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# GAO
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### 8-326630
February 10, 2015 The Honorable Lisa Murkowski Chairman The Honorable Maria Cantwell Ranking Member Committee on Energy and Natural Resources United States Senate The Honorable Fred Upton Chairman The Honorable Frank Pallone, Jr. Ranking Member Committee on Energy and Commerce House of Representatives Subject: DepartmentofEnergy: EnergyConservation Program: Energy Conservation Standards forGeneralService FluorescentLamps andIncandescentReflector Lamps Pursuantto section 801(a)(2)(A) oft.itle 5, United States Code, this is our report on a major rule promulgated by the Department of Energy (DOE) entitled "Energy Conservation Program: Energy Conservation Standards for General Service Fluorescent Lamps and Incandescent Reflector Lamps" (RIN: 1904-AC43). We received the rule on January 28, 2015. It was published in the FederalRegisteras a final rule on January26, 2015, with a stated effective date ofMarch 27, 2015. 80 Fed. Reg. 4042. Thefinal rule adopts more stringent energy conservation standards for general service fluorescent lamps. DOE has determined thatthe amended energy conservation standards forthese products would result in significant conservation ofenergy and are technologically feasible and economicallyjustified. DOE also concluded in this final rule that amending energy conservation standards for incandescent reflector lamps would not be economicallyjustified and therefore did not amend those standards. Enclosed is our assessment of DOE's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) oftitle 5with respectto the rule. Our review ofthe procedural steps taken indicates that DOE complied with the applicable requirements.

GA0-15-381R

### Ifyou have any questions aboutthis report or wish to contact GAO officials responsible forthe evaluation work relating to the subject matterofthe rule, please contact Shirley

### A Jones, Assistant General Counsel, at (202) 512-8156.

Robert J. Cramer Managing Associate General Counsel
Enclosure

cc: Daniel Cohen Assistant General Counsel for Legislation,

Regulation, and Energy Efficiency Departmentof Energy

Page 2 GA0-15-381RREPORT UNDER 5 U.S.C. 

### § 801(a)(2)(A) ON A MAJOR RULE ISSUED BY THE DEPARTMENT OF ENERGY ENTITLED ENCLOSURE

"ENERGY CONSERVATION PROGRAM: ENERGY CONSERVATION STANDARDS FOR GENERAL SERVICE FLUORESCENT LAMPS AND INCANDESCENT REFLECTOR LAMPS" (RIN: 1904-AC43)

ID Cost-benefit analysis The Department of Energy (DOE) evaluated the benefits and costs to consumers, the impact on manufacturers, and the national benefits and costs ofthis final rule. Forconsumers, DOE found thatthe weighted-average life-cycle cost (LCC) savings were positive for all product classes with amended standards. Using a real discount rate of9.2 percent, DOE estimates thatthe industry net presentvalue (NPV) for manufacturers ofgeneral service fluorescent lamps (GSFLs) would be $1,551.6 million in 2013 dollars. Underthis rule, DOE expects that manufacturers may lose up to 21.3 percent oftheir industry NPV, which is approximately $330.0 million. Additionally, based on DOE's interviews with the manufacturers of GSFLs, DOE does not expect any plant closings orsignificant loss ofemployment. DOE estimates that this final rule will result in energy savings of7.1 percent for GSFLs. The cumulative NPVoftotal consumercosts and savings ofthese standards for GSFLs ranges from $2.0 billion (at a 7 percent discount rate) to $5.5 billion (at a 3 percent discount rate). This NPV expresses the estimated total value offuture operating-cost savings minus the estimated increased product costs for products purchased in 2018-2047. In addition, these standards for GSFLs would have significant environmental benefits. The energy savings from the 30-year product purchase period with these standards, relative to the base case without amended standards, would result in cumulative greenhouse gas emission reductions ofapproximately 160 million metrictons ofcarbon dioxide, 650 thousand tons ofmethane, 140thousand tons of sulfurdioxide, 230 thousand tons ofnitrogen oxides, 2.0 thousand tons ofnitrous oxide, and 0.43 tons ofmercury. Based on the analyses culminating in this final rule, DOE found thatfor GSFLs the benefits to the nation ofthe standards (energy savings, consumer LCC savings, positive NPV ofconsumer benefit, and emission reductions) outweigh the burdens (loss ofindustry NPV and LCC increases for some users ofthese products). DOE has conpluded thatthe standards in this rule represent the maximum improvement in energy efficiency that is technologically feasible and economicallyjustified and would result in significant conservation ofenergy. (ii) Agency actions relevant to the Regulatory FlexibilityAct (RFAl, 5 U.S.C. 

### §§ 603-605, 607, and 609 DOE performed afinal regulatoryflexibility analysis for the standards governing GSFLs in this final rule, but not on the standards governing incandescent reflector lamps, as they are unchanged by this final rule. The Final Regulatory FlexibilityAnalysis included (1) a description and estimated numberofsmall entities regulated; (2) a description and estimate ofcompliance requirements; (3) a description ofany duplication, overlap, and conflictwith other rules and regulations; and (4) significant alternatives to the rule.

GA0-15-381RliiilAgency actions relevant to sections 

### 202-205 ofthe Unfunded Mandates Reform Act of 

### 1995. 2 U.S.C. 

### §§ 

### 1532-1535 DOE has concluded that this final rule would likely require expenditures of

### $100 million ormore on the private sector. Such expenditures may include: (1) investment in research and development and in capital expenditures by GSFL manufacturers in the years between the final rule and the compliance date forthe newstandards, and 

### (2) incremental additional expenditures by consumers to purchase higher efficacy GSFLs, starting at the compliance dateforthe applicable standard. (iv) Other relevant information or requirements under acts and executive orders Administrative ProcedureAct, 

### 5 U.S.C. 

### §§551 et seq. DOE initiated this rulemaking processwith the publication ofa framework document on September 

### 14, 2011. 76 Fed. Reg. 

### 56,678. DOE then held a public meeting on the framework on October

### 4, 2011. DOE published a preliminary analysis on February 

### 28, 2013, and a notice of proposed rulemaking on April 

### 29, 2014. 78 Fed. Reg. 

### 13,563; 79 Fed. Reg. 

### 24,068. DOE held a public meeting on the proposed rule on May 

### 1, 2014. Paperwork Reduction Act (PRA), 

### 44 U.S.C. 

### §§ 3501-3520 DOE has established regulations forthe certification and recordkeeping requirements for all covered consumer products and commercial equipment, including GSFLs. 

### 76 Fed. Reg. 

### 12,422 (Mar. 

### 7, 2011). The collection-of-information requirement forthe certification and recordkeeping is subjectto review and approval by the Office ofManagement and Budget (OMB) underthe Act. This requirement has been approved by OMB under OMB Control Number 

### 1910-1400. Public reporting burden forthe certification is estimated to average 

### 30 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection ofinformation. Statutory authorization forthe rule DOE promulgated thisfinal rule underthe authority ofsections 

### 6291 to 

### 6309 oftitle

### 42 and section 

### 2461 note oftitle 

### 28, United States Code. Executive Order No. 

### 12,866 (Regulatory Planning and Review) DOE determined that this final rule is economically significant underthe Order and presented it to OMB for review. Executive Order No. 

### 13,132 (Federalism) On March 

### 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of regulations. 

### 65 Fed. Reg. 

### 13,735. The Energy Policy and Conservation Act of 

### 1975, as amended, (EPCA) governs and prescribes federal preemption ofstate regulations as to energy conservation for the products that are the subject ofthis final rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, setforth in EPCA. 

### 42 U.S.C. 

### §6297. DOE determined that no further action is required by the Order.

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