2

- i CHAPTER 2. ANALYTICAL FRAMEWORK

TABLE OF CONTENTS

2.1 I NTRODUCTION ........................................................................................................... 2-1 2.2 B ACKGROUND ............................................................................................................. 2-4 2.3 MARKET A

ND TECHNOLOGY ASSESSMENT ........................................................ 2-5 2.3.1 Mar

ket Assessment .............................................................................................. 2-5 2.3.2 Te chnology Assessment....................................................................................... 2-5 2.4 S CREENING ANALYSIS .............................................................................................. 2-5 2.5 ENG INEERING ANALYSIS .......................................................................................... 2-6 2.5.1 Modi fied Design Option Approach ..................................................................... 2-6 2.5.2 Manu facturing Cost Model .................................................................................. 2-6 2.6 ENE RGY USE CHARACTERIZATION ....................................................................... 2-6 2.7 MARKUPS TO DETERMINE EQUIPMENT PRICE ................................................... 2-7 2.8 LI FE-CYCLE COST AND PAYBACK PERIOD ANALYSES .................................... 2-7 2.9 S HIPMENTS ANALYSIS .............................................................................................. 2-8 2.10 NA TIONAL IMPACT ANALYSIS ................................................................................ 2-8 2.10.1 Na tional Energy Savings Analysis....................................................................... 2-9 2.10.2 Ne t Present Value Analysis ................................................................................. 2-9 2.10.3 Ef ficiency Scenarios and Trends ......................................................................... 2-9 2.11 LI FE-CYCLE COST SUB-GROUP ANALYSIS ......................................................... 2-10 2.12 MAN UFACTURER IMPACT ANALYSIS.................................................................. 2-10 2.13 UT ILITY IMPACT ANALYSIS ................................................................................... 2-11 2.14 EMP LOYMENT IMPACT ANALYSIS ....................................................................... 2-11 2.15 ENV IRONMENTAL ASSESSMENT .......................................................................... 2-11 2.16 R EGULATORY IMPACT ANALYSIS ....................................................................... 2-12 2.17 DEPARTMENT O F JUSTICE REVIEW ..................................................................... 2-122

- 1 CHAPTER 2. ANALYTICAL FRAMEWORK

2.1 INTRODUC TION

Section 6317(b)(1) of Title 42, United States Code (42 U.S.C.), as directed by 346(b)(1) of the Energy Policy and Conservation Act (EPCA), requires the U.S. Department of Energy (D OE) to set fo rth energy conservation standards that are technologically feasible and economically justified, and would achieve the maximum improvement in energy efficiency. This chapter de scribes the general analytical framework that DOE uses in developing such standa rds and, in particular, standards for small electric motors (SEMs). The analytical fra mework is a description of the methodology, analytical tools, and relationships among the various analyses that are part of this rulemaking. For example, the methodology that addresses the statutory requirement for economic justification includes analyses of life-cycle cost (LCC) ;

ec onomic impact on manufacturers and users; national benefits; impacts, if any, on utility companies; and impacts, if any, from lessening competition among manufacturers. DOE will also s olicit the views of the Department of Justice (DOJ) on any lessening of competition likely to result from the imposition of a proposed standard.

Figure 2.1.1 summarizes the analytical components of the standards-setting process. The

c olumns l abeled “Key Inputs” and “Key Outputs” show how the analyses fit into the rulemaking process, and how they relate to each other. Key inputs are the types of data and information that the anal yses require. Some key inputs exist in public databases; DOE also collects other inputs from int erested partie s and persons with special knowledge. Key outputs are analytical results that fee d directly into the standards-setting process. Arrows connecting analyses show types of information tha t feed from one analysis to another.2

- 2

Figure 2.1.1 Flow Diagram of Analyses for the Small Electric Motor Rulemaking P ro cess2

- 3

The analyses performed prior to the notice of proposed rulemaking (NOPR) stage as part of the pre liminary analyses and described in the preliminary technical support document (preliminary TSD) are listed below. These analyses were revised for the NOPR based on new information from comme nts received, and are now included as part of the accompanying noti ce and are reported in this TSD.

A market and technology assessment is conducted to characterize the relevant equipment markets and existing technology options, including prototype designs.

A screening analysis is conducted to review each technology option and determine if it is technologi cally feasible; is practical to manufacture, install, and service; would adversely affe ct equipment utility or equipment availability; or would have adverse impacts on health and safety.

An engineering analysis is conducted to develop the cost-efficiency relationship, which is the increased manufacturer selling prices (material, labor, factory overhead, selling,
gen eral and administrative expenses, research and development costs, and profit) of more effic ient equipment.

An equipment price markup analysis is conducted to convert the manufacturer ’s sellingpr ice estimates from the engineering analysis to customer prices, which are then used in the LC C and payback period (PBP) analyses and the manufacturer impact analysis (MI A).

An energy use analysis is conducted to determine the annual energy use characteristics of small electric motors.

LCC and PBP analyse s are conducted to calculate, at the customer level, the discounted

sa vings in operating costs (less maintenance and repair costs) throughout the estimated average life of the covered equipment compared to any increase in the installed cost for the equipment likely to result directly from the imposition of the standard.

A shipments analysis is conducted which forecasts equipment shipments. This analysis is then used to calculate the national impacts of standards on energy consumption and costs,

ne t prese nt value (NPV), and future manufacturer cash flows.

A national impact analysis is conducted to assess the aggregate impacts at the national level of NP V of total customer LCC and national energy savings (NES).

A preliminary MIA is conducted to assess the potential impacts of energy conservation standards on manuf

acturers such as capital conversion expenditures, marketing costs, shipments, and research and development costs.

The additional analyses performed for the NOPR stage include those listed below. In

a ddition, DOE re

- analyzes the work done in the preliminary stage based on comments and new information re ceived..2

- 4

An LCC sub-group analysis is conducted to evaluate variations in commercial business
t ype characteristics ( e.g. , energy prices, equipment use patterns, and installation and maintena nce costs) that might cause a standard to affect particular customer subpopulations.

A manufacturer impact analysis is conducted to estimate the financial impact of standards on manufacturers and to calculate impacts on competition, employment, and manufacturing capacity.

A utility impact analysis is conducted to estimate the effects of proposed standards on electric utilities.

An employment impact analysis is conducted to assess the aggregate impacts on national employment.

An environmental assessment is conducted to provide estimates of changes in emissions of pollutants from electricity generation ( i. e. , carbon dioxide (CO 2 ), o xides of nitrogen (NO x ), and mercury (Hg)..

A regulatory impact analysis is conducted to present major alternatives to proposed standards that could achieve substantially the same regulatory goal at a lower cost.

2.2 B ACKGROUND

DOE conducted a formal effort to consider further improvements to the process used to de velop appliance efficiency standards. DOE called on energy efficiency groups, manufacturers, trade associations, state agencies utilities, and other interested parties to provide input to this effort. As a result of this combined effort, DOE published Procedures, Interpretations and Policies for Consideration of New or Revised Energy Conservation Standards for Customer Products (the “Process Rule”), 10 CFR 430, Subpart C, Appendix A. The Process Rule outlined the procedural improvements identified by the interested parties, and included a review of the: 1) economic models, 2) analytical tools, 3) methodologies, 4) non-regulatory approaches, and 5) prioritization of future rules.

DOE developed an analytical framework for the SEM rulemaking under the Process R ule. DOE documented this analytical framework in the Energy Conservation Standards Rule making Frame work Document for Small Electric Motors and presented the analytical

a pproach to interested parties during a public meeting on September 13, 2007. This document is

a vailable at :
http:/ /www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.h tml

. The following sections describe the different analytical components of the rulemaking framew ork.2

- 5

2.3 M ARKET AND TECHNOLOGY ASSESSMENT

The market and technology assessment characterizes the relevant product markets and existing technology options.

2.3.1 M arket Assessment

When initiating a standards rulemaking, DOE develops information on the present and
pa st industry structure and market characteristics for the equipment concerned. This activity assesses the indust ry and equipment both quantitatively and qualitatively, based on publicly available information. DOE addresses the following: (1) manufacturer market share and cha racteristics, (2 ) existing regulatory and non-regulatory equipment efficiency improvement ini tia tives, and (3) trends in product characteristics and retail markets. This information serves

as resour ce material throughout the rulemaking.

For this rulemaking, DOE reviewed existing literature and interviewed manufacturers to
ge t an overall picture of the SEM market in the United States. Product catalogs, third-party
expe rts, and SEM manufacturers provided the bulk of the information. The appropriate sections of the NO PR describe the analysis and resulting information as reported in the TSD.

DOE uses the most reliable and accurate data available at the time of each analysis in its rule makings. All data is available for public review.

2.3.2 T echnology Assessment

DOE typically uses information about existing and past technology options and prototype de signs t o help determine which technologies manufacturers use to attain higher energy perfor mance levels. In consultation with interested parties, DOE develops a list of technologies for consideration. Initially, these technologies encompass all those it believes are technologically feasible.

For this rulemaking, DOE developed a list of technologically feasible design options after

c onsultation with manufacturers and third-party experts.

2.4 S CREENING ANALYSIS

In the screening analysis, DOE screens out technologies that are not technologically fe asible; not practicable to manufacture, install, or service; have an adverse impact on equipment utility or availability; or have adverse impacts on health and safety. In the engineering analysis, DOE further considers design options that remain after the screening process.

As de scri bed in chapter 4 of the TSD, DOE grouped technologies into the following

c ategories: (1) technology options not screened out that decrease SEM losses and the type of motor loss es they reduce and (2) technology options screened out and the type of motor losses they reduce.2

- 6

2.5 E NGINEERING ANALYSIS

As presented in chapter 5, the engineering analysis establishes the relationship between the manufa cturer selling price and efficiency of small electric motors. This relationship serves as the basis for cost/benefit calculations for individual customers, manufacturers, and the Nation. The e ngineering analysis discusses cost-efficiency curves, product classes analyzed, representative baseline units, the methodology used to develop manufacturing selling prices, and the methodology used to develop the energy consumption model.

2.5.1 M odified Design Option Approach

In this rulemaking, DOE conducted the engineering analysis using a modified designoption approach where DOE employed a technical expert with motor design software to develop motor designs at several efficiency levels for each analyzed product class. Based on these simulated designs and manufacturer and component supplier data, DOE calculated manufacturing costs and selling prices associated with each efficiency level. DOE decided on this approach after receiving insufficient response to its request for the manufacturer data needed to execute an efficiency-level approach for the preliminary analyses. The design-option approach allows DOE to make its engineering analysis methodologies, assumptions, and results publicly available, thereby permitting all interested parties the opportunity to review and comment on this information. The design options considered in the engineering analysis include: copper die-castrotor, reduce skew on stack, increase cross-sectional area of rotor conductor bars, increase endring size, change gauge of copper wire in stator, manipulate stator slot size, decrease air gap between rotor and stator to 12.5 thousandths of an inch, improve grades of electrical steel, use thinner steel laminations, anneal steel laminations, add stack height, use high efficiency lamination materials, change capacitors ratings, install better ball bearings and lubricant, and install a more efficient cooling system. Chapter 5 of the TSD contains a detailed description of the product classes analyzed and the analytical models DOE used to conduct the small electric motors engineering analysis and chapter 3 of the TSD contains a detailed description of how all the design options increase motor efficiency

2.5.2 M anufacturing Cost Model

DOE used a cost model to estimate the core production cost of small electric motors. This cost model wa s developed using motor teardowns performed by a third-part expert. Th e approach for the teardowns involved the disassembly of three representative small electric
motors on t he market today, an analysis of the materials and manufacturing processes, and the development of a spreadsheet model. DOE obtain ed input from interested parties on the small

e lectric motor manufacturer selling prices estimates and assumptions to confirm their accuracy.

2.6 E NERGY USE CHARACTERIZATION

The energy use and end-use load characterization analysis (Chapter 6) produces energy use estimates and end-use load shapes for small electric motors. The energy use estimates enable evaluation of energy savings from the operation of small electric motors equipment at various efficiency levels, while the end-use load characterization allows evaluation of the impact on2

- 7

electricity monthly and peak demand from the operation of motors. The analysis produces a distribution of results for a variety of building types and uses covering a range of climate locations in order to represent the diversity of use, and performance, of small electric motors.

2.7 M ARKUPS TO DETERMINE EQUIPMENT PRICE

DOE used manufacturer- to

- customer markups to convert the manufacturer selling-price

e stimates from the engineering analysis to customer prices, which were then used in the LCC, PBP , and manufacturer impact analyses. Because retail prices are required for the baseline
pe rformance level and all other performance levels under consideration, DOE obtained these retail pric es by applying manufacturer- to -customer markups to the manufacturer selling-price

e stimate s.
Before it can develop markups, DOE must identify distribution channels (i.e., how the

e quipment is distributed from the manufacturer to the customer). Once it established proper distribution channels for each of the product classes, DOE relied on economic data from the U.S. Census Bureau and input from the industry to determine how much product prices are increased as the y pass from the manufacturer to the customer (see chapter 7 of the TSD).

2.8 L IFE-CYCLE COST AND PAYBACK PERIOD ANALYSES

New energy conservation standards on equipment usually reduce operating expenses and increa se customer prices. DOE analyzed the net effect of new standards on customers by

e valuating the net LCC using the cost-efficiency relationship derived in the engineering analysis, as well as the energy costs derived from the energy use characterization analysis. Inputs to the LCC calculation include the installed cost to the customer (customer price plus installation cost), operati ng expenses (energy expenses and maintenance costs), the lifetime of the motor, and a discount rate. These inputs are described in detail in chapter 8 of the TSD.

The installed cost typically increases and operating cost typically decreases in response to

ne w standa rds. Thus, there is a specific time in the life of higher-than-baseline efficiency equipment when the net operating-cost benefit (in dollars) from the time of purchase is equal to the incremental first cost of purchasing the more efficient equipment. The length of time required fo r equipment to reach this cost-equivalence point is known as the payback period.

For the NOPR, DOE conducted the LCC and PBP analyses using distributions of values
to re flec t the conditions in the field for motor life, motor retail price, national or regional energy costs, energy consumption, and discount rates. The life-cycle cost sub-group analysis includes an assessment of

impacts on customer sub-group s.
For small electric motors, it was necessary to determine several of the input values for the L CC estimation, including retail prices; electricity prices; discount rate; maintenance, service, and installation costs; and motor lifetimes.2

- 8

DOE developed discount rates by estimating the cost of capital to companies that manufacture small electric motors covered under this rulemaking. DOE commonly uses the cost of ca pital to estimate the present value of cash flows to be derived from a typical company project or investment. Most companies use both debt and equity capital to fund investments, so the cost of capital is the weighted-average cost to the firm of equity and debt financing. This corporate finance approach is referred to as the weighted-average cost of capital.

DOE considered expected changes to maintenance, repair, and installation costs for the
mot ors covered in this rulemaking. Typically, small incremental changes in motor efficiency incur no, or onl y very small, changes in repair and maintenance costs over baseline efficiency products. There is a greater probability that motors with efficiencies that are significantly greater than the base line will incur increased repair and maintenance costs since such motors are more like ly to incorporate technologies that are new to the industry and not widely available. DOE relied on input from manufacturers and other interested partie s to develop appropriate repair and maintenance costs.

2.9 S HIPMENTS ANALYSIS

One of the more important components of any estimate of future impacts from energy efficiency standards is small electric motor shipments (Chapter 9). Forecasts of shipments for the base case and each potential standard case are used as an input to the national energy savings (NES) model. DOE developed these shipment forecasts for each of the three covered small motor categories (polyphase, capacitor-start induction-run, and capacitor-start capacitor-run motors). Within each motor category, shipments are comprised of products in a number of horsepower ratings and three rotation speeds (corresponding to 2-pole, 4-pole, and 6-pole motors).

The core of the shipments analysis is an accounting model that the DOE developed to simulate how f

uture purchases are incorporated into an in-service stock of aging motors that are gradually replaced. The model keeps track of the aging and replacement of small electric motor capacity given a projection of future motor sales growth. Small electric motor shipments and a

re tirement function influence how the motors in service and the supply of motor capacity changes over time. DOE also developed a cross-elasticity model to forecast the effect of standards on the mar

ket shares of CSIR and CSCR motors within each combination of motor size and speed; this model is described in chapter 9.

2.10 NA TIONAL IMPACT ANALYSIS

The national impact analysis assesses the NPV of total customer LCC and NES. DOE dete rmined both the NPV and NES for the performance levels considered for the product classes analyzed. To make the analysis more accessible and transparent to all interested parties, DOE prepared a NES spreadsheet model in Microsoft Excel to forecast energy savings and the national economic costs and savings resulting from new standards. The NES spreadsheet model does not use probability distributions for inputs or outputs. To assess the impact of input uncertainty on the NES and NPV results, DOE can conduct sensitivity analyses for future2

- 9

analyses by running scenarios on input variables of concern for interested parties. DOE conducted a n assessment of the aggregate economic impacts at the national level for this NOPR as described in chapter 10 of the TSD.

2.10.1 Nation al Energy Savings Analysis

The inputs for determining NES are (1) annual energy consumption per unit, (2) shipm ents, (3) equipment stock, (4) national energy consumption, and (5) site- to -source conversion factors. DOE calculated the national energy consumption by multiplying the number of units, or stock, of small electric motors by the unit energy consumption. Then, DOE calcula ted national annual energy savings from the difference between national energy consumption in the base case (without new efficiency standards) and in each higher efficiency standard ca se. The analysis included estimated energy savings by fuel type used for generating electricit y. DOE estimated energy consumption and savings based on site energy, and converted the electricity consumption and savings to source energy. Cumulative energy savings are the sum of the a nnual NES, which DOE determined over specifi c time periods.

2.10.2 Net Present Value Analysis

The inputs for determining NPV are (1) total annual installed cost, (2) total annual operati ng cost savings, (3) discount factor, (4) present value of costs, and (5) present value of savings. DOE calculated net savings each year as the difference between total operating-cost savings (including electricity, repair, and maintenance cost savings) and increases in total installed costs (including equipment price and installation cost). DOE calculated savings over the life of the motor, accounting for differences in yearly energy rates. DOE calculated NPV as the difference between the present value of operating cost savings and the present value of increased total installed costs. DOE discounted future costs and savings to the present with a discount factor.

DOE calculated increases in total installed costs as the product of the difference in the
tot al installed cost between the base case and standards case and the annual shipments in the standards ca se. Because costs of more efficient equipment bought in the standards case are higher th an the costs of equipment bought in the base case, price increases appear as negative values in the NPV.

DOE expressed operating cost savings as decreases in operating costs associated with the lowe r energy consumption of motors bought in the standards case compared to the base eff iciency case. Total operating-cost savings are the product of savings per motor and the number of mot ors.

2.10.3 Efficiency Scenarios and Trends

Several of the inputs for determining NES ( e.g. , the annual energy consumption per unit)

a nd NPV ( e.g. , the total annual installed cost and the total annual operating-cost savings) depend on the e ffici ency of the equipment. Thus, DOE developed base case and standards case

e fficiency trends. The efficiency trends specify the annual historical and forecasted shipmentweight ed average equipment efficiencies.2

- 10

DOE based historical shipment-weighted average efficiency trends for small electric
mot ors on limited SEM catalog efficiency data and test results from representative motor lines. DO E found no e vidence of trends toward greater efficiency within the class of covered motors, and therefore did not use an efficiency trend in either the base or standards cases.

DOE based its standards case forecasts ( i.e. , forecasts of efficiency trends after standards take effect) on the use of a roll-up efficiency scenario and parallel growth trend. Under a roll-up scenario, all motors at performance levels below a prospective standard are moved or rolled up to the minimum pe rformance level allowed under the new standard. The distribution of motors at higher efficiency standard levels is unaffected ( i.e.
, th e motor remains at its pre-standard perf ormance levels). The roll-up efficiency scenario dictates how DOE determined efficiency distributions in the first year a new standard takes effect, but does not define how motor efficie ncy will be distributed in the future. Under the parallel growth trend, DOE assumes that the standards case efficiency trend parallels the base case efficiency trend; in the case of small electric motors this means there was no trend toward higher efficiency in the standards case. In other words, the initial jump in shipment-weighted efficiency that occurs when the standard first becomes effective is maintained throughout the forecast.

2.11 L IFE-CYCLE COST SUB-GROUP ANALYSIS

The LCC sub-group analysis evaluates economic impacts on virtually any group of
custome rs. In analyzing the potential impact of new or amended standards on customers, DOE evaluates the impact on identifiable groups of customers (i.e. , sub-groups), such as small businesses, that may not be equally affected by a national standard level. In this rulemaking, this anal ysis examined the economic impacts on different groups of customers by estimating the average change in LCC and by calculating the fraction of customers that would benefit. DOE anal yzed the potential effect of standards for small businesses and customers with spaceconstrained applications, two consumer sub-groups of interest identified by DOE. For small businesses, DOE analyzed the potential impacts of standards by conducting the analysis with differe nt discount rates, as small businesses do not have the same access to capital as larger businesses.

2.12 M ANUFACTURER IMPACT ANALYSIS

DOE performed an MIA to estimate the financial impact of higher energy conservation standards on S EM manufacturers, and to calculate the impact of such standards on domestic manufacturing employment and plant capacity. The MIA has both quantitative and qualitative aspects. The qu antitative part of the MIA primarily relies on the Government Regulatory Impact Model (GRIM) - an industry-cash-flow model customized for this rulemaking. The GRIM inputs ar e data characterizing the industry cost structure, shipments, and revenues. The key output is the industry net present value (INPV). Different sets of assumptions (scenarios) produce different results. The qualitative part of the MIA addresses factors such as motor characteristics, characteristics of particular firms, and market and equipment trends, and includes an assessment of the impacts of standards on sub-groups of manufacturers.2

- 11

DOE conduct ed

the MIA in three phases. Phase one consist ed of preparing an industry

c hara cterization and identifying key issues. Phase two addressed the broader industry where DOE wo uld use the GRIM to perform an industry cash flow analysis. DOE also developed a questionna ire for interviewing SEM manufacturers about the potential impacts of new energy conservation standards on their business during phase two. Phase three involved interviewing manuf acturers and adjusting the industry cash flow analysis as needed. Phase three also

ex amined any additional impacts on competition, manufacturing capacity, direct employment, and the c umulative burden of other regulations on manufacturers. The complete MIA is outlined in C hapter 12 of the TSD.

2.13 UTIL ITY IMPACT ANALYSIS

The utility impact analysis estimates the effects of reduced energy consumption due to improved appliance efficiency on the utility industry. This utility analysis compares forecast results for a case comparable to the AEO2009 Reference Case and forecasts for policy cases incor porating each of the small motors trial standard levels.

The utility impact analysis reports the changes in installed capacity and generation by plant type that result for each trial standard level, as well as changes in electricity sales to the residentia l, commercial and industrial sectors. The estimated impacts of the standard are the difference between the valued forecasted by a variant of EIA’s National Energy Modeling System (currently termed NEMS-BT, BT referring to the DOE ’s Building Technologies P rogram), and the AEO 2009 Reference Case.

2.14 E MPLOYMENT IMPACT ANALYSIS

The imposition of standards can affect employment both directly and indirectly. Direct emplo yment impacts are changes in the number of employees at the plants that produce the covered motors and at affiliated distribution and service companies. DOE evaluates the direct

e mplo yment impacts in the manufacturer impact analysis. Indirect employment impacts may result from expenditures shifting between goods (the substitution effect) and changes in income and overall expenditure levels (the income effect). The combined direct and indirect employment impacts are investigated in the employment impact analysis using the “Impact of Sector Energy Technologies” (ImSET) model. The ImSET model was developed for DOE’s Office of Planning, Budget, and Analysis to estimate the employment and income effects of

ener gy-saving technologies on buildings, industry, and transportation. Co mpared to simple economic multiplier approaches, ImSET allows for more complete and automated analysis of the economic impacts of energy conservation investments.

2.15 E NVIRONMENTAL ASSESSMENT

The primary environmental effects of energy conservation standards for the small electric motors covered under this rulemaking will be decreased emissions resulting from reduced electric al energy consumption. The environmental assessment tracks the impact of possible2

- 12

standards on CO 2 , NO x , and Hg . DOE bases these calculations on the NEMS-BT modeling work
pr oposed for the utility impact analysis. This approach has the advantage of examining the marginal impact of higher efficiency standards for the covered motors on the utility generation mix a nd the subsequent environmental emissions.

CO 2 emissions are tracked in NEMS-BT by a detailed module that produces robust results because of its broad coverage of all sectors and inclusion of interactive effects. NEMS-BT also has an algorithm for estimating Hg and NOx emissions from power generation.

2.16 REG ULATORY IMPACT ANALYSIS

In the NOPR stage, DOE prepared a regulatory impact analysis (RIA) pursuant to Ex ecutive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993), which is subjec t to review under the Executive Order by the Office of Information and Regulatory Affairs at the Office of Management and Budget. The RIA address ed the potential for non-regulatory approaches to supplant or augment energy conservation standards to improve the energy efficiency or reduce the energy consumption of the small electric motors covered under this rulemakin g.

2.17 DEP ARTMENT OF JUSTICE REVIEW

Section 325(o)(2)(B)(i)(V) of the Energy Policy and Conservation Act states that before the Secretary of Energy may prescribe a new or amended energy conservation standard, the Secretary shall ask the Attorney General to make a determination of “the impact of any lessening of competition...that is likely to result from the imposition of the standard.” (42 U.S.C. 6295) Pursuant to this requirement, DOE will solicit the views of the DOJ on any lessening of

c ompetition that is likely to result from the imposition of a proposed standard and will give the views provided full consideration in assessing the economic justification of a proposed standard. DOE may consult with DOJ at earlier stages in the standards development process to seek to obtain preliminary views on competitive impacts.