CHAPTER 1. INTRODUCTION

TABLE OF CONTENTS

1.1 PURPOSE OF THE DOCUMENT

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1.2 OVERVIEW OF THE APPLIANCES AND COMMERCIAL EQUIPMENT

STANDARDS PROGRAM

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1.3 OVERVIEW OF FLUORESCENT LAMP BALLAST STANDARDS

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1.4 PROCESS FOR SETTING ENERGY CONERVATION STANDARDS

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1.5 STRUCTURE OF THE DOCUMENT

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LIST OF TABLES

Table 1.4.1 Analyses Unde r the Process Rule

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1-iCHAPTER 1. INTRODUCTION

1.1 PURPOSE OF THE DOCUMENT

This preliminary technical support document (T SD) provides the analytical approaches, inputs and results associated with the U.S. Depa rtment of Energy’s (DOE’s) study of energy conservation standards for fluorescent lamp ballasts. The preliminary TSD also serves to provide technical detail and is a compendium to the lif e-cycle cost (LCC) and payback period (PBP) and national impact analysis (NIA) spreadsheets that are posted on the DOE’s website for the preliminary analysis. a

1.2 OVERVIEW OF THE APPLIANCES AND COMMERCIAL EQUIPMENT

STANDARDS PROGRAM

Part B of Title III of the Energy Policy a nd Conservation Act (EPCA) of 1975 (42 U.S.C. 6291–6309) established the energy conservation pr ogram for consumer products other than automobiles, covering major household appliances. Additional amendments to EPCA have given the U.S. Department of Energy the authority to regulate the energy efficiency of several products, including certain fluores cent lamp ballasts, the products that are the focus of this

document.

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 effi ciency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) 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 great est extent practicable, weighing the following

seven factors:

(1) the economic impact of the standard on the manufacturers and consumers of the products subject to the standard;

(2) the savings in operating costs throughout the estimated average life of the products compared to any increases in the price, initial charges, or maintenance expenses for the products that are likely to result from the 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 the utility or the performance of the products likely to result from imposition of the standard;

a The preliminary analysis can be found here: http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_lamp_ballasts.html

1-1(5) the impact of any lessening of comp etition, 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 Secret ary considers relevant.

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

1.3 OVERVIEW OF FLUORESCENT LAMP BALLAST STANDARDS

Amendments to EPCA in the National App liance Energy Conservation Amendments of 1988 (NAECA 1988), Pub. L.100-357, established energy conservation standards for fluorescent lamp ballasts. b (42 U.S.C. 6295(g)(5)) These same am endments also required that DOE: (1) conduct two rulemaking cycles to determine whet her these standards should be amended; and (2) for each rulemaking cycle, determine whether the standards in effect for fluorescent lamp ballasts should be amended so that they would be applicable to add itional fluorescent lamp ballasts. (42 U.S.C. 6295(g)(7)(A)-(B))

On September 19, 2000, DOE published a final rule in the Federal Register which completed the first of the two rulemaking cycles to evaluate and amend the energy conservation standards for fluorescent lamp ballasts (hereaft er “the 2000 Ballast Rule”). 65 FR 56740. This rulemaking established a consensus standard, representing an agreement between the fluorescent lamp ballast industry and energy-efficiency advocac y organizations. The standard levels adopted replaced the ballast efficacy factors that were promulgated in NAECA 1988 for certain fluorescent lamp ballasts. A table of the standa rds codified by DOE can be found in Appendix A under 10 CFR 430.32(m)(3).

Congress promulgated new energy conservati on standards for certain fluorescent lamp ballasts under the Energy Policy Act of 2005 (EPACT 2005), Pub. L. 109-58. (EPACT section 135(c)(2); codified at 42 U.S.C. 6295(g)(8)(A )) On October 18, 2005, DOE published a final

rule in the Federal Register codifying those new fluorescent lamp ballast standards into the Code of Federal Regulations at 10 CFR 430.32(m). 70 FR 60407. These standards established minimum ballast efficacy requirements for “energy saver” versions of full-wattage ballasts, such

b Although fluorescent lamp ballasts are typically understood to be a product used in the commercial and industrial sectors, it is the “consumer products” section of the statut e which grants authority to DOE to cover and regulate this product. In the United States Code, Title 42 “The Public Health and Welfare,” Chapter 77 “Energy Conservation,” Subchapter III “Improving Energy Efficiency,” there are two parts which cluster together the group of products which DOE regulates. First, there is “Part A – Energy Conservation Program for Consumer Products Other than Automobiles” which includes a range of consumer products, some which may be classified as being used primarily in the residential sector, such as refrigerators, dishwashers and clothes washers. However, Part A also includes consumer products that might also be used primarily in the commercial sector, such as fluorescent lamps, fluorescent lamp ballasts and urinals. Second, Subchapter III has “Part A-1 – Certain Industrial Equipment,” which includes products that are primarily used in the commerci al and industrial sectors, such as electric motors and pumps, and packaged terminal air conditioners and heat pumps.

1-2as the F34T12 ballast. A table of the standard s promulgated by EPACT 2005 can be found in Appendix A under 10 CFR 430.32(m)(5).

In summary, fluorescent lamp ballasts that are currently regulated under EPCA, as amended, include fluorescent lamp ballasts that are designed to operate one and two nominally 40 watt (W) and 34W 4-foot T12 medium bipi n lamps (F40T12 and F34T12), two nominally 75W and 60W 8-foot T12 single pin slimline lamps (F96T12 and F96T12/ES), and two nominally 110W and 95W 8-foot T12 recessed double contact high output lamps (F96T12 and F96T12/ES) at nominal input voltages of 120 or 2 77 volts with an input current frequency of 60 hertz. 10 CFR 430.32(m). Ballasts that are ex cluded from regulation include: (1) ballasts designed for dimming to 50 percent or less of its maximum output; (2) ballasts designed for use with two F96T12HO lamps at ambient temp eratures of -20 degrees Fahrenheit ( ° F) or less and for use in an outdoor sign or ballasts designed for use with two F96T12HO/ES lamps at ambient temperatures of 20 ° F or less and for use in an outdoor sign; c (3) ballasts with a power factor of less than 0.90 and designed and labeled for use only in residential buildin g applications; and (4) replacement ballasts as define d in paragraph (m)(4)(ii). d 10 CFR 430.32(m)(2), (m)(4), and (m)(7).

On December 19, 2007, the President signed the Energy Independence and Security Act of 2007 (EISA 2007) (Pub. L. 110-140) which makes num erous amendments to EPCA and directs DOE to undertake several new rulemakings for appliance energy efficiency standards. EISA 2007 did not amend standards for fluorescent lamp ballasts, but instead directed DOE to consider standby mode and off mode energy use for these ballasts. More specifically, EISA 2007 directed DOE to amend its test procedure for fluorescent lamp ballasts to incorporate a measure of standby mode and off mode energy consum ption. (42 U.S.C. 6295(gg)(2)(B)(ii)) DOE published a final rule for the standby and o ff mode test procedure on October 22, 2009. 74 FR 54445. In addition, pursuant to 42 U.S.C. 6295(o), DOE is directed to incorporate standby mode and off mode energy use in any amended (or ne w) standard adopted after July 1, 2010. Because this energy conservation standards rulemaking for fluorescent lamp ballasts will be completed in 2011, the requirement to incorporate standby mode energy use into the energy conservation standards analysis is applicable.

This rulemaking encompasses DOE’s second cy cle of review to determine whether the standards in effect for fluorescent lamp ba llasts should be amended and whether standards

c Note that in 10 CFR 430.32(m)(7), the temperature exemption granted under EPACT 2005 is slightly different than that contained in sections (m)(2) and (m)(4). In subsection (m)(7), ballasts designed for use with two F96T12HO/ES lamps at ambient temperatures “of 20 degrees F or less” and designated for use in an outdoor sign are exempt from the standards in paragraph (m)(5). The other sections require the ballast to be for ambient temperatures of negative 20 degrees F or less.

d The exclusion provided for replacement ballasts requires that they meet certain criteria in order to be considered a replacement ballast, such as being designed to replace an existing ballast in a previously installed luminaire and being marked “FOR REPLACEMENT USE ONLY.” This exclusion only applies to replacement ballasts manufactured on or before June 30, 2010. After that date, replacement ballasts will no longer be excluded. (10 CFR 430.32(m)(4)(ii)(A)) See Appendix A for the exact language of the exclusion for replacement ballasts.

1-3should be made applicable to additional fluorescent lamp ba llasts as stated under section 325(g)(7)(B) of EPCA.

This rulemaking also addresses 42 U.S.C. 6295(o) in which DOE is directed to incorporate standby mode and off mode energy use in any am ended (or new) standard adopted after July 1, 2010. Please see chapter 2 of this preliminary TSD for a detailed discussion on DOE’s consideration to expand covera ge and its consideration of standby and off mode energy consumption.

1.4 PROCESS FOR SETTING ENERGY CONERVATION STANDARDS

DOE considers stakeholder participation a very important part of the standards-setting process. DOE encourages the participation of all stakeholders durin g the comment period of each rulemaking stage. Beginning with the rulemaking framework document for fluorescent lamp ballasts (the framework doc ument) and during subsequent comment periods, interactions among stakeholders provide a balanced discussion of the information that is required for the standards rulemaking.

In conducting the active mode test procedur e and the energy conservation standard rulemakings, DOE involves stakeholders th rough formal public notifications (i.e., Federal Register notices). For this fluorescent lamp ballast energy conservation standards rulemaking, DOE will employ the procedures set forth in DOE’s Process Rule (Procedures for Consideration of New or Revised Energy Conservation Sta ndards for Consumer Products, 61 FR 36974, July 15, 1996, 10 CFR Part 430, Subpart C, Appendix A) to the extent they are appropriate for developing energy conservation standards for the ballasts covered und er this rulemaking.

Before DOE determines whether to establish or amend energy conservation standard for fluorescent lamp ballasts, it must first solicit comments on a proposed standard. (42 U.S.C. 6295(o)(2)(B)(i)). DOE must design each new or amended standard for these products to achieve the maximum improvement in energy effi ciency that is technologically feasible and economically justified, and would result in signif icant energy savings. (42 U.S.C. 6295(o)(2)(A) and (3)) To determine whether a proposed sta ndard complies with these requirements, DOE must, after receiving comments on the proposed st andard, determine whethe r the benefits of the standard exceed its burdens to the greatest extent practicable, weighing the seven factors

described above.

Subsequent to the publication of the frame work document, the standards rulemaking process involves preliminary analyses followed by two additional formal, major public notices, which are published in the Federal Register . The preliminary analyses are designed to publicly vet the models and tools used in the rulemaking and to facilitate public pa rticipation before the proposed rule stage. After the preliminary analys es are vetted, DOE issues the first major notice, the notice of proposed rulemaking (NOPR), which presents a discussion of comments received in response to the preliminary analyses of the imp acts of standards on cons umers, manufacturers, and the nation; DOE’s weighing of the impacts; a nd the proposed standards. The third notice is the final rule, which presents a discussion of comments received in response to the NOPR; the

1-4revised analysis of the impacts of standards; DOE’s weighing of the impacts; the standards adopted by DOE; and the effectiv e dates of the standards.

Table 1.4.1 Analyses U nder the Process Rule

Preliminary Analysis NOPR Final Rule*

Market and technology assessment Revised ANOPR analyses Revised analyses

Screening analysis Life-cycle cost sub-group analysis

Engineering analysis Manufacturer impact analysis

Energy use characterization Utility impact analysis

Product price determination Employment impact analysis

Life-cycle cost and payback period analyses Environmental assessment

Shipments analysis Regulatory impact analysis

National impact analysis

Preliminary manufacturer impact analysis

* During the final rule phase, DOE considers the comments submitted by the U.S. Department of Justice concerning the impact of any lessening of competition that is likely to result from the imposition of the standard. (42 U.S.C. 6295(o)(2)(B)(v))

In January 2008, DOE published a rulemaking framework document for fluorescent lamp ballasts, which describes the procedural and an alytical approaches DOE anticipated using to evaluate the establishment of energy conservati on standards for fluorescent lamp ballasts. A PDF copy of the framework document is available at http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/ballast_framework

_ 011408.pdf

DOE held a public meeting on February 6, 2008 (h ereafter “public mee ting”), to discuss procedural and analytical approaches to the rulemaking, and to inform and facilitate stakeholders’ involvement in the rulemaking proce ss. The analytical framework presented at the public meeting described rulemaking analyses, such as the engineering analysis and the LCC and PBP analyses, the methods proposed for conducti ng them, and the relationships among the various analyses. See Table 1.4.1 for all the anal yses discussed at the public meeting to be undertaken in each of the formal public rulemaki ng documents. PDF copies of the slides and other material associated with the public meeting are available at http://www1.eere.energy.gov/buildings/appliance_standards/residential/ballast_framework_mtg.

html

During the public meeting and the framewor k document comment period, stakeholders, including manufacturers, trade associations, e nvironmental advocates, and other interested parties submitted seve ral comments about the fluorescent la mp ballast rulemaking. The major issues discussed were: (1) the rulemaking’s sc ope of coverage; (2) the development of product classes; (3) investigating the use a of a new ener gy efficiency metric for ballasts; (4) updating the active mode test procedure and developing a standby mode and off mode test procedure; (5) the methodology for the engineering analyses; (6) th e lifetime of the balla st and lamp; (7) the methodology for developing shipment estimates; and (8) the use of marginal versus average electricity rates. Stakeholder comments submitted during the framework document comment

1-5period elaborated upon the issues raised at the public meeting. A detailed discussion of stakeholder comments is available in chapter 2 of this preliminary TSD.

As part of the information gathering and sharing process, DOE organized and held interviews with fluorescent lamp ballast manufact urers and fixture manufacturers who operate in the U.S. ballast market. DOE had five objectives for these interviews: (1) solicit feedback on the scope of coverage for the rulemaking; (2) solicit feedback on the engineering analysis (including methodology, prices, a nd ballast technologies); (3) solicit feedback on topics related to the preliminary manufacturer impact analysis ; (4) provide an opportunity early in the rulemaking process to express specific concerns to DOE; and (5) foster cooperation between manufacturers and DOE. During the manufacturer interviews, DOE discussed these and other issues regarding market data, distribution channels , anticipated consumer responses to standards, production and product mix, conversion costs, and cumulative regulatory burden. Appendix 12A contains a complete copy of the interview guide.

DOE incorporated the information gathered at the meetings into its engineering analysis (chapter 5) and the preliminary manufacturer impact analysis (chapter 12). Following the publication of the preliminary analysis, DOE intends to hold additional meetings with manufacturers as part of the consultative proce ss for the manufacturer impact analysis conducted during the NOPR phase.

For the LCC, PBP and national impact analyses (NIA), DOE developed spreadsheets using Microsoft Excel®. The LCC and PBP spre adsheets calculate the economic impacts of replacing products with standard -compliant ones. The NIA spr eadsheets calculate the national energy savings (NES) and national net present values (NPVs) at various energy efficiency levels and include a model that forecasts the impacts of energy conservation standards at various levels on product shipments. These spreadsheet s are available on the DOE website at http://www1.eere.energy.gov/buildings/appliance_standards/residential/fluorescent_lamp_ballast

s.html

1.5 STRUCTURE OF THE DOCUMENT

This preliminary TSD outlines the analytical approaches used in this rulemaking. The TSD consists of 14 chapters, two reports, and appendices.

Chapter 1 Introduction: provides an overview of the appliance standards program and how it applies to the rulemaking for fluorescent lamp ballasts, and outlines the structure of the document

Chapter 2 Analytical Framework: descri bes 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 Asse ssment: characterizes the fluorescent lamp ballast market and the tec hnologies available for increasing ballast efficacy factor and outlines product classes

1-6Chapter 4 Screening Analysis: determin es which technology design options are viable for consideration in the engineering analysis

Chapter 5 Engineering Analysis: describes DOE’s approach to the engineering analysis and discusses how manufacturer costs and selling prices relate to ballast efficacy factor

Chapter 6 Energy Use Characterization: discusses the sources and methods for developing energy use estimates for fluorescent lamp ballasts

Chapter 7 Markups Analysis: discusses the methods DOE used for establishing markups manufacturer selling price to installed customer prices.

Chapter 8 LCC and PBP Analyses: disc usses the economic effects of standards and compares the LCC and PBP of fl uorescent lamp ballasts with and without higher energy conservation standards

Chapter 9 Shipments Analysis: discusses the methods used for forecasting shipments with and without higher energy conservation standards

Chapter 10 National Impact Analysis: describes the national forecast of energy consumption, efficiency of new balla sts, and annual fluorescent lamp

ballast sales in the absence or presence of new standards

Chapter 11 Life-Cycle Cost Sub-Group An alysis: discusses the methods to be used to study the effects of sta ndards on a subgroup of fluorescent lamp ballast consumers and comp ares the LCC and PBP of product with and without higher efficien cy standards for these consumers

Chapter 12 Manufacturer Impact Analysis: discusses the methods to be used to study the effects of standards on the finances and profitability of fluorescent lamp ballasts, and presents preliminary manufacturer impact analysis results

Chapter 13 Utility Impact Analysis: discusses the methods to be used to study the

effects of standards on electric utilities

Chapter 14 Employment Impact Analysis: discusses the methods to be used to analyze the effects of standards on national employment

Environmental Assessment for Fluorescent Lamp Ballasts: discusses the methods to be used to study the effects of standa rds on two pollutants, sulfur dioxide (SO 2 ) and nitrogen oxides (NOx), as well as carbon emissions

Regulatory Impact Analysis for Fluorescent La mp Ballasts: discusses the methods to be used to determine the impact of non- regulatory alternatives to energy

conservation standards

1-7Appendix AA Acronyms and Abbreviations : provides a set of acronyms and abbreviations used throughout the TSD.

Appendix 3A Fluorescent Lamp Ballasts in the United States Code and Code of Federal Regulations: provides a set of existing statutory and regulatory definitions and re quirements for fluorescent lamp

ballasts

Appendix 5A Material Prices: analyzes how commodity price changes affect the manufacturer selling price of ballasts

Appendix 5B T5 Magnetic Miniature Bipin Magnetic Baseline Ballasts: describes the methodology behind de veloping T5 ma gnetic ballast

model

Appendix 5C Test Data for Fluorescent Lamp Ballasts: lists the test data used for the fluorescent lamp ballast engineering analysis

Appendix 5D Max-Tech: presents technol ogy options used in products similar to ballasts and estimates their potential efficiency impact

Appendix 8A User Instructions for Life-Cycle Cost and Payback Period Spreadsheet

Appendix 10A User Instructions for Shipments and NIA Spreadsheet

Appendix 12A Preliminary Manufacturer Interview Guide

Appendix EA-SCC Social Cost of Carbon for Regulatory Impact Analysis Under

Executive Order 12866

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