ) $70.26 $101.88 

EL 3 

( 81.5% ) $74.07 $107.40 

EL 4 

( 82.5% ) $76.70 $111.22 

EL 5 

( 85.0% ) $151.21 $219.25 

EL 6 

( 86.5% ) $154.75 $224.38 

EL 7 

( 88.0% ) $1,163.41 $1,686.94 

*DOE’s manufacturer production cost estimates use the Producer Price Index to develop a five-year 

average of material prices from 2004 to 2008. 

12A-5 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

 

 

Table 12-2 Estimated Manufacturer Production Costs and Manufacturer Selling Prices for 

CSIR, 1⁄2 hp, 4-pole Motors 

Efficiency Level 

(Full Load 

Efficiency) 

DOE’s 

Manufacturer 

Production Cost 

Estimates* 

(2009$) 

DOE’s 

Manufacturer 

Selling Price 

Estimates 

(2009$) 

Manufacturer 

Comments or 

Revised Estimates 

Baseline Level 

( 57.5% ) $63.55 $92.14 

EL 1 

( 59.5% ) $66.49 $96.41 

EL 2 

( 62.0% ) $68.33 $99.08 

EL 3 

( 64.0% ) $69.06 $100.14 

EL 4 

( 68.5% ) $78.74 $114.17 

EL 5 

( 71.0% ) $81.32 $117.91 

EL 6 

( 73.0% ) $122.94 $178.26 

EL 7 

( 77.0% ) $794.93 $1,152.65 

*DOE’s manufacturer production cost estimates use the Producer Price Index to develop a five-year 

average of material prices from 2004 to 2008. 

12A-6 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

 

Table 12-3 Estimated Manufacturer Production Costs and Manufacturer Selling Prices for 

CSCR, 3⁄4 hp, 4-pole Motors 

*DOE’s 

Efficiency Level 

(Full Load 

Efficiency) 

DOE’s 

Manufacturer 

Production Cost 

Estimates* 

(2009$) 

DOE’s 

Manufacturer 

Selling Price 

Estimates 

(2009$) 

Manufacturer 

Comments or 

Revised Estimates 

Baseline Level 

( 71.0% ) $79.36 $115.07 

EL 1 

( 74.5% ) $82.68 $119.88 

EL 2 

( 78.5% ) $95.88 $139.02 

EL 3 

( 80.5% ) $99.71 $144.58 

EL 4 

( 81.5% ) $102.95 $149.27 

EL 5 

( 82.5% ) $108.04 $156.66 

EL 6 

( 83.5% ) $164.36 $238.32 

EL 7 

( 85.5% ) $169.39 $245.61 

EL 8 

( 87.0% ) $1,176.39 $1,705.77 

manufacturer production cost estimates use the Producer Price Index to develop a five-year average of 

material prices from 2004 to 2008. 

3.2	 Please compare your manufacturer production cost percentages2 to the estimates 

tabulated below. The manufacturer production cost breakdown is used to calculate the 

total cost of goods sold (COGS) for the industry. Having an accurate estimate of the 

production costs for the industry allows DOE to better examine impacts on profitability 

and employment due to new energy conservation standards. Are the different percentages 

of each cost representative of your company or the SEM industry? Please explain any 

differences. As mentioned in section 3, the overhead component of the manufacturer 

production cost includes depreciation. In the tables below could you separate 

depreciation from overhead and include it as a percentage of manufacturer production 

cost? 

2 The manufacture production cost percentages shown in Table 12-4 through Table 12-6 are the values that make up 

COGS. These are percentages of total COGS. 

12A-7 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

Table 12-4 Breakdown of Manufacturer Production Costs for Baseline Polyphase, 1 hp, 4­

pole Motors 

Components of 

Manufacturer Production 

Cost 

DOE’s Estimated Percentage of 

Manufacturer Production Cost 

Manufacturer Feedback 

Materials 67.1% 

Labor 21.8% 

Overhead 11.1% 

Depreciation Included in overhead 

Table 12-5 Breakdown of Manufacturer Production Costs for Baseline CSIR, 1⁄2 hp, 4-pole 

Motors 

Components of 

Manufacturer Production 

Cost 

DOE’s Estimated Percentage of 

Manufacturer Production Cost 

Manufacturer Feedback 

Materials 69.7% 

Labor 19.2% 

Overhead 11.1% 

Depreciation Included in overhead 

Table 12-6 Breakdown of Manufacturer Production Costs for Baseline CSCR, 3⁄4 hp, 4-pole 

Motors 

Components of 

Manufacturer Production 

Cost 

DOE’s Estimated Percentage of 

Manufacturer Production Cost 

Manufacturer Feedback 

Materials 73.5% 

Labor 15.4% 

Overhead 11.1% 

Depreciation Included in overhead 

3.3	 Do the percentages presented on tables Table 12-4 through Table 12-6 change at higher 

efficiencies? Please explain any differences. 

3.4	 Within a motor category, does the production cost breakdown change with horsepower? 

Does it vary with the number of poles? 

12A-8 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

 

12A.4. MARKUPS AND PROFITABILITY 

One of the primary objectives of the MIA is to assess the impact of new energy conservation 

standards on industry profitability. In this section, DOE would like to understand the current 

markup structure of the industry and how setting a new energy conservation standard would 

impact your company’s markup structure and profitability. As discussed in Section 3, the 

manufacturer markup is a multiplier applied to manufacturer production cost to cover per unit 

research and development, selling, general, and administrative expenses, shipping costs, and 

profit. Currently, DOE estimates an industry-wide markup of 1.45 for SEM equipment classes. 

4.1	 Do profit levels currently vary by equipment class? Do profit levels vary by efficiency 

level? Please explain why or why not. 

4.2	 Within each motor category, do profit levels vary by horsepower and number of poles? 

4.3	 DOE currently assumes that the manufacturer markup does not vary by motor category, 

efficiency level, or equipment class. DOE would like to understand how the 

manufacturer markup changes at higher efficiency levels. If so, could you provide your 

company’s markup for any motors that meet the efficiency levels shown below? 

Table 12-7 Manufacturer Markups for Polyphase, 1 hp, 4-pole Motors 

Polyphase, 1 hp, 4-pole Motor 

Efficiency Level 

(Full Load 

Efficiency) 

Estimated Manufacturer Markup 

Baseline ( 77.0% ) 

EL 1 ( 78.5% ) 

EL 2 ( 80.0% ) 

EL 3 ( 81.5% ) 

EL 4 ( 82.5% ) 

EL 5 ( 85.0% ) 

EL 6 ( 86.5% ) 

EL 7 ( 88.0% ) 

12A-9 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

 

 

 

Table 12-8 Manufacturer Markups for CSIR, 1⁄2 hp, 4-pole Motors 

CSIR, 1⁄2 hp, 4-pole Motor 

Efficiency Level 

(Full Load 

Efficiency) 

Estimated Manufacturer Markup 

Baseline ( 57.5% ) 

EL 1 ( 59.5% ) 

EL 2 ( 62.0% ) 

EL 3 ( 64.0% ) 

EL 4 ( 68.5% ) 

EL 5 ( 71.0% ) 

EL 6 ( 73.0% ) 

EL 7 ( 77.0% ) 

Table 12-9 Manufacturer Markups for CSCR, 3⁄4 hp, 4-pole Motors 

CSCR, 3⁄4 hp, 4-pole Motor 

Efficiency Level 

(Full Load 

Efficiency) 

Estimated Manufacturer Markup 

Baseline ( 71.0% ) 

EL 1 ( 74.5% ) 

EL 2 ( 78.5% ) 

EL 3 ( 80.5% ) 

EL 4 ( 81.5% ) 

EL 5 ( 82.5% ) 

EL 6 ( 83.5% ) 

EL 7 ( 85.5% ) 

EL 8 ( 87.0% ) 

4.1	 Could you explain how the manufacturer markup varies for each motor category as the 

horsepower and number of poles vary. 

4.2	 Would you expect changes in your estimated profitability following a new energy 

conservation standard? If so, please explain why. 

12A-10 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

 

12A.5. SHIPMENT PROJECTIONS AND MARKET SHARES 

A new energy conservation standard can change overall shipments by altering equipment 

attributes, marketing approaches, equipment availability, and price. The industry revenue 

calculations are based on the shipment projections developed by DOE’s shipments model. The 

shipments model includes forecasts for the base case shipments (i.e., total industry shipments 

absent new energy conservation standards) and the standards case shipments (i.e., total industry 

shipments with new energy conservation standards). 

5.1	 Please compare DOE’s projections of annual industry-wide shipments for covered SEMs 

with your company’s projections of industry-wide shipments. 

Table 12-10 Annual Industry-Wide Shipment Projections for Polyphase Motors Absent 

Amended Energy Conservation Standards 

2008 

Total IndustryWide 

Shipments 

Projected Total 

Industry-Wide 

Shipments in 2015* 

Projected Total 

Industry-Wide 

Shipments in 2025 

Projected Total 

Industry-Wide 

Shipments in 2035 

DOE’s Estimate for Total 

Industry Shipments 

(Millions) 

.750 .838 .990 1.22 

Manufacturer Feedback 

* 2015 is estimated effective date of new energy conservation standards for SEMs. 

Table 12-11 Annual Industry-Wide Shipment Projections for CSIR Motors Absent 

Amended Energy Conservation Standards 

2008 

Total IndustryWide Shipments 

Projected Total 

Industry-Wide 

Shipments in 2015* 

Projected Total 

Industry-Wide 

Shipments in 2025 

Projected Total 

Industry-Wide 

Shipments in 2035 

DOE’s Estimate for 

Total Industry 

Shipments (Millions) 

3.10 3.61 4.50 5.94 

Manufacturer 

Feedback 

* 2015 is estimated effective date of new energy conservation standards for SEMs. 

12A-11 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

 

 

Table 12-12 Annual Industry-Wide Shipment Projections for CSCR Motors Absent 

Amended Energy Conservation Standards 

2008 

Total IndustryWide Shipments 

Projected Total 

Industry-Wide 

Shipments in 2015* 

Projected Total 

Industry-Wide 

Shipments in 2025 

Projected Total 

Industry-Wide 

Shipments in 2035 

DOE’s Estimate for 

Total Industry 

Shipments (Millions) 

.280 .326 .406 .536 

Manufacturer 

Feedback 

* 2015 is estimated effective date of new energy conservation standards for SEMs. 

5.2	 DOE’s shipments analysis estimates industry-wide shipments in 2015 would remain at 

their current levels irrespective of higher standard levels (i.e., industry-wide shipments 

remain constant regardless of the standard level set by DOE). Could you provide any 

qualitative information on expected changes in total industry shipments shown in Table 

12-10 through Table 12-12? 

12A.6. EQUIPMENT MIX 

Equipment mix describes the distribution of current shipments by efficiency level. Changes in 

the equipment mix due to new energy conservation standards can have a large impact on industry 

revenues. Having an accurate estimate of the current equipment mix allows DOE to better 

estimate how revenues might change due to new energy conservation standards. 

6.1	 Does your company offer multiple product lines at different efficiency levels? Could you 

provide a description of your company’s product lines and their respective efficiency 

levels? 

6.2	 Table 6-1 through Table 12-15 show DOE’s estimate for the mix of shipments by 

efficiency in 2015, the anticipated effective date of new energy conservation standards. 

Could you provide feedback on DOE’s estimates based on your knowledge of the 

industry? Note: Though the efficiency levels defined in the introduction of this interview 

guide apply to one representative motor in each motor category, the ELs in the following 

tables are meant to represent levels that would require manufacturers to implement 

similar design options for all horsepower and number of pole combinations for a given 

motor category. 

12A-12 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

 

 

 

 

 

 

 

 

 

Table 12-13 Percentage of Industry-Wide Shipments by Efficiency Level for Polyphase 

Motors in 2015 

Percentage of Total 

Shipments at Each 

Efficiency 

Baseline EL 1 El 2 EL 3 EL 4 EL 5 EL 6 EL 7 

DOE’s Estimate 

(2015) 95% 5% 0% 0% 0% 0% 0% 0% 

Manufacturer 

Feedback 

Table 12-14 Percentage of Industry-Wide Shipments by Efficiency Level for CSIR Motors 

in 2015 

Percentage of Total 

Shipments at Each 

Efficiency 

Baseline EL 1 El 2 EL 3 EL 4 EL 5 EL 6 EL 7 

DOE’s Estimate 

(2015) 95% 5% 0% 0% 0% 0% 0% 0% 

Manufacturer 

Feedback 

Table 12-15 Percentage of Industry-Wide Shipments by Efficiency Level for CSCR Motors 

in 2015 

Percentage of 

Total Shipments at 

Each Efficiency 

Baseline EL 1 El 2 EL 3 EL 4 EL 5 EL 6 EL 7 EL 8 

DOE’s Estimate 

(2015) 95% 5% 0% 0% 0% 0% 0% 0% 0% 

Manufacturer 

Feedback 

6.1	 Are the projected distributions of efficiencies representative of SEMs shipments by 

equipment class? Do you expect the equipment mix to change over time? If so, please 

explain why. 

6.2	 A new energy conservation standard affects the equipment mix by eliminating the sale of 

equipment below the minimum efficiency level. DOE assumes that all equipment that fall 

below the standard would roll-up to the efficiency level set by a new energy conservation 

standard. DOE assumes the distribution of efficiencies above the efficiency level set by 

the energy conservation standard will not change. In other words, those customers 

already purchasing more-efficient equipment will continue to do so irrespective of new 

energy conservation standards. How do you think new energy conservation standards will 

12A-13 

EERE-2007-BT-STD-0007 COMMENT 17
impact the sales of more efficient equipment? For example, would customers continue to 

buy equipment that exceeds the energy conservation standard level? Would your 

response change at higher efficiency levels? 

12A.7. FINANCIAL PARAMETERS 

Navigant Consulting, Inc. (NCI) has developed a “strawman” model of the SEM industry 

financial performance called the Government Regulatory Impact Model (GRIM) using publicly 

available data. This section attempts to understand how your company’s financial situation 

differs from our industry aggregate picture. 

Please compare your financial parameters to the GRIM parameters tabulated below. 

12A-14 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

 

 

 

 

 

 

Table 12-16 Financial Parameters for Small Electric Motor Manufacturers 

GRIM Input Definition Industry 

Estimated 

Value 

Your Actual (If 

Significantly 

Different from 

DOE’s Estimate) 

Income Tax Rate Corporate effective income tax 

paid (percentage of earnings 

before taxes, EBT) 

32.0% 

Discount Rate Weighted average cost of capital 

(inflation-adjusted weighted 

average of corporate cost of debt 

and return on equity) 

9.7% 

Working Capital Current assets less current 

liabilities (percentage of 

revenues) 

16.0% 

SG&A Selling, general, and 

administrative expenses 

(percentage of revenues) 

18.0% 

R&D Research and development 

expenses (percentage of 

revenues) 

2.0% 

Depreciation Amortization of fixed assets 

(percentage of revenues) 3.0% 

Capital Expenditures Outlay of cash to acquire or 

improve capital assets 

(percentage of revenues, not 

including acquisition or sale of 

business units) 

2.7% 

Cost of Goods Sold Includes material, labor, 

overhead, and depreciation 

(percentage of revenues) 

69.0% 

7.1	 How would you expect an amended energy conservation standard to impact any of the 

financial parameters for the industry? 

12A.8. Conversion Costs 

New energy conservation standards may cause your company to incur capital and equipment 

conversion costs to redesign existing equipment and make changes to existing production lines to 

be compliant with the new energy conservation standards. Capital conversion costs are one-time 

investments in plant, property, and equipment (PPE) necessitated by a new energy conservation 

standard. These may be incremental changes to existing PPE or the replacement of existing PPE. 

Replacing existing PPE could strand existing assets before the end of their useful lives. In 

addition to capital conversion costs, equipment conversion costs are costs related research, 

12A-15 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

 

 

product development, testing, marketing and other costs for redesigning equipment necessitated 

by a new energy conservation standard. For the industry cash flow model, DOE must estimate 

the conversion costs for all covered equipment. It is difficult to estimate these costs due to 

variations in efficiency between equipment classes. The questions below attempt to capture the 

capital and equipment conversion costs that would be required to convert all covered equipment 

at the efficiency levels studied by DOE. 

8.1	 Are different motor categories manufactured on the same line? Within a motor category, 

are motors of varying horsepower and number of poles manufactured on the same line? 

8.2	 Does the production equipment and manufacturing processes used to manufacturer 

motors differ by motor category, horsepower, or number of poles? 

8.3	 Are production lines shared between covered general purpose motors and non-covered 

motors? 

8.4	 Could you please describe what equipment is produced on each of your production lines? 

Please include the motor category (both covered and non-covered), the range of 

horsepower and number of poles for each line. 

In the tables below, DOE asks you to provide your expected capital and equipment conversion 

costs for the representative combination of horsepower and number of poles for each SEM motor 

category. Following the tables, DOE asks a series of questions to determine how the capital 

conversion and equipment conversion costs for these motors compare to costs to convert the 

remaining combinations of horsepowers and number of poles. 

12A-16 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

Table 12-17 Conversion Costs for Polyphase, 1 hp, 4-pole Motors 

Efficiency Level 

(Full Load 

Efficiency) 

Polyphase, 1 hp, 4-pole Motors 

Capital 

Conversion 

Costs 

(2009$) 

Equipment 

Conversion 

Costs 

(2009$) 

Stranded 

Assets 

(2009$) 

Baseline (77.0%) 

EL 1 (78.5%) 

EL 2 (80.0%) 

EL 3 (81.5%) 

EL 4 (82.5%) 

EL 5 (85.0%) 

EL 6 (86.5%) 

EL 7 (88.0%) 

Table 12-18 Conversion Costs for CSIR, 1⁄2 hp, 4-pole Motors 

Efficiency Level 

(Full Load 

Efficiency) 

CSIR, 1⁄2 hp, 4-pole Motors 

Capital 

Conversion 

Costs 

(2009$) 

Equipment 

Conversion 

Costs 

(2009$) 

Stranded 

Assets 

(2009$) 

Baseline (57.5%) 

EL 1 (59.5%) 

EL 2 (62.0%) 

EL 3 (64.0%) 

EL 4 (68.5%) 

EL 5 (71.0%) 

EL 6 (73.0%) 

EL 7 (77.0%) 

Table 12-19 Conversion Costs for CSCR, 3⁄4 hp, 4-pole Motors 

Efficiency Level 

(Full Load 

Efficiency) 

CSCR, 3⁄4 hp, 4-pole Motors 

Capital 

Conversion 

Costs 

(2009$) 

Equipment 

Conversion 

Costs 

(2009$) 

Stranded 

Assets 

(2009$) 

Baseline (71.0%) 

EL 1 (74.5%) 

EL 2 (78.5%) 

EL 3 (80.5%) 

EL 4 (81.5%) 

EL 5 (82.5%) 

EL 6 (83.5%) 

EL 7 (85.5%) 

EL 8 (87.0%) 

8.5	 Within each motor category, will the conversion costs presented above be shared across 

equipment with different horsepowers and number of poles. For example, will the 

conversion costs for Polyphase, 1 hp, 4-pole motors include the conversion costs for 

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EERE-2007-BT-STD-0007 COMMENT 17
Polyphase 1.5 hp, 6-pole motors, Polyphase 0.5 hp, 2-pole motors, etc. 

8.6	 For the conversion costs provided above, would any these conversion costs be shared 

across different motor categories? 

In the tables below, DOE asks you to provide your expected capital and equipment conversion 

costs to increase the efficiency of all covered Polyphase, CSIR, and CSCR motors by the same 

relative percentage increase (not a nominal increase in Full Load Efficiency percentage). 

Table 12-20 Conversion Costs for all Covered Polyphase Motors 

Efficiency Level 

(Percentage increase 

over baseline) 

Covered Polyphase Motors 

Capital 

Conversion 

Costs 

(2009$) 

Equipment 

Conversion 

Costs 

(2009$) 

Stranded 

Assets 

(2009$) 

Baseline 

EL 1 (2%) 

EL 2 (4%) 

EL 3 (6%) 

EL 4 (7%) 

EL 5 (10%) 

EL 6 (12%) 

EL 7 (14%) 

Table 12-21 Conversion Costs for all Covered CSIR Motors 

Efficiency Level Covered CSIR Motors 

(Percentage increase 

over baseline) 

Capital 

Conversion 

Costs 

(2009$) 

Equipment 

Conversion 

Costs 

(2009$) 

Stranded 

Assets 

(2009$) 

Baseline 

EL 1 (3%) 

EL 2(8%) 

EL 3 (11%) 

EL 4 (19%) 

EL 5 (23%) 

EL 6 (27%) 

EL 7 (34%) 

12A-18 

EERE-2007-BT-STD-0007 COMMENT 17
 

 

 

Table 12-22 Conversion Costs for all Covered CSCR Motors 

Efficiency Level Covered CSCR Motors 

(Percentage increase 

over baseline) 

Capital 

Conversion 

Costs 

(2009$) 

Equipment 

Conversion 

Costs 

(2009$) 

Stranded 

Assets 

(2009$) 

Baseline 

EL 1 (5%) 

EL 2 (11%) 

EL 3 (13%) 

EL 4 (15%) 

EL 5 (16%) 

EL 6 (18%) 

EL 7 (20%) 

EL 8 (23%) 

8.7	 In order to increase the efficiencies by the percentages shown in the tables above, would 

non-covered motors also require a corresponding improvement in efficiency? 

12A.9. CUMULATIVE REGULATORY BURDEN 

Cumulative regulatory burden refers to the burden that industry faces from overlapping effects of 

new or revised DOE standards, voluntary standards, and/or other regulatory actions affecting the 

same equipment or industry. 

9.1	 Are there other recent or impending regulations that SEM manufacturers face (from DOE 

or otherwise)? If so, could you identify the regulation and the corresponding possible 

effective dates for those regulations? 

9.2	 What level of expense are you expecting to incur as a result of these regulations? 

9.3	 Under what circumstances would you be able to coordinate any expenditures related to 

these other regulations with a new energy conservation standard, thereby lessening the 

cumulative burden? 

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12A.10. DIRECT EMPLOYMENT IMPACT ASSESSMENT 

The impact of new energy conservation standards on employment is an important consideration 

in the rulemaking process. This section of the interview guide seeks to explore current trends in 

SEM production employment and solicit manufacturer views on how domestic employment 

patterns might be affected by new energy conservation standards. 

10.1	 Would your domestic employment levels be expected to change significantly under new 

energy conservation standards? If so, please explain how they would change if higher 

efficiency levels are required. 

10.2	 Would the workforce skills necessary under new energy conservation standards require 

extensive retraining or replacement of employees at your manufacturing facilities? 

12A.11. EXPORTS / FOREIGN COMPETITION / OUTSOURCING 

Disparity between domestic and foreign energy conservation standards could impact exports or 

imports. Labor content and material changes, resulting from amended energy conservation 

standards, may impact sourcing decisions. 

11.1	 What percentage of your company’s SEMs sales is domestic? Absent new energy 

conservation standards, are production facilities being relocated to foreign countries? 

Would new energy conservation standards impact your domestic vs. foreign 

manufacturing decision? 

11.2	 If applicable, to what foreign countries or regions do you export your equipment? What 

percentage of sales can be attributed to each? 

11.3	 Would a new energy conservation standard be expected to affect your export sales? What 

would the resulting impact be, if any, on your manufacturing operations and profitability? 

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11.4	 Are your foreign exports affected by new energy conservation standards in other 

countries? 

11.5	 What percentage of the U.S. market for SEM is imported? Would new energy 

conservation standards have an impact on foreign competition? 

11.6	 What is your outlook for SEMs exports? 

12A.12. Consolidation 

New energy conservation standards can alter the competitive dynamics of the market. This can 

include prompting companies to enter or exit the market, or to merge. DOE and the Department 

of Justice are both interested in any potential reduction in competition that would result from 

new energy conservation standard. 

12.1	 Please comment on industry consolidation and related trends over the last 5 years. 

12.2	 In the absence of new energy conservation standards, do you expect any further industry 

consolidation? Please describe your expectations. 

12.3	 How would new energy conservation standards affect your ability to compete? 

12A.13. Impacts on small business 

13.1	 The Small Business Association (SBA) denotes a small business in the SEM industry as 

having less than 1,000 employees3

. By this definition, is your company considered a 

3

 DOE uses the small business size standards published on August 22, 2008, as amended, by the Small Business 

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small business? 

13.2	 Are there any reasons that a small business might be at a disadvantage relative to a larger 

business under new energy conservation standards? Please consider such factors as 

technical expertise, access to capital, bulk purchasing power for materials/components, 

engineering resources, and any other relevant issues. 

13.3	 Are there any niche manufacturers, small businesses, and/or component manufacturers 

for which the adoption of amended energy conservation standards would have a severe 

impact? If so, would manufacturers of these motors have different incremental impacts 

from implemented amended energy conservation standards than from the rest of the 

industry? 

12A.14. Supplemental Engineering 

14.1	 DOE was unable to directly analyze all equipment classes and must scale the efficiencies 

from the motors analyzed in the engineering analysis to the remaining equipment classes. 

DOE has examined the product lines of various manufacturers and created efficiency 

relationships based on data found in manufacturer catalogs. Is it appropriate to assume 

that manufacturers will use the same design options for a given product line and thus 

create a line of motors with similar efficiency ratings for their given equipment class? 

14.2	 There have been drastic fluctuations in metal prices over the past few years. To account 

for these fluctuations, DOE uses a 5-year average of metal prices from the Bureau of 

Labor Statistics Producer Price Indices (PPIs) spanning 2004 to 2008 with an adjustment 

to 2008$. Shown below is the 5-year average of metal prices that DOE calculated using 

the PPI and prices in 2008$. Do these numbers seem appropriate? If not, can you 

provide another estimate? 

Administration (SBA) to determine whether a company is a small business. To be categorized as a small business, a 

SEMs manufacturer and its affiliates may employ a maximum of 1,000 employees. The 1,000 employee threshold 

includes all employees in a business’s parent company and any other subsidiaries. 

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Table 14.4 Five Year Average Metal Prices 

Item Unit of 

Measure 

Cost per Unit of 

Measure 

Manufacturer 

Feedback 

Rotor Aluminum lb $0.6018 

Rotor Copper lb $1.6130 

Cu Wire, Gauge 18 lb $2.5643 

Cu Wire, Gauge 18.5 lb $2.5740 

Cu Wire, Gauge 19 lb $2.5824 

Cu Wire, Gauge 19.5 lb $2.5920 

Cu Wire, Gauge 20 lb $2.6017 

Cu Wire, Gauge 20.5 lb $2.6113 

Cu Wire, Gauge 21 lb $2.6213 

Cu Wire, Gauge 21.5 lb $2.6312 

Cu Wire, Gauge 22 lb $2.6411 

24M56 Steel Lamination , lb $0.1285 , N/A 

24M19 Steel Lamination , lb $0.2099 , N/A 

29M15 Steel Lamination , lb $0.3248 , N/A 

0.028 M56 Steel Lamination , lb $0.1285 , N/A 

Hiperco 50 0.006 Steel Lamination , lb $1.5972 , N/A 

14.3	 DOE seeks feedback for those components of SEMS that have had relatively stable prices 

over time. The table below lists DOE’s estimates of the costs for those components. Do 

these costs seem appropriate? If not, can you provide another estimate? 

Table 14.5 Small Electric Motor Purchased Components 

Item Unit of 

Measure 

Cost per Unit of 

Measure 

Manufacturer 

Feedback 

Rotor Bearings each $1.1000 

Thermal Switch 

(Polyphase) each $2.0000 

Housing lb $0.9500 

Thermal Switch (CSIR/CSCR) each $1.5600 

Start Capacitor (340-408 mfd) each $7.0200 

Start Capacitor (400-480 mfd) each $10.2000 

Run Capacitor (7.5 mfd) each $1.8000 

Run Capacitor (20 mfd) each $2.2000 

Run Capacitor (25 mfd) each $2.7500 

Run Capacitor (35 mfd) each $3.8500 

Run Capacitor (40 mfd) each $4.4000 

Run Capacitor (45 mfd) each $4.9500 

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14.4	 Part of the manufacturing selling prices calculation relates to labor expenses. DOE 

applied a fully burdened labor rate to estimated manufacturing time. DOE estimates that 

additional manufacturing time needed to implement all of the design options shown 

below, with the exception of die-casting a copper rotor, would be negligible. Is this a fair 

assumption? If not, how much of a change in manufacturing time would you expect by 

implementing each of the design options listed? 

Table 14.6 Additional Manufacturing Times for Design Options 

Design Option Additional Time 

Increasing Slot Fill (50% to 65%) 

Lengthening Stack (20% increase) 

Changing Grades of Steel 

Die-Casting Copper Rotor Cage 

14.5	 For the efficiency levels that have been provided, what changes to the baseline design 

(e.g., lengthening stack, moving to higher steel grade, etc.) would you use in order to 

achieve the listed efficiencies? Are there significant burdens (e.g. replacing 

undepreciated tooling equipment or R&D) that would be associated with any particular 

design options? 

Table 14.7 Design Options and Associated Burdens for Polyphase, 1 hp, 4-pole Motor 

Efficiency Level Design Options Associated Burden 

Baseline (77.0%) 

EL 1 (78.5%) 

EL 2 (80.0%) 

EL 3 (81.5%) 

EL 4 (82.5%) 

EL 5 (85.0%) 

EL 6 (86.5%) 

EL 7 (88.0%) 

Table 14.8 Design Options and Associated Burdens for CSIR, 1⁄2 hp, 4-pole Motor 

Efficiency Level Design Options Associated Burden 

Baseline (57.5%) 

EL 1 (59.5%) 

EL 2 (62.0%) 

EL 3 (64.0%) 

EL 4 (68.5%) 

EL 5 (71.0%) 

EL 6 (73.0%) 

EL 7 (77.0%) 

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Table 14.9 Design Options and Associated Burdens for CSCR, 3⁄4 hp, 4-pole Motor 

Efficiency Level Design Options Associated Burden 

Baseline (71.0%) 

EL 1 (74.5%) 

EL 2 (78.5%) 

EL 3 (80.5%) 

EL 4 (81.5%) 

EL 5 (82.5%) 

EL 6 (83.5%) 

EL 7 (85.5%) 

EL 8 (87.0%) 

14.6	 At DOE’s preliminary analysis public meeting in January 2009, manufacturers expressed 

a concern for increasing the length of the motor so much so that the new motor would not 

necessarily be a replacement for the original motor. Therefore NEMA recommended that 

the more efficient motor designs do not increase in stack length by more than 20%. What 

percentage of the OEM applications would be bound to that restriction? What percentage 

of these OEM applications will not take any additional length? What percentage of the 

OEM applications would not be space constrained? Can you provide examples of these 

applications? 

14.7	 Could you provide contact information for OEMs from which DOE could collect 

information regarding costs and space constraints for covered SEMs? 

14.8	 DOE is considering the following applications for covered SEMs: conveyors, pumps, air 

compressors, fans, blowers, and miscellaneous/general industrial applications. Are there 

other applications of covered SEMs which you feel DOE should analyze? 

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