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CHAPTER 17. REGULATORY IMPACT ANALYSIS FOR PROPOSED ENERGY 

CONSERVATION STANDARDS FOR DISTRIBUTION TRANSFORMERS

TABLE OF CONTENTS

17.1 INTRODUCTION ......................................................................................................... 17-1

17.2 METHODOLOGY ........................................................................................................ 17-1

LIST OF TABLES

Table 17.1.1 Nonregulatory Alternatives to Standards ........................................................... 17-1
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CHAPTER 17. REGULATORY IMPACT ANALYSIS FOR PROPOSED ENERGY 

CONSERVATION STANDARDS FOR DISTRIBUTION TRANSFORMERS

17.1 INTRODUCTION

Under the Process Rule [Procedures for Consideration of New or Revised Energy 

Conservation Standards for Consumer Products, 61 FR 36974 (July 15, 1996)], the U.S. 

Department of Energy (DOE) is committed to explore nonregulatory alternatives to standards. 

DOE will prepare a draft regulatory impact analysis pursuant to Executive Order 12866, 

“Regulatory Planning and Review,” which will be subject to review under the Executive Order 

by the Office of Management and Budget’s Office of Information and Regulatory Affairs. 58 FR 

51735 DOE has identified seven major alternatives to standards that represent feasible policy 

options to reduce the energy consumption of residential clothes washers. It will evaluate each 

alternative in terms of its ability to achieve significant energy savings at a reasonable cost, and 

will compare the effectiveness of each alternative to the effectiveness of each trial standard. 

Table 17.1.1 lists the nonregulatory means of achieving energy savings that 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 discussed briefly below. 

Table 17.1.1 Nonregulatory Alternatives to Standards 

No new regulatory action

Consumer tax credits

Manufacturer tax credits

Performance Standards

Rebates

Voluntary energy efficiency targets

Early replacement

Bulk government purchases

17.2 METHODOLOGY

DOE will use the national impact analysis (NIA) spreadsheet model for residential 

clothes washers to calculate the national energy savings and the net present value (NPV) 

corresponding to each alternative to proposed standards. The NIA model for both product classes 

of clothes washers 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 clothes washers. After it has 

quantified each alternative, DOE will make the appropriate revisions to the inputs in the NIA 

models. Key inputs that DOE may revise in these models are:

• energy prices and escalation factors;
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• implicit market discount rates for trading off purchase price against operating expense 

when choosing transformer efficiency;

• consumer purchase price, operating cost, and income elasticities;

• consumer price-versus-efficiency relationships; and

• transformer stock data (purchase of new equipment or turnover rates for inventories). 

The following are the key measures of the impact of each alternative.

• Energy use: Cumulative energy use of distribution transformers from the effective date of 

the new standard to 2045. 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 products bought 

during the period from the effective date of the new standard (2016) to 2045. DOE will 

calculate the NPV as the difference between the present value of product and operating 

expenditures (including energy) in the base case, and the present value of expenditures 

under each alternative policy case. DOE will discount future operating and product 

expenditures to 2010 using a 7-percent and 3-percent real discount rate. It will calculate 

operating expenses (including energy costs) for the life of a product.